we think that the pboc may not focus much more on benchmark rates.n't expect any change in pboc benchmark rate such as one year and opr rates this year but rather we think credit and how slowdown will be the main theme of policy normalization. haslinda: it is interesting to see when you take a look at the gdp projection, from china, it is 6% for 2021. but bloomberg economics is projecting an 8.5% growth for the year. what you make of the discrepancy between the two? >> i think it is an interesting observation. consensus from economists suggest china's growth will be at a relatively high level around 8%-9%. policymakers are setting a conservative gdp target of 6%. that reflects a fundamental shift in policymaking, that reduces focus on targets of gdp growth, but focuses more on medium policy targets as well as quality of growth. rishaad: we have this story about huarong's bond rout deepening, and it spreads to other companies and dollar bonds tightening. does this pose a threat to the financial system? >> i think the bond default is not a systemic fin

the pboc took it over to prevent any contention.rd to imagine the authority would be prepared to let an institution for a five times bigger go to the wall without stepping in. haidi: when you say that asian investment grade credit is likely to see volatility, where do you find buying opportunities in that volatility? >> it has already had contingent -- when you look at what happened last week or the past two weeks in the offshore market , tense and a delay the new issuance in the china dollar market, we do think there will be lingering impact on china, particularly investment grade bonds in the future. the market is attempting to price our reprice related are contingent sectors with similarities, which is relatively low transparency or high leverage or both. and how should government support be price going forward? and with spread widening of different bonds. these are three things overall that will create buying opportunities, for example in some of the -- such as the other management firms. brokerages, leasing companies and others

the pboc did say credit supply is appropriate and monetary growth is reasonable. checking in on offshore yuan today, it is holding onto monday's gains. holding below the 655 level. this ahead of the u.s. treasuries exchange report. haidi: staying on that report, we have the bloomberg scoop. sources say secretary janet yellen will decline to name janet yellen as the currency manipulator and is weighing reversals of trump era policies. what kind of changes is she reportedly considering and does the data back it up given we have seen relative stability in the chinese currency anyway? >> absolutely. so far, there are no indications for the rest of us china is -- it's currency. the treasury department is likely to say as soon thursday they will not be designating china a currency manipulator. a lot of people might remember under hank paulson and secretary tim geithner or during the global financial crisis when there were a lot of clear indications china was intervening in the currency, they declined to designate china as a manipulator to maintain diplomatic ties and un

i would not think that the pboc has been intervening as much as in the past.ina's regulator would like to see. fx rates much more than before. in that sense, i do think we will see more volatilities in the currency -- more two-side volatility in the currency as opposed to one side movement. shery: we will have more later with an economist joining us at 10:30 a.m. hong kong. we are seeing trends reversing some of the declines we saw yesterday. japan, south korea, and australia gaining ground. a little bit of pressure from the chinese yuan. let's turn to sophie. >> as you just heard from betty, she expects two-way volatility. pretty much steady as she goes, following reports that janet yellen may decline labeling china a forex manipulator. check out the yen, slightly on the back foot. japan's vaccination campaign will catch up. goldman also expecting the aggressive fed tightening, those will be paired fact. the aussie dollar pretty much steady ahead of weekly payroll reports. aussie bonds lower as we are waiting on a new indicated bond sale from australia. cash

i asked if the pboc is considering change any of the tough regulation around bitcoin. let's listen to what he had to say. >> the main role for cryptocurrency assets going forward. as the investment, including china, are still looking into it and thinking of what regulatory requirements we need to have some requirement to prevent speculative nature of such asassets. before we have clear idea of what kind of regulation we need, i think we are more current with the regulation >> reporter: i want to unpack the language here. he said at the moment, regulation won't change. he said he sees bitcoin as an investment alternative some insiders i talked to this morning say that marks a progressive attitude to bitcoin and significant change in tone to bitcoin no concrete changes on the regulatory requirement there is optimism that we might see that change. what you have seen is an increased institutional adoption of bitcoin tesla and square buying up bitcoin. perhaps that is buying into the thinking of the pboc here. it was no concrete policy change yet. it is getting some in the

when does the pboc get involved?eios: i think the pboc is one of these central banks where they learn by doing. they try to avoid mistakes from the past. i refer to what happened back in 2015, of the devaluation in everything. basically, my main point is that i think right now, they have shifted into a regime in which you have controlled appreciation, and i think they are very happy with it and pretty comfortable with the renminbi going higher in a normalized fashion. if you look at the renminbi basket, typically you tend to think of the pboc having a range between 92 and 98. however, if that rebound in global growth trade continues, the fact that china has not lost share in export competitiveness, i don't think the pboc is going to have any problem seeing the trade-weighted renminbi version of this etf basket breaking above 98. jonathan: we've got to leave it there. vasileios gkionakis there, banque lombard odier head of fx strategy. i wonder, and a different kind of question, whether they will tolerate the high yie

the pboc says it has no intention of placing the dollar.e digital yuan will be aimed at domestic use. shery: it looks like a mixed picture at the open. japan, south korea and australia. sophie: we have japanese trade data. exports rising more than expected. japanese stocks are opening to the downside after tapping a two week loss. we have seen the nikkei lag between the u.s. and the u.k.. given the slow pace of vaccinations and japan, over the weekend, we learned the government is looking for more supply from pfizer. again's resurgent strength could be a way for japanese stocks as well, the currency heading into a historically strong period. let's keep an eye on aaa stocks in tokyo, after output stopped on saturday. samsung seeking to return to full production at a texas plant by the summer. we are seeing little change in the kospi after a four-week gain. the korean won seeing some weakness this morning, but we will be looking to wednesdays trade data from south korea which could provide a lift for the currency. we are also watching crypto

the pboc drained liquidity again from the system. i think investors, there is talk among traders in asia, hey, pboc are being serious. they are showing they are very committed to tightening liquidity. this is not a good outlook for chinese stocks and not positive for commodities in contrast to the surge yesterday, and it is not good for the region because china has been so critical. no one thinks this is a sudden panic situation, but it is certainly tightening. people are turning more negative at the margins. rishaad: mark, what about commodities? how much has this resurgence in commodities prices bring down to the dollar? mark: certainly part of it has been the dollar. the dollar has come off of its highs the last couple days and of course we had yields lower, even in the wake of the cpi. and of course with powell's continued dovish and is. that -- his dovishness. his comment about the economy being better but he is staying dovish. really it is less about u.s. economic optimism and more important is china. if chinese economic outloo

shery: what will the pboc do?been concerns of preventing financial risks in the central chinese bank have already started normalizing monetary policy since may last year. a tightening clearly for the beginning of the year, especially after surging house prices. the surging credit growth as we see in the first two months of the year so the pboc has already issued guidance to banks to guide credit growth lower to ensure the sustainability and china's overall macro leverage. the pboc i think has also joined in with other regulators to ensure the typing as well as the financing and on the housing market and in terms of the overall liquidity, we have seen they will ensure liquidity, especially at times of an angel volatility -- financial volatility. for the moment, we are not looking for them for high interest rates. shery: great having you on. looking for any clarity on the state of china huarong finances on its details of its overall plan. our executive editor is joining us now. we have already seen the spill over in

the pboc is leading the way to get an agreement by midyear. the food and drug administration is planning to ban menthol cigarette sales. it stems from a lawsuit filed to force the fda to make a decision on menthols. it alleges regulators delayed responding to their decision. the fda is facing pressure over their disproportionate effect on african-american groups. global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. shery: six years after this #, a diverse roster of artists one awards this year. winners include some of these actors. yet a report finds that a lack of diversity in hollywood films is costing the industry $10 billion. i want to bring in sheldon, a partner at the firm, to discuss the findings in this report. when you look at these significant wins at the academy award, does that perhaps change the perception that casting or producing pictures that involve people of color have not a positive return on investment, because you are saying your research

positive signals to the pboc.have to cut their 2021 growth outlook for china to 9.1 from 9.3%. we are seeing ongoing expansion of the economy even if the official numbers were a mess. -- miss. the pboc could continue. the official read on manufacturing coming in at 51.1. that was below estimates of 51.8%. annmarie: that is what is going on in asian equity markets. in europe it is all about earnings. the company recorded revenue and and ebita margin above the average estimate and expects sales growth of between 3% and 6% for 2021. with us is the signify ceo. strong numbers and strong guidance for 2021. what is behind it? >> there is a rigorous execution of the strategy delivering structural improvements. what is important is we are growing in our strategy targeted domains. we have increased from $77 million to $83 million. between the previous quarter and to date. at the time of the ipo it was only 45%. the growth is leverage because we are improving operating profitability by 290 basis points. at the same time, th

nonetheless, a word from the pboc -- though word from the pboc is they want to see credit risk curtailed they are worried about double risks. the debt to gdp levels is at the highest levels since we covered it. so their goal is to get it under control as growth here is expected to crawl from the record levels we saw. it is unlikely you will see that pace of growth going forward. haidi: in the meantime, we have another ratings downgrade for quarrel -- huarong. >> you do have to question why moody's has been arguably late in coming out with this ratings cut. it follows the rating cut we saw from finch. moody's saying there was a concern about funding, market volatility and an uncertain future. you have to question why it has taken them that long. you saw bonds fall for huarong again. this is the second agency that has come out with a cut. all three of the big agencies have these on cut. this is coming after they missed and failed to report earnings and the question going forward is what are they going to do about this debt pile? $4 billion of their offshore debt is come do this year and so

we think there might be more pboc resistance to more women be strength on a basket basis.e think that means the best dates for the renminbi are probably behind us. haidi: executive director and global fx strategist at jp morgan. still more fallout at credit suisse in wakes of the archegos mess. bloomberg has learned the point salesman was also assigned to oversee risk-taking in the prime brokerage unit. let's start off with the latest of the sec. su: the implosion has prompted regulators to take a close look on how firms reveal their holdings. the sec is now exploring how to provide or increase transparency for the type of derivative death that sank archegos so spectacularly. it involved a multibillion-dollar loss for many banks as a result. the review we are told is in the early stages. here is some of what we are understanding is in focus. public documents, they typically reveal the big stock holdings of hedge and family offices. investment firms that hold shares have to file a 13 maybe that shows -- 13 b is required after the ms a large stake exceeding 5% in any one com

the pboc says its goal of internationalizing the you want is-- yuan is to give another option. it says efforts to create a digital yuan, are solely for the domestic use. reports indicate president biden is increasing scrutiny over china's role of the digital currency with concerns it could displace the dollar. hong kong's government says it is banning flights from india, pakistan, and the philippines for 14 days, starting april 20, labeling countries externally high-risk. this comes as arrivals from the nations tested positive for the highly transmissible strain of covid-19 in the past week. hong kong reported its true virus variant cases in the community over the weekend. global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ haslinda: still ahead on "bloomberg daybreak: asia." austria and new zealand and try travel bubble, while singapore and hong kong revived their plans. the center for asia-pacific aviation emeritus joins us on what means radiation.

he had just stepped down from the pboc governorship. is giving his panel speech later today at 4 p.m. but he took some exception to international criticisms about belts and road initiatives. it was a bit of a full throated debunk of the criticism. he dismissed conspiracy theories. those were his words about geopolitical motives for infrastructure part -- inverse pressure projects china is involved in. he dismissed racism that it is that diplomacy -- dismissed criticism is that diplomacy. this is a bottom up, not top down program. banks in china make their own decisions. it is not necessarily being directed politically. it is interesting. the belt and road has taken a lot of hits, not only from international criticism, but from the pandemic, as well. developing nations in particular are finding their debt situations are exacerbated by the pandemic. haidi: stephen engle in hong kong. coming next, the beginning of credit events, but downplaying the risks of a full-blown crisis. this is bloomberg. ♪ haidi: it's the latest investment bank to

the pboc has put it on track to be the first major central bank to issue a virtual currency. minister david cameron has broken his silence defending his efforts to lobby -- cab -- cameron and top cabinet ministers came under fire last month. cameron lobbied officials to give greensill access to funds. japan has just made golfing history. the first japanese born winner of the tournament. he earns the coveted green jacket by finishing 10 under par. american players came in the second and third spots. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: dallas fed president bob kaplan says he is worried investors are taking on risk as the fed continues to stimulate the economy. speaking to bloomberg's kathleen hays, he said it was too soon to pull back support as a threat of covid continued. >> we will be less preemptive at the fed then we have been in the past and even on asset purchases, until it is clear to me that we have emerged from this viru

could we see the pboc look to taper? >> four .4% is higher than the consensus. energy and metals are what she was looking at as the main drivers of this. not a huge surprise. numbers we're going to see across the world right now. there is a lot of base effects going on. some real inflation. those numbers came in a little stronger as well. as for the pboc, the story we are telling is they are moving back to their deleveraging stance before the pandemic. the pandemic is not fly under control in all regions. they are able to move back to that policy. to try to deleverage it. rishaad: how is china affected by what is happening with the dollar? we see the trajectory still going upward. how is it affecting economies in this part of the world? >> the dollar has been interesting. at the beginning of the year, everybody in the world expected dollar weakness. but it did the opposite. we have not changed massively. asian currencies have been whipped around by this. the yuan did see some appreciation early on. it has gotten some of that back. now we are not really quite sur

that will mean that the pboc could remain on hold in terms of not tightening monetary policy. seen a stronger than expected -- way on sentiment. you have china csi 300 following along with the china index. you did see a rally in a lot of metal players. and the yuan on track for its first weekly advance since february. annmarie: the csi 300 now down 0.6%. thank you for joining us. a strong economic recovery in china is fueling demand for shipping. the industry has spent the last year trying to meet demand. despite the drama, robust demand for shipping is showing no signs of slowing down. that is according to the ceo of hapag-lloyd, rolf habben jansen. i want to get your thoughts on the continuous impacts you are seeing and supply chains due to the blockage we saw in the suez canal. rolf: it did have an impact but i would say it is short-term. it lasted six days and it took another five days to get it resolved. today, there is basically no backlog. of course, that means in the northern, european ports, that will take another 4-6 weeks to work through. and we need to get the ship

tom: i agree, the pboc involved, what is extraordinary is the basic money market fund will be, in some ways, significantly reduced. you see alibaba popping on the news. it just shows how things are changing in china. it is good to have jing ulrich on with us. jonathan: did you see the response to alibaba to the record fine received? compare and contrast how a u.s. tech company might. [laughter] after receiving a record antitrust fine from china, alibaba said we would not have achieved our growth without sound government regulation and oversight. for this, we are full of gratitude and respect. that is how you deal with regulatory issues in china, lisa. [laughter] and here in the united states, you anticipate a very different response, wouldn't you? tom: i think it is a new world. the same with the changes in hong kong we have seen and all the politics involved. over the weekend, all of the discussions and tensions between taiwan and china. and i am sorry, i will the financial to be into the political debate. jonathan: can you imagine mark zuckerberg? lisa: please, can we have another, a

we are hearing the pboc wants to keep 2021 levels the same as. that would be something like 1.6 5 trillion per month in new yuan loans. this is draining some valuation from some of the big-name stocks in session, matt. matt: all right, juliette, thanks very much. we will continue to cover that story for you as well. the s&p 500 at an all-time high on monday. european stocks set to play catch-up. ♪ ♪ matt: welcome back to bloomberg markets, this is the european open. 30 minutes from the start of cash equity trading with futures higher across the board. let's get back to the latest on this developing story out of credit suisse, they are facing devastating fallout from the collapse of archigos, and a big management shakeup is underway. joining us is bloomberg's finance reporter. what are the consequences as far as personnel? >> big changes on the personnel side. highest-ranking executives set to leave the chief risk officer, lara warner and ahead of the executive bank, brian chin. numerous lower ranking employees in the risk division will be leaving

vonnie: pboc says its goal of internationalizing the yuan is not an attempt to replace the dollar but give markets another option to facilitate international trade. they also say efforts to create a digital yuan are solely for domestic use. a recent report indicated president biden is increasing scrutiny over china's rollout of the digital monetary tool amid concerns it could displace the dollar. the u.s. and china say they are committed to cooperating on climate change and on implementing the paris agreement. the joint statement comes after envoys from both sides met last night amid growing jail palooka tensions on issues ranging from trade to human rights abuses. u.s. president biden will host a virtual economic conference this weekend chinese president xi jinping will principate. the u.s. has warned russia it will face consequences if jailed opposition leader alexey navalny dies. the outspoken putin critic is in his third week of a hunger strike. allies say he is in critical condition and close to death. he has been jailed outside moscow since march for violating rules. he went to

pboc is said to of s lenders to rein credits apply on concern the loans are fueling asset bubbles.imes reported banks were told to keep new loans in the first quarter roughly at last year's levels if not lower. authorities have recently had bad liquidity injections and sounded the alarm of the financial risk. elon musk's bet on growth in china and europe is starting to pay off. the carmaker beat expectations for the first quarter of this year by delivering around 4000 cars more than it did in the fourth quarter. the company says its models or exceptionally well received in china. tesla's delivery figure is widely received as a barometer of electronic vehicles at large. delta airlines canceled over 100 flights due to staff search -- shortages the we can forcing the carrier to open its middle seats sunday and monday. the move was aimed at improving capacitor -- customer capacity impacted by the cancellation. travelers have had more than one million passengers of the past 23 days. rishaad: let's get over to sophie cameron saying the dollar is a safe place to i. why? sophie: city says

the pboc draining medium term liquidity. what do we need to be aware of from a global investor perspective? mark: two things. they did drain a little bit of liquidity today. not much, but traders seem to take it as a message that pboc is very clear on their path. they are going to tighten the liquidity situation. on top of that picture, you have the issue around the china credit bubble and what has happened with the state backed entity and the idea we might get some state backed defaults. that might continue to spread -- sorry credit spreads wider. that's kind of weighing on the whole regional sentiment. remember, we started the morning very positively in asia. it was only when we started getting more details we started turning more negative in the asian session. anna: let me linger on that story. something that has been rumbling on. being taken increasingly seriously and is now having an impact on asia credit. is it contained within that? it something from an international perspective we need to keep on the radar? mark: it

paul: give us your analysis of the pboc tightening.ing to look like a policy mistake you yucca -- mistake to you? >> know, the pboc has been clear in communicating what they are trying to do is reduce the pace of accommodation to manage a stable bull market. this has been the word they are using frequently. from that perspective, it does make sense you want to manage success and over exuberance in the market. when the economy has already recovered, the global economy doing relatively well, exports are strong in china. having a tightening bias on monetary policy, on credit policy, i think it is the right stance. shery: what about the tech regulatory bias we are seeing? >> again, if you look at the individual pieces of regulation, most of that makes sense. i do you this is a trend we will see other countries follow. many of them are already talking about regulation on the internet space. there is a general realization this was not just about individual cases. it is more a case of, we need to rethink how the regulatory -- functions for in

the pboc has been draining liquidity. if you think about the trajectory for the next few quarters, i don't think that there is a question in anybody's mind that this should affect the march rate. our view is that china's annual gdp growth will be coming in around 9% year-over-year, this year. r.g. to be forecast is higher -- our gdp forecast is higher. we don't think that will be china's real growth. it is a reflection of china's macro strength, not china's ma cro weakness. china already recovered from the second-quarter gdp numbers of last year. that is the reason why they stopped the policy normalization. we don't expect the policy packaging to be extremely different. they are looking to keep that -- they are not going for aggressive deleveraging. it will still be tracking around 11.5% growth. rishaad: today, what we have is an economy which will be showing stellar growth. where is there not quite the recovery that we were expecting? many were pointing to services in the service out of the economy. what was your take? d

shery: also leadership perhaps when it comes to some pboc tightening moves. we have other emerging markets like russia, turkey and brazil hiking rates. how concerned are you this will materially impact your assets? >> those markets not so much because they have long shied away from frontier. i think your last guest was fascinating from the world bank, talking about contagion. that is a frontier statement. we in earlier days had experience and activity and a frontier. now we are focused on the institutional growth market. we are also -- we did not utilize leverage. haidi: when you take a look at post pandemic trends and what is going to be enduring the next five to 10 years, what do you think is going to be prominent in emerging markets? >> very good question. we have been focused on sectors that are sustainable, durable, scalable. in the pandemic, post pandemic, warehouse distribution, logistics asset light and asset heavy, digital data, infrastructure, education, health care. these kinds of things. accessible housing both affordable for sale and accessible r

the pboc governor said managing inflation.e dollar after it crossed 28 for the first time since 1997. credit ebersole says it will outperform asian peers. paul: that is it from daybreak asia. standby for bloomberg markets: china open up next. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. tom: it is 9:00 a.m. in beijing and shanghai. bochum to bloomberg markets china open. i'm tom mackenzie. david: good morning. i'm david ingles. we are coming down to the open of trades. china and

growth to slow down, especially from the second quarter onward, and we do see a sector location is the pboc is trying to direct more credit flows into innovation and manufacturing and away from other sectors, so it is much more of a continuation, fine tuning and locations rather than change in direction. rishaad: please stay with us. still ahead on bloomberg markets , a massive hit, cutting dividends while rivals thrive. we will count the costs on the fallout. that's next. >> plus --julette: plus, samsung first quarter profits easily beat forecasts, but what lies ahead? we get analysis. this is bloomberg. o ♪ rishaad: the next leg higher in long-term treasury yields may come from real rates and they had a asset classes strategy at jp morgan bank is back with us -- the head of asset classes strategy at jp morgan bank. is the great bond selloff of 2021 over? what is your response? >> it's hard to say that the selloff is over when we do see 10-year treasury yields or raw yield curves still moving up towards our target of 20 basis points higher. we do see that a lot of the spreads across credit

we have the pboc trying to rein in borrowing. might that hurt the economy eventually? later on in the year perhaps? >> it is possible be tightening policy on property will have a negative impact on property activities. i mean, that is our expectation. so far in the first quarter, we have not seen much evidence of that yet. property sales remain very strong. even if we take out the basics, they are still pretty strong. the stronger the property market is, the more likely tightening measures will be implemented. yes, they will potentially be binding, and that will bring down the property investment somewhat, but our forecast has already forecasted a slowdown there to make sure growth is more sustainable. to -- the government is worried about a property bubble and related financial risks, so i think it is a reasonable move they try to control risks there. rishaad: always a pleasure. thank you so much indeed. we had the chinese economy soaring in the first quarter, just a bit weaker than expected. spending strengthening, retail sales much higher than anticipated. of course

, and for context, if the economy here continues to recover and rebalances, it maybe will give the pbocnd regulators more options to continue to push a harder line when it comes to deleveraging. we are expecting to see first quarter gdp 18.5% that would be a record. bloomberg economics thinks they are going to get a number closer to 20%, about 20.1% is the forecast from bloomberg economics. there are basic facts. the economy was crippled early last year because of the pandemic. you have to bear that in mind. but bloomberg economics would stress that in terms of the production side of the economy, that is now looking solid across different metrics. it is the demand side, particularly consumption, that means in question and remains a lag on this economy. will that come through? we are looking potentially at retail sales year on year in march at 28%, and industrial reduction 18%, fixed asset, 26%. these are the numbers that we expect around 10:00 a.m. local time, but it will round out the picture for local policymakers here and give more direction on how far they can go when it comes to de

it does add urgency for a push and calls here, including the pboc.need urgent reform to simplify the process, because you have so many different actors with different stakes in different regulatory rules at play and it is making it all very complicated indeed. haidi: meanwhile, we are hearing that the eu is looking to restrict some mergers, what do we know? shery: -- >> this is a plan that have to be signed off, but it also ties in to a greater push by european capital, and quite frankly, in the face of the disruptions as a result of covid-19, it would look that this plan on companies that would receive subsidies or have state backing might be blocked from doing so. it would need to be signed off by eu governments, and it has pushback from the chinese community. it is something that many would want to see it put in place. >> we have plenty more to come on daybreak australia. this is bloomberg. ♪ his is bloomberg. ♪ ♪ pres. biden: the bottom line is clear. if you are vaccinated, you can do more things, more safely, both outdoors as well as indoors. fo

the equities have underperformed in the region due to a supposed withdrawing of leverage i the pboc,as data out today showing that leverage loans increased. is this dissonance, or a sort of slow down that is a justification for the weakness that we see in chinese assets? enda: this is a great question. there's a lot of discussion going around china that they do want to start tapering their support. as you mentioned, china's banks are going gangbusters. we haven't yet seen any major sign of a tapering. we haven't yet seen any major sign of policy typing, per se. it is more warnings from authorities, from regulators, to keep this warning in check. i think that is because they know there are parts of the economy that still need a lot of support. it is kind of a steady as she goes. they are not going all out on the stimulus side, but neither are they pushing me -- are they pushing it either. jonathan: on the issues with alibaba as they receive a 2.8 billion dollar penalty from the regulator in china, a bit of a relief rally for the stock. you receive a little more than 6%. coming from ge

pipe dream now given the fact that it could be folded into a holding company with oversight by the pbocer companies, so there are many questions deal to be answered. i mentioned in that report that alibaba is not in the clear. it has to rectify what the government claims to be its anticompetitive behavior, so that will affect short and medium-term strategy, and then there's other questions as well -- does the chinese government feel that alibaba has grown to influential with its media holdings? it has a sizable stake in waymo and other news outlets online, so those are questions still to be answered. with ant group, what will happen with financial services and lending? lending is the number one revenue generator for ant group, and it is in the crosshairs because of the risk it poses to the bank and financial system in china at a time when china is trying to rain and risk. and what happens to payments? alipay and wechat pay have 90% of the market. that is at a time when the chinese government wants to roll out its own currency. that has to be answered. 34 other big tech companies, unicor

haslinda: this morning we heard from the former pboc governor talking about how the yuan's internationalization would be a gradual process. where do you think the yuan is in this internationalization? manpreet: internationalization is a long-term profit. we have seen it with other currencies. going back to a couple of decades ago to the euro and there was talk of how the euro could end up replacing the dollar. i think it's not about replacing or about greater internationalization, these are all matters. i think the chinese renminbi is a significant currency and when you measure it, the measures reserve, but that is a long story. ethic it's quite difficult for investors to latch onto that. also with a directional view. i think what is much more clear-cut and easier to take if yuan is a rise in internationalization that helps, even if it happens very gradually. but following the relative interest rate and with the u.s. dollar does. we think that is still going to be front and center for the chinese renminbi, and for us, that's what takes us modestly stronger in six to 12 months time. rishaad: i w

piece of reporting from bloomberg involves the big guns coming out, the big bazooka solution, the pbocg on board, china's central bank taking on board $15.4 billion of huarong's debt, move to try to clean up its balance sheet. a reminder that this is a business, huarong, that now has an outstanding $42 billion worth of bonds, that are due. 17 billions -- $17 billion are due at the end of, 2022 so there is an urgency for a solution and those are some of the issues, and potential solutions or options we know according to bloomberg reporting, that they are looking at. >> markets coanchor tom mackenzie in beijing. let's get to first word news with vonnie quinn. vonnie: the u.s. is the latest nation pledging a two india to stem the world's biggest surging covid-19 cases. the biden administration sending raw materials from vaccine production and financing support. india reported one million new cases the past three days and the prime minister narendra modi, is imploring residents to get vaccinated. the biggest campaign in history is underway with one million doses administered -- one billion

the pboc is ordering banks to slow their credit growth.ow do you thing about that part of the macro story? karen: it just feels like we get to this point every couple of years. alix: that's true. it's like a broken record. [laughter] karen: the fed is like, we want quantity growth above quality, so we are going to focus on deleveraging slightly. we thought, goodness, beijing is going to implode, but their ability to find tune that economy is absolutely spot on, and every thing is fine. i think people see exactly the same thing again. i think beijing are just taking the right long-term approach to managing this economy. they don't want to see property froth. therefore they are a pretty controlling credit, but will the macroeconomy be affected by that? now the other thing to remember -- no. the other thing to remember is that yeah, growth inside of the pmi's are not going to be at the level we see in the united states or europe because economies are not going to boom in the same way. so the level of activity is already at trend. to me, china

the pboc also cited record competition and to discourage a monopoly.loomberg has learned microsoft is set to buy nuance communications in a deal with an equity valuation of about $16 billion. microsoft has been working on ai software that helps take doctor-patient conversations and integrate them into patient portals. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ is bloomberg. ♪ ♪ >>>> we don't have a lot of work to do to persuade the american people that u.s. infrastructure needs major improvement. the american people already know it. that is one of the reasons why there is such extraordinary support for this package among the american people. jonathan: pete buttigieg, the transportation secretary, on fox news sunday. alongside tom keene and lisa abramowicz, i'm jonathan ferro. let's get to the price action of this monday morning, kicking off a busy trading week for you. tuesday inflation, thursday retail sales, the ba

opportunity and you say china was the first in, first out, i want to give you these headlines from the pbocbasically that china has deficient equity capital and insufficient long-term capital. this is why they have such high macro leverage, this feeds into the people's bank of china effort to reduce leverage in the system moving in the opposite direction that a lot of other central banks around the world. how does this affect your view on the assets in china which we have seen underperforming over the past month. do you think that underperformance will continue they stung where they are in the tightening cycle? ben: you are absolute right. they are at a different point in the cycle. central banks have had rates at 4% for one year. look where the rest of the world is. they are at a different point in the cycle. two things going on. there is a cyclical story which incrementally will tighten, but there's a strong -- there is a long-term structural story. they will open up the market on the equity side and the fixed income side to attract more foreign capital. that will dramatically expand for

bloomberg news has reported perhaps the data as well as parts of and need to be put under oversight of the pboc, or other regulatory bodies in china. there is a longer process with the fintech arms because that is talking about risks to the financial system, and challenges to the state owned banks, and lending practices that probably need much more investigation than a four-month antitrust or monopolistic behavior that we saw with alibaba. however, daniel zhang, the ceo, put out a statement, this is alibaba's ceo, put out a statement saying alibaba is ready to move on from its ordeal. i think -- i've been covering this extensively, the antitrust investigation. this is probably just the opening salvo of a regulatory shift in china, because the regulatory bodies in china, let's face it, they allowed these large platforms to grow to where they were with very little oversight. that oversight is now coming in spades. shery: we will be watching those changes that could come ahead. stephen engle, are chief north asia correspondent. let's get over to vonnie quinn with the first word headlines. vonnie:

bloomberg intelligence says there are still some challenges for china's banking sector, particularly the pboc doesn't want to see low growth above 2020 levels. nonperforming loans are still an issue as well. other banks that will be reporting later today. bank of china to round the picture. kathleen: thank you so much. that is tom mackenzie. that's it for daybreak australia. daybreak: asia is coming up next. this is bloomberg. ♪ ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings. or visit and xfinity store to learn how our switch squad makes it easy to switch and save hundreds. ♪ haidi: very good morning. we are counting down to asia's major market open. kathleen: i'm kathleen hays in new york. the fed holds near zero while saying that

the pboc wants to open up the bond market to get more foreign investors, yet at the same time, china cracks down on jack ma and fintech. in the u.s., everyone is loving spac's and bitcoin until the don't. how do you play that barbell? bob: to align yourselves with the policies is very important. in the west, it is really the cash flow, the assets that benefit from the boost in cash flow from nominal spending, nominal income rising, from the distribution of the monetization in people's hands, and funded with negative real interest rates. that is essentially, for right now, that is the path. but when you go to asia and china, it is very different because if you look at china and look at the five-year plan and what they referred to as dual circulation, you have a very rapid development of an internal economy there. what we see is commonplace, everyday industries in the west, those are going to be growth industries in many cases in china because they didn't exist in china. so they go from nonexisting to existing as they move to a more balanced, internally oriented economy. so there is a

now that we've got the data behind it, people are less worried about aggressive policies and that pboctly different perspective. but the price action in chinese stocks has been phenomenal, the best performance in february. they're rising to levels we haven't seen in a few weeks. on the other hand, we are seeing extreme weakness in stocks, and japanese stocks are also weak, again on that resurgent virus theme. anna: certainly something that shows through in the asian session. we're pretty flat on the msci asia pacific so far. let's look at the events we'll be watching out for. later today, justin trudeau's government sees its first budget in two years, additional spending to support canada's recovery. tomorrow, apple's first product unveiling of the year on air tage from -- tags from tracking physical devices. on wednesday, we will see vladimir putin make his annual address on commentary on the battle being fought by navalny. that's an interesting one to watch in the context of that appearance by president putin later. on thursday, we'll watch for the european central bank. they are set

the pboc and chinese government is going to stand behind its peers.e of the panic around that was overhyped in the short term. anna: what did you make of the market reaction to bidens tax plan? clearly questions around what remains intact when it tries to get through the political machinery in washington. there are certain things we can't know at this point. do you think the selling yesterday was justified? a reminder perhaps that even though this is a government that is still on a platform of some of these tax increases, this can still shake market sometimes. mark: i think this was a logical reaction in the short-term. i don't ask back to anymore follow-through. when you get a headline like this, even though it was expected it will come at some point, we have no idea of the timing. you have to react. there's lots of short-term traders that their whole job is to react around these headlines. i think we've seen sufficient action for now. we don't know what will be eventually passed. we have no clarity around this. the short-term sharp selloff made sens

we think the pboc is going to maintain a nice, loose policy. companies paying taxes this time of year. they also are going to be doing quite a bit of issuance. it's in their interest to keep policy loose. when we are looking at chinese government bonds, we are seeing pretty decent value. they've been bucking the trend. we've seen yields declining on chinese government bonds in contrast to the other markets, which for the past three months, more or less, has seen a rise in yields. so, nothing new from the data. it's going to be very noisy. anna: you're bullish at this point. how bullish are you and for what reasons, april? give us more reasons as what you mentioned. april: bullish may be too big of a word. when we're looking at the major developed markets, yields have risen already. there's a scope to rise further. in china, we think they are starting to come down. i think if you're looking at the different markets, what you are trying to assess is where is the safest place to have from interest rate risks? we would suggest china is one of those

the pboc is said to vast lenders to rein in credit supply on concerns up surge in loans is feeling asset times reported banks were told to keep new loans in the first quarter at last year's levels are lower. chinese authorities pared back liquidity injections and sound an alarm over financial risks. Élan musk bet on growth in china and europe is starting to be offered tesla, the carmaker beat expectations in the first quarter, delivering 4000 cars more than in the fourth quarter. the company also said the model as annexed were exceptionally well received in china. 'tesla's orderly delivery figure is seen as a barometer for its vehicles and ev's at large. tesla sales in japan and korea are down today. delta airlines canceled 100 flights to do staff shortages over the weekend forcing the carrier to open middle seat sunday and monday, a month earlier than planned. the move was aimed at increasing passenger capacity to accommodate flyers affected by cancellations. delta says it flew one million passengers in the past few days, the most in the pandemic euro. -- era. kathleen: japanese hotel o

we have seen the pboc keen to curb the flow of credit to the economy and bolster the capital adequacyhat note, when it comes to curbing risk, foreign capital climbing into china's stocks and bonds last year. regulators are warning about the dangers posed to financial stability. let's bring in our chief correspondent. why is the pace of inflows becoming a concern for china? >> well, the theme is here is almost too much of a good thing. you know that china has been gradually opening its plans to attract foreign capital. last year, that really took off. overseas of chinese stocks went up 60%. holdings in bonds went up almost 50%. the yuan had its best quarter in more than a decade. this influx of foreign money is not unnerving chinese own regulators. they are concerned all the money sloshing around may generate instability. and drive up the currency and hurt competitiveness of china's own exporters. so, it is quite the about turn from where we were a few years ago when china was concerned about outflows. now calling for inflows has been much more successful than even they anticipated. ha

the other thing we know is being looked at is, pboc riding to the rescue and onboarding $15 billion worthf huarong' debt to help clean up its balance sheet and we know the finance ministry, the biggest shareholder huarong in, is looking to move its stake to a unit of the sovereign wealth fund. but there is urgency because you are looking at an asset manager that has debt obligations of $42 billion u.s. in total, $17 billion due by the end of 2022. bloomberg economics putting out a note this morning saying, whatever the solution, it is likely that at least those dollar bondholders will have to take on some of the cost as well, whatever solution they come to. paul: china markets coanchor tom mackenzie in beijing. a quick check of the latest business flash headlines. chinese brokerage cicc is going on in overseas hiring spree which could see assets jump tenfold in the decade, the investment bank looking for m&a targets among asia focused firms including stock and hedge funds and wealth managers. cicc is looking outside china's $15 trillion asset management with rivals like blackrock seen gai