the path of least resistance for pboc. bloomberg. ♪ is. ♪ >> good morning, i'm manus cranny with dani burger. these are the stories that set your agenda. dani: president biden said it hasn't verified a pullback of russian troops. inflation in focus. chinese price pressure ease as traders. we look ahead to uk c.p.i. expected to stay at a 30-year high. plus, stalled. republicans block votes on bind's pick for the fed. it is manus here. that's dani and manus if case you didn't know. perhaps the market is overreacting to everything it sees. but is it overreaction or is it just a lack of liquidity? we have this in the g.t.v. chart, volatility in the front end is spiking. likewise the bloomberg volatility for government secures which is in blue is on the rise as well. manus: yeah, and that's moving away from fair value pricing. if there is a depth charge in the bond market. they are in smelling danes of an inversion. and an 18-month side when we typically have it. you are in election fever in the united states of america. so qui

haslinda: that was the pboc governor.adlines, he said asian economies are more resilient today because they are using their own fx currencies, but are more prone to tightening financial conditions. and he says china will keep its policy appropriate, supportive of growth and said that and will set up support for what he sees as weak links in the economy, and that china expects growth to get back to potential levels in 2022. he sees that china will go back to its potential this year. he also called on asian economies to improve resilience with gl cooperation, saying the fx topline helped facilitate trade, some lines coming through from the pboc governor. bloomberg subscribers can continue watching live. you will also find big diary entries coming later this week as well as events you may have missed earlier. rishaad: let's get to what chinese president xi jinping is saying about the covid outbreak in hong kong, saying that it should be fought with every means necessary. and it should be the hong kong government's top priori

the pboc is pumping more liquidity into the system. the move spurred gains on the csi and the shanghai compass it. giving some of those back, issues down 0.5% -- asia is down 0.5%. they are driving the truck a different direction. >> they certainly are. we know there is policy divergence. liquidity injected through that mlf, but they left the one year mlf, the white line on this. it is a big toolkit the pboc has. most economists do not expect it remain there for long. bloomberg economics saying you can see another cut in the second quarter and potentially the third. we know the central bank is really trying to stimulate the economy. when it comes to market moves, it is a down day across asia. we are grappling with so many things. you see the selloff in iron ore. ukraine tensions and so many factors going into this market. you have seen the csi 300 propped up by liquidity up by 0.5% and that is important because yesterday it deepened further into bear market territory. nowhere for investors to hide in these markets more broadly. you hav

haidi: katrina, what about the direction of the pboc in china?th more eco-data this week, including the pmi numbers. not to mention, the start of the national people's congress? katrina: yeah, the clear direction of the pboc is further easing. we know that china's economy is facing a number of headwinds. in the pboc is playing a critical role at the moment to really manage those headwinds. we have already seen that the easing from a number of different leaders in the pboc and we continue to expect those leaders to be easing over the next couple of months. haidi: what will be the monetary fallout from the tensions over ukraine? and of course, the rising inflationary pressures coming from it? katrina: i mean, that is really the key uncertainty at the moment. so what we are just looking at is if this conflict does continue to play out for a sustained. -- a sustained time and we see oil prices indoor a sustained rise, what that does mean is that asia's central banks which were tanking -- were taking for the most part a measure to monetary policy norm

money -- operations do by the pboc.he expectations as they will not cut interest rates again because, a, their recent interest rates cuts are flowing through the economy and, b, there was a big increase -- i n january. c, there are objects involved in it. they do not want to be seen to do that to back rate cuts. then there's the final particle point, we're just pulling out of the lunar new year holidays. that is always a bit of a skewed effect in january and february. it will take till march to determine where the economy is going. that said, all the suggestions are that interest rate are going in one direction, and that is lower i n order to support the slowing economy. shery: enda curran with what to expect out of g-20 not to mention china's policy decisions this week. let's get to vonnie quinn with the first word headlines. vonnie: russia says world powers have made significant progress and revising the 2015 iran nuclear grim and, as talks in vienna and to their final stage. it seems russia's top diplomat at the talk

even as the pboc contemplations just contemplates easing policy, they are strengthening to the highestel. do all of the measures she zheng paying -- teaching pang -- president xi has put in, are they having an effect? >> you guys the great article about how american brands are no longer in favor because of the shift in attitude toward the west. it's not looked at as favorably as before. i think the western partnership is not as valuable to china as it was in the past. jonathan: how on earth do they satisfy a progressive base like in america? do they have to choose? for a long time, they sat on the fence. some u.s. corporations, they have led to china perhaps more than the united states. do they have to start choosing? >> it's clear that policy toward china has created policy over principles. their human rights record is important more so now than ever before. jonathan: thank you so much. the issue is becoming a bigger and bigger issue. nationalism in china has dethroned nike. lisa: at what point is china making the decision for them? they are out of favor because they are from the unit

with more easing by the pboc expected. shery: talking about the fed, we have the preferred gauge of inflation from the numbers on the personal consumption expenditure price index coming up later in the week. how much of a very strong inflation print have they factored in and will this number make any difference? >> this is the core one for them. this is what they look at for the 2% inflation target. that will kind of underscore this idea that we have inflation since the early 1980's it will put pressure on the fed cannot just raise. it might spark debate on whether it will go by 50 in march. jp morgan expect the fed to move but 25 basis points. that is a hawkish outlook for any central bank. some fed officials speaking over the next couple days that might add some clarity as to whether or not they will go by 50 or 25 in march. the expectations are it is going to inform -- to confirm inflation is running away. a rate hike in march is expected. a debate is whether they go through the shock and all approach -- shock and awe a

price pressures give the pboc some fresh emphasis for policy support.ing ramps up a campaign to stop prices fro

i don't expect a lot of help from the pboc.pecting 50 to 100 bps, but i think it will be frontloaded. you have to look at small and medium-size households because that is a reflection of the market -- the mortgage market in china. lisa: they are easing while everybody else is tightening. is it just china, or are there other regions that will benefit from an easing cycle amid the tightening of the rest of the world. damian: we look at the philippines, indonesia. certainly on the fixed income side, it is all about the yuan relative to the dollar. u.s. and china three year yields , is now 68 basis points. dollar-yuan tracks the china u.s. yield spread differentials very closely because that is your a fetid kerry in moving your money offshore to a place like china. that is compressed significantly. i don't really see china being the play because i see tougher times ahead for the yuan. jonathan: can you track the plunge protection team for us and talk to me about how significant that is? typically when state bound funds going to the

richard: the pboc i don't think has a difficult policy challenge.ome interesting questions may be about where they are on the structural deliberating because the cycle is playing out in a way that is not radically do similar to previous cycle. -- dissimilar to the previous cycle. in japan, there is some inflationary pressure that we know the story over many decades -- i think the boj will be exceptionally patient. haidi: the boy who cried inflation. richard yetsenga, great to have you with us. you can get a roundup of the stories to get your day going i looking at today's edition of daybreak. it is also available on the mobile. you can also tweak the settings so you can get news on the industry and assets that matter to you. this is bloomberg. ♪. this is bloomberg. ♪ haidi: taking a look at the day ahead. at the start of the trading week. statistics suggest the prices rose which is a jump from the rise in december. in australia, companies reporting today include borrow and also wet -- and also watching westpac. shery: here's a quick check of the lat

chinese banks extended a record amount of loans in january, as the pboc seeks to shore up the slowing economy. and elon musk gives an update on starship. we are live from texas with details on the launch that plans to carry people to mars. yvonne: we will talk about the launch later. more on the launching of treasury yields that we have to deal with in the asian session today. we are not seeing treasuries trade in japan today so at least it gives us a bit of time to digest what we have heard in the last 12 hours or so. haslinda: you are right, it is really how fast we got here. 10-year yields above two. in the lead up to the cpi data, we know that some work betting against yields and they got burnt overnight. we are five weeks away from the march lift-off, a lot can happen . we have inflation data, jobs data, that is a risk for the market. looking at where we are in terms of where we stand in asia -- quite expectedly, we are dragging the bond market. two-year yields in particular in asia surging as much as 10% as we speak. we are seeing pressure for the equity banks. new zealand is do

it seems some gains for the csi 300, a surprise given what the pboc is expecting. central banks cutting the mlf rates. we are expecting a struggle for chinese equities, but another the less, we are seeing equities at 300 as well. still ignoring some of the geopolitical issues out there at the moment, i on all prices, let's take a look at those. treasury yields just resuming a move there. to the downside slightly for the 10 year yield. currently, seeing that yield 1.973%. they do bring higher with shorter maturity leading the increases. safety taking place and that perhaps overtook the market late last week. concern or easing of concern i should say over geopolitical developments concerning russia and ukraine and or currently there. on the way down. 10% that contract in singapore, just seeing these or prices plummeting currently. of course, we have still prices on the way down. crude, we saw that slightly to the downside, perhaps just a little bit. light at the end of the tunnel with regard to what is going on in the ukraine. all right, let's get over to what is goi

we also had the pboc adding liquidity into the market to try to bring some calm.t is also boosting the yuan, which is among the front runners, but you still see the yen beating quietly today, a different story than what you see with other the -- with some of the other safe havens. australia's 10 year up by a most eight basis points, a very different story than what we were seeing yesterday when we saw the yield fall by some 11 basis points on australia's 10-year note. yousef: very steep roller coaster. morgan highlighting how the ukraine issues might play out more broadly. juliette: they say it will really raise the risk of markets in taiwan due to geopolitical tensions. very much reflected in what we saw yesterday that i was talking about, that 4.7% shock you saw. japan, australia, singapore, the brokerage's preferred areas to buy on weakness. they say you should watch the less aggressive pricing. they have turned a little less bullish versus growth compared to before. that's really going to boost the singapore market, which was one of the best front runners in t

the pboc talking about easing in terms of rental homes. haidi: softbank's representative has confirmed going public in the u.s.. >> convinced that it is going to the golden age so we don't want to sell too much. that is my feeling. haidi: -- admitted that the storm has only gotten worse for the japanese company despite edging back into profitability. we talked about these developments at length yesterday. what did we hear from him in the earnings call and how does it indicate the role of the ipo and how crucial it is for the pace of this ongoing recovery? >> it was an interesting earnings call. he typically's pens -- spends most of the time going through the is this units talking about their various successes for the quarter. now that they officially called off the deal with nvidia to sell arm, they are going to move this ipo. he said they prefer to do it in the united states and that they had high hopes for the public offering. he was in roadshow mode. he was talking about the potential for the business, how important their designs were t

haslinda: is diversion some policy likely to continue with the pboc?an stronger now, but weaker later? >> yes, we have a profile for the dollar, moving lower for the rest of the year, however the renminbi will be the exception and it will follow a different profile that is stronger now and weaker later. in the near-term, the story for the renminbi is one of disconnection between economic fundamentals and fx on the other. the economic fundamentals in the diversions, the pboc versus fed policy, as we can see from already pricing in the market interest rate, they have typically, we have said that the renminbi should be weaker now, and interest rate differentials are saying dollar-renminbi should be 6.8 zero, however the transmission problem is that it is not working, and all the disruptions since covid have changed the balance, so we have china's exports being boosted by china production capacity, while the world is still reeling from covid. all of these border restrictions are also constraining capital flow and services, so for that, we will keep the ren

chinese inflation slows, giving the pboc more room for policy action.ry cpi is harder than expected. straight to the markets. i'm looking at the vix, volatility is one we need to watch out for. if you look at the volatility gauges, they are sitting above the 12 month moving average. traders remain on edge about risks including the ukraine standoff. you can see a list with equities on the european stocks 600 gaining. oil, $92 per barrel. traders try to assess the worries about potential disruptions to commodity supplies. let's get onto other things we are watching, a nice sector move for the european stoxx 600. central banks across the g10 delivered a half percentage point increase in the average benchmark that rate traders had priced in. perhaps stocks need a modest pace to rally this time. telecoms and consumer goods on the downside with a nice lift off or chemicals beginning 1.3% on construction and technology. this is a little different but given the news on the pboc and china, i thought it was perfect to look at today. we took it from the mliv blog,

they are saying this is a suggestion that easing from the pboc is continuing. we are seeing a lot of concerns worried about the risk to asia. morgan stanley saying this would likely be reflected in the china and taiwan markets. dani: juliette, thank you. we are talking about russia stocks, keeping everybody updated on what trading looks like. yesterday, moscow issued a statement saying they have canceled the morning session. it looks like trading might start at 6:50 a.m. london time in the securities market, but at least for this hour, we do not yet have a read on where those russian markets are opening after wiping out hundreds of billions of dollars in terms of market cap. coming up, we will look at how markets are reacting to the deepening russian-ukraine conflict. ♪ manus: our guest joins us, this looks person for the french foreign ministry, later this hour. ♪ >> we cut off russia's largest bank, a bank that holds more than one third of russia's banking assets by itself. cut it off from the u.s. financial system. >> we will of course use britain's position

haslinda: taking a look at the pboc, economists are divided into whether or not the pboc should cut ratesmonth. what is your take on it? asheesh: i think it cut tomorrow may be sending the signal that they are doing it too early. i think it is unlikely that they do one tomorrow, but there is definitely more easing coming in the months ahead. of course, more china data, you can watch and see, but there is an easing pressure needed. it may not happen tomorrow, but could happen in a few months to come. haslinda: taking a look at various asset classes, i want to take a look at cryptos in particular, some say it is moving in tandem with technology. what is your own take on whether it is time to dip into crypto-currencies, given the fall it has seen in recent months? asheesh: so you are talking to a founder of a platform that is deep into a.i. and blockchain. [laughter] crypto, in our is going to change the world. is an asset class that everyone in the world has accepted. it is not an inflation hedge, not an alternate to gold, but it is a mix of all these things. it is a technology of the futur

leading to tighten, or the fed versus the pboc, where you see the implication?kets are where we see this coming through. the markets are rewarded -- rewarding countries that moved early. uterine -- you do not want to be behind the curve. you expect the euro some mileage on the downside, the raise of one away coming through, the thing to bear in mind is the markets are getting quite savvy about not taking central guidance at face value, we have listened to enough central banks to realize that if they do not have a good idea about where their economies are going, what is going to happen with inflation? they are not going to change policy, they will likely claim to be very much part of team transitory. will they be able to keep rates on hold? markets are in doubt and we are as well. paul: the ing chief economist. thank you so much for joining us. the imf agreed to resume a $6 billion loan to bacchus and on wednesday, as the country seeks to end its reliance on debt. bloomberg spoke inclusively to the finance minister about the economic outlook. >> when i took over

we saw much weaker fixing from the pboc. what about also engendering more confident?will it work? garfield: well, they have been trying to engender more confidence for a while and it has not been working. one of the reasons there is that there has been a series of hits to companies when it comes to chinese markets over the last year or more from the government. the crackdowns we are seeing that were somewhat arbitrary and difficult to get a handle on what will be hit next. different sectors, different chinese companies that were suddenly not supposed to make profits, or were doing the wrong thing. and then of course the understandable move to try and clean up some of the difficulties that developed, reducing the leverage in that area, that has also had some unintended consequences perhaps that have led to a lack of confidence in china's markets. so the government faces an upward burden of trying to undo, at least partially, some of the damage it itself has done. possibly not helped as well by the fact it keeps on pulling different levers. sometimes it seems fairly rel

in the macro context, wherein, the pboc easing policy and even in markets where we are expecting ratesntral banks to tighten, they will not tighten as much as they are tightening in the u.s. so our view remains that markets should be able to do fine. we have a low target for equities but at the more microlevel, you are right. inflation is an issue for companies, corporate profits, and margins, and to that extent, we favor upstream areas or downstream areas in the markets and in general, one of the favorite themes we have is the theme of pricing power. we stick to companies with a better pricing power. they will be able to pass on higher prices to consumers and protect their margins. haidi: we continue to monitor some of these lines from this speech we hear from president zelensky to his nation of ukraine, saying russia is violating ukrainian territorial integrity. he earlier said within that space, it really legalizes these troops in separatist areas and it undermines peace as well as diplomatic talks at have been held between allies, with moscow to try and find a solution out of this

tom: the pboc is the one standout.hey have a slow down there for the coming rates, but in terms of liquidity adjustment, how are asset markets going to be rid -- adjusting to the rate rise and the action around the balance sheet, the boe, and the fed? virginie: that is important to notice that because as you continue to increase, you are creating a picture that could be quite dramatic and at the same time we know that this slowdown is likely to come in the second half and inflation is likely to be slower as well. a very strong balancing act. it will probably create more volatility in the market. it is a good message on the whole economy. f there's something that struck me. george serve ellis has changed his view on the euro and this was going on. they are pivoting toward the bullish euro-dollar following the ecb press conference, but they had not emphasized the need that this was the time to reprice the currency. did you reprice anything after those two press conferences yesterday? virginie: you have to look at it in t

and some of the weakening we have seen in the chinese economy and amid the expected easing from the pboc that you see the united nations strengthening -- the yen strengthening to the highest levels versus the dollar? >> the exports are really good. tourists have not been spending money abroad much. money has flowed in for the last 12 months. that is still a net positive for the currency. since they are using monetary policies, they have decided they would rather stabilize currency and lower rates. they don't want the headache of currency volatility. we all got it wrong because they didn't tell us what they were going to do. you can make it make sense read what is disturbing is they can -- make it make sense. what is disturbing is they can keep on doing this. lisa: taking a step back, mark mccormick's was talking about -- mark mccormick was talking about how they wanted currency to be weaker. that has shifted over the past six months and you are seeing nations desire more strength to get ahead of inflationary pressures. you see the world that way as well, that a lot of the rate hikes will

markets equities but we have more of a preference for china markets supported by the new tendency of the pboc is to extent -- extend asian contractors with central banks. we see a policy diversion -- divergence for 2022. in terms of sectors, we continue to advocate a barbell approach. as we continue to see supply constraints getting exposure to cyclical sectors is more warranted in this environment. we continue to want exposure to including technology, even as they get beaten up so far with rates sensitivity because we believe digitalization trends across the long text sectors are here to stay. francine: thank you so much for your insight. global chief investment strategist at lack rock. unilever to the downside this morning with activist pressure. our dani burger speaking with alan joseph. this is bloomberg. ♪ francine: welcome back to the open. let us dig into some of the stocks on the move. joining us is dani burger. you challenged the -- on his strategy, which is what shareholders are learning. dani: is a lot about strategy. the shares dropped when the gsk acquisition did not go through.

a fix from the pboc. don't be too put off because it is just a little bit of recalibration. the bloomberg dollar index was down by some 1.2% during the week china was closed. manus: juliette saly, thank you. the other big story, the ecb governing councilmember clouse says he expects interest rates increases as early as the fourth quarter as the euro area central bank made a hawkish pivot last week. christine lagarde no longer excluding a hike this year. we look at the earlier rates and it tells the whole story. clouse not is adding fuel. the short end is quite literally lit up in europe. good morning. the significance of his comments. >> another week, another hawkish central banker. he made the point that rates might go up in october this year. he is talking about inflation of 4% in the euro zone. and rates may go up again next year also. he did not -- he said the trajectory for the ecb is probably about 25. he said what is going on in the euro zone is different from what is happening in the u.s. he said the inflation in europe is being imported. a hawkish signal but tempere

we did have reports of chinese stocks because of what the pboc has been saying.n the last couple of minutes, there could be indication that there is a de-escalation. there could be a de-escalation to ukraine and russia. the interfax news agency says that russia is returning some troops to bases after the drills. some western armies are to returning to bases. you can see the dollar-yen reversing some of those losses. it could be short-lived but it could be something that could lead to the fall. the nasdaq also falling after the high of today's trading session. glencore says they will return some $4 billion to shareholders. it reports record profits for 2021 for certain commodity prices. meanwhile, -- has a drop in profits due to iron ore prices. >> at the end of the day, iron or price will be determined by supply and demand. given the strong outlook we see for the demand side of the equation, steel production in china and the supply side constraints, we think there is a measure of support to pricing. francine: let us get more with will kennedy. he is our editor fo

the pboc is in an easing stance right now. the chinese economy slowed fairly aggressively. target for at least 5% growth this year. our view, our china economist is more constructive than markets because we think it will be a policy response. the more slowing you see the more the policy response will follow. we are already seeing the data for other measures we are turning the corner. gina: you see anything in currencies we should be on guard for? the dollar was extremely strong coming into this year. where are you seeing wheat does emerge in the global currency markets and subsequently where is strength emerging? seth: i am lucky to work with great effect strategist at morgan stanley. one key point that when you think about make sense, typically in a hiking cycle the dollar will depreciate before rates go up, and after you start to raise rates you see them peek and it comes off. this time is different because of the different synchronization. we are still looking for not run away dollar for as long as the eye can see. tom: let's go back to alan blinder 101. what is the resp

safe haven at this point, given particularly that the monetary support is coming through from the pboct a region that looks attractive? maneesh: i would respectfully disagree on that front. we are a little worried about china. i think one way to think about this is perhaps there's a floor, but the support that the policy makers are doing are likely to be just enough to stabilize it. there have been three times when china has we slated when the credit growth drops. in 2018, they did enough to just support and not crush growth. we think it is going to be a similar measure. so enough to not cause further downside, but not enough to cause massive upside from here. so i think given what is going to happen for the rest of the year and where we are in terms of credit growth, we don't think it is a massive upside kind of scenario. kailey: do your worries about china extend to the broader emerging-market complex? maneesh: i think the other emerging market complex is a little bit different. there's a lot of idiosyncratic things going on in brazil and the rest of the emerging markets. i think the

it is not a positive market and when you see the pboc enjoying liquidity for two straight days, it isautious on monetary policy and not flooding the financial system with cash. haslinda: adding to the negative sentiment in the hong kong market, we also have what we heard from carrie lam earlier, the dynamic zero policy will persist. sofia: exactly. we are bound to get more of an update later today after the executive brands -- branch in hong kong and that has an impact on the markets as well because there are inflation concerns with local prices soaring over the weekend and reports that trucks are getting stuck coming in from china, so it is not just -- sentiment in hong kong is not good for the property. the stock market is starting to slow. you have hong kong importing a hawkish fed monetary policy so the monetary authority is hiking rates into a struggling economy. sentiment here is getting worse by the day and obviously omicron , the latest virus cases show that it is something that the government is struggling to control. more headwinds here for the local market as well. rishaad:

the pboc tends to respond to those fed policy rate hikes.d to see a huge diversion terms of direction. there's room for further easing. given these constraints, i think there's a practical challenge in terms of how much easing can be delivered. there are limits in terms of how much easing we can actually offer here. haidi: how optimistic we can be about attack recovery for these chinese names. julia: yeah. the assumption in markets is that tech regulations are behind us. it will not see any dramatic changes. i think some of that optimism is a little bit wasteful. there hasn't really been a great official signal. i think that that remains a source of risk. think about external environments from a geopolitical side. they can be quite volatile. they will still try to use this window as much as they can to do all the reforms and changes that they want to implement. i think we are still in that window where they are trying to squeeze as many policy changes as possible. it's a little bit premature at this point to say that all the regulations are

there was a report that the pboc has urged bank to accelerate property loans in shanghai. to profit from the real estate market expansions. for more, we are joined by china's credit editor. we know that authorities have tried to loosen policy, but why the success? they have spread to cities like shanghai. >> we are seeing that it is accelerated with real estate loans and this desire to show growth. and we know, previously, we have seen similar moves in gong show as well. and i think we are trying to improve sales and improve and engineer the softer landing. though sales come from smaller cities. these large centers are considered a bellwether. and really it would be sort of the first that people would be looking for to see any sort of fundamental improvement in sales. it is sales, really, that will help developers lift themselves out of this crisis. >> what a difference three months makes. beijing is returning to support the property sector. >> it is extraordinary. right? that drama that was all play out, seeing it engineer the own the quiddity crisis. i do think that look

is in the works, but bottom line, sooner or later, it has been clear from the various reports that pbocput out recently that they are ready to boost credit expansion. they are ready to tolerate higher debt levels. one of the big things here is how long are you guys going to wait? wouldn't you rather start doing more rate cuts before the fed starts hiking its key rates? that is the question, one that maybe will be answered today. they could still wait a month and get ahead of the fed. haidi: kathleen hays, let's get more from these meeting minutes. they really point out the key issues when it comes to bond reinvestment. cpi jobless wrapped up the mammoth qbe program recently. the achievement of gold in sight for the first time in several years. we have had a pretty strongly premarket as well as that rise in inflation, distortions from the pandemic driven slowdown notwithstanding. the rba noted there was rising bond market strains from the qe program. some moderation of inflation is expected as supply-side issues are resolved. we have seen more or less kind of look -- looking through the

chinese banks extend the record amount of loans in january as pboc seeks to shore

that seems to be a bit of a darling for strategist at the moment, given the divergence between the pbocnd the fed. do you see opportunities, or do you think there is uncertainty associated with the gains we are seeing? gary: there is uncertainty about the extent of the growth slowdown. we think growth is beginning to stabilize, by china standards, that will remain moderate by 2023. the country is undergoing a change in development strategy, which should become more apparent over the next 12 to 18 months. the shift towards more consumer-driven growth, less imports, less driven by exports and investment spending. so far, the people's bank of china has begun to ease up on policy, and we expect to see more of that providing an underpinning to economic growth. all in all, moderate economic growth over the next 12 to 18 months on the order of about 5% to 5.5%, which should provide a good setting for the asset markets there. shery: what does a shift in the economy signal in terms of asset positioning? gary: we see, in terms of the focus, really those sectors of the market that really lend them

the pboc has been stimulating the economy.y are in using mode -- easing mode at least until september when xi jinping comes up for reappointment. we compare and contrast to last year when there was a crackdown on industries. we have the real estate crisis that was led by evergrande and now we see that we have a runway for several months, a year or more, for a market that was down 25% of the last year. we see it relative price appreciation a lot of to u.s. shares, which we have the fed in tightening mode, european shares, ecb is now pivoting to tightening. we think there are a lot of catalysts for the trend stockmarket. what about in the chinese market,-- shery: what about the a versus eight shares? david: one term we like in the u.s. is the fsx -- fxi. it focuses on large china company is and is done quite well in positive territory this year, that is what we like about the shares in china right now. they are rebounding over the past month and a half and we expect that to continue. haidi: david, when it comes to the property i

universe would you be adding exposure without the likes of pboc governing as well as bank indonesia governor saying e.m.'s are at a better position this time around? they are not too concerned about capital outflows. >> i would actually agree. so the last time when the financial plan happened in 2020, a lot of the asian companies saw massive out loads because at that time, most of these asian economies were running huge deficits. the result [indiscernible] gdp was quite low, which is not the case right now. so i think the asian economies are much healthier. and hence, the slight out of larger e.m.'s because they are less vulnerable with u.s. monetary policy. that is what we've been seeing with year to date, even though a dollar for example has been moving higher in emerging markets, but still doing better than developing markets. i think relevant to developing markets, there is a case. haslinda: thank you for that. let's get to work -- first world news with vonnie in new york. vonnie: china's securities regulator is found to be more to control bond risks and reform in the debt market. in a s

haslinda: you are anticipating more stimulus from the pboc, from the government. is that enough?stay invested in high-yield property bonds? rene: i think it is a question of what are your positions that you already have? i am not advocating that this is a good time to buy it, but if you hold it, we think this is a good time to ride it out depending on where you invested it. where we make a call for very clearly is china government bonds, because i do believe that is, to some extent, the safe haven around inflationary policies that you have around the world. haslinda: we talk about china we have to talk about hong kong and zero covid policy. of course, hong kong reeling from that policy alone. but is it getting difficult to hire in a market like hong kong? rene: i have to say, having lived there myself for 16 years, it is very challenging right now to attract talent. needless to say. as an employee there, that will remain a big challenge. i also think internationally masters are cautious and we have a preference because the markets are more elevated. haslinda: so in terms of what