garfield: i think one thing to be very aware of is the pboc is not like the fed.ust to emphasize, it is not like the fed, is not usually interested in making big, dramatic gestures. it has a tendency to rely on a wide range of tools and to tweak those as it was a long, because it doesn't want to set off some unintended consequences. it may well still do so, but it is trying to avoid sudden moves. the last really sudden move they made was last decade when they let you one -- yuan collapse and that was a huge problem for the whole world. they have learned that way and they are not eager to do so again. not allowing the prime rates to go lower, that was expected, and you would also expect in the wake of that that there would be some reassuring noises from the pboc and other china policymakers to try to make it clear that we are easing, but we are not going to do dramatic easing gestures. it's a strong contrast with the way the fed -- we are going to raise rates because we need to come a and harder, and they will push the envelope. the pboc is not interested in pushin

certainly the national team for the pboc, during the pboc job disarming a 10-year yield climbing forst time in two days. the interest rate in two days. the mlf. it's a little bit of a disappointment right from the get-go. seeing the price swings, they're quite extraordinary here. take a look at the hang seng. it went to a fall of a .1%. and it went positive now trading with a deficit of again over 5% so volatility is not the right word to be using in these really, really quite trying times. of course, we've got the fed to look after as well and naturally, is it the ukraine, which is at the moment causing these ripples rights across the world. guys? manus: rishaad, thank you so much. china wants to avoid getting caught up on the sanctions in russia for its invasion on ukraine. and one of beijing's most explicit statements yet on american penalties, the foreign minister said that china is not party to the crisis and doesn't want to be impacted by sanctions. joining us now, we've got a special guest in dubai. is it or senior editor ross mathison. the language on the readout between euro

the pboc would not want to take the risk of running against fiscal policy. if they are aware they're going to be aggressive changes to fiscal policy coming in the near future, they would want to calibrate their own a to monetary policy to be in line whenever it is the government is doing, so they are probably waiting for a bit more clarity on that side. they note the chinese economy as headwinds and they will be expected to do their part in helping to ease monetary policy, but they want to do it in a way that is complementary to whatever the fiscal policy is doing, so there is no urgency for them to do it. for now, markets are stabilizing, they are not in freefall conditions that they were. we are coming toward the end of the third quarter when there will be more financial information about exposure chinese banks especially after the property sector and commodity sector. the pboc most likely will do something in the months ahead, but they will be targeting their approach. we will have to wait to see what they do in that respect. they will make sure there is

if growth slows too much, there is room for the pboc to loosen.nment on the fiscal side to do a little bit more. there is a buffer for these measures. haidi: what are the biggest delays? is there a pretty big risk that we see the macro turnaround taking longer than expected? >> i wouldn't say it is a large risk. it can be delayed by a couple of months. that is possible because of the current covert outbreak. we had covid pretty much in many other places, including two years ago in china. so we know how the market looks at it. it is very cautious, sometimes scared. even at the beginning. often times, even before they are peaking, the market is finding its footing again. i would not be too negative because we have these episodes we have seen in many other economies before, and a lasting session in the markets. haidi: global bonds are extending the route when it comes to credit in the u.s.. the worst quarter since 2008. a lot of fear about the surge in inflation, even stagflation. where do we find an opportunity, even in the bond space? >> on the bon

we are hoping that we can see the pboc play the game in the near future. but to go to 5.5%, we think more measures, especially on the property side needs to be introduced to support the current demand. >> very quickly, the conflict in ukraine is causing these inflationary expectations to ratchet up across the globe. how does higher food inflation and energy inflation play into the way you look at the chinese economy? >> the high energy inflation at the moment is starting to hurt. especially through the fuel prices. as you said. but at the moment i would say that because of this system, we probably would not seem the retail price of gasoline going up too much for too long. also, we think that for companies, the higher commodity price is probably going to weigh on their margins and probably squeeze some of them out of business. at the moment we think that the impact is probably bigger on industrial activity then household disposable income spending. that said, i would say that there is a higher up risk on our current forecast of cpi inflation for the year. i

the pboc is bowing to persist with its campaign to curb financial risks.risk lenders accounted for 1% of overall assets in the banking industry last year. 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 am vonnie quinn. this is bloomberg. haidi: china is likely to set its lowest annual gdp growth target since the 1990's. take a listen to what some of our guests have been saying. >> hopeful of any major news surprises. >> it has been a very political year. we think there will be real focus this year on profitability. >> unfortunately we are still hearing regulations surrounding the internet and e-commerce. >> the more important upside risk for china is yields stay for -- you will see further rate hikes. >> we believe we could see a bottoming out of growth helped by easing from the pboc. >> they will achieve at least 5% growth, which seems the bottom line of the chinese government. >> the demand problem cannot be easily solved by just pumping the goodie. >> -- pu

the pboc saying it is not quite comfortable with the yuan's strength.eaker than anticipated. iron or surging by 4%, brent crude also on the upside, currently at 98.70. the bond market looking like this. we have indonesia, the yields giving up about two basis points. perhaps investors are looking for some shelter in the bond market. rishaad: let's have a look at what is going on overall for regional benchmarks. this is the regional benchmarks, the msci asia index. all major ones moving to the upside. energy not quite as buoyant as usual. the biggest gain are thus far this year in that particular index. industrials, 1.1% up. the market 6/10 of 1% to the upside. arguably a relief rally taking place across this part of the world. russian forces shelling ukraine's second largest city of car give -- largest city. this as both sides agree to meet for more talks on ending russia's weeklong invasion. the latest hit to the russian economy, the u.s. has banded transactions with the central bank and also targeted the russian wealth fund and ministry of finance. thi

the expectation is still that the pboc will maintain its cautious stimulus measures.te cut next week, on tuesday, when the pboc does its monthly meeting on facility operations. we could get a larger injection, or the rate maintained as it is, which is what happened in february. but the pboc will not shoulder or bear the brunt of stimulus, and the indication is very much it would be on the fiscal side, more spending, and on the local government side as well. i wouldn't expect a big move coming from the pboc come a but we could get more interest rate cuts and more liquidity. shery: our chief china correspondent sofia horta e costa. stoxx we will be watching when markets open in about a half-hour, tencent. jen cu hung reportedly considering revising its ipo after china securities washed support for u.s. listings by its homegrown tech firms. semiconductor manufacturing reporting preliminary revenue of $1.2 billion, 59% year on year gain. so, we will be watching the stock at the open. meanwhile, cte reporting net income for the full year that missed average analyst estimat

we have the pboc, bloomberg economics is expecting them to cut the couple are further to free up more cash for banks -- triple r further to free up more cash for banks. haidi: the country has around 117 dollars. a default is imminent when it comes to the nation's debt. we see stock trading remain close in moscow but ruble trading, so much of the volatility indicated at this point, stronger than the dollar in offshore trading. there is speculation going into u.s. and china, high-level talks and what moscow is asking of beijing. even in the imf head saying that the russian sovereign default is no longer improbable. that would have counted with the assessment that it will not trigger a global financial crisis. shery: to delve into what is happening between washington and beijing because they are set for the first and person talks on ukraine. russia seeks a military assistance from china, let us bring in stephen, and others. let me start with you, what can we expect between this meeting between russia and the u.s., u.s. and china when it comes to this dynamic? >> u.s. and china officials

the pboc said it would be more forward-looking and will expand its program to smaller and rural businesses. economists cut their growth forecast for china. russia will lift the ban on stocks, removing one measure that limit market declines after a record shutdown. the bank of russia says equity trading hours will be expanded back to the regular nine hours. restrictions on the trading of securities by foreigners remains in place. the person who predicted the mortgage collapse sees the world moving closer to a similar meltdown. he says the global economy is facing multiple shocks, including inflation and the war in ukraine, and says these issues were compounded by policymakers calling for conflicted solutions. >> as you point out, we are a standard deviation away from a black swan event for things like inflation, the u.s., and europe, and also major geopolitical shocks because of the war, and a much broader geopolitical depression. we are in a difficult situation where extreme things are happening. >> china's trial on spy charges starts thursday. she worked or a broadcaster before her detain

the pboc will announce the

the pboc is vowing the campaign to curb financial risk, though it says high-risk lenders accounted for just over one percent of overall assets and the banking industry last year. china's central bank says domestic bitcoin transactions have plummeted to 10% of the global market. the country used to be the world's crypto hub, accounting for 90% of trade. beijing has been intensifying its crackdown on mining and trading as part of broader efforts to regulate its financial market. 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. rishaad: nice one. coming up, the malaysian dairy producer farm fresh set to raise two and $40 million in what would be the biggest ipo since june of last year for the country. we will find out more with the group ceo. take a closer look at markets are reacting to russia's shelling of europe's biggest nuclear power plant in ukraine. this is bloomberg. ♪ >> the day, i am announcing we are adding dozens of names, including one of russia's billionaires. i'm banning travel by mo

there is about $77 billion worse of russian -- in beijing and they also had a fault line with the pboc central bank in china, and of course there's a payment system set up between the two countries as well. so whatever domestic measure the bank of russia takes today will be seeing clear as we go, but there is potentially one liquidity lockdown. and that does depend on how china response and what kind of role they want to play in this conflict. dani: what role could the chinese central bank play? >> at the winter olympics, both president xi and president putin met in beijing and said there were now -- there were no limits to their friendships. there was a lot of commentary around china and russia were going -- growing closer more economically. china imports mostly energy. financial systems have been getting tighter. people are talking about the reserves that moscow is holding in russia. is not clear what they are denominated in. colleagues in beijing have reported this. at the same time there hasn't been a lot of public commentary about it but we do know it has been activated once or tw

it's unfortunate that the cbrc and the pboc weren't able to spot this and clampdown on it until now.: coming back to the slow pace of the pboc cutting rates and the government spending more money. is it because you think that they are seeing an economy that is not going to grow as fast as it did. it's basically doing ok. are they concerned? that could start gyrating the yen in a way that they are concerned about. what you think is happening and what happens next? andrew: yes. it comes at an awkward time. there's is a limited opportunity for people to move their money offshore. it's not that easy to get it on shore. at the end of the day, they want social and financial stability. if they have a massive crash like the united states did, that could threaten the future of the communist party. he's determined to be named in the position for life. what they are doing is trying to say, we'd rather have a managed crash or downturn that a property crash which is what they were flirting with before. they've been pretty strict about that. haidi: it always comes down to that closed capital accou

onshore intranet at a much more different part in terms of fed hiking and the pboc on an even path.k at china but more selectively as well. given where we are with the commodity price, whether in the material sector or energy sector provides a buffer with high commodity prices. still unsure china and semi conductor exposure in korea and taiwan. kathleen: thank you, that was alex wolf. let's get to vonnie quinn. vonnie: thank you. san francisco fed president mary daly is coming because were 50 basis point i get a may as warranted by data do in the coming weeks. she says she would potentially support a 25 basis point move in the decision to shrink the balance sheet. the fed official cautioned against moving too quickly given broad mobile risks and noted the fomc have to take tightening by other central bank to give account. >> i will absolutely confirm what chair powell as confirm for himself, which is that i have everything on the table right now. if we need to do 50-50 is what we will do. if we need to do 25 and balance sheets, that is what we will do but the data will help us deter

we see strengths in the chinese yuan when the fed and pboc seem to be going in opposite directions. >> obviously, the yuan has had a substantial insulation. there was never the qe equivalent in china. so, they have had that support that discourages capital outflow. clearly, china's trade balance is so enormous. surplus surged during the pandemic and that provides you on with a lot of insulation -- the yuan with a lot of insulation. the six to 12 months outlook that you want is one of -- the yuan is one of the c urrencies we are expecting to consistently up on -- outperform the u.s. dollar. great catching up with you, the senior currency strategist at westpac. it's a very volatile week when it comes to currency pairs. you can get all of these stories. daybreak terminal subscribers, it is also available on the bloomberg app. customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. >> we are tracking the fallout of the global supply chain crunch. other top stories today. a ransomware attack. the second recent cyber attack against da

the pboc saying they will provide support. what support is needed? garfield: well, it is hard to see what kind of support the government can come up with, because it has done such a good job of undermining the long-term case for investing in innovative chinese companies by serially stepping into change the rules of the game whenever anyone innovates their way towards a particular strong profit outcome. so, that is a reason to put it aside if you're looking at china tech and watch what is coming out of china's political meetings now, the big concerns being the quickly to risks to the u.s. and in general the environment is difficult for risks. rates are rising all over the place. if rates are higher and the cost of money is higher, then you have to raise the bar for what sort of risk you want to take it, so and that sort of situation, any uncertainty -- and there a lot regarding china and chinese tech -- will hit home harder. that's why we had this big selloff yesterday and today in chinese stocks. haslinda: garfield, thank you. chief rates corresponde

the china pboc is conducting the money trade loosening.rgin expansion due to rate hikes. china banks will probably see margin contraction due to the lower interest rate environment. >> so who is best positioned at this point to whether this out? -- weather this out? >> i would say china merchant bank and the pboc bank -- they have more retail banking. also because they always reported profit growth. so we prefer these banks on a one year view. regarding the short-term, given the sluggish market, we prefer more conservative names, like ecb, china construction bank. >> has the exposure to developers fully materialized at this point? >> most of the china banks have around 6% to 10% exposure to development loans. to today, the ratio rose quite quickly and the past two years -- in the past two years, around 2%. we expect the ratio to continue to increase for developer loans this year into next year. with large soe's and large developers -- there are regional once, there's a high chance [indiscernible] we do expect npr ratio increase in profit d

indication of policy, this was the state council, of highest policymaker in china and then you had the pboc after that, looking at plans and other will implement the list of the chapters -- objectives for thing six table eyes and the market and how we might see these with tech names and addressing some of the issues in china. markets responded, the highest volume says a lot. >> i have some commentators -- when do we know what this is exactly and what happens next? >> we were joking here that the market has been trying to find this. at some point they know it's there but when they actually get to the point it'll be painful but you know you will get there. interesting timing to do it today. that really led to markets being more risk-averse it probably was the last thing, the risk assets here in hong kong. it's all about the wealth effects, it's the market in the property market. both are not doing well. house prices today showing a six-month of contraction. people are bound to feel bad, they came up with something that makes people feel good going into thursday. >> thank you so much david. ch

what's to be the policy as far as actions, pboc devising those plans.n attending? do we wait? as far as markets, lots to look at. volumes, turnover, flows, foreign participation in the market. you had a massive disrupt in price yesterday. how quickly the sell side rejig's some calls. jp morgan said this was on investable. a lot of things to watch out for, but certainly you might see another strong day. haidi: how big of a whole are these markets in? is it a bottom where we do see some action, but the fundamentals have not really changed. david: now they have not. just a good example, the hang seng index had to rally over 1000 points just to get it back above 20,000. as far as the whole is concerned, it's cheaper and hong kong that it is in the mainland. as far as the rally from the bottom, could be a decently good year, it will be an incredibly stunning year if we see hong kong back to those levels, quite impossible when you look at the asia tech index which has to rally 150%. to use an analogy, the shark is out of the water and gives investors a chance

japan's policy divergence could apply to the pboc. european equity futures steady for the moment but could change at any moment. mark: -- manus: some big calls out there. let's bring everybody together that is standing by. biden heads to poland. maria tadeo is in brussels. juliette saly is in singapore covering the latest on market moves. francine: we know the u.s. president joe biden is heading to warsaw to meet with his polish counterpart after back to back summits in brussels. let's start with bloomberg's aggie cantrell. what are we expecting the president to do in poland? how much assurance can he give? >> before he goes to where i am right now in poland, where he's going to be speaking to the president and there's going to be two focuses to his meeting, first he says the humanitarian angle, he's going to be talking about the humanitarian crisis with poland seeing the tangible effects having accepted 2 million refugees coming over the border from ukraine. there is also the security side. he is expected to meet with the 82nd airbor

comes to the other end of the spectrum, we are seeing expectations for calls for rate cuts from the pboc. an analysis saying lockdowns could threaten gdp growth across half the country. we've got analysts, including morgan stanley, saying they don't expect any gdp growth for china this quarter as a result of lockdowns. we are expecting nine out of -- nine out of seven economists are expecting the rate will be cut on tuesday. shery: markets washing -- watching closely the war in ukraine. the u.s. and china held high-level talks on ukraine, with aging accusing washington of spreading what it called -- aging accusing washington of spreading what it called disinformation. >> the u.s. has repeatedly spread false information on the ukraine issue, targeting china with dangerous intentions. china's stance has been consistent and clear. he have played a constructed -- constructive role. we want to work out a diplomatic solution rather than further escalating the situation. shery: for more, let's bring in emily wilkins. this was the first meeting since october. how did it go? emily: it was a long

tom: does the pboc have to step up briefly?t will have to do that anyway because it needs to bolster domestic demand. tom: i have a chart showing financial conditions in the u.s. are at levels they were in 2018. does that concern you when we look at the rate hike tomorrow, almost baked in, 25 basis points? any concern about financial conditions? paul: the markets tend to get a little excited. i think seven rate hikes is quite aggressive. we have to reflect on the fact we have seen a significant shift in terms of consumer spending power. it has faded because savings that accumulated have been spent, but we are in a more robust household finance situation than four years ago. i think the fed is looking to get back to neutral in terms of its policy. it is not trying to push growth below trend, but it wants a more neutral position. tom: soft landing, can it do it? paul: it can but it is complicated because of the enormous structural change. and the data quality is declining in the united states. it is not that the data is bad, it i

the latest policy meeting, the pboc said it will be forward looking and will expand its lending program for businesses. economist have cut their growth forecast for china until the lockdowns have ended. russia will lift a shortselling ban on local stocks thursday, removing one of the measures that help to limit market declines after record shutdown. the bank of russia also says equities trading hours will be expanded from the shorten session back to nine hours. restrictions on the trading of securities by foreigners remain in place. opec-plus may exclude oil production estimates provided by the international energy agency following criticism for both sides. sources say ministers will discuss the pros thursday. -- the proposals thursday and it would change the come position of estimates and appears the cartel wants to use the course to use to gauge of clients on quotas. the u.k. will withdraw top judges from hong kong's final court of appeals and says keeping them there risks legitimizing oppression. the foreign secretary sees the situation has reached the tipping point with the systemat

the pboc may ease policy soon. the oil

the positive is there is more chatter that there is easing from the pboc. it is a down day across asia. after two sessions of gains, and weakness in the chinese equity market. in the tech sector, we have had three sessions of gains, but the sec chair pouring water on the tamping down of companies being delisted. we have seen share prices fall as much is 5% in hong kong sessions. dani: it is nothing if not volatile in chinese tech. thank you so much, juliette saly in singapore. coming up, oil slides as the u.s. considers releasing strategic reserves. we will discuss the impact on the oil market. also coming up, ryanair ceo michael o'leary joins us. do not miss that interview later in the hour. this is bloomberg. ♪ dani: welcome back to "bloomberg daybreak: europe." i'm dani burger in london. oil is slumping as the u.s. considers tapping reserves to tackle high inflation and supply shortages due to russia's invasion of ukraine. a biden administration could release as much is 180 million barrels from its reserves over the next month. the implications are being

it is an inflation problem, but why is the pboc interest rate cut to eating up this moment right now, said to you about inflation? kathleen: there is a confluence of events right now china and that is what is happening. you're just talking about what's happened to the china dragons, to the regulatory changes in the u.s.. boom, you hate your stock market. you got the shutdown of changing, seven half-billion people. it's a technology hub. it is going to slow down production. the last thing china needs when they want to hit a five-and-a-half percent growth rate, which most people said they probably cannot, and on top of that we're showing you this big, big slump in lending in china. that came out at the end of the week last -- just friday. the indicator for whole organ lending as part of the aggregation lender. for the first time, speaking of aggregate financing it went from four trillion yuan to 4.1 trillion. less than it was a year ago. very, very weak. banks are not lending. so once a month, china sets the loan at rate for the median term facility loans. ok? in the middle of january,

it counteracts what the pboc did by cutting its policy rates.are seeing according to the facebook international survey, -- beige book international survey, let me give you the key points of it. borrowing by chinese businesses plunging in the first quarter. given the lockdowns we have seen because of covid and now in shanghai, but interest rates on those loans surged. only 15% of the companies it surveyed in the quarterly pole applied for loans in the first quarter of 2020. corporate in china are taking a wait and see approach. shery: we have plenty more earnings out of beijing this week. we are watching china's oil majors, we already heard from one which had a record to increase production. later, we get patrol china reporting thursday. china is aiming to boost production to 200 million tons this year. the government focuses on energy security but china's covid related lockdowns are dampening demand and a could demand -- impact crudes internationally. haidi: australian finance minister joins us to break down the key measures and the latest budge

equities hit i the global risk off shock we are seeing despite the hope for more policy support from the pboc and how complicated is that going to be by the covid zero policy? the most cases since the will hand crisis. then -- since the wuhan crisis. manus: great round up. juliette saly in singapore. president putin has said again the war will continue until ukraine excepts his demands. for the latest let's get to maria tadeo in europe. we go into a third round of talks since the official invasion. a flurry of geopolitics over the weekend. will any of it bear any fruit today? maria: we are going into round three, but if you look at every round we have had so far, we've accomplished every little. round two, they agree to a cease-fire in a humanitarian corridor, but it was broken many times you have president vladimir putin repeating we had a special operation. remember in russia, the word war is not allowed in public media. you face up to 50 years in prison for spreading "fake news" about the military. putin says it is going according to plan and the objective they want to fulfill. round three

golden dragon index started the day on a rather negative footing after the pboc declined to cut the loanate. you saw tencent and baidu and alibaba in all negative territory. that index reduced its losses but still a loss of more than 4%, down 6.5 of 1% on the day. 10 year yield up to 2.30%, the highest since, the biggest gain i should say since march of 2020. the biggest move. and that was right when the pandemic was really taking hold. bond markets getting hit. the two year once again the star of the show. it is now closing at 2.11. it was up to 2.14. it is also the highest yield since 2019. jay powell again is the one who exacerbated that sense that was already there but the fed is going to hike and it may cause a recession. let's look closer. he was picking to the national association for business economics. -- he was speaking to the national association for business economics. he said that the fed will do whatever it needs to bring down inflation and if we conclude to move more aggressively by raising the fed funds rate by more than 25 basis points at a meeting or meetings, we will d

this is all about differentials and the difference between what we are seeing, for example, pboc and some of the commodity of stance. we heard from governor kuroda and how that compares with what the fed is doing. that is your cross asset. i don't know whether we are looking at some of the other things. tom: the boj, that rate differential really playing out when it comes to the yen. that demand as well. and the necessity for japan to continue to import commodities. significant further downside for the japanese currency. watching any moves from the boj. the inflationary picture is very different and japan to the picture we see in the u.s. europe, will continue to watch the geopolitics. president biden visiting poland later today. in terms of how things are breaking across asset, futures stateside, after a solid day of earnings and gains yesterday in the u.s., led by nvidia, the tech sector, semi conductors has positioned the u.s. for a solid start. u.s. 10 year at 2.35, so coming off the highs we have seen the last few days. that bond selloff as a theme, many would argue, will contin

. >> the fact that perhaps the pboc, the monetary policy and fiscal policy would ease in china. we do not necessarily see that. when will be the next upcoming catalyst? >> the first thing is going to be what comes through with the fed tomorrow. a lot of it may not move chinese markets at that point, it is still something that could push chinese adrs higher or lower depending on what the broader market is doing. the sentiment is cautious on china. nothing has changed overnight in the u.s. and into the asian morning. covid cases are rising, there are concerns about regulatory crackdowns, people are worried about delisting issues. there are more concerns that are coming through that we have not seen any sort of relief to come throughout this point. this is what people are going to be paying attention to. in earnings, transit has to report as well. -- tencent has to report as well. >> let us get to the first word headlines. >> the shanghai government was companies in the main commercial district to allow staff to work from home to stop the spread of covid. authorities are rolling ou

important upside risk for china is you will see further rate hikes and we have already had one by the pboc to get another. so bottoming in the chinese economy this year and we should see stronger growth which should generally be a stronger -- generally be a positive for australia. shery: it is good having you with us. breaking news. south korea reporting a record a surge in daily covid cases, 219,241, for the first time surpassing the 200,000 level. 96 deaths and 76 -- and a 762 critical patients. daily cases could reach 270000 and we are already at 219 thousand 241 in the past 24 hours. >> biden will have his first state of the union address. excerpts of the speech show that he will characterize vladimir putin's actions as unprovoked. russia's invasion appears to be entering a new phase. they expect more tactics as military forces -- the russian defense ministry says the operation is on track. the eu is moving to the next step in ukraine's membership. . -- membership bid. the process requires steps that can last more than a decade. >> we have proven our strength. we have proven that, at m

the pboc has already increased rates this year?icipate further cuts and rate cuts. but on the interest-rate side and also on the credit policy side, we think the room for further easing is limited. particularly on the right side. 10 basis rate cuts for the rest of the year. and also for the credit policy. we expect a little bit higher gross for this year. even with the singular social financing gross, because normal gdp gross is much lower compared to last year, the policy application would be different. the credit would come from negative to positive, but compared to early easing episodes, we think that the policy can provide modest support for economic recourse. haidi: what sectors are you watching --shery: the past year we have seen incredible supports for some of those sectors like clean energy that authorities have been really helping and supporting, but at the same time, those technology companies have taken a hit. haibin: yeah, so it is also very clear it is a structural transformation concept. we are talking about the high

the pboc, the government could, use policy -- the government could ease policy, decrease fiscal spendinglockdowns are making headlines for now, but they are not a fixture. they will help these the situation. i think china will be in a better position. the time will come. >> what's your strategy when it comes to getting exposure to the commodities and energy rally? >> well, we think, yes, that is an area for investors to focus on. if you look at the breakdown in terms of sectors, the energy sector is the best performing sector so far this year. the msci world energy index is up more than 30 her percent or so. essentially -- 35% or so. essentially, there are stocks investors can invest in, but we caution investors not to overinvest in the commodity space. commodity prices are elevated, but going forward, we have also seen commodity prices are cyclical. we are not encouraging open investment. we believe in a more diversified investment. commodities have a place in the diversified portfolio. >> used to prefer asia -- >> do you still prefer asia to japan? even with the yen seen the weakness t

how does the pboc, etc., manage that kind of crisis? will not have problems because the banks are not directly exposed in the u.s. in europe it is a slightly different story. i think the risk is we end up with multiple debt defaults at the same time. that will stretch people's bank with. we have better tools. better understanding. defaults are spread more quickly. if we have eight or 10 or 12 defaults it will spread to people's opinion -- ability to solve the problem. sonali: i've a question more for the distressed investor. coming up, this is the opportunity of a lifetime? jay: could could well be an opportunity for distressed investors to weigh in, and i believe they will. the trick about distressed investing is you have to buy right you have to buy it at a low price because what you do not know is how long it will take. if the process goes on as it did in argentina for 15 years, you have to have staying power. staying power means you buy it it good rise and depend upon approved interest and negotiate something favorable in the end. g