Bloomberg Break of day: Asia 05/02/2024

ANNABELLE:WE ARE COUNTING DOWN TO ASIA'S MAJOR MARKET OPENS.PERHAPS INVESTORS WILL BE BREATHING A SIGH OF RELIEF.THE FED KEEPING RATES STEADY, SLOWING ASSET RUNOFF AS WELL, ABIT OF A HOLDING PATTERN BUT IT IS BETTER THAN A HIKE AT LEAST.HAIDI: YEAH. OF COURSE ALL OF THIS STILLFEEDING THROUGH THE BIG MOVE WE SAW IN THE YEN.AND DID OR DIDN'T THEY INTERVENE?PERHAPS WE WON'T KNOW, GIVEN THAT OFFICIALS ARE STILLSTAYING MUM ON THAT. ANNABELLE:.

THAT'S RIGHT.WE WILL FIND OUT AT THE END OF THE MONTH IN REGULAR REPORTING.JAPANESE OFFICIALS, WHETHER THEY STEPPED INTO THE MARKET.THAT JAPANESE YEN VERY MUCH THE FOCUS, AS MUCH OF A JUMP OF 3%OVER THE GREENBACK. THIS MORNING JUST A LITTLEWEAKER AGAINST THE U.S. DOLLAR, TRADING AROUND 155.7. JAPANESE CURRENCY VERY MUCHREFLECTING THE DYNAMICS BETWEEN THE BOJ AND THE FED.AND AGAIN, THE EXPECTATION THE BOJ WILL BE STAYING EASY, VERYACCOMMODATIVE OVER THE COMING.

MONTHS, BEING REFLECTED IN THELATEST MEETING MINUTES. SAYING MEMBERS MOST EXPECTFINANCIAL CONDITIONS TO STAY EASY AND THAT THEY WILL BEMAKING DECISIONS BASED AROUND MORE DOMESTIC FACTORS, THINGSLIKE THE ECONOMY AND WHETHER WE SEE PRICE PRESSURES ANDANYTHING BEING SUSTAINED. JAPANESE EQUITIES UNDERPRESSURE. THE NIKKEI 225 DOWN .7%.THE U.S. SESSION A LITTLE MIXED OVERNIGHT. WE SAW INITIAL RELIEF RALLY BUTINTO THE CLOSED IT WAS A STORY.

OF CHIP AND AI HARDWARE NAMESWEIGHING ON THE MARKET. THE LIKES OF AMD AND SUPERMICRO.LET'S SWITCH BECAUSE IT IS NOT JUST JAPANESE GOVERNMENTOFFICIALS CONCERNED ABOUT THE CURRENCY DIRECTION.YOU ALSO HAVE KOREAN ONES AS WELL SAYING THEY WILL BE TAKINGBOLD STEPS IF MARKET VOLATILITY DOES NOT INCREASE.THEY WILL ALSO BE CLOSELY COORDINATING THE GOVERNMENT INTHE B.O.K. AMID THOSE VARIOUS UNCERTAINTIES.IT REALLY DOES COME DOWN TO THE DIRECTION OF FED RATE CUTS ANDHOW CONSTRAINED SOME SOME TRUE.

BANKS IN ASIA COULD BE AGAINSTWHAT THE FED DOES GIVEN THAT WE ARE SEEING INFLATION RECEIVINGIN MANY PARTS OF THE WORLD — RECEDING IN MANY PARTS OF THEWORLD. HAIDI: A LILIBET OF A SIGH OF RELIEFFOR ASIAN EFFECTS AS WE SEE THAT PULLBACK IN THE DOLLAR. WE ARE SEEING ASIA STILLSUFFERING. LOOKING AT PMI NUMBERS LATER.A LOT OF THESE PMI READINGS HAVE BEEN LANGUISHING INCONTRACTIONARY TERRITORY FOR QUITE SOME TIME.LET'S GET YOU TO THE STAGGERED.

OPEN HERE IN SYDNEY.IT IS ALWAYS DIFFICULT TO GET A REAL READ BUT WE ARE SEEING APRETTY FLAT START TO TRADING, JUST A COUPLE OF MINUTES AS WEGET THAT STAGGERED SESSION COMING ONLINE.THE PREVIOUS SESSION WAS NOT A GOOD ONE AND WE SAW QUITE A BITOF WEAKNESS ACROSS ENERGY AND THE BASE METALS SEEING DECLINESGOING INTO THE FED. WE HAVE SEEN A LITTLE BIT OFPICKUP IN THE PRICE OF IRON ORE. NOT UNSURPRISINGLY AUSTRALIANBONDS ARE FOLLOWING A BIT OF A RELIEF RALLY WE SAW INTREASURIES OVERNIGHT GOOD AND.

THE AUSSIE DOLLAR HOLDINGPRETTY STEADY. WE WILL BE LOOKING AT SOMEASIAN CURRENCIES. THE MOVIE IN THE YEN OBVIOUSLYDOMINATING, BUT THERE WILL BE A BIT OF A BREATHER FOR SOMEOTHER ASIAN EFFECTS THAT HAVE BEEN UNDER PRESSURE.THAT IS THE PICTURE WHEN IT COMES TO TREASURIES AND IS DOWNTO THE LESS HAWKISH THAN EXPECTED DELIVERY FROM JAYPOWELL. >> WE DO NOT EXPECT IT WILL BEAPPROPRIATE TO REDUCE THE TARGET RANGE FOR THE FEDERALFUNDS RATE UNTIL WE HAVE GAINED.

GREATER CONFIDENCE THATINFLATION IS MOVING SUSTAINABLY TOWARDS 2%.SO FAR THIS YEAR THE DATA HAS NOT GIVEN US THE GREATERCONFIDENCE. IN PARTICULAR AND AS I NOTEDEARLIER, READINGS ON INFLATION HAVE COME IN ABOVE EXPECTATIONS.IT IS LIKELY THAT GAINING SUCH GREATER CONFIDENCE WILL TAKELONGER THAN PREVIOUSLY EXPECTED. HAIDI: LET'S BRING IN STEVENRICCHIUTO, CHIEF U.S. ECONOMIST WITH MIZUHOSECURITIES. WE ARE ALSO JOHN BYERS MIXO DAS– WE ARE ALSO JOINED BY MIXO.

DAS FROM JP MORGAN. SINCE DECEMBER WE HAVE HAD WILDMARKET EXPECTATIONS. SUPER DOVISH AND FEARFUL OFMORE HAWKISH AND A RATE HIKE. DID JAY POWELL GET IT RIGHT INTHE DELIVERY? STEVEN: I THINK HE GOT IT RIGHT IN THEDELIVERY OF THE MESSAGE. WHAT AMAZES ME IS THE BONDMARKET'S REACTION TO THE MESSAGE.THE MESSAGE IS ESSENTIALLY YOU THOUGHT WERE GOING TO BECONSIDERING TIGHTENING MONETARY POLICY AND WE ARE NOT WILLINGTO DO THAT.

CAN YOU THOUGHT WE WERE GOINGTO DO IT BECAUSE IT IS AN INFLATION ISSUE AND WE ARE NOTGOING TO DO THAT. SO I AM A LITTLE SURPRISED THELONG END OF THE CURVE HAS NOT MOVED UP HIGHER IN YIELD.HE KEEPS TELEGRAPHING THE MESSAGE OF THE COMMITTEE WHICHIS BASICALLY THEY DON'T WANT TO RAISE RATES ANYMORE.THEY REALLY, REALLY, REALLY STILL WANT TO CUT RATES.THE REALITY IS THE ECONOMY IS NOT LETTING THEM DO THAT IS THE NET RESULT IS IT IS HIGHER.ANNABELLE:.

WHAT WAS YOUR REACTION TOPOWELL'S MESSAGING? MIXO: I THINK IT WAS VERY IMPORTANTTHAT POWELL CLARIFIED THEY ARE NOT CONSIDERING RATE HIKES.THIS WAS ONE OF THE BIG CONCERNS FOR THE MARKET GOINGINTO THE FOMC. IF YOU THINK BACK A FEW MONTHSIT WAS THE NOVEMBER DECEMBER PIVOT WHEN THE FED STARTEDMOVING AWAY FROM A BIASED TO HIKING FROM A BIASED TO CUTTINGAND THAT REMAINS. WE CAN SEE VOLATILITY UP ANDDOWN BUT UNLESS THAT CHANGES THE FED'S BIAS, THE EQUITYMARKET SET UP IS POSITIVE.

TO US, THAT HAS NOT CHANGED.HAIDI: WHEN YOU TAKE A LOOK AT THEDICHOTOMY WE ARE STILL SEEING IN THE ECONOMY, HISTORICALLYRESTRICTIVE RATES ENVIRONMENT VERSUS STILL RELATIVELYSTIMULUS FISCAL ENVIRONMENT. IS THERE MORE THE CAN DO ABOUTTHAT? AND WHAT DOES PERSUASIVE EVIDENCE LOOK LIKE? STEVEN:THERE IS A CORRECTION I WOULD LIKE TO MAKE.EVERYONE IS SAYING THERE IS A RESTRICTIVE MONETARY POLICY.MONETARY POLICY IS NOT AS ARE STICK TO AS 525 TO 550 BASISPOINTS WORTH OF RATE HIKES.

THAT IS BASED ON THE BELIEFTHAT THE NEW NORMAL PERIOD, THE PERIOD AFTER THE FINANCIALCRISIS PRIOR TO COVID, WAS NORMAL. THAT WAS AN ANOMALY. THAT LOW LEVEL OF NOMINALINTEREST RATES IS ANOMALOUS. THE ECONOMY IS TRANSITING BACKTO A HIGHER LEVEL. SO THEREFORE THE MONETARYPOLICY IS NOT AS RESTRICTIVE. IN ADDITION TO THAT, FISCALPOLICY REMAINS ENORMOUSLY STIMULATIVE.THE TREASURY ANNOUNCED ON MONDAY THAT THEY ARE GOING TOBORROW AN EXTRA $1 TRILLION.

BETWEEN APRIL AND SEPTEMBER OFTHIS YEAR. $1 TRILLION MORE. THEY ARE SHOWING YOU THEY ARESPENDING MONEY AGGRESSIVELY. INTERNET ENVIRONMENT WHEREFISCAL POLICY IS VERY LOOSE, MONETARY POLICY IS REALLY NOTRESTRICTIVE. IT EXPLAINS WHY THIS ECONOMY ISSO RESILIENT IT IS RESILIENT BECAUSE IT IS FUNDAMENTALLYHEALTHY FROM A BALANCE SHEET PERSPECTIVE AND GETTING THEBENEFIT OF FISCAL STIMULUS THAT IS NOT BEING WORKED BACKAGAINST BY MONETARY PROBABLY RESTRICTIVENESS. HAIDI:THE DEFICIT NUMBERS ARE REALLY.

QUITE STARK AGAINST THE BROADERPICTURE. I KNOW YOU HAVE BEEN FAIRLYCONTRARIAN. YOU SAID THEY WOULD HOLD, THATTHERE WOULD BE NO EASING. DO YOU THINK THEY NOW NEED TOHIKE? STEVEN: THE REALITY IS TIME WILL TELLUS WHETHER OR NOT THEY WILL. BUT THE CONCEPT THAT THEY AREGOING TO BE CUTTING RATES STILL HAS NOT COME OUT OF THE MARKET.AND THAT NEEDS TO COME OUT FIRST. AND IT NEEDS TO COME OUTNOT ONLY FOR 2024, BUT IT NEEDS TO COME OUT FOR 2025 AND 2026AS WELL.

SO THERE'S FURTHER ADJUSTMENTTHAT NEEDS TO TAKE PLACE BEFORE WE CAN CONSIDER WHETHER THEREIS A RISK OF THEM RAISING RATES. WE ARE A LONG WAY AWAY FROMTHAT DECISION. I THINK THE MARKET WAS TOPRESUMPTIVE TO THINK THAT CAN HAPPEN, AND THEREFORE THE FACTTHAT JUMPED TO THAT CONCLUSION TELLS YOU THE MARKET IS WORRIEDABOUT INFLATION. SO WHEN THEY DID NOT GET IT,WHY DID THEY NOT SELLOFF THE LONG END OF THE CURVE?THAT IS THE PROBLEM. THAT IS A MISTAKE.THE MISS PRICE IS THE LONG AND.

OF THE TREASURY CURVE. HAIDI: THE GROUND ZERO WHEN IT COMESTO WHO IS REALLY BEING IMPACTED BY THE RATE REGIME, CAN THE FEDDO ANYMORE AND HOW MUCH ARE THEY RESTRAINED BY THATDEMOGRAPHIC WHICH IS CLEARLY STRUGGLING?YOU ARE SEEING THAT COME THROUGH ANY CONSUMER PICTURE.STEVEN: THERE IS CERTAINLY A DEMOGRAPHIC GUN THE INCOMECHAIN SUFFERING FROM INFLATION. THE PROBLEM IS THEY ARESUFFERING FROM THE INFLATION, NOT THE INTEREST RATES.SO THE REALITY IS INFLATION IS.

THEIR BIGGEST PROBLEM.BECAUSE REAL DISPOSABLE INCOME IS VERY FAR BELOW TREND PRIORTO COVID. THAT IS A FUNCTION OF THE COVIDINFLATION. AND THE REALITY IS THAT IS WHATIS HURTING THE CONSUMER. NOT THE INTEREST RATE STORY.NO ONE BORROWS AT THE FRONT END OF THE CURVE. THIS GOVERNMENT KEEPS ONFREEING UP STUDENT LOAN COMMITMENTS.THIS IS THE SECOND LARGEST COMPONENT OF HOUSEHOLD DEBTBEYOND THEIR MORTGAGE.

THE REALITY IS THEIR MORTGAGERATES ARE FIXED, AND THEN WE ARE FREEING UP THEIR STUDENTLOAN DEBT. IT IS NOT THE INTEREST RATE.THEY ARE NOT SUFFERING FROM THIS RISE IN INTEREST RATES.THEY ARE SUFFERING FROM THE DETERIORATION IN PURCHASINGPOWER. THE FED SHOULD BE FOCUSED ONCONTAINING INFLATION, NOT FOCUSED ON KEEPING AN ECONOMYHOT, TRYING TO MAXIMIZE SOCIAL WELFARE BY MAXIMIZINGEMPLOYMENT. ANNABELLE: DO YOU THINK THE FED NEEDS TOBE MORE CONCERNED ABOUT.

DOWNSIDE GROWTH RISKS, ORUPSIDE INFLATION RISKS? STEVEN: THE FED SHOULD BE MORECONCERNED ABOUT UPSIDE INFLATION RISK.LOOK, THE ECONOMY IS GOING TO SLOW FROM LAST YEAR. LAST YEAR'S 3.1% Q4 OVER Q4GROWTH IS ABNORMALLY HIGH. WE ARE GOING TO BE CLOSER TO2.5%, WHICH IS STILL HIGHER THAN THE UNDERLYING TREND.THAT IS BAKED INDICATE ALREADY. — IN THE CAKE ALREADY.THE FED NEEDS TO FOCUS BACK ON INFLATION AS OPPOSED TO ITSAVERAGE INFLATION TARGET REGIME.

IT'S ADOPTED.WHERE IT IS MORE CONCERNED THEY ARE ASYMMETRICAL IN THEIRCONCERN TO THE LABOR MARKET THAN THEY ARE TOWARDS INFLATION.ANNABELLE: WHAT ARE YOUR VIEWS ON FEDPOLICY IN THE BACKDROP OF WHAT STEVEN HAS BEEN SAYING? MIXO:I THINK THE FED HAS BEEN PRETTY CLEAR THAT THEY SEE THEDISINFLATION PROCESS STILL CONTINUING. POWELL SEEMED PRETTYCOMFORTABLE WITH INFLATION STAYING AT 2.8%. UNLESS YOU ARE TALKING ABOUT ACHANGE IN TREND HIGHER AND THE.

DATA COMPLETELY DISAGREEINGWITH THE FED. WHAT REALLY MATTERS IS WHAT THEFED THINKS OF THIS DATA. THAT'S WHAT WE GOT CLARITY ONAT THIS FOMC MEETING. POWELL WAS VERY CLEAR THAT THEYSEE THE DATA STILL AS BEING COMFORTABLE AND COLLABORATINGWITH THEIR VIEW. IT IS JUST TAKING A LITTLE BITLONGER. AT J.P. MORGAN STILL HAVE THE FIRST CUTCOMING IN JULY AND WE HAVE CUTS THEREAFTER INTO 2025.SO FROM A BOND YIELD PERSPECTIVE, YES, WE DO THINKIT WILL DRIFT HIGHER DEPENDING.

ON THE FED VIEW A LITTLE BIT.IF YOU LOOK INTO 2024 AND INTO 2025, WE DO SEE ROOM FOR BONDYIELDS TO DECLINE AS WELL. BRINGING US TO THE EQUITYMARKET . THE WAY WE TRY TO FIGURE THISOUT IS TRY TO UNDERSTAND FROM MARKET PRICING WHAT SORT OFSCENARIOS THE MARKET IS ENTERTAINING AND PRICING IN.AND SINCE THE PIVOT IN NOVEMBER, WE HAVE SEENSIGNIFICANT GOLDILOCKS PRICING FROM NOVEMBER ALL THE WAY UNTILMARCH. AND SINCE THEN WE HAVE SEEN TWOSCENARIOS EMERGE SIMULTANEOUSLY.

THOSE ARE FIRSTLY, A HIGHER FORLONGER — A REEMERGENCE OF HIGHER FOR LONGER.AND SECONDLY IS THE INCREASING PROBABILITY OF SOME SORT OF ANAI BUBBLE. THESE TWO THINGS ARE SOMEWHATINCONSISTENT WITH EACH OTHER, SO ONE WILL EVENTUALLY FADE.BUT FOR NOW WE SEE THE PRICE MOVEMENT THIS WAY WHERE THEMARKET IS ENTERTAINING BOTH. THIS BUBBLE OF AI AND VALUEDOES REALLY WELL. HAIDI: WE SAW THE BIG MOVE IN THE YEN,AND OF COURSE JAPANESE OFFICIALS HAVING TO COME OUTAND NEITHER CONFIRM NOR DENY IF.

THEY WERE BEHIND THAT.YOU ARE IN ASIA. YOU MUST GET ASKED A LOT ABOUTTHE IMPACT AND TRAJECTORY OF THE U.S. DOLLAR.DO YOU SEE THIS AS BEING A PURELY BOJ FED DIVERGENCESTORY, OR IS IT U.S. EXCEPTIONALISM STORY? STEVEN:I THINK IT IS A DIVERGENCE STORY BETWEEN MONETARY POLICIES.BUT I THINK THE THING PEOPLE KEEP ON MISSING IS THEINFLATION STORY IS HIGHER THAN THE FED'S TARGET.AND THEREFORE, IN A WORLD WHERE EVERYONE IS TARGETING 2%INFLATION, AND CONSISTENT WITH.

THAT TARGET, WE CAN CONTRASTCURRENCIES BASED ON RELATIVE NOMINAL INTEREST RATES IN FRONTOF THE CURVE. IN AN ENVIRONMENT WE HAVE ONECENTRAL BANK THAT IS IMPLYING, HE'S COMFORTABLE WITH INFLATIONAT 2.83%. THAT'S GIVING YOU A LOWER REALYIELD THAN THE U.S. IN THE REALITY IS THE DOLLARSHOULD BE MOVING LOWER IN THIS ENVIRONMENT, NOT HIGHER.AND IT SHOULD MOVE LOWER AGAINST THE YEN, AGAINST THEEURO, AND AGAINST THE AUSSIE DOLLAR, AND IT SHOULD MOVELOWER AGAINST THE CHINESE YUAN.

THE FEDERAL RESERVE IS NOTLIVING UP TO THE COMMITMENT ON INFLATION OTHER CENTRAL BANKSARE. AND IT'S TIME MARKETS HOLD THEMTO TASK FOR IT. ANNABELLE: YEN DEPRECIATION, WE HAVEALWAYS SEEN IT TYPICALLY A POSITIVE WITH JAPANESE EQUITIESGIVEN SO MANY EXPORTERS ON THE BENCHMARK.BUT DO YOU SEE THAT CORRELATION STARTING TO SLIP A LITTLE BIT?MIXO: THAT IS EXACTLY WHAT IS HAPPENING HERE, ACTUALLY.IF YOU LOOK AT THE YEN CORRELATIONS TO EQUITY MARKETSAND REAL RATE INTO THE MACRO.

ECONOMY OVERALL, WE SEE THISLEVEL AT AROUND 157 WHERE THIS CORRELATION STARTS TO FLIP. .SO WHILE YES, YOU ARE RIGHT, YEN DEPRECIATION HAS BEENPOSITIVE FOR EQUITIES IN YEN TERMS, ALTHOUGH IF YOU LOOK ATTHE DOLLAR TERMS THE JAPANESE MARKET IS NOT BEEN DOING THATWELL. BUT IN YEN TERMS IN SHOULD BEPOSITIVE ABOUT — ABOVE 157 IT BECOMES A PROBLEM.IF YOU LOOK AT THE JAPANESE EQUITY MOVE — MARKET OVERALLTHE OUTLOOK HAS BECOME MORE CHALLENGING. ANNABELLE:YOU MENTIONED THE EXUBERANCE.

AROUND AI EXTENDING.HOW DOES THAT PLAY INTO THE PICTURE, AND IS IT PLAYING INTOYOUR THINKING FOR OTHER TECH HEAVY MARKETS IN THIS PART OFTHE WORLD? MIXO: THAT IS ABSOLUTELY RIGHT.IF YOU LOOK AT THE AI UPSIDE WE ARE SEEING LAYOUT ACROSS THETECH SPACE, IT IS NOT JUST THE SEMICONDUCTORS COULD YOU HAVESENT EQUIPMENT, POWER AND COOLING MAKERS, NETWORKINGEQUIPMENT, YOU HAVE THE GRID PLAYERS.ALL OF THIS I WOULD QUALIFY AS A BROADER AI THEME.ALL OF THESE STOCKS ARE DOING.

WELL AND WE EXPECT THEM TOCONTINUE TO DO WELL. IF WE LOOK AT TRADITIONALRIGHTS PATTERNS HEADING INTO BUBBLES, WE ARE NOT QUITE THEREYET, IF YOU LOOK AT ANY SUBSET OF THE AI SPACE OVERALL OR THEU.S., WE ARE NOT THERE YET. THAT TRANSLATES INTO MARKETSLIKE TAIWAN AND ESPECIALLY THE TECH SPACE, IN MARKETS LIKEKOREA AGAIN, WITH MEMORY AS A BIG EXPOSURE TO AI. ANNABELLE:YOU MENTIONED BUBBLES AND IT MAKES ME THINK OF THE INDIANEQUITY MARKET. WHAT ARE YOUR VIEWS?WILL WE CONTINUE TO SEE.

INVESTORS PUT MONEY THERE, ORGIVEN THE OUTPERFORMANCE IS A TIME TO REALLOCATE BACK TOCHINA? MIXO: IT IS FUNNY THOUGH, EVERYONEASSUMES NATURALLY THAT BECAUSE THE INDIAN MARKET HAS DONE SOWELL THAT WE MUST BE SUPER OVERWEIGHT THE MARKET.BUT THE REALITY IS THE COMPLETE OPPOSITE.THE ENTIRE INDIAN RALLY HAS BEEN DRIVEN BY DOMESTIC BUYING.FOREIGNERS HAVE BEEN LOOK BEHIND.IF YOU LOOK AT FOREIGN BUYING INTO THE MARKET IT IS KIND OFFLATLINING.

IF YOU LOOK AT GLOBAL U.S.FUNDS, THEY ARE MASSIVELY UNDERWEIGHT INDIA.BECAUSE IN THEIR MIND, E.M. IS CHINA, SO WHEN CHINA ISDOING POORLY THEY ARE NOT LOOKING AT E.M.AND THEIR ASSUMPTION IS THE INDIAN MARKET WEIGHT IS THESAME IT WAS 10 YEARS AGO. SO THEY STILL HOLD THE SAMENUMBER OF TALKS — OF STOCKS, BUT THEY ARE SIGNIFICANTLYUNDERWEIGHT. WE ESTIMATE IF ALL OF THESEGLOBAL GUYS SIMPLY CLOSE IN INDIA, THAT IS AN HUNDREDBILLION DOLLARS OF INFLOW INTO.

THE EQUITY MARKET.FROM A FLOW PERSPECTIVE, AS THE DOMESTIC FLOW SIDES STAYSUPPORTIVE, THERE'S A LOT TO COMPANY MARKET.AS YOU TALK ABOUT BUBBLES AND VALUATION PEAKS, WE DON'T SEETHE INDIAN MARKET AT A LEVEL WHERE YOU WOULD QUALIFY THAT ISA BUBBLE YET. IF YOU LOOK AT ANY OF THEHISTORICAL BUBBLES AT A MARKET WIDE LEVEL, IT NEVER PEAKSBELOW 35 TIMES. 35 IS THE BARE MINIMUM YOU NEEDTO GET TO QUALIFY. HAIDI:WE ARE SEEING SIGNS OF LIFE.

FROM CHINA, AND CERTAINLYCHINESE EQUITY MARKETS. I WONDER AS YOU TRAVEL THROUGHASIA HOW MUCH YOU HAVE BEEN ASKED ABOUT NOVEMBER, WHATHAPPENS AFTER NOVEMBER IN THE U.S.AND HOW THAT IMPACTS, IN YOUR VIEW, HOW TRADE RELATIONSHIPSAND ECONOMIES LIKE CHINA AND AUSTRALIA? STEVEN:I THINK THE TRADE STORY IS OVER AND DONE WITH.I THINK EVERYONE GETS THE STORY ON CHINA.THAT IS NOT A SHIP THAT HAS SET SAIL AND IT WILL NOT COME BACKTO PORT ANYTIME SOON.

THE HOLLOWING OUT OF CHINACONTINUES ON AN ONGOING BASIS. WHETHER IT IS FROM A DOMESTICOR GLOBAL STANDPOINT. SUPPLY CHAINS ARE BEINGDIVERSIFIED. WE ARE BUILDING CHIP PLANTS INPLACES LIKE JAPAN AND GIVING THE PHILIPPINES MONEY IN ORDERTO EXPAND CHIP PRODUCTION AND DIVERSIFY AWAY FROM THE TAIWANRISK EXPOSURE AND HAVE IT IN PLACES WHERE WE HAVE SECURESUPPLY CHAINS. SO THAT STORY I THINK ISPERMANENTLY GONE. THE BIGGER QUESTION ABOUT THEELECTION STORY ITSELF AND IS.

ANYTHING CHANGE FROM A POLICYSTANDPOINT ONCE WE GO FORWARD FROM A TRADE STANDPOINT, THEANSWER IS NO. FROM A DOMESTIC POLITICALSTANDPOINT THE ANSWER IS YES. THEY ARE SPENDING MONEY LIKEMAD AND THEY ARE GOING TO SPEND EVEN MORE MONEY POSTELECTION.SO THAT REALLY IS THE UNDERLYING MOTIVATION.ALL WE ARE ARGUING ABOUT WHO GETS INTO THE WHITE HOUSE INWHAT FORM OF GOVERNMENT DO WE HAVE, IS IT DIVIDED OR A SINGLEPARTY RULE, THAT WE WIND UP IN AN ENVIRONMENT OF HOW THEYSPEND THE MONEY AND HOW QUICKLY.

THE DEMOCRATS WILL BE ABLE TOSPEND MONEY MORE QUICKLY BECAUSE THEY BASICALLY WANT TODO TRANSFER PAYMENTS ARE VERY EASY TO DO.A TRUMP ADMINISTRATION WANTS TO DO DIFFERENT THINGS.BUT THE REALITY IS BOTH OF THEM ARE ACTUALLY GOING TO BEWILLING TO CUT TAXES. AND THEY ARE ONLY GOING TO HAVEONE YEAR BECAUSE NEITHER OF THEM IS A NEW PERSON COMINGINTO THE WHITE HOUSE AND THEREFORE THEY WILL BE ALAME-DUCK AFTER ONE YEAR. SO THEY WILL HAVE ONE SET OFPROGRAMS AND THEN THEY WILL.

PLAY AROUND THE PERIPHERY WITHREGULATIONS AND EXECUTIVE ORDERS AND THINGS OF THATNATURE BUT THEY WILL HAVE ONE YEAR TO GET THINGS DONE. HAIDI:JAY POWELL HAS HIS WORK CUT OUT FOR HIM THEN.STEVEN RICCHIUTO, AND OF COURSE ALSO MIXO DAS.REACTING TO THE FED. YOU CAN GET A ROUNDUP OF THESTORIES TO GET YOUR STAY — YOUR DAY STARTED.GO TO DAYB ON YOUR TERMINALS.YOU CAN CUSTOMIZE SETTINGS SO YOU JUST GET THE NEWS THAT HECARE ABOUT. THIS IS BLOOMBERG. ♪.

ANNABELLE:SOME OF THE LATEST CORPORATE STORIES.JP MORGAN IS EXPECTED TO PAY AN ADDITIONAL $100 MILLION TOWARDSTRADE MONITORING GAPS. THIS HAS TO SETTLE A NEWCOMPLAINT FROM THE U.S. COMMODITY FUTURES TRADINGCOMMISSION UP IT JP MORGAN EARLIER AGREED TO PAY OVER $300MILLION TO TWO OTHER REGULATORS INCLUDING THE FED. BARCLAYS HAS BEGUN CUTTINGHUNDREDS OF JOBS AS THE FIRM ADVANCES ON A MASSIVECOST-CUTTING DRIVE.

CUTS WILL IMPACT SEVERALHUNDRED STAFFERS AND LOCAL MARKETS, INVESTMENT BANKING,AND RESEARCH. BARCLAYS IS SEEKING TO CUT 2MILLION POUNDS OF COSTS. NATIONAL AUSTRALIA BANK SAYS ITWILL BUYBACK UP TO 1.5 BILLION AUSTRALIAN DOLLARS OF ITS OWNSTOCK. THE LENDER'S CASH EARNINGS FELL13% IN THE SIX MONTHS ENDING MARCH 31.THE CEO SAYS DISCIPLINED EXECUTION OF STRATEGY HELPEDTHE BANK MANAGE IMPACTS OF SLOWING GROWTH AND COMPETITION.IRVINE TOOK CHARGE OF THEM LAST.

MONTH AND APPOINTED RACHEL'SLATE TWO HAD THE BANK. QUICK CHECK ON HOW EUROPEANFUTURES ARE OPENING THIS MORNING. YOU ARE SEEING A BIT OFWEAKNESS CREEPING THROUGH FOR EURO STOCKS.THAT IS FOLLOWING THE FED DECISION AND WE SAW U.S.EQUITIES INITIALLY POSTING A RELIEF RALLY.THE FED NOT EXPECTING TO HIKE ANYTIME SOON.CUTS ALSO STILL THE EXPECTATION. THE QUESTION BEING WHEN.WE ALSO SEE WEAKNESS AROUND AI HARDWARE STOCKS IN PARTICULAR.THIS IS BLOOMBERG.

HAIDI: THE LATEST ACROSS THEGEOPOLITICAL HEADLINES,AMERICA'S CYBERSECURITY AGENCY WANTSSO-CALLED PRO-RUSSIAN HACKED OF US ARE ATTEMPTING TO COMPROMISECOMPUTER NETWORKS IN NORTH AMERICA AND EUROPE THEY HAVE TARGETED SMALL TAIL — NEW YORK POLICE ARRESTED ALMOST300 PEOPLE RAKING UP ESCALATING PROTESTS OVER THE ISRAEL HAMASWAR. THE ARRESTS WERE MADE AT COLUMBIA UNIVERSITY AND CITYCOLLEGE OF NEW YORK. POLICE OFFICIALS OUT SAIDAGITATORS HAD JOINED THE.

COLUMBIA PROTEST, BUT ARE STILLDETERMINING HOW MANY NONSTUDENTS WERE ARRESTED.BLOOMBERG LEARNED THE U.S. AND SAUDI ARABIA ARE CLOSING INON A HISTORIC PACT OFFERING SECURITY GUARANTEES IN THEIRPATH TO DIPLOMATIC TIES WITH ISRAEL.THEY ARE OPTIMISTIC A DEAL CAN BE REACHED.ISRAEL IS EXPECTED TO BE OFFERED A CHOICE TO JOIN THEDEAL DEPENDENT ON ENDING THE GAZA WAR, AND AGREEING TO APATH TOWARD PALESTINIAN STATEHOOD.OF COURSE THOSE NEGOTIATIONS.

AND THAT POTENTIAL DEALWEIGHING ON COMMODITY PRICES AS WE CONTINUE TO WATCH AN UPSIDEWHEN IT COMES TO OIL PRICES. .3% HIGHER FOR BRENT.NEW YORK ROAD — WE SAW A SLUMP WITH THE JUMP IN U.S.CRUDE INVENTORY THE HIGHEST SINCE JUNE ADDING TO CONCERNSABOUT THE DEMAND SIDE OF THINGS. 7.2 MILLION BARRELS WERE ADDEDLAST WEEK, THE MOST SINCE EARLY FEBRUARY.ALSO WATCHING IRON ORE, SLIPPING A LITTLE BIT BUTCOMING OFF THE BIGGEST MONTHLY GAIN SINCE LATE 2022 WITH SOMEOF THE OPTIMISM THAT PERHAPS.

CHINESE DATA IS THROUGH THE >> THE WHOLE GAME PLAN ISBASICALLY UNCHANGED. WE ARE GOING TO KEEP RATES HEREUNTIL WE ARE HIGHLY CONFIDENT WE ARE GOING TO GET INFLATIONDOWN TO 2%. NO HINT OF A RATE HIKE. >> THERE IS A LOT OF RELIEFHERE THAT THE CHAIRMAN STAYED TRUE TO WHAT WE HAVE SEEN FROMTHE CHAIRMAN. >> I THINK JAY POWELL WASDISCIPLINED HERE AND STAYED ON MESSAGE VERY WELL.THERE IS A CLEAR BIAS TOWARDS.

EASING, AND HE STUCK TO THAT. >> THEY HAVE LEFT WIDE OPEN THEQUESTION OF WHY HAS PROGRESS BEEN LESS THAN THEY EXPECTED ONTHE INFLATION FRONT. >> LET THAT POLICY WORK FORLONGER. I THINK THAT IS ABOUT AS FAR ASTHEY ARE READY TO GO TODAY. THAT IS HAWKISH IN MAY.WE WILL SEE WHAT HAWKISH MIGHT LOOK LIKE IN JUNE. >> THIS IS REALLY GOOD FOR THEMARKETS. BECAUSE HERE IS A FED THAT ISTELLING US, LOOK AT THE.

LONGER-TERM, LOOK WHEREINFLATION WAS, AND LOOK WHERE WE HAVE GOTTEN IT TO.DON'T WORRY ABOUT THE LAST COUPLE OF MONTHS, WE WILL SEEWHAT HAPPENS HERE. ANNABELLE: THAT WAS SOME OF OUR LATESTGUESTS REACTING TO THE FED DECISION.TAKING A QUICK CHECK ON MARKETS, 30 MINUTES INTO THESESSION FOR SYDNEY, SEOUL, AND TOKYO.THE MOOD HERE IS TILTED TO THE DOWNSIDE.MOST STOCKS UNDER PRESSURE, REALLY FEELING THE BRUNT OF THEMORE RATE SENSITIVE SECTORS.

LIKE CONSUMER STAPLES, CONSUMERDISCRETIONARY, I.T. AS WELL. JAY POWELL NOT AS HAWKISH ASHAD BEEN PERHAPS FEARED, BUT STILL, WE SAWTEK ALSO PLAYINGINTO THE PICTURE GIVEN THAT SLUMP IN AI HARDWARE NAMES LIKEAMD INTO THE CLOSE. HAIDI: TAKE A LOOK AT ASIA PMI'S AFOCUS FOR THE MARKETS AFTER THE FED AS WE HAVE SEEN A NUMBER OFTHESE LANGUISHING IN CONTRACTIONARY TERRITORY,CASTING DOUBT OVER THE STRENGTH OF THE ECONOMIC RECOVERY ANDHOW WE ARE PROCEEDING IN HIS FINAL LEG OF THE RATE CYCLE.WE ARE SEEING SOME.

DETERIORATION IT COMES TOINDONESIA, FALLING. WE ARE ALSO SEEINGDETERIORATION FOR SOUTH KOREA STILL UNDER THAT 50 LEVEL THATDEMARCATE'S THE CONTRACTION CONTINUE TO SEE.SOME IMPROVEMENT IN FRONTIER MARKETS LIKE MYANMAR.TAIWAN SEEING A FLIP TO ABOVE 50 AND VIETNAM ALSO ABOVE 50.SO SOME SENSE OF IMPROVEMENT ACROSS SOME OF THOSE ECONOMIESWITH THE MANUFACTURING PMI'S. OF COURSE CURRENCY HAS BEEN ONEOF THESE ASPECTS THAT HAD BEEN TROUBLING A NUMBER OF ASIAN FXWE HAVE BEEN FOLLOWING.

THE YEN HAS SEEN THE BIGGESTSURGE IN THE REACTION THIS MORNING.THE BIG MOVE OF 3% IN THE LAST MINUTES OF THE NEW YORK TRADINGSESSION. THAT FUELED SPECULATION JAPANESE AUTHORITIES INTERVENEDFOR A SECOND TIME THIS WEEK. LET'S BRING IN MICHAEL WILSON.I GUESS WE WILL FIND OUT IN DUE COURSE FROM THE DATA THAT ISRELEASED IN A MONTH. DID IT HAVE THE CHARACTERISTICSOF INTERVENTION? MICHAEL: YOU KNOW WHAT? IT ACTUALLY DID.IT WAS THE PRICE ACTION IN A WAY — I SPOKE TO A COUPLECHAPS IN NEW YORK BEFORE THEY.

WENT HOME, AND WHAT THEYDESCRIBED AND WHAT THEY SAW WAS MUCH LIKE WHAT HAPPENED ONMONDAY. A SITUATION WHERE DOLLAR-YENWAS AROUND 155.70. SUDDENLY OFFERS WOULD COME IN,SOME OF WHICH CAME FROM JAPANESE BANKS, ALL THE WAY 20POINTS THROUGH THE LEVEL. NOW, THAT IS NOT TYPICALLY HOWJAPANESE BANKS CLEAR THEIR BUSINESS.IT DOES SEEM PREDATORY IN TERMS OF THE EFFECT ON THE MARKET.I WAS ACTUALLY SKEPTICAL. I THOUGHT AFTER MONDAY'S EFFORTIT MIGHT HAVE JUST BEEN THE.

AUTHORITIES CHECKING RATES ANDASKING FOR LEVELS WHICH IS A PRECURSOR FOR INTERVENTION.BUT HAVING HEARD WHAT TRANSPIRED AFTER THE POWELL PRESS CONFERENCE IN NEW YORK, ITHINK IT IS SOUNDING MORE AND MORE LIKE INTERVENTION.HAVING SAID THAT I DON'T THINK THEY'RE GOING TO BE HAPPY WITHTHE WAY IT IS RECOVERING SO WELL AND SO QUICKLY.WE ARE NEAR 156 AFTER HITTING THE 153 LOW.DO NOT SPEND ANY TIME DOWN THERE AT ALL.THERE IS OBVIOUSLY A LOT OF.

RESIDUAL DEMAND FOR IT.AS FAR AS THE INTERVENTION QUESTION IS CONCERNED, I THINKIT IS BECOMING APPARENT. ALTHOUGH LIKE YOU MENTIONED ATTHE START, WE HAVE TO WAIT UNTIL THE END OF THE MONTH TOGET CONFIRMATION ONE WAY OR THE OTHER.HE DID NOT WANT TO BE DRAWN INTO ANY COMMENTARY ABOUT ITAND THAT IS FAIR ENOUGH. BUT THAT DOES LEAVE DEALERS WHOARE CRITICAL CONSPIRACY THEORISTS TO DRAW ON OWNCONCLUSIONS. IF YOU ARE BUYING DOLLAR-YENAND SUDDENLY YOU ARE BEING.

GIVEN DOLLARS BY A JAPANESEBANK YOU PROBABLY SPIN AROUND AND TRADE THEM BACK OUT AND GETON WITH IT TO SEE HOW LOW IT GOES.CURRENTLY THAT HAS JUST BEEN THE WAVE OF IT RIGHT NOW.FURTHER OUT I THINK — SORRY. ANNABELLE:WHICH WAY DO YOU THINK THE YEN IS GOING TO GO?ARE WE LOOKING AT 150 IS 160 MORE IN PLAY?THAT IS THE MLIV QUESTION OF THE DAY TODAY. MICHAEL: THERE IS A LOT OF ACTUAL BUYINGFROM CUSTOMERS, FUND MANAGERS,.

REAL MONEY, MACRO FUNDS FROM152 AND BELOW. THAT 152 LEVEL MORE OR LESS WASBASICALLY WHERE WE TOOK OFF FROM THE HOT USCP I LEVEL.IT NEVER CAME BACK AND IT IS WORKING HIS WAY BACK DOWN NOWEVENTUALLY. SO I THINK THE MARKET STILL HASTHAT PROPENSITY TO BUY THE DIP. IF YOU LOOK AT THE OPTIONSMARKET THE RISK REVERSALS FOR DOLLAR-YEN FOR THE ONE MONTHPERIOD, THEY ARE ACTUALLY CHEAPER.I THINK THEY HIT A ONE MONTH LOW YESTERDAY.AND THEY ARE NOT FAR FROM THERE.

NOW.I THINK THE 167 HIGH ON MONDAY IS STILL VERY MUCH IN PLAY.ANNABELLE: THAT WAS MICHAEL WILSON THERE.LET'S GO TO THE CRYPTOCURRENCY WORLD BECAUSE THE BINANCEFOUNDER SAYS HE WILL REMAIN A PASSIVE INVESTOR INCRYPTOCURRENCY'S. A U.S. COURT SENTENCED HIM TO FOURMONTHS IN PRISON FOR FAILURES THAT ALLOWED CYBER CRIMINALSAND TERRORIST GROUPS TO FREELY TRADE ON THE WORLD'S LARGESTCRYPTOCURRENCY EXCHANGE. WHILE THE SENTENCE WAS FARBELOW THE THREE YEARS.

PROSECUTORS SOUGHT, IT CLOSES ALONG-RUNNING PROBE FOR THE JUSTICE DEPARTMENT.LET'S BRING IN OUR NEXT GUEST, DENNIS KELLEHER, COFOUNDER ANDCEO OF BETTER MARKETS, A NONPROFIT THAT SUPPORTSSTRINGENT FINANCIAL REGULATION. SO, YES, DENNIS, THE SENTENCEIS FAR BELOW WHAT WAS REQUESTED BUT IT IS THE FIRST TIME WEHAVE SEEN A CEO GO TO JAIL EVER FOR A BANK SECRECY ACTVIOLATION. DENNIS: THAT IS TRUE BUT IT IS ALSO THEFIRST TIME WE HAD A CRYPTO KINGPIN WHO CREATED A CRYPTOMONEY LAUNDERING SUPERSTORE FOR.

THE MOST DESPICABLE GLOBALCRIMINALS IN THE WORLD. IT IS TRUE THAT HE IS THE FIRSTONE TO GO UNDER DISCHARGE. ON THE OTHER HAND, HERE'S ANOUTLIER IN TERMS OF THE EXTREME CRIMINAL CONDUCT THAT WAS MONEYLAUNDERED THROUGH HIS COMPANY. EVEN A COMPLIANCE OFFICER ATBINANCE SAID — ANNABELLE: JUST TO INTERRUPT, SORRY, JUSTSOME OF THE LANGUAGE USED THERE, IT'S QUITE COLORFUL ANDWE DON'T ACTUALLY HAVE EVIDENCE OF THOSE ALLEGATIONS. DENNIS:IF YOU READ WHAT THE SECRETARY OF THE TREASURY SAID, JANETYELLEN, AT THE PRESS.

CONFERENCE, THAT MORE THAN100,000 SUSPICIOUS TRANSACTIONS APPEAR TO HAVE GONE THROUGHBINANCE. THEY INCLUDED EVERYTHING FROMDRUG TRAFFICKING TO SEX TRAFFICKING, TO SANCTIONS OFAGENTS FOR RUSSIA, IRAN, NORTH KOREA, AS WELL AS NUMEROUSOTHER SENTIENT INDIVIDUALS AND GROUPS LIKE HAMAS AND AL QAEDA.THAT IS ALL IN THE PRESS CONFERENCE AND IN THEINDICTMENT. NOW, IT'S TRUE THAT CZ WAS ONLYCHARGED WITH A FAILURE TO HAVE AN EFFECTIVE MONEY LAUNDERINGPROGRAM. BUT THAT IS BECAUSE THE.

DEPARTMENT OF JUSTICE DECIDEDTO CHARGE HIM WITH A VERY MINIMAL CHARGE WHICH IS ANEXTREME DISPARITY BETWEEN THE ALLEGATIONS OF THE CRIMINALCONDUCT THAT THE MONEY WAS LAUNDERED THROUGH BINANCE.BINANCE PLEADED GUILTY AND ADMITTED TO THE CHARGES.CZ WAS THE FOUNDER, OWNER, AND LEADER OF BINANCE. ANNABELLE:AGAIN, JUST TO REITERATE, THIS IS CZ, WHO HAS GONE TO PRISON,WILL BE FACING PRISON TIME OF FOUR MONTHS.HE HAS BEEN CHARGED WITH THE SECRECY ACT VIOLATIONS.

I UNDERSTAND HE WILL BE MAKINGOTHER STATEMENTS AROUND MISCONDUCT, BUT THAT HAS NOTBEEN PROVEN BY THE JUDICIAL SYSTEM. BROADLY DO YOU THINK THEOUTCOME OF THIS COURT SYSTEM SENDS A MESSAGE TO THE CRYPTOWORLD? DENNIS: TO BE CLEAR, BINANCE DID ADMITTO THE ALLEGATION. CZ PLEADED GUILTY TO JUST ONECOUNT OF BANK SECRECY ACT. SO THE ALLEGATIONS, THEY ARENOT ALLEGATIONS. THEY WERE ADMITTED TO, WHICH ISWHY BINANCE WAS FINED $4.3 BILLION AND WILL HAVE A MONITORFOR FIVE YEARS.

UNFORTUNATELY THE MESSAGE THISSENDS IS THAT CRIME PAYS. CZ HIMSELF SAID BETTER TO ASKFORGIVENESS THAN ASK PERMISSION, WHICH IS TO SAYBETTER TO BREAK THE LAW AHEAD OF TIME RATHER THAN COMPLY WITHTHE LAW. BREAK IT IT ASK FOR FORGIVENESSAND THAT IS WHAT HAPPENED. HIS PLAN, WHAT APPEARS TO BEHIS PLAN FROM LONG-STANDING, IS HE ENGAGES IN THIS CONDUCT, HEGETS CAUGHT, GETS A VERY MINIMAL SENSE, GOES TO COURT,HAS ALL HIS FRIENDS TALK ABOUT WHAT A GREAT GUY HE IS, TALKSABOUT TURNING OVER A NEW LEAF.

AND GOES INTO PHILANTHROPY.EVERYBODY SAYS THAT WHEN THEY ARE FACING A JUDGE CONTINUE TOJAIL. SO HE IS GOING TO GO TO JAILFOR FOUR MONTHS. HE GETS TO KEEP HIS $43 BILLION.HE IS NUMBER 29 ON THE BLOOMBERG BILLIONAIRES LIST.THAT MONEY HAS BEEN ACCUMULATED THROUGH BINANCE AND BINANCEADMITTED THAT IT IS ENGAGED IN YEARS LONG VIOLATIONS OF ALLSORTS OF LAWS THAT BINANCE FACILITATED FROM EGREGIOUSCRIMINAL CONDUCT. AND SO UNFORTUNATELY OURCONCERN AT BETTER MARKETS IS.

THAT THAT ENCOURAGES CRIME.INDIVIDUALS HAVE TO GO TO JAIL. THE ONLY PERSON AT FINANCE WHOWAS EVEN CHARGED FOR ALL OF THESE CRIMES WAS THIS SINGLEPERSON WHO IS THE CEO. AND HE SHOULD HAVE BEEN CHARGED.HE SHOULD HAVE BEEN CHARGED WITH MUCH STRONGER CRIMES ANDGOTTEN A MUCH BIGGER SENTENCE. BUT THEY SHOULD HAVE CHARGEMANY OTHER PEOPLE BECAUSE CZ DID NOT DO THIS ON HIS OWN.THERE ARE DOZENS IF NOT HUNDREDS OF OTHERS.ONE OF THEIR COMPLIANCE OFFICERS ACTUALLY PUBLICLY SAIDTHAT THEY SHOULD HANG OUT A.

BANNER, QUOTE, IS WASHING DRUGMONEY TOO HARD THESE DAYS? COME TO BINANCE. CLOSE QUOTE.THAT WAS A COMPLIANCE OFFICER AT BINANCE.THEY WERE IN THE BUSINESS OF LAUNDERING MONEY OF GLOBALCRIMINALS. AND TO BE FINED $50 MILLION BYTHE DOJ, WHICH IS .01% OF CZ'S NET WORTH, AND BE SENT TO ARELATIVELY COMFORTABLE FEDERAL PRISON FOR FOUR MONTHS, IT ISNOT EVEN A SLAP ON THE WRIST, AND THAT IS GOING.TO SEND THE WRONG MESSAGE. . ANNABELLE:THAT WAS DENNIS KELLEHER,.

COFOUNDER AND CEO OF BETTERMARKETS. WE WILL HAVE MORE TO COME ONDAYBREAK ASIA. THIS IS BLOOMBERG. ♪ HAIDI:WATCH OF SHARES OF DBS WHEN TRADING GETS UNDERWAY.REPORTING A PROFIT BEAT AND CONTINUE TO BENEFIT FROM HIGHERLENDING INCOME. WHEN IT COMES TO DBS, WHAT WASTHE STANDOUT FOR YOU? >> IT BEAT ESTIMATES ON ALLASPECTS. FROM LENDING INCOME, WEALTHINCOME.

THE CEO ALSO GUIDED FOR ABETTER YEAR THIS YEAR. IN 2023, DBS ALREADY POSTEDRECORD EARNINGS, WHERE THE NUMBER TOPPED 10 BILLIONSINGAPORE DOLLARS. THIS YEAR SO FAR IT WOULD BEEVEN BETTER. ANNABELLE:WHAT STOOD OUT TO YOU IN TERMS OF ASSET QUALITY?DOES THAT REMAIN MANAGEABLE FOR THE LENDER? >> SINGAPORE BANKS TYPICALLYHAVE LOWER THAN PEERS MPL. THAT ASSETS STILL ONLY AT 1.1%OF TOTAL ASSETS.

IT IS NOT JUST MANAGEABLE, ITIS QUITE GOOD. IT IS A GOOD SIGN. THERE IS ONE THING I WOULD LIKETO ADD — ANNABELLE: PLEASE, CONTINUE. >> ONE THING I WOULD LIKE TOADD IS SOME ANALYST POINTED OUT THAT TRADITIONALLY, THE FIRSTQUARTER FOR DBS ARE THE BEST ONES. SO WE SHOULD EXPECT TO SEEMUTED CORRIDORS GOING DOWN THE ROAD. ANNABELLE:THANK YOU VERY MUCH. THAT WAS OUR SENIOR ASIAFINANCE REPORTER.

LET'S STICK WITH BANKS.STANDARD CHARTERED IS ALSO RELEASING EARNINGS.ANALYSTS WILL BE FOCUSED ON PLANS TO RETURN CAPITAL TOINVESTORS AND PROGRESS ON PUSHING DOWN COSTS.FOR MORE LET'S BRING IN DENISE WE AND. WE JUST HEARD THIS IS TYPICALLYA GOOD QUARTER FOR DBS. WHAT CAN WE EXPECT LATER?DENISE: PROFITS MIGHT BE BELOW LASTYEAR. BUSINESSES EXPECTED TO DO QUITEWELL OUR FINANCIAL MARKETS.

IN SIMILAR STORY TO DBS.NOT QUITE THE SAME BUT MIXING STRONG INFLOWS PRETTY A LOT OFINFLOWS FROM OTHER BANKS LIKE CREDIT SUISSE.THOSE ARE THE SORT OF FOCUS AREAS. [INDISCERNIBLE] STREAMLINING THE BUSINESS,IMPROVING DIGITIZATION. I THINK ANALYSTS WILL BELOOKING FOR MORE PROGRESS ON HOW THAT IS GOING BASICALLY.HAIDI: WHAT WAS THE OUTLOOK WE HEARDWHEN IT COMES TO CHINA? DENISE: CHINA IS SOMETHING WE HAVE TOWATCH OUT FOR.

IT WILL BE INTERESTING TO SEEIF THERE IS A CHANGE IN TONE. THEY HAVE HAD ISSUES, WHICHHAVE BEEN PERSISTENT EVEN THOUGH THEY ARE COMING DOWN.HSBC'S RECENT QUARTER SAW IMPROVEMENT. IF IT'S AN IMPROVEMENT IF WESEE MPR IS COMING DOWN. HAIDI: WHAT ABOUT EXPECTATIONS FORCOST MANAGEMENT? DENISE: I THINK THAT WILL BE A FOCUS.IT'S SUPPOSED TO SIMPLIFY THE BANK, REDUCE COST AND OVERLAPS. THE BANK HAS ANNOUNCEDMANAGEMENT CHANGES WITHIN THE.

CORPORATE INVESTMENT BANK.IT WILL BE INTERESTING TO SEE HOW THEY DRIVE THE BUSINESSFORWARD AS WELL AS KEEPING A LID ON COSTS. ANNABELLE:THAT WAS DENISE WEE THERE. ON THE EARNINGS FRONT, BRINGINGYOU SOME NEWS CROSSING THE TERMINAL.THE ENTERTAINMENT COMPANY HYBE IN SEOUL REPORTED ITS NUMBERS.A MISS ON ESTIMATES FOR OPERATING PROFITS. THAT CAME IN AT 14.4 BILLIONWON, DOWN MORE THAN 17%. THE ESTIMATE HAD BEEN FOR 24.2BILLION WON, SO QUITE A.

SIGNIFICANT MISS ONEXPECTATIONS. SALES, LIKEWISE WE SAW THEM AT– THE ESTIMATE HAD BEEN FOR OVER 412.A BIG GAP BETWEEN WHAT ANALYSTS WERE PREDICTING VERSUS THENUMBERS THAT CAME THROUGH. NET BASIS 10.8 BILLION WON, THEESTIMATE NEARLY 20 BILLION WON. STILLL, HYBE IS MANAGING TOSTAY POSITIVE AS WE HEAD THROUGH THE MORNING SESSION.TUNE IN TO BLOOMBERG RADIO TO HEAR MORE FROM THE DAY'S BIGNEWSMAKERS AND GET IN-DEPTH ANALYSIS FROM THE DAVE BRATTEAM — DAYBREAK TEAM.

YOU CAN LISTEN VIA THE APP,RADIO PLUS, OR ON BLOOMBERG RADIO.COM. WE HAVE MORE AHEAD.STAY WITH US. HAIDI:CHINA'S TOP CLIMATE CHIEF IS WARNING THE CLIMATE FIGHT WILLBE TOO COSTLY WITHOUT CHINA. HE SPOKE EXCLUSIVELY TO STEPHENENGLE AND SAYS WESTERN DE-COUPLING COULD COST THEGLOBAL ECONOMY TRILLIONS OF DOLLARS. >> IF WESTERN COUNTRIES — ITWILL COST THE WORLD MAYBE AN ADDITIONAL $6 TRILLION U.S., A20% INCREASE OF THE OVERALL.

COST. WE NEED TO MAINTAIN THELOW COST. OTHERWISE NOBODY IS GOING TO AFFORD THE ENERGY TRADITIONPROCESS. STEPHEN: OFFICIALS CLAIM CHINA IS GIVENUNFAIR SUBSIDIES AND THAT HAS LED TO THE SITUATION WE ARE INRIGHT NOW WHICH COULD DISTORT GLOBAL TRADE IN THESE CLEANPRODUCTS. HOW DO YOU RESPOND? >> [INDISCERNIBLE]ALL THE RENEWABLE ENERGY EQUIPMENT TECHNOLOGY, THEY AREDEVELOPED AND MANUFACTURED BY PRIVATE COMPANIES.IT IS VERY UNIQUE.

VERY UNIQUE.I THINK PRIVATE COMPANIES NORMALLY DO NOT RECEIVE ANYGOVERNMENT SUBSIDIES. WE SHOULD HIGHLY APPRECIATE THEDEDICATION AND CONTRIBUTION. AFTER MORE THAN A DECADE, NOW WEHAVE BOTH SOLAR AND WIND PRODUCTS WHICH ARE NOW AFFORDABLE TO START ATRANSITION. STPHEN: WHILE WE ARE TALKING ABOUTOVERCAPACITY WE HAVE TO TALK ABOUT THE DOMESTIC ECONOMY.WE HAVE BEEN SEEING PROFITABILITY SINK AT A LOT OFTHESE SOLAR AND EV COMPANIES.

PRICE WARS ARE DRIVING DOWNTHEIR MARGINS. WHAT DOES THAT DO TO THECLIMATE FIGHT IF THE WORLD IS BIFURCATED ON TRADE? >> WE TALK ABOUT CAPACITY INTWO DIFFERENT WAYS. FOR GLOBAL DEMAND, CHINADOMESTIC DEMAND STILL A HIGH DEMAND FOR RENEWABLE ENERGYPRODUCTS. WE ARE DETERMINED TO INCREASEOUR RENEWABLE ENERGY CAPACITY TO A HIGH PERCENTAGE.MAYBE OVER 80%. I THINK FOR THE NEXT DECADE WEARE STILL IN THE PROCESS OF.

INCREASING ARE RENEWED ENERGYCAPACITY. GLOBALLY I THINK THAT IS MUCHSLOWER THAN WHAT CHINA IS DOING. THEY WILL BE HIGH DEMAND FORRENEWABLE ENERGY. FOR THE SO-CALLED OVERCAPACITY,CHINESE MANUFACTURERS, IT IS A TEMPORARY ISSUE. IT WOULD BE GOOD FORCOMPETITION. THEY CAN MAKE MUCH BETTERPRODUCTS. HAIDI: CHINA SPECIAL ENVOY FOR CLIMATECHANGE SPEAKING EXCLUSIVELY WITH STEPHEN ENGLE IN BEIJING.TAKE A LOOK AT WHAT WE ARE.

TRACKING.WE SAW THE LABOR REVERSAL IN THE U.S.EQUITY RALLY AS INVESTORS CONTINUE TO PASS THROUGHCOMMUNICATION FROM FED CHAIR JAY POWELL AFTER THE FOMCMEETING. RATES STAYING ON HOLD BUTPERSUASIVE EVIDENCE WOULD BE NEEDED FOR ANY RATE HIKE IN THEFUTURE. A LOT LESS HAWKISH THAN WHATMARKETS HAD BEEN POSITIONING FOR. FUTURES LOOKING POSITIVE. UPSIDE WHEN IT COMES TO NASDAQFUTURES FROM A LITTLE EARLIER.

ON. TAKING A LOOK AT HOW WE ARESETTING UP AND IT COMES TO TRADING IN CHINA.WE CONTINUE TO SEE THAT REVIVAL OF CHINESE EQUITY SENTIMENT.A LITTLE BIT TO THE DOWNSIDE, ABOUT .3% SOFTER.WATCHING DOLLAR CHINA WITH A PULLBACK IN THE DOLLAR AND SOMEOF THAT IN A FITTING ASIAN FX BEING ABLE TO TAKE A BREATHER.A BIG MOVE IN THE YEN, SPECULATION AS TO WHETHERINTERVENTION WAS BEHIND THAT REMAINS FRONT AND CENTER.OUR MARKETS COVERAGE CONTINUES AS WE LOOK AHEAD TO THE STARTOF TRADING IN HONG KONG,.

SHANGHAI, AND SHENZHEN.THE CHINA SHOW IS NEXT. THIS IS BLOOMBERG.

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