Bloomberg Crack of break of day: Asia 04/26/2024

This is DAYBREAK.Asia. We are counting down to Asia's majormarket opens. Could be a pretty interesting sessiontoday as well. There's a lot of factors to considerhere. We just had that big miss for Tokyo CPIright on the eve of the Bank of Japan meeting.We've heard some more currency talk from the finance minister in Japan, April,about supporting the yen blowout results for some of those US tech stocks, butsome concerning data out of the US as well as the market going to balance allof this.

Yeah, there is a lot to digest.I mean, just thinking about how that stagflation chatter is coming back tothe fore in the US and then how this yen depreciation, how is that going tofigure into the conversation for BOJ policymakers?We are of course waiting with bated breath whether this in a way forces theJapanese central bank to come through with hawkish signals.But we do have the open in Japan now and that big tech tailwind is coming throughfor stocks. A little bit of upside on the Nikkei andthe topics at the start of trade. We're still seeing dollar yen hoveringat 155.6.

And of course, it is about whether weget any indication about the curtailing of these bond purchases from theJapanese central bank. It seems like the bond markets arebetting that we do some pressure coming on the Japanese ten year governmentbonds. But let's take a look as well as whatwe're seeing in South Korea. Yesterday, we saw those declines onstocks as the metal earnings and the outlook really put a dent in what wasotherwise a recovery for some of these Asian stock markets taking stock.We've seen four out of the seven mag Sevens report and so far it looks quitegood, especially after Microsoft and.

Alphabet knocked things out of the park.They're proving they're proving that they're able to make money from allthese air investments. So you're seeing the upside in SouthKorea as well, the one moving towards 1370.Now, let's take a look at what's going on down under, because Australia was, ofcourse, on break yesterday and the big news that dropped was how BHP is makinga takeover approach for its rival, Anglo American.This is something that could shake up the industry at a time when these minersare really looking to expand copper production.We're hearing that Anglo American.

Doesn't think that this proposal isattractive, though, and that's because it doesn't quite address how BHP willlook to demerge some of its South African operations.We're seeing BHP sliding about 3.3% at the open, as are the Australian.The broad based ASX 200 iron ore prices hovering near their seven week high.It's been recovering even though we're seeing declines in the Singaporecontract today. And this is thanks in large part therecovery due to that improvement in sentiment towards the Chinese economy.Brent hovering near 8930. Let's take a look at what we're seeingin US treasuries, because as I said, is.

That stagflation chatter, as we got thequarterly PCE numbers that were hotter than expected, but growth was soft.That caused a sell off in treasuries. And we are seeing more of the same nowon the two year yield, really nudging towards that 5% level.Paul. All right, thanks.Over. Let's get a little bit more analysis nowon the impending DOJ right decision with Bloomberg Intelligence Chief Asia Ethicsand race strategist Steven Chu. So, Stephen, we just got the latestTokyo's CPI data. How do you see that potentially muddyingthe waters for the central bank today?.

I don't think it's going to change theirmind, actually, because the number obviously understood today.But then there was sort of a one off and it's also pertaining to Tokyo.It doesn't mean that the nationwide inflation would drop as fast is the droptoday for Tokyo is due to education subsidy.And that's not nationwide, as I said. So of course, the BOJ, after dumpingtheir negative interest rate after dumping yoke of control last meetinglast month, I think today they're just going to keep on staying hawkish, eventhough they may not hike today, but they will still imply to market that they'reon course to hike further in the second.

Half of the year as long as theinflation trajectory stay above 2%. So we might see some adjustment as welltoday to bond purchasing programs. What's the outlook for JGBs?Yeah, there was certainly in the chatter last meeting.Interestingly, if you look at the footnote of the statement, they saidthat they are keeping JGB purchases at a pace of ¥6 trillion a month.And indeed, when we look at the data over the last three months, actually,even like for this month, they were buying slightly below ¥6 trillion.So that's in line with what they've set. So today we think that they're going tostart implying, if not stating.

Explicitly, that they will start to slowthat QE just because I think now all the conditions are met.And the thing is that the view they always want to move away from owning toomuch of a GDP because right now they're only over half of the market.And for any major market, any broad market, that's probably unhealthy intheir eyes. So now it's a good juncture for them tohint market that they're going to start to slow QE purchase or taper in QE.If they do say explicitly, they would probably do a stealth tapering.So you will see less GDP purchase in action going forward.Now, of course, is not part of the BOJ's.

Mandate to worry about currencystability, but currency stability is becoming a problem for the broadereconomy nonetheless. Is there an element of pressure here to,if not, do something in terms of tightening, at least say somethingthat's a bit tougher? Yes.It's very more down to a more F instead of BOJ to talk about the yen.So anything about the yen, we think they just talk about the impact of a weakeryen will cause import costs to go up and has inflation higher.So they may imply a rate hike, but it doesn't mean that they would admit toethics intervention.

They will probably tell the market thatthey're watching the market. If anything happened, an orderly, ifthere are more hurting selling of the yen, then they will probably dosomething. But they will not tell you todayexplicitly what they're going to do or. All right.Bloomberg intelligence chief Asia fixed and right strategist Steven Chu there.Let's get over to Ed Gomez now for more on this.He's CEO at SG AMC Capital and is as Stephen was outlining there, we've hadplenty of words in defense of the yen and no real action, so to speak, as yet.Do you anticipate anything, at least in.

Terms of some tougher rhetoric to defendthe yen from the Bank of Japan today? Morning, Paul, and great to be on theshow. I don't think rhetoric is going to cutit anymore to the extent that they have to talk.They were talking at about 152, you know, that was about two or three weeksago. A lot of common you know, a lot ofchatter out of the BOJ and the Ministry of Finance.That's not going to work anymore. Keep in mind that the forwardexpectations, one year forward for rates, you know, is about 30 basispoints higher for Japanese yields.

And the U.S.has seen a collapse and, you know, from seven cuts down to maybe one.So you still have about a 5% interest rate differential in favor of long U.S.dollar positions. And that is just money on the table, youknow, to be had. Also, any intervention that Bank ofJapan might do in the currency markets is going to impact the bond markets aswell as the equity markets. So, you know, do they really want thatpain to, you know, the painful decision of intervening in the affects markets,having impacts on other markets? Probably not.So overall, we don't really expect them.

To be able to say anything to talk thecurrency down. They've got to do something.And with that comes fear. And so breaking the 152 on an Aussie andis over a hundred, you know, it seems like you know there could be furtherdownside to the Japanese yen for the. Look, as a CIO, if you if you sawintervention and the end got a bit stronger, how would you view that?Would you just view it as a more attractive selling position?Absolutely, because like I said, the fundamentals, you know, don't reallysupport the position of the Bank of Japan.What they need to do is can they take.

Rates to five?Probably not going to take up to two and a half.Probably not. Can they expect and be happy with anequity market that just crashes? What happens when they start selling the7%, you know, of of ownership that they have in Japanese equities and ETFs?They can't deal with all of that. You know, domestic growth is really notstrong. They have to live, you know, on theexports that come in and they're doing reasonably well.There been a lot of Japanese companies have, you know, some great technology,you know, so there are willing buyers.

But you know, what's happening with thedomestic economy, your your population growth, your demographics are so weakthat, you know, there really is no hope, you know, of a strong domestic economyand you don't have immigration like you have in the US.So you're not going to get the benefit of that either.So they're in a bit of a catch 22. They're going to manage it the best theycan. But, you know, just down tointervention, you know, I think it's going to be a temporary, you know,temporary help for the currency to appreciate not not not a longer termfix.

We've got a few more interestingingredients for the soup a little bit earlier today as well.We have the US GDP showing a pretty sharp slowdown in the first quarter.We're still in positive territory, but it was a lot weaker than we wereexpecting. And the numbers show that there might bea whiff of stagflation in the air in the US as well.Is this changed your prospects at all for potential Fed easing or potentiallymaking life more difficult for the BOJ? Overall, we've been expecting out of theUS about two or three cuts for 2024. So we were nowhere close to the sevencuts the market has been expecting and.

Now the market has moved to just northof one cut full this year. So we still expect two or three cuts tocome through the parts of the inflation out of the US, which are coming throughfrom insurance prices as well as rentals.That clearly is an issue and is not budging at all even on the back of some,you know, high interest rates. So the likely going to have to be somekind of policy fix to some kind of policy debate in terms of specificallyhow to address these points, I think oil higher is is temporary.The price of oil is volatile and the US is relatively it's net exporting oileven at this point of time.

Biden is talking about increased nuclearenergy production. So that's going to be something whichoffsets the higher price of oil. So energy is not as big a deal as as isrentals, as well as insurance premiums. And, you know, the Fed is not going tohave the tools to address very, very specific niche parts of the market.Overall, the US economy is doing really well.You've seen the CHIPS Act lead to a lot of investments, not by the US governmentalone, but also by multinationals. You've got TSMC, you've got Japanesefirms, you've got American firms setting up production facilities.All of that's leading to a massive.

Construction boom as well as productionboom and then the ancillary ancillary industries to help the mainindustries grow. So you're probably going to have a USeconomy. Despite the weak GDP numbers reported,we're not too concerned about US economic growth.And yes, that does become a problem for the Bank of Japan when you considerwhat's happening to it.As we've been talking, we've seen some interesting moves for bond yields.We've got the ten year yield for Japan now rising to the highest since we'veseen since November and the US two year.

Well, it finally did it.It's broken through 5%. Where do you see yields hitting fromhere? Well for the US, it did break 5%overnight in the U.S. session as well.When it came back down. Like I've been saying, the growthnumbers out of the U.S. don't necessarily dictate the Fed, whichhas to be at this point of time very, very dovish.And we are seeing the seeing the expectations being built up there out ofJapan. You know, just wait and watch.You've got to be, though, Jeremy.

And, you know, we're just going to haveto see how they play this to the extent that they pulled back bond purchases,you know, trading, that's going to just add more fuel to the fire.But for the U.S., I wouldn't be surprised.The risk to our expectation of two cuts probably being felt more towards the endof, you know, slightly or maybe maybe just one rate cut or no rate cuts atall. The Bank of Japan, you know, is movingtoo timidly, even as of right now. So, you know, 30 basis points at the endof the year, you know, even if it's 50 or 60 basis points, you know, is reallynot going to be.

A game changer for them.All right. It got him.CIO at GMC Capital, thanks so much for joining us with your insights today.Let's take a look at what's moving in some of these big tech names in the AsiaPacific at the moment. We've got SoftBank rising right now, alittle bit of softness for Rakuten. Of course, we saw some great results alittle bit earlier on from Microsoft and Alphabet's Alphabet announcing a sharebuyback and a first ever dividend as well.Take a look at some of the Asian chip makers.Also, it was a pretty forgettable.

Quarter for Intel.We do have S.K. Hynix, though, for covering a lot of theground that it lost on Thursday after its results suggest maybe there was abit of profit taking a play in the sky high next rebounding pretty sharply.It's now off 1.3% from yesterday's open, but up about 4% today.Samsung Electronics gaining in the early going as well.Now, I want to talk a little bit about BHP.Also, it's slipping a bit at the moment and I believe BHP is it's down the most,in fact, in seven months trading volume doubling as well.Now this is after a story that we.

Brought you yesterday during a publicholiday here in Australia that BHP is reportedly making a bid for AngloAmerican that bids worth $59.6 billion. It's an all stock bid.So this suggests that the deal is a big deal making might be back on the tablefor the BHP chief executive. Mike Henry is particularly interested inthat copper interest. And we've seen copper prices showingsome pretty strong gains over the past few weeks as well.All right, BHP, they're off about 4.3% at the moment after 50 minutes of tradein Australia. Right.You see the yen there watching that very.

Closely.We have more talk from the Ministry of Finance today, but still no action.Of course, we're wrapping up the BOJ's two day meeting and we're going to havemore on the outlook for the yen ahead of that decision.And we're going to hear why Standard Chartered Bank is expecting some modestupside for the currency. But first, though, US Secretary of StateAntony Blinken. He's wrapping up his China visit asBeijing rebuffs his criticism of their trade policy.We'll have details of that story next. This is Bloomberg.

Beijing has pushed back against U.S.trade criticisms, as Secretary of State Antony Blinken continues his visit.The Foreign Ministry says China's practices are in line with internationalrules. Blinken's been telling officials that USfirms need a level playing field in China while also calling for sustainedcommunication. We have an obligation for our people andindeed an obligation for the world to manage the relationship between our twocountries responsibly. That is the obligation that we have andone that we take very seriously. And I think the direction from PresidentBiden and President Xi was to continue.

To build those lines of communication tosustain them. And again, to deal directly with ourdifferences as we also seek to build cooperation.All right. For more on this, let's get to GreaterChina senior executive editor John Liu, who joins us now.John, one gets the sense that the US and China are talking past each other to adegree at the moment. Is the best that can be said is that atleast they're talking. I think there's a lot to be said forthat, Paul. The fact that the two countries aretalking.

You'll remember there was a long periodafter the spy balloon incident where there was no talking.And so we are in a better place. After that meeting between PresidentsBiden and Xi in San Francisco, Secretary Blinken's visit is in large part to tryand build some momentum on that meeting. Obviously, there are lots of hurdles.The issues with between businesses and market access for American companies,that's a big one. I'm sure we have not heard it publicly,but I'm sure the Chinese side is raising questions about what the US governmentis doing when it comes to tick tock. That bill that was signed yesterday byPresident Blinken also included.

Additional money for Taiwan for militaryaid. And so that is going to cause some irein Beijing as well. So lots of issues on the table.But I think talking is the good thing here.All right. Yeah.Jon, that tick tock, ban or divest bill got passed.Justice Anthony Blinken basically set foot on the ground in China.Did he get any blowback on that? Oh, if there has been any blowback, ithas not been in the public venues that we've had access to.The Chinese side has been relatively.

Restrained when it comes to giving theirresponse to that situation. The Foreign Ministry, all they have doneso far is refer back to something the Minister of Commerce said earlier, whichwas that China would do all it could to defend the rights of its companies.We do understand there was an earlier bill passed here in China that any saleof assets involving high end advanced technologies would need Beijing'sapproval before it could be sold. And so we do believe that means TikTokwould have to get Beijing's approval before they could divest of their USbusiness, which kind of means it would make it extremely hard for them.So the situation is really complex now.

We are waiting for more from Beijing,but so far they have been quite restrained.Also another issue Antony Blinken was raising was concerns about China's role,real or imagined about what's going on in terms of Russia and Ukraine.How did discussions on that proceed? We do know that it was going to be atthe top of the list when it came to subjects that Secretary Blinken wantedto discuss with the Chinese. The Chinese side has continued toprovide support, maybe not directly military aid in terms of weapons, butthey have rhetorically. Economically, in terms of trade continueto be there as a as a support for the.

Russian economy.The Russian diplomatic efforts, the Global Times, a fairly nationalisticnewspaper here in China, did say that it seemed like every time the US officialsvisited Beijing, it was like an ultimatum they were bringing in.So that is sort of the way the Chinese government seeing some of the rhetoriccoming out of Washington about Russia and Ukraine.Or Greater China? Senior editor, Executive editor.John, do that. We do have plenty more to come onDAYBREAK. Asia.This is Bloomberg.

Barclays shares jumped the most in morethan a year after higher equity trading revenue in the first quarter helpedpre-tax profit beat estimates. S.O.S.has been cut a Christian and told us exclusively that he's expecting moreuptick in stocks and deal flow. Deal flow and the equity marketsthemselves have been starting to show some buoyancy.As I said, we are on our equity floor here and then our own numbers inequities have shown an uptick for this quarter versus the same quarter lastyear. I think deal flow is increasing, youknow, in our own energy business or our.

Sustainability business and thetransition business. We've seen nine deals in the lastquarter and a bit. And so I do think that there is dealflow happening. I think, though, it's very early, you'vegot to give it a quarter or two to cement.Is Barclays prepared to capitalize on that when it does ultimately come tofruition, when it does actually see a little bit more momentum?Is Barclays positioned to capitalize on that, given a little bit of an exodus interms of your bankers as well as lower advisory fees relative to your Americanpeers?.

How do you tackle that?Yeah, well, it has been and it is a very, very important area of focus forus. It's we want to increase what we do inM&A. We want to do increase what we do inequities. We have hired a lot of very talentedbankers. We are focused on the energy transition.We are focused across the important sectors of technology and healthcare.And so we absolutely are positioned to capitalize on it.And you should see the results over the coming quarters.It's not something that's won in days,.

Weeks and months, but over a longerperiod of time. And we've put the sustained investmentand skills behind it and we will continue to do so.Can I ask you about M&A within the UK market?Venkat We've got a bit of M&A taking place.Barclays, you yourselves in the process of acquiring Tesco's retail bankoffering, we also have consolidation with nationwide buying virgin money, thebuilding society space. We see consolidation there as well.Is this a sector where we'll see more and are you going to play more of a rolein that?.

Well, I think at any time you have aninflection in the interest rate cycle, as we have had with changing capitalmodels and changing consumer regulation, it stresses business models and ittherefore drives some amount of M&A. I think our own acquisition of TescoBank is something that's win win for Tesco and for us.We were looking to grow our unsecured lending and I think you will see otherinstitutions look at that. We have been very, very clear.Our plan for growth is predicated on as an organic one.That's the backlash. S.O.S.is saving Cat a Christian?.

Speaking exclusively to Bloomberg'scritic Gupta and Anna Edwards. All right.Let's take a look at how we're doing in commodities right now.Crude prices creeping up again, Brent, now just hovering below $90 a barrelwhen we're seeing a bit of a recovery in iron ore prices as well.Pulling back a little bit this morning, but a little bit of optimism aroundChinese demand helping to support iron ore prices there.Copper prices also remaining quite elevated, still hovering just below$10,000. It's not really helpingAustralian materials producers, though.

A little bit weaker at the moment.Still to come, Standard Chartered Bank shares and their outlook on the yen.This is Bloomberg. All right.Let's check in on how the markets are faring on the big decision day.April, Hong Kong, now Singapore studio. Everybody, you're watching.Yeah. Big day as we wait for the words of waitand not just that decision, it's also going to be about what he says, thosesignals to the market. We have the markets in the first 30minutes of trade in Japan and South Korea.It's a bit of a mixed bag as we got a.

Bit of a tailwind from the big techfront after those blowout earnings from Alphabet, as well as Microsoft provingtheir worth. Those lofty valuations are beingjustified in a way as they show that they can make money from their bets.And we also have the open coming up in China.Something to note here is how these cheap Chinese tech stocks have beenoutpacing some of the gains for this month, at least in the mag Sevens.And it gives you a sense of how they're pulling ahead at a time when the US techstocks are grappling with those concerns about the Fed narrative higher forlonger and despite what we're seeing.

From the earnings front.So a mixed picture in the Asia Pacific, but down under, we're seeing that dragcoming through from BHP group investors not liking what they're hearing from themining giant about that takeover for Anglo American proposal.And this is on a day when its peers, Rio Tinto, Fortescue, are moving up.That's a drag on the ASX 200 today. So the Bulls take a look at some of thechip movers as well. Chip makers I should say, is the hightech Sam. So that chip front really moving uptoday and this is along with what we're seeing in the after hours trade of allthe big tech shares.

Let's take a look at what we're seeingon the Japanese currency as well. As you say, it was about to be O.J.and we're seeing not much of a move right now on the currency.Is that speculation that we could see the central bank start talking about thestart of curtailing its massive bond purchases.We are also hearing about the Tokyo CPI. It was a miss on all fronts, but fornow, traders seem to be shrugging off that data as a bit of a one off.All right, Thanks, Overlap. Let's talk about price growth in Tokyo.Did, of course, decelerate sharply in April to a pace below 2%.And it happened as traders eagerly await.

The Bank of Japan's right decision.Senior Japan economist Taro Kimura joins us now.Now, Taro, we were awake to the possible risk of an undershoot on this numberbecause we did have an elimination of school tuition fees, high school tuitionfees in Tokyo. But does that explain away a miss ofthis magnitude? Right.Actually, we have to digest several things in this today's rating forTokyo's April CPI. So obviously, as you said, the wave ofhigh school fees in the Tokyo district is cutting off 0.5 percentage point fromthe core from the headline.

And given that the core reading, whichis the target of the BOJ policy is 1.6% year on year on its growth.It's like without the school fee effect, it's likely to be 2.1%, which isactually lower than the consensus, still lower than the consensus forecast of2.2%. And I washoping for a stronger gains.So that means probably still consumers who are still in the costs of cost ofliving crunch is hesitating to purchase something that's which the price ofwhich has been risen. So I overall the reading wassurprisingly weak.

Barring that from the school feessurprise. Yeah.So do you think this is going to be a one off or is it going to be a trendthat's reflected nationwide? This is obviously the school fees areone off and also it's limited to Tokyo area, which is less than 10% of thetotal nation's CPI. So it's not going to be a huge downwardpressure to national CPI reading. But we have to be careful that barringbad effects, underlying inflation is probably not as strong as the Bank ofJapan has expected. So probably the Bank of Japan wants toshow some hawkish tone, but the weaker.

Results in the CPI will kind of bindtheir hands in their seats and in sending their signals.All right. Senior Japan economist Taro Kimurathere. Let's get a little bit more on the yennow with Stephen Englander, global head of G10 Effects research at StandardChartered Bank. So we have got a yen little moved afterthat big miss that we had on Tokyo's CPI, but it's still really weak.Stephen one 5564. Are you expecting to hear anything fromthe BOJ this afternoon that might help put a floor under the currency?I think they're going to try, but we.

Don't think that they're going to changepolicy. We don't think that they're going tomake a strong commitment to change policy any time soon.And the impact of a verbal intervention seems to be diminishing.I think that the market was reluctant to sell yen,say when the U.S. data came out this morning for fear thatthey might pull some sort of rabbit out of a hat.But if they if they don't, we could see dollar again, sort of, you know, puncheven higher here.To your point on jawboning, we did hear.

Again from the finance minister Suzuki,earlier this morning saying that they're keeping a closewatch on the currency, but they've been saying that for a very long time.Now, when is the time to act and stop talking and would it make a difference?Well, I think the time to act probably would have been when, you know, wascapped at 152 before the U.S. CPI came out.I think that at that point, intervention could haveput a lot of peer panels into negative territory because most of the yen hadbeen bought, say, north of 149 and even north of one.So I think now that there's quite a.

Buffer of profits in terms of sellingyen. It would be hard, I think, to reallyintimidate the market. So I think in order for it to beeffective, what they would have to do is say something very concrete in terms ofraising monetary policy, almost a commitment to do it,and that might make the markets vulnerable to intervention as a bridgingtype of policy. But if, you know, if they just tryintervention with the way rate differentials are going,they'd probably have to put a lot of money in for not much impact.Yeah.

And that was a remark that FinanceMinister Suzuki made as well. You know that right differential.It's a factor and it's to a large degree beyond their control.And you know, I'll give you exhibit A out of the US today the worst of allworlds on data we had sharply slowing growth inflation proving to be stickyThat's pushing out those Fed rate cut bits even more.Where do you see the dollar going? Where do you see the yen hittingrelative to that? In this kind of environment, it justseems that there's going to be more of the same no matter what policymakerssay.

Well, look, you know, I think that thethe slowdown was a bit overstated. GDP is kind of a funny number.We we all talk about it, but it's it's it's probably not the most reliableindication of where activity is. I'd say that,you know, the consistent payroll numbers that we've been gettingprobably. Tell us more about where the economy ison the inflation side, I think is a problem.You know, we think that's good to come out of 2.8 if amonth, a year on year march, of course he'd be busy.If it's not to, 8 to 9 is more likely.

Than two seven.So we could see some more pressure here.Ultimately, we think that, you know, there will be some convergence and westill expect the Fed to cut twice this year.But I think the market's waiting for that convergence to be, you know, morevisible on the radar screen rather than kind of hoping and praying.Yeah. So you see two rate cuts.That's increasingly becoming a bit of an outlier position.But I'll tell you one position that's not so much of an outlier.If we look at Europe, the ECB, there.

Seems to be a bit of consensus gatheringaround June as the month for easing. Is that your view?Do you see it ending there? And what's your outlook for the euro?Well, we think that they are going to cut in June.We think that they're going to continue to cut through the year and that the youknow, we'll probably see differentials with the U.S.widened and we expect the euro to go down to one of four, one of three, oneof four by the end of the year, and that would be where it troughs out.I think ultimately the U.S. is going to catch up in terms ofcutting, but I think it's going the path.

Is going to be slower and more delayed.So through this year, we see more downside risks to euro dollar, an upsiderisk. Just want to talk about something alittle bit closer to home where I am. The Aussie dollar has popped above $0.65US this week because we had a hotter than expected inflation print here aswell. Inflation is coming down, but not at thepace that the RBA might have hoped. So do you see a bit of Aussie dollarstrength in the future? Yeah, look, you know, if the Aussiedollar and most currencies have traded on the back of central bank reactionfunctions.

So I think that the CPI tells the marketthat RBA isn't going to cut again and probably thenext move could be, could be that they're not going to cut anytime soon.Next move could be a hike. The you know, if you tried it outagainst Cengage, the relationship isn't as tight as it used to be.It's a much tighter with rates. So we actually likeAussie dollar on crosses. Maybe not against so much against USD,but against things like Swiss franc we think will do well.All right. Stephen Engle and Global head of G10Effects research at Standard Chartered.

Bank.Thanks so much for joining us with your insights.Still to come, China's largest auto show is underway.The industry's biggest names, including BYD, Geely and more, showing off theirhottest new designs. We're going to be live at the BeijingAuto Show up next. This is Bloomberg. China's largest auto show is back inBeijing. Some of the biggest names in theindustry showcasing their extravagant new models.Chief North Asia correspondent Stephen.

Engle spoke with BYD's head designerWolfgang Egger, about the inspiration behind their cars.Technology and design. They need to be also one firm uniqueunit and therefore this. We are also very as designers and as wegenerally also our customers very happy because the latest technology and theplatforms, they are thought from the very beginning to offer the theopportunity also to realize these proportions, because this depends alsoon the technology here, because sometimes you you want to do it or youcannot because the basis is is not adapted.But in in our case, we are so lucky that.

We have wonderful platforms.This is Wolfgang Eggers latest offering from the joint venture that BYD has withMercedes. Danza is the company and the car is thez9gt. You can really see some of thoseEuropean influences coming out in the lines of this car, kind of a shootingbrake style luxury. EB really emphasizes technology as wellas speed. This car will go 0 to 100 kilometers perhour in just 2 seconds, and it could be quick to the European market, perhaps asearly as the fourth quarter of this year.The company Chairman also my boss, Mr.

Lien,they give a complete free space for design because they know about theimportance of design. And I never enjoy just so much freedomas I am doing here. Now in this period.The new thing is really to search again and bring backthe emotion, the emotion to to these cars with the beauty.We have these lines very elegant. Still not art, but we are we are reallylooking to get close to this challenge, to have a timeless piece and a beautifulpiece that people can you can love in all over the world.You can definitely see Edgar's.

Lamborghini experience shaped in thisyoung Wang Yu nine super sports car, also from a BYD affiliate, Young one.Now, speed, obviously is a big theme here, including speed to market.One thing Edgar told us is that unlike the legacy automakers in Europe, BYD andthe Chinese automakers can take from design phase to market pretty quick inas little as about two years. The speed is higher, is higher, and weare running much more and are working hard.Also, our team is working day and night very hard.They are all in competition, creative competition, but they are all one teamand they have a common heart.

Me Now we reached the 24 month targetfor developing the car, getting from the creative moment to to the productioncan. And so, yes, this is amazing.Is amazing. And what would a Beijing auto show bewithout a concept car? This is a super car from, of course,designer Wolfgang Egger, perhaps his vanity project.It is a concept, yes, but could come to market.It is the Hong Kong Ball Super nine. And I can kind of see where theinspiration came from. If the Batmobile or the Mark five fromSpeed Racer were in TV, this would be.

It.Limited windshield, no roof. Fast as Lightning Stephen EngleBloomberg News at the Beijing Auto Show and Stephen Engle joins us live now fromthe Beijing auto show. Stephen, that car looked very practical.What are you looking at today? I always wanted a mark five from speedracer. As a kid, I'm kind of showing my age,but that car was special. It is a concept, obviously, fromWolfgang Egger. You know, the perspective on WolfgangEgger is that he was the former head designer at Alfa Romeo, Audi andLamborghini.

So you can see those European lines inhis designs. And there's no doubt.Why BYD, now the biggest EV maker here in China, by far, 33% of the market,hired someone like him to kind of up the game on the design front.They have the scale, they have the technology with battery and also on theplatform, as he described there. But design was always sort of, if I canspeak frankly, was always sort of lacking.So he has come in to refurbish the line up.And believe me, six of the top ten cars sold in China, EV cars in the firstquarter were BYD cars.

A lot of that was due to price becausethey were able, with their scale, to bring the cost down to the cars, somebelow 10,000 USD. But again, upping the game on the higherend with those more European lines and as he talked about a timeless classic,and that's what the idea is trying to do so they can compete against those legacyplayers globally, not just here in China.And he again, it is a major theme, China's domination of the EV space asthe legacy automakers like Toyota from Japan, like Mercedes, like Volkswagen,all come here to see what they can do with their EVs in an already prettycrowded market domestically here in.

China.Steve, one of the things that gets talked about in the same breath withthese is full autonomous driving. Of course, we had Elon Musk doublingdown on that commitment earlier this week.And you're going to be talking to James Peng of Pony Eye.What are their plans around autonomy? They have a lot of plans.And of course, they just got approval from Chinese government to list in theUnited States. You know, we haven't had sizable IPOsfrom Chinese tech companies in years. I mean, we haven't had one since over100 million US dollar Chinese listing.

Since 2022.And that also was another company that does sensors for autonomous driving.So again, we're going to be talking to James Fung, the co-founder, the CEO.And that's another reason why we're in front of the Toyota booth this morning,because they have a big partnership and they basically have a big backing fromToyota as the future is. Many carmakers say autonomous driving orat least more assisted driving, and they do the technology and the A.I.for that. So it'll be a very interestingconversation, no doubt. All right.Chief North Asia correspondent Stephen.

Engle there in Beijing.And on the topic of Toyota, the company is moving ahead with plans to make andsell more EVs in the US. It's investing $1.4 billion in a plantin Indiana. The Japanese carmaker says the factorywill add an all electric three row SUV to its lineup.And in February, Toyota revealed plans to spend $1.3 billion on a factory inKentucky to make a fully electric SUV. Now, be sure to tune into BloombergRadio to hear more from the day's big newsmakers.You can get in-depth analysis there as well from the DAYBREAK team broadcastinglive right there in our studio in Hong.

Kong.You can listen via the app radio plus or Bloomberg Radio dot com.Plenty more to come. Stay with us.This is Bloomberg. Let's take a look at the latestcorporate stories. The information is reporting that ElonMusk's A.I. Startup X A.I.is close to raising $6 billion from investors as the company looks tocompete with Openai. The sources say the funds would valuethe company at 18 billion, excluding the investment.Sequoia Capital is said to be one of the.

Investors participating in the fundinground. Chipmaker Micron is set to receive asmuch as $13.6 billion in grants and loans from Washington to help build newAmerican factories. The firm has pledged to invest about$125 billion to build plants and to US states.President Biden has hailed Micron CEO Sanjay Malhotra for the chip companiesinvestments. Atlassian's shares fell in extendedtrading after news that co-founder Scott Farquhar is stepping down as co-CEOafter 23 years. Mike Cannon-Brookes will become the soleCEO.

The software company says Farquhar willspend more time with his family, but he's going to remain on the board.Atlassian reported third quarter results that largely topped expectations, butits forecast for adjusted operating margin did fall short.A report says Bytedance would prefer to shut Tik Tok rather than sell it to apotential US buyer. Reuters cites four unidentified peopleclose to the Chinese company saying the algorithms Tik Tok uses are consideredcore to its operations by terms denied. An earlier report from the information,saying it was exploring a tick tock sale without its algorithms.All right.

Let's take a look at how we're doing forfutures. It was, of course, a very good day forsome of those big US tech names like Microsoft and Google, both performingpretty strongly. And we've got S&P E-mini futures rightnow. Better to the tune of three quarters of1%, we saw Nasdaq triple Q ETF that tracks some of those big tech names inpositive territory as well. Take a look at the yuan there, 7.25 at75 against the greenback at the moment. And we've got other futures, though,looking to be in somewhat mixed territory.Let's take a look at how some of these.

Japanese assets trading at the moment aswell. Of course, also off the back of thoseimpressive tech earnings from the US. The broader Nikkei looking kind of flatat the moment. The yen, of course, very much in focus.Not a lot of change there. One 5561 But just to give you somecontext on what we saw today, we got a real shocker, Tokyo CPI for the month ofApril that came in at 1.6 1.8%, I beg your pardon for the month.And that was a big undershoot on the two and a half per cent that we wereexpecting. That could potentially have implicationsfor what we see with inflation.

Nationwide in Japan.And of course the BMJ is holding its meeting today or it's wrapping up itstwo day meeting today. So those the press conference fromGovernor Hugh White are going to be really closely watched.We're not expecting any policy change, but we might see a rhetoric change andpossibly a change to the bond buying program as well.That is it from DAYBREAK. Asia markets coverage continues as welook ahead to the start of trade in Hong Kong, Shanghai and Shenzhen.

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