Welcome to DAYBREAK Australia.I'm Paul Allen in Sydney. We're counting down to Asia's majormarket opens. The top stories this hour.Big US tech jumping after the bell as earnings mostly beat expectations.A sigh of relief from investors worried about lofty valuations.The rebound, though, coming after markets were rattled by data showingboth stubborn inflation and slowing growth in the US economy.Also, it is decision day for the Bank of Japan.Market players set to scrutinize governor understatement for hawkishsignals and clues on bond purchase.
Plans.All right, plenty on the docket today. Let's have a look at how the markets aresetting up for this Friday in the Asia Pacific, April, Hong Kong and Singapore.What are we watching over? Yeah.Paul, It's a big day. We're watching out for those Tokyo CPInumbers for the month of April due this hour.But of course it is about the BOJ decision and more importantly, whetherwe get those hawkish signals, signals of quantitative tightening.We hear from Jiggy Press saying that the central bank is to consider measures toreduce the levels of its bond purchases.
And in the meantime we have the likes ofMorgan Stanley as well as mufg economists flagging a potential yen shotfrom the Tokyo CPI numbers because of a lack of clarity from the StatisticsBureau about how a component that is the elimination of high school tuition feeswill be reflected in the index. That makes it a bit difficult foreconomists to make forecasts. Meantime, we're looking at NIKKEIfutures pointing to a higher open again, still hovering at one 55.6 Sydney andNew Zealand, which of course were on break yesterday.Those futures pointing to declines. Now let's flip the board and take a lookat where U.S.
Assets are.As we got numbers out of the data overnight that show that p e quarterlyfront that came in hotter than expected, but growth numbers were weaker thanexpected. So this complicates things for theFederal Reserve. We saw that sell off in treasuries andin stocks quite flat on the Treasury futures.But there could be that rise as we got those big tech earnings really knockingthings out of the park. Let's for the board and take a look atwhat we got overnight from the likes of Alphabet, as well as Microsoft reallyproving that their bets on air starting.
To pay off.Can't say the same for Intel as it really disappointed with a tepidforecasts. Paul.Yeah. Thanks.I have rule on the subject of alphabet. Let's have a listen to what CFL RuthPorat had to say about the company's results.We are very pleased with our financial results for the first quarter, driven inparticular by strength in search and cloud, as well as the ongoing efforts todurably re-engineer our cost base. All right.Beat on sales, beat on net income, a.
Dividend as well.Let's take a closer look now at these earnings.Bloomberg Technology. Reporter Julia love joining us from sanfrancisco. So, julia, a lot to.For alphabet to be happy about here. Tell us more about this quarter's growthdrivers. Yes.So there was a lot of reassuring news this quarter for alphabet.They have been fighting for years to build a viable cloud business.And over the past year, they've finally gotten there.And they reported a profit for the first.
Time last year.And this quarter, artificial intelligence drove better gains forthem. They're saying that that really givesthem a competitive edge in the fight with Microsoft and Amazon.And they also saw healthy growth in their core search advertising business,which was reassuring because that business has been coming under threatfrom Microsoft and Openai with activity. So going forwards, are investorsreassured that Alphabet can maintain its margins as it just keeps investing morein AI? I think that they are.They spent 2 billion on CapEx this.
Quarter and CFO Ruth Porat said thatinvestors can expect to see the same level of spending for the rest of theyear. She declined to give a prediction onCapEx for the coming year, but at least this quarter they showed that they cancontinue to deliver good results with that level of spending.All right, Bloomberg Technology. Reporter Julia loved that microsoft wasalso at quarterly sales and profit gaining more than expected.Lifted by corporate demand for its cloud and ai offerings from all.Let's bring in our senior tech executive editor, Tom Giles, who's in Palo Alto.Tom, a good set of numbers here for.
Microsoft as well, but a similar sort ofquestion to Alphabet really kind of keep control on margins as it keeps investingmore in its cloud and AI businesses. Yeah, well, people right now really likethe Microsoft story, even if it means investment spending, unlike you saw withMeta yesterday, the concern with meta was that it's going to take a long timeor it may take a while for that spending to pay off.With Microsoft, you're seeing a company that's weaving AI into its coreproducts, whether that's Azure, its cloud computing offer, or if you're ifyou're talking about, for example, it's GitHub.This is company that it acquired that.
That uses generative AI to helpprogrammers code more efficiently, whether it's using it for search,whether it's using it for cybersecurity. Microsoft is slowly but surely andsometimes not so subtly, weaving artificial intelligence into its coreproducts and people are noticing it and buying into that story.Plus, you've got as similar to what Julia was talking about with Google,you've got the cloud offering. Azure is a big cloud services provider.And so as the AI boom gains traction, people need more cloud computing power.And also if you make your cloud computing offering more smart, moreintelligent, using artificial.
Intelligence, that's it's it's avirtuous cycle and that's going to fuel greater demand for the product as well.Yeah. In terms of that virtuous cycle, I mean,there is a consensus that Microsoft really has an early lead in terms ofA.I.. Is it doing enough to maintain thatlead? What are its competitors doing?Well, they made this big early investment an open eye, and that hasproven to be a magnificent decision in the eyes of investors.Satya Nadella saw the potential in Sam Altman and the business that he wasbuilding.
He started investing early.He's continued to invest in that. And he's really and Microsoft has thecapital to fuel a business like Open A.I.and it's Chad shipped, which of course has been this major catalyst for a boomin funding and investing in in artificial intelligence.Can Microsoft stay ahead of the competition?Microsoft needs to continue to capitalize on the open air relationship.And at the same time, again, it's all about making sure that investors andyour customers, just as importantly, believe in your story.Do they believe that you are weaving.
Into core products, including search,for example? Microsoft has long been a huge laggardbehind Google and search. If Microsoft can start to steal some ofa march on Google when it comes to search in terms of its Bing searchengine, for example, that would be a huge advantage for Microsoft.Look, it's not been all champagne corks for today's big tech earnings.Let's talk about Intel. I mean, this company used to be theworld's dominant chip maker. It's had a tough couple of quarters.What's going on here and what's Intel doing to turn things around?Intel is a company that, as you said,.
Used to dominate U.S.and global chip manufacturing. They were always could always be countedon to be to have the most cutting edge chips when it comes to servers, when itcomes to laptops and other devices. And over the years, they have they havefallen away from being the leader. Their technology is not advanced.Their capacity for building the world's most advanced chips.They've really ceded that leadership position to the likes of TSMC in Taiwanand in the area of A.I. chips.The the £800 gorilla here is in video and and you've seen in video, it justruns circles around Intel in terms of.
Being thought of as a leader in the inthe chipmaking space because of its ability to make the accelerators thatare used to power the AI revolution. All right.Senior tech editor Tom Giles there. And we're going to dig a little bitdeeper into those US tech earning shortly.But I want to get to one of the big other macro events in the Asia-Pacifictoday, and that is, of course, the Bank of Japan.Another, it's expected to keep its interest rate settings unchanged onFriday. The spotlight, though, is going to be onGovernor, because a wider, more.
Intensely than usual, because, ofcourse, we have currency officials are ramping up warnings about the yen, whichis right now trading about one 5558. Meanwhile, Jiji is reporting that thecentral bank is going to consider measures to shrink its government bondpurchases. Let's get to our executive editor forAsia markets, Paul Dobson, joining us now for more.So, Paul, let's start with the BOJ. We're also anticipating what could besome rather interesting inflation data. We've got a backdrop of a weekend.Are we expecting perhaps not policy change, but maybe rhetoric change today?I think that that's what investors are.
On the lookout for because of thecurrency weakness. There's a sense that the BOJ needs to dosomething to to sort of give an idea that more rate hikes will be cominglater in the year or that it's going to it's mindful at least of what's going onwith the currency. So things to watch out for could includereferencing more aggressively the impact of the currency on the inflationoutlook. If the BOJ shows that it's taking thatinto consideration, investors may consider that it would bring forwardrate hikes if the yen continues to weaken.Another option is to to at least.
Downplay the references to the pace ofbond purchases that the BOJ is doing to allow yields to continue to increase atthe back end of the curve, where around 0.9%.Now, on the ten year rate, we got as high as about 0.97, 0.898% earlier.Maybe we could head back towards 1% and higher if it were to loosen that andthat would give it a little bit more support to the currency.But nevertheless, the market is still on tenterhooks for the idea that thegovernment, the Ministry of Finance, might decide if the market reaction isnot so favorable in terms of the yen. Then later in the day it might need todo something in order to in order to.
Provide more oomph.When we're talking about that, we're talking about ramped up rhetoric interms of are talking about intervention in the currency market, all affirmativeaction. But that may be something that we needto wait until we get past the US inflation data later in the day beforethe ground is clear for them to come in. Yeah, that's an interesting point youmake, because to what degree is the picture been complicated by what we sawin the US a little bit earlier today? We've got GDP slowing rather abruptly inthe first quarter and signs that inflation's pretty sticky andtraders already cutting their bets again.
On Fed easing.What's the story there? Yeah, I would.I think that for Asia's markets, it's the worst of all worlds.If we have a slowing U.S. economy and a quickening US inflation,that's only going to push up US bond yields.It's only going to ratchet up the support for the dollar and that's goingto boomerang back to our markets and put Asia under pressure again.So not just the yen, which we saw weaken a little bit overnight, but we may seemore extreme reactions in some of the other Asian currencies that were closed.Watch out for the Korean one at the.
Open, for example, we know we're upagainst some pretty extreme levels, multi year lows for currencies rightacross the region. We know the central banks are having totake action to offer some support for their currencies.So there may be more volatility again, as we as we as we look at that today.Now this evening, we will get our monthly data, the Fed's favoriteinflation measure for the US investors. We'll be watching that keenly.What we got from the GDP report gave an idea that that's going to be a highnumber again. So again, it could mean higher treasuryyields the right expectations for the.
Fed get pushed out.We're now only looking for 151 one cut this year for the priced into the marketand not until December. So that could cause more dollarvolatility, particularly as we get to the end of what's been already a prettyhectic and busy week for everybody. Yes, indeed.And it's going to be a very interesting decision out of the BJP today.On the back of all of that, executive editor for Asia markets, Paul Dobsonthere. Still to come, we are counting down tothat Bank of Japan rate decision. And former DOJ board member Yuri Shiraiis going to be joining us to talk about,.
Among other things, whether the yen'sweakening strength is going to force the central bank to send some hawkishsignals. First, though, we're going to talk toFuture M Group about whether the tech rally has legs after Alphabet andMicrosoft sales skyrocket and the surge in demand for air.This is Bloomberg. Wednesday, the Fed decided Jay Powellpumping the brakes on rate hikes are off the table.No cuts. Looking perhaps a little bit morelikely. You can't see.There's a whole lot wrong with the U.S.
Economy.Trust Bloomberg to bring you the fastest coverage and exclusive analysis,including Powell's press conference. Policy rate is likely at its peakthreshold to cut rates is a little higher.Redefining Patience Bloomberg Surveillance.The Fed decides starting at 1:30 p.m. Eastern, context changes everything. All right.Let's take a look at how some of those big U.S.tech names are tracking after hours. Let's start right at the top there.Look at Alphabet.
Go up by 11.7% right now.Beats on revenue, earnings per share, a buyback, a first ever dividend.What's not to love? Investors pretty happy about that story.Microsoft also showing some impressive gains, as we were discussing earlier, AIand Cloud, again, standout performers there.Intel, however, having a trickier time. The what was the world's biggest ever PCprocessor provider having a pretty rough couple of quarters.We'll talk about that in a moment with our next guest who joins us now.In fact, Daniel Neumann is the CEO at the Future and Group.Daniel, I want to start off with the.
Goods in that story that I was justtelling. There's strong results from Microsoftand Google. We'll get to Intel in a moment.The triple Q ETF that tracks the Nasdaq is up as well.But on the flip side of that, we had some rather troubling US data today.Inflation's proving stickier than usual, a bit of an abrupt slowdown in growth aswell. So when you look across those big technames, do you have a temptation to take some profit?Well, first of all, this this setup for today was really interesting.With that GDP number.
We know inflation sticky interest ratesare staying high. We saw Medco came out with good numbersyesterday, but a guide that worried ServiceNow had a similar results.And I think everyone was kind of on the edge of their seat because we reallyneeded as a market, a strong Google and a strong Microsoft to come through andshow that this I exuberance is also being built on some real data and realnumbers. Of course, right now there's a lot ofmacro factors that might make an investor say, hey, it's time to take alittle bit of the risk off the table. But at the same time, you look at thegrowth of both Azure and Google Cloud.
Eye watering numbers, you listen to RuthPorritt at Google talk about expanding the company's margin, drivingdeflationary growth to the company, meaning more revenue, more, moreprofitability in margin. It actually sets up that these big techcompanies that are really leaning into I have a really exciting story, but myconcern is that this also shows some concentration that maybe only a fewcompanies are really going to be benefiting from this wave in the nearterm. And for an investor, that shoulddefinitely bring some concern. Yeah.Let's start breaking down some of these.
Companies here.Alphabet, for example, as I mentioned, it was a bit across the board, really afirst ever dividend as well. But can you see some potential risks tothe outlook coming? I mean, there are some antitrustlawsuits there. There's still a lot of spending neededto stay stay in the air race. What are the next few quarters looklike? Yeah, I like Google a lot here, believeit or not, despite the fact that there are concerns there is going to need tobe substantial investment. But compared to, say, matter, moreinvestment has been made.
Remember, for Google, it's been amulti-decade investment in AI and the company is actually just starting to hitthat perfect inflection, the first sort of wave of cloud.Google was a little bit behind the curve.Microsoft and of course, TWC got off to a much faster start.Now what you're seeing is some of that that pedigree that Google had in AI isreally starting to play to its advantage.The search is probably the part that I'm most worried about, though.I'm most concerned about how generative A.I.capabilities, whether that is a meta AI.
Tool, or whether it's just the waysummaries and generative apps are able to do search in a way that drives someof that revenue away from search. That's a little bit concerning to me.But having said that, I thought when Microsoft had their new Bing with chatGPT in it that it would make a bigger dent on Google.It seems that that that revenue is really sturdy, very hard to move andthat sits well for Google and its investors.Can you potentially see that changing, though?Because, you know, as we were discussing, Microsoft is often creditedwith having an early lead in terms of.
Its investment in open.And I really seems to be paying off as well.So could that potentially change? I mean, you know, Google didn't becomethe primary search engine overnight. Are we perhaps going to see somethingsimilar with chat GPT and open I. Well, look, I think Microsoft made areally good bet with open air. I think you could argue that building itin-house was the approach that Google took.And of course, all of them are sort of doing this democratizing activity wherethey're looking at different whether it's anthropic or cohere.Of course and hugging.
Fish.They're all trying too many different bets, kind of like they've done in thepast with different chip makers. Microsoft has a really sturdy A.I.practice as well, and we saw that great growth in their in their biz apps,growth in their workplace business. But I think where they actually reallyhave the advantage is that, you know, they were first out of the gate.They created that that strong inertia to the company.And so I think what we're really looking at is overall TAM expansion.I think companies are going to be hedging right now in terms ofenterprises using these different.
Clouds.So you're seeing Microsoft at around 30% cloud growth, a couple percentage, Ithink it was like up to six. They didn't report it this quarter tieddirectly to Azure. I'm looking for Google and AWB to startto share a little bit more data and give us more visibility.But I love that Microsoft came out that Amy Hood has come out and basicallysaid, look, this is how much of our Azure growth is tied to A.I.that says that the company is comfortable, the deals are growing, theenterprises are spending more with them and it's AI specific.Let's take a look at Intel now.
We had some disappointing sales andprofit numbers there, but I understand that you've been speaking with the CEO,Pat Gelsinger. Did you hear anything from him thatreassured you? Intel is a multiyear investment play.I think for a lot of investors that are looking for that short term when theyhave to understand that this new segmentation, this products and foundry,it's all about becoming a critical infrastructure partner to the UnitedStates, to the West for both supply chain resiliency, for national defense,for global technology and economic leadership.And I think Intel has made the.
Commitment that it's going to be alonger amount of time. Gelsinger continues to reiterate, and inconversations we've had and in the conversations he shared publicly, isthat, you know, the company's hit its targets and this was a problem for along time in terms of getting its newest process, its newest products to market.We've heard that its pieces are going to ship in volume ahead of the holidayseason. So this is a better turn of events forthe company. Having said that, you know, hereiterated that, hey, we are a second half company.So it gave me some reason to believe.
That maybe that softer second quarterguide is a bit of a of a golly before a better back half.Having said that, of course the competition within video with AMD for AIchips, the company needs to land it's Intel Gowdy and moreover it's Gowdy.Plus it's you know, its data center chips.It's Xeon chips as a viable competitive product to the end video and AMDofferings. That hasn't settled in the market yet.But I do believe technologically speaking, it's there, but they need thatto land. All right.Daniel Newman, CEO at the Future Group.
Unfortunately, we're out of time, butthanks, as always, for your insights. And you can get a roundup of the storiesthat you need to know to get your day going in today's edition of DAYBREAK.Terminal subscribers go to day B, go as DIY, B, go.It's also available on mobile in the Bloomberg Anywhere app.And when you're there, you can customize your settings.So you're only getting news on the industries and the assets that you'reinterested in. This is Bloomberg. All right.It's going to be a big day in Japan.
Of course, that is Bank of Japandecision day. So let's take a look at how assets aretracking ahead of that. The yen still very, very weak.And we've heard, as expected, plenty of signaling on potential intervention.No action yet. Intervention would come, of course, fromthe Ministry of Finance. But the Bank of Japan might havesomething to say in terms of rhetoric to help put a floor under the yen.Equities futures, meanwhile, they're in positive territory by a quarter of 1%.So of course we might see tech stocks get a bit of a bump after that.Really good numbers out of Alphabet's.
And Google might hear some words on thefuture of bond buying for the BOJ as well.So the end of the BOJ in focus is up next.This is Bloomberg. All right.We're getting Tokyo's CPI numbers for the month of April at the moment, andthat's a pretty significant undershoot, 1.8%.The expectation was for two and a half percent ex fresh food.That's down to 1.6%. The expectation there, 2.2%.Now, before we get too excited about this, there was some news that helpsexplain this.
In Tokyo, there was the elimination ofhigh school tuition fees, which took effect in April.And there wasn't really a great deal of clarity on how the statistics departmentmight deal with that adjustment. So it's possible that this undershoot onTokyo's CPI numbers is a reflection of that and may not impact the national CPInumbers. So maybe we've got a little bit ofcontext here to explain why that number was such a miss, but a miss it was a1.8% in April. The survey was for two and a halfpercent. Let's get over to our next guest now.We might have a bit more insight on this.
As well.So you're sure? I joins us again.She's professor of economics at Keio University and she previously served asa board member at the Bank of Japan. A theory.Thank you, as always, for joining us. I just want to pick up on that pointthat I was making about Tokyo's CPI. It was a mess.But how much of this can we explain away in terms of a Tokyo unique story?Well, so Japan's reputation is actually on a declining trend.So, you know, I don't really have a big surprise for the inflation is comingdown gradually.
But in the meanwhile, I thinkliquidation starts to pick up in May because the government is going to stop,you know, subsidy it provided to the utility deal.So there will be some jump in energy processing may.So there is a lot of ups and downs, but you know, underneath it's quite a leapand then I think it's coming down. So as I mentioned, their high schooltuition fees were eliminated. And in Tokyo, that decision took effectin April. Well, that explains such an outsizedmiss in Tokyo CPI. You know, at this moment, Japan'sinflation is, you know, affected by only.
Five item.So food is main and, you know, energy. It's also affected by decentralizinggasoline prices. But the, you know, subsidy alsoaffecting downward pressure and also the, you know, hotel fee, you know,coming from a lot of foreign tourists. And, you know, also overseas, you know,package tour and mobile communication fee, that's all.So if there was no changes in terms of prices of these five items.Japan's inflation is actually beating 1%.So underlying inflation is very weak because the demand is weak.So, you know, I don't see any, you know,.
Single cut integration, you know, 1.8%.You said, you know, maybe captured by this tuition fee.But underneath Russia itself is not very high.Okay, So how does this change the picture for the Bank of Japan wrappingup its two day meeting today? We're not anticipating any change inrates, but do you think we might see a change in rhetoric, particularly interms of trying to support the yen? Yes, I think governor may have to, youknow, give a more hawkish tone this time because, you know, Japanese economiesare really, you know, stagnant, to be honest, and consumption dropping, theirwages are dropping.
You know, there is no stronger momentumin our economies. And so in that sense, you know,maintaining an interest rate unchanged is a reasonable.But at the same time, if the be okay emphasize too much that maintainingcurrent policy is good for the Japanese economy, then that might, you know,induce more depreciation. So I think government is going to giveus some hawkish tone. For example, you know, he may hint thatpossible reduction or massively Japanese government bond purchases from ¥6trillion and or some matching thing about the possible future, you know,short term interest hike.
So perhaps I'm hinting around changes tobond purchases, but do you expect any actual changes to bond purchases by thisafternoon? There might be some slight possibilitybecause of the current very tense situation.And, you know, the initial behind us, as it has been saying, you know, they areready to intervene in the foreign exchange market, but they haven't doneso in the Internet. They tried to use every communicationtool. For example, this communication isagenda at the hearing and the Korean minister of finance.You know, they give out auto seasonal.
But they you know, I think that a marketto the test you know what means your business what to do.So I think you know this would lead to some intervention quite soon.Yeah. How is yen weakness and inflationimpacting households in the broader economy in Japan right now?How urgent is this a problem that needs to be addressed?Yes. So if we think about the appropriateexchange rate, it should be one thing at most.120. So current deliverable Japanese yen istoo cheap.
There is no other currency, you know,which moves drastically. So it's no doubt the Japanese yen isextremely cheap and that is hurting our economy because we are importing almosteverything. We don't have any sources.So, you know, we have to buy a lot of imported product at a very high pricesis only be hurting the Japanese consumer.And I don't think people are very unhappy about this situation.So in that sense, I think the government and the Bank of Japan worry a lot aboutthis excessive movement of the Japanese yen.So car seats ability, though it's not.
Really part of the Bank of Japan'smandate, but there is an opportunity here to send a clear signal.What sort of statement do you expect from Governor, you either today aboutthe about the yen? Mm hmm.So I think the Bank of Japan is facing very serious dilemma.As I said before, we are looking at the Japanese economy.It's really stagnant. And, you know, there's no strongmomentum completely deepening for us, whereas the US economy is still strong.If we look at GDP data, the services, you know, are booming.And also subsidy data prices in U.S.
Is rising and the Japanese are oppositeon the inflation so weak and then there is no demand driven inflation, Socomplete the complete opposite. So, you know, see already three in theBank of Japan should maintain current interest rate.But you know, if they think that it's only in bike carry trading out of thespeculations so that's why bank which are face facing dilemma but I thinktoday probably press conference may suggestmore talk in advance and some possible action.Otherwise I think there's a danger that GM may depreciate even more.Mm hmm.
We did get a complication out of the USa little bit earlier today as well. Quarterly GDP showed a pretty abruptslowdown, and PC inflation showed that inflation in the US is pretty sticky aswell. So how does this complicate the picturefor the BOJ and potentially does it give it a few more options in terms of thetimeline when it comes to rate increases?So U.S. GDP growth was lower than peopleexpected. But if you look at the US services,actually it grew a lot. So, see, the economy's very strong,remain very solid.
So study sees U.S.activities are growing and also services related prices in the US is rising.So this is a quite serious concern, I think, for the Fed.And they probably are postponing the first rate hike, which means it's verydifficult for Japan because of this persistent interest differential.So probably Japan will face constant pressure on the yen's depreciation.So it's very difficult. So in a sense that the DOJ, you know,have to whether they take action is not clear, but I think they have to givesome thought or distance. All right, so you're in Shanghai,professor of economics at Keio.
University.Thanks, as always for joining us with your analysis.Okay. So a big undershoot there on Tokyo'sCPI, 1.8% in the month of April. That's going to have some implicationsfor currencies. Let's get over to April Hong inSingapore. What's going on, April?Yeah. Paul We're seeing actually the yenversus the dollar not really budging that much on the back of that big misson Tokyo CPI. As Professor Shu, I was just outliningthere, there's little surprise given how.
Underlying inflation has been weak.So this continues on that trend. But the big complication, I guess, ishow the yen depreciation is going to perhaps force it to come through withmore hawkish signals. And indeed, that's what the markets arebetting on. So we're seeing those bond futurespointing to drop in cash bonds. But let's take a look at what we'reseeing in the stock markets, because futures are pointing to a bit of a climbat the open. And this is thanks in large part to whatwe got out of big tech earnings in the US with Alphabet and Microsoft reallycoming through with how their air bets.
Are paying off futures in the US alsopointing to a positive start. We are watching out for the open in NewZealand and Australia. They were on break yesterday inAustralia watching some of the iron ore producers in the next hour and how theyfared. The star of Trade.Let's take a look at the commodity. The Singapore contract has been hoveringat a seven week high and this is largely to do with the improvement in sentimenton the Chinese economy, especially after that GDP print.And we're seeing that despite that recovery in the month of April, it'sstill about 13% down from the start of.
The year, but it is a recoverynonetheless poll. All right.Thanks, April. Still to come.Stay tuned for our exclusive interview with Airbus CEO Guillaume Faury.We're going to discuss their efforts to ramp up production as rival Boeingbattles a crisis of confidence. This is Bloomberg. Analysts are expecting Japan's biggestbrokerage, Nomura, to report a strong profit rebound when it releases itsearnings later on Friday. For more on this, let's bring in ourbreaking news editor Gareth Allan in.
Tokyo.So, Gareth, what could be the reason for its recovery?Yeah. Good morning.Also reporting after the bell today, of course, the year on year numbers aregoing to look good inevitably, inevitably, because they had a dismalfourth quarter last year. So don't look at the percentage.Look at it, look at the reasons behind it.You know, Japan stock market in the quarter to March had a massive rallyreaching record levels. So it'll be interesting to see how wellNomura's retail business has been able.
To to take advantage of that and thelevel of profits they've been able to get out of the the trading businessstock trading business in Japan. A couple of analysts have said thisquarter over for the full year for Nomura.They're not expecting a buyback at this point.So a buyback by Nomura would be a surprise, and that's probably positivefor its stock price and stock price that have done pretty well this year.They're up about 40% year to date already on the back of that that strongJapanese stock market. So, yeah, definitely, definitely one towatch this afternoon.
We're going to hear from Ana Holdingsthis afternoon as well. So is it going to be the inbound tourismboom or the weekend that drives their performance?Yeah, that's absolutely right. I mean, that's the yen is a double edgedsword for for companies like Ana. You know, they've got some they've gotthey're facing the rising fuel costs and then the fuel is getting more expensivebecause they have to pay for it in yen, which of course, is with much less thanit would otherwise be. So.On the cost side, there are some real some real pressures there.And analysts are saying they're.
Expecting a profit contraction becauseof it. The flip side is, of course, that Japanis at the moment experiencing an inbound tourism boom because of the weekend,because it's so cheap for tourists to come here right now.So how much inter is being able to take advantage of of that boom will also bebe something certainly that we need to keep an eye on when they report thisafternoon. All right.Breaking news editor Gareth Allen in Tokyo.The Airbus CEO, Guillaume Faury, says the plane maker's ramping up productionof its A350 Widebody jet to meet surging.
Demand.Looking past weakness in its latest quarter.In an exclusive interview, Ferrari also discussed how the company is managingits ongoing supply chain issues. We've indeed released our Q1 numbers.We've delivered 142 commercial airplanes in the quarter, which is a 12% higherthan last year. So in terms of production deliveries, wefeel really on track and that's very important.The quarter is indeed a bit soft, but it's again on track with ourexpectations to keep our guidance and change for the year.And we are building a lot of inventory.
We are operating in a complex anddifficult supply chain environment and we want to make sure that we have theresources that we have the I mean, the hardware, the equipment and everythingwe need to keep ramping up in a year that will that will be backloaded to belike what it was last year. Okay.So we did see more aircraft deliveries in the back half of the year.There's a line, Guillermo, that stands out from the press statement that it'sright at the top. And I think it's worth repeating to theaudience. We delivered first quarter 2024 resultsagainst a backdrop of an operating.
Environment that shows no signs, nosigns of improvement. Geopolitical and supply chain tensionscontinue. Jill, why are we still dealing why areyou still dealing with supply chain issues?Many other industries face these kinds of problems during the pandemic, butthey are long in the rearview mirror. Why is aerospace still still strugglingwith these issues? How Why are they so hard to fix?Why is the supply chain not being sorted out more quickly?Yeah. Guy, It's a very important question.Actually, we are in a in a long term.
Industry.We employ people which are highly skilled and qualified and a significantnumber of the workforce of the people left the companies in the supply chainat Airbus with other companies during the pandemic.So we are hiring people, but it takes a lot of time to on board them, to trainthem, to give them the qualifications and to have them at full speed.And this is a bit across the the supply chain.But there is another reason why we are in this difficult environment and wewill remain in a challenged supply environment is because we look jumpingup, we are jumping up at full steam and.
The maximum speed really is anybody canand this will continue till we reach the rate 75 on the A320, which is expectedin 2026. And you see that now we decide tocontinue to ramp up on the A350 beyond the rate train that was alreadyannounced up to 812 in 2028. So we are victims of of our own success.We have a lot of demands the higher than the supply.And this will continue to stretch the supply chain for some years.That's Airbus CEO Guillaume Faury, speaking exclusively with our colleagueGuy Johnson. Now, you can watch this live and you cansee our past interviews on our.
Interactive TV function to go there.You can also dive into any of the securities or Bloomberg functions thatwe talk about, and you can become part of the conversation as well and send usinstant messages during our shows. This is for Bloomberg subscribers only.You can check it out on TV. Go.This is Bloomberg. All right.Let's recap those Tokyo CPI numbers, because as they sure are, we're talkingabout huge miss their core core core CPI.All of them were lowest than even the lowest estimate.1.8% was the actual rating for April.
The expectation was for two and a halfpercent. Core CPI, 1.6%.The expectation there, 2.2%. Now, the yen hasn't moved a great deal,still one 5559. But right on cue, we have heard from thefinance minister, Shinichi Suzuki. Nothing really new to say, though.He's saying we're going to take all possible measures on the yen as needed.Watching those Forex moves closely, We can't talk about the timing of specificsof fixed policies at the moment. The specifics seem to be doing talkingabout the currency. Nothing's actually happened yet, but wedo keep an eye on this.
It is, of course, BOJ meeting day to dayas well. Now we heard from PIMCO also just beforethose numbers came out. PIMCO says the Bank of Japan might raiseinterest rates three more times even after last month's historic hike.But those remarks, of course, came out before those CPI numbers.All right. China's largest auto show is back inBeijing after a five year absence. Some of the biggest names in theindustry showcasing their extravagant new models.Chief North Asia correspondent Stephen Engle spoke with BYD's head designer,Wolfgang Egger, about the inspiration.
Behind their cars.Technology and design. They need to be also one firm unit here,and for this we are also very as designers and as we generally also ourcustomers very happy because the latest technology and the platforms, they arethought from the very beginning to of the.Opportunity 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 and experience. And the new thing is really to searchagain and bring back the emotion, the emotion to to thesecars with the beauty. We have these lines very elegant, stillnot ours, but we are we are really looking to get close to this challenge,to have a timeless piece and a beautiful piece that people can come to love inall over the world. You can definitely see Edgar'sLamborghini experience shaped in this young Wong Yu nine super sports car,also from a BYD affiliate, Young one.
Now, speed, obviously is a big themehere, including speed to market. One thing Edgar told us is that unlikethe legacy automakers in Europe, BYD and the Chinese automakers can take fromdesign phase to market pretty quick in as little as about two years.The speed is higher, is higher, and we are running much moreand working hard. Also, our team is working day and nightvery hard. They are all in competition, creativecompetition, but they are all one team and they have a common heart's content.Now. We reached the 24 months target fordeveloping the car and getting from the.
Creative moment to to the productioncommunity. And so, yes, this is amazing, is amazingto me. And what would a Beijing auto show bewithout a concept car? This is a super supercar from, ofcourse, designer Wolfgang Egger. Perhaps his vanity project.It is a concept, yes, but could come to market.It is the Fung Chung 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.
Light Stephen Engle Bloomberg News atthe Beijing Auto Show. And we're continuing our live coverageat the Beijing Auto Show. The China show team speaks later to PonyAir CEO James Peng about his outlook for the EV sector.Now, these are the stocks we're going to be watching when trade opens in Korea,Japan and Australia shortly. Asian tech stocks, of course, in focusafter Microsoft and Alphabet both beat expectations on strong demand forartificial intelligence and Australian markets reopening after yesterday'spublic holiday. We're going to be watching BHP followingthe Aussie miners move to purchase.
Anglo American market opens coming up inSydney, Seoul and Tokyo. Up next, this is Bloomberg.
