This is DAYBREAK, Asia.We're counting down to Asia's major market opens.And Heidi, it's really all that big countdown from investors to those medianumbers that are due out later and really weather that sky high bar.Can I jump over it? Yes.And what happens to the rest of the market?Right. We sort of see a bit more breath beingcreated across broader parts of this market, maybe a rotation more into valueif you take a look at some of the numbers.But certainly central banks are not far.
From the fore, although we have the ANZdecision and expectations are for policy settings to be unchanged.But certainly watching for any nuances or communication about how close we arepotentially to easing to. Yeah, and not just of course the RBNZthat we've been hearing from Fed officials over the past hour or so.The Boston Fed President Susan Collins, Cleveland Fed President Loretta Mesteralso heard from Bostic, the Atlanta Fed president, all really just reinforcingthis need to keep rates higher for longer.And that, yes, there is perhaps some progress on inflation, but it's reallytoo early to declare any sort of victory.
Just yet.What we're tracking this morning as we come online with Japan is also some echodata to note here, because we actually just had the trade figures coming out inthe last 10 minutes or so. Broadly, we saw a bit of weaknesscreeping through lower than estimates here because exports were up 8.3% on theyear. The estimate had been for 11%.And as well, we saw that trade deficit widening in in the latest reading.That's the state of play for Japan, of course, tracking the Japanese yen.They're holding again fairly steady this morning, but still at historically veryweak levels, of course.
And and a big focus again on theJapanese ten year yield because we're continuing to monitor.When will it hit that 1% mark? And we're just continuing to track thoseyields inching ever higher. Japanese equities, we're just slightlyunder pressure so far in the session, so not really following that optimism thatcame through on Wall Street overnight so far.Let's change on because Korea just coming online, of course, and and hereecho data to note because we actually had April PPE coming out earlier todayand we saw it rising actually 1.8% on the year, 4.3% on the month as well.But importantly, it was actually a pick.
Up in PPE.Again, producer price inflation. And so certainly perhaps presents a bitof a headache for the BOC. That meeting is also coming up.What else we're watching today for Korea, of course, that optimism, as wesaid around around, I actually got South Korea hosting a global forum.But in really numbers in particular, as you said, the real focus for marketstoday and in video and one of the key suppliers to that of HBM chips isSamsung. We know, of course, and a very heavyweighting on the cost be Heidi. Yeah.Well take a look at this first couple of.
Minutes as we creep online here inSydney. A little bit upside a pretty flat at themoment, but certainly the futures picture was pointing to some gainsacross the rest of the region. We did see some mild declines at theclose yesterday. A lot of mining and healthcare shareswere kind of the biggest laggards there. But watching for some of those minerswatching Rio Tinto over one after the force majeure being declared on thealumina cargoes. Of course, of course that big spike inthe price of aluminium to a 23 month high there.So that's one area to be watching.
The Aussie dollar is holding prettysteady at the moment, watching to see kind of if we get any advantage throughfrom the ANZ decision, depending on the messaging on sort of how dovish that'sperceived to be watching Treasuries of course as well.We did hear from the Fed Reserve Governor Chris Walla, just one of thespeakers that we've had over the past 24 hours or so saying the continuedsoftening of the data over the next 3 to 5 months would allow the Fed to considerlowering borrowing costs to the end of 2024.But the takeaway really is this idea of kind of several good months of dataneeded to take a listen.
In the absence of significant weakeningin the labor market, I need to see several more months of good inflationdata before I would be comfortable supporting an easing in the stance ofmonetary policy. We won't say it's not correction andreaction to that upward. Brent also leads markets love Asiacoverage and I like this part said if I was still a professor had to assign agreat disinflation report, it would be a C-plus.Far from failing, but not stellar either.So really, the managing of expectations, if you're wondering, is it going to bethe next perennial, the one after that.
Will might be several from here.Yeah. I mean, a lot would depend on the actualinternals. And also your wallet made it clear thata big part of the equation here is what's going on with the labor market.And we actually had Mr. and Collins out just now.They're in a roundtable sort of discussion making the same sort ofpoint. They're happy with where policy is now.So they've got to see no reason to move rapidly from here.And they also talking about inflation. We need to see more.And again, the job market is in a good.
Place, so there's no rush.Very clear they're only going to rush towards interest.Rate cuts if they see not just inflation staying soft, but also the jobs marketsare starting to show some real strain. And that makes a lot of sense.They've already been called out at least a couple of times this cycle by beingconfident that inflation would not get out of control and then being confidentthat it would keep on coming down. So they really want, as Walter wassaying, several they want several papers on the inflation front before they'rethat they're willing to to allow us to move to the next level and go to a ratecut regime instead of the holding rates.
Regime.Some some tiger parenting there from Fed governors and possibly from the BNZgovernor, too. Likekind of trending expectations are trending in the right direction, butstill above what they'd like to see. Yeah, and oil has been one of the morehawkish, not the most hawkish, you know, central bank head out there.He took rates higher than just about anybody else.And he's shown a willingness to hold them there longer, even if that means arecession. And yes, the labor market there isshowing signs of slack and inflation is.
Coming down, but it's still not wherehe'd wanted to be as yet. And that's why everyone thinks that theRBNZ will stay on hold. The big question is do they make aserious shift towards, you know, putting rate cuts on the table?We have the contrast with the RBA, especially with the minutes that cameout yesterday showing that they went back to thinking about whether or not arate hike might be needed before deciding the best thing to do was standpat. So far the BNZ has said yeah, rate hikesare definitely no longer needed, but they're a long way from saying we thinkrate cuts will soon be needed.
So any steps they take towards that willbe watched for very closely. If they do take some strong stepstowards that, then you could see the Kiwi fall, especially with those Fed andAussie central Bank comments as a backdrop.And Garfield, of course, what else investors are going to be watching veryclosely for the NVIDIA numbers coming out and whether that can drive furthermomentum and what it signals around spending in particular.But already we're we're hearing commentary, perhaps we had earnings outfrom Palo Alto Networks and and that was perhaps foreshadowing what could be somenegativity for the company.
I want to test that.Yeah, it's a it's a difficult day for equity investors because of the youknow, this time last last earnings cycle,everybody was worried that Nvidia couldn't possibly beat expectations andit totally blew everybody away, both with what it actually reported and moreimportantly with what it said it saw. Going forward.The stakes are perhaps even higher now. We've had several you mentioned PaloAlto. There have been others, even TSMC awhile back, who you're in the chip space who've reported, Yes, things are good,but they're a little bit less certain.
About, you know, the future, about theoutlook. And that's the key concern because theAI boom has driven a lot of valuations extremely high based on the expectationthat earnings will catch up, as it were, with the share prices at some stage.So any sign that we might start to get even just a maintenance of the currentearnings momentum for NVIDIA rather than continue the acceleration, that wouldcause a lot of damage both to in video itself but also to the tech space.And more broadly, you know, the S&P 500 we had to tie the story on in Live USApointing out that we've got a very long time without a 2% daily decline in theS&P 500.
And I think one of the things thatunderpin that is this very strong expectation that the AI boom is a gamechanger. Soif that game and if the endgame for the initial burstin AI starts to come into view, that's going to cause a significant lesseningin that optimism that the only way, sustainable way for shares is up.Yeah, it's that high bar that just keeps getting ever higher for engineering and.And the marketing. Well, that was Garfield Reynolds wholeads our Markets Live Asia coverage. And as Garfield was talking about theFed's Waller wanting more good CPI.
Months before they start to have anysort of policy shift that's actually the top of of the day.They go to rebuttal today or DAYBREAK. Today's edition of DAYBREAK.You can reach out on the terminals, I said.Also available on Mobile in the Bloomberg Anywhere app.We'll have more ahead. This is Bloomberg. Cause lots of potential headwindsbuilding over the coming months and the next year for global trade, not least ofwhich, of course, is threat of China tariffs and potential retaliation.In the meantime, the container spot.
Rates for cargo departing China surgingover 9% last week. This is the highest level since thepandemic boom. Bloomberg intelligence expectinggeopolitical tensions could keep those prices elevated.Let's discuss the outlook for the industry with one of the largestshipping companies in Japan. Joining us from Tokyo is TakashiHashimoto, who's a president and CEO at Mitsui OSK Lines.Because you really great to have you with us and we really appreciate yourtime. So we are seeing potential pricinglooking more favorable as a result of.
Some of these geopolitical tensions.Do you think broadly on balance, is that more of an upside or are you moreconcerned about the impact on trade volumes?Yeah. Yes.And there are various other factors that arethe since the Palestinian problem happened at the Suez Canal, we could notuse therefore that generally that a demand and supply, but it's relativelytight. In addition to that other recent tradethat we observe that the total cargo volume from Asian markets to both NorthAmerica and Europe are steadily.
Increasing and that it creates a tie tolabor market situation, perhaps that this trend will continue for the timebeing. How much concern are you really feelingat the moment when it comes to the impact of U.S.tariffs on Chinese goods, potential retaliation?Any kind of volatility and impact on global trade following the November USelection? Yeah, that they are a little bit tooearly to say, but certainly that this can be quite a bigpotential factor for us. But that look at the market as of todaythat the total volume of the cargo flow.
From Asia markets to North America isactually increasing, not decreasing. Andso the reason is that the relocation of the export terminal from China to otherAsian countries, including India, so that the traffic tree is rapidlyincreasing so that the total volume of Asian US today too, is quite steadilyrecovering in line with the US economic recovery.That is our observation as of today. So perhaps a little bit of wait and seeon that one. But where you are directly beingimpacted is from the sanctions on Russia due to its war in Ukraine.And and we know that you owned three LNG.
Vessels that you had actually planned tocharter to the Arctic LNG two project in Russia.Can you give us an update on on what you're doing with those vessels?Yeah. The first of all that the existing LNGprojects or at Sakhalin or Yamato is still not the target of sanction.So therefore that we are continuing our service to provide that LNGtransportation from Russia to the European and Asian markets.But as you correctly mentioned, the new project Arctic Two is the target of thesanction. And so thatwe we recognize that we cannot provide a.
Service to Arctic to and that are notnowadays, that we are studying the how to transfer our business to to somebodywho can continue that other business. We Arctic too.But it seems to me a very complicated political process andthat we we are carefully at the underwriting that to addthat the detail of detail of the sanction regime and of course that theone of the shipping company in Japan that we will follow, we should followthat the other sanction regime that are decided by US and the G7 countries.So who would you be looking to sell to? And also, what sort of timeline are youlooking at as well?.
Which.Hmm. Sothe situation is not so simple because it is it isit is very, very difficult to sell our asset to, for example, the RussianRussian companies that it is also that create that potential, that the sanctionor sanction target, therefore, that we have to be very, very careful with howto protect our our own interests and without, uh, without evaporatingviolating our sanction regime. How much extra money is are we making asa result of the sanctions are so that it's it's, it's very, verydifficult to say.
Butif you look at the positive side, on the negative side of the sanction regime,that perhaps that that that in total that we, uh that we can gain quite a lotadditional income from that other, ah, the sanction regime because that itcreated that are completely new, completely new that that transportationrequirement for the global market for example, that there are so many, somany goods that are now before sanction, that are so many, the volume of cargoescoming from Russia to Asia market, but not nowadays that other is it thatas an alternative route, a very long way from northern Europe to the to to thatto the various routes that are at.
The South Africanroute. So createdthe quite volume of the additional transportation requirements so that suchkind of the things that are created that are additional additional businessopportunities for us. But at the same time that we a at we, wedramatically reduce the our volume of the direct to trade with Russian market,especially the Russian Far East. Therefore, if you look if you analyzethe pros and cons of the sanction regime, Ito me it's a very, very difficult to say that, but perhaps that are not not quitethat serious negatively impact.
Financially not least as a Takeshi verybriefly because we don't have much time but we know that the Tokyo StockExchange is putting a lot of pressure on Japanese companies to improve theircapital efficiency. How are you looking to improve your yourprice to book ratio that we have? Mm hmm.Yeah, that's not true. What are the shipping industries arethe exception. One that that we are very, very theshipping market is a very volatile and quite cyclical industry.So therefore that that I do want to debate on that ourbusiness portfolio and the to achieve.
That the more stable written and thestable growth for the company. Therefore that to do so that we you hada good idea to diversify our business and to uh to, to materialize that quite,quite stable growth for coming 5 to 10 years time and it will create additionalrevenue for our shareholders. I strongly believethat was Takeshi Hashimoto, the President and CEO of Mitsui Alwaysclients. And you can watch us live and see ourpast interviews on our interactive TV function TV go.Then you can also dive into any of the securities or Bloomberg functions wetalk about, plus become part of the.
Conversation by sending us instantmessages during our shows. This is for Bloomberg Subscribers only.Check it out at TV. Go. Well, supporters of Taiwan's newpresident alleging terror are protesting an attempt by the China leaningopposition to curtail his powers. Lawmakers have begun the final stepstoward passing this controversial bill. Bloomberg's Taipei bureau chief,something else joins us for more some of the scenes out of parliament.Just extraordinary. It's never a dull moment when it comesto Taiwan politics.
No, obviously not.What we saw last night was the largest public protests in years in Taiwan, asthese protesters, as you say, trying to stop lawmakers from passing this newbill. And the reason they're so against thisnew bill is that it really is a quite remarkable expansion of thelegislature's powers. The bill would give lawmakers theability to call the president in front of them whenever they request.The president would also have to present an annual state of the nation addresssimilar to the United States. It would also expand lawmakers abilitiesto investigate the government.
It would expand the powers to requestdocuments from the government. It would also implement fines for anygovernment officials who are speaking to the legislature and are found to havetold untruths to lawmakers that could result potentially in prison sentencesof up to one year. So on the executive branch, this hasreally been seen as a huge power grab by the legislature and an attempt really bythe legislature, which is controlled by the more China friendly Kuomintang hereas an attempt to really curtail a new president relating to just shortly afterhe took power on Monday. So how much power do the people reallyhave here?.
Said if they're against this proposedlegislation, can they really block it through protests?Well, that's what we're going to see over the coming days.So last night, the legislation passed its second reading.It now goes into its third reading, after which it will become law onFriday. So I think what we're going to see iswe're going to see a repeat of these protests Friday evening, potentiallyeven bigger. We saw about 10,000 people out on thestreets last night, according to our own estimations and local media.And so that should repeat itself on.
Friday when this bill comes to passingits final hurdle before becoming law. And this really does hearken back to tenyears ago in Taiwan, when the government at the time tried to pass a trade dealwith China and people took to the streets in huge numbers to protestagainst this bill and actually managed to storm the legislature and occupy itfor several weeks and eventually forcing the government to shelve the bill.So that was ten years ago. That was that was called the SunflowerMovement. And that was the pivotal moment inrecent Taiwanese history and really is as an example for these protesters.And so you go out there and you spend.
Time with the protesters on the streets,they do refer back to that and they are saying, you know, some people are goingto try to get into the legislature to try and stop this bill, if at allpossible. A Taipei bureau chief Samson analystthere. Let's get you to futures opening up inEurope. And we are seeing this is a picture whenit comes to Stoxx 50 futures as well as german dax futures.Pretty positive there. We did really see that decline ineuropean stocks in the previous session. The focus, of course, firmly on in videostill also fresh clues from the fed as.
Well.We saw an all time peak though for the Stoxx 600 index.Also when it comes to German stocks, we could see a little bit of upside with animproved profit backdrop as expected by most analysts.They're also watching the euro pretty steady and in fact, lacking a bit ofmomentum to reach that higher range. There is a gap arising between thedemand for natural gas and the supply that's available.I think there are other factors that are going to cause the potential gap towiden even further. Things like electrification as heavyindustry moves to reduce emissions and.
Moves to lower carbon intensity sourcesof power. When we think about things, the naturalfield decline that we're facing is going to put pressure on the supply side.Demand, as I said, is going to continue to grow.So the pressure is going to be more and more acute as we move out in time.With that energy CEO Mike O'Neill there. Take a look at some of the commoditiesthat we're tracking. Aluminium is actually really one of theshining aspects of this rally that we've seen across broader metals andcommodities. We saw Rio Tinto issuing there forcemajeure when it comes to the shipment of.
Alumina from one of their Queenslandshipments and that really saw that big spike when it comes to aluminiumprocessors at 23 month high, we're seeing a bit a little bit of a pullbackthere when it comes to primary aluminium traded in London looking pretty flat atthe moment. Copper futures continues to push throughwith this rally. We are seeing gains of about 3/10 of 1%there. It has been kind of a steadying moodthough, when it comes to copper and this record rise.We have seen participants in physical traits of copper now warning ofovershooting risks as well, particularly.
As we see kind of a few concrete signsof a property turnaround in China despite some of these incremental andmore significant measures that have been announced.Rio Tinto, as I mentioned, up by about 1.3%.They're also watching Fortescue Metals. We have related to, of course, the Chinaturnaround story saying that big jump when it comes to iron ore futures nowextending that rebound highest since about early March.And we are seeing some of those pure play metals, iron ore names reacting aswell. Taking a look at the broader markets interms of what's trading in Japan and of.
Course in South Korea and here inAustralia as well. A little bit of struggle for directionreally. We're seeing Nikkei off a little bit,the cost be also on the back foot here in Australia bouncing back fromyesterday's losses. And Bill, of course we are watchingamongst other things, the ANZ Kiwi stocks looking pretty perky ahead of ameeting that is expected to stick to the current policy settings.Yeah, very much. The countdown of course, to Nvidia'snumbers because we're going to be getting its much anticipated quarterlyresults later Wednesday and that's going.
To give investors fresh insights into anair spending boom fuelled by the world's largest tech companies.Let's get more analysis of Maribel Lopez, founder and principal analyst atLopez Research and Maribel. And of course, it comes down to two.It really is chips and and the sort of demand for those whether they can meetthe demand. But but what are you expecting when theexpectations are already so sky high as well,expecting to come in expectations possibly even beat the generalexpectation that the demand for air is just super hot.They can sell anything they have that's.
Going to come off the line for at leastanother year. So we expect them to just continue tohave blowout quarters. Having said that, I do think that themarket can be a bit unrealistic in terms of the growth pattern that we have.And video is actually extremely strong company, the bellwether of obviouslydoing grand. But having said that, you know, themarket keeps pressuring them to continually overperform.And so we expect them to sell everything they have.And then the only question is how fast they can get those Blackwell's chips outso that they can actually meet the next.
Wave of demand that we're hearing fromHyperscalers that really do want to move into the next generation platform.Yeah, and I think we saw that earlier today because we had the cybersecuritycompany Palo Alto reporting as well and actually met estimates.But after hours, their stock dropped nearly 10% at some points in thesession. So perhaps foreshadowing what could beto come for media if it does indeed just come in line.But what do you think they're going to be able to say to to really impressinvestors, do you think, for instance, relates perhaps to the new Blackwellchip?.
It's a long game and a short game.So one of the things we really like about the video strategy is the factthat it's not just a hardware only play. They're actually going to be building asoftware revenue stream around it. They're also very vertically integrated.When you look at health care, when you look at manufacturing, they have theability to not just apply it as it is in chips, but to really think about theindustry perspective around A.I., which means that they can be part of thedevelopment cycle for a very long time. So really the issue is one timing of theBlackwell chip, but also two timing of when they start charging additionalmoney for software revenue.
And this Nima of this NVIDIA inferencingthat they were talking about having an additional software revenue stream, Ithink that's an extremely smart move for the company to diversify themselves tobeing both hardware and software. They're obviously software already, buthaving very specific enterprise software to create what they can have beencalling the factory I think is the wave that we're going to be looking at overthe next coming years. Having said that, people are reallyexcited about hardware. That's the big number.That's the number that drives lots of billions in an organization.So really, the timing of when this.
Happens, you know, people are justconstantly expecting them to outperform. So the ton of pressure on them.Having said that, they're the game in town to be with A.I.and everybody wants, but they have. A lot of the morale, a lot of theloftier projections for growth will come down to the ability to secure supplyabroad. Is there any concern or uncertainty onthat side, particularly when it comes to Taiwan?Semi Mike. I think we always have a concern when itcomes to supply because we've had such a tremendous fast ramp up in demand,probably the fastest ramp up in demand.
We've ever seen for any type oftechnology anywhere in the world. So given that, there's obviouslyconcerns. One of the good things about concerns,so you have to balance the good with the bad.So the bad is there might be supply can change supply chain constraints.The optimistic side of that is when there are supply chain constraints, youhave very high margins and the ability to charge a premium for the product.So it's a nice balancing effect for NVIDIA and there really isn't a lot ofdownside. I think for Nvidia, this is all aboutmanaging the expectation of how much.
Growth there could be because the marketdoes expect them to constantly overperform and it's just a matter ofwhat level of overperformance do they have to really be careful about how theyguide for the next several quarters because that's the unknown of willHyperscalers actually hold back orders or other things?You know, in terms of scale, we heard, of course, more details from video, theCEO about their tie up with Dell to talk about these so-called AI factories.Right. How much does that, I guess, createscale and in a way simplify the, you know, incredibly complex infrastructurethat's required.
Do you think that's a game changer?Joe So one of the nice things about being in the gold rush era is if yousell picks and shovels, you can sell picks and shovels to a lot of people.So if you look at the announcements that they've made in the past several months,they can sell picks and shovels with Microsoft, they can sell it with Dell.You know, they've got a wide range of companies that they can go to marketwith all up and down a high and low level of the stock.So they're actually fairly well positioned.Now, of course, are other companies that are coming on with different aspects ofit.
We've seen some interestingannouncements this week with Microsoft and Qualcomm, for example, or Qualcommand Dell on more of the APC front. But when you look through the datacenter, know, we see in video being very well positioned for that today, have theopportunity to go to market with a lot of companies and that can only be goodfor them. I mean, the sort of superlatives, whenyou take a look at the stock price, whichever way you call it, it isextraordinary, Right. More than 90% higher this year.And I do wonder, you know, there's no questions and bets being taken as towhen it becomes simply the largest.
Company in the United States.Does this idea of value kind of compute with you?And at what point, given that we do see evidence that a lot of the big scaleinstitutional investors are taking money off the table more broadly when it comesto AI, is more going to be needed in terms of the evidence of this maturingindustry for investors to feel this good about one particular stock, even if itis NVIDIA, you know, even if it isn't video.The thing that one is looking for in this market right now is rapidinnovation. As long as they can continue to provethat they are rapidly innovating, they.
Have the opportunity to continue marketmomentum. This is the largest technologytransition that we have seen since the Internet, and it has extreme legs interms of growth over the next 6 to 10 years.So in the six or ten year horizon, they have tremendous opportunity for both themarket they're currently in, but also create next generation markets.For example, we've not even seen the robotics market really take off and theyare actually quite far ahead in the robotics market.So you have to look at the several iterations of markets that they could gofor.
There's a general business market in thehyperscalers that we're looking at today.We continue to see more happening in health care and also in drug discovery.We continue to see more happening in the manufacturing area and in robotics.So if they play their cards right for the long term, they should be able tomaintain the valuation and actually have some legs behind it.The devil is in the details, but they're clearly looking at a forward vision,much more so than a lot of the other organizations in that area.So we are very optimistic that they have a strategy that will be good for thelong term.
There are obviously concerns it is anextremely high value company in. But but if you're asking if thefundamentals are there, the fundamental the wave is in fact their it is theirjob to execute on making sure they have the right technology at the right timeto capitalize on that. That was Maribel Lopez, founder andprincipal analyst at Lopez Research. And of course, all of that investorinterest and attention on Nvidia's numbers that are due out in late aWednesday. But we will have a t live blog is notunderway just yet, but it kicks off around that earnings release.So stay tuned to t live.
Go to get commentary and analysis frombloomberg's expert editors. But let's stay in in the chip space andand bloomberg's learned that ASML and TSMC have ways to disable the world'stop semiconductor making machines in an emergency scenario such as Chinainvading Taiwan. Let's get more on this scoop from Chinaeconomy editor James Mager in Beijing. And.And James, this is a really fascinating exclusive report from Bloomberg here.Can you can you tell us exactly how that idea of remote shut off works?And is that something that we knew about before that could be possible with thesecompanies?.
I think there's two things to thinkabout. One is a capability that the that wereport on yesterday, which the chairman of TSMC kind of hinted at in Septemberlast year when he spoke about it, that they could render their factoriesinoperable. And what this seems to be what wereporting on is that Tier three ASML has a kill switch of some kind, which allowsthem to disable the the the extreme ultraviolet machines that are used in inTSMC chip fabs in Taiwan. I think the other thing to think about,though, is that even without such a capability, the supply chains that gointo making these machines work, the.
Supply chains that go into making chipfabs work are so, so complex and and touch so many different countries thatin the in the event of a Chinese invasion of Taiwan, which is basicallywhat we're talking about here, if Taiwan invades sorry, if China invades Taiwan,all of the supplies that go into making chips, the silicon wafers, thephotoresist chemicals, all the machines from Japanese and South Korean andAmerican companies and Dutch companies, all of those stuff, There isn't going tobe a Japanese company like Tokyo Electron, American Company, like Lam orApplied Materials. They're not going to be continuing toexport the machines that TSMC needs.
They're not going to be continuing tosend the engineers that are needed to maintain those machines.So even without such a kill switch in these EUV machines, the ability of thesuccessor of TSMC that would take over those those factories in the event inthe very unlikely event of a Chinese invasion of Taiwan wouldn't be able tocontinue to use them as they are currently used now.And I suppose the question is, does it makea huge impact when it comes to China's ambitions?Right. There's some suggestions that some ofthe restrictions that we've seen have.
Become perhaps come a little bit toolate in terms of curtailing the development that we have seen out ofBeijing? I think that's possibly true.I mean, you've seen the the chips, the semis, see chips that are in the newestHuawei phones or at about seven nanometers.You know, there's been a lot of questions raised about whether Samsungis able to get the sort of the yield that you might want on those, whetherthey have enough, whether they're making enough of those and their accuracy isgood enough to really sort of make that a commercially viabletechnology and to to make money on those.
Things.But China does seem to be improving in their ability to make the higher endchips, and they're throwing so much money at it that eventually you wouldhave to assume that they will be successful.I mean, they're trying to recreate a technology that already exists.The Dutch were able to master this technology in the eighties or eightiesand early nineties. And so China is basically looking at agoal that already exists and saying, we're going to throw as much money atthis as possible as we have until we're successful.So in the end, you would have to assume.
That that that first sort of brute forceoperation is going to be successful. How long it takes and how much money itcosts. I guess those are the two questions.But I mean, for them, at least for the moment, this technology that ASML hasthat they sell to TSMC is not available to China, and that is holding back theirtheir technological progress, at least for semiconductors,though. China economy editor James Makgoba inBeijing. More to come here on DAYBREAK.Asia. This is Bloomberg.
Singapore's transport Ministry isinvestigating after one person was killed and dozens of others injured whena Singapore Airlines flight from the UK hit severe turbulence.Bloomberg's overall Hong is tracking the latest developments for us.So some of the images of video are really quite confronting what we know.Yeah, this was really quite a surprising incident and traumatic, I think, forthose involved. We hear how Singapore transportauthorities are in contact with their Thai counterparts and they will besending investigators to Bangkok, which is where the plane made an emergencylanding.
The civil aviation authorities inThailand are doing the same. And we also hear how Singapore Airlineshas already said that it is working with authorities.Now, there were about 230 people on board when the incident occurred, andthey came from various nationalities, including the UK, Australia, India,Singapore. This was supposed to be a routineflight, 13 hour journey from London Heathrow to Singapore's Changi Airport.But when it was over, Myanmar was when it hit severe turbulence and passengersdescribe being in their seats one moment and then hitting the overheadcompartments the next.
As you see, you know, it was reallyquite startling for them. And do we have any sense or anunderstanding yet of what caused that turbulence or the type of turbulence itcould have been in as well? Are we likely to see with with climatechange impacts, these sorts of events continue?So yeah, we don't yet know for sure what sort of turbulence this was, but ingeneral, this tends to be caused by a rising pockets of hot air or from gustsand storms and the clouds that come with it.But if you go even higher in terms of altitude, you could see what's known asclear air turbulence.
These are practically impossible forpilots to see, which makes them particularly insidious.And this is, of course, caused by, you know, the differences in speed of twoair masses. So, you know, it begs the question howclimate change might impact this. While it is really difficult to pinpointclimate change to these specific flights just because the data is not there, it'shighly dependent on pilots records. We have studies already talking abouthow these climate change in the past decades, since 1979, according to onestudy, has prompted about 50 plus percent increase in severe airturbulence at the North Atlantic area.
Other studies predict that this coulddouble or triple into the decades ahead guys.Thanks. I rule home first in science there.And be sure to tune in to Bloomberg Radio as well to hear more from theday's big newsmakers and get in-depth analysis from the DAYBREAK teambroadcasting live right now from our studio in Hong Kong.Good Listen by the app radio plus or Bloomberg Radio dot com more Morehead.This is Bloomberg. Chinese e-commerce company pointed out.Wall is reporting first quarter results later today.Bloomberg Intelligence sees revenue.
Doubling over the period, possibly evenbeating its rival Alibaba. Senior Asia Pacific consumer analystsKathryn Lim joins us for a preview. And I think, Catherine, perhaps somepeople outside of this region might not be so familiar with Didi, but they docertainly know tamer or team. Who do you think, given the huge successof that online shopping platform, we can expect another strong quarter from PD,right? Indeed, Annabel, it is Timo that isactually driving PD's revenue and profit growth.So we are expecting a doubling of their revenue growth.And taking a step back, we've actually.
Only seen two to single digits kind ofgains coming through from Alibaba and JD.com.So it is again going to be a great set of quarter and showing from PD tonight.Are you concerned about margin pressure? We've seen that really as a trend overthe last five quarters. Right.That's a good question. And clearly the company is now venturingoverseas and the overseas business is the one driving the growth, the businessmodel of which, you know, it is costlier because of some of the consignmentmodels that they've actually undertaken to actually bridge Chinese supplierswith customers overseas.
So that's going to hurt their marginsfrom the high. But I do think that, you know, we canactually get that compensating factor from the very high revenue growth thatwe are seeing. So we should still be seeing profitsgrowing into double digits. And how do you see PTT is likely toreward investors here? We are.We likely to see a share buyback or dividends, for instance.You know what? PGD is now one of the few remainingChinese tech companies that have yet to actually have a share buyback program,nor declared dividends.
Now, I will be a little surprised ifthey actually go in that direction, given that, you know, they are lookingto invest more into some of the logistics network overseas as well as inChina. So there is needs and uses for theirfunds. But let's see how, you know, the companylook at shareholders returns going forward.Bloomberg Intelligence, senior analyst for Asia Pacific, Consumer Kathryn Limthere for us. Take a look at how is setting up when itcomes to us. Futures at this point, of course, isonly one stock that's firmly in focus.
For investors at the moment.And of course, today's expectations of another impressive lot of numbers fromNvidia. This is the picture as we see us, whichis pretty flat at the moment. Taiwan futures up by just about aquarter of 1%. Broadly, we're seeing really a kind of astruggle for momentum and direction at this point after the US session reallyhit another fresh record high, the 24th record this year for the S&P 500 withall eyes. Of course, now on Nvidia, this is ofcourse at the heart of the AI boom. The results will be out on Wednesdayhere in the region.
We're watching for the ANZ as well withits great decision out today. We're not expecting a change in policysettings, but certainly some of the communication around what GovernorO'Neill might be thinking about the balance of risks and when the timing ofeasing might begin as well, has been typically very much on the hawkish sideBill. Yeah, Heidi.And that decision actually just over one hour time away.What else are tracking? Of course, it relates to what'shappening in the crypto space. And and take a look at that big run uplosing their in ether over the last.
Three sessions alone more than 20% atthis point that it is these rising expectations and really changedexpectations because we're now actually perhaps thinking the the US FCC couldlook to approve spot ether ETF applications.We previously thought that wouldn't be the case, but the odds are now rising.And so off the back of course you've got that subsequent run up in the token.And this is Bloomberg.
