Bloomberg Morning time: Australia 04/02/2024

♪ >> WELCOME TO DAYBREAKAUSTRALIA. MARKETS JUST HAVE COME ON LINE.PAUL: THE TOP STORIES, THE U.S. STOCKS AND BONDS LOWER WITHSTRONG FACTORY DATA REINFORCING THE VIEW A RATE CUT MAY NOTHAPPEN THIS QUARTER. >> HURTING THE YEN, IT’S APOTENTIAL INTERVENTION LEVEL. PAUL: WE LOOK AT THE FUTUREFRAMEWORK, SPEAKING LIVE WITH CHRIS KENT. >> INFLATION POLICY NUMBERS TOPOF MIND AS WE ASK ARE THEY MORE.

OR LESS ONLINE WITHEXPECTATIONS WHEN IT COMES TO THE PRICE INDEX AT .10%,SOFTENING FROM HALF A PERCENT WE SAW IN FEBRUARY.THE YEAR END NUMBER IS HOTTER, 3.1% AT A FASTER CLIP THAN THE3% THAT WAS THE CONSENSUS SURVEY AND MATCHING THE SAMEPACE WE SAW IN FEBRUARY AS WELL. ENERGY PRICES YEAR OVER YEARCOMING AT 2.4%, A LITTLE LOWER THAN 2.5%.MORE PROGRESS TOWARDS THE 2.4% WITH THE BANK OF KOREA BUT HASA WAY TO GO AND WE SEE THE INCREASE IN FRESH FOOD POLICIESAND A THE PRICE BY THE.

GOVERNMENT LEADING TO THATSLOWDOWN AND SAW A RISE IN RETAIL GAS PRICES PULLING INTHE OTHER WAY. THESE READINGS ACCORDING TOBLOOMBERG ECONOMICS LIKELY TO CHANGE THE B.O.K.’S NARRATIVETHE FINAL STRETCH TO 2% WILL BE BUMPIER WITH INFLATION LEVELSTILL FAIRLY ELEVATED AND PRIVATE SECTOR DEBT RISKCONTINUING TO BUILD FOR THE ECONOMY POLL AS WELL.WE’RE WATCHING THE SHIFT IN POLICY GUIDANCE IN ITS MAYMEETING BUT EXPECTATIONS THAT WILL STAY ON HOLD FOR THE BANKOF KOREA TO THE REST OF THE.

YEAR. PAUL:TWO MINUTES INTO TRADE HERE WE HAVE A STAGGERED OPEN AND WILLWAIT TO SEE HOW THINGS UNFOLD. A LOT OF STOCKS GOINGEX-DIVIDENDS BUT AT THE TUNE OF 1%. WE’LL WATCH TREASURY LINES ABIT LATER WITH CHINA LIFTING THE TRADE TALKS ON AUSTRALIAWINE BEFORE THE LONG WEEKEND AND WE SEE OIL PRICE RECOVERINGA BIT AFTER SINKING TO 10-MONTH LOWS.WE HAD PRETTY DECENT P.M.I. NUMBERS OUT OF CHINA, ALSO.LOOKING AT THE BONDS FACE, YIELDS EDGING A LITTLE HIGHER.WE DID SEE YIELDS GAINING.

ACROSS THE CURVE IN THE U.S.AFTER THAT STRONG I.S.M. FACTORY DATA BUT IN AUSTRALIAWE’VE BEEN HEARING FROM THE ASSISTANT GOVERNOR CHRIS KENTWHO WILL JOIN US ON SET SAYING THE I.B.A.IS NOT RULING ANYTHING IN OR OUT WHEN IT COMES TO THE FUTUREPATH OF RATES IN AUSTRALIA. LET’S LOOK AT FUTURES FOR THENIKKEI IN THE MEANTIME SITTING UP FOR A SLIGHTLY DOWN DAY.THE YEN IS SOMETHING TO WATCH ON THE BACK OF THAT U.S.DATA AS WELL AND THE FINANCE MINISTRY STILL MAKING NOISESABOUT POSSIBLE INTERVENTION.

WE HAVE 151.63.AROUND THE FOUR YEAR LOW HIGHS. >> AND WHEN IT COMES TO THE U.S.FUTURES, GIVEN RENEWED FOCUS ON HOW THE LAST STRETCH OF THEINFLATION FEES THROUGH FEDERAL EXPECTATIONS AS WELL AND THEFUTURES LOOKING FLAT BY .10%. IF YOU LOOK AT THE BOND TRADE,THEY’RE PRICING IN LESS MONETARY POLICY EASING BY THEFED AND POTENTIALLY EVEN SET THE ODDS OF A FIRST MOVE BELOW50% AFTER THAT U.S. MANUFACTURING ACTIVITY SHOWEDEXPANSION FOR THE FIRST TIME SINCE 2022.THAT HAS REALLY BEEN REALLY TOP.

OF MIND THIS IT COMES TO HOWWE’VE SEEN THINGS FOLD SINCE THE LAST MEETING.WE’RE WATCHING OIL MARKETS RISING ON TIGHTENING CRUDESUPPLIES IN AMERICA AS WELL AS ISRAELI WITH SYRIA THREATENINGTO WIDEN THE MIDDLE EAST CONFLICT AND THIS ACCUMULATINGIN THE FACT WE’VE SEEN THE UPWARD MOMENTUM IN CRUDE PRICESALL HITTING THE OCTOBER HIGHS AS WE SEE THE EXPORT CUTS INVARIOUS MARKETS. NEW YORK CRUDE CURRENTLYTRADING AT JUST UNDER $84 A BARREL.AS WE CONTINUE TO LOOK AT FED.

CUT ODDS, TAKE A LISTEN TOCHAIR POWELL. CHAIR POWELL: THE REPORT WAS PRETTY MUCHINLINE WITH OUR EXPECTATIONS. WE’RE MAKING PROGRESS BUT NEEDTO SEE MORE. THE DECISION TO BEGIN TO REDUCERATES IS VERY IMPORTANT ONE. THE ECONOMY IS STRONG AND WESEE STRONG GROWTH. WE HAD GROWTH LAST YEAR OVER 3%.WE DON’T NEED TO BE A IN A HURRY TO CUT AND CAN BE MORECONFIDENT. I DON’T THINK RATES WILL COMEDOWN AT THE LOW LEVELS IT WAS BEFORE THE PANDEMIC.THIS ECONOMY DOESN’T FEEL LIKE.

IT’S SUFFERING. >> LET’S BRING IN NICHOLASBROOKS, LET ME GET YOUR OPINION ON EACH RELEASE HAS THEPOTENTIAL TO REPOSITION MARKET EXPECTATIONS A BIT. NICHOLAS:ABSOLUTELY. I THINK WE’RE HIGHLY DATADEPENDENT RIGHT NOW AND FOR GOOD REASON.I THINK MARKETS ARE PRICED TO PERFECTION, VERY MUCH FOCUSEDON THE SOFT LANDING AND THE GOLDIE LOCK SCENARIO.INVESTORS ARE TRYING TO GAUGE WHICH WAY TO GO AND THERE ARECONCERNS IN FACT WE WON’T EVEN.

SEE A LANDING IN THE U.S.AND OBVIOUSLY THAT WILL HAVE IMPLICATIONS FOR U.S.BOND YIELDS. WE SAW THEM PUSH HIGHER TODAYON THE STRONGER THAN EXPECTED I.S.M. ON THE FLIP SIDE, WE ARE SEEINGTHE P.C.E. COMING DOWN, SO WE’RE SEEINGINFLATION MOVING IN THE RIGHT DIRECTION IN MOST COUNTRIES BUTSLOWLY. I THINK EVERYONE IS JUST TRYINGTO UNDERSTAND WHETHER WE’RE REALLY GOING TO GET AWAY WITHTHE SOFT LANDING AND MARKETS.

CAN KEEP PERFORMING OR IF WE’REGOING TO SEE A NO LANDING SCENARIO AND PERHAPS THEINFLATION REMAIN VERY STICKY AND THEREFORE A REASSESSMENT OFRATE CUTS I THINK WOULD BE QUITE NEGATIVE FOR RISK ASSETS.HAIDI: THE CONSENSUS TRADES SEEMS TOBE U.S. EXCEPTIONALISM. ARE YOU SEEING BETTEROPPORTUNITIES OUTSIDE THE U.S.? YOU SEE THERE ARE IS ANUNDERPERFORMANCE FROM EUROPE AND ASIA AND I ASSUME EVEN WITHTHE UNDERPERFORMING STRUCTURE OF CHINA. NICHOLAS: THE U.S.EQUITY MARKETS HAVE HAD AN.

INCREDIBLE RUN, PARTICULARLYTECH AND THE SO-CALLED MAGNIFICENT SEVEN. BUT THERE HAVE BEEN A LOT OFLAGGARDS SO SMALL CAP STOCKS HAVE LAGGED AND EUROPE AND ASIAHAVE LAGGED AS WELL. SO MY OWN VIEW WOULD BE FROMAND AS ET AL. OCCASION POINT OF VIEW, I’D BELOOKING A LOT MORE EUROPE. I ALSO WOULD BE LOOKING ATCERTAIN MARKETS IN ASIA AS WELL. MAINLY BECAUSE I THINK THATTHOSE SEVEN STOCKS IN PARTICULAR BUT TECH IN THE U.S.HAS REALLY HAD A RUN AND.

LOOKING VERY EXPENSIVE ON ANYMEASURE, ANY TRADITIONAL MEASURE ONE MIGHT USE, WHEREASIF YOU LOOK AT THE SMALLER MID CAPS, YOU KNOW, THEY ACTUALLYLOOK RELATIVELY ATTRACTIVE RELATIVE TO HISTORY OR AT LEASTIN LINE WITH HISTORY IN THE U.S. AND IN EUROPE THE DISCOUNTS,P/E, PRICE TO BOOK, IN SOME CASES HISTORIC LOWS.SO I THINK THAT’S QUITE ATTRACTIVE IN THE ENVIRONMENTWE’RE IN. JUST TO ADD IN ONE INTERESTINGCHANGE IS A PICKUP IN THE INDUSTRIAL CYCLE.ONE WHO COVERED ASIAN MARKETS.

OR EUROPE FOR A WHILERECOGNIZES THAT ASIA AND EUROPE DO TEND TO OUTPERFORM WHILE WESEE A PICKUP IN THE INDUSTRIAL CYCLE GIVEN THE NATURE OF THEIRECONOMY. SO THIS MAY BE THE TIME TO MAKETHAT KIND OF SWITCH. PAUL:SICKLING BACK TO THE FED, THE ENVIRONMENT YOU’RE DESCRIBINGDOESN’T LOOK LIKE A NEED FOR RATE CUTS.DOES MORE PRICING NEED TO BE DONE IN TERMS OF MARKETEXPECTATIONS HERE? NICHOLAS: I AGREE COMPLETELY AND THE CLIPYOU SHOWED EARLIER OF THE FED.

CHAIRMAN SPEAKING, THE U.S. ECONOMY LAST QUARTER, 3.4%,FIRST QUARTER LOOKING LIKE IT’S RUNNING AROUND 2%. SO THE U.S.ECONOMY DOES NOT SEEM TO BE SLOWING A LOT.OBVIOUSLY WE CAN ALWAYS FIND SOME INDICATORS THAT POINT TOSLOWDOWN AND EXPECT THE ECONOMY WILL MODERATE. THE U.S.ECONOMY IS GOING ALONG VERY STRONGLY AND WHAT WORRIES MEMOST, FRANKLY, IS THE U.S. INFLATION, THE SERVICESINFLATION IS NOT COMING DOWN AS QUICKLY AS I THINK THE FEDWOULD LIKE TO SEE.

IF WE LOOK AT THE CORE P.C.E.XSHELTER IT DID IMPROVE FROM JANUARY AND IF YOU LOOK AT AYEAR ON YEAR END BASIS IT’S ELEVATED AND THAT TO ME IS ACRITICAL INDICATOR FOR WHAT UNDERLYING DOMESTIC INFLATIONPRESSURE IS IN THE U.S. THERE IS NO RUSH FOR THE FED TOSTOP CUTTING RATES. PAUL: IS THERE ANOTHER RISK TOCONSIDER. AND WE HEARD FROM ANOTHEREXPERT HE IS WORRIED ABOUT U.S. NATIONAL DEBT.IS THAT IN THE RISK COLUMN AND ANY OTHER RISKS YOU’RE LOOKINGAT AS WELL? NICHOLAS: YES.

IT ALL PLAYS INTO THIS.THE BIGGEST RISK IS NOT THE BASE CASE SCENARIO BUT THEBIGGEST RISK MARKETS FACE THIS YEAR AND PROBABLY INTO 2025 ISTHE BACKUP IN U.S. GOVERNMENT BOND YIELDS WHICHHAS A RIPPLE EFFECT THROUGH OTHER MARKETS.ON TOP OF THE PICKUP IN THE USISM AND THE INDUSTRIALP.M.I.’S AND THE STICKYIER THAN I THINK THE FED WOULD LIKE TOSEE UNDERLYING INFLATION, ON TOP OF THAT OF COURSE IS THEU.S. GOVERNMENT IS ISSUING HUGE AMOUNTS OF DEBT AND WILLCONTINUE TO DO THIS GOING.

FORWARD.WE’RE RUNNING IN THE U.S. A DEFICIT OF 6% FOR 7% OF G.D.P.WHEN THE ECONOMY IS DOING WELL. SO FAR, YOU KNOW, WE HAVEN’THAD A KIND OF U.K. LIZ TRUST IN THE U.S.AND WOULDN’T SAY THAT’S GOING TO HAPPEN ANY TIME SOON BUT ATSOME POINT THE BOND VIGILANTES COME OUT AGAIN AND IS A RISKAND NEEDS TO BE WATCHED QUITE CAREFULLY. PAUL:YOU MENTIONED HOW THE A.I. VALUATIONS ARE LOOKING A LITTLESTRETCHED. DO YOU SEE OPPORTUNITIES INTHIS SPACE IN ASIA MAYBE GOING.

A LITTLE BIT UNAPPRECIATED ATTHE MOMENT? NICHOLAS: YEAH, IF YOU LOOK GENERALLY ATVALUATIONS ACROSS MOST OF ASIA, THEY LOOK ATTRACTIVE, CERTAINLYRELATIVE TO THE U.S. AND WITHIN THAT, OF COURSE,THERE ARE A NUMBER OF TECH SEGMENTS THAT LOOK VERYATTRACTIVE. I WOULD ALSO JUMP IN WITH WEARE LOOKING AT THE MOST RECENT P.M.I. OUT OF CHINA WE MENTIONEDEARLIER AND INDICATIONS, NOT JUST INDICATIONS, ACTUALLY, THEAUTHORITIES IN CHINA HAVE BEEN EASING, NOT AS QUICKLY AS THEYMIGHT HAVE IN THE OLD DAYS, BUT.

WE ARE SEEING MONETARY EASINGCOMING THROUGH IN CHINA. AND YOU KNOW, STOCKS IN CHINAARE PRETTY BEATEN DOWN. I THINK THERE ARE PROBABLY ALOT OF INTERESTING INVESTMENTS IN THE CHINESE STOCK MARKET ANDTECH WOULD CERTAINLY STAND OUT. PAUL: ALL RIGHT.NICHOLAS BROOKS, HEAD OF INVESTMENT RESEARCH AT I.C.G.WE’LL HAVE TO LEAVE IT THERE. THANKS FOR JOINING US.STILL TO COME, WE’RE GOING TO BE SPEAKING WITH ASSISTANTGOVERNOR CHRISTOPHER KENT ON AUSTRALIA’S FUTURE FRAME YORKFOR MONETARY POLICY AND JOINS.

US LIVE NEXT. THIS IS BLOOMBERG. ♪ HAIDI:BLOOMBERG HAS JUST HOSTED THE AUSTRALIA BRIEFING IN SYDNEYWHERE THE ASSISTANT GOVERNOR SPOKE.THEY’LL PASS TO A NEW SYSTEM AS THERE IS A DECLINE IN THERESERVES IN THE BANKING SYSTEM. JOINING US IS CHRISTOPHER KENTAT THE RESERVE BANK OF AUSTRALIA.GREAT TO HAVE YOU WITH US AND AT BLOOMBERG.JUST UPSTAIRS YOU WERE TALKING ABOUT THIS CHANGE IN THEMONETARY POLICY IMPLEMENTATION.

SYSTEM, IS ABOUT THE PIPING ANDNOT ABOUT THE TEMPERATURE OF THE WATER RUSHING THROUGH THEPIPES. CAN YOU ELABORATE A LITTLE BITMORE ON THAT? CHRIS: WHAT WE’VE ANNOUNCED IS A NEWSYSTEM FOR IMPLEMENTING MONETARY POLICY, WHAT WE’LLTRANSITION TO IN THE FUTURE. BUT IT REALLY IS ABOUT THEPLUMBING, THE NUTS AND BOLTS OF MOVING MONEY AROUND AND USACHIEVING OUR CASH RATE, CLOSE TO THE CASH RATE TARGET BUTIT’S NOT WHAT THAT TARGET IS. WHAT THAT TARGET IS, ISMONETARY POLICY.

THIS ISN’T ABOUT MONETARYPOLICY BUT JUST HOW WE ACHIEVE THE TARGET AT ANY GIVEN TIME.HAIDI: IT’S ABOUT RESPONDING TO PERHAPS THE IMBALANCES IN THESYSTEM STRUCTURALLY COMING FROM THE LAST FEW YEARS? CHRISTOPHER:IT’S ABOUT RESPONDING TO THE RUNNING DOWN OF THE VERY LARGELEVEL OF RESERVES. WE CALL THAT EXCESS RESERVES INTHE SYSTEM BECAUSE WE AND OTHER CENTRAL BANKS PURSUEUNCONVENTIONAL MONETARY POLICIES AND IT PUTS A LOT OFMONEY IN THE BANKS ACCOUNTS AND GRADUALLY UNWINDING AS THEBONDS MATURE AND THE TSF GETS.

PAID AND IT’S ABOUT LOOKING TOTHE FUTURE AND THINKING ABOUT WHAT WE NEED TO DO AS FAR ASWHAT SYSTEM WE NEED TO TRANSITION TO. HAIDI:WHEN IT COMES TO THE MODERATION, YOU OBVIOUSLYDEPEND ON UNDERLYING DEMAND BUT DO YOU HAVE AN IDEA OF SCALE,OF TIMING OF HOW THAT FRAMEWORK WILL PLAY OUT? CHRISTOPHER:WE DON’T AND WHY WE’VE PICKED THE SYSTEM WE’VE PICKED ANDWHAT WE HAVE CHOSEN IS A FULL ALLOTMENT ALLOCATION SYSTEM.THAT MEANS THE BANKS COME TO US AND FOR A FIXED PRICE THEY CANBORROW RESERVES, PLEDGE.

COLLATERAL FOR 28 DAYS AT THEMOMENT AND TAKE WHAT THEY WANT AS LONG AS THEY HAVE SUFFICIENTCOLLATERAL. WHAT IT MEANS IS THE SUPPLY OFRESERVES WILL DEPEND ON THE BANK’S DEMANDS.THE BANKS HAVE THEIR OWN ESTIMATES AND WE CAN COME UPWITH SOME ROUGH ONES BUT UNTIL WE GET THERE, WE WON’T KNOW.BUT IT SHOULD TRANSITION FAIRLY SEAMLESSLY FROM EXCESS TO AMPLEAND WE’LL KNOW WE’RE THERE WHEN BANKS START SHOWING UP INLARGER NUMBERS AND QUANTITIES AT OUR OPERATIONS ON A WEEKLYBASIS. HAIDI:.

UNTIL WE GET THERE WE WON’TKNOW PROBABLY IS A GOOD PHRASE TO DESCRIBE A LOT OF ASPECTSWHERE WE’RE AT AT THE MOMENT IN TERMS OF MONETARY POLICY.UPSTAIRS YOU ASKED, TO GIVE ONE WORD TO DESCRIBE MONETARYPOLICY AND DIRECTORY AND WILL GIVE YOU A FEW MORE WORDS.CAN YOU ELABORATE. CHRISTOPHER: THE BOARDS MADE IT CLEAR ANDTHINK THE 9 INTEREST RATE PATH THAT WILL BEST BRING INFLATIONDOWN IN A TIMELY MANNER IS UNCERTAIN.AND SO THEY’VE NOT WANTED TO RULE ANYTHING IN OR OUT WITHREGARDS TO INTEREST RATE.

CHANGES.WE’RE IN A BETTER PLACE THAN WE HAD BEEN, INFLATION HAS COMEDOWN A LONG WAY AND DOES LOOK TO BE MODERATING BUT OUR PATHACCORDING TO OUR FORECAST IS A GRADUAL MODERATION FROM HERE.AND MARKET PRESSURES ARE EASING, THEY’RE STILL TIGHT BUTEASING BECAUSE GROWTH IS SLOWING AND THAT BRINGS DEMANDINTO A BETTER BALANCE WITH SUPPLY.SO ALL THOSE THINGS ARE IN PLACE.OUR CENTRAL FORECAST IS IT SORT OF PREDICATED ON GOOD THINGSHAPPENING, INCLUDING.

PRODUCTIVITY GROWTH BUT THERE’SA LOT OF UNCERTAINTIES AROUND THERE AND THE KEY POINT ISTHOSE ABOUT REASONABLY WELL BALANCED AS BEST WE CAN TELLAND BECAUSE OF THAT, THE PATH IS UNCERTAIN.THE NEXT RATE CHANGE, THE EFFORT IS HIGHER, DON’T KNOW IF IT WILL BE A LOWER INTERESTRATE. HAIDI: WHEN YOU TALK ABOUT THE ABILITYTO RULE OUT SHOCKS, WHAT ARE THE RISKS MIGHT BE GEOPOLITICALOR ELECTION DRIVEN POLICIES OF OTHER COUNTRIES, AND HOW MUCHOF IT IS DOMESTIC OR STRUCTURAL.

MACKO ECONOMIC ASPECTS PERHAPSWE HAVEN’T SEEN IN THE DATA SETS YET? PAUL:IT COULD BE BOTH. WE JUST DON’T KNOW.BUT AS A SMALL OPEN ECONOMY WE’RE ALWAYS SUBJECT TODEVELOPMENTS OFFSHORE. WE TALKED QUITE AT LENGTH ABOUTWHAT’S HAPPENING IN CHINA. CHINA IS A MAJOR EXPORT MARKETFOR US AND THERE ARE CONCERNS THERE ABOUT THEIR PROPERTYSECTOR AND THE PROBLEMS THEY’RE TRYING TO DEAL WITH THERE.SO THAT CAN HAVE AN IMPACT FOR KEY COMMODITIES LIKE IRON OREAND MOVE OUR ECONOMY AROUND.

BUT DOMESTICALLY THINGS CAN BEMOVED BY WHAT PEOPLE HERE IN THE AUSTRALIAN ECONOMY ISDOING, PARTICULARLY HOUSEHOLDS AT THE MOMENT AND HOW THEY’LLBEHAVE AT THE MOMENT. THAT WILL BE A KEY POINT WHERETHE ECONOMY GOES. HAIDI: I WANTED YOUR VIEWS ON SAVINGSDATA I KNOW YOU LOOK AT QUITE CLOSELY.THERE ARE CONCERNS ABOUT GLOBAL DEBT, HOUSEHOLD AND PRIVATEDEBT. IN AUSTRALIA WE KNOW THE LATTERDWARFS GOVERNMENT DEBT LEVELS. WHAT ARE YOU SEEING IN THE DATAAT THE MOMENT WHEN IT COMES TO.

HOUSEHOLD SAVING AND SPENDINGAND ARE YOU CONCERNED? CHRISTOPHER: I’M NOT.I THINK WHAT YOU CAN SEE IN A NUMBER OF PLACES IS HOUSEHOLDSAVINGS HOLDING UP A BIT MORE THAN I WOULD HAVE THOUGHT.WE KNOW HOUSEHOLD CONSUMPTION IS VERY WEAK AND HOUSEHOLDSHAVE BUILT UP A FAIR — NOT ALL HOUSEHOLDS BUT MANY BUILT UP ABIG BUFFER DURING THE PANDEMIC AND THEY’RE RUNNING IT DOWN BUTRUNNING IT DOWN QUITE SLOWLY. AND HOUSEHOLDS WITH MORTGAGESARE STILL PAYING EXTRA OVERALL, NOT ALL MORTGAGE HOLDERS BUTOVERALL HOUSEHOLDS WITH.

MORTGAGES ARE PAYING EXTRA INTOTHEIR ACCOUNTS, INTO THEIR OFFSET AND REGIONAL ACCOUNTSAND THAT’S HOLDING UP AROUND THE SORT OF AVERAGE LEVELS,EVEN PICKED UP IN THE LAST SORT OF SIX MONTHS.I THINK THAT’S A SIGN MONETARY POLICY IS WORKING BECAUSE ONEOF THE THINGS THAT MONETARY POLICY DOES IS WHEN INTERESTRATES ARE HIGH IT PROVIDES AN INCENTIVE TO SAVE SO MAYBE IT’STELLING YOU MONETARY POLICY IS WORKING. HAIDI:THE SAME SORT OF RHETORIC YOU’RE HEARING FROM A LOT OFCENTRAL BANKERS TRYING TO.

NAVIGATE THIS LAST TRICKIER LEGOF THIS POLICY CYCLE, HOW DIFFICULT IS IT TO BE A CENTRALBANKER IN THIS ENVIRONMENT AT THIS POINT IN TIME AFTEREVERYTHING THAT’S HAPPENED IN THE LAST FEW YEARS? CHRISTOPHER:LOOK, I THINK THEY ALWAYS SORT OF WANT TO LOOK WITH FRESH EYESAT ALL OF THE DATA THAT COMES IN BUT CENTRAL BANKERS NEED TOTAKE A SLIGHTLY LONGER PERSPECTIVE AND THINK ABOUT THETRAJECTORY AND WEIGHING ALL THE BITS OF INFORMATION THE MARKETSGET VERY EXCITED ABOUT BUT ONLY ADDS INCREMENTALLY TO WHAT WEREALLY KNOW.

I THINK ALL CENTRAL BANKERS ARELOOKING, ARE WE REALLY ON THIS PATH WHERE INFLATION WILL COMEDOWN, LABOR MARKETS WHICH HAVE BEEN VERY TIGHT WILLIZE BUT NOTTOO MUCH SO THE UNEMPLOYMENT RATE WON’T RISE TOO MUCH ANDHOLD ON TO THE EMPLOYMENT GAINS WE SAW DURING THE PANDEMICPARTICULARLY HERE. IT’S ALWAYS A CHALLENGE.BUT THAT’S THE JOB. THAT’S WHAT THEY’RE DOING.HAIDI: AND FINANCIAL MARKETS HAVESTILL REMAINED VERY SANGUINE ABOUT THE POTENTIAL RISKS WHATTHIS NEXT PART OF THE JOURNEY.

LOOKS LIKE, RIGHT?ARE YOU COMFORTABLE WITH THAT OPTIMISM AND DO YOU THINKAUSTRALIA WILL STICK ANOTHER SOFT LANDING AND KEEP BEING THELUCKY COUNTRY BECAUSE OF BETTER MONETARY POLICY? CHRISTOPHER:THAT’S WHAT THE BOARD IS FOCUSED ON, TRYING TO BRINGINFLATION DOWN BUT IN A GRADUAL WAY SO AS TO MAINTAIN MANY OFTHOSE GAINS IN THE LABOR MARKET AS POSSIBLE. ONE NEVER KNOWS.PRIVATE MARKETS, EQUITY MARKETS, PRIVATE BOND MARKETSARE FAIRLY RICHLY PRICED AT THE MOMENT AND MADE REFERENCES TOTHAT IN A FINANCIAL STABILITY.

REVIEW AND CENTRAL BANKERS WILLWATCH FOR THOSE MARKETS AND COULD BE A PERIOD OF ADJUSTMENT.AS I SAID UPSTAIRS IN RESPONSE TO A QUESTION, FINANCIALCONDITIONS IN AUSTRALIA, THOSE SORTS OF THINGS ARE IMPORTANTAND WHAT’S HAPPENING IN PRIVATE MARKETS IS A LOT OF WHATMATTERS IS WHAT’S HAPPENING, WHAT’S HAPPENING TO BBSW RATESAND THE YIELD CURVE IS THE NATURE OF OUR MARKETS. HAIDI:A PLEASURE TO HAVE YOU HERE. WE APPRECIATE YOUR TIME.THAT WAS CHRISTOPHER KENT, THE ASSISTANT GOVERNOR AT THERESERVE BANK OF AUSTRALIA.

CAN YOU CATCH UP TO US LIVE ATTVGO AND DIVE INTO THE SECURITIES AND BLOOMBERGFUNCTIONS WE TALK ABOUT AND JOIN US ON THE CONVERSATIONS ASWELL AND SEND US MESSAGES. FOR SUBSCRIBERS ONLY, TV GO. PAUL:WOOL LOOK AT WHAT’S TRACKING ON THE A.S. IS X.ONE OF THE TOP PERFORMING STOCKS IN AUSTRALIA, BETTER BYMORE THAN 3%. TREASURY SAYING IT WELCOMES THEREMOVAL OF TARIFFS ON AUSTRALIAN WINE AND THAT’SDROPPED JUST AFTER THE CLOSE OF.

YESTERDAY OF LAST WEEK’S, ASHORTENED TRADING WEEK WHEN CHINA ANNOUNCED IT WAS REMOVINGALL TARIFFS AND OTHER BARRIERS AGAINST AUSTRALIAN WINE AND ISNOT THE FIRST OPPORTUNITY AUSTRALIAN WINEMAKERS HAD TOREACT TO THAT AND SEEING THEY’RE TAKING IT PRETTY WELL,TREASURY UP BY 3%. OTHER STRONG PERFORMERS, THEMINING SECTOR, ALL OF AUSTRALIA’S MAJOR MININGCOMPANIES IN THE GREEN, B.H.P., BETTER BY 1.7%.IRON OIL PRICES ARE RECOVERING AND DID TOUCH A 10-MONTH LOW,AND PRICES ARE $100 A TON AND.

ARE PRETTY DECENT NUMBERS OUTOF CHINA. P.M.I. COMING IN A BIT BETTER THANEXPECTED AND THE PROPERTY SECTOR IN CHINA STILL PRETTYWEAK BUT IRON ORE MINERS LIKING THE NEWS OUT OF CHINA. OK.WE’VE GOT THE PRICE THERE AS YOU SEE, BETTER BY 1.35% OUT OFSINGAPORE. PLENTY MORE TO COME ON DAYBREAKAUSTRALIA, THIS IS BLOOMBERG. ♪ ♪ PAUL:LET’S LOOK HOW THE YEN IS DOING AND FIRMED A BIT AFTERAPPROACHING 152 PER DOLLAR. THAT’S A KEY LEVEL FORPOTENTIAL INTERVENTION BY.

JAPANESE AUTHORITIES.THE CURRENCY DID SLIP ON STRONG U.S.FACTORY DATA THAT REINFORCED BETS THE FED WILL TAKE ITS TIMEWHEN IT COMES TO LOWERING RATES. LET’S BRING IN OUR G-10REPORTER. WHAT’S NEXT FOR THE YEN, IS THEJAWBONING GOING TO BE ENOUGH TO PUT A FLOOR UNDER THINGS? ANYA:EACH NEXT VERBAL INTERVENTION IS BRINGING LESS AND LESSSUPPORT FOR THE YEN. SO AT SOME POINT THEY WILL HAVETO DO SOMETHING. BUT I’M AFRAID IT’S A LITTLE.

BIT MORE WEAKENING FOR THE YEN. THE BASE OF JAPAN WILL NOT HIKETHIS YEAR AND ALL EYES TURN TO THE FEDERAL RESERVE AND MONDAYIN THE U.S. WE HAD DATA SURPRISING TO ALLECONOMISTS SO HIGHER DATA THAN EXPECTED, MEANING THAT MARKETSSTARTED RISING HOW MANY CUTS THEY SEE BY THE FEDERALRESERVE, THAT TOGETHER IT WEIGHED ON THE YEN AGAIN. HAIDI:ANYA, WHAT IS ENOUGH FOR JAPANESE AUTHORITIES TO JUMP INAND CONDUCT A INTERVENTION? ANYA: THAT’S THE MILLION DOLLARQUESTION.

BASICALLY RIGHT NOW THE YENCONTINUES SLOWLY MOVING TOWARDS, SAY, 1352, WHICH ISTHE LINE IN THE SAND THAT MANY OBSERVERS AND TRADERS AREWATCHING BECAUSE LAST TIME THEY INTERVENED CLOSE TO THAT LEVELAND WHEN YEN GOT TO THAT LEVEL LAST WEEK, EVERYONE GOT VERYNERVOUS. SO NOW IF THEY GET CLOSE TOTHAT LEVEL AND BREAK THROUGH, IT’S A LOT OF RESISTANCE THEREAND OF COURSE IT’S NOT SET IN STONE BUT JUST A LEVEL THETRADERS ARE WATCHING AND OF COURSE BANK OF JAPAN ANDMINISTER OF FINANCE IN JAPAN IS.

WATCHING.ONCE IT GETS THROUGH, THERE CAN BE SOME TIME OF NERVOUSREACTION, AND IT THEN CAN MOVE QUICKLY.IF THAT HAPPENS, IF THE MOVE IS QUICK, THEN THEY CAN STEP IN.THEY ARE VERY AWARE THEY DON’T WANT TO MAKE AN IMPRESSIONTHEY’RE TARGETING A CERTAIN LEVEL IS WHAT THEY SAY BUT IFTHE MOVE IS FAST, WHICH CAN HAPPEN AS SOON AS TOMORROW ANDTUESDAY IN THE U.S. THEY HAVE NEW DATA ABOUTECONOMY IN THE U.S. IF IT’S GETTING HOTTER OR NOT,HOW MANY CUTS.

SO THEN WE HAVE ANOTHER REPORTOF INFLATION NEXT WEEK, SO FOR THE SEVERAL DAYS GOING AHEAD, IT WILL BE A NAIL-BITER. HAIDI:INTERVENTION HAS TO BE FUTILE IF YOU’RE LOOKING AT THE LONGTERM IMPACT. [ANYA: YES, THAT’S ANOTHER BIGTHING FOR THE BANK OF JAPAN, FOR THEIR RESERVES, FOR THEMINISTER OF FINANCE TO DECIDE TO INTERVENE, THEY NEED TO BESURE THAT THIS WOULD BRING A CERTAIN RESULT BECAUSE IT IS,AS YOU SAID, FUTILE FOR THE MARKET AND MAYBE THEY’LL DECIDETO WAIT FOR THIS NERVOUS.

REACTION WHEN THE YEN WOULD GETWEAKER FOR SOME TIME AND THEN SUPPORT IT WITH INTERVENTION.BUT JUST GOING OUT STRAIGHT IN FRONT OF THE MARKET, THEREWOULD BE NOT A SMART MOVE AND MARKET LIKES TO PROD REGULATORSAND CENTRAL BANKERS, SO THEY WILL TRY TO SEE HOW FAR THEYCAN GO. SO THIS IS AN ART HOWE TO MAKEINTERVENTION LAST EVEN THOUGH JAPAN HAS RESOURCES TO DO INTERVENTION, THEY WOULD BEVERY CAUTION IN ACTUALLY STEPPING IN. HAIDI:THANK YOU, ANYA, AN ART FORM.

WHEN IT COMES TO F.X.INTERVENTION AND WE’LL LOOK OUT FOR THAT AS WE TEND TO GETJAWBONING FROM MARKETS AND THE FINANCE MINISTRY AT SOME POINTAND SEE HOW THEY’RE SETTING UP FOR THE REST OF THE MARKET ANDAUSTRALIAIAN STOCKS UP ABOUT .10% AND WE HAD MANY MARKETSCOMING UNDER PRESSURE AFTER THE U.S.DATA THAT CAME IN STRONGER THAN EXPECTED AND THAT BIG CLIMB WESAW IN 10-YEAR YIELDS IN PARTICULAR.AND LOOKING AT NEW ZEALAND, WE’RE SEEING THAT ON THE BACKFOOT OF HALF A PERCENT AND.

’NIQUE AYE FUTURES ARE UP .10%.WE’RE DISCUSSING HEAVY, HEAVY PRESSURE WHEN IT COMES TO THEDOWNSIDE OF THE YEN BUT THAT WILL PROVIDE SOME OF THOSEJAPAN EQUITIES, PARTICULARLY THE EXPORT ORIENTED ORSENSITIVE NAMES TO TRADE QUITE WELL AND THE S&P FUTURESLOOKING SOFTER AND THE MARKING POLL, CLEARLY DOLLAR YEN WILLBE KEY FOCUS AND STILL UNDER THE 152 LEVEL AS WE SEE IS THETHRESHOLD FOR POTENTIALLY REAL INTERVENTION. PAUL:LET’S CHANGE GEARS AND TALK ABOUT THE GLOBAL I.P.O.MARKET AND SAW A SHIFT IN.

GEOGRAPHICAL COMPOSITION IN THEFIRST PART OF THE YEAR. VOLUMES DOWN 7% ON YEAR AND THELATEST SURVEY BY E.Y. INCLUDE AS SHARP DECLINE INMAINLAND CHINA AND HONG KONG. JOINING US TO TALK ABOUT THISIS GEORGE CHEN, GLOBAL LEADER AT E.Y. THANKS FOR JOINING US.LET’S TALK ABOUT SOME OF THE TRENDS YOU FOUND IN YOURREPORTS. YOU HAVE GLOBAL I.P.O. VOLUMES FALLING BUT PROCEEDSARE RISING. CAN YOU EXPLAIN THIS TRENDFIRST? GEORGE: BASICALLY, IF WE LOOK AT THEI.P.O.

TRENDS FOR THE FIRST QUARTER IN2024, WE NEED TO BREAK IT DOWN IN DIFFERENT REGIONS.THE TREND IS WHAT IT IS BECAUSE EUROPE AND THE U.S.ARE DOING PRETTY GOOD. BUT OVERALL, THE STATISTIC HASBEEN DRAGGED DOWN BY POOR PERFORMANCE IN CHINA ANDMEDIOCRE PERFORMANCE IN HONG KONG AS WELL.THIS IS WHY WE’RE SEEING I.P.O. NUMBERS INCREASE AND THEN THEI.P.O. HIMSELF INCREASE BECAUSE MORESMALL DEALS THERE ARE ACROSS THE GLOBE. PAUL:SO YOU’RE ANTICIPATING — OR.

BLOOMBERG HAS BEEN DOINGREPORTING AND A LOT OF WHAT YOU FOUND, PARTICULARLY IN TERMS OFA PICKUP IN SOUTH KOREA AND YOU MENTIONED JAPAN THERE AS WELL.WHAT’S THE ENVIRONMENT FOR I.P.O.’S IN JAPAN IN PARTICULARRIGHT NOW? GEORGE: I THINK THE JAPAN MARKET ISQUITE UNIQUE BECAUSE THE ECONOMY IS GROWING OK BUT LOTSOF GOVERNMENT POLICIES STIMULATING THE REDEMPTIONPOLICY WHICH LEADS TO THE VERY BOOMING I.P.O.OR THE STOCK MARKETS. WHEN THE B.O.J.NOW ENDS THE NEGATIVE INTEREST.

RATE ERA BUT AS WE CAN ALLAGREE THE STRENGTH IS QUITE MODERATE AT THIS POINT IN TIMESO I WOULD EXPECT A LOT OF THE I.P.O.CANDIDATES, THEY WILL ADOPT A WAIT AND SEE APPROACH TO SEE IFTHEY HAVE ANY EFFECT ON THE I.P.O. PLANS.SO I WOULD EXPECT THE JAPAN I.P.O.MARKET TO BE STILL ACTIVE FOR QUITE SOME TIME THROUGH AT LEAST THE THIRD QUARTER OF THISYEAR. HAIDI: IN TERMS OF SECTORS AND THEMESI’M SURPRISED TECH IS SHOWING.

SUCH LEADERSHIP, IS IT DOWN TOCHIP AND A.I. RELATED NAMES? GEORGE: A.I.WOULD BE ANOTHER VERY IMPORTANT CATEGORY OF COMPANIES BECAUSEFROM OUR REPORT, WE FOUND THAT A LOT OF A.I., THEY’RE PRETTYMUCH IN THE P.E. AND P.G. STAGE.WE’VE SEEN WHITE A BIT OF PEVC IN FACT COMPANY GOING TO THEI.P.O. MARKET WHICH IS AN INDICATIONOF PEVC AND FIND VALUATION IS RIGHT AT THIS POINT IN TIME SOI DO EXPECT APART FROM THE TECH COMPANIES, THE A.I.RELATED COMPANY WOULD BE.

ANOTHER MAJOR SOURCE OF I.P.O.CANDIDATE THROUGHOUT THIS YEAR. HAIDI:I WANTED TO ASK ABOUT HONG KONG. OBVIOUSLY THIS HAS BEEN SUCH ASTRUGGLE FOR THE MARKET AND WHILE THE WITHDRAWAL WAS NOT ASURPRISE FOR THOSE WATCHING DEVELOPMENTS, HOW MUCH OF ASENTIMENT HIT IS THAT FOR THE PIPELINE? GEORGE:FROM MY PERSPECTIVE, I DO HAVE A CAUTIOUS OPTIMISTIC FOR THEI.P.O. MARKET ACTIVITIES IN HONG KONGBECAUSE WE ARE EXPECTING A INTEREST RATE CUT ALTHOUGHTHERE ARE SOME UNCERTAINTIES.

BUT THE MARKET, I THINK THEYHAVE ALREADY FACTORED IN AND WE ALSO HAVE SEEN THE APPLICATIONINCREASING IN THE FIRST QUARTER WHEN COMPARED TO LAST YEAR ANDALSO FOR THOSE LISTED COMPANIES IN THE FIRST QUARTER, THE AFTERMARKET PERFORMANCE OF THOSE COMPANIES, THEY’VE BEEN PRETTYIMPRESSIVE, EVEN UP TO TODAY. SO I THINK THE MARKET SENTIMENTIS THERE. AND WE HAVE ADEQUATE CANDIDATESJUST LIKE THE MANUFACTURING COMPANY, THE CONSUMER INDUSTRYCOMPANY COMING FROM CHINA AS THE CHINESE MARKET HAS BEENPLACING ON A VERY TOUGH.

SCRUTINY ON I.P.O.CANDIDATES AND THIS CANDIDATE WILL PROBABLY LAND IN THE HONGKONG MARKET. IT IS NOW A MATTER OF WHETHERTHE I.P.O. CANDIDATE AND INVESTOR CANAGREE ON THE VALUATIONS SO THE MARKET SENTIMENT CAN CONTINUEINTO THE SECOND HALF OF THE YEAR. PAUL:WANT TO CIRCLE BACK TO THOSE REMARKS YOU’RE MAKING ABOUT A.I.RELATED I.P.O.’S. OBVIOUSLY THE HOT TOPIC OF THEMOMENT. I’M JUST WONDERING IF YOU FOUNDANY EVIDENCE OF 1990’S DOT-COM.

STYLE EXUBERANCE IN THIS SPACE?GEORGE: AT THIS POINT IN TIME WE HAVETO ADOPT A WAIT AND SEE APPROACH BECAUSE MOST OF THEA.I. COMPANY, THEY’RE STILL IN THEEARLY STAGE BUT FROM OUR DATA, WE SEE A LOT OF THEM — YEAH,WE HAVE ALSO TALKED TO LOTS OF THEM AND FROM THEIRREPRESENTATIVE, IT IS ACTUALLY, THEY REALLY WANT TO TAP IN TOTHE I.P.O. MARKET TO EXPAND THEIROPERATIONS. SO WE WOULD EXPECT TO SEE QUITEA BIT OF THE A.I.

COMPANY GOING IN THE I.P.O.MARKET AS WELL. PAUL: GEORGE, THANK YOU FOR JOININGUS, GEORGE CHEN IS GLOBAL I.P.O. LEADER AT E.Y.HERE ARE DEVELOPMENTS IN THE CORPORATE SPACE WE’RE TRACKING.NIPPON STEEL HAS MADE A FORMAL COMMITMENT TO EXPANDING JOBS.AND INCLUDES A $1.4 BILLION IN CAPITAL SPENDING AS WELL AS APROMISE OF NO LAYOFFS BEFORE 2026.ANYBODYON STEEL NEW PRESIDENT HAS PLEDGED TO TRACK AHEAD WITHTHE TAKEOVER WITH THE OPPOSITION OF PRESIDENT BIDENAND SAID NIPPON STEEL SHOULD BE.

AMERICAN OWNED.TESLA BOOSTED HEAD COUNT BY 86% AND HAS MORE THAN 22,700EMPLOYEES IN THE REGION AND TESLA TURNS OUT ITS MODEL Y’SAND CYBERTRUCKS AND OFFICIALLY MAKES ELON MUSK, AUSTIN’SLARGEST PRIVATE EMPLOYER AND MULTIPLE MUSK FIRMS INCLUDINGTHE TESLA GIGA FACTORY AND THE LAUNCH SITE FOR SPACE X.CITIGROUP HAS A ROUND OF JOB CUTS IN THE INVESTMENT LASTWEEK. TECHNOLOGY, MEDIA AND TELECOMWERE AMONG THE COVERAGE AREAS HIT HARDEST WITH SENIOR BANKERSAND JUNIOR ROLES EFFECTED AND.

COMES AS CITIGROUP SAID ITCONCLUDED THE MAJOR ACTIONS AROUND ITS REORGANIZATION PLAN.MCKENZIE IS OFFERING NINE MONTHS PAY AND CAREER COACHINGSERVICES TO SOME U.K. STAFF WHO WOULD LIKE TO LEAVEAND THE MOVE COMES AFTER THE FIRM EARLIER WANTS SOME –WARNED SOME U.S. CONSULTANTS THEY WERE RUNNINGOUT OF TIME TO WIN PROMOTIONS AND THEY SLOWED THE PACE OFHIRING OVER THE PAST YEAR AS DEMAND FROM CLIENTS DECLINES.AND YOU CAN GET A ROUNDUP OF STORIES YOU NEED TO KNOW TO GETYOUR DAY GOING IN TODAY’S.

EDITION OF “DAYBREAK.”TERMINAL SUBSCRIBERS CAN GO TO DAYB GO AND CUSTOMIZE YOURSETTINGS SO YOU’RE ONLY GETTING NEWS ON THE INDUSTRY AND ASSETSYOU CARE ABOUT. THIS IS BLOOMBERG. HAIDI:WE HAVE BREAKING NEWS WHEN IT COMES TO WHAT JAPAN’S MINISTRYOF ECONOMY INDUSTRY IS DOING TO SUPPORT THE COMPANY.THIS IS A JAPANESE COMPANY OFFERING TO AIM FOR MASSPRODUCTION OF ITS TWO SHIPS ACCORDING TO TV TOKYO, THEY’LLOFFER AS MUCH AS $950 BILLION.

YEN IN ADDITIONAL SUPPORT ANDBRINGS THE TOTAL AMOUNT OF FINANCIAL SUPPORT FROM THEGOVERNMENT TO $1 TRILLION YEN AND $55 BILLION WOULD BE SENTON PACKAGING TECHNOLOGY AND THE REST ALLOCATED TO MANUFACTURINGEQUIPMENT AND CONSTRUCTION. WE HAVE BEEN REPORTING RAPIDISWILL DO BUSINESS IN AMERICA WITH THE SEMI CONDUCTOREXPECTED TO EXPAND ACROSS THAT MARKET LATER THIS YEAR AND HAVEBEEN WORKING WHEN IT COMES TO BEING A PART OF A $10 BILLIONOF ADDITIONAL SUBSIDIES FOR A COUPLE OF KEY SEMI CONDUCTORPROJECTS AND ONE OF THEM HAS.

BEEN THE ONE FOR RAPIDIS.WE’LL GET MORE DETAILS ON THAT STORY AS IT DEVELOPS.SHIFTING GEARS, THE OIL AND GAS SECTOR APPEARS TO SHIFT AWAYFROM RENEWABLES IN ITS DECARBONIZATION EFFORTS.NEW DATA FROM BLOOMBERG N.E.F. SAID IT TURNED TO CLEANMOLECULE TECHNOLOGY SUCH AS CARBON CAPTURE AND THE E.T.G.LOOKS AT ANALYSTS. TALK US THROUGH THESE TRENDSAND IS IT SOMETHING TO BE CONCERNED ABOUT? LUXI:I WOULDN’T SAY IT’S SOMETHING TO BE WORRIED ABOUT BUT I’DRATHER SAY THAT THE.

ORGANIZATION EFFORT FOR THEINDUSTRY IS BECOMING MORE DIVERSIFIED.PREVIOUSLY RENEWABLE POWER WAS THE DOMINATING TECHNOLOGY ININVESTMENT FOR THE SECTOR WITH SOLAR AND WIND ALONE ACCOUNTINGFOR 60% OF ALL THE INVESTMENT FROM 2015-2021.SINCE THEN THE DOMINANCE HAS DIMINISHED AND WE’RE SEEINGINVESTMENT IN RENEWABLE FUELS AND CARBON STORAGE AND ADVANCEDMATERIALS HITTING ALL NEW HIGHS IN THE PAST TWO YEARS.ACTUALLY LAST YEAR WAS THE FIRST YEAR WHEN CLEAN MOLECULESTAKE A LEAD IN INVESTMENT.

IN GENERAL WE’RE SEEING OIL ANDGAS COMPANIES ENTER TRANSITION INVESTMENTS SWITCHING AWAY FROMCLEAN ELECTRONS TO TECHNOLOGIES THAT CREATE GREATER CINERGYS TOTHE FOSSIL FUELS AND AND RENEWABLE FUEL PRODUCTION ANDPLASTIC RECYCLING, ETC. PAUL: SO LET’S TALK ABOUT SOME NAMES,WHICH OIL AND GAS FIRMS ARE LEADING THESE CHARGES IN THELOW CARBON INVESTMENT TREND? LUXI: THERE ARE TWO GROUP OFCOMPANIES I LIKE TO HIGHLIGHT HERE. FIRST IS THE U.S.OIL COMPANIES, SUCH AS EXXONMOBIL, CHEVRON, OCCIDENTALAND SOME U.S.

REFINERS AND HAVE PRIORITIZEDCLEAN MOLECULE TECHNOLOGIES IN THEIR ENERGY INVESTMENT SUCH ASRENEWABLE FUELS WITH VERY LITTLE INTEREST IN RENEWABLEPOWER WHATSOEVER. THE OTHER GROUP OF COMPANIES,THE EUROPEAN OIL MAJORS SUCH AS B.P.N.SHELL AND PREVIOUSLY HAVE LED THE ENERGY TRANSITION INVESTMENT CHAIN WITH VERY BIG BETS ON RENEWABLE POWER AND WE SEESOME OF THEM SLOWING DOWN THE PREVIOUSLY VERY AGGRESSIVEEXPANSION IN RENEWABLE POWER AND FOCUSING MORE ON OTHER LOWCARBON SEGMENTS SUCH AS.

BIOFUELS, E.V.CHARGING OR, LIKE, GREEN HYDROGEN PRODUCTION. HAIDI:WHAT ARE THE MAIN DRIVERS BEHIND THESE COMPANIES’ CHANGEOF FOCUS? LUXI: OBVIOUSLY EACH AND EVERYCOMPANY WOULD HAVE THEIR OWN CONSIDERATION WHEN IT COMES TOANY ENERGY TRANSITION STRATEGY. THE OVERARCHING THEMES AREMONEY. THE U.S. HAVE RENEWABLE INVESTMENTBECAUSE THE COUNTRY HAS VERY ENCOURAGING POLICIES FOR SUCHINVESTMENT AND HAVE TAX CREDIT OR FUNDING OPPORTUNITIES, ETC.,FOR THE EUROPEAN OIL COMPANIES,.

THEY HAVE SLOWED DOWN THEIRPREVIOUS EXPANSION IN RENEWABLE POWER.I BELIEVE THE LOWER RETURNS OF RENEWABLE ENERGY PROJECTS ARETHE POSSIBLE DRIVERS BEHIND SUCH CHANGE. BOTH B.P.N.AND SHELL HAVE LOWERED THEIR RETURN TARGETS FOR A RENEWABLEPORTFOLIO FROM 6% TO 8% AND IS LOWER THAN THE RETURN FOR OTHERSEGMENTS. B.P. IS TARGETING 15% RETURN OFINVESTMENT IN BIOENERGY AND SHELL IS TARGETING A I.R.HURDLE RATE FOR 12% IN INVESTMENT IN LOWER FUELS ANDE.V. CHARGING PORTFOLIO. PAUL:.

DOWNSTREAM OIL ANALYST INCHANGE HIGH, LUXI. LET’S LOOK AT THE GEOPOLITICALDEVELOPMENTS WE’RE TRACKING. IRAN AND SYRIA SAYING AND ISREALLY AIR STRIKE ON TEHRAN’S ENERGY COMPOUND IN DAMASCUSKILLED SEVERAL PEOPLE INCLUDING TWO MILITARY GENERALS.IRAN’S FOREIGN MINISTER SAYS ISRAEL SHOULD BE HELDACCOUNTABLE FOR THE ATTACK, WHILE THE COUNTRY’S ENVOY TOSYRIA PROMISED A DECISIVE RESPONSE.ISRAEL WOULDN’T CONFIRM IT CARRIED OUT THE STRIKE BUT SAIDIT WILL TAKE ANY STEPS THAT.

SERVES ITS WAR ON HAMAS.THE U.S. AND ISRAEL HAVE AGREED TO ANIN-PERSON MEETING TO DISCUSS THEIR DISPUTE OVER AN EXPECTEDISRAELI INVASION OF THE GAZA CITY OF RAFAH.THE STATEMENT SAID ISRAEL WILL TAKE U.S.CONCERNS INTO ACCOUNT AND APPEARS TO MARKED CONCESSION BYNETANYAHU WHO EARLIER SCRAPPED A PLANNED VISIT TO WASHINGTON.THE INDONESIAN PRESIDENT-ELECT HAS MET THE CHINESE LEADER INBEIJING AND STATE MEDIA SAID XI TOLD THEM CHINA IS WILLING TOBOOST STRATEGIC COOPERATION AND.

HELP WITH POVERTY RELIEF.AND BOEING HEADS TO JAPAN FOR A MEETING WITH THE PRIME MINISTERADMITTING HE WILL CONTINUE THE CENTRIST STRATEGY IN NAVIGATINGTHE U.S. RIVALRY. TUNE IN TO BLOOMBERG RADIO TOHEAR MORE FROM THE NEWS MATTERS AND GET IN DEPTH ANALYSIS FROMTHE DAYBREAK TEAM AND FORECASTING LIVE IN OUR STUDIOAND HONG KONG AND LISTEN TO THE APP OR BLOOMBERGRADIO.COM.PLENTY MORE TO COME. HAIDI:TAKE A LOOK AT HOW CURRENCIES ARE TRADING AND OF COURSE THEBIGGEST FOCUS IS WHERE WE’LL.

SEE THE YEN TRAVEL IN THE DAY.JAPAN INTERVENTION WOULD POTENTIALLY COME AT THAT 152LEVEL WHICH IS SHY AT THAT LEVEL AT THE MOMENT AND WOULDTARGET THAT YEN RALLY AND COULD SEE EMPLOYEES EMPLOYING SEVERALTRILLION YEN WHEN IT COMES TO TARGETING THAT RALLY AGAINSTTHE DOLLAR IF THEY DO IN FACT DECIDE TO INTERVENE IN U.S.MARKETS. AND WE COULD SEE MORE JOBEARNING AS WELL. AS WE SEE REALLY THE DOLLARIMPACT, THE DOLLAR NEARING ITS YEAR END DATA HIGH AFTER THESURPRISING I.S.M.

READINGS AND THE DOLLARTRACKING THOSE TREASURY YIELDS HIGHER LOOKING TO THE STRONGESTLEVELS WE’VE SEEN SINCE MID FEBRUARY.THE MARCH REPORT SHOWING MANUFACTURING ACTIVITY IN THEU.S. UNEXPECTEDLY SEEING A SIGNIFICANT EXPANSION IN PRICEPRESSURES REMAINING HIGH AS WELL AND SEEN THE BLOOMBERG DOLLAR .4% REVERSING THEEARLIER LOSS, 125121 IS WHERE WE’RE AT HAD IN THE YEAR TODATE HIGH AND UP ABOUT ALL OF ITS G-10 PEERS AS WELL.LET’S LOOK AT SOME OF THE.

STOCKS WE’RE WATCHING IN THESESSION. PAUL: A FEW TO KEEP AN EYE ON WHEN WEGIT-GOING AT THE OPEN TOP OF THE HOUR IN SOUTH KOREA ANDJAPAN AND THE STOCKS TO WATCH WHEN WE GET TRADE UNDERWAY,NIPPON STEEL IS ONE TO KEEP AN EYE ON LOOKING TO BUILD SUPPORTFOR THE U.S. TAKEOVER AND HAS MADE A FORMALCOMMITMENT TO THE UNITED STEELWORKERS UNION FOR ANADDITIONAL $1.4 BILLION IN CAPITAL SPENDING, MAKING APROMISE THERE AS WELL THERE WON’T BE ANY LAYOFFS UNTIL 2026.A RECORD ONE WE’RE WATCHING AS.

WELL, RAKUTEN RETURNING TO THEHIGH YIELD BOND MARKET WITH MORE THAN $1 BILLION WITH ASTRONG RALLY IT SOLD EARLIER THIS YEAR.ASIAN TESLA SUPPLIERS WILL BE BACK IN FOCUS AS WELL.ANALYSTS ARE RAPIDLY LOWERING PROJECTIONS FOR THIS WEEK’SDELIVERY REPORTS FROM TESLA. SOME ARE SEEING A FIRST DECLINESINCE THE EARLY DAYS OF THE PANDEMIC.AS ALWAYS, CHIPMAKERS ARE GOING TO BE IN FOCUS AFTER JAPAN ASWE WERE JUST REPORTING, APPROVING UP TO $3.9 BILLION INSUBSIDIES TO CHIP VENTURER.

RAPIDIS WITH MORE AMBITION TO CATCH UP TO SEMI CONDUCTORMANUFACTURING. HAIDI: CHIPMAKER A.I.WHICH IS UP WITH POSITIVITY AS WE GET THE WEAKNESS IN THE YENTHAT WILL BE SUPPORTING A LOT OF THOSE TRADE AND EXPORTRELATED NAMES AS WELL. WE SAW JAPANESE EQUITIESFOLDING EARLIER IN THE WEEK. INVESTORS ARE TAKING A BIT OFPROFIT UNSURPRISINGLY ON THE FIRST DAY OF THE FISCAL YEAR.THE NIKKEI 225 HAVING THE STRONGEST QUARTER IN ALMOST 15YEARS. WE SAW WEAKNESS ACROSS.

AUTOMAKERS AND WATCHING TO SEEIF THAT CONTINUES AFTER WE SAW A SURVEY SHOWING SENTIMENT FORLARGEMAKERS OF CARS, ACTUALLY SEEING DECLINES THERE AS WELL.A LOT OF THE TOP PERFORMERS SEEING A BIT OF PROFIT TAKINGIN THE PREVIOUS SECTION AND SEE IF THAT REVERSES AS WE GET INTOTHE OPEN. AUSTRALIAN STOCKS AT THIS HOURA IN AND HEALTH SHARES AMONG THOSE LAGGING AND NEW TO THESTART AS WE SAW WALL STREET EDGING LOWER ON THE BACK OFINVESTORS TRYING TO MAKE WHAT THEY WILL OF THE VERY SOLID U.S.FACTORY DATA AND EXPECTATIONS.

THAT PERHAPS THEY’LL NOT BE INA RUSH TO CUT RATES. THE MARKET OPENS IN SEOUL ANDTOKYO ARE NEXT. THIS IS BLOOMBERG.

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