>> WELCOME TO DAYBREAKAUSTRALIA. I'M HAIDI STROUD-WATTS.WE ARE COMING DOWN TO ASIA'S MAJOR MARKET OPENS. >> I'M ANNABELLE DROULERS. TRADERS WEIGHING MIXED ECONOMICDATA AND HAWKISH LEANING FED COMMENTARY FOR CLUES ON THERATE OUTLOOK. WALL STREET'S RETURNS DOMINATEDBY SELLOFF IN BONDS. HAIDI: ECONOMISTS EXPECTING CPI TOTAKE LOWER WHILE STILL FACING PRESSURE. HAIDI:.
TOYOTA SHAREHOLDERS URGED TOREVOLT OVER THE COMPANY'S PLAN TO REELECT THE CHAIRMAN OFTOYOTA. HAIDI: A LOT TO CONTEND WITHPARTICULARLY IN AUSTRALIA AS WE LOOK AHEAD TO CPI NUMBERS.PRESSURE WHEN IT COMES TO THE RBA.A LOOK TOWARDS THE POSSIBILITY OF EASING SOONER RATHER THANLATER. WE HAVE EXPECTATIONS WHEN ITCOMES TO RETAIL AS WELL AS CONSUMER SENTIMENT, LOOKINGSOFTER AS WELL. WHEN IT COMES TO HOW WE ARESETTING UP FOR THE INFLATION.
DATA IN SYDNEY, DOWN BY 6/10 OF1%. BIG DROP IN TREASURIES THAT MOSTLY DOMINATED THE U.S.SESSION. U.S. MARKETS AND INVESTORS CAME BACKAFTER THE MEMORIAL DAY LONG WEEKEND.KIWI STOCKS HOLDING STEADY, 1/10 OF 1% HIGHER AHEAD OF THEANNOUNCEMENT OF THE NEW GOVERNMENT BUDGET.THE FINANCE MINISTER WILL BE DELIVERING THE FIRST BUDGET ONTHURSDAY. THEY ARE POSTING BIGGER BUDGETDEFICITS AS WELL AS MORE LEVELS OF BORROWING.THAT'S ONE TO WATCH OUT FOR.
WHEN IT COMES TO TRADING IN NEWZEALAND. NIKKEI FUTURES LOOKING TEPID ATTHIS POINT. CHINA FUTURES OFF BY ABOUT 1 –1/10 OF 1%. ANNABELLE: YOU MENTION THOSE MOVES THATCAME THROUGH IN THE BOND SPACE. THAT'S WHERE WE SAW MOST OF THEACTION. 10 YEAR YIELD UP EIGHT BASISPOINTS. U.S. STOCKS WERE LITTLE CHANGE. U.S.FUTURES ONLINE THIS MORNING. STEADY RIGHT NOW.IT'S THAT COUNTDOWN TO THE FED'S PREFERRED INFLATION GAUGEAT THE END OF THE WEEK.
AHEAD OF THAT, THE U.S.CONSUMER CONFIDENCE FIGURES OUT AS WELL.THOSE ROSE IN MAY FOR THE FIRST TIME IN FOUR MONTHS.NEWS ABOUT BUSINESS CONDITIONS, THE LABOR MARKET.THEY ARE BECOMING LESS NEGATIVE EVEN THOUGH RECESSIONEXPECTATIONS INCREASED AS WELL. PUT THAT AGAINST THE BACKDROPOF THESE FED MOVES AND WE ARE STILL HEARING MORE HAWKISHCOMMENTARY COMING THROUGH FROM FED OFFICIALS THAT THE BANK OFMINNEAPOLIS PRESIDENT SAYING YES, THE STANCE IS RESTRICTIVE.THERE ARE STILL CHANCES OF.
FURTHER INCREASES FROM HERE.TAKE A LISTEN. >> I'VE BEEN ASKED, WOULD WETAKE POTENTIAL INTEREST RATE INCREASES OFF THE TABLE.I DON'T THINK ANYBODY HAS FORMALLY TAKEN THEM OFF THETABLE, EVEN ME. I SAY THAT WE COULD SIT HEREFOR AS LONG AS NECESSARY UNTIL WE GET CONVINCED THAT INFLATIONIS SUSTAINABLY GOING BACK DOWN TO OUR 2% TARGET.I'M NOT RULING OUT POTENTIAL INTEREST RATE INCREASES FROMHERE. SITTING WHERE WE ARE IS A MORELIKELY OUTCOME.
IF WE GET SURPRISED BY THEDATA, WE WOULD DO WHAT WE HAVE TO DO. ANNABELLE:LET'S GET MORE INSIGHTS WITH OUR FIRST GUEST, SARAH MALIK.WE WANT TO POINT OUT HE IS ONE OF THE MOST HAWKISH ON THE FOMC.IS THIS SOMETHING THAT YOU HAVE IT ALL IN YOUR THINKING AS WELL?THAT WE STILL HAVE AN OUTSIDE CHANCE OF A RATE HIKE.ARE WE IN A PATTERN WHERE WE STAY HIGHER FOR LONGER? SAIRA:WE ARE IN A PATTERN FOR HIGHER FOR LONGER.WHETHER WE GET ANOTHER HIKE WILL DEPEND ON WHETHERINFLATION REACTS SELLER'S AGAIN.
RECENT CPI AND PPI DATA HASCOME IN IN LINE SO INFLATION IS SHOWING SIGNS OF NO LONGERACCELERATING. WITH PCE DATA LATER THIS WEEK,THAT COMES IN LINE WITH CONSENSUS.THAT WOULD BE GOOD NEWS FOR THE MARKETS.PORTFOLIO MANAGEMENT, GIVEN HOW THE MARKETS HAVE RIVEN –RISEN. WE NEED TO WAIT FOR INFLATION TO GET TO A MOREMODERATE LEVEL FOR A LONGER TIME BEFORE WE SEE THOSEFIRST-RATE CUTS. THERE IS A SMALL CHANCE THATRATE HIKES COULD BE BACK ON THE.
TABLE IF INFLATION RATESRE-ACCELERATE AGAIN. HAIDI: ONE OF THE KEY QUESTIONS OUT OFTHAT COMIC IN THE U.S. ECONOMY CONTINUED TO GROW WHENYOU HAVE THAT INFLATIONARY ENVIRONMENT?YOU'VE ALSO GOT RATE HEADWINDS. SAIRA:THAT'S THE MAIN QUESTION FOR INVESTORS.CAN THE ECONOMY WITHSTAND HIGHER INTEREST RATES ANDINFLATION? THEY'VE BEEN FAIRLY NARROW,DRIVEN BY ARTIFICIAL INTELLIGENCE WITH NVIDIAWRAPPING UP EARNINGS SEASON.
STRONGLY LAST WEEK.ALSO EARNINGS IN THE ECONOMY. VERY STRONG IN THE U.S.WITH 80% OF COMPANIES BEATING CONSENSUS.ECONOMIC DATA HAS BEEN MIXED ON THE MANUFACTURING SIDE.CONSUMER CONFIDENCE COMING IN STRONG.ALL OF THAT IS SHOWING US THAT THE ECONOMY SO FAR CAN GROWTHROUGH THESE HIGHER RATES. WHETHER THAT WILL BE WHERE WEARE AT THE ENDING IS STILL THE QUESTION THAT'S ON THE TABLE.HAIDI: GIVEN THAT UNCERTAINTY IN TERMSOF HOW MUCH GROWTH AND THE PACE.
OF GROWTH, DOES THAT MEAN YOUARE BETTER OFF LOOKING AT INTERNATIONAL MARKETS THAT ARESEEING STRONG RETURNS? THE LIKES OF JAPAN.EVEN WITH ALL THE EXUBERANCE OVER THE JAPANESE EQUITY RALLY,THERE ARE A LOT OF GLOBAL PORTFOLIOS THAT ARE STILLUNDERWEIGHT. SAIRA: INTERNATIONAL MARKETS HAVE BEENPROMISING THIS YEAR. CURRENCY AND INFLATION DATA OUTOF THE U.S.. IF THE U.S. MOVES TO RATE CUTS AND THEECONOMY STARTS TO SLOW, THAT WOULD BE FAVORABLE FORINTERNATIONAL MARKETS.
JAPAN HAS BENEFITED FROMREOPENING AND REFLATION. STRONG CONSUMER AND GDP GROWTH.MILD INFLATION FOR JAPAN. JAPAN CAN CONTINUE TO PERFORMWELL. GLOBAL PORTFOLIO MANAGERS HAVEBEEN UNDERWEIGHT THE JAPANESE EQUITY MARKETS.CHINA SHOWING SIGNS OF A RESURGENCE.I WOULD LIKE TO SEE MORE STABILITY IN THE CHINESEPROPERTY MARKET BEFORE KNOWING IF THIS IS GOING TO BE ALONG-TERM RECOVERY FOR CHINA AT THIS POINT. HAIDI:DO YOU PREFER X CHINA?.
SAIRA:YOU CANNOT IGNORE CHINA GIVEN ITS WEIGHT IN THE EMERGINGMARKETS BENCHMARK. AREAS SUCH AS MEXICO WHICHBENEFIT FROM ON SHORING WITH THE U.S., I THINK THERE'S OTHEREMERGING MARKETS WHICH HAVE LONGER-TERM STRUCTURAL TRADETAILWINDS SUCH AS MEXICO. ALSO INDONESIA WITH ITS YOUNGERPOPULATION BENEFITING BECAUSE OF THE ISSUES CHINA ISHAPPENING. THAT HAVING. GREEN SHOOTS IN CHINA.OTHER AREAS SHOWING CHINA SHOWING SIGNS OF RECOVERY.
HAIDI:YOU MENTIONED THE ISSUE OF TRADE.HOW MUCH ATTENTION ARE YOU PLAYING — PAYING TOGEOPOLITICAL CONCERNS? PARTICULARLY AFTER WE'VE HADMORE AND MORE NOISE ABOUT THE DISCONTENT FROM WESTERN TRADINGPARTNERS TOWARD CHINA. >> I THINK DEFINITELY THEELECTION IS GOING TO BE A BIG ISSUE THIS YEAR.77 COUNTRIES GOING TO THE POLLS. 60% OF GDP.THAT'S A HEIGHTENED YEAR FOR ELECTIONS. U.S.MARKETS TEND TO PERFORM WELL.
DURING AN ELECTION YEAR WHICHIS WHAT WE ARE SEEING. IN TERMS OF TRADE, WE WILL HAVETO SEE HOW THE ELECTIONS SHAKE OUT AND WHETHER — WHAT HAPPENSWITH TARIFFS AND TRADE GOING FORWARD.THE CLEAR BENEFICIARY REMAINS COUNTRIES THAT ARE CLOSER TOTHE U.S. LIKE MEXICO AND INFRASTRUCTURESHOULD CONTINUE TO BENEFIT. THAT'S A KEY CALL FOR USBECAUSE WE THINK THE U.S. WILL BRING MORE MANUFACTURINGBACK HOME. NOT ONLY BECAUSE OF TRADEISSUES BUT ALSO SINCE THE.
PANDEMIC, WE WON OUR SUPPLYCHAINS CLOSER TO HOME. THAT'S A TREND WE ARE SEEING.ANNABELLE: INFRASTRUCTURE IS INTERESTING.PEOPLE ARE LOOKING AT IT FROM THE AI PLAY AS WELL, GIVENPOWER NEEDS. WHAT ARE YOU SEEING IN THE AISPACE IN PARTICULAR? WHICH AREAS ARE YOU SEEKING TOBENEFIT FROM? SAIRA: INFRASTRUCTURE BENEFITS FROMMULTIPLE TAILWINDS. NOT ONLY MANUFACTURING.ALSO RENEWABLE ENERGY. WE NEED TO UPGRADE OUR GRIDS.ARTIFICIAL INTELLIGENCE.
INFRASTRUCTURE.BENEFITS FROM ALL OF THOSE. IT'S ALSO ECONOMICALLYRESILIENT. THE PIECES WITHIN INFRASTRUCTURE OUR UTILITIESAND WASTE MANAGEMENT. DURING A RECESSION, WE STILLTURN ON OUR LIGHTS. INFRASTRUCTURE IS A RESILIENTPLAY. ARTIFICIAL INTELLIGENCE IS ABENEFICIARY FOR THE U.S. BUT ALSO THE WORLD.WITH JAPAN AND ITS AGING DEMOGRAPHICS, ARTIFICIALINTELLIGENCE COULD BOOST PRODUCTIVITY ACROSS SECTORS.AI COULD BRING US MORE RAPID TO.
THE MARKET PRODUCTS.AI IS GOING TO BE SOMETHING THAT BENEFITS MANY COMPANIESAND SECTORS AROUND THE WORLD. ANNABELLE:JUST LOOKING AT OTHER POINTS IN YOUR NOTES WHEN IT COMES TO HOWYOU CAN POSITION AROUND A SLOWDOWN, PRIVATE CREDIT ISSOMETHING YOU ARE LOOKING AT FAVORABLY. SAIRA: IT'S AN AREA THAT IS MORERESILIENT. WE ARE LOOKING ON OUR PORTFOLIOS.BEING MORE DEFENSIVE AS MARKETS CONTINUE TO RISE.
AREAS LIKE INFRASTRUCTURE,COMPANIES THAT CONTINUOUSLY INCREASE THEIR DIVIDENDS,PRIVATE CREDIT IN THE ALTERNATIVE SPACE.ALSO NOT FUNDING THOSE FROM TECHNOLOGY WHICH IS VERY STRONGGOING FORWARD. AI IS A REAL TREND. LARGE TECHNOLOGY COMPANIES LIKENVIDIA DON'T LOOK EXTREMELY EXPENSIVE AT THIS POINT.NVIDIA TRADING AT A DISCOUNT TO THE SEMICONDUCTOR SPACE. HAIDI:ALWAYS GREAT TO CHAT WITH YOU.
ABOUT THOSE INVESTMENT IDEAS.YOU CAN GET AROUND UP WITH THE STORIES YOU NEED TO KNOW TO GETYOUR DAY GOING. SUBSCRIBERS CAN FIND THAT ONTHE MOBILE IN THE BLOOMBERG ANYWHERE AT.CUSTOMIZE THOSE SETTINGS FOR THE NEWS AND ASSETS THAT MATTERMOST TO YOU. THIS IS BLOOMBERG. HAIDI:ISRAELI TANKS HAVE REACHED THE CENTER OF PROFITH — RAFAH.RESIDENCE REPORTING CLASHES IN THE CENTER OF TOWN. IT COMES ON THE BACK OF THATHORRIFIC SCENES THAT HAVE COME.
FROM THE REFUGEE CAMP.INTERNATIONAL CRITICISM IS REACHING A FEVER PITCH.THIS IS AN OPERATION THAT IS STILL GOING AHEAD. >> WHAT WE ARE SEEING ISCONFIRMATION OF WHAT PRIME MINISTER NET YAHOO!AND THE ISRAELI GOVERNMENT SAID THE WHOLE TIME.THEY MUST GO IN HERE. THERE IS STILL GROUPS OFMILITANTS THAT NEED TO BE TAKEN OUT. IT'S PROBABLY WHERE THEHOSTAGES ARE. THAT'S WHERE THEY SIX BACKEDMILITARY LEADERSHIP IS.
THERE'S ALSO WEAPONS FROM EGYPTAS WELL WHICH THEY TRY TO LOCK UP. THAT'S GOING TO CONTINUE.WE SAW THAT TERRIBLE AIRSTRIKE ON SUNDAY THAT KILLED 45 PEOPLEINCLUDING WOMEN AND CHILDREN. IT'S AN INTERESTING DISCUSSIONGOING ON ABOUT THAT. THE U.S. HAS SAID IT DIDN'T CROSS THEREDLINE WHICH WAS SURPRISING GIVEN IT WAS A MISSILE STRIKEIN A HEAVILY TENT CITY. THERE'S ALSO REPORTS COMING OUTOF ISRAEL. IT'S A REAL FOG OF WAR STUFF.THEY ARE SAYING THEY USED SMALL MUNITIONS AND THAT STRIKE ANDPOTENTIALLY HIDDEN ARMS DEPOT.
OR AMMUNITION DUMP.IT WAS A SECONDARY EXPLOSION THAT CAUSED THAT.WHAT THE TRUTH IS, WE WON'T KNOW UNTIL THERE'S ANINVESTIGATION. WHEN YOU HAVE 1.4 MILLIONPEOPLE IN A VERY SMALL AREA AND YOU ARE CONDUCTING FIGHTING,THESE TERRIBLE THINGS ARE GOING TO HAPPEN. I DON'T THINK ISRAEL.UNTIL THIS IS LOOTED. IT'S JUST AS LIKELY THAT THEMILITANTS OR LEADERSHIP WILL MELT AWAY AND TURN UP SOMEWHEREELSE. IT'S WHACK-A-MOLE STUFF THATISRAEL IS CONDUCTING.
THAT'S WHY THE WORLD IS SOFRUSTRATED. IT'S NOT OVER. ANNABELLE: YEAH.HOW DO YOU KNOW THAT HAMAS IS AN ISSUE — FINISHED? WHEN WILL THEY BE DONE HERE?MICHAEL: THE MILITARY HEAD SEEMS TO BETHE REAL BRAINS OF THE OPERATION. SEEMS TO BE — OUTSIDE OF BEINGQUITE MURDEROUS, INCREDIBLY TALENTED AND HAS A GREAT HANDLEON HOW ISRAEL AND ITS POLITICS WORK.HE'S OPERATED THIS PARTICULARLY.
WELL. LEAVING ASIDE THE TENS OFTHOUSANDS OF PEOPLE BEING KILLED WHICH IS TRAGIC, FORHAMAS THAT DOESN'T MATTER. ALL IT DOES IS PRODUCE GLOBALPRESSURE WHICH IS EXACTLY WHAT HAMAS WANTS. EVEN IF THEY WERE TO KILL ORCAPTURE HIM, THIS TRAUMA THAT THE PALESTINIAN PEOPLE HAVEBEEN THROUGH IS GOING TO RADICALIZE ANOTHER GENERATION.WHETHER IT'S A NEW ORGANIZATION THAT HASN'T BEEN FORMED YET,UNTIL YOU HAVE A POLITICAL SOCIAL — SOLUTION, IT WON'TEND.
FOR ISRAEL, IF THEY CAPTURED ORKILLED HIM, THEY WOULD DECLARE THAT MISSION ACCOMPLISHED.HE'S OBVIOUSLY IN A STRING TALENTED MILITANT IN VERY BADWAYS OBVIOUSLY. HE'S THE BRAINS OF THEOPERATION. THAT WOULD BE WHAT THEY WOULDCALL VICTORY. SHORT OF THAT, IT WOULD BE TOCLEAR THE MILITANTS FROM THAT AREA.THEY ARE MORE THAN LIKELY TO POP UP ELSEWHERE.ISRAEL CANNOT MOST DECLARE VICTORY AFTER THEY'VE BEENTHROUGH RAFAH BUT I DON'T THINK.
IT WILL CONCLUDE. HAIDI:THAT COMPLICATES THE POSTWAR IMAGE OF WHAT GAZA AND THISAREA IS GOING TO LOOK LIKE, RIGHT?THERE'S BEEN TALK OF SENDING BLUE HELMETS IN. THE U.N. SAYS THIS IS WILDLY COMPLICATEDIN TERMS OF WHAT THEY CAN REBUILD. >> IT'S GOING TO TAKE A HUGEAMOUNT OF MONEY AND REQUIRE ARAB NATIONS BEING IN THERE.ANY BLUE HELMETS OR ISRAELI FORCES OR WHOEVER ARE GOING TOBE TARGETED BY LOCAL PEOPLE.
THERE AND REASONABLY ENOUGH.IS THERE TERRITORY. OUTSIDERS HAVE LEVELED IT.THERE WILL BE A LOT OF RADICALIZATION THAT GOES ONTHERE. IT'S GOING TO NEED SAUDI MONEYAND GULF STATES PROVIDING TROOPS TO HELP REBUILD.UNTIL ISRAEL GETS ON BOARD WITH THE PROSPECT OF A PALESTINIANSTATE, THAT'S UNLIKELY TO HAPPEN. ISRAEL BEING ONBOARD ISUNLIKELY TO HAPPEN WHICH IS THE CONUNDRUM THAT WE FINDOURSELVES IN TODAY. HAIDI: THERE'S MORE TO COME HERE ONDAYBREAK US REALLY A.
THIS IS BLOOMBERG. ANNABELLE:CHINA'S BIGGEST CITIES INCLUDING SHANGHAI, SHENZHENHAVE EASED DOWN PAYMENTS FOR — REQUIREMENTS FOR HOME DOWNPAYMENTS AND MORTGAGES. IT FOLLOWS CHINA'S MOSTFORCEFUL WRECK — RESCUE PACKAGE WITH 41 BILLION DOLLARSIN FUNDING TO BUY UNSOLD HOMES. FOR MORE, LET'S BRING IN THESHANGHAI BUREAU CHIEF. IT REMAINS TO BE SEEN WHETHERTHIS LOOSENING IS GOING TO TEMPT BUYERS BACK IN.WHAT ARE THE SIGNALS AND WHAT'S.
THE SENSE ON THAT SO FAR? >> THAT SHOWED HOW WORRIED HOW– HOW WORRIED THE CHINESE GOVERNMENT IS ABOUT THEPROPERTY SECTOR AND ALSO THE ECONOMY. TWO WEEKS AGO, CHINA JUSTANNOUNCED 300 BILLION YUAN WORTH OF CENTRAL BANK FUNDINGTO HELP LOCAL GOVERNMENTS BUY UNSOLD HOUSES.300 BILLION YUAN'S SEEMS LIKE A LOT OF MONEY.IT'S JUST A DROP IN THE BUCKET COMPARED WITH THE SHEER SIZE OFTHE INVENTORY WHICH WAS.
ANYTHING BETWEEN FIVE TO SIX TO8 TRILLION YUAN. IT'S NOT ENOUGH.THE KEY IS TO REVIVE PUBLIC CONFIDENCE IN THE HOUSINGMARKET . YOU NEED TO GET THE HOUSEHOLDSTO BUY THE UNSOLD PROPERTIES. SO THAT'S WHY. THE ANNOUNCEMENT CAME OUT LASTNIGHT THAT CHINA WILL CUT THE DOWN PAYMENT AND MORTGAGE RATESFOR PEOPLE IN THE HOUSING MARKET IN SHANGHAI AND OTHERMEGACITIES IN CHINA. IT REMAINS TO BE SEEN HOWEFFECTIVE THE MEASURES WILL BE.
THE QUESTION IS, THE PEOPLE ARENOT CONFIDENT ABOUT THEIR INCOME. USE UNEMPLOYMENT REMAINSSTUBBORNLY HIGH. THE OFFICIAL RATE IS ABOUT 15%. XI JINPING HAD A STUDY SESSIONLAST NIGHT TO EMPHASIZE THE NEED TO BOOST EMPLOYMENT ANDURGE TO CREATE MORE JOBS IN KEY INDUSTRIES. HAIDI: THIS IS ABOUT LIFTING BROADERSENTIMENT AND INJECTING ANIMAL SPIRITS BACK INTO THE BROADERECONOMY. WE'VE DONE A RECENT SURVEY OFSUNNA — SOME ECONOMISTS.
LOOKING AT CHINA.HAVE THE RECENT POLICY SUPPORT MEASURES MADE A MEANINGFULDIFFERENCE WHEN IT COMES TO THEIR OUTLOOK? >> WE DID A FLASH SURVEY THISWEEK. THE IMPACT MOST OF THE ECONOMYSEES FROM THE HOUSING POLICY IS PRETTY LIMITED. THE ESTIMATE IS ONLY LIKE 0.1TO 0.4 PERCENTAGE POINTS WHICH IS VERY SMALL. THE REALITY IS, PEOPLE INCHINA, AFTER THE YEARS OF.
RUNAWAY GROWTH, IT'S IN ACONSOLIDATION TIME. THE FINANCIAL ROUTE — NEWSREPORT RECENTLY RELEASED A REPORT RECENTLY. GROWTH OF SAVINGS IN CHINA'SBANKING SYSTEM. THE AMOUNT OF TOTAL SAVINGS ANDBANKS HAS RISEN SHARPLY OVER THE PAST FEW YEARS.A LOT OF THAT IS LOCKED IN FIXED RATE ACCOUNTS.THAT SHOWS YOU A LACK OF CONFIDENCE ABOUT INCOME.THAT'S THE BIGGEST HEADACHE THE GOVERNMENT IS FACING.GETTING THE CONSUMER TO SPEND.
AGAIN. HAIDI:THE SHANGHAI BUREAU CHIEF THERE. WE ARE STAYING WITH EGO DATA. CPI EDGING LOWER BUT SOMEFACTORS COULD STILL BE PUSHING PRICES IN A DIFFERENT DIRECTION.OUR ECONOMICS REPORTER JOINS US FOR NOW.SOME OF THESE SAME ELEMENTS COULD CONTINUE TO CREATEPRESSURE. I WONDER HOW IMPORTANT THISPRINT IS FOR THE RBA IN ITS DELIBERATIONS. >> IT'S REALLY IMPORTANT.USUALLY MONTHLY INFLATION DATA.
IS NEW.THE RBA DOESN'T PUT A LOT OF RIGHT ON IT.THIS IS THE MOST LATEST PRICE INFORMATION THAT THEY WILLRECEIVE BEFORE THEIR JUNE MEETING, JUNE 17 AND 18TH.SO THEY DEFINITELY DO WANT TO SEE IF PRICES CONTINUE TO HEADIN THE DIRECTION THAT THEY WANT OR NOT.SO IT WILL HEAVILY BE DEBATED OR DISCUSSED IN THE JUNEMEETING. WE WILL ALSO GET GDP REPORTNEXT WEEK. SO THESE TWO WILL BE CRITICALIN THE MEETING. ANNABELLE:.
WHAT IS THE TRAJECTORY OFINFLATION? IN NEW ZEALAND, THERE'S A BIGISSUE ABOUT HOUSING. THAT'S A NONTRADABLE.IS THAT A SIMILAR SITUATION IN AUSTRALIA WHERE YOU HAVE THOSECOMPONENTS OF THE INFLATION BASKET THAT ARE NOT EDGINGLOWER? SWATI: THAT'S RIGHT. WE DO HAVE THOSE COMPONENTSLIKE SERVICES, INSURANCE, EDUCATION COSTS.THEY'VE BEEN REALLY STICKY. THE RBA HAS REPEATEDLY SAIDTHAT IT'S A SORE POINT FOR THEM AS WELL.WHICH IS WHY THE RBA FORECAST.
ACTUALLY SHOWS INFLATION ISREMAINING AROUND THIS 3.2 3.3% UNTIL THE END OF 2025.THAT'S DIFFERENT FROM THE GOVERNMENT FORECAST. THEGOVERNMENT IS EXPECTING INFLATION WILL FALL BACK INTOTHE TARGET THIS YEAR BECAUSE SOME OF THE MEASURES THEY HAVETAKEN SUCH AS REDUCING ELECTRICITY PRICES AND RENTASSISTANCE. SO THE GOVERNMENT IS TRYING TOWORK ON THAT SERVICES PART OF INFLATION.THE RBA FORECAST CAME BEFORE THE GOVERNMENT ANNOUNCED THESEMEASURES IN THE BUDGET.
WE ARE YET TO SEE THOSEEFFECTS, THOSE MEASURES WILL KICK IN FROM JULY.SO IT WILL NOT BE IN TODAY'S DATA.BUT THAT IS SOMETHING THE RBA AND THE GOVERNMENT WILL BOTHKEEP AN EYE ON. HAIDI: HOW WORRIED WOULD THEY BE ABOUTTHE CONSUMER? THAT'S BEEN IN THE DOLDRUMS FORSOME TIME NOW. SWATI: YES. IT'S A BIG PROBLEM FOR THE RBA.THEY WANT TO ENGINEER A SOFT LANDING.THEY WANT TO ENSURE THAT THEY ARE ABLE TO PRESERVE THEIREMPLOYMENT GAINS AS THEY BRING.
PRICES DOWN.THE CONSUMER IS THE WEAKEST LINK AT THE MOMENT.CONSUMER SENTIMENT IS REALLY WEEK.RETAIL SALES DATA YESTERDAY WHICH WAS VERY WEAK AS WELL.THAT'S A WORRY FOR THEM. BUT I THINK WHEN THE RBAGOVERNOR TALKS ABOUT CONSUMER SPENDING OR SPENDING ON THEECONOMY, SHE IS STILL SAYING THAT OVERALL DEMAND CONTINUESTO EXCEED THE ECONOMY'S CAPACITY TO SUPPLY.SO THEY ARE NOT WORRIED AS YET. BUT I THINK IF WE START TO SEELOAN DEFAULTS AND THINGS LIKE.
THAT, OR IF IT STARTS LEADINGTO A RECESSION IN THE ECONOMY BECAUSE HOUSEHOLD CONSUMPTIONIS SUCH A HUGE PART OF AUSTRALIA'S ECONOMY, THAT'SWHEN THEY WILL BE REALLY WORRIED. HAIDI: CPI NUMBERS OUT A LITTLE BITLATER. THIS IS BLOOMBERG. ANNABELLE:YOU ARE WATCHING DAYBREAK AUSTRALIA.TAKING A LOOK AT ONE OF THE CURRENCY PAIRS IN FOCUS.THAT IS HOW THE YEN IS TRADING AGAINST THE BRITISH POUND.WE ARE AT A LEVEL WE HAVE NOT.
SEEN GOING BACK 16 YEARS.WHAT IS DRIVING THAT COMES DOWN TO THE INTEREST RATEDIFFERENTIALS AND EXPECTATIONS AROUND WHERE RATES GO FROM HERE.YOU HAVE THE JAPANESE YEN WEAKER.THE BOJ STAYING RELATIVELY DOVISH EVEN THOUGH WE HAVE SEENTHE PATH TO FURTHER HIKES. YOU HAVE THE VIEW THAT ISDEVELOPING THAT U.K. INTEREST RATES ARE GOING TOSTAY HIGHER THAN MOST OTHERS IN THE G10 COUNTRIES.THE BOE SET TO LAG BEHIND ITS PEERS WHEN IT COMES TO EASING.WHAT WE ARE HEARING IS EVEN.
ANOTHER HIKE FROM THE BOJ ISNOT GOING TO DO MUCH TO DISSUADE TRADERS FROM PICKINGNEARLY ANY OTHER MAJOR CURRENCY OVER THE YEN.WE ARE TRACKING THE EURO VERSUS THE YEN AROUND 170.THE DOLLAR VERSUS THE YEN AND THAT HAS BEEN A KEENLY WATCHEDPAIR GIVEN YOU AT THE 157 LEVEL. 160 PERHAPS SEEN AS A LINE INTHE SAND FOR THE BOJ WHERE WE SEE ANY POSSIBLE INTERVENTION.HAIDI: WE CAN GET MORE THOUGHTS INTERMS OF THE POLICY GAP AND THE INFLATION OUTLOOK IN GENERAL.GOING TO HEAD BACK TO THE UBS.
INVESTMENT CONFERENCE UNDERWAYIN HONG KONG. OUR NEXT GUEST IS ONE OF THEIRSPEAKERS AT THE EVENT AND A CO-RECIPIENT OF THE 2018 NOBELPRIZE. HE IS A PROFESSOR AT BOSTONCOLLEGE. HE PREVIOUSLY SERVED AS CHIEFECONOMIST AT THE WORLD BANK. AS WE TALK ABOUT RATEDIVERGENCE AND HOW A LOT OF THESE GLOBAL ECONOMIES ANDCENTRAL BANKS ARE AT THE MERCY OF WHAT THE FED DOES NOT, I DIDWANT TO START WITH YOU WHEN IT COMES TO YOUR INTERPRETATION OFWHAT THE INFLATION AND GROWTH.
PICTURE IS AND THE FINE BALANCEOF RISKS FOR THE U.S. AT THE MOMENT. PAUL:THERE IS ONE FACT I THINK IS HELPFUL FOR INTERPRETING WHATIS GOING ON. THE ROLE INFLATION NUMBERS FROMMONTH-TO-MONTH HAVE A STRONG SEASONAL PATTERN.IT IS VERY LOW AT THE END OF THE YEAR.THE MONTHLY INFLATION RATE IS MUCH HIGHER IN JANUARY,FEBRUARY AND MARCH. EVEN THOUGH THEY TRY TO DOSEASONAL ADJUSTMENT TO TAKE OUT.
THOSE EFFECTS, THERE IS ATENDENCY TO LOOK EVERY JANUARY, FEBRUARY, MARCH AND SAY WE ARELOSING THE FIGHT AGAINST INFLATION AND PEOPLE ARECONFUSING THE SEASONALS WITH THE UNDERLYING TREND.WE ARE PAST THAT NOW. WHAT YOU ARE GOING TO SEE ISMORE RECOGNITION INFLATION IN THE UNITED STATES CONTINUES TOCOME DOWN. . MAYBE A LITTLE BIT SLOWER THANPEOPLE WOULD LIKE. THERE IS EVERY REASON TO BECONFIDENT WE WILL GET TO WHERE WE NEED TO GO. ANNABELLE:ARE YOU ALSO CONFIDENT A SOFT.
LANDING CAN BE — A NUMBER OFOTHER ECONOMY STRUGGLING WITH THE SAME CONUNDRUM, THESTRENGTH OF THE CONSUMER, RETAIN GAINS IN THE LABORMARKET BUT NOT HAVE A GROWTH RUN AWAY TO A POINT WHERESTRUCTURAL INFLATION BECOME SUCH AN ISSUE. PAUL: EACH COUNTRY IS GOING TO BESOMEWHAT DIFFERENT. THE UNITED STATES HAS BENEFITEDFROM A CONSENT SINCE WE NEED TO DO A SIGNIFICANT AMOUNT OFPUBLIC INVESTMENT. PUBLIC INVESTMENT SINCE COVIDHAS BEEN PROVIDING A REAL.
BOOST. STIMULUS TO PAYMENTSTHEN PUBLIC INVESTMENT HAVE BEEN PROVIDING A BOOST TO THEECONOMY. THE ODDS OF A SOFT LANDING AREVERY HIGH INTHE U.S. WE SEEM TO HAVE INFLATIONEXPECTATIONS THAT ARE PRETTY WELL ANCHORED.WE HAVE THIS BLIP ASSOCIATED WITH THE WAR IN UKRAINE.I THINK THE ODDS OF THE U.S. HAVING A SOFT LANDING ARE GOOD.IN OTHER COUNTRIES YOU HAVE TO LOOK AT THOSE SPECIFICS AND SEEHOW THEY LINE UP OR DIFFER RELATIVE TO THE U.S.ANNABELLE:ANNABELLE:.
WHAT ARE YOU THINKING IN TERMSOF THE U.S. CONSUMER? WE HAVE BEEN LOOKING — FORINSTANCE WE SELL CONFIDENCE RISING FOR THE FIRST TIME INFOUR MONTHS BUT DO YOU THINK WE ARE OVERSTATING THE HEALTH OFTHE U.S. CONSUMER GIVEN THERE IS A LARGEPART OF THE POPULATION THAT IS STRUGGLING WITH THESE RATEINCREASES? >> WE MAY BE OVERSTATING ALITTLE BIT THE HEALTH OF THE CONSUMER.THE CONSUMERS ARE NOT THE ONES WHO ARE DRIVING THE ECONOMY.IT IS INVESTMENT AND THE.
GOVERNMENT IS THE KEY ACTOR.FOR STRATEGIC REASONS, FOR CLIMATE CHANGE REASONS, THEREIS EVERY REASON TO EXPECT THIS TO CONTINUE. ANNABELLE:WHAT ABOUT THE TRADE PIECE — HAIDI:WHAT ABOUT THE TRADE PIECE? YOU HAVE SPOKEN AT LENGTH ABOUTTHE COMPLEX NATURE OF TRADE POLICY AND HOW FREE-TRADE ISNOT ALWAYS BENEFIT ALL. WE COME TO AN INTERESTINGJUNCTURE WHERE INDUSTRIAL POLICY, TRADE POLICY IS SEEINGA LOT OF THE THINGS YOU SAY ARE NECESSARY LIKE SANCTIONS, LIKETARIFFS, EXPORT CONTROLS AND.
SUBSIDIES.DO YOU THINK THESE PARALLEL MOVES WE ARE SEEING FROM THEE.U., CHINA AND THE U.S. ARE ON THE RIGHT TRACK? PAUL:I THINK THEY ARE INEVITABLE. COVID MADE EVERY COUNTRYREALIZE HOW VULNERABLE IT WAS TO OUTSOURCED OFFSHORE SUPPLYOF THINGS LIKE MASK. THIS POSSIBILITY OF A CONFLICTWITH CHINA HAS MADE THE UNITED STATES AND EUROPE WORRIED ABOUTTHE SUPPLY OF CHIPS T THEIR IS GOING TO BE AN INEVITABLE]\PRODUCTION ACTIVITIES. BEYOND THAT AS I HAVE SAID ANDAS YOU MENTIONED, THERE IS A.
GROWING RECOGNITION THAT WENEED TO DO SOMETHING TO MAKE SURE ECONOMIC GROWTH BENEFITSALL NUMBERS OF A SOCIETY. A COMMITMENT TO FREE-TRADE DIDNOT HAVE THAT CHARACTERISTIC SHOULD WE ALWAYS SAID WE COULDSUPPLEMENT IT WITH SOME OTHER MEASURE TO MAKE SURE NOBODYGETS LEFT BEHIND BUT WE NEVER DID THAT TO WE EITHER HAVE TOGET SERIOUS ABOUT FINDING WAYS TO PROVIDE GROWTH AND HOPE FORALL MEMBERS OF THE U.S. ECONOMY AND EVERY ECONOMY ANDIF THAT MEANS PULLING BACK TO SOME EXTENT ON THE COMMITMENTTO FREE TRADE, I THINK IT IS.
INEVITABLE WE WILL DO THAT.ANNABELLE: YOU HAVE TALKED ABOUT HOW THERESHOULD BE LESS FOCUS ON THE TRADE OF GOODS AS OPPOSED TOFOCUS ON THE TRADE OF IDEAS. IS IT A BIT OF A CONUNDRUM ATTHIS POINT WHEN YOU TAKE A LOOK AT TECH LIKE SEMICONDUCTORS, AIWHERE IT IS THE TRADE OF BOTH? >> THE THING TO REMEMBER WASTHE DEAL THAT WAS DONE BETWEEN THE UNITED STATES AND JAPANDURING THE 70'S AND 80'S WHEN JAPAN WAS PRODUCING SO MANYCARS OF HIGHER QUALITY THAN U.S. CARS. WHAT THE U.S.SAID IS IT IS GOOD FOR U.S.
CONSUMERS TO HAVE WELL-MADECARS USING THE KNOWLEDGE THE JAPANESE MANUFACTURERS HAVE BUTWE WANT THOSE CARS TO BE MADE INSIDE THE UNITED STATES.YOU CAN USE MECHANISMS LIKE DIRECT FOREIGN INVESTMENT TOIMPORT THE KNOWLEDGE THAT A COUNTRY OR A FIRM OFFSHORE HASDEVELOPED BUT YOU CAN STILL SOURCE THE GOODS, TO THEPRODUCTION WITHIN YOUR OWN BORDERS AND THIS IS WHAT WE AREDOING WITH CHIPS RIGHT NOW. WE ARE INVESTING IN INTEL WEARE INVESTING IN THE TAIWANESE MANUFACTURERS TO SET UPPRODUCTION IN THE UNITED STATES.
ANNABELLE:IT SEEMS LIKE THERE IS ALSO A TRADE-OFF AT PLAY BECAUSE YOUHAVE THE FOCUS ON RE-SHORING OR BUILDING OUT SOVEREIGN CAPACITYIN THESE AREAS BUT YOU ALSO HAVE GREATER SCRUTINY WE ARESEEING OF DEALS WHERE YOU HAVE GOT NIPPON STEEL'S PROPOSEDTAKEOVER OF U.S. STEEL THAT IS BEING POSSIBLYBLOCKED AT THIS POINT. PAUL: SOME OF THIS IS POLITICS AND ITHINK IT IS A HARD DISTINCTION TO CONVEY TO THE VOTERS WHICHIS WE DON'T CARE WHO THE OWNERS OF A CORPORATION ARE.IT IS UNCLEAR WHO EXACTLY OWNS.
OF THESE COMPANIES ANYWAYS.WHAT WE CARE ABOUT IS WHERE THE MANUFACTURING TAKES PLACE.I THINK IT IS TOO EASY FOR RHETORIC TO BECOME LIKE AHOSTILITY TO FOREIGNERS AND WE SHOULD AVOID THAT.WE BENEFIT A GREAT DEAL FROM FOREIGN INVESTMENT AND THE KINDOF TAKEOVER THAT WAS PROPOSED IN THIS CASE AND WE SHOULD NOTHAVE RESISTED THAT. ANNABELLE: YOU MENTIONED THAT FOCUS ONINTEL AND CHIPMAKERS AND THERE IS — THAT LEADS ME TO THINKABOUT AI AND WHERE WE ARE AT IN THAT STORY. IN SOME OF YOUR MOSTINTERESTING COMMENTARY, IT HAS.
BEEN ON AI.YOUR VIEWS ON THINKING AROUND AND BEING THE NEXT BIGREVOLUTION COULD BE A LITTLE BIT MISPLACED. PAUL: I THINK WE HAVE TO REMEMBERTHERE WAS THIS SOLID CONSENSUS ONLY A COUPLE YEARS AGOCRYPTOCURRENCIES WERE GOING TO CHANGE EVERYTHING AND THENSUDDENLY THAT CONSENSUS GOES AWAY.NOBODY EVEN ASKS WHY WERE WE SO CONFIDENT AND IT BLEW UP.RIGHT NOW THERE IS WAY TOO MUCH CONFIDENCE ABOUT THE FUTURETRAJECTORY OF AI.
WHAT IS CLEAR IS AI HAS MADEREAL PROGRESS. YOU CAN DO THINGS WITH IT NOWYOU COULD NOT DO FIVE YEARS AGO. WHEN PEOPLE PROJECT TO THISFORWARD, THEY RISK OF MAKING A SERIOUS MISTAKE.WE HAVE BENEFITED FROM SCALING UP COMPUTE AND INGESTING AWHOLE LOT OF DATA. SCALING UP COMPUTE IS EASY.IT IS JUST MORE MACHINES, MORE CHIPS.WE ARE NOT GOING TO HAVE ENOUGH DATA.WE ARE GOING TO GET THROUGH THIS BURST OF INGESTION OF DATA.THERE IS NOT ENOUGH DATA TO.
KEEP THE RATE OF PROGRESS GOINGTHAT EVERYBODY HAS SEEN RECENTLY.THIS IS SHOWING UP WITH AUTONOMOUS VEHICLES.THIS WAS THE KILLER APPLICATION FOR AI. CARS THAT WOULD DRIVETHEMSELVES. BUT WE ARE FINDING IS WE DON'THAVE ENOUGH DATA ABOUT THOSE RARE EVENTS THAT CAUSED THEAUTONOMOUS SYSTEMS TO MISBEHAVE AND KILL PEOPLE.THE RAPID PROGRESS RECENTLY SHOULD NOT BE EXTRAPOLATED INTOCOMPARABLE PROGRESS GOING FORWARD.THINGS ARE GOING TO SLOW DOWN A.
LOT.WE ARE ALSO EXPERIENCING A LOT OF HYPE.THE TYPICAL BUBBLE HYPE WHERE PEOPLE ARE TRYING TO CASH IN ONTHE LATEST TREND. I PROMISE YOU WHEN WE TALK INTWO YEARS WE ARE GOING TO LOOK BACK AND SAY IT WAS A BUBBLE.WE OVERESTIMATED WHERE IT WAS GOING. HERE IS THE NEW THING. HAIDI:HOPEFULLY IT WILL NOT BE TWO YEARS BEFORE WE SPEAK TO YOUAGAIN. I DO WONDER WHETHER PART OF THEFROTH WHERE YOU SAY THE BUBBLE.
HAS BEEN EXTRAORDINARILY LOOSE,THE MONETARY POLICY FRAMEWORK OVER THE PAST TWO YEARS.ON THAT, WHEN IT COMES TO WHAT THE FED DOES AND THERESTRICTION OF MORE U.S. CAPITOL AS RATES HAVE CHANGEDDIRECTION, DO YOU THINK THAT IS GOING TO HAVE A MASSIVE IMPACTWHEN IT COMES TO THE FLOW OF CAPITAL TO OTHER PARTS OF THEWORLD, TO EMERGING MARKETS? PAUL:I THINK IT IS A GOOD THING HERE TO BE SURE AND ACKNOWLEDGE HOWLITTLE WE KNOW AS ECONOMISTS, ANYBODY KNOWS.FOR EXAMPLE WHEN WE SAW THIS.
BURST OF INFLATION CAUSED BYTHE WAR AND FOOD PRICES, ENERGY PRICES, MOST EVERYBODY THOUGHT– ALL OF US THOUGHT THE FED WOULD HAVE TO CAUSE AN INCREASEIN UNEMPLOYMENT TO BRING INFLATION DOWN.WE WERE WRONG ABOUT THAT. WE NEED TO ADMIT WE DON'TALWAYS KNOW WHAT IS GOING ON. THE BIG UNCERTAINTY RIGHT NOWIS WHERE WILL REAL RATES — THE FED FUNDS RATE MINUS THEINFLATION RATE. WHERE WILL THAT SETTLE DOWN?WE GOT USED OVER THE LAST DECADE OR TWO TO EXTREMELY LOWRATES.
THAT MAY HAVE BEEN AN ANOMALY.IT WAS THE TAIL END OF THIS LONG PROCESS OF DISINFLATIONTHAT STARTED WITH PAUL VOLCKER. IT MAY BE WE ARE GOING BACK TOA MORE NORMAL PERIOD WITH REAL RATES THAT ARE POSITIVE.I WILL BE GOOD IN SOME WAYS. IT WILL REDUCE THE RISKS OFTHESE SPECULATIVE BUBBLES. THAT WILL CAUSE SOME MAJORREADJUSTMENTS BECAUSE PEOPLE HAVE LARGELY BEEN INVESTING ONTHE ASSUMPTION WE ARE GOING TO GO BACK TO ZERO REAL RATES.RIGHT NOW WE JUST DON'T KNOW. ONCE EVERYBODY — THE INFLATIONIS DONE, WE ARE GOING TO BE.
STEADY AS YOU GO, WE DON'T KNOWWHAT FED FUND RATE MINUS THE INFLATION RATE, WE DON'T KNOWWHETHER THAT NUMBER IS GOING TO BE. ANNABELLE:I SUPPOSE THAT GOES TO THE LONGER-TERM STRUCTURAL NATUREOF WHAT THESE PRICE PRESSURES LOOK LIKE.DO YOU THINK THERE IS A SENSE AS LONG AS THE FED STAYS HIGHERFOR LONGER THEY ARE SUCKING CAPITAL AWAY FROM OTHERMARKETS, FROM EMERGING MARKETS? PAUL:I THINK THAT IS PROBABLY NOT THE RIGHT WAY TO THINK ABOUT IT.THE FED — THE THING THEY NEED.
TO BE MOST CLEAR ABOUT THEYHAVE NOT BEEN CLEAR ABOUT IS HOW FAST DO WE WANT INFLATIONTO COME DOWN. IF WE STIPULATE WE WILLINFLATION TO GO DOWN LOWER, THERE IS STILL A QUESTIONSHOULD WE BE HAPPY WITH A PROCESS WHERE THIS HAPPENSGRADUALLY OVER TIME OR DO WE NEED TO GET THERE RIGHT AWAY?THE FED HAS NOT BEEN CLEAR ABOUT THIS.MY ARGUMENT HAS BEEN WE HAVE SEEN CONTINUOUS DECREASES ININFLATION SO THERE IS NO REASON TO BE MORE AGGRESSIVE AND RISKCAUSING A RECESSION.
THE FED SHOULD SAY AS LONG ASTHE FED IS COMING DOWN, WE ARE HAPPY.THEY SHOULD SAY WE ARE HAPPY AND WE NEED TO START UNWINDINGSOME OF THE INTEREST RATE INCREASES WE KNOW ARE NOT GOINGTO BE SUSTAINED. WHEREVER THE FED FUNDS RATESTABILIZES, IT IS GOING TO BE AT A LEVEL LOWER THAN WHERE WEARE RIGHT NOW. ANNABELLE: THAT WAS PAUL ROMER, PROFESSORAT BOSTON COLLEGE. ANNABELLE:TIME IS RUNNING OUT ON BHP'S AMBITIOUS $49 BILLION TAKEOVERPLAN.
THE TWO SIDES REMAIN AT ODDSOVER THE AUSSIE GIANTS COME LOOK AT A TRANSACTION STRUCTUREAHEAD OF WEDNESDAY DEADLINES. WE WILL GET MORE WITH OURCOMMODITY EDITOR. THIS HAS BEEN A STRUCTURE OFTHE DEAL AND THE TWO SIDES ARE STILL YET TO COME TO TERMS ONIT. >> THE MAIN PROBLEM IS OVERBHP'S REQUIREMENT ANGLO SPINOFF MAJORITY STAKES IN SOUTHAFRICAN MINORS. ANGLO ARGUES THAT IS GOING TOCREATE TOO MUCH RISK FOR ITS OWN SHAREHOLDERS WHICH AREGOING TO END UP OWNING THE.
SHARES IN THOSE MINERSACCORDING TO BLOOMBERG'S REPORTING ON BOTH SIDES OF THEDEAL. THEY ARE STRUGGLING TO FIND ARESOLUTION. ANGLO EITHER WHEN A CHANGE TOTHE STRUCTURE OR THEY WANT ADDITIONAL COMPENSATION FORTHEIR OWN SHAREHOLDERS. IT IS UNCLEAR IF THEY ARE GOINGTO GET TO A RESOLUTION BEFORE THE DEADLINE WHICH IS 5:00 P.M.IN LONDON TODAY. IT COULD BE A SITUATION WHEREBHP WILL HAVE TO APPLY FOR AN EXTENSION WITH THE U.K.REGULATORY AUTHORITIES.
IT IS UNCLEAR IF ANGLO WOULDAGREE TO THAT. IF YOU LOOK AT THE SHARE PRICEAT THE MOMENT IT IS 14% BELOW THE VALUE IMPLIED BY BHP'SLATEST OFFER WHICH SUGGESTS MARKET DOES NOT THINK THECURRENT PROPOSAL IS GOING TO GET THERE AND BHP MAY HAVE TOSWEETEN THE OFFER SOMEHOW. HAIDI:IN THE MEANTIME, WE SEEK COPPER RESUMING GAINS.IN THE LONG-TERM, THE CASE FOR COPPER A STRONG. IS THERE A CHANCE ANGLO COULDWAIT.
IN COUPLE OF YEARS THERE MAY BEMORE COMPETITION AFTER A RESTRUCTURE. >> AS YOU IDENTIFIED COPPER ASTHE MAIN REASON BEHIND THIS DEAL.IT IS EXTREMELY IMPORTANT TO THE ENERGY TRANSITION SHOULD ITIS USED IN WIND TURBINES, SOLAR PANELS AND ENERGY STORM –ENERGY STORAGE GRIDS WHICH ARE GOING TO NEED MASSIVE UP RATESTO COPE WITH A LOT MORE RENEWABLES. THAT IS THE MAIN REASON THE HPWANTS — THE REASON BHP WANTS.
ANGLO.ANGLO ACTUALLY HAS ITS OWN PLAN TO RESTRUCTURE AND THATINVOLVES SPINNING OFF ITS PLATINUM BUSINESS AND EXITINGDIAMOND MINING AND COAL. THIS IS A GOOD — THIS IS GOODTIMING FOR BHP GIVEN WHERE ANGLO'S SHARE PRICE IS AT.THE FACT ANGLO HAS STRONG ROOTS IN SOUTH AFRICA AND EMPLOYS ALOT OF PEOPLE, THE FACT THIS IS HAPPENING BEFORE THE SOUTHAFRICAN ELECTION POTENTIALLY COMPLICATES THINGS A LITTLEMORE. WE WILL — IT WILL BE INTERESTING TO SEE WHETHER WEGET ANOTHER EXTENSION AND.
WHETHER BHP WANTS IT ENOUGHTHEY WILL BE PREPARED TO CHANGE THE STRUCTURE. ANNABELLE:WE WILL CONTINUE TO MONITOR THAT STORY — HAIDI:WE WILL CONTINUE TO MONITOR THAT STORY.WE HAVE TO TALK ABOUT T OSHA SPEAKING ABOUT DRAMA TENSION TOELECT A CHAIRMAN. COMING UNDER PRESSURE AGAINSTTWO LEADING PROXY ADVISORY FIRMS WHICH HAVE ADVICESHAREHOLDERS TO VOTE AGAINST THE FOUNDING FAMILY HEIR.IT IS ALWAYS FASCINATING, THE BOARD ROOM DRAMAS.THIS IS IN PART WHY WE ARE.
SEEING OPTIMISM TOWARDIMPROVEMENT IN GOVERNANCE IN JAPANESE COMPANIES.WHAT ARE THE SPECIFICS OF THE SITUATION HERE? DANNY:TWO LEADING PROXY ADVISORY FIRMS TARGETING THE AIR TO THECOMPANY — THE HEIR TO THE COMPANY.THIS BOILS DOWN TO ISSUES THAT HAVE FLARED UP OVER THE PASTYEAR OR REEMERGED. CERTIFICATION ISSUES HAVEDOGGED SOMEONE LIKE TOYOTA AND THE COMPLAINTS AROUND THESEHAVE ALL HAPPEN UNDER HIS WATCH AS TENURE , AS CEO.THIS IS A REBUKE TO THE TOYOTA.
BOARD AND HIMSELF.WHEN IT COMES TO THE SHAREHOLDER MEETING SOME OFTHESE ARE LARGELY UNDRAMATIC AFFAIRS.WITH THE GRIP AND CONTROL THE TOP SHAREHOLDERS HAVE, WE ARENOT LIKELY TO SEE MUCH CHANGE. THIS IS SENDING A SIGNAL INPARTICULAR WHEN THERE ARE ISSUES THAT DO ARISE AND INTHIS CASE FOR TOYOTA OVER CERTIFICATION ISSUES AND THEWIDER COMPANY STRATEGY. ANNABELLE: WHAT IS THE OUTCOME?WHAT IS THE MOST LIKELY SCENARIO YOU ARE LOOKING AT FORTHE VOTE? DANNY:.
ULTIMATELY LOOKING TO SEE JUSTHOW MUCH DISSENT THERE IS AMONG SHAREHOLDERS WHO MAY BEFOLLOWING THESE PROXY ADVISORY FIRMS. LAST YEAR THERE WAS ANUPTICK IN DISSENT AGAINST THE REELECTION OF CERTAIN DIRECTORS.IT REMAINS TO BE SEEN JUST HOW MUCH MORE THERE IS.WITH THIS WIDER TREND OF SEEING MORE ACCOUNTABILITY ANDDEMANDING MORE ACCOUNTABILITY ON THESE JAPANESE CORPORATEBOARDS. . THAT REMAINS TO BE SEEN. HAIDI: OUR ASIA TRANSPORT REPORTERDANNY LEE.
HAIDI:LET'S TAKE A LOOK AT SOME OF THE TOP CORPORATE STORIES. BID HAS — BYD HAS UNVEILED ANEW HYBRID POWERTRAIN ABLE TO TRAVEL TO THOUSAND LIMITERSWITHOUT RECHARGING OR REFUELING.SOME OF THE AUTOMAKER HYBRIDS COULD COVER THE DISTANCE FROMNEW YORK TO MIAMI OR MUNICH TO MADRID ON A SINGLE CHARGE AND AFULL TANK. OFFICIAL CHINESE DATA SUGGESTING APPLE'S IPHONE SALESBOUNCE BACK IN APRIL WITH SHIPMENTS JUMPING 52% FROM AYEAR AGO LEVELS.
SALES FIRST SHOWEDSTABILIZATION IN MARCH AFTER STEEP DECLINES THE FIRST TWOMONTHS OF THE YEAR. APPLE AND CHINESE RESELLERSHAVE BEEN CUTTING PRICES SINCE THE BEGINNING OF 2024.ANNABELLE: WE CAN BE CHECKING SOME OFTHOSE BIG OR KEY APPLE SUPPLIERS OPEN UNDER THE NEXTHOUR WHAT WE. ARE TRACKING OVER THE NEXTCOUPLE OF HOURS IS THE AUSSIE INFLATION DATA.THAT IS ONE OF THE HIGHLIGHTS ON THE DATA DOCKET THIS MORNING.. WE ARE EXPECTING CPI TO HAVE.
EDGED IN APRIL.FAIRLY STEADY SO FAR. A BIT OF WEAKNESS FOR THEAUSSIE SESSION JAPANESE FUTURES COME A BIT OF UPSIDE PERHAPS. VERY LITTLE DIRECTION COMINGTHROUGH FROM THE WALL STREET SESSION.A LOT OF THE ACTION WAS IN THE BOND SPACE TRACKING THE POUNDVERSUS THE YEN GIVEN WE ARE AT LEVELS WE HAVE NOT SEEN IN 16YEARS. LOTS OF BIG INTERVIEWS COMINGUP IN THE HOURS AHEAD. WE WILL BE LIVE FROM THEINVESTOR CONFERENCE IN.
SINGAPORE SPEAKING TO THE HEADOF. THE SOUTH ASIA MARKETS. AND THE HEAD OF EMERGING-MARKETECONOMICS JOINS US AS WELL. MORE AHEAD. THIS IS BLOOMBERG.
