tv Bloomberg Daybreak Asia Bloomberg May 11, 2022 7:00pm-9:00pm EDT
haidi: a very good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories, the stock selloff set to continue in asia after a hot u.s. inflation print triggers a slide on wall street. treasury curve flattens as young -- long yields fall. hong kong defense is dollar peg for the first time in three years as currency hits the weak end of its trading ban. mixed results for disney, adding more streaming customers than expected, but warning subscriber growth may slow. the s&p 500 already fell to its march 2021 low. we're talking about relentless selling across assets with a very hot u.s. cpi print with a headline number at 8.3%.
a little cooling but still a decade high. nasdaq 100 underperforming with the likes of tesla and apple leading declines. saudi aramco overtaking apple is the world's most viable company. not surprising given we have continue to see oil prices trending higher. we saw it rise for the first time in three sessions in new york, right now unchanged in the asian session. still at around the $105 level. we continue to see haggling over an eu ban on russian crude but also because we had u.s. government reports signaling inventories were falling and that was leading to an upside on fuel prices. bitcoin also little rebound in the asian session still below the $30,000 level. this of course after we had the collapse of the stable coin, a flight to safety in the crypto asset space. losing about 20% or so. haidi: huge moves in the crypto
space and we will watch for some of those platforms and crypto-related names trading in asia as we get the start of trading in this part of the world react into the hotter than expected inflation print. expectations cemented for more aggressive moves to hide from the fed. this is how we are shaping up when it comes to be start of trading in asia. we had a breed -- brief halt to the slide but asian equities are going to continue selling off. looking at the cheapest asian stock market since he pandemic when you look at 12 month forward pe, dropping below 11. australia looking like indicated downside of .6%. when we get trading after that brief .2% higher in the wednesday session. the 10 year yield, seeing the yield pick up as we continue to see volatility in the treasury and global sovereign bond space as well. new zealand equities off by about .4% as well as dollar yen below 130. we saw the greenback giving back
some of the super strength we have seen over the past few sessions. that is not that if the -- lackluster trading. shery: this is the markets continued to watch out for perhaps a more hawkish federal reserve given the very hot april u.s. inflation numbers. let's discuss all of this with kathleen hays and andreea papuc. it was really surprising that although we had the u.s. cpi numbers cooling a little bit, the breadth of the price pressures were really and focus. kathleen: and the fact have only cooled a little bit. to skip to the conclusion, will the fed moved to 75 basis point hikes, or has the fed been, unlike markets, unlike investors who have never been through a sigh collect this who are saying -- maybe the fed knows they will have to work hard to get
inflation down and they don't have to get more aggressive yet. let's talk about the numbers. i should not get too far ahead of things. 8.1%. that is what we got down to, or were supposed to get down to. instead it only got to 8.3% from 8.5%. 40 year high. core cpi, that also did not get as low as it was expected to do. still above 6% by a mile. that is a big difference. in terms of what is driving it, services prices have picked up steam. when inflation first started rising 2020 into 2021, it was all about supply chains, it was going to be transitory. they would ease and it would not be a problem. instead we are seeing goods prices, which were driving inflation more than services, have started to pull back a bit. they were in mixed bag. new car prices shot through the roof, but used car prices fell. but core services were actually
up 8% year-over-year annualized over the last three months. people were locked up for a long time, now they have gone back to work, they still have high savings in the u.s., airfares are record surge, hotels are up, restaurants are up. people are spending money. the problem is what people were worried about. if the fed waited too long they would let inflation pressures go from goods prices and get more entrenched in services. the former new york fed president bill dudley in his latest opinion column says he thinks the fed has to get real about the fact they will have to be a lot more aggressive than what they are saying. >> the problem is the federal reserve has not been forceful enough in stating not just what their goal is, 2% inflation, but the means to achieve that goal. chair powell not want to talk about why monetary policy might
not just have to go to neutral, but to tight. a tight monetary policy is what will be required to get inflation under control. kathleen: i am also thinking it will be easier to make those statements when you are not actually at the fed anymore. jim bullard is more aggressive saying get to neutral rate to 2.5%. some day 2.5%. and see where you are. they want to take this step-by-step. do they have that luxury? is it going to be so persistent a godless of whether it piques or not? they will have to speeded up, maybe even by the summer. haidi: all of this uncertainty will weigh on markets, which we saw asian stocks briefly snapping that seven-day losing streak. but it looks challenging again today. andreea: that's right. we have seen that rebound yesterday as investors came in at the edges. but there has not been a rebound with any sort of a conviction even though you are seeing u.s. futures edge up this morning in
asia. that does not mean that asian markets will have a positive session. and we are looking at technology stocks. they are the ones that are on performing -- underperforming this market rout as the treasury yield flattens, as we are looking at higher interest rates into a slowing economy. so watch out for chinese tech stocks. they have been coming under pressure here in asia. traders are now pricing and perhaps another 50 basis point rise not only in june and july but maybe september. so all of these things are going to continue putting pressure on the market. shery: any conviction in the very small rebound we are seeing in crypto assets right now? andreea: here's an interesting fact about crypto assets. we had bitcoin, its lows have
always been higher than the previous low but now that is gone. intraday it fell below the intraday from last year, which plays into these negative outlook for cryptocurrencies. this is a very volatile space as we know. and they are getting swept into this risk off we have seen in markets. so on top of that you have the terry usd, you have got the stable coins. all of those selling off. and we know that this is a volatile market. another interesting thing is bitcoin is more correlated with the nasdaq that it has been since 2010. so it is going to mirror that slide in technology stocks. so look, overall, a lot of negatives for the crypto space. haidi: let's get you to vonnie quinn now with the first word
headlines. vonnie: the hong kong monetary authority has moved to support its local currency for the first time since 2019. they are buying nearly 1.6 billion hong kong dollars. the intervention comes as the hong kong currency hit the weakest end of its trading ban in three beers. sri lanka's president as promised and new prime minister and cabinet will be named this week to end political instability. he's also pledging constitutional changes to give more power to parliament, a long-held demand of protesters. the country's central bank chief has threatened to resign if stability is not restored. the protests have seen around nine people killed and 200 injured. the philippine presumptive president says he is looking to prioritize the economy, jobs, and infrastructure, as he looks to boost economic growth. the country has been forecast to grow at one of the fastest rates in southeast asia this year. they claimed victory in the
presidential election wednesday, citing an unassailable lead. china has denounced the w.h.o.'s criticism of its covid zero strategy. a spokesman hailed the merits of the approach, which has left the nation increasingly isolated. the spokesman said the w.h.o. director general should get a better understanding of the facts and refrain from making responsible remarks. -- making irresponsible remarks. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's take you to the u.s. senate floor, where voting is continuing for the confirmation of the remaining two of president biden's fed picks. that's jerome powell for another term, and philip jefferson as governor. the senate has enough votes to confirm fed nominees philip jefferson with the vote ongoing. we have seen absences due to 19 cases among democrats in the
evenly divided u.s. senate, having delayed the confirmation vote. but we do have enough votes to confirm jefferson. he would become just the fourth black man to join the fed's board. he had unanimous support from the banking support -- banking committee. powell was opposed only by elizabeth warren, a progressive democrat. of course we have seen a commitment from all three of president biden's fed nominees. still ahead, sri lanka set to name a new prime minister and cabinet this week. we discussed how that could change the course of the debt crisis as global investors selloff dollar bonds. first, staying rational during the bear market. hear lolita strategies. this is bloomberg. ♪ this is bloomberg. ♪
>> these numbers obviously are too high. >> the fed is walking a significant tight rope. >> the fed has its work cut out for it. >> they will have to be a lot more tolerant of high inflation for a while. >> the market is overpricing with the fed will do. >> the market is pricing in that the fed will have to hike more. >> we are expecting a 50 basis point increase the next meeting. >> may be put that 75 is this point increase back on the table. >> now, greater than 50 basis point moves, why rule anything out in the early innings. >> if they go by another 50 basis points in june, another 50 in july, that is a lot of tightening over a couple of
months. >> monetary policy is going to be required to get inflation under control. shery: guests reacting to the u.s. cpi print. our next guest continues to take a defenses position. loreen gilbert, good to have the weather us. cash seems to be king these days what with inflation numbers this high, where you go to hedge? loreen: cash has been king so far this year, but that is not a long-term fault, it is short-term. as you said, inflation continues to rage on and therefore people go into negative territory just by earning cash. so it is a matter of looking at where we are in the markets. we have seen a major price adjustment. we are in a bear market. right now the s&p 500 is trading at a forward pe of 18.6. much more reasonable than it was at over 21.4 before this route. so it is a more reasonable
market we expect some more downside and then we are looking for opportunities to get there. shery: where do you think the opportunities can present themselves? we know that value has been doing better than growth but it has not been doing is better as analysts expected. loreen: it has been better than growth, thank goodness. when you look at large-cap value and growth, a huge disparity between the two. and this most recent round we have had has impacted all of the market including value. but we still see opportunities, especially in the value space, until there is more deterioration in the growth space. then we are looking for opportunities there as well. haidi: segment-wise, do you still see further upside for some market dialing's like energy, particularly with inflation pressure still so high? loreen: energy -- commodities is
a broader basket. if you look at commodities as an overall basket and not just energy, and tomorrow we are going to hear ppi numbers we think are going to go up because of commodity pricing that has continued to be higher. so, we do have an allocation, we do like commodities as part of it. but we are seeing that even with the higher cpi number it is coming down. and if we look at the five-year breakeven, that is coming down as well. so i want to express to investors that as high as these numbers are not like to see four years high -- for your highs, but it is coming down -- haidi: how do you weigh the impact on the strength of the u.s. consumer and therefore which companies are likely to be hit by that? loreen: so, consumer sentiment
is down and consumers are concerned about their pocketbook. if we look at cpi numbers, one of the big trending upward numbers is shelter. that is up significantly over 5%. so that is going to continue and that is a lagging part of the cpi numbers that will continue to go up. with all of that the consumer is hit harder. consumers still have been strong. but that is waning. so we have to look at that is part of the overall component when we look at the overall strength of the consumer which drives are u.s. economy. so for right now the consumer still has strength and is spending and when we look at it or look at the spending on services, and services has been increasing and that of course is an opportunity for investment as well. shery: loreen gilbert, always good to have you with us.
and of course we are counting down to the start of trade in tokyo and seoul. some of the stories we are watching today in japan, futures already pointing to significant downside as you can see, down 1.3%. this as we continue to see that water selloff globally. one stock that we will be watching is softbank, set to release her latest earnings report. we could see bad numbers for their vision fund. we are also keeping an eye on japan's current balance which is set to be released in about a half-hour. we will break you those numbers. blackstone considering teaming up with kkr on a joint bid for toshiba. in south korea, the president holding a meeting on a budget plan. they are seeking an extra $25 billion for the budget, but that would be without new bond issuance is. we have fourth-quarter earnings reports and the bank of korea holding a non-rate second
haidi: let's take a look at some stocks moving in the after hours trade. taking a look at rivian. shares a jumping 13% in the post-market trading. we are coming off some of those highs. they still expect to produce 25,000 vehicles this year despite some pain across the supply chain. they built more than 2500 units in the quarter. also watching beyond meat, they
dropped below their 2019 ipo price as sales fell short. down 21%. also citing the high cost of producing new products that bit into profitability. this is first quarter revenue that missed expectations and dropping below the $25 price set in the 2019 public offering for the first time. bumble is a much brighter story. the dating and social app up just over 10% in extended trading. they recorded first quarter results that beat expectations and the outlook was pretty good when it came to what analysts were looking for. of course disney is the one to watch. topping screaming -- streaming subscriber estimates the outlook was muted. those gains are not enough to outweigh worry about the balance of the fiscal year as well as how much it will be spending on content. the ceo of disney says disney+
will soon be in dozens of new markets. >> by the end of q3, we plan to roll out disney+ to 53 new markets across europe, africa, and west asia. starting with south africa next week. haidi: let's get more from ed ludlow. we saw disney stocks initially rise on the subscriber number. it was optimistic. why did we see the reversal? ed: especially because of what we saw from that next and there surprise scriber loss. it was kind of a relief. better subscriber number, strength in the quarter. especially one chapek had telegraphed that the first half of 2022 would be slower growth. and disney suffering from the same headwinds as everyone else. the war in ukraine impacting some of those eastern european markets. you have high inflation, concern about recession. there were other bright spots about the parks business has done very well, new markets
coming online. it is a mixed bag, as you put it. but overall positive. shery: how did parks in china do given a lockdowns? ed: there was a miss on eps. part of that was one time tax obligations. the other is shutdowns in china, and what is going on in hong kong is weighing on profitability in that unit. it was very clear in this quarter and in the coming quarter. but parks everywhere else globally are doing really well. a real tailwind as part of the reopening story coming out of covid. but inflation, concerns about recession. there are longer-term questions about how much improvement we see from the parks business. haidi: what did we hear about spending on content? ed: spending going to get pulled back a little bit, around $1 billion. going into the quarter we thought that the reason that
disney+ subscribers would be slightly muted is because it was not any new content. new content is coming online. but disney is managing a budget, and that includes theatrical releases. get out there, watch dr. strange. that was a hit. but what they were saying relates to the china story. could have done even better in china as an example would not had the covid lockdowns. but it is a balancing act between spend and fiscal prudence. shery: i am so excited. i think he is my favorite character. ed ludlow with the latest on disney, and i am headed to watch dr. strange. bloomberg has learned three bondholders not receive their interest payments as the developer's 30 day grace period expired. the noteholders say they were not paid as a 5:00 p.m. wednesday in hong kong. it opens the prom -- possibility of them being declared in default. the first missed the deadline last month for an almost $30
million payment. chinese ride-hailer didi global has provided more details on its planned delisting from the new york stock exchange, saying it needs to complete cybersecurity review and rectification to resume normal operations in china. however, didi also said he remains unclear whether those measures satisfy of already's -- satisfy authorities. they proceeded with a u.s. listing despite chinese protests. coming up -- not surprising given the hawkish fed stance not to mention the growth concerns of the city. we will have the details. this is bloomberg. ♪ is bloomberg. ♪ what's it like having xfinity internet? it's beyond gig-speed fast. so gaming with your niece, has never felt more intense. hey what does this button do? no, don't!
♪ vonnie: this is daybreak: asia. the ecb president has signaled a move on interest rates as soon as july. bloomberg has learned policymakers are interested in taking interest rates to as low as zero by the end of the year. the chinese premier has urged officials to use fiscal and monetary policy to boost employment and the economy. reports say he oversaw measures will be taken to secure supply chains and subsidized power producers. the australian opposition leader has been declared the winner of the third and final election debate.
candidates and the prime minister were questioned on the minimum-wage and australian integrity. australians head to the polls may 21. hong kong media reports say national security police arrested four democracy activists, and including a cardinal. others were reportedly detained on charges of colluding with foreign forces big reports say the forward later released on bail. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ caroline: the hong kong monetary authority has moved to support local currency for the first time since 2019 let's bring in bloomberg markets coanchor yvonne man. the intervention was expected by downside on the hong kong dollar
has. been quite something. yvonne: selling pressure on local currency is something that we have seen for weeks against this hawkish fed, against the rise in treasury yields and a strong dollar story as well. you add to that that the domestic sides of that side of things in hong kong hasn't been good, growth slowed slowdown due to these covid restrictions. at you at a hot cpi print from the u.s. overnight and that was the trigger that sent the hong kong dollar to seven point 8 that is the weak end and forced the central bank to stepien and -- two step in and by local currency worth 200 $10 million u.s. the hong kong dollar is still actually around those levels. dbs is saying pressure for the hong kong dollar will fade as we see rate hikes in christ and when it comes to u.s. yields. if there is any silver lining,
perhaps the economy here is on the mend after the four percent contraction in growth we saw in the first quarter in hong kong. now that we have curbs loosening inmate, that perhaps could come back on track for recovery and support the hong kong dollar. haidi: how much further can they defend the peg? yvonne: it seems they can continue to defend the peg, at least in the short-term, and intervention for months to come. bloomberg intelligence's steven chu says it is not a problem for hong kong for now, the hawkish fed. the trading ban is a constraint, doesn't give them wiggle room, and it will be tested in the short term. when you look at key measures for liquidity, you look at the aggregate balance of the h cma and that is very positive.
you're not seeing much sign of stress. hcma trucking data back to march are not seeing significant outflows just yet, so there may be something for the hong kong dollar now and you could see local interest rates here catch up or surpassed the u.s. rate, if the fed has to revert to monetary easing after its aggressive path. you also have stock connect inflows and listings in hong kong that could provide currency tailwinds. there are still longer-term questions and whether it is time to unpeg the hong kong dollar to the u.s. dollar. existential questions remain a focus. haidi: bloomberg markets reporter yvonne man in hong kong. call for world policy support for the chinese economy as
beijing slams the head of the world health organization over his criticism of the china covid zero policy. our chief nor asia correspondent stephen engle joins us. what are they pledging? stephen: it comes against a backdrop of rising criticism as well as rising concern that this time around, the exit of the wave of covid in china will not necessarily have a fee-shaped recovery -- v-shaped recovery that we saw in 2020. in part because of criticism that we saw from the likes of the w.h.o. chief, and that is just the nature of omicron raises the risk of flareups throughout this year, and the corresponding lockdowns we have seen china not back down from its zero-covid policy. according to cctv, and the most recent state council meeting in
beijing, he is calling for more monetary policy to stabilize the economy, particularly the grave and complicated situation in employment. employment is key for political and economic stability. he did not acknowledge what specific measures the state council would endorse. but many economists expect perhaps more rrr requirements that banks as well as a possible cut in interest rates. on inflation, he urged the stabilization of consumer prices which rose faster than expected in april, both consumer prices and factory prices, ppi, and also ensure grain output and supply. caroline: beijing not happy with the w.h.o. right now. what has been the response from beijing over dr. tender' criticism of covid zero? stephen: the response from the
foreign ministry spokesperson is emblematic of the sensitivity, put it that way, of covid zero. and perhaps there could even be some internal debate and arguing over the validity of the long-term strategy of covid zero. let's hear the response to yesterday's criticism from mr. tedros criticism, who says covid lockdowns are not sustainable and he urged beijing to rethink the policy. >> we think a relevant individual will make objective views on china's protocols and policy and refrain from making irresponsible marks. stephen: the world health organization has never really supported lockdowns, they always advocated a moderate approach to controlext with concern for social well-being and human
rights. let's be fair and honest. jen, he cited that report we reported yesterday from the university that used new modeling techniques to show that if china were to abandon covid zero, there would be "a tsunami" of new cases and deaths in china. caroline: our chief north these are correspondent stephen engle. coming, sri lanka's president promises a new prime minister and cabinet as the central bank chief threatens to quit unless stability is restored, next. this is bloomberg. ♪
♪ haidi: after days of violent protest, sri lanka's president has promised a new prime minister and a new cabinet will be named this week to end instability. the central bank chief has threatened to resign if stability isn't restored. joining us right now is a professor at georgetown university, also one of the advisors named by sri lanka's president to help resolve the growing debt crisis. glad to have you back with us on
bloomberg television, we appreciate your time during what i am sure is a very busy time. the promise to restore stability, if you look at what is going on, the strunk -- the slump in sri lankan dollar bonds, investors not convinced, is it going to reduce the ability of the country to receive funds from the imf and world bank? >> we are working on three fronts to alleviate economic hardship. one is to restructure sri lanka's debt. second is to negotiate a program with imf. and third is to seek rich financing from friendly nations. and all of these are proceeding at the technical level. we are discussing with the imf the various components, and those negotiations continue. the problem is, when you conclude the negotiations, if
you need to make an announcement , we feel there needs to be a government that has legitimacy and that is the problem sri lanka is facing. the government has lost the support of the people and people are calling for the resignation of the president and dismantling of the government. so, it would be very difficult at that point if that persists, it would be very difficult to say that we have negotiated a program for development. at that is the dilemma that we are facing. haidi: i think the dilemma is, you can name a new prime minister, but global investors want a government that can stay in power, with certainty. is it possible to begin to restructure with either global institutions or global investors without that? shanta: that is the point i was making, that there has to be
credibility in the government. it seems to me that what people are saying, there is no credibility unless there is a change in the president, that the phrase go home and thing like that seem to be echoing that any new government structure with the president in place, with the power he has, will not be an acceptable government by the people. caroline: what are you -- shery: what are you hearing from the president right now, what are they telling you to do in the meantime while they settle political issues? shanta: we are continuing to discuss at the technical level the kinds of measures needed to be put in place in order to have a debt restructuring. those are continuing with the central -- with the governor of the central bank, with the
minister of treasury, how to bring about these reforms. shery: we are hearing the central bank governor is threatening to quit. that makes technical talks more difficult? shanta: of course, that will make it hugely difficult. with the -- what the central bank governor is really saying is that he cannot continue to operate when the government in power does not have political legitimacy, which is the point i was making as well. these are very difficult problems to overcome when the government does not have the support of the people. paul: breaking news -- haidi: breaking news about a beleaguered property developer in china, sunac, now saying they
will be able to make payment on their 2020 three notes and other notes as well. they are seeking to resolve issues from bondholders, but saying there is no assurance to be able to meet financial obligations. we see several holders yet to get money they owed, and they say they will be unable to make payments on 2023 as well as other notes. they missed an issuing deadline last month for a 29 and a half million dollar coupon payment on the bond maturing in 2023. the 30-day grace period expired wednesday and we have heard a number of holders of those securities have not received payments at the end of business thursday in hong kong. this is a significant development when it comes to china's property sector, that has been grappling with a debt crisis since last year after the
crackdown on excessive leverage. it has been just a string of default, a dozen builders missing offshore payments including the big one, china evergrande at we are giving now that sunac is unable to make their bond obligations. shanta, part of what we are seeing so much in this distressed segment of corporations is because of the impact from rising inflation, from tighter global liquidity conditions. how much of that is going to complicate the macro environment in sri lanka, given we know so much of the problem has been caused by rising prices? shanta: the local environment is making things even worse in lockup. an increase in fuel prices and food prices for instance, as a result of the russian invasion of ukraine. and the potential for worldwide inflation can exacerbate
inflation in sri lanka as well. we are also not seeing a rebound in tourism that we were hoping for. two of the top five sources of tourism in russia were russia and ukraine, so that market is frozen. these are all exacerbating for situation, but keep in mind, the situation was very bad to begin with. sri lanka had no access to capital markets, inflation was already at 20%, and growth was anemic and has actually been downgraded once more. shery: a big part of the problem has been that chief funding coming from china for infrastructure projects in sri lanka that went nowhere and just ballooned the debt. what conversations are there right now with beijing? shanta: conversations on various
fronts, and one is the possibility beijing might the able to provide the financing -- the bridge financing i was talking about earlier. there is a $1.5 billion swath of the central bank that beijing has not released at there has been discussions about how we can make use of that in this time of short liquidity. and there is also discussion, as you said, china has 10% of sri lanka's total debt. that is as high as japan, so not an overwhelming amount of debt. but any debt restructuring talks include restructuring of official depth, which includes china, japan, india and so forth. so, there are talks about how to manage that, to achieve a harmonious restructuring of the debt of all the creditors. and what of the principles we are maintaining is inter-creditor equity so that
all creditors take the same as part of debt restructuring. shery: chinese property developer troubles continue, with sunac saying they don't expect to pay their october 2023 bond and other notes. shanta, i know your panel is in charge of ensuring a sustainable and inclusive recovery. but in this environment of political instability and violence, how do you ensure non-debt inflows? shanta: first, we have to stabilize the economy, that is the highest priority. securing bridge financing, restructuring the debt and achieving a program with the imf. if we do those three things and in particular the program with the imf, involving structural
reforms that are conducive to putting sri lanka back on a path of sustainable growth, and i should add that if we have that program with the imf, it increases the possibility of support financing from the world bank and the asian development bank, both of which will lead to other structural forms. to give you one example, it is reforming the safety net in sri lanka so that we can actually target poor people with cash transfers, to cushion the effects of some of these structural reforms. that can make a big difference to sustainable growth and it can also send a signal that we are protecting the poor when we are undertaking very difficult reforms. shery: shanta devarajan, a georgetown university professor and advisor to the sri lankan government.
thank you for joining us with the latest on those negotiations in sri lanka. this, as we watched the latest breaking news japan. we are getting the latest march current account surplus numbers coming in at 2.54 9 trillion yen. the japan current account surplus again, coming in at 2.549 trillion yen. the surplus is bigger than expected and adjusted from previous months are coming in at 1.5 6 trillion -- 1.56 trillion and we could see further pressure on the japanese yen plenty more to come -- japanese yen. plenty more to come. this is bloomberg. ♪
♪ haidi: we have the bank of japan releasing a summary of opinions from the april policy meeting. we are hearing one member say the challenges are to escape from inflation and another member saying to watch the impact of fx moves on prices and the economy. huge moves in the yen, weakness in the yen and how fast that has happened even the strength of the dollar has been a huge
challenge and a quandary for the bank of japan. of course, the outlook is mixed when it comes to inflation. the sustainability of prices, particularly for boj. shery: this as we watch stores across japan. softbank earnings do in a couple of hours, softbank the third-biggest leader on the benchmark and investors will be watching for numbers including the performance of the vision fund, impact of rising rates and the regulatory crackdown. let's discuss this with su keenan. a billionaire is expected to set another record, not in a good way. su: a record loss is what is expected and analysts say it will be a dramatic reversal from a year ago. because they expect the soft bank vision fund unit to lose more money than it ever loss before.
$18.5 billion on its public portfolio alone according to an analyst. would mean a loss for the vision fund unit of about $10 billion. softbank has profits and losses from its debt fund startups, so the selloff in the global market was in a rising rate environment and tighter galatians in asia have altered the business model. -- have all hurt the business model. shery: we will be watching the open in japan. we are getting the latest from north korea, they are confirming their first coronavirus case, kim jong-un ordering all cities to lock down. we are getting shanghai numbers as well, 440 nine local covid cases as well. this is bloomberg. ♪
shery: welcome to daybreak asia. haidi: asian stocks set to fall. chinese property developer sunac warning it doesn't expect to make bond payments with no assurance of meeting its financial obligations. plus crypto, the stable coin struggling. shery: some risk assets have been translated to cross assets in asia, the nikkei falling more than 1%, consumer staples and health care stocks leading the decline. safe areas like utilities gaining ground.
real estate as well. we saw the japan march current account surplus coming in at ¥2.5 trillion, winding slightly -- widening slightly as we got boj opinions from their april meeting, saying they need watch the impact on economy and prices as we continue to see the japanese yen strength thing a little bit -- strengthening a little bit against the u.s. dollar, below the 140 level for the first time in a while. we heard a member say the boj stand is helping the appropriate yield curve, continuing to trade around the upper limit of the boj level of tolerance. we are talking about .247 percent of the moment. south korea, the kospi losing about 1%, the other index moving -- losing 1 -- the topix
losing 1.4%. north korea ordering all cities to lockdown, we don't have much information about the pandemic in that country, but we are seeing confirmation that front -- on that front. the korean yuan weakening to 2020 levels and the kospi having its worst week. haidi: in australia, a little downside. still, some green the coming through from the likes of energy, the biggest gain are on the as asked to hundred -- asix 200. the 10-yield, the aussie dollar rising, the yield curve flattening, the yield on the three-year pretty unchanged although we are seeing the yield on the 10-yield -- 10-year down five basis points.
we are hearing from bloomberg economics that investors may be caught wrongfooted when it comes to expectations the bank will hike 250 basis points by the end of the year. the kiwi dollar, didn't see much gains for either the kiwi or the aussie despite the broader pullback in the u.s. dollar overnight. have a look at the treasury market, a lot of repricing when it comes to whether 75 basis points is back on the table or at least in conversation. a little improvement when it comes to both the 10-year and the two-year, with that end of the curve holding steady. s&p 500 index equity futures are up about 1%, and not much risk appetite going into the next session. crude, energy stocks outperforming peers, oil holding
u.s. gains before the key summer driving season, continuing concerns about the global supply even with worries about demand out of china and its lockdown. shery: talking about china, shanghai now announcing two new cases outside quarantine on wednesday. three days of no community cases would lead to restrictions being lowered. that doesn't seem to be the case at this point. those are big market risks but our next guest says she believes in structural growth in asia. christina woon is the investment manager at aberdeen asia. the emerging markets nature of asia, some people seem to be avoiding asia altogether. what do you think?
christina: it is a valid point. asia is an emerging region. i think the concern is, if we stay away from asia, we are missing many opportunities that could arise. to give an example, many markets across asia are at the start of reopening, so you have yet to see the full trajectory of recovery you have seen in other parts of the world. if you look at inflation data as well, it is more manageable in asia then it seems to be in other parts of the world, still positive for this region at this point. longer-term, many of the structural drivers will play out beyond a covid or higher interest rate or inflation, and that is why we remain positive on asia right now. shery: beijing reporting 46 new
covid cases from may 11. what do you make of china as an investment destination? christina: china has been very tricky for all of us navigating that market. the lockdown has been a definite concern for us in the near term, highly disruptive not just for china but for supply chain's globally. i think this is not something that we should expect to be in definite. i think i should be support coming through. there are expectations of perhaps stimulus coming through in the second half of the year. having said that though, we have to see how things play out over the rest of the year. in the meantime though, i think we have to lay the groundwork for that recovery, but we can start constructing portfolios that our position for that. china, even with the bad news, is not without opportunities at that is something you should not
get. haidi: what are those opportunities in segments as to positioned to benefit in the second half? christina: in the second half, if stimulus comes through, the sectors would be financials, infrastructure, property should be positive as well. other trends we are positive on our the localization of supply chain within china. we have seen geopolitical tensions that have come up in the past few years, so i think one of the stronger themes that will continue is localization of supply chain's in china -- supply chains in china. and i think the green theme in china is attracting a lot of capital investment, so that should be a driver for growth over the long term as well. haidi: you are also positive on
australia. what do you see with the election risk, is it even a risk when it comes to equity investors? christina: i think the unique case of australia, the current environment is quite defensive as part of a portfolio. that is something we like. it is not just the property sector that is holding up well within the market, there are a few ways investors can play in the current environment. the australian market gives investors access to good quality mining, for example. in an inflationary environment, these are names that would hold up well. on the flipside, australian banks are stable because the economy, relative to many other markets within asia, is one that has been able to sustain
recovery better than other counterparts in asia. that also lends stability to the investment case across asia, one of the reasons we are positive on australia. haidi: great to have you with us, christina woon equities manager at aberdeen asia. vonnie: president biden says the federal reserve has primary responsibility for inflation pbyte it has called inflation unacceptably high and reducing it is a top economic priority. during a visit to a family farm outside chicago, biden urged farmers to maintain global food supplies. >> we can make sure americans can make up for the ukrainian gap and supplies. american exports in my first
year in office shattered previous records, $177 billion last year alone. vonnie: the ecb president signaled a move on interest rates as soon as july. bloomberg sources say policymakers at the central bank are open to taking interest rates above zero before the end of the year. christine lagarde says the rate hike may happen weeks after bond buying ends early next quarter. the sri lankan president has promised a new prime minister and cabinet will be named this week to end political instability. he is also pledging constitutional changes to give more power in the parliament, a demand of protesters. meantime, that central bank chief has threatened to resign if stability isn't resort -- isn't restored. protests have seen nine people killed and 200 injured. china has condemned world health organization criticism of its zero covid approach. it has left the nation isolated
from the rest of the world. a spokesman says the w.h.o. director general should get a better understanding of the facts and refrain from making irresponsible remarks. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ shery: still ahead, a bank set to report earnings. the world's biggest tech fund lost $18 billion in its public portfolio alone in the last quarter. we have a preview. plus, what the hot u.s. inflation figures mean for the fed's rate hike half,. this is bloomberg. ♪ -- fed's rate hike path.
>> some people think it could be as high as 75. >> maybe put that 75 basis point increase back on the table. >> why rule anything out in the early innings? >> if they go another 50 basis points in june and in july, that is a lot of tightening over a couple months. >> is going to be harder to get inflation under control. shery: some of our guests on inflation and the fed's tightening. red-hot prices did not cool much in april is fed officials continued to count on 50 basis point rate hikes to be enough to bring prices under control. our global economics and policy editor kathleen hays is here with more. it matters what the composition of those cpi numbers is and what is driving those inflationary pressures. kathleen one of the key challenges is keeping inflation so persistent, or whether it is speaking.
who cares? it is still so high. let's start with the numbers. we see in the latest report that cpi was up 8.3% year-over-year. it is not a record for-your high, but particular. it was supposed to ease to 8.0 in march, which would have been comfort if you are a fed official. it is under 8.5%. at 6.2%, this is the problem. what we are seeing -- the core cpi, six point 2%. this is the problem. the shift in the core is largely due to services. goods prices rose a lot during the pandemic and out of the pandemic, rising because a demand when people were locked up at home and supply chain constraints pushed those higher. what we are now seeing is services prices rising, airfare,
a record rise as a matter of fact, hotels are up, you name it. goods prices have cooled a little, used-car prices, apparel prices, new car prices have prevented them from falling further but overall, this is keeping inflation high. the problem is, what people were concerned about, if you wait too long and don't start raising rates when demand is still strong, you are going to see that you are going to get a more persistent rise in inflation and it will take more right hiking to get it down. that seems to be the case now. haidi: does this, if not 75 basis points back on the table, does it bring it back to the debate? kathleen: jim bullard, president of the st. louis fed, a month and a half ago at than event, he would asked about a 75 basis point rate hike and he said, we could if we needed it, but my best cases 50 basis points.
they have committed to three in a row, may, june and july. most are sticking with that, but maybe they will do more 50s and not a 75. the former new york fed resident bill dudley, a bloomberg opinion writer and senior advisor to bloomberg economics, was on television today. he said the fed is going to have to communicate, be a lot more aggressive, get way above the futures rate of 3% or 2.5% that he think maybe we have to go all the way to 5%. it is too early to say. but i think the question maybe how many 50's you do, not whether or not you do 75. 75 would be under unusual circumstances. knowing the history the fed, i think that is one reason they don't put higher on sonic. shery: kathleen hays with the latest. let's look at hong kong, the hong kong monetary authority has moved to support the local
currency for the first time since 2019 50 intervention comes as the hong kong dollar is the weekend of trading for the first time in -- the weak and trading for the first time. how unusual is this and what are the implications? >> it reflects what is going on in the u.s. with inflation, interest rates, hong kong keeping its currency pegged to the u.s. dollar, 7.5, seven -- 8.5, so when you have u.s. interest rates going one way, you have people bracing against the hong kong dollar. and the gap is the widest since 2019. that is encouraging traders to get in and do this carry trade -- parry trained, that is putting pressure on the hong
kong dollar and affected by the interest-rate story in the u.s.. but the other side is about the hong kong economy. it is going through a very rough patch. it is not just a money market bet, it is also reflecting underlying bets in terms of what is going on here. i think most people say there will be downward pressure on the currency for some time. shery: tell us more about economic pain across the city, especially small businesses given ongoing restrictions? >> small businesses are the core of every economy. hong kong is opening up on the ground at the moment and you might see headlines saying there will be a big rebound. and there will be if people are allowed to spend again for the first time in months. but we went out and spoke to several business people and said how is it looking? they are all making the point that it will be a very long road back for the hong kong economy. they are not talking about the port or areas that continue to see strength, but underground spending remains subdued --
subdued as people remain very nervous in the food and hospitality sector, beauty salons, gymn owners, they are all saying they lost money during the pandemic and are concerned about how long it will take to make up the gap, and also the risk of the government doing another u-turn and imposing more restrictions because of covid-19. it is a better move on the ground, a better time or business people, but confidence remains weak and nobody's quite sure yet whether hong kong pulled out of the pandemic. shery: edna curran, our chief asia economics correspondent. this is the european futures space is looking like this -- and mixed picture after european stocks jumped the most in six weeks with attractive stock rua should given slump in europe the past four weeks. but across asia, u.s. futures
are also down, so not surprising we are seeing pressure on futures. especially as we hear from sources that the ecbc is increasingly embracing us scenario of taking rights positive before the end of the year. coming up, and experiment on digital coins that behave like the dollar and a death spiral, now. this is bloomberg. ♪
monex restored some of the underpinnings with stable coin dropping and a stampede out of digital products, avalanche, solana slumping, bitcoin losing 11% and well below the $30,000 mark, a key threshold. there are a lot of factors converging, do we see further downside of volatility? >> there is a high chance of that because [indiscernible] chill one dollar -- to one dollar. the market is still trying to absorb everyone out there trying to exit their position on usd. shery: what is the story about
the collapse of terra at the exodus from defi? >> stable coin started early, the importance of having stable coin in cryptocurrency because the idea is to have a cryptocurrency that has a more stable value versus bitcoin and ether. but two people who are believers in decentralization don't think centralized stable coin or usdc should have such an important role in crypto. as in the case of terra, they are trying to create a token that doesn't have a centralized issuer.
they control the value. they have this token called luna that is volatile. it is not stable. the idea is that for every [indiscernible] you can swap into one dollar value of luna. in that way, you can see this mechanism to keep the token stabilized at one dollar. the past week, there has been a large withdrawal. shery: thank you for trying to explain a very difficult story for our viewers. coming up next, we discu so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets
haidi: let's look at the appetite for risk in the early asian session. stocks giving back gains despite better-than-expected earnings, but it is the inflation piece when it comes to whether 70 five basis point is back in the conversation. whichever way the fed chooses to go, it looks like aggressive tightening as i had given that -- tightening is ahead given that u.s. inflation doesn't look like it is speaking. the nikkei 225, down 1.7%, the kospi off eight tenths of a percent. we see the community transmission clock for shanghai, optimist driving a large part of the gains across chinese markets and broader asia yesterday, we are not seeing that at the
moment let's get to vonnie quinn with first word headlines. vonnie: north korean leader kim jong-un has ordered all cities to lockdown in quarantine after the country confirmed its first covid case but state media say the announcement came at a meeting chaired by kim. his regime has long denied even a single case of covid come adopted by experts in the u.s. and other countries. it has a strict border closures in place since early 2020. the philippines' presumptive president ferdinand marcos, jr. says he is looking to stabilize the economy, jobs and infrastructure. the country is forecast to grow it when the fastest rates in southeast asia this year. the marcos campaign's declared victory in the election wednesday, citing an unassailable lead. >> economic market managers are going to be critical because of the pandemic.
that is something we are looking at very carefully. vonnie: the hong kong monetary authority has moved to support global currency, biting only 1.6 billion hong kong dollars to defend against the greenback as the hong kong currency hits the weak and demonstrating bad for the first time in three years. hong kong reports say national security police arrested four prominent anti-democracy activists -- prominent democracy activists on wednesday including some detained on suspicion of colluding with foreign forces. rta reports all four were released on bail. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ shery: the chinese premier, again calling for more support
for the chinese battered economy has beijing slams the head of the world health organization for criticizing covid zero. let's bring in chief north asia correspondent stephen engle in hong kong. the most important word in that sentence is again pledging more support. what is the premier saying? stephen: not a lot of specifics, but we know the backdrop right now, mounting evidence the chinese economy has slowed considerably through the lockdowns imposed on shanghai and other cities, and restrictions in beijing as well as growing calls from economists saying we are not likely to seee a v--shaped recovery. we saw a pickup in economic activity, the thinking going that omicron is unpredictable. we could see other flareups and
therefore, because of those flareups, we could see lockdowns. and it is going to be much more difficult to get the economy humming again like in the second half of 2020. what is the premier doing? they had another state council, that is the cabinet in china, essentially calling for more policy support, monetary and fiscal report. his emphasis all along has been employment. talk this week about the grave employment situation. this is the dilemma leaders have in china. you have a call for an employment boost and boost of the economy, but at the same time antennae covid zero. haidi: we have a situation where the clock has reset for shanghai , and lockdowns and restrictions continue. the criticism we had from the ua joe chief about this strategy did not go down well with beijing. stephen: no, it did not go down well at all, and you have
seen a doubling down from levers on zero-covid in china and jie zheng paying talked last week about not tolerating -- and president xi jinping talking last week about not tolerating criticism of zero covid. and the mental health human toll is mounting as we are now in seven weeks of lockdown in china. the ministry of affairs spokesperson in beijing said this about the director general of the w.h.o. over comments criticizing zero covid as not sustainable. >> an individual will make
objective views and try to get a better understanding of the facts. stephen: we reported yesterday that if china were to abandon zero covid policies, there would be "a tsunami" of new infections as well as death in china. haidi: our chief month asia correspondent stephen engle with the latest. more pressure on chinese property developer sunac, saying it did not make a bond payment before the wednesday deadline and the company saying it does not expect to make upcoming payments. let's bring in our china credit editor. this is the fourth of an biggest developer in china and they are not just talking about 2023 bond payments, it is others as well? >> absolutely. sunac has at the last month or so of those who missed initial
bond payment said were thinking they were going to use a grace period to rustle up the cash and now, sunac saying it missed the deadline on a payment yesterday, the end of that rate period and expects to miss payments on other coupons. at when you look at this moment of cash that is due, that does point to the level of financial strain it is under and does suggest that there is a broader issue of liquid finance for sunac. but what is really important with sunac is it size, the number-four property developer in china by sales. and sunac has followed this second wave of stress we have seen that has hit lots of smaller developers including evergrande. for a long time, these
developers without to be immune to missed payment failure and the government was assumed to be able to come in. the fact we have nothing that in this case and sunac is now saying it will renegotiate payment with bondholders directly does suggest there is a real shift year and that some of these really strong, large developers with projects across china are not necessarily going to be saved. shery: weiss and thing government stepping in? we continue to -- why isn't that government stepping in? we continue to hear from the premier and others that they want to support the economy, why not the property sector? >> there has been a lot of talk, many pledges and promises of support, but little concrete action and little clarity. one thing that may help is a stability fund that may direct cash towards banks that will be
offered to developers. and we may see that indeed focused on stronger developers, where there could be this broader fallout. and it doesn't just go for sunac , but other big developers where we have seen some worries about their financial position. they may also be beneficiaries. but we have yet to see that trickle through and directly help. shery: our china credit editor with the latest on sunac and the broader property sector. up next, softbank losses, our guest says the biggest tech fund shed $18 billion in its public portfolio alone last quarter. this is bloomberg. ♪
♪ haidi: softbank earnings to out and a couple hours and as the chart shows, we see the stock's correlation with the nikkei. investors will be watching for news on a number of fronts including the performance of the vision fund, the impact of rising rates and the regulatory crackdown. our next guest [indiscernible]
the founder of rednecks holdings kk -- redex holdings kk. where you see weakness in the rating? >> tech valuations in the u.s. are where the most exposure is at the biggest risk. on a number of levels, first evaluation. the public vision fund, we can see that every day how those shares are performing, but also in terms of leverage because they have borrowed against some public securities. so, declines in that does increase worries about leverage, and whether they are going to need either commit more collateral -- need to either commit more collateral or start to pay down loans. beyond that, we probably won't get much of an update from softbank on this, but as you
mentioned, what is happening in china, there is exposure to china in the vision fund. but mostly, it is alibaba because that is very exposed. they are very exposed to alibaba in terms of valuations and leverage. haidi: let's talk about buybacks. the chart shows the history of softbank buybacks. we have seen a lot of share price recovery being driven by the fact it has triple share buybacks to $1 billion as of march for still slower than what a lot of investors had been hoping for in terms of guidance given back in november. we are seeing sony, toyota doing bigger buybacks, do you think we could see softbank [indiscernible] ?
kirk: i don't think so. they could always change focus. but the capitals that they do have, they have been very aggressive about investing in vision fund two, and the buyback was sort of on the back burner. when they announced it come at the discount was widening and they wanted get a little bit of a punch. but what has happened is, and vid -- invidia was how they plan to pay for that and that deal collapsed last quarter its own now, you have a new plan where they are going to list arms and we believe proceeds from arms is softbank's preferred way of finding that by bank. what you see is drips and drops, 100 billion yen a month until they get that. shery: does a strong dollar help
those operations? kirk: it is interesting, this is the one tailwind we have seen for softbank over the last couple months. because 89% of their assets are dollar-based end dollar denominated. and you had a move of greater than 10% strengthening of the dollar against the yen. for a lot of international investors, that sort of currency move doesn't really matter because if they are buying shares in yen, softbank has become more expensive on that basis. but for things like the share buyback, where you are using dollar assets, converting that to yen to buy shares, that certainly is a tailwind. whether they would to do something with that remains to be seen. shery: when you look at softbank
nc losses we are facing this quarter as opposed to just a year ago, where they saw more money earned in a single quarter than any japanese company in history. if you are an investor watching a company that performs like this, what are you thinking? kirk: softbank is a good vehicle for investors in japan that are looking for exposure to tech. you don't have as wide a variety of these sort of high-growth, riskier, potentially more rewarding assets for it softbank provides that. and you get the good with the bat. a year ago, it was definitely good recently, it hasn't been -- definitely good. recently, it hasn't been. shery: kirk boodry, good having
shery: treasuries extending gains in the asian session, the 10-year yield falling below the 2.8% level. this as we had a mixed picture in the new york session, the curves flattened with two-year yields rising, they are more sensitive to fed policy decisions. the 10-year rate falling below 2.9 percent now in the asian session. all to do with inflation numbers at where the fed might go. former new york fed president bill dudley saying the u.s. central bank should stop sugarcoating its message about how high interest rates need to get. dudley, also a bloomberg opinion economist, speaking to bloomberg. >> the fed has not been forceful enough in just stating their goal of 2% inflation, but also the means of achieving their goal. fed chair powell last week didn't want to talk about
monetary policy may be having to not only go to neutral, but tight, and i think tight is required to get inflation under control. >> why are they timid? >> it is not clear. they are not to mid when they talk about the end goal. but if you're talking about an end goal of 2% inflation, you get there. if you start to sugarcoat it, financial conditions don't take as much and you run the risk people lose confidence in the fed. one thing in the fed's favor up until now is that people are confident the federal reserve is going to do their job. if you keep under promising what is required, i think there is a risk of stability down the road. >> you think this really is sugarcoating, or do you think that chair jay powell doesn't believe we are good to get a more persistent level inflation -- level of inflation that many are talking about? >> you can see it in the fed's
economic projection. after the march fomc meeting, they projected inflation would be melting away and a monetary policy that wouldn't get too tight. projecting 3.5%. that is magical and i don't think out it works. the fed has to take monetary policy to slow the economy and push the interest rate up and that is what is required and the federal reserve should be more forthright about plans. >> you think andrew bailey at the bank of england can target that path for fed officials saying we are hiking rates into a slowing economy and might exacerbate a recession, but a near term recession will be necessary to bring supply and demand into balance and create growth later on? >> i don't think the fed is saying necessarily there is going to be a recession. the fed is still going for a
soft landing, but they should say a soft landing is difficult to achieve when you have to push up unemployment to hold down inflation. >> from where you sit, decades at goldman sachs and all your academics as well, i think our audience is fascinated by what politicians can do. and if we stretch our memory from lbj to jimmy carter to richard nixon, who was handed that, and on to the president, what do presidents do about inflation? >> i think the public has an exaggerated view of what they can do about inflation. this administration come of the most important thing they have done is released oil from the strategic oil deserve and that has relieved pressure on oil prices. but the president' ability to do something about inflation is extremely limited the only thing
a president can do is get congress to tighten fiscal policy to make the fed's job a little easier. shery: bloomberg opinion columnist and former new york fed president bill dudley. we are looking towards the open of trade in china and hong kong with david ingles. what about hong kong monetary authority intervention? david: we have hit the wall, as i expected. not that there is going to be any change in the story over the short term, because pressure on the hong kong dollar will continue. we are seeing that in this changing rate environment. libor is on the way up, hibor is holding steady, and the gap is widening. nhk continues to intervene in not level -- hk continues to
intervene at that level and it needs more in a quiddity right now looking at risk aversion out there. ed will be a long while to see how markets reacted to this further as long as the exchange rate trades at about that level. shery: we continue to watch pressure on asian equities as well. a couple days ago, i was talking about the near bear market. are we there? what does it mean in terms of valuations? david: in asia, we are there. on the global benchmark, we are 1.5% from that 20% threshold. but that is academic. asia is down already 30% on price, so when you look at what has been done to multiples, we are trading i think 12 times forward earnings right now. do you buy this, or do you stay
away given the rising rate environment? i have the perfect guest coming up in about 15 minutes. tim mollo from goldman sachs -- tim moe from goldman sachs telling us the next few months will be flat across asia and a 17% upside here. stay tuned. haidi: it was near the started trading in mainland shining and hong kong, crypto, blackchain, related stocks, all open to big moves, digital accents -- digital assets, we have seen related stocks trading in tokyo and korea falling. that is it for "bloomberg daybreak: asia," our market coverage continues with the start of trading in hong kong, shanghai and shenzhen.
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