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tv   Bloomberg Markets Asia  Bloomberg  June 12, 2022 10:00pm-12:00am EDT

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>> we are staying right here in hong kong. i am rishaad salamat with yvonne man. >> hawkish pressure is based here. the yen slipping further toward a 24 year low. beijing warns that a cluster -- a bar cluster is proving hard to eradicate. but >> monday the 13th is proving as unlucky as friday was. on top of that, looking at the
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yen, 135. we are just a little bit off of that now. here is the benchmark treasury. they are moving up as much as nine basis points. u.s. stocks at the same time are right here. this is to .8% of the downside. commodities are feeling it as well. >> you are expecting that we were. we can still see a headline inflation. this is still very much the height of the economy.
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if you look at what the fed is pressing in, what people are pricing in, 75 basis points, that is what will emerge. quick 50 basis points here. we go to 75 basis points moved to the upside to june, june 3 futures. at the moment, we are looking at what is being priced in. constantly, inflation is moving higher. we could be seeing an even larger print given the elevation in gasoline and oil prices.
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>> may be as early as this week, the fed meeting, we could see that hike from the federal reserve. u.s. dosing households -- corporate loans are quite week as well. it seems there are a lot of questions about what more is in could be done. >> the fed probably wants to reestablish its inflation fighting credentials. let's look at what is going on here. mark joins us now.
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it is not pretty out there. give us a sense of what -- markets are getting the inflation print long. >> it is all about this jump in treasury yields and continuing this morning. this even further increases in the short term. this to your rate especially. this is the risk-free way that people will import this into their calculations. you have a 3% yield on a 2-year note. that is very attractive. it is a big problem for equities.
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they can't beat the young. that is available in treasury. the market was not prepared for such high inflation. it would be interesting to say that about the basis points. they really have to acknowledge that they may not be doing enough. these are at least considering -- considered a bigger move here. request any to push this in order to control prices.
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where do you see that play out or how? >> it is a difficult situation. you can see there is a risk of the economy slowing down the road. the white house is putting pressure on the fed as well. they just have to keep on going but at the same time, keep their minds open. they are only cutting rates within a few months of having rates of them. it is a difficult job.
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rishaad: there was mark crumpton there. they say they are not going to comment on anything having to do with currency. -- the chief cabinet secretary speaking in tokyo here. this is right at the heart of things right now. at the moment, you could say that this rapid weakening of the end, that is the subject of our next chat with steven chu. this is probably causing the biggest confirmation here. request when we talk about the
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dollar yen, it is hugely differential. now we are talking about 10, even after the 75 they did. if that is broken, we are talking about 375 already. when we talk about the basis point different, we are talking about 136 really for the dollar-yen. >> 136, we hit this closer -- we saw quite a bit of weakening when it comes to the renminbi. has it impacted the yen? will get worse from here? >> yes.
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if you get worse. what drives the you want? it is about the lockdown. that is just the absurdity. the other is the yen weakening. yen weakness will translate into yuan weakness against the dollar. >> how has that impacted the rate differentials? do you think that the gap that has been narrowing, is that going to mean we are going to see more output out of china again? how do you see that playing out? >> this probably matters more to the bonds though. the regression is very highly coordinated.
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we think there could still be outflow in the near term unless the fed reverses but as mark said, -- >> you can follow more on all of the day on the bloomberg terminal. you can find deeper analysis on our question of day which is when will the federal reserve hike interest rates 75 basis points? the overlay and all of this, let's get to the first word news with vonnie quinn in new york. >> the strongest warnings yet about the risk of war with
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taiwan. speaking in singapore, the defense minister repeatedly expressed that beijing will -- china's defense minister said that china's behavior is highly concerning. this is worse she calls military provocation. her comments are buzzing canadian planes -- and they have also raised concerns about taiwan. >> we remain committed to a one china policy. at the same time, we are concerned with the level of chinese military activity in the region. there for, continuing to build a relationship taiwan is important, continuing to ensure the stability of this region
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with like-minded partners is also important. >> u.s. editors will give more to red flag laws. negotiators say that this agreement is a significant break. hong kong reported more than 800 new covid infections for the second straight day. authorities warned that more than 230 infections are found each month. the new cases reported on sunday -- 15 were the new subvariant. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. rishaad: still to come on bloomberg markets, bridging the
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gap with technology, we speak as closely to the fence about the rise in the health startups in southeast asia. first, and his interview with the incoming philippine economic planning secretary. that is next. this is bloomberg. ♪ ♪
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>> just checking on those guarantees. 3.2 on the dollar. we see the continued appreciation for the greenback. inflation also showing here. the real gdp is 8.3%. >> let's discuss more about the philippines economic outlook. the cemetery is currently chair of the philippine competition commission. the antitrust agency. take you for joining us. just given the inflation story out of the philippines right now, i have to wonder how you see this impact to consumption
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and overall growth in the country. >> inflation is very much important. we are expecting growth at the beginning of the year. many things have happened since then. >> what measures are you going to be undergoing under this market administration to try to tame inflation? what can you see on the monetary front? >> the goal is to wrap up the economic recovery.
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we need to make sure that we have access to the food supply in particular. we will attempt to clampdown on exports and domestic markets. that is one with many domestic issues.
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they jump to high prices. the production is short-term. we should be able to respond with these high prices. >> what can you do socioeconomically? you have key projects. what are the core objectives in your portfolio?
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>> we essentially coordinate the policies and these plans that are approved by the president. we essentially help advise the president in these meetings.
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also, the economic policies would have to be coming from our agency and our partners in government. >> if you are going to continue, are you going to continue with these infrastructure plans? >> we don't see any reason why we should not continue with
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this. we will be launching many more. we will stick to funding these infrastructure programs. both internal and external. also, bilateral and multilateral success. we also have to think about the public and private partnerships when it comes to infrastructure. >> are you saying that you
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believe there is a need to put the brakes when it comes to lending and allowing the private sector to develop? >> yes. i believe the private sector participation is clearly obvious. we also believe in public services. we think much can begin from getting the private sector involved in their infrastructure development.
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>> we really want to thank you for coming on the program. we have a lot more ahead. we have a lot more talk about prices coming up. this is bloomberg. ♪
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>> we are back with bloomberg markets. we have been going down 6.5%. it could be seen as a barometer. of -- we have a 6% fall back for bitcoin. given the strong correlation with tech stocks, it could be
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pretty horrible with the nasdaq. >> we continue to see a thread across tech as well. a bit of a meltdown. you see alibaba down from 5%. it really is that you'll pick up story. this is the first time they see that -- you will see that in eight years. >> what does that tell us? >> it tells you that we could be headed to our possession. >> a lot more coming up. >> a lot more coming up. this is bloomber (police radio call)
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(sirens) (news report) (sirens) (news report)
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rishaad: there we go at the paris, looking beautiful in tokyo. not so much if you are a traitor. 2.6% of as we head into the lunch break. the urine story is at the heart -- the yen story is at the heart of things. our broad based selloffs. yvonne: it seems like a verbal intervention is not working. let's bring in annabelle droulers. what are you watching for? annabelle: it did briefly touch the 135 level. we could reach 135.15 ahead of the fed meeting this week. a lot of focus on the shock u.s. inflation rate, and we are seeing that in the dollar
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strength. risk aversion is the major theme. we are seeing foreigners current net sellers in south korea and that is contributing to the losses we are seeing. in the treasuries market, a lot of focus here on that 2-year yield. . at a 15-year high. yields are generally getting across the board. traders are starting to price being a 50-50 chance of the fed hiking by 75 basis points at its next meeting, barclays saying that could come as soon as this week. yvonne: one of the first to call that. let's talk more about that higher than print in may in the u.s., it has investors wondering what the fed is going to do. let's get to our bloomberg's global economics and policy editor, kathleen hays. kathleen: how much it will do to get inflation under control. we will see a change at this meeting. in terms of what they are going to signal or message, it is
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going to be, "we will do whatever," it takes to get it done," especially after the cpi. 8.6% year-over-year. highest since 1981. it is because prices were supposed to start coming down -- food, as, shelter, used-car prices. they kept raising in may. this is hitting consumer sentiment very hard. the university of michigan consumer sentiment survey showed that sentiment among consumers. the lowest since the 1970's. inflation expected over five years is the highest since 2008 so no wonder that economists say, there is no doubt that you get a 50 basis point hike this week. markets are expecting another one in september. the question is, what will they say about 75 basis points hike? >> a former economist says they will not start doing anything about it now.
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will start looking at it. and jay powell will surely get questions about that after the meeting. remember two more things are happening, one, the fed balance sheet runoff has started a new get more aggressive over the next few months. there you see that consumer sentiment numbers, a signal that people continue to be so negative. what happens then? it is ironic that may be by being aggressive on rate hikes, they fed can head this off, even if it means a slowdown in the economy and even a bit of a recession. it is a very difficult tightrope that the federal reserve is walking. the answer is to be as aggressive as you are. . the question is do you get more aggressive? the dots show you that medium amount of rate hikes could be up to 1.9%. james bullard sent over 3%. do the dots change? that will be another big focus for investors. it will give us a sense if the
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fed has gotten more aggressive and they are worried about what it will take to bring inflation down. rishaad: a more aggressive fed could mean surely -- what does it mean for the bank of japan and for the yen? is it more downward pressure? the yen has not been at these levels since "saving private ryan" was in the box office. [laughter] kathleen: we have a lot of historical comparisons -- "saving private ryan," "top gun," etc.. the yen has had this critical 135 rate. if anything what people are thinking about is the boj, the ministry of finance the warning they made on friday, making it clear that they are talking about this and what they might need to do about that. but a bloomberg survey last week
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says that almost all of the economists, almost all of the economists our team surveyed say that if the yen goes above 140, no change yet. they figure that a weaker yen helps manufacturers because it will make exports cheaper. governor kuroda started a backlash on social media last week when he talked about the japanese having a raising tolerance for higher prices. it rubbed people the wrong way. but basically, he is sticking to his argument. he says there is no evidence consumers are changing their spending patterns as prices rise. the boj still thinks we will see widgets start rising in the second half of the year, the economy reopens more -- the boj still thinks we will see
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wages start raising in the second half of the year. so there will be a focus on what he says on all these issues and what he has to say about the rapidly weakening yen and what he could mean for any changes in boj policy. rishaad: kathleen hays, our global economics and policy editor. let's get the first word news with vonnie quinn in new york. vonnie: local governments in china say that a corporate outbreak linked to a bar is proving harder to control. the weekend saw mass testing and raising infections in beijing and shanghai. authorities delayed the reopening of most of the schools in the capital outbreaks reemerged just days after the two cds eased social curbs. australia will pay 500 million dollars in compensation for canceled submarine deal as it looks to reset relations with france. the prime minister says he has had cordial discussions with the french president and has
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accepted invitations to visit paris. ties between the two countries soured after the submarine deal was scrapped last year. french president emmanuel macron's majority is at risk after the first round of elementary elections. full suggest that his centrist party and allies may not secure the seats needed to form a majority international assembly. the result could force emmanuel macron to compromise on his reform agenda. the second and final round of putting happens on june 19. a source told bloomberg that goldman sachs is facing an sec investigation into whether two of its mutual funds are in breach of metrics about marketing materials. the inquiry may focus on whether goldman's disclosure to clients actually describe its practices. the sec and the bank both declined to comment.
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electricity use soared to an all-time high in texas sunday amid a searing heat wave demand on the power grid topped 79 gigawatts, surpassing the record-setting all of 2019. officials say that the grid is operating normally. texas has already posted the second hottest may on record. its population is growing fast as companies flock there to take advantage of low taxes and relatively cheap labor. 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 am vonnie. this is bloomberg. yvonne: the australian defense minister and his chinese counterpart met in singapore, ending a two-year diplomatic deep-freeze. >> let me be really clear that our policy in respect of taiwan and china has not changed, we have a one china policy. we do not support taiwanese independence. two support unilateral action on
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either side of the taiwan strait which would change the status quo. the resolution of the people of taiwan is a matter which should have by consensus, by agreement, and that is the way in which we serve. >> you have labeled china as australia's biggest security anxiety. how are you working to counter these expectations? >> we want to be engaged in the pacific in the way that australia should be. you see the emphasis of that in the new government. the foreign minister was sworn in on monday and she was in beijing on thursday, visiting the countries of the pacific. in my experience in the pacific, if we engage with energy and seek to place the interests of the pacific people first -- and there are a lot of challenges that countries in the pacific face in terms of development and australia is in a unique
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position to assist -- if we do that, we will be there natural partner, but it is not something that we get by right, we have to earn it. >> let's talk about the fact that australia has paid $600 million to france over the withdrawal of the submarine packed. does this reset relations with france? >> i met with minister sebastien, a very warm meeting. i think there was gratitude expressed for the fact that we have moved very quickly and tried to draw a line underneath what was an episode that really got in the way of our relationship with france. france matters to australia. we don't think about it enough, but france is in many ways our nearest neighbor, the closest overseas population is france. so the longest border that france has with any country in the world is with australia.
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so it underpins the fact that france is a pacific country. we share strategic interests in this part of the world. >> when it comes to aukus there are concerns from asia-pacific nations that it will fuel issues. >> it is not a security alliance. it is about the sharing of technology between australia and the united kingdom and the united states. this is very important from an australian point of view, delivering the successor submarine to our existing collins class submarines. it submarine with nuclear proportion. but it is not a security reliance. we remain committed to building security relationships. >> prime minister kishida of japan says the ukraine of today could be the east asia of tomorrow. how worried are you about instability and potential war in
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that region. >> i think the point he makes is that the rules-based order is important everywhere. what we are seeing in ukraine is a challenge to the rules-based order. the behavior by russia in a completely unprovoked way, crossing the border and invading ukraine -- totally contests the rules-based order and undermines it and it is unacceptable in 2022. that is really important that we stand with ukraine. rishaad: the australian defense minister speaking with bloomberg's juliette saly. coming up, we have got the tech enabled health care platform, dr. anywhere, serving 2.5 within users in southeast asia. we will speak with the founder and chief executive. we'll look at whether this will be the future. we are seeing declines across the board. futures contracts are suggesting
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more pain ahead for european and u.s. equities when their respective trading days begin. this is bloomberg. ♪
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yvonne: some lines crossing about risk aversion in southeast asia that is being a broad trend in the back of the cpi shock.
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the bank of thailand governor this morning, talking more about inflation concerns, saying it is too slow of a rate hike and it is not good. and the mandate to prevent too strong inflation dynamics, they do see rising short-term inflation expectations. the key job is to anchor the medium-term inflation expectations. rishaad: the open concert to come in just about 15 -- the open is set for just about 15 minutes. health care is seeing a transformation through digital health. we have the founder and ceo of doctor an hour, a telemedicine startup, a little more than a startup. give us a sense of how it could act as a catalyst for you. and how you know look at growth ahead. guest: i remember when we first started in 2017 in southeast
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asia, color health was still a remote and very futuristic kind of tag enablement for the health care space. but post-covid, people are getting used to it, people are a lot more aware of telehealth as a tool to be used, especially with doctors. they are very good at using that enhanced the experience with their own patients. yvonne: hurriedly operate post-covid? does it change the business model usb, of their homes and go back to normal life, her -- how do you operate post-covid? does it change the business model for you? >> it is mostly primary care. within southeast asia right now,
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what we're are seeing more across the board would be a lot of people traveling right now, and especially in singapore, into malaysia, and thailand, to seek secondary work specialist health care treatment. that is something that we think telehealth as tech enablement within the health care space is going to be very useful for them. rishaad: to ivanka's point, business imperative is compelling -- to yvonne's point, business imperative is compelling. how do you scale the business to track more people and provide more services to the potential audience that you have? guest: that is a very good question. we are talking about southeast asia. it is a region with many different countries within eight
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. one of the challenges is that within each country, you have different health care culture, health care system, health care regulations. with that comes a varying supply of health care providers and standards of care and that is the backdrop of the rising middle class, the population getting more fluent. there is more propensity for them as well as more demand for better health care. and we do think that digital health is going to be helping the space to match the demand and supply of better health care , because it is very scalable. it gives instant access to personalized health care and, value for quality health care. i am not talking about cheap health care, i am talking about
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value. 700 million population's access to health care is going to be changed permanently with traditional health care players also going online seeking to enhance their own services using digital health solution. i think it is going to change our people seek health care, how people seek health care not from where they stay, but where care is more appropriate. that will fundamentally shift how health care infrastructure is going to be built in the future. yvonne: look at the u.s. market and how telemedicine kind of evolved, it was a bit delayed in development because of the ongoing hippo laws, -- the ongoing hipaa laws. is that still one of the biggest obstacles for you in order to see wider adoption of this virtual platform? guest: i think in southeast asia
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you don't see that as much more of a concern. i think we do see different challenges in southeast asia. we do take health care information, data security very seriously. we have a whole team of people around data security and guarding that information for us right now. in the future, we are also looking at decentralizing information and getting them to stay on the platform. that is something our team is looking into. rishaad: an a day like this market wise, i guess you are not in the mood to have an ipo. but you had series c funding last year. what is your cash position, and when do you plan ipo? guest: that is a tough question. the market is tough right now.
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we just raised our series c about half a year ago, 88 million singapore dollars funding. with that, we have been quite lucky to have posted just before the market turned. we are using that money right now to continue to build an appropriate-sized team for the future of the company and to build benchmark-setting product for the industry tests serve more than 5 million users the now, across singapore, malaysia, thailand, vietnam. yvonne: wai mun lim from dr. anywhere, thank you for joining us. plenty more ahead. this is bloomberg. ♪
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rishaad: have a look at what is going on in our world of business. didi shares will start trading in the u.s. on monday. two weeks ago, shareholders voted to list the company after it raised about $4 billion last
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year. a study revealed that a spinoff of hsbc's asian business could unlock $26.5 billion, 1/5 of its current market value. the study was commissioned by ping an insurance, hsbc's shareholder. retinal's south korea unit will introduce -- renault's south korea unit will release its first electric vehicle in 2023. yvonne:. yvonne: it is risk-off across the board. we continue watching bond markets. the 5's and 30's were inverted on treasuries and the fives and tens have just inverted. certainly, the fed replacing is very much in focus. traders are pricing in a 25 basis point hike as far as july. barclays saying it may happen
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this week as well. markets across asia continuing this pickup yields. rishaad: analysts saying they may want to show some commitment and shock the market. let's have a look at bitcoin. we have a 6% loss, matter of fact, 7.3% loss now after extending its losses over the weekend. this is what portends for european and u.s. features. features are off the lows of the day. in this part of the world, the nikkei is closing down 2.6%. yvonne: the back of thailand saying a too slaoui rate hike is not good. perhaps the most hawkish comment from the bank of thailand. setting us up possibly for more hikes in august. we have more to come. this is bloomberg.
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haslinda: almost 11:00 a.m. in singapore and shanghai. welcome to "bloomberg markets: asia." rishaad: we have stocks, futures and bombs falling as rising inflation that's sentiment and raises hawkish pressure on the federal reserve. haslinda: the yen. touching the level of 135. the japanese monetary easing policy increasingly stands at odds with developed peers. rishaad: last chinese authorities are imposing covid restrictions, raising concern over a return to stricter lockdowns. let's look at the market action. treasuries in focus. bonds under pressure. some parts of the treasury yield curve inversion.
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we also have bitcoin in their midst. the island central bank governor talking about interest rates. here is annabelle droulers having a look at what is going on market wise. annabelle: it is right across the screen. the thailand central bank governors saying that too slow rate are not a good thing. korea is selling off the most since november 2020. india is the next major market we're are seeing coming online, futures went into a weaker start at the start of trade. in the fx space, we are keeping an eye on the korean won selling off this morning, risk aversion the order of the day. selling off the kospi being dominated by foreign sellers. the yen touching the 135 level. we saw it reach that earlier instrumentalists say we could reach 135.15 before the fed meeting this week. in the commodity space we are seeing oil decline for a third
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straight session. in treasuries, a lot of focus on the 2-year yield. we are seeing a 15-year high. inflation fears not good for the tech sector. nasdaq futures are pointing to a nearly 2% selloff. we had that awful session on friday as well. highly correlated is the moves that we see in bitcoin, now approaching the $25,000 level, a seventh straight day of selling. haslinda: it is about that 75 basis point hike. it is likely now? hotter than expected inflation inmate has investors worried. over global economics and policy editor kathleen hays is here. what is the may cpi report mean for the fed message this week? su: no doubt that it puts more emphasis on the federal reserve signaling and messaging and then taking steps to show that it
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will do whatever it takes, quote unquote, to bring down inflation. because whatever it takes maybe a bit more after that cpi report on friday. the cpi up year-over-year, h .6%. it is not just but hasn't peaked or moved higher, it is the key elements -- food prices, gasoline prices, shelter prices, they have started moving up again. used-car prices update down -- used-car prices moved down and then started raising again. consumer sentiment got hit hard inmate. the university of michigan survey goes back to the late 1970's. your number hit the lowest since those numbers since the survey started 30 years ago. and importantly, inflation expectations for five years out are at their highest instant thousand eight. that was just about the time --
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were at their highest since 2008. this was just about the time we were in a recession. the fed has to risk information in order to bring down -- has to risk recession in order to bring down inflation. remember that dots. they will be revised at the meeting. that means they will look at gdp , inflation and employment and say, where do we need the dots to be? in march, the fed started getting aggressive. the median dot -- the lower point might be jim bullard, the hawkish, and president of the seat louis fred. it would be important to see how much the dots move up and what the median is. that will not necessarily spell a 75-basis-point rate hike, but could show that more that officials are willing to be
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aggressive. and a former fretboard economist saying that he thinks they will discuss it, no 75-basis-point rate hike this week, but i can guarantee that jay powell will take a lot of questions about what is the possibility of a rate hike at the meeting. rishaad: certainly they will be focusing on the very aggressive and hawkish message and that could add to the downward pressure that the yen is under. the boj essentially under the -- even more so than other central banks arguably. what does it mean for them this week? kathleen: the consensus of our surveys that they will not change policy, that the is under pressure. just last friday the boj put out a statement expressing concern about this.
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governor kuroda has testified to parliament around this. but the bottom-line for the boj appointed to people who are familiar with the way they are thinking right now is they do not want to see the yen dropped to quickly but they are maintaining very weaker yen is going to help manufacturers, it will help exports out of the country because it makes them cheaper. when it comes to raising inflation, governor kuroda spurred a backlash recently when he said japanese consumers are getting more used cities price increases. on social media, people exploded they didn't like him characterizing it that way. the boj continues to believe the economy will get stronger and prices are going to raise more, maybe even wages in the second half of the year especially as they reopen up to tourists. but haslinda, we will hear more from governor kuroda and i am sure we will get questions in parliament when he testifies
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again later in tokyo. haslinda:. haslinda: is a big week for central banks across the world. kathleen hays in new york, thank you. it is a risk-off day, nothing spared, including bitcoin, dropping to the lowest level since 2005. we saw bitcoin dropping as much as 6% over the weekend and it continues to sink even lower. rishaad: absolutely. we have pressure on the back of thailand as well, the bank of thailand chief saying the initial over there policy after their cpi spike to theirs well. saying that inflation would hit no income groups, and not tackling it -- would hit low income groups and not tackling it would be a mistake. it is seen as a much greater threat than actually raising the cost of borrowing. of course, the fed will stay in inflation fighting mood
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and is sure to up the ante this week. our next guest joins us. what are you making of all of this? it is a lot to be grappling with. as somebody investing money, it must be a real conundrum. guest: it is a difficult time for markets. the last couple of weeks we have had very bad inflation data, firstly, wage growth is coming down not coming down as quickly in the labor market, it has come down from 600,000 to 400,000. also the wage growth, 5.5%, which is not consistent with 2% inflation. add to that the cpi data from the weekend and the fed has to act. we are still expecting 50 this time, 50 next month and then we will see what happens in september. i think the main difference in the markets and where we are at risk off, the markets are not believing the story that inflation is temporary. that is the real risk-off.
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we have been warning that bonds are in danger for a while, you need to have alternatives. we still like equities in the short-term but in the near term, everything will come under pressure. rishaad: wotv governor saying that you can't be complacent as things change -- the bank of thailand governor. obviously. so how does it impact asean or emerging markets in this part of the world because they in some sense either have to play catch-up, or try and actually emulate others and that may not be quite as effective? sean: there are two positive things about this region. you have japan and china going the other way almost. they will have to stimulate more to get this going, and that will put pressure on the currency in the short-term. and the second good point is, inflation is not as high in this region, even in thailand and korea as the rest of the world.
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the third thing is the asean region hasn't had as much stimulus as the rest of the world in terms of the consumer. so this is a problem. you will have a grave problem in europe not just an inflation problem, because all the furloughing, the extra help is not going to be there, so the consumer will be weaker in that will be affecting bank lending as well. in the region, it wasn't helped out, it is slowly coming out of covid, things are getting slightly better. inflation is a bit behind the curve. but the growth profile for the second half of the year will be better. haslinda: asian dollar credit looking better than u.s. peers give her that the fed is likely to tighten even more now? sean: i think you have to be selective in asian credit. i think asian credit sold off a lot more than was expected due to the chinese high-yield issues, the property issues, and it is looking cheap.
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the duration is shorter. at the moment we want to be underweight duration. we are seeing some good inflation hedge is in india, in renewables and commodities. in australia, some good opportunities. and japan as well. . we think on the relative play, asian credit is holding up better. and it has this local bit -- it is not subject to huge amounts of money coming out. now, some other emerging market countries we would not be as positive on outside of asia, countries like turkey will certainly suffer higher oil price, higher inflation, et cetera one has to be selective. but within this market, asian credit is a relative light. haslinda: you talk about still liking equities, are you liking chinese equities? when do you start buying into chinese equities? sean: we have been negative for a while on chinese equities. we neutralized that a couple of months ago. we think chinese equities will
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in the second have outperformed, but it is going to be slow. we think the bottom has been reached in chinese equities, particularly in the internet and the e-commerce stocks partly because the chinese government changed its policy on regulation. but we are going to be in and out of lockdown interview. it is not going to be simple, it will be two steps forward in china and one step back. better growth in the second half of the year, but not a v-shaped recovery so you have to be patient. on a relative basis, they are quite cheap now. if you can get through one quarter of earnings, we think they will start to outperform by the end of the year. rishaad: very quickly, japan. exporters make hay. are you confident in their ability to do so and are you invested in them? sean: we are still overweight exporters in japan underweight the domestic side of the story. i would think switching
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exporters into china at some stage because i think everyone is underway to china. so in the next few months i think you will see people taking money out of japan, and also india, which is looking a bit expensive, and putting it into china. rishaad: thank you very much, sean taylor. we will be looking at some of the first word news headlines as we head over to new york and join vonnie quinn. ♪ [inaudible] vonnie: speaking at the shangri-la dialogue in shanghai, the chinese defense minister. bloomberg has learned chinese military officials are questioning washington's stance on the taiwan strait, saying that it is not international waters. haslinda: australia's defense
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minister says his country needs to prioritize its relations with pacific island nations. he met with his chinese counterpart at the shangri-la dialogue in singapore, ending a two-year diplomatic deep-freeze. on the question of taiwan, he says canberra continues to support the one china policy. >> let me be very clear that our policy in respect of taiwan and china has not changed. we have a one china policy. we do not support taiwanese independence. we don't support any unilateral action on either side of the taiwan strait which would change the status quo. haslinda: and australia will pay around $580 million compensation for a canceled submarine purchase deal that as it seeks to reset relations with france. the word minister says he has had cordial discussions with the french president and accepted an invitation to visit paris. ties between the two countries
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soured after his predecessor scott morrison scrap the deal last year. that was global news -- 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. still ahead, india's may inflation data is out this evening. while the cpi probably eased in may, it is set to come in well above the target band. we will be looking into that with hsbc's chief india economist. but first, lockdown fears linger as china starts imposing lockdown restrictions. details ahead. keep it with us. this is bloomberg. ♪
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insured: that is the position for chinese equities. the hang seng included in that 2.8%. the tech side of things really being hit hard. the shanghai composite of the csi 300 also below water as we look to wednesday's dated damp -- data dump. and it is not so much the elephant in the room as it is the room, china starting to impose restrictions just after major easing in key cities. major concerns. senior medical reporter michelle cortez is with us. we were just talking a minute ago being a revolving door, we
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keep going in and out of this. give us a sense of what is happening now. michelle: china has done a great job of keeping infections low, but you have to get to zero to prevent any flare-up because these new variants are contagious. that is what we are seeing. as soon be in and shanghai started easing up a bit, we're seeing the numbers creep up and in some cases, people finally thrilled to get out, they go to a bar, 63 people on saturday detected with the virus. not only those people but everyone who has been to the same locations they have and in, everybody back into lockdown, quarantined apart from their families and trying to get the virus under control. and it doesn't end until they get to zero. haslinda: so should we be worried about more contagious variants? michelle: we are definitely seeing more variants pop up not
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only in china but around the world. the theme is consistent with what you would expect with any virus. the ones that will survive are the ones that are more contagious. we are seeing increasing transmission. it makes it more difficult for places like china when trying to lockdown and gratitude zero numbers. everywhere else in the world, we are seeing increasing cases. no evidence that it is particularly more virulent. there is three of them we are watching. it doesn't seem likely that they will land you in the hospital or increase mortality, but more people will get them in because more people are sick, more people have serious disease. rishaad: give us a sense of where we are with vaccinations. in china, good response, even in hong kong, especially with the elderly. but it is the type of vaccination as well that is under the microscope.
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michelle: not only that, but the waning immunity from a vaccination. if you were very good in the beginning and you'll end up at first to get vaccinated, perhaps the antibodies you have in your body has a over time. we need to be watching those numbers. we have increasing rates in china and hong kong and other places, people who now see what devastation covid can do are more likely to get the vaccines. but the opposite is also true, in places where people have come through it ok, they are less afraid about the various and are less likely to get re-vaccinated and that is where we are seeing these more contagious variants circulating. rishaad: michelle, thank you very much. let's quickly look at one company which has seen its stock up 80%, has. haslinda: it is 100%, on the day when all stocks, almost all are getting sold off. this stock getting as much as 100% on its livestreaming effort.
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of course, this is its search on friday at 39%. investors are excited about the company's inroads into livestreaming. on a day when we're seeing red, this stock is bucking the trend. keep it here with us. this is bloomberg. ♪
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rishaad: this is a look at the currencies at the moment. the yen weakness persisting. we were at the 135 handle earlier. currently almost half a percent decline against the dollar there. the bank of thailand governor about inflation, saying rate hikes will be data-dependent and that the tyra banks recovery will not be brought without tourism -- the thai
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recovery will not be broad without tourism. didi shares set to start trading in the over-the-counter market on monday in the u.s. two weeks ago, shareholders were ready to delist the company from the exchange. it raised around $4 billion last year. the listing had angered beijing and shares had fallen 80% since their debut and raising more than $50 billion in market value. a study is revealing that a spinoff of hsbc's asian business could unlock 26.5 billion dollars, about 1/5 of its current market value. the sunday times says the research by an external consultant was commissioned by ping an insurance, hsbc's biggest shareholder. shareholders are against the idea of spinning out hsbc and have begun their own analysis to pushback against england.
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shares of this studio jumped on the news that "squid game" will return for second season. netflix is betting that a second season make up this year's 70% slump in its own shares, after announcing it april that it had lost 200,000 subscribers in its first quarter. to sports now, sources say that the bids for the broadcast rights to the indian premier league cricket hit nearly $6 billion on the first day of auction. amazon pulled out in the last minute, leaving reliance industries, disney and sony as the leading contenders battling for a five-year contract for one of the world's most popular sporting events. . bidding resumes later today. haslinda: if you are wondering whether there is correlation between crypto-currencies and stoxx, today they are definitely correlated very strongly -- crypto-currencies and stoxx.
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we are keeping an eye on them on the back of bitcoin slumping to the lowest level since december of 2020, expanding the decline that we saw over the weekend of 6%. this company down 2.5%. here is one stock that is bucking the trend, koolearn extending friday's 39% gain, investors excited about the company's inroads into livestreaming. rishaad: and let's have a look at markets overall, no other color but red. we have asian equities dropping bond yields surging. u.s. futures trading in the yen weakening to a psychological low of 130 five to the dollar. coming up, we look at tensions over taiwan as australia's defense ministe millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year
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haslinda: chinese markets are going on a break in just a moment. under pressure. this is a 300 is down 1.2%, on the back of worries on lockdowns. aging and shanghai resuming mass testing and walking back the loosening of restrictions. remember chinese markets just posted what are the best weeks in decades, but it is hard to maintain those gains. rishaad: yes. let's have a look at what is happening as we head to lunch break. just erasing some of the earlier losses. perhaps not that bothered by what the inflation rate is in the u.s., they are looking ahead to the data dump on wednesday -- retail sales, industrial production, fixed asset investment, all coming out.
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they are trying to make sense of what is happening overall. annabelle droulers is on the markets. annabelle: picking up on what haslinda was saying about the lockdown fears we are seeing that we are in the hang seng tech index outpacing the losses in the broader hang seng. inflation fears and lots of concerns around the pacing of hikes. some at barclays saying we could see a 75 basis point move this week. we are seeing the kospi trading at in november 2020 low. india, on line about 15 minutes from now, also pointing to losses at the start. inflation very much a domestic issue in india. we are getting some consumer price index data today. it is expected to show inflation above the 6% target range for a fifth straight month. ahead of that, we are seeing weakness in the indian rupee. indian 10-year yields also rising as we track the moves in the treasury space. the 2-year yield very much a
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focus, at a 15-year high. also keeping an eye on the two return yield curve. moving the board to other asset classes, bitcoin is very much on the radar, we are starting to see it break out of the trading range, very much to the downside. that is pointing at a 200-day moving average back into play. oil, meanwhile, also dropping for a third straight session. lockdown fears persisting in china, also inflation. and finally, the yen not acting like a haven, at the 135 level. it briefly talk that earlier today. rishaad: the indian rupee started trading at just under two minutes ago and we have it dropping past 78 against the dollar, in decline of 0.4% -- a decline of 0.4%. so all of this is what we're
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seeing. dollar strength, inflation concerns, and currencies globally under pressure from a strong dollar. let's find out with first word news with vonnie quinn in new york. vonnie: scansource has told bloomberg that goldman sachs is facing an sec investigation on whether two of its mutual funds breached metrics for marketing materials. the inquiry may focus on whether goldman's disclosures to clients actually described its investing practices. neither the sec nordea bank commented. u.s. senators have reached a tentative deal on a new gun safety legislation package that includes giving grants to states to implement red flag laws, allowing courts to remove guns from potentially dangerous owners. it also allows for more funding for mental health services and school safety. the agreement is a significant breakthrough, after years of little progress.
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electricity soared to an all-time high in texas on sunday amid a searing heat wave. demand on the power grid top 74.9 gigawatts, surpassing a recordsetter in august of 2019. officials say it is operating normally, with ample supply. texas's population is growing fast as companies flock there to take advantage of low taxes and relatively cheap labor. the french president's majority is at risk after the first round of elementary elections. . just his party and allies may not secure the 239 seats needed to form a majority. . the left-wing alliance looks set to get the second-highest number of seats. the result could force macron to compromise on his reform agenda. the second and final round of voting happens on june 14. 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 am vonnie quinn. this is bloomberg.
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rishaad: we have taiwan taking center stage in the weekend talks between global defense chiefs at the so-called shangri-la dialogue in singapore. beijing says it will fight to the end if taiwan made a move toward independence. the united states accused beijing of trying to unilaterally change the status quo over the territory. let's bring chief north asia correspondent, stephen engle, who is with me now. what did you make of all of this? it seems a bit of saber-rattling. stephen: similar messaging. say the biden administration, and the defense secretary lloyd austin picking a different approach with asian nations as far as its relation to china, really what the shower led dialogue has been seeing over the weekend was competing visions of what is driving stability, or instability in the asia-pacific, with both china and the u.s. accusing the other of destabilizing the region with
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whatever you mentioned, saber-rattling and the like. but lloyd austin essentially said that conversations with his counterpart, the minister of national defense in china, they had constructive talks. however, they traded barbs over the weekend in press conferences about taiwan. we have lloyd austin saying, as you rightfully said, accusing china of "unilaterally attempting to change the status quo on taiwan." in fact he says, "our policy hasn't changed at all. it is beijing that doesn't have the same track for the prc. that doesn't seem to be true for the prc." his words. and the chinese defense minister accused the united states of being a destabilizing factor not only in the pacific but also in western europe, referring to
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ukraine. haslinda: we just got breaking news thailand, thailand's finance ministry will propose a stock transaction tax to the cabinet. stockbrokers would get 90 days to comply with the new tax. again, the thai ministry will propose a stock transaction tax to the cabinet. of course, this will likely weigh on thai stocks, currently down 1.5%. just a follow-up, stephen, on the talks at the shangri-la dialogue, how did the russian war on ukraine factor in the discussions? stephen: well, it was in the backdrop. there is a number of different flashpoints in the world, taiwan is one of them and north korea is the other, in what is happening in ukraine is on the front of people's minds. the japanese prime minister said, quote, "ukraine today may be east asia tomorrow."
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then the ukrainian president addressed the crowd via a video link, the -- zelenskyy saying that future rules of the road are being decided on his country's battlefield. it is the first time that the shangri-la dialogue was able to be held in person since the pandemic. it was a chance for these defense chiefs to meet face-to-face and try to hash out a lot of their differences. between china and the united states, male to male dialogue has been fraught with problems -- ,ill to ,il -- mill to mill dialogue has been fraught with problems. but there are lots of differences to be discussed. haslinda: because of geopolitics, the rooms were all jampacked and attendance was very high. stephen engle, thank you so much for that. it is about russia and it is
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about china. canada's defense ministry says china's behavior needs to be re-examined,: its recent displays of aggression both "concerning and worrisome." this comes after china was caught buzzing of canadian planes. she spoke with me at the shangri-la dialogue in singapore. >> we have to stand back and examine china's behavior writ large, concerning behavior in diplomatic relations, concerning behavior in terms of theft of intellectual property, concerning behavior in cyberspace and in actual airspace in terms of coming close to our planes that are simply monitoring you and sanctions regarding north korea. these are all very worrisome and concerning behaviors. haslinda: from a military
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perspective, president biden has said the u.s. will help to defend taiwan should china attack taiwan. would canada come to taiwan's defense? >> canada has a very strong relationship with taiwan in terms of trade, in terms of people to people ties, in terms of a large taiwanese diaspora in canada itself. canada will continue to build those relationships in the short-term and long-term what does that mean? would canada defend taiwan if attacked by china? >> we remain committed to a one china policy. at the same time we are concerned about the level of military presence in the region. continuing to build relationships with taiwan is important. continuing to ensure the peace and stability of the region with like-minded partners is also
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important i want to touch upon canada's defense commitment. the u.s. ambassador to china said canada has failed to live up to its defense pledges. what is your response to that? >> canada's commitment to our policy has seen a 17% or oca 17% increase in defense spending over a nine year period beginning in 2017. in addition in 2022 we committed $8 billion in additional defense spending. haslinda: it is $8 billion over five years, way short of the 2% gdp that nato has targeted. when will you get there? >> we are on an upward trajectory, for sure. the previous government in fact allowed defense spending to dip the 1% -- to dip 1%. we will ensure that canadian forces have the equipment and resources they need to defend our country and participate in multilateral alliances.
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haslinda: some say that there is already -- that there is already war fatigue in the western world and it is pushing ukraine to make compromises with russia. what is the stand as far as you can see from the western perspective? is there fatigue? is it willing to go long in terms of the war, as long as the ukrainians are willing? >> canada stance shoulder-to-shoulder with ukraine in the short, medium, and long-term. we have a very close relationship with this country and we are deeply committed to its 70 and its stability. but also, the broader rules based international order. haslinda: that was the canadian defense minister, anita anand. we are counting down to the opening of the indian market in about four minutes. the ruby is at a record low -- the indian rupee is at a new record low. the global risk-of sentiment
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continues. indian bonds falling. 10-year yields racing seven basis points to 7.59%. -- 10-year yields rising seven basis points. futures are pointing to a lower open. the countdown to that open at 11:45 singapore time. still to come, ahead of india's latest cpi data, we speak to the hsbc chief indian economist. that is next. this is bloomberg. ♪
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rishaad: at the moment we are looking at a nifty futures contract. price discovery as well, and we are looking currently at day 4. indian rupee record lows in the lead up to that important price print, as it were, haslinda. has linda: inflation is likely to remain well above the r.b.i.'s comfort range. joining us with more insight is pranjul bhandari, hsbc's chief in the economist. looks like it will stay above 7% good is it about fuel and food?
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pranjul: it is actually everything, food, fuel, core inflation. it is likely to print between 7% and 7.5% to me. but it is likely to be even more, 11% quarter on quarter annualized. there is a lot of price pressure in the system. this is despite a lot of the paths not yet fully happening. from goods inflation teleservices inflation, rural inflation to urban inflation, a lot of hats still to happen. and despite that, numbers are high. this is a problem that will stay with us for the rest of the year . haslinda: what will it take from the r.b.i., how many more rate hikes to get information to target range? pranjul: everybody is trying. the government has cut taxes on oil products. hopefully we'll see better impact from that in june.
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the r.b.i. hiked the report rate. it has tried to drain liquidity. so they have taken steps but there is a lot more they still have to do. our sense is they will continue to get the report rate hikes from 4.9% now to 6% by the middle of next year -- repo rate hikes. markets are pricing in more, 7% year. our sense is that the r.b.i. will not be that aggressive towards the end of the because growth will begin to slow then and the r.b.i. is very conscious about the sacrifice ratio. another part is liquidity. liquidity is happening on its own. we discussed the rupee problem. the r.b.i. will drain out rupee liquidity. all of that is going to continue to drain liquidity as well.
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rishaad: you mentioned growth. the conundrum that all central banks have not just the r.b.i., but the. federal reserve as well. . are the high forecasts for gdp evolving? pranjul: gdp is actually surprisingly strong now. there is a large wave of pent-up services demand and india's banks are in good shape. they have become far more solid since the pandemic. they have been able to increase their loan book. all of that is generally good for growth. but that is the story today. our worry is that by the end of the year growth will begin to slow because this pent-up services demand doesn't last forever. also we are seeing the first signs of export slowing and that can hurt gdp growth. growth momentum right now is about 9%, but towards the end of the year, it will be close to 5%. that links up with how we think
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about the r.b.i., it is giving large rate hikes, 40 basis points. going ahead we think it will be another large rate hike. but when it hits the middle of the year, and it will likely slow down, it will lead to slower momentum and fewer rate hikes. rishaad: talk a little bit about what is happening this morning. we have seen the indian rupee dropping to record lows, trading at $.78 against the dollar. what impact does that have on the export side of things, but let's not forget the inflationary impact from imports? pranjul: when it rains, it pours. this is the problem on the inflation front too. why it is happening i think is the fact that the current account deficits are widening. india is a big importer of commodities. we have large portfolios outflows. all of that is weighing on the rupee. of -- it does add at
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inflation risk premium to assets. when it rains, it pours, it will have inflationary implications. depreciation has not been very sharp, but still, it will not be insignificant. we have to live with that for now. good thing for india right now is it still has a big stock, $600 billion in spot, $60 million in the forward market. the r.b.i. has intervened a lot in the forward market, over time it could even start in the spot market. still providing some stability to the rupee. rishaad: pranjul bhandari, hsbc's chief in your economist, thank you. to keep the india economic theme going, we have bidding for india's coveted indian premier league broadcast rights, surpassing 5.8 billion dollars even after amazon reportedly dropped out at the last minute.
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let's get more with our reporter. give us some color on this intense bidding going on. guest: thank you. three numbers i want to give. one is, as you rightly said, the bidding went past $5.8 billion, which was like three times more than the base price for this year. it has already gone beyond what they garnered last time. what the indications are is that this will be more indexed and it will fetch more value. we are entering only the second day. this could spill over to one more day. the auction might get into the third day. intense bidding. all are super interested and excited and looking for more price. haslinda: all very excited, but will will -- what will these
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rights need to the winners? reporter: if it is a new entrant, say if a new entrant is winning, for them it is the best place to get more healing eyeballs, more subscribers. if an existing guy gets this one, it is an easy way to retain subscribers and to get more because in india, cricket is a religion. rishaad: alright. when does it all end? when do we know who has won? guest: originally we were thinking today, but indications are that it might spill over to the third day or even the fourth day. we don't know, just crossing fingers. haslinda: our conglomerate and telecom reporter p.r. sanjay, thank you. india has been trading for six minutes and it's pretty much right across the board. plenty more ahead.
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keep it with us. this is bloomberg. ♪
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haslinda: is a risk of day work stocks, bonds and crypto-currencies are getting sold off on the back of uscp i coming in at a 40-year high -- u.s. cpi coming in at a 40 year
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high. prompting more talks that the fed is going to be even more aggressive. we had the likes of barclays saying that perhaps is 75 basis point hike will happen as soon as this week. in terms of the benchmarks in asia, 2.5% decline for the legs of new zealand, south korea, singapore and taiwan. keeping a watch over the yen, inching ever closer to 135 after touching that level slightly earlier this morning. the lowest level in more than 20 years, rishaad. rishaad: just having a look at the u.s. bond market, certain parts of the curve are inverting. look at that, the five-year and the 30-year have inverted. have a look at the three year, there is an inversion place. 2's intends remain -- two's and twn's remain positive.
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look at bitcoin, a level not seen for 18 months, 6.8% down. ether and others gathering momentum to the downside. this also portends perhaps its correlation with tech stocks, pointing to a very weak open also reflected in the futures contract on the nasdaq. it is 1.8% to the downside. u.s. inflation data continue to reverberate around assets which are deemed as risky across the world right now. celsius network has swaps and that is reflecting the broader market selloff, has. haslinda: that's right, a red across the board. that is it from bloomberg markets: asia. daybreak: middle east is next. keep it here with us. this is bloomberg. ♪
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