Skip to main content

tv   Bloomberg Markets Asia  Bloomberg  June 19, 2022 10:00pm-12:00am EDT

10:00 pm
kong and beijing. yvonne: asia stocks fly as u.s. futures reversing gains as recession worries persist. janet yellen sang unacceptably high prices are locked in for the rest of this year. bitcoin falling back below 20,000. resume the white knuckle ride in the wider crypto space. china's banks hold their key lending rate after the decision to put policy cuts on hold. rishaad: we are heading and a southerly direction at the moment. -- heading in southerly direction at the moment. concerns about the men weighing in on what is happening with these tech age -- about demand wing in otis happening with these tech issues. this is all at the moment taking its toll on the stock which is down 10%.
10:01 pm
making adjustments to improve the experience. iron ore down significantly. 7% plus the fall back here. new pessimism about demand. it has wiped out this year's gains and virus was. that is a look at what is happening. gaming stock under severe pressure as we look at and out rake in macau -- an outbreak in macau of covid. let's all forget about the other elephant in the group -- the room and we are talking about bitcoin. yvonne: we're wondering if that is why you are seeing risk assets react to this way. i'm sure all the bitcoin traders were going nuts should this roller coaster ride we have seen. we broke below 20,000 this morning. everyone thought if we can hold above 20,000, maybe things will be looking better. that led to u.s. futures reversing. bitcoin is at 19,882.
10:02 pm
it is hard to find a floor at this point. it is impacting sentiment across all asset. rishaad: asia for a change outperforming this year. we will have a look at this chart we have got. asia year to date. msci asia-pacific index down 19% thereabouts. if we stripped japan out, a decline of 17%. the world index meanwhile so far down 22.5%. if you take out the u.s., about 20 and a half percent. the biggest fall for energy. infotech the biggest industry group down. the best one is energy, up nearly 7%. yvonne: you have to wonder if china is a big part of that. three straight weeks now where they have done better than what you are seeing in the u.s.. everyone is dealing in the u.s.
10:03 pm
with inflation. we heard the comments from janet yellen. let's take a listen. >> we have had high inflation in the first half of this year. that locks in high inflation for the entire year. i do expect in the months ahead pace of inflation is likely to come down although remember there are some the uncertainties relating to global development. rishaad: chief asia correspondent -- economics correspondent enda curran is with us. somewhere suggesting 12% plus if he took the basket we had in the 1970's when jimmy carter was president. >> several experts came out and said do not expect inflation to come down soon.
10:04 pm
jerome powell making the point they will do effectively whatever it takes to bring it down. janet saying it will take a while to come back to where it should be. she is blaming a a lot of it on global forces. and then loretta mester's from the cleveland fed making a similar point. she went a step further and saying it is going to be heightening a risk of a recession in the u.s. it seems like the whole narrative in the u.s. has gone from when can inflation be cooled down to the brace for this to last for some time to come. yvonne: i'm looking at commodities. it seems like everything is in the red. every reached a point where we are seeing depend destruction -- seeing demand destruction? >> and key developed economies, we are seeing consumer spending slowdown. on this end of the production chain any asia, manufacturers saying there demand is slowing
10:05 pm
down. there are signs of demand destruction. the fact that economists are ramping up their warnings now does show you the path we are on. rishaad: it was perceived as being a supply side issue only. that narrative has changed somewhat. this is a blame game. the government -- to the government spends much money? to they put too much money into consumers pockets or is a lot of it coming from the supply chain? that is coming from the fact it has been more expensive to get ships out of china and the price of energy at the western world. central bankers will say we cannot harvest a ukraine field. it is an ongoing debate. you have to say it is a mix of supply and demand. the end result is where dealing with the worst inflation in decades. that will have any economic
10:06 pm
outbreak -- economic impact globally. yvonne: we're watching the moves in the peso. one of the biggest laggards in asia. this is on the back of what we are seeing, the stronger dollar story. that is playing out across the asia session. that is despite the fact we did hear from the incoming central talking about rate hikes in the last couple minutes with look immediate saying they are looking to see rate hikes june, august and maybe beyond august. rishaad: there is a positivity saying the economy will grow 7% . yvonne: at the end of the day, it is all about the fed. you are seeing that play out when it comes to the peso. crypto, that is -- normally we used to check crypto after and now because crypto trades on the weekend, it never actually goes
10:07 pm
to bed. it seems like it is impacting everything should rishaad: let's get to it coin and where we are at the moment. just below 20,000. our cross as that team reporter joins us. give us a sense of what the view is currently. we heard michael seiler on with all its. he was talking about there is a buying opportunity. >> there are people who still see it as a buying opportunity and people have been in the space for a while will say we have these drawdowns of 80 to 90% periodically. it is to be expected. then we go up to new all-time highs. there are the super bullish people. there is also so much volatility right now. on saturday afternoon, bitcoin and ether tanked quickly. it triggered some liquidations.
10:08 pm
there is a lot of fallout in the space right now. it is not just it is going down and we can deal with it. it does look like the medium-term outlook is there will be more difficulty as people try to figure out who was overleveraged and what say these lenders have frozen bulge just frozen withdrawals will be able to do. people like michael fuller may remain a wash. -- remain bullish. yvonne: how can the market find a floor? >> i guess if you have some days or weeks where you have the price stays steady, it could happen. we did have something of that around 30,000 for a few months s recently and it tanked from there. it is hard to say where a floor
10:09 pm
would be but there definitely people talking say 10,000, 12,000. it could go even further down. with crypto, it is hard to say what a floor or ceiling would be. rishaad: that is the deal. the only other question of the day as well -- thank you for that. bloomberg's cross asset reporter. our mliv question of the day. yvonne: that is a hard one. rishaad: what is it? yvonne: don't ask me. are we going to hit 20,000 or 10,001st? check on all things bitcoin. go to your mliv blog. rishaad: let's find out what is happening in first word news. vonnie quinn is in new york. vonnie: shanghai's first weekend of citywide mass testing found the virus seemingly contained. the city reported 13 covid cases
10:10 pm
for sunday with just one found outside quarantine for the second day in a row. concerns shanghai could be plunged back into lockdown. elsewhere, beijing recorded five cases on sunday and resume to most public transport services over the weekend as cases declined. the u.s. is said to have decided to reject china's assertion of the taiwan strait is not international waters. joe biden has been briefed on the water and his security team is examining beijing's claims. in a statement to bloomberg, the state department says the taiwan strait is an international waterway were freedom of navigation and overflight are guaranteed. hong kong's financial secretary is staying on. he has held the position since 2017 overseeing a deep recession triggered by antigovernment protests and a strict covid policy. there cabinet picks including eric chan and paul lam who will
10:11 pm
head the judiciary. friends president emmanuel macron centrist alliance has lost its outright majority in parliament. his group won 245 seats. the far right national rally claimed 89 seats. you may retain control of the executive branch but will have hard time passing legislation putting much of his agenda at risk. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. yvonne: still ahead on bloomberg markets: asia, the imd world competitiveness ranking places singapore as number one in the aipac region. the director joins us later on this hour. rishaad: a rise in the offshore you on.
10:12 pm
-- offshore yuan. that is on the way next. ♪
10:13 pm
10:14 pm
rishaad: this is bloomberg markets. let's have a look at what the week in stores holding for us. we already have the china loan prime rate come out. unchanged. looking at jay powell, he is
10:15 pm
going to be out there. he will be doing his semiannual testimony to congress. we will have you look at that. every little word will be analyzed for any nuance. the boj minutes. looking further ahead, eu leaders meeting on thursday over ukraine and rate decisions out of indonesia as well. who have that to look forward to. taking a look at what we can expect out of jakarta. taking a look at what the cost of borrowing is. 3.5% were interest rates are expected to stand. vonnie: it's bring in -- yvonne: let's bring in the manager of affect strategy in singapore. i'm just wondering is there any reason to actually not by the
10:16 pm
dollar at this point? >> i think in the short term, the long dollar trade is still the one to basically chase at this point. that is because the fed is so focused on inflation now. it is important to remember monetary policy reacts with a leg. even though inflation is going to get the new to fly higher, you're not going to see the fed slow prices down for a couple more months. the fed is going to have to stay with its hawkish tone in the market is going to interpret the surprises with the fed having to do more. rishaad: does it mean priced in already? >> after powell's comments that 75 lose unusually large, the market eased back. that 75 a news with -- 75 was unusually large, the market eased back. now it is pricing in 50 50
10:17 pm
market is going to focus on the 75 point basis move. the main goal right now is to bring inflation down or that hits employment or the economy and slows growth, but as a secondary concern for some of the more hawkish members of the fomc. yvonne: if china emerges from code, how beneficial is that for market fx? > i think it is helpful. we did see the market get more optimistic on china's reopening in june. shanghai mass testing we saw last week, was are going to be futures of china's ongoing reopening. you will get clusters here in therapy or that is going to dampen sentiment for china. i do think that will point to an
10:18 pm
uneven recovery. as long as the pboc is going to remain dovish to support unemployment, i still think that is going to mean a stronger dollar versus the yuan. yvonne: how much does the yen factor into that forecast? after we heard from the boj, doubling down when it comes to yield curve control and the bond market is going nuts. is intervention the only way to stop the end selling? >> in the short term, i think that is what the market is focused on. after the comments in the boj's statement, it is obvious they're not going to change yield curve controls anytime soon. they have not done that yet to it if there are no signs of the mof, the market is going to keep going higher.
10:19 pm
just purely based on fed versus boj divergence. rishaad: isn't it now -- is in the ministry of finance and japanese authorities looking at the yen with a sense of benign neglect because it does sue summit -- does do some of the heavy lifting for their economy? >> yes nopd i think it is positive for exporters. boj officials and mof officials have said so but i think what is a bigger concern is a lot of japanese households are concerned and japanese importers are concerned the prices they are paying for imported goods are rising. it is starting to become politically unpopular but for kuroda, that is in line with his goals. he wants this inflation to push wages higher. whether or not that pans out according to his goals remains to be seen but at the -- but it seems like things are going according to what he set out
10:20 pm
when he started this program. yvonne: is the bond market in japan still functional? >> there is a lot of volatility between the futures market and the bases you see. it seems the boj is unconcerned about being able to maintain this yield target for a 10 year jgb. as long as the boj things it continues doing the -- it seems like things will be ok for the bonds themselves. the futures market with the boj is not a factor, you will continue to see some volatility there. rishaad: i just want to get your thoughts on the euro, which took a bit of a beating given this election in france where we saw emmanuel macron a his majority. where does the euro go next and why? >> we think the euro could go a little bit weaker against the
10:21 pm
dollar. it is mostly a function of the fed. the ecb is talking about a possible 50 point basis point move in july. it is still far short of the 75 and 50 the fed is talking about at each of the couple meetings. from a divergence perspective, the ecb is starting to be more hawkish. it is still at a much lower pace than the fed itself. we think it is going to go around 103, 10350 but it does point to some downside risk in the euro. yvonne: if i'm looking at commodities, seeing the largest decline last week. what is it mean for commodity currencies? -- what does it mean for commodity currencies? >> commodity currencies are a little bit interesting because you do have a lot of supply constraints in the energy market which said benefit commodity currencies. you still have the dollar strength in the short term.
10:22 pm
for the em currencies, we think there is going to be more downward pressure. fundamentally when you think about high-yield currencies or commodity currencies, we think the commodity space should be a little bit better or more stable against those other he yield currencies. mostly because you're still going to have a lot of demand for energy exports and the prices of coal lng, even though they came out last week, they're still going to be strong because of supply chains in the conflict in you cream. yvonne: we have plenty more ahead. this is bloomberg. ♪
10:23 pm
10:24 pm
10:25 pm
rishaad: we got -- let's have a look at some of the misfires headlines. a company says diablo mortal will be released elsewhere in asia on the eighth of july but no date was given for china. the account was than from posting what a banner notice said was violating relevant laws and regulations. apple store workers near baltimore voted to a form a union in landmark case that could change the face of the retail operation. voters supporting the union outnumber those against 2-1. the unit includes about 100 workers that could spark a wider movement across apple stores. sources us telling us the link those co-founder made an offer to buy the e-commerce platform.
10:26 pm
they are expected to meet monday to discuss the future. they were investigated over allegations of financial irregularities leading to the dismissal of the ceo and cofounder. let's take a look at the box office. animated film layer by disney and pixar falling shy of its forecast on its debut. the film brought in just about 61 million dollars in the u.s. and canada placing it second to jurassic world domination. have not seen either. yvonne: we neither. i'm guessing your cage -- your kids are going to watch layer. -- watch lightyear. annabelle, you are watching some of the big moves. >> the csi 300 fairly flat one set their is outperforming that
10:27 pm
and that is the ev makers in china the government saying it may provide support to help with the high cost of raw materials. that could be expended -- extended to consumer complaints per producers in as drill you slumping this morning. since the iron or contract in singapore dropped and the fed tightening path. some things we're watching this morning. these are some of the exchange operators we have with bitcoin moving below the $20,000 level. yvonne: plenty more ahead. this is bloomberg. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year.
10:28 pm
and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™
10:29 pm
>> 11:29 there in tokyo.
10:30 pm
we are taking just a quick look at what is going on with the nikkei. we see a broad-based move to the downside. because although china is faring better across the rest of the road, the s&p's futures basically reversed all the gains and they are erasing all of that by about a third of 1%. we continue to extend those gains here. at what is been quite a wild ride in crypto's this weekend. >> brent crude, we have the w's -- wti's here. these are just under the growth
10:31 pm
concerns looking at the fed if the interest rate keep going where they are. there could be a fairly significant slowdown. >> you have that and the china slowdown story and basically what they announced at this year's gains in iron ore. this brings us back to the height of the pandemic as well. that whole concern about demand is quite different. let's look at china with richard. we were talking about this outperformance in chinese stocks. we finally got to it. what is going to keep this rally going? >> i think part of it is being sustained by people bringing money out of pretty much everything. you are seeing the oil in cryptocurrencies and china became a value trade because the
10:32 pm
downside was ultimately limited after such extremes. at the moment there is still momentum in terms of money going into those markets and potential for gains because they are coming -- becoming so extremely useful. the situation is looking useful in china. there are still huge restrictions on economic activity. people still can't go to china. that is going to challenge the forecast of 5.5% growth. vision will be very happy to see its markets doing well. that will validate their approach while taking things much more cautiously. they had previously criticized the fed for being far too easy on monetary policy. but there is still huge amount of risk to china.
10:33 pm
we see that the global economy is in trouble. people may have also had since been altered. everything seems were interested in these age chairs. >> age chairs have always been one of the worst performing stocks. they tend to do well when things are very bullish. were very bullish in china. we are not really that yet. there is some potential a lot of them are state owned. but again, the stocks are driving everything down today. >> the day is better than expected. does that mean there is less willing for the pboc to cut rates now? >> >> there are some who think
10:34 pm
that the pboc would be reluctant to do that. but there are others saying that the pboc if they want to invigorate economic activity and not in the second half of the year, things are not as bad as they were but there is still a slowdown going on. there are still a lot of risks to see. always a pleasure. richard foster, the senior editor there. the huge problem is inflation. this get to our first word news item. correct the current obsession saying the leg in raising rates is partly to blame. it will take several years to return to the that inflation goes. the view on slowing growth was shared by yellen.
10:35 pm
>> we have had high inflation and the first half. that locks in high inflation through the entire year. but i do expect them to increase the pace of inflation -- the pace of inflation. there are so many uncertainties on the global development. >> macau casinos fell after the first covid-19 outbreak in eight months. he revealed 21 preliminary positive cases. and as cases in maine and china did align. residents will undergo mass testing until tuesday. columbia's leftist candidate has claimed a narrow victory in the
10:36 pm
presidential election with 50% of the vote. the former mayor defeated construction magnates. the result is that to upend u.s. columbia relations. the u.k. is on track for the worst rail destruction since 1989 after failing to avert a worker strike. all of the starting tuesday. blunders will be further hit by a walkout in the underground network here. the strikes come as soaring inflation threatens to push the u.k. into recession. 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: let's have a look at the u.s. as it is ready to reject growth initiatives in beijing and taiwan.
10:37 pm
stephen engle here with us right now. it is not news but the timing is significant. >> china has long regarded the taiwan trade as part of its own exclusive economic zone and almost every time, they will lodge a protest. where this has been escalated, they essentially say the chinese had a regular talking point in the meetings but according to these sources, every occasion, every level, the chinese are reasserting that china is not in international waters. if they are challenging each other's claims through those
10:38 pm
waters. they needed the fujian. the fujian province is the province closest to taiwan. read into that what you like. >> that is why the situation in taiwan, maybe defense officials would say that beijing's attempt to change the legal
10:39 pm
interpretation of the international waters to make it consistently repeating this claim that it is an internal waters but the other issue are the trump your tariffs. mr. biden was asked whether this meeting between president xi and president biden would happen. they have not spoken since march 18. that is what biden did to condemn the war in ukraine and russia's war. the tariffs will likely be there as well. i am in the process of making up my mind. janet yellen indicated they were looking to reconfigure those tariffs given the state of inflation in the united states. quite the latest on taiwan here. let's look at futures here in the u.s. given that markets are closed on monday.
10:40 pm
here is what we heard back from the losses there. nasdaq futures are actually back in the green after what comes from bitcoin. i thought macro was unset to use that parliamentary majority as well as to see a bit of a dip in the euro. >> let's have a look. although this is next, this is bloomberg. ♪
10:41 pm
10:42 pm
>> let's check in with the indices at the moment. we had the new central bank with the incoming governor there talking about growth. just looking at the gdp growth of that sort of magnitude this year. they also have further rate risers on august year, there we go. there is the currency there but on the move. there is the dollar at .5%. this is a huge move, taking the
10:43 pm
biggest loss at the moment. >> that is the one to watch as well. given the dollar move we have seen. it is 75 basis points and the markets still kinda dealing with that after we saw that last week as well. we are talking a little bit more about competitiveness. >> singapore number three. they have now slowed into fifth place in 2021. >>? claimed the top spot, bushings which down to second. singapore and hong kong following that. let's get more from how professor of finance at imd. thank you for joining us. what struck you the most when it came to these rankings this time around?
10:44 pm
>> usually this is something that has never happened in our history. traditionally, companies like switzerland and singapore have listened to the talks. click the second surprise is that these rankings show the way economies have changed from 2022. that is why every ranking is relative. >> this is my point. how do you define competitiveness? >> very often, countries understand that competitiveness is there to complete -- to compete. competitiveness is very clearly
10:45 pm
-- a clear concept and very well understood. they need to generate prosperity, growth and jobs for their people. this is for institutional and economic arrangements. for example, infrastructure and education. when you combine all of these factors, you have the medical success that can be compared to countries in a very good way. >> i wonder how covid changes because you have some of these countries like china that are still going at covid zero but they are still drinking quite high across our rankings as well. singapore is coming out on top. >> that is actually the case. it would be the case of china.
10:46 pm
>> china was on track to become one of the most competitive ever. covid has stopped that. the reason is how the covid policies have taken their toll and the chinese economy. this is how you explain the performance of singapore, indonesia or thailand. it is to what extent lockdowns augment the economic damage like denmark or switzerland. that open up earlier. that is why they have to perform better in 2021. >> i find it bizarre that hong kong comes in at number five. the economic numbers are dreadful. how did it manage to get that high up in these rankings?
10:47 pm
>> hong kong is a striking country but our exercise is not about meeting and deciding which country ranks here or there. of course, hong kong is a very strange economy in the sense that it belongs to a large institutional arrangement. it will be difficult to factor in competitiveness when it comes to inflation. hong kong has dropped significantly because for years ago, it was number one. >> these have also been reflected in the rankings. it is difficult to mess with the economies such as hong kong or even china.
10:48 pm
>> what makes singapore the top? there are lots of questions about a lot of people moving from hong kong or china to southeast asia. singapore seems to be that alternative. but you're starting to see policies where ex-pats are going to find it tough to get a visa. they are stressing nationality. how does that all play out? how is singapore ranked number one in asia? >> this says a lot about all of these regulations and everything i mentioned earlier. i would not sync -- i would not say singapore is an exception. despite the problems you mentioned. singapore is the country with a very clear strategy. it is a country very attractive
10:49 pm
for businesses. not when it comes to trade, import services and talent but finally, one looks at the intangibles of the economy. namely scientific infrastructure. all countries have their problems. singapore is trying to boost competitiveness. >> let's have a look at what is going on with the chinese currency. the offshore yuan is up by half of 1%. six point 8% up against the dollar. that is the macro picture with some of the bad news already priced in. maybe we will price in some better news.
10:50 pm
>> you still have that policy trend. maybe that has gone too far but there is not really any news that is sparking this. i will let you talk about the inflows or turnover of the csi 300. people getting back into the stocks. maybe that will work in terms of flows. coming up, international air transfer association sees them recovering from cove despite the slowdown in economic activity. we will hear from the group's director general. this is covid. -- this is bloomberg ♪
10:51 pm
10:52 pm
>> you can see shanghai plunging higher. you can see the renminbi also getting this morning. it's give a quick check of the latest business flash headlines. the main trade lobby says carriers will be able to sustain a post-pandemic rebound, even despite a global economic slowdown. willie walsh told bloomberg the recovery and demand along with the removal of travel should continue regardless of financial pressure on consumers. >> there is clearly pent up
10:53 pm
demand. this reaffirms that people want to be flying again. the outlook remains very positive. >> qantas and airbus will make a joint investment aimed at kickstarting the fuel industry. they plan to invest as much as a few million dollars to accelerate the adoption of sustainable fuel in the country. alan joyce as the move is necessary or australia risks getting left behind. air india is said to be considered a large order for narrowbody jets as those who overhaul dailies. the carrier is rolling out a purchase of as many as 300 airbus neo's or boeing 737 max plans or both. production and delivery of an order of that size would likely take years or even decades.
10:54 pm
air and boeing declined to comment. this is a landmark u.s. case that could change the tech giant's retail operation. the bargaining unit could spark a wider movement across apple stores. >> let's get a check of the markets here. just taking a look at what is going on with the bloomberg intelligence gauge. we have the first covid infections in eight months. enough to gain another blow to the sector. operations are mandated -- mainly suspended here. 34 covid positive cases coming in. they were young, bitcoin and the crypto space also just feeling it. bitcoin is the biggest. they are flirting with 20,000. it has just been hovering around
10:55 pm
that psychologically important level. does it go to 10,000 or 30,000 next? >> we are paring off with a lot when it comes to brent but then again, we are extending the collapse on friday. new york road is -- crude is still below 10%. you have the deli move, the demand destruction concerns. recession risks building. we have plenty more in the next hour of bloomberg markets: asia. stay with us. this is a risk off session this morning. this is bloomberg. ♪
10:56 pm
10:57 pm
10:58 pm
10:59 pm
>> almost 11:00 a.m. here in
11:00 pm
singapore and shanghai. welcome to bloomberg markets: asia. the recession worries her. unacceptably high prices are locked in through the rest of this year. >> bitcoin resumes losses after briefly snapping a 12 day light as the white knuckle ride continues in the water crypto space. >> then we will go to the upstart china smartphone maker. we speak exclusively to the international business group president. >> we are starting with the asian stocks holding at these two-year those. you have the red saying the chance of a u.s. recession is increasing. we have south korea leading the declines here. we did have chinese banks
11:01 pm
lending curates unchanged. -- leaving key rates unchanged. have a look at the renminbi that is rising by around .5%. watch what has been happening in the oil market. a little bit of pressure as we are seeing other commodities sold off by about 6.5%. we will talk about bitcoin as well. we do have australia's tenure off by about 10 basis point. no trading in u.s. treasuries in the cash markets due to a holiday there. >> talking of bitcoin, we have been asking her question of the day. we have seen volatility, we have seen huge weekend moves.
11:02 pm
i'm talking about bitcoin and before recovering, all of this tableau 20,000. you can imagine the index itself also having huge volatility here as well. let's look at what is going on in thailand. we have the index down about 20%. it is set for the august 1 of losses in almost two months. the bank of thailand has been dashing hopes for out of cycle interest rates. this is apparently heading for -- the dollar is heading for a seventh day of gains against its thai counterpart. we have oil prices that may help day-to-day as we see wti below $110 per barrel. >> let's get more on markets with our strategist, mark goni from singapore.
11:03 pm
it seems recession fears have investors looking at this aggressive monetary tightening and suggesting where is the bottom here? the s&p 500 basically erases that pandemic. >> i don't think investors appreciated janet yellen money them about inflation. they were looking for something else they will make the treasury secretary cupid number one. this is such a political issue in the united states meaning it really has no choice with a very aggressive cycle of timing. that just adds to risk sentiment
11:04 pm
as well. making people even more nervous. all of this until they are more confident. the fed is coming toward the end of it cycle. >> again, we have this and then we have nancy's. it seems this is a very fragile industry group. >> indeed. the underlying signs of a little bit encouraging. if you look at the hang seng index, all of the components of them are rising today. that is a vast improvement from what we were seeing earlier in the year. if you had alibaba or tencent leading declines, the whole index was down. there was a better situation then we were seeing earlier in
11:05 pm
the year. it actually shows a bit of resilience in the great china sector there. of course, there will be services from time to time but if you look at the way china was backed off, the rhetoric is much calmer now from china. there are also reports saying there will be more support for companies across china as well. this eases into the mode as well. all in all, china has become a little bit outside the global context. there are certainly reasons to believe all of china will hold up a lot better than most of the rest of the world. >> thank you, mark. now we will just dial back to cryptocurrencies and get some analysis and look at what is going on with annabelle. let's have a look.
11:06 pm
this 20,000 level is psychologically important. >> pretty much sums up the morning trade. we are back below 20,000 until about three hours ago, we were about it but we have those lines at first alpheus. they said it will take more time to stabilize liquidity. i will leave the details of that to joanna. his sins bitcoin below techie level. we can look at the price action for the cryptocurrency over the past few weeks. this is a massive slump in the past week but over the past 12 sessions we have been in negative territory. it is also feeding across into crypto sentiment for some of the big movers in asian stocks as well. these are some companies that either operate exchanges or we are seeing them more as well. >> what is driving this?
11:07 pm
>> we do have the uncertainty from celsius saying he needs more time to deal with its liquidity issues. it has these proposals from the decentralized plan organizations, trying to figure out how to deal with liquidation is ignored -- in an orderly fashion. we had one that was really kind of a first where they decided to take on large accounts. there is just a lot of unprecedented movement here. people trying to figure out what to do. >> isn't causing people to rethink crypto as an asset? is there a lot of long-term panic still here? >> anybody who got in and said 50,000 or 60,000 on bitcoin is going to be a big concern.
11:08 pm
even a long-term holders who says i am in it for good, they are probably going to question it. most people are underwater at that point. >> michael sailor was a convert. because that is what he is saying but that 20,000 level is what is important here. a lot of large hedge funds. that can really incentivize people to trade down and it goes to what we were hearing on twitter. this is the cofounder of the crypto exchange.
11:09 pm
he is saying we can expect more sellers because of this $20,000 level. he can bring some opportunities for what he calls skilled knife catchers. also, whether we see more signs of distress in other crypto letters or hedge funds but the director -- direction where we go from here is the question of the day. we are hearing more because for 10,000. >> let's get over to new york. >> thank you. citywide mass testing found the virus seemingly contained. the city reported 13 covid cases with just one outside quarantine. a spike in cases last week
11:10 pm
fanned concerns shanghai could be going back into lockdown. beijing reported five cases on sunday and resumed cases as they declined. -- and resumed as cases declined. macau reported its first covid outbreak in a month. it revealed 34 positive cases and as cases in mainland china declined. proof that non-essential businesses will be shut here. >> the u.s. is said to have decided to reject the assertion that the taiwan strait is not in international waters. the national security team is closely examining beijing's claim. the state department says the taiwan strait is an international waterway where freedom of navigation is guaranteed. >> adam schiff told cnn that mike pence could be asked to
11:11 pm
testify investigating the january 6 right at the capital. shift said nobody was excluded at this point. the vice president had refused to give into former president trump's demands to overturn the election. 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. >> still ahead, this is the fastest growing smartphone market in the world. >> and other wild week for traders. this is bloomberg. ♪
11:12 pm
11:13 pm
11:14 pm
>> the committee decided that a large increase was warranted at today's meeting. quick people think it is necessary to increase rates today. the inflation forecast shows that inflation is higher. if we do say great -- see greater evidence that the current high level of inflation is becoming embedded in pricing
11:15 pm
behavior then that would be the trigger. >> the calibration of this rate increase will depend on the updated medium-term inflation outlook. >> if you raise the yield ceiling, you would expect to see long-term yield rise above 25% and that would weaken the effect of monetary easing. we are not planning on doing anything like that. >> i expect inflation to get a 7%. that is a very high number. we need to be able to chart a course back to 3% inflation. >> if the medium-term inflation outlook persists or deteriorates , a large increment will be appropriate. >> this was an intense few days of politics. it all really does get the
11:16 pm
narrative that they have been looking at as well. as a consequence, they have lowered their forecast for real gdp growth to 120%. it was previously 2.5% here. we are looking for 2023 to be -1%. only a growth of like 1.3%. they are also seeing a u.s. possession staffing in the fourth quarter of this year. >> let's get analysis from our guest at pepper stone. certainly, it seems like the market is pricing in the chance of a recession. is that your best case scenario in how deep it will be? >> yes, it is just how deep it is. the fed has basically overlooked this entire situation. the idea that they can manage inflation and then manage a
11:17 pm
recession is something that the markets are genuinely quite worried about. you can see that first rate, that is coming through the kink in the curve. bates markets have been very good at publicizing this rate hiking cycle and now they're looking at fairly aggressive rate coming in through next year. that is where the market is firmly in place. i think that sector is up for a 20 -- a very strong buying opportunity. timing that will be everything but if the market is telling you right now that we are going to get rate cuts at some stage, it is really a matter of time that we are going to get further downdraft in equity markets and continue to tighten the dollar remains at your natural hedge against that situation. and after their for the downside, we are looking at 3300 on the s&p. they will have to pivot at some
11:18 pm
stage because they will have to work on the markets there. the rates market is sending you a clear message. >> that is what i would ask you. the s&p 500 is poised to erase that pandemic rally. are you looking across all sectors? >> the question is where do you want to go? how far is this growth going to go on the downside? you have an opera performance invalid -- in value. the evaluation marks are still too rich. you had a decent decline in multiples but earnings still need to come down. that music -- that may be the case as they come out. they will start their earnings season. that is we will get the earnings coming down. we are going to cpm multiples come back a little bit on that situation but 35% of s&p companies are still trading at 20 multiples and that is still
11:19 pm
too high. i think we go down. i hear you probably looking for the markets. let's pick a number. 3200 or 3300 will be leveled at the value funds will be coming in but for now, rallies need to be solved. there is no doubt that people are just looking at levels. the trade is about how the price reacts into those levels but everything at the moment suggests that rallies need to be pounced on. and the distribution of outcomes , they will be going down. the value probably comes into the market around 3200, 3300. >> has it become the case that credit quality becomes more important with the rising rate environment? >> 100%. we are looking at credit and the high-yield see the x trading there.
11:20 pm
i can't remember the exact number but we have been seen credit spreads and credit insurance blowing out. that is something noticeable on the federal reserve. that needs to to continue at the moment. if you have a look at inflation swaps and the expected inflation coming in, the market is expecting inflation in the u.s.. they are pushing higher. they are expecting to top out around 9%. about 8% the rest of the year. the fed needs to continue tightening positions. that was the equity markets pushed down. >> what has been happening with the yen is quite something. the thing is that there are a lot of shorts build up on the end. there could be squeezed very hard. >> i think the conviction of
11:21 pm
holding those shorts is very high. this year has been a fantastic year for trend followers. let's have a look at the cta index. having that diversification strategy and having trends in the mix as well has worked exceptionally well. the yen has been the backbone of that trade. they have so much conviction to buy them off. if that changes in the july meeting, that is something else we will deal with. you're holding them with reasonable conviction that the positioning will become very skewed. right now, that central bank divergence is working beautifully. >> chris, almost out of time. but the question of the day is whether or not we see bitcoin go to 10 or 30,000. i guess it is in terms of what
11:22 pm
sort of volatility this has been in terms of influencing other sentiment on risk assets. >> the correlation is high. bitcoin or crypto has driven each other. they have produced liquidity. so much of that is going in here at the moment. for the quiddity, rates going higher and people going out in those direction assets. i think we probably go lower. whether we get to 10,000 is probably a bit of a stretch but we might get the s&p into 3300. crypto will probably be going in a similar path. that is when we will focus on the change. >> joining us from melbourne. thank you so much. stay with us, this is bloomberg.
11:23 pm
11:24 pm
11:25 pm
>> you are watching bloomberg. just getting some breaking news about a lockdown or a partial lockdown in shenzhen. we are hearing that shenzhen is locking down some neighborhoods due to local covid cases. we did see a single global -- a single local covid case that triggered mass texting -- mass testing. nationwide china reporting the most number of new cases in early february. we are continuing to watch the impact of the lockdowns across china here. a quick check on the latest business flash headlines. this was a joint investment kickstarting the sustainable aviation skill industry. this is also excel of a deduction of sustainable fuel in the country.
11:26 pm
the airline looks to over all here. bloomberg sources says the carrier is milling a purchase of as many as 300 airbus is here or a mix of both. in order of that size would likely take years or even decades. >> looking at these minors -- miners here. looking at oil prices down again. 7% plus at one stage. we have been looking at this all day.
11:27 pm
>> the biden administration said to reject a vague assertion by china that the taiwan strait is not international waters. we will look at the potential fallout next. this is bloomberg.
11:28 pm
11:29 pm
>> do you go, 11:29 a.m. there in shanghai.
11:30 pm
the chinese markets going with the turnaround. shanghai was further in the red. just taking a look at those constituents at the benchmarks. there we go, shenzhen feeling at their this latest bit of news coming in. they will be locking down some neighborhood this with local covid cases. in the china x, 2.3% to the upside. let's look at macau. >> let's look at some of the casino stocks. we are seeing them under pressure. those were the first cases in eight months. that is going to get tourism even further to the world's largest gaming hub. let's get more on that and join bloomberg's correspondent here. we have this latest headline here, it will not help things
11:31 pm
out. , exactly. what we have seen is that macau's gaming history has been suffering for a tourism drought since march when china's covid situation worsened. and the gaming revenue in macau has much more than 60% in both april and may and now this outbreak is the largest since the original one in early 2020 and analysts are expecting that it could cause the game industry revenue to drop to near zero levels for at least a few weeks until the government brings this other control and casinos are already burning through millions of dollars of cash every day and analysts predict that they could only survive between nine months to two years, most of the casinos only have enough liquidity to survive that amount of time. things are really getting worse for them and we shall see what
11:32 pm
the border situation will be in the coming few days. >> it is death by a thousand cuts it seems here. , they just make sure that the game index is down over 12 months. that is not even including the times that covid was at its peak here. could some of these go to the wall? >> the covid situation in macau right now is really getting worse and so far, as of last night, they were -- there were 31 people testing positive in the government won't rule out more cases. not many people are visiting macau nowadays. they are stepping up their border control and asking people visiting from macau to undergo
11:33 pm
seven days of home quarantine plus another seven days of self-help monitoring. so that will further deter people from going to macau. we could foresee the number of tourists will drop even further. in the gaming revenue in june and july will be hit by the situation a lot. >> keeping us up-to-date on all of the latest in that. it's have a look at the broader markets. they are still at their two-year low, june 20 20 levels. the fact that we have had janet yellen talking about the risk of u.s. procession increasing and these inflationary pressures not helping out with sentiment, you have outside coming through as a whole here. you see commodities very much in australia. the dollar-yen is 134.
11:34 pm
let's go to new york with vonnie quinn. >> loretta says the central bank using rates is partly to blame for rising recession rates. >> is measured by janet yellen. the goal made me see that on his heavily high prices will probably stick with consumers through the rest of the year. >> we have had high inflation issue. and that high inflation leads to -- may be there for the entire year but i do expect the pace of inflation, it is likely to come down. there are so many uncertainties leading to global developments. >> emmanuel macron's interest is out by a majority in parliament.
11:35 pm
a lasting alliance with 131 members as the national rally came to 89 sees. macro may retain control of the executive branch and would have a hard time with this, putting a lot of his second term agenda and risk. >> gustavo has claimed a narrow victory in the presidential election with 50% of the vote. the former mayor conceded the construction magnate got 49%. hernandez compared -- campaigned against corruption and u.s. columbia relations. the u.k. is on track for the worst after a failing to avert worker strike. all of this as 40,000 staff came to work. rising labor dispute as well. the strike comes as inflation
11:36 pm
threatens to push the u.k. into recession. global news, 24 hours a day on air and bloomberg get bloombergquint take. i am vonnie quinn. this is bloomberg. >> the u.s. said to be ready. let's get to stephen engle with us right now. this has not been particularly new but it is the timing here that is involved in this. >> it is just a stronger assertion. we are hearing from the u.s. government that aunt every occasion and at every level, the chinese are taking very strong, their opposition to the united states, using the taiwan strait to -- as the united states argues the freedom of navigation in the south china sea. and china is saying that these
11:37 pm
are not international waters. this is nothing new. china has long asserted the taiwan strait is part of its exquisite economic zone and china regularly protests u.s. military moves in the strait these sources telling bloomberg news that the legal status previously was not necessarily brought up all the time in discussions. it is now. the concern in the is that beijing is deliberately trying to muddy the interpretation of international waters with regards to the taiwan strait. you can read into it how you want but it could lead to more challenges, more standoffs between the two militaries but keep in mind, just on friday, june 17, the chinese launched their biggest worship today. you can read into the symbolism if you want but there was a
11:38 pm
public relations video put out. offense is a remission. read into what you want. >> let's talk about u.s. china and whether or not we got an update and whether or not they will have this fun. >> that question was put to joe biden on saturday. we don't know the sources within the white house. perhaps this could be as early as july. they were asking whether the repealing or reworking or reconfiguring of the trauma your tariffs, would that be in the cards or would he do it? they say they are in the process of doing that. i am in the process of making up my mind. taiwan will be on the agenda of any discussion.
11:39 pm
have not talked since march 18 and of course, those trump your tariffs would probably be very high on the chinese agenda. >> just having a quick look at the foreign exchange right now with the you that continues to strengthen. the last time they checked on it, it was up by 1.5%. that is trading at that level. 6.67, it focuses certainly on these growth and management industries in the eurozone. we are seeing a pmi for u.s. services year will be extremely low. we did have a prior printer that was quite positive at 3.2. having a look at that one.
11:40 pm
we do see oil prices declining and that is a cheap driver for that repeat weakness of late. >> a chinese upstart looking to dominate india's smartphone market. all of this in the market that is about to crack. that is next. this is bloomberg. ♪
11:41 pm
11:42 pm
>> we are counting down to the india open where we are expected to see slight gains in the equity markets according to the futures here in singapore. the finance minister is set to hold a review meeting when officials from the public sector bank meanwhile the defense minister is expected to meet with his australian counterpart who arrives in india. this all after a gap of nine years. >> let's have a look at china's real means.
11:43 pm
they now hold the number three position in india. 600 million sand -- smartphone users. they are getting over and exclusively joining us. this is the biggest mobile phone manufacturer anybody has heard of. >> i think we are the underdog. we started back in 2018. this was a more than 61 countries across the world. i think our journey has been really amazing. the most important part, we have been manufacturing this all at the same point in time. we are number one in online space as well.
11:44 pm
i think this is quite a big leap in this market. cripes it is a portfolio of smartphone product. you have a multibrand strategy. tell us why you have that and how it is better to deal with all of this. because this is completely independent. i think this is extraordinary. >> will go to smartphone devices.
11:45 pm
i think this has created a portfolio for people. as a people are only trying to control the ecosystem in the home. quite there is a global chip shortage there in a global recession. how does a young company like yours counteract all of that? >> we had an agreement about this. we had normal supplies backing up. we just wanted to make sure we do not get this impacted. we also made sure that we would not democratize this.
11:46 pm
even in india, we have more than a quarter now. >> india as we know is a huge market. in that sense, we have a lot of revenue opportunity. there is a lot of regulatory flip-flop as well. how do you beat those challenges? >> i think it is completely all right. i think it is more about the the appliances. >> the thing is we have these tensions between delhi and beijing. have they affected your business
11:47 pm
in any way? have you seen people not by the chinese smartphone? trying to go to the likes of samsung instead as a consequence? how do you navigate it? >> every brand will have to follow compliances but i believe technology has gone beyond the boundaries. i think people have actually enjoyed technology in this product. people are looking for quality product. at the same point in time, >>
11:48 pm
you are not overly concerned about geopolitics? >> it is learning. but we are not worried about it. it is about following the compliances. >> thank you so much for joining us. there was the really india boss joining us. indian markets up and running about three minutes ago. let's check out what has been going on there. the nifty banking index is
11:49 pm
pretty much flat. they are getting a little bit of traction again as we see oil prices on the way down. >> the french president has lost his absolute majority in parliament after an unexpected surge in far red support. we will have the details of the election next. this is bloomberg. ♪
11:50 pm
11:51 pm
>> look at some of these features, particularly europe features there. -- futures there. it was weaker because we had this political intrigue playing out in france where the president suffered a major setback to his second term agenda. it is showing a fragmentation of the politics in france. >> that is right. a couple of numbers to keep in mind when looking at this result. one is 577.
11:52 pm
there is the left alliance led by the one that came in a close third in the presidential election. they scored a big win. that is a combination of his own party, the democratic-socialist like party. then you have the far right which got 89 seats. that was a big surprise. people were expecting that number to be much lower. a huge win for marine le pen. also, her whole movement to make the far right more part of the mainstream of french politics. click the far right and far left are not going to get together.
11:53 pm
give me a sense of his reform agenda. >> it is not a great position for macron. it is ironic that his party actually won the most seats. they are 245 but that is down from where they were before. if they want to pass any legislation, they will have to get support -- get support from others. the republicans are the mainstream conservative party. he might be able to get some support there. >> thank you, bruce. >> after postponing the june
11:54 pm
launch, the company says it will be released elsewhere in asia on july 8 but no date has been given to china. the way my account was banned. they violated relevant laws and regulations. the head of the line industries says carriers will be able to sustain a pandemic rebound even despite the global economic slowdown. the director general told bloomberg recovery and demand should continue regardless of financial pressures. >> clearly, it is pent up demand. all of the research affirms that people want to get back flying again. the outlook is very wholesome. >> just looking at this from
11:55 pm
last week, they are ramping up their exports. what it has done is it cemented powers. futures are 5.5% down. this is actually the lowest we have seen since january. it has fallen the most since march. that is a look at what is going on. i or growth is down 10%. cryptocurrencies, wild weekend. that as we continue with this. bitcoin is going above the 20,000 level. juliet: and just adding to the
11:56 pm
good news, we are seeing asian stocks at two-year loves as well. of course, the concerns about monetary policy tightening and the fact that you have u.s. recession fears as well bring into sentiment. we have seen a little bit of upside coming into china there. we have the banks keeping their main lending rates unchanged. the renminbi on a tear. 6/10 of 1% against the dollar 67. we are looking elsewhere at a little bit of weakness in commodities. but that is it from bloomberg markets: asia. bloomberg middle east is next. this is bloomberg. ♪
11:57 pm
11:58 pm
millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network, with the carrier rated #1 in customer satisfaction. that's a whole lot of happy campers out there. and it's never too late to join them. get $250 off an eligible 5g phone with xfinity mobile. take the savings challenge at xfinitymobile.com/mysavings or visit your xfinity store and talk to our switch squad today. psst. girl. you can do better. ok. wow. i'm right here.
11:59 pm
and you can do better, too. at least with your big name wireless carrier. with xfinity mobile, you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill, over t-mobile, at&t and verizon. wow. i can do better. yes, you can. i can do better, too. break free from the big three and switch to xfinity mobile.
12:00 am
>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> the following is a

33 Views

info Stream Only

Uploaded by TV Archive on