tv Bloomberg Markets Asia Bloomberg June 20, 2022 10:00pm-11:00pm EDT
this is bloomberg markets. yvonne: signs of stability with asian stocks rising along with u.s. futures. treasuries retreat after reopening from the holiday. chinese demand plays into commodities with iron ore raising gains. copper rising a bit on hopes of housing support. plus, airbus says it because not make single jets fast enough to make demand. we hear from the ceo. rishaad: sentiment is positive today. we also have bond markets under a bit of pressure seeing yields up. for the u.s. looking at 3.29%. there is no inversion at the moment. just seeing some pressure for australia and new zealand with yields up about six basis points. looking at equities. the nikkei up but currently some
of this movement on the bond market can be attributed to comments coming out of jim bullard, who of course is the st. louis fed president, saying u.s. inflation expectations could become unmoored, possibly leading to high inflation and highly volatile. this is on the heels of larry summers saying he sees a significant chance of the country will face a recession. indeed, joe biden has been on the phone with him, reiterating a u.s. recession is not inevitable. but certainly looking at these markets as far as equities go. asean, these southeast asian countries approach a bear market. that is one in correction. thailand opens up in about one hour. it is approaching the bear market -- no, a technical correction, a 10% move from imts peak. -- from its peak.
8% down. philippine composite already in correction. as we see it underperform against the dollar. comments coming out of the fed, or shall i say, jim bullard, also reflecting perhaps what we have at the moment coming from the reserve bank of australian. yvonne: you have to wonder how much the rba can file the fed with a 75 basis point hike. that is what the speculation is now. what traders are pricing in, that was trimmed down a bit. basically pushing back against any kind of calls that they are going to have to do a three quarter-point hike. 2550 is what they are considering. deutsche bank still saying the cash rate could still get 3.1% by the end of the year. and a recession could happen in 2023. how is that all playing out across commodities?
although today is looking much better when it comes to iron ore after erasing this year's gains, up about 4% in singapore. brent up about 1%. copper seeing an eighth day of losses as we continue to deal with slowdown concerns. rishaad: let's have a look at these slowdown concerns. we are seeing the glass half-full, if you will. mark cranfield, give us a sense of sentiment right now. mark: traders are certainly looking at these central bank comments very carefully to see where they put their money in the major asset classes. in the past few hours you have been saying there is quite a contrast between what the fed's bullard said and what lowe had to say. the fed is pretty committed to large and aggressive interest rate hikes. probably another 75 basis points to come. the rba today has pretty much
taken off the table. they say they are talking 25 to 50 basis points. immediately will get the attention of equity and foreign-exchange traders. seems as though the central bank in australia is willing to sacrifice some strength in the australian dollar so they can raise interest rates but not by too much to affect it. that puts australia in a good position when it comes to exporting the australian dollar. of course they may be a bit concerned that china is starting to make some moves to try and find sources away from australia for products. so certainly this will play out, you have seen with the ecb as well, they are on a slightly different path from the fed as well. so the euro will be affected by that. all of these contrasts are being taken seriously because we are in a territory where every central bank meeting is very live right now. yvonne: there was an interesting note about food inflation in asia and how could get worse in
the second half of this year. i have to wonder, the rba has been wrong before, whether on yield curve control, rate hikes. how confident should we be that central banks have gotten it right this time? and do you think asian central banks can continue to ignore some supply-side shocks? mark: i think traders are taking all central-bank messages with a pinch of salt. they are seeing this idea of transitory inflation did not work out too well. people are talking about the inflation numbers peaking just recently again. that was not really the case. at one stage we had the fed talking about mutual funds rate around 2.5%. now it will be closer to 4%. it is a very fluid situation and traders are responding to the changes. some asian central banks are in a very difficult place. food is a much bigger component of their basket. their countries rely a lot more on changes in food prices. they will be hit much harder if
we see food prices going up and they will have to be very considerate and the fact you do not want to cause a recession. so if they are caused that hiking interest rates, they will probably go more slowly than what you see in some g10 spaces. they will risk their currencies being weaker, possibly stockmarkets underperforming. but they will not want to trigger a hard landing in their countries, when already the cost of food is very high. yvonne: that stronger fix on the pboc today, did you not expect the renminbi would be trading sideways from here on forward? mark: i think that is the message from the central bank. they are happy to see dollar yuan calm down, not go anywhere too spectacular. you can see the option market has cooled down quite a lot as well. there is a lot of work for the chinese authorities to do in trying to reestablish growth in the country. they have a lot of credit issues
to address. they want to make sure the banking sector does not take on too many bad loans. the last thing they need is high volatility in the currency. they would like to push that into a corner where it is not part of the big picture and just focus on the things they need to get done. rishaad: mark, good stuff. you can follow his musings and all the day's tradings on the terminal on mliv . yvonne: when you talk about recession risks and china demand picture, how is that being impacted, you are seeing in much better picture than yesterday. we snapped out of seven or eight days of losses. iron ore is slightly higher and dollar-yen as well. although we talked about how in the last couple sessions we have a raised the gains we saw in 2022. let's bring in martin ritchie, commodities reporter. we are seeing more of a reprieve today. what do you think will be
driving commodities for the next few weeks or months? martin: there is a little bit of a tick higher today but for metals in particular, i look at the broader picture which is slightly more thick. we have seen copper, the bellwether of global economy, come down from above 10,500 to below 9000 of the moment. it has been a pretty tolerant quarter so far for copper. the two major things going on our the demand slowdown in china and the prospects for the second half of the year have been very uncertain. we do not know how key industries like car making for copper, air conditioners, and some of that state spending the grid or infrastructure -- it is uncertain how all that will come through and lift copper demand. on the other hand you have all
these inflation worries around the world and monetary tightening. this is the kind of environment that copper just does not like. so things are looking a lot less positive than they were at the start of the year for copper. rishaad: just give us a sense of what is happening with the chinese real estate sector here as well. we are talking steel production. you made an allusion to that, can you expand on it? martin: that is right. let's take a look at two numbers. property sales in china down 40% year on year in may. steel production down only 2.8% from very high levels a year ago. that is just a rough snapshot, but it shows this mismatch we have at the moment between steel production, which is very
important for iron ore, and between the very important downstream market of housing construction. until that property slump eases, there cannot be a really powerful rally for iron ore because property is such an important part of the mix, much more than infrastructure even. yvonne: mark ritchie on the latest on commodities. we were just talking about food inflation. they came out with an interesting call. this could look worse than what we are seeing right now. rishaad: particularly when it comes to southeast asia countries. we are looking at these prices weekly to heat up. said to be the sharpest price increases according to the japanese lender. yvonne: there are a lot of questions. there is a lag effect from where you are seeing food costs and
the impact to asia. we were talking to mark about how, can asian central banks see this continually, or the second round effects begin and they have to hike rates to try to damper down food pressures. rishaad: a lot of these are also bought and dollars. the dollar is much stronger. yvonne: they are saying 9.1% for food inflation in india. 8% for singapore. so those are flashing some warning signs for them. let's get the first word news with paul allen in sydney. paul: the ecb president christine lagarde reiterated policymaker's plans to raise interest rates in july and september to fight rising inflation. speaking to a european parliament committee, she also said work is underway on a crisis talk for the euro region, without giving details on how it is supposed to function. she told lawmakers she is confident the economy can keep expanding. >> russia's unjustified aggression towards ukraine is severely affecting the euro economy and there is still high
uncertainty. but the conditions are in place for the economy to continue to grow and recover further over the medium term. paul: russia has overtaken saudi arabia as china's top oil supplier. that is as beijing continued to snap up russian energy products last month including a record quantity of crude worth nearly $7.5 billion. the increase comes as the wharton ukraine continues at other buyers shy away from russia's shipments. chinese demand also improved as virus restrictions loosened. the owners of hong kong's floating jumbo flooding restaurant say it capsized as the crafter began taking on water due to adverse conditions. the restaurant first opened in 1976 and in its heyday could seat more than 2000 customers. it was towed out of hong kong last week from an undisclosed location after being forced to shut down during the pandemic. 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. on paul allen. -- i am paul allen. this is bloomberg. rishaad: let's look at what we have coming up next. short-term volatility will remain high as investors weigh risks of further rate hikes as well as slower economic growth. this is bloomberg. ♪
summers this morning. and there's nothing inevitable about a recession. >> the main risk here is that inflation expectations could become unmoored as they were in the 1970's, unless the federal reserve, the central bank, takes credible action. and if we didn't do that, we could get a new regime that would look more like the 1970's. you would have high inflation and volatile inflation and volatile performance. yvonne: that was st. louis fed president jim bullard and president biden on the u.s. economy. so yeah, you continue to hear more hawkish talk on the federal reserve. it is a drumbeat to the testimony of jay powell in d.c. wednesday on how he will continue to talk this whole
playbook here. are they going to recommit to fighting inflation? are we going to see another volatile session? if he continues to talk about fighting inflation over the cost of growth. let's bring in fan cheuk wan, hsbc global private banking and wealth. what a week we have had. rishaad: what a year. yvonne: how do you stay invested in this market now? fan: we continue to stay invested but we turn to a more selective and more putin and -- more prudent investment strategy because we keep a neutral stance to risky assets. but we are very much focused on the hedging strategy because we now have the inflation shot from the u.s. and europe. and we expect central bank will turn more oppressive. we expect inflation to go further in the third quarter. yvonne: so risk assets on one side, how do you offset it with the stagflation scenario?
commodities does not seem like that is the traditional hedge for inflation. fan: currently we are overweight on commodity class. we are overweight energy and material stocks. we still believe financial stocks provide some hedge to interest rate hike risks. and we have an overweight allocation to hedge fund focusing on multi-strategy and macro hedge fund. and we think commodity link currency will likely do better the second half of the year. i think the market is not priced insignificant central bank policy rate hikes. currently we expect another 75 fed rate hike in july followed by two more 50 rate hikes. and then we expect policy rates in the u.s. will go up to 3.625% before we may see a pause in policy tightening in the first quarter of next year. as we expect the growth, we see
more substantial slowdown in the next six months in the u.s. rishaad: interest rates going up, a lot of corporate are leveled up. this would expose that. what kind of companies with good credit i'm assuming, arguably good valuation as well, and free cash flow. these are the companies that could perhaps withstand what is happening. fan: our portfolio strategy is very much focused on quality, income, and diversification. and now we're facing significant disruption in the global economy, so we position in quality companies that have the ability to this -- to adapt to disruptive change. those are companies with strong balance sheets, with resilient cash flow. rishaad: everybody else wants to go there as well. fan: not all companies can fulfill this requirement. for this strong and quality
company, with powerful adaptability to this macro challenge will upper from the market and grow stronger in a tough macro environment. yvonne: the second half, are you still thinking it will be much of the same, or should we expect in terms of the macro picture, is inflation going to moderate later this year or do we have to wait until 2023? fan: we positioned for a volatile third quarter because headline inflation in the developed economy, particularly the u.s. and the euro zone, will continue to suit up. so this will bring more volatility to the equity market. but in the bond market, we think bond yields have largely reflected the fed policy tightening pace. and the frontloading of that rate hike has already pushed up bond yields to an attractive level. so we are seeing it value in the short-end medium duration --
short to medium duration of the yield curve. and we think investment grade bonds in five years duration actually looks quite attractive. rishaad: how does the dollar essentially play into all of this, and where do you think the dollar goes next? fan: i think after the sharp appreciation of the dollar, many investors would doubt whether dollar strength could hold in the second half of the year. but when you look at the central bank policy tightening trajectory, the fed is expected to lead in the run of policy tightening. so the ecb, the bank of england, they will continue to lag behind the fed in terms of the pace of rate hike. so we still position for a strong u.s. dollar. and as you can see from asian central bank actions, i think central banks outside the u.s. continue to remain quite
cautious about the impact of policy tightening on growth outlook. yvonne: you still like hong kong and asean equity markets? fan: also australia and japan. the priority of asian central banks is still very much on growth stabilization. yvonne: they will not follow the fed. fan: they would rather stay on the prudent stance in order to defend the growth outlook. rishaad: fan cheuk wan, thank you so much for joining us. hsbc global private banking. lots more to come. equities on the way up, futures helping things along nicely. this is bloomberg. ♪
yvonne: here are your business flash headlines. evergrande says it is actively pushing forward with restructuring work. they have received the resumption guidance from the hong kong exchange it is taking steps to comply, but it cannot yet give timing for the release of its 2021 annual results. the stock has been suspended since march. they have won a reprieve on debt repayments, easing the short term liquidity pressure. the distressed crypto lender battles to survive the cryptocurrency market slump. the cofounder told bloomberg the company will disclose to the public once details emerge on the repayment period of debt. the board if weighing options after a meeting ended without a decision. sources tell us they recommended selling off the company's assets but zilingo's cofounder reportedly made a last-minute pitch for a buyout.
directors will consider both options before another meeting. rishaad: let's have a look at some market moves. i warning about food prices. what do we have? annabelle: you mentioned at the top of the shovel because to the biggest rice bikes get to come in singapore, south korea, and the singaporeans -- and the philippines. we flipped the board and we can check in on airlines stocks as well because we had a very up beat outlook. they are saying air travel will resume to pre-pandemic levels by next year and that will put the biggest carriers into profitability. . we are seeing broad-based gains across the biggest carriers in asia. let's flip the board and check in on the macau casinos. we're seeing them higher, though perhaps a bit of a relief rally because we saw that slump yesterday. essentially macau seeing a resurgence in covid cases. 36 new infections on monday afternoon.
casinos still open neighboring on the mainland shuttering the border. certainly the fundamental picture stacy same. finally let's check in on the biggest real estate developer is the mainland. another local media report also here in play. essentially what we are hearing is mainland officials say could be considering extraordinary measures to boost housing demand in the city. yvonne: hbcu saying that is a long-awaited policy push. coming up, onshore renminbi bonds are better positioned than offshore dollar bonds due to policy diversions. more of that next with eric
right now we have essentially the japanese markets being pushed up by the impact of the yen's recent weakness, and perhaps they have been looking at the recent selloff and wondering if it has gone far enough. pricing concerns. some companies open support the topix. we've got stocks expected to have an upward revision from the weakness of the yen as well. so that is a look at what is going on there with the yen at 135.10. and treasuries too, we had a holiday yesterday. yvonne: a bit of a catch-up story when it comes to yields. the u.s. 10 year at 328. the fed testimony on wednesday to contend with as well after the fomc stuff. and of course we heard some pretty bullish -- i should say hawkish comments from bullard overnight as well. markets wise, things have calmed down a bit, but asean trouble as
of late. annabelle: that retreat we have seen and treasuries setting the stage across asean. most moves to the upside. thailand still shot for another 30 minutes. but effectively the moves in treasuries is calming investor sentiment. also seeing some weakness in the dollar. still, it could be short-lived. we have taiwan approaching your market territory. the rest of the markets in the correction phase. let's bring up the terminal. speaking of malaysia, i want to bring in focus what has been the worst performer. done at the bottom, top glove, losing around 60% year to date. that is a significant drop. it has been really driven by the weakness in demand we are seeing for ppe gear. switching the terminal, let's check in on emfx as well, because we have seen that. it's the dollar that is the focus here. we have course still have the
chance of a much more aggressive fed, and that puts pressure on asian central banks. specifically in terms of needs to support their own currencies and of course to curve inflation. rishaad: yep. of course fx rates at the heart of all this. let's get to our fx rates strategist. the singapore being the best performer so far. does it -- is it likely to remain that way for the rest of the year, david? david: yeah, think there is a good chance it is. the reason being is other central banks focus on interest rates. it is a very open economy so it focuses on the exchange rate. it looks at the singapore dollar effects rate and looks against a basket of currencies. it does not trade against a currency, but a basket of currencies. it's trying to control inflation.
if look at core inflation, which is their main priority, it's supposed to pick up again this week to 3.6%, which is higher than what it estimated. so the higher that goes, the more likely tightening will come. if you get a high cpi this month and next month, interbank meeting cannot be ruled off. october is certainly on the cards. if you compare that to other currencies who appear to be performing well, commodities are doing well, bank indonesia is expected to not be quite as aggressive. and you are seeing some bond outflows. you look at other regional peers like thailand, philippines, india, they all have deficits. specifically, or particularly, philippines and india, which are big oil importers. in the case of the philippines, it is not just the commodities, it is also the economy opens up, they are importing more anyway. yvonne: in terms of outflow
pressure, where am i going to see the most stress across asean now? david: stress in terms of fx, the rupee in the pace of will be the two logical ones face on because of the current account problems. while the rupee in india has become a lot more hawkish, in the philippines they are still indicating taking a gradual approach within 25 basis points at a time. when you have the fed hiking potentially 75 basis points moving forward, that interest-rate differential. thailand has the deficit problem but i think they'll will be more hawkish to move forward. the number should improve helping that current account. rishaad: good stuff, david. our next guest is looking at china's recovery from covid lockdowns, saying it has brought back the yuan's resilience. eric liu from harvest global
investments, $200 billion in assets under management. thank you so much for joining us. give us your thesis on that. eric: if you look into it, very well said by daniel, is the fed is hiking. even the ecb is hiking. globally from $13 trillion negative debt, now we only have about $1 trillion. a lot of fixed income investors are just wanting that income. you want to expose somewhere where the central bank is easy, accommodative, and progrowth. a lot of people have been telling me, hang on, yields and china are less than what we have in the u.s. what makes it attractive? the fact the central bank is still an accommodative stance. you want the stability, and the recurring income. yvonne: are you concerned about capital outflows? eric: not so much. since 2015, the nature of the flow into china has been so much different. you have core asset allocators
looking for index plays and core allocation into china. back to comparing from 2015 to now, or even 2018 in the u.s. china trade war, the pace of depreciation has been very different. at the same time now, you have the sense of potentially the u.s. talking about the reduction in tariffs, which is also prone to ethics as well. rishaad: this is it, isn't it? it is not a one-way bet. eric: no. rishaad: and of course the differentials are going to play hugely into this, and allow that will depend on where -- and a lot of that will depend on where we see the fed going. eric: correct. the problem is the fed probably does not know where inflation will go. they have been telling you second half there is a potential easing. i think it will go into a top stance and ease inflation second half of the year. but there is so much supply chain disruption, and at the same time with the war in
ukraine disrupting the supply chains and the commodity prices. so the fed does not have a really good stance. put back into play, asia relatively, inclusive of china, has been hiking a lot because of the progrowth stance. they also want to have a wait-and-see mode. ultimately globally, all central banks cannot really solve the supply chain and food inflation. yvonne: obviously there is a lot of focus last year on high-yield and china. i'm wondering given what we have seen the last few days about more policy support, have you seen enough to get back in that space? eric: we definitely have to see more. there are a lot of different treatments now between onshore and offshore investors. so this is a moment where globally, when a lot of companies have always been relying on refinancing, issuing more debt, not actually making enough to service that debt, those kind of companies we have actually avoided a very long time ago. we talked about evergrande last year. at the same time we have recent issues of other companies having a similar model, even on not on property, but they have been
relying on issue more to refinance, all the ones. these companies because of the lack of easy liquidity, we have tended to be trying to avoid. so this is the year, especially bond investors, you have to pick and choose the right company. does the business make sense? ultimately a lot of fixed income investors ignore that and just take about repayment. but this is a question fixed income investors need to think about more on the equity side. rishaad: give me a sense of how capital controls are playing into all this. if there was a loosening of them, which is highly unlikely to happen for the time being for obvious reasons, how would all this alter in your view? eric: i think question is for the past few years, we have been seeing a big push, that the regulators want to have foreign inflows into china. that has not changed, and we stand by that. we have been seeing the introduction of foreign investors being able to access the exchange market. so it is very pro the foreign investment. your question is more on, are we
going to see more domestic money coming out? rishaad: exactly. eric: the angle to look at it, because we have seen a sharp appreciation the past two years, a lot of domestic investors have changed their mindset as well, because they do not so it is -- do kno -- do not know if it's a one-way depreciation. so we have to look at it from two ways. currency, but also the underlying asset class. does it supply the stability, volatility, compared to onshore assets? yvonne: we have seen four months of bond outflows. are you saying we are not going to see if it? eric: i do not want to say that. i think the question is we have to look at it from a medium to long-term view. when you look into a portfolio and when you see the performance, just year to date, on average, any u.s. dollar portfolio on bond is probably giving you -12% to -15% on
average. so it is probably 3% to 5%. relatively you are still outside on the better range. being a negative return will never be good, but as an asset allocators, you have to think about where is it that you are going to get your stability returns. rishaad: very quickly, aside from more covid lockdowns, what is your biggest fear there? eric: right now, policy uncertainty. because there is the uncertainty in terms of how committed is china to continue with this easing and regulation from lucrative tmt space, how progrowth are they, that is what i'm concerned about. rishaad: eric, thank you so much. eric liu there. ok. we're going to move to sydney and have a look at some of the first word news headlines with paul allen. paul: thanks. rba governor phil lowe says he expect the central bank board to discuss a rate increase of 25 or
50 basis points at their july meeting. he has told an audience in sydney that market rising for a cash rate near 4% i year's end is not particularly likely. he says it may accelerate to 7% in the final quarter and will only ease early in 2023. >> in those minutes you will see the possibility of a 25 basis point increase or 50. in the end we decided on a 50 basis point increase. i would expect we would have the same discussion again at the next meeting. paul: israel is heading for its fifth election in less than four years, with the fractures ruling coalition headed by prime minister naftali bennett collapsing following internal disputes. parliament will be dissolved with the foreign minister to -- israel is due to host president biden next month on his first middle east tour.
conyers -- chinese relators -- one person was killed when a fire broke out at a plant in shanghai saturday. earlier this month, a fire at another plant left two people missing. officials said the assonance -- the accidents fell short of standards. president of the philippines, ferdinand marcos junior, has appointed himself agriculture secretary. it is a rare move that gives him direct sponsor bodhi for food output. he's pledged loans in modern machinery for agriculture workers to boost food supply and bring down prices. the last time an incoming philippine leader assumed a concurrent role in cabinet was in 1998. 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 paul allen. this bloomberg. yvonne: airbus says it cannot
strong. >> there is massive demand. if i can get more aircraft into the air, i will do it. >> demand will probably remain in place for the next 18 months, two years. >> we have the upslope from continued covid recovery. >> there is a very deep need for traveling that has been contained for two years. >> internationally we are only at 50% of pre-covid levels and demand is a lot greater. >> we have a situation where people have built up savings, but you are also dealing with inflation rates we have not seen. >> the aviation ecosystem is still, as you said, suffering from some of the same staffing challenges we are seeing in other sectors too. >> the problem is you have demand cannot be serviced. does that mean demand is going away? possibly but not entirely. >> the outlook remains very positive. yvonne: all right. the best of the best in aviation at the iata in doha, discussing
the resurgence in air travel. rishaad: let's get more now from airbus, which says it is seeing record demand for airlines, particularly single aisle aircraft. the ceo speaking to us from doha. guillaume: when we look at supply versus demand on the single aisle we are ramping up now, most of the scenarios, demand will remain higher, stronger than supply. so it is a supply constraint environment for us on the single-line. we are hoping to get back to 65 we had just before covid. the system is existing, but it has been idle for two years. so it's very difficult to get there, especially with the global situation on the marketplace, the supply trains disrupted. it is very difficult to ramp up. in 2022, we want to ramp up by 20%. then we go to rate 75. so i think demand will remain
higher than supply, so it is a race on supply. we're working very hard to stick to our trajectory. if at a point in time we will have to fate -- slow down, we will face the reality. but at the moment we stick to our plans. >> where the biggest concerns? we're hearing you are currently experiencing issues with energy manufacturers. there is a suggestion that aircraft are being built without engines being available. a, is that the case, and b, is that were the biggest problem will lie? the joke is you bolt an airplane onto an engine, not the other way around. is that where the real concern is going to lie, that marrying of engines and airframes? guillaume: it is a consequence of other reasons. engine makers are facing the same problems we are facing and these are difficulties across the board. it is not the situation we have
one commodity that is a problem. we see across the globe the same problems on supply of chips, small components, wires, connectors. we see shops that were closed for 1.5 years having difficulty to ramp up because you do not find the people, the skills in number. that is across the board. so everybody has difficulties to get their suppliers to deliver on time. and it is a very complex supply chain. that is what we see for engine makers and also for airbus. now, the fact we are missing engines, that's at the moment one of the -- we're starting to build gliders in 2018, meeting plans without engines. that is a situation i do not like. engine makers are telling us they will recover in the second half of the year. that is why we take the risk to build plans without engines in limited numbers, with the
perspective to get engines at a later stage and being able to serve our customers. again, demand is very strong. guy: a couple of related but unrelated questions. i could not help but see you sitting next to -- at dinner last night. you have had your issues with qatar recently. guillaume: it is a complex matter. i do not like to be in that situation with one of my main customers, so we are working hard to try and resolve, but it is not an easy situation to manage. i want to remain optimistic and think we will find a way forward. as you have seen indeed, the relationship is good between the persons, so the organizations need to find a solution. guy: you are a ceo who has many jurisdictions, most in europe. the politics of europe seems to be getting more and more complicated. it just got more complicated overnight with parliamentary
elections in france that we have seen the results for. it looks like mr. micron will not have -- mr. macron will not have a majority. guillaume: i will not comment too much on france because as we just discussed, i have not had time to look at detailed reserves and i do not yet understand fully what the consequences will be. but yes, the landscape in europe is very complex. europe is complex. but we see complex situations in major countries in europe that does not make our life easier. rishaad: the airbus chief executive guillaume faury speaking with our very own guy johnson. a lot more on the way. looking at the yen and comments coming from a rather influential individual. this is bloomberg. ♪
yvonne: a quick check of the latest business flash headlines. mondelez has agreed to buy u.s. energy bar maker cliff. the chicago-based maker of oreos and cadbury chocolates will acquire the cliff luna and cliff kid brands for $2.9 billion. further payments may be possible. ceo resigned following a fuel price increase that angered brazil's president and prompted
calls for a congressional inquiry. he had been fired in may and named a replacement. rishaad: we have got finance minister suzuki speaking in tokyo alongside the current prime minister. they are talking about having a responsible fiscal policy management, talking about a concern surrounding the recent and sudden weakening of the yen. saying foreign-exchange moves like this are undesirable. we got them to also say they will take appropriate reaction on foreign-exchange if necessary. it is the foreign finance which intervenes, not the bank of japan. he goes on to say they will continue to collaborate with the bank of japan. sudden moves are undesirable and inflation responses measure size, timing, not set yet. yvonne: we were just talking to harvest about, look, it is not
quite time to get back into the chinese high-yield space. a clear example here today, this record retreat in their dollar bonds. we continued that plunge after the record weekly selloff last week. this goes to show the stress we're seeing in high-yield going beyond property developers, but spreading to china's weaker borrowers as well. 2025 bonds, that's not at $.61 on the dollar, $.55 on the dollar for the 2027 bond yield. moody's putting the firm on review for a downgrade as well, but certainly you are seeing more stress in the junk bond market in china. rishaad: let's have a quick look at what is happening with stocks and other asset classes. just taking a look at generally equities moving to the upside. having a look at treasuries after that holiday for juneteenth in the states.
we have a drop in treasuries taken the benchmark 10 year yield towards 3.3%. a report from the reuters news agency that teslas can be banned from china's communist party resort. yvonne: bloomberg will be speaking with the tesla ceo elon musk at the qatar atomic forum tuesday morning in doha. you do not want to miss this interview. we are going to ask him about twitter, tesla, and beyond. plenty more in the next hour of bloomberg markets: asia. stay with us. this is bloomberg. ♪
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rishaad: let's have a look at our top stories. stocks climbing along with the u.s. futures and treasuries retreating. investor sentiment steadying. after last week's global rout in risk assets. juliette: relative calm in crypto as bitcoin holds above $20,000. signs that sellers are exhausted. rishaad: we will be assessing what is going on with indian equities after they have been suffering a three-month selloff. girish pai says he's positioning for capital protection rather than performance. juliette: a lot more calm coming through in equity markets, particularly as we saw that drop in treasuries, sending the 10 year yield to 3.3%. we have green on the screen when it comes to asian equities after eight sessions of losses, while longest losing streak we had seen for asian stocks since the onset of the