tv Bloomberg Markets Asia Bloomberg May 10, 2021 9:00pm-11:00pm EDT
hi. iron ore and copper running hot onyx dictations china will add to commodities alongside expectations for ongoing stimulus. china's delayed census numbers also due out this morning. clues into the future shape of the world's number two economy. and coming up this hour, calling for beijing and washing to reduce unhelpful rhetoric. join exclusively -- we are joined exclusively by the chairman. a lot of data coming through, we talked about producer prices coming out and about a half-hour. we talked about inflation, we talked about breakeven overnight.
we've gone incrementally worse in the last couple of minutes, down 1.1%. the nikkei, couple of markets opening up. gdp numbers in malaysia and the philippines, there are heightened nationwide restrictions to curb the virus spread. the m fx index, a record high. the big story across commodity markets, we will talk about later on in the show. copper, iron or and gold and brent, everything down across the space. it has been a soaring six or seven weeks. speaking about inflation and commodity markets, mark, a lot of people woke up in asia this morning looking at the headlines and inflation expectations, they
are trying it with the tech rally. what do you make of it? mark: there is a lot for people to digest. it is certain giving people a chance to reassess any positions they've been running for a while and seeing whether or not they make sense when you see them, particularly things like breakeven swaps and forward inflation swaps writing at multiyear highs. yet they are saying everything is transitory, you don't have to worry about inflation for the time being, but there's a major inflation record coming up in the united states this week. it's all coming together in a very uncomfortable situation, as you were saying the nasdaq futures taking out some stock losses this morning and in asia as well, just to compound the problem. on issues about the reflation situation, it's a time when you need to be a very good stock picker and you need to be good
at knowing how the yield curve works, particularly the u.s. dollar curve. that's when people with skills in those areas can really come to the fore. it may look as though everything is pretty bearish with equities, but within that position there will be some cyclical stocks that outperform some of the tech companies. but knowing which -- sorting out who is experience and knows cyclicals better than the tech stuff. you look at the way the u.s. curve is behaving, it may lucas though u.s. treasuries are calm -- she may look as though they are calm, but treasuries and swamps are swinging around as well. it's a time for people to look at some specific action and not be too worried about the overall noise of the markets. david: the next question is, when you look at what's happening with the nasdaq, hout
is that affecting growth in the space? mark: we have major tech companies in korea, taiwan, china, and the hang seng index is somewhere that people are looking closely for what is going on. this is an index that at one point was down 30% from its highs after we came back from chinese new year. the hang seng got beaten up pretty badly. it wouldn't be out of the question for us to repeat that kind of decline. everything is working against it, you have china's regulators clamping down on the big companies in china at the same time. it's a bit of a double whammy for any tech company which is exposed to global tech trade but is also looking in china at the same time.
so a big outperform by the hang seng index compared to other major tech parts of the world. it's something the traders in the region will watch very closely. that could be one of the biggest movers in asia today. david: put options surged yesterday. also coming up, inflation numbers coming out of china, the fastest commodity rally since april. 6.5%, 2018 highs. let's bring in our china economy editor. james, what do we expect with these inflation numbers?
james: we're expecting to see that rise again to 6.6%. copper is up, oil is up, chinese goods are much more expensive but they are making chinese exports much more expensive. you had the big spike in shipping costs which haven't gone down, plus the increasing cost of chinese goods, it's another source of tension for world inflation. it's expected to speed up again in april. even food prices, they are expected to fall year on year. even if there is a drop in food inflation, inflation pressures
are still very high and getting stronger in china right now. david: from a drop in food prices, maybe we will see a drop in the population, the census data comes out once in a decade. what are we expecting there? mark: the government came out last week and said there's not going to be a drop in the overall population. is trying to tamp down rumors that were circulating. but there will definitely be in drop in the number of births last year. japan, south korea, taiwan, the u.s., all these countries are facing shrinking or falling populations. 1961 was when the great famine happened. that will bring forward the time when china's population stops
going and starts shrinking. there were state media reports last month on what happens next year. we will see confirmation on that trend later today. china's population is not going to be as big as everyone expected. david: stay tuned for that, it comes out at the top of the next hour. iron ore prices down $16. the exchanges saying they are prepared to punish violations after the massive spike we got early on monday. where do you go as far as risk rates are concerned? let's get over to vonnie quinn in new york for the first word news. vonnie: president joe biden said there's no evidence russia was involved in the ransomware attack that crippled colonial
pipeline. but he said moscow bear some responsibility. colonial expects the pipeline to be viable again by weeks end. a frenzied mood by traders and retailers for alternatives. in india, authorities are warning about an injection that can disfigure facial features and even kill. those who had long -- for long stays in the icu are particularly susceptible. malaysia's prime minister says the country has tightened restrictions across the nation to contain a coronavirus infections. it will be in effect from may 12-june 2. schools will close.
social gatherings are banned. malaysian officials say one mp is suing -- one mpg is suing more companies including jp morgan and deutsche bank in an attempt to recover assets. the finance ministry said 22 civil suits have been filed. it's a latest effort to recover billions after the government successfully recovered $3 billion from other firms. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. david: coming up, an exclusive interview from the chamber of commerce in china.
rise in prices. people are not concerned about the future. >> the market needs a new catalyst to keep that momentum going. i'd be slightly concerned as we move through the summer months that we need to see this momentum keep going. >> it takes many years to build new capacity. you can't just depend on tax to increase demand. that something the world is going to have to get used to. david: experts weighing in on whether the price surge can continue. have a look at prices right now. let's get a broader read here. 3.5% down payment let's bring in james, our energy reporter.
we know what's happening with the equity market in australia. what is driving this higher, above $200, and how far can it go? james: good morning, david. yesterday we had a 10% gain in the futures market. it's acting more like a cryptocurrency than a base market right now. we had a bit of a pullback this morning. i think speculative activity was driving it yesterday. mindful of trading restrictions with trading limits imposed on that market. underlying that, the reason for the strength and iron or, it's been very well documented. part of it is chinese steel mills front running their demand
for or in expectation the authorities will impose tougher environmental standards incur production of steel later in the year. also in the background you've got those deteriorating diplomatic relations between beijing and canberra. australia provides the bulk of iron ore to the market and puts him in an uncomfortable position in terms of commodity exports it sends to china. of course there are limited in their ability to substitute iron ore from australia because there simply isn't the bulk that you can get from anywhere else. brazil is struggling to meet supply requirements itself. that's what's keeping the price so elevated. david: will probably connect this with the copper story.
we are again on the weaker side of estimates. the midpoint of the currency, keep in mind the back strop -- backstop is the dollar on shore. copper, china is a big part of that story. is there anything that can stop copper? james: all the technical indicators are flashing red on this copper rally. i think we'll have to have a pause at some point. the long-term demand fundamentals are well documented. you've got this clean energy transition which to a larger extent is based around copper feeding a lot of the things that go into that transition, electric vehicles, wind and solar turbines, they all need
copper. that is really driving the market. and on the supply side of the ledger, there's trouble meeting that demand. there simply aren't the huge copper resources that are needed because there's been a dearth of development and spending on new projects recently. short-term i think we might have a dip back but long-term we are looking higher at copper. david: james, great stuff. let me correct myself, on shore with a three year high on the back of a weak u.s. dollar recently. let's bring in our emerging market strategist here to talk about it.
what is your team talking about today? simon: we are looking at this pretty keenly. we've had three fixes in a row that have been significant. we have an expected some of the mrs.. we view it as a pretty clear signal from the chinese authorities that they want to slow down the -- appreciation of the renminbi. david: i'm going to bring in things like the effective exchange rate. how much of it is down to dollar weakness and how do you parse what is incrementally you want strength? simon: that's a great question. at least 80% is just dollar weakness. the residual really is positivity on the renminbi that's been driven by the latest -- we saw strong balance of payments being restored in april
after march positive's appointment. for example, trade surplus was better than expected again in april after march positive's appointment. data showed april saw quite significant bond inflows after a disappointing march number. so some of it is about china, but as you say, at least 80% of it is a dollar move. dani: -- david: is there anything that suggests, or is like a case to be made that beijing may look for more forceful gains, or does it just kind of makes sense at these levels? simon: it makes sense at these levels. what beijing will want to avoid is a break to 640. it's widely talked about in the market that they may be stopped
around that level. if we break below 640 in dollar-renminbi terms, you could get a rapid move lower. that's where they should start getting more nervous about the pace of the move. david: simon, we will let you get on with your work. i know you guys are busy there. as we approach the open, have a look at where we are in terms of the move across these futures. there is more coming up. this is bloomberg. ♪
like will open for percent or from percent lower. volume spiking, put options, will talk more in a couple of minutes. a london lawsuit for apple claiming it overcharged 20 million u.k. customers for app store purchases. the claimants call the tech giants 30% fee excessive, the claim filed in london calls for apple, ipod and iphone users overcharged. apple calls it meritless. and the steering will issue could cause a loss of control, involving honda accords made 2013-2018. there were to ask a dean's --
two -- junta said it will cooperate with the investigation while continuing its internal review. look at volumes yesterday, 74 million shares. we will see what happens today. 10 straight days of declines, the lowest level since october. and emerging from the blue line, which is the 12 month price target from analysts. here's a look at some of the forecast for consumer prices, 6.5% is what we're expecting for price inflation. 1% is the estimate, a couple of things were tracking in about 34 minutes from now, the census report should be due out from china. we talk about inflation, tech stocks, and it looks like we'll
seng tech index from the peak. korean markets down 4% or 5%. we will get the inflation numbers coming out of china for april. keep in mind april was the second-best month for commodity prices in the last 10 years or so. keep that in mind. here's the open for you, the opening seconds. we're down about .7% on the csi 200. the 14 day rsi is in the high 40's. what is going up the last few days on friday and monday are volumes. have a look at the hang seng index in the open. we talked about the tech index, we are down 3.5% on that benchmark.
30% from top to bottom right now on that market. we are essentially on track for the biggest drop on that specific index since march 8. we fell 6.4%. inflation number, 6.8%. the estimate for ppi was 6.5%. let me just get a sense in terms of the range of forecasts out there. you did have a couple of economist predicting numbers north of 6.8. i'm counting at least nine or 10 that had a 6.8% forecast. let's get a sense if this is a one-off, what it means for the inflation story and what it
tells you about underlying demand. let's bring in j.p. morgan senior china economist. i'm not sure if you heard me there, but let me repeat that, 6.8%. what do you think? >> it's not exactly surprising, given that we knew there are high commodity prices on the global front so far. what is important going forward is that if you look at the broader inflation picture, you basically have two trends, cpi, slightly below expectations. ppi continues to move up. going forward, the important thing is how does ppi feedthrough to cpi? our baseline is that there will be more impact on cpi but it
should be pretty well behaved. we do have an expectation of about 1.4%. but that means is that ppi is probably going to put some stress and pressure on certain sectors, especially those on the downstream sector because of consumer pricing power. but overall cpi should still be quite stable. then for the pressure on monetary policy for instance from the cpi front, it should still be quite manageable. david: when do you think ppi peaks? grace: we think it will quite likely stabilize going forward in the next two or three months. then where do we trend down in the second half of the year?
but the overall number will still be pretty much on the high side, 6% are potentially higher for 7% for one or two months. david: and on consumer prices for your full-year forecast, 1.4%. how much of that is junior one, demand driven price pressures? grace: that's a very interesting question. for the cpi side, we did have a couple of months of cpi deflation, if you remember, late last year and early this year. if you look at the broader trend, there are a couple of factors affecting that. the most volatile one is pop prices. we've seen the peak which have been on the downward trend. that should be an important factor that will be dragging down cpi. on the other hand is the fundamental consumer demand
which is mostly reflected in the course cpi trend. course cpi has been generally week in recent months. -- core cpi. in that regard, we're looking at consumer demand to gradually recover and to gradually trend up but in a very managed way. david: that's the title of your report dated friday, may 7. what is delaying this, and what gives you certainty or opposes certainty that it is in fact coming? grace: a very interesting topic. if you look at china's recovery last year, we know that the recovery, post pandemic recovery was led by the policy related sectors, the housing market, as well as the export sector.
consumption and services have generally been lagging, partly because of the very nature of policy support from china, which is mostly focused on infrastructure and with impact on the credit intensive sectors. in that sense, consumption and services have been lagging the overall economic recovery. it's lagging, but it is coming. earlier this year, consumption and services somewhat disrupted because of the short-term cross regional travel restrictions, but then by march and going into april, we have seen signs of very decent recovery in those areas. especially with the may 1 legal holiday, suggesting booming domestic tourism activity. going forward with improving labor conditions, growing household income growth, we do
think the groundwork has been laid for further recovery and consumption spending and services sectors. david: and with that improvement, do you think monetary policy and fiscal policy adapts with that? grace: our broad picture for this year is one of normalization, that means consolidation of fiscal policy and gradual slowing in credit growth, along with selected industry policy like some sort of tightening on the housing market policy. without backdrop, that would mean that in the growth picture, you would have some of those sectors which have been more dependent on the policy side last year, like the housing sector and to some extent infrastructure investment. that part would likely
consolidate and slow somewhat going ahead. at the same time, those areas that we mentioned, housing, consumption spending, are less sensitive to policy, would continue to grow along with the broader economic recovery. so what we are expecting is normalization, a partial reversal of last year's easing, and basically bringing the economy back to its potential growth. david: in about 20 minutes, the census report is coming out. we know the demographic profile of china has been slowly deteriorating since the 1990's. what is the key takeaway? grace: to us, for this year, the
growth picture should not really be a problem. the government is looking for 6% growth a bit we're actually looking for 9.3% growth. so it is stable. we are concerned about the medium-term perspective, particularly from the population demographic perspective, in the decline in the birth rate and aging population with pressure in terms of the economy, potential growth, and turning the positive factor for growth into a drag. at the same time the government has committed to double gdp by 2035. that means other parts of the economy will have to grow faster and that probably would mean fixed investment. that means the economic
rebalancing process may be slower than otherwise. so in that regard, this demographic is a very important medium-term issue and the government should take efforts to raise the child birth rate as well as potentially to raise the age of retirement and push ahead this urbanization so they can work for longer years and boost domestic growth in the medium-term. david: grace, always a pleasure to have you. hong kong is doing a lot worse than the mainland, the tech space doing a lot worse than the actual inch mark. attempt straight day of declines. let's get to vonnie quinn new york with the first word news. >> a palestinian militant far dozens of rockets toward jerusalem.
officials saying 20 palestinians were killed, including nine children and 65 people injured. israeli prime minister benjamin netanyahu accused thomas of crossing a redline. -- accused hamas of crossing a redline. and approval to include adolescence 12-15 years of age for the pfizer biontech vaccine. the agency says the decision comes after rigorous review of all the data they have. indian officials tell bloomberg news they are in talks to import covid-19 vaccinations. talks are underway with the state government for as many as
40 million shots. mumbai according to officials is open to any vaccines and will pay extra to maintain supplies. the u.s. is planning a summit with companies impacted by the global chip shortage. the meeting will convene may 20 to discuss ways to bring together chip suppliers and consumers. last week raimondo stressed u.s. is unlikely to come up with a quick fix for the global shortage. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. david: still to come, our exclusive interview with the american head of the chamber of commerce. that is next.
and the annual white paper reduce this morning with a call for beijing to allow for nationals to return to china for work. we're joined by gregor gilligan from beijing. a pleasure to have you on the show -- the white paper is out, is 564 pages. why is it so long? greg: it's long because we want to be specific about what is going right, what needs to improve, and offer suggestions to make that happen. david: let's go with your three policy priorities. greg: we are focused on dealing with the covid challenges, trying to manage bilateral statutes, and then also how we can get our arms around the new
themes which include the reasonably new foreign investor blog, being proposed -- which involves dual circulation, and how american business can fit into that in a way that achieves national treatment. david: since you brought it up, the foreign investment law, that's a great topic. if i remember correctly, that started in january of last year. has it actually improve the way business is conducted? one of the reasons i was brought up was to improve all these different things. what is the update there, from your perspective? greg: in china, law is passed and then it's written. in other words, it is passed in with very broad themes and with objective stated, and then following implementation and
regulations to be determined. so as we move forward, we're trying to figure out where there are additional protections for foreign investment. you would need to naturally offset that, though, with the idea of a state owned enterprise having their own set of regulations. so when state owned enterprise achieve certain recognition of the china government, is difficult to reconcile that there is absolute equity in that relationship for foreign investment. so there's all kinds of things we need to work through to try to specify. david: you would know of all people that things move very slow in china. if you're moving in the right direction, that is a good start. if we measure things from the start of covid, now about 16 months, have things improved, or have they gotten worse?
greg: pointing to the covid impact, we had survey responses at a historical low for profitability. that was about 56% of the respondents. however, on domestic, mostly because of how well china has done to manage the virus here and to contain it, the economy is back on its feet in a robust way, and fairly quickly. much more quickly than anyone expected. so everybody got walloped during the first half of 2020, did much better toward the end of 2020, and has some optimism going forward. but also as to profitability david: david:. that's a good point to bring up. we were just speaking with the
jp morgan senior economist. 2020, you guys point out, was the worst year for profits, particularly when it comes to the consumption side of things. i know it's early in 2021, but is there since that we can completely reverse that this year? greg: i think that consumer remains conservative for 2021 projections. last year, covid related, we saw great progress made by resources in the industrial sector. a big hit on the consumer sector. so i think they are a little shellshocked. we also see that consumers are maybe conservative in their actions, although recent reports in a few days note that consumer activity is picking up significantly. so especially where people can't travel abroad or are less able
to. over a two-year forecast, people are quite optimistic. david: as always, it's a pleasure to have you on the show. the white paper is out a few hours ago. it's a policy prescription or businesses on the ground on the operating environment on the chinese mainland. there is plenty more ahead. keep it here. this is bloomberg. ♪
i imagine she's talking about today. we are maybe expecting some electoral change, stay tuned for that. live pictures from hong kong, carrie lam speaking in a press briefing ongoing here in hong kong. the tech index down 4%, when it comes to the story across the markets right now. you probably woke up this morning and the headline was, inflation is basically turned, inflation trade hitting a frothy part of the market. 4% down today, but over 30% down from the peak back in february.
it's been painful for many investors. there is the regulatory story playing out. another 7% day, it should take you back to october of last year. in terms of data coming out today, numbers from malaysia and the philippines. the worst-performing market in asia, japan is the big story today. two point 5% down on the nikkei to 25. the carmakers are coming out. do we get more clarity in which automaker was hit more than their peers when it comes to the chip shortage? will they talk about that? 2.4 percent down in taiwan. when you look at the currency, the taiwan dollar, the highest
or strongest level since 1997. also coming out later today, commodity prices. brent down about .5%. a little older -- lower on iron or futures. inflation numbers due shortly, in about five minutes from now. 6.5% year on year for april, 29% was consumer prices. and coming up, the seventh census report out of beijing. what will that show for demographic trends? airbnb seems to rally.
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moment, giving us the future of the world second are just economy. >> at the bottom of the hour we speak with -- about his outlook for digital currencies and where the money is going. >> plus, a special investigation. how myanmar's military has created a business empire, making the leaders of the coup almost untouchable. broad risk off moves across the board today, but hot on the terminal is a headline from census data coming out of china here today. the total population rose to 1.4 billion people. that is according to what we heard. rebutting earlier reports the population may be shrinking. a lot of questions on what this means for the growth trajectory of china.
the projections where the population was going to start shrinking in 2030. a lot of questions whether that is going to be earlier. we are seeing the population rose this year. i mentioned the risk off move. inflation angst certainly front and center. chinese inflation data, though it was mixed, did not change the narrative. cpi prices surging for april. you are seeing equity markets selling off, people pulling out of tech with nasdaq futures continuing to fall for a second day. some of these record highs we saw in australia on the kospi, those are off as well following the u.s. tech retreat. we are watching the philippines later on. this is the worst equity market in the world, down from 12%. just goes for that diversion in growth we have seen.
when it comes to commodities, the center of inflation angst, some steam taken out of the rally. oil down 0.6%. gold futures hovering around that three month high. iron ore futures in singapore close to 4% right now after surging to record yesterday. we mention futures in the previous our lower, copper as well. close to records as we speak. goldman talking about the goldilocks scenario in the complex. across yields, 150 eight for u.s. 10 year. yields are steepening and u.s. five year breakevens at 15 year highs. the china 10 year yield at three 13. >> breaking news out of the philippines, another contraction for the economy, 4.2% year on year versus the estimate of 3.2%. this is the fifth quarter the
economy has shrunk. this has to do with that surge in infections leading to tightened conditions, weighing on household consumption, the main driver for the economy. and looking at q2, perhaps it will return to your on your growth. on the back of that, expect the central bank to keep rates on hold at a record low to support the economy. gdp contracting for a fifth quarter. and to china's economy now. factory prices surge or than expected in april well consumer price inflation remains relatively subdued. let's get more from our shanghai bureau chief. your key takeaways, no surprise there. >> the interesting bit is the ppi. the highest since october 2017.
it is faster than 4.4%. it is quicker than the median forecast of 6.5%. it is a bit of a surprise. to our understanding, that is mainly driven by sharp increases in commodity prices. but cpi remains relatively muted. it only increased 0.9%. still slightly below market forecast of 1%. we know that is mainly because of pork prices which is a key element in the china cpi basket, well under control. so what does it mean for global inflation? china is the world's largest exporter to a lot of countries.
the rising factory prices will lead to more upward pressure on global prices as manufacturers start passing on higher prices to retailers. >> we have not seen that quite yet. we are not seeing that pricing power filtering through to the consumer price right now. what does this mean in terms of the monetary policy perspective for china? what implications do we see? >> if prices keep increasing, the pboc will have no choice but to start tightening. policymakers in china have -- the impact on the economy will be muted and that price increase remains generally under control. economists have told us they expect policymakers to slow the pace of credit expansion rather than raise interest rates because they want to avoid too much pressure on that, seeing
significant increase during the pandemic. officials in china have pledged to keep an eye on the raw material prices in order to limit cost to companies. >> thank you. our shanghai bureau chief joining us with the latest on inflation numbers. let's bring in the global investment strategist for -- investments. the chinese inflation story playing into what we have been seeing globally. how are you viewing these numbers, which are going to be scary for the next couple months? >> that's exactly right. we will know about base effects. we were expecting inflation figures to basically rise through the second quarter, now is an addition to that, where there is a fair amount of uncertainty is the impact of
rising import prices well ahead of most estimates. after that, the tentative reopening of many economies and services sectors get back online. what impact does that have in terms of transitioning the leadership from the good sector to the services sector? we may see inflation pick as well. inflation persists longer than we anticipate and bleed through into the third quarter. we are seeing the market reaction to that with five year for instance above 2.5% this morning. inflation next is really the dominant market narrative at this point in time. >> it is not just china. we are going to see that for the restm of emerging markets. anu the question isli at what stage will that impact debt holders and currency stability? >> with domestic demand remaining very subdued, right
across the region, this includes even china, the pricing power is very limited in terms of the ability to pass on those higher input prices to the consumer. margin pressures are rising. we are seeing in the likes of china that differential between ppi and inflation were cpi inflation is only growing wider, pushing 5% to 6% on a year on year basis. that is going to feed through into multiples. we have found that while the lag has lengthened over the past 10 to 15 years, margins started rolling over in china around about 2019. we should expect to see that feeding through into the multiples very shortly. >> we will get more on your call in a bit. sue stays with us.
china holdings briefing on the population census. speakers including the director of -- the seventh population census. the headline this morning was that the total population rose by 5.38%. this once in a decade report was delayed up until now. the numbers were not looking as rosy as china wanted. today we are learning the population did rise in 2020. 51.24% of the population was male. no indication yet on a number of babies born in 2020 as well. something to look ahead to as we focus on the press briefing in beijing. live go is where you go to look at that. bloomberg subscribers go there to check out the biggest stories of the day.
to the first word news, we have vonnie quinn the new york. >> the u.s. food and drug administration has expanded emergency use authorization to the pfizer-beyond tech vaccine. the agency says the decision comes after a rigorous review of all available data. israel outlaws airstrikes on the gaza strip after palestinian militants fired dozens of rockets toward jerusalem. officials say 20 palestinians were killed, including nine children, with 55 people injured. the rocket fire slightly damaged two houses. benjamin netanyahu accused thomas -- hamas of crossing a
redline. malaysian officials say 1mdb is suing more companies including jp morgan and deutsche bank in an attempt to recover assets worth more than $23 billion. the finance ministry says a total of 22 civil suits have been filed, the latest effort to recover billions allegedly siphoned from 1mdb as the government recovered $3 billion from other firms including golden sacks. -- goldman sachs. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. 1mdb as the government recovered $3 billion >> still ahead, we speak to the cofounder and ceo of the world's fourth-largest courtesy -- cryptocurrency strange by volume. -- x change by volume. >> plus, we look at the
director of investment strategy at manulife. it is that inflation angst we are talking about. i have to wonder, what do you do in terms of a portfolio at this moment? what is the right kind of protection? do you have to change the next six months? what is your call? >> it comes down to investment horizon. certainly from a shorter-term perspective or a three to six month perspective. we have been of the view that inflation protection would be prudent. we are not expecting inflation to peak until later on this quarter. the risk is that spreads out into q3. there is also an important distinction between reflation and inflation. what we are starting to see the risk of is stagflation, which is a dirty word in a lot of policy circles, but with domestic demand still very subdued,
suffering the effects of the much more prolonged pandemic than initially anticipated, there is this suppose that reflationary narrative and that is the angst you are seeing in markets currently today. >> in terms of where to put your money, seems like people are just liquidating out of tech stocks. do you think we have taken enough of the froth of the sector, you rotate back into reflation trade? >> we think the inflation narrative has some legs to it in the shorter-term. the rotation back to value remains the right trade. it is how our portfolios are tilted on the dynamic side. that is paying dividends at the moment. >> the questions and the longer term is -- the longer term
perspective, whether we have sustainable reflation comes down to whether you start to see bank lows to deposit ratios rise and whether you see consumption rise. those pre-connections for sustainable reflation's have yet to be met -- preconditions for sustainable reflations have yet to be met >> we are seeing the faangs giving up gains of as much as 4%. >> 4% is a drop in the ocean relative to how far they have come the past 18 months, and even longer if you take a longer-term perspective. we would not get too worried about day-to-day moves. that is consistent with our expectation we would not see a continued rotation of growth -- out of growth into value less than the shorter-term while reflation worries about. >> what assumptions are you
making about the dollar? >> we have expected the short-term cyclical rebound we have seen in the dollar is likely to reverse. we have to look at what is driving that, given u.s. growth is outperforming the rest of the world quite sharply. what we are seeing is the fed is injecting immense liquidity into the market. driving the dollar down from its highs from the end of march. the question is whether the fed is able to continue that extraordinary liquidity injection through the repo market while inflation starts to spike on a headline basis. certainly the longer that inflation remains elevated, the more difficult it will be for the fed to maintain that inflation is transitory. powell rolled out transitory to describe high inflation back in
january, so it does seem to be long in the tooth. a really key risk event in the next couple of months will be the lead up to jackson hole which could be an inflection point in markets. >> that is something we are looking for. how much should central banks in asia look at that and look at the fed? can central banks in the region do the same? >> we have been rather cautious on emerging markets, but we have expected asia to outperform from a growth perspective, the recent pmi numbers have certainly reinforced that view. in regards to inflation, it is very concerning margins are being squeezed and most central banks to appear more concerned about limiting undue tightening and financial conditions from rising market bond yields, the likes of the rba, the bank of korea, they have pushed back in
terms of the rhetoric to try and really contain overtly sharp rises in yields. the question is, the likes of indonesia, the philippines, they tend to dip monetization. whether that is a sustainable strategy is questionable in the face of what we are seeing in terms of margins and reflation concerns. >> thank you for your insight. next, colonial is getting a lesson in the efficiency of ransomware. if such attacks are here to stay -- we will discuss if such attacks are here to stay. ♪
>> the industry understands we are a target. >> criminal networks around the world have incredibly sophisticated cyber capacities to destroy things. >> it tells you how utterly vulnerable we are. we have seen all these examples of ransomware attacks. >> we are preparing for multiple possible contingencies because that is our job. >> the ongoing investments are going to be substantial. >> it will mitigate the impact on and consumers -- end consumers on the east coast. >> if it is prolonged, impacts will be more extreme. >> we are prepared to take additional steps depending how quickly the company is able to bring its pipeline back to full operational capacity.
>> major names reacting to the pipeline hack. it seems like service will be restored by the end of the week. >> the company may be getting help from private cyber security experts. it is facing difficult choices including whether to negotiate with hackers and how quickly to restarted system. su keenan joins us with more. take us through the very latest. >> we do know colonial plans to restart in a few days. we do not know if they plan to negotiate with hackers. the fbi has confirmed the hackers are part of a group known as darkside. bloomberg has learned a small group of private companies helped colonial actually disrupt the ongoing attacks. there were other attacks against two dozen other companies. they were able to get back some data that was stolen which the
sources say was headed for russia. the attack shut down the biggest fuel line in the u.s.. colonial is privately held. it has released a statement saying they have a plan to address the issue that safety is the key issue and they plan to restart by the end of the week. the fbi has said they are working with colonial and are directly involved. >> meanwhile, gas stations say they have run out of gas due to panic buying and low supply. what is the story there? >> gas stations are reporting they are out of gas. residents in these states are no stranger to hurricanes that have knocked out gas lines and cause long lines to form. the concern is it is similar to a hurricane, that colonial will not get the restart in time to avoid immediate shortages. north carolina has already declared a state of emergency. if you look at the price charts,
the outage immediately triggered a sort of short-lived spike in gas futures. colonial trying to get service back online by the end of the week, manually operating and segment of the pipeline running from north carolina to maryland. stay tuned. back to you. >> su keenan joining us with the latest. it is that tech selloff that is getting worse. it started with commodities surging. the catalyst is for tech stocks to continue to sell. nasdaq futures down more than 1%. the kospi already low by 1.5% or more. take a look at the movers. shanghai pharmaceutical rallying after a deal. tencent, one of those names that has taken it on the chin.
more fallout from the ceo deleting the post that was critical of beijing. we have sk i.e. tech surging on its debut. ♪ ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings. or visit and xfinity store to learn how our switch squad makes it easy to switch and save hundreds. ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30.
>> it is 1020 9 a.m. in shanghai and hong kong, 10:29 p.m. in new york. vonnie quinn with the first word news. the u.k. government is pressing ahead with using pandemic restrictions but prime minister boris johnson is urging people to remain cautious. next week, pubs, restaurants and cinemas will be allowed to serve customers indoors. u.k. health officials downgraded covid alert levels to three from four meeting transmission is no lagarde high or rising.
in india, health of 40's are running about a fungal infection seen in some covid-19 patients that can disfigure facial features or can kill. health officials say patients who have been on medication for some time or had prolonged stays in icu are particularly susceptible. india is in the middle of the world's fastest-growing coronavirus outbreak. sources tell us the u.s. is planning a summit with companies impacted by the global chip shortage. they include intel, samsung, samsung, amazon and gm. according to an invitation, converse secretary gina raimondo convened may 20 two is gus how to bring together chip suppliers and consumers. last week she stressed, the u.s. is unlikely to come up with a quick fix to the global shortage. president biden says there is no evidence russia is involved in the ransomware attack that crippled the colonial fuel pipeline. the president says the perpetrators may be based in
russia, and so moscow bear some responsibility. colonial says it expects a pipeline to be viable by the end of the week but warned of potential supply shortages. the shutdown is prompting frenzied moves by freighters to secure alternative supplies. pres. biden: over the weekend at my direction the department issued an emergency order to send restrictions on truck drivers to a lot more field be transported by tanker. we are prepared to take additional steps, depending on how quickly the company is able to bring its pipeline back to full operational capacity. >> global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> take a look at markets read across the board and asia tracking losses on wall street overnight. investors worrying about surging commodity prices stoking inflation.
breakeven at 2006 highs. the kospi retreating from monday's record close. companies in asia tech as a whole down 4%. taking a look at some of those tech companies, samsung electronics down 1.9%. high makes - hynix, after philly semiconductor declined 5% overnight, the biggest decline since march. cryptocurrencies, bitcoin in the money now, doubled in 2021 up three had a percent last year. a cerium up 400 62% higher here today and doge coin, 60,000% the last year. vonnie: elon musk changing things up and moving things around during s&l over the weekend when it came to doge coin. in the cryptocurrencies space
the tokens associated with our next guest have been surging in popularity. the cofounder and ceo of derivatives exchange stx which had her record 400 billion dollars in monthly trading volume in april. the are two years old the exchange, that makes it the world fourth-largest cryptocurrency explained by volume -- exchanged by vile. they pledged a percent of -- fourth-largest cryptocurrency exchange by volume. they also pledged a percentage of their revenues to charity, and donor dated a percentage to joe biden campaign last year. haidi: $400 billion in trading volume. when you look at coinbase it is valued at $80 billion. when you look at all these numbers, is crypto mania getting out of hand? or is a reflection that traditional finance is now essay -- passee?
>> there are two ways you can look at it and think you for having me. there is a lot of leverage in cryptocurrency markets. you have days like today where markets are down 5%. and some cryptocurrencies are down 10% or 20%. a lot of that is the unwinding of leverage. on the other hand, the optimistic take as that, over the last year, the majority of global regulated financial institutions, has gone from thinking they are not going to do anything in crypto, to having a mandate to do something in crypto. most have not done anything yet but are planning to and testing the waters. so there is a real chance of massive inflows into the space over the next few years, as the big banks, investment banks, pension plans, mutual funds, and other institutions, start to find their way into the space. >> yes institutional investors
but it is still retail at individual investors. we heard from a governor saying if you're going to be investing in cryptocurrencies you must be prepared to lose all of your money. >> that is true of anything. cryptocurrency has been more volatile than average sodas a bit more true of crypto than the average asset. i think in general when you put on a financial position that has substantial risk you should understand that risk and not be using more than -- losing more than you're prepared to lose if the market does go down a lot. i think i technically agree with some of what he said but i think he was probably implying a pretty dire tone, about the outlook for crypto which i do not share. vonnie: what do you make of a surgeon these alt coins, doge coins, ethereum, that about china bitcoin, what does -- that
have outshined bitcoin, what does that signal? >> in some ways more institutional and some likely institutions that stuck up on bitcoin over the last year through asset. some are now rotating. , rotating some of their portfolio into ether. the story is confusing and there are a lot of forces at play. the story with doge coin is less confusing. it is the same story we saw with gamestop and similar to what we see with tesla. there have been massive global inflows into, a decent part retail, fueled, like inflows into gamestop and tesla stock, in a decent part by elon musk, and a few other notable backers. it started out as a joke, similar to some of gamestop, maybe. but it very much is not one now. >> right, so it begs the
question is there anything fundamental behind these rallies or is it fundamental? -- or is it speculation? >> nothing beyond the fact that it is a currency. so come on the one hand, no, there's nothing backing it, so to speak. on the other hand, what is the fundamental driver of value for gold or euro, or other sort of assets that have fairly large value that we impart to it by our collective imaginations. that is how a lot of currencies work. it is particularly true with a lot of cryptocurrencies. there is nothing outside of the fact that now a lot of people want doge coin. that can drive value to things. haslinda: you get a sense that investors are adopting a broadbrush to cryptocurrencies? if we take a look at the increasing interest in doge coin, without poser threat to it
-- would that pose a threat to bitcoin, supported by technology people are keen on? >> there has been worries over the years about things making a run on bitcoin and nothing has made a serious run before. i would be pretty surprised if doge coin did. it has gotten bigger but it is not close to the point where bitcoin is. but i do think, and bitcoin does have an incumbency advantage where a lot of people give it value, because it was the first, because it has the most adoption. but that is not something that cannot change. you know, that could change. and although we cannot and to be clear, does coin is nowhere near -- doge coin is nowhere near doing that now but it goes up another tenex or 20 x in the story starts changing a little bit. but it would take more than a retail swell is what i would say, in order for another currency to really challenge
bitcoin, as the biggest cryptocurrency, you cannot just have retail and it. you would have to start to see large financial institutions pouring tens of billions of dollars into it. haidi: do you think this is a good or bad sign we are seeing more of these tokens rise up in particular. and does the larger size of the crypto industry now reaching $2 trillion mean there is perhaps greater systemic risk if these markets pullback? >> yes, i think is mostly a good time for crypto. and the reason is, it draws crypto closer to the forefront of finance. and not just bitcoin as an asset some people invested through alternate means. not just something you find, and some people buy it like a gold hedge. but crypto and blockchain themselves don't see much adoption. that was one path but i think the thing we are seeing now is
more in-line with crypto it self and blockchain itself becoming big. in all of its advantages and disadvantages. with whatever you think, for the world, i think it is probably good for crypto. to your other point, quit -- crypto is not at the systemic point for global financial markets now. but it is getting closer. each year it has gotten closer and frankly you need to see another factor of 10 growth in crypto market cap, for it to really get to that level. but, obviously we have seen close to that in the last year. so it is not impossible, that in the next few years we could get to a point, where you know, crypto plays a significant role in the global economic house. haslinda: we talked about how some people view doge point is pointless. when you talk to some of the funds they say it does not matter because as long as there is volatility, they are interested.
what is the risk from that? >> it could go to zero, to be clear. doge coin, say what you will about it, it is a volatile asset. doge point was -- coin was trading at less than one penny and it is now at $.50. anything you invest in doge coin, i think he should be prepared to lose a substantial fraction of it, if he gets wonky and things go down. i certainly would not suggested as a safe investment. i would not generally give investment advice. but typically that is not the play if you're looking for something safe. a lot of people like the volatility and it has shown upside over the past year or so. while is not safe, i would not say that does not mean it would not have value. just because there is not the dividend stream for it does not mean it will not retain that value. we have seen that an gold is a good example, right? gold's real economic value does
not come from its use as a precious metal in machinery, like most of its value comes as effectively, a store of wealth. that is what the world impart upon it. in the same way, the world has seemed to impart upon bitcoin trillions of dollars of value. there is nothing stopping it from having a -- happening with doge coin. haidi: it has been up from mendez two years for you and you are celebrate your anniversary and we mentioned the 400 billion dollars in monthly trading volumes you are seeing on the platform now. what is next for you, ipo plans or emanate your thinking of? >> we would be crazy not to be -- mna? >> we would be crazy not to think about those and not to do our due diligence. there is nothing imminent. the other thing is, while we are often happy to talk with prospective investors and while we have made acquisitions. i would not be surprised if we made more acquisitions this year.
there is nowhere on our roadmap of us getting acquired, i do not see that in the future of the company. haidi: we are going to leave it there and thank you for your time, cofounder and ceo of ftx, joining us from hong kong. live pictures in beijing, china holding the seventh population census, the ones in a decade report. we did hear the big headline, the total population did rise to 1.4 billion people in 2020. more details from the census we are learning is they mention how china is the most populous nation in the world and the population growth rate moderated, they say, but still study. trying to bring down concerns that some people have that perhaps the population was shrinking. mention about newborns, half were a second child in 2020. reflecting more about how they loosened the one child policy a few years ago, a slowdown in the population growth, natural, as they say, as the nation
develops. and the lifting of birth restrictions they say, has paid off. still a lot of questions about, at what point and what timeframe we are talking about, when the aging population continues to grow and at what point the population will shrink and the growth of locations for the economy? it seems now policymakers are trying to at least calm down the nerve some people have had. haslinda: that's right and the demographic dividend and some say including pboc, says, perhaps it will be for the next 10 years only. still to come, more on china's latest once in a decade census, and what the data means for the economy. this is bloomberg. ♪
>> china's seventh national census data released a short while ago shows up population 2020 increased to 1.4 billion. but the growth rate is declining and the population aging. haidi: let's get to details with our chief north asia correspondent, stephen engle. or some key takeaways? >> as we have been saying, the population china is growing at its slowest pace since the 1960's. we are having the falling birth
numbers and a graying population and it presents the communist party with huge social and economic challenges. already it has loosened its family planning policies and we got the headline coming out basically saying they think the loosening of those policies, the one child policy, has borne fruit. have to newborns in 2020 work a second child -- newborns in 2020 were a second child and the number is 1.4 2 billion, 72 million more than the last census a decade ago in 2010 which was 1.3 4 billion. in the key demographic here is people over the age of 65 now is 13.5% of the population, over 65 so, potentially out of the workforce, 13.5%. a decade ago was 8.9%. again, this is a demographic challenge that is going to be -- china is facing and going to be facing for some time. haslinda: having said that, how
can china address these drastic demographic changes? >> that is the big question, isn't it? they loosen the one child policy now. they are working perhaps that changing the household registry program, which has cemented many inequalities between rural and urban ides -- urbanites in china. they have to plug those gaps in health care and pension coverage. in china at the iron rice bowl is no longer there for many chinese. and again, you have to look at the demographics for the workplace. they have already switched heavily to on a mason, because factories -- two automation, because factories in china there's a shortage of workers and rising wages. they need to increase automation. but right now the demographic number's are not looking good. because those who aren't 0-12 years of age, those numbers are down. those 13-24, those are down. the key working age 25-44 has
remained flat. the one demographic that is going up, up, up, is 45-84 years of age, those are not key employable ages, obviously, at the later half of that number. so, they have the challenges. and again, the gender inequality. there were 34 million more males in china than females, as of 2020. they are going to have to balance that out as well. haidi: it is not going to be an easy process. steve, our chief north asia correspondent. the china population will peak at some point they are saying, the timing is uncertain. coming up, special report on white myanmar's biggest military companies could be sanction proof. details ahead. this is bloomberg. ♪
reporter has the story. how extensive are the letters economic interests? >> it is interesting -- how extensive are the militaries economic interest? >> some people i talk with talk about the tentacles of the military reaching everywhere. they are involved in important industries from mining to real estate to banking. they produce here, cigarettes and sugar and rice. for some industries like mining imports the military are the gatekeepers in the sector so it is hard to avoid the rate. because of that the u.s., u.k. and eu, have sanctioned the two military conglomerates. because they recognize these businesses provide a big source of income for the forces and top military leaders. so western countries want to make sure these funds are not going, are not contributing to whites but human rights violations. haidi: what was the aftermath of the coup in terms of the fallout, how did that affect the
military's businesses? >> there have been widespread boycotts in myanmar and consumers are not buying goods and services tied to the military. circulating on facebook you see posters and photos of products people should avoid. and supermarkets are no longer carrying them. that includes products produced with joint venture foreign partners like kirin beer. you also see this increased pressure on foreign and international companies. they're all reconsidering their business relationships with military businesses. japan's kirin said they are looking to exit their beer joint venture. a south korea from also said they are planning to exit a joint venture tied to the military. a lot of the concern is they might be working with a business connected to human rights violations and many are concerned about operating a business in this climate of military control and violence.
yvonne: we talk about sanctions but this is a country that is no stranger to sanctions. it was under sanctions for decades and any impact from sanctions on the country? >> you make a great point and you're right, these are renewed sanctions. they essentially freeze assets that these top military leaders and their families and conglomerates may have in western countries. but also effectively, he many western companies and brands from doing business in myanmar for fear that they might be directly or indirectly be doing business with the military. what is interesting is that the asean and asian countries have not imposed such sanctions. because of that the sanctions have limited effect because you do see a lot of asian businesses, foreign businesses, still operating in myanmar at this point. the main takeaway is, as the economy becomes increasingly
isolated and easy foreign copartners withdraw, the military businesses only get stronger and stronger. that is the real fear. >> you can hear more on this story on the terminal and bloomberg.com. get more details and check out its interactive features. >> take a look at markets now before we go. it is looking like a sea of red, a broad-based risk off mood when it comes to equity markets. this csi 300, moderated lower. the rest of the region, hang seng, taipei, tech heavy indices following what we saw in that u.s., the nasdaq hitting it hard, with the inflation angst to that seems to be continuing to rear its head. we saw inflation numbers out of china as well and pbi prices were higher than expected at 6.8%. not relative to cpi prices yet but questions as to whether they were exporting inflation to the rest of the world. plenty more to come in "bloomberg markets: asia."
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