tv Bloomberg Markets Asia Bloomberg June 21, 2021 10:00pm-11:00pm EDT
ease some of the world's harshest quarantine measures, paving the way for the return of business travel. haslinda: we hear exclusively from the prime minister of india. >> we at reliance have adopted this cold heart of the and are transforming each one of our businesses. yvonne: the markets, it seems like things have stabilized a little bit. it seems like now things are reversing what we saw here. bond yields particularly on the long and are reversing and we have been talking about the dollar as well. look at the nikkei. we are close to recovering the 3% loss per saw yesterday.
mainland stocks have been more resilient. futures have been flat after stocks jumped the most in five weeks. we are still watching what has been going on in these bond markets. that yield curve steepening trade seems to be resuming once again. td securities are targeting 1504 that curb right now. a big swing here. we hit 130 during the asian session. look at the dollar, the drop in the dollar, we are seeing a little bit more in the way of loans for the greenback. the end, that is an exception. we see the yen weakening to 110 .33. we have been dealing with about seven days of losses for the remedy -- rimmon be -- reminbi
right now. -- renminbi right now. >> raising a red flag on inflation, the voices are getting louder. everything from u.s. presidents to former treasury secretary. >> what they are trying to get across is that it is not just the risk of power inflation, inflation is higher. that is for sure. the question is the best the fed does not deal with. jim bullard, speaking in an event today, he want and
inflation is already above 2%. it may move higher and stay there. here is what he said. >> there is upside risk to ablation. -- inflation. we have to be able to react to that and be as noble as we were coming out of the pandemic as we work going into the pandemic. >> let's remember the interview with jim bullard, he got concerned with what the fed is doing. they have to move sooner rather than later. the president also said you have to manage the risk.
inflation at 3%, the fed is going to have to tighten. it will probably hit the bond market. >> you saw the reaction in the markets even hinted at tightening. i don't think they can tighten a lot without negative effects. >> the fed has to start normalizing rates and the bond purchases. he said markets are underestimating the risks there, larry summers, another treasury secretary said inflation is transient. he pointed out in the first five months of the year, inflation is well above 2%. semiprofessional forecasters thought that the year would be just over 2%. he is also calling out the fed.
>> we got his prepared remarks from jay powell. one of the most important things he said was inflation has increased notably in recent months however, it will ease as the transitory supply effects, the transitory effects start to diminish. what kind of questions will he get on that tomorrow? john williams, part of the fed transfer -- triumpherate said that the economy is way off in achieving substantial progress. yes, we see pressures but we need to get jobs done as well before we even think about moving. all of the things we have heard for so long. maybe that is an indication of the things that jay powell said tomorrow. >> global economics policy editor kathleen hays, you can
also turn to your googler -- bloomberg for more on jay powell's testimony. vonnie, you have headlines. vonnie: this is what we are hearing from the bloomberg scoop. three large chinese banks have decided not to roll over maturing loans as of june of 2020 having combined ¥46 billion. decisions were made before those bonds began tumbling at the end of may and they have resulted in the bank's internal risk assessment. several big china banks. you have to wonder what this all means right here, right now as they deal with these debt lows. yesterday, we saw this pop substantially after a long supporter of the billionaire founder of ever grand stepped in and bought a stake in one of the
property units. does this kick the can forward and for how long? that will be the key question. haslinda: that is right. still down about 40%. morgan stanley investment management had of risk control strategy, andrew, good to have you with us. we had 48 hours after the fed comments. where are we in these markets? >> i think that is the whole point. i think the reason for that is the fundamental investors. when the bad news comes out, all you have left our investors --
the market goes down there. they are not providing direction. >> if you take a look at the reaction that we saw after the fed decision, the nikkei drop of about 4%, we had the yuan drop, not like the kind of reaction we saw back in 2013. our markets pretty supported with all of that tapering? >> i think tapering is clearly bad from a fundamental perspective but also from valuations. all of these things are quite negative for the market outlook. i think what we have also seen -- i think they are sitting on their hands and that is why we
are not getting the direction that we would expect. >> are questions about that tapering. what areas or asset classes do you look like that are potentially the most vulnerable to any kind of taper tucks? >> the longer duration ones tend to be the growth assets. the ones that are least vulnerable are the ones most closely tied to the community. that would be financials for example. generally speaking, higher rates are attracted to them to create opportunities. secondly, on the energy side, as the economy grows, energy use rises. i do want to mention that people should be looking at options at this point. long options because volatility down and the chances of the market moving significantly up or down, more than likely down
with the fundamentals, it is attractive when you put long options. >> your stilts -- you are still staying in the value camp. why? andrew: you have to be tied to something concrete. that is growth in the economy. the sectors that benefit the most from growth in the economy and will be more or less protected with the rise of interest rates. >> andrew, it is a dollar strength story. we are seeing asian currencies in the red today. how much momentum is there in this dollar sector? the ust is very important in dictating where equities go from here. >> we have to keep in mind that there is active trade going on
between foreign investors, that is non-us investors who find this attractive. when the fed acted, i think there was a reaction of interest in the u.s. treasuries. that would also benefit the dollar. there are still headwinds against the dollar in terms of the large trade deficit that the u.s. has. a lot of the impact on the dollar tends to be temporary. >> andrew, thank you for joining us from morgan stanley investment management out of singapore. i want to talk more about this fed story. he has a way of letting us know, don't worry about inflation running high, but the fed control it. this came out on twitter with some of these videos, teaching people about what inflation is,
hyperinflation, what the fed can do it -- do about it. you have to wonder what these videos cater to. >> a measuring -- imagine going back to lego and communicating the 21st century bond. in wants to reach the wider american. i guess it goes to -- it wants to reach the wider american. they need to understand the concept of inflation. i love how it ended. don't worry because the fed is there to make sure just the right amount of inflation is there. the question is what is the recommend of inflation? >> we spent decades talking about low-inflation. this is all pretty no -- new for the bankers that are in the industry now. >> president-elect has demented
-- demanded an end to u.s. sanctions. he suggested they were to revise the deal remanded by the top administration. rir -- iran ended a sixth round of new clear negotiations without a breakthrough. they indicated the next talk may the last. beijing's targets for the trade one phase don't even further out of reach. that takes total imports from january of 2020 to almost $157 million. that is only about 40% of the target agreed to in the trade deal. the u.s. says 150 million americans own more than 40 -- over 45% of the population have
been fully vaccinated for covid-19. cases are exhilarating in fully vaccinated states. the highly contagious delta buried -- variant is spreading in southern u.s. states which is lower in inoculation rates than the rest of the country. reliance industries chairman says he plans to reach a net carbon zero goal by 2035. asia's richest person says sustainability is the only option for business. >> we at reliance have adopted this wholeheartedly and are transforming each one of our business plans to be sustainable , circular, recyclable and fully
transparent in social and governance standards. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> still ahead on bloomberg markets: asia, a topic the japanese government says the company needs to pump at least ¥1 trillion into chip developers if it is to revive that industry. >> up next, docent a reprieve. more analysis on going's fall. also, the crypto options boom. this is bloomberg. ♪
>> turning to bitcoin now, it is looking like this in the asian session. seeing a little bit of green here. it has been fluctuating. we saw that big drop. joanna, it is china broadening its crackdown on the token. >> right. the pboc summoned the number of chinese banks and reminded them of the restrictions on crypto activities and that has put a lot of pressure on bitcoin again. it is trading close to the bottom, about 31,000-41,000. >> it is make or break for bitcoin. what are some of the key levels
to watch going forward? >> we are looking at that 31,000 level. it has not hit since the quick drop in may. if it breaks through that, a lot of people think it could see a lot of downward momentum because there is a bit of an air pocket there. it could go to 20,000. early thousand is really key. bitcoin being so volatile, if it gets to 40,000, it could see a sign that momentum is getting better but really, 30,000 is the big deal. >> staying with crypto, that has been a boom in options. it is shaking up trading along the way here. here with more is su keenan. options have been minting money. >> they are now working for a fund called ledger prime. it is 130 million in the
flagship fund. the returns are up next. 76% year-to-date. that's go into the chart of what we are seeing with bitcoin. even with the pullback in may and again, recently. that is a lot of action for derivative plays. at this fund is making options and running systematic strategies like price arbitrage and momentum across multiple platforms. you have to realize there are so many different coins in the crypto universe. whether it is cerium, does going -- ethereum, dogecoin, multiple coins across multiple platforms. the opportunity where the trading desk for the training exists here. you come up with $.11. you could make a lot of money. that is what is happening here.
this is where a lot of opportunity is being seen. a lot of professionals are entering the space. goldman sachs is running some derivative plays on either -- ether. >> to what extent is this option flow running this? >> we are seeing the volume that could drive the rally higher. they can also over exaggerate the retreats. when this happens, you have this driving this option. as this market matures, you will see much more of that. there is also the added complexities. you can see regular trading, it has multiplied exponentially in the derivatives market.
been said to be restricting credit as concerns about financial health grow. it does seem like the banks are getting even more cautious. >> that is the trend. they decided in recent months not to review the loans to the company. the decisions were made at the end of may. >> we talked about the stock rebound. what else can they do at this point? >> they miss it that ever grand is at risk of an eminent --
imminent liquidy crisis. this is the second biggest lender to ever grab which is chinese transfers. they have been reassessing their exposure to the countries. one of the firms no longer considered guaranteed. ever grand right now, we will offload more assets by selling them. the company does have to meet the guidelines set by the chinese government. >> joining us with the latest on ever grand. the top diplomat in china says that he will leave his post soon. he has been the ambassador to the u.s. since april of 2013. a little changeup when it comes to some of these trade envoys.
yvonne: take a look at some of the key did i are watching southeast asia. in singapore the consumer commission is seeking public input on the plan between singapore airlines and ana to assess whether their packs would infringe the competition act. and thailand, the prime asterisk agile to consider the final plan for the phuket sandbox. and the delta strain is seeing governments take action in southeast asia. metro manila mayors are said to tighten restrictions there.
haslinda: broad gains across asia. investors are taking comfort in the belief that any tapering will be done pretty gradually. inflation has increased, but supply-side will abate. the asian and taxes up 1%. in terms of the currency market, dollar strength persisting after having its best week in a year. all eyes on the greenback. we see in the commodities space and a lot of people saying the dollar is overbought. the aussie economy is easing down, up to sense of 1%. in commodities, oil is above $73 per barrel and bank of america is saying we will get to $100 exterior. gold is up by 2/10 of 1%.
that's a snapshot of the markets right now. yvonne: has, we've been taught you about this chip crisis. new research from bain is suggesting that the shortage could last through 2022. let's bring in and hecker, a partner at bain and the americas technology practice leader. thank you for joining us. how do you think this will play out? how severe will they be? when will supply chain resolve itself? guest: great question. we think the semiconductor supply shortage will last longer than we had hoped. our research indicates this could last through 2020 -- into tories when he two. that is primarily -- into 2022. adding supplies is highly expensive. they have been running at full
capacity since q3 of 2020. adding new capacity can take two or three years, and even adding current capacity can take up to a year. even though we are seeing massive investments announced, by players and the governments making big pledges of money to support semiconductors overall, it will take time and large amounts of money to add capacity. our research indicates that to just 5% capacity -- to add just 5% capacity could be $40 billion. yvonne: the global economy is learning the hard way of what it means to be too reliant on one country or one company for chips , like tsmc, like to -- like samsung. could we see a more diversified supply chain coming out of this or to the likes of tsmc and samsung just to beg? guest: it is really complex and
quite global. china, as we have seen for years, has viewed semiconductors as a national priority. now we are seeing a lot of other countries starting to do that. you're seeing big announcements from the u.s., from europe, from japan, korea. they are all talking about how they add resiliency to their semiconductor supply chains. giving -- given the importance of semiconductors to so many markets, auto, consumer electronics, each part of our economy, semiconductors are a part of. the trick is the global nature and highly complex manufacturing process. each country need something different. china has been investing a lot over the years but they still need bleeding edge processing technology, as well as the really complex tools required to manufacture the chips. the u.s., which just made a big announcement on government support, needs more manufacturing capacity. same with europe. they made big investments, big pledges to have more bleeding
edge manufacturing capacity, as well. but each of these countries are reliant on a global supply chain for the equipment, the rare earth. it will be hard for one country to do it on its own. but there is the possibility to add more seville -- resilience into the system so we are not as reliant on one player. haslinda: some people are questioning whether there is really a need to pump and hundreds of billions of dollars in an industry that is already profitable. is there a reason to be concerned? could it eventually lead to a glut in the industry? guest: it is definitely a concern some people are saying. semiconductors have been cyclical in the past. what we are seeing is that they are now in so many end markets. there is so much demand, pcs, automotive, industrial, adding more and more bleeding edge content in their semiconductors. the demand will,. that cost to build these bleeding edge factories is going
up, as well. each technology is getting more expensive. if you want to have a more resilient supply chain and not have everything in one location, to encourage it in your country where you might not have as much infrastructure already in place, i think some of these investments will help broaden that supply base. yvonne: the auto industry certainly was the first to get hit. where you see the next sector within the technology space that will be affected most? guest: we definitely saw with auto parts and we have been talking about that for a while. we've seen a moving into consumer electronics. you're seeing announcement from companies like nintendo, sony, even apple saying some of their new profits -- products will be delayed. or the supply will not be what they would like them to become an because of the shortages. all the markets are sharing the
same supply. auto pushed up some of its orders. it is now hitting across the board. haslinda: we have been talking about the intensifying competition in the space, the u.s. is trying to come in in a big way. is it fair to look at it from a point of view of -- who will win this chip race? guest: there's lots of players out there trying to win. i think we can look at it a couple of ways. pushing forward really benefits everybody. data, ai, it is so broad-based now, the use of bleeding edged -- bleeding edge semiconductors having multiple players pushing forward is a benefit. there are a lot of companies that fell into semiconductors, substrates, rare earth, all the gases that go into the manufacturing. those companies -- there is unprecedented announcements on the amount of capacity capital put into this industry.
those will be winners. overall, having multiple players innovate on the leading edge is good for all consumers. haslinda: thank you so much for your insights. first word news with vonnie quinn in new york, vonnie? >> jay powell is scheduled to speak before the house later on tuesday. rising prices will be in focus. in written remarks prepared for his testimony, he says inflation has picked up at should move back to the 2% target. when supply imbalances resolve. he also remains optimistic on the outlook for on employment, same job gains should pick up in the coming months. the tokyo olympics will have spectators at venues. this number is two to be set at either 10,000 people per event or 50% been your capacity, whichever is smaller. that means japan's national stadium will be at less than 16 per cap astley -- 1/6 capacity
for the opening ceremony. an nfl player has announced he is gay, making him the first active player in the leak to come out. the las vegas raiders defensive and revealed the news on instagram, adding he is donating $100,000 to a nonprofit aiming to event suicide among lgbtq youth. he says he made the decision with representation and visibility in mind in hopes the coming out process will not be necessary in the future. >> i want to take a quick moment to say i am gay. i have been meaning to do this for a while. i finally feel comfort ball to get it off my chest. i have the best life, the best family, friends, a job the guy could ask for. i'm a pretty private person, so you guys know i am not doing this for attention. i just think representation and visibility are so important. i hope that one day videos like
this just are not necessary. 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 a vonnie quinn. this is bloomberg. yvonne: coming up, our exclusive interview with the richest person in interview. he plans to transform every unit in his retail conglomerate. plus we will get his take on the pandemic, as well. this is bloomberg. ♪
yvonne: asia's richest person plans to transform every part of his refining to refill -- to resell empire. haslinda: speaking exclusively to bloomberg at the qatar economic forum, the indian billionaire said the pandemic had put sustainability into the pot -- into the spotlight. i also spoke with him about the biggest challenges that remain in the global recovery. >> the challenges first are really to make sure that we get rid of the vaccination device -- vaccinated by the end of the
year. i think we in india have taken not many steps and we expect by the end of this year, first quarter of next year, we will do very well. but it is the whole humanity we have to make sure that we are all in it together. the second challenge for all of us is to make sure we bring back the economics, particularly in countries which have not had the benefit of stimulus, which have not had the benefit of government money. by really supporting the whole global economic -- economy to come back and grow, so that we are able to grow the whole world in a sustainable way and not only bring back. haslinda: the pandemic has shown
how critical it is to close that digital divide. do you see digital services bridging the inequality gap? what is your exterior is in closing the gap? what are the key experiences -- what are the key takeaways there? >> it must be bridged. among nations and within nations. this is because connectivity and communication have become a sick needs. and also fundamental rights -- have become a sick needs, and also fundamental rights among every human being on the planet. even in india, our prime minister has given a call for additional india. -- for a digital india. we were lucky that we rolled out
a network across the length and breadth of india by 2018. we have always wondered that what we have done without a 4g network across india in facing the corona crisis. haslinda: the pandemic is also highlighted the issue of sustainability. businesses are now increasingly under pressure to commit to sustainability. how do you view that as a business leader? >> my view is we have no option. society, as business, to adopt sustainable business models, to ensure we embrace the model of cleaning energy. it is a prerequisite for our growth.
we have adopted this wholeheartedly and are transforming each one of our businesses to be sustainable, circular. recyclable. i think that is a prerequisite for every business to survive as we go forward. haslinda: would that mean dialing back some of your businesses right now? is that something that needs to be thought of? >> yes, it will mean transforming our businesses and integrating with the future. let's discuss more about the ambitions in the outlook. we will bring in a reporter in mumbai. tell us more about the green ambitions of reliance industries.
they said not carbon zero and 15 years. how achievable is that goal? reporter: in the interview, he's planning to transform every single industry of his unit. it set a target of becoming a net zero carbon company by 2035. that is a shorter timeframe compared to 2050, set by many global peers, including bp. he is very serious about it. he is enthused about this. yvonne: he is also set up h2 in india to help for the push for hydrogen power. she also talks about that digital supply -- he also talks about the digital supply in
india. what is the way forward? reporter: clearly he has laid out things -- the digital divide needs to be bridged. a call for upgrading, plus health care and education. it is the right time to offer opportunities for the whole world, not just one country. this digital divide should be capped within nations and among nations, as well. haslinda: stay tuned for much more from the qatar economic forum, powered by bloomberg. plenty of big names joining the event. bloomberg subscribers can also use our interactive tv function to watch interviews, including a
-- and extrusive chat with asia's richest person. yvonne: great interview there, has. we're checking with movers in the markets. we are seeing a rebound when it comes to risk assets. a reversal we saw after that statement from the fed. we are watching some of these pillion -- poly silicon stocks out in china, some of which a mixed picture, some of which are falling on the back of reports that the biden administration is considering a ban on xinjiang ultra conducive solar panel metals. bright oil is edging about $75 a barrel for the first time since april. upwards of 5%, petro china up 6.7% here. hong kong has some of the strictest a travel quarantine rules in the world. now the city is cutting requirements for vaccinated
campbell focuses on timberland and national resources and has 5.3 point three doing dollars in investments. the deal should be completed in the third quarter. banks like hsbc are ramping up hiring ahead of the well -- the scheme will allow investment across the hong kong, china border and could open up more than $460 million in annual fees for lenders. hsbc is set to hire 300 to 400 people in hong kong, while others are looking at hiring or promoting 3000. four of hsbc's most senior u.s. bankers are said to be leaving the investment bank as part of an overhaul of its new york operation. sources tell us the executives are departing as hsbc plans to revamp its global banking business in the americas to better serve asian clients. and hsbc is in the midst of a global reorganization to grow
its core asian market, which generates most -- generates most of its profit. yvonne: hong kong governments is sure naming meant -- the hong kong government is shortening mandatory quarantine. it is down to seven days from 21. we will hear the details from stephen engle. quite a significant relaxation. stephen: it is, considering they had some of the strictest regular and in place as the rest of the world is opening up. this is something that the jp morgan asia ceo told me, that he was worried hong kong and other parts of asia are being left behind as other parts of the world open up. hong kong is significantly, after a bash -- after a backlash, some frustration that had welled up, is going to relax this. the 14 day quarantine. up to 21 day quarantine. can be reduced down to seven
days for vaccinated hong kong resident returnees. they also must attest positive for antibodies. we also note -- we do not know what the threshold is. is it just a little bit? is it a medium amount? there are still a bunch of variables to be worked out. but there are going to -- but they are going to allow this seven day quarantine in a hotel, even from high-risk places such as the u.s., u.k. u.k., and also medium risk, which includes the u.s., canada, japan, and to singapore, key destinations for hong kong people and returnees. but extreme a high risk and very high risk destinations like result, india, nepal, pakistan, the philippines, ireland, and indonesia will not be included in this current relaxation. as i said, yvonne, there still variables. what happens to children if they are not eligible for a vaccine? can they be included in the same
kind of restrictions or will they have to do to anyone days? that's not tenable, i do not think. i know my 13-year-old daughter would not be allowed in the hotel for tony when days while i am home. also, antibody testing. you need to have the antibody tests before you leave hong kong and it is good for three months. in later of july, they will work out a system where they take but at the airport voluntarily if you want to have that seven-day relaxation. it could be done as of july from the airport. haslinda: another hot topic in hong kong is the situation with the apple daily. what is the latest with that? stephen: we were just listening to carrie lam give her regular weekly address. she spoke quite sharply about accusations that the crackdown on the apple daily is a possible suppression of press freedom. i will read one of the quotes.
she does not agree with that assessment. she says, do not try to accuse hong kong of of -- of using the national security law as a tool to oppress the media or stifle freedom of speech. these accusations are law. while still, there are lots of speculation -- these accusations are wrong. still, there are lots of spect elation in the city. when you have a large pro-democracy newspaper like this with a paid some scriber base of 630,000, 86,000 copies are prettied every day, it has to be that -- it has 2000 employees, but many in the last 24 hours have submitted their resignations. this is five senior editors and executives last thursday were arrested, two of them were charged under the national security law for allegedly colluding with foreign forces. the founder of his newspaper is already serving a 20 month jail sentence for illegal assembly and he is also of course going to be facing national security
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