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tv   Bloomberg Daybreak Australia  Bloomberg  March 27, 2022 6:00pm-7:00pm EDT

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haidi: i'm haidi stroud-watts in sydney. shery: good evening from bloomberg world headquarters in new york. i'm shery ahn. the white house see's to call for the president of russia's removal. haidi: the global bond selloff seems to be deepening as traders focus on the yen.
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shery: shanghai looks to stop a spig covert outbreak. pressure this afternoon -- the s&p with gains. we had a rally in the afternoon friday which took stocks higher but it was a wobbly trading week. we've seen significant pressure. oil coming online at $111 a barrel after we saw gains last week for the first time in three weeks. the european union continues its debate on how to wean away from russian energy imports. we had saudi r.g. assets being attacked and that has propelled prices higher. the focus was on that global bond selloff and we might see a little more pressure in this
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week's session as we have treasuries extending declines on friday. we have to talk about the rising yield because with the outlook of the fed tightening faster than expected, the two year yield, the 10 year yield above that 250 level, which is the highest not only since may 2019, but the pace of depreciation is huge, given that it is one of percentage points in the early part of december. haidi: we are seeing the bond share that selloff continue in the asian session. that three year yield climbing to the highest since 2014. the 10 year yield jumping 10 basis points. according to janice henderson, we are seeing aussie bonds with a possible turnaround in the global scale looks overdone. these yields are looking like promising high income to investors. take a look at the equity session.
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we are watching the delivery of the federal budget and how the government is going to wind back on all the pandemic spending. new zealand seeing modest upside and another week where the yen will be in focus. we are seeing not a huge amount of moves but still over 120 -- we've had three consecutive weeks of losses when it comes to the yen and it has been on this divergent story comparing the boj to the fed. shery: given this faster than expected rate hikes and the anticipation we could see more to come much faster in larger amounts, we are seeing the best hope for the fed could be a growth recession. that means it's not an outright contraction but perhaps smaller growth for the u.s. economy than its roughly 1.5%-2% and a pickup
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in unemployment. haidi: the missing piece might comes to the end trading action is it typical role as a haven asset. it has not been that way with the ongoing ukraine and russia war. we are hearing these in person negotiations between russia and ukraine will resume this week according to officials. shery: senior officials looking to clarify this comment from president biden during a speech in warsaw. >> have a brighter future in democracy. the freedom of possibilities. for god sake, this man cannot remain in power. shery: our chief correspondent, garfield reynolds, where are we when it comes to ukraine tensions because it seems --
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it -- for the u.s. and germany, it does and germany, it does not stand for organization. and germany, it does not stand for organization. it is -- --
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saying you should read -- this s -- what expectations, if expectatie
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there this week? >> as usual, we are more usual,a month into this war and
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us bring in the chief economist,
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great to have you, what are your expectations we are your expectations for your budget, especially as the labor market site has rebounded so well out of covid? >> in since of the numbers, what we see is a significant improvement in the deficit, almost automatically if you would like. automatic stabilizers would be payable, much lower unemployment, we have also have the rolling off of the covid emergency report, together, we already know it will take 20 billion off of the deficit in fy 23 compared to the current year at 422. i think the other aspect of the budget is the cost of living and that will be above freight. we have seen an hints of an absence for those on low income and social security report for the other headline measure. along with the usual infrastructure health, another
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spending and targeted support for child care payments. we think the federal government is when to step in. >> speaking of the labor market, and we assume that the tightness translates to wage pressures as inflation has not been as underway here as other economies? >> it is interesting the ways that systems in australia are different to the u.s.. a significant proportion of the workforce are tied into multiyear agreements. the collective bargaining system , we have a lot of workers who are subject to the national minimum wage and that gets reset once a year and we have a public sector who sees much higher prices than the private sector. it will take time for that group to see their wage growth accelerate. while the private sector is starting to show positive
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momentum, if you are one of the high demand skilled jobs, the overall picture will be slower. it will take a bit longer and that does explain more and less why the rba do not feel the need to move right now when in contrast we have the fed talking about moving progressively over the next few months. haidi: we have runaway inflation here at a four-year high. some economists saying that perhaps a growth recession is the best outcome for the fed. we do not actually go into a contraction, what are your expectations? >> that would be the goldilocks outcome, that they were able to raise rates from here, and we see a slowdown in momentum which is what they want. they say that the economy is running very hot. above full employment, above capacity. we need to slow it down. slow it down just enough to tame
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inflation but not too much to generate a recession. whether or not they can get that, we are looking at the numbers as they come through through the end of this year. it would take him for any time -- kind of monetary tightening to come into the system. if we are going to come i think we will see some of the indicators flashing orange or even write towards the end of this year. -- red towards the end of this year. haidi: how much does commodity prices benefits, -- how much does commodity prices benefit? >> this is what is interesting for australia, it is quite a
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different story. the spillovers to commodity markets, for commodity producers generally, this is what we call national income positive. even though we have cost-of-living
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provide the support on the payments. it is a bit of a different story here, looks different and it gives more space and ways of offsetting the negative impacts. haidi: good to see you back, we have plenty more to come on daybreak australia. this is bloomberg. ♪
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seeing they yields climbing to the highest in more than seven years. the three year yield bouncing 11 basis points in australia, we
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play catch-up with friday's tumble in treasuries. 10 years surging by 11 points on friday. we are seeing interest rate hikes from the federal reserve over the remainder of this year. shery: at least one day as the city tightens virus restrictions, shanghai begins the lockdown of the eastern part of the city for mass covid testing. the rebuild cause for the chinese markets at other parts of asia and europe. surging energy prices in china's economic recovery. the biggest oil refiner posted $11 billion in net income, double the 2020 estimate. coming up, our next guest says
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despite ukrainian dissent, it is not waning -- says despite russia's attack, ukrainian is not >> we have foure
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censures and we are working on those sanctions. we are aware that there are some loopholes that are possible and we have started to ensure that we are able to close those loopholes. >> we have agreed to low polls e discovered circumvention's that some have tried to take and do everything within their
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systems and make the loopholes impossible. shery: sanctions on russia. germany's ambassador to the u.s. says that it will end reliance on russian coal by september of this year. the use of oil by the your and -- year end. >> it is change in german thinking. the higher connectedness when considered to be part of the stability. i think that putin's war against ukraine has helped that notion. we understand now that getting ourselves energy independent from russia is a requirement. it is a requirement for our national security.
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the announcement that you have mentioned just before, the american president, energy and exports to europe, that would be the huge part of that picture. that estimate says it may replace about one third of the energy imports in germany and europe from russia. our thinking is right now, they german economic minister said he wanted to/all imports from -- slash all imports from russia. we want to get as far as we can, totally from russia by the end of the year. markets may take a slightly
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longer time, we want to be free of energy dependence from russia. shery: we know the economy minister returned from carter. -- qatar. can you speak to us about nord stream one, is germany willing to hold purchases from that pipeline? >> we are focusing on gas. to be free of gas we are not able to do overnight. it is the auto market. we are determined and we are doing a lot to be able to replace gas imports from russia. you mentioned lng practices in qatar, in the emirates, we are
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talking to norway. we are taking the announcement of the american president, in germany. we are altering the architecture of our storage. we are accelerating renewables. all of that is designed to cut off our dependence on gas imports. shery: ukraine says talks between is negotiating team and moscow's will resume in turkey this week. this is as russian cities protests russia's occupation. this has drawn a stark rebuke from kyiv. good to have you with us.
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what referendums have to do with the negotiating of a peace deal at this point? >> i think holding a referendum would be very much in keeping with the kind of presidency that we have seen from the ukrainian president. he was elected on a platform of being an ordinary person who would not rake themselves above the citizenry about making decisions about the country. he needs to take searcy public opinion within ukraine at the moment -- take public opinion within ukraine at the moment. a poll showed that more than 80% of the ukrainian population do not wish to lose any territory under any peace negotiations. 80% of that says that for crimea, even higher for the
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western -- eastern populations that are occupied. they do not want to lose any territory. shery: how much of that determination is being reflected in ukraine's defense? >> i think it is completely reflective. you see the resistance not only within the military, it is understood now that putin seriously underestimated the capacity of the ukrainian military. the civilian defense has been remarkable. that both i refer to also showed that 90 tree -- 93% of the ukrainian population believes that ukraine will defeat russia. president zelensky needs to take into account that this war has been taking place for eight years, there were soldiers
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already killed in the eight years preceding. ukraine has constantly stated that those are occupied territories. they are not breakaway territories. they are occupied by russian and russian proxy forces. that history needs to be taken into account as well. shery: the extraordinary level of impassioned defense from civilians on the ground, and makes a high-level negotiator definition of neutrality or compromise even more difficult? >> i do not believe so. i think at some point, he will be able to get some ground. for example, he has said that he is prepared to reconsider ukraine's aspirations to join nato. he says that he has also been
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saying that there needs to be real security arrangements for ukraine. just a few minutes ago, i listened to his most recent address to the ukrainian people. he reminds the population that he is not considering seating territory -- ceading territory. that made you mean a different arrangement, an arrangement outside of nato which he has previously referred to as well. haidi: as we see a level of damage control over the comments that were made by president biden in that speech, we are hearing the president responded to a reporter's question asking for clarification. rest by saying that he was not calling for a regime change. how do you read the commentary and the support that the west
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has given? is this narrative useful? does the west need to change it has been giving ukraine? >> this support has been good but clearly not enough. i think we see a mixed message in that statement from president biden. the comment on the surface appear to be a call for regime change and then the white house took a step back from that. that kind of inconsistent message does not assist ukraine. we see more leadership coming from poland at the moment. the polish prime minister has ramped up the discourse in defense. even the idea of sending some forces. the polish prime minister has actually stated recently that he cannot allow the threat of
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nuclear weapons to stop us from acting. that, i believe is a strong statement. the leadership we have seen coming from poland together with other eastern european countries does seem to be more consistent. i do agree that some of the united states needs to take that kind of approach. shery: we have seen the huge humanitarian toll that this ongoing war in ukraine is taking at the moment. your family is from ukraine. you are also feeling the emotional toll that is taking on your family members. tell us about what you are hearing on the ground, especially when it comes to pushing back against the russian invasion. at the same time, russian people do not seem to understand what exactly is going on given all of the disinformation movement that
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we have seen in the country. >> you are correct that the vast majority of the russian population will not be understanding what is genuinely occurring in ukraine. the ukrainian president gave -- spoke to russian journalists for more than an hour in russian. it as only -- part of me -- pardon me. it has only just been announced that press conference that he gave with the russians will not be allowed to be aired. certainly, subject to state control. russia does not understand what is going on. you mentioned my family, it is a very distressing situation for me personally. my family comes from a city in the northeast.
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unfortunately, it is becoming the new -- that is food shortages, at the moment, 60% of the city has been destroyed. 60%. what i am also being told by contacts that are still in the city is that the archive, the kgb archive, the archive which revealed the atrocities committed by the soviet union is being burned. books on ukraine's history are being removed from libraries and burned. we are see the attempts at versification -- russification. a young man has remained in the city voluntarily, to fight and defend his city.
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his wife and young children are now evacuees in poland. they are awaiting, thinking about their next step. shery: thank you for joining us at this time, we have breaking news. they came in group ceo has tended his resignation, he was part of the australian gaming counsel as well and previously had been the cfo and the executive director of star entertainment. we are hearing that he has abandoned his rigid selection -- resignation. there shares have been falling or the lowest -- at their lowest. sydney casino has concerns about a gaming license that could be in jeopardy.
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we did here at the start of the proceedings, looking to determine the casino's ability to run is flexible operations in sydney on the first to our public hearings. they had accepted hotel payments made with chinese debit cards and then transferred funds to gambling accounts instead. we are hearing that he has stepped down. let us get you to first word news. >> president biden is expected to propose a new minimum tax aimed at billionaires when he unveils the budget on monday. it calls it a billionare minimum income tax, a 20% tax on households worth more than $1 billion. it would gather new revenue over the next decade. china is walking down shanghai four masked covert testing at reporting more than 2600 cases on saturday. the city owes you 5 million
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people -- has a 25 million people. the same period following that, the president at a public -- the presence at public transport will be suspended. a case that has contributed to tensions between beijing and cameroon. the trial will start on thursday. a woman is charged with life in prison, she has already been detained for 19 months. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. haidi: coming up next, investigators find the flight data recorder at the chinese lane crash, it has been submitted for analysis -- plane crash, it has been submitted for analysis. this is bloomberg.
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haidi: investigators have retrieved the second black box from the airline flax -- chinese plane crash. our aviation safety reporter is here with more. what are we hoping that the second black box can tell us?
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>> it will be critical. the second box is known as the flight data recorder. on a newer plane like this, i am told it has as many as 2000 channels of data that it records. everything from speed and altitude, direction of the plane, all kinds of indications about what actions the pilots are taking. how the control problem is moving in the cockpit. the engines and all of that. if it was working, it should provide very fine detail about what happened. they also have the cockpit as well which captures sounds in the cockpit. between the two of them that should give them a good idea. haidi: we know the trajectory of the fall, right? a vertical nosedive that held for 10 seconds before resuming plummeting.
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what are the theories out there of what could have happened? >> we have some data. it is not precise. the plane did plunge at a very high rate of speed. we have data points that are 15 seconds apart. an awful lot that the plane could have done in those 15 seconds. it is hard to know for sure. there have been a handful of accidents in recent decades in which planes went down from high altitudes like that. they include things like control issues, pilots lost control. i am hesitant to bring it up but there have been at least two cases where pilots dove planes intentionally in murder suicides from a high-altitude as well.
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shery: a real tragedy there. a quick check of the latest business flash headlines. asian rbc has been editing research reports to remove any reference to a war in ukraine. according to the ftc, they have stopped language in multiple reports including tooting the world war ii conflict. this is as it joins a closing business in russia. a consortium has been rated by a 60% stake in national risk gas, the deal values the unit at around $13 billion. u.k. company plans to sell as it transitions into a low carbon future. it is one of the largest in the u.k. and includes 7000 colonial pipeline network -- kilometer pipeline network.
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new pay increase ms. -- new pay increases, this follows a round of phrases to match pierce including goldman sachs and deutsche bank. the firm is facing increased competition from biocide and technology companies. this is bloomberg.
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shery: global stocks are flashing the green light for the first time in two years according to bank of america. the buy signal is going against poor investor sentiment. more than 5% of assets are put into cash and pulling out of stocks and high-yield credit. haidi: we continue to see this one a momentum when it comes to the bonds selloff -- one way momentum when it comes to the bonds selloff. the markets could state a recovery. global inflation is being overdone, it means bonds are already closer to pricing in the top of the rate hike cycle and that will boost the odds of a rebound as the court wrote loses steam.
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high yield also from the more income -- small income for investors. turnaround in the sydney session. the global bond rout continuing as eels are sitting at the highest since about 2014 across a three year, eels jumping as much as 11 basis points this morning. the 10 year yield jumping 11 basis points. other than the bond selloff, the steepest of the modern era, again this week. shery: we see weakness on the japanese yen. we are talking after coming back from the worst week since march 2020 against the u.s. dollar. we are watching the yields as well. we have the 10 year yield at about six years already, this is after seeing two weeks of gains against the u.s. dollar, the qe
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dollar is under pressure and falling against others. this is railing to the mid-2020 highs, we have seen a greenback attracting the most haven flows, even more than the japanese yen. the continue to see tensions over ukraine and other geopolitical risks. bitcoin is above 46,000 dollars in the asian session. we have been trading the narrow range after we saw a slew of central banks removing some of the pandemic stimulus measures. the fed is hiking rates. ether also gaining ground. the crypto index was under a little bit of pressure. we have seen a gain of double digits since march four bitcoin -- for bitcoin.
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haidi: daybreak asia is next. the start of trading here in sydney, we watch these bond yields keeping on rising. a lot more to come, this is bloomberg. ♪
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we are counting down to asia's major market open. shery: welcome to daybreak asia. asian stocks set for a cautious start as bond yields job, traders wait risk from fed and the war in ukraine. president biden trying to temper comments about vladimir putin.

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