Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

The dollar gaining some ground after paring losses after that meeting. Fx sellinging asia off, especially the renminbi after reaching may 2019 highs. There are signs perhaps the currency is being overbought. Expecting boj, boe, and Bank Indonesia today. Those currencies and focus. Watching the bond market as well put it did not get adjustments on qe from the fed. We saw the 10 and 30 yield spike coming off a little now but that did lead to earlier the yield curve steepening and coming off a little. We are watching brent crude as well as wti. Also saw off some of the highs we saw overnight. There is optimism for demand but that is also losing some of those gains right now. Tom lets get you up to speed with some of the first word News Headlines and other stories. President trump says a Coronavirus Vaccine could be just tribute it widely as early as october, contradicting statements by some of his top health officials. The head of the centers for Disease Control and prevention told a Senate Hearing a vaccine would not be available until at least march. The nations top Infectious Disease expert told bloomberg he is reasonably confident of a vaccine by yearend. Maybethe end of 2020, november or december, i feel reasonably confident there will be one or more vaccines that will be begun to be made available to the american public. Slumphe World Economic will not be as bad as initially feared, according to the oecd, which revised its forecast up to 4. 5 from a production of 6 in june. The oecd gave big revisions for the u. S. And eurozone, as well as china, which is now expected to grow modestly. It says economies however will still need the support of governments and Central Banks to aid recovery. New zealand suffered its worst economic slump since the Great Depression in the Second Quarter, as a strict nationwide coronavirus lockdown brought the country to a standstill. Gdp plunged 12. 2 in the first quarter, slightly better than economists predicted. However, more pain could lie ahead, as borders remain closed wageurists, and an end to subsidies could see unemployment rise. Sweeping failures by boeing engineers, deception by the company, and significant errors in government oversight led to the two fatal crashes of the 737 max. 275 page report provides the most scathing account so far of the miscalculations that led to 346 deaths and the grounding on boeings bestselling jet. It makes the case for broad changes in the faas oversight of the industry. Yvonne to our top story, bloomberg has learned oracle will get full access to tiktoks source code, but that has not alleviated the administrations security concerns. President trump says he is not happy what he heard about the terms of the deal so far. Lets get more clarity with Senior International editor Jodi Schneider. Tell us what happened in the last couple hours or so. What are the concerns that would exist . To peoplerding familiar with the matter who spoke to bloomberg, this falls short of resolving the concerns that the chinese video sharing app would pose a risk to National Security. Of course President Trump has the authority to sign off on a deal but if he does not feel comfortable with these concerns, he may not. An agreement does remain on the table and escutcheons are continuing and discussions are continuing. But at the same time the president s comments on this could be problematic. He says he is not prepared to until heon anything knows that these concerns are going to be dealt with. He has four days until this decideposed deadline to whether to approve this proposal. Tom the other chinese app in focus in the u. S. Is wechat. Where do we stand on actions against wechat and its owner, tencent . Jodi the u. S. Commerce department has said that wechat users who download the app for personal or Business Communications would not be targeted by that executive order that could prohibit use in the app for some transactions. That had been a big concern. There is a group called the u. S. Wechat alliance who has been seeking a preliminary injunction against that executive order, basically saying the app they use to communicate with family and friends in china and the u. S. Would not be useful to them, that it is so integral to their lives that a ban would be like losing a limb for some users, they cite. It appears the Commerce Department will clarify this next week. It appears that some of those transactions would not be prohibited, those, what they call relevant transactions. Yvonne and also, adding to another front in the u. S. China dispute is this u. S. Crackdown on Chinese Technology theft. What are we hearing from the Justice Department now on the previously sealed indictments of chinese hackers, and the malaysian businessmen accused of intrusion . Jodi this is a fascinating story. It goes really around the world. The Justice Department did reveal in these previously sealed indictments that the attacks facilitated the theft of source code, it said, Software Code signing certificates, Customer Account data, and valuable business information. This is in that intrusion that had more than 100 companies in the u. S. And abroad. We saw targets including software the vitamin companies, computer hardware morning manufacturing companies. And these first indictments came a year ago. Department officials are crediting malaysian authorities for arresting the two businessmen they say conspired to profit from attacks on the videogame industry worldwide. Tom Senior International editor Jodi Schneider in hong kong, the latest in terms of the hacking allegations and actions against wechat and tiktok in the u. S. In a moment we are going to look at policy decisions from the fed and the boj, but later in the show, a look at the global ship sector as the rivalry between beijing and washington turns the industry on its head. Mehdi teeny hosseini will give us his thoughts on huawei, and arm. This is bloomberg. Tom welcome back. Three more years of near zero rates in the u. S. The fed signaling it will not hike through at least 2023 to support the recovery while raising its forecast for the u. S. Economy in september meeting. We believe that particularly is very strong Forward Guidance, very powerful foreign guidance Forward Guidance will we are effectively saying rates will remain highly accommodative until the economy is far long in its recovery. That should be a powerful statement in supporting economic activity. Tom for more analysis we are joined by our Global Economics and policy editor Kathleen Hays. What is the response, what has the reaction been to the fed statement . Kathleen for a lot of people, i think it was a bit surprising that the powell fed made a shift in its Forward Guidance that was clear, that was based on what was announced by jay powell at a virtual jackson hole fed conference about three weeks ago. It is all stemming from moving from inflation target, that 2 , not really moving away from it, but allowing it to be an average of 2 . In terms of Forward Guidance and what they said today, no rate hikes until inflation hits 2 . That is a very clear and explicit thing they had not said in the past. Also, until the economy reaches maximum unemployment, and the fed said it is going to allow inflation to overshoot its 2 target. Everyone figured this is what the fed was meaning in its framework, what was going to do, but this is a very clear statement. Not everyone thinks it is complete. Wasact, charlie foster, who head of the philly fed for many years, he said the fed has the elephant in the room it will have to address. Here is what he said. The real question is why did that happen . Why did they not get it to 2 . And what now makes them think that they can get it to above 2 . In theiroing to change policies and their actions that will get it to 2 . Kathleen fair enough. How are you going to get it to 2 . What is different now . Thepowell accepted, yes, fed upgraded the forecast on gdp and employment. However, he still has a rather negative view of the economy and what could happen in the months ahead. Dowpresident of the dissented because he wants to keep more flexibility. He wants to say maybe we are hitting 2 and the economy is picking up steam, maybe we will have to raise rates. The president of minneapolis had a dovish dissent because he said no, we will not raise rates until the core inflation rate gets to 2 and stays there. That is the measure that takes out food and energy, so that takes makes it a tougher thing to achieve. Overall the Market Reaction was a steepening of the yield curve when jay powell made it clear there is no plan right now to increase purchases of treasuries or mortgagebacked securities. Yvonne we still have a lot of Central Bank Action to look ahead to. The bank of japan is up next in the next couple hours. This is the first decision we will be seeing under the suga era. Will that change what is expected . Kathleen not at all. Not at all. You picture, when it in your head, it is not so much governor kuroda speaking to reporters, the thing that comes to mind first is suga becoming the Prime Minister officially, just this week. Of course he goes into this having said very clearly that he is going to follow many of abes policies. Shinzo abe of course stepped down because of illness, but he said he is going to support abenomics. The number one arrow in that is aggressive monetary stimulus. However, at this point the boj is not seen as doing anything because they have already done so much. They are going to leave their key rates unchanged, they are not going to change the amount of bond purchases. Bloomberg news reporting earlier this week that people familiar with the matter, what is going on, they do not think they need to do anything else because businesses can get credit. Financial markets are stable. Remember, the boj launched in two a big Lending Program to give banks incentive, give them the capital and the incentive to lend to small businesses. So they feel they have done enough. Theres governor kuroda, maybe when he sits down and gives his Virtual Press conference, he will be expanding on something we might see in the policy statement, which is a better view of the economy. And again, if you look at this chart, you can see how the certainly when it comes to the Balance Sheet to the relative size of japans gdp, it is probably the biggest ratio of any of the big three Central Banks. The only thing they will probably expect it to do is reflect some recovery we have seen in the job economy after the negative three quarters of growth. Things are not so bad, they are getting brighter. Yvonne Kathleen Hays with a preview. We also have to remember that bank of an injury bank of indonesia also is coming up. Of volatilearning times for chinese stocks. Were going to ask Raymond Cheng about it. This is bloomberg. Bloomberg. Here is your latest headlines. Snowflakes soared by as much as 166 in its new york debut, given a valuation of more than 70 billion, more than uber and dell. Shares opened in more than double its ipo price after winning rare investment from Berkshire Hathaway and salesforce venture. Snowflakes ipo was a record for a Software Company and the biggest in the u. S. This year. Sonys highly anticipated playstation 5 will go on sale november 12 in the u. S. For 500, matching the price of microsofts upcoming xbox series x. A ps5 without a disk drive is priced at 400. The next announced final fantasy game will be a console exclusive for playstation, a significant coup for the japanese publisher. J. P. Morgan chase is no longer allowing junior sales and trading staff to take uber to work at the companys expense. That reverses a measure enacted early in the coronavirus pandemic to help workers feel comfortable commuting to the office. More workers are expected to resume working in the office with senior traders required to return next week. Lets check in on the markets. It is a day of red on the screen in the mainland and hong kong, led by technology shares. If you look at the hs tech index of the biggest 30 Technology Companies listed in hong kong, down 1. 5 . Nasdaq 100, you are seeing the futures there also lower. The dollar is reflected in the eurodollar cross, currently the euro down. 4 . Offshore currency in china, 6. 7 6 . A bit of pressure on the yuan. The dollar index up more than 2. 2 . Yvonne yeah. That dollar coming back is what has been leading this risk off ter the fed offered it looks like the recovery has been faster than expected, but they things are they think things are going to stall from here. That disappointed the market today. Scott minerd told bloomberg the feds push to keep rates lower for longer will make it virtually impossible to ran bubbles in asset prices. Remaining on hold for at least five more years. The chairman is going to have a lot of pressure on him to define what an overshoot means, what will actually trigger a rate increase. But coming into this, the way the market was priced, we are basically priced for virtually no increase for the next five years. I was a little surprised because im probably more on the bearish side of this. That they would be strong in their commitment through 2023. But the market is clearly priced for that and they did not want to disappoint the market because the last thing they want to see right now is for Interest Rates to begin to rise, especially 10 year notes, which are an important benchmark to price corporate debt off of. Record issuance at the moment. I am interested in your perspective, whether we will ever see an overshoot on the 2 level. Not pricing that in, the 10 year breakeven. Scott it is really interesting. I think that the market may ultimately be surprised. Inflation could come back faster and harder than anyone is expecting. And i think one of the important things about how that would happen is that the number of Zombie Companies it was pointed out in a Research Piece by Deutsche Bank, has now wished about 20 now reached about 20 of the market. These are companies that really should be allowed to go out of business, but one of the things about companies that should fail or be restructured that do not fail, is that they begin to become very unproductive. If we, if companies, suddenly see it takes more labor input, or it takes additional demands on resources, you could start to see pressure there. But thats just speculation. I think the first order of affect is this will drive asset Prices Higher. And while we might have a setback here in stocks over the course of the next month or so, i think we should generally expect to see risk assets go up in price, and Treasury Bonds to even go down in yield. Let me jump in here was something scott may find interesting. There was this question about whether anybody in the fed would predict inflation above 2 in the long run. The consensus is no, it is still 2 . But it appears there are several people who have forecast pce inflation above 2 starting in 2021. Its the first time we have seen anybody do that, but the range now runs from 1. 3 to 2. 4 for 2021. In 2022, the range goes up to 2. 3 and 3. 1 in 2023. Either suggests inflation dynamics are going to change over those years, or it does not square with the idea that you are not going to raise rates, because how you get inflation overfrom 2. 4 to 2. 1 those tewo years isnt clear. That is the range of forecasts now. Scott there are two things. One is the arithmetic of inflation. After we had such a shock from covid and the lockdowns, now we are kind of getting a bounceback. People retailers have had to liquidate big inventories, they were very cautious for the christmas season. I think we are going to see further pressure on inflation over the course of the year. That does not necessarily mean it is a secularized, but it rise, but a secular it certainly means it is a shortterm increase. Tom that was scott in speaking to bloombergs Caroline Hyde and mike mckee. Were going to check in on the markets in terms of what we are seeing. Dollar strength appears to be linked to the comments from jay powell of the fed. He did warn about pressures on the economy. He even adds the fed is pointing to three years of near zero rates. And of course jay powell also came out and talked about the need for additional stimulus. In terms of the yuan, because the dollar is playing into what we are seeing, the biggest quarterly gain for the chinese currency versus the u. S. Dollar on record. Under a bit of pressure on the day, down. 2 . Offshore currency currently at 6. 76. That is a picture over the longerterm. Yvonne yep. Still a lot of people willing to be bullish on the renminbi. Saying the lack of push we see from the pboc means they can still be bullish on the currency. Lets go over some movers we are walking across the region. We will talk, about hong kong on a plymouth numbers set to come out. This will be pretty ugly. 6. 3 is the forecast. That will be the highest on employment rate we have seen since january, 2005. That are0,000 people out of work in hong kong, with this latest one coming out, we could be talking about topping 500,000. Despite the threat of the coronavirus epidemic here has been fading down, under control now, that they are still dealing with a lot of headwinds with the economy. Plenty more to come. This is bloomberg. This is bloomberg. Im Karina Mitchell with the first word headlines. Bloomberg has learned that oracles bid for tiktok remains short over of answering concerns over data security. We understand oracle will get full access to tiktoks full source code and updates to make sure there are no backdoors to access data. It remains on the table ahead of a september 20 deadline. President trump says he expect a briefing thursday morning, u. S. Time. The Federal Reserve left Interest Rates near zero through at least 2023 to help the economy recover from the coronavirus. Willomc said the fed retain Monetary Policy until the u. S. Gets back to maximum employment and 2 inflation. Jay powell called it powerful and determined guidance. We believe particularly this very strong Forward Guidance, very powerful Forward Guidance we announced today, will provide strong support for the economy. Effectively we are saying that rates will remain highly accommodative until the economy is far elong in its economy. A very powerful statement and supporting economic activity. Karina karina the bank of japan meets later on. Suga has been showing off his new cabinet after being elected on wednesday. The boj is expected to keep its stimulus untouched as the country looks to recover from its worst economic crisis in decades. He plans to continue shinzo abes economic policy. Hong kongs government formally protested the trump administrations move to aseling ports from the city made in china as opposed to made from hong kong. They called the move irresponsible and highly inappropriate. Hong kong has made a complaint to the u. S. Trade representative robert lighthizer. Global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. At marketse a look right now. We are at session lows when it comes to asian equities. This sinking feeling seems to be the fed talking about how this economic rebound might start stalling. We need more fiscal stimulus. Asian stocks down from. 8 . U. S. Futures deeply in the red, fow s p futures. The dollar regaining strength, which could be the culprit. Movers we are watching as well. Reports, theyocal to spin off whether its battery business today. Some Retail Investors could be protesting the plan. Also down some 5 and australia. Thean stanley downgraded stock despite acting bullish when it comes to iron ore prices. Hong Kong Exchange city reiterating the bullish view on hong Kong Exchange, saying the further boost could help increase its daily average volume. Lee and man paper in hong kong actually gaining 7 despite the risk off we are seeing in the markets, the most since 2016. Retail sales after we saw much better print in august. That seems to be aiding this view for some of these paper stocks. Lets take a look at how markets are. Lets get more contacts with Raymond Cheng from j. P. Morgan private bank. It seems like the market is really digesting what jay powell said about needing more government aid, and more of a negative tone this morning. But its not just the u. S. That needs more stimulus. Theres talks of additional spending in europe, japan, china. That has died down as well. How much more stimulus to risk assets need now . From monetary loosening, theres definitely a need for a bit more targeted fiscal stimulus. Speaking on china, i think given the increased tensions between the u. S. And china, china feels the need to ramp up rnd in order to spur innovation and digital infrastructure. Going into the next five years, that chinahe view will use catch waivers and a lot more policies to promote better rnd spending trends to catch up on the learning curve. Its not just for Semi Conductors, for a lot of technologies, they want to become more selfsufficient. Yvonne speaking on that theme, jefferies wrote a note that this is one of the best periods for asian equities right now. You have this oldschool recovery of a weaker dollar, lower oil prices, and this digitalization theme playing out as well. Do you agree with that kind of view . Raymond yes. Its pretty much aligned with how the Chinese Government experiences this as well, because opposed to the previous cycle when china would just pour yen,ur trillion traditionally highspeed rail, they have come out with a much broader scope of encz of infrastructure these days. Primarily digital and innovative infrastructure. Even electric vehicles are included in that. Definitely using the next five years to really ramp up spending to invest in these areas. Tom ok, so you have that theme playing itself out. You also have a stronger yuan. To what extent will that foster more demand for chinese assets, do you think . Raymond yeah. In general, like a flat to weaker dollar should be positive for emergingmarket equities, and we think that a stronger yuan definitely is not good for export oriented names. And we have our eye set on just domestic set industries. Be it ecommerce or also digital and for structure, as i alluded to with the two serts of sets of focus is in my point of view. Tom regionally, you are compelled to look at dividend plays, particularly dividend stocks i should say. What are you looking to add in that space . What part of the region has some of the more attractive positions potentially forgetting exposure to dividends . Interest rates are going to be low for longer. We are of the view that some of stockstainable dividend that are of good quality and leaders in some of the relatively Stable Industries including consumer and telecommunications, they have good dividend yield in the range of 5 to 6 . So that creates a pretty positive spread versus the 10 year space. So we are putting constructive on some of the singapore reads and the hong kong names that have been beaten down quite a bit of late. Onwe are primarily focused the consumer and telco parts. Better raymond, so its to focus on companies with strong Balance Sheets, with strong growth process, as you mentioned. Is that better than china trying to move between cyclicals and defensive stocks . Raymond i think it has been a very popular question these days among our investors. View thatll of the assuming rates would stay low for longer, secular stocks will outperform in the meteor to medium to longterm. But valuation has run its course so we are mindful of that. We would recommend a balanced portfolio between secular Growth Stocks and also a good quality value cyclicals. That should be well pushed for recovery post this outbreak. Yvonne what would that entail, the cyclicals . Would you look into more financial names . What are some of the beaten sectors you are looking at . Raymond very selective on the financial side of things because many of us are where of quite a few of the banks are still suspending their dividend payouts. On theare more focused Industries Like insurance within financials, or brokerage that are poised for more ipo activities here in the region. And they are more committed to continuing with their dividend payment. Aside from that, some of the neat names in singapore that are more leverage to data centric will also benefit from continuing toward digitalization, and they are in a much better position for growth. Yvonne Raymond Cheng, thank you for joining us from hong kong. Gives up, Mehdi Hosseini us his outlook for the Semi Conductor sector as frictions between china and the u. S. Continues to shake up Global Supply chains. This is bloomberg. S is bloomberg. Tom welcome back. Nvidias record deal to buy arm is likely to encounter major hurdles. The concern is the transaction will limit competition and unfairly favor arms future owner. The u. K. Government is already considering conditions on the 40 billion deal to save jobs. China has also emerged as a potential hurdle, with the global Times Newspaper seen as a government mouthpiece, urging regulators to treat the deal with caution. Joining us now from San Francisco is susquehanna Senior Semiconductor analyst Mehdi Hosseini. Great to speak to you. What are the challenges around this deal and what does it mean for competition in the broader sector . Mehdi thank you for having me on the program. Obviously, when you are dealing with a deal of this size and sure nvidia and their banking partners have thought through this Regulatory Approval. And im sure they will make a concession if they have to. Think about the next generation of Cloud Infrastructure and what that factories, the deal makes absolute sense. In the nearterm, nvidias products are enabling the Building Blocks for the next generation of Cloud Infrastructure. And then their arm and portfolio armntellectual property offers would enable nvidia to also implement solutions at the to thees, close it application. In the nearterm, nvidias solutions are used for building Cloud Infrastructure, and their portfolio of companies numbing with arm would allow nvidia to have access to the application side. Tom right. So that is the case clearly for nvidia buying arm. But what are the challenges, the risks, the concerns for arms competitors . Is there a way for nvidia to address the concerns of the likes of apple and samsung . Mehdi yes. Of course the concerns are very obvious in limiting competition, but as i said earlier, i am sure nvidia has remedies. They would not announce a deal of this magnitude, the size, not having thought through the challenges that would come up. Challenges would be associated with Regulatory Approval, china has to approve this, and also how nvidia is going to overcome concerns regarding limiting competition. We had to in the 1990s, wintel alliance, an alliance between microsoft and intel, that enabled the commoditization of the computer. The last decade has all been about convergence of communication and consumers that apples iphone introduced. That limited come petition. And apple were able to do that by providing a cheaper solution. I see the concern, and i think nvidia will do that, but ultimately they will minimize competition, but it will help the enduser, just like how wintel in the 1990s and apple in the last decade helped commoditization of computers and smartphones. What does this mean for china chipmakers, then . If arm is owned by a u. S. Andany, is there a chance might be forced to fall under the jurisdictions of u. S. Sanctions . Could arm not sell to some of these chinese rivals . Disputebviously, the between china and the u. S. Is something that we have been dealing with for almost seven years. Is that appleg has been able to increase their market share in china. And there has not really been much of a concern about china retaliating against the u. S. By limiting apple. So i think there is a lot of concern in the headlines, but in reality, i think china needs the u. S. And u. S. Needs china. John is a very broad and large market, and the u. S. , and the longer term, there will be a compromise made. In the nearterm, the political aspect is something that is going to make a very noisy. I am not at politics expert, but i would say in the longer term, they will be concessions because both parties need each other. Yvonne ok. So there could be some concessions. Lets talk through some of these huawei sanctions, where the u. S. Is closing some loopholes and further restricting huaweis access to u. S. Technology. What does this mean for the suppliers right now . At what point are they going to run out of components after the u. S. Titans curbs on tightens curbs on huawei . Mehdi we have known about these loopholes for almost three years. But how interesting that additional restrictions were introduced only two months before your selection. In my opening, and as we have highlighted this in our published research, huawei has been accumulating a lot of component inventories. Opinion,he risk, in my comes from excess inventory, at huawei and at huaweis competitors, like samsung, wework. They have access inventory thinking that huaweis inability to access components would enable them to gain market share, especially with the smartphone. This is something that could backfire. I think there is some double ordering going on. That is a nearterm concern. But in the longer term, i think everything will be resolved. Because we have been dealing with this for three years, and i thereafter the election, will be some remedy. I think the china issue is bipartisan, but there will be concessions made. I go back to apple. How come china has not retaliated against apple . I think there are compromises that will be made, and in the nearterm the risk is from excess component inventories built up, but in the longer term, china offers a vast market that the u. S. Cannot ignore. Tom right. This geopolitical tension is feeding into the need to continue to build out education. You have the cheap sector chip sector in the u. S. Asking for federal support of up to 50 billion. Do they need it . Is that the key ingredient to keep the u. S. Ahead of its peers in the rest of asia . Mehdi i think in the nearterm, both the u. S. And china need taiwan Semi Conductors. Evennk apple, nvidia, amd, like Service Providers microsoft is your, alibaba, they all need this leading manufacturing technology, and they are the only solution for contract manufacturer. In the longer term, the u. S. Will need to become more independent. It will take time. The 50 billion you referenced is for basic rnd. It will not lead to independence overnight. And i think that is needed to enable a second or third source of psmc. But in the nearterm, the only viable manufacturer is tsmc, and the 50 billion is beginning of research that we need to be done to minimize the risk of relying too much on psmc. Yvonne we have to leave it there, but thank you. Mehdi hosseini joining us from San Francisco. Coming up, snow flex sores. The biggest u. S. Ipo this year. Now more valuable than the likes of uber and dell. This is bloomberg. Breaking news. The boj decision, no change expected. The pouncey they kept the 10 year yield target at about 0 . They did revise some things when it comes the assessment a production. Right now they are saying they will keep the long term policy rate at around 0 . They will take more action without hesitation if needed, but they did also upgrade some of these projections when it comes to assessment of exports. This was not unanimous, though. The vote was 81, but they were unanimous when it came to the amount of asset purchases. Just a little bit of tweaks when it came to awarding those assessments. Tom looking at dollaryen, currently at 105, still a bit of weakness on the back of the Dollar Strength. The boj seeing japans economy is still any severe situation. The economic improvement will also be to moderate during the pandemic. Japans economy has started to pick up the boj says, but it will moderate during the pandemic, still any severe situation. We have a line in exports. Exports and production have turned to pick up. We have course have had had a lot of support from the central bank in japan for the corporate sector. Cpi as well to stay negative for the time being due to the impact of covid, and oil prices, which have been around the 40 level. Yvonne yeah. That is something they have to deal with, the potential deflation in japan as well will continue to be the story for the boj. As we were talking to Kathleen Hays about, this is really not about corona, but more suga san. This is the first decision we have seen since he became Prime Minister. Does this change the equation at all for the central bank . It does not seem so, given the fact suga was one of the chief architects of abenomics as well as this whole relationship within the government and the central bank as well. We will likely hear from governor kuroda more about these economic productions. But so far the market is not too surprised. Those Structural Reforms that suga has flagged in terms of the aching sector and telecoms will be in focus in the medium to longer term. We have a few more lines coming out of the doj boj. We will wait to listen into corona. In terms of exports, we have seen a pickup in terms of the boj. The central bank will continue to support corporate financing. We talked about the measures the central bank has gone through to support japans corporate sector. Most economists we spoke to have suggested that have been relatively successful. The boj seeing it will continue to maintain stability in financial markets. More lines coming through from the boj. The currency currently at 105. Yvonne yeah. Some 95 of economists surveyed by bloomberg expected this kind of decision, leaving rates unchanged. Asset purchases also on talked. And of course this is as we hear more coming after suga here. We are looking at more of the structural side of things on what we can actually do to implement some of these reforms. His cabinet seems to be suggesting this is something they are looking in the longterm term as well. Taking a look at dollar assets or dollaryen, they are still on the stronger side around the 105, but weakening on the back of the Dollar Strength which has been coming back on the back of the fed. Pretty much in line with their tone that they will keep being as accommodative as possible. They are still seeing headwinds in the longterm outlook of the economy. That is what we are focusing on. We are going to have more on this in the next hour and more analysis. And what else are you watching . Tom therell be plenty more ahead. We dive into the situation around the pandemic in japan. There is of Course Movement on the vaccine. You have trump saying you will get in october, others in the Health Department in the u. S. Saying it will be more like next year. Plenty more ahead. Stay with us. This is bloomberg. This is bloomberg. It is in most 11 00 a. M. In singapore and in hong kong, im juliette saly. Im rishaad salon a bit of a cautious move out in the markets. Shares warning of an uncertain recovery without fiscal stimulus. Falling nasdaq futures helping to drag down those indices as the doj maintains its policy stance. Get full access to tiktoks source code, but President Trump says he does not like what he has heard of the plan. Look at ones, we sector serving of growth during the pandemic meal delivery. A chief executive joins us for an exclusive interview as they expand into japan. Juliette the bank of japan has just left its 10 year bond target unchanged after concluding its today policy meeting. The boj also keeping the balance rate at 0. 1 . Joining us now is Kathleen Hays in new york. The boj dealing with its worst recession on record. Is todays decision consistent with that . Kathleen i think we have to say it is. Certainly after three straight quarters of negative growth, the worst recession on record, as you said, the boj has to continue to do everything it can to help keep a floor under the economy at very least. The economy has been pushed down a few stories lately. They have to build on some of the emerging signs of improvement they have seen in the economy. They have seen Industrial Production last week. Exports, but the pandemic has continued to weigh on Consumer Sentiment even though Household Spending has gotten a bit better, the boj has to keep firing every single bullet it can and hope that as the new Prime Minister takes office, that at the very least he will do what he has pledged to do, which is put full support behind aggressive Monetary Policy stimulus behind the bank of japan. Fiscal spending, the bank of japan has already done a lot of that. There continues to be more talk infrastructure spending. Then a third era of abenomics and then Structural Reforms. Will he build policies to get more women into the workforce, other things. Right now, the boj is doing what it was expected to do. I think the biggest question is for governor kuroda, if they dont get better as the virus receives which they are expected to do what other policy tools could they event or pull out of that quiver to move ahead . We are showing you this very dramatic chart. Look at the Second Quarter decline. This is what they are dealing with. Interesting to hear what is set at the Virtual Press conference just hours from now. Indonesiahe bank of out with its policy decision. It is a pretty weak economy. Most economists think we will thinkates about 4 , i that is what Interest Rates are at the moment in indonesia. Kathleen as you know, Bank Indonesia has already cut key rates by about 100 basis points, but this will be the second month in a row that they think it is better to sit tight. At a very weakg economy, as well. You can see economies going along pretty well, including in indonesia. Now you are seeing the rate cuts. 100 basis points. , they have had to do with the currency. Right now, the gop is a very big thing waiting on the sentiment. It is not surprising a lot of people dont want to hold it. Another reason note rate cut is expected is because Bank Indonesia has shifted its emphasis a little bit more toward relying on unconventional measures like direct financing of the government deficit. It is also dealing with a government that wants to take a bigger role in Monetary Policy. They want the finance minister on Bank Indonesias board. Maybe the government figures they can do a better job than the team has done and prevent Something Like that read drop you see. You are the weakest growth have seen in indonesia probably since the Asian Financial crisis. Economists are seeing what investors are listening for , any comments they do make about this struggle over central independence, because the move from the government, this proposal in parliament is seen as a potential threat to their independence on policymaking. Right, we will be watching. Kathleen hays, thank you. Lets get the first word news now. President trump says a Coronavirus Vaccine could be distributed widely as early as october, contradicting statements by some of his top health officials. The head of the cdc told a Senate Hearing a vaccine would not be available until at least march. The nations top Infectious Disease expert anthony found she has told bloomberg he is reasonably confident of a vaccine by yearend. 2020, namely of november or december, i feel reasonably confident that there will be one or more vaccines that will begun to be made available to the american public. The World Economic slump wont be as bad as initially feared according to the oecd, which has revised its forecast up 4. 5 from its prediction of 6 in june. They give big revisions to the u. S. In eurozone, as well as china, which is expected to grow modestly. It says economies will still need the support of governments to aid recovery. New zealand has suffered its worst economic slump since the Great Depression in the Second Quarter as a stricts nationwide coronavirus lockdown brought the country to a standstill. 12. 2 , slightly better than predicted. More pain could lie ahead as borders remain closed to end to wage an subsidies may see unemployment rise. Sweeping failures by boeing engineers, deception by the company, and significant errors in government oversight led to the two failed crashes of the 737 max. The report provides the most scathing account so far of the miscalculations that led to 346 deaths and the grounding of boeings bestselling jet. It makes the case for broad changes in the oversight of the industry. Hour, a still at this boom for food delivery companies. We will hear from the ceo of one of the Major Players in the asiapacific area. We are talking about strategy. Juliette lots for markets to digest. Tech names being focused on this year. This is bloomberg. Juliette a quick check on the markets. We are seeing asian stocks in will betures, rates lower for longer at least another three years. A lot of week is coming through intact players. Sengkong hang hang hang one of the biggest lacquers. Little bit of a gain here. Futures holding onto their losses after the bank of japan kept its powder dry, if you will, maintaining asset purchases and the 10 year yield target of around 0 . Lets get analysis on all the centralbank action. Fromng us is our guest Aberdeen Standard Investments and she joins us from singapore. We know a lot of the Central Bank Liquidity has been underpinning what we have been seeing in market action. That brings us to our question of the day, which is essentially how much more stimulus do risk assets really need here . That is a tricky question. We have been seeing a lot of stimulus coming through and i think we have just seen overnight that we are lower for longer for now. I think we have to look at how the recovery of the economy would look like Going Forward in the next few quarters and then we will see whether the central bank will add more stimulus and whether it will result in a different stimulus action . Juliette what we have been seeing is this rally intact . When we had the we chat ban announced by President Trump, you said this was a buying opportunity for tech. Do you still see it as a strong buying opportunity . Pruksa i think we are seeing volatility in terms of Share Price Movement following this announcement. Over the past few months. It is too think about think about structural growth. We look at it, this is valuation of some of these tech stocks. Juliette talk about the selectivity here. What are some of your topics . Top picks . Ks pruksa you look at the top 10 , we dos, it is no secret have different positions in companies we think are Global Leaders in what they do. These would be names like tsmc, electronics in the tech space. The underlying drivers in terms of 5g, the increase in data center digitalization driving the growth of products. That is long term structural growth. Chat ban is a we concerning development, but i think it is part and parcel of what is going on and we have to look at details as they come out. Longterm investments looking ahead with these tensions in place between beijing and washington, things could evolve where we get an even more polarized world. We could have a digital berlin wall. How does that change your strategy . Pruksa i think what you are likely to see over the longterm, supply Chain Security has been brought to attention covid19 issue that broke out early in the year and last year over the threat of u. S. China tension. We are very likely to see perhaps a disintegration of supply chain to a regional basis. ,s long as we align ourselves growth andill have ,he Capital Expenditure names that will be an opportunity, as well. A couple of your top holdings, samsung, tsmc. That could really move the dial and be a big chipmakers,other and china, as well. What is your view of that . I think nvidia is a customer of tsmc and samsung. View, it isint of the shift that happens. It would not be a threat. We are other thing thinking about and watching very closely is the attractiveness about the ecosystem. It is important that the ecosystem remains intact. Should that be the case, that should result in a bigger pie for the whole industry and be beneficiary for everyone. The thing that we got to watch for is how they manage the delicate balancing act of the potential conflict of interest. That is the balancing act that we have to look at how they manage that. Overall inst going addition to what juliette was asking earlier on, are you indulging in any sector rotation . Pruksa not particularly. At ourwere to look positioning, the top 10 positioning across the last year or so, it would be the same names. We are not engaging in much sector rotation. I think we are positioned for the long of these companies that we hold in the portfolio. 2020 has always been about tech, but also health care. I wanted to get more of your insights about the news that we are going to potentially see it partner with oxford. What longterm longevity you see in this stock and other areas you are looking at in health care . It is a name that we have quite liked. In our longterm holding portfolio, as well. Been on theave march. It is something that we are positioned in. Attractiveness that you touched on, the core business is actually in plasma and plasma derivatives. It is a global leader. But the company has done over the last few years is to increase its capabilities, so that allows them to invest in r d to allow them to basically produce more higher valueadded products from the plasma they collect. Theyis a multiyear journey have been doing and they are very well positioned for the longterm, so something we quite like and a vaccine opportunity is something that adds to the investment in the stock. Other health care names we do have exposure to an the portfolio, as well. Pruksa iamthongthong, thank you for joining us. The latest on oracles bid for tiktok. Donald trump saying he will be briefed about the deal, but he is not liking what he is hearing so far. Details next. This is bloomberg. Bloomberg has learned that oracle would get full access to tiktoks source code, but that does not alleviate the administrations security concerns and President Trump happy with the deal. Jodi schneider joins us. Tell us a little bit about the National Security concerns playing into the tiktok deal. Does it look like the oracle bid satisfies the concerns to the layperson and the regulator with whatever responsibility they have . Jodi at this point, there are these do not that that these National Security worries have not been satisfied. President trump speaking to that at a press conference. He said hes not prepared to sign off on anything yet. He was not happy about some things he was hearing about the bid. He has for days until a selfimposed deadline to decide whether to approve that proposal by tiktoks chinese parent bytedance to restructure the video apps Global Operations as a new Standalone Company that would give oracle in and other american investors minority stakes. Worried thats bytedance could still have access to user data from its nearly 100 million users in the u. S. That appears to be the major concern. Officials are wary about that and proposed a new Ownership Structure and how much influence that would give china over the company. Juliette regarding one aspect of the deal and those security concerns, how does it deal with gathering data on users of the video app . Jodi that has been obviously another concern. , whetherhey would users would have to have some worries about that. That is one of the reasons that oracle says this new company would be a way to try to get around that. Oracle would be able to check source code from the algorithms that decide which tiktok videos get shown to which u. S. Users to ensure there are no entry points for the chinese parent. Tocle says it would be able continue to review the technology as updates come in to make sure there are no new points of access to the data. Trying to sell this as the structure working for that protection, but again, the administration is not so sure about that. Know, whatat do we dont we know about the timeline . The 15th of september deadline was a bit of a gray area. There is another deadline for the 20th, i believe. Jodi yes, the clock is ticking here. It is hard to know whether they will be able to get this done in the timeframe. This is a timeline that President Trump set out himself that he wanted this deal done by , even before it was the deal with oracle, that he wanted a deal done or he was going to ban the video app in the u. S. Perhaps it could be extended. President trump in the past with some of the selfimposed deadlines has extended them if he thinks enough is being done, but right now getting all of this done before a deadline is going to be tough. There would still have to be obviously Regulatory Approval in the u. S. , as well. Internationalor editor Jodi Schneider keeping us uptodate in hong kong. A quick check of the latest business flash headlines. Sonys highly anticipated playstation 5 will go on sale on november 12 in the United States for 500, matching the price of the upcoming microsoft xbox. An additional ps5 will be priced at 400 without a disk drive. Fantasy again will be a consul exclusive, a significant move for the japanese publisher. J. P. Morgan chase is no longer allowing junior sales and trading staff to take uber to work at the companys expense, reversing a measure enacted early in the coronavirus pandemic to help workers feel comfortable commuting to the virus. More of the workers are planning to redo resume working at offices, with senior traders required to return next week. Rishaad getting to todays kets and really a moment it was a cautious day. People running a bit scared. The hang seng now 1. 8 percent down. Got u. S. Futures under some serious pressure here. Nasdaq futures down 1. 5 . One point 25 a decline for s p 500. Lets have a look at china as we had to the lunch break. Where wenother story are seeing red, but the big move is essentially what is going on with the dollar. The dollar has been pushing up. It has been acting as a haven. That has broken this winnings fell by the yuan. Weve still got traders pushing the wand for the best quarter on record. That is certainly where we find ourselves. The shanghai composite. A deficit on the day. Look at the market as we head to the china lunch break. That is shanghai and this is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Almost 11 30is a. M. Here in singapore. We are in the middle of the trading day and we are seeing stocks take a little bit of a leg lower amid the risk off tone. Some good news on the export front. Singapores export quickening thanks to rising demand from china. Nonoil domestic exports up from a ago. Toorts surging 10 compared the previous month against an estimate of 2. 2 . Right, lets have a look at some of the first word headlines. Bloomberg learning that oracles bid for tiktok is shy of answering security concerns and chinas ongoing influence. Tocle will get full access tiktoks source code and update to make nor there are no backdoors to access data. The agreement remains on the table ahead of a deadline. President trump expects a briefing thursday morning. Leavingral reserve Interest Rates signaling a hold through at least 2023 to help the economy recover from the coronavirus pandemic. At the end of its meeting, the fomc said the fed will maintain Monetary Policy until the u. S. Get back to maximum employment and 2 inflation. German jay powell called it powerful and determined guidance. Particularve this and strong Forward Guidance that we have announced today will provide strong support for the economy. Saying rateswe are will remain highly accommodative until the economy is far along in its recovery. That should be a powerful statement supporting economic activity. Rishaad the bank of japan keeping it stimulus untouched as the Prime Minister began his first full day on the job. Off his been showing new cabinet. The boj leaving its 10 year bond yield target unchanged and its policy balance rate at minus zero point 1 . Hong kongs government has formally protested the trump administrations move to label imports as made in china rather than made in hong kong. They called the move irresponsible and highly inappropriate. Hong kong has made a complaint to the u. S. Trade representative, robert lighthizer. Lets check out Japanese Equities are returning from the lunch break following the boj decision leaving things unchanged. You are seeing the nikkei holding onto the losses and accelerating those. A little bit of weakness in the end. What we are seeing is a selloff across tech stocks similar to what you saw in the tech index. Down one point 5 after yesterday touching its highest level on record. Watching some movement lower in the aussie. Unemployment unexpectedly dropping in the month of august to 6. 8 from 7. 5 percent. Quite a bit of a jump coming through in the parttime jobs with overall employment surging 111,000 in august and watching what is happening in the rupiah. The Bank Indonesia has its decision today as well, being seen as leaving things on hold because you are seeing this pressure coming through in the rupiah, the weak economy in indonesia caused by the law in and concerns about the banks economy weighing on the currency as well. Rishaad lets have a look at financials. Chinese regulators issuing new regulations which contain risks in the online lending industry. This came from the China Banking and ensuring Regulatory Commission and the new rules follow recent regulatory tightening from the pboc and all this at a time when they are getting ready for the worlds biggest ipo. The biggest ipo in history. Lets get more from lulu chen. What is this new regulation exactly and what is the likely impact, lulu . Lulu essentially what it is is the chinese regulators are curbing a key source of funding for aunt pops ants lending business. The chinese banking watchdog said on wednesday that they plan to cap the use of assetbacked securities to fund quick consumer loans and the new regulation limits. Right now, the Current Ratio stands at 4. 7 times, so that means the Company Needs to cut back and in the future, it could also limit their Growth Potential juliette do we have an update on the ant ipo plans . They are still seeking to raise as much is 30 billion in the ipo, making them the Worlds Largest if that happens. The company is scheduled to have a hearing with the Shanghai Stock Exchange tomorrow, friday, and the results are expected to be announced the same day and then they will have their hong kong hearing within weeks, as well. After that, it is the roadshow in the final listing will come after that. Lulu chen with us in hong kong. Saw a euphoric stockmarket debut that transformed the eightyearold company into a business that is now more valuable than uber, dell, or general motors. Snowflakes worked by as much as 160 6 , giving an evaluation of more than 90 billion. The chairman and ceo was speaking earlier with bloomberg technology. Thee were thrilled with reception. We started assembling our Institutional Ownership a little bit over a year ago, so this is we did lastomething week. Snowflake is a vetted company, so by the time we got to the ipo, there was really High Conviction into buying into the offering. We are thrilled with the way things have gone this week. About shares more than doubling, closed at 253. That said, you left a lot of money on the table. Do you have concerns that you have given the bankers a little thetoo much here . Assumption is always that we could have sold the entire offering at the number we closed at. There is the demand curve. There are always investors but are willing to buy some number. As you know, the ipo is a price discovery process and we were after a very specific set of institutional investors, people that can hold multibilliondollar positions for 510 years and people that dont chase momentum either up or down. That is really how we landed at our price. It is not unusual for price to , so there was a lot of noise to it. The idea that we could have sold a whole thing at the price that we closed out i dont think is reasonable. Lesson said, is there a here for some of the other Companies Looking to go out of the gate . Have huge public debuts expected for some other companies in silicon valley. Any advice . Is hardnow, i think it for people to price a highgrowth asset. Highgrowth assets, how is it going to grow into its valuation . You need to really do a lot of work with investors because they have to make a longterm bet. They need to understand the story extremely well to be able to do that. We were really delayed. We had no sellers. People were hanging on for dear life. Investors are seeing an opportunity here to disrupt iszon because what you offer basically your own version of a data warehouse. What do you have on them . On the wholeve industry is really a product that was built from the ground up. Clean sheet of paper by a group of people who are some of the worlds greatest Database Technology architects. People really understand the architects. One that gets completely redesigned for cloud scale computing. It is something that innovates on multiple vectors at once. You compare that to what other people are offering, they are to look at the software design. They can take advantage of cloud scale. That is what you see going on. We only run on a public cloud. Over theero legacy machine architectures. Rishaad the snowflake chairman and ceo speaking to emily chang. , theyre price really down about 6. 8 . Off theirpinning battery business is a whollyowned business. Spinning it off into a separate entity and seeking to carve that value. The business is going to be called lg energysolutions. It will be separated as of december 1. Of course, there is the possibility that the company will hallowed foreign ipo for the divisions and that will really be decided at a later juncture. Coming up, food Delivery Platform foodpanda launching in japan as part of its asia expansion. We will discuss strategy and the impact of the pandemic with the asiapacific ceo next. This is bloomberg. It is a market some say has underrated Growth Potential when it comes to Food Delivery Services talking about japan where revenues expected to show a growth rate of more than 6 over the next four years. Our next guest runs one of the looting leading for Delivery Platforms in asia and it is making its way into japan. The asiapacific ceo of foodpanda joins us. Competition like in japan . Why the move now . Jakob yes, thanks for having me. We are in the process of , processing japan our very first orders in three cities. We are very excited to be in japan and launched today. We have been observing the japanese market over a long period of time and we are excited to finally launch. You are talking about the competitive landscape. One interesting thing about the Delivery Market is that while on the one hand we see a very tech savvy innovative customer base, actually, the food Delivery Market in japan is still very early stage, particularly if we would compare it to some of the more mature markets like a hong kong, taiwan , or other parts of the region. Therefore, we do see a very large opportunity and a very clear path for food panda to become a key player in japan. Of course this is the right time i guess in the whole covid lockdown world we live in and im sure you have been in a fitting hugely from people being unable or unwilling to go to restaurant. Jakob yes. And manyompanies industries, the covid period has been a very challenging period for us. Of course, there are some effects that we see. Demographics and customer groups which have not been really so open in the past for online food ordering are really starting to forore jakob foodpanda the very first time and this is giving the business a bit of a boost. On the other hand, the covid andod is a very hectic challenging period for us. We do work very closely and rely on our Restaurant Partners and rider networks. The big question is how can we support the restaurant ecosystem to navigate together with us through this very challenging period . A lot of restaurants had to are completely closed for in dining business. Food delivery really kind of represents the only lifeline those restaurants have. It has been a big effort of us to navigate that with our Restaurant Partners. That in ahe thing is postcovid world, you are going to have to contract quite significantly arent you . How are you preparing for that . Jakob you know, food delivery, we got founded in 2012. We have been seeing a very strong growth rate prior to this covid pandemic. While we see a lot of interest and a lot of new and first customers, we are very optimistic. I think it is a more longerterm shift in mindset. People are much more open to this idea of buying groceries, buying food. From the comfort of their home. Can we get a specific figure of how much you are investing on your expansion in japan . Jakob we already communicated this year that we will be investing around 20 million. This was officially the number we put out. Im very confident in saying that this is really only the starting point for us. For very heavy investments not only next year, but also the years to come. We take japan as a market very serious and we are very excited about it. Track record of really identifying and realizing longterm Sustainable Investment opportunities. Japan is really, for us, a very important one. Markets, in your other how are you competing with your competitors . And what set of incentives are you giving customers and your drivers to make sure that they choose foodpanda . In the region,a we are operating in 12 markets including japan. It is a very busy industry. There are a lot of players out there. Frankly for us, competition is something very normal and to some extent something positive. , in our most competitive markets, we are seeing our best business performances. We are quite confident at the moment so far with most of our markets. Theeally embrace competition we are having at the moment. Of course, we do compete on price and discount. Thatpanda has made a point we always want to be the most affordable option available in the market. For consumers and customers, they are much more than that. Consumers nowadays want convenience, they want choice, they want their most favorite restaurants to be available, not just any one. Two years ago, a delivery time of 45 minutes was actually considered something great and exciting. Today, we are really pushing the limits and a country like taiwan, for example, where we are delivering an average of 18 minutes, that is a good choice for the company. Juliette all right, thank you for joining us. The foodpanda asiapacific ceo. Checking in on the Indian Markets in what is a risk obsession as we start to see trade occurring in india. We have been seeing downward momentum. Off by about 0. 4 . Quite a bit of selling coming through in the banks today. So, looking as well what has here, we have been seeing quite a bit of momentum in the Indian Markets. It is a little stronger today. Rishaad coming up, how the feds pledge of near zero rates for the next three years could impact inflation in asset prices. Minarderview with scott s on the way next. This is bloomberg. Coming into this with the way the market was priced, we are basically priced for no increase for the next five years we had five years. Im a little bit more on the bearish side that they would be strong in their commitment to go through 2023. The market is clearly priced for that and they dont want to disappoint the market. The last thing they want to see right now is for Interest Rates to begin to rise, especially 10year notes, which are an important benchmark to price corporate debt. Juliette and corporate debt we get thick and fast. Im interested in your seepective as to whether we and overshoot another the 2 level. Scott it is really interesting. I think that the market may alternately be surprised. Find that inflation could come back faster and harder than anyone is expecting. I think one of the important things about how that would happen is that the number of Zombie Companies that was pointed out in a Research Piece by Deutsche Bank has now reached about 20 of the market. These are companies that should be allowed to go out of business , but one of the things about companies that should fail that dont fail is that they begin to become very unproductive. So if companies are if we suddenly see it takes more labor input or it takes additional coulds on resources, you start to see pressure. But that is a speculation. The first order effect is that this will drive asset Prices Higher and while we might have a setback in stocks, we should generally expect to see risk assets go up in price and Treasury Bonds to go down in yield. Somethingjump in with that scott may find interesting. There was this question about anybody in the in the fed would predict inflation above 2 in the long run. The consensus is that it will be 2 , but several people have forecast inflation above 2 starting in 2021. It is the first time we have seen anybody do that, but the range runs up to 2. 4 up to 2021. To2022, the range goes up ,. 3 and 2. 1 again in 2023 which suggests that inflation dynamics are going to change over those years for it does not square with the idea that you are not going to raise rates. How do you get inflation down over those two years is not clear. We dont know how many people are making these two things. Just the arithmetic of inflation after we had such a deflationary shock with covid and the lockdowns, now we are kind of getting a bounceback. Retailers have had to liquidate big inventories. They were very cautious in orderings for the christmas season. I think we will see further pressure on inflation over the course of the year. That does not necessarily mean it is a secular rise, but it is a shortterm increase. Rishaad that was the guggenheim global chief Investment Officer scott minerd speaking to Caroline Hyde and mike mckee. A quick look at the markets. The dollar is coming back as a haven asset. It is putting some of the other currencies under pressure. Euro breaking a twomonth low. The you want also declining by 0. 3 . Still on course for a record quarter. Bank of japan moving down with the yen. Against the greenback. Have traders, we covering some of the short positions perhaps a bit less dovish than they expected and some of those long positions in the euro, aussie dollar in particular. Bloomberg daybreak middle east is next. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. The following is a paid presentation brought to you by rare collectibles tv. The 10 indian head gold eagle containing nearly half of an ounce of pure gold is one of only two coins that the legendary sculptor augustus saintgaudens was responsible for designing. The inception of this stunning coin began with president