Of momentum out there. Commodities also fallen, especially oil. Rishaad venezuelan politics as well. The dollar has been steady of late. Nifty futures, there you go. Having a look at these. Various things will be on the agenda for investors. We also have reports that india will be skipping the belts and road forum. You can see there is a move downward for the dollar against the rupee. The rupee at a record low when it closed off trading. Yvonne we have been talking about the big theme, which is the middle east, and whether moves when it comes to oil markets, how sustainable are they as we wait and see if the risk becomes more of a wider conflict. We heard from the fed chief of philadelphia repeating his call to the central bank to stop raising, that Small Businesses in the United States are struggling to cope. A lot of these Companies May not make it with the higher rates. It feeds back into my view that this is why we should hold rates steady. We should not be thinking about increases. Rishaad Scott Solomon from t. Rowe Price Associates is visiting us here in our studios in hong kong. We have a lot of pressure taking place in commercial real estate. Is at a slow grind down for the u. S. Economy . That is the no landing scenario. There has been a lot of talk about soft landing. We feel pretty strongly were certainly not in a soft landing. At some point, it is tough to say one, we will probably get a very hard landing. Back in 2007 we saw something similar. People were actually worried about inflation and that the fed will hike again. They actually hiked again, followed by some companies not being able to get some debt deals done and that was sort of the end of it. Historically, when you have inverted curves that moved back to normal as curves, that is the best time to buy bonds. There is certainly some opportunities to buy bonds here, however we are concerned about rising yields from the standpoint of, there is a lot of fiscal still coming from the u. S. , a ton of supply from the u. S. As the treasury moves, that can be painful for the markets to accept. You have gone from the fed buying bonds to now someone who was selling bonds. And the next bond buyer out there is very sensitive. Rishaad adding more pink to bond investors. Pain to bond investors. What if the Federal Reserve signaled they were done . That is kind of what they have been trying to do for the last couple of weeks. They certainly have to keep their options open and they have done that by saying there was going to be a hike before the end of the year. But there were some are members of the committee that said they were basically done. What the fed is trying to do is they are in fact data dependent. They are testing out, can they basically say we are going to pause and not loosing financial conditions enough or too much . So far they are kind of getting their way. Maybe d israel situation has helped a little bit. Again, they are testing the markets. If we pause our financial conditions going to loosing . So far they have not. Yvonne do you think inflation is behaving the way the fed wants it to . One of the most consensus thanks is the low volatility inflation. Things out there is the low volatility inflation. I think that the survey that came out friday was interesting. The one year out survey says inflation is still a really big problem for the u. S. Consumer. Their prediction went from 8. 2 3. 2 two 3. 8. To 3. 8. Rishaad people want free money back, begging for those times to come back. Therefore inflation may invert to the mean. What are your thoughts on that . The issue the fed is fighting is the fact that the labor market is still really strong. There is still a shortage of jobs in the United States. Until Inflationary Forces get kicked out the fed is going to have trouble getting it back down to its target. The rba is more hawkish than everybody thought. I think you can see more of that coming from other central banks. Yvonne how are you look at at where rates are . Do think we have reached the peak of this cycle . Historically, the 10 year typically meets the eventual terminal rate of the fed. Right now, 5. 5 . The 10year is that 4. 7 or so right now. I think there is still a little ways to go. Theres no reason to believe that will not eventually come true. Rishaad Scott Solomon from t. Rowe Price Associates there. Lets get to our top story. Yvonne President Biden traveled to israel wednesday in efforts to prevent the conflict from escalating. On wednesday present by the will visit israel. He is coming here at a critical moment for israel, for the region and the world. First, the present will reaffirm the United States solidarity with israel. Rishaad olivarez in tel aviv and joins us now. Albert is in tel aviv and joins us now. There is this dual function of this trip which is to show the unflinching solidarity with the United States and israel. Something we have heard from every u. S. Official who has traveled here. Also, it is a deterrence factor. It is the president of the United States in israel. But it is also going to be diplomacy. President biden will be in tel aviv tomorrow. He will also be in jordan. He will also meet with the palestinian authority, mahmoud abbas. He will stress the importance of opening up humanitarian corridors. The other point he will make is that hamas does not push for the interest of the palestinian people. This comes after Antony Blinken has been laying the groundwork with all of this. He says the israelis have agreed to work on a plan to get aid into gaza. The reality is the closing at the border with egypt is still close. We have a death toll in gaza approach and 3000 people. The humanitarian situation has not improved. Yvonne what do you think President Biden can achieve with this trip . Does it only delayed this ground offensive we have been waiting for . That is certainly one of the notions that comes first to mind. I think a fair question to ask. We do feel at this point it is inevitable that there will be a ground offensive into gaza. The Israeli Defense force basically confirmed this. The question is what form will it take and what form will the war take . We do not have any visibility on what their longterm goals are. We heard from the Israeli Defense ministry yesterday speaking alongside its knee blinking. This will be a long war. The price will be high, but we are going to win for israel, for the jewish people and for the values that both countries believe in. So a long war from they Israeli Defense minister. The question is how long and where exactly . Irans rhetoric has been sharper as time has gone on. There is no epic take appetite for the israelis to occupy gaza but there is a lot we do not know at this stage. Yvonne still ahead, we will be speaking with the ceo of hcl tech. Rishaad we will be taking a deep dive into xi jinpings belt and wrote initiative. That is next. Get help reaching your goals with j. P. Morgan wealth plan, a digital money coach in the chase mobile® app. Use it to set and track your goals, big and small. And see how changes you make today. Could help put them within reach. From your first big move to retiring poolside and the other goals along the way. Wealth plan can help get you there. J. P. Morgan wealth management. [flight attendant alert] [baby crying] [snoring] [luggage rattling] [baby crying] dramatic music upbeat music begins for everyone whos endured the bad seat, finally, sweet, sweet redemption. The lexus tx. Threerow luxury that treats every seat like the best seat. explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Rishaad russian president Vladimir Putin arrived in china to talk at belt and road. He is expected to meet with president xi via wednesday. On wednesday. This might be a more gene counter than the last time they met. That if speculation or it could get more chummy heard these two gentlemen have met 40 times over the years. They develop of no limits partnership about a year ago in the weeks before Vladimir Putin launched his war in ukraine. Other beijing news that in advance we simply do not know. Whether beijing knew that in advance we do not know. Vladimir putin is an isolated individual. He has not traveled abroad except last week in central asia. He is here at a time when he is wanted by the International Criminal court for war crimes in ukraine. Hes getting a welcoming red carpet in china as state media has essentially sat our friend from afar has arrived and that is Vladimir Putin. It persists up it a person to support of the a participant of the belt and road forum. Some people consider it an attempt by china [indiscernible] but we see otherwise. To get to the heart of your question about how things have changed, Vladimir Putin needs beijing. They need chinas assistance. 55 increase in imports from china to russia as well as about half of all foreignexchange transactions in russia are with the yuan. Yvonne there has been talks about how the number of projects and the overseas loans has dwindled of late. What is the next decade going to bring . The world is a different place today than it was the last time the belt and road forum met in 2018. That time we saw tens of billions of dollars of loans to the developing world. In the last decade there has been a tally of 900 billion spent. Over the pandemic and through chinas troubled economy and its own debt problems, there has been debt crises all across the developing world. Allegedly, very difficult and demanding repayment terms by the chinese. Xi jinping is going to have to convince those coming here that the belt and Road Initiative will be reinvigorated. We will have to see. Yvonne Stephen Engel there. China is also facing calls to play a key role in helping ease tensions in the middle east. Our columnist says chinas response so far has fallen short. Is china not using its influence enough . Frankly, it simply is not. I was listening to what stephen was telling you about how much the relationship between russia and china has grown. In the ukraine war when the world appealed to beijing, can you step up, it did not use its influence with russia. It is not using its influence with iran at this time. We have seen a muted response when it comes to a condemnation of what is happening in the middle east region. It falls short of what china professes that it wants to be a voice of peacemaking. Beijing could do a lot more to make the situation in the middle east better. Rishaad china is an economic giant, but when it comes to Foreign Policy, is it a . I was speaking to a lot of people who worked on policy affairs with china over the years. As chinas economy has grown as fast as it has, its Foreign Policy ability does not match its ambitions. There is a lack of capacity within the Foreign Policy circles in china. It is not within its experience to negotiate and mediate in the way we have seen for the United States. It is willing to go out and get its hands dirty. Beijing is not willing to take that risk yet. Getting involved in Foreign Policy affairs is often messy and that is a geopolitical risk chinas not willing to take. Yvonne this is happening during the belt and road summit. What are you watching out for there . There are reports that the taliban is expected to attend as well. That is something i am watching very closely, particularly as we have seen china make outreach to the taliban. Whether or not that actually does happen we still do not know. And what kind of relationship we might see china strike with them if any at all. Rishaad thank you very much indeed. Lets get you to what we have coming up. Markets very much in focus. The hang seng coming back after a drop back. This is bloomberg. Morgan Stanley is partnering with the Womens Tennis Association to remove boundaries. because this game is for everyone. Rishaad a look at the baidu annual conference taking place. A keynote speech was made earlier about the mean chatbot. Ernie chatbot. This is of course a q a session designed to showcase the companys ability to provide answers on the fly. Yvonne it is some numbers he is bringing out. The chatbot has 45 million users since its launch. Certainly there is a demand for it. Talking about china approval for these ai models. We talked about the significance of this be made live event. Being a live event. Rishaad we are looking at markets as well. The aussie dollar heading for its low of the year. A low tolerance for sticky prices. Yvonne a grace period when it comes to country garden. It could be tomorrow when we so, youve got the power of xfinity at home. Now take it outside with xfinity mobile. Like speed . Its the Fastest Mobile Service around. With the best price for two lines of unlimited. Only 30 bucks a line per month. Thats hundreds in savings a year when you wave bye to the other guys. All on the most reliable 5g network nationwide. You really shouldnt walk out the front door without it. Switch today at xfinitymobile. Com. Rishaad seeing some gains for chinese equities here, on the back of volume pretty much where it should be. A data dump taken place on wednesday. Chinese Civil Servants are facing constraints on private travel abroad and will face scrutiny over foreign connections. More than a dozen people familiar with with the matter. Beijing is waging a campaign against foreign influence. Hang seng will have another half hour of trade. Yvonne that us despite the fact that china has reopened its borders. There is a sense of more scrutiny of overseas travel when it comes to Civil Servants. When it comes to japan, those markets reopening, continuing the rally. Overall, still watching dollaryen. No comment about the imf. I think some of the data suggest perhaps not. Rishaad here is a look at some of the stories investors will be looking out for in india. We have earnings from many big names. India will be skipping chinas belt and road forum. The Indian Supreme Court will be ruling on samesex marriage rights cyan tuesday. On tuesday. Yvonne lets get a little bit more on that. Our india Court Reporter joins us from new delhi. How do proceedings go down in the Supreme Court . The case came to the court last november. The ruling will potentially determine if india will become the largest democracy with Marriage Equality rights. The government has opposed legalizing samesex marriage. As says it could alter the definition of family. In india according to the government a marriage could only be between a man and a woman. The petitioners took the legal route to come to the Supreme Court. The Supreme Court said five judges of the court will hear the case. The court reserved its judgment in may and it is due to be delivered today. Rishaad whichever way it goes, what does this ruling actually mean for the country at large . If samesex marriage is fermented in india, a section of society will get Marriage Equality. The Lgbtq Community can then ask for adoption rights and succession rights, all of the rights that flow from marriage. Their legal argument was hinging on the right to equality. The petitioners told the court that it is discriminatory to not allow a section of society to get married to the person of their choosing. Rishaad thank you so much for that. Coming up, we will be looking at indias hcl tech. We will be speaking with the ceo. That is next. This is bloomberg. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh rishaad that is mumbai shrouded in fog. Futures indicating some good gains at the start of the trading session. We have some big names reporting earnings. The indian rupee has strengthening a tiny fraction here as well as it comes off of record lows. We are also looking at other companies. We have indias number three Software Service company, hcl tech. Yvonne its secondquarter income be average analysts estimates. Here to discuss the results is c. Vijayakumar from hcl tech. It is great to have you. The Second Quarter was a record of 4 billion when it came to bookings, which was quite strong. What does that suggest to you . Are some of these deals back on the table after this rough patch . Good morning. Actually, what you see in the market, there are two independent spending patterns. One is of course to continue the transformation journey into new technologies to help businesses digitally transform. The second streak of spenders really look at the current operating model and how to be more efficient. Which is to drive cost optimization through technology and Global Delivery transformation. A lot of bookings we saw in the last quarter was driven around driving more efficiency, looking at current operating models, looking at how do you bring more automation to fundamentally become more efficient. These are the two trains of spending. The first one is a little soft, but the second three must spending a strong. Yvonne what does it mean for the outlook . Are you thinking especially i. T. Spending is beginning to return now . I would still not say that. Discretionary Spending Continues to be there, but a little lower than what we saw in the last fiscal. Customers are reducing spend in some areas. I get a sense it has stabilized. Customers are focusing on becoming more efficient and looking at programs which is driving more efficiency for them. Rishaad when you look at your customer base, you have a plethora of different industries. Where are you seeing weak spots in demand from the Different Companies in those industries . I think if you look at the financial services, we continue to do very well year on year. And manufacturing to some extent we are doing well. Telephone, while the industry is a little muted in growth, but our own performance because of cuttingedge propositions, we are doing well. Tech vertical continues to be a little soft. That is the only segment i would call to be still soft. Rishaad your sales guidance, it was still a bit stronger than most of your peers. What is the rationale behind that . We have given a guidance a guidance of 56 which is informed by the fact that our first half was modest. Our First Quarter was weak, the Second Quarter was ok. But we have a very strong q3 and q4 ahead of us. Primarily due to the good bookings. It is almost twice the usual run great we would normally have. That will translate into meaningful revenues into q3 and q4. Rishaad looking at your Gross Margins, 32 . Could you do more in terms of rewarding shareholders . Yes, of course Gross Margins are what you mentioned. Our property margins improved by 154 basis points. A lot of the investments we made in the past year or maybe even 18 months in building opacity to service some of our customers, i think that has been deployed now. In terms of rewarding shareholders, we increase our dividend. It used to be 10 rupees, now it is 12 rupees. The last two years, we were returning 88 of the net income. This increasing trend of dividend is visible in our announcements this quarter. Yvonne you also recently made a pretty large deal with verizon. Historically, they like to do a lot of these deals more inhouse. What was that key in landing this deal . This is not an i. T. Deal. This is helping Verizon Business to service their enterprise clients. We are going to be the management for service their customers. This is a deal for directly working for verizons customers, not internal i. T. Some of the automation and Network Capabilities came to the form into Verizon Business. It is really a Strategic Partnership more than a deal. Rishaad verizon does a lot of inhouse i. T. Does this deal open the door for others . Who else are you talking to and what is your expectation . This is a very unique Strategic Partnership. Verizon is a large flagship client of ours. We work with other Telecom Service providers in other areas, like servicing their internal i. T. We work with a lot of technology companies, which constitutes almost 70 of our revenue. 17 of our revenue. Yvonne you have a portfolio of Legacy Software products, which might be aging. Is hcl tech looking to invest to keep relevancy . [indiscernible] we continue to modernize them and keep them more relevant for clients. This is a business which is about 10 of our overall revenue. A lot of clients have built very important applications on the back of the Software Products that we have. They are all looking for a journey to modernize themselves. We are putting a lot of money into modernizing these products. That is helping us see it as a profitable business. The revenue grew 3. 9 year on year. It has been a growing, which is a terrific sign. Yvonne we are going to leave it there. C. Vijayakumar from hcl tech join ms there joining us there this morning. We are seeing a rally in asia. It looks like india is joining the fray. We are watching plenty of earnings coming through. Yesterday there was a lot on the banking side. Jio financial up about 2 . Companies reporting earnings today. We have plenty more ahead. This is bloomberg. adventurous music be ready for any market with a liquid etf. Get in and out with dia. What do you see on the horizon . Be ready for any market uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. Rishaad we are back with bloomberg markets. Demand for five natural gas liquefied natural gas bigger than expected. We have just completed financial closing of a major offshore wind project in the renewable area. We just started a new project in india in a green molecule which has significant and promising future in the area of Maritime Aviation fuel. It could be a precursor to Building Blocks required for toys and for medical equipment. We also have a new project in biodiesel. I think all of these projects are going to shape the future of our portfolio that is transitioning from Traditional Energy related business to a low Carbon Intensity era in the future. What is your thinking to diversify risk . You have a significant share in the lng business. Is there anything you are considering to stabilize that or reduce risk . Globe to move to a lower Carbon Intensity state. And lng, we have good and promising projects in the area. We like to make sure these products do go forward. There is a lot of work to do in each of these projects. We want to have our portfolio strategically diversified. This helps the energy Stable Energy procurement needs for our customers. Do you think the current japanese Interest Rate is going to change in the shortterm, or how are you evaluating the gap between u. S. And japan Interest Rates . We think the u. S. Economy still has certain momentum. And i am sure the Interest Rate policy may change in the future. From that standpoint, i think there is still a scenario where the United States could find a nice balance in terms of their Interest Rate management and trying to minimize the downward effect on the current policy. From that standpoint, i think the Interest Rate difference between the u. S. Dollar and the japanese again for example, there will be a certain delta that will continue. Your employees are scattered around the world. You are promoting diversity and inclusion within the company. How have you been became progress and how have you been promoting more women into management roles . Our female representation of the management class, or Global Company population is doing better than japan. This is accumulation of a lot of work. We see diversity and inclusion as a holistic approach of people respecting and understanding each persons professional background. Diversity is a must, but inclusion is the most important step. I would like to see us providing a lot of different stages for these great employees to show their performance. We are working on it. I think our whole team is on board. Yvonne that was the ceos speaking exclusively to bloomberg in tokyo today. Japan had a 20 year bond auction. The auction led to the lowest bid that was lower than forecast, so not that much demand. There has been a lot of talk of where bonds will be. The tenure will test the 10 year testing the level. Rishaad in terms of the bond picture for new zealand and australia, what we have is a situation where certainly australian yields are climbing. They do not expect an Interest Rate change. Yvonne because of the inflation print that came out softer than expected. Pushing back their calls for the next hike. Used to be november, could be february. Does this set the stage for a rate cut . You still have rba in the higher for longer camp. Rishaad prospects of perhaps softening rather than hawkish behavior. Lets move to some of the individual companies. We have apples new iphone in a downswing compared to the last one. That is affecting the ones in the supply chain. Yvonne huawei may be eating some apples pie. Some of apples high. Up 3 there. Take a look at energy. Despite oil prices stabilizing, there is an easy enough than is willing sanctions. Easing of venice willie and sanctions. More to come. Its easy to get lost in investment research. Introducing j. P. Morgan personal advisors. Hey david. Connect with an advisor to create your personalized plan. Lets find the right investments for your goals okay, great. J. P. Morgan wealth management. Yousef this is bloomberg daybreak middle east africa. Our top stories this morning. President bynum prepares to travel to israel in a visit to