Tom good morning, happy friday. This is bloomberg daybreak europe. These are the stories that set your agenda. Chinas lopsided recovery. Factory growth moves up a gear, but consumption unexpectedly slows. Chinese officials hold urgent talks to address the property crisis. Stocks retreat as traders reassess the path forward for Interest Rates with more fed officials morning lending costs will stay higher for longer. Plus, jp morgan ceo jamie timon tells bloomberg he is still more worried about price pressures the markets appeared to be citing Inflationary Forces ahead. We bring you more from that interview. Lets check in on these markets then. On a day when there was a bit of a pullback. The dow jones crossed above the 40,000 level for the first time. The s p coming back below the 2300 level. A breather coming through for the markets have worked so much to add those gains year to date. Pairing some of those gains by the end of the session yesterday. European futures pointing lower. Markets pricing around the fed once again from two cuts just a day or two ago to one cut right now. The chinese data is a concern for the european markets, particularly when it comes to health of the chinese consumer. European futures pointing lower. Ftse 100 futures in the u. K. Pointing to losses of around 2 10 of a percent. S p futures currently flat after modest losses yesterday. Nasdaq futures, 18,000, also flat. We have heard from jamie dimon from china to geopolitics to inflation, take a listen. I think the surprise would be a higher rate because inflation didnt go down. Inflation has been stubborn, may be bounces up next year. I think inflation next year may be in the cards. It may have nothing to do with what you see today. That to me is the surprise. Tom jp morgan Ceo Jamie Dimon that may be inflation is underpriced by the markets. Lets cross a look cross asset as we see movement in terms of yields edging higher on the tenure yesterday. Today, the 10 year is unchanged at 436. Jamie dimon saying that headwinds that could keep prices elevated remain structural changes, particularly around things like Renewable Energies and the shifts to more military spending. You are eurodollar at 10 eight. The ecb suggest that yes, you make get a cut in june, but dont bank on july as a cut is not warranted. Concerns about it being flat. Bread 83 53, up 3 10 of a percent. Copper continues to grind higher. 10,429 on that industrial metal. Currently flat in the session. The gains continue to come through. Avril hong standing by in singapore for a breakdown, and its a busy friday for you. What standing out for you . Avril let me count. So many things. First with the fed narrative, there may have china data. Asia stocks are already negative territory as the expectations of cuts were underground. So were declined. We have the china retail sales number, Industrial Production accelerating, so we see this in chinese equities. The csi 300 slipped into negative territory. The hang seng initially was in the red but wasnt managed to eke out some gains. It speaks to how sentiment driven the hong kong markets have been of late. Lets take a closer look at what else we are seeing from the board, if we can. It is really about the property sector. Thats a heart of the issue related to the chinese economy. It wasnt just retail sales and Industrial Production numbers we got, it was home price data, and that was a deeper contraction than the previous month. And i think it speaks to how the fundamental issues, they havent been fixed, indeed, we have the likes of Morgan Stanley downloading the outlook for the real estate sector as they flagged the physical market issues that havent been resolved and we also have, if you remember, the report about how we could get some of the excess inventory resolve. That plan proposed might actually disappoint. This is what we are seeing despite that we see the chinese stocks and bonds. They have been climbing. Its really above expectations of policy. Flip the board because i also wanted to take you through what we see in china bonds. Of course there has been a focus as we have special bonds going on sale. Those are the 30 years in the idea here is to raise funds for government spending. It was a pretty solid auction. Four times the demand of what was on offer. But of course, as we look at the currency moves, the u. N. Has been weakening, no thanks to the china data. Japanese currency as a double whammy for the renminbi. Tom avril hong, thank you, a check on the asian market with the reader across. Thinking about when it comes to the federal reserve, but also the china data. More lines crossing now. Avril hong was referencing these. Senior officials meeting in beijing from key regulators to address the property crisis. And here is the redhead crossing. China will be removing the Mortgage Rate floor for individual homebuyers. The context is that in recent years, up until two to three years ago, chinese officials have placed restrictions on homebuying because of what was once a redhot Property Market. Now they are doing those restrictions in the latest move removing them Mortgage Rate for individual homebuyers. There may be stress on the Banking Sector as a result of this, but the idea is that you can see lower Mortgage Rates encourage consumers and how buyers and prospective house buyers to buy up some of these houses. The prices continue to drop. We see that in the most recent data. We have also heard more recently that the cities have started to remove all curves on property purchases. Lets get the details in the reaction with jill disis standing by who will be monitoring this for us. Walk us through what we will be hearing. Senior officials from beijing to put a floor under this property crisis, how potentially significant could these moves be . Yes, i think obviously they could be significant here, we are still getting details on what exactly this ultimately means. We see they are lowering the minimum down payment ratio for First Time Buyers for 15 in second time buyers to a little bit more. This time we will ultimately see where that goes, but thanks for putting this in context. This is all part of the broader package thats up for the discussion about what the government needs to do to ultimately put a floor under this years long property crisis. Bloomberg reported a couple of days ago that there are additional measures under consideration that help the Housing Market. Maybe that means state owned enterprises, local areas take out state loans and buy a properties from distress but developers turn it into affordable housing. Thats something we have reported just a couple of days ago. I think the totality here is that it really does mean that there are additional measures they need to take to put a floor under this property crisis as we just discussed with the chinese data with the china data. As you said, this is a two speed recovery. Manufacturing is doing really well, but look at domestic demand. It still really struggling and thats in large part because of the property crisis. Tom the two are very much interlinked. The squeeze at the softness of the Property Market in the link is the consumer. What does that tell us about the assessment now as to the policy response, the support that many would argue is needed in form of some type of stimulus to support the consumer, could we expect that to be stepped up . Jill we are talking now about the potential for some of these additional property related measures. I think that could be read as some form of support. But in terms of largescale stimulus, it does seem unlikely you would see some type of package as you did about a decade or so ago. I think that, at this point, the government also wants to see how other types of measures that they have been taken transmit into the economy. We just had, a couple of hours ago, the beginning of a sale of an ultra long Government Bond to sort of fun infrastructure related projects, and stuff like that. We had the initial kicking off of that sale happening this morning. That will be happening throughout the rest of the year. Again, the idea being that would primarily Fund Infrastructure related projects to release per activity and growth within the economy. We will see what happens. Maybe it takes the form of additional rate cuts throughout the rest of the year. Something else has spurred demand because as we have been talking, demand continues to be an issue. Its not just the retail sales figures that were released today that were more depressed than what a lot of economists were expecting. Its also some barely weak, barely anemic cpi numbers that came out recently. Theres a lot here that continues to drag on that segment of the economy and comes with the consumer. We will have to see how that results in Additional Support from the government. Tom thank you very much. Indeed with wrapping some of these redheads and breaking lines around the support that comes from beijing. We will see how material that is. A redhead crossing the terminal around process that houses much of the internet assets at and has a significant stake of chinas tencent, which is the Company Behind many of the most popular gains in china. The pipeline for those gains, the we chat app. Naming a new ceo, fabrizio is going to be the new ceo from july the first, replacing urban who has been at the helm since september of 2023. So change at the top there. Urban stepping down. He has been held the ceo since september of last year and a new ceo taking charge. We will see how the stock reacts to that. Start a change at 8 00 a. M. U. K. Time. Lets get to the geopolitics of china and russia. Pledging to intensify corporation against what they call u. S. Containment. The two countries agreed to greater coordination between militaries in opposition to washingtons destructive and hostile course, speaking after he met with Vladimir Putin in beijing. President xi outlined his position on the war in ukraine. China and russia agreed that a political solution to the ukraine crisis is the right direction. Chinas stance on this is consistent and clear. Tom lets bring in bloombergs news director Ross Matheson to get the latest. We expect to get pictures. I think we will get pictures of putin speaking live in the Northern City not far from the russian border. Symbolic between russian culture in that city. The chinese city. Talk to us about what we hear in terms of president xis views on the conflict in ukraine and to what extent that aligns or not with Vladimir Putin. Likes its really important to see the recognition of the no limits friendship between china and russia has been important for Vladimir Putin with this war in ukraine. Where china has done is they are not explicitly endorsing the war in ukraine. They have not overtly criticized it. Just dont let it get too messy and too out of control. Dont draw us into much. Some Chinese Companies have benefited from the war in ukraine because they are now the bars of less result last resort for russian commodities. They can negotiate good prices for themselves. Really this stance has been your business. Thats important for Vladimir Putin on the real stage. Especially against the u. S. Against russia and china together countering the u. S. Tom the trade support, economic support in china. We continue to see live pictures of the russian president. Many were described as Pivotal Moment potentially for the conflict on the ground in ukraine. Russia making some significant gains. What is the latest on that front . Like they have been doing that offensive in the northeast and its around that major city. It seems like it took ukraine by surprise even though Russian Troops are in that border area. But certainly they are making progress in smaller towns in the area. Can they take kharkiv . Unlikely, given their resources. They are stretching the ukrainian resources. Ukraine has been suffering a lack of artillery ammunition, manpower, air defense and russia is probing all along the front line, particularly in the northeast to see how distressed the resources and how can i maximize. In making progress around the northeast that can extend south as well into ukraine. Russias priority is probably the southeast. And wants to get further along the black sea area, odessa being a main port in the area. Ukrainian resources are being drawn to the northeast and then russia can come into the south. Certainly we see signs of small breakthroughs along the entire line. Tom zelensky has been on the ground in kharkiv with the military commanders. They address the concerns or which are addressed. On the ground ukraine for what we have been hearing from putin and xi jingping. China announces new property measures. We will get the take from the shanghai advance institute of finance and advisors and former advisor to the pboc. Plus, formula one World Champion max speaks to bloomberg about growing the sport in the recent personnel changes at red bull racing. We bring you that interview later in the show. This is bloomberg. Tom welcome back, happy friday. We heard some really important lines crossing from china. Officials meeting in beijing to try to address a property prices. Some of the most significant moves coming through to address the slowdown in the Real Estate Market of china. In some of the lines now, the detail. China will be removing the floor on Mortgage Rates. Its also lowered the minimum down payment ratios for individual homebuyers. Hate is categorized as one of the most dramatic moves to shore up that Property Market. They are cutting down payment ratio for First Time Buyers to 15 and cutting it to 25 for second homes. This after property prices, sales, i should say, fell the most in a decade and property prices continue to be squeezed in china as well. How effective willies measures be . Very pleased to say that im joined by professor of finance institute of finance, also an advisor to the pboc. At least, in unofficial adviser to the pboc and a number of other governing bodies in china. Thank you for joining us. Give us your reaction to these measures, is this going to be enough in your opinion to put a floor under this Property Market, how substantial, how significant will these measures be . I think the first take is, these are very helpful measures compared to the policies that we have already had in the past year or two. And i think its also very important and significant to signal to the market what companies are changing its priority of the policymaking. So it is trying to put some into the Property Market. I think by lowering the Interest Rate or by allowing a greater portion of the housing pricing to go through mortgage, this is really providing some incentive for the homebuyers to consider the real market again. However, for the moment, i do not think that is sufficient to attract enough buyers to stabilize the market. For two reasons. One is, the Housing Market is sluggish, given the high prices relative to peoples expectations of where their income it will be. I think its still quite expensive. More importantly, over the past three years or so, housing prices have been coming down, not going up. As we know about the theory, people tend to buy assets only when they see a potential of making money rather than losing money. As long as that is changing, i do not think the softening of the landing requirements or the reduction of the Mortgage Rates would have a significant would have a Significant Impact on how people and households perceive the Housing Market in general. Tom thats really interesting context, professor. The other key proposal that came through, we are getting more detail on it, a proposal for local governments to buy up xs infantry excess inventory on sold properties and units for local governments to buy those up. How significant could that be, and to what extent is this shifting the debt loan from the Real Estate Companies to local governments and state owned banks . I think this is similar to the billing out of the Financial Institutions going into the financial crisis. I think the Real Estate Developers are in a fairly dire situation. So without that stepping in, it is very likely that almost all the private and Real Estate Developers will go into distressed by the end of the year. I think it is probably an option that has to be taken for some kind of Government Credit to support the real estate sector in the real estate developer. That being said, we are talking about chileans of real estate. So the local government will have enough for the report and stash for apartments to be finished. There is another logistic of challenge, which is how do we make the distinction about whether you should buy at this product versus the other one. There will be some rent seeking an acid issues in the implementations of the policy. In a way, i think it is encouraging to see the local government stepping into stabilize the market. But in the end, unless the Central Government is stepping in and extending its own credit to the rest of the market, it is a little difficult or a little too premature for us to believe we are out of the woods. I think there is st