shery: welcome to daybreak asia,

we are counting down to the major market open. all: the sec accuses binance of deception and handling customer funds. the decision day for the rba, rights expected to stay on hold despite a jump in monthly inflation. apple shares slip as investors point at the price tag of the mixed reality headset. >> ego severity week, we are asking business leaders are about the impact of technology and finance in the race to net zero. shery: we get you started with how u.s. futures are trading early in the asian session. they are under pressure after we saw u.s. stocks dropping in the wall street session. we got the concern about the

economy and we have regional banks falling almost 3% on plans by regulators to boost capital requirements. we also had equities dropping with apple, peeling back earlier gains as we saw the pricing mixed reality headsets. yields were down across the board, the ism servicers gauge numbers. all of that leading concerns to the broader economy. we are seeing oil prices in the asian session reverse. small gains we saw in the new york session we have a little bit of gains in wti today. saudi arabia's production cut announcement after the opec-plus meeting is not lasting in the asian session. paul: a big day here in australia, it is the rba decision day and it is a tough one to call. 375 basis points of tightening,

traders are split of what we will see. we futures pointing weaker -- we see futures pointing weaker, the dollar in a holding pattern. the aussie dollar currently trading just above $.66. one market trading is new zealand returning after the king's birthday. moderately in positive territory. playing catch-up, a very strong rally on monday. 2.2%. anticipating a little bit of a pullback today. hang on below the 140 level. shery: cryptocurrencies, bitcoin rebounding a little bit in the asian session. we had a big blow to the crypto industry itself. the sec finding a lawsuit against it ceo for more than a dozen alleged violations. su keenan joins us with the

details. let us start with the suit itself. what are the most damaging aspects of this complaint? >> market manipulation, and fraud, the sec alleging that the ceo and binance to sell well aware they were violating security laws. this is a thing in the sec is using that they were operating in unregistered securities exchanges. mishandling customer funds and misleading everyone along the way. the words from gary gensler could not be stronger. in accused binance and its ceo of engaging in a web of deception, conflicts of interest, a lack of disclosure, and calculated a vision of the law. he said the public should be aware that investing in of their assets in these unlawful platforms. binance has vigorously denied the allegations but they are significant. the lawsuit further claims that binance sold unregistered crypto

asset and that its own tokens as well as its stake in investment schemes are in fact securities. that is the heart of the lawsuit. it adds binance purposely saw to evade u.s. laws -- sought to evade u.s. laws. they say the ceo and the binance company remain heavily involved behind the scenes and the founder misled the regulators as well as the investors. in terms of the impact of this, on the crypto currency markets, with all other exchanges such as coinbase, the largest u.s. crypto exchange down as much as 13%. it paired losses to 9% by the end of the trading day, robinhood took a hit and as mentioned bitcoin fell. the implications of this with

the sec asking a court to freeze finance assets and appoint a receiver would really be a large disrupter here in the crypto space. paul: this is not the only a regulatory headache for binance? >> back in the spring we knew that there was a cftc suit accusing it of derivatives violations and there is a separate justice department probe. all three aspects of the regulatory environment are looking very closely at binance and hammering at it. that has been one of binance's biggest objections. they claim they have been working to settle these issues and that there are multiple players in the regulatory space, all with different rules and that it is difficult to proceed on that basis. they deny any assets were ever at risk and plan to vigorously defend their platforms.

your looking at some of the red on the screen as a result of the lawsuit being filed. we should point out a lot of the alternative assets such as solano is down as much as 13% and bitcoin fell as much as 7%. if there is a court order that does allow the freezing of assets for binance, that could even have a greater negative effect. this lawsuit being watched very closely and a very big test for the sec, gary gensler has made his mission to impose order and crackdown on cryptocurrencies. this lawsuit goes a long way into sending that shot across the bow. shery: su keenan with the latest on the crypto space. investors also eyeing cues from the rba today as it gets set to release its right decision. the governor surprised markets with a hike last month. well he surprised -- will he

surprised those awaiting a hike today? kathleen hays is here with the latest and the consensus right now is for a hold. it is a close call? >> it is one of those calls when people seem to be saying i expect a hold, it could be a hike or i think they will hike what they could hold. the rba, fellow, he surprised last month with a rate hike of 25 basis points when everyone was expecting a hold. he put it in context. 375 basis points of hikes since may of 2022. have you done enough? is it time to pause? a lot of big central banks are contemplating around the world the federal reserve is a couple of weeks who will make that decision as well. of course kluber abenomics -- of course bloomberg economics says there is flowing. negative employment, it has gotten higher. that is why one of the big reasons why two thirds of the

economy -- economists we served urveyed see the pause and the hike. the majority. a couple of things to look at was inflation. inflation in australia went from year-over-year 6.4% to 6.8%. that is more than doubled the target of two or 3%. it is going over duration. minimum wage hike going through. that is of t main reasons. this whole inflation issue that is not solved is persistent and sticky. this is why a lot of economists are saying that there is going to be more rate hikes. there need to be more rate hikes and lowe has been more hawkish. they have raised their terminal rate forecast to 4.6% from 4.1% and the current rate is 2.8 .5%

-- is 3.85 percent. paul: a tough call for the rba today. christine lagarde has a much easier decision? rates are certain to rise again? >> if you want someone to guarantee what the central bank will do christine lagarde, president of the ecb did it today, more hikes are coming. listen to what she said. >> indicators of underlying inflationary pressures remain high. although some are showing signs of moderation there is no clear evidence that underlying inflation has peaked. >> the inflation is down and it is often the high in the euro zone and dashed off of the highs in the euro zone the inflation -- the inflation is off

of the highs in the euro zone. some are saying inflation risk is tilted to the upside and this inflation is happening very slowly. i think nobody has to bet, it has been very clear by the ecb that there will be another rate hike in two weeks. paul: all right. a look at central-bank action. let us get to vonnie quinn to check on the first word headlines. >> a new revelatory plan may require large u.s. banks to boost their capital by an average of 20%. the proposal may cover up banks from 100 billion dollars in assets and lower than the current $250 billion threshold. it means dozens of regional banks may have to meet the new standard. the changes which may be introduced this month are part of a global overhaul of banking rules. russia and ukraine have reported widespread fighting along the front lines as a participation built for kyiv's counter

offensive. earlier, moscow said it deterred an attack it in and ask region. chinese ships and planes suggest going aggressiveness from beijing. john kirby says these actions risk an accident and it could result in injury. the pentagon says the chinese worship cross in front of a u.s. navy vessel. >> it will not be long before somebody gets hurt. that is the concern with these unprofessional intercepts. they can lead to misunderstandings and miscalculations. when you have pieces of metal that size whether it is in the air or on the sea, they are operating that close together, it would not take much.

>> global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. paul: the first major new product category since 2018, taking a second look at the price tag for the mix reality headset. up next, shares have a good outlook and why we have seen the lows for this year, swing or print holding up just fine. -- showing print is holding up just fine. this is bloomberg. ♪

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suggesting more pain for the u.s. economy as services gauge filter 15 three -- 50.3 in may. business activity and orders are downshifted. this follows the manufacturing survey which showed the longest stretch of contracting factory activity since 2009. shery: our next guest thanks the economic -- thinks the economic pullback will not be long lasting. we have sylvia jablonski cio at defiance etf. are you investing in this pullback whether it is the economic pullback or perhaps a soft landing? or even the market lows we have seen? sylvia: i would be investing.

i do not think we will have a massive recession. there is a lot of data that indicates corporate america and the macroeconomic environment is holding up pretty well. although you have pmis sliding a little bit you have consumer spending going down a little bit and you have estimates that have fallen and come back throughout the year. we have a lot of different information as well. earnings for example have been positive. the last four earnings season we expected a pullback and that did not happen at all. we have company is growing at an. outlooks. the nasdaq is out for the best performance since the 1990's. on these pullback days i would like to get into some of the stocks that are poised to run in the future and that is around innovation technology. that is where i am looking to invest. shery: morgan stanley coming out with a sudden pullback in corporate earnings, anticipated by their strategists saying they could see an eps for the s&p 500

set to drop a 16%. we have some of those calls that are warning about how well these companies are doing? sylvia: there is a lot of disagreement about where we are going to end up and it is sort of a tough debate to have. i think we look at last year we are undoubtedly in a bear market and across broad indices and we are starting to see things turn around. it is difficult for me to believe that we will have a massive pullback in earnings only because again the consumer is strong and the fed is coming to the end of our rate hike cycle. technology is revolutionizing corporations and allowing them to cut spending and to run leaner and meaner. all of that kind of boats fairly well for not seeing a massive pullback in earnings are in the market or the economy. paul: we have had discussion post the debt deal about the issuance of t-bills we will see. if you have concerns about how

much liquidity this will soak up? sylvia: i think the overall liquidity on the markets will be on the mind of investors. we see a lot of fear in the market around the banking issues and investors pulling money out of the markets. sitting on the sidelines and not to invest in the markets. anything the government or the fed does that can risk liquidity in the system i think of something that will keep us in a range bound mode until we see where it all lands including the fed's final decision on rates. paul: i want to get your thoughts on the big ai inspire rally that we have seen. -- inspired rally we have seen. do you have been etf's that play the ai played really well? sylvia: we were thinking about this years ago and we are thinking about what artificial intelligence and machine learning will shake out to be. we look at it from two different sides.

one side is the technology side. you have quantum which invests in machine learning and think about supercomputing. essentially powering ai. on the other with thought about communication. you have to have the low latency connectivity in order for ai to work and robots to communicate with people and things like this. we are very much invested in the ai revolution and we do not think it is a trend or a fad. and been around for a long time. you are asserting to see and hear about it in earnings -- starting to see and hear about it in earnings. look at marvel and nvidia. this is here to stay. shery: we have seen this huge rotation into tech giants already. do they have room to run or could we be looking at smaller names that could see more upside in the future? sylvia: i think a lot of the larger names have had a good run. as we talked about the market pulls back a little bit when you get weaker data. you get those pullbacks are

nvidia, maybe you want to get in there. it is good to look at baskets and etf's because you will have small winners. chip companies that will power ai and innovation. it is hard to pick those winners when they rates are high and they have a lot of debt on the balance sheet. combined the microsoft, the nvidia, with the smaller names that are out there whether it is a snowflake. they are becoming more sizable. sum of those smaller and newer players in the spaces. shery: do you like any overseas tech names? what about also geopolitical tensions and this tech rivalry and the divergence not only between the u.s. and china but when it comes to regulatory backdrops with europe as well? sylvia: i think in terms of how that can impact the bottom line

of specific u.s. companies that have high amount of concentration of manufacturing. if you take it apart, i like global baskets that represent the top players in china, the semiconductors space and the communication space. they are actually an absolute key to powering ai innovation and machine learning. the global basket makes a lot of sense. shery: it is good to have you with us. she is the ceo and cio at defiance etfs. if you missed any part of this conversation and you want to know our top stories today, internal subscriber -- terminal subscribers can go to dayb . customize your settings so you get the news that you care about. this is bloomberg. ♪ (♪♪)

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latest business flash headlines. adani combo agglomerate -- conglomerate has improved, they seek to improve. it is time to improve net debt to earnings and a higher cash balance of $4.9 billion. evergrande has delivered a delayed earnings report that may bring h-shares closer to a presumption of trading. the group reported a profit of just under $200 million for 2022 and that reversed the prior year loss but did fall short of 2020's results. the most edit developer in china has been suspended for more than a year. and best talks for acquiring an

aviation business. it could be valued at $8.7 billion. a deal would help the firm owned by saudi arabia's public investment fund boost his presence and key leasing markets. italian coffee roaster's ceo says the company is on track to meet its goal for an ipo by 2026. she says the company has reached its current size acquisition but it should not be rolled out. it is present in over 140 countries. and yet education technology by ju is said to start tutoring in 2024. it been trying to strike a deal with creditors to restructure a loan after

online tutoring dealt a blow to its financing. shery: where half an hour away from the market open in japan and australia. south korea is away on holidays and we are seeing a bit of pressure for sydney futures at the moment. this is after we saw the asx 200 gaining for a third consecutive session ahead for the reserve bank of australia's policy decision today. the expectation is for a hold but it is a very close call especially after we saw may's surprise 25 basis point hike. we also see kiwi stocks gaining. we have seen a pressure on the kiwi dollar as we see a 60-71 u.s. senate level. -- on a $.60 through $.71 level. already the weakness for two sessions this week had given a little bit of a boost to the stock markets with the highest

since 1990. we are seeing nikkei futures under pressure as u.s. futures are under pressure. this is after we had a little bit of a little bit of the muted session today. we saw equities dropping and reversing earlier gains. apple erased gains and fell after announcing the very pricey mixed reality headset. coming up next, apple finally unveiling the headset but investors balking at the eye watering price tag. we have the details. this is bloomberg. ♪ when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block. hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. just $30 a line per month.

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vonnie: this is daybreak: asia. ucb president says inflation pressures remain powerful and

are wing cost will be raised. the comments summit expectations for another interest rate hike. with full effect of the monetary tightening campaign, she reiterated there is no clear evidence that underlying inflation has. >> indicators of underlying inflationary pressures remain high and although some are showing signs of moderation, there is no clear evidence that underlying inflation has peaked. vonnie: the fcc has accused binance of mishandling funds. it says for years it flouted rules by letting americans improperly open accounts and trade. it also says it misled investors about controls in place to prevent a nuclear of trading. it calls the claims baseless. at the u.s. service sector

nearly stagnated in may as business activity and orders a slowed. the ism's overall gauge of services fell to 50.3, the weakest level this year and barely about the mark that separates contraction. the measure of prices paid for materials dropped inmate closer to pre-pandemic levels. the airline industry's main lobbying body is doubling its estimate for global net profit as a surge in line drives up ticket prices. the international says profits will reach $9.8 billion more than double the december forecast of $4.7 billion. it expects 4.3 5 billion passengers to travel, around 96% of 2019 levels. global news 24-hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn and this is bloomberg. shery: we have breaking news out of japan. we are getting the labor cash earnings.

we are awaiting this because we are getting a reflection of the wage negotiations. economists expected a growth of 1.8% but it is only a growth of 1%. a little improvement from the previous month but considering inflation and your cash earnings with a contraction of much bigger than expected at 3%. this is an economy where core cpi is about the level. the april figure a contraction of 4.4%. much bigger than economists had expected. a bigger contraction than the previous month. laker -- labor cash earnings disappointing that we got the raises agreed in the spring. being pressured by inflation, real cash earnings contracting

3%. paul: apple has unveiled a range of new products at this year's worldwide developers conference and among them the long-awaited mixed reality headset. bloomberg's ed ludlow has the latest on the companies newest product since 2015. >> the headset will cost 3400 $99. and start shipping in early 2024. apple said it would usher in a new era of computing, something i can to the cell phone in mobile computing. we have had some more modern use cases. what strikes you when you get close to the vision pro is its external power source. next are no battery pack. it is a small device, something i can to ski goggles with a

cable running out of it made from carbon fiber and aluminum and other fabrics and textiles for comfort. there are 12 outward facing cameras that power the function and five sensors. apples chip is behind it. and a specialized chip that processes inputs from the sensors. beyond that we got much of what bloomberg reported that we would get in recent weeks and months. a 15 inch macbook air. a new generation of the macro -- macbook desk top hearing 6900 $99 which they said had superior computing. this is apple wwdc, focus for developers. it has new functionality.

once -- if there was one surprise it was some guests on the stage including bob iger. shery: bloomberg intelligence as the mixed reality headsets price tag would turn off most consumers leaving corporations as the likely early adopters. let's get more on this from our senior technology analyst. does this mean we should not be expecting too much when it comes to the volume of sales and can the high price tag make up for the lack of unit sales? >> we don't think it is going to be a major uptick in terms of units and largely because it is an expensive product. i could not come even close to buying something like this. as opposed to the total number of iphones out there, they sell more than 200 million iphone in

a year. apple expects in year one somewhere around 900,000 units, close to one million units but we think it will be around half that number. i think it will have a low impact on sales. but this is a new system when it comes to headsets. paul: one of the practical uses for this product -- watch are the practical uses for this product and what is in the pipeline in terms of apps? >> they are showcasing this so developers can create applications on edge. -- on it. the applications -- architecture. i saw a demo that microsoft gave

when they showed the architecture of the cirque du soleil. like a soft had a product with the u.s. army to train people on edge. simulations of fighter pilots. a lot of enterprise applications where the company can afford to pay $3500 for a simulation device and save money on r&d costs. shery: the focus was on this very much anticipated headsets. was there anything else at the event that stood out to you? >> i like the new macbook air. in terms of the applications where the ios upgrades, they were in small and incremental areas. two things stood out, the focus

on privacy. the second thing that was interesting was perhaps the increased use of generative ai. as someone is calling me and the call is going into voicemail you can prompt a transcription of the call to come up on your screen. it is minor things like that but it seems they are spending a lot more money on making the product a lot more intuitive than it is already. shery: our senior technology analyst that bloomberg intelligence in chicago with the latest on apple. coming up, we take a deep dive into china's path to net zero emissions in our energy transition segment. and more of a push towards decarbonization. terrascope's claire perry oneill joins us.

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policymakers. a report from bloomberg shows a pathway for china to reach net zero emissions by 2050. our head of china research joins us now to discuss the findings. what are the key technologies for china to achieve net zero emissions by 2050? >> the most important thing for china to the carbonized is all energy systems -- the power sector. everything else relies on a clean power supply. there are a lot of ways to d carbonized china's system. the cheapest way is to maximize wind and solar installations and we will need to install more nerd clear and carbon capture storage for fossil fuels. china has already had the

largest clean power system which has more than 800 gigawatts of wind and solar. the number has to ramp up to 6700 gigawatts by 2050. and china right now has about 57 gigawatts of nuclear power and this number has to ramp up to more than 300 by 2050. clean power sector is the most important thing for china to reach net zero. shery: what is the dollar amount attached to those numbers? how much investment is needed? >> a huge number. from now until 2050 there is around 37.7 trillion dollar investment opportunity for china to reach net zero. this includes money from the supply side as well as the demand side. the electrical video calls is

the -- electric vehicles is the largest segment. and the hydrogen system represents another 7%. china is already the largest clean power investment around the world. last year it invested around $550 billion into the system. this number has to triple to around $1.6 trillion for the latter half of the decade. paul: what are the benefits for china to achieve this goal by 2050 instead of the current target of 2060? >> first of all china is the largest emission country around the world. if china could achieve this 10 years earlier there is a higher chance that the whole world could stay within the paris agreement. besides that china also increases energy security

because ever energy relies less on fossil fuels then it relies less on energy imports. energy security will increase. shery: the head of china research with us. let's stay with that theme and go to singapore where he go parity week is underway -- ecoparity week is under week. discussing sustainability challenges. haslinda almond is there and joins us with our next guest. >> joining us now is claire perry oneill, former u.k. minister for energy and clean growth and currently sustainability advisor at terrascope. she is also the cochair of the world business council for sustainable development imperatives advisory board. good to have you with us and welcome.

this poly crisis world. we have -- is climate still front and center when it comes to policy and business leaders? claire: it is. we have had a series of headwinds. the biggest supply side stock in history with the and ukraine. governments scrambling for legitimacy. what has been interesting is even if policymakers focus on energy security and energy provision, the business world still has net zero as its organizing northstar. as you can see at this event, the level of attendance, and interest is huge. not just because we realize this is a massive global set of challenges but because there is a huge emerging opportunity. if you treat net zero, improving

livelihoods as organizing principle, the business opportunities are enormous. >> policymakers are in the driver's seat. the bank of england has cut its banding focusing on financial stability. that is a worrying sign. claire: it is a special case because under mike -- mark carney's leadership, the bank of england was in the driving seat of climate reporting both for the regulatory system and also for the corporate system. some say they focused too much on that so there may be a portfolio adjustment. increasingly you are regulators, stock exchanges and governments saying, we understand that we have a massive role to play not just in some of the tax and spend regulations and incentives but also and how we analyze and report what data use. data is the great unlocked.

we need radical transparency across the board. governments have short-term focus on the challenges they are facing although it has been striking that no government has pulled back on their net zero pledges. they may be quiet on the trajectory but net zero is a huge landing. we established that at 26. >> the eu is pushing through its carbon border tax. what impact will that have on farms and other countries? trying out crying foul saying it is going to pay the price. claire: it is a clever policy. a question you have is without a global carbon price, how do you reward those companies who have prepared to drop their emissions and how do you incentivize your domestic industries to do better? we have to be careful to ensure we are not penalizing poor

farmers in developing countries but it is a clever tool and the u.s. is now talking about adopting it. it would deal with the challenge that we always face in the west. you claim this net zero process but you basically send it overseas. that needs to be accompanied with investment and finance. there is incredible work being done, how do we cooperate to get the indonesian society to use less coal for example? that has to be the quid pro quo for the legislation. >> you talk about how companies are pushing ahead with climate goals. for companies like terrascope, how is it tapping technologies like ai? claire: this is an incredibly important meshing in the fight against climate problems with new technology. companies need to know their emissions state.

what is your footprint. tell us what you're going to do with it. most companies can tell you about the scope. terrascope's approach, a fantastic provider of data for those missions set particularly scope three, and a do it in a way that enables the company to use the data. we are giving you a lot of intelligence about how you can change the trajectory. using ai and machine learning speeds up the process. it frees of the chiefs the state -- it frees up the chief sustainability officer. >> asia getting a strong push --how do you get europe on board? claire: you're up for a long time had led particularly the overseas development financing

what is interesting now is working out what is the best way to finance? it is not just writing checks. how do you have a blended finance package that rewards people for investment but also allocates the risk fairly. an important tool which we are developing quickly. >> always a pleasure. great insights. claire perry oneill, sustainability advisor for terrascope. and we are coming to you live from ecoparity 2023. paul: t wipe your that was claire perry oneill, former u.k. minister for state energy. we are going to have more insightful conversations from singapore and ecoparity week. this is bloomberg. ♪

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shery: here's a quick check of the latest headlines. apple shares erases gains after hitting an intraday high after the company releases its headset. the vision pro gives apple its

first new major product category since funny 15. sales begin next year. the headset price is at around $3500. industry-leading headsets sell for $1000. the indian millionaires in battle conglomerate says it's key debt metrics have improved. it unveiled the figures and a report as it seeks to restore investor confidence after this year's attack from hindenburg. improving net debt to earnings and a higher cash balance of $4.9 billion. china evergrande's a property unit has delivered a delayed earnings report that may bring his shares closer to a resumption of trading. evergrande property services group reported a profit of just under $200 million for 2022 there were a prior your loss but fell short of 20 20's.

it has been suspended for more than a year. paul: we are just a few minutes away from the open in australia and japan. a public holiday in korea so no trading there. futures pointing to the downside. off two thirds of 1% in australia. in new zealand, playing some catch up after yesterday's public holiday. better by a quarter of 1%. these are the stocks we will be watching when trade opens in japan and australia shortly. apple supplies and asia in focus after the unveiling of the long-awaited headset. keep an on sony and sharp. part. another company is said to be preparing to replace its -- a head officer following the news that the sec is suing binance

for breaking securities rules. shares of australian firms tied to weed may move on expectations that production will slide 34% in the coming season. coming up in the next hour we will be back live at ecoparity week in singapore to hear from the ceo of genzero as well as the netherlands minister of digitalization. the markets open in sydney and tokyo next. this is bloomberg. ♪

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shery: this is "daybreak: asia." we are counting down to asia process market opens. korea coming online. apple declining update announced its new precis mixed reality headset. we will be watching apple suppliers asia tweeting. crash: and stoxx in japan had a very strong day on monday, up two point 2%, consumer discretionary leading the way but, after a pretty weekday for u.s. equities, we might see a slightly softer open. it is the reserve bank of estonia decision day. make it another 25 basis points. that would be 400 basis points of tightening in the past 40. shery: a pretty close call there in australia. also watching with the bank of japan will do, given that we got the real cash earnings declined

for a 14th consecutive month, -- 13th consecutive month, really posing a challenge for the government because we are talking about those inflation pressures really affecting voters' spending power. household spending contracting, and more than expected, we are seeing pressure on japanese stocks which had rallied to the 1990 high, especially with the japanese continuing to weaken. we are seeing strength against the u.s. dollar in this session, at the 139 level. and we are watching the 10-year yield. we are talking levels below the 3.70 level given that treasury yields drifted in today's session. we had the ism services gauge falling to the expected level for the year. lots of concerns about the economic growth and potential recession coming up, as

investors are trying to find out what the fed will do this month. paul: paul: we have a staggered open here in australia. we were seeing a bit of positivity to begin with, slightly weaker now, though. this company went up about 2% after its patent got approval from chinese authorities to sell china baby formula. hard to get a beat on things, though, as we have the staggered open here. a lot of action on the currency side of case as we await the decision from the reserve bank of australia. as you mentioned, it is very much on the knife edge, traders split 50-50 on whether we get a pause or another hike. analysts are mainly coming down on the side of a pause. seeing a few losses, though, for brent crude and that will throw some interesting questions on the part of saudi arabia after

that one million barrel per day supply cut. not really having the desired effect at the moment. brent is $76.48 a barrel. let's bring in executive auditor for asian markets paul dobson. another staggering day on the asia pacific on monday, but things are looking softer today. what is casting the shadow? paul: a bit of a read-across from u.s. markets where the ism figure was really a big surprise and sort of jolted bond yields and the dollar as well, weighing on equities somewhat. it is a bit flat today. there's not a great deal out there. there are bits and bobs. i think the bigger longer term trend people are thinking about is how far can this stock rally go? the global gauge is at the highest in more than a year. we are on the cusp of the bull market for the u.s. gauges as well, and this is not what

people were expecting. i think it's caught a lot of people wrongfooted. the established narrative was that we were headed towards recession, at some point the stock will hit the bottom and then rebound. in some ways stocks have trickled higher and that is forcing people to reevaluate their holdings. they are sitting in cash. looking for protection. they are seeing equities raising and thinking we might need to jump onto the bandwagon, but at the economic recovery is not that certain. when we get a data point that jolts that narrative like that ism yesterday, that can provide a setback and reawaken concerns once again. shery: yeah especially once we see s&p global pmi's improving, mixed jobs report in the u.s., mixed data from china and mixed data in australia. you have the rba rate decision. how difficult is it for central banks to make up their minds now?

paul: very difficult. and very difficult for investors to get a read on it as a result. it depends a little bit on their mandate. if their mandate is just getting inflation under control and not worrying about anything else, that is easy, you carry on hiking until you are confident you have gone far enough that it will hold things in check. on the other hand we know that monetary policy works with a lag, so people will worry that maybe they will over tighten, and in six months time the slowdown will be much more sharp. so that creates the dynamic. it is very hard for central banks to do that analysis correctly. it makes trading around central bank decisions a lot more fraught. a lot more interesting, obviously, for the commentators but a lot more difficult for people to figure out where we are going, which creates more volatility around those events as well. paul: in terms of volatility, we are expecting a lot of

t-bill auctions, increasing supply up to $90 billion. what is the effect of throwing this boulder into the pool? paul: [laughs] i like the way you put it. it is a bit like that. but we have had warning that it was coming, in the run-up to the debt ceiling agreement. you would expect a lot of it would be priced in. we will see whether demand will hold up and where the money is coming from in order to fund it, which is important. if it is people taking money out of their account in order to invest in treasury bills, people using reserves that are being pushed into the fed report facilities at the moment, that is another. depending on what sort of money goes into that, it could result in more tightening of financial conditions. people have talked about the impact overall being akin to another. 25-basis point hike by the fed.

that would be negative for risk sentiment in the global markets. shery: bloombergs paul dobson. this as we follow what is happening with apple suppliers in asian trading. can we have the tech giant at one point hitting an all-time high, just to reserve against as they announce the price tag for the much awaited mixed reality headset of about $3500. this will come in early 2024. bloomberg intelligence saying given the high price tag, we may not expect huge adoption among u.s. consumers, maybe more for corporations, so the sales volume may not be as high. you can see the pressure on apple supplier names. look at how crypto assets are trading as well. we had the sec saluting binance and its ceo changpeng zhao for breaking securities rules. we had seen their downside pressure on crypto-currencies.

bitcoin rebounding in the asian session slightly after filing the most in almost three months. crypto related stocks across asia now under pressure. let's turn to bloomberg's su keenan who joins us with more of what is happening with binance and its ceo. so what exactly is the s.e.c's case? su: market manipulation, securities violation, and fraud. it is a 136-page complaint, outlining 13 separate violations, largely that they mishandled customer funds, lied to u.s. regulators and investors -- particularly about investors and trading controls -- and they are operating in unregistered securities exchange. a key thing for the s.e.c. the case claims binance sold unregistered crypto asset securities, and that its own token as well as its staking investment schemes are in fact

securities. the chair gary gensler pulled no punches in his statement, he accused the binance ceo of engaging in a web of deception, conflicts of interest, lack of disclosure, and calculated a vision of the law. in short he said the public should beware of investing any of their assets in these unlawful platforms. the suit also alleges that the sigma chain a trading firm controlled and owned by cz show engaged in bad trading in order to inflate volumes of trading. the same entity was involved in both the buying and selling. the suit also states that binance purposely wanted to invade binance u. -- wanted to evade u.s. law, but binance remained heavily involved behind-the-scenes. binance issued a lengthy statement, calling the suit

disappointing and denying allegations that the funds have been at risk. but look at how not only crypto assets, but exchanges have been reacting. coinbase, the biggest u.s. crypto exchange, at one point was down as much as 13%, managed to pare its losses. robinhood took a hit. bitcoin fell into the $25,000 range. the sec is asking the front to freeze its assets and that could have a greater chilling effect on the crypto industry. paul: this is not binance's only regulatory problem, is it? su: they have a big headache here because every u.s. regulator has them in the crosshairs. back in march, the cftc, commodities futures trading binance and cz, the ceo himself, of alleged violations of derivative regulations,

alleging that the firm was involved in sham compliance. and there is a separate justice department investigation also looking at both binance and its ceo. when you look at the lengthy statement binance put out, they are pointing to the regulatory uncertainty, saying there is a basic turf war here, there is a lot of regulators involved, it is hard to get cooperation when it is not clear what the rules are -- again, this is binance 's response, saying they are disappointed with the sec filing the suit. again, they are the biggest crypto exchange in the world at this point, so implications of any freezing of assets could be rather damaging for the industry. again, we are seeing not just bitcoin, but all coins lower in reaction, some of them bouncing back from losses earlier in the session. that this will d.a.

closely-watched case for the industry -- will be a very closely-watched case for the industry, binance trades on average about $65 billion a day, and that is what has made it a target for every u.s. regulator trying to put curbs on this industry. paul: bloomberg's su keenan there. now let's check in on the first word news. we have new revelatory plans which may require large u.s. banks to boost their capital by an average of 20%. sources tell us the proposal could cover banks with at least 100 billion dollars of assets. that means dozens original banks might have to meet the new standard. the changes, which may be introduced this month, are part of a global overhaul of banking rules. russia and ukraine have reported widespread fighting along the front lines as a distribution builds for kyiv's long-planned

counteroffensive. ukrainian officials say it russians are spreading disinformation to distract from their losses around bakhmut. moscow says its forces defeated a large-scale ukrainian attack in the donetsk region. former u.s. vice president mike pence has formally entered the race for, the white house setting up a clash with donald trump in the battle for the republican nomination. sources say this 53-year-old will formally announce his candidacy in iowa on wednesday, the former vice president and indiana governor has been laying the groundwork for a white house bid for more than a year. . those are your first word headlines. shery: coming up, we go to singapore for a conversation on the path to net zero, and how technologies like ai are reshaping our future. bloomberg's haslinda amin and annabelle droulers are there. guys, really timely themes at the moment. haslinda: climate --

fighting climate change has been called the moonshot of our generation. seven years since the paris agreement and we are far from getting to net zero and five from keeping global warming below the two degrees celsius needed. we just saw how europe had its warmest january ever in its history. here at ecos, we will be speaking to ceos and leaders to talk about what they're doing in terms of tapping technology like ai, blockchain to get us to net zero. coming up, we will speak to genzero which invests in companies who will x alert the process to net zero. pretty excited. annabelle: end here in singapore also the asiatic event is getting underway. people milling behind me. the focus today very much on the promise and also the perils of ai because we are told generative ai could be worth $1.3 trillion within the decade. there is a need for regulation.

are we moving too fast, too fast? we will discuss that with dutch minister for digitalization joining us soon. this is bloomberg. ♪ three nights, esg... the broker will take your bonds. -diversification, futures, options. fiduciary. leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪

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>> on balance, we think that the

evidence tips towards 25-basis point hike this afternoon. that would be the prudent thing to do really, in terms of taking policy more subjective to get on top of inflation. we have a very tight labor market that is beyond full employment. >> the chief at rbc capital markets there. economists and many markets are divided over which way the rba will move, as it weighs price pressures against a slowing economy. our next guest joins us from hong kong, james mcintyre. we have seen an uptick in consumer prices, but then again , we have a lot of tightening as well. james: we see that there is already so much baked into the cake for the rba, and the central bank, the longer they wait, the longer latency the

downturn in the economic data beginning to emerge, especially when you look at weakness in retail sales, consumer confidence remains subdued, and we have the large bulk of mortgages that are about to come off the low, fixed rates. it will really hit cash flows, do the central bank's job of ramming home the tightening into the economy. we did see them deliver a 25-basis point hike last month. we think there is room for them to pause. with her that pause turns into a scapes or a full bunch towards them being on hold remains to be seen. we think the longer the rba can delay, the more likely there is that there will be evidence that they have to do more. it comes down to a question of where their judgment is on how comfortable they are about how quickly inflation will return to target here in australia. shery: so when will the hike in the national minimum wage

comfortably? james: what we saw last week was at the fair wage commission announced a very large increase in minimum wage for a very small portion of the workforce. it comes into effect on july 1. for a bigger group, 20% of employees get a 5.7 5% increase in their wages. when it is 20% of employees, though, it is only 11% of wages, this will still be at the low end. it will not be a dramatic increase in labor costs in the economy. these workers will not be keeping up with inflation, we still have real wage pressures coming down and that will be grinning down on spending power for those people -- grinding down on spending power for those people. shery: bloomberg james mcintyre with a preview of the rba rate decision later today. you can get around up on all of these stories that you need to go to get your day going on today's edition of "daybreak." bloomberg subscribers, go to dayb . this is bloomberg. ♪

♪ paul: new zealand's ceo says high costs and logistical challenges are tampering the rebound for air travel. the ceo told us more about the changes and tailwinds now facing the industry. >> enjoying the recovery is where we are at the moment. demand exceeds supply and keeps prices out. phase 3 will be more interesting. we are still dealing in a pretty high-cost environment. it will test us, will have to think about this differently. >> you are saying capacity comes back. there is another way of looking at it, which is demand drops off. which one do you think it's going to be? capacity is coming back slowly. the ceo of boeing talks about how they and they see themselves

struggling for. quite some time. does capacity stay constrained and demand drops off, is that how you think things will work out, or do you think capacity keeps getting incrementally better and better? >> i suspect the latter. we shouldn't forget that as you fly around the world, you can still go over deserts and see planes packed up. not everybody has their planes back and operating. in air new zealand, we got the last one back about four weeks ago and it is now in service and flying. so i combination of getting planes back and within storage, a combination of having enough pilots that you are actually flying as much as you can, a combination of having the spare parts available so that every plane you have got is actually serviceable and operating, and then of course, purchasing some new ones. all of those things will see capacity come back. i am not convinced demand changes all that much.

i am still seeing oliver new zealand, people interested in traveling and that is strong for us. increasingly, people not just visiting friends and relatives, but now also going on holiday. >> if that is the outbound, what about the inbounds, you are running auckland, new zealand to new york, which is a think about 16 hours -- 17 hours. what is demand like on a? >> route like that? >> pretty good actually? >> new zealand is seen as being clean and green and safe. tourism is back. up and operating. the dollar is good. . we are seeing strong capacity coming from the u.s. into new zealand and increasingly more people from china and japan. >> how is china? >> building.

the thing holding china back from our perspective is not a lack of desire of. people wanting to travel. it is they have to renew their passports. a lot of people had passports actually expire during that three year period that the country was locked down. >> auckland to new york is a very long flight, you are talking about, you have been causally trying to figure out ways of improving comfort on these super long haul flights. you are now talking about putting bunkbeds, and i heard, charging $100 an hour. do you think you are lowballing it? do you think pay that price? is it higher? is it low? what do you think? >> i love the fact that we have a deck and we are renovating. we were boiling water at 35,000 feet 25 years ago. we have got sky couch back in 2019, and here we are with this new option. you rent it for about a four

hour period for about $100, $400. we will see how it goes. we think it will be a treat. most importantly we are providing a service for customers who on the long flight , usually overnight, and you are sitting down at the back of the plane, so you have an option to buy an economy seat, you can take four hours to buy a flight during the night without the extra premium we would pay for a higher class. so we will see how it goes. shery: the air new zealand ceo greg foran speaking to our guy johnson. this education technology company is seeking to list its tutoring unit in the middle of next year. the plan is later than the company had expected as it strangles with financial challenges. byju's has been struggling to

restructure after the decline of the pandemic era boom in online tutoring led to a bill in its finances. indian be the owner got time at it's key debt metrics have improved. is -- it is seeking to restore investor confidence after this year's attack by u.s. short-seller hindenburg. it is touting improved debt to earnings ratio, and a higher cash balance of $4.9 billion. we have more to come on "daybreak: asia." stay with us. this is bloomberg. ♪ and this is ready to go online. any questions? -yeah, i got one. how about the best network imaginable? let's invent that. that's what we do here. quick survey. who wants the internet to work, pretty much everywhere. and it needs to smooth, like super, super, super, super smooth. hey, should you be drinking that? -it's decaf. because we're busy women. we don't have time for lag or buffering.

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paul: we just got an alert on the bloomberg terminal.

pmi numbers from singapore for the month of may. signaling a better softness, still in expansionary territory, and a bit of a slowdown from the 55.3 we saw in april a great. deal of change for the singaporean dollar, still trading just below 1.35 u.s. dollars. shery: take a look at how asian futures are trading at the moment. we do have south korea away on holiday. we are seeing downsides pressure everywhere else with the nikkei down 0.5%. this, with the japanese holding around the 140 level. a bit of strength against the u.s. dollar, but really not that much. information intact, financials, materials, leading the declines. we also have the asx 200 reversing two sessions of gains, this ahead of the rba rate decision. the consensus is for a hold, but it is a close call given the

surprise rate hike in may. u.s. futures still down 0.1%. let's head back to singapore where ecosperity week has begun. -hour mark markets coanchor haslinda amin is standing by with our next guest who runs a global investment firm founded by tamasek. has? haslinda: er talking about genzero, and with me is frederick tao, ceo at genzero. you started with the coffers at 5 billion singapore dollars, 3.5 billion usd. given the uncertainty in, the markets today what are we talking about in terms of investment deals, are they weakening? frederick: we have been fortunate to have a good pace of net investment in the one year since we launched. over the past 12 months, we have been able to have new commitments and capital deployed of about 700 million singapore dollars, about $500 million, a

sizable deployment into new and interesting opportunities. we've also been able to grow our firm, we have doubled it from the time we launched to about 30 professionals, looking at different aspects of investment from nature to technology to carbon markets. haslinda: what is in the pipeline, what are we refueling and what can we expect in the next 12 months? >> we will be exploring nature-based opportunities. later this week we will be announcing a new project that we have invested in which is great to be a reforestation project in africa. we think nature will be particularly important for near-term decisions because it will deliver a cost-effective climate impact. haslinda: er invested in carbon projects, but there are a lot of questions about whether they are still credible. your take on it? >> my sense is it represents a good opportunity for us to proud find carbon finance, different sources of capital to accelerate

deployment of new solutions. when you think of carbon offsets, you often think you're going to use offsets to offset my carbon footprint from air travel and from operations, but actually carbon finance, people are willing to pay more than is required, and in so doing, we improve the economics of new solutions that are currently too expensive. you think about carbon offsets, carbon markets that way, we think it's a very powerful blend of finance tool to accelerate decarbonization. . haslinda: but it is suffering from a credibility issue. how do you gain trust? >> first we have to recognize we have to constantly improve the methodology and standards associated with carbon markets and carbon finance. it's a relatively new area and the standards are relatively evolving. but there are signs we are converging uncommon definitions of what it looks like. the recent propagation of carbon

principles, at least there is a greater convergence in the industry and the market around what good looks like anything that will be a positive step. haslinda: the issue under nationalization, we saw what happened in the number boy. are you worried and are there countries that may be the same thing? there are talks about how china and india could be on the same path. frederick: countries have to look after their national interest, that is legitimate and proper. but what is their enlightened national self interest? often times it requires them to collaborate, to be open to the free flow of capital, ideas, of technical expertise, and if there is certainty in what the rules are, whether it is the way you set a percentage for revenue-sharing and profit-sharing, as long as there is that degree of certainty then, perfect center players can make up their minds as to whether it makes sense for them to invest. if it does, that is great. if it doesn't make sense, that is ok. haslinda: when you look at how your invested right -- how you

are invested right now, how are you looking at and assessing your returns? frederick: we have to deliver returns above our cost of equity, that is the requirement from shareholders. for genzero, we are a double, financial returns, we are looking at the end of climate impact we achieved through our investments. it's a balance of financial returns on one hand, and the ability to achieve quality climate impact in the near term on the other. haslinda: you are making bets among the sustainable aviation fuel. some say if you listen to the ceos of big companies like boeing, so on and so forth, they say that those fuels will never get to the price of the jet fuel. when you invest, what are some of the considerations? frederick: we think about a few things when it comes to sustainable aviation fuel.

we know that decarbonizing aviation is a strategic imperative, surgery for singapore and for many other places which are dependent on aviation, global aviation. so really there are three things. one, there must be feedstock availability, the technical pathway must be able to produce at scale. if you don't have the supply, people can't even buy it in the first place. on the other hand, we also have to talk about fundamental decarbonization. not all sides are equal. depending on the feedstock, whether it is from a virgin feedstock, we are able to determine the lifecycle carbon abatement of that particular fuel, so we need to go for the maximum carbon abatement. different types of fuels have different carbon abatement. finally, price. some of them are more expensive. to put it this way, and iphone costs a lot more than it used to cost. so things will get more expensive. the fact something is more expensive is not a reason not to adopted.

the question is whether we can get the price down to a accessible level that allows for scaling and adoption. haslinda: the question is when. frederick: the more that we adopt this the faster it will come down. haslinda: haslinda: give me a train frame, frederick. frederick: my sense is not in the next five years, but beyond 10 years, we have recently invested in a company called clean jewel, a technology company that looks at producingsaff from agricultural waste food stocks. they have the opportunity to eventually have the economic entitlement to get prices close to if not to at parity with conventional fuels and i think those technologies exist. you just need to identify them back them with enough capital and give them enough time and incentive to scale up. we will see if that is enough to convince haslinda: david calhoun. there you have it haslinda: coming to you live from ecosperity here in the lion

city. paul. paul: that was our markets coanchor haslinda amin in singapore. now let's get a check of the first word news. the biden administration says military interception maneuvers by chinese ships and planes suggest a growing aggressiveness from beijing. . the national security council spokesman john kirby says these actions risk an accident that could result in injury. a chinese warship last week crossed in front of the u.s. navy vessel in the taiwan strait at a distance of less than 100 meters. >> it will not be long before some to get hurt. that is not concerned with these unsafe and unprofessional intercepts, they can lead to misunderstandings, miscalculations. when you have pieces of metal that size whether it is in the air or on the sea and they are operating that close together, it wouldn't take much. paul: the ecb president christine lagarde, says inflation pressures remain powerful and borrowing costs

will be raised further to tackle them. the comment cement expectations for another interest rate hike week's meeting. the tightening campaign is still materializing. lagarde reiterated there is no clear evidence that underlying inflation has. peaked. the airline industry's main lobby and buddy is doubling its estimate for global profit in 2023 as a surge in flying drives up ticket prices. the international air transport association says profits will reach nine point 8 billion dollars, double the forecast. they expect four point three 5 billion passengers to travel in 2023, about 96% of 2019 levels. those are your first word headlines. shery: staying on the airlines, the korean air company says its takeover of asiana will happen despite antitrust concerns with the u.s. and the e.u.

the chairman also told us they are seeing a surge in travel demand in the americas and europe, and they expect the chinese market to fully recover by the end of the year. >> demand from korea to the americas and europe is very strong, almost near the pandemic level. the yield is actually stronger than pre-pandemic right now. china is weaker, but it is still opening up so we expect towards the end of the year, we expect a full regaining of demand by china. >> do you think china will be as strong as everybody thought it was, when the economy reopen everybody expected a really strong recovery. the micro data is not pointing to that at the moment. do you think the chinese recovery story might not be as strong as anticipated? >> it might be in the beginning, but china is a very strong and

very important economy in the world, and i believe demand will come back very sharply soon, hopefully sooner rather than later, but i believe everything will be back to pre-pandemic level by the end of the year. >> it's a key market for you, chinese tourists? >> yes. >> let's talk about asiana, the deal. you are consolidating the korea market, significantly consolidating the korea market if this deal with your smaller rival does go through. as a result, regulators are telling you, you already know, they are very interested. is this deal going to happen? >> it will happen. we are pushing very hard. we will make it happen. regardless of what we have to give up. i feel strongly that we will push it all the way through. >> how much are you going to

have to give up? >> i don't know yet. [laughter] >> more than you thought? >> yes. i am thinking long-term, this is still a game for me, so i am willing to negotiate on it, talk to the regulators, and i believe i can make it happen. >> do you have other aircraft that you need, all the engines that you need at the moment, do you have everything you need at the moment? >> it is a little difficult, but we are managing. we have the capability to do all of our maintenance of our aircraft and the engines. >> everybody that i have talked to has talked about engines, are they the issue? >> i see a few of my airplane sitting in the hangar with no engines. it hurts. but i believe in the manufacturer's. they will come back soon for us. and we will get it back soon.

paul: the korean air chairman walter cho speaking to bloomberg at the conference in istanbul. still to come, we are looking at the need for regulation around ai with the netherlands minister for digitalization, alexandra van huffelen joining us in singapore. that conversation is next. this is bloomberg. ♪

paul: the asian techx conference begins in singapore today. bloomberg's annabelle droulers is getting by without first guest. belle. annabelle: thanks, paul. we are here at the event kicking off in singapore and the focus is the promise of ai technology and generative ai, the perils, and perhaps the need for regulation. our first guest is the dutch minister for digitalization, alexandra van huffelen. the e.u. is looking to be at the forefront of this regulation, perhaps with laws coming out as soon as the end of this year. what can we expect out of that framework? >> what we find very important

is that the internet or the digital world will be a world that is face that has values like transparency and nondiscrimination. what we see already happening with social media platforms but now also with the narrative ai is we are not sure -- sometimes we are sure -- that they do not adhere to these values, so we find it very important to start regulating, and the reason why i am here also is not only to speak about what we are doing in europe, to find out how countries in the region are looking at this, because this is a global development. we will be very interested to share ideas and see how we can do that together. annabelle: what exactly would you say you are looking to achieve with the framework? >> what we are trying to achieve in europe is see how we can regulate ai. we are doing it in the netherlands already, we created

an algorithm register for governments to make sure that whatever we use the technology, it is being done safely. but this needs to be bigger, of course, and it needs to be not only europe, but i hope larger than this region, because we want to be sure that we can use all the great things ai is going to bring us, whether it is in health care in making our jobs sometimes easier, but also we want to make sure that everything is happening safely and adhering to the values that we find very important. annabelle: the openai ceo sam altman visited europe, and in some instances he would look to move away from europe if the rules were too strict. he has changed his tune. >> we hope to see that they will adhere to the regulations we are putting in place. some of the companies already adhere to setting up codes

together, voluntary usage of it. we're also very clear in europe, either you comply with regulation, or you have to go out. or you have to pay a big fine. so we're saying that it is not something that we take very lightly, we think this is super important because the digital world is so huge, it is affecting everybody's life today. how you work, how you communicate, so on and so forth. so, keeping up with that and making sure you apply to the regulation is super important to us. annabelle: when you mentioned and think about the idea of coordination at the international level, what exactly does that look like to you? >> hopefully, and that is something i will hopefully discuss today and in the coming days, it is how we can make sure that we make the digital world a world that is safer for everybody. for instance, on children's

rites, we know everybody in the world basically wants to protect children from harmful content, from addiction to social media or ai. so we'll talk about that. how can we jointly think of protecting children's rights, have regulation that helps in doing that. annabelle: when you think about values, sometimes they can be misaligned, especially when you have raising tensions between the u.s. and china, you have the ukraine war that is ongoing. how do you regulate ideal in that situation where people don't disagree on what the basic values are? >> we have to find that out. that is one of the reasons why i am here, because i want to talk about these values, about things like transparency and privacy, things that we find very important in the netherlands and also in europe. and how that is working here. i do believe that most people

really like privacy. . they want to be safer on the web , right, they don't want to be attacked or want people to use their data in any way that they don't like. so i am sure that we can get quite far by talking about these values and seeing how they can work. but it might be that regulation is going to be a bit different from region to region, but hopefully, in general, it will be regulation that makes us safer. we have the same ideas about protecting consumer goods, for instance you don't want a certain food to not be good or a certain car to not be safe, this is also what we would like to achieve with ai. it should be safe for everyone. annabelle: minister, thank you so much for your time, that was the dutch minister for digitalization alexandra van huffelen joining us. more coming up today, we will discuss the promise, perils, and the opportunity for partnerships

around ai. shery: annabelle droulers joining us from singapore. if you missed any part of the conversation, tv is your function. you can watch past interviews and watch us live as well, and dive into any of the securities or bloomberg functions that we talk about. you can also become part of the conversation by sending us instant messages during our shows. this is bloomberg. ♪

shery: we are watching property developers in china at the open in half an hour from now. stocks resumed declines on monday. let's bring in chief markets reporter sophia a quarter -- sofia horta e costa. we did not see a turnaround in the markets. what gives? sofia: yes, exactly, the focus of stimulus measures in beijing, is not a broad-based stimulus package, unlike the package we saw at the end of last year, but it is also really focused on supply, supporting developers. the problem is that the key issue is on the demand side and confidence there. when the housing market starts to pick up sales wise and pricing wise, that was what will move the needle, and so far, we are not seeing that. there is a huge confidence crisis in the physical market and that is not translating into

developers' bottom line, they need to sell more homes and have activity pickup. right now the focus is on putting a floor in confidence, a much bigger challenge for policymakers than rescuing this property developers. paul: is there a spillover for banks and consumer confidence as well? sofia: there is. consumer confidence is already low, covid zero obviously hammered consumer confidence. youth unemployment at a record, more than 20%. let's not forget china's youth is a big chunk of consumer spending and that is really hammering confidence. also, the spillover not just to banks, but to local government financing vehicles. local governments really rely on land sales for their bottom line and, we are not seeing increased fiscal spending from the central government. also, the central government is unlikely to rescue these local

governments because of the risk of moral hazard. this would go against what beijing is trying to do, which is reduce credit risk. so these negative feedback loop, it would be a very difficult problem to turnaround right now. paul: bloomberg's chief china markets correspondent, sofia horta e costa there. still to come, the economic outlook with this company that sees a brutal rise in household debt default. and we talk renewable fuels with another guest joining us from ecosperity week in singapore. that is it for "daybreak: asia." markets coverage continues as we look to the start of trade in hong kong, shanghai, and shenzhen. ♪

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