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shery: are watching "daybreak: asia." coming to you live from new york, sydney and hong kong. annabelle: we are counting down to asia's major market opens. paul: the top stories this hour. traders boost bets on further fed tightening following canada's surprise rate hike. cathie wood says ai is the biggest catalyst for innovation and sticks to her bed on million-dollar bitcoin. in china's core banks are set to -- as stronger dollar demand boosts the yen. shery: we are seeing pressure after a mixed finish in new york, u.s. futures and or pressure. the nasdaq 100 down. the s&p 500 further away from the bull market territory. we almost gained 20% from its october low. the russell 2000 of small caps, gaining ground for a second

session which is pretty interesting because it has been underperforming in past few weeks. we'll yields being lifted after the bank of canada rate hike. the 10-year yield at 3.79. 2-year yield rising above the 4.6% level as traders are pricing in a full fed rate hike by the july meeting. watching oil prices as well. not a lot of movement, but we saw oil gain ground as we had data showing u.s. refiners increasing processing to the highest since 2019. we continue to see that push and pull it when it comes to the demand concerns about an economic downturn. on the same time, concerns around supply. annabelle: absolutely, it is the dynamic at play. you look at the set up for asian stocks, we are pointing to the downside. there is concerned, the realization that the fed will be hiking rates sooner rather than later and we are not done yet in

the fight against inflation. we are seeing equities looking for a slower start. new zealand onto the downside. keeping an eye on the currency space, the japanese yen is back clean at that 140 level. it is a picture of that yields differential between the fed and the boj, even though some economists say that boj could be forced to change tact as soon as possible. we will be watching next week. let's change, we are also seeing it way out in the bond space, this expectation around the fed. we are seeing the three year yield in australia spiking up 13 basis points, now at its highest level we have seen since 2012. the rba very much in focus because we have that decision where traders were split on what phil lowe and his colleagues would do. ultimately we got that 25-basis point hike. the concern from phil lowe yesterday that inflation could stay high for some time to come.

plenty of central-bank action. kick started by the bank of canada earlier today. shery: inflation concerns in canada, and not to mention a housing market that has managed to recover. some of those reasons that we saw the bank of canada unexpectedly hiking rates by 25 basis points and taking it to the highest level in 22 years. we have seen concerns continue to really affect economies around the world, when we are talking about overheating growth. after declaring that conditional pause in january, canadian policymakers coming back and hiking by 25 basis points to take the rate for the highest since 2001. that really pulled u.s. yields higher as well. the dollar was fluctuating between gains and losses. we are hearing that if this trend continues into next week, we could see more strengthening

of the greenback as well. haidi: this is it, isn't it, going into next week, more hawkish expectations across the board for central banks. we still have the reserve bank of india as well this week. but between the rba and the bank of the canada surprise moves, this is what we are watching. this is adding to bets by traders that we will see the fed hike in july from the fed. not just the fed, but the pboc as well. even in china, rate cut expectations have been growing as we see further signs of the weaker economic recovery. the story about the guidance to banks to cut deposit rates. just another sign that we are perhaps seeing more stimulus and easing on the way. also in the bank of japan, calls for a tweak to the ycc. and of course, the you see the grounding that as well, officials watching higher rates, even as we see a bit more steady

retreat on inflation across the e.u.. for more, let's bring our executive editor for asian markets, paul dobson. when you look at the surge in tightening, it is playing out through australian bond markets as well, is this shifting the narrative as well get into some key central-bank decisions next week? paul: good morning. i am not sure that the narrative has changed. , you know, we are facing this generational spike in inflation across developed markets and central banks still having to deal with that, so the slightly unexpected rate hikes from australia and canada this week but says in that paradigm, of higher bond yields. the environment is less friendly for stocks, particularly technology companies, and the likes of gold and bitcoin and other alternatives that do not like higher interest rates.

shery: a different picture playing out in china, though. looks like we will see more stimulus measures coming from the policymakers this year? paul: yeah, china is in a completely different position. it's inflation is decelerating, or heading towards negative territory at the moment. no reason for them to worry about that kind of thing. quite the opposite, the economy is in a bit of a funk. people are starting to look at more stimulus, how that might come. whether it is from fiscal policy, measures on the property side which we are looking forward to at some point. maybe now with the reduction in bank deposit rates, they will also start to see a bit more on the interest rate side, it may be the mlf, or from the loan rates. you know, how much that will help at this point is still a question, because china feels

like it is in this confidence process at the moment more than anything else, and it needs that to come through. shery: executive editor for asian markets, paul dobson. our next guest says dividend paying stocks may be more attractive in an environment of higher interest rates. she joins us now, global equity chief investment officer at alianza global investors. always great to have you with us. here in the u.s. we are expecting cpi numbers to come out next week on the first day of the fed's policy meeting. in this environment, how do you position? guest: we are expecting a hawkish pause. we have seen some deceleration of inflation, and i think we will see what the message is for july, but a hawkish pause would be warranted at this point in time for the fed.

shery: what does that mean for tech stocks? we have seen a bit of a downturn for the big megacap tech names, but at the same time of course, we see this huge frenzy around ai, even in an environment of rising yields. guest: exactly. as you know, aia has been a very long-term theme for us, we have had it many years, including more generally technology and cybersecurity, which is even more important in a world where ai takes a lot of share, if you want, of technology. given the rally we have had, it will be normal to see a pause, particularly in the context where we see the rates might plateau. in this environment, you have an opportunity. this is not an area where you buy an etf, this is an area where you do a lot of work from the bottom up stockpicking,

position your portfolios for the long-term, because the trend will continue to stay with us for the long term. haidi: is there a split between pre-regulatory crackdown and post regulatory crackdown when it comes to ai, though, because it does seem to be that reckoning that will be coming in markets like the u.s., but also in china. virginie: yes, absolutely. ai is not one thing. one element of it is what i call digital darwinness, competitiveness between countries and companies, etcetera. another part of ai will be the automation, the productivity increase, and it will permeate a lot of sectors. and of course, the third part will be the part where humans become less involved. the regulation aspect will be very wary about that last part,

particularly if you take the financial industry regulators who will be very wary of decisions made by the machine on its own and in an evolutive way, which is what ai will do. so it is not one-size-fits-all, if you want. haidi: certainly not one-size-fits-all when it comes to investing in chinese risk assets more broadly. what are your views on how the recovery is going, what opportunities there are still, and what catalysts there might be to adding positions as part of that china story? virginie: one, 5% growth in a world that is accelerating or is going to decelerate is actually attractive. number two, there are different factors at force after the initial reopening and that normal tendency to go to service. you're out of luck, you go and get a haircut, or to the

restaurant, et cetera. we are in that second phase. the industrial site has not picked up. and then industrial pressure. we have seen it in the port numbers. that is putting pressure on companies involved in the global supply chain, if you want. you also have the trending down factor in consumption, people perhaps uncertain about jobs. what is the conclusion of all this? "bad news is good news." if there is too much negative pressure in the domestic economy , i believe the government will come in with support measures, but in a much more, i would say dedicate way than what we saw in the post '08 crisis, so it will be much more targeted. and of course, the long-term built around ai technology, infotech, innovation is a theme that we like very much in china that is still massively underestimated.

haidi: always great to speak with you, virginie maisonneuve, global equity chief investment officer at allianz global investors. still ahead, finding solutions to the world's most pressing environmental issues. we are joined live by the ceo of the earthshot prize. shery: but up next, ark investment ceo cathie wood tells us is lucidly wide they are buying more coinbase shares despite the sec's crypto crackdown. this is bloomberg. ♪ it can happen to the people who teach us and rescue us, the people on our team and in our family. it can happen to the people who serve us and the people who served.

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vonnie: this is "daybreak: asia." i am vonnie quinn was the first word headlines. the new york city mayor told residents they should stay inside or wear masks outside. flight delays are reported in new york, philadelphia and new york. the canadian prime minister says canada is living through the worst wildfire season in history with millions of hectares scorched so far. these are life pictures of new york. china is said to be the biggest factor driving oil prices. opec+ agreed last week and to extend production cuts to the end of 2024, with saudi arabia taking an extra million barrels a day off the market. oil prices have given up most of their gains since that announcement. soccer superstar leonel messi is reported to be planning to join u.s. soccer club inter miami.

the move was revealed to a spanish newspaper. it would mean he is forgoing a contract in saudi arabia. the newspaper says messi is being offered profit-sharing agreements with adidas and apple. also, espn he may get a stake in the club, joining co-owner david beckham. global news, powered by more than 2700 journalists and analysts in more than 120 countries. i-one vonnie quinn. this is bloomberg. shery: that's take a look at how crypto assets are trading, we are seeing pressure for bitcoin for second day as we continue to see the widening crackdown when it comes to crypto assets and to crypto assets and the sec's suits against coinbase and binance that is now targeting $120 billion of tokens. lawsuits expanding those lists of tokens seen as unregistered securities. we have seen coinbase slightly higher, but binance continuing to fall.

haidi: there is one investment firm that we know is unfazed by the widening u.s. regulatory crackdown in crypto. ark investment actually boosted its coinbase stake even after the platform was sued by the sec. ceo cathie wood told us exclusively earlier that she is standing by her big called when it comes to bitcoin. cathie: the cases go through court in the judicial system, the judicial system is questioning the sec's decisions here. so we think this is a good thing. we actually think this is going to be in the courts and in legislation for perhaps years, and what has happened in the meantime? we have binance under increasing regulatory scrutiny for more criminal activities and fraud being one of them.

therefore, we have the competition to coinbase really, we think it is disappearing, and so that is a good thing longer-term for coinbase. haidi: you are still maintaining your confidence across crypto more broadly. are you still confident in that one million-dollar target for bitcoin? cathie: yes. the more uncertainty and volatility there is in the global economies, the more our confidence increases in bitcoin. one of the reasons is we have just been through an inflationary scare. we think it was very much supply chain driven, and bitcoin is a hedge against inflation. we also believe now that the bigger risk is deflation, not inflation.

why would bitcoin do well in that circumstance? it would do well because it is an antidote to counterparty risk in the traditional financial system. on the bitcoin blockchain, everything is transparent. we can see all of the transactions, all of the activity. therefore, we have a much better understanding of how little counterparty risk there is in the blockchain world. shery: so what you are saying is that you expect those accusations on binance to actually prevail if you are expecting coinbase to actually benefit from this? and would that not lead to more glittery crackdown on coinbase if it has actually become a bigger player in this industry -- more regulatory crackdown on coinbase? cathie: it was interesting to see the sec sue binance on monday and the next day, coinbase. they were trying to put them in the same bucket. they are not all in the same

bucket. we have two former officials, binance u.s., coming forward, and actually we now understand that they have been working with regulators and the government generally, to help the government understand how binance u.s. was not separate and distinct from binance international, and how much cz controlled binance u.s., and how much of binance's data was in china, and how much commingling of funds there were. coinbase is not accused of any of this. and it is unfortunate that the sec took action against coinbase the day after binance and then seemed to, chairman gensler as he was on one of the major news channels, was trying to implicate coinbase in the same way that he was implicating binance. no.

they are very different. there are questions about what is a security, and about staking. those are the two questions that coinbase is facing, and binance is facing. but most of the other questions around binance have nothing to do with coinbase. shery: the ark invest ceo cathie wood speaking exquisitely to us. you can watch us live and see our past interviews as well on our interactive tv function tv . you can dive into any securities or bloomberg functions that we talk about, and also become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. cnn ceo chris licht pop has stepped down from the channel. the parent company says his departure is immediate and is scouting for a new leader. this comes after a backlash for a town hall in may, and an unflattering profile of him in "the atlantic." the gamestop shares plunged after the firing of the ceo. his responsibilities as executive chairman of the videogame chain will include management oversight and capital allocation. the retailer also reported fiscal first-quarter sales fell short of estimates. traffic euro has paid $3 billion to its top traders and executives as it matched up a record profit. the giant. reported profit of from a year

ago. but traffigura warns that the record earnings are unlikely to be sustained through the end of the year is the energy crisis begins to ease. shery: and of course we are counting down to the start of trade in tokyo. these are the stories you're watching. in japan, gdp numbers for the first quarter. bloomberg economics thinks growth likely accelerated to 2.1% quarter-on-quarter. also due, the current account balance for april. and sekisui house is among the companies releasing their earnings today. in south korea, the central bank is set to release its quarterly monetary credit policy report. the finance minister will speak at a debate forum hosted by an association of senior journalists.

and samsung's third generation automotive processor willpower hyundai's next generation in-vehicle infotainment systems. the collaboration expected to roll out in 2025. take a look at the bond space right now, we have seen the uptick end-yields globally, treasury yields higher. 2-year yields rising. the 10-year yield also rose to the 3.79 level. traders are fully pricing in a fed rate hike in july, given what happened with the bank of canada raising rates unexpectedly, to the highest in 22 years. that pooled u.s. yields higher too. we are seeing the impact in the asian bond space, with the australia three year rising to the highest since 2012. and we are, of course, following jgb's, because we had seen super

long bonds advancing. we have a quiet auction scheduled for the next few weeks. haidi: certainly the moves we are seeing across the bond markets are pushing us into potentially next week with a bunch of major central bank decisions looking more hawkish. this is the picture when it comes to the equity set up. we saw investors wrongfooted by the bank of canada, despite the s&p 500 at the brink of a bull market. we are seeing softness as we get into the start of trading in sydney. kiwi stocks are down 0.6%. chicago nikkei futures looking pretty flat as well. boj watchers are agai we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams)

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shery: -- annabelle: you were watching

"bloomberg daybreak: asia." we are 30 minutes away from the opens in sydney, seoul and tokyo, but the focus is what will be happening in the bond space, because we have seen investors questioning whether their recent expectations could see a fed cut by the end of the year could be incorrect. it given the action we have seen in treasuries as of late, it has been a reinforcing expectations of the key rate for the fed will be lower by the end of the year. overnight, that has perhaps been upended by the bank of canada, because we had a surprise rise in the key rate to 4.7%. it is considered a policy leader having it was one of the first to start hiking and one of the first to start pausing, so that decision casting a re-think over what traders are expecting from the fed when it meets next week. the australian yield three or at

its highest since 2012. weaker trade in equities and textiles will be in focus given the moves we saw in the nasdaq overnight. the fed is meeting next week, but there are a host of rate decisions, over a 36 hour period. boj among them, also pboc but bloomberg economics team expecting them to drive a borrowing costs lower. haidi: gearing up for a big week of central banks. let's get you caught up with the vonnie quinn with the first word headlines. vonnie: new zealand's timothy budget deficit are is wider than protected according to the financial statements published by the treasury. at the figure shows that around $760 million u.s. $80 million less than expected. bloomberg has learned that the proposed combination of liv mpj

-- it creates a giant monopoly in industry that it only recently become competitive. usa democrats are calling for investigations setting competition issues and allegations of human rights abuses in saudi arabia. the coinbase ceo says the sec started to change its tone and its questioning of the company last year before finding its lawsuit against a directive exchange told bloomberg the firm had been forthcoming about discussions about it met with silence. this week the sec hasn't widened its crackdown on crypto and accused coinbase of running an illegal exchange. >> this was not unexpected. we have been in discussion with the sec for a long time, even going back to before we were a public company, we started sharing them how we operate our business, how we post assets on our platform, and through a large number of dialogue they allowed us to become a public

company. we had many discussions with them in the last year when their tone started to change. vonnie: global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. shery: staying with the crypto sector a south korean prosecutor spearheading the case against do kwon says the fallen crypto mobile it may spend most of his life behind bars. he could also face a trial and jail time into both korea and the u.s. >> when it comes to bringing justice or recovering damages were victims, it is much more favorable if he is extradited to south korea, and in some ways it is a no-brainer. first of all, most of the basic investigation it done in korea. most of the evidence is in korea. we have also already made a lot of progress in the investigation in korea, and we have already

indicted a number of co-conspirators, so i think the most efficient way to get justice is to have the investigation and to the trial take place in south korea. >> there is a theory do kwon will be sent to south korea and face the drought here and then sent back to the u.s. and face trial then. is that a potential theory? >> such a scenario is an option. it is complicated. it is a possibility, but i know there are a lot of variables. it is possible if a person is tried and sentenced in south korea first, then there are still crimes in the u.s. that are not yet punished in korea, and they need to be punished in the u.s. and they can be extradited to the u.s. and face investigation and trial there and then have the sentences executed in korea, and the u.s. afterwards. >> we heard montenegro

authorities have begun their extradition process for deciding where to send do kwon. how long will this take? what is the process from now? >> first of all, it means that south korea has filed an extradition request. it is our understanding the extradition process can take up to nine months depending on how long the suspect has been in custody and so forth. >> what kind of discussions are you having with the u.s. side? are there talks on going u.s. doj or sec? >> it is true that we are working on the necessary cooperation with the u.s. department of justice were u.s. prosecutors, but i cannot confirm the specifics. >> many of the investors say they prefer do kwon to be sent to the u.s. were trial because south korea has lenient sentencing.

what do you think about that? >> it is expected to be the longest sentence ever handed down in south korea, and as you said earlier if the sentence in south korea is not enough, he can be sent to the u.s. and face another trial there and serve additional sentences. >> in february, sec said they were looking for the 10,000 bitcoin that do kwon was carrying around in his pocket. do you know where this while it is right now? >> we can see that it is coming out of the wallet, but we are not aware of for might be in possession of the cold wallet or how they are withdrawing it, on what methods. >> how was the investigation going? is there any more progress on him, and has he been charged? >> we have already indicted dhin

and several other -- indicted shin and several other co-conspirators. we have indicted him, but the trial has not been scheduled. the trial was to be scheduled. >> what happens then? >> this is the largest financial fraud or financial securities fraud case that has ever happened in south korea, so we are expecting the maximum sentence to be handed down, which up until now was probably 40 years in prison, but we are expecting it to be more than that. haidi: kwon has denied the charges of using forged travel documents. as representatives previously said the u.s. securities fraud charge was unfounded and rejected prosecutors in seoul. shin has also rejected involvement with his lawyer

saying he voluntarily returned to south korea after the collapse and has been cooperating. shery: coming up, as wildfire smoke blankets new york and east end parts of north america, we are joined by the ceo of the earth's stock price. we will be talking about solutions to air quality and other pressing environmental challenges. this is bloomberg. ♪ ve to worry about things like changing tax rates or filing returns. avalarahhh ahhh it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management. fabulous surroundings... but everyone's looking at their phones

for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company.

shery: you are taking a look at live pictures of new york city right now and you can see how foggy that skyline is. we went from orange to gray at the moment, this as we are seeing by one measure air quality in new york the worst of any major city in the world. we are getting air quality and health alerts from new york to ontario to south carolina as those wildfires continue to scorch huge tracts of forest in candida. little sign of improving weather conditions. for more let's bring in bloomberg's montreal bureau chief. what is going on in canada right now? we are hearing hundreds of fires are still burning. >> it is the worst wildfire season we have had so far in

recorded history, so more than 400 wildfires are burning right now with most of them out of control in canada, and the focus is on quebec. candidate's largest province in size. there are 150 wildfires there that were caused by lightning that happened last week with hot temperatures and dry temperatures, and the smoke you were seeing right now in the u.s. comes from quebec. haidi: what is being done at the moment to put out those fires? >> well, many countries are sending firefighters on the ground right now. u.s. president joe biden tweeted earlier tonight that the u.s. was sending more than 600 of firefighters to support canada. there is some help out there, but for now in quebec all they have is to fight 40 fires at the

same time, so there are 150 wildfires, none, so we do not have enough support, equipment, airplanes, firefighters to fight all of those fires in the north in the forest. we have thousands of evacuees in quebec. it is a critical situation right now that is being felt across north america. haidi: luger -- bloomberg's montreal correspondent. air quality issues are just one of the things we see endangering lives in public health. finding innovative solutions to our most pressing environmental problems is a key challenge for those looking to win the earth's uprising founded by prince william in 2022 offer funding and tailored support for the best ideas across five key categories, protecting and restoring nature, clean air,

reviving oceans, reducing waste, and addressing climate change. hannah jones is the ceo of earth shot prize and she is joining us from singapore. the earth shot prize will be taking place in singapore this year. tell us about how you view this prize and other similar environmental prizes and the role that it plays in advancing efforts toward combating climate change? >> thank you, and it is great to be here with you today. the earth shot prize is scouring the planet every day with our community of nominators to find breakthrough innovations that if scaled could help to fix our climate and regenerate the planet. we are at a critical inflection point, and the wildfires in canada are really just part of a bigger story, which this must be the earth shot decade. we have to do something that

seems almost impossible by the end of the decade, which is to reduce our emissions by at least 40% and protect 30% of nature and oceans. if we are to prevent some of these terrible disasters that are impacting the world as we see today. we believe the world of the earth shot prize and other prices like us is to support innovation, but more importantly once we have found that innovation, the world needs to come together collectively to speed those solutions to scale. haidi: it is a hard time for a lot of people to come on board with that. cost crisis, inflation, we are just coming out of covid where there are a lot of vulnerable populations that are still on the path to recovery. how difficult is it to rally that optimism and the sense of urgency for this effort? >> it is a hard time, but it is

also a time of great possibility and potential, and for many of the communities hardest hit today, it could unlock new areas of prosperity, jobs, and green growth, and we see that every day when we look at the thousands of nominations coming into the earth shot prize. we see solutions that would create new jobs for coastal communities and allow them to stop relying only on depleting fishing stocks, the transition to new forms of economic prosperity. we see amazing solutions in the air cleaning and stopping air pollution, and here in singapore a young man as invented a very simple low-cost piece of engineering so that indian farmers who are subsistence farmers no longer burned their agricultural stubble every harvest but actually put them into the equivalent of a coffee making machine and turn it into

fertilizer that increases the yield in the future harvests and helps make them more of an income. we have two pivot our mindset to understanding the world is full of human ingenuity. it does not need to be about the biggest high cost. it is about us taking individual action and about us taking innovations to scale, and that will already have a huge impact. shery: let's talk about why you are in singapore and why southeast asia has been chosen this year to showcase those environmental efforts? >> the earth shot prize travels to a different city in a different region every year. we began in london, we moved on to boston, and now we are in singapore. we will be holding the earth shot prize and first-ever earth shot week data beating stakeholders and young people on the week of november 6 in

singapore, and we selected southeast asia to come to, because while many people see southeast asia as on the forefront of climate negative impacts, we see southeast asia really leading on innovation and looking at solutions that will leapfrog into green growth, and where better to come than to singapore, that almost paints a picture of what the future can look like? we see singapore along without partners here meeting and convening this week also talk about how we create breakthroughs so that green growth becomes the new transformative decade that we need to be moving into. shery: talking about partnerships, you have also officially launched a partnership with youtube. tell us how that is going to help your efforts. >> we are very excited about the partnership with youtube, because we have a huge

commitment that comes from our founder prince william to bringing urgent optimism into the conversation. it is very easy to feel a sense of overwhelmedness, anxiety. we see so many young people suffering from profound climate anxiety these days, but when we see these solutions coming through the earth shot prize, we feel optimism, and we know optimism unlocks action, and that is a core part of our mission. this year you will see us telling the story of solutions and the incredible people behind those solutions who are this generation's innovators, entrepreneurs, game changing leaders that come from every part of the world, and we prioritize solutions like this to tell their story. shery: hannah jones, ceo of the earth shot prize, inc. you for joining us today. we have more coming up from ecoprosperity week.

the black rock five joins us exclusively at 11:15 hong kong time to discuss the outlook for investments. haidi: we have breaking news crossing the bloomberg, confirmation we have seen one of china's big banks cutting the yuan deposit rate 20.2% from 0.25%, a cut to the demand rate. we are just seeing the agricultural bank of china cutting yuan deposit rates to 0.2% after chinese authorities as biggest lender's to lower their deposit rates. this is part of what is seen as an escalated effort to boost the world's second-biggest economy to get households and businesses and credits of light being taken up again and to ultimately stimulate consumer spending.

shery: we have breaking news out of japan as well, we are getting first quarter gdp numbers, a final figure, growth of 2.7% on an annualized basis. the estimate was for 1.9%, so we are seeing the upgrade in the growth figure for japan, quarter on quarter annualized for the first quarter. not that surprising given that we had seen a bigger than expected increase in private driving that upward revision. when it comes to the nominal figure, both of 2%, also on the upgrade. quarter on quarter number, growth of 0.7% for the first quarter. we are getting those numbers out of japan. gdp figures, what i understand trade figures are also up. haidi: trade and balance of payments as well. this is what we are seeing when

it comes to the balance of payments and the trade numbers. it is interesting you take a look at some of the net export numbers, contribution to gdp falling .3 of 1%, weakness we have seen in global demand. that story is playing up for economies like japan and korea. we have the credit adjusted number coming through as well as the trade imbalance on the balance of payment basis of their at 130.1 billion yen. more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

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shery: first quarter jeep to be -- gdp numbers out of japan have been updated to growth of 2.7% on an annualized basis. this is upside for gdp, first quarter annualized quarter on quarter growth of 2.7%. let's bring in elizabeth reynolds -- isabel reynolds. it was somewhat expected given numbers that we got. do you make of this? >> it was expected it would go up, and in fact the initial figure for this period was 1.6%,

and economists were looking for growth to 1.9%, so going up to 2.7% is a substantial upswing on what was expected and shows that obviously the economy is getting back into full steam. if you look around, you can see the return of doris -- tourists to japan. earlier this month we saw a substantial increase in from private firms, so this is more than we expected by that is in the direction we expected. haidi: does this move the needle for the boj at all? we are seeing the latest survey looking at boj watchers pushing back the forecast for any adjustment to why cc -- ycc? >> i'm not sure whether the bank of japan will take this into account when they are making their decision. we just had this news survey and

of their meeting next week and the big take away from that is there are far fewer people expecting any change at this point, and those that give expected change are likely to expected next month in july or later in the year or next year. it is difficult to say what will happen, but in any case, nothing is expected for the time being by most economists. haidi: we do have the market opens in sydney, seoul, and tokyo next. this is bloomberg. ♪ the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

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shery: this is "bloomberg daybreak: asia." we are counting down to major asian market opens as we saw the rise of global yields with the surprise rate hike from the bank of candidate. we are watching asian sovereign bonds as well at the moment. haidi: past expectations going into the fed meeting, ecb, boj and pboc. we just thought two of the biggest lender's there cutting yuan deposit rates after we heard policymakers and authorities had asked the big banks to do so earlier. how was all of this training it together for the market open? david: -- annabelle: certainly a big focus on the bonds at the open of japan, korea, and australia. it is the two year yield they were watching a particular, coming online fairly flat moving

higher in the procession, and it was the re-think for traders around where they see the fed ending up with a key rate, because the expectation of getting a markets most recently was that the key rate would be lower by the end of the year, but it was that surprised hike in the key rate from the pboc to 4.7 5% forcing a re-think amongst traders, so that is putting a lot of focus on these key central-bank meetings next week in japan today. also leading to some further moves in the japanese yen, we are close to the 140 level. it is that expectation of what the boj does as well, because our latest survey indicating that no changes will be in next week. instead perhaps we could see some sort of tweet to the yield curve control program in july, given that the boj as continually stressed any sort of change is done prematurely could

be bad for the economy. we just had gdp data showing it grew on an annualized basis by 2.7% in the first quarter. a huge beat on what economist had been expecting. we see japanese stocks coming online, fairly flat but fractionally to the upside. let's take a look at what is happening in korea at the start of trade, because when you do see higher yields and a bonds, it does lead to downside pressure on tech stocks. nasdaq futures trading fairly flat but kosdaq outpacing broader weakness we are seeing in the kospi. the korean won is weaker against the greenback this morning, but kiwoom security saying expect further volatility ahead, we have got to get the fed meeting out of the way. very much focused on what is happening at the bond space this morning, and in australia it has

been the reaction in yields as well, particularly at the shorter end of the curve, three year yield at its highest since 2012, but at the younger and it is the reflection we are seeing from bond traders as well, recession to further on the horizon. the rba has indicated there could be further tightening to come. brent crude a little bit under pressure this morning. we had seen wti rising somewhat, given that we are seeing u.s. refiners start to ramp up for the summer and the weaker dollar coming in, something supportive of any commodities that have priced in the greenback, just a little bit weaker. shery: our next guest prefers emerging-market currencies and emerging asian equities. let's discuss where opportunities are with a macro strategist at state street global markets. we were talking about higher bond yields globally. we have seen the bank of canada rate hike pulling u.s. yields are higher.

will that mean a stronger dollar coming forward to and with that not put asher on em calls? >> to your point, we do see there is more pricing and terms of where central banks will go given that we had the rba surprised hike and bank of canada overnight, and that means there is still more to go in terms of near-term dollar, and that is our call as well, but in terms of the em space it is different this time around given that central banks were very corrective in terms of their tightening and hiking cycles. so in terms of a lot of inflation in the em space, it has been in a downtrend for quite a bit, so that really means once it investors start to look beyond near-term fluctuations and go back to search for yield, em spaces coming back to favor given that it is been undervalued. shery: is that the same rationale when chinese assets

perhaps? >> yes, a little bit to that as well. data for the past few months as been a bit disappointing compared to where the hopes were at the start of the year, but the recovery is still underway, even though it is uneven, deposits will be bumpy, and there will be ups and downs along the way. we do have more hope in terms of or support from the policy side. that will bring upside to the china space as well as the em space. haidi: the effort when it comes to cutting dollar deposit rates and how that will potentially play into supporting the yuan, do you think it will be effective? >> cutting the deposit rate is helping banks in terms of protecting their profit margin to help stimulate, to really encourage people to not save their money, to try to start

borrowing or spending more, and that will help in terms of helping overall sentiment, recovery, and confidence. again, the signaling is definitely on the easing side, and gradually it will trickle down to add more positivity into the overall recovery. haidi: and, of course, there are a lot of ships and expectations, and you see that playing out across about a markets today in terms of what we can expect from the fed and other central banks. has your view meaningfully changed given the surprises we have had from the rba and bank of canada earlier this week? >> in terms of our call for the fed we think it is fairly likely that will hold unchanged for the upcoming meeting, but they will assess going forward in terms of if they need to do more. that has been our call for a bit. in terms of overall market pricing of cuts, we have been saying for quite a bit it has been too aggressive.

a lot has come out in recent weeks on pricing because been in decline, but given where the labor market is, it is not unlikely we see cuts for this year, so the fed will definitely assess what is happening elsewhere as well as look at its own data in terms of where the economy is headed. shery: it has been an interesting few days in the market with this rotation into economically sensitive stocks like finances, financials, not to mention small caps and away from big tech. you can see this trend continuing? >> our view is we still like the tech space in the u.s., in particular, given that higher rates were the reason that they released struggled last year, and even though the right path forward there could be more to come, but we are a lot closer to pete rates than where we were a few months ago, so that means it is a positive for tech stocks

and in terms of the overall profit margin outlook for tech space that tends to be more resilient if we have an economic downturn that is coming, so we still like the overall tech space in the u.s. haidi: always great to speak with you. let's get back to belle. david: -- annabelle: just under 10 minutes into the session in tokyo, seoul, and sydney, but we are watching a couple of names in the ev space and battery space in particular given we are seeing more assessments coming through, including from citigroup as to which names can most benefit from the u.s. inflation reduction act, which essentially offers incentives to reduce renewable energy because were organizations. citigroup is joining morgan stanley and really focusing on panasonic in particular as one of the biggest beneficiaries.

they are saying total ria credits could reach $1 trillion versus the initial rational budget office estimate of $370 billion of rate 10 year period. they have rated panasonic's position in the most highly and continue to recommend lg energy as well as sk ei technology. we have seen morgan stanley really focusing in on panasonic, and they raised their price target to 2000 yen from the ¥1500 prior rating on that keeping it underway. let's change on, because we are keeping an eye on energy names in particular, and these are moving higher. we did see wti moving in the prior session, given we have seen more focused coming back onto what u.s. refiners are doing, really ramping up production ahead of the summer driving season. we did see brent crude coming

online weaker in the session, so perhaps still that concern on the demand dynamics, particularly the weakness we are continuing to see and china. shery: not to mention u.s. stockpiles continuing to rise. let's get to vonnie quinn. vonnie: the new york city mayor as told residents they should stay inside or wear masks outdoors as a from canadian wildfires blankets the city. these are live pictures of new york right now. the fa reported flight delays in new york, philadelphia, and newark. the canadian prime ministers as candidate is living to the worst wildfire season in recorded history with almost 4000 hectares scorched so far. the international energy agency says china is the biggest factor driving oil prices and says the recovery of the world's second largest economy will have a larger impact than supply moves by grid exporters. opec+ agreed to extend production cuts to 2024 was

saudi arabia taking an extra one million barrels per day of the market. a south korean prosecutor spearheading the case against do kwon says the fallen mogul may spend most of the rest of his life behind bars. he says kwon could face jail time and trial in korea on both south korea and the united states. it is charged with rages of capital markets over the collapse of his stablecoin terra usd. >> this is the largest financial fraud or financial securities fraud case that has ever happened in south korea. so we are expecting the maximum sentence to be handed down, which up until now was probably 40 years in prison. we are expecting it to be more than that. vonnie: do kwon has denied montenegrin charges of using forged documents. it is representative said the charges are unfounded and rejected allegations from prosecutors in seoul. his lawyer could not be reached

to comment about the scenario. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. and this is bloomberg. haidi: we look ahead to india's upcoming decision on rates and analysis coming from dbs bank. china is defending banks against a weaker u.s. dollar. we will have the details ahead. this is bloomberg. ♪ 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 -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

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haidi: bloomberg has learned china's big state lenders have effectively cut dollar rates as the yuan weakens against the greenback. let's get more from our guest.

tell us about the move when it comes to these chinese letters and implications for the pboc next week. >> yeah, so the cut in dollar deposit rates is seen as a response to the recent fall in china's lending rates, which as deeply hurt chinese lenders' profit margins, because banks in china have been under pressure to beef up their profitability and also increased lending to support the economy in order to let them have more resources, free up more resources for lending. they have to do something. so what has happened is the dollar rates, the rates on the u.n. deposit, both demand and fixed term as fallen by 5 to 10

basis points, and people are expecting the pboc to further cut lending rates, so this can be seen as part of preparation for that cut. the economy is not doing well. yesterday's export number looks pretty bad. there are increasing calls among analysts in china for another round of stimulus. a rate cut seems to be in the cards. shery: there is also a gathering of trying to about top financial regulators. what do we know at this point? >> today is the first day of the annual forum, an annual gathering of chinese financial regulators and state bankers as well as international financial services industry executives. at the head of china happens because new superpowerful financial regulator, the financial regulatory administration is expected to give a speech this morning,

although we do not have the final agenda. we are expecting him to make a speech, of course, because his new role, this will be the most high-profile public speech by him since he was appointed to the new role, so people will be watching every word he says about regulation, risk communication, financial industry opening up, and reform. pboc officials could be represented at this morning's ceremony, people obviously will want to hear what they are going to say about china's outlook and monetary policy direction. shery: our bloomberg bureau chief with the latest on china and the monetary policy and policymakers gathering as well. at the moment we are watching the japanese yen, a little bit of strength against the u.s. dollar. earlier today we had japan's gdp

numbers for the first quarter growing at an annualized two point 7%, faster than initially expected. for more let's bring in our fx and rates strategist. what is moving the yen now? we also had overnight the bank of canada's unexpected rate decision. >> that is a good question. even though gdb did that was positive, it is the rate differentials really making the difference for where dollar-yen is going. the bank of candida's surprise decision, you sought yields across the globe go higher except basically japan because they are limited with the yield curve control policy the bank of japan has. differential interest rate spreads widened, and going for the key thing will be the bank of japan eating at the fed

meeting. the bank of japan is not expected to do anything because labor costs earnings really disappointed, so there is no way to pressure there, and the bank of japan is expecting inflation to call up the second half, so if it maintains its yield curve control policy, even if the fed does nothing, the question is what does it say? the market is looking for know i potentially engine one in july. the question is does the fed. plot says maybe there are two heights. james bullard mentioned this is a possibility. the question is has that cap grown? has the fed become more hawkish? if that is the case, then that will add pressure to treasuries and that will send dollar-yet higher. -- dollar-yen hgiher -- higher. haidi: there seems to be a

shifting of expectations if you look at what is going on across sovereign bond markets going into next week. has the bank of canada on the back of the rba surprises will change your expectations at all? >> no, not mine. i think the fed will be -- the market over the next week, everyone is focusing on the fed. the market is adamant at the moment, it is one hike and done and then there will be more rigid cuts. the fed will push back against rate cut expectations in the dot plot. i think they will pause and leave it to july, but the question becomes the dot plot. the market is looking for one and done. there is a possibility given how sticky inflation is, if you look at special consumption expenditure, which is the fed's preferred measure, it upticked

to 4.7%. the question becomes for fed members is two hikes actually needed to tame inflation? if more people enter that camp, i think the market could be a bit surprised. even though i think the fed will hold next week, i think the dot plot may be more hawkish than the markets are anticipating. haidi: david finnerty there, you can get around up of this raising you to know in today's edition of daybreak. it is also in the bloomberg anywhere apt, customized settings as well so you get the news on the industries and assets that matter to you. this is bloomberg. ♪

>> it is unfortunate the sec

took action against coinbase the day after binance. german gensler was trying to implicate coinbase in the same way that he was implicating binance. no, they are very different. haidi: the ark ceo cathie wood speaking exclusively to us earlier. the coinbase ceo brian armstrong says the sec started to change its done last year and is questioning the company. he spoke with us in new york about the regulator's decision to sue over alleged violations of securities law. >> we have been in discussion with the sec for a long, long time even going back to before we were a public company. we started sharing i we operate our business, list assets on the platform, how we think about our staking program, and drew a

large number of zaila expected before they allowed us to become a public company. we had many discussions with them in the last year when their tone started to change, and they started to come to us with more questions about the business, so we were very forthcoming. we met within 30 times over the last year, and we started to weston for feedback. we would like there to be a robust market in the u.s. to trade crypto securities of the thousand plus assets we have reviewed today. we have rejected 90% of them. what feedback do you have for us? how can we register and work together? unfortunately, we were meant -- met with silence. we got no feedback. the first meeting where they were scheduled to give us feedback, the canceled it a few days before that and that we got a notice. we work with regulators all over the world, other regulators in the u.s. i am a reasonable person to get along with, but unfortunately

the sec under this chair has taken a regulation by enforcement approach instead of creating a clear rulebook in the u.s. that can allow this industry to be built and is safe and trusted way. >> one was the last time you personally met with gary gensler ? >> when he first came in as the chair, i flew out to new york. i tried to make an effort to connect with them in person, because that is what i try to do when a new regulator comes in. unfortunately, we were not able to connect at that time. he could not get on his calendar. we followed up a few times in the year after that. we eventually got a meeting that was virtual. it may have been covid related. we were able to get a virtual meeting, but unfortunately it was a pretty icy reception. we came in and said you have asked people to come in a register and we would like to

register. what process would you like us to go through, and his response was talk to your lawyer. i am not here to advise you. shery: here is a check of the latest business flash headlines. a billionaire says ai is here to stay, calling it as transformative as the internet. the family office chairman and ceo spoke to us at the bloomberg best conference, saying he expects to own nvidia shares for several more years. >> the ais dominated the loan portfolio for five or six months. if it is as big as we think it is, nvidia is something we want to own for two or three years and maybe longer. shery: gamestop shares plunged after it fired it ceo and said a chairman it will take on a new executive role. his responsibilities as chairman will include management

oversight and capital allocation. the retailer reported fiscal first-quarter sales that fell short of analysts' estimates. amazon reportedly plans to launch an ad supported tear of its video sharing service. discussions have been going on for the past few weeks. the report says amazon is in talks with warner bros. and paramount about adding tiers. up next, the reserve bank of india is set to announce its rate decision later thursday. dbs tells us in a moment why they expect a pause as the fence will bank stays in wait and watch mode. this is bloomberg. ♪

vonnie: this is "bloomberg

daybreak: asia." the big of canada surprises with a 25 basis point rate hike we start good campaign. policymakers raise the lending rate to the highest and 22 years. the move ends the pause to raise hikes. the governor cites an overheating economy is the reason for the hike does not give guidance on the next move. new zealand of las vegas tenement budget deficit is wider than protected according to new financial statements published by the treasury. the figures show a deficit of around $760 million u.s. core expenses were about $200 million less than forecast. bloomberg has learned the proposed type between liv golf and the pga tour is raise concerns among antitrust importers. it says it creates a giant monopoly in an industry that only recently have become competitive. the u.s. senate democrats are

calling for investigations, citing competition issues and allegations of human rights abuses in saudi arabia. soccer superstar at lionel messi is reporting -- reportedly planning to join a u.s. club. he refilled the move to a spanish newspaper. it would mean he has forgoing a contract and said he would be outward $400 million a year. he is being offered profiteering agreements with apple and espn says he may get a stake in the club joining co-owner david beckham. one of the most prominent black voices in economics william springs has died. he was an outspoken critic of how the profession address racial disparities in the united states. he criticized the fed over how policy actions could disproportionately harm black workers without addressing the root causes of inflation. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. and this is bloomberg.

haidi: let's get to annabelle and hong kong. annabelle: we are just over 30 minutes into the session for japan, korea, and australia, but looking at the stock that is moving the most on the benchmark so far, this is a japanese pharma company climbing more than 10%, so this takes it back to its highest level since july 2021. there are a couple of different stories leading to this move reaction from investors, the first is that eisai is moving closer to getting full approval for its drug and the u.s., so it is filed alongside its partner biogen to get the green light for his treatment, which is shown to be the first to slow the progression of alzheimer's. the other one is that they have filed to obtain approval from south korean regulators for the

drug to be used as a very -- as a treatment there, and it is the first application we have seen for the product outside the u.s. and japan and china. they are planning to submit the application in other asian countries, so something leading to this bounds at the start of trade. let's take a look more broadly what we are seeing in a so far in asia. the tone is mixed, msci asia-pacific index of trading fairly flat. when you look at the sectors to the downside to, unsurprisingly it is of those ones that are more rate sensitive, real estate, i.t. among them, and that is down to moves we saw in the u.s. textbased overnight, -- tech space overnight, particularly if move by the bank of canada. shery: we are getting glimpses of what the fed could do next in its policy meeting, which is coming up just next week. annabelle just talked about the bank of canada, but we have the

rba signaling more rate hikes could be coming after raising rates this week. on the back of canada's decision as well, they defied expectations, they restarted their titan campaign. they are saying excess demand in the economy looks to be more persistent than anticipated. we have several other central banks issuing policy decisions this week, including india, russia, and peru. haidi: that shift is something that is interesting as we get into a very, very busy week and the rest of the week as well. let's get more on the reserve pic of india's decision. executive director and senior economist at dbs pank. -- bank. what are your expectations in terms of how the rbis will thread the needle? >> good morning. certainly i think the rbis against the backdrop of two

central banks globally who have surprised, slipped into a pause and got into height rakes -- hike rates. they did surprise with a pause in april, and what we expect them to do today is extend the pause for a couple of reasons. what they have said is they went to be underrated. they went the effect to show in the real rates in the economy, but i think what they will do along with the pause is to maintain their stance, withdrawal of accommodation, which essentially means that in the event they see risk to inflation, they would go ahead and respond to it by hiking rates. i think that is the balance that they might need to strike, stay on pause but maintain their stance where they stand ready to act if required. haidi: the monsoon season could

be the wildcard here, because we have actually seen perhaps the rbis and economy in a fairly comfortable situation at the moment. >> growth numbers they came out for the first quarter of 2023, the final quarter of the fiscal year, it was my stronger-than-expected. if you look at the industry breakdown, pharma sector performance as well as services, on the growth front i think they are quite comfortable and the central bank rhetoric has been that growth is expected to give us 6.5%. going back to your question on monsoon risks, certain of the one thing our community as well as the central bank is watching closely. what that means for a crucial summer crop, because this part

of the monsoon makes up 3/4 of annual rainfall. it's in fact on food production will be something to watch out for. as a preemptive step you saw yesterday the government raised minimum support prices for the summer crop. we do not think it will be very inflationary, but it is a preemptive step in case there are any problems, in case farmers face higher costs going into the season, that this will help in that regard. specifically the early onset is something that will be under close scrutiny. shery: how strong is the transmission mechanism in and out right now and also the liquidity picture overall in the economy? >> transmission has been fairly

quick. a few years back the central bank introduced a new benchmark, which actually ties one on one. as soon as the rate is adjusted, this benchmark rate is also raised. that benchmark is making up close to half of the new loans being given out, so the transmission has been swift, and if you look at other lending benchmarks, it has been fairly quick and you see that interbank lending rates, but i would not say that is impacted credit growth yet. loans are still getting financed . coming to the liquidity part, apart from the stance, what the central bank things of liquidity will be crucial. liquidity had gone down to near neutral.

the central bank has been quite keen to keep it near neutral, so that is why you have seen them take some money market. that will continue, but we do not expect any durable measures from them. shery: what is the effect on india when it comes to the global divergence in policy? we are talking about higher rates potentially in the u.s., we saw that bank of canada act as well, but when it comes to indy's neighbors like china and japan, they are going in the opposite direction. >> certainly, you are absolutely right. there is a clear divergence. a divergence between where market rates are going and asian rates are going. it boils down to the nature of inflation that both parts of the world face. in asia, the nature has been

much more supply driven. the labor market is more fragmented, so demand sectors are not as strong as what we have seen in the u.s., for instance. i think asian central banks are watching for what the fed will do. are they going to pause in june and come back to hikes in july or slip into a pause as we expect next week? i do not think asian central banks will be reactionary. i think it will be watching what i higher terminal rate will mean for their own rates and affects -- fx. i think that will be the driving factor. as of now i think most asian central banks have returned to a pause, asean and india in particular. in thailand there could be more tightening, but rest of the central banks have entered a

pause. haidi: always great to chat with you, rhadika. we have more coming up when it comes one thing central banks. we hear exclusively from the malaysian central-bank assistant governor later on thursday. shery: ray dalio saying the u.s. is at the start of a big cycle debt crisis with too much debt and too few buyers. the founder of bridgewater associates spoke exclusively to us at the bloomberg best conference. >> in my opinion, we are at the beginning of a very classic late cycle debt crisis when the supply and demand gap, when you are producing too much debt, and you have also a shortage of

buyers, what is happening now is we have to sell all of this debt , do you have enough buyers? there are changes now in terms of the quantities in the world that are being held by large investors around the world that have lost money in these treasury bonds and so on, and then there are geopolitical changes having an effect. some countries are worried about sanctions, and then there is this deal little shift. so when i look at the supply and demand issue, there is a supply and demand issue for that debt. there is a lot of debt, it has to have a high enough interest rate create so a crisis? if we continue down this path and terms of what looks likely over the next five and 10 years, when you reach the point at which that balancing act becomes difficult. >> how will we know, and it is a

function of not having enough buyers? is there evidence of that so far? >> we are right at the brink of starting to find out that. the month of selling of government to let -- debt collapse. we do not issue government debt, and now we will issue a lot of government debt. we look at the buyers, there appears to be a significant shortage of the buyers for that government that. we are now at the brink of being able to see what that supply demand gap picture it looks like over the next year or two. haidi: the founder of bridgewater associates ray dalio speaking inclusively at the bloomberg best for on at new york. we get our exclusive interview with the south korean prosecutor spearheading the case against do kwon. find out why the founder could spend decades behind bars next. this is bloomberg. ♪

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haidi: the south korean prosecutor spearheading the case against do kwon says the fallen crypto mobile may spend most of the rest of his life behind bars. he could also face trial and your time -- jail time both in

korea and the u.s. >> when it comes to bringing justice or recovering damages were victims, it is much more favorable if he is extradited to south korea, and in some ways it is a no-brainer. first of all, most of the basic investigation was done in korea. most of the evidence is in korea. we have also made a lot of progress in the investigation in korea, and we have already indicted a number of his co-conspirators, so i think the most efficient way to get justice is to at the investigation and the trial take place in south korea. >> there is a theory do kwon will be sent here and face rockier and then sent back to the u.s. and face trial there. is that a potential theory? >> such a scenario is an option. it is complicated. it is a possibility, but i know there are a lot of variables.

it is possible, for example, if a person is tried and sentenced in south korea first and there are still crimes in the u.s. that are not punishing korea, and they need to be punished in the u.s., then they could be extradited to the u.s. and face investigation and trial there, and then have the sentences executed in korea and the u.s. afterwards. >> we heard the montenegro authorities have begun their extradition process for deciding where to send do kwon, whether to south korea or the u.s. how long will this take and what is the process for now? >> first of all, it means that south korea has filed a extradition request. it is our understanding the extradition process can take up to nine months depending on how long the suspect has been in custody of course. >> what kind of discussions are you having with the u.s. side?

are there are talks on going with the u.s. doj or sec? what are you talking about with them? >> it is true we are working on the necessary cooperation with the u.s. department of justice or u.s. prosecutors, but i cannot confirm the specifics. >> many of the investors say they prefer do kwon to be sent to the u.s. for the trial, because south korea has lenient sentencing. what do you think about that? >> it is expected to be the longest sentence ever handed down in south korea, and as you said earlier, if the sentence in south korea is not enough, he can be sent to the u.s. and face another trial there and serve additional sentence. >> in february, sec said they were looking for the 10,000 bitcoin do kwon was getting around in his pocket.

do you know where this cold while it is right now? >> we can see that it is coming out of the wallet, but we are not aware who might be in possession of the cold while it or how they are withdrawing it -- wallet or how they are withdrawing it, on what methods? >> how is the investigation going on shin? has he been charged with capital markets fraud? >> we have indicted shin and several other co-conspirators. i do not know if you've seen the indictment lists do kwon as a co-conspirator as well. we have indicted him, the trial has not yet been scheduled. >> what happens then? >> this is the largest financial fraud or financial securities fraud case that has ever happened in south korea, so we are expecting the maximum sentence to be handed down, which up until now it was

probably 40 years in prison, but we are expecting it to be more than that. shery: do kwon has denied charges of using forged travel documents. he previously said the u.s. securities fraud charges in and rejected prosecutors' allegations in seoul. his lawyer could not be reached for comment. daniel shin has rejected involvement in the implosion with his lawyer saying shin voluntarily returned to south korea after the collapse and has been cooperating with the probe. we have more to come. this is bloomberg. ♪ ♪ (upbeat music) ♪ ( ♪♪ )

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shery: as expectations grow for beijing to provide more stimulus, traders which were positioned to markets could end up getting squeezed by a cignarella. our chief china market correspondent joins us now. we know those four lenders have got their dollar deposit rate, so what are we seeing in terms of actual stimulus happening? >> so, there is confusion over whether this is stimulus or not, and if the answer is yes and no, chinese banks reducing deposit rates, at the effect this has is it makes it less attractive for

you to park your cash and a deposit sitting in the bank doing absolutely nothing. the secondary effect of this is it should channel that money into higher yielding assets, into the stock market, and we had state media suggesting this earlier in the week. the other impact is it makes it easier for banks to lend, because let's not forget banks up and encouraged and pushed by beijing to lend more to the economy, to get growth picking up, to get households and businesses to bother -- borrow more. the central bank is essentially saying we are making this easier for you. please lend more to the economy and get the growth kicking in. haidi: i guess what i more expectations of what we could get? >> this has been in play and in the market for a few months now, but it is really gathering steam, because not only did we

have these deposit rate cuts this week, but we also had indications that authorities are considering more support measures for the property market, so we do get the mlf operation, the pboc's monthly liquidity operation where it could cut rates thursday and we have the lpr when banks set their prime rates for city mortgages on the 20th of june. so a lot of interest building up ahead, and there is a forum in shanghai where the csrc and pboc and a regulator are all set to speak. shery: what assets are you watching given everything that is going on? >> this implies yuan weakness. watch what happens to the repo market, turnover is building up to record again, and this is

people are building up leverage and preparing for a rally in the bond market. whether this moves stocks or not, we will see, but there is been more skepticism among equity investors. haidi: some of the stocks we are watching ahead of markets opening in hong kong and china, continuing to watch state lenders that have cut dollar deposit rates. we have confirmation that other banks have cut deposit rate as well, two specific names to watch. trip.com and focus reporting revenue that be the average analyst estimate as the reopening recovery travel boom continues. an auto company saying vehicle sales are 15% higher year on year. this is bloomberg. ♪

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