♪ >> welcome "daybreak: australia." i am paul allen in sydney and were counting down to asia's major market opens. annabelle: i am annabelle

droulers in hong kong. at the top stories this hour. a stock rebound is set to extend into asia as stocks hold strong earnings. treasuries waiver ahead of a flurry of bond auctions. >> digging in for a legal battle over u.s. moves to force the tiktok sale could be shaping up as a four officials in washington and beijing. annabelle: somehow teslas china price cuts could cut on her property in the world's biggest tv market. al: parade, out of the gate, we have breaking news out of australia. pmi's, personal reading for the month of april shows a modest approval, 50 3.6, from the 53.3 had in march. a reasonable rebound in manufacturing as well, 49 point nine, a shade below the crucial 50 level.

pma services backing up a bit but still in positive territory, 54 .2. we are counting down to the major data event of the week on wednesday the first quarter cpi numbers. that is seen holding steady at three point 4%. but some encouraging personal readings from that bank pmi's. let's look at how we are shaping up in terms of trading this tuesday in the asia-pacific. as you consider, futures are pointing higher by a quarter of a percent for australia. we had a broad-based rally on the air starts monday, up 1% can pretty much every sector apart from energy in positive territory. similar story for the nikkei and the kospi as well, the kospi was at 1.5%. we might see more of the same today. nikkei futures looking flat at the moment. new zealand showing a better softness, off by 0.25%. but it was a pretty good day for equities in the u.s., we will get to that in a moment. we will have pmi's for japan

later. cpi for singapore in the month of march is coming up too. flood of earnings of the u.s., and about. annabelle: that's right, as he said, we saw start heading higher -- we saw u.s. stocks heading here overnight but the sustainability of the rebound is the question. u.s. futures fell flat this morning, little movement across the screen over all, but it is the counter to the key numbers coming up magnificent 7, very much in focus. expectations are extremely high because our bloomberg intelligence team is seeing a 40% jump in earnings growth. where they can deliver on that is the key question, but strategists are very much split on the expectations for numbers. we saw bombs falling, oil as well, sort of slipping a bit higher, but slipping overnight. it seems the geopolitical

tensions, middle eastern risks, seem a little bit contained for now. paul, that it certainly bring into the dynamics for crude, but also -- paul: our next guest is cautious on crude prices and gold as well. let's discuss with chris weston, head of research at pepperstone group. i wonder if your position on oil" is informed by the easing of the geopolitical tensions we have seen in the middle east, or is it more supply and demand? chris: oil has had a significant run, and the optionality, it got a little bit too stretched. we have seen very short-dated calls on gold. they have traditionally been at

a level where settlement had gotten a little bit stretched. a lot of the correlation we have been seeing in gold had to do with what we have been seeing in crude. people have been using this predominantly as a hedge against geopolitical headlines. it seems now that israel is finally focusing their attention on hamas as opposed to the broader region. i think people see a very high probability now that this will be contained. there is further downside to go to get down to 2260. probably offer them a chance to flip positions and go along. but the very extended geopolitical head coming through in the markets. we have seen that in manage money and optionality's. a little bit more downside there. on the crude side, we have gone back down from $91 to $85, just holding the 50-day in brent. the premiums have moved in alignment. i think there is probably a little more downside there. but suddenly gold, i would be

looking for a bid to come back take 20 to 60. paul: does this mean you are looking at opportunities. equities, particularly as belle was mentioning, we are heading down to a pretty big earnings in the u.s.. are you changing some of your positions ahead of that especially in some of the big tech names? chris: not at the moment. i don't think you're out of the woods just yet. you look at the price action in s&p and nasdaq futures, they are trading off the 100 who couldn't close above that friday high. that would have been a signal that we could be seeing further positioning coming through. obviously tesla is much in a dark horse, losses seven days in a row. i think people will be selling into any kind of strength there. nvidia is doing a bit better and obviously microsoft will be an important one later in the week. the price action at the moment it's pretty unconvincing at this stage. we have been oversold. sentiment has gotten beaten up.

i would need more bounce from the risk assets to give me that signal and it hasn't happened. so i am still a bit cautious and i think will sell into this rally in the short term. annabelle: [laughs] i like the turn of phrase, because in the doghouse. absolutely true when you look at the stock slide. . what will come out of the earnings call to make you turn a bit more positive, do you think,? chris: i will be following the price action. if you start to see some volume coming back into the name, then we can look for a counter move and perhaps the shorts could push is higher. i reckon we have never seen a situation where the stock is down eight days in a row. we have had four in occasions where it has been done seven days in a row and it has snapped back. but we haven't had this prior to earnings, that is the key

differential. the sentiment towards tesla and around the whole ev space it's shot to pieces at the moment. people are looking at those deliveries, the reasons why. some people said elon musk. but when they cut 10% of the workforce, i think most people realize now that this is actually a demand story, not a supply issue. i feel as though there is a lot to play out in the stock and still some downside to go in the price. any short covering rally of this , there is still a lot more negative two. on the stock. annabelle: nvidia, another key earnings. we have seen a focus on that and concentration risk perhaps in the market. what price action are you also need to be monitoring there? chris: the problem with nvidia is a debt report until may. we need to get that back about $800 and 90 will start to see the optionality coming through. dealers will have to hedge when

the price goes up and obviously that means buying the underlined which perpetuates the price. we have not seen that dynamic. it works really well on a momentum beast. momentum is a factor is underperforming at the moment. people want quality. defensive areas of the market have been outperforming. that is a place i think people are wanting to gravitate towards. until we see momentum showing, nvidia is the trading vehicle. we need it to trend higher and then you can use it as a momentum vehicle, sort of something like a bitcoin. the natural catalyst for nvidia from the earnings call is not going to come through for some time, so you are obviously watching the chips and the semis, they have been trading poorly. we need that momentum and then he can start chasing again. annabelle: you mentioned bitcoin. we just had the halving

take place. the token seems to be lacking a big narrative perhaps, following the halving. what are you watching? chris: it a slow moving shape. everyone has done the numbers and we know bitcoin's pricing after the three prior halvings didn't do much. i think in the short-term, we have almost chased the price if it starts going higher, but i think here watching etf fund flows sharply. there simply a correlation between the performance of bitcoin and the percentage of inflows into that 10 etf floors. ex-grayscale which has arisen seeing some big outflows. on friday we saw a bit of buying coming back into the etf. we will be watching the order closely. if we start to see for

influence, through, this idea of demand picking up again could be an interesting one. while supply does come out of the bitcoin scene, certainly for the miners, it is the demand side of the equation that we will be focused on what will be the big kicker from that. i think short-term, it will be around the etf fund flows driving the price action. would have seen in the last 48 hours, and also have been quite encouraged by what we have seen from the bitcoin miners, who obviously have a negative effect from the bitcoin subsidy, if you have good price action overnight, the whole mining seen , the listed miners had well over a double-digit percentage move. encouraging there as well. annabelle: i question whether we will see bitcoin mining consolidation. that was chris weston, head of research at pepperstone group.

thank you for your time this morning. as we were discussing with chris, the big focus is on tesla numbers such a report on tuesday. investors watching margins and guidance. jl warren capital will share their outlook. but first, tiktok is bracing for a court battle as u.s. lawmakers move closer to a sale or ban order for the chinese-owned app. detail this is bloomberg. ♪

annabelle: tiktok's chinese parent company bytedance has made clear it has no intention of selling the video app, that at the u.s. government moves ahead with its start to shut down the platform if it is not divested. for more, let's bring in tech reporter alex barinka. tiktok has a lot of reasons to fight, but it has also made it clear that it will not be backing down quietly. alex: absolutely and this bill is looking like it is inevitable that it becomes law. the senate interview to take up the bill. president joe biden plans to sign it into law. the reality of tiktok facing the divestiture banking legislation is here. bytedance, the parent company

that the u.s. government has taken issue with has also expected that it is going to fight this tooth and nail through the u.s. legal system. if this bill goes into law with the correct language, bytedance would have nine months with a potential three-month extension today best the app. that seems to be an option that would be the case for the legal battle for bytedance who plans to fight this in a legal battle that could last more than a year. paul: what is the plan? to put up for a better administration somewhere down the track? and also in terms of what is worse, is it a ban or is it investment? alex: if you do the math on the 29th, for it passes this week, that would put us around january which is in operation time here in the u.s. as that a presidential election year. we have seen tiktok in the past tried to lean into the idea of

looking for a more amenable administration. donald trump changed his tune on tiktok, the first president to try to ban the but it -- by executive order, has now says it should stay. if the law passes, which has a 90% chance of it happening, that may mean the best recourse is to wait for the administration of donald trump to be voted in, who might be more amenable while they try to fight this one but first amendment arguments and otherwise, in the american judicial system. annabelle: this has a domino effect as well. could the u.s. also be looking to ban other chinese tech platforms? t, for instance, seen asemu and amazon competitor, has had a lot of success in the u.s..

alex: yes, and there were this legislation is written is about basically social media companies who are owned or majority-owned by a foreign entity. that scrutiny around that chinese ownership has come into play because of lawmakers are worried that because of regulations internet and how they can request data from companies in that domicile, that there could be a risk to americans. there are certainly a number of companies, temu is a great one that comes to mind. however countries might react to have america, home to some of the biggest social media companies that are at stake, now saying it looks like this needs to be a company that is not owned by one of our foreign adversaries, but over and by american investors. paul: bytedance is also fighting a battle on two fronts, across

the atlantic there is trouble in the eus well. what is going on there? they are staring down the barrel of a fined rye? alex: they are, it's a major moment. it was an app that was launched in both france and spain and rewards users through a point system. the e.u. regulator opened a new probe on monday into whether bytedance violated its content law because they are worried that point system might have an addictive effect on users. they have 24 hours to deliver a risk assessment. so we should see potentially some news on this in the coming days. but it is not the first time the e.u. has gotten involved, they previously announced an investigation under the digital services act around the apps design, around spring term limits, privacy settings, age verification. all that to say that tiktok is waging battles in other domiciles where there are either privacy legislations, or similar

concerns about its ownership and its connection to the chinese government. paul: tech reporter alex barinka there on the difficulty is currently being faced by bytedance and tiktok. we have been hearing plenty about the difficulties of tesla. let's look at how tesla closed in the u.s., not a great day for that stock as we await what is expected to be a brutal earnings report. we will get more of that in a moment. it is a tide that sinks all boats in the ed space, vinfast is down 3.5 percent, as well. general and ford, the internal combustion engine not quite ready to join the horse and the steam engine on the scrapheap, there seems to be a place for conventional vehicles as well. ford will also be reporting earnings. they had a pretty good day. for more on the tesla story, let's bring in a global business editor peter.

we are counting down to the tesla earnings report, it will be a very interesting day. what are analysts looking for? >> obviously there are expectations earnings will fall, we have seen the big drop in vehicle deliveries in the first quarter year on year so the numbers are expected to be good. -- numbers are not expected to be good. i think what investors are analysts looking for is for some kind of year and an strategy from tesla and whether elon musk will take their concerns seriously. we have seen on previous earnings calls that musk can be kind of flippant and dismissive of questions and treat the whole thing as a troll. in previous times, investors have sort of excuse that a bit when tesla sales were up 50% year on year and the stock surging to record highs. this time it is different. i think there will be a focus on tesla and aunt musk in particular, to atlantic that coherent strategy.

one tesla watcher says, who will be the adult in the room this time? we'll that continue on monday in the u.s. when tesla dismissed about 40 employees. in the marketing team. it was only formed about a year ago. then musk said the ads were too generic and they could have been for any car. we know he is a mercurial character at best. he seemed to announce the company's growth outlook on the robotaxi that he says will be unveiled in august. so there needs to be clarity on that and whether that will come at the expense of what was widely anticipated to be a more affordable mass-market car, around the $25 mark -- $25,000 mark.

but autonomous driving still needs constant human supervision. annabelle: we are seeing tesla resorting to a familiar strategy, price cuts to try to boost sales. but how much further can it continue to do that? there is reporting out, evercore isi, for instance, saying price cuts in china could cost if their entirety of its -- the entirety of its operating profit there. >> that was an interesting report yesterday after we saw at the latest round of price cuts. it seems to have been tesla's strategy, sales down, cut prices. but what is really happening now particularly in china, it is faced with a whole suite of new competitors from byd, to even other companies that have unveiled their first new ev's. they are tech heavy and also have cool gadgets, they can convert them into beds, they have rollout kitchens.

tesla relies on its model 3 and its model y for the bulk its sales, not just in china, but globally. without that mass-market so-called $25,000 car, how will they feel that growth hole? they can't just keep cutting prices. annabelle: that was global business editor peter branco as we look into the earnings from tesla. more analysis on them coming up this hour. the outlook for china is in focus with the ceo of jl warren capital just ahead.

paul: here watching "daybreak:

australia." here is the latest in geopolitics. the israeli military's intelligence chief has quit fulfilling to to present the october 7 envisioned by hamas. he is the first senior israeli official to step down over the assault that killed about 1200 people. he accepted blame shortly after the hamas attacks but stayed in his role as a u.s. continues its attacks on gaza. the e.u. will expand restrictions already import for supplying russia with drones. the sanctions of the target weapons transfers using iranian proxies in the middle east including hezbollah. countries including germany and sweden are pushing to add the islamic revolutionary guards corps. to the terrorism list. president biden has told his ukrainian counterpart that the u.s. will move quickly to deliver weapons to improve and aid package. therefore, with ukraine's president aims to shift battlefield and defense equipment. meanwhile the u.k. is sending more missiles to ukraine including lower integrated

weapons. plenty more to come on "daybreak: australia. stay with this is bloomberg. ♪

annabelle: this is "daybreak: asia." a quick check of the bond space, a bit of a retreat for yields, very much tracking which came through with treasuries overnight in the session. it is the changing expectation around tensions in the middle east, they appear contained for

now. also bond traders are looking ahead to a record of action that signals perhaps, 5% yield is the peak. certainly that will be a key test and a very tricky week as well because we are looking at the market absorbing nearly $185 billion calendar up to your notes, five-year notes and 7 --year note sales. something we are tracking very closely here, paul. paul: let's look at the morning because i had of the asian trading day. blackrock says bond investors are facing a painful run-up in

yields and may soon find relief. the cao of global fixed income season two rate cuts by the fed this year as inflation moderates in the months ahead. for now he says blackrock has cut its own interest rate exposure, weighting investments towards more shorter maturities. >> the beauty of this for an investor going into it is we are trying to manage our interest rate exposure and if we think, which i think will be the case this year, we will get to a place where we anticipate the data improving and taking in the next month or so he will get better inflation data. paul: meanwhile, jp morgan says that three week rapper in u.s. equities is not done yet. the chief market strategist says rising bond yields, elevated oil prices and higher stock market concentration are among a lengthy list of reasons. he adds that he is concerned about complacency in equity valuations and the further repricing of rate-cut expectations and over all rosy profit outlooks. and ahead of this week's earnings, ubs group is cutting their sector recommendation on the big six tech stocks to neutral from overweight. he says earnings momentum is turning negative after a surge in profit growth. ubs calculates the growth in

earnings-per-share in the big six is expected to slow down to 42% in the first quarter down from 68% growth in the previous quarter. belle. annabelle: a focus on earnings kicking off with tesla. looking at this chart, the slide we have seen in the stock in the past five sessions, down nearly 10%. the losses this year totaling more than 40%. the ev maker is set to report its first-quarter earnings and price cuts are very much the focus, ramifications of those. we had more announced over the weekend in countries including china, where ev buyers are also awaiting a stimulus program that could include incentives aimed to encourage businesses and households to adopt greener technologies. let's discuss more with jean handling -- junheng li, founder and ceo at jl warren capital. we could get to beijing's

trading in a moment, but the price cuts in china, are they going to be really substantial enough to boost demand? junheng: probably not. the core issue with tesla and certainly with china, is aging. tesla has not had a new product for the last three or four years per minute model 3 came to the market in 2017, model y, 2020. meanwhile, there are many made in china homegrown brands. the latest has been show me. a few months ago, while a car. before that, byd -- the latest has been xiaomi, a few months ago, huawei car. before that, byd. the prices are extremely competitive.

china has not been able to launch any new products in the last few years and it has definitely slowed down its momentum in china. annabelle: i was actually in mainland china over the weekend and astonished at the number of different ev makes over there. but the price cuts, do you think tesla is shooting itself in the foot? junheng: it doesn't really have alternatives, because everyone else is cutting prices. in fact, tesla has been doing promotions consistently over the past six months either through the insurance rebates or zero financing. it actually raised the model y price by couple of thousand renminbi effectively on april 1, but then only two weeks later, it slashed prices again. we see this as a general pattern not just in china, but also in the u.s..

subscription was at 199 dollars a few weeks ago. adoption was poor so they merely cut the prices by half. so i think this will be a really tough year for tesla. the problem can't be just the addressable market isn't as big as people have thought. it does really well in particular markets like california and china where there is a lot of administrative incentives. but when that slows and when the competition catches up, the momentum very naturally comes down. paul: in your analysis, you point to an oversupply of vehicles coming out of tesla's gigafactory in shanghai. even with price cuts, is china's market able to soak that up, or are there other markets in the region that could do that? junheng: i think when musk decided to build and expand the

factory outside of shanghai in 2018, he had this in mind, that made in china cars can be exported to certain markets, particularly in europe. but over the past five years, we have seen an escalation in geopolitics tension. obviously the u.s., the access to the u.s. market is not possible, and potentially the future india market is not quite possible. right now, europe is the largest export destination for china cars -- made in china cars, but that could change. going forward, there may be an outright ban in the future if the geopolitics continues to escalate. so it is possible that we see that oversupply is not at its worst yet. it could go from bad to worse in

the next couple of years. right now 50% of the cars made in china for domestic deliveries and 50% were exported away in 2023. but the european demand is muted as well. that is why we see 25% year-over-year decline in gf three production. and right now they are making about 2000 cars a day versus its capacity at 3000 cars a day. so it is that about 65% utilization. that is going to do some damage to its overall gross margins. paul: we have been hearing from you love must over the past few days, he is increasingly going all out on self-driving robotaxis. as far as china, what is consumer demand like for those products and what is the regulatory environment like as well? annabelle: i think fsb is

primarily a u.s. story because it requires access to a map data. map data in china, they have access to baidu map but not the data behind the map so that has handicapped them. number two, all the data -- onshore data cannot leave china. they have to process and trim the data offshore. obviously the nvidia hardware and software have the export ban in the u.s. so that his handicap number two. so it is not a china-centric story. i don't think consumer demand, especially when you have to pay 8000 u.s. dollars for that subscription. on the u.s. side, if you read the stories, and there are lots of them, lots of those stories are telling their journey, tesla

drivers using fsd, they are both positive and negative. the picture is mixed. i just think it is too early to ask people to pay for product that requires pretty frequent human intervention and still requires hands on the wheel. most importantly, i don't believe there is a demand for autonomous driving for a short commute of an average of 20 minutes each way from home to work. i just don't think the demand is there, even in the u.s. annabelle: i am interested in what you are seeing more broadly in terms of luxury demand in china. we have seen sort of a pickup perhaps, but spending levels seem to be a bit lower still. junheng: consumption dip again

after the chinese new year in the role of february. we are pretty diligent with our stores. what we see is, the first two months of the year, consumption came back a bit. but then immediately after, the chinese new year, it dipped again. obviously there are different stories. there are tier 1 luxury brands such as our maize and chanel, they can manipulate demand and the financial outcome. but when it comes to sort of a material brand such as gucci, it is a little bit tough because, in the case of gucci specifically, they have a change of designer and the new designer is supposed to launch a deal that is going to hit the stores

globally in q2 and q3, but in a down market when the economy is weak, what we see is the respective mass and the reception of newness is rather muted. so in a tough economy, people embrace or clinch towards the old design a logo, a fashion that preserves value, as opposed to that fresh new design. i think that is that headwind the brand needs to embrace in the next few quarters. paul: junheng li, founder and ceo at jl warren capital, thank you for joining us with your insights. still to come, u.s. claimant advisor john podesta weighs in on china's capacity in green tech and relook at how trade negotiations are playing into the energy transition, next. this is bloomberg. ♪

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paul: the senior white house claimant advisor says the u.s. needs to ramp up the speed and scale of its shift away from fossil fuels, speaking at the bloombergnef summit in new york. he also joined the chorus of complaints from washington about china's overcapacity. >> the concern about overcapacity in china across the

so-called green technologies -- batteries, electric vehicles, the solar supply chain. particularly the shift of the economic focus of beijing, has been on trying to get out of those -- the stagnation they were in by over investing in capacity in some of these technologies. but that is not good for the united states, it is not good for workers and it is not good for the world, because we need a level competitive playing field across the globe so that everybody has a fair chance to compete, build the product necessary. i think american auto companies and autoworkers can compete with anybody across the globe. so we will do what we need to do to protect the investments we are making as we are decarbonizing. the first goal we have is to cut emissions in half by 2030. that is what the ira was all

about, to invest in these new technologies and spur innovation. we are not going to let those be undercut by unfair trade practices. >> but the tariffs hurt climate change, in the sense that you wake up every day and think about decarbonizing? >> i think what we need to do is have a system that, and i think by the way,, i am traveling around the world, and people were first critical of the ira. and i think what has happened particularly with our partners and allies in europe, in japan, in korea and in other places, is they have responded by saying, this investment-led strategy is a smart strategy. it helps spread the benefits of green energy across communities. we have been very mindful of trying to ensure that every

committee including traditional energy communities feel the positive effects of the investments that we are making. we have seen the emissions profile and the emissions reductions happening, and we need to protect that overall effort and we will do what we need to do to do that. annabelle: that was the white house senior claimant advisor john podesta, with bloomberg's annmarie hordern. staying on those efforts to reduce emissions, bloombergnef's latest annual assessment shows 20 to 20 -- the g20 climates have made limited progress of decarbonization improving their average score from last year by just one percentage point. let's bring in the bnef head of of aipac research for more. why is it that the scores are not improving so much? ali: one of the main challenges is policy uncertainty.

even the inflation reduction act which is now being as a success, if youthat past, it created a lt of policy uncertainty through that process. so in the last couple of years, we have seen policies around decarbonization face a lot of uncertainties and, in some cases, we have seen g20 members roll back initial measures they had put in place. in parallel, we have not seen g20 members fulfill their commitments to reduce their incentives for fossil fuels. annually they still spend hundreds of millions of dollars subsidizing fossil fuels which is of course helping with emissions reductions. paul: the asia-pacific members of the g20 largely cluster around the middle of the ranking. what is driving the scores for korea, australia, india and indonesia? ali: indeed as you pointed out, if you look at the aipac members

of the g20 compared to their european members, they do relatively worse. part of it is a reflection of european members have had longer consistence on measures towards decarbonization particularly when it comes to power sectors. they score better on that front. they also have very stringent robust carbon pricing. across the asia-pacific, markets like china and south korea have been emissions trading schemes, but they are still below the level of pricing in these countries and not enough to drive decarbonization. we see japan and korea do relatively better partly because they have policies across all sectors, not just for power transfer, but looking at areas such as industry. still overall when we compare them to european members, they are lagging. annabelle: so how would a pact countries then lifted their

scores? what are the best policies to do that? ali: there are two fundamental areas. one, clean power is really important. we have seen improvements particularly in markets such as china and india. still the power market designer for aipac countries compared to european members does not provide incentives for acceleration in renewable deployment. while designs have been improved,, for example, china, india as well as australia we have seen deployment accelerated , but if you look at japan and korea, you have seen annual deployment actually decelerate in the last two years because of the lack of that right policy. other areas i mentioned earlier are around carbon pricing. if you look at the level of pricing of emissions today across aipac regions, the pricing levels are too low or actually nonexistent. without pricing emissions, we will not see it and accelerated

trend towards decarbonization, particularly in harder sectors. paul: the bloombergnef head of aipac research. still to come, fresh signs of stress emerging in koreans shadow banking sector. why it is being seen as a weak link in the $63 trillion chain. that is next. this is bloomberg. ♪ were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. empower. what's next.

annabelle: south korea is emerging as a weak link in the rule shadow banking, with its real estate exposure quadrupling over the past decade to more than 670 billion dollars. for more, let's bring in asia credit editor finbarr flynn. this is spooking a lot of global investors. what is the problem of the stress and korea exactly? finbarr flynn: yes indeed. the root problem goes back to the flesh of cheap cash that was around the globe after the global financial crisis. so in korea, as in many parts of the world, with interest rates near zero or else, -- zero or less, the cash had to go somewhere, and it went into these more riskier projects in

and outside of seoul. it has culminate -- come a bit undone as rates in korea and much of the world have gone up. paul: how serious are these issues, and what are market participants expecting here? finbarr: to date, the government has done a pretty good job of keeping stuff intact, but the worry is that in the second half, now that elections are out of the way, that they will have to take a stricter stance on all these issues. so the baseline is that people are hoping, expecting a soft landing. but the seriousness of the situation cannot be underestimated. this could force the bank of korea to cut its rates more than it would wish you could also impinge on growth in the second half, so we have to keep an eye out.

annabelle: we have seen policymakers managed to stem the contagion risk so far. but would this be the case this time around? and if not, what are the milestones to look out for in particular? finbarr: have one coming up actually this month, actually a company called taeyoung. it's the first markets at the end of last year when it said it had to restructure its debt . so there is a quote for banks including a state lender to sign off to actually give their approval to the restructuring. our reporting has shown that 50% of the debt on the books could be converted to equity in a huge equity for debt swap. but we need to look forward to the plan, to be honest.

paul: thank you for joining us, finbarr flynn, asia credit editor. let's look at the stocks we will be watching when trade opens in korea, japan and australia just a few minutes away now, keep an eye on asia teslas applies, the ev maker is set to report first-quarter results after cutting the price of its cars in key markets including china. woodside energy will be in focus, after one of australia's largest pension funds voted against its climate plan and re-election of its chairman. aussie miners might move, demand in oil or easing along with tensions in the middle east. it is next on bloomberg. ♪

>> this is daybreak: asia. we are counting down to asia's major market opens. we started the weekend on a brighter note put the moves on wall street could inject a

little more optimism into the session even as we wait for key crucial earnings. paul: that's right. we had a pretty decent rally on monday and it looks like that is set to continue today. those big earnings announcements from tesla, among the auto makers as well. a lot of u.s. debts will be auctioned this week also. what are we watching right now? annabelle: that's right. certainly going to be testing traders' appetites. this is the open for japan and south korea, as well as australia coming online. again, posting 1% to the upside for the nikkei 225. it was a story of rebounding from last week's slump. we've seen the nikkei two to five very close to entering a technical correction but it moved off those levels. the japanese in