singapore and shanghai. welcome to number markets a shot. i am haslinda amin and here are the top stories. the pboc signal support for the currency while the risk of intervention from japan stalls the yen's decline for now. wait and watch mode as investors look ahead to a busy week of economic data including the fed's preferred inflation gauge. also ahead, pakistan's new finance minister says he is keen to tap chinese investors by sending as much as $300 million in bonds this year for the first time and we have some great interviews lined up. marc franklin with his market outlook plus we look at the asian private equities space with mcm partners. we are markets. let's get to the very latest. you get a sense that there is

nerves ahead of the pce data. avril: it almost looks like a pullback from the performance last week where we got those dovish signals from global central banks and that seemed to help stocks and bonds to rally but today, we are seeing the rally in treasuries, stalin a little. the japanese benchmark, the asia stock gauge, some of the market enthusiasm being taken out and today, we also hear from the top currency official in japan that a verbal job -- that the fx moves in a couple of months but by far, the attention for traders is squarely on the offshore/onshore as they weaken last week on friday to the four-month flows. today, the pvcs yuan fix sending the signal because it is the strongest estimates in the past couple of months. it seems like what we saw on friday was something the pboc

was not that comfortable with and we are not just looking at stocks but also the fx space today. haslinda: leon carry trade is being focused -- though you one carry trade is being focused on by traders. avril: it is increasingly unattractive form for the funding and we are seeing how the offshore yuan, four points today, turning even more negative, really making the case for the em carry trade and it's also worth remembering why. it's because of its low volatility, relative, i guess. also, how it is seeing limited scope for appreciation on the chinese currency. especially given the economic conditions in china. not forgetting if you compare it to the dollar or the japanese yen, given how last week we had the boj with negative rates and a surprise hike from taiwan. the one as a funding currency

still looks very attractive. haslinda: that's right. big moves in the currency market. let's dig deeper into the big swings in markets with bloomberg intelligence chief asia fx as well as rates strategist steven chu. let's have your take on the yuan supported by the fixed today. pboc saying it is not quite ready to be tolerant of a weaker currency. steven: that's right. i think we have to remember that the yuan tend to be quite strong in the first quarter because of chinese holidays, because of market looking forward to some positive measures out of the two sessions and if you look at the regional performance, it has been quite resilient until last week so now, first quarter is nearly then. the yuan tailwind is gone so the market focuses back on the structural interest with china, for example the basic balance to showing and seeing rate differential in favor of the dollar. that is why the yuan starts to

drop again and of course, the market wants to get support from the fed. they had a stronger yen and hopefully, we will tractor you want higher. it is not quite ready to cut at least not before june. they did hike for the first time since 2007 but as you can tell from the market reaction from the yen, the market is not strong enough so that is why the yen slumped and could not get help as well so that is why right now, the yuan is facing pressure against the dollar. haslinda: when it comes to the yuan, was the pboc testing the markets to see the reaction from investors if the fix was weaker than anticipated? steven: i mean, you can see once the pboc last week -- they set the fix higher than 7.1 and then you saw the spot basically just sort of collapse. you saw they fix it back to stabilize it and of course we saw the cnh at 725 and sort of stabilized a little bit but the

thing is over the next few weeks, if the dollar stays resilient, it is hard for them to keep doing this and probably, they will have to be more forceful in terms of supporting the yuan. haslinda: when it comes to the yen in particular, we saw -- i mean, it is an effort to prop up the currency. what would it take for actual intervention? the last time we saw that, it is when the currency touched 152. steven: is very close. we usually look at two metrics. the first one is the level. the second is the master -- the psychometric is the pace of the yen dropped. if you look at the end, we are talking about mere 2% drop over a dollar per week so that is fast enough. if you look at the two interventions in 2020 two, that is the pace that will trigger the boj so that is why we saw them this morning talking about the washington market and usually what preludes the actual intervention is they will come

out and say they are checking the rates so we saw that statement so we have to be really careful of actual intervention in the yen. haslinda: we will keep a watch on that. steven chu, thank you for your insight. to continue the discussion on what is next for major currencies, let's bring in mark franklin, senior portfolio manager phase asset allocation at many allies investment management. good to have you with us. for a long time, asian currencies have been driven by the usda and when we saw the sinking of the yuan on friday, we saw ripple effects in the asian currencies as well. how are you reading the movements? >> do you want has managed carefully for some time by the pboc and ultimately, they sent a message to both japan and the u.s. on friday to signal that they are getting uncomfortable with the pace of the weakening of the yen and the loss of competitiveness for chinese exports. if you start to see the yuan weaken precipitously, that would effectively signal to the global economy, the regional economy, the exporting of deflation and

that is why you start to see a ripple effect on friday. fast-forward to today and things have calmed down and do not will out the possibility that there is a high degree of communication between u.s. treasury, the japanese finance industry and the pboc. haslinda: there is a story of usd exceptionalism and some say it is overvalued by 3% to 4%. by the same token, the yuan should be weaker than it is. what is the right reflection of the economy in china? steven: china's strategic goals are to create a certain degree of resilience, particularly in commodities where it is importing and the pressures to import. we saw the inventory built not just in gold as an alternative but also significant build of inventory and foodstuffs, commodities, and so on. in that context, the pboc and attaining finance ministry want to maintain a relatively stable, resilient currency to make sure that the importing of those commodities doesn't become too

expensive. haslinda: where is one headed by year-end? marc: it depends on the extent to which they are satisfied by the firewall and of the economy from outside influences and pressures. it will be driven by rate differentials and we also have to look to the u.s., the extent to which interest rate cuts continue to be priced out. it looks like the fed has pivoted to prioritize growth and rate cuts will probably resume by the middle of this year and therefore the rate differentials should narrow so don't rule out the possibility that that creates a certain underpinning to the yuan and weakening pressures relatively modest. haslinda: for japan and the, we are canada saying it is not a reflection of its fundamentals. do you agree? marc: it is a reflection of rate differentials. they move rates by only 10 basis points. rate differentials are still in excess of 500 basis points. ultimately, the carry trade is attractive to global investors and asset allocated or so whilst that is in place, there will be

weakening pressure on the yen. rate differentials are narrowing in the favor of japan and that will be driven by the fed accelerating its rate cuts which is not our base case at the moment but also an acceleration of the japanese economy. late last year, the japanese economy was flirting with recessions or even the wage inflation is starting to move in the right direction, the rate picture is modest because japanese domestic consumers are seeing pretty low sentiment and not particularly a optimist about the outlook. haslinda: you are saying the right move forward is to stand pat, just wait for the fed to make its first move? marc: it is a favorable backdrop for the japanese economy. it is weakening consistently and that creates greater competitiveness for japanese exporters. the pressure is on domestic consumers and political approval of the current government is very low and that is also a reflection of the concern that weight has not kept up pace with inflation so they will watch very carefully the extent to which the government continues to lose approval or whether that reverses.

they will be quite comfortable allowing this to continue. haslinda: let's get to the bond market. traders factoring yet again that the fed will move as soon as june and they have been burned by this trade before. how best to position in the bond market? marc: we have to look at what is going on under the hood. we have seen a significant increase in one year breakevens from 2% at the start of the year to over 4% now and that is the market effectively saying they believed that the fed will allow the economy to run into the election so you have a twin very loose policy setting on the fiscal side and on the monetary side and therefore, we have to be a little bit careful about taking duration risk right now but at the same time, it seems to be the case that there is an appetite for buying duration again and a perception that the economy will slow down in the u.s. over the coming quarters. if anything, there is a chance that the u.s. economy and inflation could wreak salary and the second half of this year so what we are effectively doing is we are getting cautious when the number of rate cuts that get priced in is too high and we

start to be more constructive when the number of rate cuts that get priced and by the market looks low and we are heading towards the low point now but the risk actually is the 2025 rate cuts, something like 70 basis points, gets priced out because even if the fed starts to move in the love this year, if inflation is reaccelerating, once you get through the election, the next administration will definitely have some challenging economic questions to answer at that point in time. haslinda: where do you see protection? assumptions could be wrong for 2025. we are respecting fewer cuts that were priced in perhaps last year. marc: if you look at what breakevens are doing, is telling you to be positioned in those asset classes that are resilient in the face of rising inflation. we like a treasury link inflation bond, particularly at the front end, and we also liked commodity exposures as well so that is giving us a bit of resilience to rising inflation but still active in fixed income markets. haslinda: i hear bonds are here. how much more upside are we expecting from the stock market?

haidi: we think there -- marc: we think it is quite an interesting rotation play. we saw a flavor of that over the last few weeks. some of the more cyclical sectors, whether it is energy and industrials, they are starting to catch a beta and for good reason. it has been pronounced leadership by the technology sector and that is being driven by fundamentals. share buybacks have started to pick up again but we liked the idea of rotation under the hood even if it doesn't mean that at the next level, you see large gains from here on in. our focus is looking on parts of the market that have lagged to somewhat but have fundamental support that is improving. haslinda: what are you staying away from question marc if you take a look at the markets, there is a lot of herd mentality. everyone is putting into assets the same assets for a very long time. marc: what we want to do is be wary of mispricing's in the market. haslinda: and where you have seen that. marc: the session becomes the tail end of growth stocks in the u.s. which have been brought up by this rising tide, whether it is the ai theme, other types of

themes as well, so we think you have to be careful at the single security level, avoiding stocks which have appreciated in valuation, but lacked the growth story, or that the cycle is starting to slow down. that is where you have to be careful and you need to be more selective. haslinda: marc franklin is sticking around. here's a quick look at the week ahead. japan releasing a slew of economic data as investors try to figure out the boj's next move after they raised rates for the first time in 17 years. bloomberg economics thinks tokyo's core cpi eased this month but could still stay above the boj's 2% target. china meantime will also be releasing industrial profits data that could show -- following a decline last year and in the u.s., the fed's preferred inflation date could edge higher on volatile transportation categories. still to come, partner shares --

the outlook on private markets and why it is seeing opportunities in countries including india as well as sri lanka. more on the insights later this hour. keep it here with us. this is bloomberg. ♪

>> mocon--. here are some time geopolitical stories we are following. russia has held a national day of mourning 137 people killed in friday's attack on moscow concert hall. people across the country gathered in memory of the victims. russian officials are continuing to suggest a ukrainian role in the massacre even after the so-called islamic state claimed responsibility for the attack. kamala harris has declined to allow consequences for israel if it invades a crowded southern gaza city of rafah. she told abc news washington has been clear multiple conversations with israel that a major military operation in the city would be a huge mistake but that yahoo! has rejected warnings about attacking off

where more than one million palestinians have sought shelter. the u.s. contend ♪ ♪ -- condense actions after they fired water cannons at a filipino civilian boat. the philippines says the vessels were stationed at an outpost and were severely damaged. the crew had also been injured. washington state department says they are destabilizing the region. we are receiving news that the philippines has summoned china's diplomat in manila amid those tensions. also more on the geopolitical risks facing investors. let's bring in marc franklin, asset allocation for foliar manager at an investment management firm. you don't get a sense that there are risks out there. you have to wonder whether it's even relevant. marc: the one thing we are also watching for his bond market

volatility and that is also on the way down so it has a positive feedback loop for equity volatility so if you month ago when it was much more elevated, we might have taken the view that equity volatility was underpriced, but looking to the bond market now, things are relatively calm there and there is amid pressure for equity volatility in the very short term. haslinda: how do you trade vix? marc: it's very difficult because typically speaking, there is a lot of erosion so it costs a lot of money. options can be a more effective way of playing it. haslinda: lots of geopolitical risk out there. one is the most important? marc: what understands the current conflicts that are underway. whether it's other categories of tension, we would watch out for things which have not bowled over but could well do so in the coming weeks and months. look at the border between india and china. india has committed to an increased troop number. there's a lot of military infrastructure that could lead to a flashpoint and the korean

peninsula as well. the world is getting more restless and i think that is the perception that whether it is china, russia, iran, they are not comfortable with the status quote. they feel like it just advances -- disadvances them. haslinda: so are they are trading opportunities? should you be buying defense stocks, for instance? marc: that is a good question. it is something we debated over the last few weeks. the challenge is actually the defense budget is not growing very fast in the u.s. once 2% per and i'm but at the same time, there is a lot of conjecture about whether the military spending should be used towards ammunition rather than platforms so the defense stocks may not be the best way to play it. we like the idea of addressing geopolitical views through commodity exposures which would come into supply constraints should conflicts start to broaden out. haslinda: in terms of particular market, would a market like singapore, for instance, which has proven to be stable, do well

under such circumstances? in terms of markets, what would you be looking at? marc: open economies that are dependent on the free flow of global trade would definitely be under pressure in a situation where global trade was significantly disrupted and we don't necessarily see that as a near-term risk but certainly speaking in the longer-term, if we believe geo-political tensions are here to stay and potentially rise further, we prefer economies more driven by domestic economic drivers, circular growth stories rather than being totally dependent on the economic fortunes. haslinda: the risk lies in what is happening in november this year. the election in the u.s. does it make a difference who wins? marc: i think there's bilateral view that running very large fiscal deficits is the way forward. fiscal conservatism has been marginalized as a political faction for some time now. both trump and biden are in favor of running large fiscal deficits. how they get there is different. in trump's mind, it's about

cutting taxes. in biden's mind, it's about redistributing. the outcome is the same. it is supported for inflation. foreign policy in terms of style and potential substance is where we could see differences. biden administration has been very strong on building alliances and reinvigorating alliances where i think trump is much more of a disruptor and questioning historic allies in terms of their commitments to defense spending so the headline risk will be higher under a trump presidency but from an economic perspective, there is not a great deal of difference between their instincts. haslinda: how about in terms of the indian election happening midyear? it is a give me that modi is coming back to power. is it tradable? how do you position for that, especially for a market that is going gangbusters? marc: given that it tends to run for four weeks to five weeks, you have this window where there is somewhat of an uncertainty. modi is likely to win again but what is the margin of victory? what is the mandate question marc if there is any weakening of the mandate, yes, there might be a bit of a pool -- a pullback

which creates opportunity but in general, we don't see any pullback as lasting for a very long time and there are very, very strong commitments from foreign investors because they like the continuity of policy. they like the economic policy program, the rebuilding of infrastructure, the domestic investment that is going on and that is a very strong story particularly in a world where there is a high degree of cyclicality that we have observed. haslinda: they are like prospects of a percent growth. marc: nominal growth. -- 8% growth. marc: nominal growth. haslinda: plenty more ahead. keep it here with us. this is bloomberg. ♪

>> it is shaping up to be a big week for earnings and major lenders including the bank of china and icbc all report the

results after maintaining the benchmark lending rates last week. we will be looking for commentary from lenders on where china's property crisis is heading. speaking of property, we will get results from embattled director -- developers such as country garden which it expects to see its loss and deepen after posting its biggest sales drop in at least seven years in february. and earnings out of china have been somewhat disappointing so far with a majority of companies either in-line or missing profit estimates with about 20% of stocks in the msci china index reporting. speaking of developers, let's do a check on chinese developers in play today. the premier calling for policies to stimulate demand for the property sector in what is seen as an effort to provide more efforts to support the property sector which is about 25% of gdp. country garden also higher. take a look at where it is right

now, currently surging by about 8.5%. it is falling after flagging that loss of up to 21 billion yuan. in terms of brokerages, recruiters falling after they received on-site supervision that is weighing on sentiment. six securities down about 4.2%. securities also in negative territory, weighing on sentiment at this point in time. plenty more ahead. do keep it here with us. this is bloomberg. ♪

haslinda: -- what a reverse back in friday. china after lunch, japan back from break. let's get the very latest.

avril: let's take a look at how the nikkei is faring. we saw it running higher after the boj. there was a bit of fomo as well and investors really betting on the economic revival in japan. today, there is a bit of profit taking the pullback from the nikkei and we are also seeing this in light of what we have seen in the japanese currency. it slides or strengthens against the greenback after verbal intervention. let's take a look at what we are seeing across assets in japan. we heard the boj signaling it will keep things accommodative and bonds are studying. the buck almost seems to be passed to the ministry officials. the top currency chief coming in with the job running today because it's not just about the levels as the yen hovers earlier near the 152 level. it's also about the magnitude of

the moves and given how the currency weakend last week, is putting traders on maximum alert. there is a traders guide you can read all about on the terminal. that should really be the attention of the markets as we keep an eye on any intervention. haslinda: suddenly, the intervention came when it hit 152. thank you so much for that. the boj's momentous decision last week to overhaul its monetary policy for the first time in 17 years was one that everybody already knew was coming. let's talk about the boj's information problem with the bloomberg opinion columnist. not necessarily a bad thing. that was well telegraphed and you know, it is controllable. >> the first thing to note is all central banks engage in a degree of telegraphing, a signaling of their broad inclinations.

it does them no good to have market upsets but what we have seen in every development since -- it's just not level. it is known in extreme she it in detail and critically, details are coming out during the meeting. last time we wrote about this, one message said the fed does the same. i can tell you the guy once responsible for the federal reserve coverage -- nothing approaching what the boj does happens anywhere else. people wonder why doesn't japan join the five eyes? they can't even control their monetary policy information. how are they going to keep national secrets? haslinda: what does it mean? does it open the cath for more chaos in japan with the boj dropping such a policy i guess? marc: there is a fundamental question here. who runs the bank of japan? the

editor in chief of nikkei or casual waiter --or him? do they massage the media or does the media massage the bank of japan? japan has made and norma's progress in breaking down this sense of cozy club which was always dominated decision-making but this must be one of the final frontiers and there's going to be more scrutiny of what the boj does now. they are talking about normalization. what we have seen is anything but normal. they need to get with the program if they want to be taken seriously as a first world central bank. let's start with behaving like one. haslinda: 13 people were basically at that particular meeting. it is meant to be kept a secret and you wonder whether anything will change for the boj in terms of how it relays that message. marc: outside scrutiny if it is brought to bear will change it.

go back last month. sherrod brown, chairman of the senate and king committee in the u.s., wrote a test the letter to jay powell after internal probes found three policymakers did not violate the law during their celebrated trading of securities during the feds very active pandemic period. so ultimately, somewhere, someone in the decision-making process within japan has to say this is not up to snuff. haslinda: so what are you hoping to see? dan: i'm hoping to see something that brings the bank of japan into the policy mainstream in terms of its media management. that is what i am looking for. haslinda: don't hold your breath. dan with his take on what is happening with the boj. pakistan's new finance minister, mohammed, is setting his sights on diversifying the country's funding sources. he told us he is keen to sell as

much as three hundred million dollars in bonds this year for the first time. >> the way i am looking at it, it will have, if you have to restructure, it will have certain enhancements and those enhancements then should make it palatable, even in the course of the next fiscal year to tap the bond market locally in china. >> how big or small are those numbers? i mean, i -- >> i think the inaugural issue -- i think the actual size can be as large as $1 billion in rmb but my own sense is even if you are able to tap $300 million as is the first issuance, i think that would be a good start because it would allow us some things which we have not tried

before and something which we should have looked quite frankly sometime back. you know, the second largest and deepest bond market in the world and not tapping it while we do the dollar in the euro prices i think is the right thing to do for the country in any case irrespective of the size of my own sense is that it will be $300 million and then we can keep it at that. >> how soon can you tap it? how soon would you need to tap? >> my own view would be that during the course of this calendar year, we should move in that direction. >> once or multiple times? >> at least the inauguration. >> you mentioned the rupee. you see it being stable. do you continue to see it being stable? we have 3.5 billion dollars that need to be paid by june. do you think that will bring some pressure on it? >> my own view is remittances

and exports are almost matched by imports. on the current account side, as you know, it has come down significantly. february was in the surplus. there is a lot of discussion whether it caused the economic slowdown, etc. maybe some aspect of it is that. for example in the auto market, the demand for this has gone to down simply because the auto car prices have gone up in a big way and therefore the demand has lowered. i think the current account deficit is going to help us in our overall balance of payment position and it will support that in terms of reducing the gap. so i don't really see a huge

pressure on the rupee at this point in time as we move forward. i think it's going to remain range bound around these levels. >> short-term, medium-term? >> i think the only one i would say -- the wild card in this whole thing is oil. right? you know, that is the only thing which i think, you know, given the red sea and everything else that is going on, can the impact at some point in time? fortunately, it has not but that is the only wildcard. my own sense is, you know, it will be -- the currency will

remain stable. haslinda: the pakistani finance minister speaking to bloomberg's just in islamabad. still to come, mcm partners tells us why they are seeing massive investment opportunities in countries like india as well as sri lanka. more on the insights, next. keep it here with us. this is bloomberg. ♪

haslinda: -- mcm partners which focuses on private markets. good to have you with us. >> nice to be here. haslinda: the picture is not perfect. we saw when it came to 2023, japan was the only market with growth in private equity activities pretty much. what is different this time around? >> i think there's going to be rate cuts so i think that will spur things.

countries like india and sri lanka, which is a turnaround story, going to present opportunities in the private space so i think we are seeing a difference from 2023 and we already see a pickup. stockmarkets were at a high at the end of 2023. inflation was curved and rate cuts are going to kick in which will also spur investment activity. haslinda: inflation remains really sticky and the rate cuts have been pushed back again and again and some say, you know -- we go from three to two so there are risk to the projections you are making. >> there are always risks but i already see a flurry of activity in 2024 in the private market space than i did in 2023. 20 23 was a very difficult year with the exception of japan, as you mentioned, where they were up 180 3% in terms of deal size. the rest of the markets were suffering. but we are seeing a turnaround now in terms of investor interest, in terms of people wanting -- looking for opportunities. i myself have been asked in sri

lanka for a different investment opportunities. as you know, the imf has made almost $3 billion of commitments in terms of that. there are some points that they need to adhere to in order for the provisions of that loan and therefore, the sri lanka has several huge assets which are being divested and a lot of institutional players and investors are looking to come in which will also spur activity there. haslinda: you talk about a flurry of activities. quantify that for us? >> a flurry of activities, i have a lot of investors coming to me and saying let me be part of the india growth story. how can i be part of the india growth story? haslinda: how big are these deals? >> the deal in sri lanka is $250 million. in bangladesh, we have a deal which is $1 billion potentially. in india, we have deal sizes which are small, 10, 20 million dollar range come up to half $1 billion so where you are looking to take a huge chunk of some

conglomerate or becomes like a merger or acquisition deal. haslinda: you have to wonder what they are in a market were different asset classes are giving -- he lock in 5% in bonds and you see many countries are having record highs in terms of stockmarkets. why pe when you can just lock in and have good returns from some of these asset classes? >> india today has 100 level you -- 111 unicorns. they will see returns you will not see in the bond market. he will not see it in the stock market. haslinda: they are disappointed. >> baidu and pay tm were a specific story driven by the covid imperative which they thought would last forever, right? but that is not the case. when interest rates rose and covid kind of stopped, those companies suffered but other things like food deliveries.

now, it has a competitor which is listed so you can always look to it tomorrow the trajectory so had think there will be more nuanced investment now but there's huge opportunity. because of the unprecedented growth we are seeing in countries like india, right? 7.5 percent projected, inflation is benign so there will not be stringent monetary policy. the population is young, around 130, so that will also drive gdp. we were the eighth largest economy 10 years ago and now we are the fifth largest economy and they project it will be the third largest economy by 2027 so there's huge growth to be taken advantage of in those numbers for investors risk institutional and private. haslinda: what is there to be excited about? dan: there is a huge amount of innovation in india's in --

india's ecosystem. we have a huge amount of talent because we have a young population and therefore, they can drive growth and they can also bring prices down so i think that those are two of the key factors that will drive haslinda: tech remains very attractive. >> to investors, yes. very attractive but i would say commodities, energy, they are also supplanting it to some extent so tech was the beauty queen, if you were a few years ago, but now, you have energy, commodities also being asked for. haslinda: when you talk about text, you have to talk about ai. how do you invest in hardware? how best to do it? dan: -- >> we have to make that distinction between software and hardware. software, openai. is it going to be the story or is there going to be a competitor that comes out? that remains to be seen. one thing is for sure, ai is

changing the trajectory and the landscape of investing in terms of how companies run in almost all domains and i see it being a huge part of the future. haslinda: investing in ai is investing in potential which has yet to be realized. what risks do you see and how do you guard yourself -- how do you hedge against it? >> it is difficult to hit yourself against risk. if you have return, you have risk. i think basically, you have to take a punt. openai, there is a massive amount of interest in openai and it's difficult to source. we have been dealing with blocks of ai for months now where the trade does not quite go through. sometimes, it does. sometimes, it doesn't. it's doing your homework. that is what is going to prepare you for the investment landscape. haslinda: if you return this risk, but in this case, there's concentration risk because people are interested in the

same asset classes in the same companies in the same way. >> absolutely, but you know, if you look at something like amazon, it is a large, dominant player and there's concentration risk there, too. people have had outsized returns. if they have a winning idea and they are implementing it right, the consecration -- concentration risk is litigated. any contrarian view? any moment, real estate and reit's have not been looked at as much as they should have. everybody was working from home so they thought the office is defunct. the office is still very necessary and i think some of those investments are undervalued and should be looked at and also fmc g, the mainstay, fluids, restaurant, all of that needs to be looked at. right now, the hubbub is around ai but don't forget domains days. haslinda: the office is

necessary but we are seeing a lot of cutbacks in terms of manpower in tech companies. we are talking about tens of thousands of workers. how do you look at that? how do you assess that? >> basically, i think it is undervalued relative to where it should be. i'm not saying it's absolutely at the scale it was earlier. it is undervalued relative to where it should be because while it may be diminished, it has not been eradicated. still go to the office two to three times a week, still have client meetings and we still need it. there is more value than investors are seeing. it may not be what it was. haslinda: thank you so much for that. plenty more ahead. keep it here with us. this is bloomberg. ♪

>> secular themes that were very

powerful but that rally was narrowing and suddenly, you have a very powerful top down factor that has come in, enabling central banks. they are clearly going to do what they want to do regardless of selective data focus. these two things coming together are really powerful. >> we used to price by what came out of the news conference with chairman powell. >> i was surprised to the extent to which he expressed patience in two ways, patience with inflation running higher -- he basically dismissed the fact that we have had some pretty surprising, hotter than expected inflation -- inflation prints. the balance sheet. we may get there slower than we would have otherwise which means monetary policy is going to be more expansionary than it would have otherwise so i was struck that on the balance sheet, he talks such a big step forward when he could have waited until the next meeting to do that. haslinda: we keep wondering what she was going to drop. we keep thinking everyone is

bullish and more bullish and bullish on top and you have to wonder, ok, when does something break? we were talking on wednesday -- it is the inflation expectations. at some point, this will be a higher, more inflationary environment with a fed that is less willing to fight it and yet i am not seeing it in other places that you normally would. why do you think that is? >> you are seeing it in gold. look at record highs on gold. what you are having is that she have all said it really well, the everything rally. it is going everywhere. what is interesting now is this notion of market enthusiasm, not economic enthusiasm. that is quite a consequential statement. if that occurs, then the u.s. relative strength is going to be somewhat diminished. i think it is too early to pivot. to use your phrase, u.s. economic exceptionalism is not

going to expand to the rest of the world. the u.s. is really exceptional. the others are not doing what others are doing in terms of investing in the future drivers of growth. they don't have the society we have, the mobility of factors of production that we have and the u.s. is truly exceptional among other advanced economies. >> do you think it is rational for people to stay in the united states and to keep adding more even if valuations are at such high levels relative to the rest of the world, to continue to batch on this and not expect it expand elsewhere? >> i have been asked that question every single year for the last five years. the u.s. premium has increased in year, i say, do not do the u.s. too early. i see some argument for diversifying purely based on this enthusiasm on relative valuation but i don't see it as strong. people have to realize this. this is more betting on the momentum and i understand that. the momentum factor is very

strong right now. haslinda: that was bloomberg opinion columnist mohamed el-erian. let's do a check on market china in particular, in the money on a day when the rest of asia is in negative territory. we are keeping a watch on both surging as u.s. lawmakers are leading the bio secure -- they warned the proposed legislation would weaken investor confidence. they are currently up by more than 8% and some of the earnings resting so far, meituan currently up by about 8.5%. profit growth is 23%. that is it from bloomberg markets asia. daybreak middle east and africa is next. this is bloomberg. ♪

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