to the 5% level. we are hearing from the ministry of finance again about possible intervention. it is really a retread of those old lines. if the yen keeps on weakening, maybe today is the day. haidi: we spoke earlier about when the intervention could come and the sensibility of the fact they may want to wait until after the u.s. inflation print. wait for that to washout if you will, before if they need to do significant intervention. let's take you to the market open. we are expecting a solid set up. japanese equities just extending those gains about .4% higher for the nikkei 225 and the topix. watching a lot of the commodities and energy names. this is oil, iron ore and a number of other commodities continue to clock in those gains. dollar-yen hovering just under that 152 level.

it has been pretty stable for the past few sessions and maybe even sideways trading as we get to the u.s. inflation trip -- print which could potentially worsen the gap between the fed and the boj pete we are seeing more conviction perhaps when it comes to timing around when the boj could be moving. this as governor ueda kicks off his first anniversary under his belt at the home of the bank of japan, having dismantled this huge stimulus experiment. the question is what is next. the 10 year is also looking to see some reaction from what we have seen across treasury and markets. take a look at korean markets. politics is in focus as the election really hinges on what urban voters will respond to the macroeconomic outlook and easing inflation pressures as we see polls indicating top issues had been tackling into inflation,

household wealth and the like. tech stocks doing well. watching dollar want given the recent weakness but of course a lot of the recent weakness across broader asian fx, not just the yen. paul: let's look at how we are doing in australia. moving modestly higher in the early going. a couple minutes in, so a number of names still yet to begin trading. already we have materials among the best performers pretty we have seen a recovery in the iron or price. we have seen encouraging signs of demand coming out of china helping to support that. we also have brent crude trading again and that is also moving higher. notwithstanding israel's decision to withdraw troops from gaza where a lot of the supply and demand picture remains intact. yields in australia climbing a little. the aussie dollar pretty stable. let's look at how u.s.

treasuries are trading in japan at the moment. yields climbing a little bit. yields for the two-year were initially higher. easing back a little bit now but one of the questions is when could potentially the two-year yield hit 5%. the 10 year did touch -- got close to 4.5% in u.s. trading. that is seen as a level where rates could break out and test the highs we saw in 2023. that's the highest we have seen since november last year. markets leading towards the possibility of just two rate cuts this year from the fed. in that regard we have neel kashkari speaking earlier. let's listen to what he had to say. >> the labor market is not red hot the way it was one or two years ago. when it was crazy hot and they had to keep paying out to keep their workers in place alone trying to find new workers. it is not that red hot but it is

still a tight labor market. they still have to compete. paul: let's get to joshua crabb, head of asia-pacific equities joining us from hong kong. i want to start with the remarks we heard from neel kashkari. this is the neel kashkari who a few days ago suggested we maybe don't get any rate cuts at all this year. he is still talking about how the data in the u.s. is pretty strong. where do you stand in terms of your expectations now? have you repriced and reassessed? joshua: the view from our macro team has been consistent over the course of the year, and that has been for two to three cuts. earlier in the year the market was looking for almost double that and has now come back to that range. i guess we are not that different from the rest of the market. the backdrop is we have a lot of inflationary pressures with energy transition, whether that is liver force, supply chain diversification. we think you end up with a more

elevated level of inflation for some time. clearly the market is hoping that will come back and we will see rate cuts stimulate the market. the positive side of the offset of that is growth has been a lot in the u.s. market. some feel we are not that indifferent to the market at this stage. paul: we are seeing yields rising. we had that screen up when you were talking just now. the two-year is perhaps an exception. when you look at this chart we see the trend from the two-year starting to push towards 5%. can you see a scenario when we cross that, and when might that be? joshua: this is where it is always interesting to step back a little bit. it was not that long ago when people thought interest rates would stay around zero and now we have moved up to a level more consistent with inflation. for us it is a debate whether it is a little bit higher or lower. that is probably less important

than thinking about how many cuts are going to come. that is going to come down to what we are seeing out of u.s. growth. it will depend on what we see out of the u.s. labor market and that wage growth. for us it is probably less of an issue now than it was a couple years ago from that inflationary perspective. i think the biggest question here is what is going to happen with u.s. growth and inflation happening from the wage perspective. haidi: japan has obviously been so popular but we have seen over the last few sessions may be a loss of momentum for the nikkei 225. are there more downside risks of potentially lower guidance from companies, perhaps a strengthening from the yen, some flows being redirected back to china? joshua: i think this is one of those interesting questions. if i was sitting here a year ago, quite optimistic on japan, and that is a market that has done quite well. it is not contrarian to be optimistic about japan anymore. that said, fast money entering

into japan, we saw some of that money taken off of the table last year. what has been interesting is the strength we saw in the beginning of this year for more longer-term investors coming into that market. from a corporate perspective clearly a lot of the companies are not assuming the yen is as weak as it is now. the risk is built in for some strength from here. ironically, we have the potential to see upgrades. from our perspective, i think the yen has probably run the majority of its course in terms of its weakening. but we don't think that destabilizes the story. if we see strength in the yen from here, that would definitely change may be some leadership from some exporters to more of the domestic sectors. but we don't think it changes the story for japan. a lot of that is around restructuring, around simplification of businesses, around cross shareholding, unwinding, etc. that story continues to remain. one other interesting aspect in

terms of new catalysts, we have seen a lot around wage negotiations having an impact on inflation. as people start getting increased wages hitting them with the question is going to be where does that go. does it go into consumption? does it go into real estate purchases? does it go into financial products? that money will need to flow somewhere. it's a very different person in japan today that will be getting those wage increases than when we last saw this 20-plus years ago. haidi: korea, if japan's path is anything to go by, korean stocks have a long way to go. where do you think is interesting when it comes to korean markets at the moment, and what do think the implications are of the upcoming election? joshua: i think this is a great analogy coming after japan. because if we think about japan 1.5 years ago no one would believe these changes were happening. for a number of the same reasons, the aging population, the drive coming from the stock

exchange or whatever else, we see something similar. immediate market reaction to this is now stabilized. some people are taken profit and waiting to see the execution on this. i think it will be a really important point to sit back, look at the companies that will affect that change. the elections will matter in the current ruling party pushing for the value up, for lack of a better name of what is happening in korea. so we think the election will matter. only a couple days away now. but there will be a lot of opportunities. people have all can -- have often talked about the korean discount. seeing increased buybacks and dividends and shareholder-friendly activity definitely creates opportunities in the korean market. haidi: there are some interesting moves across e.m. more broadly. we see a lot of weakness across asian fx, seeing maybe stabilization in china. i am wondering if you see more

investable opportunities there. are you looking at emerging markets in asia? joshua: absolutely. you need to look at the world in a bit of a backdrop and fx is an interesting start. clearly i am an equity person but even if we are talking about the yen, with the boj may or may not do, you are talking 10 basis points here or there. when we talk about changes index rotations in the u.s., it dwarfs those moves. a lot of the fx and the rate environment is being driven by what is happening with the u.s. and expectations around growth and inflation rather than what is happening here. if we take a step back and look at the natural growth in economies, if we look at a lot of southeast asia, indonesia, vietnam, the philippines, these will continue to be very medium-term stronger growth stories. there are a lot of opportunities there. you touched on china. again, this is sort of the elephant in the room about what will change there. we don't see any wholesale changes in terms of what people see as long-term headwinds, but

clearly the market is starting to stabilize in terms of the stock market, and the economy as well. and what we think the interesting aspect they are is if we look at some companies, they are now beating lois rotations, seeing an increase in things of buybacks. we are seeing things that should be supported but are probably more at a stock level for the chinese market. haidi: joshua, great to chat with you as always. take a look at some of the stories we are watching. defense stocks in japan are in focus. also seeing howa machinery. not much of a change. we did see some, really when it comes to the visit we have seen from japanese prime minister kishida meeting with president biden and this talk about potentially, at least in the second part of the agreement, having japan involved as well. we could potentially see a bit of a move, but we are not getting a great deal of details

in terms of how that would play out. taking a look at chip stocks as well. this is the picture as we look at the likes of gains across tokyo electron. sk hynix seeing more minus -- more modest gains. we're seeing some associated optimism. interestingly we heard from elon musk talking about that feverish demand perhaps when it comes to ai-related demand starting to pass for chip demand. paul: let's talk about the bank of thailand, facing government pressure to cut rates with the prime minister insisting inflation is not low enough reason. we will have a preview coming up later. also janet yellen wrapping up her china visit with a warning against any aid for russia's war in ukraine. details of that next. this is bloomberg. ♪

so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management.

>> we continue to be concerned about the role that any firms, including those in the prc, are playing in russia's military procurement. i stress that companies including those in the prc must not provide material support for russia's war, and that they will face significant consequences if they do. haidi: u.s. treasury secretary janet yellen wrapping up four days of talks in china with a warning against any moves to bolster russia's military capacity. our chief north asia

correspondent stephen engle joins us for more. i think janet yellen got across the points she wanted to make. arguably we not have seen much of a reaction in terms of progress being made from the chinese side. but how do you rate the impact fullness of this trip, i guess? stephen: by the way, this is her second trip to china in the past nine months, so that is a good sign that they are talking. but deliverables are hard to measure obviously when you are trying to build up trust between two, i would say, competitive adversaries in the global space in many different realms. so, janet yellen was there, and we already kind of knew that she would go to beijing in her four day visit and talk about excess capacity, particularly in new industrial efforts by xi jinping. i will get to that any minute. she capped off the trip yesterday with that warning we just heard about any banks including those in the people's

republic of china that facilitate significant transactions that channel military or dual use goods to russia, expose them to the risk of u.s. sanctions. the ultimate weapon i guess would be a cutting off from the u.s. dollar. that would be an extreme case like what we have seen the last couple of years with russia. it comes at an interesting time, her comments about russia in beijing's relationship at the time of two years of war in ukraine. because survey lavrov, the foreign minister of russia, also arrived in beijing the same day. unit did say most of the trade between china and russia is not problematic. but the key is finding evidence, if there is any, of dual use goods or military hardware that is going to feed the war in ukraine. paul: in a press conference

janet yellen also said the global economy may be adversely impacted by ramped up factory exports we are seeing from china. does beijing have a response to that? stephen: they have had a response. for the most part beijing has played nice. according to the treasury department did they have listened to janet yellen. xi jinping is giving the marching orders to basically unleash new productive forces in electric vehicles come in batteries, in solar capacity and the like. when you had that kind of mandate coming from the top, there is excessive, in some estimation, buildup of excess capacity. where does that need to go when the chinese economy is slowing down? it will go abroad, according to janet yellen. so she made that warning about flooding the market with cheaper subsidized goods under xi jinping's industrial mandate. but again, what is beijing going to do when consumer confidence

and consumer spending and the domestic economy is sputtering? again, there will be a lot of debate on this going forward as it is an election year here in the u.s. and donald trump threatening further tariffs on chinese goods if he were to come back to the white house. you asked about the chinese response. in a commentary friday, they blasted yellen's xenophobic narrative of china's excess capacity. they said it smacks of creating a pretext of rolling out more protectionist policies to shield u.s. companies. he also heard from the vice finance minister who pushed back saying the current production capacity is far from meeting market demand. he was talking about green tech energy products like batteries and ev's, which i believe peter elstrom is here to talk about after me. paul: he is and we will get to him in a moment. stephen engle, thank you so much.

we are going to have more on the impact of janet yellen's visit to china in a few minutes with the asia society policy institute. that conversation is coming up shortly. but he did mention tsmc, u.s. listed shares gaining after the biden administration announced almost $12 billion in grants and loans to help build a chip factory in arizona. for more unless let's get to executive editor for asia technology peter elstrom. very significant. walk us through the details. peter: it is a significant award from the u.s. government. the biden administration of course has passed to be chips act were there giving money to various players in the semiconductor industry to build up what they see as a strategically important industry. tsmc is the most to tediously important of those chips companies that makes the most advanced chips. it will make the chips for companies like nvidia, the ai chips that train chatgpt and

other kinds of models. it also makes the chips that go into the latest iphones. being able to land this deal with tsmc and help them land sophisticated chip plants is a split fifth -- is a sophisticated deal. the u.s. government is giving $6.6 billion in grants to tsmc and at least another $5 billion in loans as the company. builds one of the surprises we found is tsmc has already agreed to build two fabs in arizona. it is now going to add a third on top of that and this third one is going to make the most sophisticated chips we have heard so far. they are called to nanometer chips. right now the current state-of-the-art is three nanometer chips. they are going down to two nanometer chips in the u.s. that is important because they need to make these more advanced products that will help drive innovation like artificial intelligence, electric vehicles, and that sort of thing. that will be very important for the u.s. economy.

awarding the money is one thing. they still need to be able to get these construction projects done, and that has been a little slow in the u.s. so far. haidi: you have talked about the types of chips they want to have access to. what is the broad ambition in terms of why the government has allocated so much funding for this industry? peter: there are a couple of things going on. partly because of the covid pandemic and the disruptions we saw to the supply shock. governments around the world saw how risky it was to not have access to key components, particularly semiconductors. the most advanced semiconductors right now are made in taiwan in a little more in south korea. those are the two countries that are so key. when supply chains become disrupted that can cause a lot of problems. in covid we saw auto manufacturers having to shut down operations in japan, the u.s. and europe because they could not get a lot of chips they wanted. on top of that we have rising

geopolitical tensions between the u.s. and china. the u.s. government, like the japanese government and european governments, have decided semiconductors are strategically important for their economies, you need to have some sort of domestic supply so they can continue supplies if anything happens like what we have seen in the past. so the u.s. has actually been a little behind japan. japan was quick to move ahead with these programs. it also ported them to come to japan they have already built one in japan. it is not a sophisticated as what we see in the u.s. but they were able to move very quickly. the u.s. is playing some catch-up but it is a good sign that now they have tsmc on board and have allocated money to intel, it big american ship company, the most advanced chip company in the u.s. at this point. on top of that they are courting samsung and some other players with the hopes they will be able to build a critical mass of semiconductor capabilities to help the economy in the future.

paul: what is it going to mean for the u.s. economy, all this investment in cutting edge chips? peter: first and foremost it is going to mean jobs in these construction projects per part of the money tsmc is getting for example is going to go into training workers. they are going to get 20,000 construction jobs and then 6000 high-tech manufacturing jobs. there is a hope that this will create a benefit to the local economies in these key areas getting some of this money at this point. first and foremost there will be direct economic benefits. longer-term with the u.s. government is trying to accomplish is to build a semiconductor industry that can help serve as a foundation for the innovations you want to see in the economy going forward. part of that is artificial intelligence. part of that is quantum computing, electric vehicles. you want to make sure you have

access to these chips so you can build those industries in the future. haidi: that was editor for asia technology peter elstrom. more to come. this is bloomberg. ♪

paul: let's get the latest geopolitical newsprint senior israeli officials say progress has been made in negotiations for a cease-fire in gaza that would include the release of hostages and palestinian prisoners. the defense minister says israel has reached an appropriate point for questions on returning hostages held by hamas. israeli media say in meeting of the security cabinet has been called for tuesday. germany is said to be forging ahead with a sweeping military overhaul costing as much as $7.6 billion. sources so the ruling coalition was to order hundreds of armored transport vehicles and two

additional navy frigates as part of germany's push to modernize its military following russia's ukraine invasion, and will require approval from lawmakers in parliament. still to come, janet yellen got a very respectful hearing in china, but will it translate into the changing she wants? we will have analysis on this next with the asia society policy institute. this is bloomberg. ♪

paul: got some breaking news out of australian. consumer confidence figures for the month of april, or lack of confidence. we are seeing a contraction of 2.4%. the reading itself, 82.4. anything less than 100 denotes pessimists outweigh optimists. and they sure do.

that is another sharp contraction following the contraction we saw in march, and that is what we got after the rba walked back the chances of a rate cut in australia. the next meeting is not until early may, so consumers are not feeling too good. family finances versus a year ago improved, but the view for the economy one year ahead, that contracted 2.7%. five years ahead is even worse, contracting 4.4%. buying a major household item contracted 6.6%. there is not a lot of confidence around buying a dwelling either. another big contraction in consumer confidence but at least it is a nice day. haidi: let's get the latest when it comes to geopolitics. janet yellen wrapped up her visit to china, repeating her key message on with the u.s. says is a buildup of industrial overcapacity. >> china is now simply too large for the rest of the world to a

this enormous capacity. actions taken by the prc today can shift world prices. and when the global market is flooded by artificially cheap chinese products, the viability of american and other firms is put into question. haidi: our next guest says he yellen's modest objections underscore the complexities in u.s. china relations. joining us now is wendy cutler. always great to have you with us. particularly around these sort of events and meetings. this sort of engagement, it is hard to measure the deliverables, but it is important it keeps happening. wendy: exactly. this is just another step in engaging with china, even if we don't see eye to eye. it's better to talk than not to talk. at the same time we need to be prepared to take the actions necessary to deal with problems

they are creating, such as overcapacity. haidi: the overcapacity issue is interesting. if you look at the data there are questions around what sector your -- what sectors secretary yellen might be talking about, and whether there is an element of the data that distorts with the reality of the capacity is and what products are being affected. regardless of that do you think it was noteworthy that she did not rule out potentially import restrictions? and given the fact the chinese did not really respond on saying they will take any concrete measures to address these complaints? wendy: absolutely. i think she succeeded in raising this issue of grave concern to the most senior levels of the chinese leadership. i was disappointed that the chinese response seems to be very defensive and said things like we should just rely on market forces. but how ironic for china now to rely on market forces after they

have been subsidizing industries like steel, like electric vehicles, like batteries and others for years and years with hundreds of aliens of dollars. -- hundreds of billions of dollars. paul: china's stance was defensive certainly not aggressive. are you surprised there is not been a stronger pushback from china? wendy: no. but again, in the december work conference report in china, they did acknowledge that excess pacitti was a challenge for them. and so in some ways, i saw the premier's comments as being a step back from that and basically saying don't worry, this is all going to work out and there is global demand for these products. again, this is not just a u.s. problem, because these exports are flooding markets all around the world, leading countries like brazil, south africa,

mexico, to take measures against chinese imports, unfairly treated imports. paul: janet yellen says china is too large to export its way to growth, then china disagrees with that position. so who is right? wendy: [laughs] well, i think we are right. the supply and demand factors in china are out of whack. they are taking measures to encourage more investment in manufacturing and they are not doing enough to promote consumer demand. and i think that is one of the reasons why secretary yellen agreed to intensive consultations on balanced growth. the idea that they need to do more on the demand side and less on the production side. but the talk she launched, in my view, are medium to long-term types of talks dealing with structural issues and they could lead to delaying tactics by china.

so i think the u.s. needs to be very clear i'd and very vigilant and take actions before we are impacted by a surge of chinese imports. we have waited too long to take measures against chinese imports of steel. frankly, our industry has never really recovered from just the global overcapacity of the chinese steel all around the world. haidi: janet yellen is very well-regarded and well-liked in china. do you think that this contributed to her ability to be able to speak very plainly, and can we expect that consistency of diplomatic engagement once her term ends, and also depending on what happens after november? wendy: given the fact that she is respected and is viewed by the chinese as the cabinet official they can work with, having sharp words on these issues come from her carry a lot

of weight. that said, i also will be watching to see if the chinese try and use their relationship with her to kind of delay taking the kind of steps that need to be taken. and my view is in the coming months and whoever wins the presidential election, or whoever is in the white house is going to have to deal with these issues. because we have seen this movie before with respect to solar imports, with respect to steel imports. and that is if we don't take measures and we let these chinese products, which are subsidized and priced in a predatory manner, come into our borders, our companies just cannot compete on a level playing field. haidi: and of course the new battlefield, if you will, is now over ev cars and batteries for china. i do wonder, how much capacity

economically, domestically, does china have to pull back, given it is also dealing with structural issues in its own economic transformation? wendy: clearly china is a large market for ev consumption. but they are making millions more cars than chinese consumers can consume. so therefore, there is no option for the thousands of electric vehicle companies in china that have received subsidies to just export in a manner where they don't really need to make profits. they just need to kind of get rid of the production that is hanging around in china, idling in parking lots. paul: in a case of interesting timing we have the russian foreign minister sergei lavrov arriving in beijing the day janet yellen leaves.

how credible are yellen's warnings when it comes to saying china, watch it, when it comes to supporting russia's efforts in ukraine? wendy: that is another tough message she delivered. i am sure her chinese counterparts heard what she said. whether they take any actions to address her concerns is an open question. given their close relationship with russia and their growing exports to russia, i think this is going to be an issue that is just going to get more difficult between the u.s. and china. haidi: things could get complicated as we have been talking around potentially if there is a change in leadership in the u.s. in november. going by past recent history, do you expect policy to remain more or less the same? wendy: it is unclear. i think if president biden

succeeds in securing a second term i think we will see a continuity in the policies he is pursuing including protecting our national security, but also promoting economic exchanges in the nonsecurity area and looking for issues that affect the world and the region where we can work together cooperatively. if former president trump wins, either we will see a quick increase in tariffs across the board and against china, but we also may see a president trump that wants to negotiate and to deal with china and to try and conclude the deal of all centuries with china. so, i think with president trump in the white house we would see a lot of unpredictability and volatility with respect to our

relations with china as well as other countries. paul: wendy cutler, vice president at the asia society policy institute. thank you so much for joining us, unpacking the takeaways from janet yellen's trip to china. let's look at how we are tracking markets opening around the region. a mostly positive day. the nikkei better by two thirds of 1% right now. we are watching the yen, not a lot of movement at the moment, 151.86. the kospi also in positive territory by .5%. in australia we are also up by .5%. leading the charge in australian, materials. that sector better by 2% right now. some interesting names in the mix as well, focusing particularly on fortescue metals group. something of a bellwether for chinese demand as well, considering china is overwhelmingly its biggest customer. we have seen a recovery in the iron ore price as well, back

above $100 per ton on encouraging data out of china and encouraging demand out of china as it has returned from his long weekend. some of those iron ore names, other resources names performing very strongly in austria today. plenty more to come. this is bloomberg. ♪

haidi: take a look at u.s. treasuries, which i think yields pretty close of the year's highs. buyers coming in despite the potential fed re-think. treasury yields at their highest levels of the year. traders deciding that two rate cuts from the fed are likelier than three this year. earlier we heard from neel kashkari commenting around the path of inflation trending lower, that the labor market is not red hot although still tight. that is from the minneapolis fed president, who is not a voting member, but had been recently commenting on the possibility that no easing at all would be required. but this loss of faith is what

we are seeing here that the fed will deliver on three rate cuts which was expect it last month. it has been gathering pace the last few trading sessions. next up of course, we will be fixated on the cpi print. paul: yes indeed. that is coming up very soon in the u.s. a new imf report is warning of emerging risks in private credit markets including liquidity and the strength of underlying borrowers. we spoke exclusively with the deputy director about the fund's concerns. >> the concern is one of rapid growth. this is part of a trend that has been going on for decades from public to private markets, and there are certainly benefits, including for borrowers as well as for investors. but there's also vulnerabilities and possible risk. we highlight risky borrowers, smaller firms with more leverage for example.

the liquidity mismatch between asset -- this is less of a concern, but there is a growing size going market to retail. leverage is another vulnerability. this is the point in case over a prolonged economic downturn. we just have no idea how the system will operate. >> i will be curious about that layer of leverage, that you are finding how many there are. i am also curious on the surface here, how much of a force is private credit becoming in the economy? >> the sector is a significant source of credit at this point. representing about 7% of the overall credit in the financial sector and about 10% of bank credit. the size is relevant now. this is why we decided to focus on the sector. there are important sorts of credit for firms and for investors, including solution investors.

that is the reason why we look into this sector. >> there is some language here i am very curious about, this idea of potential systemic risk that could be created. what future worries do you have down the road? >> the two main concerns, one is interconnectedness. in this ecosystem a private credit, we have not just cry -- private credit funds, we also have insurance companies as investors, and we have private equity and the link between private equity and insurance companies is a growing feature in the market, as well as other banks. banks are one of the providers of credit to the sector. it is the link between the funds, private equity insurance companies, and banks, in a world where we don't have much data to use for assessing. paul: that is the imf deputy director speaking with our colleague sonali basak. a lot of central-bank action and looking forward to more this week.

one of the ones we have been watching is the bank of thailand. normally there is a bit of a separation of church and state when it comes to central banks. politicians don't like to meddle, but the thai prime minister is not shy. he is calling for a 25 basis point cut, but it seems to be falling on deaf ears. haidi: saying they should cut by 25 basis points to support the economy his expansion may have slowed below 1% in the first quarter. we have been hearing this pressure since the beginning of the year from the prime minister, since the start of this year, ratcheting up his calls for the b.o.t. to cut levels which are at the highest since 2013. central-bank pretty much snubbing those demands, saying the economy's slow recovery is due to structural problems which they cannot fix with monetary tools. so this back-and-forth continues. but economists ahead of the april 10 decision are split, 17 out of 24 economists we spoke to expecting the bank of thailand

to hold steady at 2.5%. the rest expecting a .25% cut, which would be the first easing in four years. we have been watching a bit of weakness when it comes to the bhat after that rate cut call, or the call for them to put through more easing. we have seen this broad-based weakness across a lot of asian currencies. a combination of what we have seen a bit of strengthening in the u.s. dollar, but also some volatility and uncertainty around the chinese yuan as well. earlier he said we might see more volatility and weakness across asian fx until we get uncertainty from the pboc in terms of what their line in the sand is. dollar-yen at this point seeing a bit of weakness, 151.86, creeping towards that 152 level. a lot of economists seeing more flexibility around that 152, has a point where we could see

intervention, particularly given u.s. cpi out. it's more likely we will see policy makers waiting until afterwards before any intervention is determined to be necessary. we got more verbal warnings from the finance minister earlier this morning as well. a little bit of weakness when it comes to trading in the yuan as well. but of course stability and even a bit of strength for some petro l and commodities. and of course you can get all of and more on bloomberg radio. you can hear more from the day's big newsmakers and get in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. you can listen via the app or bloombergradio.com. more ahead. this is bloomberg. ♪

♪♪ the lexus take on luxury... ...take it wherever you go. the all-new gx. ♪♪

♪♪ discover our newest resort sandals saint vincent and the grenadines, now open. visit sandals.com or call 1—800—sandals. paul: alibaba is cutting prices for cloud customers globally by as much as 59% in a bid to win back customers in what has become a hotly contested market. let's get more on this with catherine lim.

does this come as a surprise to you at all that alibaba sources outside of china or this much? catherine: not a surprise at all given we have seen how the company cut prices within china, which is a key market for the cloud unit. for them to emulate that and slash practices -- prices outside of china does not come as a surprise. and it goes to show that the company is out to win the cloud market as well as tie that together with its ai ambitions. haidi: do we see this as having any impact on the broader financial outlook for the company? catherine: this is one of many businesses within alibaba. while not the biggest it is one that most people would like to actually see alibaba develop more of the breakthroughs in

technology is pretty in the near term what we have to watch out for is that there will likely be adjustments to the fiscal 2025 numbers. particularly now it seems like expectations of higher cloud margins in 2025 is overly optimistic, in my view, particularly given the price cuts that we have seen. paul: does this invoke a potential response from some of alibaba's competitors? could we see further price cuts going forward? catherine: we have seen that in some of the other companies. jd.com being one of many. i would be surprised again to actually see the adjustments in prices by rivals. whether they are going to do it subtly, or in a much bigger and more aggressive way like what we have seen from jd.com that

depends on what comes through over the next couple of months. haidi: catherine lim there. a price war could be brewing. taking a look at some other corporate stories, another key headline, ted is the ceo elon musk says a shortage of chips is starting to ease. but he is warning of new challenges ahead in the supply of transformers and other hardware. musk spoke in a live discussion on his twitter platform. >> last year it was about chip supply. we cannot get enough nvidia chips particularly. this year is starting a transition to a voltage transformer supply. if you look out one, two, three years, it is just electricity available. those are the constraints on the hardware side. haidi: bloomberg has learned ubs is planning a stake swap to get a full ownership of its china

platform. sources say it is proposing to buy its remaining 33% stake in ubs securities from beijing state owned assets management. in return it would sell up to its entire 51% position in credit suisse. it has a new twist in the month-long bidding process with ant group and citadel earlier vying for the china venture. that is it for daybreak asia. markets coverage continues. the china show is next. ♪ when you own a small business every second counts.

120 seconds to add the finishing touches. 900 seconds to arrange the displays. if you're short on time for marketing constant contact's powerful tools can help. you can automate email and sms messages so customers get the right message at the right time. save time marketing with constant contact. because all it takes is 30 seconds to make someone's day. get started today at constantcontact.com. helping the small stand tall. wealth-changing question -- are you keeping as much of your investment gains as possible? high taxes can erode returns quickly, so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

>> half an hour the opening bell. >> treasuries facing pressure with yields hitting highs as traders position for u.s. inflation numbers. markets pricing in two fed rate cuts. >> janet yellen visiting china, calling on officials to rethink