haidi: welcome to daybreak australia. we are counting down to asia's

major market opens. annabelle: the top stories, asian stocks face pressure after wall street's full session of declines as the longest losing run since january. dip buyers emerging in the treasuries market. haidi: president biden works to win the votes of union workers, promising u.s. steel will stay american-owned and saying he may triple tariffs on chinese imports. annabelle: and investors are waiting tsm see earnings with capex outlooks to potentially extending a $340 billion stock surge. haidi: take a look at how we are setting up when it comes to the start of trading in this part of the world. we are one hour away from the start of trading in australia, japan and of course looking ahead to trading any chinese markets. given those threats of potentially more serious tariff implications from president biden. take a look at futures for

sydney, upside about .3%. we are getting labor market data out a little later, expected to show employment falling in march. we had a big surge in february. we are expecting a 25,000 job decrease according to bloomberg economics. we are also getting bhp and santos reporting quarterly numbers as well. watching out for those when trading begins. kiwi stocks down by about .1%. seeing a pretty muted session for the chicago nikkei futures. but we are sort of watching to see broadly asian stocks coming under pressure after we saw u.s. stocks extending that losing streak. annabelle: yeah, the longest losing streak we have seen since january. an interesting session. futures coming online, fairly muted. but it was that story of yes, another day of weakness. the s&p 500 for instance is now down around 4% from its record high. big tech really bearing the

brunt of this as well. there have been a lot of question marks, or there had been a lot of question marks over how far could go over the near term. but it is the digesting of the fed message we are going to stay higher for longer. treasury yields fell and we had a weaker session. that is the outlook as we come online for let's discuss where markets go from here and bring in our first guest, burns mckinney. i was taking a look at your notes and it seems like investors should expect low returns and higher volatility at least in the near term. burns: that's correct. i think you noted that what the markets have been doing over the last couple of days has been consolidating around some of the latest statements from jay powell. that is probably the biggest driver of equities over the past week, and probably over the coming quarter.

whereby inflation has been stubbornly sticky so far this year, and as a result you had chairman powell talk about they have the patience to maybe wait a while before they cut rates. and as a result you've seen the markets start this year expecting six or seven rate cuts, and now they are pricing in one or two at best. the good news is that the markets have done a pretty good job, notwithstanding the last few days, of really digesting and handling this. when one considers that stocks are still up from where they were last fall when interest rates were about the same level. equities have done well, corporate earnings have been fairly strong. despite the fact this rate tightening cycle begin a couple of years ago, there is a lab to that -- a lag to that, the economy has done pretty well. when one considers the unemployment rate in the u.s. has been below 4% for over two years, actually the longest

streak of unemployment being this low in over 50 years. because the economy has been fairly solid, it does give the fed the ability to be patient. it is like if you are unable trip in your car is getting better mileage than you were expecting, you can make it a few more exits before you have to make a pitstop. but that does mean higher for interest -- higher for longer interest rates, higher volatility, and it probably suggests investors should focus more on shorter duration financial instruments. this is not a great scenario for some of the highest growth tech names, but it bodes well for possibly being a catalyst for a reversion towards value of equities that tend to be shorter duration. could be very positive for value stocks and dividend payers as well. annabelle: we can get to value stocks in a moment, but i want to mention big tech and the outlook. this is the other big potential catalyst where we go from here. there are a number of big tech earnings coming out in the coming days.

meta, nvidia, amazon, a lot of different names. but the point is what are you expecting, and are we going to see really that strength in big tech continue, do you think, given that even we had high rates, a lot of it has been on the ai theme instead? burns: the ai theme has really been the primary driver of equities this year. despite the fact interest rates have risen and stocks are up as well really results from the fact that you had a lot of these big tech names -- last quarter nvidia had high earning expectation baked in and they beat them. they had their investor conference where they introduced new products and a boosted a lot of investor optimism around that. that said, a lot of these names, they really do have very optimistic scenarios priced in. when we look at big tech, we are probably suggesting investors, it is probably the time to be choosier.

it is a sector in which not all names are created equal. you have a lot of cash on balance sheets, low dividend payout ratios, you have room for future growth. and you do have a lot of long-term secular benefits such as growth in e-commerce and demand for cloud computing and ai. so there definitely are some opportunities to be had there. haidi: when you look at the growing divergence that we are expecting when it comes to monetary policy and the rates environment, do you see more potential in asia, in particular with the favorable currency effect? burns: the currency effects could certainly definitely act as a beneficiary. that said, one of the things with interest rates potentially being higher for longer, that really means a stronger dollar. it gives a boost to exports from other countries. and so, when we look at u.s. investors, it would probably be

a positive for multinationals. it could definitely be a nice, solid benefit for countries that are export-oriented, on the namor cyclical. -- a little more cyclical. whether that be in europe, countries like germany. it could continue to give a boost to japan, which has really been one of the bigger -- biggest winners last year. haidi: are you looking for any companies that might have exposure to china? i noticed starbucks is one of your picks, and obviously they have a lot of investment when it comes to the chinese market. burns: looking at domestic stocks that have that asian exposure, it is not necessarily we are looking for names that might benefit from china. rather, those are the names because of the slow reopening of the economy in china, a lot of companies that do have exposure there, they have just gotten hit pretty hard on earnings and have gotten cheaper. a lot of expectations have come down. when you look at a name like starbucks, as a result of the

fact that they do get a substantial amount of sales in china, in stock is really as cheap as it has been that we can recall. right now you can get starbucks, it is a premium growth name, at a discount in the s&p 500. right now the pe multiple on the name, with the exception of a brief period in the pandemic, it is not been this cheap in the last 10 years. you have a company that have been very generous with returning capital to shareholders. they have grown the dividend by high digit -- high double-digit rates for a decade. just on a personal level, i look at it as a type of name, they have pricing power because they sell a legal and addictive product. it is a place where my daughter goes her homework, my son meets his friends there. it positions itself as the town square of the 21st century. haidi: you mentioned value

equities perhaps ready to turn a corner. can you give us more insights into the sectors perhaps you are looking at, or different industries? burns: just looking at value equities as a whole, the base case is reversion of mean, which is one of the most rocksolid rules there is. we live in a world where last year the u.s. value index trailed the growth index by 30 percentage points. historically when that happens over the last several decades, usually value outperforms growth about three quarters of the time over the subsequent year. the discount of the value index, right now it is trading at nearly a 50% discount to the growth index. that is typically more like a 25% discount. so you have valuation on your side, you have the fact that they have lagged, and the one thing you need is a catalyst. that catalyst could be interest rates being a little higher for longer. we like value names really across all industries.

that said, if you want to think about more specific areas, defensive's are starting to look good. going back a year ago, investors were dead certain we were going to have a recession, and as a result they piled into the defensives and they got expensive. going back towards the end of 2023, investors pretty much at this point are not pricing in any risk a recession at all. and so those defensives that would defend capital in that instance have been largely dumped. the way we say it is when it is sunny outside, no one is shopping for umbrellas. so areas like utilities is one space investors have really fled, so you can get some solid values there. haidi: burns, always great to have you with us. burns mckinney from nf j investment group. still ahead, we look at how -- sharing outlook for --

the imf says the u.s. and china and their levels of debt will pose risks for global public finances. that is next. this is bloomberg. ♪ o coming in.. big orders!s starting a business is never easy, but starting it eight months pregnant.. that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right. and so did our business needs. the chase ink card made it easy. when you go for something big like this, your kids see that. and they believe they can do the same. earn unlimited 1.5% cash back on every purchase with the chase ink business unlimited card from chase for business. make more of what's yours.

haidi: the international monetary fund issued a fresh warning about the risks coming from u.s. and chinese debt. they will drive much of the increasing public debt over the next five years with their own observations nearly doubling over the next 30 years. let's bring in chris ansley.

where does the im -- >> in the u.s., one thing we are hearing from not just the imf but a number of delegations here in the washington spring meetings of the imf and world bank is the u.s. fiscal stance is out of whack, if you consider that the economy is going strongly, if you consider that the u.s. is effectively at full employment. it is extraordinary that they are on course to run a $1.6 trillion deficit. and something that has consequences for the rest of the world is of course the transmission channel of big u.s. deficits, higher inflation, stronger growth, stronger dollar. that makes it more difficult for

everybody else to pay back dollar obligations, especially if you are the likes of developing and emerging markets. so that is one thing. and then on the china side, there is concern about the overall level of debt, especially at the local government level. and increasing questions about china's long-term growth prospects and the ability to sustain that debt load. annabelle: and then how do those issues within china and that larger than expected slowdown, how does that also have ramifications for the rest of the world? what are the ramifications here? chris: the implications are that many of the countries that had been supplying china's real estate engine, for example, think chilean copper, think brazilian commodities, the demand is not likely to be what it had been. and in the meantime, you've got

a debt load in china that raises potential transmission channels through finance as well. we're seeing the chinese yuan pushing towards 7.3 per dollar. many countries have exchange rates that are tied to the yuan. so, it means exchange rate depreciation pressure. it means less of an export gain. so, a host of different concerns. annabelle: that was our senior u.s. economy editor chris anstey there. some breaking news crossing the terminal. this relates to more detail on u.s. funding for major chipmakers. it is all part of this effort by the biden administration to bring semiconductor production back to american soil. we just had the latest details

of perhaps the latest recipient, because this is according to people familiar with the matter, but micron is poised to get over $6 billion in chips act grants next week. the award is not yet finalized but could be announced in the coming days. not clear whether the company plans to accept loans. they would be available through the 2022 chips and science act, in addition to what is this direct grant funding. as we said, the chips act set around $40 billion for direct grants as well as loan and loan guarantees worth $75 billion. micron poised to get about $6 billion worth of this. there have been a number of different chip companies unveiled as preliminary recipients so far. the likes of intel, tsmc, samsung was one we had earlier this week. micron poised to get over $6

billion in chip grants next week. it really does come is that race for texas premises between the u.s. and china. on that point, president biden has called china xenophobic, highlighting the asian nation's economic woes as he sought to make the case for u.s. economic strength during a campaign stop in pennsylvania. while overall relations between the nations have stabilized as of late, tensions have grown over manufacturing. >> they have a population that is more people in retirement then working. they are not importing anything, they are xenophobic. nobody coming in, nobody going out. they have real problems. haidi: the president also vowed to keep u.s. steel american-owned and threatened higher tariffs on chinese deals as he seeks to win over workers ahead of the november election. >> u.s. steel has been an iconic american company for more than a

century, and it should remain a totally american company. [applause] american-owned, american operated by american union steelworkers, the best in the world. and that is going to happen, i promise you. haidi: for more let's bring in karen leigh. what is in it for president biden, the union, and can they come to an agreement? karen: let's look at what is happening especially in the context of the election in november. biden wants to woo the union and wants their support. at the same time u.s. steel shareholders have approved a $14 billion takeover bid by nippon steel, which is a japanese company. biden has been hitting the ground running in pennsylvania this week. he wants to win the state, it is a big swing state. at the same time this will go to politicians and regulators. whether this will be something that will move markets is yet to be seen.

annabelle: we have heard president biden really pushing for tariffs on chinese steel. let's listen to what he said. >> right now a u.s. trade representative is investigating trade practices by the chinese government regarding steel and aluminum. if that confirms these anti-competitive trade practices, that i am calling on tripling the tariff rate for steel and aluminum for some time. [applause] annabelle: so, give us some more context on this. i think part of the question around tariffs is how substantially -- substantially visit -- how substantial it is. karen: it is meant to shore up u.s. steel, it is meant to courtly workers. at the same time bloomberg is being told this could be more of a political statement. it might have no market impact

at all. and chinese steel imports are just a small sliver of the steel market. what we are going to look at is in terms of biden's support among the workers. he has the backing of the union, but so does donald trump. he has a lot of support among the rank-and-file. this is something both of these candidates want to win going into november. haidi: karen leigh there. china's contents ministry has blasted a biden administration plan for a review of its maritime and shipbuilding sector. they announced the investigation after a petition from five major union groups. they say the review wrongly frames trade as being harmful to the u.s. and is being driven by domestic all text -- politics. you can get a roundup of the stories you need to go in daybreak. terminal subscribers can find it at dayb and on the immobile in the -- on the mobile on the bloomberg anywhere app.

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haidi: ubs is said to be planning another round of job cuts as they continues to trim the headcount. adam haigh joins us with the details. this is going to affect a number of different business units. adam: yes but it is mostly in investment banking. this is potentially going beyond the usual pruning of the bottom 5% or 10%. this is more about the continued restructure and following the absorption of credit suisse and what it shows is that still globally, there is still more work to be done in terms of tweaking the teams in the resources they need at ubs.

they are still going through the process of understanding exactly where they want to highlight priority areas. this is another example of that. interesting to see that this is fairly widescale. it will be quite a sizable number of people. but yeah, just another example of how this integration is really taken quite some time still. annabelle: which areas are going to be most impacted? we know investment banking but possibly wealth management, market units. who is, for want of a better phrase, on the chopping board here? adam: certainly investment banking seems to be the main area of focus for this round of cuts, annabelle. but of course there are some adjustments still being made in wealth management. in places like australia, the wealth management business for ubs is still really, really a strong core area they are

wanting to build out. so you really do still need to see this in the context of the integration of credit suisse, but growth areas that ubs is still wanting to highlight, like australia for wealth management, like places up in asia and india for wealth management. so there are still growth areas alongside some of these more traditional areas, like investment banking, which of course is still a very pressured area of global finance at the moment. so you would expect that there are still some further adjustments to be made as they bring on board all the people from credit suisse. haidi: that was our bloomberg finance editor adam haigh with our scoop on ubs. annabelle: a couple lines crossing the terminal, we have federal reserve governor bowman commenting at an event in washington and a couple different headlines dropping from this. chief among them is he is saying progress on inflation has stalled. that's really been the big

question mark, and speaks to what would have been hearing from the likes of jay powell, saying inflation is taking longer than expected to come down. that so-called last mile of disinflation very much in play. but time will tell, that is another line he is saying, that time will tell if policy is sufficiently restrictive. we saw treasury yields dropping. we will mark them again when tokyo reopens in about 30 minutes. coming up, barclays shares their outlook on fx markets as -- this is bloomberg. ♪

it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. annabelle: time for monitoring calls ahead of the asian trading day economist at citigroup going out on a limb by wagering that

everyone on walls is wrong about the get andrew holland the clark art therefore cap for five this year. they say policymakers are eager signs of economic. traders in the interest rate futures market are piling into a contrarian bid, happening in the futures on the secured overnight financing rate. it evolves the disc -- involves buying the contract while selling the one that is due in 2025. the scenarios in which that trade stands to gain include the fed front loading rate cuts before the presidential election in november and more aggressively easing than is currently priced into markets. haidi: of course, so much debate going on in terms of the noise around fed expectations and

whether by signaling a pivot to rate cuts towards the end of last year that perhaps this is part of the reason we are seeing that stickiness and stubbornness when it comes to inflation. of course, we continue to monitor that. we are seeing upside there going into the open and a half hour. sitting up three times of 1%. elsewhere looking pretty meek. kiwi stocks accelerating losses. singapore nikkei futures looking to the downside, half a percent. a little bit of breathing space when it comes to asian currencies. certainly these latest comments, time will tell of policy sufficiently restrictive. the progress of inflation may have stalled. we will continue to reprice that outlook for the fed. that will play out when it comes to asian affect sweeteners. -- weakness.

we pulled back from the 155 levels that we saw in the previous session. the dollar is taking a breather after multiple sessions of gains. we do get numbers later out -- later on today. a big surge in jobs gains in february. we are expecting a pullback in those barge numbers. -- march numbers. watching dollar you want as well. president biden. let's get onto the subject of expected -- fx. great to have you with us. we have a little bit of rest by for asian fx. given the direction that we see when it comes to u.s. rates and the inflation picture, do you expect if you -- sievert -- see further strength for the dollar? >> dollar sentiment has shifted

sharply, especially against g10 currencies. that may limit the ability of the dollar to move to much higher from here. we talked about the fed. clearly there has been a massive repricing of u.s. interest rate expectations. u.s. treasury yields have been shifting higher continuously in recent weeks. that has been helping to propel the dollar higher. it's hard to see that reversed any time soon. even if the dollar doesn't move higher with the same sort of momentum, it is likely to command -- remain firm in the weeks ahead. that puts a lot of asian currencies on the back front, especially those that have your yields. we will still be in this what -- environment for the time being. we have cut our own fed easing expectations as well. we only expect the fed to cut once this year in september. there's a good chance they may

delay that to december. that pullback in easing expectations adds to the u.s. dollar. haidi: we've seen attempt by china to root -- loosen its grip . do you expect to see this as an ongoing themes? moves in the yuan have been as impactful as moves in the dollar. >> the very tight fix that the pboc has maintained in recent months have provided an anchor for regional currencies. this is proving difficult to hold. as the dollar strengthens, the fixing has to move higher to avoid this breach of the 2% band without having to intervene significantly. while china does have enough ammunition to maintain stability of the currency, it is losing out on a competitive perspective.

the index continues to move higher, above 99. that's adding more and more pressure in terms of competitive pressures at a time when exports are weakening. if anything, it means that china will probably have to loosen up its grip on the currency in the weeks ahead, allowing more depreciation and probably less gains in the currency. annabelle: talk to us about the interplay that we see between the dollar yuan and the dollar-yen. the weakness that we see in japan's currency. >> again, that's adding to the pressure. dollar-yen is continuing to move higher. there isn't much to move that stock higher. interest rate differentials continue to widen. that adds pressure on china. dollar korea has also moved higher. the trade-weighted perspective means that the yuan is returning

-- returning. as dollar-yen moves higher, that just adds more and more pressure for dollar yuan to also move higher in the days and weeks ahead. our forecast, the reality is that with lisa moves in fx that we are seeing at present, we may hit that forecast sooner than anticipated. as i mentioned, it will be difficult to keep on fixing so strongly the currency for the pboc. annabelle: of course, currency concerns at the imf meetings. on the sidelines of those, we've got the read out from the finance chiefs of the u.s., japan, korea. what are the steps, what options are available to currency chiefs in japan and korea to arrest the slide? >> i think it's very difficult.

after all, this is a u.s. led move. it's also risk aversion. we see risk appetite having deteriorated sharply because of a plethora of concerns and markets. whether risk rising commodity prices or the fact that the fed might not cut his much is expected. in reality, central banks in asia can intervene. we are already seeing significant intervention across the region. that's obscuring some of that dollar upside against asian currencies, why we are seeing more dollar upside against the g10 currencies. there's only a limited amount of ammunition you can throw at this move. the other option is interest rate hikes. we've just put out a highlight of bank indonesia now hiking rates. this all may prove them at it as the dollar continues to strengthen.

even for japan, if we see boj intervention, dollar-yen could move lower. we anticipate that move in intervention ends about -- ends up about 3%. it may be short-lived. what i understand from speaking to a number of investors, it may provide better levels for clients to go back into long dollar-yen positions. it may be only temporary for the central banks. haidi: as you said, possible rate hike from the reserve bank of indonesia to shore up its currencies. >> india is in a better position. india is benefiting from strong capital inflows, both from the bond and equity side. india, if anything the r.b.i. has been buying dollars in recent months. it has moved higher but not significant lee so. we continue to look for indian

rupee outperformance. we hold trade recommendations to buy the rupee just based on that view that it will continue to do better. we don't really see risks of a rate hike in india. admittedly, the r.b.i. is not moving quickly to cut rates either. we are watching inflation evolution in india. we think as we move into the second half of the year, later into the third quarter, we could see a rate cut from the r.b.i.. certainly no prospect of hikes to protect the currency in india. it is something we may see in indonesia. but unlikely to see that be replicated in india. haidi: let's get back to a breaking story that came out the last 10 minutes or so. you are seeing the stock climbing and after hours so far. we are hearing that it could be set to receive a very large

amount in grants from the commerce department in the u.s. to help pay for domestic factory projects. mckenzie, thanks for joining us. we've heard a number of different companies being announced as preliminary recipients. micron now also. >> the seventh announcement the biden administration has made from this push to subsidize semiconductor factories. micron has pledged to build as many as four to produce chips in upstate new york. they are planning to build a $15 billion facility in idaho. they are one of 600 companies that expressed interest in this $50 billion program from the u.s. government. they are in line to receive a very significant amount of money. it could be announced as soon as next week.

producing computer memory chips for the united states. the commerce department has already announced significant awards for samsung, tsmc, and intel. all of those awards also north of $6 billion. some of the companies receiving multiple billions of dollars worth of loans as well. we are already seeing a lot of federal funding and it is started early -- starting to finally flow out the door. haidi: we know there are multiple factories being planned. micron has four of them. do these grants support the ones going into production sooner? >> there are 600 companies that have expressed interest. the commerce department has some

really difficult divisions -- decisions to make. the secretary said a couple weeks ago that they are going to prioritize projects that will begin production by 2030. a lot of these biggest factories on delay tide lines. sometimes by a quarter or multiple years. the secretary has said, we are putting a cap on it. we are going to prioritize projects by the end of the decade. they've attached a lot of their goals such as producing 20% of logic chips to that deadline. mike rounds new york project contingent on u.s. support. two of those factories are set to be done by 2029. two of them not until 2041. it's very likely that the commerce department funding is going to be designed to support the first two factories but not the second. annabelle: we can say that there's no such thing as a free lunch here.

are there any strings that are attached to this funding, given that this is also about the u.s. making sure that it stays competitive ahead of china in chipmaking efforts? >> certainly. the commerce department broaden bankers from wall street you are used to negotiating these types of deals with companies to hash out the awards over months of negotiations. the announcement that micron is expected to have next week, the case for all of the announcements the commerce department has made so far, just a preliminary agreement. they are not going to receive any money. they were -- will enter months of due diligence, continue to hash out benchmarks. the first check that they get is not going to be for more than $6 billion. it will be for some fraction of that. once they had a particular milestone, they will continue to get money over time. those milestones are negotiated specific to factories.

there's always the possibility that the commerce department could clawback some of the money. if micron doesn't meet the goals that it said it would come of the u.s. government has written into statute that they have the ability to take the money back. there are lots of strings attached for these companies. that's why it takes so long to hash out these agreements. it will be important to watch over time when the money starts flowing out the door. haidi: mckenzie hopkins there with that story. more head on daybreak australia. this is bloomberg. ♪

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creative planning -- a richer way to wealth. haidi: some of the corporate stories we are tracking and a couple of bloomberg's groups as well. saudi arabia's city project is planning its debut bond sale for later this year. it looks for more funding sources for the $1.5 trillion worth of construction projects it plan. sources tell us that hsbc advises on the sale of its let -- it's bonds which could raise $1.3 billion. documents seen by bloomberg show jane street generated over $10 billion in mid trading revenue last year. that was among financial markets the firm disclosed to investors

as part of a debt deal that it is seeking. it's a very rare glimpse into the mechanics of the notoriously secretive firm which is steadily expanding to make markets and areas -- in areas such as etf's, derivatives, and bonds as well. jp morgan ceo jamie dimon is laying out his vision for the future of money in an ai world. bloomberg originals spoke exclusively with him to kick off season to of the circuit with emily chang. she asked about the opportunities and risks that are ahead. >> the thing is, be prepared for any business. think about things that can go terribly wrong. can you survive them? it could be technology, government regulations, literally the weather. if you are a restaurant, that might close you down. if you lose this week's business, you are out of business. think that through. >> bill gates once said banking

is necessary, banks are not. to what extent could ai or fintech replace traditional banks? >> i remember you saying banks are dinosaurs. a guy in 1997, he was dead wrong. but he's not wrong. technology changes everything. if anyone is complacent or arrogant or things that because you have a big position today, you will have one tomorrow, that's a mistake. someone is going to have to hold the money. someone has to move the money. someone has to raise the money. someone has to do research around money. those services will still be around. hopefully you are using a lot of tech to do a better job at it. i've always thought that is possible that some tech thing is a piece of that. i've been right about big tech. we have fintech. we also have big tech. they will embed payment systems in there. they have the right to do that. i'm not against that. i would be against unfair use of

their position to dominate us in the business. >> apple's going deeper into financial services. do you worry about the bank of apple? >> they have a tough competitor. they hold money, move money. they are a competitor. we also partner with them. i'm used to partnering and competing with lots of people. >> existential threat? >> i don't think it's an existential threat. i think if we were complacent about it, yes. annabelle: you can watch that interview in full on the circuit with emily chang on bloomberg television at 6:00 wednesday, six clock a.m. thursday if you are watching in hong kong. coming up, tsmc releasing its first quarter results later today. we discussed why analysts are expecting a rebound in earnings growth, next. this is bloomberg. ♪

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(impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo annabelle: taking a look at micron shares. you can see the pop that we have their after we had a bloomberg scoop out talking about micron. it is poised to get over $6 billion and ship grants. possibly next week. micron is the largest u.s. maker of computes it -- computer memory chips. these grants would be to help

pay not yet finalized but it could come within the next several days. there have been a number of different companies that have benefited so far from the chips act. it set aside $40 billion for direct grants. it's also loans, loan guarantees. officials so far have unveiled six preliminary awards and three to firms produced older generation semiconductors plus multibillion-dollar packages for the likes of intel, samsung, and also tsmc. haidi: yeah. we are watching shares of tsmc, the world's biggest chipmaker have more than doubled from their 2022 low as the company benefits from the ai boom. full first-quarter results could deliver more catalysts to drive the stock even higher. let's bring in our executive editor for asia technology. what are these expectations? >> well the expectations for

tsmc are quite high at this point. we are expecting the company to recover from some of the challenges that they've had in the past. one of the issues we are looking at closely so is the earnings results we got out of asml. asml is the most important maker of the machines that actually fabricate chips. it sells a lot of those machines to tms -- tsmc in particular. what we heard from asml yesterday was a little bit concerning. their revenue fell about 22%. the bookings, their forecast of revenues in the future, was much lower than expected. 20% of -- shy. that has raised concerns about how strong demand is from chipmakers like tmm c to be able to buy these high-end machines and whether they are continuing to invest as aggressively as we've seen in the past. there are a bunch of things

driving demand for chips right now including ai. that's been a big investment area. nvidia is making the ai chips that everyone wants right now. it can't make them fast enough. tsmc fabricates those chips for these customers. everyone thought demand would be strong, would continue strong. what we heard from asml yesterday was concerning on that front. annabelle: so what do you think then for the outlook for tsmc? earnings are coming out. ? 's about whether the ai boom could extend. what does this mean and what is the likely reaction when it comes to the share price? >> one of the key things that people want to understand is why orders from taiwan, orders from tsmc, fell for asml in particular and whether they are pulling back on its capital spending plans.

it has historically invested $30 billion a year in capex. a lot of those go to machines like asml. so the consensus has been that tsmc is going to invest very heavily so we can build up additional capacity and ai in particular and other kinds of new technologies. there's this very interesting geographic expansion going on. you mention micron. chipmakers are not only investing in these machines but they are trying to do it across different countries like the u.s., japan, and taiwan. annabelle: yeah. all right. ♪hat was peter elst

annabelle: this is daybreak

asia. we are coming down to asia's major market opens. the big story is to let consistent theme, what is the fed going to do? what does that mean for currencies? we are really focusing on the korean won and the japanese yen of course. haidi: perhaps the growing inability for policymakers to be able to do anything to support any further weakness in those currencies. if we have a further lag in dollar strength which is expected. there are some questions being raised. in terms of the inflation being so stubborn in the u.s.. did the fact that the fed actually flagged easing into the end of last year potentially encourage that scenario? let's get you to the opens. annabelle: we've got japan and korea. australia also starting to trade here. the focus sees on currencies. you are watching the japanese yen holding steady here. still around that 154 mark. some investors are san