Just continuing to track a bit higher. Were sitting at levels we havent seen since 2013 for this bond here. Certainly the question is, thage station that thage decision that were getting from traders, when were going to see the b. O. J. Start to cut or hike rates, were hearing them say the same three moves this year could be possible. We are getting close to the 1 market. Continuing to track the 10year yield at levels we havent seen since 2013. Really does play into the currency dynamics. Again today in the stherks yen fractionally weaker against the dollar here, trending back again closer to the 157 mark. Stocks wise, look, were a little high right now but fairly range bound on the session. That points to what were saying. Nvidia numbers are yet to come out. You mentioned the cleveland fed president , three rate cuts could no longer be appropriate. What does that mean for the dynamics of japan as well, that we continue to track. And also Rafael Bostic saying he expects a higher steady rate for rays as well. Some of the different officials were hearing from reinforcing and reiterating that wait and see approach in. Korea, lets look at how marks are coming online this morning. Of course data to note. Trade numbers coming out for the first 20 days of may. Exports rising 1. 5 . Still in positive territory, just. It is quite a significant slowdown from the month prior. Chip ebltion ports, big gains there. Up 45. 5 on the year. Imports though, contracted nearly 10 in the latest numbers coming out as well. Put that up against what we also had in terms of Consumer Confidence numbers this morning, actually seeing consumers turning pessimistic. The b. O. K. Continues to hold rates higher for longer as well, haidi. Haidi ill take a look at how were faring here in australia. Assets under a bit of pressure when it comes to the currency at risk from early moves were seeing this week with the dollar with the pushback on easy expectations from the fed. The first couple minutes of cash trading here in sidney not seeing much in sydney not seeing much. The benchmark yield hitting decade highs, were seeing that move when, the third day in a row on monday. Potentially a little bit more to coe go when it comes to last weeks rally in bonds. Its this to and fro with ow ho its perceived that is still at play here. Energy prices will be a major part of the, Commodity Prices in particular. Copper prices still under 11,000 at the moment but pretty close. Not getting the geopolitical boost we exped but looking ahead to the june opec plus meeting and whether the supply settings will be kept unchanged. As i mentioned, the drum beat of what were hearing from the fed continues. We heard from Loretta Messer amongst others overnight. Take a listen. I was on the record before saying i was at the median, which was three. The developments ive seep in the economy right now i would not think thats still appropriate. The inflation risks have moved up. I do think our stu status is likely to be higher than what people have known over the last decade. Maybe back to where we were in the 1990s and 2000s. Well just have to see. Haidi jim is here, a portfolio manager. Theres some to and fro in expectations. You think theyll move quickly, inflation will get to a point where its fawlg. Whats the trigger there . You dont see the cut at all this year. This year wont take place because inflation is taking a bit longer and the consumer is taking a bit longer to reduce their spend. We do however we do think by the end of the year, the calendar year, therell be a lot of softness that were already seeing the trajectory of to start appearing. By next year we do think the cut is coming through and, but maybe it will stay a little higher for longer but the cuts will start early next year. At the same time were seeing the miami um being driven by a. I. , nvidia the one to focus on. How much are you look, how much is it possible to start looking ahead to the sort of second tier, thirdtier effects of a. I. And what companies will benefit. Is that something youre looking into . Absolutely. I think this is an incredible trend. I think it would be short sighted for any investor to mis. Every company we have spoken to have talked about how they can utilize the a. I. Tool into the existing model to improve efficiency and maybe take advantage of opportunities. So you know, it is real. So and however now its like you said. Its going to so many secondary derivatives. Not only the chips itself, its going to software. And the data center. Incredible amount of Data Center Capacity required over the next few decades. With that comes the requirement for energy. Now we look to the whole supply chain of how to take advantage and yen rate through the whole supply chain. Are there any names that stand out to you in particular to capitalize on this . Absolutely. So we here in australia, we see through the data centers as the easiest way to play this trend. We dont have the thrieives nviia. The data centers like next pc and gruman group. They used to be Industrial Property specialists and has global reach, top five in the world. Now has branched into the data center and has secured many megawatts of power and demand over the next deck kaismed we think that this trajectory going to drive the growth noars company for many years to come. Japan has been sort of one of the key beneficiaries of that a. I. Trade. One of the reasons we have seen a runup in stocks. Do you see that performance expending or do you think its a bit overstretched and investors are just putting their money back into other marks like china now, for instance . I think the japan market has benefited somewhat in the last couple of years with weakness in the chinese market. As well as uncertainties of other surrounding marks thats impacted by the chinese slow economy. However we are seeing now with improvement, destabilization in the chinese economy and we are seeing a bit nor flow back into those markets. Certainly, you know, japan, those segments, high growth segment is doing very well. I think overall in the next short month should expect it to be underperforming the emerging market like china. Were also seeing this perhaps be expressed but the india stocks as well, right . Take a look at the jut flows we have seen across the india market which has been such a darling. Valuations are so expensive and have accelerated. But we have seen this underperformance by mbsi india by nearly 5 so far this month. Do you think this is a case where were seeing portfolios be rebalanced toward china even though the property measures really by and large considered not enough . Absolutely. I think china is coming back into its growth but slowly. I think what we see in terms of the outflow out of india, out of japan, those defensive market into china is still at the frin only, still in a small way. I think in the next month when we see growth stablizing in china, things getting better, i think that sort of growth in terms of flow is going to be quite significant. Ive got a question about the risk you see for markets ahead. One weve been talking to a lot of investors about is the u. S. Election of course. Do you see that as a key risk . Im seeing you note it may not result in all the sorts of volatility that some are perhaps expecting as well. Absolutely. Thats a really good question you talk to any investor, the moment you ask whats the major risk, they talk about the u. S. Election. Just because our experience from the previous election with trump because hes sort of erratic policy directions. Now this time around, it certainly seems that a lot of tariff that he talked to previously hasnt really been removed and we got biden already now imposing some new tariffs. Its i do think this election may not be as volatile and as risky as expected by many commentators. Perhaps it could even just be business as usual. Interesting business as usual, it fits into the idea that punitive trade measures are the norm in both camps regardless of who takes the election. How much of the trade pressure not just from the u. S. But e. U. , probe into chinese e. V. s, how much is that going to impact china given that e. V. s batteries are at the heart of what president xi wants to prioritize boost the economy . I think this is the world that we talked to perhaps even five, 10 years ago. The world will become more disintegrated. Chinese companies and china will form its on p. A. C. In terms of trading. That will continue to take place. But look, i think the u. S. Elections, one thing it might create a bit of disruption is what trumps policy toward e. U. Right now it seems to be, you know, the e. U. Against the Chinese Companies and how the policy might be formed. Should there be any punitive impact on the e. U. Companies in terms of their expert into export into the u. S. Market that may create more disruption to what companies are doing. I think ultimately its, for businesses to thrive is really about saving policies. If you have sudden changes in policy it becomes very difficult. Most businesses now have talked about or done of our moving supply campaign to a different area where they have less of those geopolitical threats. And i think if the policy doesnt change in a sharp way that businesses will be able to thrive in this environment. Thanks for your time this morning. About 10 minute into the session so far for sydney, seoul, and tokyo. Actually watching the bonds space in particular this morning and the japanese 10year yield in particular because youre continuing to see them just taking a lit ticking a little bit higher, getting closer to the 1 mark. These are levels we havent seen for the japanese 10year yield going back to 2013 which to put it in perspective is when the b. O. J. Governor was starting his radical monetary easing. But certainly what were hearing for investors and when you look at swaps price, the odds of a rate hike by the july meeting has increased. Some say perhaps three moves for 2024 could still be possible here but certainly that is really the big question, especially when youve got japan really grappling with that week yen. You can see on the screen close to that 157 mark. Well have more to come on daybreak asia, this is bloomberg. At morgan stanley, old school hard work meets bold new thinking. To help you see untapped possibilities and relentlessly work with you to make them real. Some breaking news crossing the terminal relating to leadership changes at samsung, theres a new head of the chip division, a pivotal part of samsungs enterprise. The current head will be becoming the head of the future Business Planning team instead. Samsung, again, its a little bit weaker but fairly range bound so far, down around half so far but the chip section has been mired in a longstanding thing weve seen, they said the business should recover to 2022 level this is year. Samsung pushing ahead with a partnership with nvidia around high band width memory chips, h. B. M. , a critical component of the graphics processors that train a. I. Systems. Haidi were watching Energy Markets as well as geopolitical developments. Its been a busy start to the week, with Power Transition in the middle east with the death of irans president. The health of the king of saudi arabias health is a concern, his son has canceled a trip to japan to staythere the only sis seems to be that continuity will be ensured for both of these governments or these administrations. Where is the uncertainty for you, particularly when it comes to iran and the fact that raisi was one of the top contenders to replace the Supreme Leader . Thats really the biggest question i think now for iran is who is next in line to replace the Supreme Leader, who is in his mid 80s at this point, and many people had believed the late president had been set up or had been in position to take that spot. Immediately for iran, they have to were expecting elections to take place within the next 49, 50 days. So that will determine who the permanent replacement is as president of iran. But that, you know, how that unfolds and who emerges from that process, whether its the Current Interim president , makber, or someone else, therell be some sort of power struggle, we expect, between possibly the interim Vice President , the interim president , the Supreme Leaders son, an always the chance that some kind of third candidate emerges in this process. So the its i think even less of a focus on who tbheks president in 50 days than on who gets set up from this process to become the next Supreme Leader. Annabelle its not just access arising in iran, theres also saudi arabia as haidi mentioned. Perhaps continuitythere do you see these changes sort of derailing the detent that was broke bin brokered by china last year and also as well iranian support for regional proxies . Yeah, i think the big question is perhaps on the proxies, not whether iran will cort to will continue to support them, i think the Islamic Revolutionary guard corps, will continue supporting proxies like hezbollah and the houthis. That will continue, i think both sides in this, saudi and iran, have seen the benefits of trying to sustain that detent. Saudi arabia, you have the crown prince who has been long running the daytoday business of the kingdom and leading many of its biggest initiatives, whether its you talk about the 2030 plan, the outreach with israel, the work with opec plus group. I mean m. B. S. Has been basically at the forefront of all of that. So i think there would be very little spoil change coming, it may slow down some critical decisions such as this agreement to potentially reach a deal with the u. S. Over security and energy, but i think both sides, when you look at the big picture, have seen the benefits, these are two of the biggest, historically biggest rivals in the middle east. They are trying to get over that to some level. The more uncertainty, i think, comes with the internal politics of iran at this point rather than the Foreign Policy of either nation. Its an extraordinary, i think our last guest said its never an uncomplicated time in the middle east, right . But this comes, just a few weeks after weve seen kind of this shadow war if you will, test red lines between a number of these parties. I do wonder how much more complicated does this get with the leadership change in iran potentially and how that impacts this conflict were still seeing in gaza. Weve also just gotten the i. C. C. Leveling arrest warchts against both netanyahu and hamas leader for crimes against humanity. You have the i. C. C. Decision, its not clear how that will be enforced. It was not surprisingly, rejected by all sides when it came out that they are seeking arrest warrants for both top leadership of hamas and the top leadership of israel. I think the big x factor in all of this is that conflict in the middle east between israel and hamas at this point. Weve seenly seen since that took off in october that developments on the ground can very quickly shift the politics in the region. Vukd a Major Incident take place there. That does change the calculus for a country like iran or a country like saudi arabia or even the u. S. Thats where i think a lot of the uncertainty lies. Theres still efforts going on at having some sort of temporary cease fire. But we have been talk about that for three months and havent seen it come to fruition. And of course you have the internal politics of israel as well which seem to be heading in a slightly les predictable direction at this point. Haidi some of the other stories were follow, china has criticized the speech, saying the speech is seeking independence. He used his first speech as president to end its campaign of pressure on taiwan. South africa barred the former leader jacob zuma from running for parliament. Thats related to his conviction of the plunder of 27 billion during his presidency. His upstart Political Party is seen as a wild card as south africa gears for elections next week. Plenty more to come here on daybreak asia, this is bloomberg. Noim microsoft has introduced new software and computers infused with a. I. Features. As it steps up efforts to compete with google and apple. Their c. E. O. Spoke with bloomberg about the a. I. Race. Its really a ground up, you know, reimagination from silicon, so we have a new s. O. C. That as the n. P. U. Think about it as, we have always had c. P. U. s and g. P. U. s, now we have neural processing unit for these a. I. Models. We have 40plus model that are local on windows machines that are being used by a variety of experiences we have bill into whip does starting with a frafg memory feature called recall which is phenomenal. Copilot is built into windows. Its not just an app its a shell thats going to be there to assist you, as you see a demo of playing minecraft, i share my screen with it and copilot helps me be competitive with my drawer. Ard third parties are bringing all they do to copilot plus p. C. s. Its an exciting day for us to have a complete rethink on the full stack of windows for the i. H. I bet youre pretty good at minecraft. This new recall feature means your computer has a photograph memory of everything you do it. The speed is so fast. Uns pre dend. How will this make things different for consumers and change our daily routines . If you think about the p. C. Its always been about creating things, right . Its about being able to synthesize lots of information, create new information, pass better judgment, gain insights and act. Thats what you sort of do on a p. C. A. I. Is an assistant. It helps you as an end user do anything. One of the most beautiful demos today was this thing called cocreate. Im in paint, im painting a nice spring seattle day, i want mountains with flowers. I can have the a. I. Assist with me. I can be inspierd by a. I. But im the one painting. One of the things my coworker was telling me, her 5yearold was saying give me designer. It feels like when we all fell in love with the p. C. s, thats what got us going, the ability to use computers to create and i think this a. I. Is just going to take it to the next level. Haidi that was microsofts c. E. O. Speaking with emily chang in that conversation. We are watching the yen, we are getting some lines through there from the from suzuki really at a time when we continue to see commentary on the yen, both pluses and minuses when and theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Haidi we have some data crossing the bloomberg with the Consumer Confidence numbers. A big focus with the consumer the elevated rates