Need to keep rates higher for longer. There is progress on inflation but it is too early to declare any victory yet. What we are tracking this morning as we come online, with japan some ecodata. Broadly we sell weakness creeping through, because exports are up 8. 3 on the year. The estimate had been for 11 . We saw the trade deficit in the latest reading. That is the state of play for japan. Tracking the japanese yen, Holding Steady this morning but still at historically weak levels. The big focus on the japanese 10 year yield because we continue to monitor when it will hit the 1 mark, and we continue to track those yields inching higher. Japanese goodies under pressure in this session, so not that optimism from wall street overnight so far. Korea coming online, and the ecodata to note, april ppi coming out earlier today, we saw it rising 1. 8 on the year. 0. 3 on the month, but it was a pickup in ppi, Producer Price inflation. That presents a headache for the bok. We also watching in korea for the optimism around ai. South korea hosting an ai global forum. Nvidia numbers are the real focus today, nvidia is one of the key suppliers for chips to samsung. A heavy weighting on the kospi. Haidi just a look at the first couple of minutes, in sydney, some upside, but flat at the moment. The futures was pointing to gains across the rest of the region. We these we did see some declines yesterday, Health Shares were the biggest. Watching for some of the minors, watching rio tinto after the force majeure declared on the aluminum, causing a big spike in aluminum which one he threemonth high. Aussie dollar is holding stott is Holding Steady. Depending on the messaging from the rbn, how dovish that will be perceived to be. Watching treasuries, we were heard from the fed reserve governor saying the continue softening of the data over the next 35 months would allow the fed to Lower Borrowing costs for 2024 but the take away is after several good months of data needed. Take a listen. In the absence of significant weakening in the labor market, i need to see several more months of good inflation data before i would be comfortable supporting an easing in the stance of monetary policy. Haidi we get reaction to that, if a professor had to assign a grade to this inflation report, it would be c . A bit managing of expectations. If you wonder will it be the next print or after that, it will be several. A lot will depend on the internals and waller made it clear that a big part of the equation is what is going on with the labor market. A roundtable discussion makes the same point, they are happy with where policy is now. They see no reason to move rapidly from here. Talking about inflation, we need to see more, and the job market is in a good place so there is no rush. Very clear they will only rush toward Interest Rate cuts if they see not just inflation staying soft but the jobs market starting to show real strain. That makes sense, they have been caught out a couple times this cycle by being confident inflation would not get out of control, then being confident it would keep coming down. They really want, as waller was saying, they want several a papers on the inflation front before they are willing to allow us to move to the next level and go to the rate cut regime instead of holding rates regime. Haidi they are kind of trending, expectations trending but above what they would like to see . Yes, and waller is one of the more hawkish if not the most hawkish centralbank head out there. He took rates higher more than anybody else and has shown a willingness to hold them longer even if it means recession. The labor market is showing signs of slack, and inflation is coming down but it is not where we would want it to be yet. That is why everyone thinks rbn will stay on hold. The question is do they make a serious shift toward putting rate cuts on the table. We had the contrast with rba with the minutes that came out yesterday showing they went back to thinking about whether a rate hike might be needed before deciding the best thing to do was stand pat. So far, the rbn has said rate hikes arnold unger needed but they are a long way rate hurts our no longer needed but they are long way from saying they will soon be needed, so any steps taken towards that will be watched closely. If they take stronger steps towards that, you can see the kiwi fall, especially with the fed and aussie centralbank comments as a backdrop. Annabelle what else investors will watch for, that nvidia numbers, and that can drive momentum, and what it singles signals around ai spending. We are hearing commentary, earnings from palo alto, and that was foreshadowing what could be negativity. Yes, it is a difficult day for Equity Investors because this time last earnings cycle, everybody was warning nvidia could not possibly beat expectations. It totally blew everybody away with what it saw going forward. The stakes are perhaps higher now, we have had you mentioned palo alto there are others who in the chip space have reported things are good, but they are less certain about the future, the outlook. That is the key concern because the ai boom has driven a lot of valuations extremely high based on the expectation that earnings will catch up as it were with share prices at some stage. Any sign we might start to get even just a maintenance of the current earnings momentum in nvidia rather than continued acceleration, that would cause damage to nvidia but also to the tech space more broadly, the s p 500. We have pointed out we have a long time without a 2 daily decline in the s p 500. One of the things to underpin is this strong expectation that the ai boom is a game changer. If that game if the endgame for the initial burst in ai starts to come into view, that will cause a significant lessening in the optimism that the only way Sustainable Way for shares is up. Annabelle it is that high bar that keeps getting ever higher for nvidia and the market. That was garfield reynolds. The feds waller wants more good cpi months. Todays edition of daybreak is also available on mobile. We have plenty more ahead. This is bloomberg. Haidi potential headwinds building over the next year for global trade come on not the least of which is china tariffs and potential retaliation. This is the highest level since the pandemic boom. Bloomberg intelligence expected gee up little tensions could keep prices elevated. The outlook for the industry with one of the largest shipping industries in japan. Joining us from tokyo is takeshi hashimoto, president ceo executive officer, mitsui osk lines. Great to have you with us. We are seeing potential pricing looking more favorable as a result of these geopolitical tensions. You think more broadly on the balance, is that more of an upside or are you more concerned about the impact on trade volumes . Takeshi yes, there are various factors that since the palestinian program, we cannot use, then generally the demand is tight. In addition, the total cargo volume from asian markets to north america and europe steadily increasing. Perhaps this trend will continue for the time being. Annabelle how much concern are you feeling at the moment when it comes to the impact of u. S. Tariffs on chinese goods, potential retaliation, any volatility following the u. S. November election . Takeshi yes, it is too early to say but this can be a potential factor for us. Today the total volume of the cargo flow from asian markets to north america is actually increasing, not decreasing. The reason is relocation of exports from china to other asian countries, including india. The increase of the total volume of asianu. S. Trade is quite steady in the recovery. That is our observation as of today. Annabelle perhaps a little bit of weight and see come a but where you are being impacted is the sanctions on russia due to its war in ukraine, and we know you own three lng vessels that you planned to charter to the arctic project in russia. Can you give us an update on what you are doing with those vessels . Takeshi yes, first of all, the existing lng projects are still not the target of sanctions. Therefore, we continue to provide lng transportation from russia to the european and asian markets. As you mentioned, the new project to the arctic is a target, so we recognize we cannot provide that service to our service to the arctic. We are studying how to transfer our business to somebody who can continue the business to the arctic. It seems very complicated in the political process, and we are careful about the details of the sanction regime. We should follow the sanction regime decided by the u. S. And other countries. Annabelle who would you be looking to sell to . And what timeline are you looking at . Takeshi it is not so simple because it is very difficult to sell our asset to russian companies. It also creates the potential of the sanction target, so we have to be very careful how to protect our own interests, and without violating the sanction regime. Haidi how much extra money is being made as a result of the sanctions . Takeshi it is very difficult to say. If you look at the Positive Side and the negative side of the sanction regime, perhaps in total we can gain quite a lot of additional income from the sanction regime, because it created a completely new transportation requirement for the global market. There are so many goods, before the sanctions, so many volume of cargoes coming from russia to the asian market. Nowadays there is an alternative route that is a very long way from Northern Europe to asia and the south african route. It created quite a bit of volume of transportation requirements. That is the kind of thing that created additional Business Opportunities for us. At the same time, we dramatically reduced our volume of trade with russia, especially the far east. If you analyze that of the sanction regime, to me, it is difficult to say, but perhaps not as much of a negative impact financially. Annabelle very briefly, we know the Tokyo Stock Exchange is putting a lot of pressure on Japanese Companies to improve their capital efficiency. Our you looking to improve . Takeshi the exceptional one, the market is very volatile and cyclical, i want to balance the business work folio and have stable growth for the company. Balance the business portfolio and have stable growth for the company. And to materialize quite stable growth for the coming 510 years. It will create additional value for our shareholders, i believe. Annabelle that was takeshi hashimoto, president ceo executive officer, mitsui osk lines. You can watch us live and see our interviews on your tv function go, and become part of the conversation by sending us instant messages during our shows. This is for bloomberg subscribers only, check it out at tv. Youre a rock star. Were all rock stars. Oooo look look at my data driven insights, im a rock star. Great job putting finance and hr on one platform with workday. Thank you guys, can you keep it down. Im working. You people are guitar noises . Hand over the air guitar. Ive got another one. So, what are you thinking . Im 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 downpayment. On a ranch. In montana. With horses lets 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 youre planning for it all. The answer is j. P. Morgan Wealth Management. Haidi supporters of taiwans new president lawmakers have begun the final steps toward this controversial bill. Some of the scenes are extraordinary. Never a dull moment when it comes to taiwan politics. Obviously not. What we saw last night was the largest public protests in years in taiwan as these protesters are trying to stop lawmakers from passing this new bill. The reason they are so against this new bill is because it is a remarkable expansion of the legislatures powers. The bill would give lawmakers the ability to call the president in front of them whenever they request the president , and he would have to present an annual state of the nation address similar to the United States. It would also expand the lawmakers abilities to investigate the government and expand their powers to request documents from the government. It would also implement fines for any government officials speaking to the legislature and have been found to told untruths. That could result in prison sentences up to one year. On the executive branch this is seen as a huge our grab by the legislature and an attempt by the legislature, which is controlled by the more china friendly as an attempt to curtail the new president shortly after he took power on monday. Annabelle how much power do the people really have here . If they are against this proposed legislation, can they really block it through protest . That is what we will see over the coming days. Last night the legislation passed its second reading, now goes to the third reading after which it will become law on friday. What we will see is a repeat of these protests friday evening, potentially bigger. We saw about 10,000 people on the streets last night, according to our own estimations and local media. That should repeat itself friday when this bill comes to passing his final hurdle before coming before becoming law. This goes back to 10 years ago in taiwan when the government tried to pass a trade deal with china, and people took to the streets in huge numbers to protest, and managed to storm the legislature and occupy it for several weeks, forcing the government to shelve the bill. That was 10 years ago, that was the Sunflower Movement and a Pivotal Moment in recent taiwanese history, and is an example for these protesters. You spend time with protesters on the streets, they refer back to that. They are saying some people will try to get into the legislature to stop the bill if possible. Haidi lets get you to futures opening in europe, were seeing this is the picture with stoxx 50 futures, pretty positive. We did see the decline in european stocks, the focus on nvidia. And fresh clues from the fed. We saw an alltime peak on the stoxx 600. With german stocks we could see an upside. Also watching thern the demand for natural gas and the supply available. I they i think other factors will cause that gap to widen further, things like electrification. As industry moves to reduce emissions and lower urban intensity sources of power. The natural decline we are facing will put pressure on the supply side. Demand will continue to grow. The pressure will be more acute as we move out in time. Haidi take a look at some of the commodities we are tracking. Aluminum is one of the shining aspects of this rally across broader metals and commodities. Rio tinto issued force majeure when it comes to the shipment of aluminum from one of the queens land shipments, thats how the big spike when it comes to aluminum prices, at a 23 month high. We see pullback with aluminum trade in london, looking flat. Copper futures continues to push through with this rally. We see gains of about 0. 3 . It has been steadying when it comes to copper and this record rise. We have seen physical trades overshooting risks as well, as we see a few concrete signs of a turnaround in china despite incremental and more significant measures announced. Rio tinto up 1. 3 . Related to the china turnaround story, that big jump in iron ore futures, extending the rebound. The highest since early march. We are seeing iron ore names reacting. A look at the broader markets in terms of what is trading, in japan and across south korea and australia, a little struggle for direction. The nikkei offering a little bit, the kospi on the back foot. In australia, bouncing back from yesterday, we are watching among other things, the rbn. Kiwi stocks looking perky ahead of a meeting expected to stick to the current policy settings. Annabelle very much the count down to the nvidia numbers, because we will get the much anticipated Quarterly Results on wednesday. That will give investors fresh insights into the ai spending be human ai spending boom. Lets get more from maribel lopez, principal analyst founder, lopez research. A comes down to nvidias ai chips in the demand for those, but what are you expecting when the expectations are already so skyhigh . Maribel i expect expectations to beat the general expectation. The demand for ai is superhot, they can sell anything they have that will come off the line for at least another year. Expect them to have blowout quarters. I think the market can be unrealistic in terms of the growth pattern that we have. Nvidia is an extremely strong company, the bellwether of ai, doing grand. Having said that, the market keeps pressuring them to over perform. We expect them to sell everything they have, and the question is how fast they can get chips out to meet the next wave demand the next wave of demand. Annabelle we sell that earlier today, we had the Cyber Security company palo alto, and they met estimates. Perhaps it is foreshadowing what could be for nvidia if it does come in line. What you think they will say to really impress investors . Does it relate to the new blackwell chip . Maribel it is a long and short game. One thing we like about nvidias strategy is that it is not just a hardware play but they will build a Software Revenue stream around it, and they are vertically integrated. When you look at health care, manufacturing, they have the ability to not just apply ai as use in chips to think about the industry perspective around ai, which means they can be part of the develpment cycle for a long time. Really the issue is the one time of the blackwell chip and the twotiming of when they charge Software Revenue they are talking about, having additional a Software Revenue stream. It is a smart move for the company to diversify themselves being hardware and software. Having very specific in a prize software to create very specific Enterprise Software is the way we will be looking at it over the coming years. Having said that, people are excited about hardware, that number drives billions in an organization. Really, the timing of when this happens, people are constantly expecting them to outperform. There is a tenant pressure on them. They are the game to beat in ai, and everybody