Us a bit of support. A little bit of strength on the yen. The bank of japans yield curve control may not impact the markets which some are expecting, so do not expect any great strength. Crude oil, and opec meeting coming up. Yvonne you have the dollar sinking the most in two months so there was this fed commentary about how it looks like what the fund is leaning towards is a positive or a skip in june. That is helping lift overall the risk move. Even china, you take a look at the rally we are seeing in the hang seng. The extreme bearishness is coming off a little bit now. Rishaad yesterday if we wanted to go to the advice of the hang seng in 2018, you would need to have an 18 improvement. But ecb inflation. Christine lagarde has a bit more wiggle room, came in at 6. 1 inflation. Compared with pakistan yesterday, 37. 97 . Yvonne yikes. But the euro story will be interesting. If they are also close to a positive we heard from some of the ecb officials that may be the next few hikes are going to be more marginal. What does that do for eurodollar . We certainly saw the weakness of late, but the dollar weakness story trumping that. Now there are questions on the tightening we have seen across em. Rishaad and em, we saw sri lanka yesterday, a different case altogether, but so much wiggle room it seems for the Central Banks in this part of the world. They are cutting before the fed and already pausing as well. And Interest Rates are only at 2 . Quite something. Yvonne it is an ongoing discussion whether it is a hike, skip, or pause for the fed in june. That is affecting the macro movers and it is mostly green across the screen this morning. We have been seeing recovery in china and the Hong Kong Markets, risk assets overall doing this. Commodities are breathing a sigh of relief that we are not just focused on this recovery story that is fluttering in china. Rishaad indeed. As Federal Reserve officials consider whether to hike, pause, or skip the next meeting, the may u. S. Jobs report may help them. Kathleen hays is in new york. We have the indicators and the jobs report coming. What is the difference between a pause and a hike, and why do fed officials insist on using everything as an exercise of obvious asian obfuscation. Kathleen my impression is a pause in hiking rates indicates that you are not going to hike for a while because you think you might not hike rates again, but when you skip, it means we need time to think this over and get more numbers because we think we may have to hike again. That is Kathleen Hays interpretation. Payrolls, look at this. Another slow down. Some 200,000. We know for the past 12 months, the miss has been consistently to the upside. A gain of 90 500,000 is not a week jobs report. A gain of 195,000 is not a weak jobs report bid even if the average earnings on wages are lower, that is better to have a somewhat lower pace because or. 4 yearoveryear is down from the highs, but it is about two times higher than what wages used to rise before the pandemic. Overall you can say a report that is cooling off a bit, but the fed wants to depend on a weaker job market that will help bring down demand, suit inflation. Soothe inflation. This one will not make a big impact. Yvonne do you think this data will sway the doves in a direction today . There is a push for a pause button in june now. Kathleen in terms of the numbers themselves, it is interesting to me over the past four to six weeks, many fed officials when they have been speaking say that there are three more big reports, we will keep our minds open, watch the data before the june meeting. That is one job support and two Inflation Reports. This report does not seem to make much difference, especially when some people are intent knowing what they are going to do, and that is one of the people who has been calling for the pause, calling for whatever you want to collect, and that is Patrick Harker from the philly fed. For the first third day in a row, he said this. We should be moving meeting by meeting, so we need to look through that as well. There are other forces happening with the revision on the wages and so forth. It gets me to think we should at least hit the stop button for one meeting. Kathleen phil dudley formerly worked at the fed, saying that they will posit this meeting, perhaps with one or two more hikes bid he says perhaps powell will see the wages and payroll gains. Lets see more from this historic perspective and you can see cpi, one of the two main inflation gauges in the u. S. Has come down to 4. 9 . The average Hourly Earnings yearoveryear have spiked up during the pandemic and stayed steady. They are not getting much lower. Bloomberg economics says for jay powell, he is ready for a pause and is focused on the Downside Risks, especially when it comes to tighter credit conditions. We do not know how much turmoil will affect this. So if anything makes a difference, it will probably be the Inflation Report coming up. Yvonne Kathleen Hays, are Global Economics and policy editor joining us. Lets bring in joshua crabb, head of asiapacific equities at robeco. Do you think at the end of the day the fed is not done yet when it comes to cooling inflation . Joshua you see different opinions from even people at the fed, and that is because you have mixed data coming up. You have the jobs data, but also the unit cost is slow, and that is why the fed is deliberately stepping back. If we look to prevolker, which is the last time was on this activity, you saw the mistake of backing up too early, and as Inflation Expectations become more embedded, we have a bigger problem longterm, and that is why the fed is playing this cautiously. That being said, we are closer to the end than the beginning on the short end of the cycle, but we think there are probably lingering issues and we see that in the labor market. If you work in finance or technology seeing the headline job cuts all the time, but for bluecollar labor, there is a strong backdrop. Rishaad when volcker did it, he was still cutting rates two months before inflation. We have had to peek inflation and surely we did have peak inflation because things carried on, so the mystery is why we are not seeing this biting as much as it should be . Joshua that is the question. There is still a lot of slack in certain parts of the economy. China has been surging back, issues in places from a command perspective, so the last aspects have slacked despite we do have seen from the supply chain, so that is a bit of why we have not seen that issue. This becomes the problem and it is never the headline thing. It is the wage expectation that gets built into the process. You get a higher rage wage, the prices are expected to go up. Yvonne if we are getting close to the end of this tightening cycle, how much does asia benefit from this . Are there equity markets that you think can thrive now that the fed is closer to a cut . Joshua one of the questions i always get is, what would be the best thing that could happen for asian markets . The u. S. Gets the recession over and done with and then we see them move forward. If you look at valuations in asia, they are as close to cheap as they can get. We are pricing in a recession for the rest of the world, while the u. S. Is not. We have seen assets in asia trading very cheap, all of this on expectations around china. Of course the reopening has meant that we have expectations for that market. We see positive markets even in korea, where we saw Companies LikeMemory Companies trading further while ai was getting a better trade elsewhere in the world. Rishaad we got a lot of treasury issues coming up. There is a fear that will suck liquidity out of the system. We still have qt going on. Looking at the money supply, negative growth, we have had that since december. These are all pointing to tightening and very illiquid credit conditions. Is this something the fed has been taking care of because it has been doing their job in some ways . Joshua i am not an asian equities person, but for a long period of time rishaad it would affect the global economy. Joshua but you also remember the role of velocity. We have been pumping money into the system for a long time and nothing is happening. We experience a sub shoot. Now what we are seeing is money supplies coming up from inflation and that velocity is starting to pick up. For me, the bigger concern is what we have seen from the u. S. At the smaller commercial banks being in a tight liquidity situation. They find a lot of smes and smes are a big funder of the u. S. Yvonne there are so many alternatives out there beyond china. Are you still looking at china . We just have Goldman Sachs saying we are staying overweight because of the fact that valuations are not close to those moves yet. At this point, earnings recovery could happen in the second half, and there is extreme bearishness when it comes to sentiment this morning. Joshua we think china is at an interesting junction. It is cheap, we certainly like certain parts, and this is a question of keeping an eye on cheap companies, looking at expectations getting low that even against the backdrop, they can move down on the market. We think selectively those opportunities are coming. On the 60 reopening, there was less of that around, but now there is. What is important here is asia is more than china. I mention some of the opportunities in korea tec, japan another great story, and it is not reliant on the global economy. It has been valued for a long period of time, access balance sheets, Shareholder Activism and what is happening recently with the tsc, we see catalysts unlock that. Asean, people topic talk about decoupling, but that will be a beneficiary for places like asia. Rishaad it is interesting how one thing can make a big difference, and we talked about the new boss of tsc coming in last year. They have credit values responsive to shareholders, and that has changed the game. But how long does that go on for . Joshua they breeze up over a long period of time. We are still a long way off from the 1990s when value came around fukushima and you have seen Foreign Investors move the markets. There are a lot of cheap companies and we are seeing announcement after announcement around these companies doing dividends, buybacks, lifting our oes. It ebbs and come a but we think it will be a positive backdrop for an extended time. Yvonne how should i look at ai right now . What will benefit the sectors you get specifically . Joshua ai is an interesting topic area. It is one of those buzz topics right now. Nvidia clearly you saw these huge jumps in that, but i look back at where we can make money out in asia. And we have seen a number of laggards in the memory space or places like that. That is where the disconnects happen because if we will see this huge increase, we are going to require more aspects like memory coming through as well. That is where we are trying to take opportunities. Rishaad i love that, the lawsuit brought against the lawyer who used chatgpt to come up with a summation of the cases, the fabricated court cases. It was thrown out, of course. Joshua we will not have chatgpt in the courtroom soon. [laughter] yvonne i hope not. Rishaad joshua crabb, head of asiapacific equities at robeco. We are checking on the pentagon as it looks towards a deal with elon musk and starlink services. The u. S. Has praised the role of starlink terminals and watch they have played in ukraine as they are seen as vital for kyivs civilians and military. A shanghai official request musk to boost his investments during his trip to china this week. He had a midnight appearance at shanghais tesla facility. He met with several senior officials including she qin gang. And taiwan and the u. S. s trade agreement is opposed by beijing. The statement of the agreement is a crucial step towards an expected freetrade agreement between the island and the u. S. It is the first concrete action after an Initiative Last year that beijing says violates the one china policy. Yvonne still ahead, u. S. China tensions will take center stage at the annual defense dialogue beginning today. More with the director general of the International Institute for strategic studies. Plus, the ceibs european president joins us to discuss the studies from the mainland. This is bloomberg. We go to the senate floor this evening in d. C. Where we are expected to hear this vote taking place when it comes to the debt ceiling deal. It cleared in the house yesterday. We will see if it does the same in the senate. It was an overwhelming yes yesterday in terms of that debt ceiling deal. You are starting to hear those votes. Rishaad we have got votes on various different amendments. We had the 314117 votes to pass it in the house. And jain says they are interested in investing further in Adani Enterprises following that hindenburg short sellers attack. As we look at the adani side, this is what we feel has helped us add values for appliances. There is a lot of disconnect from time to time. As things do not happen every so often. They are rare, and our view is that they need to be bigger when you talk about these outsized opportunities. And the Supreme Court verdict was a clear case that there was not really anything there. Most of the things, the allegations had been investigated before, and it just confirmed rvus based on our own market view that we have added since, so it is any a meaningful position amongst others. You have had said that adani has some of the best assets in the country. Are some of those units you have been increasing your stakes in . I am doing a little bit injustice if i do not mention the management because the assets are the number one bond out of there. The question is, how come gautam has been able to accumulate these assets and run them effectively . So we like ports, transmission assets, and india needs that too. It is very hard to execute sometimes when the entities it is not easy to execute for various reasons. And if you look at the history of these assets before, there is nobody who has been able to do it at this size and scale and i am still blown away that if you look at the results of the reported numbers, they are fantastic numbers. The airport reported numbers, transmission reported numbers. In any world, these would be very good numbers, so these are the kind of assets we own. We have added one new position, which is purely in the market. We have explored now more than four companies. What about the risks from the indian market regulators probe . How do you see that . There is no perfect company, so risk is always there. If you look at france, they nationalized utilities and force the utilities to eat up and not allowing them to pass through. Let me do an interesting comparison. If you look at all the Chinese Companies listed in the adr form in the u. S. , you do not own anything. You have no ownership of those assets. There is risk in that. The Education Companies disappeared in china. They have been confiscated in europe. If you look at german utility, they bankrupted the german government. That is part of doing business investing wise. That is risk in every area. It is not unique to this or anything else. How do you see the stock market in india performing against china in the longterm . If you look at the corporate Earnings Growth, if i were to ask you what is the corporate Earnings Growth for the last 10 years, msci india versus msci china, most people would not imagine that corporate earnings in india has been far better in dollar terms than the msci china. So if you believe corporate earnings drive stock prices like we do, i do not see why Indian Markets would not outperform the chinese equity markets. Because the Regulatory Risk in china is tremendous. We have seen that. Yvonne we have got gq g partners chairman and Investment Officer rajiv jain there. We have plenty more ahead. This is bloomberg. Rishaad quite a day. We saw yesterday we were going up on the hang seng but they managed to go below the gain line by the end of the session. 3. 1 up essentially, looking at what is going on out of the 76 stocks on the hsi, just two are down. Alibaba leading the charge in terms of fixed market followed by tencent and meituan. Group also having a broadbased move higher, and is it a relief rally . I guess we will find that out. Yvonne and i wonder if the u. S. Jobs report will help or hurt things just given that we have seen a resilient labor market. Doesnt actually move the dow in a fed pausing narrative does it actually move the dow in a fed pausing narrative . Shanghai moves up two point 5 as we count down to that opecplus meeting in vienna. Coming up, concerns over the u. S. And chinas growing rift. Or getting underway in singapore and we get the prospects of easing tensions with so. I know you and george were struggling with the possibility of having to move. Hows that going . 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I mean, we have had it up for three weeks, but the jobs report. Yvonne basically we are on course to snap three weeks of losses for the gains of the dollar, just given the slump we saw overnight in the bloomberg dollar index. It was the biggest low we have seen in on