This is the Asia trade.

I'm April Hong and Singapore.

 I'm you, Stroud.

What's in Sydney? The top stories this hour.

Asia stocks are set for gains after deep buying turns around a slide on WallStreet.

 The S&P 500 closing on the brink of abull market as investors shrug off that Moody's US downgrade.

Australia's central bank set to cut rates today for a second time this year,while remaining cautious on the policy path ahead.

Also ahead, President Trump says Russia and Ukraine will begin immediateceasefire talks after his phone call with Vladimir Putin.

And I'm Yvonne Man live on the Hong Kong Stock Exchange where Chinese EV batterygiant Seattle is set to make its trading debut here in the world's largestlisting this year.

 Shares are already higher in the greymarket.

 Are we going to watch out for?But in the meantime, let's get you straight to how we're setting up when itcomes to this Tuesday morning here in Asia.

Take a look at U.

S.

 futures trading at the moment.

We spoke about that turnaround as sort of a markers really looking forsemblance of good news despite these concerns over that U.

S.

downgrade.

 We're looking like Asia will set upquite nicely as traders kind of shrugged off that risk.

S&P futures at the moment look looking pretty flat at the moment, as are techfutures, with the Nasdaq down by just about a 10th of 1%, watching oil pricesas well as sort of trading sideways at the moment.

But we did manage to end that previous session higher.

A lot of volatility coming through from the geopolitical headlines overall, too,with these talks of the Ukraine cease fire and where we might go from here.

Yeah, massive uncertainty still, even though there seems to be some progresson that front.

 But take a look at how we're shaping upwhen it comes to Australia.

 Futures maybe see that uptick.

Of course, it's about RBA watch 25 basis points and cuts are expected.

This would be for the second time this year.

And in terms of A50 futures, remember just a day ago in China we saw that BigMiss when it came to retail sales numbers.

Even though factory output was a nice beat, the attention now shifts to theloan prime rate announcement in a couple of hours from now.

China is expected to follow the seven day reverse repo tracking lower by tenbasis points.

 We also have a number of Chinese banksthat have already cut their deposit rates from today.

So certainly a lot in the way to keep an eye on for the whole of trading onTuesday Heidi.

 Yeah.

And we've been very watchful when it comes to geopolitical developments, too,Right.

 President Trump saying that Russia andUkraine will begin talks immediately on ending their war after a two hour phonecall with Vladimir Putin.

 But Trump denies that the US is steppingback from the peace talks after little signs that he's putting any pressure onthe Russian leader.

 All with President Putin today.

You'd mentioned that the pope would like to take a role potentially in mediatingthese talks.

 Does that mean that the U.

S.

is taking a step back from.

 No, no, no.

I think it would be great to have it at the Vatican.

Maybe it would have some extra significance.

Let's bring in Bloomberg's Michael Haith.

And look, he might be denying it, but certainly you've got world leaders inparticularly European leaders that are quite disappointed of this kind ofdisengaged mood from the U.

S.

.

 Yeah, look, I mean, everything PresidentTrump has said about what will happen between Russia and Ukraine hasn'thappened.

 I mean, whether it was he can solve itin a day, whether it can be solved in 100 days, and that they would put moresanctions on Russia, that the US to be part of it.

All of that has sort of gone out the window.

And um, you saw again, President Trump sort of putting a positive spin on thisconversation, but all it is is it's direct negotiations between Russia, theaggressor in Ukraine, which is the smaller country and has been sort offighting for its life.

 And it's an imbalance there.

And President Trump seems to be leaving it in that sort of imbalance.

I mean, Russia says that it needs to, you know, the underlying causes of thisconflict need to be addressed and those underlying causes really a Russianimperialism.

 So it's very difficult to see without athird party how in any sustainable way this is resolved other than a completeRussian victory.

 Mike, can you talk us through also someof the nuances when it relates to this sort of change in stance from Trump?Because there was so much optimism, especially from European leaders, youknow, that they would take a bit of a bigger step when it comes to mediatingbetween Russia and Ukraine.

 Yeah, look, I mean, in a sense, what'shappened is that the US is not prepared to apply any pressure to Russia.

I mean, Senator Lindsey Graham, who's an ally of President Trump, has a packageof significant sanctions that the UN, the US, is prepared to deploy againstRussia.

 There was no mention of that.

There's no talk of a truce or a ceasefire here.

And at the end of the day, the only country that can keep us Ukraine in thefight is the US.

 I mean, for all the goodwill fromEurope, you know, France, Germany, Poland, the UK, which is sort of thechief countries that are backing Ukraine, that don't have the weapons,they don't have the firepower here to sustain Ukraine.

And estimates are that Ukraine could probably go to three or four months ifthe US cuts off its you know, if it gets no more supplies from the US.

And and just, you know, the underlying nature here is that Russia and PresidentVladimir Putin particularly we've seen for 25 years, there's nothingparticularly new in what he does.

 He responds to power.

And power involves, you know, the US being there or the option of NATOmembership for Ukraine or something like that to protect it.

Either way, Russia will end up, you know, in the current situation, unlesswe see something different, Russia, this will be a frozen conflict and Russiawill and Russia will have some form of control.

The disengagement when it comes to the Middle East has been interesting towatch when it comes to Israel and Gaza.

 We're now hearing that Israel wants totake over the area and restart aid, which has been halted for almost threemonths now.

 Yeah, I mean, look, Israel has beencoming under pretty serious pressure for the restrictions on aid into into theregion, which obviously, you know, in a catastrophic state.

But we're also seeing Israel basically re rereviving its the conflict in many respects.

And so the resumption of aid is to try and try to sort of stave off theinternational criticism.

 And basically Israel is again trying touse its military to to force Hamas to agree to terms, which is the release ofthe hostages, the remaining hostages, and for Hamas to disarm and and go intoexile, which Hamas has said that it's prepared to hand over power, but itwon't disarm.

 So, yeah, again, you know, it's not avery good state in the world at the moment with that conflict restarting.

Thanks, Michael.

 Hey there.

With the latest, let's bring in our Gottfried Reynolds who leads our MarketsLive Asia coverage.

 And at the same time, we're seeing quitea lot of consternation in US markets.

 It's interesting that we see both stocksand Treasuries kind of following this pattern of where, you know, there's asell off.

 There's genuine fundamental concerns.

This time it's the ratings issue, but then kind of crawling back into into theaction.

 Well, rising back to some extent.

You know, yesterday we were talking about the sell America trade beingrevived, and it's become a bit of a trope where the sell America trade issomething that happens while America is sleeping.

And then us investors especially, you know, some particular groups of retailinvestors, they buy the dip that's been created.

So that's again, the situation.

 And by now, in the wake of theextraordinary comebacks for both bonds and stocks after the early Aprilmeltdowns following reciprocal tariffs, you've effectively got a Pavlovianresponse that, you know, when there's a dip, you have to buy it.

So that's likely to go on being the response unless and until you get eitherthe dip spending.

 It's because everything just keeps ongoing up.

 Or more likely, until you get anotherserious meltdown and this time you don't get a rebound because, yeah, I mean,that would involve the actual damage from the tariffs to the US economy.

You're playing out rather than, you know, we had equities and bond marketslooking to price in the damage that was anticipated by reciprocal tariffs thatwere in many cases like the worst possible scenario or even worse thanmost people had priced as being a possible scenario.

So that was pricing in the impact that was going to come if those weresustained.

 Now, we've had all of that pricingremoved despite the fact that we do have the highest tariffs since the 1940s, ifyou look at the average effective tariff rate.

So those are going to have an impact, but the impacts are uncertain and fornow that by the dip response is ingrained.

GOFF Is there a sense of complacency when you look at stocks, when you lookat bonds even I mean, we have the likes of Jamie Dimon just saying that, youknow, there's still this slew of risk, whether you're talking geopolitics orinflation.

 Yeah, theJamie Dimon is not the first and won't be the last to point to a level ofcomplacency.

 I mean, part of that complacency is thatprecisely over the last year or so, we've had, you know, the surprisingresilience of the US economy.

 That's a theme that that that had legsfor many a month.

 If you think that we had the mostextreme tightening cycle for 30, 40 years andultimately the US economy didn't go into recession despite a lot of expectations,I was one of those who expected that that sort of policy actionwas going to have the impact in the real world that you would have the US fallinginto recession.

 That didn't occur for a whole range ofreasons, but the modus operandi now for markets is that we're not going toexpect a recession until probably after it arrives.

So that is by definition a complacent set up.

The whole question is whether or not that complacency proves to be misguidedor not.

 And for now, the jury is very much outon that.

 I do think it's significant that themarkets are hesitating around, you know, the levels that they are now.

There seems to be a lack of a trigger for a serious, sustainable rally fromhere.

 We're sort of dithering around waitingto see what happens.

 Yeah.

GOFF There also seems to be quite remarkable,right? The sense of resilience we're seeingacross the markets still got through.

 Reynolds, thanks so much.

Kathy Reynolds leads our Markets live Asia coverage.

And of course, markets have also been kind of preoccupied by the sense offiscal discipline in the US or the lack of it.

And President Trump is planning to go to the capital on Tuesday to urge HouseRepublicans to unite behind his tax cut legislation.

House Speaker Mike Johnson is seeking to meet a self-imposed deadline of passingthe package through the House this week.

 Bloomberg editor John Harney joins usfor more from Washington.

 So, John, what's been holding up theagreement until now? These disagreements really reflectnot only divisions in the Republican Party, but in the country at large overthe role of government, how much government should spend.

The big issues that Mr.

 Trump is trying going to try to resolvetomorrow when he goes to the capital, our Medicaid, the program, the healthinsurance program for the poor and children.

How much how much to cut it and when?And the state and local tax deductions.

 Republicans in high tax states likeCalifornia and New York, New Jersey want the cap that was imposed when PresidentTrump's original tax overhaul was was passedback in 2017 to be raised.

 And even though Mike Johnson has offeredup to 30 to $30000 cap, that's not enough for some of these Republicans.

Now, all this unfolds as yet another election draws near, and that's the 2026midterms in which all the House members will be up for or will be felt will befacing the voters and 33 senators.

 It's crazy that we're already looking toApril 20, 26 as sort of the jostling before midterms already begins.

Right, John? What is the infighting that we've seenat times quite embarrassing for President Trump's own party.

Tell us about the state of support that he has internally at the moment, notjust for this bill, but perhaps more broadly?Well, he certainly still has broad support within, you know, within hisparty and and among and among his voters as well, I should say.

Yet there is a question of just how much, as we've seen with the UkraineRussia war, just how much his involvement can accomplish.

Now, it seems as if this tax package looks like it can be resolved.

Certainly.

 And as you point out, Mike Johnson, theHouse speaker, has set this deadline for four this Friday before the Memorial Dayrecess.

 They are really they're working veryhard to, you know, it to bring this toconclusion.

 Last week, the Budget Committee rejectedthe or voted against the tax the tax plan.

And then, lo and behold, on Sunday, it was it was passed, although the fourRepublicans who were very much against any spending and any more spending andwant Medicaid cuts voted to abstain.

John, thanks so much for keeping track on those developments for us.

Boomer editor John Harney.

 Now, the other thing that we're watchingfor today is Seattle set to start trading in Hong Kong in a few hoursafter raising $4.

6 billion in its IPO, the biggest in the world so far thisyear.

 The Chinese battery mega commands morethan 35% of global market share, supplying carmakers from domestic brandsto Mercedes Benz, Honda, Tesla.

 The China Show co-anchor Yvonne Man islive for us at the Hong Kong exchange.

 Yvonne, what's in store today?Yeah.

 You mentioned how things are doing.

There's a lot of interest in the stock, particularly we saw the grey marketshares already rising.

 We heard that the stock was also heavilyoversubscribed leading up to today.

 So when you take a look at how theshares were priced at 263 HKD a pop, that's only about a 7% discount from theShenzhen listed shares last close, which is quite rare that a share premiumusually is about 25%.

 If you look at past secondary listingslike Media Group, China Tourism Group, for example, So strong demand headinginto today and it seems like foreign investors, they are leaning into thiswhole story, a global story of China dominating when it comes to ITI supplychain manufacturing over some of these US-China trade concerns.

And you mentioned about the superlatives, right?They are they champion the battery market.

They have top tier customer base and the technological innovation is there.

There's the overlay of geopolitics.

 Right.

How worried should investors be about us?Chatter, tensions? Yeah, You know, leading up to this, thislisting was already filled with hurdles.

 Right?You talk about, you know, the Seattle excluding these onshore U.

S.

institutions from taking part of this deal in order to limit and reduce theirU.

S.

 exposure.

That was already one thing.

 But then again, you take a look at whatthe underwriters of this deal, U.

S.

 banks like Jp morgan, Bank of America,who are sponsoring this deal, they were urged by U.

S.

congressional lawmakers to drop out of this IPO.

They decided to not do that and stuck to this deal, but just goes to show howthey are being enthralled in this US-China trade debate.

Despite that, though, it's interesting, right?If they do? Well, Bloomberg Economics has a veryinteresting take on this.

 That means that Chinese companies canactually tap into global capital, raise a significant amount of funds withoutthe support of U.

S.

 investors.

That certainly is what the founder, Robin Zang, wants here with theseproceeds being put into international expansion, particularly when it comes toEurope.

 And Iran is also a big day for the HongKong exchange.

 Should we be expecting other Chinesecompanies to kind of follow suit? Well, we've talked about years of theHong Kong exchange really been reeling from the lack of IPO appetite.

But now this listing, a secondary one for Seattle, does put Hong Kong exchangeback on the map.

 In some ways.

Singlehandedly, it doubles the amount of proceeds that Hong Kong listings haveraised this year and certainly is going to be a good day for Bonnie Chan and herteam at Hong Kong Exchange.

 And also when it comes to the appetiteand optimism around the tech sector.

 Right.

The fact that, you know, this secondary listing went what went through did gopublic getting the approval of Beijing.

 So what does that mean?Does that mean that the relationship between Xi's administration and theprivate sector is improving? Maybe we're seeing a restoration ofthose relations when they really do rely on the entrepreneurs and the privatesector to shore up growth.

 Now,indeed, the Chinese authorities support for the private sector, something we'vebeen watching closely Yvonne Man for us there.

And also coming up on the Asia trade, we're talking about AI robotics chipswith IDC group.

 We'll get market insights with Maggie.

Plus more in Seattle's Hong Kong trading debut with Macquarie Capital.

This is Bloomberg.

 Australia's central bank is expected tolower interest rates for a second time this year due to easing price pressuresand a pause in US-China trade tensions.

 However, it is expected to be a hawkishcut and Asia-Pacific economy.

 Reporters Patty Penny joins us now formore on that.

 So there are reasons, as always, itseems, with the RBA on either side.

 Some of the labour market data has beenquite interesting and the pressure seems off when it comes to China.

That's right.

 When the year started it felt like thelabor market is loosening, but the data in the past two months have proven to bepretty strong.

 In fact, the price gauges that the RBAlooks at inflation and wages have both been stronger than expected.

And yes, I mean, even though the uncertainty has eased, there is stilluncertainty.

 We never know what happens after the 90day pause ends.

 So the RBA does need to be cautious orcareful about all of those scenarios as well.

So what are we expecting from the governor, from the press conferenceconference to maybe provide that maximum optionality going forward amid thisuncertainty? Yes, Michelle Bullock has become reallygood at expressing herself at the press conference, discussing what happenedinside the board meeting and really telling people, individuals, households,explaining monetary policy to them and telling them why the RBA is doing whatit's doing.

 And today, if they do decide to cutinterest rates and Michelle Bullock, I believe would tryand send this message to households and businesses to not expect any furthercuts from here.

 There may be or may not be, but theyhave been really careful about providing forward guidance and that is going to bethe case even today.

 How much of this is sort of a Goldilockssituation and how much does it mask maybe the bigger structural issues withthe economy? Obviously, productivity across allsectors is going to be a key focus for the government's now stronger mandate.

Yes, it does mask some of those problems, as you pointed out, Heidi.

I mean, we are in a good situation, right?Like labour market is very strong.

 Inflation is inside the RBA target band.

In fact, when I spoke with Warwick McKibbin, who used to be on the RBAboard, he was saying the RBA should not be cutting interest rates.

He reckons the neutral we are already at neutral and given the low productivitythat we have in the economy, we should try and keep interest rates where theyare and the Government should in fact take the burden of reviving the economyand putting money where it really needs to be.

And excited.

 Penny there Ahead of that RBA decisionor hedge on the Asia trade, this is Bloomberg.

 Take a look at what we're watching whenit comes to US Treasury futures, which was quite a wild ride given the sell offthat we saw on Monday.

 In the wake of the ratings concerns,Moody's sharpening its focus on U.

S.

 debt.

And we saw that fall in U.

S.

 assets, including Treasuries and thedollar.

 But that really saw a pretty rapidturnaround as we saw sort of domestic buyers coming back into the fray.

We're also seeing Aussie ten year bond futures seeing potentially a knee jerkpop higher on up If we do get that rate cut through today by the RBA, reallyseen as a hawkish hot or potentially a protective cut.

But we see from the Reserve Bank of Australia that is unlikely to besustained as we see Treasuries kind of still remaining ultimately in that bearmarket despite the recovery from the deep sell off that we saw on Monday.

And as we head towards that RBA decision, watching those bond marketswith the Reserve Bank saying to lower to 3.

35% by the end of the year.

Much more ahead on the Asia trade.

 This is Bloomberg.

 It is day two of Computex, the Asia'sbiggest electronics forum.

 Day one had big announcements from IndiaChief Jensen Huang, who announced plans to let customers deploy rival chips incenters.

 Let's get across to Bloomberg's AddabboJewelers for the latest out of Taipei.

 And then we also heard from Intel thatBoutin give us the latest in terms of what we're hearing from these industryleaders.

 Yes, you said yesterday was the sort ofthe kickoff of Computex this year, and it was when we had a lot of keynotesfrom the likes of Nvidia, for instance, Qualcomm on high media tech, just someof the names today, it's more of the focus on the exhibitions.

And here we are at the at the venue, but we're going to see lots of people comingthrough these stores in the coming hours.

The focus on Intel as well, this was really interesting to note because Intelactually isn't here to give any keynotes this year.

It is, though, the chance to hear from the new CEO live, Bhutan.

So last night there was an there was an event where live Bhutan was speakingdirectly with some of the big customers and clients of the business.

He certainly has some major challenges ahead.

And in his speech he was really talking about those challenges as well andsaying that he had been listening to some of the feedback.

He really played up the role of Intel in the Taiwan ecosystem and really stressedthose partnerships, too.

 So that was, again, a bit of a departurefrom the past because the former CEO, Pat Gelsinger, was someone who'd beenquite critical of TSMC in particular.

 Also of note yesterday, which came latein the day, was on his filing to the Taiwan Stock Exchange.

So they're actually investing a further $1.

5 billion into their India unit.

And that's notable because we know that that Apple is planning to manufacturemost of the iPhones that it sells in the US by the end of next year in India.

And that is despite President Trump as well, really pushing Apple not to dothat.

 But Hon Hai does appear to be pushingahead with it.

 Yeah.

BELL Amid all these shifting supply chains, we're also keeping tabs onwhat's happening outside Computex.

 And we have reports that Sammy aims tospend billions to build its own chips.

 Yeah, that's right.

So this is an effort that Jamie is making here to really be able to todevelop its own smartphone processes in-house.

And so we got an update on the timing of that.

They're saying that they're going to be able to unveil their first self-designedself-designed processor rather, by May.

 So really just in the coming days, butit's going to be made with three nanometer technology.

So we heard from late June.

 This is the founder and chairman of thebusiness talking directly to people on social media about this.

It's an effort that is going to be costing them a lot, really a bit, nearly$7 billion to ¥50 billion that they're putting into this effort.

They're saying they've been working on it for several years now.

Very interesting to note, of course, because it is sort of the process or theapproach, for instance, that Apple has taken moving away from Qualcommprocesses.

 But now it's trying to also bring thatin-house.

 We're also seeing something of amilestone from Huawei.

 Yeah, that's right.

So so Huawei has unveiled that it's got a new operating system for its matePC, rather, or it's folding laptops.

 This, again, is sort of a departure fromwhat we've seen in the past.

 Weiwei is essentially phasing out theWindows operating system for its range of different PC products.

And so this is the latest on that.

 But bringing harmony, that's what it'scalled.

 And it's already been using that forsmartphones.

 But they're saying now it's going to becompatible for PCs and also making it compatible for more than 2000 apps,including WeChat.

 So, again, it's this sort of departurewe're seeing with Huawei, very strong in hardware now moving into software.

And China generally focused on building more self-reliance and resiliency in theecosystem and shifting away from US products.

The individual is there.

 Another story that we're following,China is accusing Washington of undermining recent trade talks with itswarning that using Huawei's chips anywhere in the world would violate USexport controls.

 The Commerce Department had issued thestatement last week.

 While the U.

S.

has since toned down that language, stripping away the anywhere in the worldreference.

 It hasn't appeased Beijing overall.

Yeah, it's really this focus on tech that we're seeing today as well.

And later on Computex.

 IDC group vice president Mario Moralesjoins us to talk about his outlook for the chips industry as well amid theuncertainties surrounding US policy.

 But first, the latest from the corporatefront Hong Kong issue.

 A F.

W.

de has filed a fresh application for an IPO in the city.

A-share sales pick up again.

 The firm is reportedly seeking to raiseseveral hundred million dollars from a listing this year.

fWt is backed by billionaire Richard Lee and had dropped previous attempts formuch bigger listings in both Hong Kong and New York as far back as 2021.

TRIP.

COM has reported first quarter adjusted earnings per Americandepositary receipts that beat estimates.

 Revenue came in at ¥13.

8 billion, whilegross profit was around ¥11 billion.

 Executive chairman James Liang says theindustry maintained strong momentum in the first quarter of the year, supportedby consumer demand and favorable travel policies.

Uber said to be set for defeat in its first efforts to water down a Swiss lawraising its capital demands.

 Sources say the proposed bill wouldforce the lender to boost its ability to cover losses at foreign units to 100% oftheir capital.

 That would mean as much as $25 billionin extra capital.

 UBS is pushing against the new rule,arguing it would be a major disadvantage.

However, take a look at how we're setting up in Asia as we expect to seesome of the tailwinds that we had from the US.

The ultimate sort of bounce back in that rally overnight to pass through to thispart of the session.

 For Australia, it is all aboutpotentially that protective or hawkish RBA rate cut that is expected today,despite of course some mixed signals when it comes to the broader economy.

The US-China trade reprieve perhaps complicating matters in terms of whatthat means for inflation and what that means for broader growth as as a sort ofChina proxy that we see here in Australia.

S&P futures, SBI futures, I should say, when it comes to Sydney, looking higherby about 9/10 of 1%, looking like an early gain of about 8/10 of 1%.

So potentially a seventh straight day of gains for the US leading through toSydney here as well.

 Singapore Nikkei futures also lookingpretty solid at this point and S&P futures up by about a 10th of 1% aftersix days of gains.

 What led to Fed President Rafael Bosticis adopting a wait and see approach when it comes to rates there, citinguncertainty over ongoing trade negotiations.

He knows more about the trade tariff uncertainty influencing policymakers andinvestors.

 The market is trying to process a lot atthis point and where our rates are, I think are mildly restrictive in themarketplace, trying to get inflation back to our 2% target because it's beentoo high for too long.

 I think the rest of it is really aboutperceptions of risk in the marketplace and, you know, uncertainty and thevolatility that might be present in the market, I think leads to there being anextra premium on it.

 And so, you know, the market will decidewhat it what its price needs to be.

 But it doesn't surprise me very muchthat we see it at a higher level relative to the things that we've donewith our rate in the last year.

 Well, we've got the downgrade now thatpushed rates up early this morning and overnight, and then it started to fadeback a bit.

 The same thing that sort of happenedafter Fitch and S&P did their downgrades.

Does it worry you that they are not pricing in more of a credit risk to theUnited States, given that we're no longer triple-A?Well, you'll have to talk to their ratings about sort of how they interpretthese things.

 What I would say is this so much of oureconomy is based on faith that we will deliver on the things that we say thatwe've promised for the future.

 When you start to see the markets wavera little bit, people I think people are asking the question, do we still havethat same level of faith? I think the sign that rates have startedto come back down and the markets are sort of returning back to a normal basisto us that they think there is that likelihood moving forward.

And we'll just have to see where it goes.

I mean, I always want to make sure I understand what the price of credit andthat is.

 And but, you know, the markets will makea determination of that on their own.

 Well, if they are higher and stayhigher, as they are right now, does that affect your calculation of what you haveto do? Well, it depends.

You know, one of the things that will be interesting to see is how businesses andconsumers respond to the environment.

 What I'll say is, because of the wordthat you said at the very beginning, uncertainty, we know that manybusinesses and many families are really holding tight to see sort of how thisall sorts out.

 And we'll just have to see how thechanges in pricing in bond markets, in other markets translates into differentstrategies moving forward.

 I do think the spaces that we have rightnow is one reason why I think it's appropriate for us to be waiting on ourpolicy as well, and we'll just have to see how this all plays out.

I'm hopeful that as we get through the summer, we start to get more, moreclarity on exactly where things are going to settle out on trade policy andother factors.

 Atlanta Fed President Rafael Bosticspeaking with Bloomberg's Michael McKee.

 Time for morning calls ahead of the Asiatrading day.

 And in spite of some of theseuncertainties, Morgan Stanley's Michael Wilson says investors should buy anydips in U.

S.

 stocks fueled by Moody's U.

S.

downgrade.

 Wilson says the trade truce with Chinahas reduced the chances of recession and the corporate earnings season seems tohave ended with no major impact from the uncertainty over tariffs.

He adds that the recent pickup in profit upgrades also bodes well for furtherequity gains.

 Jp morgan CEO Jamie Dimon warningagainst complacency, though, in the face of various risks, including inflation,credit spreads and geopolitics.

 And speaking at the bank's Investor Day,Dimon said he's concerned about elevated inflation and stagflation and high assetprices.

 He added that credit spreads are notaccounting for potential downturn impacts.

Personally, I don't like making forecast stuff like that.

I am not a buyer of credit today.

 Okay.

I think credit today is a bad risk.

 I think that people who haven't beenthrough major downturns are missing the point about what can happen in creditmarkets.

 And a reminder that later this week,Bloomberg will be speaking exclusively to Jamie Dimon from the bank's GlobalChina summit.

 Tune in for that conversation at theTimes on your screens.

 More ahead on the Asia trade.

This is Bloomberg.

 More now from Computex in Taipei, whereNvidia CEO Jensen Huang has made a splash at the event announcing plans tolet customers deploy rival chips in data datacenters built with his company'stechnology.

 Let's go back to Anabel, who's standingby with our next guest.

 Thanks, everybody.

I'm joined this morning by Mario Morales, vice president enablingtechnologies and semiconductors at IDC Group joining us this morning.

Sir, thanks very much for making the time very much.

I want to start with with the keynotes that we heard yesterday.

So it was really the chance for a lot of people here to be hearing directly fromNvidia, for instance, Qualcomm, Hon Hai Media take lots of different names.

Okay, maybe we're missing some of the ones in the past, like AMD, forinstance, or Intel, but which announcements stood out to you inparticular? I think the fact that we're still in themiddle of a $1 trillion transformation, I think in video brought that up andthey talked about the fact that they're seeing $5 trillion worth of investmentin the coming years in infrastructure.

 I think that's a massive amount ofinvestment and potential growth for the entire ecosystem.

So that stood out to me.

 I think the Nvlink fusion announcementby in video was also very interesting because for a while now NVIDIA has beenproprietary with its technology, its CPU and interconnect technology, itsnetworking technology.

 But now because customers are pushingthem towards more open an open approach, you're seeing some of their products nowinvite third parties to participate and collaborate with them inside of theNVIDIA ecosystem.

 So I thought that was important.

We're also seeing a big refresh of PCs.

 I think we're do a very big upgradecycle in the enterprise space for both PCs and servers, and so many of thesecompanies are getting ready for that.

 Despite some of the geopolitical ormacroeconomic uncertainty, we still are very optimistic that we're going to seedramatic growth in Indiana.

 PRICE And so companies are refreshingtheir product lines to get ready for that.

This year was really about the move to the edge.

And this that we were going to see are being implanted directly into devices.

But it seems to be happening maybe a little bit slower than some hadanticipated.

 Yeah, I think it's takes time, right?I think most of the growth that we've seen in AI has been primarily ininfrastructure because we're doing a lot of training and a lot of the largelanguage models are being developed to this day now.

And we've seen new models form every single day.

Eventually what we're going to see is AI is going to move to the edge and you'regoing to see inferencing and and reasoning happening at the edge.

And and that's just that we're just at the beginning of that.

I think the inflection point will probably happen in the next couple ofyears.

 And keep in mind, there are billions ofdevices out there that are becoming more intelligent.

They'll have A.

I.

 capabilities infused into these devicesand they just need the content they need to date to be able to take advantage ofthat data that exists that we create every single day as consumers.

What are you hearing about the demand for A.

I.

servers? Because again, there were concerns maybewould sort of hit over capacity and and there wouldn't be such a need movingforward.

 And at the same time, you know that deepseek effective if it's still playing out.

What are you hearing from people that you speak with?We have still not yet seen a slowdown.

 I think there was some pause when whenwe saw the US administration issue the initial messaging around tariffs.

But once that started subsiding, we started seeing again the demandcontinue.

 So we're still very optimistic thatwe're going to continue to see pretty rapid growth in the build up of airinfrastructure.

 I mean, most of it today has beenhappening with cloud service providers, but IDC believes that in the next threeyears we're going to see $1.

5 trillion of I.

T.

spending.

 And of that, about 325 billion worth ofspending will be for AI platforms.

 So there's still a lot of investment tobe made, and I think a lot of that happens over the next 5 to 6 years.

We were just talking earlier on TV about about Louboutin speaking last night atan Intel event.

 It's not an official keynote becausethey're not here in that sort of capacity this year.

But it's certainly Library ten from Intel is talking about the challengesthat are facing the business and stressing that that role that it has andthe relationships it has in the Taiwan ecosystem, is that the right approachand how much patience do you think there's going to be as well with thisturnaround strategy? Well, I think Intel has a lot of legacyin Taiwan.

 Many of the companies, whether it'sFoxconn or compiler Windstream, all of these companies have grown up withIntel.

 Intel was very early on in seeding a lotof these companies in the PC ecosystem and also in the server ecosystem.

And today these companies are all giants and have grown up because of Intel'stechnology.

 I think Intel's now is caught in a verychallenging time because the markets are moving faster than their ability toexecute.

 So LIPA has a tough challenge aheadthere.

 Still, I consider them still a leader inthis space, but they're not at the table today in AI just because they don't havethe product roadmap today.

 But they're working on those things.

I think on the PC client side, there are a lot more competitive.

I think they had missed a couple of steps there.

But with Lunar Lake Panther Lake is coming, these are architectures that aregoing to be very important for HPC.

 They are they will be in the game.

And it's more about not only.

 Continuing to maintain their marketposition as they continue to transform as a company.

But it will take time.

 I think the biggest challenge for themwill be more on the manufacturing side of things because TSMC is the globalleader in this space and they're years ahead of everybody else and so Intelwill need time to catch up.

 Just briefly, as I said, Intel's nothere in a keynote capacity this year.

 AMD is not here either.

What does that tell you? Okay.

Yeah, maybe the ecosystem is really still very Taiwan focused, but what doesthat tell you as well? In a time of rising tensions between theUS and China and that pressure on Taiwanese companies to ship productionabroad? Yeah, I think there's definitelycontinue to be a lot of geopolitical pressure.

Just overall for every company there are growing potential costs as well with thetariff conversations that we've been having.

But the ecosystem here in Taiwan is still intact, and even though they'reoutsourcing or moving to other regions, they have to because the customers thatthey serve are global customers and they need to provide and mitigate some of thepotential future risk with any type of of of issues from a geopoliticalstandpoint.

 So I think Taiwan is an essentialingredient for all of the ecosystem that we're talking about.

And when you think about the keynotes that we're seeing this week, whetherit's in video or Qualcomm, these are companies that are driving the fastestgrowing segments of the market.

 So Nvidia has grown faster than anyoneelse.

 And today they are the largestsemiconductor company in the world.

 They're the first company to achieveover $100 billion in revenue as a chip company.

And that's unheard of.

 I think Intel was the one that cameclosest, but you're seeing sort of a changing of the guard, and I thinkthat's what you're seeing also with the keynotes.

So Qualcomm in the same position, diversifying its portfolio of customers,they've been very good at execution, but they also have to find markets for moregrowth.

 And that's why Qualcomm announced thatthey're getting into the datacenter space as well.

Mario, thanks so much for your time this morning.

That was Mario Morales, their vice president for enabling technologies insemiconductors at IDC group, April.

 I'll take it from here.

Bell attack were put out of control as that in Taipei covering Computex for us.

And we'll have more from the event in Taipei later today.

Speaking exclusively to the Advantech group about the path ahead for thatconversation happening at 10 a.

m.

 Hong Kong time.

More ahead here on the Asia trade.

 This is Bloomberg.

 You're watching the Asia train and oneof the companies we've been keeping a close watch on out of Japan.

Nippon Steel said to have bolstered its pledge to invest in U.

S.

Steel in the event that President Trump approves its takeover bid.

STEPHENS Neptune Ski leads Bloomberg's Asia energy team, and he joins me now inthe Singapore studio.

 So, Stephen, we're hearing that NipponSteel is committing billions.

 Does this help to salvage the deal?Well, I mean, I think you have to first look at what they're committing to,right? They're committing to build a new mill.

They're committing to keep the jobs.

 And they're committing to potentiallytake in more unionized laborers.

 Now,they've kind of said stuff like this in the past.

They've always kind of sweeten the pot.

 This is one more attempt by them toincrease this investment to try to get Trump's approval.

Trump loves big numbers.

 Now, I think what's interesting aboutthis in the story, my colleagues from the US were writing according to theirsources, this was negotiated by the Trump administration.

So Nippon Steel is in direct communications with Trump allies, withpeople in the White House potentially to try to get this over the line.

So clearly, this will most likely help not hurt their case going forward.

But I think you also have to look at what Trump has said now.

If you trust his past statements, he has consistently said over the last fewmonths that Nippon U.

S.

 Steel should not be foreign ownedessentially, and Nippon Steel instead should just invest in the United Statesor build a new plant.

 So it's still quite unclear whether ornot we're going to see any approval from the Trump administration.

Stephen, what are the next steps that we should be watching?Well, I think the next thing to watch, besides just Trump's statements to themedia in general over the next few weeks and months is June, early June, That'swhen the severe review that's for review as to whether or notNippon Steel will be able to make an investment into US Steel.

Whether that will get approved or not.

 Now, this was famously the city's reviewunder the Biden administration had had suggested that there could besome problems, and that's why ultimately Biden rejected and in the very end ofhis administration, rejected that takeover.

Now, the next thing is what will happen with Trump's review.

We're going to have a clearer picture in June.

And I think that's the date that everyone's really watching for.

Yeah, we'll be hyperfocus on that Stephen stuff.

Chatzky, Thanks for bringing us the latest.

Bloomberg Stephen Krinsky there.

 Now a little story we're watching inJapan when trading opens.

 Toyota motor Nikkei reporting that thegroup and other companies are considering borrowing up to $21 billionfrom financial institutions to help take Toyota industries private, somethingwe'll be watching when trading begins in the next hour.

 This trade we're counting down to Asia'smajor market opens.

 And of course, Heidi, the one thingwe've been watching was that reaction somehow short lived to Moody'sdowngrading the US credit rating.

 Yeah, you saw that sort of typicalpattern that we're starting to see play out when it comes to US assets, right?That you talk about the dollar or treasuries or even US equities wherethere's foreign selling overnight and then US buyers come back online and weend up rallying.

 It's that rally that's expected to passthrough.

 So a pretty solid session here in Asia,one that which holds potentially that hawkish cut from the RBA.

Yeah, 25 basis points.

 That seems to be what's in the works butalso keeping a close watch on the messaging that comes through from thegovernor eventually to keep that sort of maximum optionality for theuncertainties that could lie ahead for the rest of this year.

And let's take a look at how Japan is faring at the start of trade asexpected, given the handover that we saw from Wall Street, somehow shrugging offsome of the market concerns.

 We're seeing that lead in the Japanesestocks higher by about 6/10 on both the Nikkei and the topics.

The Japanese bonds also seem to be tracking what we're seeing in UStreasuries, a bit of that recovery.

 That being said, something that hasn'treally bounced back as much is the declines that we're seeing in thedollar.

 Dollar yen now still stable at aroundthe 145 hand at the ball.

 Take a look at the South Korean marketsat the open.

 We're seeing still those gains on theKorean one, actually not by much.

 1389 is where we're seeing Dollar Koreaone the gains quite pronounced on those stocks in South Korea, Heidi.

Take a look at our setting up on RBA decision day.

Of course, as we mentioned, the expectations are for that sort of almostprotective cut to come from the RBA today.

I'll be very interesting to see what happens with the property market giventhere has been this kind of pent up expectation that some things havechanged when it comes to sort of easing back of US-China trade measures, theimplications on that for inflation.

 But also on the flip side for growth aswell will be quite interesting to watch as well.

Of course, there are all these underlying sort of structural issueswith productivity in the US economy.

 I mean, the Australian economy, I shouldsay that we'll be waiting to hear the commentary from from the RBA and alsosort of their views as to just how robust really the labour marketcontinues to be.

 We had blowout employment numbers justover the last week or so.

 We're seeing a little bit of a trickleup start when it comes to Aussie shares at the moment that staggered session.

Just a little bit of positivity.

 We're also seeing the Aussie dollarlooking pretty flat at the moment, are trading at 64, 54 Treasuries was reallykind of the interesting story that we saw out of the overnight session as weas as overall mentioned, really that concern over the Moody's downgrade andthe revision of US debt really seemed to be quite short lived despite an initialfall in treasuries as well as the dollar.

The traders, though, really ultimately shrugging off that downgrade.

The question is whether this pattern of kind of sell off, followed by a recoveryin US hours, has that sort of robustness to be sustained from here on overall.

Yep.

 When it comes to stocks especially.

So let's bring in our next guest who remains constructive on Japan, China andIndia.

 With us now is Vikas PRASHAD, Asiaequities portfolio manager at M.

G.

 Investments.

Nick, great to have you.

 We're seeing that bounce back when itcomes to US stocks to a certain extent in Asia as well.

What do you make of this? Does this come as a sort of surprise toyou, this kind of trading patterns? Good morning.

It's wonderful to be here.

 Is it a surprise?Perhaps we shouldn't be surprised.

 I was here.

I was by the resilience of the US market overnight, which you were justdiscussing.

 That should carry through to Asia.

But this is short term.

 The Moody's downgrade many havehighlighted, is backward looking.

 We look forward.

We look several years out for our time horizons.

And when we do that, we see a strong case for the continued convergencebetween the US market and the rest of the world with Asia in particular, andthen within Asia, the three largest markets, Japan, where I am now, Chinaand in India.

 Yeah.

We want to talk a bit more about your Japan.

China, India calls, but I just like your sense as well on, you know, you look atlong term horizon, but in the interim, like for the rest of the year, what areyour, you know, assessments of perhaps the US recession?We have all these finance industry leaders out of the US still saying, youknow, that's potentially their risk, their uncertainties out there.

There are clear uncertainties and there's a clear bridge between in myanswer between the US and Asia, Japan in particular.

I've only been here about a day and a half.

I had a series of meetings yesterday with factory automation companies,semiconductor companies in various parts of that supply chain, and the outlookswere, I would say, cautious to almost bleak insome cases for the near-term, near-term being maybe the next 2 to 4 quarters.

There's a lot of uncertainty.

 These sectors are highly exposed to theautomotive sector because of the tariffs.

There's heightened uncertainty there because of the higher recession risk nowin the US than there was perhaps a year ago.

There's heightened risk there.

 So the visibility is not clear.

And yes, we are long term investors, but we do pay very close attention to shortterm data points and for now those data points are not looking great.

But then we have to ask ourselves what is in the price?And what we've seen is in early April, a lot of bad news was in the price,clearly, and the the pace of the recovery since then, actually to me andto our team has been surprising in some sectors.

But there still remains a lot of value on the table for long term investors inAsia and in the three largest markets in particular.

Yeah, because if you talk about the dislocations, how much of that is stillin place despite the market recovery? And where do you see, I guess, moreidiosyncratically opportunities in these markets?Yes.

 So if we start off in in Japan, it'sacross the market cap curve.

 It's across sectors.

The corporate governance transformation that's been underway for many years isonly accelerating Now.

 If you look at the year to date,shareholder buyback figures that we've seen it completed in the March quarterthat continued into April, we have dwarfed the totals from last year, whichwere up substantially compared to several years ago.

That will continue.

 That's very exciting.

That's just the beginning.

 And that's not the only signal ofcorporate governance transformations underway.

There's also the changes in the c-suites, the Internet, nationalizationof boards and companies, the outbound M&A.

There's inbound M&A as well.

 So there's a lot happening here inJapan.

 In China, the consumer sector is onethat we continue to like.

 It's not just bubble tea, which we'vebeen involved in, but more broadly, consumers spending in certain areas isvery strong.

 And then in India, there continues to bea lot of long term opportunities across sectors health care services, realestate, auto parts, auto companies, factory automation is picking up inIndia as well.

 The make in India defense, we continueto be overweight defense in India that has served us well this year.

It's not just but beauty is above beauty.

And La Boo-Boo.

 What else are you looking at for Chinathat perhaps we haven't been talking about?Well, there's this toys.

 There's the various retail formats.

The internationalization of these concepts that are scaling very well inChina.

 Coffee as well, I should add to that isa food and beverage consumer companies.

 But it's broader than that.

I should also talk about China, because this came up in every meeting I hadyesterday when I was meeting factory automation companies and semiconductorcompanies.

 The margin differential and thesubsidies and the level of support from the government in China is causinggenuine issues.

 It's beyond nettlesome.

It's causing genuine issues for companies in South Korea and in Japanthat are in the semiconductor production equipment space, in semiconductorwafers, in robotics.

 And to those companies in China continueto get stronger while in the short term causing some weakness for companies inother parts of North Asia.

 So that's something that we're watching.

It's a sector that we have been very overweight at times in the past 20 yearsin Korea and in Japan.

 But it's we're in an underweightposition now given what we're seeing.

 Oh, are you saying that when it comes tosome of these Chinese investments, ultimately that will come at the expenseof some of these other markets in North Asia that used to have dominance?How exactly are you going to play that? But if you're asking about overallcapital allocation to the largest three markets in in Asia, we have allocatedmore to each of those markets this year, end to end last year as well.

But within that, the mix is changing.

 So, for example, in the semiconductorproduction equipment sector, for the past ten years, there have been longstretches where we've been quite overweight in this space.

But when we look at growth, the exposure to China, the margin structure of Koreanand Japanese companies compared to Chinese companies, some shift wasnecessary.

 And we've expressed that throughunderweight positions in the SP sector, the semiconductor production equipmentsector here in Japan.

 And we are doing more work on thefactory automation, robotics, space sectors in China.

Because it's really great to have you with us because Bouchard, equitiesportfolio manager at ANGI Investments.

 Well, what we're watching is Seattle setto start trading in Hong Kong in just a few hours time after raising $4.

6billion in its IPO, the biggest in the world so far this year.

The Chinese battery maker commands over 35% of global market share, supplyingcarmakers from domestic brands to Mercedes Benz, Honda, Tesla among them.

Outside of Chicago, Yvonne Man is live on the ground for us at the Hong Kongexchange.

 This is a big one.

What's in store today? One.

Yep.

 And you're hearing the mike checks rightnow.

 They're saying testing yet you say,right.

 So we're about to hear from Robin sayingthe founder of Seattle and just a few minutes before the shares start trading.

But you talk about the highlights, right?I mean, this has been a big stock for Hong Kong as well.

A big day for Seattle, heavily oversubscribed.

We're talking about the shares did rise in the gray market.

And the fact is that there are 263 HKD a pop for the shares.

That's only about a 6 to 7% discount from the Shenzhen listed shares lasttrade.

 So that just goes to show there is nomassive discount here.

 There's strong, strong demand leading upto today.

 It seems like foreign investors arereally leaning into this blue chip stock here and really focusing on what theydominate in strategic technology in the EV battery manufacturing side of thingshere and really kind of brushing aside the US-China trade concerns.

Yeah.

 I mean, on that note, Yvonne, howworried should investors be? Well, certainly there's been a lot ofhurdles, right? We talked about the Pentagon blacklisthere and where US has basically alleged of security risks around this companythat Seattle has links to the Chinese military.

The company has denied it repeatedly.

 And then there's also just even theunderwriters of this deal, the US banks like Jp morgan, Bank of America.

U.

S.

 congressional lawmakers called them out,telling them to drop out of this IPO.

 They didn't listen and stuck to thedeal.

 But just goes to show this company hasbeen caught between the US and China crosswinds here.

And in terms of the global impact with tariffs and from the US Seattle saysthere's little impact so far.

 But ever more reason for this secondarylisting for the founder Robin Zheng he has had his eyes on really tapping intoglobal capital and really trying to use these proceeds for internationalexpansion.

 $5 billion, we're talking about 50billion, I should say, in revenue.

 Only 30% comes from outside of China.

So that's where the potential lies.

 They are factories all over Europe.

When it comes to Germany, that's €7 billion one in Hungary that they'redeveloping as well.

 They're building out this materialsupply chain in Indonesia.

 So all these moves in some ways to avoidimport tariffs and really tap into markets that are more profitable than inthe mainland.

 What are analysts saying about thestock? Yeah, there's a lot of optimismobviously here.

 But we mentioned about the fact that,you know, Beijing gave the green light for this secondary listing to happen.

You know, Bloomberg nomics had a very interesting take on this, saying thatthis is a sign that Beijing and the Xi administration is warming up theirrelations with entrepreneurs once again since that failed IPO of Ant Financialback in 2020.

 So are we seeing a restoration of tiesbetween the government and the private sector?Does that mean we could see more IPOs coming back here into Hong Kong?That certainly is the hope from Bonnie Chang and her team here at the Hong KongStock Exchange.

 But, you know, when it comes to thestock, we talked about just that small discount.

Right.

 But analysts are saying, look, that justgoes to show there's a small slice of the pie that investors can get.

Right.

 Two thirds of the stock is being held bycornerstone investors who cannot sell the stock for at least six months.

So there is that liquidity issue.

 But ever more reason.

They say it's a no brainer for the stock.

Jefferies in particular saying at 17 times earnings, they're saying thevaluations are low compared to some of their rivals out there.

Attractive earnings potential as well.

 The stock, though, Jeffrey says, hasroom to rise some 50% from today.

 Right.

Yvonne, great stuff.

 Thanks so much, Yvonne Man.

On a big day at the Hong Kong exchange for us.

And we have more later this hour on Seattle's Hong Kong trading debut, TheGlobal outlook for EVs as well with Macquarie Capital.

In the meantime, checking in on one stock that we've been closely watching,Toyota Group, Toyota Industries, I should say.

We're seeing that massive surge about 8% and of course this is against a backdropof Toyota group set to be eyeing a ¥3 trillion loan or loans for buyoutproposals to go through this, according to NIKKEI reporting.

And of course, other local media reports, including from Kyodo, alsosuggest that Toyota Industries is set to accept this buyout proposal.

Of course, part of efforts to sort of streamline things when it comes tocorporate developments in Japan.

 More ahead on the Asia trade.

This is Bloomberg.

 Oh.

President Trump says Russia and Ukraine will begin talks immediately on endingthe war after his two hour phone call with Vladimir Putin.

This is not a war that would have happened if I were president.

This is not my war.

 I'm just here to try and help our.

From all this rain.

 Bloomberg's Michael Hayden.

So this kind of goes to this is not my war.

This sort of goes to the concern that Trump on both Ukraine and Russia andIsrael and Gaza has sort of disengaged somewhat.

Yeah, well, look, on Russia and Ukraine, he was never terribly engaged other thanwanting to rebuild bridges with Russia, which he's always had this unusual sortof soft spot for Vladimir Putin.

 But, yeah, you know, we sort of seenthis Trump's rhetoric run into reality here.

You know, he's I'll stop it in a day.

 It'll be finished in 100 days.

11 days ago, we were talking about a ceasefire and potentially sanctions onRussia.

 And now we're talking about nothing.

And this notion that the war wouldn't have happened if he was on there.

It's sort of hard to how to take seriously, given that.

I mean, Russia has been since Vladimir Putin has been in power, it's beentrying to sort of recreate, if not the Soviet Union, the elements of theRussian empire.

 And Ukraine is the largest and mostimportant part of that.

 So, yeah, look, what what we seem to besaying is, is the US disengaging there with Israel?It's sort of more interesting because Netanyahu and Trump sort of have alwaysseemed to be quite close there, but there seems to be a degree offrustration and sort of understandably so in the White House that just thisidea of trying to get the hostages out, of trying to bring this vote orconclusion, it's hard to to see how how the Israeli government is helping that,because obviously Prime Minister Netanyahu relies on very hawkish membersof the of the political group of sorry lawmakers there to to maintain power.

And so he's sort of committed to keeping up this effort to destroy Hamas, whichobviously leaves the hostages in limbo, too.

So, yeah, I mean, on Ukraine and Russia, it's very you know, it's a pretty sadsituation there.

 On Israel.

I think Trump is sort of going with the global flow, too.

There's a lot of frustration internationally with Prime MinisterNetanyahu, I think.

 Just on the US and Russia.

I mean, this sort of disengagement.

 Where does this leave Ukraine?Because this is also being seen as Trump maybe handing a win to Putin.

Yeah.

 Look, it's very, very hard to see it anyother way.

 I mean, Ukraine, Europe, Europe, for allits moral support and efforts to provide weapons, it just doesn't have thefirepower that the US has.

 And, you know, the nature of this warhas been very, very ammunition heavy.

 And you've even seen Russia having toturn to North Korea, which has just massive amounts of ammunition.

And you know, that Soviet Soviet era weaponry that it can draw on.

And without the US, Ukraine, you know, the estimate that I could last maybethree or four months there.

 And Europe can't step in in thatsituation.

 So in a sense, time is on Russia's sidehere.

 And even if they do find some sort ofagreement, as you know, as Trump suggested at various points to havefreezing the conflict, I mean, all that means is that Russia becomes more andmore influential in Ukraine's political environment and and Ukraine'ssovereignty sort of comes it comes at risk.

If Russia doesn't control it completely, at least it can turn it into a clientstate.

 So it's really hard to see Ukraine andhow Ukraine will sort of function as a sovereign state after this unlessthere's some dramatic change there.

 The question offunctionality going forward and then the vision of what Gaza looks like is cominginto play again.

 Right.

Israel right now making clear that they want to take it over entirely.

We've had aid cut off since for almost three months now.

Yeah, well, I mean, look, Israel says it is resuming now.

They're under a lot of international pressure on that front, too.

I mean, it's a catastrophic situation in Gaza and the idea of reoccupying it, youknow, obviously the military has been through there already is that it's notgoing to be attacks.

 They're going to be there to try and,you know, root out Hamas, you know, the remnants of Hamas, which probably theycan do.

 But, you know, they're going to be inamong a very hostile population.

 It doesn't it's not necessarily thatPalestinians support Hamas, but, you know, they've been subject to 20 monthsof conflict.

 I mean, it's a horrific, horrificsituation for the civilians there.

 So it just seems like this is going todrag on and on.

 And that, again, speaks to why PresidentTrump is sort of, you know, that negotiated directly with Hamas to bringout a US passport holder, a US citizen from among the hostages, which no USadministration has ever done.

 But it sort of speaks to theirfrustration.

 And and and this is what Israel is doingnow is it's going back in.

 They already controls about 30% of Gaza,but it's looking to reoccupy it.

 And some of the elements of PrimeMinister Netanyahu's government want to reimpose settlements there as well.

So, yeah, it doesn't look like that conflict is going to be resolved anytime soon.

 Michael HayterLet's take a look at how futures in Europe are opening up at the moment.

Of course in the overnight US session, which is sort of carrying through whenit comes to Asia, we did see that reversal of the 1% dip as dip buyersreally came back into the fray.

 But take a look at euro stoxx 50 futureswere up about 7/10 of 1%.

 Some upside when it comes to german daxfutures there as well.

 The previous session was a pretty flatone.

 Their earlier losses really kind of todo with Moody's downgrade of US government credit rating.

The ongoing trade tensions as well.

 Pretty good earnings season at thispoint in time.

 We had aviation, Ryanair, for example,which saw a bit of a boost.

 The European stocks is up over 8% so farthis year.

 That's an outperformance still over theUS and it's still being seen by many as a diversification market that's quiteattractive.

 We also did have some commentary when itcomes to what to expect from the ECB's well, these views Governing Councilmember matters.

 Mueller saying that they need to becautious when it comes to further easing.

There's no clear need to be actively supporting economic growth, but theycould consider further rate cuts.

 More ahead there on the Asia trade.

This is Bloomberg.

 Planet.

Fed President Rafael Bostic is adopting a wait and see approach on interestrates.

 He told us more about the tariffuncertainty influencing policymakers and investors.

The market is trying to process a lot at this point, and where our rates are, Ithink are mildly restrictive in the marketplace, trying to get inflationback to our 2% target because it's been too high for too long.

I think the rest of it is really about perceptions of risk in the marketplaceand, you know, uncertainty and the volatility that might be present in themarket, I think leads to there being an extra premium on it.

And so, you know, the market will decide what it what its price needs to be.

But it doesn't surprise me very much that we see it at a higher levelrelative to the things that we've done with our rate in the last year.

Well, we've got the downgrade now that pushed rates up early this morning andovernight, and then it started to fade back a bit.

Same thing that sort of happened after Fitch and S&P did their downgrades.

Does it worry you that they are not pricing in more of a credit risk to theUnited States, given that we're no longer triple-A?Well, you'll have to talk to the readers about sort of how they interpret thesethings.

 What I would say is this so much of oureconomy is based on faith that we will deliver on the things that we say thatwe've promised for the future.

 When you start to see the markets wavera little bit, people I think people are asking the question, do we still havethat same level of faith? I think the sign that rates have startedto come back down and the markets are sort of returning back to a normalstatus to us that they think there is that likelihood moving forward.

And we'll just have to see where it goes.

I mean, I always want to make sure I understand what the price of credit andthat is.

 And but, you know, the markets will makea determination of that on their own.

 Well, if they are higher and stayhigher, as they are right now, does that affect your calculation of what you haveto do? Well, it depends.

You know, one of the things that will be interesting to see is how businesses andconsumers respond to the environment.

 What I'll say is, because of the wordthat you said at the very beginning, uncertainty, we know that manybusinesses and many families are really holding tight, too, to see sort of howthis all sorts out.

 And we'll just have to see how thechanges in pricing in bond markets and other markets translates into differentstrategies moving forward.

 I do think the spaces that we have rightnow is one reason why I think it's appropriate for us to be waiting on ourpolicy as well, and we'll just have to see how this all plays out.

I'm hopeful that as we get through the summer, we start to get more, moreclarity on exactly where things are going to settle out and trade policy andother factors keep an eye on U.

S.

Treasuries amid all this.

 We'll have more on the Asia trade.

This is Bloomberg.

 Keeping tabs on Asia markets and how theselling didn't last for very long.

 We're back up on the benchmarks acrossthe region with the Nikkei in Japan leading gains mostly a risk on day.

Heidi, let's get some more on one event thatwe're watching, the trading debut of Seattle in Hong Kong.

After raising $4.

6 billion in its secondary listing.

The Chinese company is the world's largest maker of batteries.

Last month, it unveiled a product set to offer a market leading 520 kilometers ofrange on just 5 minutes of charge time.

 Seattle commands over 35% share of theglobal market, supplying domestic and international brands from the likes ofMercedes to Honda to Tesla.

 Still, China makes up the vast bulk ofits sales with the US and Japan coming in at a very distant second and third.

The U.

S.

 Defense Department, of course, has alsoblacklisted the company over alleged links to the Chinese military.

It is an accusation that Seattle has denied.

Despite that, the firm heads into the secondary listing with a strong cashflow.

 It intends to use much of the proceedsto fund a planned $7.

6 billion expansion in Europe and gain greater exposureoutside of China.

 Let's bring in now for some analysisEugene Sale, who's a head of China equity strategy and China autos atMacquarie Capital, a very own Yvonne Man, is also joining us again on theground from the Hong Kong Stock Exchange ahead of this debut.

Great to have you both.

 And Eugene, let me start off with you.

We've talked about some of the downsides, and I know that you thinkthat the geopolitics side has been priced in.

How much value do you see in this company?I mean, we still think that Seattle is very well positioned overseas right now,as you mentioned, with this IPO.

 Now they really have this new war chestthat they can go and build out that capacity overseas.

So right now, we do see a lot of upside for them to continue to expand overseasconsidering how competitive the domestic Chinese markets are.

How smooth do you think or easy will be the challenge of broadening into theseoverseas markets, given we have spoken about some of the headwinds?Yeah, it definitely is going to take a little bit of work, not just in terms ofbuilding out the actual facilities, but one of the things, of course, is justmanaging the geopolitical picture.

 I think you mentioned before, you know,previously Seattle was actually had a decent business in the US, but with thevarious policy changes in the US, with the IRA and now, of course, the Trumpadministration with the tariffs, they've been pulling back from that a bit.

Now when we think about the use of proceeds for this Pacific deal for thelisting is really much more targeted towards Europe.

And when it comes to Europe right now, our view here is that there is a degreeof possibility that the US, US or the EU Commission and the Chinese government istrying to work out some sort of easier way to be able to export things like EVsand build batteries in Europe over over time.

So that should hopefully ease over time.

 Eugene, I got to ask you about overallwhat the stock mean.

 I mean, we're talking about eight or 8.

8million shares for retail investors, two thirds of which are going to be held bycornerstone investors.

 So they're not going to be selling thestock or doing much with it for the next six months or so.

Do you think liquidity is going to be an issue?Yeah, I think it's an interesting question because this is not a normalIPO, right? Obviously, the Asia already exists.

So in the near term, I do think there's going to be a lot of trading justbetween the agency and that's pretty common for these sort of transactions.

However, I believe longer term it is still positive for the stock in thesense that being listed brings additional liquidity in the market.

It's just being a much more easier currency, you could say, for globalinvestors.

 You know, when you're thinking aboutbuying issuers, there's always restrictions like going through cellphone or through QF IE in order to get access.

Now, being in Asia, not only do you not have to deal with that, but you alsohave purchasing in Hong Kong dollars, which is obviously a much easiercurrency to work with.

 It seemed like from the perspective offoreign investors as a peer battery play, is that a good thing, do youthink? I mean, obviously we've seen unit priceshave come down a bit as well.

 Yeah, that's a great point.

I think Seattle, if you really look at their most recent strategy, I think evenjust earlier this week, they've been trying to look at adjacencies within thebakery business.

 You know, our longer term view here isas EVs become wider spread.

 That means batteries get widespread andto be honest, they all become a bit commoditized over time.

Our view is that Seattle is actually quite aware of this and they're tryingto move further downstream into the supply chain, doing things like batteryswapping for heavy duty trucks or for passenger vehicles or building out thesevehicle choices to partners like timeline, etc.

.

I think you put that all together.

 It looks like they're trying to increasetheir network effects and the stickiness of their products.

So this is how they're going to manage that transition over the next couple ofyears.

 Where do you see the priority markets asthey're looking to expand beyond China? DRIVE We've talked about obviouslythere's some traction in Japan and the US still pretty far behind.

What do you see kind of the low hanging fruit when it comes to internationalexpansion for these guys? Right.

I think clearly the first stop is going to be Europe.

I mean, they've already put, you know, money in the ground in terms of buildingout their German facility.

 Relatively small, only about 14 gigawatthours.

 But now with this new capital raise,they're going to build out that Hungary facility, which is, I believe, a plannedafter three phases will be of 100 gigawatt hours.

So if you think about their current capacity now, which is close to 700gigawatt hours, that's a meaningful chunk of that.

So you can see that Europe has been the first priority.

I think after that, it's really looking at other more geographically friendlymarkets.

 Oxiana, I think would be the logicalexample.

 There is talk that they're going to betrying to move there either someplace like Indonesia or somewhere else, but Ithink that has yet to see really confirmed plans.

But I do think that's probably the next step of growth overseas where thiscompany.

 Geopolitical and sort of externalpressures aside, how do you rate the competition environment within China?China's competition for almost everything is extreme at this moment.

I would say this is the clear example here.

I mean, we've seen so much competition, so many brands, so many models, andbatteries is no exception to that.

 And I would say that even though BYD asyet, you'll have the vast majority of the battery sales in China, we areseeing some of the second tier players slowly gain more share over time.

I think this is just a matter of the market getting more mature as well asthe rising competition in China.

 Your last one before we go, the factthat this secondary listing is happening for Seattle, Beijing must have given thegreen light for this.

 Is this a sign that maybe the governmentis is maybe warming up its relations with entrepreneurs and the privatesector once again? What does this mean for overall the techsector in China? Yeah, I think overall it is a positivehere.

 I mean, for the last three years, I'msure you guys are very aware of the Hong Kong markets in terms of capitalraisings.

 Was was pretty, pretty weak.

But over the last you could say 3 to 6 months, we have seen a pretty sharp risein raises.

 Not just yet, of course, but we saw Showme.

 We saw it.

So plenty of companies looked at the Hong Kong market.

And overall, I think this does provide a boost of confidence to investors thatthere is liquidity here, that there are innovative companies that want to belisted in Hong Kong, and I think that will provide investors as well as eventhe governments, some feeling that it is worth pushing the capital markets more.

Eugene, so really great to have you with us is the head of China Equity Strategyand China Autos at Macquarie Capital.

 And sort of keeping with the tech scene.

And video Chief Jensen Huang has outlined plans to let customers deployrival chips in data centers built around his company's technology.

The announcement came at the Computex conference in Taiwan, and we go acrossto Bloomberg's Annabelle Joyce for the latest in Taipei.

So, Bell, what's the latest? Yeah, well, I think you just mentionedreally one of the fire lines that came out from the casinos yesterday.

So really the event kicked off hearing from Jensen Huang, for instance, from avideo.

 Also, Qualcomm on Night Media.

Take just some of the names yesterday.

 Today, really, it's the exhibitions thatthat get underway.

 And I'm here at the conference venue andI can see there are really hundreds of people that are starting to come throughthe doors.

 So we had the Nvidia announcement also.

What was really interesting to hear yesterday was from the new Intel CEO,Lee Foods, and now he's taking the helm at the company at a time when it'sfacing a lot of challenges to Intel.

 Isn't he in a keynote capacity thisyear? But certainly the new CEO, Boutin, issaying that he's meeting with lots of different customers and clients andgetting feedback on the products, pushing out really as well, emphasizingin an event last night, which I attended, the close relationship thatIntel has to place in the Taiwanese ecosystem.

So again, something that's a point of difference from former CEO PatGelsinger, who'd been sort of critical of TSMC role in the semiconductor supplychain in the past, but also to note at the event yesterday or after the marketclose, we did get an announcement from Hon.

Hai and they put in an exchange filing.

 But essentially they're saying thatdialing up their investment in the India unit at $1.

5 billion.

And that's notable because we of course heard Apple their plans to produce allof their iPhones.

 So most of the iPhones that are sold inthe US in India within the coming years, and that is against the wishes ofPresident Trump, of course, who's pushing Apple to bring that investmentback to the U.

S.

 But clearly on high, the major assemblyof products is moving ahead with India.

 Something else that might be perturbingPresident Trump.

 Is this advancement outside of Computexreporting that Salemi is planning to spend 7 billion USD to build out its ownships? Yeah, that's right.

And I think, Heidi, to your point, I mean, I don't think it's any coincidencethat that what is one of Asia's biggest techevents of the year all kicked up in Taiwan and China is making theseannouncements of its own.

 And so yes, it's going to be investingor has been investing billions of dollars into this effort.

They're saying they're ready or nearly ready to unveil their self-designedprocessor.

 It's actually going to come later thisweek, late June, that the founder and chairman speaking to his followers,essentially, but on social media about this.

And it really is a big departure for the business that because, of course,they've been reliant, like others on Qualcomm, for instance, media tech, butnow moving that in-house, moving actually back to Apple, though, becauseit is interesting to make that comparison as well, saying Apple makingthis push in the past, bringing in processors back into Apple.

Huawei, rather Shammy are looking to do the same.

And Bel, I guess in that same vein, we're also hearing about someself-sufficiency efforts from the likes of Huawei.

Yeah.

 So this is actually more on the softwareside.

 So while we know it's very, very strongin hardware, but now they're actually shifting this software offering instead.

So they've actually just debuted their first in-house operating system.

The pieces as this is how many, which we already see is sort of the replacementfor the Android operating system.

 And it's not.

But now they're saying, okay, we're going to move that and make it availablefor PCs as well.

 So it's going to be running on thematebook fold rather than Matebook.

 All that's its latest foldable laptop,but a shift away from the Microsoft Windows operating system.

And again, while we're starting to move more of the software systems in-houseand compete against the likes of Microsoft from the U.

S.

.

Then Joe was there and staying on highway.

China's accusing Washington of undermining recent trade talks with hiswarning that using Huawei's chips anywhere in the world would violate USexport controls.

 The Commerce Department had issued thestatement last week.

 While the US has since toned down thatlanguage, stripping away the anywhere in the world reference.

It hasn't managed to appease Beijing overall.

Yeah.

 And we're also tracking some otherdevelopments on the corporate front, Hong Kong issue.

F.

W.

 de has filed a fresh application for anIPO in the city, a share sales pick up again.

The firm is reportedly seeking to raise several hundred million dollars from alisting this year.

 fWt is backed by billionaire Richard Liand had dropped previous attempts for much bigger listings in both Hong Kongand New York as far back as 2021.

 TRIP.

COM has reported first quarteradjusted earnings per American depositary receipts that beat estimates.

Revenue came in at ¥13.

8 billion, while gross profit was around ¥11 billion.

Executive chairman James Liang says the industry maintained strong momentum inthe first quarter of the year, supported by consumer demand and favorable travelpolicies.

 UBS is said to be set for defeat in itsfirst efforts to water down a Swiss law raising its capital demands.

Sources say the proposed bill would force the lender to boost its ability tocover losses at foreign units to 100% of its capital.

This would mean as much as $25 billion in extra capital.

UBS is pushing against the new rule, arguing it would be a majordisadvantage.

 More ahead on the Asia trade.

This is Bloomberg.

 And of course we are counting down tothe RBA decision today.

 This is where Mark is at the moment ofpricing in at three RBA cuts by year end.

We are expecting what is being characterised as potentially a bit of ahawkish or protective easing measure at today's meeting.

Let's bring in Michela Foot Sheila, who is the chief economist at Jarred andMichela, really glad to have you with us.

And so, you know, as always, it seems there are reasons on both sides in termsof whether the RBA should move or not.

 What's the more compelling argumenttoday? Oh, I think regardless of the volatilityin global markets and global economics in general, the RBA was already with aneasing bias in place waiting for inflation to reach target.

We have seen inflation reaching target at the underlying level already, so theywill be welcoming that development as long as we don't see those upside risksonly on the inflation front.

 We also have a labour market that'squite solid with employment growth in line with what they were expecting andthe unemployment rate largely at a level that has been really, reallylow.

 In addition to that, I guess thedownside for them is that consumer consumer spending has been quite weakinto quarter one, and the strength that we've seen late last year hasn't beensustained.

 So the balance of risk is to be a littlebit more on the downside risk to growth.

 In our view, the risks or theopportunities arising from trade is always an interesting one because firstof all, it is just the pause that we have, you know, things I guess couldcontinue to to go south.

 But also was the risk bigger when itcomes to inflation or was a risk bigger when it comes to a slowdown in growthvia the proxy through China? Yeah.

So I guess the RBA will have to take into account any policy response fromChina initially.

 Is there any hint or any idea that Chinawill go and stimulate the domestic market?That's potentially an upside to growth for Australia.

In the other hand, if we continue to see uncertainty dragging along, we alreadyhave 90 day pauses another quarter where businesses and consumers don't reallyknow what's going to happen and they really tend to wait and see.

We have seen that in the Knop surveys showing a little bit of weakness interms of capital expenditure plans and things like that.

So I guess overall will be the uncertainty is dragging growthpotentially softer and inflation.

 We really don't know the impact yetbecause Australia hasn't had major tariffs put in place on the 10%.

And in addition to that, we know that any overcapacity from China could becoming into Australia, which could be seen as a downside risk to CPI as well.

Mikayla, what are you expecting in terms of the governor sort of threading theneedle and tamping down the markets expectations of future rate cuts fromthe RBA for the rest of this year? Yeah.

So the market pricing has been all over the place since the last meeting.

We had periods of time where we saw 50 basis points pricing for this meeting.

Now, if we look at the data, that seems really unlikely.

So the communication will be really important.

We don't think is going to be a very hawkish message.

I think the government will try to balance and focus on the risk to to theoutlook perhaps.

 So in our view, they will deliver 25basis points cut today and they will talk about what the trading partnersgrowth looks like as well as global growth.

Those are things that will probably sound a little bit more on the dovishside.

 But in saying that the domestic thatremains quite strong, we have seen wages perhaps a little bit stronger than wherethe RBA wants it to be.

 So the combination of those two will bethe RBA will deliver a card and will flag that more cuts will come as needed.

Remember, this is a full review of their forecasts as well with global growthwill look a little bit weaker than they expected initially.

But in saying that the dollar domestically has been relatively okay,so a card with a more neutral stance and perhaps highlighting the downside riskto growth in the near term.

 Michela I think where things are, maybenot where the RBA wants it to be, is in productivity.

Are we expecting further reforms from the Government?Look, I guess from an Abbott perspective, they really can't do muchabout that small government problem and focus.

We do look a lot into the GDP accounts that show that productivity growthremains really weak and that means wages are more likely to surprise to theupside and the downside in terms of reform that is more a fiscal issue.

And what we're seeing after this election is regardless of any of theparties, the outcome is been a clear path and more policy or more support,political support for the party that is in place to Labor to continue to pushreforms.

 What that looks like in terms ofproductivity gains is very unclear yet.

 In fact, the Productivity Commission hastargeted 15 priority reforms.

 As they point out, productivity is at a60 year low for Australia.

 What do you think should be the mainpriorities and what's actually going to be effective in improving productivity?It's a great question.

 I guess in the near term.

And what we can do for now is try to address those sectors that are high,highly productive.

 One of those is the mining sector.

We have seen weakness throughout that one for a long time, I mean, not for along time, but for the last few years.

 We could currency would support anincrease in productivity growth in the near term in terms in terms ofaddressing further productivity growth, perhaps the health sector will be thetop priority as it's been a main focus for this government.

Well, Mikala, really great to have you with us.

McCallum Virgilio, who is a chief economist at Jarden.

Subscribers can also turn to the terminal for more on the right decisionfrom the RBA today, Tel Aviv goes your function for those updates, commentaryand analysis from our expert editors as we await that call.

Expectations for a rate cut today.

 We have more on Australia ahead everyTuesday at 10:40 a.

m.

 If you're watching here in Sydney,that's 840 in the morning out of Hong Kong.

Plus you can tune in to the Bloomberg Australia podcast, too.

We delve into the biggest stories shaping the country's role in globalbusiness.

 You can find that on Apple, Spotify orBloomberg.

com.

 More ahead on the Asia trade.

This is Bloomberg.

 And of course, overall, looking ahead tothe excitement when it comes to the debut secondary offering.

But still so much insight in terms of a demand for a key sector.

This is, of course, China's 11th largest company as it is.

And we are also seeing that pick up when it comes to broader debut and dealactivity for Hong Kong still rising, $4.

6 billion last week, really kind ofshrugging off market concerns over these geopolitical tensions.

The Pentagon blacklisting US congressional scrutiny as well.

And we've got down to hungry.

 Pharmaceuticals is next in line.

They're seeking up to $1.

3 billion.

 So the question really is over, is thisthe renaissance? Right, The return of listing and dealsactivity in Hong Kong after what has been such a period of drought?Yeah, And we seeing how, you know, in terms of if Seattle actually exercisesan option to increase, we could see it singlehandedly doubling Hong Kong'sproceeds from listings this year.

 So quite something to keep in mind.

But of course, amid all this, we are hearing from analysts, right, the ideathat Seattle shares have room to rise.

 I think Jefferies expects it to rise50%, driven by strong earnings, by attractive valuations.

But the bigger question in the background is also how we could seepotentially broader market moves in Hong Kong stocks, given how portfolios needto be adjusted to sort of make way for this listing this stock Heidi.

Some really interesting sort of points that we had earlier when I was speakingto Eugene Sell about this listing in sort of their house view.

They're looking at the fact that some of the geopolitical concerns may havealready been priced in by investors.

 They really see a lot of value in termsof where they can go internationally beyond obviously, the primary market ofChina.

 They've got sort of secondary marketsthat are quite far behind the primary market in the US and Japan, but they arethe largest maker of EV batteries.

 We have seen so much enthusiasm thereand the company is not really expecting a lot of impact when it comes to therisk of U.

S.

 tariffs.

The European market is really going to be one that's going to be front andcenter when it comes to where this funding will be used to fuel that xChina growth.

 That's $7.

6 billion.

Overseas expansion in Europe is where a lot of that funding is headed.

So watching out for that debut in Hong Kong today, that's it for the Asia TradeChina show is next.