>> you are watching "bloomberg

daybreak: asia" coming to live from new york, sydney, hong kong. >> we are counting down to the opening of markets. >> jerome powell dashing hopes, hiking by 25, stressing the commitment to fighting inflation. asian equities facing headwinds, plus a janet yellen's denial she is considering blanket deposit insurance to stabilize the financial system. coinbase says it welcomes a lawsuit over potential violations of securities law that is preparing for a disappointing outcome. >> we have the open other asx 200. we continue to monitor the decision from the fed to raise rates by 25 basis points. hong kong monetary authority is

following the fed raising the base rate to 5.25% of the reaction in markets is not jerome powell, but janet yellen, specifically saying her government does not intend to provide blanket deposit insurance to all vendors, so we are watching anz bank, one of the first lenders to come online in australia, the etf declining 2.6% on those comments. the state of play initially was higher for wall street, but lower into the close. that is after those comments. we are watching the bond space, the front end of the curve. you can see the pullback, the aussie three-year, the kiwi to-year. jerome powell says he does not see a cut. bond traders not so convinced.

we saw the move higher. yields lower intern. the japanese yen has been stronger against the greenback given that the differential is narrowing. bitcoin under $28,000, under pressure. we have been monitoring coinbase as well. >> exactly. weight will look at that in a moment -- we will look at that in a moment. first, let's look at how the market may trade tomorrow. futures look higher, but that is because we had a round trip today between the fomc's date meant in the news conference. the s&p was down 1.6% and nasdaq down 1.4%, both having risen after the 25 basis point hike. real estate, financials, consumer discretionary the worst performing sectors. two yields 3.96%, was as low as

3.91%, the curve trading lower yield wise as treasuries increased following the statements, in particular, the press conference. the dollar index down 0.9%, below 102.50. coinbase getting the notice. brian armstrong coming out swinging. let's have a look. this is not the regular session. it had been railing hard this year. we will see what is priced and later on today in asia. first republic, if you called this a rebound that would be generous. pack west down this year. it is a rebound given that shares traded lower because janet yellen said we will not guarantee everyone's deposits

everywhere. we said what we will guarantee and we are not changing that stance. jerome powell saying we have the tools and do not need new tools. the federal reserve casting aside concerns of the banking crisis may not be over yet as it raises key rate to fight inflation as they wait to see the impacts of tighter conditions. kathleen hays is here to make sense of it all for us, but the key takeaways from what the fed did and what jay powell said. kathleen: what they did is raise the rate. why is that significant? ok, 25 basis points. not 50. we were expecting this. this time there was a debate. should they pause? is the banking crisis over? do they need to do more/less? you are seeing the dots, and in terms of the terminal rate they did not change. maybe perhaps they are watching

tighter financial conditions and know that will slope the economy potentially and everyone has been talking about what is happening to the banks. they will need to stop lending and pullback in. these are all issues. jay powell said reassuringly, i guess, they may not hike rates this year. they will wait and see what happens but they will if they need to. >> if we need to raise rates higher, we will. for now though, as i have mentioned, we see the likelihood of credit tightening and no that can have an effect on the macroeconomy, demand, labor market, inflation, and we will be watching to see what that is. kathleen: the reaction was all over the map with stocks and bonds. you get one reaction on the day of the meeting, the next date

the markets think it over and react another way, so we will see what happens in the next 24 hours and in overnight trade in asia. these questions very important because the fed has made it clear because it they were worried because it was so easy what they will be tighter now and another thing that strikes a lot of people is the sense that jerome powell gave us that things are ok and we have the tools and we are managing this, you know, this note of cautious competence which to some people who have warned about rate hikes coming and going and even more so, banking crisis sees coming and going. -- crises coming and going, this is a concern as well. we just heard from alan blinder urging a pause who said that would have been a better decision. it would have been better to actually sit back and wait and see what is happening and then decide what you are going to do and signal that we don't know

and inflation is still an issue and when we get through this banking crisis we can start rate hiking again, and alan blinder thinks that is what is happening in less than next slows the economy enough that the inflation comes down. bill dudley, former vice chair of the fed, former new york fed bank president, bill dudley thinks they may have things ending harder rather than softer , and the chances of rising. >> the fed is saying uncertainty has gone up a lot. we are not sure how long the banking system stress will lessen how severe it will be. number two, but will constrain the economy and rate hikes, so we will not have to do as much as we thought we would have to do earlier. everyone understands what a difficult time this and how much uncertainty there is so it seems to me that we are still in the middle and at the beginning of something across this that's

going to go on for a long time. the banking crisis has to get fully settled and we need to see market settling down and there are still things out there that the fed will need to navigate. >> kathleen hays. janet yellen says it will be shareholders and bond investors after losses from those lenders. take a listen to her speaking to lawmakers. janet yellen: it is important to be clear, shareholders and debt holders of the failed banks are not being protected by the government, and know losses from the resolution of these banks are being born by the taxpayer. deposit protection is provided by the deposit insurance fund, which is funded by fees on insured banks. >> for more let's get to our treasury and economic policy reporter out of washington. what with the biggest takeaways

when it comes to the testimony? it was interesting watching the market struggled to digest that, plus what we heard from jay powell. >> right. right. first and foremost, he hammered away at the message that it will act in a forthright manner to protect depositors and not bailout the equityholders and bondholders of the banks that went down. she hit that once again pretty hard today. the other thing that stuck out is this testimony came a day after bloomberg reported that the administration was considering whether regulators had the authority during the emergency to expand the f dic's deposit insurance to cover more uninsured deposits at u.s. banks, perhaps all of them.

she was us directly by the senator from tennessee whether they could do that without congressional approval. she shot the idea down and said flat out said know she had not discussed or considered doing that without consulting, actually without legislation she said. so she purely clearly shutdown the idea that regulators could act unilaterally if there is an emergency to expand insurance. >> why is there so much confusion? why are people saying it surely can't happen. a regulatory decision to guarantee more than the $250,000 the fdic already ensures? >> there is still uncertainty around whether they can do this on the temporary basis, and she did not explicitly raise the idea we cannot do this

permanently or temporarily, so i suppose there is some wiggle room there. number two, it does not cut off the idea certainly bet the administration might say ok, we really need to do this. let's get together and passed some legislation that would allow us to expand insurance, either to a certain extent or more broadly. so it does not cut off that app. but you know, she -- that app -- avenue. she was asking whether they could expand that insurance to all banks and all depositors without congressional approval comes so the answer only narrowly applied to that question. >> let's look at the market reaction. our chief rates correspondent garfield reynolds is with us.

we were talking previously about the struggle in communication from jay powell to janet yellen and of course, janet yellen with some degree of understanding on how these comments can be construed. garfield: yeah, i mean, that yellen comment directly affected banks, may be at the margins you know help to underscore fixed income and currency markets how difficult the potential situation in credit risk is not a big part of what they need to factor in when are considering where the yield will go and where the u.s. dollar will go. as far as powell and communication, my thought, especially looking at powell in the press conference, in the appearance, he is a world away, not just from march 7, march 8 addressing congress but after

the last fomc meeting. think about it, we know now more than we did at the time, but even so the way he acted at the beginning of february consistent. we went 25. we thought about 50. it turned out that some did not want to go 50. that set the stage for a hawkish february from central bankers in the u.s. and elsewhere in hammered away at the idea that you come at the market, are dead wrong when you think we are about to pivot. now we best forward and he looks uncertain and is more concerned about what this credit crisis might mean. yeah, they admitted it. we considered the pause and went 25, basically because we did not want to scare you. that is a huge difference in the bond markets reacted and said you know what, jay, you were wrong and we were right.

you are done. this is it. if you do another hike, you will have to take it back. this tightening cycle is dead. >> garfield, you're saying the bond market is back in control and the yield is reflective of the economic strength in the economy and the fed funds rate that is now 4.15% for the year is also reflective? what is it reflective of? garfield: i don't know if the bond market is in control, per se. one of the lurking questions behind all this is to what extent can the bond market be in control of anything when the federal reserve for one thing on such an enormous part of it, but that as it may come at the bond market is more certain than ever that the fed should not go any higher, and if it does go higher , it has to come back down. in fact, a year ago, jay powell

was quizzed about the drop in the conventional yield curves everybody looks to us recession indicators and said no, no, no, you should not look at that. you should look at this curve that shows three-month the rights now, where they will be in 18 months. that is deepening. we are good to keep hiking. if that inverts emmett that says the economy is weak the fed will have to cut rates. guess what? that curve went to 134 basis points below zero with the lowest it has been with data going back to 2000. that curve which he says is a recession indicator is saying recession in capital letters. >> oh my gosh. so happy to have you on this morning. our chief rates correspondent for asia, garfield reynolds. let's get to su keenan with first word headlines. >> world bank president david malpass says a global recession is not off the table.

the vendor is reviewing its global growth forecast following china's lifting of its covid lockdown. david malpass told bloomberg that the lack of investment in developing economies is a concern. >> what we have seen in the latest is advanced economy growth expectations have gone up some late last year, the u.s., china in particular, as china lifted the embargo in the lockdown, and so as we are looking at it now, the growth is slow, but positive in advanced economies, but developing economies, not much investment taking place. that is the big challenge. >> the sec is suing tron for violating security rules selling unregistered crypto securities. regulators accuse sun of breaking antifraud and market manipulation rules.

the sec named lindsay lohan among celebrity's who illegally promoted the tokens without revealing compensation, with most paying a fine to settle the charges. china evergrande group has announced its long awaited restructuring plan for the world's most indebted developer as it says it will give creditors the option to swap debt into new bonds and equity-linked notes. evergrande has become the poster child for the property prices. it seeks to return to normal operations after refinancing $43 billion. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i and su keenan. this is bloomberg. >> still ahead, tencent's revenue back to growth. we talk about what that means for the sector. coming up next, fed chair jay

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>> disconnect again between what the fed says will happen, even more so today. let's discuss it with our guest, professor of economics at the university of maryland, as well as kathleen hays. first, there had been a disconnect. it seems like the markets and fed were coming together closer, but then the crisis threw that awry. where are we now? >> we still have but disconnect,

because markets today after the press conference thinks the fed is done, but we heard today a clear, determinant fed that they are not done. they will bring inflation to 2% and they are determined about that so we heard this loud and clear so i would say there is a disconnect in the markets and the disconnect is intensifying in terms of the financial volatility and the banking crisis. >> is the crisis over? paolo acknowledges the risk -- powell acknowledges the risk. he says we have it under control. you know about this. is it done? >> i think it is self-contained right now. i don't think he is over optimistic. they provide all the you know guarantees, assurances and so in the u.s., i would say you know, it is some banks and they did

contain that. you can never rule it out fully, but a very small rub ability to go to a full-fledged banking crisis in the united states, like 2008. i think we will be good to go in the united states. the international dimension, i am less sure of. there can still be ramifications globally, especially emerging markets. >> it is complicated by the fact that the fed is now having to investigate itself and its role and what played out with the banks. is this a question of regulation or supervision? >> there is regulation in the united states. some of these banks were regulated. svb bank is now part of the stress testing because they grew a lot in the last few years, so, i think it is more of a

regulation issue, which everyone is looking into now. >> in terms of the disconnect between markets, the bond market rate hike expectations versus rate cut expectations, why is this happening? is the market keeping its ears closed? or are they right in the fed is wrong? >> i think the markets are still closing their ears. i heard a clear fed the date say they will bring down inflation. i also heard that they will not run to that. they will walk. that is the 25 basis point hike, but they are determined to bring down inflation to 2%. the problem is the uncertainty about the terminal rate, when we will go to 2% inflation, and other things. this is the problem of the market in the cause of the disconnect. markets are in a sense closing the ears because they cannot function in this uncertain environment but the destination

where we are going is clear. the fed tried to separate that from the financial stability and gave the message we can deal with financial stability issues but this will not deter us from dealing with inflation and hiking the rates and bringing down inflation. >> really great to have you with us, as we continue to parse the fed decision. plenty more ahead. this is bloomberg. ♪

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ever better. >> take a look at how australian stocks are trading 25 minutes into the start of the session. the asx 200 down 0.10%. weakness in kiwi stocks.

we are seeing decliners like real estate down 1.5%, also the fall and materials. every sector trading in sydney and the red. chicago nikkei futures setting up for a tough start to trading. s&p futures seeing upside as we see bond markets betting against further rate hikes as jay powell flagged the 25 basis points this week would not be the last. more to come on "bloomberg daybreak: asia" as we parse that statement, plus comments from janet yellen, sending further volatility through

>> i think that the fed is basically saying we do not know

how much credit tightening is in the pipeline and we will do whatever is necessary. >> i think we are in a worse place because there are two forces, one keeping inflation high, the other slowing the economy down. it has gone up a lot. >> this meeting is dealing with the present crisis in the banking sector. >> it is not easy to assess how the banking woes will affect credit conditions and economic growth. >> that unknown will determine where we are in may. >> those were some thoughts from guests on bloomberg television weighing in on the latest rate hike. let's check u.s. futures. unless -- an exciting session ahead as we saw all the indices dropped more than 1%. we see a gain for futures on all three indices.

we will see if that holds. what we also sought to date was a dip in crypto assets towards the end of the session. crypto has been doing well in a risk off environment, but coinbase shares sliding with the company saying it has received notice of an sec lawsuit over its crypto offerings. the potential for a suit, a wells notice, and now we get more on it. >> you can see the stock down 15% in after-hours trading. it is the biggest crypto exchange in the u.s. and is the latest in a long-standing battle between coinbase and the sec, but let's discuss the outlook for regulation. let's bring in the co-ceo and cofounder of promethean, and sec compliant market infrastructure provider for digital assets. you have been working in the digital assets i number of years

-- a number of years, what is your take on this wells noticed coming from the sec? >> this is the latest step in a cycle where the overwhelming majority of crypto services are coming under the law. we have seen sec action against taking, changes -- staking, changes in the custodial roles, and the next is the virtual currency exchanges because all these activities are coming under the regulation of the securities law. >> coinbase argues that the majority of its assets are not securities and its regulators are misunderstanding what it is offering. where do you stand on about? -- on that? >> the wells notice is in relation to the staking and asset business. in regards to the staking, the

sec is arguing the service is creating a security service, and those providing it would have to be registered as broker/dealers and the instrument would have to be registered under the securities laws and go under registration. >> what about the tussle between different regulators, the sec and others, as to who should take over all control of the crypto industry? who is best suited to do this? >> i think the sec is likely that more capable regulator when it comes to regulation of digital assets as they implicate a lot of the same processes of securities when it comes to issuance, trading, settlement, and custody. >> ok, what about the number of enforcement actions we have seen this year from the sec because there has been a huge increase,

how would you seek that affecting the overall sector, something that helps it and makes a credible or deter people from investing in the space? >> institutions need to feel comfortable about the places where they are trading and custodying assets are accredited, and through that seeing regulation for trading of assets come online in give the benefits of the securities laws. >> what sort of scope and what can we hope will be defined by regulators over 2023? >> i think we will see some clarification when it comes to regulated custodians under the securities laws, specifically broker/dealers, which will mark a step forward as they qualify as custodians and regulated

venues where they could custody digital assets, even with the changes in the law. >> ok come it comes at an interesting time because at the same time the u.s. for instance is defining, yes, we can hope for more clarity over this year, but other jurisdictions, for instance, the middle east, asia, start to be more open to the sector come so do you see the majority of go influence pivoting away from the u.s.? >> i think we will see a lot of clarification on the different regulatory fronts whether hong kong, europe, the u.k., even the sec in the u.s., it is part of a maturity process where a lot of the different processes in the industry are coming under regulation, and that will be the best way forward for investors to be protected and the industry to end the crypto winter. >> ending the crypto winter is

interesting. one of the big gainers out of the turmoil we have seen has been crypto, so what is your outlook for bitcoin and other tokens over the coming months? >> i think that a lot of the prices related to virtual currency and crypto are associated with where interest rates are. if we see at the end of the timing cycle and interest rates sort of get raised at a slower rate, it should be beneficial to risk assets including cryptocurrency, virtual currency, and the like. >> thank you for your time this morning. coinbase one of the big stocks week will be watching. >> right. exactly. down 14%. at big reminder, big interview, another big interview, jane fraser joins david rubenstein

for the first conversation with the u.s. bank leader since this sector turmoil began, 8:00 a.m. hong kong time -- just 20 minutes. up next, tencent's return to growth, and expected rebound through the year. this is bloomberg. ♪ vestment research. introducing j.p. morgan personal advisors. hey david! connect with an advisor to create your personalized plan. let's find the right investments for your goals. okay, great. j.p. morgan wealth management. you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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malpass says a global recession is still not off the table with a lack of investment in developing economies a particular concern. we ask him if he sees echoes of the 2008 financial crisis currently? >> there are parallels. there was a maturity mismatch at some institutions. the fed had been raising rates leading into 2008. then some big differences. one, this time, the discount windows available to the major institutions combat was not the case then, so that gives some backstop and you are seeing that play out now. another big difference, the fed itself, buying huge amounts of duration, and other central banks as well, ecb and boj hold

giant amounts of duration which was not the case in 2008. at that time, central banks only owned the treasury bills, so that creates a different complexity to the market and a different set of tools that the regulators have to intervene. so today, i think the big issue is, where is growth going to come from into the future? >> i know you want to bleed that over into the rest of the world. that is an important point. i went talk about a liquidity mismatch. it is not a credit crisis/credit crunch, but in 2008 and i would argue earlier, the mismatch led to a crunched. how -- crunch. how is that a direct bleed over? >> as rates are held down, 2004, 2005, 2006, in this current, the

last 10 years, bet causes us to go up and that has a workout period after that. how do you adjust asset prices if yields will be much higher than what you thought one or two years ago? that is the challenge facing the market. how do you allocate the losses? i hope they don't go to the poor, developing countries, and the average taxpayers. the issue is that if you have created that asset price boom, can the losses be allocated back into the same markets? that is a big challenge. >> can you elaborate on the disproportionate holding of the burden you see that is with the developing nations that may affect the growth profile of the world? >> over the last 10 years, there was a concentration of wealth in a near group in advanced economies, fueled by fiscal deficits, the huge run-up in

debts across the advanced economies, and the central banks themselves buying duration. that supports asset prices and long-term assets go up when there is a constant buyer of those assets, so that leaves not enough capital elsewhere in the world. we have seen the slow growth in developing countries because there is not good access to global capital markets, and now going forward the challenge is a lot of the world's capital will be used by the advanced economies to keep rolling over the debt. >> david malpass they're speaking to bloomberg. let's get you to su keenan for first word headlines. >> treasury secretary janet yellen says regulators have no plan to provide blanket deposit insurance for u.s. banks. in her testimony, she hinted at raising the current fdic cap in what she called a special

one-time assessment, and also says creditors and shareholders will be held accountable. janet yellen: it is important to be clear, shareholders and debt holders of the banks are not being protected by the government. and note losses from the resolution of these banks are being born by the taxpayer. deposit protection is provided by the deposit insurance fund which is funded by fees paid by banks. >> meanwhile, antony blinken told senators that the state needs its full budget request to tackle threats from russia and china. senators said that 11% budget increase will be a tough sell in the house. antony blinken cited immediate acute threats from russia and highlighted long-term challenges from china. >> the budget contains discretionary and other proposals and we are happy to talk about why.

for new investments, including enhancing our presence in the region and ensuring what democracies can offer, including maritime security, digital technology, is more attractive than any alternative. >> china and russia have reached a long-term deal to develop key nuclear technology as part of a series of agreements signed during chinese presidential asian kings visit to moscow. the u.s. has repeatedly raised alarm over what it says are beijing's ambitions to beef up its atomic weapons arsenal. china has rejected those claims, saying it is focused on nuclear energy. the u.k. prime minister sunak has emerged unscathed from a day of parliamentary drama, this after convince of a women -- convincingly winning a key brexit vote. 515-29.

sunak's leadership may have been bolstered as former prime minister boris johnson faced a three-hour parliamentary grilling over a series of downing street gatherings during covid lockdowns. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. >> tencent's revenue higher in the fourth quarter after two successive periods of contraction, fueling hopes for growth of a recovery coupled with friendlier regulation. let's break down this with our guest. john, great to have you with us. these were encouraging. what stood out to you? >> well, actually, in our previous report, we forecasted it. the key driver is video, short

video, so that is why tencent is stronger than previously estimated. gaming is weak, but this year there is a more friendly regulatory environments for approval. in general, tencent is back to that rebound of growth, an important sign for chinese stocks. >> how strong do expect gaming revenue to be and how well-positioned is tencent to benefit from more regulation and gaming approval? >> they have several games with approval, like a popular shooting game. also, it has a couple of games to be launched overseas gaming. this year, probably are estimate is 5% to 10%.

it is not high, but considering that tencent has performed relatively weak for the past year, it is a good sign. >> can tencent breathe a sigh of relief on break at torrey concerns when it comes to gaming? what the government stay out of tencent's way? >> i think we have already seen that with the approval in the past couple of months. it more when back to the chemicals back to the routine where every month there would be 30 or 40 games getting approval, and more imported games. i think people are getting that another title could get approval because if it could be approved that would be good for tencent. so far, we have not seen this

very clear sign, but anyway, in general, that is the regulatory environment that will be more friendly to tencent this year. >> one person at tencent talked about ai being a growth multiplier. how does tencent monetize that? >> there has been plenty of ai, but a high is similar -- ai is similar when the internet companies introduce the fees to the advertising system. every company developed its own technology based on ai, because every company has its own data, and some company is focused on e-commerce, some company is focused on gaming, so while they can largely reduce developers and artists.

the other thing is more a productive thing in terms of generating revenue, so i think that is because a lot of tencent are based on large dau, which means a lot of players need to play against each other, so ai will create a feeling for these players, that i'm playing with others, not computers. in terms of advertising, that is where ai will help a lot of merchants to create the video and also the ads and videos for tencent and that has helped to reduce the merchant cause. so that will be a long-term thing, but so far tencent says revenue will rise. i think that is the right attitude. >> tencent talked about cutting fat and making the muscle greater in the company.

we have heard that from a lot of u.s. tech companies as well. tell us your thoughts on hiring because obviously china's youth unemployment rate was 20% at one point during the pandemic. will tencent be hiring or cutting? >> i think they already cut, not a lot, but some people, but if you look at them, there is a line called administrative costs, but that actually is higher than people thought in terms of q4 financial report, so that means there were some cuts, like layoffs, but it is not that much. i think that is for tencent because it is a large company with a lot of divisions, so probably this year we will still see tencent increase their headcounts a little bit, but what they emphasized because

they will spend money more prudently, more cautiously so it will be some headcount ads, but not a lot. >> do you see a lot of macroeconomic risks if we see a potentially global recession? does that put a dent in the recovery prospects? >> a couple of reports recently, basically the recovery is slower than we previously thought because online ads is a good indicator. what we have seen is that e-commerce slightly recovered of the two bit, bu -- recovered a little bit, but fomg companies are still relatively weak, so if the macroeconomy is slower than expected, probably some part of tencent, like less than 50% of tencent ads will be affected, but for the other two parts like gaming and e-commerce, i think

ads, advertising spending will continue to increase. >> thank you so much for all your time today. that is the managing director at blue lotus capital advisors. be sure to turn into bloomberg radio to hear more from the newsmakers today and in depth analysis broadcasting live from her studio in hong kong. listen via the app meridia plus or bloombergradio.com. plenty more ahead. stay with us. ♪

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>> let's check the business flash headlines. bloomberg has been told that partial access to the books of new crest has occurred. newmont's limited due diligence may indicate a revised offer is in the works. the u.k. antitrust watchdog will look at the proposed $61 billion takeover of vmware, unless the company offers remedies to deal with agency concerns. regulators said the deal would likely lead to a substantial reduction in competition. renault automobiles invites bank pitches for the evr listing.

it is considering listing on the paris exchange as soon as the fourth quarter and aiming for that valuation of $11 billion. >> a big reminder, a great interview coming up in the next hour. jane fraser joins david rubenstein in a few minutes. also in a few minutes, the market opens in seoul, korea, and tokyo. next, we are setting up for those markets to join in on the struggle as we see australian stocks and kiwi equities under pressure as asia wakes up to the fed decision to hike by 25 basis points. japan futures off by almost 1%. this is bloomberg. ♪

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vonnie: this is "bloomberg daybreak: asia." a lot of the just indecision session with the fed increasing interest rates by 25 basis points today, 5.1 the median and basically saying that the banking industry is just fine. there is not going to be any more trouble, but we are investigating. haidi: it was that perhaps gap in messaging that certainly confuse confused, confounded markets. take a look at the treasury's market, they think that jay powell is done. quite a bit of pressure when it comes to the equity session today in asia. annabelle: that is right, we do have the open of japan, korea, and the start of trading forecast treasuries. a lot of focus on the short end of the curve very we saw a

retreat in yields in the prior session now coming online like this. bond market traders saying they did not quite believe the sentiment coming through from jay powell but was not seeing any rate cuts over the course of this year. in terms of what we are watching in the fx space, japanese yen continuing strength coming back into it given there is less of a focus on the guilt differential between the fed at the boj. watching the nikkei declining at the open, financials very much in focus given to what we heard from janet yellen about no overall backstop for the broader banking sector. let's toss it over to you because we have first comments coming through on the banking sector turmoil from citibank. vonnie: thank you, we want to get to the economic -- of washington d.c. speaking with jane fraser. >> ended up burning cash much faster than anticipated, and

they ended up wanting to raise capital and it went down quick. >> would you think the federal reserve would recognize some banks would be hurt by higher interest rates in a way that silicon valley was her, or do you think the fed was focused on inflation and did not worry about the impact on the banks? >> the fed's job number one is fighting inflation and we want the fed to be dependable in fighting inflation. that should be there most important priority. there are ramifications, but there are certain banks, an isolated few that have been impacted negatively that did not have balance sheets it was respect. >> the u.s. government has legislation, and under the tarp legislation large amounts of capital were injected including citibank. effectively that meant the

shareholders, creditors, and depositors were all protected. this time around silicon valley bank, only depositors were protected, a decision made by the administration and others over the weekend. do you think that was the right way to say goodbye to the shareholders and protect the depositors? >> right now the banking system, everywhere around the world depends on confidence, and that confidence has to be in the safety and security of deposits. in terms of the most important job here, they did the most important job, which is making sure depositors were whole. >> in the old days when there were bankrupts -- bank runs you would see lines of people down the street. now you have your iphone and you can take money out. money move so quickly. was that a factor as well? >> it is a complete game changer

from what we have seen before, david. you are absolutely right. there are a couple of tweets, and this thing went down much faster than what happened in history. frankly, i think the regulators did a good job of responding quickly, because normally you have longer to respond to this. they acted with speed. >> some people say you have a moral hazard when you protect. by protecting the depositors come at the implication was that if somebody as a problem we will protect them. the $250,000 limit is meaningless, or do you think the federal reserve and secretary of treasury saint we will not protect every depositor or protect certain depositors? >> they need to go out right now because banking system is quite sound. we heard it from chairman powell today. this is not something that has

spread across the entire banking system. this is not like what it was last time. this is not a credit crisis. this is a situation where it is if you banks that have some problems, and it is better to make sure we nip that in the bud. >> what about the problem went over the weekend when this was being debated in the administration, people did not know if they would protect depositors, shareholders, creditors. they decided to protect depositors, but they were obviously trying to get something to buy silicon valley bank. i do think nobody emerged willing to buy it? >> normally it takes you a few days to get your arms around these. normally when a bank had problems historically you had a week while people were looking at it. in terms of the digital side, it does happen to very quickly, so we will wait and see if we see a buyer in the next few days emerge. >> not to pit on the west coast,

but there is another west coast, first republic bank, which is based in san francisco, and they have had problems, a gigantic decline in market value. do you expect someone will bail them out or buy them? >> i will not comment in-depth on first republic, because they are actively working through the challenges they are facing right now. what you saw last week was a number of large banks got together to put a large capital deposit injection into them to help buy time to make sure they could come up with the right solution for the restructuring that is needed. >> so the large banks put in roughly $30 billion in deposits. i think you put roughly $5 billion. did jamie dimon call you and say you have $5 billion that you do not really need and put it in first republic or did you have

to go to your board and said i have to get $5 billion somewhere? you said, jamie, i will call you back. i will think about it? how does that work? >> one of the great things about this was that the banks did all come back together. we usually try and kill each other in different deals that we are trying to do. you do not want to have fun and someone fits over yourselves. there is competition between us. we are in a strong position, we want to stop what could have been a problem, and we all know when there is a confidence crisis, the logic that takes over is not necessarily irrational. we want to protect the system. it is in the interest to do so. despite this environment we are operating in, this is an instance of that the banks coming together saying ok, what can we do to support a system

that we have confidence in? you do not put $5 billion into the system from the generosity of your heart. you do that because you have confidence in the system? . >> do you expect to get that money back? jamie dimon has been the head of jp morgan for years. >> who? >> why do you think it is the case he is doing this and not the secretary of the treasury or the federal reserve? i would've thought a government people would do this. >> why do you think janet was not calling around. do you believe everything you read in the newspapers. >> when people in washington do something good they usually have a press note about it. jamie seems to be getting all of the credit or is that not there to give him the credit? >> jamie played a role, i think

we all played a role. there was a very active discussion over the weekend. there is a lot of engagement. i think people should take confidence in this. there is good engagement, brainstorming and a good intent of how do we come together and try to give support into something that we believe in. >> would citi consider buying first republic or you are not interested? >> no. >> ok, another bank. credit suisse seemed to dissolve very quickly. were you surprised after how quickly that bank went away after 100 years? >> we are talking about three or four banks out of thousands that are here in the states and the rest of them. credit suisse, i do not think anyone was falling out of their chair that credit suisse ended up where they did. it has been a troubled institution. it is a very global bank.

it is a very strong operation in switzerland, wealth management, in asia, investment bank in the united states and around the world, but it has had a lot of issues. it has had a lot of management instability, a number of different crises and things that have hit it, so no one was usually surprised. it was a question of time in everyone's mind. >> one situation that seems unusual is when credit suisse was taken over by ubs they had protected to some extent the shareholders. they got to billion dollars or something like that, to billion euros or swiss francs in compensation. but the bondholders who held a certain kind of bond, they were wiped out. normally bondholders get protected before the shareholders. >> it is an anomaly in switzerland, and we were happy to see the europeans, quickly and u.k. as well saying that is

not how the system works. it was truly just a swiss piece, and i think all of us were quite relieved when the clarification came out because it because each of people by surprise. >> ok. >> let's also look at this. this was oddly processed. this is a major global bank with operations everywhere. this was done extremely well over a few days because we were quite worried about what would happen on monday morning. was it going to be complete chaos? >> credit suisse has great private bankers and clients. our citi bankers calling up former employees and saying you should come here now. >> no, i think they are calling us. [laughter] >> as we talk today, the federal reserve has announced that it will increase the federal discount rate by another 25 basis points, which was probably

not a surprise for the market. do you think that was the right decision? >> i think it was a tough decision. was it going to pause, increase it by 25 bits or more. i think what he said was a bit jolly sensible if you pardon the british expression. he said we do not know how much credit tightening is coming from what is going on in the last couple of weeks. what we do know is inflation is a real problem that is persistent. it is starting to come off, but he has to tackle this. in jay the markets trust, and many of us do because he has been so clear about slaying the inflation dragon, but he is going to wait and see what the data shows as to what the impact of the last couple of weeks has been. that feels like a very sensible response. let's tackle this had to make sure that everyone is quite clear that they are going to

tackle inflation hard, but let's see what the data is and adjust accordingly. >> he has said consistently i went to get inflation back to 2%, but some people say 2% is kind of low. it will produce unemployment up to 6% and maybe guarantee a recession. what about 3% as an inflation goal? >> as we look out longer-term there are a number of things that are inflationary nature that we have got to tackle. if we are looking at moving to a greener economy, that is inflationary. if we look at building and or resiliency to supply chains, that adds costs to the system. 2% will be quite hard when we think and the longer run about some of these trends. it is not impossible, but it could be difficult. >> did jay powell call you up for your advice? does he call you or do you call him?

you are running one of the biggest banks question -- banks? >> yes, they do call. it will ask for opinions on things. it is great to see that we have people that are not just telling you what you do or they are soliciting advice. what are we seeing? what are we learning? because we are a big, global bank. we have operations everywhere and we have a lot of information on it. they will be asking for advice. they will not necessarily take it. >> if you are in a board meeting or something like that, does your assistant tell you that there is a call from the secretary of treasury or federal reserve, do they put that right through? >> the gentleman sitting in front of me can attest i will dump the board to pick up on janet yellen or jay powell. >> do you see evidence on information data that we are heading for a recession?

a mild recession or some type of recession? if so, when white we think we would see the evidence of that? >> we have been expecting a recession could well be happening in the second half of the year. if one does occur, we do not think it will be that heavy and that part of a recession, because normally when you are heading into tougher times, the consumer is in such good health, the companies are not, the banks are not which is not the case. the consumer is in good health. balance sheets are strong. and the banks are strong, so the factors that typically amplify a recession are not in play at the moment. so we have to make sure that nothing crazy happens in the geopolitical world that would change it, but we could very well have a mild recession.

the last couple of weeks could make that more likely. it does not feel like it will be a tough one, and the u.s. economy is likely to pull out of it weekly. >> are you worried about any of the bank without mentioning one that might have a financial problem? or do you think we are pass this problem right now? >> their credit will be smaller institutions that have similar issues in terms of them being caught without managing the balance sheets as ably as others have done. there could be a few of them. we hope there will be if rather than more, but it should be manageable within the existing toolkit that is there. >> let's talk about your background. you grew up in edinburgh? >> i did. >> were your parents bankers? >> definitely not.

my father was a scottish accountant. you are not reliant on extra money from a scottish accountant. i used to earn my money on the golf courses caddying. >> were you a good golfer? >> you would not think i was a golfer if you saw my golf game now. >> i am sure it is better than mine. you are an only child. there is an advantage to that. there are pluses and minuses. what did you say you wanted to be, the ceo of citi. haidi: bloomberg subscribers can continue watching on life go. find he rest of those diary entries just hearing from jane fraser of citibank saying recent weeks make a mild recession more likely. citi has expected the mild recession in the second half and talking about how jay powell and

janet yellen go to bank ceos for their opinions. really great conversation. she is saying there could be smaller banks with similar issues as we have seen with silicon valley bank. watch the full interview with jane fraser on the david rubenstein show peer to peer conversations next week march 30 at 7:00 p.m. if you are in hong kong. we are almost 20 minutes into the start of trading in tokyo and seoul. annabelle: recapping what we are seeing so far and trading sentiment, two year yield sitting flat, but there has been the big question mark around bond traders about whether there would be no cuts in the course of 2023, whether that would happen or not. what we are seeing in terms of the yen, further strength coming back in. yield differential level invoke is and very much focused on the banking sector. as you said just there, what jane fraser was saying is there

could be smaller banks with similar issues to svb, and janet yellen world the markets overnight by saying back stocks -- backstops would not be available for all of them. broader nikkei trading weaker. let's take a look at what is happening in the korean session. we have been having follow-through on this from officials, the finance ministers saying overall financial markets are stable overall locally, also this is something they have been watching closely. bok is do to release its financial stability report shortly. in terms of broader trading sentiment, financials in the red today. korean won continuing to gain and is just below the key 1300 level. quick check on a story, we are just under 90 minutes into the session. financials in focus, they are weaker but not seeing the same level of declines as the asx 200.

real estate and industrial place in focus. the 10-year yield is dropping and lined with what we had in tracers overnight, and brent crude coming online 1% to the downside. vonnie: we will be back with you later on this hour. plenty more to come on "bloomberg daybreak: asia." this is bloomberg. ♪ the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com

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vonnie: were watching "bloomberg daybreak: asia." went to dimension jane fraser's comments at the economic club of washington, d.c. she says the banking failure is not spread across the entire system and this is not a credit crisis. it is a few banks, though she also said something smaller than svb are likely experiencing the same types of problems. in terms of the economy, she said citibank expected a mild recession in the second half of the year, and the weeks turmoil will make them more likely. she said we will see about markets and how they respond to jay powell, but for the moment in jay markets trust.

let's discuss that now, and if you want to watch the jane fraser conversation please do on your terminal at life go -- live go. it is staying the course, the fed hiked again 25 basis points. kathleen hays is here. what were your key takeaways? >> the federal reserve is confident enough on what is going on in the economy and the banks that they can move ahead. the federal reserve is acknowledging that there is a lot of uncertainty out there. they did hike the key rate by 25 basis points two 5%. a month ago inflation was surging and debate was 25 or 50. the median forecast for the terminal rate this year looking at the dots, 5.1% unchanged. they do see it down to 4.3% by the end of 2024 with a wide variety of forecasts. they are expecting inflation

will come down, but they did keep the door open to higher rate sessions. alice had an additional firming may be appropriate. look at the second to the left the bar for -- or poll standing. what a wide range, so there is great uncertainty. even though i think jay powell with the best face on the situation, just not sure how deep and far it can go in the financial industry. he said if they do have to raise rates to fight inflation they will go ahead and do it. >> if we need to raise rates higher, we will. i think for now though, as i have mentioned, we see the likelihood of credit tightening. we know that can have an effect on macroeconomy, demand, they premarket, inflation, and we

will be watching to see what that is. >> becoming a perennial are discussion, the disconnect between the bond market and what the fed has to do versus what the fed's signaling. financial conditions are tightening. how much will that replace the number of rate hikes the fed has to do or may elimiate them altogethr or say we have had enough weight on the economy that the fed will start cutting rates. meanwhile, jay powell put a lot of confidence in the fed's tools along with the treasury department to keep the banking situation under control. haidi: what has been the reaction so far? >> a former fed vice chair just a couple of hours ago said he would ever heard -- he would have preferred the pause to super the compactors. if inflation keeps rising, then we will start raising rates again. he does think there is an inflation problem. bill dudley, former president of

the new york fed, said he thinks to a certain extent with what the fed is doing what it is doing the risk of hard landing has risen. >> basically the fed is saying the banking system stress we are not sure how long it will last. or how severe it will be. that was press the economy and that substitutes a little bit for rate hikes, so we will not have to do is much as we thought we would earlier. >> a big step taken and it left just about as much uncertainty as the markets and investors had before the fed met. we will see what happens next is always. haidi: kathleen hays there. speaking of central banks, we are hearing from the rbnz at the moment, really looking at the comments when it comes to their deep commitment to bringing

inflation down. their chief economist paul conway making these comments in his speech, that they are determined to get inflation back to target edging firms not to push up profit margins that express reassurances when it comes to new zealand's banking system, saying it is very well-capitalized. the path back to low inflation involves output losses according to the chief economist. rbnz really being at the forefront of the global tightening cycle. we have heard before that the reserve bank of new zealand expressing that confidence that banks under supervision have sound liquidity and funding positions, and they operate different business models

>> inflation remains too high, and the labor market continues

to be tight. we no longer state that we anticipate ongoing rate increases will be appropriate to quell inflation. if we need to raise rates higher, we will. we remain committed to bringing inflation back onto our 2% goal and keep longer-term inflation expectations well anchored. our banking system is sound and resilient with strong capital and liquidity. we are doing a review of supervision a regulation. my only interest is that we identify what went wrong here. when a bank fails, they are it, and we welcome that. we will closely monitor conditions in the banking system and are prepared to use all of our tools as needed to keep it safe and sound. at the end of the day, we will do enough to bring inflation down to 2%. vonnie: some of the comments from federal reserve chair jay powell of the central bank's decision to raise rates and lots more. it really does show you just what an interesting news conference it was.

let's have a look at futures and how they are trading very early in the session. pointed higher, but we did get a risk off trade at the very end post news conference today. all of the major u.s. indices down at least 1.5%, one .6% for the s&p 500. treasuries soaring. the dow sold off as well. haidi: take a look at how that is bleeding through to sentiment in asia, quite a bit of pressure when it comes to the start of the trading session. we are about half an hour or so in when it comes to trading in japan. nikkei225 down by .6 of 1%. the finance minister talking about the willingness to use financial stability tools to stabilize any market volatility earlier. we are seeing extended downside in sydney. every sector trading on the asx in the red today, about .1 of

1%. real estate suffering the worst. really struggle also being felt across the board, but looking at bond yields continuing to decline after we saw those comments from jay powell suggesting we will see more tightening to come even though the bond market is doubting that, as well as janet yellen pouring cold water on the idea that complete deposit insurance is being molded by the u.s. treasury. our next guest says risk reward for the tech sector looks compelling. always read to have you with us. the premise to that, the continued rally intact and devalue we are now seeing. is the expectation we are seeing in built into bond markets now that the fed is done? >> look, i think the fed today was a close call in any case.

we were looking for a pause because of stresses in the u.s. banking system, but the fed went along with the market with the basis point hi. we expected them to hike rates into the air and we are not expecting rate cuts. it seems like that is being priced out of the market now, so i think with the rate cycle maturing, that could be good for the tech sector. i think for the region as a whole that one way of looking at the markets are favoring parts that are sensitive in china. for tech in particular, the reason tech is more dominated by china, valuations there are cheaper, two standard deviations lower. we expect strong profit. the risk reward for the tech sector is improving quite a bit eerie it -- bit. haidi: do you prefer extending

china exposure, and if so, is that a direct or indirect play? >> for china, the clear difference, the ways to think about what is happening globally is you have a u.s. rate stock that will need to be price. a u.s. credit stock and u.s. growth risks with the stresses in the banking system. you want to favor parts of the market where growth is recovering, and china is a case. given the strong january and february data there. i think parts of the market including china equities but also hong kong, thailand, which art much more sensitive to chinese growth, should do well in the near term. parts of the region more sensitive to u.s. financial conditions should come under pressure. that would mean internet but also banks on the back of

maturing in the rate cycle. vonnie: it would seem to be definitely something to be concerned about at the very least. sunil, how much does your outlook depend on a weaker dollar? >> i think -- we do think dollar in the medium-term should be weaker. the good news that the dollar has not rallied on the back of the [indiscernible] because in general there is a strong correlation between dollar and asian equities. if the dollar continues to stay weak, that is good news for asian equities. i reemphasized the fact that although we do think given the mix of risks in u.s. growth and stresses in the u.s. banking system, it makes more sense to

lean into the stronger growth in china and the positive implications it has for asian equities in general. we do think asian equities and non-asian equities have output from the u.s. vonnie: our central banks and other emerging markets across asia breathing a sigh of relief if it looks as you say like the fed has inflation linked? -- licked? the fed chair said nobody sees an upside risk. >> we expect u.s. inflation to go down toward the end of the year. we have 3.3% growth u.s. cpi forecast. we think inflation comes down but u.s. growth comes on. we think there will be some pullback of demand by the u.s. mid and small banks, which by the way was reinforced by chairman powell.

i think with inflation coming down and growth also coming down, there is a risk you will see pressure on u.s. equities. we think asian equities should do better because of stronger growth in china, lower valuations as well as stronger earnings growth. haidi: is it time to be more worried about emerging markets, or do you think in asia we see more resilience and more of that positive tailwind thing headed to the china reopen -- peged -- pegged to the china reopen? >> we think it will be more sensitive to the chinese growth. we think the stronger recovery in china and corporate earnings growth. we are looking for 17% earnings growth in china. we have no consensus in terms of profit growth expectations. we think close to 20% plus over

the next 12 months. that would be helpful for other parts of the market sensitive to china and hong kong and thailand. we have a strong view that asia should outperform u.s. keep in mind that if you have a strong pullback in u.s. equity markets, is directly asia has never dodged a correction in u.s. markets. that is a risk. if you go back in history back to the early 1990's, there has been 26 episodes where the s&p has corrected more than 12%. i think that remains a risk for the markets. given the stronger fundamental backdrop in asia as well as on the back of the china reopening, we think we should relatively outperform u.s. equities. vonnie: good luck today. hopefully it will not be too long of the session. let's get to su keenan who has

got the first word headlines. su: we are at with world bank president david malpass who says a global recession is still not off the table. the lender is reviewing its mobile growth forecast following china's lifting of its covid lockdown and told bloomberg lack of investment in developing economies is a concern. >> in the latest what we have seen is it as economy growth expectations have gone up late last year. that is the u.s. and china in particular as china lifted the embargo, the lockdown, so as we are looking at it now, growth is slow but positive in advanced economies, but in developing countries not much at taking place. that i think is the big challenge. su: china and russia have reached a long-term deal to develop key nuclear technology. it is part of a series of agreements signed during chinese

president xi jinping's visit to moscow. the u.s. has raised alarm i would it says about chinese ambitions to beef up its atomic weapons arsenal. china of las vegas evergrande group has announced his restructuring program. the most indebted developers as it will give creditors an opportunity to swap their debt. evergrande has become the poster child for china's pretty crisis. it seeks to return to normal operations, which will acquire additional financing of up to $43 billion. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. vonnie: thank you. coinbase ceo brian armstrong says he welcomes the sec's plan to take enforcement action or to at least notify the coinbase exchange that it plans to take

enforcement action. let's get more from annabelle droulers. what are the details? annabelle: it is the latest in a long-standing dispute between coinbase and the sec. to give some context around what it means, it is a letter from the sec that it sends to people or firms at the conclusion of investigations, and those can include notice of intent to bring about enforcement action. what going voice -- what coinbase has received his intent to sue from the sec. coinbase has filed its own form to the sec, because it is compulsory to notify shareholders of major events that can affect the stock price. it says potential enforcement actions could cover parts of his -- its exchange as well as coinbase prime and coinbase wallet. what is at issue is whether

these are securities. coinbase has maintained the tokens listed on its exchange are not securities and that it has gone through a thorough vetting service. the company's chief legal officer argued the company's mistaking product is different to one offered by mccracken saying many of these tokens, these products are securities, they need to be registered with the regulator. haidi: this is not the first time coinbase has received a wells notice. annabelle: they received one back in 2021 and that related to the company's proposed led product, which would have allowed users to earn interest by lending out there crypto holdings. the exchange canceled that launch. in terms of the reaction we are getting so far from brian armstrong, he has been active on twitter this morning.

he is saying coinbase will welcome the opportunity to go before a court. is that optimistic. coinbase executives have been very critical of the sec in the past, and we are told by sources that they have met with them more than 60 times over the past few months -- four past nine months in particular, but that is to bring about regulatory clarity for the entire sector. haidi: annabelle droulers there with the latest. we have more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

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haidi: hong kong listed shares of tencent will be in focus today. the company reported better earnings, upbeat in quarterly revenue after five straight quarters of misses. online ad sales were better-than-expected. robert lee joins us now from hong kong. this was an improvement, that is a good starting point. what were the highlights for you? >> in terms of the numbers we have, the results were more in line, so no major surprises. when you look into the details, some areas are ahead in some behind. in terms of area stronger-than-expected to, at their international gains business did particularly well. revenues quite strong in the fourth quarter.

there is a seasonal affective driving that, but that is an encouraging factor. equally, the advertising business came back stronger-than-expected. gathering strength within the chinese economy or growing confidence. on the flipside, the domestic gains business was behind expectations as well as fintech. overall the results were underpinned by marketing expenses. they fell 50% year-over-year, so that underpinned the results of q4. looking forward to, i think there are opportunities and challenges that we can discuss in a minute. vonnie: let's just do that. everybody seems excited about ai. is it monetizable or is this to distract everybody from the things that are actually losing money right now? >> of all of the things that have come up in recent years whether it is crypto, metaverse,

etc., ai is based on real fundamentals and there are real interesting and exciting opportunities to come. tencent tried to downplay expectations by saying that things were at a fairly early stage of development. they would not rush into things. the fact that they did not have a productive to demonstrate shows how early-stage things are for them. i do not think ai will make any difference to their numbers or financial performance this year. he described ai as being a prophet multiplier in years to come. exactly what they mean remains to be seen. haidi: reminds me of what that means for a lot of firms bullish on ai. in terms of the broader microenvironment is that a risk tencent is facing for the rest of the year? >> clearly a lot of their businesses are geared into the reopening play. advertising got off to a great start in q4 and should continue

to improve. there fintech business, which was weaker than expected in q4, should a benefit through coming quarters as the economy reopens. the next two or three quarters look fairly promising for them, but china does not operate in a bubble. tencent is looking to international gaming markets for growth. there are macro risks on that front. the chinese economy overall is suffering or at risk from geopolitical issues or from a more prolonged slowdown within the global economy, that will impact china and there will be an impact on tencent's business. they have got two or three good quarters to come, but beyond that is more cloudy and i think tencent faces structural growth challenges. vonnie: we will be watching for how that stock trades today. thank you for joining us in hong kong.

be sure to tune into bloomberg radio to learn more from the day's big newsmakers and get in-depth analysis from the bloomberg team broadcasting live from our studio. listen on the bloomberg app or bloombergradio.com. stay with us. ♪

>> the banking system is pretty

sound, and we are talking about a few banks. we heard it from chairman powell today, this is not something that hasn't spread across the entire banking system. this is not like it was last time. this is not a credit crisis. this is a situation where it is a few banks. vonnie: citigroup's ceo jane fraser speaking with david rubenstein at the economic club of d.c. bloomberg has been told newmont as gained partial access to the books of arrival. the company said it is worth a lot more. newmont due diligence signals a new offer may be in the works. the u.k. watchdog will conduct an in-depth review of the takeover of a cloud computing company vmware unless the company offers remedies.

regular say the deal would likely lead to a substantial reduction in competition. bruno is preparing to -- renault is preparing to -- renault is considering listing as soon as the fourth quarter and is aiming for a valuation of nearly $11 billion. haidi: the hong kong monetary authority as raised its benchmark interest rate by 25 basis points following the lead of the fed, which of course moved by 25 basis points amid the unfolding bank turmoil. for more on what to watch, let's bring in our china markets reporter. talk us through expectations as we get a hint we could see more positivity from hong kong and greater china markets when they start trading? >> i think there were two key things to watch it one is the 25

basis point increase in the u.s., how that will affect hong kong stocks in particular, because it is a very financially concentrated benchmark in hong kong. the second thing is tencent earnings yesterday. that was actually a positive sign from the technology sector's perspective. tencent adr increased overnight in the u.s., which makes it the first technology company to rise among the big giants. so for the fed hike concern, that will affect hong kong market in particular given that is so liquid. on the other hand, you need to consider a weaker dollar in general should help the asian stock market in general despite the rate hikes. i think the market could be a

little divided. vonnie: hong kong dollar? >> i think the market could be a little bit divided. financials will be affected by rate hike concerns, but on the other hand technology sectors should be encouraged by the tencent earnings in particular. haidi: i think vonnie had a question about the hong kong dollar and what sort of pressure we could potentially see. >> right, actually we have seen really volatile on-call, so the borrowing cost has been going up and down. really volatile, and also we have seen hong kong raise its benchmark following the u.s. i think in general, we should

expect the currency rate to stabilize a bit after the rate hikes, and also people are pricing in a less aggressive rate hike past the banking crisis. haidi: our markets reporter jeanny yu. some of the stocks we are watching, asian financial stocks again. staying in the spotlight, u.s. treasury secretary janet yellen saying the u.s. government is not considering packing all bank deposits. tencent is the one to watch when it comes to tech, revenue inching higher that managed to reverse those cook -- reverse two consecutive quarters -- ♪ let's find the right investments for your goals. okay, great. j.p. morgan wealth management.

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