haidi: welcome to daybreak australia. we are counting down to asia's major market opens.

annabelle: we top stories this hour, u.s. inflation such a way on asian markets as wall street traders send stocks and bonds sliding. 10 year yield stopping 4.5% in a hawkish repricing of the treasury curve. haidi: president biden programs japan's prime minister to the white house just as the doj reportedly begins investigating nippon steel's $14 billion bid for u.s. steel. annabelle: a political blow for south korea's president. parliamentary elections weakening his position was three -- with three years left in his term. haidi: let's get you straight to the open. of course so much of today -- ahead of the open, percolating through the implications from another hotter than expected inflation print from the u.s. repricing of fed expectations of easing very much top of mind. stocks in asia primed for early declines. you can see red across the

futures board and in the middle of cash trading. new zealand already down .5%. australian stocks down .1%. merely reselling we saw on wall street on wednesday. we saw the s&p 500 falling 1%. the nasdaq also seeing weakness. we are really watching in terms of how quickly this passes through. chicago and nikkei futures down by about .4%. that march u.s. core consumer price index stripping out food and energy costs really increasing .4% more than expectations and in fact not just more than excitations but this idea it was more than expectations for the third straight month. are we starting to see that kind of structural sticking ask take hold? looks like a down day here in asia. annabelle: yes. certainly looks like the biases for the fed to be staying on hold post inflation numbers. the real action came through

overnight in the bond space. you can see that move higher across the curve led by the front end. more rate sensitive but a jump of more than 20 basis points intraday intercession. you saw the two-year yield hitting 4.97%. the benchmark 10 year note topping 4.5% for the first time since november. certainly very much an unthinkable turn of events given when we came into this year, 150 basis points of cuts were being priced in. now we're pretty much shutting the door to any rate hike by june. let's take a look at what is happening in futures. u.s. stocks looking to perhaps see more downside pressure in the intraday session. that is the open of futures. otherwise of course keeping an eye still on oil. more sensitive to geopolitical news instead. haidi: let's get some more when it comes to what we are looking at at the implications of the inflation print.

our global economics correspondent enda curran joins us now. we are seeing some significant repricing of fed easing expectations. what was most interesting to you in the fact we have now had a third straight month of hotter than expected levels of inflation? enda: i think it was the breadth of increases of products people by everyday. half of it was down to rent and transportation. those were kind of familiar culprits by now. when you look at the details, the cost of getting your car fixed, car insurance, the cost of education, the cost of going to the doctor, the cost of elderly care. these are some of the services were prices have increased. the pace of increase for food has slowed. that is the one positive right spot. obviously food prices remain elevated with the pace of increases have slowed. but it is on the pockets of day-to-day living where

inflation is starting to sting. as you mentioned, that forced a dramatic repricing of the fed re-cut story today. only a few months ago traders were betting that by now the fed would cut interest rates at least in march and hike in june. really and truly those expectations are underwater now. people say it could be the back half of this year if they cut at all. and then you have people like larry summers making the point that the next move could be a hike. i think today's inflation numbers certainly have put an end to the whole disinflation arc. annabelle: given these structural changes taking place, is 2% even a realistic target or are we just facing a new normal now of 3% instead? enda: economist would say to you it has to be really hard not to go down from 3% to 2%. that would inflict a lot of pain on the economy.

there are parts of the economy that are shipping pain. but nonetheless monday -- the fed has to get inflation down to 2%. that is their target. their own core readings perhaps still not as bad as the numbers we got today. nonetheless, inflation is not where it should be. it is also coming in a critical election year. president biden today made the point he still expects interest rates to come down before the year is out. all told today when you consider the breadth of increases in these numbers, it shows how hard it is going to be to get inflation down to 2%. you could argue 3% is the new 2%, but the law of the land says the anchor has not changed. annabelle: let's get more on the u.s. inflation print now from singapore.

what stood out to you most in this print? vishnu: looking at the inflation print, the headline was a little bit of a surprise and certainly only hawkish side. when we take a step back what really stands out is there seems to be a little bit of legs in how quickly disinflation can come through in key components like rent. i think the fed is still of the view that it will come down. what we want to do is look at inflation in tandem with wages. this is where i think we see some encouraging signs, which is the fear of wage price spiral continues to diminish despite the stickiness around inflation. i think that would be more important for the fed's response function rather than the inflation print in and of itself.

so the market response does not surprise us but i do not think it is a war call to turn around the views on which way policy is headed. so the marketannabelle: so whicu think policy is headed? have you shifted your excitations off of what the fed will be doing this year? vishnu: that is a really good point. at this juncture the fed would be quite correct to say they continue to be data-dependent. it does not distract from two key things. the first is disinflation has come a long way. there needs to be some recognition for the path taken so far despite the bumping is ahead. all that the fed is not required to do is get enough that they are not re-accelerating so they can cut rates a little. given the -- to your point about structural inflation, the fed's pollution to neutral rates continues to be real rates at about four -- .5%.

which is to say the current rates are really constrictive. the fed has cut at the very least 50 basis points. arguably above 100 basis points. all that requires is not for the data change anywhere from where it is. all it requires is for the fed to say look, our response function can now be less hawkish. i think that is where it is headed. which is why this year, despite the dynamic repricing in the market for fewer than the three rate cuts in the dot plot, we are now set on two if forward curbs are to be believed. despite the fed still has to do three rate cuts. if consumption and consumer sentiment weekends substantially, which we cannot rule out, they can still do more. that is something we have to keep our eyes on. the last point is the 12 month view of rates i think could still be sharply lower rather than sticky.

haidi: how close are you watching commodities prices? positive -- obviously we have seen the moves in gold despite high-yield. we have u.s. intelligence now warning about a potential strike by iran and its proxies on israel. do you think this will be a bigger component into the said stickiness of inflation? vishnu: you make a really good point. for sure at least oil is going to be a real headache for policy. because on the one hand, i think it does reignite concerns about reaccelerating inflation. the trouble with oil is it has a really long reach and it tends to permeate inflation more broadly and quickly. so that is really something the fed will watch very closely. but the defiance response to oil may not quite be to hike rates substantially for two reasons. one is i think there is enough of an understanding caused by geopolitics.

the flayer in oil prices do not reflect demand. in fact, contempt for demand as we go ahead. we are hoping this works out on the supply side which is one reason trying to pump more is part of the u.s. plan. the other component which you pointed out is gold, i think gold is in a very unique space where it is looking at the risks of dollar debasement rather than inflation as a standalone because real rates continue to be high. we should not push too much higher, particularly as the chances of stickier rates remain in place. but the broader metal sector is perhaps still clinging onto some of the hopes of china coming out of the woods. that adds to some inconvenience but i do not think it distracts from the broader disinflation picture if we cast our horizons a bit wider.

the larger disinflation story is still intact. it does get a little more fraught and bumpy, but i do not think we are at a conclusion where policy needs to stay high and perhaps go higher. that argument i think would require their tell risk events to take place. haidi: do you think a narrative of the cyclical economy in china recovering compelling given the ongoing struggles still exist? vishnu: this is the stuff that my days are made up of. wondering whether one offsets the other. my quick take on that really is i think china has to pick up for two reasons. one is a really soft base, and the other aspect is there seems to be a greater convergence around the stimulus required. to your point, a lot of the structural headwinds remain in

place. the pickup that you see in china is going to be a lot more spotty. i think the industrial sector will click -- pickup quite quickly. consumer segments might remain somewhat more beaten-down. you are going to see a very uneven recovery by the industrial pickup is something in the interest of china. one reason is part of the geo political play. it's crucial to get it right. and beijing recognizes it is one way to create jobs, and they jobs market is one of the structural issues china is very cognizant about. i forgot to give you our bottom line. [laughter] sorry. i was waffling too much. the bottom line is we still think 5% growth rates are still out of reach. we are looking at something softer than 4.5%, just because of the drag factors we mentioned will remain in place. haidi: you had to end it on a

characteristic down point. always great to have you though, vishnu varathan. still ahead, the south korean president's conservative alliance suffering a major defeat in parliamentary elections. we get some analysis later this hour. first, the u.s. and japan in amazon and nvidia to fund an ai research program. we will get the details next. this is bloomberg. ♪

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haidi: president biden is hosting a state dinner at the white house for japanese prime minister kishida. the guest list including apple ceo tim cook, amazon founder jeff bezos, and jp morgan boss jamie dimon. earlier the two leaders announced efforts to improve collaboration in tech and ai. let's bring in jon herskovitz. it is a celebration of spring expected to mirror this lateral alliance. what are we also expecting from the state dinner? jon: i believe the musical guest is paul simon. we are going to have a menu that celebrates the california roll. they will also be some u.s. ribeye. it is always an interesting thing.

i think this is the fifth state dinner biden has hosted, and the pomp and pageantry is a lot of fun. they will be interesting guests. the figure skater kristi yamaguchi and robert de niro are supposed to be there. i think this is also live from the bloomberg terminal. haidi: certainly a very coveted invitation. so if you cannot make it, yes, you can watch it on the terminal instead. we have already seen a number of agreements coming out of this. it seems that focus on emerging technology. what can we take away from what has been announced so far? jon: i think what we have seen from the summit and the meeting is the key you -- the huge, expansive relationship between japan and the west there are some problematic details like the nippon and u.s. steel, which is causing some problems for biden because it is in a swing state of pennsylvania. there have been some

difficulties with liquefied natural gas. the biden administration stopped since is from january. japan is a big consumer. so you have these strains, but you also have things benefiting the two countries. the ai deal you alluded to. there is a plan to make a japanese-american the first to go to the moon. you are seeing friction but also points moving the relationship together. it underscores how broad and deep their relationship is between the u.s. and japan. haidi: we are also hearing that the department of justice has opened up an antitrust probe into the nippon steel takeover. is there a sense that this might have been the elephant in the room? wasn't mentioned at all? jon: whether it was mentioned or not, it just hangs over everything. this is such a key issue in pennsylvania, one of the swing

states for the election. nippon steel is one of the flagship companies of japan. and while kishida has given assurances they will not be any labor disruptions, it is just a big element hanging over the summit. how much is actually addressed is another matter. but this covers so much in terms of the relationship between the countries and really affects biden heading into the presidential election. annabelle: that was jon herskovitz. other stories we are tracking, the philippine president ferdinand marcos junior says he is horrified to learn of a so-called gentlemen's agreement between his predecessor and china. the former spokesman says the deal borrows the philippines from shipping construction materials to a military outpost in the south china sea. tensions with china are set to dominate thursday's summit with the philippines, japanese, and american leaders.

chinese president xi jinping met with former taiwan president in beijing on wednesday. they shook hands at the great hall of the people in a rare act of diplomatic engagements. in comments that appeared aimed at the u.s., xi said external interference cannot stop the historical trend of national reunification. marr is the first former taiwan leader to visit the chinese capital. haidi: we are getting some reaction, some commentary coming through from japanese policymakers when it comes to the moves we have seen in the yen. this is the vice minister of finance speaking at the moment, saying that they will take appropriate steps on ethics as needed and not ruling out any options. the recent moves they have seen in fx are rapid and policymakers are prepared to address any event.

they are not judging based on specific levels but excessive fx moves are bad for the economy. the yen holding onto its gain reiterates not ruling out any options. we have seen the japanese currency weakening to that fresh 34 year low. that is the lowest since june 1990. as we have seen of course a third straight month where the u.s. cpi print has come in hotter than expected. that deepening of the yen drop prompt and more commentary. the job -- the jawboning from japanese officials, not ruling out the fx side of things and are prepared to address any event not based on specific levels, but not ruling out any options available to them. more to come here on daybreak australia. this is bloomberg. ♪

haidi: australian will begin

marketing its first-ever greened want issuance. about $4.6 billion worth of debt material in mid-2024. how do we make the timing of this? paul: it is a little bit unfortunate. typically green bonds would attract a premium, or a "gr eenium." horrible word there. last quarter there were $187 billion worth of green bond issuance. 40% came from sovereigns within the yield on the australian 10 also climbing by about 90 basis points. that greenium is slowly starting to erode, so maybe australia is a little late to the green bond issuance party. also australia has a reputation of being a laggard when it comes to moving on climate. this was all announced towards the end of last year and now the marketing phase begins. the roadshow starts today in sydney and moves on to melbourne

and brisbane, then to larger markets like japan, singapore, and europe. annabelle: and it comes in the backdrop of the prime minister about to announce new legislation to boost investment in green manufacturing technology. how does that play into it as well? paul: yeah, we have got a bit of a sneak preview of the prime minister's speech that will happen later on tonight. this is the future made an australian act, another clunky name. the intention is to compete with the likes of the u.s. inflation reduction act when it comes to boosting investment, creating green jobs in manufacturing, attracting more higher tech investment. the prime minister says he understands that australia obviously cannot compete with the u.s. dollar for dollar. but he views this as more of a competition rather than an option. as you say, tied in with this green bond issuance for this first set of notes, electricity

generation obviously gets a lot of focus. about one third of australia's emissions annually come from the power sector, very coal and gas heavy. this announcement from the prime minister aims to speed up that transition, a greater focus on wind, solar, hydro projects. the goal is to get the electricity sector 82% renewable by 2030. so that is only six years away now, so that is a fairly aggressive target. annabelle: that was paul allen. let's look at some other corporate stories this morning. tsmc's quarterly revenue grew at its fastest pace in more than a year things to booming demand for ai chips. the company reported a 16% rise in sales to almost $19 billion in the first quarter, above estimates. the main chipmaker to nvidia and apple expects revenue to grow at least 20% this year. the global ai boom has also sent taiwan's exports surging by the fastest pace in two years.

bytedance's roughly 60% jump in profit in 2023. sources say the company's ebidta grew to more than $40 billion. that growth is way ahead of its chinese online peers tencent and alibaba, a sign of the tiktok owner's resilience in the face of an economic downturn. coming up, we hear from the center for a new american security about how the south korean president's parliamentary defeat could impact the rest of

haidi: south korean president has suffered a major defeat in parliamentary elections that will leave him in a weakened position in the remaining three years of his term.

his conservative party secured about 105 seats in the 300-seat parliament, down from 119 before the vote. let's get more analysis with duyeon kim, and adjunct fellow at the center for the new american security who joins us from seoul. really glad to have you with us. did the extent of this loss surprise you at all? guest: i think we start the exit polls and that was, they were an early indicator of what we might expect. you know, this certainly is a big loss for the ruling party and for president yoon. and the stakes aren't really high especially because his domestic agenda has been to implement a liberal democratic agenda at home. so he is expected to face challenges going ahead on his domestic policies. but his foreign policies are not likely to change drastically.

haidi: how does this play out in terms of his ability to govern and push through policy for the next three years? duyeon: certainly he will be constrained because the opposition holds a majority in the national assembly. but again, on his foreign policies, they generally don't require national assembly approval. so we can expect the president to accelerate foreign policy like on north korea or on strengthening the alliance relationship with the united states or improving relationships with japan or contributing more to global issues. we could see him bulldozed through these issues because of his personal conviction and his personal style. but if there is a challenge, it could be that the entire country's focus will now be on the upcoming 2027 presidential election. even his party will be focused on preparing for that.

if the country is focused on the upcoming presidential election, then implementing his foreign policies will depend on whether the bureaucrats, his bureaucrats, who implement them at the same level and progress they have until now especially if the national assembly, controlled by the opposition, cuts budgets. or if the democrats feel that the domestic political environment is unstable until 2027. annabelle: so how does this impact some of president yoon's signature or priority policies, including the value of program? -- value up program duyeon: ? the opposition, they are going to want to constrain president yoon's domestic agenda. they will want to either disapprove or not let many of his policies passed, especially his laws be implemented. so his domestic agenda really up

for a major challenge. annabelle: one of the things that stood out to me at least, was a turnoff. it was estimated at 67%. seems like it would be the highest in more than three decades. what does that signal to you? duyeon: the number itself might sound low, but if we put into context that it is the highest record high that the country has seen, i think it shows that the south korean people i really out to -- it is a fight between both parties. and different ideologies here in south korea. it is also reminiscent of the amount of energy that has been put into voting this year. it is reminiscent of the past, the most recent presidential election when south koreans on the left and the right both were saying we are fighting for our

country's future. fighting for our country's democracy. it really does reflect the level of interest coming from the south korean voters. annabelle: and as you mentioned, this result is not likely to affect the president's main foreign policy initiatives. it does include taking a tougher line on north korea. i am curious on your perspective of what china is doing the same it's high-level delegation from north korea in nearly five years. duyeon: i think we are seeing a situation where china, north korea and russia, those three countries are trying to strengthen their relationships because they see the united states, south korea and japan strengthening theirs and the united states strengthening relations with other democratic and like-minded countries. this really does not fare well on, for example, the most pressing issue in southeast

asia which is north korea's nuclear weapons program and any policy to try to reigning bama that program or try to stop that program. we are clearly seeing china and russia play a very fierce game against the united states. they have not been upholding their obligations, for example, at the un security council implement sanctions are north korea's -- on sectors in north korea that our financing north korea's nuclear weapons program. so i think we are going to see, in the months and years ahead, more of a stalemate when it comes to north korea's nuclear weapons program, especially on the diplomatic front. it will be tougher going ahead and more challenging to try to deal with that. haidi: and it will be one of the sort of tougher issues if we see this summit that is supposed to take place at the end of may.

do you think if the summit goes ahead, that it will be fruitful? what will be the priorities on that agenda? duyeon: that really remains to be seen. there are so many variables and caveats to that equation. clearly as much as south korea and japan are strengthening their relationship, their alliance relationship with the united states and other democratic countries, the reality is that they also need to cooperate with china especially on the economic front. so it is really difficult to predict at this point, how fruitful or how successful a potential summit between china, south korea and japan will be. or even if it will actually happen. i think there are big question marks as to whether that sub it actually happen. haidi: duyeon kim, adjunct senior fellow at the center for new american security, really

great to have you with us. coming next it dived into fx markets. -- a dived into fx markets. we just heard from china's top currency diplomatic talking about they are not ruling out any actions when it comes to these rapid moves in the yen as it moves past 153 in the previous session. this is bloomberg. ♪

haidi: take a look at the japanese yen. far from triggering intervention. we saw the 152 level crossed without reaction, it crossed 153, as well. pulling back. 152.8 that is where we are sitting. we are seeing that level being held as we hear from japan's top currency diplomatic talking about the fact that these excessive moves are bad for the economy. they are not judging based on specific levels but they are prepared to address any event and will take the appropriate steps. they are not ruling out any of these access moves. the excessive moves in the yen from the beginning of the year are significant. the benefits of the weaker yen which we have seen play out in commodity markets, they are decreasing at these levels. mark olson is our fx and writz

reporter and transits us for more. where is the line? mark: it's a moving target at the moment. they pick these numbers or these calendar levels, 151.97, and to be fair, we have loitered there for so long and the catalyst which was in u.s. cpi, it has basically rolled off. the presliced through that level. we got to the 153 point 25 last night but that may not be the top. we have a couple of other existential factors like china cpi. some people, if they are dollar bulls, they might not necessarily want to go and buy donors against the yuan so they will express that view by buying dollar-yen. so if you see a big print, the dollar may push up against that. the yuan itself is coping with a bit of grief right now and it is

fueling the dollar move higher. we could say 155 in dollar-yen, that gives us a bit of breathing space may be until the weekend. but you have the u.s. ppi numbers out tonight following three monthly cpi print beats. so the setup is therefore -- they are for dollar gains to continue. if you are sitting back and watching, i think you may be better served to let these run for the next, say, 24 hours. until there is intervention. mr. fumio kishida right now is in the u.s. he will break bread with mister biden. seems like a bit of a stretch for me. so unless something was to really extend the move, i think they might just sit there and see how it plays out because the

dollar-yen at 153 does have a good reason to be there. and at -- until the fed repricing, until it settles down and you see the fed reprice julian off the calendar now and move towards july, if july doesn't survive, you might see 154 as a consequence of that. so we are not over at any stage, just beginning the next chapter and moving higher. annabelle: as you say, it is the dollar-yuan dynamic that plays into this story. there are quotes from some china watchers from beijing to loosen its grip on the currency, something that would have pretty serious reverberations, it seems. michael: we have been looking at that 7.2 five level.

we are above their. in fact, the whole range, the holy dissent, the level has been about 7.22, at the halfway point. we have been above there now for a few days, i march 27 we have been above the halfway point and operating within the range. so i think the pboc can come out and throw good money after that. the fundamentals are there. the cpi is coming out shortly. how do they compete with three hot prints out of the states? fundamentally, the underlying weakness of the yuan, they have their own domestic dilemma that i think the boj and pboc are probably going to have the same wish list, which is just to try to raid this one intravenously as quickly as possible rather

than cause a lot of grief. great annabelle: insights, our fx and writz reporter michael wilson. as he said investors are also watching out for the latest information reading from china that are due in the coming hours. bloomberg economics sees the cpi retreating in march from a holiday bounce. jane is in the stability it was a key topic as financial executives gathered from bloomberg's new voice event. kkr and hsbc sounded an optimistic note on china even as global investors withdraw billions. first of all, the context is that the global fund allocation to china hit a five-year low. the room has significantly reduced. then i think the concerns of the investor, primarily relating to geopolitical events like the u.s. election, the weak property market in china, the long-term

growth of china and all of that. at the same time, big valuation discounts in the age of market versus china, also explaining why they are underweight for so long. but as we talked about, we see that sentiment has improved because of for example the cyclical growth by stabilization, and we also see capex extension. meaning actually the market instead of that deflationary cycle. so with that, we started to see some regional active managers cutting back their underweight positions in hong kong and mainland china. back to the tech or growth stocks starting in february. this is what we have been seeing. having said that again,, investors eventually still need to see the earnings revision before we can see more sustainable inflow into the

market. i believe it will be sometime before the key trends are moving back to china. shea: how attractive is the china market for you now, kate? obviously you have been trying to tap into the world. what is a way to capture that right now? >> we have invested in china. we think china is investable. if you talk about some of the trends daisy has highlighted, china has come under pressure obviously in the real estate sector. but if you think about the new economy, the green economy, the industrial automation, it comprises about 20% of the gdp. . growth but it is actually 50% of the growth. so, that sector is definitely of interest. consumption upgrades, technology

upgrades. we invest in the retail pharmacy chains, we invest in hospitals. we invest in white liquor, pet, mushrooms. [laughter] you know, it is the consumers we are after. . if you think about 850 million-odd of millenials, these are the consumers that we invest into. now i do want to add that renminbi as a currency, when you look at trade, has an increased transaction volume today. we see that renminbi currency as an ecosystem in china and we want to invest in that. >> daisy, you mentioned more about putting cash to work. what our clients telling you

right now? obviously equities have done quite well so far this year. it was supposed to be the year of the bond. we haven't seen that yet. commodities are doing it well as well. even the likes of bitcoin. what are the fund lows telling you? >> i think because we have a lot of retail clients, we see a lot of excess being piled into cash or money market funds, et cetera. i am trying to generalize some of the investment behavior here, where in asia, there is one theme, income. people here love income. dividend payouts, regular dividend payouts. this is one trend we have been seeing in different market cycles. then as i mentioned earlier on, i think for those who want to have higher rate returns, seeking higher returns, they will be going into equities, and then india. i think india is the obvious choice for investors. not even on the equity side, but even on the fixed income side, you look at india because of the bond index inclusion of the india government bond.

so until march, we have already seen them put a billion into the local indian bond market. so you can see the potential there. then we have large institutional clients who are already looking into allocating into india, fixed income, as part of their location. i think over time, these large institutional clients are looking because of inclusion, they will put it as a strategic asset allocation. so we envisage the fact that india, for example, the fixed income market that we will see in the next three to five years, hundreds of billions of investment getting into india. you guys can see in the stock market where it has been performing very well. i think the story will continue. so that is a very, very strong inflow as part of the investment

theme over the past 12 months. haidi: hsbc asset management daisy ho and kkr's katie ridgedale, speaking. bloomberg new voices is focused on amplifying the voices of women in finance. the number subscribers can see more of that event on the terminal and online. more ahead on "daybreak: australia." this is bloomberg. ♪

haidi: improving relations between beijing and canberra are brightening the outlook for us stocks that have faced. restrictions. for more, let's ring in jean mckay who has been looking at this. we heard from them ahead of the key meeting where we are expected to see those tariffs being dropped. have those moves been priced and already? jean: since speculation started mounting late last year, we have seen a jump in treasury shares and other data tariffs were scrapped, we saw a jump. we saw a jump in smaller companies like australian vintage. that was priced in any way. there are questions around how much of an uplift you're going to see in the earnings of these companies. prior to the levees, the china market with 30% of treasury's

earnings. but since 2019 from a has just about halved. how quickly that will pick up will be interesting. in another stock, a bottle of maker, morgan stanley is predicting an earnings left for them for boxed wine. annabelle: and no sector is perhaps more exposed to the warning diplomatic relations of the commodities is. what does this mean for the mineral sector in particular? georgina: for the mineral sector, there are more questions. election election years china has flagged that they want to invest more in austria in lithium. they have tried to invest in the rare earth space as will permit bluffed the deal last year for northern minerals so that was a

bit of a test to relations. but regardless of however ties improve, australia's critical numeral's -- are important critical minerals are important for the world. if you have other governments like the u.s. trying to invest in reserves gear. that is happening across lithium and rare earths. we had last year the mineral resources boss chris allison say that there were concerns about australian companies with partnering with chinese firms as we are already seeing with producers having trade ventures having money trapped in china. perhaps with warming trays that might alleviate some of those concerns. but how much -- with warming ties, that might alleviate some of those concerns. our annabelle: asia stocks and credit report or georgina mckay. heading into the morning session so far it was really -- what is

really standing out to us is the move in bonds. overnight, following that hotter than expected u.s. inflation print, it was a very swift repricing, through. traders now seeing the fed waiting until after the northern hemisphere summit to cart. we'll yields surging across the curve, particularly the front-end. the 20-year hitting 4.5% for the first time in months. you can see the yields moving higher. a quick check on korean equities as we head into the open. you are looking for a drop. it is that moving in wall street, plus, south korea's president suffering a big loss in the parliamentary vote.

annabelle: this is "daybreak: asiaannabelle: ."

we are counting down to asia's major market opens. it's about the market reaction this morning to the u.s. inflation print, watching the japanese yen in particular touching 153 in the prior session. a bit of pushback from japanese government officials. but will traders really be paying attention? [laughter] haidi: haidi: and also, does that push back mean we are getting directions from the bank of japan for intervention? maybe they just sit back a couple more sessions and see whether it starts to fade, rather than acting on the immediacy of the moment. but it those comments from the ministry are very firm. we are waiting to see what is next after 153. annabelle: that's right. just recapping some of the lines coming through from japan's top currency official. he is saying authorities will be considering other options for the fx market and they are ready to respond to any event coming through. that has been the big driver, one of the b