>> the narrative of this tap is interesting because it brings us closer to further escalation. on the other hand, the fine-tuning of the attack, how it was intercepted leads us to a scenario where there is room for both sides to be able to move back a little bit, to show restraint. we continue to watch that. interesting when it comes to lack of moves in the yen, something we are watching closely. annabelle: absolutely.

the amount of calibration, no outsized reaction from investors in early trade. japanese yen not in line with haven assets. still holding. what else we are tracking is equities. nikkei and topics declining at the start of trade could be function of the u.s. on friday, given that we saw weakness. that is the state of play in japan. eco-data, coming in better than what economists had tipped four. month on month was a jump of 7%, estimate had been 4.8%. let's look at the market open for korea. weakness coming through. more in the tech heavy index.

continuing to track moves in the korean you want, weakness against the dollar. starting to check lines we are getting and we're hearing that korea is taking steps against volatility in its markets, but those uncertainties, they are rising due to increased tensions coming from the finance minister in a meeting earlier today. haidi: as we await for the is really response, what shape it takes form in being expressed through the likes of gold, that has been the main haven and where we see the biggest moves or positive moves for australia. staggered open, so we will wait to see. ironwork continuing to gain.

chinese data coming out suggesting first quarter could be positive, whether that comes at the expense of frontloading is a risk. more upside as a result of chinese recovery and iron ore side 10% gain. materials and miners are points of leadership. aussie dollar is steady. mixed trading for the u.s. dollar and upside risk, we will see that move across the u.s. dollar index as well as potentially further gains in foil and across treasuries. futures taking lower as middle east tensions are top of mind for traders. the balancing against interest

rates and inflation picture. annabelle: you mention those moves, part of that could be what we are seeing with metals. a spike for aluminum, nickel and copper, surging. reasons behind that are well understood. new u.s. and u.k. sanctions were issued and they are banning any russian supplies produced after midnight on friday. so spoken to more than two dozen market participants and the jump had been predicted. the question was whether this persists over the long term. some argue that removing russia from the market will drive prices higher and others are more focused on the prospect of russian metal permitted.

certainly a story we are tracking. after u.s. and u.k. sanctions on new supplies on midnight on friday in response to the conflict. but the other one we are tracking, antony blinken saying washington does not want escalation while supporting israel's right to defense. balance anchored joe joins us. joe, how much of the chance of escalation hinges on response from tel aviv? they can claim a victory, they might not want to have broad retaliation. joe: imagine if we were talking on friday about a strike by iran

directly targeted to israel, you would think markets would be in disarray and we are looking at a different scenario. lack of damage, lack of casualties has left us in a scenario we might not have can sit in, seeing israel with the help of the u.s., u.k. tan france, knocking down 99% of hardware, 300 missiles and rockets. they could want to limit retaliation to something more pinpointed and proportionate. there is a real question as netanyahu faces pressure, not just the u.s., but joe urged restraint. we are hearing a lot of different messaging. the president spoke with netanyahu to reaffirm commitment

to israel. new york times reports the president told him if israel were to respond to iran with a direct strike, the u.s. would not support a move like that. so we will have to see what happens to figure out the next move for both governments. annabelle: we're hearing from the u.s. and beijing through their ambassador, curing that all leaders agreed to use channels of influence to convince them not to launch retaliatory attack. so i wonder how that plays out. a lot of domestic pressure at the moment and pressure on western leaders in terms of support waning in gaza. joe: joe biden knows about that,

which is why he was on the phone to try to move a funding bill that could be threatened by an over-the-top response by israel if may be any response. there is opposition by democrats to funding israel and if the bill is tied to funding ukraine, it could jeopardize both. joe biden is walking a narrow line domestically and internationally as he tries to tame the response by israel and move the bill. speaker of the house is expected to bring that to the floor. unclear whether they have a path to pass it. haidi: joe mathieu there with the latest. let's bring in jonathan, director of the middle east security initiative. he served as deputy national intelligence officer at the u.s. counsel.

in many ways, the attack was unprecedented, but the way this has been structured, forward advancement of this over one week ago, how unusual was the way this played out? >> it was intentional. iranians were trying to ensure they could retaliate in a way that is robust to create deterrence against israelis. but it was not clear what retaliation would be. iran was trying to ensure there was not a response.

i am skeptical israel will open lie the desire. haidi: you talked about the action will determine the response and whether this is the end. what is your best assessment about the israeli response? >> israeli war cabinet is lit. benny gantz, the opposition leader, netanyahu has pressure. the response will be small, precise, aimed at avoiding another iranian response. whether that will be sufficient to stop iran it is less clear if

you see multiple casualties and that is where you get into the escalatory's viral of back and forth. annabelle: are we likely to see hezbollah enjoyed a mosque inviting israel? jonathan: we've seen hezbollah respond this morning, there were some attacks in washington. you saw hezbollah taking shots against israel that were greater in intensity on friday, the day before this happened. so i think if iran feels it has no choice but to escalate, they are going to get involved because iran has no -- is below is the crown jewel. they are under the spear. if hezbollah does not attack in

israel takes out hezbollah, they are wasted. it is a dangerous game of escalation that is possible, but again, you can see israel retaliation just tit-for-tat with israel. haidi: israel has different tools to repel. the groups have more than 100,000 missiles, what sort of attack can israel withstand? >> if you had a full-scale attack from has below and iran was attacking and you had

attacks from militants, the kind of war president biden has been trying to prevent, israel will have success. we saw defensive maneuvers with aerosystems last night, iron dome. hard to imagine that they will stop everything. not just five hours like last night, there will be significant damage. damage to gas platforms. concerns that israel's nuclear sites would be targeted and military bases. hard to prevent military casualties let alone civilian casualties. haidi: how much appetite it when it comes to u.s. involvement?

politics are collocated, there is diminishing support when it comes to what is playing out in gaza. jonathan: the u.s. is desperate consistently to keep this from escalating. one of the two major goals that the u.s. had was to ensure there was not a regional war. second goal was to support israel, but they will not support attacks against iran because they're trying to prevent conflict from escalating. so you would see that u.s. providing support if there was additional retaliation. it is unlikely you will see president biden taking attacks against iran unless israel had

no choice. annabelle: that was jonathan, director at the atlantic council. breaking news in the last couple of minutes, apple shipments to china getting an update from the first three months of the year. data coming through shows a drop of nearly 10%. this is global. global shipments falling nearly 10% in the first quarter. a lot of those going to china. we demand so far. data over the month of february is seeing a drop of 33%, but certainly it is the question of how apple can keep its market share when losing ground to rivals in china and android. we are seeing data coming through.

seeing apple supplies under pressure. we are tracking the metals story. actually seeing some big gains at the open for trading of aluminum, nickel and copper at 1 a.m. local time in london. we've got new sanctions, deliveries produced after midnight on friday, the question is how long this will last removing one of the largest producers. on the flipside there is russian metal getting dumped. that is another story we are tracking as we monitor reaction to iran's strike on israel. more on daybreak asia, this is bloomberg. ♪

♪ >> we are heading through the morning session in asia, tracking reaction to iran's attack on israel. traders are taking this in stride.

slight move to save havens, but range bound. equities wise, weakness creeping through. if you look at the broader gave each, every sector barring energy is in the red. losses for korea, and erased all of its gains. let's bring in max who is ceo at s gmc capital and i'm curious for your views, reaction is muted, but how much more closely are you going to track tensions now? >> this will be the main risk for markets and asset violations, so this will be the main thing in the coming days. headline risk will be high with

respect to what if any reaction is going to be after is strong first quarter. these could bring in risk and desire to take profits after a good start and before we continue monitoring that, it will be relevant and crucial. we hope things do not escalate so we can see a continuation in the first quarter. haidi: what -- what reaction or which area are you tracking the most? elevated will prices and that pressures the fed to say higher for longer? which area are you tracking most closely? >> the first things is any clear evidence so you have to look at the yen, is it strengthening?

is gold strengthening? these are clear first signals. you have to look at how interest rates move and discern with respect to the fed on interest rates. the key theme with respect to strong reactions is risk off factors. in the medium-term you have to look at what the fed is saying and interest rates. from a microeconomic perspective, we remain constructive. you have seen the numbers being very strong. with respect to the numbers on earnings, we are quite constructive. it is about whether tension could derail the bull market and for how long. haidi: this is a market that

keeps looking for excuses even in the face of dwindling expectations and some tenuous signs of a recovery in china. are you optimistic beyond sheer confidence in this market? >> we remain constructive because we feel with respect to the numbers and how companies are positioning, if you're looking at the semi conductor revolution, everything carrying forward these names, you have to be selective. it does not mean that everything will be going up but in terms of potential for the names and themes we've mentioned, we think that could keep going and you've seen that with respect to strength in the breadth of the market rally so far. and it really goes to see, in

terms of numbers we are confident and we don't think the fact that the fed is looking at two or three cuts depending on the data is going to be a big hit to markets because look at how the market has taken that easily. they're expecting two or three cuts and the s&p is higher than at the beginning of the year. what the fed will do is not the only story. haidi: we've seen big moves in metals, across aluminum, nickel. goldman sachs when it comes to the gold rally racing that gold forecast by 17% to 27 u.s. dollars an ounce. are you expressing this through

any conviction at the point? >> we like this with respect to diversification and a hedge. in terms of gold in an environment where interest rates remain elevated we are not bullish, but this is a diversification asset class which does well in the case of tensions and a hedge for inflations which remain stickier than most predicted. that is what gold has been doing well with respect to overall demand. going forward, we do not like it , we see it in terms of i diversification strategy. haidi: always great to have you, ce of at ndn ge capital. more to come. this is bloomberg.

♪

>> taking a look at futures in europe, we have seen asian stock declines in the wake of the attack over israel. this is the picture in europe, muted reaction. we also have risk when it comes to german assets with olaf scholz in beijing to deliver a difficult message when it comes to china's overcapacity. to china's overcapacity. g7 leaders food isn't just fuel to live. it's fuel to grow. my family relied on public assistance to help provide meals for us. these meals fueled my involvement in theater and the arts as a child, which fostered my love for acting. the feeding america network of food banks helps millions of people put food on the table. when people are fed, futures are nourished.

join the movement to end hunger and together we can open endless possibilities for people to thrive. visit feedingamerica.org/actnow people couldn't see my potential. so i had to show them. i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. today i'm the ceo of my own company. it's the way my mind works. i have a very mechanical brain. why are we not rethinking this? i am more... i'm more than who i am on paper.

>> from our point of view, this

operation is over. there is not indented to continue the operation. if the regime takes any action against the islamic republic -- only separation -- our next operation will be larger. quick take a look at asia stocks. you can see some degree of caution there. we have seen what a steady stream of gains. all of this continuing to hold past that and three level there as well. not really being seen as a haven of demand there. all of this is tracking the follow-up seen that u.s. equity

markets are continuing to grapple. in australia we are seeing a little bit more of a tamed downside. we are seeing that they are curbing some steeper losses there. we had some fairly dismal data on the coast of the services sector. speaking of gold, this is the picture across the havens we are tracking their. gold futures actually falling by .1%. that speculative froth is being seen a little bit as we see the reaction to the attack on israel. the drop in the rebound and then the drop again.

we are seeing some volatility there across message metals. the u.s. dollar is pretty muted at this point. the u.s. dollar index could have hired to about 1217 if we see an escalation. oil is the other asset we are watching. traders have kind of shrugged off the check on israel after that we can gains were held in check to a large extent, sharon joins us now. the fact that we are seeing not too much of a response in crude, what do we make of that? >> i think that a lot of people were surprised this morning as oil has been a much needed this morning. although the trains volumes are higher than normal, is not

really seen much of a move. the attacks were unprecedented and the first of their kind. it didn't really affect supply for now. i think that is what the response we are seeing at the moment. iran has said it has pretty much included desk included with the text. they did warned that if the u.s. gives a strong retaliation against his attacks -- iran has made clear -- israel told the u.s. it has made clear it is not looking for any significant escalation and the biden administration is telling israel to take the win. all of the situation doesn't really point to a significant escalation in terms of conflict. that does not mean there will be no escalation but at least for now the prices are pretty much

calmed at this point. quest given that level of calm, what were analysts and traders most worried about their? >> any strong reaction from israel is like the most concerning thing for oil traders and analysts at this moment. any flareup of patients and this becoming a broader regional war in the middle east is going to be a very significant risk factor if it does come about. so far, and the attacks on oil-producing assets or the blockage of the strait of hormuz. the fifth of the world's seaborne cargo shipments flow through their. if there is any kind of blockage of that, it is going to be a really big risk for the oil market.

we have seen there was a container ship that was contained that was seized by iranian forces and if we continue to see something like that that is because it was considered to be linked with israel. but if that continues to happen, i think the oil market is going to seriously concern -- consider this risk and it will result in a risk surge in geopolitical risk. >> that was our oil market report. we are keeping a close eye on metals. look at that move you have for aluminum. it is jumping by the most since 1987. this is a response to the new curves that were put in place by the u.s. and the u.k..

they are banning deliveries of any ration supplies produced after midnight on friday. that is leaned into these big price swings you are seeing here and we will be discussing the key question of how long we will see the source like lasting in the markets because on the one hand you have some that are arguing that removing one of the largest producers of the market will drive prices higher. others are focused more on the prospect of a flight of all russian metal because that is permitted. that could get dumped in response. at this point in time we are seeing this bike coming through here. that biggest jump since 1987. big moves in copper, nickel and gold. still, big moves you're seeing here. the question is how long those last. i have more to come on daybreak asia. this is bloomberg. ♪

chris olaf scholz bring in the eu chamber of commerce and china president.

great to have you with us. they will be one major message and we saw it. also be delivered by janet yellen on a recent trip. how effective do you think this messaging will be? >> we believe it is getting urgent. there are some very serious imbalances in the relationship. we have impressed upon the chinese leadership is something must change. it is a bit lazy and.

>> what are you hearing on the ground from your membership? is it concerns? using worries about the deterioration of this relationship? >> the major concern is the state of the domestic economy. there is a low level of consumption growth. if you are not selling at home, you need to go abroad. we just collected data from her 1800 members. 36% are indicating the nursing overcapacity.

50% of our numbers are seeing decreasing markets. there is enough quicksand curious given the businesses that you speak to, what is the level of commitment to putting new capital to work inside china in terms of expanding operations on the ground? given these geopolitical and high tension situations? >> they are not running for the years but it depends very much on what kind of company you are. then you will continue to invest. so many exciting things are

happening in china. a lot of them are feeling they might eat overtime. a lot of this sme's will simply not have the bandwidth to run the supply chain separate. our concern is china is missing out. this is something that will be filled in china and europe. this is something that china needs to be alert to. quick something that is the shipment numbers for apple. we saw apple iphone shipments plunging 10% in the first quarter of the year. one of that is the china story. they saw drop off in demand for apple iphones.

part of the driven by this preference for local brands and local plays. shipment companies are aware of that risk as well. quik-trip. we have seen significant ever to participate in this. the economy has grown by 20. that is of course a concern. it increased in volume terms. you can get the most for the less money.

exports to china were different to export from switzerland. we had to numbers from europe. >> separatism of the biblical tensions that will dominate the visit, have you seen signs that policymakers and the business environment has gotten easier for overseas partners because of the economic slowdown?

do you think there is more willingness to appease to foreign investors now? >> we have seen initiatives. implemented in a meaningful way. we have seen a little bit. we need to see those figures change. i think the number of numbers that are enjoying -- i think the picture is a little bit more pessimistic. that is something china needs to be vigilant.

we cannot have a relationship. we can say china is decoupled from your. whether you are in china or if you're sitting in your. >> that was the european chamber of commerce. the quick check on what is happening in the fx market so far today. we have a particular watch on the dollar strength coming through. where moving back into the aussie dollar. there is the strength in from of the mining.

resource prices. the result is japan's trade balance. that led to a weaker japanese currency. grexit interestingly take a look at how u.s. treasury trading is playing out in terms of that even aspect that we typically see. it does seem to be falling short of the case is being priced in and going to the end of last week. potentially looking like we can see what is going higher this week. if everything remains at the

levels we see now. we have seen futures declining. we see the risk of further escalation. and of course, what that means when it comes to feedthrough and regular expectations. we are seeing bonds in australia and new zealand and the catch of the catheter treasuries as well following those moves over the weekend. you can catch up live and see some of those past interviews in our interactive tv function on tv . you can also dive into securities with the bloomberg functions. you can send us instant messages during the show. that is at tv . is bloomberg. ♪

given its very much in the eye of u.s. regulators. it does question whether we see u.s. regulators approving it. it is really mired in their political firestorm. let's shift to another group of stocks. 10% in the first quarter of the year. let's bring in debbie wu. we have a weakness for apple in particular. still, globally, we saw a bit of numbers for all smartphones in general. should apple suppliers out to be

concerned in this point in time. >> that is a very good question. we are seeing apple smartphones after the high-end by default last year. we saw the tim cook made extra efforts to visit china at least twice over the last six months. you can see that apple is paying extra attention to china. the most important market for the company after the u.s.. course when it comes to tsmc animals, what are the expectations we are looking at here? >> they have already reported a very robust sales numbers for the first quarter. investors will want to see

whether or not you need to be lifted. that means the investors will want to find out more for an additional plant in arizona. there will be its third advanced chipmaking plant in the u.s.. >> we are tracking this risk that we could see more of a pushback from some of the chipmakers in this part of the world on these calls -- try to restrict china's ambitions. how is that going to play out? >> i think we will need to wait and see. we actually reported the

administration is seeing to ask allies of cutting edge chip technologies. they have actually resisted the u.s. call for that. and because they want to see the outcome of the elections. quick let's take a look at some of the stocks headed to the open in the next half hour. we will be continuing to look at energy in retaliation of the beacon. also watching chinese builders in particular. in short-term operational difficulties fell. course continuing to track how markets are faring in the face of this weekend.

an attack by iran on israel. so far the picture is looking fairly muted. we are seeing a bit of pressure for taiwanese equities. a weaker session on wall street. bank earnings, a little bit of disappointment. u.s. futures to the upside here. tracking what we see for the japanese yen. they are trading at that 153 mark. >> coming up in the next hour, more analysis when it comes to the escalation in the middle east. goldman sachs is telling us why they received the technical on chinese and review.

we are half an hour away from the open and hung, change in and shanghai.