>> welcome to "bloomberg daybreak: australia."

i am haidi stroud-watts. >> i am. the top stories this hour, elon musk making an unannounced trip to china meeting the premier and seeking to reduce the revenue decline. >> bhp is said to sweeney 02 anglo american after having its offer turned down. >> bloomberg learned elliott management is to build a large stake in one of warren buffett's favorite japan trading houses. haidi: we are looking like a pretty positive set up so far, said futures up by .3 of 4%, indicating an early advance of 1% will be get to the cash open. u.s. equities getting on friday, strong earnings reports with the likes of alphabet and microsoft under relief when it comes to month inflation lifting spirits at the end of what was ultimately a choppy week.

take a look at how we are setting up when it comes to japan, nikkei futures flat at the moment. we see that yen tumbling pass levels targeted for intervention. we saw the slide gathering pace after a deb fischer boj and lots of questions as to the credibility of policymakers testing those losses in the early part of the session across major trading pairs. china futures looking muted. annabelle: as you said, that optimism and that strength we are seeing coming down to key earnings we had out last week, microsoft, alphabet. it investors going into the season wanted to understand whether all of the money being poured into a i was starting to pay dividends, and the message of that is coming through to it investors is that it is starting to pay off at least for some firms in the market, so that

really did build into the equities a backdrop and we had stock seeing their best week for 2024. there are concerns around the macro economic picture instead in this week very much focused on the fed and no height expected and no cut either, but what sort of messaging are we going to be seeing from jay powell at the conclusion of the meeting on wednesday and whether we get any shift coming through in his tone? oil markets to note, brent crude and wti coming online this morning. weekly advance, signs of tightening physical market today close to the $90 per barrel level. let's shift our focus to what else we are tracking, and that is elon musk making an unannounced chip to -- trip to china seeking approval for driving software.

stephen engle, you are in beijing. you saw the plane perhaps carryingwe cannot confirm elon s on that particular plane, but we can see he was there in beijing meeting with the premier li chung. he was the party boss at the time elon musk and tesla negotiated the factory for shanghai that opened in 2019, and there was a long five year relationship if not more between musk and the premier, and that is the most productive factory in the world for tesla, but

tesla is having troubles right now just coming off its first year-over-year decline in quarterly revenue and slipping down the table in ev leadership in china. at they are cutting headcount globally and are said to be axing new recruits, college graduates in china. they are also looking to accelerate new models around the world. however, they are not at the beijing auto show. li qiang did go to the auto show. there is speculation that elon musk before he jets off might make a visit today at the beijing auto show. we cannot confirm that. we are getting a report, a statement from the china's association of automobile manufacturers in a statement coinciding with elon musk's arrival by the way. he arrived at 2:00 p.m. we got the statement at the same

time. tesla has passed the data security test on how a vehicle collect sensitive information and whether a vehicle allows a driver to stop its firm collecting data for the model 3 and model y, but the overall pressure tesla is facing globally is acute and is in china. i asked the founder of automobility, and he essentially said tesla is losing ground in this market, and it just does not have the new models and is not present at the beijing auto show when chinese ev's have made such ground over the last four years or so. haidi: we hear of new technologies china is pushing for self-driving. is this a service that would be

accepted by regulators there? >> that is an interesting question. assisted driving is accepted in this market. whether tesla's is going to be accepted is another question. he wants to see the revenue stream included in the world's biggest auto market. tesla charges a $99 subscription as an alternative option for buyers, so he wants to get that approval from beijing regulators , but there are all kinds of sensitivities around the cameras that are in the system, data security, the safety. the full self-driving system does not make these tesla's fully autonomous, they need driver assistance, but it is a step up on the other system

tesla has, which is autopilot. u.s. regulators have launched an investigation into the safety citing 20 crashes involving that system since a software upgrade since december. these are odd because he concerns chinese regulators would have about the safety of any tesla system, but also data security is absolutely at the crux of the differences between china and the united states. chinese regulators and authorities have banned tesla's from going on to military compounds and other facilities, so there was a long road for tesla. he does have the good relationships with li qiang, but it is a big struggle to get that kind of approval immediately, but they sit on the right things. li qiang said china is always open to foreign companies and

added that tesla is a successful example of u.s.-china cooperation and tesla was willing to deepen cooperation with china. you can kind of see elon musk's priorities. she was supposed to be in india eating with narendra modi. he wants to get into india. at dr a lot of tax issues of import taxes and the like in the indiana market. he also wants starlink in india, but china is elon musk's priority. all he obviously sees china as a more pressing matter right now. haidi: stephen engle with the details of the surprise visit. stick around for more insight into elon musk's weekend trip to

beijing. wedbush securities at 11:40 a.m. sydney time. antony blinken is due in saudi arabia for talks with regional counterparts on the israel-hamas war. wrapping up two days of sometimes confrontational talks with the chinese president wanting not to target china saying the two partners should be pals, not rivals. >> if we do not see a change, we will impose sanctions on more than 100 chinese entities and are fully prepared to act, take additional measures, and i made that very clear in my meeting today.

haidi: russia says ukrainian drones attacked an oil refinery in the south because of the fire, which partially suspended operations. the facility is among multiple refineries targeted by kyiv. the latest attacks follow a heavy missile barrage which targeted defense and revelry infrastructure. we will have more coming up with a comes to antony blinken's visits to china in the middle east. bonnie glaser joining us at 10:30 a.m. sydney. annabelle: we have japan's oldest vc firm closing in the targeted trip of the value of its of investment. we hear exclusively from the ceo, but first year why goldman sachs expects developed market inflation to gold despite recent hot cpi readings from the u.s.. this is bloomberg.

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haidi: let's get a look at the week ahead, the federal reserve will hand down its latest policy decision following the release of hot inflation a prints. bloomberg economics expects jay powell to dampen help of a cut.

the job reports will show payroll growth slowing to do hundred thousand this month after surging by over 300,000 in march. in asia, april pmi's they're probably edged lower after surges in march and japan will release a slew of eco data after the boj left rates unchanged. looking at the results from all four chinese megabanks of this monday. bloomberg's intelligence is earnings persisting there even if the banks avoid a part. hsbc, standard charter releasing results this week. we are also waiting for earnings from the magnificent seven stocks, apple, amazon reporting after mixed results last week from their peers. samsung's results to out after preliminary numbers showed a sharp profit rebound in the first quarter, and vanke will be reporting.

that is your week ahead. annabelle: a lot for investors to be digesting over the coming days, but let's get golf with one of the key events on the calendar, and that is the fed meeting wrapping this week and bring in andrew tilton. he joins us now in the studio. i am interested in your views here, not expecting any movement policy, but it will be that focus on the press conference and the tone jay powell strikes as well. do you think he was shifted? >> she needs to keep options open for the fed after a set of upside surprises. we do not know if we will see inflation down to target in time for the fed to begin cutting by midyear. our forecast, we think the fed starts cutting in july and see a lower run rate of them nation in q2 and beyond, but that is a

forecast, not a fact. annabelle: what are the sort of economic conditions that make you or goldman sachs confident that we will see a cut by midyear? >> some of the inflation we saw in q1 was due to the january effect, annual adjustments, rent have been a couple of big chunks of inflation that have been running hard, but the leading indicators, private-sector leading indicators suggest that inflation is more like 2% or 3%, so as the existing said of lease and rental contracts could reduce down to the lower rate of inflation, we think we will see the sequential rate of inflation just about 2%. if the fed is focused on sequential inflation they may see what they like over the next few months, but we will still be above a little over 2.5% even late this year. haidi: when you listen to the

fed and other central banks at the rba there was a corinthian that the balance of risks is so fine at the moment that it could go either way. what do you think is the major driver in terms of what we are looking at in the data to tip the scales potentially? >> on the central banks, it really is inflation. rba, australia also had an upside surprise in q1, so that pushes back the onset of their rate cuts. we originally thought they might go in august. now we think november is likely given that we have more work to do to see inflation come back down to the target, so for many central banks especially developed market that is all about the inflation market outlook. to a large extent it is all about the fed. they feel they want to see the fed in easing modi before they

feel comfortable cutting themselves. haidi: a key surprises what we saw out of the bank of indonesia. are there key vulnerabilities in these more frontier aspects of asia and central-bank policies there? >> india is a great example. they have an fx ability mandate. the rupee moved above 16,000 two the dollar, and because of that the goal for fx ability they decided they needed to raise rates. indonesia is probably one of the better examples are one of the more fx focus central banks in the region, but that dynamic waiting longer to cut, or even in the case of hiking is something we will continue to see if we do not get a relatively dovish message from the fed over the next couple of

months. annabelle: does the boj need to be more fx focused? we see the weak yen getting close to 160 and perhaps dampening consumption trends? >> on friday governor ueda did not express a lot of concern. the yen is down 10% year-to-date to date but implied that is not had too much of an upward effect on inflation and will probably take the outlook report suggesting it will take until 2026 for inflation to sustainably get back to targeted, so i think the message from the boj was we need to normalize policy very very slowly, and that clearly led to a further yen selloff on friday 2150 -- to 150. as long as the fed and other

central banks are relatively reluctant to ease, the yen is likely to be on the back foot. haidi: you talked about it all being down to the fed. is that the bigger anchor now in a dominant way than china and is that relationship between the e.m. complex and what is happening in china becoming de-correlated? >> we think the fed is most critical in terms of how em central banks are behaving. china growth has held up moderately so far this year, but policymakers are probably feeling reasonably confident about the overall growth target. it is still early days, but the pressure on them to ease aggressively is not extremely high at the moment. we will have a politburo meeting that we expect will be more focused on the implementation of measures that have already been announced or hinted at than i

knew big announcement of policy easing. china's growth as more export oriented this year, so to some extent that is coming at the expense of exports and other parts of asia. there is a competitive aspect of that, but a relatively stable renminbi to the dollar gives banks optionality, so we think that that is probably the most important factor for most em central banks of the region. annabelle: thank you for your time and for coming into the studio so early. get a roundup of the stories that you need to know to get your day going into day's edition of daybreak. terminal subscribers go to dayb. customize your settings so you only get news on the industries and assets that you care about. more ahead. this is bloomberg. ♪

haidi: we have breaking news crossing the bloomberg involving scotland, the first minister yousaf is preparing to resign and could send on a monday. this coming to a conclusion that his position is still longer tenable. senior figures are being told they decided over the weekend that there is no way for him to survive this week's vote of no-confidence. this comes as we have seen a period of disarray for the smp, conservatives launching that vote of no-confidence after he ended the power-sharing deal. we are waiting for further developments, but that resignation could come as early as monday. bhp is considering an improved

proposal for anglo american after its $39 billion deal was rejected. what are the next steps? >> there is no official comment from bhp or anglo, but last week bhp made the share offer. anglo said it was opportunistic and fails to value its prospects. may 22 is the next day. bhp has then to table a fresh offer or walk away. we have been talking about all week copper prices are surging. demand good soar as well. an electric vehicle needs four times the amount of copper than a normal car. it is much cheaper to go out and

buy a new mind. annabelle: if bhp comes back to the table with a better offer, will that be enough to flush out some of the rival bidders? >> that is the next thing will be watching for because it is not beyond imagination that the likes of rio tinto will become interested. other miners will be thinking the same thing when it comes to demand. another company is doing a major deal for $90 million worth of coal mines in canada. copper and gold deposits are usually found together and beric expressed some interest in expanding into copper as well. dive into prices are down. last december it announced a

production downgrade and we saw shares falling 20% in december. contrast that to the last two days of last week where we saw shares gaining 20% on news of this potential offer. haidi: coming up on "bloomberg daybreak: australia." we are on yentervention watch. a monumental day for the yen on friday and we are watching to see how low it will go before policymakers step in. this is bloomberg. ♪ ♪ my name is teresa barber. i was in the united states navy and i served overseas in the middle east and africa. early on in my career i had a commander that taught our suicide prevention training on a friday afternoon and the very next day, he took his own life. 90 percent of suicide attempts involving a gun are fatal. you don't know how much somebody can hide what's going on in their head. store your guns securely.

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>> when it comes to the yen, intervention watch after a number of red lines touted as

levels where we would see policymakers step in. the yen came off its single worst day on friday. 1990 lows for the yen. similar lows like 2008 when it comes to euro and sterling. levels we have not seen since 2013. garfield reynolds talk at length about yen intervention and the comfort level, has that changed the lines in the sand? garfield: it is because it has been a slow grind. but the yen is not alone. the u.s. economy continues to blow away expectations that it

is going to slow down. initial readings might end up being after the slightly weaker and concerning first -- you know, reading. none of that says this is an economy that needs rate cuts. we've got traders betting on rate cuts. no one expects the situation to last. the market will bid on less than one rate cut. above 5% for the two-year, it becomes really hard to push back through intervention channel. the effective way to push back would be shifting's to rapid

monetary tightening. there are reasons why that is not something the boj governor was eager to countenance. the japanese are being patients, which is something that japanese policymakers have been for more patient then say u.s. governments and that was part of what made them so exceptional. the governor came in and blew away expectations as to what a boj policy set up my be, to come in with massive easing. the governor is cut from a gradual list cloth.

it is a slow path. that makes it hard for the ministry of finance to come in strongly to drive dollar-yen down. haidi: especially when everything else is driving thehaidi: dollar up. haidi: it's not just the japanese currency. the korean won has been sensitive. is the worst over? garfield: in a lot of ways, that depends on the fed. perhaps you've got some level of safeguard for currencies. the main meeting for the fed decision comes out thursday morning. you are likely to get a signal

that they are going to take one of the rate cuts off the table, but nothing definitive about the path for u.s. rates. if the fed comes out hawkish in this week we have the run-up into payrolls. so the risks are skewed to the downside for every currency except the dollar, maybe the frank. but the korean won looks vulnerable. it will be key for what china does with its own currency. big influence on asian currencies. and what happens with china pmi's due out tomorrow to give us a few of where the chinese

economy is going. even with a lessening of china's influence as the economy struggles, that is crucially important around the region. korea is a big part of that. haidi: we've got pmi readings from china and the survey is for modest deterioration. that was garfield's rental -- garfield reynolds. 30 minutes out from the start of trade for sydney, japan equity markets shut monday. we are tracking futures and trading, pushing close to the 160 mark and of course on watch for intervention. quite a lot of positivity following the u.s. session.

best week for u.s. stocks this year. same goes for asia. numbers really reassuring investors. haidi: a lot of reassurance in what had been a choppy week. event risk with the fed and earnings when it comes to china's big banks. we know this will not be straightforward given the property downside, involvement in projects which impact asset quality. it is all about margins. the big state lenders are in focus when it comes to those themes. icbc, margin risks. impact on asset quality and

funding, quite again, shares of 10%. 13% in shanghai. risk will set the tone fundamentally in 2024. china construction bank is impacted. property downside impacting asset quality. a gain although not as much in hong kong. bloomberg intelligence expects their earnings will be lower single digits. we talked about property. numbers in focus weighing on banks after the plans to resolve liquidity pressure. operational difficulties. looking ahead to the details.

$18 billion asset package for collateral as it seeks new lending. annabelle: not just the focus on chinese banks, also carmakers following the beijing auto show. controlling around 33% of the auto market in china. what is interesting is how much of an impact price cuts have had. uid is learning -- leading a price war to boost market share. impact will show up in the margins. first quarter revenue will climb 10%, something we are tracking. uid really interesting unveiling's. the other name is samsung. final results and preliminary once showed a sharp profit rebounds.

better sales for its smartphone. firm expected to be a key beneficiary of solid demand for ai chips. a rise of 16% and what has not been big has been intel numbers. lackluster forecast for the second quarter. the ceo spoke about efforts to restore dominance. pat: we delivered a solid first quarter. tepid in the first half as we said, but a lot of improvement in with that, the foundry business, we will see progress every quarter from now through the end of the decade, it gets better and better.

getting back to leadership, better asp, better products. more external foundry customers. we get past having to invest in create capacity for one decade plus of underinvestment. one milestone this week, we went to production on intel three server parts. the u.s. is back to leadership being manufactured on our shores for the first time in one decade. key milestones, everything is coming together. we are optimistic. but we will deliver. foundry and manufacturing capabilities as we laid out for the company, industry and the world. >> 2024 should mark the bottom.

they want to understand pace of decline necessary. how can you tell us about how quickly you will scale back the market share? pat: we look at intel, two different perspectives. we expose through financials that we have a solid business with healthy financials. we expect those to improve. the big story has been about exposing losses and that will cross through profitability for the business as we get back to leadership and moderate the level of investment required to rebuild a decade of underinvestment. haidi: that was pat gelsinger speaking to carolyn hyde. still ahead, the ceo of japan's

venture firm. this is bloomberg. ♪

>> japan's oldest venture capital firm is tripling the value of its investment in a sign of resurgence in the ecosystem. the ceo told us they are getting

the latest from potential japanese unicorns. >> there is no doubt a number of stocks taking on global challenges and social issues is increasing. >> there is defeat about how some startups want to debut early when they are small. what is a good sized to go public? >> the japanese stock market is unique and allows companies of all sizes to go public. the number with market capitalization extending -- exceeding tens or hundreds of billions of yen is exceeding. host: it would be great if you could show the target return. and how you came to the target. and whether this was a good

performance or average for how -- how -- how it is, if you can explain? guest: i would like to name for a return of investment of three times or more. our performance has been lower than that. the reason i think we can aim for triple is our performance is determined by the large startups we can generate. the number of startups is increasing. but we meet the standard of triple, we meet certain standards on a global basis. >> it would be ok to understand? is one of the best if not the best performers? >> i want to achieve good

results. it is important to keep up good performance. reporter: the next step, for the next fund, could you explain to us the strategy behind it? guest: our strategy is to create every three or three to half years on a recurring basis. launching the next fund in the second half of 2025. we have not decided on the size, but at least a size that exceeds seven. host: if you can share how much size you want it to be? guest: 97 point ¥8 billion, so

the number will exceed ¥100 billion. host: a number of challenges japan is facing, what do you think is the most urgent challenge that it needs to solve? guest: with asset management in place, changes happen rapidly at large companies. same applies to startups and the transformation of industrial structure. it is very important for us to communicate current changes in japan to the rest of the world. host: without be attracting more interest from foreign investors or even bigger growth in startups? is that correct? guest: japan's economy is small compared to the u.s. and china. however, we are about to undergo a major transformation and speed of growth will change quickly.

i hope people will become aware and invest in japan. i would like to promote this investment in human resources. >> ceo speaking with bloomberg. you can catch japan ahead every monday at 8:40 a.m. in tokyo. subscribers can subscribe using the tv function. this is bloomberg. ♪

>> >> top corporate stories, apple renewing discussions about technology. the two firms are discussing terms for a possible agreement one month before apples developer conference where it is poised to introduce new services. they've agreed to boost cooperation following a meeting between the company's executives. it will bolster cooperation.

a billionaire owner is close to making an offer to take the company private. sources say they are considering an offer on shares he does not own. blackstone and goldman sachs will fund the buyout in the deal will be $7 million including debt. >> activist fund manager elliott has a large stake. japan is one of the largest markets and institutions are being asked to retool business strategies. let's get more from our asian equities reporter. one thing that attracted the attention of elliott? guest: so when you search with other trading, from previous

investments, through some of the ratios, the stock price underperforms when you look at a five-year span and the reason comes down to shareholder returns, which is not the trend we are seeing in japanese companies. and 500 billion yen share buyback is the biggest in history. there increasing their payout ratio target and that put pressure to do good. annabelle: we have earnings for trading houses, so what are you expecting on thursday?

guest: it comes at interesting timing. they are going to announce full-year earnings in a medium-term plan on thursday. expect announcement around shareholder returns. we've had shares that value, we're waiting according to people we spoke to. when you look at historical investments in the company, before these companies put out to help the company think about shareholder value, assets and increased buybacks in february, the biggest buyback, there is a lot of excitement with what

they've got to say about earnings and the improvement funds that they have. haidi: that was asia equities reporter whitney. these are the stocks when trade opens in korea shortly. japan shut for public holiday, but elon musk made an unannounced visit to china on a mission to boost the revenue, there are some names we are tracking. sydney trading. focus on bhp. the aussie miner is considering making an improved opposable for anglo american. haidi: as we head into the market open, we are watching the yen trading keenly. not just the yen, but

dollar, the relentless ascent of yields and how that is playing is not likely to abate ahead of the fed skewing a -- a -- a -- a pivot and entrenched u.s. inflation. if you look at the yen, we are asking where policy makers are as red lines have broken. in the next hour, the feds last mile in focus and

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haidi: this is daybreak asia.

japan is shut for a public holiday. the yen is in focus. a one-way street. we are asking one authorities will ted -- step in. haidi: the efficacy of stepping in, red lines that we thought where previous levels, it is not just the yen. we're watching all asian fx with relentless strength in u.s. data. this week, the fed and earnings as well. annabelle: constrained by the expectation of staying higher for longer. necessitating a cut, this is the outlook we've got for the korean stocks. a few minutes to show,