>> welcome today bric australia.

i am haidi stroud-watts in sydney. annabelle: i am annabelle droulers in hong kong and the top stories this hour. stocks set for a positive start. investors hoping mainland markets follow the bullish lead when they reopen after a holiday. the yen vulnerable to any hawkish fed commentary this week. haidi: westpac's first-half profits slide in line with analyst estimates as it boosts a buyback by a one billion aussie dollars. annabelle: the chinese president touches down in paris to begin a three nation european tour with trade tensions on the rise. haidi: let's get you straight to how we are setting up when it comes to the start of trading in asia. this monday morning, we are looking like a pretty positive lead, china coming back online, to see where chinese equities will be gearing up to bridge the gap with hong kong counterparts. the hang seng jumping on friday,

the longest winning streak since 2018. before we get to the china open, we are seeing quite a bit of upside when it comes to futures. we are one hour away from the start of trading there and we did have of course a softer than expected u.s. jobs report really coming at such a relief, reviving some bets that the fed will have rate cuts back on the table for later this year. we are seeing outside of about .3% for the start of trading here in sydney, and he restocks on the back foot, softer by just about 1%. chicago nikkei futures setting up to see a little bit of upside. it is a busy week when it comes to quite a few sort of key data points including japan wages. we are getting tenant credit and export cpi's from southeast asia and of course here in australia, we have the rba decision as well as a central-bank decision out of malaysia as well. take a look because we still have some close markets to contend with. a thin session across some parts. japan closed today and we are

seeing market closures and south korea as well as thailand. annabelle: just taking a look at how u.s. futures are coming online this morning, you still got some modest gains coming through which follows of course what we had on friday. biggest advance for u.s. equities going back to february. we saw yield tumbling, a softer dollar. apple's earnings post results rally played into it but that focus very much coming down to the jobs numbers which were a lot softer than had been expected or predicted by economists so take a look at the terminal chart and we can put into more context nonfarm payrolls come up around 175,000 over the course of april. the estimate had been for 240 thousand so a very big gap there. and wages growth, another really important component, that slowed. the bulls do seem to be back in control here with bets that the fed could start looking to cut as soon as september. we actually had immediate reaction from the chicago fed president, austin, and here is

what he told us in an exclusive interview. >> 170 5000 is a very solid report. some of the root of our frictions here might be that it's kind of a day trader's timetable and there is an economic timetable. for setting monetary policy come of course, you have got to take a longer arcview on inflation, unemployment. haidi: let's bring in bryan. you think the fed is going to be annoying in how exceedingly patient they will be when it comes to the next easing steps. do you think the data that we had on friday was kind of a perfect print in terms of what the markets have been hoping for? brian: thank you for having me. it really was. we saw that downshift over the last 12 months. nonfarm payroll gains have averaged around 240 thousand and removed down to 175000 and that is all good.

it is going from great to good. the danger here of course is that things can go from good to bad fairly quickly and so we will obviously have to monitor that, but really, i think that the wage numbers also were encouraging. the .2% month on month, 3.9% year on year, was really suggesting we don't have to worry all that much about service sector price inflation. we already have goods vector price deflation and now, maybe we can see the service sector numbers began to kind of hold down that headline inflation number as we go into the summer months. haidi: it's interesting that you say that service inflation is not so much of an issue because it feels like still the fed is fighting this fundamental battle when, yes, rates are at historic highs by most gauges. but you have the fiscal spending still relatively easy. is that going to grow more challenging in terms of how to close that gap, particularly as we get closer to the november election? brian: it has been a challenge

for the fed, the fact that the fed has been trying to tighten economic policy as well as the federal government has been practicing expansionary economic policy so when you put the two of them together, it does create a lot of this sort of friction as far as you have one that's kind of pumping the brakes and the other that is pushing on the accelerator. and that actually has contributed to some of the distortions in the economic members so when you look at where have the job gains mainly been? it's been health care, government, and areas like transportation and adjust six, things that may be do have some sort of relationship at least on the margin towards where the government spending has been said that has really complicated things for the fed which is one of the reasons why they really, i believe, at this point, want to just hold rates high for longer as opposed to really putting rate hikes on the table anytime soon. annabelle: how does that

thinking around the fed policy also play into your views or your approach to bond investing then? brian: i saw a few here with our investment committee with bonds. the upside potential for bonds is pretty much the coupon so when you look at the yield maturity or the coupon rates on any of the fixed income instruments out there, maybe that is what were expectation should be for what the total return potential is. we are not really banking on massive price appreciation. the idea that yields can go that much lower. because if we think out about one year from now, if the federal reserve has cut 50 basis points, 100 basis points, really, most of the movement is going to be on the short end of the yield curve. the longer end might only move down a little bit so we don't anticipate some major gains as far as price appreciation from a drop in yields. we might be close to fair value on the 10 year treasury where we are now.

>> the flipside of that is what is happening in the equities market and does that also in fact how you view valuations, for instance, not quite as stretch as they appear? >> a lot of people like to look at the earnings yield, the earnings divided by the price of the s&p 500 and then compared to the yield on the 10 year treasury. that is not really a fair comparison and it doesn't actually work. when we look at history, a fair comparison is to look at earnings yield relative to real yields. on an inflation-adjusted security, tenure tips or something like that. when we look at that spread, the earnings yield on the s&p 500 versus the real yields on a 10 year treasury, it's not really stretched. it's close to about the average, slightly above average. from a headline perspective, we think if you actually compare the right measure on the equity markets versus the right measure on a fixed income markets,

people can calm down a little bit in terms of the evaluations that are out there. >> if you look at the right area of the market as well, i know that you are quite focused on the often overlooked mid-caps space and also different areas of the ai theme as well. >> we are looking at the investment opportunities on equities. we have people thrown in the towel? internationally, china represents some pretty interesting opportunities from a valuation perspective, possibility of additional stimulus coming out of there. economic acceleration coming out of europe. in the united states, we like the mid-caps base because when we look at large-cap stocks, a lot of the concerns about the lofty valuations are more they are and on the small-cap side, you have one of the problems of a lot of unprofitable opportunities and highly leveraged plays. when we are thinking about high valuations on one end, high valuations on the other, it does lead us in the middle with

mid-caps. haidi: i am looking at your aia thesis to jewelers. which part of that cycle are we in and when you take a look at the international landscape of where you could invest, where do you find the ultimate users? >> that might be a theme that we look at for 2025. right now, we are looking at think more that transition from the shovels, so the semiconductors, more towards the miners and refiners which would be the companies like, you know, for example, like google and microsoft and then also some of the other plays as far as the data centers, the analysis, and ultimately, the ones who benefit from it will be the ones who actually implement the technologies, so that would be those companies, whether it is on the industrial side, health care side, even materials side as far as who is using the artificial intelligence technology to really support business growth there.

we think the market narrative has shifted from a real soul focus on the semiconductors tomorrow what we call the miners and refiners which would be more the data center plays and the analytic companies that are out there. >> that was brian jacobson at annex wealth management. thank you so much for your time this evening. still at this hour, we speak with rbc capital markets alvin, who is ranked as bloomberg's top yen forecaster in the first quarter. stanford university tells us what to expect from president xi jinping's european tour. this is bloomberg. ♪

haidi: westpac has joined the trend of big australian banks returning cash to shareholders, announcing a special dividend. paul allen joins us now with the details so what did we see? paul: have some money is pretty much the headline here. that is on top of the ordinary dividend of $.75 and another buyback. that is an additional one billion aussie dollars and it was six months ago. that is not yet finished. it is giving money back to shareholders hand over fist and it is happening despite profit shrinking. it is down to 3.3 billion aussie dollars and it was pretty much in line with estimates on the bank saying the competition has been squeezing lending margins and the coronet interest margin

slipped by three basis points to 1.8% while operating it expenses rose so it is a tough environment for the banks. peter king said the economy is on track for a soft landing but the whole rates picture is very much what we have been hearing. higher for longer, difficult getting inflation back to the range and that has been some of the commentary around this. >> as you said, profits are getting squeezed and at the same time, australian banks really seem to want to give cash back to shareholders, so squared that up for us. paul: the takeaway seems to be has anyone got a better idea? there is a lot of money sloshing around and nowhere else to put it so we have had this environment of high rates in australia relatively speaking for some time now which has been good for the bottom line. the capital ratio for all the big banks is really, really strong, and there's limited options for m&a at the moment. we had and said -- anz agreed to

buy suncorp after -- it's all about returning money to shareholders and that is what keeps them happy. we did hear from the national australia bank last week and they announced additional buybacks. we heard this one from westpac today. the market is expecting a similar story there. that is helping to prop up share prices of course but if you look at some of the analyst ratings, in westpac's case, six holds, six sells suggests tougher times ahead. >> that was paul allen in sydney. warren has praised apple even after reviewing he has cut his stake in the tech giant. they disclose the move during berkshire hathaway's annual meeting in omaha, the first since the death of charlie munger. let's bring in sally who brings our finance coverage in the americas and this does not seem to be any sort of shift in thinking around the invest

ability case of -- investability case of apple. sally: apple was a really big talking point in the annual meeting of berkshire that took place on saturday and it was the first question out the gates. why did he cut his stakes? the greatest product ever made. he said the business was even better than american express and coca-cola which are two other businesses he owned and he said that apple will likely remain berkshire's top holding until the end of the year so i do think it was a really sort of -- a view on apple he was taking and he did indeed hand that there were tax implications that motivated the sale. >> lots of questions of course in terms of how the conglomerate will operate without charlie. is there a deeper question, you know, looking further ahead in terms of succession now?

>> what really looms large over the meeting was the absence of charlie who was worried about the longtime business marker and -- partner and it cannot be underestimated the level of admiration of the esteem he was held in both by buffett and shareholders and much of the meeting was devoted to paying tribute to him but i think it really focused questions on what berkshire mike look like -- might look like in a post-buffett world. shareholders wanted to know whether the same culture could carry on after his anointed successor -- while he take over capital allocations for warren buffett? and warren buffett said that would make sense and he also sort of assured that shareholders and investors that it was in good hands and he even joked, saying -- he was the vice chairman for insurance operations. why would they settle for warren buffett? >> but of course there is a big

question as well as not just succession planning but also how they plan to spend the enormous cash pile because that grew in the latest reporting period and still, it is not being deployed. >> exactly. yet again, it hit a record at 189 billion dollars. and buffett explained that they just cannot find the kind of needle moving acquisition that they want to spend significant amounts of capital on and remember, buffett is known for these big-ticket deals but he's been struggling to find them in recent years and of course, the cash pile is thus built up. he actually said on saturday that in this uncertain world where geopolitical risks are bound and we are uncertain about the trajectory of rate cuts and inflation remains high, he is actually quite comfortable holding that big cash pile and he also said that if in this world that is more sort of complex and intertwined, more

things can go wrong and this cash pile, having that already available in these situations, may pose an opportunity for berkshire which has in the past swept in such as in 2008 and 2009. >> poised to pounce. sally, who leads our finance coverage in the americas, will lead us on berkshire hathaway. the spotlight shifting to major carmakers and banks. analysts think toyota could deliver its fastest profit growth since at least 2013 and that would be led by the recovery in north america and europe. taking a look at the lenders, ocbc and you obi -- uob will be reporting the results. more to come here on "daybreak australia." this is bloomberg. ♪

>> taking a look at how u.s. futures are coming on this morning, modest gains so far in the session, backtracking what we had on friday and that was a healthy session for the s&p 500, up more than 1.3%. other gauges also rallying intern and it was a reaction to the jobs print we got coming through, softer than expected. it was the key take away here so really helping to appease any investor fees about stagflation and even recession and actually, the print also giving fodder to this belief that the economy is gradually slowing and the fed -- to ease policy later this year and we spoke to the chicago fed president about austin goolsby, haidi. haidi: he did tell us that the latest u.s. jobs print, which of course, the markets really cheered, gave comfort that the economy is not overheating when it comes to possible rate cuts this year. he said he still needs to see

more data confirming that inflation is under control. take a listen. >> 175,000 is a very solid report. some of the root of our frictions here might be a day trader's timetable and there is an economic timetable. for setting monetary policy, you have to take out a longer arcview on inflation, on employment, and we are just trying to figure out, after the excellent dual mandate performance of 2023, where inflation fell almost as much as it has fallen on record and did so without a recession, how much can we continue that into 2024? we hit a bump fischer at the start of the year on the inflation front and now, everybody has just got to take a step back and try to figure out is that a sign that the economy is overheating or is that a sign

of some other thing? the more jobs report to get like this where they are solid but it's clearly moving back into something that looks like free covid and conventional times, the more confident we can be that the economy is not overheating. we got to watch this. >> i don't want to use the word dovish, but you were one of them are optimistic people about the possibility that rates could be cut this year. how do we feel now? we do see this slow down. the ism numbers show slowdowns, spending numbers were not -- they were lower than anticipated and lower than the last quarter. how we setting up to go back to the idea that rate cuts are going to happen this year? >> i don't like committing even for the next meeting, much less when it comes to the fallen going into next year. i will say i was optimistic in

2023 that he could hit when i was calling the golden path, that there were reasons why in an unprecedented way, we potentially could get inflation down significantly without having a big recession. previous to 2023, that really doesn't happen. we did that in 2023. as we are looking in 2024, we clearly hit a bump at the start of this year and we have just got to get comfort that it is not a sign of a re-acceleration of the economy. >> that was the chicago fed president speaking exclusively with our colleague, mike mckee, following the u.s. jobs sprint. it's not just the optimism we had in the u.s. equity session on friday and over the course of last week, but something else that could hurt asian equities is what we get in china because we had mainland markets that

were shot for the past three sessions last week. golden week holiday of course. and during that period, it was a very good run-up for hong kong stocks in particular actually entering a technical bull market. it seems perhaps we have found a footing for the chinese economy, some science perhaps that consumption is picking up somewhat. really, things seemed a little bit primed for hong kong stocks or chinese stocks looking to ride on hong kong's coattails perhaps in the session later this morning. haidi: one of the other things bloomberg intelligence is looking ahead to is the delay to be held in july. it was supposed to be held by the end of last year and any kind of policy cues from that could see the extension of this optimism that we are finally seeing and it is set to focus on economic reforms and address the housing and property market issues that have been a big part of what is weighing on confidence and also looking at the yuan as well across broader asia fx, getting worse bright.

we had the member dollar index falling over 1% for three straight sessions, the worst losing streak since december last year and that is really giving a little bit of relief to a lot of asian currencies including mainly the yen but also the yuan. we could see that fixing fireworks, seeing a bit of a delay, given that the central bank, the pboc is likely to take a pretty cautious approach when it comes to how it is setting the yuan, little bit of room for compression still but some of the gains are coming off on the back of yen strength so the recovery in the yen will remain there as well. more to come here on "daybreak australia." this is bloomberg. this is bloomberg. ♪ 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. no matter what you're up against, we have your back. we are united way. we are neighbors helping neighbors in communities around the when disaster strikes we get you back on your feet. we help children build brighter. we've been here for over 135 s but now our work is more .

join us. join your neighbors. join united way. annabelle: taking a look at how the japanese yen is faring. you are back down to that 153

mark. there have been some very wild swings for the japanese currency the last week or so. even going back beyond that. it is about the yield differential between the boj and the different policy directions they are taking, feeding into the dynamic. also looking at the japanese yen against some of their major counterparts. the euro, the aussie dollar, and the offshore yuan. in aggregate, the question is really where we go next for the japanese currency as well is after we had perhaps two different periods of intervention following over the course of last week by japanese government officials. but perhaps we could see the yen weakening quite a bit further from here down to around 165 perhaps by the end of the year. that is a call from our next guest who is one of bloomberg's top ranked forecasters for the yen. alvin tan.

alvin, talk us through your call, and why do you see the yen weakening again from here? alvin: well, thank you. first of all, i should emphasize the yen forecast was key. in terms of our young forecast we remain relatively negative on the yen. i say relatively because certainly there has been significant intervention year to date. but given the rate differential between the u.s. dollar and the japanese yen, the dollar-yen is likely to move up from here again. and retest 160 level as a baseline forecast. the risk is it breaks through that and goes higher to 165. a new high basically of the cycle.

it fundamentally boils down to the rate differential between the u.s. and japan which remains tremendously wide. annabelle: we are not 100% certain but the moves last week had the hallmarks of intervention. do you see the impact of that dissipating quite quickly? alvin: i think the impact of the interventions will dissipating quite quickly if u.s. interest rates do not continue to drop from here. apart from the interventions we had last week or suspected interventions, there is the important fact that u.s. interest rates fell quite a bit last week. the two-year yield dropped 20 basis points from last tuesday to friday. that supported the general weakness in the u.s. dollar and

caused particularly the drop in dollar-yen. so long as u.s. interest rates can find support around here, which we think it should, we will find dollar-yen stabilizing at these levels below 150, and eventually creep back towards the 160 leve. -- level. haidi: and it is not just the yen being impacted. we are seeing the impact and the trading in the won and yuan. when it comes to the yuan, how much volatility do you expect there to be given the caution we have seen from the pboc, and also how much the levels of the yen have been impacting that currency? alvin: i think there has definitely been an impact on the dollar-yen general uptrend on the northeast asian currencies. there is also the korean won, where i think the impact of the yen is even greater.

nonetheless, in terms of dollar cny, i think volatility will remain below there. because the pboc remains very intent on managing this tightly. so i think volatility will remain depressed. that said, i think dollar cny will gradually creep back towards the 730 high we saw in october last year. haidi: does this now become more of a geopolitical issue? we had a note of caution from janet yellen talking about intervention. clearly we have seen that from japanese authorities. do you think this will become a point of contention going forward? alvin: i think at this point actually, the intervention in the yen -- well, suspected intervention in the yen we saw last week -- was probably justified. there was increasing volatility to the upside from about two

weeks ago. it was trading 155 two thursdays ago and was trading above 160 last monday quite suddenly. i think the volatility surge does justify some intervention. but certainly if tokyo continues to perhaps intervene from here and try to push it down into the 140's, it could create some tension in terms of economic policymaking with washington. as you mentioned, yellen made it quite clear that washington has not signed up to do intervention by tokyo. annabelle: what else is feeling the impact of that sizable yield advantage is the dollar versus the euro, euro versus the dollar. what about there? alvin: i think for the euro, the fact is we are going to be getting quite a significant

monetary policy divergence in the euro because it does look like the ecb is going to start cutting rates in june. whereas we don't expect the fed to cut until december. that will sharpen the policy divergence between the ecb and the fed, and also widen the yield of parental between the dollar and a euro. so we expect the euro to trade back towards the 105 level in the second quarter basically. haidi: that was alvin tan there. annabelle: thank you so much for your time. sticking with the central bank focused, because it is a key theme over the course of this week. it will be another busy period for central-bank decisions. australia's reserve bank is expected to keep rates unchanged tuesday as it weighs hot inflation reading and a tight job market. malaysia is also seeing holdings as a rate cut could undermine

the ringgit. no change expected for the bank of england's monetary policy. some economists anticipate a rate cut in june. aside from central banks, keep an eye on wage numbers from japan, gdp, and cdp readings from southeast asia, and credit and trade data out of china. haidi: and of course geopolitics closely watched this week. israel closing a humanitarian crossing into gaza after a rocket attack from hamas. it comes after we can talks in a potential truth and inconclusively. let's get more from our editor michael heath. we have had weeks of these negotiations now and not much progress being made. in the meantime these developers continue. michael: it is really depressing. the push was very strong on this. there were even talks that the u.s. was pressuring qatar -- these are unconfirmed reports -- that they were pressing qatar to

potentially expel hamas's political representatives from their territory if hamas did not go for this. everybody in the middle east is pushing for this in the u.s. as well, trying to get it to happen. the rocket attack obviously gives israel a perfect excuse not to proceed. and it also justifies them going into rafah, which is where it came from. you almost get this sense from the israeli side, which we will talk about later, but certainly from the military leadership of hamas, when you impose piece on two warring sides that are not interested in it, it is very difficult. so if it comes it will really be quite amazing. annabelle: at the same time we are also getting questions over press freedom, because we know israel has shuttered al jazeera's offices in gaza. what is the significance of that and what are the possible

implications? michael: what i was just alluding to was the timing of this is really awkward. obviously qatar is a central role in trying to facilitate these negotiations. this has been under discussion for a while. and a law was passed earlier giving an opportunity for israel to do that. just to shut them down on a sunday when they are in the middle of these talks, it makes it very difficult for anyone to have a sense of goodwill on either side. so, from the palestinian -- sorry, from the hamas side and israel side, there is a sense that neither wants this peace agreement, despite the will of the world and everyone surrounding them. so it is worrying. and israel's right-wing government closing down al jazeera, whatever its faults, that is not a good sign on israel's front either. haidi: it comes at a time where the new palestinian authority has in place these new modern technocrats, which i would

imagine is exactly what the u.s. and other partners are looking for when they are looking to the future. it is hard to see that future at this point. michael: that is right. bloomberg has done really nice reporting from the ground. they are dealing with ex world bank people, doctors, the foreign minister came from the u.s. so yes, it's really difficult for those guys. technocrats operate in a war zone, so they cannot do much. the names are good but the progress is limited. annabelle: that was our editor michael heath. some other geopolitical stories we are tracking, russia has launched weekend drone attacks across much of ukraine, hours after the ukrainian president says his forces shot down another russian fighter jet. officials say those raids were followed sunday by a barrage of bombs targeting kharkiv. but observers say russian ground troops continue to press their advantage in eastern ukraine while kyiv awaits new u.s.

weaponry. the u.s. is in talks to lead a group of allies that would give as much as 50 down -- $50 billion in aid to ukraine. it would be repaid with windfall profits from frozen russian assets accruing interest. sources play the plan is being discussed among the group of seven nations with the u.s. pushing to have an agreement with g7 leaders in june. we will have more ahead on daybreak australian. this is bloomberg. ♪

haidi: chinese president xi jinping arrived in france on a three nation trip through europe designed to bolster ties even as trade tensions mount. this is his first visit to the region five years. it comes as the eu forges a more unified voice with washington in opposing china's capacity for cheap exports. xi's trip includes hungary and non-eu member serbia. let's get some analysis with center fellow at the friedman institute for international studies at stanford and author of upstart, how china became a great power. always great to have you with us. it is a critical time version pinned to be visiting europe at this point.

how difficult will these conversations be given how the issue of chinese overcapacity has loomed large in every diplomatic interaction china has had with western partners over the last few months? oriana: i think xi is hoping the conversations are going to go smoothly in that they designed it this way. they picked france, serbia, and hungary, that the chinese referred to as being more friendly and pragmatic in terms of other countries in europe. so they are trying to push this idea that european countries should have strategic independence, meaning they should not follow the u.s. lead, and a think these are the countries that are most willing to hear china on some of these issues. haidi: so there is no hanging fruit there in terms of the countries more amenable to working with china. it does sort of address the broader regional issues, right? do you think there is any

willingness on beijing's side to work on the issue of overcapacity? oriana: i think china is going to try and hear the conversation two things that they want to talk about. in particular, economics, some trade and investment treaties. they signed one with the europeans and it has not gone anywhere. they are going to try and steer the conversation away from some of these tough issues, whether it be overcapacity, their role in the developing world, human rights issues, or their relationship with russia, the russian invasion of ukraine. they are going to try to present this picture that a partnership with china is still in these country's interests. and they are hoping that by making advancements with a few countries in europe they can create a wedge between european countries and the united states. annabelle: given the choice of countries, france perhaps, but serbia and hungary, serbia not being in the eu and hungary being on the out as well, will

that be effective? oriana: the choice of countries shows that china has a two-tiered approach. they tend to go with countries that have the most influence. a wedge between the u.s. and france really means something. then they try to go towards these outsider countries that are the weakest links. so they are still signaling, listen, china can put together these ad hoc coalitions, they can disrupt the eu, or disrupt the goals of what countries are trying to achieve with russia or the baltic states if china has better relations with these countries than other western european countries do or the u.s. does. they like to show that they have something for everyone and so the differences between those countries is actually some of the strengths for why they pick them. annabelle: the fact that france in particular has been willing to lend more of an ear to china in the past, the thing that

gives emmanuel macron any advantage to try and chess -- try and press for change with china's support for russia and the war in ukraine? oriana: i think it is very unlikely he has some sort of advantage that c press the chinese to do something against their strategic incest. what he is probably hoping is it will give him some leverage in more economically focused negotiations with the chinese. i think that is what the trade-off is, he is trading in strategic closeness and some of the focus on strategic issues in order to have a better economic relationship with china. we will see whether or not the chinese are willing to make exceptions and play more fairly with their french counterparts than some other countries. but over time if the french do not see some benefits associated with that special relationship they are cultivating with the chinese, they might be less likely to try in the future. it is definitely a risky strategy on the part of france. china is going to try and

cultivate that relationship, because it can create this real perception that the united states does not have the full backing of nato when it comes to its strategic competition with china and its pressuring of russia in ukraine. haidi: emmanuel macron has very much positioned the fact that he said we need china. he can play the role as the balancing power between the u.s. and beijing. i do wonder, is there more room for negotiation and compromise from this side of china given we know a lot of the domestic challenges and economic challenges that demographically at least, structurally, have yet to fully play out? oriana: i think the chinese perspective on the economic front is that they are still a developing country with significant disadvantages. i write in my book that one of the main ways they build power given they are a communist country, they are not going to pursue a laissez-faire economic approach. so one of the ways they manage

to gain advantages in key sectors is through a spate -- state-sponsored industrial policy. party control is so important. even if economically it would make sense for them to be more laissez-faire about it, they will still have a state-controlled policy. so that means there is less wiggle room for the chinese making concessions. because that would really risk a key part of their strategy to become an economic power. haidi: as we creep closer to november, is there the risk that china becomes a campaign issue, given that we know between the two parties and the two presumed candidates, there is not too much of a fundamental difference in how tough they get on china? do you expect this to be front and center in november? oriana: generally speaking foreign policy issues are not front and center in u.s.

elections, especially when the u.s. is not actively fighting a large-scale war. that does not mean the issue of china will not come up. you will probably get a question or two at a debate. the candidates will probably say something but he hawkish on china that china will not appreciate. but it is likely u.s. voters are not considering china when they are making voting decisions, so it should not be constraining for u.s. policy, the fact we have an election coming up. annabelle: that was oriana skylar mastro there, center fellow for the institute for international studies at stanford university. we will have more ahead on daybreak australia. this is bloomberg. ♪

>> this could not have been scripted better. this report runs the tables for a good report. >> a goldilocks report that will please the fed and the markets. >> this is a good report across the board for validating what we heard from jay powell on wednesday. >> people were starting to be concerned we needed more hawkishness from the fed. we did not get on wednesday. we got a more muted version of what is going on. this data is proving that out. >> now we are pricing into cuts for the year. >> people were looking for a slowdown because they don't want

to thing about rates staying high for much longer and i don't want to think about a hike. you seen those go higher. >> the fed would like to get a cut or two in this year and today opened the door for them to get that done. haidi: our bloomberg tv guests reacting to the latest federal report. that was a sigh of relief in terms of giving the bulls the reins back in control with what has been described as a near perfect print in terms of showing the progress being made. we have seen the overheating of key markets including the labor market. a lot of economists are now concerned it could go from a perfect reading to underwhelming quite quickly. this is what we are watching in terms of how we are trading across treasuries and australian and new zealand bonds playing catch-up. japan i should say equity markets are closed for a public holiday but that is the picture when it comes to jgb's as we saw that recovery in the yen and

japanese bonds as being the main driver for some of the moves across what we see across asia fx in particular. but the question of course given some of those comments we had from janet yellen over the weekend, the sustainability of any intervention, if that is in fact what we have been dealing with. annabelle: that's right. something we are tracking very closely. also some of the corporate stories we have this morning, strong growth in april sales helping to boost expectations for iphone sales. the company, also known as foxconn, assembles most of apple's smartphones and posted a 19% jump in monthly sales. revenue rose to a record for the month as it diversifies his business to focus on equipment tied to ai. qantas has agreed to pay a fine of 100 million australian dollars uncompensated customers over claims the airline sold tickets on thousands of flights

it had already decided to cancel. the agreement with australia's competition watchdog also includes remediation program expected to cause some $20 million. payments will range from about $245 to $450. coming up, we're live at bnp paribas's second annual ev mobility conference in hong kong. you can catch our exclusive interviews from the event, including with the bank's apac deputy head of global markets, in the next hour. japan and korea shut today for public holiday but we have sydney trading in the next hour. we will have more ahead. this is bloomberg. ♪

>> this is daybreak asia.

it was a probable sigh of relief across markets at least on wall street. we are expecting that reprieve to carry through to the asian session. the jobs print, a goldilocks number in terms of putting back on the table the prospect of said easing -- fed easing. haidi: the estimate had been for 240,000 so a lot softer than had been predicted by economists. perhaps the fed could have reason to cut as soon as september. >> let's take a look at how we are setting up here in sydney as we come online in just a couple of seconds. just a reminder, japan is closed for a public holiday today so we are seeing a few markets in fact shuttered on this monday session. sydney, you already out of the gates a little bit to the upside, about .6% and we are