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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. Welcome to the Daybreak

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Speaker 1: Asia podcast. I'm Doug Chrisner. Markets are de risking in

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Speaker 1: reaction to the US Israeli military operations against the Islamic Republic.

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Speaker 1: Crude oil is rallying, although we are off session highs,

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Speaker 1: and if you look at US Equity index futures, we

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Speaker 1: are lower across the board. Precious metals are moving higher.

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Speaker 1: And for a closer look at some of this price action,

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Speaker 1: I'm joined by Bloomberg's Paul Dobson. Paul is executive editor

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Speaker 1: for Asia Markets. He joins from our studios in Singapore.

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Speaker 1: Thank you for being here. So the d risking is

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Speaker 1: not a surprise. These moves, I think seem fairly predictable.

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Speaker 1: Would you agree that there's nothing to indicate a sense

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Speaker 1: of broad panic so far?

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Speaker 2: The reaction is pretty textboocause you say, Doug, we do

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Speaker 2: have sock index futures lower, but only by about one percent,

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Speaker 2: so not screaming panic just yet. We had a pretty

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Speaker 2: large jump in crude oil at the open, as much

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Speaker 2: as thirteen percent. Again that moderated somewhat, and as you'd expect,

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Speaker 2: we're having a gains in bonds haven currencies faring well,

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Speaker 2: Gold also performing strongly, but not gigantic moves, And I

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Speaker 2: think you know, the market really needs to assess and

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Speaker 2: determine how sustained this conflict is going to be, how

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Speaker 2: long it's going to last, and particularly what happens to

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Speaker 2: the choke point on the Strait of hor Moos, and

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Speaker 2: whether ships will be able to navigate that channel or

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Speaker 2: whether they will all get stuck in a very big

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Speaker 2: queue and then the products can't get out of there,

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Speaker 2: which short term isn't an issue, longer term could become

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Speaker 2: much more challenging for the global economy.

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Speaker 1: So we know that China is a big buyer of

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Speaker 1: Iranian crude. There are obviously sanctions on that oil. China

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Speaker 1: seems to ignore that fact. We've got a meeting between

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Speaker 1: President chi Jinping and President Trump in about a month

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Speaker 1: from now. I know we're getting into the political realm here,

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Speaker 1: but can you give me a sense of what may

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Speaker 1: happen in that meeting. As a result of what we've

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Speaker 1: seen over the weekend, you.

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Speaker 2: Do certainly have a feeling that China is not policed

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Speaker 2: at all by the latest events. They put out an

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Speaker 2: official statement that was condemning it saying, you know, it

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Speaker 2: breached international law, which we have heard from other places

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Speaker 2: as well, and so it does make it more challenging

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Speaker 2: that another one of China's allies, you know, Maduro as well,

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Speaker 2: was more China friendly, has fallen and I guess that

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Speaker 2: that probably makes China feel pretty uncomfortable. Now if it

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Speaker 2: can't get hold of oil or replacements for the Uranian oil,

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Speaker 2: then that would be a whole lot worse for China

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Speaker 2: and for the economy and put a lot more pressure

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Speaker 2: on them. So it does raise the stakes about you know,

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Speaker 2: whether this meeting will proceed in the end, but certainly

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Speaker 2: you know what will be said there as a result,

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Speaker 2: and I think that you know, that sense of encirclement

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Speaker 2: will probably breed to, you know, some kind of sense

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Speaker 2: of persecution from the Chinese side of things. And China knows,

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Speaker 2: you know, they have the tools to sort of threaten

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Speaker 2: the US as well, having seen how successful they were

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Speaker 2: with the Rare Earth's measures before. But neither side really

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Speaker 2: wants to get back into that situation again of tit

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Speaker 2: for tat escalations. So it will be interesting to see

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Speaker 2: how the geopolitics plays into that sort of trade dynamic

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Speaker 2: in the coming month.

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Speaker 1: We kind of had a shaky day in the US

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Speaker 1: last Friday, some weakness and Nvidia I think the stock

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Speaker 1: was down a little more than four percent. I know

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Speaker 1: that South Korea is on holiday today. So if you

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Speaker 1: try to understand what's going on in the technology space,

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Speaker 1: do we need to look to Japan and get a

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Speaker 1: sense of what's happening.

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Speaker 2: It'll be hard to do that today, just because of

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Speaker 2: the geopolitical risk that's also foggying things, And also on Friday,

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Speaker 2: a lot of the moves, at least in Asia seem

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Speaker 2: to be kind of end of the month, people rebalancing

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Speaker 2: their portfolios, looking to take some profits those kinds of

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Speaker 2: things as well. To discertain or to separate that from

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Speaker 2: everything else that's going on might be a little bit hard.

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Speaker 2: We might need to wait a little bit longer into

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Speaker 2: the week to get a clearer read. But you're right

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Speaker 2: that there were a couple of things that were troubling

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Speaker 2: in the US market performance on Friday, not just then

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Speaker 2: the video thing, but also what was going on with

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Speaker 2: the financial stocks, with all of the banks under a

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Speaker 2: good deal of pressure, partly because of their own concerns

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Speaker 2: about what a I can do in terms of disruption

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Speaker 2: in the financial space, and also because more and more

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Speaker 2: of those kind of credit cockroaches seem to be emerging

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Speaker 2: and putting a little bit more worry about what exactly

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Speaker 2: is going on in the lending markets.

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Speaker 1: We have the employment report at the end of the

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Speaker 1: week here in the US. Obviously that's going to be

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Speaker 1: critical in terms of the bond market. But if you

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Speaker 1: look at the price action in yield terms treasuries, the

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Speaker 1: tenure broke below four percent last Friday. To the point

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Speaker 1: that you just made about the concern over what may

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Speaker 1: be happening in private credit. But if this, I'm wondering,

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Speaker 1: if the job's number comes in on the soft side,

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Speaker 1: whether we see further retreat in US treasury yields.

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Speaker 2: It's certainly possible, isn't it. That's what people are worried about.

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Speaker 2: I think more a lobal number than a decent number.

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Speaker 2: The two ye yield is already the lowest I think

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Speaker 2: since twenty twenty two as well, so people continuing to

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Speaker 2: bet on the Fed being able to cut interest rates

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Speaker 2: at some point, and a weaker labor number would certainly

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Speaker 2: open the door to that a little bit more. I

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Speaker 2: think it's the US economic data as a whole is

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Speaker 2: quite hard to read at the moment. There's been, you know,

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Speaker 2: a good deal of more favorable numbers pointing into the

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Speaker 2: idea that the consumer is still holding up relatively robustly,

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Speaker 2: and the most recent jobs numbers that we've had have

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Speaker 2: been a little bit more encouraging that that sort of

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Speaker 2: soft patch is over. But I was reading I think

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Speaker 2: you can read it a different way, and you can

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Speaker 2: reel off a whole number of stats that have come

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Speaker 2: in weaker than expected as well. So exactly what's going

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Speaker 2: on with the economy is a little bit difficult to

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Speaker 2: tease out right now, and there is still that tension

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Speaker 2: between inflation and the jobs numbers and that kind of

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Speaker 2: just overall confidence. So I feel like almost if equities

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Speaker 2: do start to turn over because of other doubts, that

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Speaker 2: may be another factor that actually creates a little bit

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Speaker 2: more of a doubt in the mind of people watching

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Speaker 2: the economy and maybe helps the Fed policymakers to see

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Speaker 2: apart forward two breat cuts later in the year.

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Speaker 1: So we have a couple of events this week in China.

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Speaker 1: One is fairly major, that being the National People's Congress,

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Speaker 1: which gets underway on Thursday. We also on Wednesday will

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Speaker 1: have the official PMI numbers. Give me your sense of

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Speaker 1: what we may learn this week, both from the data

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Speaker 1: and from this NPC.

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Speaker 2: Honestly, Doug, I wouldn't get too excited about it all,

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Speaker 2: just because so I think in the NPC we'll get

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Speaker 2: the growth target. Everybody's expecting that it'll be somewhere between

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Speaker 2: four and a half percent of percent, so China accepting

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Speaker 2: the idea that growth is going to be relatively slow

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Speaker 2: as it has been in recent years. We will probably

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Speaker 2: get more lip surface to China boost the consumer, which

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Speaker 2: we've seen before and haven't effort really had anything that's

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Speaker 2: been a game changer there. Will probably get more references

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Speaker 2: to the property market without any real sense that there's

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Speaker 2: going to be a turnaround there either. We'll probably get

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Speaker 2: some more on encouraging the newer technology industries new engines

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Speaker 2: of growth, which is really where China is putting its

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Speaker 2: energies and efforts. You know, the market is already pretty

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Speaker 2: keenly priced for that, but some of those AI stocks

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Speaker 2: or robotic stocks or new technologies new productive forces may

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Speaker 2: continue to get a booster as a result of it,

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Speaker 2: and we may hear some more about the internationalization of

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Speaker 2: the UN too, but I think that probably, you know,

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Speaker 2: the market has heard a lot of these messages before,

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Speaker 2: and while there may be a little bit more of

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Speaker 2: a push in some directions, perhaps a little bit more

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Speaker 2: on the welfare state, which should be positive of all

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Speaker 2: of those things that are already in place. You know,

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Speaker 2: the stock market slowly going higher, but the bond market

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Speaker 2: struggling with the deflationary concerns. It seems like unlikely that

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Speaker 2: we will get a game changer in this meeting.

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Speaker 1: Over the weekend, we had the trade data for South Korea. Boy,

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Speaker 1: that export figure was pretty stupendous. I mean, a twenty

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Speaker 1: nine percent increase in the month of February. I think

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Speaker 1: the street was looking for something around twenty five percent.

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Speaker 1: Give me a sense of what's happening in South Korea

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Speaker 1: and how the Bank of Koream may view this.

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Speaker 2: Yeah, it's a holiday in South Korea today, so as

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Speaker 2: you were saying, so we won't get any big read today.

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Speaker 2: But it's about you know, that huge demand for the

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Speaker 2: memory chips that Samsung and sk Heinez are producing above

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Speaker 2: all else. This guiding those exports and really helping that

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Speaker 2: humongous performance that we've seen in the Korean stock index

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Speaker 2: so far this year, gains of more than forty percent

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Speaker 2: already and building on what we saw in the year

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Speaker 2: before as well, those two companies making up and increasing

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Speaker 2: share of that of the gains in the Asia Pacific

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Speaker 2: Index or the Emerging Market Index as they become bigger

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Speaker 2: constituents as well. And you know, it sort of tilts

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Speaker 2: a little bit to a kind of uneven looking economy

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Speaker 2: in some ways, I think a lot like we're seeing

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Speaker 2: in other parts of the world as well, where you

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Speaker 2: really have a bit of a boom going on and

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Speaker 2: the export's performing extremely robustly, but maybe not filtering into

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Speaker 2: all parts of the economy in an even manner.

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Speaker 1: So we were talking about geopolitical issues visa VI the US, Israel,

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Speaker 1: and Iran, and I'm wondering whether it's a surprise to

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Speaker 1: you that we're not seeing more strength in the Japanese yen.

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Speaker 1: It's a day of dollar strength and a little bit

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Speaker 1: of weakness in the end. Does it surprise you Normally

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Speaker 1: we see kind of a have in trade involving the end,

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Speaker 1: but doesn't seem to be playing out that way today.

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Speaker 2: It's true, it's not performing as strongly as the dollar.

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Speaker 2: So I think that you need to map a little

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Speaker 2: bit impact of higher oil prices across the Asia Pacific regions.

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Speaker 2: So those countries that are very dependent on imports well

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Speaker 2: of not just oil but also of natural gas, and

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Speaker 2: Japan is definitely one of them. India would be another

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Speaker 2: gonna I'm gonna have a little bit of a setback

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Speaker 2: relative to those that are producers. So think about Malaysia,

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Speaker 2: for example, as being on the on the other side

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Speaker 2: of that equation, Australia as well from a gas perspective,

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Speaker 2: and that may have an impact on the economy, and

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Speaker 2: it may have an impact therefore on exactly what people

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Speaker 2: are pricing in as far as the exchange rate is concerned.

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Speaker 2: So because Japan has to has to import so much

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Speaker 2: oil and gas, a much higher oil price is not

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Speaker 2: going to do it any favors.

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Speaker 1: Okay, Paul will leave it there. It's always a pleasure.

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Speaker 1: Thanks so much, Bloomberg's Paul Dobson. He is Executive editor

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Speaker 1: for Asia Markets, joining from Singapore here on the Daybreak

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Speaker 1: Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm

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Speaker 1: Doug Prisner. Let's take a closer look at the US

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Speaker 1: Israeli military operations in Iran. Earlier, President Trump said bombing

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Speaker 1: in Iran will continue until his objectives have been achieved. Now,

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Speaker 1: the actions have drawn criticism from members of Congress, and

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Speaker 1: that's where we begin our conversation with Madeline Dean. She

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Speaker 1: is a Democratic congresswoman from Pennsylvania and she's a member

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Speaker 1: of the House Foreign Affairs Committee. Mandalin. Dean spoke earlier

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Speaker 1: to Bloomberg TV host Joe Matthew and Kaylee lyines, you.

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Speaker 3: Put out a statement yesterday calling this action when done

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Speaker 3: without the constitutionally mandated consultation of Congress. I would imagine

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Speaker 3: that means you would be supportive of a war powers vote.

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Speaker 3: My question to you, though, is knowing that President Trump

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Speaker 3: just this afternoon said that it is expected or likely

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Speaker 3: that more American lives could be lost, that we could

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Speaker 3: see additional casualties in this, would a war powers vote

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Speaker 3: put any limitations on our ability to be flexible to

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Speaker 3: conduct these operations in order to protect American troops who

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Speaker 3: are in theater.

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Speaker 4: Thank you both for having me on in this very

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Speaker 4: serious weekend set of events.

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Speaker 5: And it's funny you and I are on the exact

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Speaker 5: same spot just coming across my feed.

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Speaker 4: It says, this is a CBS post.

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Speaker 5: Trump predicts more US casualties as Iran operations will quote

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Speaker 5: continue until all of our objectives are achieved. There's a

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Speaker 5: big problem with that statement. We have not been told

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Speaker 5: the president's objectives. The American people were not briefed on

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Speaker 5: the president's objectives. Congress was not briefed, even though he

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Speaker 5: was four days before in front of the American people

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Speaker 5: and a Joint Session of Congress at the State of

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Speaker 5: the Union address, where he had I believe the obligation

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Speaker 5: the duty to.

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Speaker 4: Make the case to US Congress.

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Speaker 5: We are the one who could declare war under Article one,

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Speaker 5: Section eight, and he and his advisors know that and

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Speaker 5: also make the case to the American people. After all,

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Speaker 5: they are the president has demanded and has made American

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Speaker 5: lives at risk. We've already seen some American casualties with

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Speaker 5: forty fifty thousand military men and women in this theater.

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Speaker 5: The President had an obligation not to go to a

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Speaker 5: war of choice, but to come to Congress.

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Speaker 4: Under the Constitution, but much.

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Speaker 5: More importantly, to go to the American people to make

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Speaker 5: the case before we spend resources and spend our blood

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Speaker 5: and treasure.

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Speaker 6: Congresswoman, before you joined us, we spent some time with

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Speaker 6: darryl Isa Your, a Republican colleague from California, who is

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Speaker 6: not on board, as you might suspect with a War

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Speaker 6: Powers resolution and in fact said this doesn't even apply.

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Speaker 6: He said this is not a new war, it's been

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Speaker 6: going on for fifty years, and that a War Powers

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Speaker 6: Act has never been tested constitutionally. I'm wondering how many

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Speaker 6: folks he speaks for in the Republican conference and what

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Speaker 6: that means for the debate that you're about to begin.

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Speaker 4: With due respect, I think that is nonsense.

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Speaker 5: We have not been at war for forty seven years,

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Speaker 5: since this murderous regime has been in place.

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Speaker 4: He knows that. He knows better why.

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Speaker 5: You would cover up for a president and abdicate your

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Speaker 5: constitutional role.

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Speaker 4: Congress.

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Speaker 5: After all, we're elected every two years because we are

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Speaker 5: closest to the people. It is required, and the founder

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Speaker 5: said that it is required that the president come to

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Speaker 5: us and to the American people to declare war.

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Speaker 4: So I think I will be in favor.

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Speaker 5: Of a War Powers resolution to curb this president's open ended,

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Speaker 5: open missioned attack on Iran. And please understand, nobody is

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Speaker 5: shedding a tier for ayatolat hommony. Nobody is shedding a

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Speaker 5: tier to an end to some part of the madness

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Speaker 5: and the state sponsored terror in the region. We're just

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Speaker 5: now trying to keep together the fragile peace plan. After all,

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Speaker 5: the sponsorship of Hamas in Gaza in the West Bank,

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Speaker 5: and so I'm not confused about that. But this is

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Speaker 5: an act of war. You go in, you use our

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Speaker 5: military with a joint operation with Israel. You don't defy

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Speaker 5: the mission. Is it about ballistic missiles? Is it about

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Speaker 5: the nuclear program? Is it about regime change? This was

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Speaker 5: a war of choice, and it is so incendiary, so dangerous.

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Speaker 5: I worry about our military members. I worry about civilians.

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Speaker 5: We've already seen loss of life in Israel.

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Speaker 4: I was just in.

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Speaker 5: Israel two weeks ago, in Jerusalem and in places right there.

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Speaker 5: This is an extremely dangerous move by the President and

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Speaker 5: his acolytes, and Congress needed to be briefed.

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Speaker 4: I think maybe you've seen.

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Speaker 5: We're going to get a joint classified briefing Tuesday. A

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Speaker 5: little late, but we'll take it. But the founders knew

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Speaker 5: what they were doing when they said the power to

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Speaker 5: declare war should not be in one man.

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Speaker 7: Well, when we consider Aron and the one man, well,

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Speaker 7: many men who've been taken out. But the supreme leader,

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Speaker 7: of course, is taken out. Who was the head of

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Speaker 7: what you described as a murderous regime. So as you

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Speaker 7: talk about how dangerous this moment is now, is the

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Speaker 7: world not safer because he is dead?

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Speaker 4: Again? I don't worn taking out of the ATLA at all. Sure.

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Speaker 5: I don't know in balance that we are safer because

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Speaker 5: look at our troops in the theater. I think you

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Speaker 5: have maps on your own website showing where our military

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Speaker 5: personnel and equipment is.

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Speaker 4: They are all at risk. Are we safer? I don't

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Speaker 4: know that we are.

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Speaker 5: Something I really care about is our military personnel. I

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Speaker 5: think about how many from Pennsylvania, for example, from my

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Speaker 5: home state, are at risk of this. Again, the president

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Speaker 5: went to war or a preemptive war, a war of choice.

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Speaker 4: That's not how.

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Speaker 5: This works in a constitutional republic, in a democracy.

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Speaker 4: That is about our constitution.

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Speaker 5: You saw in a single week, this president, by the

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Speaker 5: Supreme Court de pensil excuse me, by the Supreme Court

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Speaker 5: of the United States, was found to be a violation

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Speaker 5: of Article one, section eight. In terms of tariffs, Congress

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Speaker 5: only Congress has the ability to lay tariffs taxes on

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Speaker 5: the American people. And then that very same week, Article

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Speaker 5: one section eight another clause. Only Congress has the power

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Speaker 5: to declare war again, because we are closest to the people,

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Speaker 5: and no power to declare war should be in a

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Speaker 5: single hand. Again, what I worry about is an escalation

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Speaker 5: of this fighting and an incendiary message around the region

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Speaker 5: and to our allies and friends in the region, not

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Speaker 5: to mention the economic impact which you are covering so

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Speaker 5: very very well with the interruption of oil. This president

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Speaker 5: was elected to reduce prices for everybody, to get things

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Speaker 5: under control, to bring peace.

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Speaker 4: What are we watching now?

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Speaker 6: How concerned are you about it spreading here? Congresswoman, Our

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Speaker 6: own homeland security is a question at the moment, with

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Speaker 6: our Department of Homeland Security closed, realizing that this is

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Speaker 6: not about ice agents now, how worried are you about

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Speaker 6: cells terror cells in this country, about lone wolf activity

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Speaker 6: in the days ahead?

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Speaker 5: That's the question, Joe. It is literally not making us safer.

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Speaker 5: I'm not talking about the closure of DHS. They certainly

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Speaker 5: have more funds than I would have ever wanted them

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Speaker 5: to have as a result of the big ugly bill,

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Speaker 5: big ugly law, I should say, but it is about

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Speaker 5: keeping us safe here. This will only set off more

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Speaker 5: and more strikes against us, and some of them could

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Speaker 5: come to the homeland.

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Speaker 4: This will set off more terror.

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Speaker 5: What I really regret, Joe is this might have been

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Speaker 5: something that had to happen at some point, but I

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Speaker 5: wish we.

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Speaker 4: Had been briefed on it.

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Speaker 5: And more than that, I wish we had had a

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Speaker 5: Secretary of State who pursued the diplomatic path. After all,

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Speaker 5: the President took us out of the JAYSCPOA and abandoned

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Speaker 5: a structure to be there and watching Iran's nuclear program,

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Speaker 5: and then abandoned the diplomatic talks that were taking place.

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Speaker 4: This should not be, mister Wickcoff.

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Speaker 5: This should not be these deputy assistants, non confirmed folks,

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Speaker 5: doing this negotiation when they have so many conflicts of

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Speaker 5: interest business interests within the Middle East. This should have

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Speaker 5: been the Secretary of State continuing deep, intensive diplomatic talks

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Speaker 5: for peace.

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Speaker 1: That was Madeline Dean, Democratic congresswoman from Pennsylvania, speaking with

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Speaker 1: Bloomberg TV host Joe Matthew and Kaylee Lynes bringing you

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Speaker 1: their conversation here on the Daybreak Asia Podcast. Thanks for

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Speaker 1: listening to today's episode of the Bloomberg Daybreak Asia Edition podcast.

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Speaker 1: Each weekday, we look at the story shaping markets, finance,

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Speaker 1: and geopolitics in the Asia Pacific. You can find us

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Speaker 1: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere

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Speaker 1: else you listen. Join us again tomorrow for insight on

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Speaker 1: the market moves from Hong Kong to Singapore and Australia.

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Speaker 1: I'm Doug Prisner, and this is Bloomberg