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Welcome to the Daybreak Asia podcast.

I'm Doug Krer. Markets are derisking in

reaction to the USIsraeli military

operations against the Islamic Republic.

Crude oil is rallying although we are

off session highs. And if you look at US

equity index futures, we are lower

across the board. Precious metals are

moving higher. And for a closer look at

some of this price action, I'm joined by

Bloomberg's Paul Dobson. Paul is

executive editor for Asia Markets. He

joins from our studios in Singapore.

Thank you for being here. So, the

d-risking is not a surprise. These

moves, I think, seem fairly predictable.

Would you agree that there's nothing to

indicate a sense of broad panic?

>> So far, the reaction is pretty textbook.

As you say, Doug, we do have stock index

futures lower, but only by about 1%. So,

not screaming panic just yet. We had a

pretty large jump in crude oil at the

open, as much as 13%. Again, that

moderated somewhat. And as you'd expect,

we're having a gains in bonds. Haven

currencies fairing well, gold also

performing strongly, but not gigantic

moves. And I think, you know, the market

really needs to assess and determine how

sustained this conflict is going to be,

how long it's going to last, and

particularly what happens to the choke

point on the straight of Hormuz, and

whether ships will be able to navigate

that channel, or whether they will all

get stuck in a very big queue, and then

the products can't get out of there,

which short term isn't an issue. Longer

term could become much more challenging

for the global economy. So, we know that

China is a big buyer of Iranian crude.

There obviously sanctions on that oil.

China seems to ignore that fact. We've

got a meeting between President Xiinping

and President Trump in about a month

from now. I know we're getting into the

political realm here, but can you give

me a sense of what may happen in that

meeting as a result of what we've seen

over the weekend?

>> You do certainly have a feeling that

China's not pleased at all by the latest

events. they put out an official

statement that was uh condemning it

saying you know it breached

international law which we have heard

from other places as well and so it does

make it more challenging that another

one of China's allies you know Maduro as

well was more China friendly has fallen

and I guess that that probably makes

China feel pretty uncomfortable now if

it can't get a hold of oil or

replacements for the Iranian oil then

that would be a whole lot worse for

China and for the economy and put a lot

more pressure on them So it does raise

the stakes about you know whether this

meeting will proceed in the end but

certainly you know what will be said

there as a result and I think that you

know that sense of encirclement will

probably breed to you know some kind of

sense of persecution from the Chinese

side of things and China knows you know

they have they have the tools to sort of

threaten the US as well having seen how

successful they were with the rare

earths measures before, but neither side

really wants to get back into that

situation again of tit fortat

escalations. So, it will be interesting

to see how the geopolitics plays into

that sort of trade dynamic in the in the

coming month.

>> We kind of had a shaky day in the US

last Friday. Some weakness in N invidia.

I think the stock was down a little more

than 4%. I know that South Korea is on

holiday today. So if you try to

understand what's going on in the

technology space, do we need to look to

Japan and get a sense of what's

happening?

>> It'll be hard to do that today just

because of the geopolitical risk that's

also foggying things. And also on

Friday, a lot of the moves at least in

Asia seem to be kind of end of the

month, people rebalancing their

portfolios, looking to take some

profits, those kinds of things as well.

So to discern or to separate that from

everything else that's going on might

might be a little bit hard. We might

need to wait a little bit longer into

the week to get a clearer read. But

you're you're right that there were a

couple of things that were troubling in

the US market performance on Friday. not

just the Nvidia thing, but also what was

going on with the financial stocks with

all of the banks under a good deal of

pressure. Partly because of their own

concerns about what AI can do in terms

of disruption in the financial uh space

and also because more and more of those

kind of credit cockroaches seem to be

emerging and and putting a little bit

more worry about what exactly is going

on in the lending markets.

>> We have the employment report at the end

of the week here in the US. Obviously,

that's going to be critical in terms of

the bond market. But if you look at the

price action in yield terms, treasuries,

the 10-year broke below 4% last Friday

to the point that you just made about

the concern over what may be happening

in private credit. But if this I'm

wondering if the jobs number comes in on

the soft side, whether we see further

retreat in US Treasury yields.

>> It's certainly possible, isn't it?

That's what people are worried about. I

think more a low ball number than a

decent number. Uh the 2-year yield is

already the lowest I think since 2022 as

well. So people continuing to bet on the

Fed being able to cut interest rates at

some point and a weaker labor number

would certainly open the door to that a

little bit more. I think it's the US

economic data as a whole is quite hard

to read at the moment. there's been, you

know, a good deal of more favorable

numbers pointing to the idea that the

the consumer is still holding up

relatively robustly and the most recent

jobs numbers that we've had have been a

little bit more encouraging that that

sort of soft patch is over. But I I was

reading I think you can read it a

different way and you can reel off a

whole number of stats that have come in

weaker than expected as well. So exactly

what's going on with the economy is a

little bit difficult to to tease out

right now and there is still that

tension between inflation and and the

jobs numbers and and that kind of just

overall confidence. So I feel like

almost if equities do start to turn over

because of other doubts that may be

another factor that actually creates a

little bit more of a a doubt in the mind

uh of people watching the economy and

maybe helps the Fed policy makers to see

a path forward to break cuts later in

the year.

>> So we have a couple of events this week

in China. One is fairly major that being

the National People's Congress which

gets underway on Thursday. We also on

Wednesday will have the official PMI

numbers. Give me your sense of what we

may learn this week both from the data

and from this NPC.

>> Honestly, Doug, I wouldn't get too

excited about it all just because so I

think in the NPC we'll get the growth

target. Everybody's expecting that it'll

be somewhere between 4 and a half% and

5%. So, China accepting the idea that

growth is going to be relatively slow as

it has been in recent years. We will

probably get more lip service to try to

boost uh the consumer, which we've seen

before and haven't ever really had

anything that's been a gamecher there.

We'll probably get more uh references to

the property market without any real

sense that there's going to be a

turnaround there either. we'll probably

get some more on encouraging um the the

newer technology industries, new engines

of growth, which is is really where

China is putting its energies and

efforts. Um you know, the market is

already pretty keenly priced for that.

But uh some of those uh AI stocks or

robotic stocks or new technologies, new

productive forces may continue to to get

a boost as a result of it. And we may

hear some more about the

internationalization of the UN too. But

I think that probably, you know, the

market has heard a lot of these messages

before. And while um there may be a

little bit more of a push in some

directions, perhaps a little bit more on

the welfare state, which would be

positive, um all of those things that

are already in place, you know, the

stock market slowly going higher, but

the bond market struggling with um the

deflationary concerns, it seems like

unlikely that we will get a game changer

um in in this meeting.

>> Over the weekend, we had the trade data

for South Korea. Boy, that export figure

was pretty stupendous. I mean a 29%

increase in the month of February. I

think the street was looking for

something around 25%.

Give me a sense of what's happening in

South Korea and how the Bank of Korea

may view this.

>> Yeah, it's a holiday in South Korea

today. Uh so as you were saying, so we

won't get any big read uh today, but it

it's about you know that huge uh demand

for the memory chips that uh Samsung and

SKH Highix are producing above all else.

is uh guiding those exports and really

helping that humongous performance that

we've seen in the uh Korean stock index

uh so far this year. Gains of more than

40% already and building on what we saw

uh in the year before as well. Those two

companies making up an increasing share

of that of the gains in the Asia-Pacific

index or the emerging market index as

they become bigger constituents as well.

Um and you know it's it it sort of tilts

a little bit to a kind of uneven looking

economy in some ways. I think a lot like

we're seeing in other parts of the world

as well where you really have a bit of a

boom going on and the exports performing

extremely robustly um but maybe not

filtering into all parts of the economy

in an even manner. So, we were talking

about geopolitical uh issues visa v the

US, Israel, and Iran. And I'm wondering

whether it's a surprise to you that

we're not seeing more strength in the

Japanese yen. It's a day of dollar

strength and a little bit of weakness in

the yen. Does it surprise you? Normally,

we see kind of a haven trade involving

the yen, but doesn't seem to be playing

out that way today.

>> It It's true. It's not performing as

strongly as the dollar. So, I think that

you need to map a little bit impact of

higher oil prices. across the

Asia-Pacific region. So those countries

that are very dependent on imports well

of not just oil but also of natural gas

and Japan is definitely one of them.

India would be another are going to are

going to um have a little bit of a

setback relative to those that are

producers. So think about Malaysia for

example uh as being on the on the other

side of that equation. Australia as well

from a gas perspective. um and that may

have an impact on the economy and it may

have an impact therefore on exactly what

people are pricing in as far as the

exchange rate is concerned. So because

Japan has to has to import so much oil

and gas um a much higher oil price is

not going to do it any favors.

>> Okay, Paul, we'll leave it there. It's

always a pleasure. Thanks so much.

Bloomberg's Paul Dobson. He is executive

editor for Asia Markets joining from

Singapore here on the Daybreak Asia

podcast.

Welcome back to the Daybreak Asia

podcast. I'm Doug Krer. Let's take a

closer look at the USIsraeli military

operations in Iran. Earlier, President

Trump said bombing in Iran will continue

until his objectives have been achieved.

Now, the actions have drawn criticism

from members of Congress, and that's

where we begin our conversation with

Matteline Dean. She is Democratic

Congresswoman from Pennsylvania and

she's a member of the House Foreign

Affairs Committee. Battle and Dean spoke

earlier to Bloomberg TV host Joe Matthew

and Kaylee Lines.

>> You put out a statement yesterday

calling this action one done without the

constitutionally mandated consult

consultation of Congress. I would

imagine that means you would be

supportive of a war powers vote. My

question to you though is knowing that

President Trump just this afternoon said

that it is expected or likely that more

American lives could be lost, that we

could see additional casualties in this,

would a war powers vote put any

limitations on our ability to be

flexible to conduct these operations in

order to protect American troops who are

in theater. I thank you both for having

me on in this very serious weekend uh

set of events. And it's funny, you and I

are on the exact same spot. Uh just

coming across my feed. It says uh this

is a CBS post. Trump predicts more US

casualties as Iran operations will quote

continue until all of our objectives are

achieved. There's a big problem with

that statement. We have not been told

the president's objectives. The American

people were not briefed on the

president's objectives. Congress was not

briefed even though he was four days

before in front of the American people

and a joint session of Congress at the

State of the Union address where he had

I believe the obligation, the duty to

make the case to us. Uh Congress, we are

the one who can declare war under

article 1 section 8. And he and his

adviserss know that. uh and also make

the case to the American people. After

all, they are the president has demanded

and has made uh American lives at risk.

We've already seen some American

casualties with 40, 50,000 military men

and women uh in this theater. uh the

president had an obligation not to go to

a war of choice uh but to come to

Congress under uh under the Constitution

but much more importantly to go to the

American people to make the case before

we spend resources and spend our blood

and treasure.

Congresswoman, before you joined us, we

spent some time with Daryl Isa, your

Republican colleague from California,

who is not on board, uh, as you might

suspect, with a War Powers resolution,

and in fact said this doesn't even

apply. He said, "This is not a new war.

It's been going on for 50 years, and

that a War Powers Act has never been

tested constitutionally." I I'm I'm

wondering how many folks he speaks for

in the Republican conference and what

that means for the debate that you're

about to begin. With due respect, I

think that is nonsense. We have not been

at war for 47 years since this murderous

uh regime has been in place. He knows

that. He knows better. Why you would

cover up for a president and abdicate

your constitutional role? Congress.

After all, we're elected every two

years. Because we are closest to the

people. It is required and the founders

said that it is required that the

president come uh to us and to the

American people to declare war. So I

think I will be in favor of a war powers

resolution to curb this president's

open-ended openmissioned

uh attack on Iran. And please understand

uh nobody uh is shedding a tear for

Ayatollah Humeni. Nobody uh is shedding

a tear to an end to some part of the

madness and the state sponsored terror

in the region. Uh we're just now trying

to keep together the fragile peace plan

after all the sponsorship of Hamas in

Gaza in the West Bank. And so um I I'm

not confused about that. But this is an

act of war. You go in, you use our

military uh with a joint operation with

Israel. Uh you don't define the mission.

Is it about ballistic missiles? Is it

about the nuclear program? Is it about

regime change? Uh th this this was a war

of choice and it is so incendiary, so

dangerous. I worry about our military

members. Uh I worry about civilians.

We've already seen loss of life in

Israel. I was just in Israel two weeks

ago uh in Jerusalem and in places right

there. Uh this is an extremely dangerous

move by the president uh and his

acolytes. Uh and uh Congress needed to

be briefed. I think maybe you've seen

we're going to get a joint classified

briefing Tuesday. A little late, but

we'll take it. But um the founders knew

what they were doing when they said the

power to declare war should not be in

one man.

Well, when we consider uh Iran and the

one man, well, many men who've been

taken out, but the Supreme Leader of

course is taken out, who was the head of

what you described as a murderous

regime. So, as you talk about how

dangerous this moment is now, is the

world not safer because he is dead.

>> Uh again, I don't mourn uh the taking

out of the Ayatollah at all.

>> Sure.

>> I don't know in balance that we are

safer because look at our troops in the

theater. I think you have maps on your

own website showing uh where our

military personnel and equipment is. Uh

they are all at risk. Are we safer? I

don't know that we are. Uh something I

really care about is our military

personnel. I think about how many from

Pennsylvania, for example, from my home

state are at risk of this. Again, the

president went to war, a preemptive war,

a war of choice. That's not how this

works in a constitutional

uh republic, in a democracy that is

about our constitution. You saw in a

single week this president by the

Supreme Court of P, excuse me, by the

Supreme Court of the United States was

found to be in violation of article 1

section 8 in terms of tariffs. Congress,

only Congress has the ability to lay

tariffs, taxes on the American people.

And then that very same week, article

one, section 8, another clause. Only

Congress has the power to declare war

again because we are closest to the

people and no power to declare war

should be in a single hand. Again, what

I worry about is an escalation uh of

this fighting and an incendiary

uh message around the region and to our

allies and friends in the region. Not to

mention the economic impact which you

are covering so very very well with the

interruption of oil. Uh this president

was elected to reduce prices for

everybody uh to get things under control

to bring peace. What are we watching

now?

>> How concerned are you about it spreading

here, Congresswoman? our own homeland

security is a question at the moment

with our department of homeland security

closed uh realizing that this is not

about ICE agents now how worried are you

about uh cells terror cells in this

country about lone wolf activity in the

days ahead

>> that's the the the question Joe it is

literally not making us safer uh I'm not

talking about the closure of DHS they

certainly have more funds than I would

have ever wanted them to have as a

result of the big ugly bill ugly law I

should say. Uh but um it it is about

keeping us safe here. This will only set

off more and more strikes against us and

some of them could come to the homeland.

This will set off more terror. What I

really regret, Joe, is this might have

been something that had to happen at

some point. Uh but I wish we had been

briefed on it. And more than that, I

wish we had had a secretary of state who

pursued the diplomatic path. After all,

the president took us out of the JCPOA

uh and abandoned uh a structure to be

there and watching Iran's nuclear

program uh and then abandoned the

diplomatic talks that were taking place.

This should not be Mr. Wickoff. This

should not be these deputy assistants,

non uh confirmed folks doing this

negotiation when they have so many

conflicts of interest, business

interests within the Middle East. This

should have been the Secretary of State

continuing deep, intensive diplomatic

talks for peace.

>> That was Mattaline Dean, Democratic

Congresswoman from Pennsylvania,

speaking with Bloomberg TV host Joe

Matthew and Kaylee Lines, bringing you

their conversation here on the Daybreak

Asia podcast.

Thanks for listening to today's episode

of the Bloomberg Daybreak Asia Edition

podcast. Each weekday, we look at the

stories shaping markets, finance, and

geopolitics in the Asia-Pacific. You can

find us on Apple, Spotify, the Bloomberg

Podcast YouTube channel, or anywhere

else you listen. Join us again tomorrow

for insight on the market moves from

Hong Kong to Singapore and Australia.

I'm Doug Krissner and this is Bloomberg.