What to watch in Asia today
Jakarta: China and the Association of Southeast Asian Nations will meet in the Indonesian capital to discuss the South China Sea, where tensions have risen amid overlapping territorial claims between a number of Asean member states and Beijing.
Earnings: Cathay Pacific releases earnings. Traffic at Hong Kong’s airport has rebounded from its pandemic lows but numbers passing through still remain significantly down on 2019 levels.
Markets: Stocks declined in Japan and futures in Hong Kong pointed lower. Wall Street stocks fell after Federal Reserve chair Jay Powell warned that the central bank could raise interest rates more aggressively if the economy grows too quickly.
Elon Musk says Twitter may reach positive cash flow by second quarter
Elon Musk said Twitter could return to posting positive cash flow next quarter, as the chief executive attempts to cut costs, lure back advertisers and navigate the platform’s tech woes.
Speaking at a Morgan Stanley investor conference on Tuesday, Musk said that cash flow at the company he bought for $44bn last year would break even in the second quarter, adding that it might even become positive in that period.
He said Twitter’s costs were projected to run at about $3bn a year, down from the $4.5bn he said the company would have otherwise incurred in 2023.
Read more about Musk’s cost cutting plans here.
Senators introduce bipartisan bill paving way for possible US TikTok ban
Senate Democrats and Republicans have introduced a bill that would give the administration new powers to ban Chinese apps that pose security threats, including the popular video-sharing platform TikTok.
Mark Warner, the Democratic head of the intelligence committee, announced the bill on Tuesday as part of an effort to create a more co-ordinated approach across the government to address threats from countries including China, Russia and Iran.
The Restrict Act would require the commerce secretary to establish a process to identify threats related to communications and information technology and create solutions to address them.
Read more on the proposed bill here.
Two-year Treasury yield tops 5% for the first time since 2007
The two-year Treasury yield, which moves with interest rate expectations, topped 5 per cent for the first time since 2007.
The yield reached a peak of 5.01 per cent — up 0.13 percentage points on the day — following remarks on Tuesday by Federal Reserve chair Jay Powell, who indicated that the US central bank may be prepared to accelerate the pace of interest rate increases in response to hotter-than-expected economic data.
Investors now expect interest rates to peak at 5.6 per cent in September, with some chance of a single cut by December.
Ukraine denies any involvement in Nordstream pipeline explosions
Ukraine has denied involvement in last year’s explosions that damaged the Nordstream gas pipelines connecting Russia and western Europe, after media reports in the US and Germany suggested that pro-Ukrainian operatives may have been behind the attacks.
“Although I enjoy collecting amusing conspiracy theories about Ukraine’s government, I have to say: Ukraine has nothing to do with the Baltic Sea mishap and has no information about ‘pro-Ukrainian sabotage groups’,” Mykhailo Podolyak, an adviser to President Volodymyr Zelenskyy, wrote.
Podolyak was reacting to a report in The New York Times that said US officials had reviewed new intelligence suggesting a “pro-Ukrainian group” had carried out the underwater bombings hitting both the Nordstream 1 and 2 pipelines.
Read more about the alleged perpetrators here.