vonnie: you are watching

daybreak asia coming to you live from new york, singapore, and hong kong. annabelle: we counting down to asia's major market open. haidi: australia has come online, the top stories this hour, asian shares are set for a positive start after wall street's best week of the year, investors are convinced that interest rates are near the peak. one billion-dollar buyback with mortgage strength lifting the four your profit and warren buffett's cash pile hits a record amid a lack of deals much of it parked in short-term treasuries. annabelle: we are waiting for more live pricing but at the outset of the day it is that focus and the reaction to the payroll stated that came through on friday. the number is softer than expected, telling us that the end of the fed tightening

could mean year, we are seeing the retreat in yields. all the stocks are nearly flat so far by futures have been indicating to gain wife with a session and this is a little bit higher, close to the 7000 mark. rather want to watch as we get through the session here, the aussie dollar is fairly flat. let us take a look around the rest of the region today, because, the futures market as well indicating we will see gains for other markets. kiwi stocks are online a little bit weaker this morning, continuing to monitor as i said they reaction to the payrolls data and geopolitical headwinds and it is china's conference and further opening up. earnings, central-bank moves, right a lot to look forward to this week. haidi: as for the u.s., we are starting the week as we finished it, in the green for equities. vonnie: equity futures pointing to a higher open for the s&p 500 and the nasdaq.

we saw a massive rally you can call it a relief rally, after the fed did not sound any warnings about the economy and did not hike. we saw the s&p 500 back from correction territory and up 5.9% for the week. a huge rally for stocks, the nasdaq is down for the year, still, only down in the last while, about 7%. you may see some money coming out of bonds as we are looking at futures, we are seeing them in the red. do not forget that we had the 10 year around 40 basis points of the yield last week, phenomenally volatile week in u.s. markets. we are seeing 14 sent gain, 85 dollars oh three cents. -- $85.03. haidi: the israeli military, some troops have entirely

encircled a gazan city, cutting off the northern part of the strip as antony blinken made a stop in baghdad to prevent a spread of the israel hamas war. let us bring in bloomberg editor adrian in, talk about the implications of having dividing this area in two? >> i think you can look at it in a couple of ways, i mean, it has been clear from the start that gaza was the center for hamas. they are stepping up their attacks on hamas, they are above ground and below ground and the tunnels are a big issue. i think to some degree in maybe a reaction -- it may be a reaction to the high civilian casualties. the israelis who at this point almost 10,000 people are dead

have come under a a lot of criticism, even among u.s. senators today, bernie sanders came out and said the death toll is not acceptable. it is possible that by encircling gaza city, having worn people -- warned people, please get out, we do not want to kill you, there keeping up with humanitarian lines but they may be trying to sheer off civilians from fighters, i do that has been successful, i think 400,000 civilians are still in gaza city. i think that they are trying to make the case that we are doing what we can to get civilians out of the fighting zone. vonnie: antony blinken in the region and made an unscheduled stop in baghdad, it is not clear who he spoke to or what is going to emerge from that meeting. he he met with the

palestinian authority leader, what do you think the state department is trying to accomplish with these kinds of meetings? >> i think that they are trying to get some kind of unanimity among allies, it is in response to the fact that there are a lot of the u.s. and allies are against the large civilian death toll. they need a cease-fire. this is not acceptable. antony blinken, he went to iraq, westbank, he arrived in turkey not that long ago, a big critic of what has been going on there. he is trying to say we can get this done with what they call humanitarian pauses which is something short of a cease-fire

but what allow aid to get in and possibly some room for negotiating on hostages. haidi: there have been some comments being made within israel, this is underscoring the domestic challenges we are seeing as well? >> yes, from what i understand, i am not there, israel is although it is divided over netanyahu's plans to change the shape of the judiciary, i think they are united in eliminating hamas. i think the question is at what cost, really? there is a faction within netanyahu's government, only formed from the very far right and today, one of those far right ministers said it is one way to go, to using a--to use a nuclear weapon in gaza and he

was slapped down by netanyahu and he was not asked to leave the government yet, but i think that there are some indications of how feelings are there. vonnie: that is ian fisher there. have opened the china export expo with a promise to boost imports, they vowed to protect the rights and interests of foreign investors and in accordance with the law, is providing global exporters with the opportunity to increase their trade with china after foreclosures due to the covid-19 pandemic. china has been seeking to bore more foreign investments to aid economic economy -- lure more foreign investments to aid economic security. >> world economic recovery and economic globalization is making headway's against -- china

sincerely hopes that all countries move forward towards a future success in a vast, open platform. vonnie: let us bring in our senior editor in shanghai. what is the message the leader is trying to convey? >> the leaders of the event, it is the first time that this event has been going through all of the pandemic controls. also because the economy is slowing down quite a bit. two takeaways, first is, they lose imports. that is coming out for imports have fallen for seven straight months and it is almost like he heard the chain

the proactive fiscal policy which we know that we're starting to see, you know, an expansion of the budget deficit and expecting to be about 4.5% from 3% last year. we're also seeing a recession, expectations starting to ramp up as well. how much fiscal space does china have right now? well, you know, i would say this. you know, even though it may not have fiscal space, i think the concern over the slowdown is taking precedence. i mean, we know that in the past it's, what, 3% of gdp and now it's going to be 4%. and they're moving a lot of the the liabilities of local government into the central government balance sheet. i would say it doesn't have a lot of fiscal space, but it needs to do something in order to spur the economy. it can't it can't cut interest rates without, you know, spurring more fund outflows.

but this is seen as a big step. but next step, of course, is sort of and this is what i see is important, is sort of to a sort of to ease foreign investor concerns, not just about the economy, but also that china is open again to foreign investment. bloomberg senior editor alan one they're taking a look at some of the challenges that that balancing act right for policymakers is there. let's get you to bell, who's in hong kong for some of the early movers and certainly we're watching potentially a bit of a tug of war when it comes to which narrative traders are wanting to go for when it comes to westpac because largely positive the buyback, of course, but some spots of weakness there too. yeah, that's right. and we're ending the fed tightening cycle. and so given that it's not a great backdrop when we've seen so much focus on net interest margins or income margins for banks over the past couple of

years, but really the sentiment today. well, yes, as you said, we've got that buyback coming through and the bank as well lifting its dividend and the final dividend to 72 aussie cents a share here. so that is a really giving a bit of respite to investors. of course, as we know, the mortgage market in australia is starting to test profitability for its lenders. so westpac here it is higher at the >> we know that brookfield asset management and igg want to take this company private. but the largest shareholder of the company, where they have a 10% stake, is not wanting to get into the transaction. it thinks it is undervaluing the company as well. that company is continuing to rebuff any hope of talks between those two private equity firms. another one to watch.

sources saying the situation. >> still ahead, our guest shares an outlook for japan's consumption sector. up next, columbia thread needles global rates strategist on why asia needs more to boot credit growth. this is bloomberg. ♪

>> the payroll report was picture-perfect. >> goldilocks for markets. >> for the equities and bond market. >> it help support the narrative of slowing and then labor markets, slowing in wage inflation. >> we are seeing a slowing pace over the last few months.

>> i think the fed is done. >> this takes the sails of those who want to go further. >> i think the fed should be done. >> i think it makes it more likely that we will hold where we are for a while. >> the fed will be on hold for a while and probably will take that out of your calculation. >> there is no signed the fed will be eager to cut or talking about cutting anytime soon. >> some of our guests on the latest u.s. jobs data and what that could mean for fed policy. let's take a look at the week be had. we will see the rba's rate decision. home prices rising for a third straight month in october, so most economists are expecting a 25 basis point hike. bloomberg is making an out of consensus call and expecting the rba to hold. and the cpi out of china. some think that consumer prices fell back in october and week inflation figures would add

volatility to the growth outlook for china. factory activity also contracted in october. we will be getting inflation data from thailand and the philippines. in the u.k., the boe's meeting. gdp is expected to drop by 0.1%. that contraction will likely mark the start of that monetary policy induced recession in the united kingdom. some other eco-data, japan payments, as well as key trade figures out of china. >> let's stay there in china because columbia thread needles as demand and credit growth remain weak and will require likely more fiscal stimulus. their analyst joins us. we heard the nation will expand access to markets and boost imports, which have fallen this year, quite substantially. it is not something you can just order up, or is it?

we have seen plenty of monetary and fiscal steps from china, but more is needed, correct? >> i think that is right. it is the focus of that stimulus that is now key. i would say two things have happened if you look at what china has done over the past year, here and a half. most of the credit side stimulus has gone to state owned enterprises. the stimulus consumer site has been relatively underpowered. it is that balance that has made the stimulus relatively ineffective. i would focus on consumer demand, particularly predictability of fiscal support for consumers as the next leg for policymakers in china. >> when will that come and what will the format be? >> it is a difficult thing. they have been hesitant to focus

on the consumer so far. it has been disproportionately faxes -- focus on the industrial sector. that is why we see both weak domestic demand and weak imports, and weak domestic inflation. domestic consumers in china are proportionally focused on exceptionally high savings, in part because of very low predict ability when it comes to government policy. when that gearshift is going to happen is hard to say right now. >> i have to ask you about the jobs report and the fed last week. many strategists seem to think the fed is done and the market is pricing in 75 basis points of cuts in the first three quarters of next year, which it had not been pricing in at all. what have you come to in terms of conclusions since last friday's payrolls report and for decision? >> really hard to make very difficult conclusions.

at the moment, this is what i would say. the fed is likely to return a little option aldean terms of hiking into the first quarter of next year. i think taking this year, perhaps those odds have gone down. the underlying economy is still strong enough that the fed is going to have some doubts going into next year that inflation will come down. i think it is correct to conclude that the labor market has been cooling on the margin most of this year, and it is correct to look at wages and wages in particular have been coming down. i think a place where we are sure that inflation will get back to 2%, there is enough doubt and therefore the fed will carry that into next year. when you look across the rate curve, i think two things are true. one, we are pricing into the second half of next year. it is really premature to be confident around whether they will materialize. the second thing i will say,

when those cuts do come, it will not be 75 basis points. it will likely be a much faster cutting cycle. i think we need more time to build up confidence around that. >> at the moment, rate cuts are surging. we are up to 70 basis points by september of next year. we will see what happens this week. where does the 10 year go from here? >> it is close to 50 basis points in the space of a week. i think the answer to your question, exceptionally difficult. let me say this, 4.5% to 5%, one of the questions for investors is there value in the 10 year. are we compensated enough of the inflation risk? are we compensated enough are some of the fiscal uncertainty around the signaling going into next year? we are pretty close to saying

yes on both of those fronts. that decent value across the curb for investors to take comfort around real rates. >> we will have to leave it there, but thank you. that is columbia threadneedle global rates analyst. you can get a round up of the stories on daybreak. terminal subscribers go to dayb you can customize your settings. this is bloomberg. ♪

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no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial. >> the atlanta fed president rafael bostic says policymakers have time to watch how the

economy is evolving, and be patient when it comes to interest rate moves. he says while watching the day that he is using other sources to gauge the result of monetary tightening -- the effect of monetary tightening. >> in addition to looking at the data, i do a lot of on the ground intelligence. in a period that is really unusual for may, everyone was saying the same thing, which is that things are slowing down, we are seeing the economy start to "normalize," is a thing people have been saying, relative to this hot pandemic period. when i get unanimity on that, that tells me there is something happening on the ground that is probably stronger than what i might see in the data. the data, even though they did come in very strong in september, if you looked over a longer term trend, it still said the economy was moderating, and those two things together made me very comfortable with the notion that we still have time to watch, be patient, be

cautious, and make sure we understand the trends and it don't overreact to any data point. >> barring some shock, would you say you are basically at the peak now, that you don't need to raise rates anymore? >> what i would say is this. there are three possible outcomes. either inflation is going to stall out and this trajectory is going to continue slow and steady, or it is going to go off a cliff. i have all those possibilities in play, and i'm going to stay on that. today, my outlook is we will stay on the slow and steady. if we continue to do that, where we are now will be sufficiently restrictive to get us to the 2% level for inflation. but there is a lot that is going to happen between now and the next meeting. we will get a couple jobs numbers, a couple readings for inflation, and that will give us more signals as to what is going on in the economy. >> you mentioned talking to a lot of people in your district telling you things are slowing down. can you characterize that? not long ago, the question was,

did the fed go too far? others are saying the soft landing narrative. where do the business people see it? >> business people are in an area of moderation back to normal. they understand they have gone through a period where they have had sales at levels that frankly they didn't expect, and the decline in those sales and activity over time has come in slower than expected. but it is continuing. that is really the dynamic that governs. >> rafael bostic speaking with michael mckee, . plenty more to come. this is bloomberg.

>> small gains for australian bonds this morning as the 10

year yield falls a couple of basis points. early part of the trading session this morning and the rba is forecast to raise rates by tuesday and the consensus here at bloomberg's to call for a hold. broader economic labor resistance -- resistance in the labor market. further needs to be done by the rba to cool prices. october inflation tracker is due later today and jobs data for october. a little move with key reebonz. the new government -- kiwi bonds. we are looking at australian

banks. here is the picture trading half an hour into the session. west back lifting some other banks, including anz. it will buyback some of its own shares. let's get more with adam hey, joining us in sydney. there were concerns over bad loans. does that stack up against expectations? >> i think in many ways the share price tells you a lot of people are thinking the under performance we have seen relative to peers might be ending. you got the buyback and a dividend a little higher than some expectations. those together against the

backdrop of peter king's statement around the fact that mortgage competition was acute in the first half and eased off in the second half but does not see that ending soon. next year seems to be a story of if you believe michelle bullock will raise the rates tomorrow, rba reaching peak rates but nothing in sight suggests the outlook for the margins to ease further for the banks any time soon in which case the continuing strategy king has to simplify bank selloff assets is still the big story but i think there are some who say maybe they share price in underperformance is starting to reach its peak. >> what does king's comments

about the economic outlook tell us about what bank profitability might look like? >> in some sense it depends whether you -- whether what you believe in the economic outlook on how australia will play out next year. it could be relatively benign if there are not huge changes to interest rates and markets are pricing in big cuts from here and no if that more hike from here. a scenario where inflation continues to be relatively contained, certainly trending back toward the rba target, is not too bad but it still relies on the idea of continued pressure not just in home loans but some of the gains -- gains in the business bank, and that not really being a huge driver of profitability next year and

so i think it depends on where you sit as to how banks can respond from that but i think it is pretty clear that pressure continues in a lot of the areas that people are well aware of and makes it a pretty tough outlook for banks from here with interest rates having peaked. vonnie: much appreciated, adam. we will stick with origins. merger hathaway reporting third quarter earnings over the weekend. let's get results with annabelle in hong kong. pressure has nearly $160 billion ready to deploy. tell us about it. annabelle: $157 billion. not a great signal for the markets when you have someone

like buffett who has struggled to find value in the market so the deals draft that has afflicted berkshire hathaway, the company hung back during the pandemic and more recently started to get back into the market, buying up shares of petroleum, acquired another for $12 billion but a lot of dry powder they are really struggling to put to work, that cash deployment is starting to show up in the company will be under pressure just one we know it has gone so far is in short-term treasuries and the company spent more on buybacks coming in at $1.1 billion and that brings the total for the first nine months to $7 billion haidi. haidi: what else did we learn

from the earnings? annabelle: they reported operating earnings of $10.76 billion and higher than what the estimate was though there are only two consensus readings for this and the stronger earnings coming through even as buffett cautioned at the animal -- annual meeting in may that earnings of the majority of earnings or operating units could fold this year as what he called an incredible time for the economy in the u.s. draws to an end so that operating income one to note and then other things that played out, the first thing, the deal we know but investor enthusiasm noticeable given that sharp stock up nearly 15% so far over the course of this year but berkshire hathaway is really well known for having investments across a spectrum of

the u.s. economy and so our team saying as well it demonstrates the diversity of the earnings power of the company some of the key takeaways haidi. haidi: animal they are in hong kong. our new economy for them gets underway in singapore other this -- later this week. we have the theme embracing instability and we will hear from world leaders and executives discussing the challenges of inflation, the rise of ai, climate emergency and geopolitical tension. some of the major voices coming up are on your screen. do not miss the coverage starting wednesday. next, the outlook for japan's consumption sector and why the yen might be on track for a correction. this is bloomberg. ♪

>> cannon is planning to price its new chipmaking gear at the fraction of the cost. a plant is threatening to pick japan's energy security drive against the relationship with western allies so japan and the philippines agreed to begin discussions on mutual military

visits and strengthen security ties with the u.s. amid heightened tensions with china over disputed waters. john hritz joins us now from tokyo. how has japan worked with the philippines since last year? >> japan has been looking to expand security relations beyond the u.s.. the philippines has been key to this. marcos visited japan in february and they decided on infrastructure and humanitarian assistance deals and security cooperation. japan has been working to help philippines coast guard get stronger because of confrontations between the philippines and china with territorial disputes in the south china sea.

haidi: how does the visit to the philippines and malaysia fit into the bigger regional security picture? >> what we are seeing is a work by the u.s. and partners with japan to build relations that are a united front against china. the u.s. says the china assertiveness in the indo pacific region. they will be a meeting this month will see a pet conference and the more the u.s. has in its backyard, japan, philippines, the more the main partners get together to join in the front, the stronger biden's position will be when he meets with president xi at the meeting in san francisco. haidi: that was bloomberg's east

asia government editor. a new poll suggests that japanese prime minister's specification has slumped. measures are worth more than $113 billion and were meant to boost growth and help households hit by inflation. let's bring in our next guest who specializes on multinational operations operating in japan. she joins us from tokyo. good to have you with us and it is a perfect storm of factors, weak domestic currency, resurgent inflation. how do you see this when it comes to consumer spending trends? >> consumers are underspending.

wages are struggling to rise. so inflation is fresh to a country that has been in deflationary mode for decades. the three's -- the 3% sustained cpi increase through august is new to japan, which last saw this in the early 1990's and wages are struggling to grow so the pipe the market -- so despite the market tightening, wage is not catching up with inflation so the real wages people actually get is falling and that translates into household spending being very sluggish. haidi: you talk about this

impacting staples. what are some other areas? >> we have some bright spots because we are rebounding still from the covid traction of spending so areas like eating out and traveling, hospitality are doing well, also help by tourism coming back. but the daily staples and necessities people spend day today are where people are being conservative. haidi: are there any areas where you see less price sensitivity? luxury is always interesting. >> you are right. the luxury segments are more resistant because they cater to the high-end individuals who are

blessed -- who are less hurt by inflation and what -- and wage stagnation so they are doing well. also with the tourists coming in . so department stores for example have seen a surge in revenue, a rebound from covid when they were hit. haidi: it is interesting that we did not see the some return of inflation. expectations would have been managed but you say that shock of inflation has taken consumers by surprise? >> i would say so, because people are not used to seeing increasing prices and you really feel it in utility and staples like eggs, which we are so used to having very cheap in japan.

these are increasing and some people really feel it day today in shopping. haidi: what about inbound spending? with the weakness in the yen it is a perfect opportunity for tourism. >> absolutely and tourism is returning to japan. it is not at the level of pre-covid but still. except for some chinese incoming crowd, we have a big return of inbound tourism so that helps with some like accommodation and high-end spending, but it is a different world than what you would shop in a grocery market day today for japanese people is what i am saying. haidi: we spoke a bit about the stimulus package and the efforts of the prime minister. will it make a meaningful impact

in terms of positive trends? >> it is very uncertain. history shows the tax cut in terms of income tax did not really impact people's behaviors. it is because it is felt a little indirectly, it is not really cash back in your pocket. and history shows the tax cuts of this nature do not affect the shopping patterns or the rate of the government of the day -- or the approval rate of the government of the day. haidi: what change does japan need most right now? >> the confidence of the long-term future. if that is lacking, people will always be conservative to spend because they would rather be safe than spend or invest so it

needs to show japan has a viable future. we have heard in the news we will be overtaken by germany in terms of gdp but negative news needs to be counteracted by some positive news as a country so if the government can show that the gin, what kind of country we aim to be, i think it would -- so if the government can show some of that kona -- that, what kind of government we could be, it would help. haidi: thank you so much. for bloomberg subscribers can catch everything live using tv . this is bloomberg. ♪

>> south korea is banning short selling of stocks monday through next jean -- june as they say they have uncovered major illegal activity. this is a fascinating story.

what led to this? why is korea self -- banning short selling and for so long? >> good morning. this is the fourth time that country has done this but unlike previously where there were global financial crises, this time a lot of investors are saying there is no global financial crisis. south korean authorities say they are introducing the full-scale ban on shortselling and that there have been cases of selling that are illegal in south korea that have her markets role of finding prices and distorting it. they also say there are growing uncertainties in the market, the israel-hamas war and authorities need to respond preemptively but

it seems a lot of analysts believe the latest mood has been much more politically motivated than in the past cases. haidi: what are investors saying about the ban? do we expect a big market impact? >> yes. i think this morning we will see some market impact, especially in the small-cap cost that has been heavily influenced by retail investors and we have seen some shortselling in that market and we are now seeing the cost of futures up 5%, and that might be due to some of the short covering as this ban is introduced and also on the market and in the past we have seen some rebound but this time because the kospi and because it has been on track for recovery after a short market sell out in

recent months is analysts said the upside to the market might be limited coming from the shortselling band but still might play a role of limiting the downside of the stock market going forward, they also see more excitement coming from the retail investors who are not sharing the moves that we might see more engagement and buying from the retail investors but in the long-term term we might still be seeing what shortselling could have lasting impact on the stock market or even give a rebound to the stock market because of hedge funds playing long short strategies might have to reduce their long positions in the stock market when they cannot do shortselling in south korea so it remains to be seen how it will play out. vonnie: much appreciate it, thank you. the philippines will allow shortselling from monday after a 27 year wait.

all the equities on the benchmark gauge will be available for shortselling along with one etf's. this plan was proposed in 1960 -- 1996 and seeks to revive interest in a market where daily transactions have slumped almost 40% in the last decade. haidi: bank of japan minutes from the september policy meetings, where the central bank introduced flexibility saying the 1% cap will be a reference not strict ceiling was the main takeaway so in terms of these minutes boj says hitting the price target is not in sight yet but it is important to support momentum when it comes to wage hikes so we continue watching the communication given that in addition to flexibility we had commentary from the government saying they do not expect yields to rise much beyond 1% after earlier this year saying boj

would not come close to 1% of the move we see with u.s. treasury yields has been the weakest factor with increasing concern in the markets that the boj overwhelmingly perhaps more than the fed in some aspects is the source of potential more volatility just the continued loose monetary policy adding to imbalances across asset volatility still at 149 level. coming up, and investment strategy and looking at china's economy. the market opens in tokyo and seoul next.

>> this is daybreak asia and we are counting down to the major market opens. it looks like we might be off to a positive start. it will be interesting because we got a catapult in markets last week after softer jobs data in the u.s. and the fed does not look to do much of anything at least before the end of the year. haidi: and a lot of focus when it comes to australia and china this week with a key visit in beijing and trade and inflation numbers coming out expected to continue painting a picture of an economy in weakness. annabelle: china inflation numbers one to watch later this week that a number of things to watch including the market reaction this morning so japan stocks are back from a long

weekend and playing catch-up further emphasized by u.s. stocks that had one of the best weeks this year and nfp numbers came out softer than expected so the market is pricing the end of the fed tightening cycle so we saw yields for treasuries moving lower in the session fairly steady this morning although a cycle in 10 years yields. the domestic situation in japan is interesting because the boj meeting minutes just came out for september and the read is that members are split over whether the inflation target is insight. some say it is not. others say we can see it but the second half of financial year 20 three will be important to take note of, whether it is underweight and it could be a

big headwind for japanese equities gaining this morning 1.6% but some analysts say they could come under pressure if the boj starts tightening policy settings and investors could look to other markets where equities are cheaper and china is highlighted as one in particular. the open for korea, stocks are trading, a key story we are tracking, south korea is going to ban shortselling monday today through june of next year. at the financial services committee says it is about giving regulators time to improve rules and systems and there are many investors taking advantage of these. south korea allowed shortselling of talks in may of 2021 so it's a reversal of that but analysts are saying that shortselling band could further jeopardize

korea's chances of moving from emerging to develop its market. the korean won is strengthening up nearly 1% at this year -- at this point, a three month high so a signal of the risk on tone taking hold in markets this morning. training for australia, the focus is on a different earnings coming through. westpac is lifting its dividend to 70 two australian cents a share versus 64 year on year so a big job and the company announcing a buyback which is helping to boost stocks but stocks probably up and we are watching the oil space and brent crude slightly firmer this morning as is wti and that is that story of russia and saudi arabia affirming the oil supply

cuts and we just got eco-data dropping and that is the melbourne inflation institute reading coming out for october coming in contraction of .1%. vonnie: thank you, a new trading week up and running. our next guest sees more reasons to sell them to buy. kyle rodda is a senior market analyst at capital.com. you said before last week where we saw a correction turnaround and now we are only 5% lower on the s&p 500 from the peak in july and a little more than that for the nasdaq. is it still time to sell rather than by? >> i think the narrative has shifted short-term and if you look into next year things are looking reasonably gloomy for a fundamental perspective but what

i preface those comments on initially was the geopolitical risk and tighter for longer dynamic playing out in the rates markets by virtue of the strength in the u.s. economy and issues in the bond market and those reasons were keeping investors on the sidelines. central bank was looking for any excuse to see some weakness coming through the data to justify some of the dynamic in rates markets so we have gotten that from the data last week, especially the u.s. jobs report showing weakness but more importantly the ism showing it could be slowing down and we are getting the mechanical uplift that comes in equity prices because of foreign bond yields. it does not say much about 2024 but it says may be there are reasons for investors to buy into the market and momentum might start to take hold and

push risk assets higher into the end of the year. >> are we looking at valuations in line with fundamentals? >> there are two parts to it. in the third time if you get a three basis point drop in the 10 year and a few days it will make things more attractive and short-term if you look at tech stocks and favorite names even if they have been reasonably disappointing it makes valuations at the margins more attractive you get flows going into these names and momentum takes over and we saw building in equities but long-term you start to wonder how the weaker data starts to flow in and if there is one thing we have learned it's that the bar was set very high for 2024 and now it is getting lower and if the data weekends we will see downgrades come through which will impact the fundamentals so there is the short-term

mechanical uplift from valuations on momentum that could feed a rally which often happens but there is still headwinds coming in 2024 when rate and some earnings had wins start playing out in asset prices. annabelle: after the first few days of trading this week no doubt some attention will start focusing on the rba. do you see an additional rate hike and what might it do for the australian economy? >> my view is it does go again tomorrow. the markets are 50-50 at the time being in terms of futures pricing but leaning into data we received lately they all suggest policy in australia was too loose compared to the rest of the world. they all suggested a cash rate that was too low so the cpi data

recently and retail sales figures show fairly robust consumption in australia shows most places around the world there is tweaking required from the rba so it goes tomorrow and boost the aussie dollar and we will probably see some underperformance short-term and australian equities as a result because we will see the impact of higher rates and also china tied and that is a severe area of disappointment when it comes to the outlook so the rba is beneficial for the aussie dollar and i suppose if nothing else a reason for australian investors to feel less inclined to follow the momentum we have seen build on wall street. vonnie: so a fairly negative view on australian equities and maybe not hugely positive on the united states. what are your favorite things to

recommend right now? >> we are looking at a rally until the end of the year in equities and his short-term focus so not thinking too much into 2024 for the time being so that momentum that could build, the rally has all the hallmarks of it now so rate sensitive areas of the market are positive and the u.s. dollar is due for a little bit of a pullback and the aussie dollar looks prime for an uplift because of the china story and short positioning the aussie dollar starts to unwind so those are some short-term views and more characteristic of a trade running into the end of the year but a big shift in u.s. data and the change in market

dynamics has underlined some potential key ideas as we go into the end of the year. vonnie: kyle rodda, thank you for joining us today. we are a few minutes into the trading session in some markets. annabelle, what do you say? annabelle: not looking at stocks specific this morning, looking at markets because the focus is on korea and we are 10 minutes under -- into the session but the outperformance of the kospi and the cause stack also jumping in tandem following a move from south korea over the weekend to ban stop shortselling until next june and that takes effect today and south korea allowed shortselling of stocks in may 2020 one for some indexes but kept a pandemic ban in place but

a full band reimposed from today and this is something extensively to give regulators more time to improve and the trade-off is some analysts say this could really jeopardize korea's chances of reaching develop market status because it has been working towards that but the market impact is clear this morning with the kospi gaining more than 2% and the korean won at a three month high. haidi: still ahead, we speak about the latest developments when it comes to u.s.-china ties as the president's are prepared to meet next month. first, an update on israel as the military has said it [indiscernible] the gaza strip. this is bloomberg. ♪

>> anyone who might seek to take advantage of the conflict and threaten our personnel here or anywhere else in the region, don't do it. haidi: antony blinken speaking on an unannounced visit to baghdad. israel says they have cut off the northern part of the gaza strip. this comes as antony blinken made that unscheduled stop in baghdad with the goal of preventing spread of the war.

michael heath joins us with more. the implications of the split and efforts israel has made so far in this ground incursion. >> they have surrounded gaza city and cut off the northern section and they are making incursions bit by bit. as we have seen from some of the protests going on around the world, the casualties have been terrible. this is the great difficulty on the u.s. side and israel side is how to stop that while the military operation is conducted. they are going house to house, floor to floor, clearing it of militants and trying to hold it

as you go to the next one. in such a built-up area with so many people having left, there is going to be a lot of fallout and civilian casualties. there is a long way to go in this operation. vonnie: antony blinken on a tour in the region, speaking in baghdad on the west bank, what is the mission? ostensibly it is to get a cease-fire. is he really looking for what might be done after the war? >> a bit of both. he is trying to push back on the idea of a cease-fire. neither the u.s. or israel wants it. they do not want hamas to be able to reorganize. so he is trying to bring them to

the u.s.-israel side of brief pauses so people can leave conflict zones. but there seems to be an element of what comes after on the top is that the u.s. would be keen on the palestinian government in control of the west bank but there is conjecture over how it would work. israel wants to keep security control over the gaza strip, how that would work is the question. there is also talk of wanting to bring in arab states as peacekeepers. the palestinian authority does not have the resources to look after gaza and it will be in a really degraded state, with buildings flattens. they will need a huge amount of support and a coordinated effort and that underpins a lot of blinken's diplomacy of late. haidi: remarks being made by a

minister in israel are incendiary. does this add to the domestic context of what netanyahu is dealing with at home? >> when he formed his government he brought in some fairly extreme right-wing groups and the minister has since clarified, saying he was speaking metaphorically saying he would drop a nuclear bomb on gaza. they are on the fringe of the israeli political scene and he needed them to form his government so that does not make it any easier to negotiate internationally and try to keep a moderate view that israel is fighting hamas, not the palestinian people. vonnie: the chinese premier has

opened a key trade conference with promises to boost imports. for more, alan juan joins us from shanghai. what was the message that he tried to convey? >> the cie is not normally one of the events where you [indiscernible] first time a lot of high officials over -- overseas since communists took control and the economy is not doing well. a few takeaways. china pledges to boost imports because imports have been down.

friday the eu chamber of commerce blasted the cie for being a sideshow, saying it has not done much to increase chinese imports. the deficit has increased to 400 billion euros. and china pledges to protect the rights of foreign investors which has been a major concern and he says he will try to ease up on the [indiscernible] and this is crucial for foreign investment which has turned negative for the first time since 1998. haidi: china will be one of the biggest questions as we gather some of wall street's biggest names in hong kong for the financial summit that comes as

there are efforts to revive efforts as a global financial hub and david ingalls joins us from hong kong and it is a huge schedule with great conversations and many we want to hear from given the volatile trading environment. david: absolutely. what a time to be having these conversations. talking about how markets in the global economy look going into next year and the china conversation will be part of this event that starts today and if hong kong becomes the center of the financial universe, the bosses of morgan sachs, name your boss essentially here, effectively we will be looking

at a series of panels discussing opportunities in the market, what china looks like as a wealth hub, hong kong is the weakest in the chinese economy, we will hear from top leaders in hong kong and john lee will be speaking so it will be packed the next three days and it is also going to be very busy and sleepless for those covering it like me and the early part will be eventful going into where all the events are in singapore. vonnie: thank you. such a richness of conversations we will be having on bloomberg the next few days. our new economy form gets underway in singapore later this week and the theme is embracing instability.

we will hear from world leaders, policymakers and executives discussing the challenges of inflation, geopolitical tension, the rise of ai and the climate emergency. just a few of the voices coming up are on your screen. do not miss coverage beginning wednesday. this is bloomberg. ♪

>> the leaders of opec-plus, saudi arabia and russia have reaffirmed they will stick with the currency is the end of the year as the israel hamas war adds volatility to oil prices. su keenan joins us. wti futures had a sharp pullback. >> we are moving closer to 80 in west texas being traded in new

york on friday and that is part of the concern, it was part of a two-week decline in oil as you see here in this commodities pullback. very much weighted down by the oil decline and that was despite dollar weakness which tends making commodities more attractive than this is what is clearly on the minds of saudi arabia and russia who reaffirms they will stick with the $1 million -- one million barrels per day. they wanted to keep the market tight. there is a bit of green on the screen but west texas slid almost 6% last week. brent also took a slide and this comes on new indications that it is unlikely for now that the conflict in the middle east will spread beyond hamas and israel. there was concern it would

spread into the surrounding region or result in disruptions but we have not seen that yet. the focus on a lot of oil traders and investors has changed from the war situation, the war premium has faded and i will reemphasize the supply demand dynamic. we continue seeing week data out of china and we see buildup in inventories here in the u.s.. haidi: producers might be hedging? >> yes. there were unusual trades in the option market that sought trading activity almost threefold what it would normally be and a lot of speculation among traders and analysts is that this is an unnamed producer perhaps hedging to lock in price. several thousand options that

traded for 2024 in recent days and to give you an idea these are open interest of 58 million barrels of dated brent average priced crude options, a threefold increase and it is a combination of selling and that is why they think there is a major producer trying to hedge against what has been a very volatile oil market. haidi: su keenan there. next, a the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi.

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♪ >> we are getting breaking lines

when it comes to this bid for origin energy, australian super in talks with joining the bid, saying the bid is overloading the long-term estimate. we sought their biggest shareholder boosting their stake. they declined former talks and global energy partners over 6 billion u.s. dollars takeover plan. australian super buying 24 point 3 million shares which ups its voting power from 13 point 68 earlier today. so just building on the commitment of the fund according to people that they have spoken to, they have no interest in the current deal as a co-investor in the statement we've gotten that they are substantially below the

estimate, not in talks to join the bid, quite difficult to see the path ahead when it comes to the deal at this point. >> will have to wait and see. more breaking news in the last few minutes, japan's pmi services and the composite number is in expansion territory. this is the final data so i will give you the breakdown. 51.6 is much better than the 51.1 of the previous month and then the composite number including manufacturing data came in at 15.5 whereas the prior meeting was 49.9, so the difference between expansion and contraction, we are in expansion for japan services read we were having a rally anyway in the japanese markets and perhaps annabel can tell us more about

reactions. annabel: japan markets were shut on friday for a public holiday so we are seeing catch-up trade and the nikkei is one of the outperformance but the story for investors comes down to the payroll data on friday in the u.s. coming in weaker than what economist had been expecting and slowing the pace from the month prior, the september reading. investors are betting that we are at the end of the fed tightening cycle so you seen a bat coming through in yield. it follows treasuries on the friday session. that is something that is supportive for equities and you can see the nikkei is extending as is the cost be and that is a different theme influencing the market because you had korea announcing it was re-imposing a ban on shortselling from today until june of next year to give

regulators more time to work on their market dynamics and regulations. we are seeing the cost be gaining 2.3% and the currency space, the korean you want is one the out performers. 1% against the greenback but still trading at a three month high against the dollar. so you have a firmer dollar coming through and lower yields and supports. the wti is up around three quarters of a percent read we had cuts from saudi arabia and russia. haidi: so much of this when it comes to global demand comes after the chinese premier pledged that his nation would expand access to markets and imports ahead of a meeting between president biden and shooting pain at the apex

summit. let's discuss the relationship between these trading nations, bringing in a senior fellow at the institute for international economics and it is a delight to chat with you in person here in single or. i suppose this dynamic is top of mind as we had the australian prime minister visiting china to reestablish the relationship. how easy is that to do when the fundamentals of this competition, this rivalry have not changed? >> you are putting your finger on the problem, we expected deliverables at the meeting to be the fact that they are meeting. it's important for australians to be in conversation to begin to ease tensions with china but we do not expect any change in the fundamentals as you said, so the big question is where do we go next?

haidi: do you think the dynamics have changed a little bit? i was looking at the economist expectations and recession expectations for china that are starting to get up there. in a lot of ways we've gone back to what we started before the easing of covid zero policies . does that give leverage to trading partners? >> it is unclear because she ching thing has been willing to impose economic pain on the popula in response to the changes that feels need to be done to the chinese economy. shrinking of the property sector, changing how people view work. he has been unwilling to provide a safety net even though that could boost consumption so it is not clear how much leverage this gives the west if he intends to stay the course in current all lessees. the harder issue is whether

tensions increase and that would spell a deeper economic contraction for the chinese economy if one is to come. haidi: there are domestic political pressures on president biden. another election cycle, does that change things given that being hawkish on china is a pre--- one of the few agreed-upon i should say stances on both sides of the aisle? >> true, coming from washington that is true. the policy space shrinks during an election year way president and there are savvy moves that president biden could make in conjunction with the chinese. rationalizing the tariffs that it replaced on chinese imports under president trump in a reciprocal way with china, that is off the table right now and it would be a bold move by president biden if he were to do

it but there would be a lot of backlash from the republican party and others that used to soft on china so we see the closing of the policy space through the election. haidi: we started talking about how countries like australia and singapore are quite often mentioned as a country that has balanced interests and alliances very well in this respect. you will hear from someone who looks at this dynamic, it's hard for countries to navigate this. we've seen the example of australia being rosen out for the last decade read >> it's difficult but we see opportunity for these middle countries, they are very much needed. the u.s. in terms of friend showing, the attempt to reduce reliance on china, absolutely needs middle income asia in particular. it needs up her income asian

partners as well, it cannot do it alone. that gives these countries some agency, some ability to shape the u.s. response. with china, similarly, although these countries are deeply engaged with china through other trade agreements, these countries have been deepening economic integration with china. what they want to avoid is being put between a rock and a hard place. they would like to see these two giants talking so in the region there is a little bit of a sigh of relief hoping that the meeting goes forward in november where the two sides can cool tensions. the theme for a pet is interconnectedness, innovation and inclusion. it's hard to see how this agenda can be put forward when the u.s. and china are at such odds. haidi: when you take an

existential view of china's economy most people would agree that a lot of the big issues are structural, you think the global economy is ready for a lower growth for longer china and are there other on amines that are in place to be able to step in? >> there are certainly a lot of countries that would like to grab a little bit of the markets that china has and we have seen that happen as the u.s. pulled away with the trade war. they can replace china has the biggest engine of growth, that remains to be seen we've known for a long time china had to decelerate the level of growth that was not possible. maybe it was an opportunity for lower income countries to push forward. we've been seeing it for the last 10 years, countries like vietnam, mexico. indonesia moving forward in important ways.

and increasing their share of global manufacturing that it's not just commodities. it gives a elemental opening for these countries. the world's largest economy, puts the burden of adjustment on the economy. haidi: great to have you, appreciate your time. wishing you a fruitful summit. vonnie: bullish bets fell flat and headwinds continue to grow. let's get more with our equities reporter charlotte. feels like this time last year we were not sure whether you get a rally in china.

we been getting steps for stimulus. have investors given up? >> yes, so if we look at the market, the china market outperformance is -- a lot of investors are navigating the landscape facing chinese markets where we see benchmarks underperforming. our colleagues recently spoke with a bunch of big name info managers and they are turning more defensive, more selective. there are pockets of opportunity is specially sectors, battery names, high-end manufacturing space that they are less willing

to tell those who are bullish on china given what has happened this year with the earnings taking time to recover as well as china's economic growth at a slower pace now. haidi: the valuation story is compelling. i receiving investors looking at a shift from the market dialing of japan into china? >> this is interesting because by japan, cell china has been one of the winning strategies but in the short term investors are rethinking that it is time to enter china. we are looking at the csi 300 at a valuation level cheaper than the five-year average and with japan's outperformance we are seeing global fund managers

positioning the heaviest in a decade and a tightening cycle ends. again strengthening is going to be a headwind. also because of out performances fund managers feel like the upside is limited. china's valuations, positioning and if the earnings recovery comes on a broader level in the next 12 months, china is where there are more opportunities in the short term. vonnie: that is bloomberg's asia equities reporter charlotte. coming, singapore's prime minister says he will step aside as early as next year. an update on the transition of power next. this is bloomberg. ♪

♪ haidi: singapore's prime minister will hand power to his deputy, lawrence, before the general election signaling the transition would come as early as 2020 or. let's fling in south asia reporter. it would be the end of an era and this has been telegraphed. is this a surprise? >> it might be considered so a

little bit but the selection has to be done by november 2025 and a decision also meant the was will they lead the charge? in the end they thought it would be better to have a fresh mandate a new prime minister so allowing him the runway to get the chair would give them a stronger position going forward. vonnie: what does the announcement say about what the php thinks its choices and chances might be? philip: it's been a tough year with a number of scandals including one involving a cabinet minister. there's been a couple of resignation among mps. you have an economy that has grown 1% in the third quarter, so the fact that they have done this suggests they might have confidence. even though in the last election in 2020 he is still at 81% so

that is quite high, they must be feeling good going in. haidi: what needs to happen between now and the handover? philip: it is common to see a cabinet reshuffling. the size is unclear but a dpm should come out of it, a couple of interesting names floating around, so we can expect something like that to happen. you see the conclusion of corruption cases, hopefully before the end of november, by november of next year. vonnie: bloomberg's southeast asia government reporter philip in singapore. be sure to tune into bloomberg radio to hear more from newsmakers and get in-depth analysis from the daybreak team broadcasting live from hong kong. listen via the app, radio plus or bloomberg radio.com. plenty more ahead, stay with us.

♪

♪ haidi: atlanta fed president rafael bostic says they are watching how the economy is evolving and being patient. while he is watching the data he is using sources to gauge the effect of monetary tightening >>

in addition to looking at the data i to a lot of on the ground intelligence and the time that was unusual for me, everyone was saying the same thing, which is things are slowing down we are seeing the economy start to normalize is a thing people have been saying relative to the hot endemic time. when i get unanimity on that that tells me something is happening on the ground that is stronger than what i see in the data and then even though the data came in strong in september if you look over a longer term it still said the economy was moderating and those things together made me comfortable with the notion that we have time to watch, be patient, be cautious and understand the trends without overreacting. >> would you say you are at the

peak now, you don't need to raise rates anymore? >> there are three possible outcomes. either inflation will stall out, it will continue slow and steady or go off a cliff. i have all of those possibilities in play and i'm going to say that today my outlook as we are going to stay slow and steady. if we continue to do that where we are now will be sufficient to get us to the 2% level four in ration but lots will happen between now and the next meeting. a couple of jobs numbers, readings for inflation and that will give us signals as to what is going on in the economy. >> you mentioned talking to a lot of people who were telling you things are slowing down. can you characterize that because the question was did the fed go too far? we're going to fall off a cliff as you mentioned. others are saying the soft

landing narrative, what do the business people say? >> the business people are in an area of moderation back. they understand that they have gone through a time where they have had sales at levels that include they did not ask that and the decline in those sales and activity over time is slower than they expected but it is continuing and that is really the dynamic that governs. vonnie: rafael bostic speaking to bloomberg's michael mckee. here are the top corporate stories, berkshire hathaway's cath file set a record of $157.2 billion stood by elevated interest rates and lack of deals. it surpasses the previous high set two years ago. they have parked their short-term treasuries. the company is trying to find big-ticket deals despite wrapping up its acquisition strategy.

west bank is lifting its dividend and will buy back $980 million of shares net income rose 26% from one year ago but missed estimates. the ceo sees customer sentiment remaining week going ahead but said there were glimmers of hope with cost pressures starting to use for businesses. heidi? haidi: getting back to the earnings that we broke earlier in the day, dbs group ring profit that beat analyst estimates propelled by margin growth across commercial lending. let's bring in senior reporter -- great to have you with us and see you in person. what we are looking at was commentary around the penalties we have seen, right? take us to the numbers first read they were solid. >> yes indeed the beat comes from the interest margin which expanded for seven consecutive quarters.

the outlook is for longer -- stronger for longer. and a good positive is higher fees and credit card fees. it is quite in line with smaller competitors which reported earlier last month. those are the positives. the negatives come from higher buffers for expected loss and this will be controversial because the bank flags higher losses coming from the $2 billion money-laundering case which is the biggest talk of the town in single or right now. we hope that they can talk more of out this. haidi: tell us about the assessment that we've heard from participants as to whether this could be a long-term upside despite shorter and medium-term

headwinds to earnings. >> as a commercial bank dbs is going to derive more positives from the higher rate that are quite strong globally. so that is what ceo group to expects to see next year. expenses will be high but he projected that next year's income will be around a record high that we are seeing in 2020 read, so the outlook seems good. he did flag for microeconomic clouds. haidi: asia finance senior reporter joining us there. this is bloomberg. ♪ , colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

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