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asia," new york, sydney, and hong kong. >> we are counting down to asia's major market opens. >> the top stories this hour. is stocks set for a lower open as traders await the jobs report . oil is extending declines as the brief rally fizzles out. the boj could scrap negative rates as soon as this month. he wants them to be china's key partners on trade amid their highest level of talks in four years. annabelle: some breaking news out of south korea. we have the current accounts data -- the current account widening to 6.8 billion dollars. it was a bit of a surprise. the current account surplus at $5.42 billion so we have that widening to $6.8 billion and if

you take it in context, last year, the october surplus was 1.63 billion dollars so a massive difference there. the goods trade surplus was $5.35 billion versus 7.424 september -- 7.42 for september. that came in at 1.2 5 billion dollars in september. -- in october. a little bit of a mixed set of data. we will see how markets react of course when korea opens but as i say, we have u.s. october goods trade surplus narrowing in south korea and the current account surplus widening. let's check on u.s. futures which seem to have made a complete 180. futures looked to be pointed lower. nasdaq 100 futures indicating a lower opening in the friday open for the all jobs data. this is after a session in the

thursday session where we saw the mega caps rally and the nasdaq 100 rise almost 1.5 percent. the s&p up .8% which is a bit of a surprise session, i have to say, for traders. bond futures look to be selling off just that little bit as well and we did not have that much movement or the kind of movement we are used to in bonds in the thursday session. the 10 year yield at 4.149. the two year yield at 4.5% -- 4.594. the story with oil is that it is stabilizing. let's see what is going on in asian markets. annabelle: stabilization. it is also that wait and see because traders are very nervous perhaps ahead of the nonfarm payrolls but it should still indicate really what we have had across the jobs data over the course of this week. that labor market softening is coming in and that tells us that the fed is going to be needing to cut rates over the course of next year. not much movement in treasuries and the price session inching

down slightly in the aussie bond space. stocks wise, under pressure and that sets the tone for the rest of markets in this region today. most markets looking tilted to the downside here and a does indicate to us as well that that ai optimism and enthusiasm that drove up the nasdaq so much probably will not translate too much to this part of the world. aussie dollar fairly steady but let's take a look at currency of course that has been moving quite dramatically over the past 24 hours and this is japanese yen. we saw it breaching its 200 day moving average. the gains as much as 4% in the last session, seeming to stall near that high of 141 point 52. what we want to know, is the path ahead for boj policy normalization -- a lot of really interesting commentary. some photo objects as well. the governor visiting the prime ministers office as well.

all of this really is ramping up that speculation of if and when we are going to see that policy pivot. haidi: let's get some more on this from our senior japan economist. it sort of is almost to a secondary story given how much there is focus on the change in the narrative, the market narrative, for the fed. how do you make sense of the boj's messaging and how significant has the change in tone been this week? taro: right. it is clear to me that the boj has changed its messaging strategy in the sense that from this week, they start to clearly mention and discuss about the exit scenarios. for example, for monday, there was a workshop on the boj's policy review which they

announced to conduct in april's meeting. i was surprised that it was full of discussion of exit and also discussion of side effects on current yc see an unconventional monetary policy so i felt that their policy review proceeded and they start to communicate with -- with the markets to think about the exit in the near future. and of course after that, the governor took -- talked about the merits of the hike in interest rates and also yesterday, the governor in the parliament mentioned about some what if scenarios so after that, he met with prime minister kishida. that's a coordinated, intentional move by the boj that they will start to communicate. >> it is still strange.

traders seem to think it will happen even this month but do you think the boj is signaling an end to yc see and negative rates this month or even january? taro: i am not in that pool and i am against that speculation because my take on what we are seeing now is the boj is preparing a ground for a pivot sometime next year so not indicating that they have found some development in prices and they are moving quickly. i do not think that is the case because even after -- even those communications, i think it's planned even at the appointment in april because as an economist, i don't think the kuroda policy that -- his predecessors policy, intervening too much in the market and too

rigid to adjust when the stock happens, it doesn't match. i don't think it matches with his vision. my guess is that here today wants to face ycc and negative rates as soon as possible. at the same time, doing it quickly will spook the markets. that's why they introduced the policy review and i think they will use it as a communication tool to prepare for this move exit so that is what we are seeing now so the boj's intention is planning to exit from may be in april or my guess is july and they are starting to prepare gradually for the exit. yesterday's market to it too much. haidi: we are seeing yields facing more pressure when it comes to wages and spending data. what are your expectations for the labor market data that we are getting later this hour?

taro: right. my expectation is wage growth, kind of at its growth pace. i think the boj will wait until the next year spring wage talk. the result of that wage negotiation will be reflected in wage data and prices and as an economist, i think that we can see the result of the spring wage talk is reflected in the cpi data after april. that's why i am forecasting july. that is part of the reason. the gdp readings. also, it is coming today, later to suggest that domestic demand is very weak. so at this moment, i don't see any strong momentum that the boj can declare achievement of 2%

goals. >> that is all very exciting. thank you so much for joining. that is taro kimura there. we all set to get november's jobs report with expectations for a pickup in hiring. at that, continuing jobless claims fell by the most since july. bloomberg's economist joins us with more. to help make sense of the u.s. jobs picture, it is c alming that continuing claims fell. what is going on? >> it's nice to see that continuing claims fell and initial on employment claims were essentially in line with expectations and have stabilized relatively. the thing we will need to keep in mind tomorrow when we see the pickup in the pace of hiring and the consensus calling for 185,000 jobs to be added up from 150 last month, that uptick is due in part due to the resolution of the uaw strike so that increase in the pace of hiring is going to be temporary

at best. in general, we are seeing a broad loosening of the labor market. we are expecting the household survey, for example, to show an increase in the unemployment rate as workers that had previously left the labor force started returning to the labor force. we even saw a decrease in labor force participation in the last month. we are expecting to see that increase and that will provide upward pressure on the unemployment rate and that is the sort of thing that is characteristic of labor market loosening and we'll catch the fed's attention. -- will catch the's attention. haidi: are they -- the fed's attention. . haidi: are they overpricing that? traders have been also swift in pushing that aside. stuart: so there's been some moderation in fed speak but the pivot by some of the notable hops including christopher waller last week or the week before, it speaks volumes and some of the jawboning that we have seen more recently about the fed taking policy decisions

meeting by meeting and really trying to walk back the number of cuts that are currently priced in is really an attendant -- attempt to keep financial conditions from loosening even more than they already have. we have seen the 10 year yield retreat pretty notably since october. if financial conditions continue loosening, the fed will have more work to do. the jawboning that we have seen recently is an attempt to reign in the financial conditions loosening so the fed can cut as much as is priced and we think the fed will cut by over 100 basis points in 2024. it's going to be difficult for the fed to suggest that when it releases its economic productions -- projections wednesday but we asked back to see an increase in the number of cuts the fomc members themselves are expecting in 2024. we are expecting the fomc members to show about 75 basis points of cuts in 2024. haidi: stewart paul with us

ahead of -- stuart paul with us ahead of those key data points. we might be creeping closer to christmas but this activity is happening in australia. vonnie: the m&a activity in australia, lots of big deals even as that other one was scuppered, the origin one, but this one here is woodside one. two energy giants in australia. they are in talks for a merger. this would be to create an lng giant pig woodside is the bigger of the two companies, looking to unlock greater growth opportunities. santos looking to increase its values so that is the market reaction. woodside a little bit under pressure but as i said, both sides or both companies confirming the negotiations but saying talks may not end in a deal. still, it would be to create a huge lng giant in australia.

australia, one of the major lng exporters globally. vonnie: fascinating stock reactions. to some extent, you expect something like that but that is a pretty nice pop there. thanks. still ahead, alphabet shares jumped the most since july as google releases its gemini ai model to a mostly positive response from analysts. but first, tribeca investment partners explains how australian equities a surprise to the upside amid and improving cyclical backdrop. this is bloomberg. ♪

>> take a look at australian and kiwi bonds this morning. we have seen yields falling across the australian sovereign yield curve in the early part of the friday morning session. we are seeing the three year and the five-year down just about 3.8 six basis points, the 10 year yield falling 4.5 basis points there. the updated communication when it comes to the reserve bank of australia saying that they are committing to clearly communicating how it is balancing its nation and employment objectives. that is from the updated statement on monetary policy from the rba this morning. let's bring in a portfolio manager at tribeca investment partners because you are in the camp that the rba is done.

what sort of opportunities does that throw up within the domestic market for you? >> it was very positive for the australian market and opportunity, you are looking at the cyclical companies, whether they are retailers, property markets. the property sector is very interesting because clearly, the valuation is still high but the share price has underperformed significantly and if we are seeing the peak in interest rates, perhaps it will last a little longer than expected. we do expect the property sector to do quite well particularly for some of those under owned property space. haidi: how do you feel about the consumer? jun bei: the consumer is holding up ok. the recent data out of the cyber weekend is showing slight growth on last year. look, but it is expected to be strong because consumer is willing to spend -- they are shopping for christmas so you need to look at the november and december evenly. we think december will be weaker which will then go in well for the rba sort of not increasing

the interest rate thesis because there is some softening across the services as well as goods. haidi: foot traffic seems super busy for this time of year. when you take a look at the sectors that are more exposed to china, is that looking other a bit better with the improvement of the relationship and also maybe a bottoming of the china slowdown story? jun bei: absolutely. we are already seeing the space, particularly iron ore running aggressively but we are starting to see the movement across other commodities as well but they have yet to be translated into the actual equity market performance so we see a lot of opportunity in that complex as well as looking at the trade relationship, the likes of a couple of other names. share prices have yet to respond. it represents a quite interesting opportunity for investors when the china data does start to really turn. haidi: what are the most compelling themes going into next year for you?

jun bei: you will have economic slowdown to take place, inflation surprise on the downside, and you are falling quite faster than what people expect. the interest rate increase is done and that is bullish for australian market where we have the latter part of next year, pretty good sort of driving activity coming from a stronger china, better stories. haidi: stronger china in the second half of 2024 is your expectation? jun bei: absolutely. haidi: is that going to come from our polity stimulus -- policy stimulus? there is no easy fix for the property sector. jun bei: one is the law a weaker numbers so heading into next year, a little bit easier. but we do see consumer. consumer is holding off ok but we do expect them to improve on next year once they sort of

cycle out the covid lockdown, finding new jobs and start traveling and we have seen some of the travel numbers are looking pretty strong now given australia has a better relationship, it does, you know, make australia a much better destination so that should really come through and you know, the stimulation should continue to -- stimulus should continue to drive it. it is the confidence that needs to return. haidi: what do you like within the china market? jun bei: we still prefer the names that's more exposed to the services and the like but at the moment, it is interesting. there's a lot of names within china that they have significant offshore growth. one of the names we really like is listed in the u.s. and it is growing offshore as well so growing 80%. and right now, a bit of volatility in share price on the china equity does represent a lot of opportunity for those long-term growth investors. haidi: always great to see you. portfolio manager at tribeca investment partners here in

sydney. much more to come here on "daybreak asia." this is bloomberg. ♪

a few years ago, i came to saona, they told me there's no electricity on the island. we always thought that whatever we did here would be an emblem of what small communities can achieve. trying to give a better life to people that don't have the means to do it. si mi papá estuviera vivo, sé que él tuviera orgulloso también de vivir de esta viviendo una vida como la que estamos viviendo ahora. es electricidad aquí es salud.

>> alphabet shares jumped after the release of its gemini ai model used concerns about the company's position in the highly competitive artificial intelligence market. mark gurman joins us now from l.a. so tell us a little bit more about this model and how it might compete with openai. mark: all of these models are based on the concept of large language models which means they can process large chunks of data at one time and really rival and are beginning to rival human interaction here in some cases. the reason this gemini model was so unique was because they are building multiple variations of this model, some that can be

attributed to a data center, some that can be used in a very broad way across the cloud and devices, and then the other sense of this is that you can apply it to mobile devices, have something run on something as small as a phone or even a smartwatch or tablet. a very unique spread of different types of models in the gemini program and this is a significant leap for what google has already been doing in ai and the reason this is so exciting to investors, you see the stock going up 3%. it is because anything ai related is going to trigger excitement to wall street at this point whether it is from amazon, google, apple, you name it. we have gotten some news today about tesla in the ai world so this is the hot topic right now and this is what is moving the markets for everyone. haidi: so much investor pressure for them to come up with something like this. how does this integrate into the existing suite of services and how will it be monetized? mark: it will be integrated into google as well as their ai

assistant, some of the fundamentals beginning to be included in those operating systems and consumer features this year. we are going to see more advanced variations of the gemini model be applied next year and certainly for a monetization standpoint, you know, you can hook in ai for many uses, for selling things. you can hook it up into understanding more data customers, able to sell that in the case of google and other providers. the monetization is limitless. there are companies that are charging for use of their ai models. at this point, i don't cai in the very short term bringing a lot of revenue in terms of these new models and features but over time, the possibilities are limitless and that is why this is exciting to investors. it is not only fueling the stock market right now but it can fuel the revenue of these companies probably not too long from now. haidi: the other story i am fascinated by is this idea that tesla's supercomputer project --

he has left the company and this is according to sources to bloomberg. why did he leave? a huge amount of experience in ai but was he pushed or pulled? mark: i don't think he was pulled. i would say something probably closer to pushed. they parted ways with him and at least one other gentleman on their supercomputer team. this is super fascinating given we have been talking about google gemini today. google gemini is a series of models that run on supercomputers that process these things at very high speeds with a lot of power. dojo supercomputer is an example of a machine that actually does that ai processing of the different models, right? to be really powerful, you need both. for a simple example on a phone, the ai algorithms that run on an ai chip. this dojo supercomputer is that ai chip or there is a chip within it and this person, the person you mentioned, the other people who were let go, they were instrumental in developing

high-performance computer chips for amd. other people involved in computer chip design for apple, nvidia, ibm, hp, you name it, so this is a big blow to tesla's efforts. they likely believe they were not moving fast enough. they want to work on a second-generation chip before this version is out. haidi: mark gurman there. we do have much more to come here on daybreak. this is bloomberg. ♪

haidi: we are getting some breaking data out of japan.

cash labor earnings and household spending. this coming at a crucial time given that we have heard something of a change in tone from the boj in terms of expectations of the resumption of less extraordinary monetary policy. we have been waiting on those communications. the spending numbers falling. household spending year on year, that number a decline of 2.5%. real cash earnings falling 2.3%. that is bigger than clinicians of a contraction of 3%. we are seeing slightly shy of expectations. labor cash earnings rising 1.5% year on year end estimate was for 1% so certainly really playing into that narrative that is being adopted by the markets. we have two thirds of boj walkers now expecting the end of negative rates by april. bloomberg economics being a little bit more cautious, saying they will wait until may and then meeting after that in terms

of being able to fully prime market expectations for that pivot. >> certainly, you are seeing a lot of market activity with traders advocating for those policy changes and one of their way to be in track it is implied volatility. this chart taking a look at the moves that have been placed in in either direction for the japanese yen on a one week, one three-month, and six month basis. traders, as you indicated, will be discussing positioning now for some sort of shift for the expectation. we will see that end to negative rates paid less change on because the market reaction is going to be quite sizable to get tokyo in the next hour. -- just coming online, down one .5% at this point in time. can't expect to see some soda selloff. the sector we know really likes a rising rate environment to a point. that is why we have seen the

topix banks index, indicating we will see some gains in the session. certainly want to watch on the countdown to the market open. another key thing to be watching is to what is happening in china because the selloff has extended. let's take a look at the terminal chart. shanghai composite touching another major technical trend line once again, this trend line here has been tested a number of times over the past 18 or nearly 20 years. it has been called the mother of all trend lines. it has been tested as i said. it has proved to be a line of support. really that they are sentiment continuing with economic signals coming through and we have also got geopolitics that is really keeping investors on the sidelines.

>> exactly and we are going to stay right there because xi jinping has told e.u. leaders he wants both sides to be key trade partners. he met with european council president and ursula von der leyen on thursday. for more insights, a lecturer in chinese politics and diplomacy at oxford university joins us now. thank you so much for joining. we have seen quite an amount of diplomacy on both sides and particularly the u.s. and europe, right, with china and the president. is there a path to some kind of trust here? >> good to be with you. yes. as you mentioned, there was a lot of talk about trade this morning and over the day of the summit. there is some pathway towards trade. they recognize they are strategic partners. very cautious to not as engaged with each other to address global issues including climate

change, ai, so there is intention to build trust to find a way to move forward and not to inflate differences and i was very surprised that the e.u. put out a press release right after the summit and it was not what i was expecting because i thought there wasn't going to be any press release but there was so this is a good sign i think towards building trust on the european side. vonnie: ursula von der leyen certainly did not mince any words when she was speaking with xi, and also we had italy telling china it was not going to participate in the belt and road initiative anymore. come march, it is not going to re-sign. can he look past those? lucie qian: yes, that was a hiccup. this was not something that was unexpected. it certainly is something that is reflective of the e.u. voicing its unhappiness

vis-a-vis the ongoing nearly 400 billion euros deficit, trade deficit between the e.u. and china. e.u. is unhappy with this trade deficit and the chinese side needs to move forward to address this trade deficit and i think president xi understands this and his team understands this on the chinese side. therefore, i think there will be some ongoing high-level e.u.- china trade dialogue ongoing in the future. >> for sure, that is a lot of what this is about. we have the geopolitical question on russia and so on, but you know, will xi be able to impact the outcome of something like the investigation into the subsidies on electric vehicles? will europe be able to influence how china deals with europe when it comes to medical devices and cosmetics, which is very important to europe? lucie qian: yes, so these are kind of the nitty-gritty e.u.

-facts hindering the china trade and investment talks at the moment but i think the big picture -- let's step back to see the big picture. in china, they have been negotiating this comprehensive agreement over the past decade and they came to an agreement in principle in 2020 but the european parliament have obviously put this on hold because of the geopolitical and political sensitive issues ongoing between the e.u. and china. what they should do now is really to have more frank and open discussions between -- with each other and also, you know, just to lay out the strategic interests both sides have and also what can be done that can overcome these kind of nitty-gritty issues that you just mentioned? i think the e.u. and china are not just involved with each other but they are also involved with addressing international issues, like you mentioned, like the geopolitical issues with the

middle east conflict ongoing at the moment and i think that china does have a role to play and china does want to show itself as a responsible stakeholder. i think the e.u. can have china get involved in a more strategic and more frank way. so to speak. >> how much can xi promise or offer given the flagging domestic economy he has had to deal with? lucie qian: this is something that is not easy for xi, obviously. the domestic issues are always impacting upon china's foreign relationships and this is of course the economic issue is always something that has been top of the agenda on chinese leaders, political calculus, i would say. i think, obviously, china needs investment and china is an investment oriented kind of model, economic model, so i think the leadership in china

recognizes this and they do want to engage with the e.u. and the west at large and they do not want to see a de-risking or decoupling. this is something that china is very, very open in its attitude toward the e.u. it is not beneficial to both sides. apart from this kind of nitty-gritty negotiations plaguing relations, the domestic issue that undergirds china's global economic footprint is not going to -- it is not going to go away and it is certainly top of the leadership's agenda so this thing will not, you know, will not really -- yes. i would say it is not going to be a factor that is going to hinder the e.u.-china relationship. >> will keep an eye on how the rest of the meetings go. thank you so much for joining us. that is a lecturer in chinese

policy and diplomacy at oxford university. u.s. trade representative katherine tai sees excellent progress made on talks for a new deal between washington and taiwan but she told bloomberg's david westin that any new agreement should address current headwinds. >> from a trade policy perspective, what we have been very disciplined in trying to do is to say let us bring a trade program to each one of our partners that is tailored to that partner, that is tailored to their interests and our interest in the partnership that is also tailored to the challenges in the dynamics that we are navigating together in the global economy. with taiwan, what that has meant is that we have been negotiating agreements and the first agreement that we have with taiwan is one that covers i think five issue areas. trade facilitation, small to medium enterprises, good regulatory practices, and i will

have to look at my notes for the other two. we have a core group of five disciplines. we signed that agreement. congress, in a fit of enthusiasm, even though they were not legally required to, took a vote on it to show their support for what we are doing here, and on the basis of that support, we are negotiating another set of disciplines right as we speak. we have been making excellent progress and we will continue to look that building out those agreements. to have an arrangement with the taiwan economy that is fit for the times, and the times are very challenging so this is one of our accomplishments that we are particularly proud of and committed to. >> so you do not rule out a free-trade agreement but it is not now. >> let me back up to what do you mean by free-trade agreement? do you mean the traditional kind of u.s. approach to a very, very comprehensive, maximally

liberalizing -- aggressively liberalizing agreement? we are not doing that with anybody right now. it is actually insensitive to the dynamics in the global economy and the u.s. economy right now to push on with that program which may have been fit for the 1980's and 1990's, maybe it was starting to show its age in the to thousands, 2023. there's innovation going on all around us. when we were negotiating those agreements, ai was not even a thing that we talked about so in all these different ways, but certainly we had not experienced the pandemics, supply chain discombobulated and's and disconnect, the fragility's -- the geopolitical tensions where we always had them but they were different and at a different scale with different partners. in all ways, as much as we embrace innovation instinctively as americans and certainly in our economy, we need to be embracing innovation in our trade policy and that is what we are doing and that is why when you say fta, sure, if i fta you

mean are we innovating trade agreements and are we doing trade aggressively but in new ways? yes. if you mean the old-style trade agreements that we used to do, then no. >> u.s. trade representative katherine tai speaking with bloomberg's david westin at the aspen security forum in washington. more to come here on "daybreak asia." this is bloomberg. ♪ usic all day or deal with payroll compliance? payroll compliance, for sure. gusto automatically calculates and files my taxes for me. hold up, compliance? easier? choose payroll compliance without the ups and downs.

>> israel has blamed the united nations for the inadequate flow of food and other aid into gaza as the u.n. secretary general called for a cease-fire, warning the situation is fast coming a catastrophe. let's get more from bloomberg's editor. what is the latest when it comes to the un's push to halt the fighting? anna: as we talked about before, secretary-general gutierrez did decide to use the article 99 tool to force the security council to review a proposal for a cease-fire. this is the first time it has been used since 1971 so it is a rare tool the secretary-general has but it is nonbinding so you know, it is a strong suggestion that the security council consider this but he has no way to enforce that. the u.s. has a veto vote and is a staunch supporter of israel so

it is going to be interesting to see how that debate plays out and whether or not there will be any give and take on a middle ground for an agreement in israel. >> of course, israel talking about destroying several hundred of the tunnels. what is left to destroy and how much can hamas be using those panels that are still in existence, anna? -- those tunnels that are still in existence, anna? anna: these tunnels are where hamas plans, staged, and launched the attack in southern israel so it is a very military objective for israel to destroy. more than 300 miles of tunnels under gaza. the problem of course is that these tunnels go under a densely populated area, civilian infrastructure, schools, hospitals, homes, so destroying those tunnels from underground also will destroy the structures above it. obviously, gaza was standing a huge aerial bombardment from israel in the early days of this

campaign. it continues still so we are getting kind of two sides of this attack on civilian infrastructure, both from the air and from below where this tunnel network is. >> that has been ongoing criticism of the fact that there hasn't been enough aid and humanitarian support and being able to get into gaza. is israel pushing back on who is to blame here? anna: this was another interesting development in the disagreement with the u.n. in that israel said the u.n. is to blame for not being able to distribute the aid it has gotten in. there is consideration of opening a second border crossing to egypt so negotiators are working around-the-clock to make that happen but it remains a question once this aid gets into gaza whether or not it can be distributed to the people in need. the u.n. says there is no safe harbor for civilians who have fled from the north to the south because as israeli operation --

as the israeli operation ramps up in the south, it is hard for even u.n. facilities to take refugees and care for the civilian population there. >> thank you so much for joining us once again. that is anna edgerton coming to us from washington, d.c. for the first time, saudi arabia says it has delayed past 2030 some projects under its economic transmission plan. saudi's finance minister the move will help riyadh avoid inflationary pressures and supply bottlenecks. the government is forecasting budget deficits every year out of 2026. saudi arabia is working to diversify its oil dependent economy and attract foreign investment. after nearly 24 straight hours of negotiations, e.u. representatives remain divided over a plan for the most comprehensive ai regulation in the western world. the discussions will resume later friday. sources say negotiators have made some progress including our

provisional deal on generative ai tools. however, it is unclear whether they will be able to agree on a draft. plenty more to, on "daybreak asia." stay with us. this is bloomberg. ♪

>> we have some breaking news. more japan data crossing the bloomberg. gdp and current account balance as well as trade. we did have of course a little bit earlier the jobs data and all of this really eating through to what we potentially see from the bank of japan in the coming weeks and months. this is the picture when it comes to the gdp number. first and foremost, we are seeing the annualized -- the seasonally adjusted quarter on quarter number. these are the final numbers for the third quarter and we are seeing a contraction of .7%. that is worse than expectations of half a percent for that annualized seasonally adjusted number, seeing a contraction of 2.9%, worse than estimates. nominally seasonally adjusted gdp for the third quarter, the final number is flat and the gdp

deflator coming through at 5.3%, a little bit higher than the 5.1% in the surveyed estimates. we are getting private consumption numbers as well, a bit of a contraction. business falling on par with expectations, .4% there. we are seeing some of the trade data come through as well. that experts cutting about 0.1 percentage points of that quarter on quarter gdp number. we are also seeing some of that weakness across private consumption as well as business spending and confidence as well. let's bring in marc wilson. obviously almost under the radar has been the shifting of expectations from the bank of japan this week. bloomberg economics don't see a change until the middle of next year. our markets already primed at this point? >> i think the market. ahead of itself in a big way yesterday. they talk about, you know,

february or the next two meetings being live and you can see why because there was a shift in the commentary from later. all he really said, you know, in what was, you know, at the end of the financial year, japanese financial year is march, so we have got those wage negotiations. so i mean, by the time they digest all of that, you are talking about the second half of next year. today's gdp numbers themselves, they don't actually speak to any sort of rush on anybody's part so i think we might see a little bit of consolidation in dollar-yen and jgb's where it was properly gutted last night. it did bounce a couple hundred points. the spot rate, no change in the gdp print and probably rightly

so. the story does not take a turn one way or the other by itself and if anything, it does speak to giving them a more time to consider their options. >> a brilliant move, right? if it had been planned out or strategize that way because now, we have got the yen stronger, back at -- that is a far cry from where it was just a few weeks ago when we were worried there was passed in 150 constantly. could this have been in some way a strategic plan? michael: i would say more likely design myself because i am not sure what he was trying to achieve when he made that cryptic comment. it did get a desired result really i suppose -- the yen short squeeze going on and that is cool but if he does -- if you are not careful, he might get the market pulled up on the yen

too soon so when they start talking about, you know, removal, they could be doing it from a level of 130 in dollar-yen which would be undesirable because by the time it finishes, it would be nearer to 110 so i don't think they should leave well enough alone and count their blessings this week. there is no need for intervention and there wasn't last month. the market seems to be regulating itself quite well so i think the boj has had a good week. and the data itself is probably making a bit more challenging in terms of, you know, rate hikes n.y.c. see removal but what is the rush anyway? -- ycc removal, but what is the rush anyway. >> michael wilson. take a look at that chart when it comes to the revised lower picture for japan gdp. the numbers we got, the biggest contraction since the onset of the pandemic. biggest contractions of the

second quarter 2022 so the first full quarter during the pandemic. we also had really some of the weakness when it comes to earnings as well, japan's real cash earnings seeing negative real wage growth there. data has been negative for the last 19 months so whether or not that plays into some reassessment of boj expectations will be interesting to look at and of course we have the market open as well in tokyo. traders sort of processing through the barrage of data we have gotten from japan over the last hour and we have the market open in seoul as well, this is we had the revised third-quarter gdp annualized falling almost 3%. this is bloomberg. ♪ a few years ago, i came to saona, they told me there's no electricity on the island.

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teddy sheringham -- shery: we have data before friday's u.s. jobs reports. also just before the weekend. >> before that, as you alluded to, significant numbers out of japan. wage growth numbers and gdp numbers are not great. the biggest contraction since the onset of the pandemic. whether that figures into what we get from the bank of japan, certainly with so much focus on the fed, we are focused on repricing of expectations from the boj. vonnie: the market open is upon us for japan and south korea. plus, the reopening of cash treasuries. at the start of the day payroll data is due later. the big focus is around japan. there has been market expectation building.

the boj will be scrapping the world's last negative interest rate regime. our latest bloomberg's survey says perhaps we will not see any policy pivot. more than 90% so we won't say anything in december. two thirds productive move by april of from about 30% the last time we ran the survey in october. it's a big increase in expectations we will bring forward exiting away from negative policy rates in japan. market reaction has been swift. a couple different sectors. the broader index is under pressure. the topics banks index slightly in the green. thanks like -- banks like rising rates for the japanese yen earlier was up as much as 4% and broadly 5.2% higher against the greenback over the past session. this morning fairly steady. we are around the 144 mark. the other focus is the data that

just dropped. as you said, we saw further negative real wage growth for a 19th straight month. and a big mess in gdp. because it was a contraction of 2.9% on an annualized basis, outpacing what economists expected. that is the opening getting japan online. cash treasuries. the 10 year yield still around the 1.4% mark. in korea the other question was, the positivity we had in the u.s. session. the big move we saw in meda cap -- mega caps helped push u.s. equities higher. the speculation is ai will continue to fuel market gains. alphabet unleashed a new ai model. nasdaq futures under pressure, but still seeing the kospi in the green here. a big move in the korean one, a

currency that is not right when he for hours per day -- 24 hours per day, catching up to the prior session trading .8% higher against the dollar. now let's look at australia. we are one hour into the session. deus ex 200 -- the asx 200 is a little weaker. there are a couple stocks. santos and woodside are two big energy companies in australia. both companies have confirmed they are in early deal talks to create a major lng giant in austria. a story of is a major -- australia is a major lng exporter. we continue to track that. the talks may not result in a deal. haidi: of course, we are still processing the reaction when it comes to the japan third-quarter revised gdp numbers. contractions since the in -- onset of the pandemic. japan gdp revised lower than the biggest fall we have seen since

the second quarter of 2022, the first full quarter of the pandemic. our chief rates correspondent for asia is garfield reynolds. we saw a picture of negative real wage growth as well. does it change boj expectations? garfield: i think it muddles it a little bit. on one hand, it might create concern within the bank of japan. they do want to be gradual in their shift towards, at some stage, normalizing policy. on the other hand, some of the internals, like the gdp came in stronger than expected. signaling perhaps inflation pressure there. nominal wages rose faster than expected. spending fell less than expected. there are some underlying signs of strength. there is also always the potential that when you get a

big downside surprise in gdp or a big upside surprise, are you going to get the payback coming ahead? we had surprisingly strong u.s. gdp in the most recent quarter. it did not stop people betting the u.s. is heading for recession. it has even underscored some of the concerns that the u.s. gdp is going to run out of puff after the blowoff top kind of thing. it will be very messy. going forward, we have had a huge surge in the yen and a big jump in bond yields yesterday. can those moves sustain? especially when it comes to yields, in a time when we have a big global bond rally that has helped create the scenario where the boj can start talking about, well, maybe we can tighten policy because they are not so

under the gun. they are not facing 10 year japanese yield pushing up towards 1% as they were a couple months ago. it makes it easier for them to think about moving. the problem is the potential unintended consequences. that is likely to keep currency markets in particular on edge. it's the main transmission mechanism. we saw huge moves in they get overnight. that also set off some surprising weakness for the u.s. dollar against other currencies such as the australian dollar and the new zealand dollar, the euro. so, as i said, it muddies the waters and especially when you pretty much always have the potential that the boj governor or one of his deputies could be called to parliament to comment in public on what they think. that's part of what helped set off yesterday's extreme moves. shery: it is such a strange time

as well. only a few weeks until the end of the year and suddenly traders are thinking perhaps something will happen this month. could the bank of japan exit negative interest rate policy at a time when other central banks are really looking to prevent and when -- pivot and when markets are pricing that pivot in, more portly? garfield: well, the boj is a definitely in a very different place from its peers. the fed, even as the fed is considering ending its rate hikes and moving, perhaps, if inflation goes the right way, towards cuts, it is still also reducing its balance sheet. it's certainly not about to start buying bonds. the boj will be buying bonds today. it is looking like it will again by more bonds this year. next year, to potential he its holdings in the jgb -- to potentially increase its holdings in the jgb market

already about 50%. it faces a lot of pressure to move away from that when you consider inflation is occurring in japan. it becomes very much about the timing of it. how you find a way to pull off an actual policy change without creating major market turmoil. seeing as all it has taken is a few comments about how maybe come at some stage, we might think about thinking about thinking about exiting policy to set off the sort of moves we saw yesterday. it highlights how much volatility can emanate from tokyo over the coming weeks and months. vonnie: thank you for the context chief rates correspondent for asia and mliv interpreter garfield reynolds. despite japanese equities strong performance year to date, they will continue to improve equities with long-term structural drivers of reflation, reform, and real allocation in

place. it is the perfect day to have ken long on the asia equity portfolio specialist at east springs investment. it's a conviction -- is it the conviction for you still even after today seeing the yen at 144? we had a nice run up, almost 25% in the nikkei 25 this year? ken: we think with normalization of interest rates and yield curves in japan this will be positive for japan. if the boj is actually doing this, or actually contemplating doing this, it means inflation, a slight rise in inflation is sustainable. the fact is potentially in their view, the economy, despite what we saw in the gdp reading today, that it's on a gradual path of modest growth in japan that should bring positives to japanese corporate's. from our point of view we feel that with japanese corporate

seeing a normalization of interest rates, potentially you might see them increase overall capital expenditures. we could potentially continue to see further wage growth and at the same time, improvement in overall eps growth for japan, what a lot of investors are looking for. that's why in 2024 we see a lot of positive. particularly, if japanese corporate continue to do share buybacks, improve overall corporate governance, increased dividend payouts. these will continue to be benefits for japanese investors. vonnie: explain why an exit from negative interest rate policy would help corporate's? ken: it's more of a sentiment. when interest rates are more normalized, the fact is, you have to remember a lot of japanese corporate balance sheets are very strong. the fact is, while interest rates are normalizing, it's more of a sentiment. it is more there is a sign of an overall structural improvement in the japanese economy that would actually enable for a lot

of japanese companies to increase capital expenditures. that is where we see the benefits. when it comes to normalizing interest rates. vonnie: india is another one of your conviction picks, or has been. are these staying conviction picks for the year into 2024? we have seen not quite the same on india, 15%. but we have had regional elections now looking like it could be good for modi. would that make you more bullish on in syria -- on india at least stops wise? ken: we remain bullish. this week we saw fairly nice gains in the indian equity markets with regional elections we have the main elections coming up next quarter. specifically, that should have a continued boost. the fact is, all expectations are still for modi to beep prime minister again -- to be prime minister again. what we are seeing on the ground

in india is when you look at some structural changes, some of the positives around, whether it be financials, increased sentiment towards real estate, there is a lot to focus on when it comes to indian equities. yes, valuations continue to be quite extensive and expensive. when you look at indian equity markets. when you factor in the fact that overall economic growth remains strong, eps growth remains strong, and more importantly, domestic investor sentiment and their overall allocations and investments back into the indian equity markets, especially over the past couple years that signals you have a very strong domestic investor base that will continue to invest in the indian stock market regardless of whether you have foreign investors or not. vonnie: in asia, vietnam is your third conviction picks. going into this year, we did not necessarily see what was coming. i wonder if investors are now a

little wanting to see returns immediately, and if they don't see them they will head for the exits. that happened in china several times this year. obviously, the china story did not quite play out. are you pessimistic on china for 2024? what about investors being now or never? ken: the thing is with china we remain cautiously optimistic. we have a neutral position right now in china. it is more importantly about overall sentiment and whether we can continue to see further policy support. right now, because of uncertainty around help policy support potentially could affect specific sectors, we think the bottom up stock picking will be much more important in 2024 when it comes to trying to outperform in the china market. like you mentioned with vietnam, one thing we want to consider potentially as if they can come up for maybe intrusion into emerging markets, not next year, but maybe 2025.

we tend to see run ups in the stock market when there are specific frontier markets potentially in consideration for a move to emerging markets. these are some strategies and areas we are looking for opportunities in 2024. vonnie: thank you ken wong of east spring investments. let's get to annabelle for an update on how things are shaping up for the trading day across asia. annabelle: we are under 15 minutes into the session so far for korea and japan trading. a key sector we are focusing on in particular is japan bank stocks. it's down to speculation we have discussed that the boj could exit negative rates by april according to our latest bloomberg survey. more than two thirds of survey respondents are seeing that policy change by that point. the majority are not seeing any shift at the upcoming meeting in

december. the economic data adds extra complexity to the situation, given it undershot expectations, potentially -- particularly, on annualized gdp. that's one thing we are focusing on at a particular and we will have more at the bottom of the hour. haidi: ahead, the outlook for central banks. that's front and center for markets ahead of a busy week of decisions covering 60% of the global economy. asia decoded joins us for that a little later. first, president xi jinping tells eu leaders he wants them to be china's key trade partners on trade amid the highest level talks in four years. details are next. this is bloomberg.

haidi: xi jinping want eu leaders to be partners building trust oversupply trains. the two sides met in beijing to discuss a litany of economic concern and frustrations. >> china is the eu's most important trading partner but there are clear imbalances and

differences we must address. we both recognize the importance of the risking and strengthening the resilience of our economies. that is why the european union is working to ensure the security of its supply chains, critical infrastructure, and technological and industrial bases. haidi: a senior economy and government reporter now joins us from beijing. it is a softer, more friendly beijing. i have never seen xi jinping smile so much before the last few months. is this economic or -- economic necessity driving the relationship now? james: the chinese government, even from the middle of last year, was looking to turn down the temperature on a lot of different diplomatic disputes. we saw that with australia. that took 18 months to come to fruition. you saw it with the u.s., derailed by the balloon earlier this year. but there was a clear effort by

beijing to turn down the temperature. i think the eu, the issues the eu and china have our various but china is trying to make an attempt to improve relations. the reality is, on the real issues the eu has with china, there was no proposal on that from what we can see from this meeting. the biggest issue is obviously ukraine. there will be no change on china's attitude onto ukraine and russia. on economic ties as well, china will not open its economy to european companies in the way europe wants. there will be reciprocity to the open european economy from china. on a number of issues, yes, it is a friendly face. but, it is almost impossible to imagine that there will be real, substantial change in the way the european leaders are asking for when they were here yesterday.

vonnie: to hear the word trust being bandied around it does not strike me as something that is ever achievable. at least, not in the near future between these parties. it's not like the block speaks with one voice. there are plenty of countries in the block that have their own ideas about what the relationship should be. what will it look like in a couple years time? will xi have an influence over the probe into easy subsidies >> -- ev subsidies? will europe get something out of it? >> with dev subsidies it is what europe wants to do and decides it can do. chinese complains about ev subsidies and protectionist attitudes are completely hypocritical. china is in the process of creating a self-sufficient domestic economy in all of its high-tech sectors. china is in the process of restricting other countries from participating in large sectors

of its economy. cars with batteries made by foreign firms could it be sold with subsidies in china. now the chinese are saying you cannot subsidize your manufacturers and your markets, like the u.s. is doing with the ira, that's hypocritical. i do not think you will see a change. the chinese government has been clear they want a self-sufficient industrial economy that does not rely on europe or america for critical imports like semiconductors. they won't change that strategy. the question isn't, will we see china open markets substantially? the question is, what -- how will europe deal with that and what changes can europe make to strengthen its economy? vonnie: thank you so much

bloomberg's james mayger in beijing. taiwan heads to the polls next month to pick a new president, shaping the island's future and setting the course for u.s. /china relations. bloomberg spoke with the three candidates about how they plan to navigate ties with beijing. >> china has begun military drills around taiwan. >> we have not seen this level of incursion. >> china likely fired missiles over parts of taiwan. >> the people's liberation army is flexing its muscles and the communist party is stepping up rhetoric. >> china looms large as taiwan votes for its next leader. >> we don't want to be enemies. we can be friends. we love to china enjoy democracy and freedom like us. >> the taiwan strait must be

stable. taiwan must be safe. this is my top priority. >> a really important principle is we have to think of a way to have a dialogue with china and not always tell them no. after no there is no other step. >> the world is watching taiwanese voters choose the new president. the decision to determine the balance of power and prospects for peace and stability in the region in years to come. >> elections in taiwan tended to be inflection points for the cross strait relationship. if they have seen over the history of taiwan's presidential elections, a change in the relationship and heightened periods of tension leading up to and following it. >> this is the end of the president era. regardless of who wins next, we will have a new president. >> taiwan decides, a special reporter presented by coanchor yvonne man. catch that on burke tv at 8:00

p.m. and 7:00 p.m. friday on new york and it will be available on our youtube channel. there is plenty more ahead. this is bloomberg. was also the first time you heard of a town named dinosaur, 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 what do you see on the horizon? with a partner uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

♪ vonnie: you are watching daybreak. on the corporate front, alphabet chairs posted their biggest jump since july on positive analyst reactions to googles gemini ai offerings, easing investor concerns about apple's position -- alphabets position under the competitive market for artificial intelligence. some google staff said the technology does not work quite as well as in a promotional video showing gemini analyzing a drawing of a duck. lululemon shares slipped after fourth-quarter revenue guidance trailed wall street estimates with a disappointing forecast that is a rare miss for a company who routinely exceeds investor expectations with sales

growth slowing with higher income shoppers spending more on travel and entertainment. the outlook is robust still compared to peers. santos shares a surgeon in australia with the company confirming it is in preliminary merger talks with rival woodside energy. the firms worth $53 billion and would create a national gas powerhouse that would face potential regulatory risk. santos is reviewing other alternative same as lifting its valuation. there was plenty more to come on daybreak: asia. stay with us. this is bloomberg.

>> this is "daybreak asia." i am annabelle droulers with a check on markets. big movers as we get underway

with trading this morning. you're watching benefit one with a holdings company saying is planning to buy at least ¥1800 a share in an offer so that is making a rival bid against m3. last month, it offered to pay ¥1600 a share they are looking to acquire around -- m3 was looking to acquire a stake in benefit one. it is looking at the portion that is not held by the company. benefit one is better than what m3 had offered for the company last month. daichi saying it is prepared to buy ¥1800 per share. we are half an hour into the trading session so far for japan.

we are watching what is happening in the financial center given this expectation it is building for a boj policy. so the exit away from negative rates seen by april in our latest survey. financials, a sector that likes rising rates to a point but certainly one that has moved in the past on this sort of speculation so that is a key one today. let's take a look at stocks more broadly in the region. the nikkei not doing as well and it is helping to bring the broader index down. the trade fairly flat. you can see the kospi gaining this morning, perhaps that follow-on from the price session given we had that optimism around ai on wall street. the focus today, fair and square very much on japan and when we can start to see any policy changes coming through. >> especially given the stalling recovery that we see in those latest gdp numbers. they are revised numbers or

possibly bring about one hour ago. japan's economy contracting more sharply than estimated. it does underscore the fragility of the post-pandemic recovery. gdp shrank at 2.9% in the three months through september from the previous period. let's bring in priyanka. this was the biggest contraction we have seen since the onset of the pandemic. taken in context with how we are seeing the weakness in real wage growth in japan, does this really muddy the waters when it comes to the bank of japan? >> i think it underscores that the very accommodative macro policy -- it is not really working for growth because what is happening is that a higher level of inflation is not helping real wage growth go up as i mentioned and it is affecting consumption.

in some sense, it does not really detract from you know, what is the biggest question right now for the boj is when will it actually exit negative real rates? haidi: what are your expectations? the markets are looking at april. bloomberg economics thinks it's closer to the middle of the year after the policy update. priyanka: actually, according to bloomberg news, markets are pricing in as early as december of this year. the next policy. i think that is running a bit ahead of themselves. i think what the boj would like to get a sense of is what the spring wage negotiations come up with to get an idea. trade unions are talking about 6% with a 4% increase in basic peso the governor will definitely keep an eye out on that. i think i'm going to go with the survey where i think in april is where they are going to -- once

negotiations are out-of-the-way. vonnie: -- haidi: what could potentially change that in terms of what we see from global central banks, particularly the fed? priyanka: from the boj's perspective, they already raised their forecast rate for 2024 so they are already pricing in elevated above target forecast for another year. from their perspective, they pretty much signaled that they should be exiting negative real rates and entering a very gradual hiking cycle. let's not expect any rate hikes here. globally on the other hand, we are actually talking about whether rates have peaked or not. what does jay powell actually signal in terms of them staying hawkish and signaling towards one last rate or so? in 2024, you will probably see

most global policy moves towards cuts whereas the bank of japan stays on a very gradual tightening bias. haidi: we are also looking ahead to the are b.i.. is that it -- our b.i. -- rbi. priyanka: agree with you there, haidi. if anything, we are going to see that they are going to retain that withdrawal of the accommodative stance and maintain a hawkish bias. the reason for that is of course the very volatile food inflation that india can use to grapple with even as food and energy is trending down. he will see headline prints close to 6%, the upper end of the target range for the next couple of months. so yes, they are not going to do anything. they are not going to change their hawkish stance. i think the next move will still likely be a cut but that does not come before the middle of

2024. haidi: when you take a look around the rest of asia going into 20 24, what do you see as being the outperformer's? priyanka: in gross terms, india will continue to hold onto its mantle as the fastest growing economy in the region, one of the fastest growing major economies in the world. having said that, growth has been consumption driven so far this year and we are going to see a bit more of that consumption driven growth as elections come up. we are not seeing so much of the private sector participating in that growth so we are going to see a slowdown in india's growth from the very stellar 7% growth we will see for fiscal year 2024 that ends in march of next year.

it will still be one of the hirer growers. the other thing i would watch out for is vietnam. it will benefit from a low base but it is also coming out with a corruption scandal and property sector in stagnation. we should see vietnam rebounding to 6% sort of growth as well. haidi: priyanka grandma great to have you with us, founder and principal economist at asia decoded. benchmarks reaching key technical levels among this relentless selloff. it may lead to further losses ahead. if you take a look at the technicals, what are we set ting up for, support or further capitulation? >> if we look at the benchmark in the indexes, there is a recount of a long-term trendline

since the asian financial crisis. we are dropping below that kind of support level. also, it is a similar case. they are all dropping below a very long-term historical support seen by the investors. i think obviously, the sentiment has been really, really bearish over china in general, especially this week. we have seen so many downgrades by moody's over the credit ratings, not just for china sovereign but also for all the biggest companies in china like tencent, alibaba, and yesterday, we got another cut for the top insurance companies in china. all in all, i think investors still like, even though we are seeing, you know, some easing science from the u.s. data in terms of the rate path, but still, you know, when it comes to sentiment over china, people are still really concerned about

the growth outlook. haidi: dare i ask what happens if it does breach that level and stay below it for some time? jeanny: i think, you know, people have been waiting for the central economic conference. i guess it is going to be due during the middle of this month, where investors can gauge, you know, what the government really wants to do for the economy next quarter, whether there's going to be more physical support, monetary support, you know, from the chinese government, you know, and also, we are going to see -- we have already seen some support to revive the sentiment in the capital markets so we are seeing whether those measures can be effective going forward so those are big questions that no one can answer at the moment so i guess, you know, before everything clears, all the overhead gets removed, the index

is going to stay like this at least, you know, in the short-term. vonnie: in the doldrums. thank you. that is our asia stocks reporter there. remember, bloomberg users can use the functions on the bloomberg and can interact with the charts shown using gtv . charts featured on bloomberg tv to catch up on key analysis and save charts for future reference even. this is bloomberg. ♪

a few years ago, i came to saona, they told me there's no electricity on the island. we always thought that whatever we did here would be an emblem of what small communities can achieve. trying to give a better life to people that don't have the means to do it. si mi papá estuviera vivo, sé que él tuviera orgulloso también de vivir de esta viviendo una vida como la que estamos viviendo ahora. es electricidad aquí es salud.

haidi: take a look at the treasuries. we are also seeing some moves when it comes to the catch-up from the yen surge overnight and that is the case when it comes to the won jumping the most in three weeks, tracking those moves in dollar yen. the won rising as much as 1.1%, at one point the most since november 15 and that is really what we have seen, the yen surging by the most in almost a year. some stabilization though for trading in dollar-yen after that big jump with traders still kind of repricing that the bank of japan will scrap the negative interest rate regime potentially as soon as this month but really about two thirds of those surveyed.

bank of japan think by april of 2024 at least. bloomberg economics looking more midyear after that policy review. they think bank of japan wants to give markets and investors more time to be primed for that shift. we are watching the aussie dollar pretty much unchanged there. trading at the minute. we are also seeing really the kiwi dollar trading with marginal moves as well. it really is about the yen. setting up really some pretty tense trading for japan assets today. some geopolitical headlines that we are following. vonnie: saudi arabia says it has delayed past 2030 some projects under its economic transformation plan. his finance minister says the move will help riyadh to avoid inflationary pressures on supply bottlenecks. the government is forecasting budget deficits every year out to 2026. saudi arabia is working to diversify its oil dependent economy and attract foreign investment. after nearly 24 straight hours

of negotiations, e.u. representatives remain divided over a plan for the most comprehensive ai regulation in the western world. the discussions will resume later friday. sources say negotiators have made some progress including a provisional deal on generative ai tools. however, it is unclear whether they will be able to agree on a draft. haidi: israel has blamed the u.n. for the inadequate flow of food and other aid into gaza, deepening a dispute over an evolving humanitarian crisis. the offensive expect it to take months, likely leaving many of the about two point 2 million palestinians homeless. let's get more from bloomberg's bruce einhorn. you know, since the resumption of fighting after the temporary cease-fire, things have not improved when it comes to civilian and humanitarian fallout. we are hearing some blame it being traded in terms of the ability to get aid in.

>> the u.n. secretary general has said the situation is, as he put it, fast deteriorating into catastrophe. israel gave a briefing to reporters near gaza yesterday, talking about the issues related to destroying the tunnels. this is a main goal of the israeli military in this operation. hamas has built up a vast network of tunnels throughout gaza that extends about -- some of them down 10 stories below ground, 30 meters. and israel so far says that it has discovered 800 of these tunnels and destroyed 500 of them but continuing to go after these tunnels could take much longer and could displace best

parts of the population is more than 2 million people could be homeless as a result of this. and that would contribute even more to the humanitarian crisis in the region and yet this is something that israel says it has to do in order to actually fulfill its operation, to get rid of hamas. >> if the second part of the war has really only started post the cease-fire and israel is already talking so hawkish lee, what would, you know, convince it to maybe talk less hawkish lee to the united nations on humanitarian aid or be a little bit less hawkish when it comes to talking about raising -- ra zing beirut if necessary? >> the comments about beirut was from premise netanyahu who made a statement warning hezbollah that if hezbollah worked to

launch a full-scale attack on israel, israel would retaliate. there has been exchange of fire in the north between israeli forces and hezbollah since almost the start of the war up until now. it has been restrained if that is the right word. it has not gotten to the extent that it has become a full-fledged second front in this war, however, there is that possibility. there have been exchanges of fire and so prime minister netanyahu has issued this morning. president biden did speak to the israeli prime minister yesterday and he did speak with the jordanian king about efforts longer-term to eventually lead to a palestinian state. of course, diplomatic efforts at the moment have really not gone very far. >> first, thank you so much. bruce einhorn bringing us the

latest. be sure to tune into bloomberg radio to hear more from the days big newsmakers and get in davos and alice from the daybreak team. they are broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. meanwhile, plenty more ahead. stay with us. ♪

>> sotheby's knocked $1 billion worth of sales during november but it's ceo, charles stewart, says he is seeing weaker demand in asia. he spoke with manus cranny in new york about the sustainability of the buying spree. >> year to date all in think we'll be closer to more like $8 billion overall. manus: that sort of caught the headlines. it is the second highest ever on auction. is the art market robust and strong or how would you define at the moment as you close 23? charles: i definitely think the market has changed this year. the market -- the art market is not immune to the geopolitical factors, higher cost of money we are seeing in the world, the same factors we are seeing globally. at the same time, what we have seen is there is strong demand for artwork that is a plus in

quality, has exceptional provenance, and is fresh to market. manus: is there any sign around the world of a slowdown? are the chinese slowing down? are the asian buyers slowing down relative to the middle east and americas? how would you describe the landscape? charles: we are seeing some changes in where the buying and selling demand is coming from and i certainly would agree that asia and china in particular seem somewhat softer than it was . that doesn't mean that it has fallen off a cliff or anything like that. we have very successful sales in hong kong in october and have big plans for what we can do next year. we are opening a big gallery in the middle of next year which we are excited about. at the same time, we are seeing particular strength in the united states. i definitely think the u.s. is powering a lot of the market right now. along with parts of the middle east. manus: i want to talk about the future of southern beans. -- sotheby's. the owner says everything is

open. it is just offer and demand. is he exploring the sale of sotheby's? charles: no, he is not. patrick is incredibly committed to sotheby's. i think he loves it as a business. manus: is that a hard no? charles: no one can predict the future but i would find it very unlikely. it is not in his plans or interests at all. manus: you took altus to the market. are you pushing him to ipo? is this the moment of where you have got great numbers, you are having a great run. is this the moment to go for the ipo? manus: from -- charles: for a lot of companies, an ipo is something they are looking forward to. it is not the case at sotheby's. sotheby's has been a public company within patrick's broader organization. there are companies that have gone public and private. i would describe it as much more

situational. it is not in our plans right now. we are enjoying operating as a fully private company. that suits us well and keeps us focused on our actual mission, but never say never. i think the point of raising capital to fund growth is something that we will always consider. manus: do you need capital? do you need capital to grow the business? charles: no, we don't need capital to do what we are currently doing in our core business. we have been investing in real estate. we made some acquisitions. we are expanding sales channels and categories and geographies so all of that we can do within our core business. if we were going to be in a place where we were expanding sotheby's dramatically yawn what we are doing, we might look at if we wanted to make significant acquisitions, then that might be a different case, but it is not the moment we are in right now. >> sotheby's ceo charles stuart speaking with manus cranny. and of course, at a time when

much focus is on cost-of-living, the volatility of the markets, we know that some families have benefited more than most, right? the world's richest families adding $1.5 trillion in their wealth this year. this is bloomberg's big take story. and a lot of this is really down to moves that we have seen across publicly traded markets, right. it has been a very good run when it comes to u.s. stocks and this has really come down to everything from the house of ermez to royal family's in the gulf. another family has really emerged as the richest family in the world for the first time. this is the house of -- joining the annual ranking of family fortunes at the very top. they have a $305 billion fortune. they are from abu dhabi, really topping the waltons of walmart to buy a cool $45 billion.

we also saw the royal family of qatar coming in at number five. vonnie: this is the impact from earlier about how economies and stock markets are sometimes not the same thing and economies are doing better in some cases dan we might be thinking -- than we might be thinking if we are just reading analyst estimates. i love these stories because we can all dream and think about what it might be like to have that money. these families think jenna relationally. they don't think orderly so they have a much broader view on wealth. that is it from "daybreak asia." our markets coverage continues. this is bloomberg. ♪

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