sherry bob welcome to

daybreak: asia counting down asia's major market opens. paul: australia just came online. the bank of japan set for the final g10 rate decision of the year, awaiting clues on the outlook of the world's last negative interest rate. the chicago fed says it's too early to declare victory over inflation as officials try to temper market expectations of rate cuts and the u.s. calls for hong kong to free former media mogul jimmy. rage markets open in australia moving sideways at the moment. it's not unexpected. we have a staggered open. futures indicating a fairly slow start to the day in austria. after impressive gains largely inspired by the fed towards the end of last week, we saw aussie bonds decline. the 10 year is not a great deal changed, just a little weakness in the yields. similar for the three year. the aussie dipping just below

the $.67 level. we will have minutes from the rba's last decision later this week. elsewhere, we have new zealand also slightly off the pace. we have nikkei futures opening at the top of the hour. not a lot of changes forecasted there. we have a boj decision coming up this week. again, no change expected to the negative rates policy but perhaps clues to watch out for. shery: we will watch the japanese yen after volatility the last couple weeks. look how u.s. futures markets are coming online in the asian session with the dollar rising for the first time in four sessions. we are seeing more civility. traders lowered expectations of future fed rate cuts given commentary from officials pushing back on early rate cut speculation next year. u.s. futures muted early in the asian session. it was really interesting to see the stock market and bond market rally last week because we had

that immense gain after the fomc meeting. then that faded throughout the week. we are also reacting to this year's largest quarterly options and futures expiring friday leading to a little volatility. still we managed to end the dow on a third consecutive record high and the nasdaq 100 also at a record high for the first time in two years and the s&p 500 unchanged. this is the seventh consecutive week of gains for the s&p 500. treasuries a little mixed. at the 10 year yield still below 4%. that fell through last week for the first time since august. oil coming online. wti and brent up -- both to the upside in the asian session. oil fell friday but we are seeing a marginal gain for the week halting seven weeks of losses already. you mentioned the boj. we are watching that central

bank decision likely to keep its monetary stimulus unchanged on a two day policy meeting. earlier sources told bloomberg officials we aren't in a hurry to move. we are looking for right decisions in chile and the bank of new zealand. wednesday inflation numbers from the u.k.. there is still a long way to go to reach 2%. in the u.s. bloomberg expects headline pce inflation to be negative last month and core pce to remain flat. we will get a cpi print from the euro zone and japan as well. third-quarter gdp figures from the u.s. and the u.k., trade a numbers and what in five year-long rates from central --. we had lots of central bank decisions out of the way last weekend we have plenty to watch for this year -- week as well. paul: so much for the end of the year being quiet. to help us unpack it is the senior economist at moody's analytics. katrina, i want to start with

the bank of japan. i want to get your sense of where we are with inflation in japan. the rba -- not the rba, the boj, waiting for it to be sustainably above 2%. does this give euro -- you confidence may be inflation is becoming embedded? katrina: we are not expecting any action from the bank of japan this week, but when it comes to japan, we are looking at two factors. first, the fact that a lot of inflation we have seen in japan has been supplied driven, imported inflation. whereas, domestically driven inflation in japan is quite weak , and we have seen that with the weak labor market report of late and also the week gdp figures third quarter, we go to zero point 7% contraction third quarter. that points to the fact that domestically driven inflation is still quite weak.

so the fact we have not gotten to the sustainable 2% inflation they have been craving, unfortunately. paul: some events are coming up in the new year. mainly, wage negotiations in the spring. katrina: that will be incredibly important. we need strong wage negotiations coming out of that. i do not think even if we see a week print, it will fundamentally change the view that negative interest rates will be a thing of the past from april onwards. shery: what will be the net impact of the fed policy decision and potential dovish pivot year on the bank of japan? we saw the boj challenged by rising global yields when the fed was higher for longer. if we see the fed cut, we saw how much stronger the japanese yen became because of that dynamic. katrina: good question. i think the really comes into play here.

the week yen has challenged the bank of japan for some time. it added to inflation pressure. if we are in a situation like the past couple weeks where the rate cuts coming out of the u.s. put downward pressure on the greenback and as a consequence upward pressure on the yen, that takes a lot of pressure off the bank of japan to be as hawkish as they might have been in not a rate cut situation coming out of the u.s.. shery: wait, i thought the boj wanted more inflation? is your idea that what we could get through a weaker japanese yen through imports is not the type of inflation the boj wants? adrina exactly. -- katrina: exactly. they want a sustainable uptick in demand and it driven inflation. we are not at that point yet because we are not getting this essay -- the same sustained run

in household consumption the bank of japan is craving. paul: to some degree they are getting squeezed a bit by the fed, if you believe the dots, moving to a potentially dovish pivot coming up. there seems to be a disconnect between the dots and what the market is expecting. what do you anticipate in 2024? katrina: our anticipation is rate cuts out of the u.s. between june or july of next year. that's a positive development from a recession point of view. a u.s. recession point of view, and a global recession point of view. the fact we have been able to avoid recession to date even the incredibly aggressive monetary tightening that has been delivered is important. and the fact now we are talking about rate cuts next year, no more rate hikes, that's positive. i think there is still a lot of life to be lived in the more than six months until we actually see rate cut.

inflation has come down. it's almost where the fed wants it to be. there is still some sort of adjustment that needs to take place. i think there is risk there. paul: chair jay powell tried to maintain tightening saying inflation is not defeated yet. austan goolsbee doubled down on that over the weekend. what are the risks we could see inflation accelerate away again? adrina: if the past couple years taught us anything it is to be prepared for the unexpected. we have seen significant exogenous shocks that derailed baseline outlooks. russia's war in ukraine and the flare up tension in the middle east taught us gl -- geopolitical events need to be considered front and center as a risk. looking at the u.s. we need to remember that inflation and monetary policy in particular operates with a lag. we could see a re-acceleration,

or, we could see labor market gradual cooling not occur as much as we would like. shery: what about global demand risk? could we see an upside surprise from china in 2024? adrina: i do not think we will see an upside surprise from china. we expect chinese growth about 5% next year. what we have seen from policymakers is a really measured approach to releasing stimulus. at the end of the day they have a domestic demand problem. it has not reinvigorated as much as they would like. it is an ongoing targeted release of measured stimulus. private investment has not come to the party yet. households are still being quite cautious but it has improved. i do not think we will see upside surprise but conditions will hopefully not be as volatile as they have been in china.

paul: we will hear from the rba and not have another decision until early february. where are we in terms of tightening in australia? is this it? katrina: our expectation is we won't see more rate hikes in australia. we think the rba has done enough to attain -- to tame inflation. in australia inflation is still nowhere near where it needs to be. they will keep rates high until at least september of next year before we see cuts gradually come through. paul: katrina ell senior economist at moody's analytics, thank you so much. still to come, israel pushing back on mounting international pressure for a cease-fire in the third month of its war on how loss -- hamas. and live from a hong kong court with former media mogul jimmy la

i set to go to court after 1000 days in prison. this is bloomberg. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

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shery: you are watching daybreak: asia. israel is pushing back on intensifying calls for a cease-fire as the civilian death toll in gaza mounts in the third month of the war. the u.k. and germany called for a sustainable cease-fire. france is calling for a truce. bloomberg's vonnie quinn has the latest. how is israel reaction? we have seen significant pushback against a cease-fire because they don't want hamas to recoup the losses. vonnie: the foreign minister had extremely strong comments to the

effect that israel is not backing down. netanyahu, while admitting that he is heartbroken over the lost of some hostages to idf bullets is the him and ellie opposing -- the heavenly opposing this international and domestic pressure. we saw a letter from david cameron and his german counterpart using the sustainable cease-fire phrase. they defined that as a piece lasting for days, years, and saying israel will not win the war if the operations destroy the prospect of peaceful file a steady and coexistence. they are putting out a framework for what might happen. they say in this editorial israel has a right to eliminate the right -- threat posed by hamas but don't many set -- too many civilians have been killed. france's foreign minister called for an immediate and durable

truth. one of france's diplomats died from injuries sustained by israeli bombing in rafah at the south end of the gaza strip and the three hostages shot by the idf friday emerged shirtless from a building in northern gaza holding a makeshift white flag and one shouted help in hebrew before they were shot by idf forces. the idf revealed this saturday. nevertheless not in yahoo! -- netanyahu has vowed to press on. the pressure had already been mounting. there had been no new prisoner exchange deal two weeks after the weeklong cease-fire ended. you saw the quote from foreign minister cohen calling -- saying any call for a cease-fire with hamas is a prize for terrorism we will not agree to. u.s. defense secretary lloyd austin is beginning a visit to not just israel but bahrain and qatar to work on defense

capabilities. washington is very concerned about attacks in the red sea and that israel continues to have pressure mounting upon it to exercise more surgical approaches to the war. paul: have there been entity developments -- any developments on the prisoner for hostage exchanges. vonnie: we have a meeting between the israeli intelligence head and the prime minister of qatar that took place in europe at an undisclosed location. very few details are emerging. we know progress was made according to israeli media. very little progress and very slow progress, but better than nothing you remember israel negotiating team was ordered to return from qatar about two weeks ago, the team that brokered earlier exchanges about two weeks ago. the shift to one-on-one talks is the door nudging open a little bit.

120 nine people taken in the october rates by hamas are estimated to still be held in gaza 70 days after their capture including hostages that were killed and also all the hostages that were already exchanged for palestinian prisoners. there are still 129 hopefully alive in gaza and potentially releasable. paul: bloomberg's vonnie quinn there. here are other geopolitical stories making news around the world. russian president vladimir putin says he has no into genoa attacking nato countries. he says moscow has no territorial claims to the box members after president biden said russia would not stop at ukraine. white house is trying to convince u.s. lawmakers to release $61 billion in military aid to kyiv, held up in a dispute over republicans with border security. egypt is monitoring tensions in the red sea as you many militant attacks prompt ships to avoid

the region. assaults increased in recent weeks as who see fighters target vessels they say are connected to israel as a response to the war in gaza. several major shipping lines say it will pause important voyages on the red sea one of the world's most important trade corridors. the philippines is seeking more military agreements with other countries to allow joint training. in a visit to japan president fernando marcus junior says medela is looking to boost alliances and heighten tensions with china over the south china sea. a recent encounter in recent months included chinese ships ramming and blasting water cannons at philippine vessels. shery: we are seeing gains in asian trading despite a supply -- surprise surge in u.s. shale production. could this pose a threat to opec? su: the rise in oil has a lot

to do with the fed but the shale production in the u.s. has always been a nemesis of opec-plus. it was discounted recently a couple months ago and now it's back in a big way. suddenly drillers from the permian basin to the balkan shale of north carolina have ramped up reduction well beyond what analysts first saw pushing output to a record as opec and allies put the brakes on supply in a big attempt to support price. what we see here is last years u.s. government forecast predicted domestic protection around -- production around $12.5 million a day. the latest forecasts in recent days bumped the estimate up to 13.3 million. the difference there is the equivalent of adding a new venezuela to global supplies. the surge in u.s. oil output

caught the global market by surprise. it also caused many to question opec-plus strategy of curbing supply to prop up prize and prevent a big decline because of any glut. it makes clear that the region of companies in the u.s. pumping oil from u.s. shale fields have enough power to put opec efforts into a frustrating place. what we have is a situation where the u.s. is playing a huge role in global markets for oil in 2023 and the head of the key p&g -- kpmg u.s. energy practice says it's different than the days of the shale boom. it's not exactly drill baby drill but it is meaningful measured growth. definitely a big bump up in shale production. paul: oil prices seem to have halted in almost two months

decline as well. su: i lot of green on the screen in asian trading. the fed was really the catalyst for what we saw as the first weekly gain for both west texas intermediate and brent after seven weeks of declines. that has a lot to do with overarching concern about global oversupply. the iea adding to the bearish outlook slashing estimates for global oil demand this quarter by almost 400,000 barrels per day as economic activity has weekend. there are concerned china demand will not come back as expected. and, the recession is still a threat to demand going forward. shery: su keenan with the latest on oil. get a roundup of all the stories you need to get your date -- day going in today's addition of daybreak. terminal subscribers go to dayb and it's also available on mobile on the bloomberg anywhere app. customize your settings to only get news on industries and

assets you care about. this is bloomberg.

♪ shery: you are watching daybreak asia. robert friedlander says copper prices need to nearly double to stimulate the industry to build a new minds. in an exclusive interview with bloomberg he said he expects strong demand from china going ahead. robert: when people think of china they think of real estate. it is a much broader economy than that. there was solar, wind, new energy. all of it. it's massive. >> what do you think that amanda pulled from china will be like next year? robert: very healthy. physical inventories are incredibly low. chinese smelters are scrambling to find feed.

the refining charges in china are down a very sharply mating -- meaning they are very hungry and the miners are having trouble providing enough copper concentrate to keep the downstream full and that's a global issue. >> morgan stanley things copper will go to 9000 by the end of the second quarter. is that a realistic pride -- price target when it is at about 80 500 now? shery: that is more or less the consensus view. 9000 is the middle-of-the-road. hard to argue with that. >> will that disrupt demand? will it be cost sensitive? >> $9,000 is not enough per ton to stimulate the industry to take the risk to build huge minds especially in latin america. traditional giant copper mines are $5 billion each and 15-20

years of work. we probably need $15,000 per ton, stable for a long time before the industry can really gear up and build a giant minds. >> we have seen that. copper supply disruptions are rising rapidly robert. what does the supply picture look like in 2024? will it tighten even further? robert: if i hold a telephone book for an hour i can do it but if you put a feather there after an hour i will break my arm. we have lost about 3% of the market from disruption in panama and minds in chile that are light and that's enough to take all the slack out of the market. we are in deficit already. as the fed weakens rates in an election year, almost any additional disruption because of really -- will cause a really sharp upward spike in prices.

all: that is the ivanhoe mines founder robert friedland speaking exclusively with bloomberg. more to come on daybreak: asia. it is bank of depend decision week with the yen currently around 142.23 with trading starting at the top of the hour in japan with futures indicating we are probably setting up for a soft opening. this is bloomberg. so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience in the comfort of your own home. a kohler walk-in bath has one of the lowest step-ins of any walk-in bath for easy entry and exit. it features textured surfaces, convenient handrails for more stability, and a wide door for easier mobility.

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shery: welcome back. the u.s. is urging hong kong to free former media mogul jimmy lai ahead of his trial in the

city's largest high-profile national security case. rebecca choong wilkins joins us live from outside the court. we are seeing a lot of international pressure. we talked about the u.s. and the u.k. as well. what are we expecting from the trial? rebecca: the risk is we see some kind of geopolitical flashpoint building. as you say, the state department re-irradiating -- reiterating the call from the u.s. to release jimmy lai. u.s. foreign secretary vowed support for jim eli -- jimmy lai showing how far beijing is willing to go to crackdown on political dissent raising questions over press freedom in the city and a rule of law that has substantiated its status as an international financial help for so long. today we expect jim eli court to a -- lai to arrive in court in the next three hours.

it is the first time we have seen him in public in about three years. sebastian lai his son has raised concerns over the health of jimmy lai. his physical appearance will be closely scrutinized today. the case is expected to last about 18 days but could go a little further. we are likely to have a slightly procedural beginning at a stop and start because of the christmas holidays and is an chinese new year. we are waiting to get clarity because it is these in sl cases that have not that much president when it comes to procedure. paul: you mentioned the rule of law. there is a lot more hinging on this trial at then just the freedom of jimmy lai. what could the imprecations be for hong kong's status as a financial hub? rebecca: i think that's really critical here. lai has come to take on this more symbolic value over just how far beijing is willing to go

to impose controls on the city. that has raised criticism or worries over how robust the rule of law is here. jimmy lai is a former media tycoon, very well-known, a slightly eccentric tycoon and mobile known in the city. he has drawn attention to just how far. he has been the number one target for hong kong cracking down on national security. for that reason too the case is being very closely scrutinized. shery: because of hong kong's increased crackdown, we have really not seen the scale of pro-democracy protests we saw just years ago. what is it the environment like around the court today? rebecca: that is absolutely true. the crackdown has been pretty swift and very effective. we have not really had any protests similar to what we saw in 2019.

there's a very very heavy police presence here today. they clearly outnumber the press goggle. so far those in the queue for public admission. all sorts are here. even that now is ramping up around. we are expecting local reporting, more than 1000 police coming out. jimmy lai is reportedly being treated as a maximum-security prisoner and because of that we will have these protocols kicked into gear. shery: rebecca choong wilkins joining us from hong kong. we will be watching the open later in the day. what i the worst benchmark performers this year. take a look at how the rest of the markets are sitting up for the open pre-the asx 200 down .4%. led lower by real estate, financials, and materials. consumer discretionary is it the only sector in the green. kiwi stocks also losing ground for a second consecutive session

as nikkei futures at the moment are also pointing to the downside after we saw some gains in japanese stocks on the friday session. we are around a one-week high. the japanese yen at the moment holding steady. a little weakness against the u.s. dollar at a 42 level. the big story this week in japan will be the boj policy decision. no changes are expected on that front. we will be watching any commentary around any exit scenarios from the currently's monetary policy. u.s. futures really muted after u.s. stocks and bonds mixed on the friday session. that rally on the feds dovish pivot earlier in the week faded through the week. suffice to say the dow and nasdaq 100 are at record highs. paul: the bank of new york mellon ceo robert vince says banks need to be prepared for the unexpected. speaking with bloomberg he told us the fed deserves an a grade for its handling of the u.s.

economy. >> the fed has had a lot of work to do combating inflation. we have had over 500 basis points of increase in fed funds rate in a fairly short time. that will create dislocation. i think that shines a light on that you really have to be, if you are a large bank, really focused on asset and liability management and good at it too. you have to be focused on being prepared. you said earlier on there are so many things going on in the world these days. we have wars. we have significant durations in economies. we have had a big run-up in stock markets and rates and record issuance from the treasury. that teaches us you really have to be prepared for the unexpected. so, while i hope i know what might be happening in the future we are not in the predictions business. we are in the preparedness business. that is the lesson i would take from what we have seen this

year. romaine: what kind of economy are you preparing for in 2024? robin: you have to be prepared for lots of different types of economies. i am rooting for a soft landing. i think the fed deserves an a grade for all the things they have done this year and how they have managed to the new ones. the treasury as well has managed to issue a little bit at the shorter end of the curve and that helped markets. so far so good. a good run-up in the stock market this year. i think we can feel quite pleased with where we are. but you said it you there is a lot going on in the world. things could take a different turn. for us, it's about making sure we are partnering with clients, and using our market-leading platforms to wrap ourselves around our clients. to help navigate that. we touched 20% of all investable assets in the world. we operate in 100 markets across the world. so, being able to really be

there for client through the -- clients through uncertainty allows us to be successful. rebecca: that gives you a unique birdseye view as to the health of the financial system. is it healthy now? robin: the u.s. economy has performed remarkably. when i visit with clients around the world, it's a common refrain that there are lots of uncertainties in the world, but the u.s. economy has been a place to invest. the people of the country. the innovation we see here has been powering us through some uncertainties and it is an investment destination of choice. i think that is one of the reasons why you saw the u.s. economy outperform a little this year versus what many of us may have thought at the beginning of the year. shery: robin thence speaking to bloomberg's romaine bostick. next our exclusive interview with the president of japanese tofu company yamami.

here why they expect record profits as some peers struggled to stay in business. this is bloomberg.

paul: japanese markets opening at the top of the next hours with futures for the nikkei nudging a little higher. still looks like a fairly quiet

open. the yen, it strengthened quite a bit last week, 142.31 off the back of the fed decision. this week it's the bank of japan's turn. we have not really expected any substantial change. but perhaps and there are some clues in this week's two day meetings as to what the future of negative rates will be. we will have trading in the japanese debt starting at the top of the hour as well. futures there indicate a softer start when we get going. let's look at some corporate stories in japan. mitsubishi will buy australian link administration. in a deal valued at about $724 million. z entertainment asked to extend the deadline for finalizing a merger agreement with sony's india unit. shery: many of japon's tofu producers are struggling to stay

in business amid rising cost at a shrinking market but tofu company yamami is bucking the trend with a share that soared over 100% this year projecting record profits. an exclusive look at the company factory. >> tofu, fresh out of the fire and plenty of them. the president of yamami likes to taste test a piping hot fried tofu at this plant located near the base of mount fuji. he insists the water originating from the famous mountain makes his tofu taste better. after clearing rounds and rounds of the factories sanitary requirements we get a tour of the facility. they make all kinds of soy products from fresh tofu two slabs of the deep-fried kind. apparently, they make a huge thing of tofu, then they cut it up here and then even smaller

over there before they fry it up. tofu has been made by mom-and-pop shops for centuries. with the country's declining population many are closing. how does yamami beat the odds? the number of tofu companies in japan going bankrupt is nearing an all-time high. but yamami stock has doubled in the last three months. what are you doing right to attract investors? >> i think investors are starting to realize we are not just a small traditional tofu shop, but rather, a properly established food company. we use to focus on sales, on profits. ever since i took over as company president, i have been trying to raise productivity. i think the achievements are starting to show in our earnings. kurumi: tofu is not an easy business. you have rising soybean prices

and japan's declining population. what is keeping you up at night? what is it biggest challenge you will face? how will you overcome it? toru: we are currently working to deal with rising inflation by implementing energy-saving measures and replacing equipment. as prices remain high for the soybeans we import we are considering increasing the use of domestically produced soybeans and planning to shift 10% of the soybeans we used to domestic ones starting in march of next year. kurumi: at what yen level will you go back to buying international? toru: i base our business plan on the current exchange rate of about 150 to the dollar. i think we could be more profitable if the exchange rate was one 40 or stronger. kurumi: walking around the factory earlier i saw a lot of foreign workers. are you looking to increase the number of foreign workers you have at the factory? what kinds of work are they

doing? toru: we have a lot of from vietnam and indonesia. but i don't want them to go home after just three or five years. i wanted them to become long time employees at yamami. i would like to divide them thank all opportunities as japanese employees. i want to increase the number of foreign workers going forward to help with labor shortage. kurumi: in japan, tofu is a staple. it's always in our fridge is what are your ambitions for overseas expansion? toru: overseas tofu is often considered a health food. if we expand outside japan in 10-15 years i want people to eat are tofu because of the delicious taste, not just for health reasons. i do see an opportunity for yamami to raise our profile abroad. kurumi: what do you think is the

one thing japan needs most to stand in the world? toru: i think it is important to take on more and more challenges , whether it is new investment, or, hiring new employees. we can achieve something great. i think this kind of mentality is what both our company, and japan as a whole, need to succeed. shery: yamami company president speaking exclusively to bloomberg. we have an alert. we are hearing that north korea fired a suspected ballistic missile on monday towards the waters of its east coast as south korea's military says north korea fired the unidentified ballistic missile monday morning without providing further details on the launch. we are hearing also from the japanese coast guard that made a similar statement that north korea may have fired a ballistic missile. we are watching this closely. this comes as the u.s. and south korea held talks on containing

john youngs -- pyongyang's economic -- atomic ambitions. support for prime minister fumio kishida fell to fresh lows after he reshuffled his cabinet in a bid to contain a funding scandal. isabel reynolds joins us from tokyo. the public did not seem at peace from the reshuffle. what is next for quote kishida? isabel: pulled over the weekend found disapproval for japanese prime minister fumio kishida's cabinet had presented 97%, the highest ever for that series of polls going back to the 1940's. it is not very encouraging for prime minister kishida. the issue is this is far from over. he attempted to purge the one faction that has been tainted from his cabinet, ejecting those four people i bringing in different once we get it is far

from clear whether this candle will spread further in his party. over the weekend we saw our reports prosecutors have been questioning people including lawmakers about the scandal. the next step that could come could come as soon as today. that is actual raids on officers. we could see prosecutors going in there and coming out with cardboard boxes full of files. who knows what they will turn up over the next few days and we. paul: kishida has been hosting leaders at a summit from -- in tokyo this weekend. what has he achieved on the national front? isabel: he has tried to focus on the summit marking the 50th anniversary of ties between japan and ossian. what has been interesting coming out of it is these various bilateral deals on military assistance, a new system japan has instituted, authorizing

things like patrol vessels and radar equipment to south eastern asian nations including malaysia, the philippines, and vietnam. although the amounts of money involved are relatively modest, the message is clear. we share concerns about china's activities in the region and we have territorial spats with china so let's work together to make sure our militaries and coast guards are in touch about these issues. paul: bloomberg's isabel reynolds in tokyo. catch japan ahead every monday at 8:40 a.m.. in tokyo. 6:40 p.m. on a sunday in new york. bloomberg's subscribers can watch us live on the terminal using tv . this is bloomberg.

paul: a tourism hub in australia's far north has been inundated with life-threatening floodwaters after days of torrential rain. we are joined by bloomberg's agricultural reporter carol wright. things are not good. what's going on? kera: over the past weekend and into this morning we have seen severe flooding in the far north of australia. in queensland. we are hearing reports overnight

of people dropped on the roof of a clinic including a very sick child as crocodiles are circling in the floodwater below. people have been put on notice to try to conserve water. we expected drinkable water to run out in a matter of hours. paul: the region is important in tourism and agriculture as well. keira: yes. a big tourism hub. one of the areas most severely impacted is cannes a gateway to the great barrier reef. a lot of tourists are in the area. there has been a lot of notice that this would happen so a lot of tourists have been able to get out of the area. we knew it was triggered by a cyclone that was known about for about a week now. the cyclone has been downgraded at this point but we are still seeing severe impact. shery: what will that mean to the economic impact on broader australia? keira: we expect a pretty severe economic impact as a result of this. this morning, the state

treasurer for queensland said he is expecting and impact of up to $1 billion. that's a lot of money. we are already seeing a lot of damage to infrastructure. buildings, roads, power lines, trees. that is not even taking into account the huge impact on the tourism industry. shery: bloomberg's ever cultural reporter keira right with the latest on flooding in australia. in the u.s. we are bracing for a powerful storm poised to strike at the peak of monday morning rush-hour. forecasters warn of heavy rain and wind storm have to delay air travel and cause power outages. fraud watches and high wind advisories currently stretch from north carolina to maine. we have continued to see more extreme weather events as we continue to watch the climate space as well. the philippines is temporarily relaxing lending to allow banks to finance more green projects. the requirement rate for green,

social, and sustainability bonds will be gradually reduced to zero from 3%. it proved an additional 15% single borrower limit on loans for sustainable projects. the two measures will be available for at least two years. wall street banks are warning stricter capital requirements make it in the way of climate finance. j.p. morgan and goldman sachs say the increasing capital they need to set aside would make green projects harder to fund. the proposed rules are part of the so-called basil three endgame regulations created after the financial crisis of 2008. paul: let's look at trading in australia. up and running for almost an hour with a little weakness on the a sx off by about .5%. two big sectors, materials and financials in negative territory at the moment. the financials includes the insurance industry, not having a great morning.

the floods hitting the northern queensland town of cannes severely. we open in japan at the top of the hour with nikkei futures modestly positive. better by a few points. the yen holding pretty stated -- steady at 142. one sector doing reasonably well in australia at the moment is energy. shery: look at how we are setting up for u.s. futures trading at the moment. this is the future for u.s. futures trading already. still early in the asian session seeing a little outside with often bonds having ended the session mixed on friday. still we have to put in the caveat the nasdaq 100 hit a record high. the dow also its third consecutive record high. though the s&p 500 finished unchanged in the previous session we are talking about seven weeks of gains, the longest regal weekly gains since

2017. you mentioned the energy sector gaining ground. brent and wti at the moment also gaining ground. you saw a marginal gain for the week last week. on friday a little pressure. we just halted at seven weeks of a losing streak for crude. there has been a lot of oversupply concerns and those continue to plague the market. we are seeing treasuries having finished the session mixed on friday and we will see what happens at the cash open in japan as soule and tokyo come online. this is bloomberg. and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

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♪ shery: this is daybreak: asia

counting down to major market opens after a couple fed officials pushed akron bets of early rate cuts next year. we saw stocks and bonds finishing the session on friday mixed. we have to put it into context paul. talking about the dow and the nasdaq 100 at record highs and even the s&p 500 seeing seven weeks of pains, that -- gains, the longest winning streak since 2017. paul: it is also interesting that bloomberg intelligence has an upgraded profit forecast despite this possibly dovish information coming out of the fed. you mentioned the narrative that the fight is not done and inflation is still very much alive. the bank of japan has the opposite problem. trying to wait and see if it is sustainable before moving. shery: we have their decision on tuesday. nothing is expected to change from the boj. we saw a lot of volatility already on the japanese yen.

speculation from the markets because fed officials and boj officials talking about exit scenarios said milling perhaps a minute change for your the nikkei coming on line to the downside, .6%. we saw gains on the friday session and falling from that one-week high as the yen holds at the 142 level. a little weakness against the u.s. dollar. but, putting to get into context, talking about the japanese yen gaining ground for five weeks against the u.s. dollar making it the longest weekly winning streak since may 2020. we have the of data from japan this week including trade and cpi numbers on top of the boj decision. look at how the kospi is coming online in south korea. we saw it again in the previous session friday because foreigners were buying of chip stocks on speculation the fed will pivot towards rate cuts next year. we are seeing gains sustained,

especially with the caused act gaining .7%. the korean won seem weakness again as we had a two week high against the u.s. dollar last week. really that's to do with great expectations and rate differentials. with the dollar as gain for the first time in four sessions last week. we are really watching the currency space as well, paul. paul: we have been trading in australia for a little over an hour now. we are seeing not a great deal of action on the a sx at the moment, off by about .25%. the two biggest sectors are materials and financials that appear to be weighing at the moment. financials includes insurance stocks, which aren't having a great morning. severe flooding in far north queensland. we brought you the details of that story earlier. elsewhere we have the aussie dollar just below 67 u.s. cents. yields on the aussie tenure creeping up a little.

not a great deal of change. we will get minutes from the reserve bank of austria this week. crude prices putting in a little bit of recovery. brent at the moment edging higher, 77 37 per barrel and new york crude 7221. u.s. treasuries, started trading in japan as well. the 10 year pretty firmly below four. it moved sharply lower on the back of last week's fed meeting. yields continuing to ease across the curve there. let's bring in our next guest, who still likes risk assets even though a soft landing seems more priced in. we have hayden briscoe head of aipac multi-assets at ubs asset management. thank you for joining us. you see a soft landing as the most likely scenario now. how is your risk appetite? hayden: i think a lot of people are recognizing the saw fighting and talking about potential risk for the downside. we are noticing in markets no

one is talking about the upside. i think there is a risk we see a manufacturing renaissance. we have seen that already in emerging markets. we have seen that in south korea. enjoying a fourth or fifth month of expansion. that is picking up giving you a signal developed markets are starting to write good. we may have lived in growth rather than a soft landing. i think the market has priced in a soft landing. we have to think about either the pickup or the recession. i think the pickup is where you start to make money. >> bloomberg has done some research showing profits are not really expected to improve in 2024. that in mind, some of the valuations come are they looking a bit rich? hayden: spot on. the profits people are looking at are the tech sector. the magnificent seven, those types of firms. they are going through an exponential growth phase. when people look at the profits they don't realize the potential

profit because will be exponentially larger. when we step back to look at the manufacturing side people tend to look at the consumer side. manufacturing is given -- giving us the lead things are starting to change and the profit side will bottom out into 2024. paul: we saw the dots out of the fed perhaps indicating a dovish pivot in 2024. the market took the narrative and ran one million miles with it. chair powell and austan goolsbee saying hang on, the inflation fight is not done. do you see risk inflation could be resurgent in 2024? hayden: we have not really worked out if it will be sticky or not. our outlook is it is starting to come down on his typical perspective. it could be a touch lower than bottom out again. one big change is productivity is really starting to improve. that means we don't lose jobs but job openings diminished. that's really different cycle

that plays into the soft narrative stands and potentially productivity. companies will make more money. what will they do? start hiring again. paul: you mentioned manufacturing. china has a reputation as being the world's factory. you see a rebound in china along those lines? is that an area where you will look for exposure? hayden: valuations there are screaming off the chart as cheap. the rest of the world is cheap to the u.s., but china is cheap to the rest of asia. you can see that with india, taiwan. those markets at the moments still looking for a turn. this is when you start to lend banking to china. paul: cheap for a reason. there is a deflation problem and who knows how many cockroaches are under the property market fridge. hayden: the key thing people keep missing is china is using

monetary policy for the first time. they only introduced at about six or seven years ago. the rest of the world has been using fiscal policy. it just takes longer to recover here. but the cycle will be much longer than 2-3 years. think 5-7. we think a multi-asset approach there keeps you in the market, keeps you invested. a nice steady 45 degrees up the next 4-5 years. paul: we have seen commentary around the possibility of a growth target for china in 2024. do you think that is created will? do we need to more broadly assess expectations around sustainable growth in china? hayden: china does a fantastic job putting a plan on the table so you know where it is the next five years. other countries erally get in the right vicinity. you're on your numbers point more towards 3.5%-4%. the government overall is.

remember, they are our second largest net creditor nation in the world. they don't over anybody money. the rest of the world owes them money. paul: hayden briscoe head of multi-poorly -- multi-portfolio asset management at ubs. shery: the u.s. is urging hong kong to free former media mogul jimmy lai ahead of his trial in the city highest profile national security case. asia government and corresponded rebecca choong wilkins joins us. we are seeing pressure mounting. what do we expect in the trial? rebecca: absolutely. this is the first time we will see a public appearance from jimmy lai in quite some time. the last press photo of him showed him looking white then, -- quite thin, not in good health. lai's family has warned of that. the broader concern is that this

could be a geopolitical flashpoint. we had a statement in the last few hours from the state department calling for his release and we had a strong statement from brussels, we from washington and the canadians too also calling for his release as well as the u.k./u.n. foreign secretary. there is mounting screws into the over what the case means. the bigger issue is not just press freedom about national security in and of itself, the vaguely worded legislation that critics have said compromises the rule of law in hong kong. paul: what could the trial mean for hong kong's status as a financial hub? we come to the question through the lens of the transparency of the new gissel -- is judicial system. rebecca: that's a fundamental question here. some worried about the use of the nasl. just how hard cincinnati -- hard the sentencing will be.

the fear is beijing has shown this great willingness to crackdown on political freedom. hong kong's government continues the nfl -- and sl as part of a crucial factor safeguarding the city's status. others are pushing back against that saying worries that the rule of law and law could be used to target those that disagree with the government undermine the free wheeling nature of hong kong that underpinned its success as a financial hub. paul: we can see behind you there an ever-growing immediate presence. what is the security presence like today? keira: --rebecca: there is a very heavy police presidents now -- presence now. the police easily outweigh both the press behind me and at the number in the queue, about 100 people in the public queue to be admitted. the cmp separately reported

about 1000 police that will be enlisted to support security. previously we -- we reported jimmy lai is considered a maximum security risk. because of that all of the protocols will be enacted. the mogul just turned 76. he just had his 76th birthday in prison. there is quite a lot of attention on his welfare and his health. shery: our asia government and agoura -- economy correspondent rebecca choong wilkins their joining us from hong kong. goldman sachs has cut its 2024 brent oil forecast by $10. they are signing hot -- citing higher u.s. supply for the forecast of $10 last for 2024 in terms of brent oil pricing. this coming as we heard that u.s. shale oil production has surged. it was quite a surprise because

u.s. drillers have now ramped up oil production well beyond what analysts had forecasted pushing up output to a record just as opec-plus put the brakes on supply in a bid to halt price declines we have seen lately. u.s. shale now adding an equivalent. of a new venezuela to the supply outlook. we saw a down grade in prices over concerns oversupply and now we are hearing that goldman sachs cut their wendy 24 brent oil forecast by $10. we have more to come. this is bloomberg.

shery: you are watching daybreak: asia. israel is pushing back on intensifying calls for cease-fire as the civilian death toll in gaza mounds with the war now in its third month.

the u.k. and germany called for sustainable cease-fire. france is calling for a truce. vonnie quinn joins us with the latest. we are seeing international pressure, but israel is not budging. vonnie: israel is the hemet it will -- bennett it will continue to try to eliminate hamas. the foreign minister coming out saying it will continue with or without international help area also saying any call for a cease-fire with hamas is a prize for terrorism and we won't agree to it. there is domestic and international pressure. we saw a joint letter from the u.k. foreign minister david cameron and his german counterpart urging for what they call sustainable cease-fire. they defined that as lasting for days, years, generations. they suggest this will not happen if israel continues to kill thousands and thousands of palestinians. it says they have a right to

eliminate the threat posed by hamas but too many civilians have been killed. after that the french foreign minister called for an immediate and durable truce. crawled -- the calls come in the wake of bad news for france in that one of its diplomats died from injuries sustained during israeli bombing in rough of in the south -- raw for in the cells of the gaza strip. the israeli defense force had a massive loss this weekend having to reveal that three hostages it shot emerged shirtless from a building holding a makeshift white flag. one of them actually shouted help in hebrew. the idf apologized saying it will not happen again if it can help it. that the lessons have been learned. prime minister benjamin netanyahu saying he will make sure if it all possible these types of incidents do not happen again. he found it to press on through all the pressure. bear in mind protests started friday night outside the military in israel. they have continued.

they have grown. people watched negotiations for israeli hostages to return home to start again. they have been stopped for the last couple weeks since the weeklong cease-fire that saw several hostages released. three palestinian prisoners for every israeli hostage. since those talks stop there has not been much effort to restart the talks or engage in conversation. shery: -- paul: how about prisoner for hostage exchanges? shery: negotiations were brought home from qatar after the original exchange. obviously there is growing desperation at this point domestically and internationally for something to begin again. what is happening this weekend is one-on-one talks between the head of israel's intelligence agency and cauterize prime minister. those talks happened in europe. very little has been leaked

about those. very little happened. israeli media is reporting progress. that's a little glimmer of light in what is otherwise a pretty bleak picture for the moment in israel's 10th week of the war against hamas. paul: here are some other geopolitical stories from around the world. egypt says it is monitoring tensions in the red sea as you many -- yemeni fighters target vessels of the group says are connected to israel in response to the war on gaza. several major shipping lines say they are pausing voyages on the red sea, one of the world's most important trade corridors. russian president vladimir putin says he has no intention of attacking nato countries sang moscow has no territorial claims with the box members -- blocks members after president biden said russia will not stop at

ukraine. the white house is trying to convince u.s. lawmakers release 61 billion dollars in military aid to kyiv held up in a dispute with republicans over border security. the philippines is seeking more military agreements with other countries to allow joint training. on a visit to japan president ferdinand marcos junior says minella is looking to boost alliances over heightened tensions with china over the south china sea. that included chinese ships ramming and blasting water cannons at philippine vessels. get around above the stories you need on today's addition of daybreak. bloomberg subscribers can go to dayb on their terminals and it is available on mobile in the bloomberg anywhere app. customize your settings to only get news on the industries and assets you are interested in. this is bloomberg. ♪ to a child, this is what conflict looks like.

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♪ paul: bank of new york ceo robyn vinson says banks need to be prepared for the unexpected saying the fed deserves an a grade for his handling of the u.s. economy. robin: the fed has had a lot of work to do as it has combated inflation. those types of changes had over 500 basis points of increase in the fed funds rate. that will create this location. that shines a light on that if you are a large bank you have to be very focused on asset and liability management and good at it too and you have to be focused on being prepared. you said earlier on that there are so many things going on in the world these days. we have wars. we have significant gyrations in economies. we had a big run up in the stock market and rates. we had record issuance from the treasury and that teaches us,

and we had this lesson over a long time, that you really have to be prepared for the unexpected. so while i hope i know what might happen in the future, we aren't in the predictions business. we are in the preparedness business. that is the lesson i would take from what we have seen this year. romaine: what type of economy are you preparing for in 2024? robin: you have to be prepared for lots of different types of the economy. i am certainly rooting for a soft landing and i think the fed deserves an a grade for all the things i have done this year and how they managed the nuance. the treasury managed to issue a little on the shorter end of the curve that helped markets. so, so far so good. we had a good run-up in the stock market this year. i think you can feel quite pleased with where we are. but you said it, there is a lot going on in the world. things to take a different turn. for us, it is really about making sure we are partnering

with clients and using our market-leading platforms to wrap ourselves around our clients to help navigate that. we touched 20% of all investable assets in the world. we operate in 100 markets across the world. being able to really be there for our clients through the uncertainty allows us to be successful. romaine: last week you were on capitol hill for your inaugural trip to capitol hill for oversight hearings. this ostensibly was about the health of the banking sector but devolved more into a discussion about capital rules, the basel three end game. if there was a push back almost unanimous among you and your seven peers up there that day that those rules, that endgame, needs to be watered down a little bit. robin: i think the message you really heard from the eight firms come as you say, the largest, most systemically important companies in the

banking sector in the united states, and many of the policymakers, by the way, was that the u.s. economy is the greatest economy the world has ever seen and in order to be able to have an economy like that, you need the lifeblood of economy, the investment of capital, the powering of the economy through the financial system. we have eight of the strongest banks thanks in many part to work done by policymakers and regulation over the past 15 years to make sure we have a safe, secure it banking system. but we also don't want to mess that up. we want to continue to support the u.s. economy through everything over the course of the next few years. that was the common refrain last week. romaine: the bases three proposal endgame that came out in july, if it stands, does it hurt your business? robin: i think policymakers are being thoughtful about this and i expect it will evolve.

but we want a safe banking system, no question. we want to safe cars driving on highways too. but we don't make a choice to have them drive 10 miles per hour because that would reduce freedom of movement and it devastate the economy. so we make trade-offs over making sure we have the right safety and at the same time help power the economy and i think that holds true for banks as well. they need capital and liquidity and they have it. we need them to contribute to the economy as well. shery: bny mellon ceo robin thence speaking to romaine bostick. european stocks on their longest winning streak since april. look at how futures are trading at the moment. a little bit to the downside after the bets were ramped up last week on data showing private-sector activity in france and germany have worsened after that we saw the euro a little pressured. we are seeing it hold steady. look at how other currencies are trading across asia. other little upside -- a little

upside for the aussie dollar and kiwi dollar. we saw upside last week as well on hopes of stimulus from china. a little picture for the japanese yen and korean won. the korean wanted now falling five week i -- the korean wanted now falling from a five-week week high against the u.s. dollar. the cause dr. leading the gains with a 1% gain early in the asian session. it is really to do with the nikkei. a little pressure for the nikkei down .8%. this as the japanese yen hold steady after weakening versus the u.s. dollar on friday. you have to put this in context. we are talking about five weeks of gains for the japanese yen against the u.s. dollar, the longest winning streak since may of 2020. we are around a four week high. that is all to do with what we will hear from the bank of japan later this week on tuesday.

the consensus is nothing will change. boj policymakers are likely to keep their yield curve control and negative short-term rates unchanged. recent commentary from boj officials led to speculation of when they will exit negative interest rates. you can turn to your bloomberg for more on that decision this week. tliv is your function to get commentary and analysis from bloomberg's expert editors. this is bloomberg. i'm a little anxious, i'm a little excited. i'm gonna be emotional, she's gonna be emotional, but it's gonna be so worth it. i love that i can give back to one of our customers. i hope you enjoy these amazing gifts. oh my goodness. oh, you guys. i know you like wrestling, so we got you some vip tickets. you have made an impact.

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shery: we have breaking news out of singapore. we are getting the nonoil domestic exports numbers year on year coming up in at growth for the month of november which is

below economist expectations. still turning positive after a contraction of 3%. we are seeing improvement on the month on month sequential numbers growth of .3% -- i'm sorry. better than economist expected but it is not an improvement. it is easing from the previous month of gains of 3.4%. perhaps a little bit of disappointment when it comes to these trade numbers. electronic numbers you're on your seeing a decline of 12.7%. talking about budget declines to we will be watching with the breakdown is for the exports because we have seen exports to china outperforming in the last couple of months. we will be waiting for those numbers. year on year's growth of 1% and month on month is easing of .3%. paul: let's take a look at how we are trading around the

asia-pacific. the sx bounced back from early declines. currently kind of flat off by a couple of points. the kospi pushing ahead after being a little flat. seeing some steep falls from the nikkei off just over 9/10 of 1%. it is decision week for the bank of japan. we are not expecting to see any change. we keeping an eye out for any commentary around inflation and the positive -- the possible end of negative interest rates. shery:shery: we are setting up for the market opens in mainland china and hong kong. for the china bulls on wall street, 2023 is perhaps a year to forget. global investment banks forecast double-digit gains in china but saleh drop in the msci china index. i next guest says it is difficult the time a market bottom in china. always great to have you with us.

we have been waiting for the upside in kenny's assets given the new measures put forward by the government. why aren't we seeing a reaction? it seems we have lost him. what i wanted to discuss with him was what was happening in the chinese markets because we have seen stocks are pretty cheap. valuations are pretty low. it is really -- it has really not helped when it comes to market performance in 2023. perhaps one of the reasons is we have not seen a recovery in the property sector. that slump has been ongoing. it is the same thing with hong kong. the distinctive skyline has been built on a key partnership between the city's property developers and bankers but that relationship could be put to the

test with the billions in loans that are due next year and industry under pressure. bloomberg opinion columnist joins us now. what are we hearing from hong kong bankers who seem nervous going into 2024? >> the problem is commercial real estate. hong kong is no exception. there are an estimated 25 billion u.s. dollars of loans to be due next year and so far only 15% have been refinanced. we have seen hong kong banks such as hsbc and the dbs stepping back from smaller leveraged landlords. there was a loan that was due earlier this year that was used to finance the ocean park marriott hotel in 2015. that was only rolled over 80%. bankers have become a little bit

nervous about that. paul: banks have gone an incentive to not rock the boat and will likely roll over developer loans. why is that? >> angst have not put any provisions on their potential credit losses for commercial real estate. if banks pull out their loans, the stock market gets nervous. developers could have asset write downs. if you look at the hsp financial reports, they have written aggressively and sufficiently on their exposure to china as a real estate market but no write downs all on the hong kong market. they don't want to rock the boat too much. shery: incentive does not seem to be getting better. her hong kong people feeling on the ground? -- what are hong kong people feeling on the ground? >> everyone knows hong kong is not back to its normal days.

a lot of hong kong ours have been going north titian jen over weekend -- going north to shenzhen over weekends because everything is cheaper in mainland china. a lot of developers started ambitious urban rejuvenation projects in 2021 i the central business district. -- in the central business district. there is some new projects launched in 2021 when the market was at its peak. people are looking back and saying you don't have that much foot traffic right now. paul: bloomberg opinion columnist. you can watch us live and see our past interviews on our interactive tv function tv . you can dive into any of his acuity's or bloomberg functions we talk about and you can become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only.

you can check it out at tv . this is bloomberg. ♪

paul: let's take a look at how we are doing with oil prices. something of a revival at the moment. print wti above $72 a barrel.

geopolitics or more to the point, terrorism part of the cause for this. we have had the egypt's suez canal authority saying it is closely following attacks on vessels in the red sea. the u.s. shooting down 14 drones launched from areas of yemen on saturday. risks of shipping, and of the key reasons we are seeing oil prices pressing higher. shery: take a look at how we are trading in the fx space. we have seen the dollar gaining ground for the first time in four sessions with traders lowering expectations of future fed rate cuts. we had a couple officials come out and push back on the beds of early rate cuts next year. on the others of the trade, we are seeing upside for the aussie dollar and the qe dollar. not necessarily for the japanese yen and korean wan right now.

this, put into context, the korean wan was near a two week high. the japanese yen has strengthened for five consecutive weeks. that would make it the longest winning streak since may of 2020. all in a week where we have the bank of japan likely to keep policy unchanged. you're going to be watching the yen closely for volatility depending on what we hear for the exit strategy when it comes to ultra-loose monetary policy. the offshore yuan holding steady at the 17 -- the 730 level. paul: a unit of japan's largest lender is buying australia's link administration in a deal valued at 744 million u.s. dollars. it is paying two australian dollars and $.10 per share. a 24% premium to the friday closing price.

link says it's poured is intimately recommending shareholders vote in favor of the deal. the entertainment has us to extend the deal for finalizing the merger agreement. a deal to create 10 billion delhi media giant had a deadline of december 21. they have been locked in showdown with sony over whether the ceo would lead the firm after the merger. sources say sony is wary of appointing him due to a regulatory investigation trade ivanhoe mines found robert friedland says copper prices need to double to stimulate the industry. he says he expects strong demand from china going ahead. >> everybody when they think of china, they think of the real estate sector. but actually, it is a much broader economy. they are solar. they are wind. they are new energy. >> what do you think there demand pull from china is going

to be like next year? >> i think it is very healthy. physical inventories are incredibly low. chinese smelters are scrambling to find feed. tolling and refining chargers in china are down sharply. many of them very hungry. the miners are having trouble supplying enough copper concentrate to keep their downstream refining capacity for. -- capacity for. >> morgan stanley think -- is that a realistic price target when it is at 8500? >> that is more or less a consensus view. 9000. sort of middle of the road. hard to argue with that. >> is that going to disrupt demand? is that all right? will it be cost sensitive at all? demand is going to be strong. >> 9000 bucks is not enough per time to stimulate the industry to take the risk to build huge

capital-intensive mines especially in latin america. the traditional giant mines are five to $20 billion each and 15 to 20 years of work. we probably need $15,000 a ton stable for a long time before the industry can gear up and build the giant mines. >> we have seen that. copper supply disruptions arising rapidly, robert. what does the supply picture look like in 2024? will it tighten even further? >> if i hold a telephone book at the end of my arm, i can do it but after an hour if you put a feather out you would break my arm. markets are made at the margin. we watched 3% of the production from the disruptions in panama and some mines in chile. 3% is enough to take the slack out of the market. we are in deficit already. as the fed weakens rates in an

election year, almost any additional disruption can cause a really sharp upward spike in prices. shery: the ivanhoe mines founder speaking exclusively with bloomberg. we have been following the trajectory of a north korean missile. we do have an alert. we are hearing from the japan coast guard the north korean missile likely has already fallen. domestic media nhk is quoting a japanese government official saying the north korean missile may have reached an altitude of 6000 kilometers and the missile may have been an icbm class and the last time they fired one was in july. our east asia government editor joins us from tokyo. what do we know at this point? >> the missile probably would have flown for about an hour. that is consistent with the

north korean icbm. we don't have it officially out yet but the flight time indicates it is an icbm. launched on a lofted trajectory which is kind of like straight up and a little bit down. if so, it would be the fifth of the year. the launch comes as kim jong-un is heading into a major policy-setting meeting at the end of the year. it is a show of strength to the contrary in his ruling party and his people the nuclear program is making progress. it is -- it needs to be further advanced for the following year. and the sacrifices the people and the economy are making for this are justified in -- in the way that north korea's propaganda apparatus will frame it. paul: we also have this launch coinciding with telex between the u.s. and korea. how does this launch sharpen the focus of that? >> the talks were over the

weekend in washington. this -- the launch, there was a short range ballistic missile launch sunday night more in response to those talks. these talks are used to deter north korea from using nuclear weapons. what the u.s. has done is it sent military assets to the region in a show of force that demonstrate that if north korea were to launch an attack, they would be an overwhelming response. the most recent part of this, the show of deterrence is a new ice nuclear powered submarine that arrived in the south korean port over the weekend. we are seeing aircraft carrier groups coming. u.s. is working with south korea as well as japan on drills to intercept north korean missiles. it is all part of this emergence of talks and action that are taking on north korea's threats.

shery: we know external geopolitical tensions help leaders shore up domestic support. this would have come at a good time for the japanese prime minister kishida whose support rating continues to fall display a reshuffle of his cabinet. >> exactly. his support is now the lowest it has been in more than a decade for a japanese leader. what this -- he is -- his ruling party is facing some financing scandals. cointreau of his ministers stepped down last week. he is trying to restore confidence in his government. it is a difficult thing to do. what this may do is speed up the clock for him to be replaced. the ruling liberal democratic party has an election in september for its leadership. kishida may go before that. a majority of the public and public surveys show they want him to go before that.

a short serving prime minister is more the rule than the exception in japan. kishida has served more than two years making him one of the longer ruling politicians since the start of the century. shery: who can forget the revolving door of prime minister's before shinzo abe? john hersey of its there. be sure to tune in to bloomberg radio for the days big newsmakers to get in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. plenty more ahead. stay with us. ♪

shery: we are setting up for the market opens in mainline china and hong kong. this as assets have underperformed in 2020 three going against bullish expectations. thighs is the chief economist in partner of grow investment group. why are chinese assets reacting to the more positive news flows coming from beijing policy one thing to do more to support the economy? >> thanks for having me. i think we are seeing a flurry of new policies coming out to address the problem with the property sector. shanghai and beijing, two of the

most important tier one cities has relaxed -- lowering the down payment for the second home. i am in shanghai. i am seeing large traffic going through home inspection over the weekend. it is nice for a change. both people in the market watching property transaction, volume and prices as a leading indicator of the share market. this is a very large part of the economy. we need to see some decisive positive signs from the sector in terms of pricing to be able to instill confidence in the market. shery: and has the market reaction been pretty disappointing because we did not see that at the annual conference? >> i think people were looking for a specific bazooka like stimulus package from the conference. we did not get that.

having said that, we are seeing positive news coming out. we will extend the balance sheets. we are hearing some and invaded ways to solve the housing problem. they are using properties for the existing owner and to let them use property stem to buy new houses while at the same time as they leave their home, the shantytown would be redeveloped. things like that. the property stem would help to move housing inventory at this stage. inventory is still moving slowly. with new approaches such as this, we should see a gradual improvement in the housing sector. shery: and it is better than doing anything for the monetary

side of things because you mentioned the pboc which would have more leeway to do more given the disinflation has been the case in china. the transmission mechanism is not that great. >> the property market is still failing. when you do large stair -- large-scale using, you have to consider the pressure. the chinese -- has been with the negative effectors negative -- because there is abundant liquidity in the market and if you look at the banking system, it is flushed with cash. the savings deposit in the bank account. as a result, the market interest rate has been trending down. it is difficult to argue for a large-scale monetary policy easing. the targeted policy plus expansion would be more helpful at this juncture. shery:shery: what is your expectation for the yuan? we have seen it pressured by

pboc policies. we are expecting a dovish pivot from the fed. what are the year end levels you are envisioning for the chinese yuan? >> we are right now at about 7.1. we have risen from the level before. around seven would be a reasonable valuation level. shery: we have policy support. we have cheap chinese assets going into 2024. i wonder what their earnings momentum will be like going into 2024. i am told we have lost that feed. he is the chief economist in partner agro investment group. take a look at the chinese markets. it has been a year in the red. take a look at the underperformance after having been so bullish in terms of analyst expectations going into

2023 and going into 2024, not much has changed. perhaps we could see that improved policy support helped out chinese assets. perhaps some of that confidence returns. take a look at some of the stocks we will be watching. we are talking about apple suppliers. more chinese agencies have ordered staff to stop ringing iphones to work. china has reported passenger traffic for november was up 334%. air china announced passenger traffic for that month was up 349%. perhaps some of that travel and tourism rebound will be felt in these airlines. ex-con was also in focus after alibaba disclosed plans to cut its stake in the chinese ev maker. paul: that is just about it for

a bloomberg daybreak: asia. let's take a look at how we are positioned in -- at the moment. seeing weakness across all major markets. the nikkei the worst performance off by 1% as we stand on the eve of the final bank of japan meeting of the year. not expecting any change. in australia, the sx slipping back into negative territory. the kospi weaker. that is it from daybreak: asia. markets coverage does continue as we look ahead to the start of trade in hong kong, shanghai and tensions entered uber markets china open next. this is bloomberg. ♪ 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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