going to sell any residenti ploe first quarter of this year. there will be of supply of around 11,530 new homes in the new year ending in march, close to the government's annual target but it would be the first time in recent years for the government not to sell any residential plots. this sluggishness in the land market going to hurt the government coffers. we are talking about that revenue being brought in by those land sales, touching only 14% of the annual target. haidi: it is such a reversal of fortunes and signifies on all fronts how difficult it has been for the government in hong kong to try to reset the economy after those harsh restrictions. a lot of the concerns over the national security regulations, geopolitical concerns, and its ever-growing closeness with beijing and the impact when it comes to business sentiment, retail, consumer sentiment. at the peak we saw hong kong see

shery: you are watching in more than 5.5 mainland -- 5.5 daybreak: asia coming to you live from new york and sydney. million mainland arrivals. that was since 2017. >> we are coming down to the market opens in tokyo and seoul. this is a look across markets as >> australia has just come we head into the start of online. global stocks and treasuries trading in the next hour in hong slip ahead of friday's jobs kong and shanghai. reports as traders reposition on ♪ federate cuts. the nasdaq 100 looking its longest run of losses in more than a year. apple is hit with a second analyst downgraded in a week. islamic state claims it was behind the deadly bombings in iran that threatened to further inflame regional tensions. annabelle: you mentioned apple and the downgrade weighing into the moves in the u.s. session. it was the tech sector in focus. that is also the sub index we are tracking closely. we are not seeing much movement. it is a staggered start. nine minutes for australian markets to be fully online. we will see. how we see trading coming online.

futures had been indicating toward a little movement as we had been discussing through the course of this week. trading volume off 20 day moving averages. the big moves we are seeing in the bond space. tracking the moves in treasuries overnight. it is the changing or recalibration of expectations for g10 central bank monetary policy decisions over the course of this year that is the key focus for us. we are continuing to see a robust labor market in the u.s. the fed high for longer is the key narrative. equity markets so far flat as we come online. not seeing much of a move in the tech index. let's take a look at the rest of the region in asia. as i say, we are checking the moves in bonds. we are seeing the yields moving to the upside in the kiwi space. the japanese yen a key watch.

we have been seeing the weakness over the course of the week. down 2.5% against the greenback. a lot of traders saying the boj given the earthquake on january 1 unlikely to pivot away from its negative policy settings anytime soon. continuing to track the outlook for japanese futures. given the weaker yen nikkei pointing to gains. shery: we have seen that gain ground for a fifth consecutive session. the longest run since september. we had treasury yields taking off in today's session with the 10 year yield rising to almost 4%. u.s. futures coming online to the upside. a 10th of 1% after drifting on the wall street session. the nasdaq 100 down. the longest losing streak since 2022. apple getting another ground.

-- another downgrade. investors reacting to more economic data. the adp report showing firms ramping up hiring in december. the jobless claims number coming in below estimates. not to mention the service pmi numbers for december revised upward people. have been paring back expectations of fed easing. that has led to the treasury selloff today. a focus very much on the upcoming u.s. payrolls report on friday. let's bring in vonnie quinn. we had some indication with all the data out today. what are analysts thinking we are going to get in terms of the payrolls numbers? vonnie: you can update your estimates. i was having a look across the estimates. if you look at j.p. morgan, looking for a 150,000. pantheon looking for 125,000. the median estimate for growth of 175,000 jobs in december.

that is relatively healthy. very healthy i would suggest in terms of the unemployment rate. economists are looking in the median for that to tick up a notch from 3.7% to 3.8% should if you look at all of the data, that points to a still very healthy job market. i look across the commentary to see what some of the economists are saying. goldman pointing out the mild winter we have had in the united states may be beneficial to the monthly data. snowfall was be minimal in the major cities of that would be go that team pointing out we will be getting striking workers returning to the workforce in december but that will only add to 8000 casino workers. in the previous month that was 38,000. we can discount any returning striking workers for the most part.

those data points and give us clues. the adp data showed private payrolls were very healthy. we did not get the layoffs we thought. christmas surveys also give us a snapshot into private hiring. showed that there were only 35,000 layoffs. if there was any weakness, it was in the laying of staff which is not happening as opposed to laying off staff that are already hired. that is also a positive data point in terms of what we might anticipate for tomorrow. you still in treasuries trading, typical pre-and if he -- pre-nfp trading pattern. haidi: wage growth estimates. what are they suggesting? vonnie: we have been in range of up point to end up point for the last couple years back to august of 2022. we are looking for something similar again. up .3 month over month.

that would be with average weekly hours unchanged at 34.4. this is a significant data point for the fed. i might suggest they would wait for the end of january for the quarterly data to make a final decision on what happened with wages over the last couple months because that is a lot more specific when it comes to what happened. we have adp saying according to adp, we are at no longer a risk of a price spiral. adp showed the bump in wages was 5.4 for those who stayed in their jobs and 8% who moved their jobs. haidi: vonnie quinn with the numbers. our next guest says despite what we have seen across the tech space and tech equities in particular it has been a bad week for some of the magnificent seven like apple. despite the valuation gains have seen in the previous year, she is still constructive on the

magnificent sector -- the magnificent seven and the wider sector. we have seen a second warning when it comes to apple and that has taken the heat out of that stock. you have been consistent in terms of leaning into the depths for these stocks. >> good evening and thank you for having me. i have been consistently adding to these stocks and i like when they pull back a little bit. if you look at last year and you look at the nasdaq, the mac seven, the moves have been anywhere from 50 to to 50%. that sounds great and maybe overdone to scented if you go back to 2022, they had a terrible year. my thesis on this is 23 was more or less the start of a recovery year for check. they gave back what they gave away. they got some price potential from the idea the fed would stop raising rates. 24 is the year where you are

going to start seeing some of these things and themes we have talked about like generative ai start to monetize. instead of this being a society of chatbots, aia is going to start enabling different industries to benefit their rotor mines, become more efficient. that is what drives tech forward. tech means cloud, cybersecurity. it means chips. these companies like apple, microsoft and google who have very steady balance sheets and are good long-term holds. haidi: we did see the tech heavy nasdaq 100 dropping for a fifth day. this is the longest losing streak since december of 2022. are there stocks within the cohort you would be avoiding? specifically, where would you be adding to allocations every time we see this pullback? >> it depends on the type of investor. if you are looking for a

broad-based allocation, you can look to an ai type of fund. you can look to a mac seven type of fund. in terms of single name stocks, i think my picks for this year are going to look like google, amazon, ibm will be on that list. the reason i like to and ibm is i think google is going to picked up in the ai space. monetizing particularly with their gemini review. their abilities in cloud. for ibm and google, they have this focus on quantum computing, just going to be a growing field. there are of dollars of government spending going into that. in order for ai to work efficiently, you need speed of computing. i want to allocate to the names that have not led the race. haidi: you have got a bit when it comes to positivity on amazon.

i think it also speaks to what i perceived to be some optimism for the consumer this year. >> that is a great point. you discussed a little bit earlier in terms of some of the data that has cannot recently. we see wages have remained strong. jobs have remained healthy. while that might be confusing when the fed starts to cut, i think it is a good sign the economy is holding up. if the economy is holding up, that means consumer spending is holding up. amazon touches just about everything for me. i think they were trying to find their footing post bezos. a lot of supply chain efficiencies. now you have online shopping. consumer continuing to spend. they are into the drug space. they are going into the food space. they touch quantum computing. they have ion q offering the bracket. cloud and cybersecurity with a

20% compounded annual growth rate because of the growth of ai. amazon is one of the stocks that did not perform as well as the other seven over the last few years. along with google and end up in winners this year. haidi: if you take a look at market expectations based on what the fed does, this pricing of over five cuts this year, if that does not materialize or if the economy weakens more than expected, how do you think that plays out for the growth sensitive in rate sensitive stocks? >> that is a great question. the markets have become so interesting because it seems like when the ducks are in a row and the fed is going to stop, you get the geopolitical issues. you get a shock in the inflation number or manufacturing number. my view is this is going to be a stable year in terms of how it ends. i think it will be an annualized

return for the s&p 500. it is an election year. incumbents running the last 16 times the market was up. whether the fed cuts four times or five times, until then it is going to be choppy. we will all be talking about soft landing. are rates going to be high for too long/at tha first -- for too long? at that first cut, i think stocks are going to take off. it is behavioral in terms of what we have seen in the past. haidi: always great to chat with you. ceo and cio at defiance etf's. the st. louis fed has appointed the former new york fed executive as the. president he is assuming the post on april 2. replacing james bullard who is stepping down to become a dean of a business school. will be the first policymaker to lead a fed bank.

still ahead, we will check in on energy markets as rising u.s. gasoline stockpiles signal shaky demand despite tensions in the middle east, the red sea and libya. we will get the latest next. this is bloomberg. ♪

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haidi: islamic state is planning a response -- is coming responsibility for wednesday's bombings in iran. let's bring in michael heath and. we spoke about this yesterday as being you had mentioned the likely scenario. >> i don't think it is much of a surprise it was islamic state. it was such an indiscriminate attack. when these are state based operations, they tend to be more precise as we sort of saw earlier in the root in lebanon with the killing of a senior hamas official attributive to israel. it does inflame tensions. there are all sorts of amazing stuff going on now. there was a state media report coming out of iran israel runs as lum estate is obviously nonsense. it is a very tense situation. these problems are mushrooming

up. we are looking from lebanon to the red sea. there are issues everywhere. we have the secretary of state blinken coming to the region. he is going to have a tough task ahead. haidi: how big is the risk being posed given we are seeing these i ran back to proxy efforts in the red sea and other parts of the region? does this widen the conflict? >> it certainly is an issue for israel. this is what the u.s. has been trying to navigate. to limit this conflict to israel versus hamas kind of thing. iraq because the area the ark of resistance. it sponsors has blown in the southern region. that is an issue too. the israelis have signaled they want something done about hezbollah which is a powerful organization. that has a lot of missiles and

rockets. israel fought a war with hezbollah in 2006. they want to deal with that issue now while -- once -- excuse me. once hamas has been removed. there is this arc of groups. that is what secretary blinken will be trying to do is ask regional states to put pressure on iran, put pressure on these other groups to refrain from widening this conflict. it really could spiral out of control easily. haidi: as has been suggested, they don't expect every conversation on this trip to be easy. michaelheath -- michael heath we get the latest on this story from north korea. white house spokesman john kirby says russia used weapons in at least two attacks on december 30 engine or second.

he says russia plans to keep using the missiles and is looking to acquire more weapons from iran. >> we assess that russia intends to purchase missile systems from iran. the most effective response to russia's horrific violence against the iranian people is to continue to provide crane with vital air defense capabilities and other types of latour equipment. we need congress to approve our funding request for ukraine without delay. shery: other geopolitical events adding volatility to oil trading. fresh evidence of a surge in u.s. supplies has added to bearish sentiment. su keenan joins us with the latest. we are seeing these rising gasoline inventories. su: the biggest in several decades. at the same time where the demand in the u.s. is a a snowstorm hitting the u.s. and there are projections that will

reduce a lot of people using their cars and retailers will work through demand. what we have a is crude supplies. more of a mixed picture. all of this depressive on oil in u.s. session we are seeing a slight uptick in trading. west texas, up a third of a percent. while the mideast tensions and shutdowns in libya oil production had created volatility, the real focus seems to be on the issue and concern about oversupply. the gasoline data. gasoline futures falling as much as three and one third percent at one point in u.s. trading before pairing those losses. very telling. analysts explain despite the substantial drawdown in crude supplies nationwide, we did see a buildup in the supply hub in oklahoma. . the buildup in gas and distillate stockpiles, these are the products of crude oil taking resident and bringing to light fuel demand once again stalling

out. that is a key thesis for the bears at this point. haidi: wall street analysts are scrambling to cut oil price forecast for the year. what are we hearing in terms of the outlook? su: it is a worrisome message in terms of the direction of oil prices. bloomberg surveyed five major wall street banks and only one of them, bank of america, actually sees gains for oil in 2024. morgan stanley cut their outlook for brent crude by 9% following in the footsteps of goldman and ubs. you are looking at what is some of the key themes owing forward. a renewed focus on geopolitics as we heard. . in the mideast, the red sea and libya is seeing some of its oil production taken down. . that shows a potential to re-induce a conflict premium. the overarching concern seems to be the rising production from non-opec plus sources such as the u.s. and the potential for this town strip demand.

that is why there is concern about the data from the u.s.. there is concern about whether there will be a rebound in the china economy. there are questions about opec-plus's ability to bolster oil prices. morgan stanley analysts expect a relatively precarious balance in 2024. the cut their average price target for 2024 by 9%. citigroup men's the most bearish rejecting an average of $75 a barrel for brent. bre bloomberg intelligen -- bloomberg intelligence says when it comes to west texas intermediate, it is far more likely it will move to $50 rather than 90. he points out west texas intermediate failed to make it much above 90 in 2023 despite some bullish pressures on oil. there are also concerns about potential recession still a

possibility going forward should shery: su keenan with the latest on everything affecting the oil price right now. wti at 7231. you can get a roundup of all the stories you need to know to get your day going in today's edition of debris. terminal describe her's go to dayb -- terminal subscribers go to dayb . you can customize your settings so you only get the news on the assets you care about. this is bloomberg. ♪

shery: treasury futures not doing much in the asian session after we saw a selloff in new york. the 10 year yield rising to almost 4% as we got resilient data. adp report showing u.s. firms ramped up hiring in december. . jobless claims coming in below estimates.

really it is about the global bond space which is now on a four day skid. we are talking about falling after the upward revision to pmi's. expecting european inflation numbers as well. trying to gauge where central banks go from here if they have room to start lowering interest rates. we have already seen in the u.s. services pmi for december and revised upwards so that solid data being felt across the bond space. the latest corporate stories we are tracking right now. bloomberg learning bridgewater associates flagship headphone lost 76% last year. entire drop came in the last two months of 2023. reversing would have been a 7.5% gain in october. the losses for the biggest hedge fund corresponded with the biggest gain in global bond since 1990.

growing concern over iphone sales has triggered the second analyst downgrade this week on apple stock. lowering recommendations to neutral from overweight after holding a bullish view since march 2020. the analyst attributes the cut to a weak environment in china. we have plenty more to come on daybreak: asia. this is bloomberg. ♪

>> there is a possibility of stock-price defaults to around

¥31,000 in january but i believe it will hit the 40,000 level toward september this year, considering u.s. rate hikes around that time. i believe the nikkei will surpass the record from february 1989 before the bubble burst. >> we may see the stock markets touching ¥40,000. possibly hitting the record high since the end of the bubble era. we expect overall markets to move steadily, ending the year around ¥38,000. shery: despite the optimism there, we saw the nikkei seeing its worst day in two weeks in the first trading day of the year. airlines leaving the losses. cancellations after a collision between japan airlines and a coast guard plane. futures are pointing to the upside of a quarter percent while the japanese yen holding steady. really weakening against the

u.s. dollar for most of the week. there's more speculation that it will be harder for the bank of japan to abolish negative interest rate given the earthquake that hit the country on new year's day. rescue personnel in japan still carrying out last-ditch adverts to find any survivors. john herskovitz is in tokyo. what we know -- what do we know? john: there are more and more personnel that are being moved to the area. police, fire responders, immersive -- emergency personnel who are taking these efforts to try to find people. there was a report this morning about a woman in her 80's who was going through the rubble after three days being trapped. the government sees a 72 hour window from the time of the quake as the best time, the most

urgent time for the rescue operations. they are going on at full tilt. really, they are getting up to the edge of the point where they are looking and they can reasonably find people who are still alive in the quake. haidi: significant impact on infrastructure. do we know anything about what the estimated economic cost will be from this disaster? john: we've seen some estimates that have come out. loss of five or 6 billion u.s. dollars from this. the area where this took place is not home to a lot of industry. the earthquake was powerful. it had a broad area that --.

the total for the people on the ground is enormous. you are seeing pictures of the devastation. people have lost everything. 30,000 residents without power. people trying to get food, water, shelter. there's a chance of landslides. so the economic impact for the economy is significant but it's not as big as other natural disasters. but the human toll is enormous for the people who are affected. haidi: john herskovitz in tokyo. an international team of investigators is coming through the wreckage of the two aircraft that collided at tokyo's airport. they are hoping that the recorders from the airbus could provide clues about the final moments before impact. the cockpit voice recorder has

also been recovered. pressure is building to find out exactly how the aircraft ended up on the same runway at one of the world's busiest commercial airports. we are watching the yen under pressure. banks repricing their bets. let's bring garfield reynolds. we are seeing traders the least bullish on the yen since august. is there more room for further weakness? garfield: at least in the short-term term, yes. it was one of those puzzles about those year-end moves that became extreme across assets. when it came to the yen, the expectation that the fed would be cutting rates rapidly and that the boj would be moving fairly rapidly to end negative rates. those factors combined to set up

a strong move in the yen. we've had pullback on both of those sides. in the case of the japanese side of things, the earthquake concerns about disruptions to the economy have spurred some speculation that this will make it less likely that he moves as early as this month's meeting. there always seems to be an outlier. a lot of interest had been more in march, april. that sort of timetable. the earthquake has helped to reinforce the idea, he has shown signs of being a gradualist, being cautious about the moves he makes. that will add to the reasons for him to be cautious. the other thing for the yen is that the unwinding of some of

those very aggressive bets on interest rate cuts from the fed this year, that's dollar supportive. a general feeling that the dollar selloff in the last year went too far, too fast with a lot of other moves. at that together and until you get something that brings back that zeitgeist, 2024 is the year where the bank of japan hikes and the fed cuts. both of them go fairly rapidly until you get a restoration. you are unlikely to get strong gains for the yen. shery: that seems to be an inevitable outcome, isn't it? it's not a matter if we get a stronger yen. it's a matter of when. garfield: very much so. however cautious he may be about the endgame, the boj governor is clear that the endgame is in

play. he wants the boj -- once the boj gets rid of the negative rates, -.1%, once they move to unwind yield curve control, therefore eventually move to reduce buying of government bonds, that should all be very supportive for the yen. the question is very much about how fast we get there and how strongly yen -- strong the yen gets in response to that. a lot of traders and investors, how rapidly -- whether we've gone too far. if you've already gone to ¥140 and you think you can go to 110, that's fine. if you go 140 and think 130 is more likely as the medium-term

target, that gives you a lot less potential profit to play with and the risk reward balance shifts more towards risk than reward. haidi: have we gone too far when it comes to the global bond selloff in treasuries? there's one massive bearish bet that doesn't think so. garfield: again, this comes down to -- when the bond rally kicked off in november, that seemed very sensible. 5%. that's real money. retirement level. 5% yield. that it extended in december. it seems to be just a case of fomo. there were a lot of reasons why people would go into fixed income. so there's -- things went too far, too fast. fairly thin trading conditions. there remains a lot of concern that we are vulnerable to a pullback to a more sane level.

there's one options trade that caught a lot of buzz overnight. 4.2%. that sounds like a lot. then again, it would still leave you without strong -- with that strong downtrend. it underscores the idea that investors are seeing difficulty at the moment for yields to push lower than they got to at the end of last year. so the easier money now looks to be in betting on increased yields. shery: garfield reynolds there. we heard from double line capital who things wall street expectations for the fed to cut interest rates as early as march is also optimistic. the deputy ceo told us more about the warning signs that remain in the economy and labor market. >> at the end of the day, what's happened is that those risks are

present. the yield curve is still inverted. this is one of the longest 10 years of yield curve inversion when you look at 2/10, since back in the early 40's. it's really problematic that you see that the market is fighting the fed here. the rallies we've seen, what we've been calling the everything rally since november 1, started to be based on rate cuts again. if the fed was trying to go with their higher for longer mantra, we would get closer to the recession. when people call for soft landings, there is some problematic area of the economy but it doesn't have the breadth to make it a hard landing. i think there are still some challenged areas. if we start to see rate cuts, maybe those problematic areas get skirted. if the fed achieves the miracle

of being able to navigate this hiking cycle and be able to normalize policy back without causing pain. historically, the fed has 100% track record in most of these instances of causing recession, at least when they say -- stay dedicated to the hiking cycle. >> interest rates are a blunt tool when it comes down to it. what is the bigger risk right now? a readmission and inflation or a stronger-than-expected labor market, which is what we are seeing signs of right now. >> i think the labor market has been relatively strong. a lot of people question it. is it the birth death model? we've seen some negative net revisions. on a whole, the labor market has held up resiliently. when you look at unemployment claims today and the new data coming out, they are not putting up red flags at this point. i don't think that the labor market is going to reignite and you will start to see 400,000 jobs per month being created.

i do think that the bigger risk is the inflation. i think the fed will have concerns about some of this which is why we scratch our heads with jay powell at the last press conference in november. he talked about financial conditions being tight, then rates rally. made no mention really of it at the last press conference. if the fed believes in these wealth affects that we heard at the fed, ultimately when people feel wealthier, risk assets rally, they spend more. maybe all of a sudden, this starts to cause concern at the fed that we start to see this re-acceleration of inflation. at this stage, we see core inflation has been dampening. the trajectory is right but the market is extrapolating this. that the fed is going to normalize policy back to a much lower rate. it seems that's a little optimistic today, to think that's going to happen as early

as march. haidi: jeffrey sherman there with scarlet fu. you can catch up on some of those past interviews in our interactive tv function at tv . you can dial into any of the securities or bloomberg functions and become part of the conversation. this is for bloomberg subscribers only. this is bloomberg. ♪

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>> you're watching daybreak: asia. one of the focus points over the course of the week has been what's happening in the bitcoin space and crypto overall. it's been whipsawed trading. you can see the action over the past five days. we are up around 4% over the cap -- course of the past five sessions. that fluctuation being dominated by the strange thing perceptions around the expectations for a spot coin etf to be approved in the u.s. by the sec. the deadline for the first act location is january 10. there was a media reporting suggesting that it could come as soon as friday and that led to that rally once again overnight. it's not just the focus on

bitcoin etf's in the u.s.. that would lead to a lot of institutional adoption. if you change on, take a look at what we see. we have a futures etf that's managed by us esop in hong kong. you can look at the returns on that since the end of december 2022, rallying around 150% over that time which is notable when you think about the hang seng overall which is down around 23% over that same time. this could be the market where we see asia's first spot bitcoin etf being approved in hong kong. we've had regulator signaling it could be the case but certainly it plays into those trading dynamics. investors want to see that etf being approved in the u.s. to begin with to give them more conviction to return back into crypto markets. shery: let's discuss those expectations. with us now is the founder and

managing partner at token bay capital. good to have you back. first of all, what do you expect to happen with bitcoin etf? we've heard the likes of some analysts thinking that the applications will fall short of the requirements by the fcc. >> i think overall, the expectation is almost 90% that we are going to get an approval next week. of course, there's room for that not to happen. and it doesn't get approved. we did have one analyst say that it led to a selloff of bitcoin around the world. it's very jittery with these expectations. there's a laser focus on bitcoin's price right now. it's always been a volatile asset. the focus on the price could make it move even more than usual. shery: that's exactly one of the reasons why regulators have been hesitant about these products.

ordinary investors might not be able to stomach all that volatility, not to mention the potential for market manipulation. what has changed? >> i think that's exactly right. it's going to be interesting to see what's in the disclosures. what's in the small print for investors to read before they go ahead and invest in these types of products. the volatility is extreme. that's a characteristic of bitcoin right from its inception. we have to remember that bitcoin is still only 15 years old. it's a very new asset. it's the lead asset in an entirely new emerging asset class of crypto more generally. so this volatility is a characteristic, it's feature. it has to be something that investors are informed about so that they know how to place it and invest in it and have it as part of their asset allocation, treated in the way that it is supposed to be treated. at the moment, advisers are saying, have a small part of your overall portfolio in a

volatile asset like bitcoin. while the upside is very appealing and we've obviously seen historic -- the drawdowns can be particularly painful. looking at investment timeframe and looking at your overall asset allocation when it comes to bitcoin. shery: the reason that we had this tear on crypto assets leading up to this announcement by the sec is the expectation that we will get a new wave of investors, of different sets of investors having access to cryptocurrencies, right? tell us about how mainstream this crypto token has become. how much of a game changer with this etf be? lucy: to date, what we've seen with bitcoin and in the crypto space and industry is that it's being retail driven. it's bottom up, it's retail driven. that's how bitcoin came to be. bottom-up organic growth.

it wasn't the institutions coming in. what we are likely to see with a bitcoin etfs continued retail flows because etf's make that more accessible. the sticking point with a lot of retail investors when it comes to bitcoin and crypto in general is how to access it. retail investors are not familiar with the crypto exchange is, how to onboard onto these financial institutions. it's not broadly available. that's about to change. it's going to become easier for retail. the big shift that we are likely to see with this etf is the institutional flows that can start moving into this asset class. they may move into bitcoin as a standalone investment or as part of the overall asset allocation for any institutional portfolio. that's really going to move the needle. that's why everyone is getting so excited at this moment. it's this upcoming era of institutionalized crypto. shery: activity picking up

around stablecoins being issued by traditional financial firms. what role are stablecoins playing in bridging the gap between crypto and traditional farms? lucy: stablecoins are definitely one of the winning use cases of crypto. typically tethered or backed one-to-one with of yet currency, usually the u.s. dollar. what we are seeing with stablecoins is that there can be an array of different stablecoin issuers. it's not limited to banks. we see crypto exchange is issuing stablecoins. we are seeing corporate like paypal issue stablecoins. this technology is making it very easy to create for the private sector money. now the task for regulators around the world is, how are they going to manage this? who are they going to give a license to for them to be a stablecoin issuer? that's a hot topic in hong kong

and across asia. there's a belief that stablecoins are a very useful tool. indeed, they do bridge crypto markets with the traditional markets. let's see what hong kong is going to come out with. at the moment, they have a consultation to ask the industry what they think, how stablecoin should be regulated. also how to position stablecoin vis-a-vis the central bank digital currencies which are coming down the pipe. shery: we will be looking forward to that outcome. good to have you with us. we have more to come on daybreak: asia. this is bloomberg. ♪

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sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh haidi: top corporate stories that we are following this hour. the maker of wilson tennis rackets has filed to go public in the u.s., targeting more than $1 billion. sources say the listing could lead to evaluation of 10 billion. the company is backed by --. greater china drove 1/5 of its revenue growth in the first five months of the year. tencent will back a record 1.3 billion dollars of shares in december, accelerating the pace

after gaining regulations rocks chinese markets. the announcement triggered a broad tech selloff. tencent has bet over $380 million on buybacks this week alone. we will take a look at how we are tracking as we end what's been a decidedly risk off week. a little bit of a call back and a mixed picture for markets online at this point in time. sidney stocks modestly higher, 1/10 of 1%. we are expecting that picture to continue as japanese and korean markets come online in the next few minutes. this is bloomberg. ♪

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shery: we are counting down to asia's major market open. a global han solo continues. we have the 10 year yield around 4%. we have more eco data showing resilience in the u.s. economy ahead of friday's nonfarm payroll numbers. haidi: we will see what that means for the fed's path. we are seeing repricing in that aspect. in asia we are looking like the mixed end to what has been a challenging week continuing. annabelle: investors -- not the week investors wanted to see for 2024, but the focus has been the key concentration on where the fed wants to go next. it is the signals in the resilient labor market that are telling us we need to see rates perhaps staying higher for longer. that was not priced in at the end of last year perhaps. the set up will be dominated by that theme. we are continuing to track the moves in treasury yields.

that is the reopen for cash treasuries. the 10 year yield hovering around that 4% mark. we are seeing yields rising around the region today. that has been playing into the dynamic for the japanese yen. it 145. it has seen a slide of 2.5% over this week. there is the dot plot alert -- there is the dollar dynamic playing into it, but also the japanese yen. the boj is unlikely to shift away from its negative policy settings given the ramifications from the earthquake on january 1. the outlook for stocks today, the nikkei is rising, which is looking to be one of the brighter spots for asian equities trading, perhaps taking advantage of that weaker yen story as well. let's see what is happening in korea. we are keeping an eye on fx markets here. it is still the story of korean won weakness, trading past the

1300 mark. it is down around 2%, the korean won versus the greenback, over the past five sessions. stocks-wise, we are keeping an eye on the tech space given the moves we had in the nasdaq overnight, dropping for a fifth straight day. that is the worst showing for a u.s. tech stocks going back to december of 2022. it is a signal, selling pressure, given we did see that huge run-up in the so-called magnificent seven over last year. turning to the aussie session so far, one hour into trading, it is lower trading volumes, a lot of people away for the christmas-new year break. the asx 200 barely budging. but continuing to track the moves in wti. oil did drop yesterday in the session. the focus very much on rising gasoline stockpiles in the u.s.. that really signals a shakier

picture for demand. haidi: let's bring in a senior macro strategist that joins us. we have gone from there is no alternative to, there are many alternatives, at least as you see it. many are in the bond, fixed income and credit space. if you look at the global bond turmoil we have seen this week, what does that tell you of how selective we should be in that space? homin: the normalization of bond markets valuation to the long-term fundamentals was not going to be a straight line. so we see this week's episode as more of a calibration, a temporary calibration. so our medium-term view on bonds is still quite constructive, especially for the conservative

investors. you think of bonds relative -- bonds valuation relative to the risk assets. now you have a genuine yield. we say that, even accounting for a bit of relief rally for the bonds in the latter half of last year. so, it makes sense after this significant rally, especially for the conservative investors, to lock in these in their per folios and perhaps by some investment grade credit. so we think these are still good ideas for these investors. certainly we still believe the start of the year that it is good to have these assets in a diversified portfolio. haidi: dci haven in chinese bonds -- do you see a haven in chinese bonds? china in terms of policy, the economic outlier in so many

ways, that that one market will be able to withstand that selloff? homin: so for international investors, it's still a complex market because you don't have a fully open capital account here, even though the authorities have been making efforts to open the markets more to the international investors over the last few years. certainly the macro situation in china is challenging, so that is supportive for the asset class. in thinking about the suitability for the investors, at this point, especially after this rally, it's not as appealing. so for local investors, certainly you might have a place for the portfolios, but the international investors still need to think about the fundamentals and their potential impact on the currency as well, which is an important dimension for them. we would argue it is a tactical

trading opportunity for international investors and it is more difficult to make the argument that it should be part of a strategic asset allocation. haidi: that is for equities as well, right? chinese equities, which cannot catch a break. given what seems to be constraints, or restraint on the part of chinese policymakers on how to support the economy, do you see any opportunities that are compelling this year? homin: the country has been coping with the long-term challenges. they are very clear to the international investors. the least thing that the policymakers can do is to ensure that the economy is avoiding the risk of a long-term deflation. that is still the risk we are dealing with. on the volume of activities, it is ok. we looked at the decent release for the service pmi for china, so there is growth in the country. but on the inflation front, it is still very low.

that is indicative of deleveraging that is still going on for the private sector, and i am very pessimistic outlook in the private sector. so the authorities need to tackle this more convincingly. as you mentioned, there are constraints that the authorities have imposed on themselves. we understand the reasons for this. renminbi stability would be slightly inconsistent with the re-inflation efforts. the delay in reform for urban planning, which we would argue is also important for the cyclical policy decisions, because the supplementary landing in these efforts, they need a clearer view for medium development in these cities. we are not getting these signals, probably because the are -- these are complex topics with the authorities. last year was a window to announce these measures. unfortunately we have not gotten

these signals yet. because of this constraint, the reinflation efforts will face resistance. for the international investors, it is a difficult market to get into. we have been reducing chinese equity exposure in favor of the other markets over the course of last year. haidi: do those markets include japan this year? you see an end to negative rates by april. homin: for the medium-term, we are constructive on japanese economy and financial markets. we do think the country is positioned very well for this trend for the global economy, but in the near term there is that currency dimension. now in the very near term we think it will be a bit muddled, because as you mentioned we are dealing with a sign that the u.s. economy is slightly more resilient than what we expected, even though we still expect the

economy to slow down. we are coping with data uncertainty. the bank of japan does not seem to be in a hurry to end the negative interest rate, even though we still expect it by april, a monetary policy meeting. in this combination it will be a bit muddled for the currency market. for the equity markets we will probably have a similar outcome. in the long-term, the domestic stocks should perform better because we still think the fundamentals will start to show up again after a pretty difficult third quarter last year. we are still neutral on the japanese equities for the medium-term. haidi: really great to have you with us. let's get a look at some of the early movers. annabelle: just taking a look at some auto stocks, or providers of chips and other technology to the automotive industry.

you can see mostly in negative territory this morning. this does follow the moves we saw on mobile ai overnight. you can see that plunge of 25% in the intraday session. mobileeye is israel -- mobileye is an israeli based company that makes systems for vehicles. overnight its put out its for your revenue forecast. it fell well short of what wall street had been expecting. that contributed to that significant plunge for the stock. mobileye says customers are paring back orders after stockpiling during the, so it does flag some concern -- the pandemic, so it does flag some concern in this part of the vehicle sector. that is the state of play for those stocks that provide chips and other technology for the automotive industry. shery: still ahead, the u.s. jobs report may show strength

only in concentrated pockets of the labor market. our preview of the numbers next. this is bloomberg. ♪

>> there is a possibility for the stock price to fall to around ¥31,000 in january but i

believe it will hit the 41,000 level toward september this year, considering u.s. rate hikes around that time. >> i believe the nikkei will surpass the mark recorded on february 1989 before the bubble burst. >> i think we may see the stockmarkets touching ¥40,000, possibly hitting the record high since the end of the bubble era. we expect overall markets to move steadily, ending the year around ¥38,000. shery: we are still some ways to go in order to get to those levels. 33,000 when it comes to the nikkei. we had a bad start when it comes to the equity markets in japan to 2024. right now we are seeing more upside. 0.1% for for the nikkei, 0.3% f or the topix. materials and tech in the red at the moment. the reason we are watching this closely, the levels of the

japanese yen so important, 144.69, a bit of weakening against the u.s. dollar, but the trajectory depends on where the fed goes from here as well. what we are seeing in terms of economic data is resilience. bloomberg economics expecting friday's u.s. jobs data to show strength, but perhaps only in concentrated pockets of the labor market, with the details perhaps revealing more weaker underlying fundamentals. vonnie is here with a preview of the numbers. we are still seeing resilience, but perhaps not as strongly as in the past year. vonnie: there are signs in places such as where bloomberg economics sees it. there has been wage growth and jobs growth in two a cyclical areas, government jobs and health care. we saw that confirmed in the adp report on thursday where you saw

hospitality and leisure adding employees, you saw government adding employees, and service producing jobs making up the bulk of the numbers. 164,000 jobs added in december. and of those, all but 9000 of them were in-service producing. bloomberg economics expects the unemployment rate to go up to 3.9%, more than what the bloomberg survey expects. the median economist expects the on a plummet rate to take up to 3.8%. -- the unemployment rate to tick up to 3.8%. they do point out that a fed pivot may have stunted recessionary economics in the labor market, but that dynamic is not clear enough yet, as we have been see a markets repricing expectations. will they reprice again starting from friday at 8:30 a.m. eastern when those numbers come out? we will have to see.

several data points today show there is resilience in the labor market. we had initial jobless claims, they were lower than anticipated. the adp report showed growth. the jones data showed less turnover, and that was on. wednesday they also had challenging christmas data and that suggested any labor market cooling is coming in the form of weaker hiring as opposed to layoffs. shery: what are the wage growth estimates suggesting at this point? vonnie: we will get wage data and it will show cooling, just like adp showed today. adp showed that people who stayed in their jobs saw wage growth of 5.9%. people who moved jobs saw wage growth of 8%. take out inflation and it's anticipated that tomorrow we will see wage growth month over month up .3%, year-over-year up 3.9%. that is still extremely strong. we have been in that range of

0.2% to 0.4% since august of 2022, so that is 18 months of really strong wage growth. we will see if that comes down. the fed will be looking at that closely because that will suggest what it needs to do about whether inflation is coming down just as much as it is optimistically suggesting. the other data point that will tell us about that is the eci, employment cost index, which comes out quarterly and will come out when the fed meets again january 31. perhaps that will be the better indicator of how wages are moving in the united states and how they moved at the end of last year. shery: bloomberg's vonnie quinn with the latest on what to expect from the friday's nonfarm payrolls report. the st. louis fed appointed the former new york fed executive as president. he is assuming the post on april 2, replacing the man who is

stepping down to become the dean of harvard university business school. momst recently he served as -- most recently he served as ceo of evince asset management. haidi: the islamic state is claiming was possibility for wednesday's deadly bombing in iran. let's bring in bloomberg's michael keaton. we talked about the likelihood of this being the response from the party yesterday. michael: such an indiscriminate attack, it was unlikely this was a state-based one. the assassination tribbett it to israel -- attributed to israel of a senior leader of hamas, killing the individual they are targeting and there is limited fallout. where is this one, it is basically -- whereas this one,

it is basically carnage. this is happening in iran. iran is the source of a lot of the financing and support of these groups fighting with israel, whether it is hamas in gaza, whether it is hezbollah in the north of israel or southern lebanon, the houthis who were firing on the ships in the red sea. this arc of resistance is supported by iran. to have such a high-profile attack in that country, it ratchets up tensions even further, which were already high. we are seeing these flashpoints emerging all over the place at the moment. haidi: we are expecting secretary blinken to again be in the region. how much is at stake during this trip, and what can be achieved given that it seems tensions in the region are just expanding and escalating? michael: that is right. it's his fourth trip since the initial attacks on israel on

october 7. and it is going to be a difficult one. he's going around the region. there is a lot of angst, or anger even, there. there has been terrible civilian casualties in gaza caused by israel's ground campaign, more than 20,000 civilians killed. there is a lot of anger there. by the same token, the u.s. needs to apply some pressure or encourage these states to rein in iraq, hezbollah and the houthis and these other areas to stop the conflict from widening. i think is key goal in the region is to impress that this remains contained, and is real to press -- and on israel to press on what gossett looks like when the conflict ends. shery: we have seen those escalating tensions around israel and gaza spreading to the red sea. skirmishes around the red sea forcing ships to take an

alternative route around africa that is driving up container shipping rates. this chart showing rates from shanghai to europe have surged since the attacks. that could add to inflation pressure globally. bloomberg intelligence argues these costs will remain below the 2021 peak and tend to have limited inflationary effect. now, the latest geopolitical events adding volatility to oil trading. still, we are seeing fresh evidence of a surge in u.s. supplies. that is adding to bearish sentiment. su keenan joins us. we are seeing rising gasoline inventories in the u.s.. su: the latest inventory data was delayed a day because of the new year's holiday. what it showed was the largest one week build in gasoline supplies in three decades. and it implied one week demand decline that was biggest in the

year, partly because we are expecting a big snowstorm on the east coast and that could limit people using their cars and therefore needing gasoline. you are seeing oil dropped significantly because of the geopolitical events and some of the pressures having to do with the oil data. at the end of the day, slightly lower. a slight increase in asian trading. this theme of oversupply remains the large theme, even though there are shutdowns in libya's oil production putting a dent in supply. gasoline futures fell as much as 3.5% at one before pairing the losses. one analyst explains that despite the substantial drawdown in crude supplies, we saw a mixed picture with crude data. supplies really rose at a key storage hub in oklahoma. but down across the nation. it is the buildup in gas and

distillate products that is taking precedence and getting all the focus of traders and bringing to light that fuel demand once again stalling out. that was a dramatic drop in the implied demand figure that seemed to drive a lot of the late daytrading. haidi: wall street analysts are scrambling to cut a price forecast for crude. what does that tell us about the outlook for the year? su: it is a worrisome message to any of the oil bulls. morgan stanley cut its outlook for brent crude for the year by 9%. that is a major reduction. they followed goldman and ubs in making reductions. a bloomberg survey of five big wall street banks shows only one is forecasting oil price gains in 2024. you look at the themes analysts are stating, while there is a nude focused -- there is a renewed focus on a premium

conflict for oil, that overarching concern seems tng.s.

demand, concern about china, the rebound that was expected not playing out. there are questions about opec-plus's ability to bolster oil prices. they face a lot of challenges into 2024. morgan stanley analysts expect "a relatively precarious balance in 2024." citigroup remains the most bearish of the banks, predicting an average of a $75 price for brent. bloomberg intelligence says for west texas intermediate we could go $50 or lower in the next move. haidi: bloomberg's su keenan. we have more to come on daybreak asia. this is bloomberg. ♪ the first time you connected your godaddy website 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.

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shery: we saw the global bond selloff overnight with treasury

yields spiking on the wall street session. we are seeing a bit of a reversal in the asian session with the 10 year yield below that for percent level. this of course after we saw a falling after an upward revision to pmi's. we are expecting european inflation numbers again. we already had u.s. economic numbers showing resilience. we are heading to friday's nonfarm payrolls as well. we have more to come on daybreak asia. this is b

shery: breaking news out of japan. we are getting the bank of japan pmi numbers. it is a revision to the downside for the final data point for the month of december. the pmi composite at 50, coming down from 50.4. still barely in expansion

territory. the pmi services numbers at 51.5 instead of 52, so that has also been revised downwards, which is an interesting contrast to what we have seen in the u.s. and europe, where pmi numbers have been revised upwards. but we will continue to follow the latest developments, especially as we are seeing big moves in the japanese markets. what are you seeing right now? annabelle: the direction for asian equities this friday is being set by the expectations around the fed and the action we saw on wall street overnight. it has been a pretty weak start to the year in a matter which way you look at it for stocks and bonds. it does come down to that resiliency we are seeing in the u.s. labor market. telling us that the fed is likely to keep rates higher for longer. that is the dynamic across the bond space this morning. you had treasury 10 year yields touching the 4% mark overnight, holding fairly steady this morning. still it is that move higher for

yields in asia this morning. that is putting pressure on currencies in turn. you see this weakness against the greenback this morning, also playing out in the weakness in the commodities space. iron ore down 1% but still hovering around the 140 mark, historically elevated levels. equities wise, fairly steady is the key takeaway. not seeing too much movement so far. there is that seasonality factor with a lot of traders still a way for holidays. the labor market and that focus is coming down to what we get out of the nonfarm payrolls data on friday in the u.s. let's look at the expectations for that. in december we are estimated to see a slip in the number of jobs that were added. bloomberg economics are saying that the nonfarm payrolls report likely shows strength only and concentrated parts of the labor market, but the details still reveal week underlying fundamentals. -- weak underlying fundamentals.

what does that signal for equities? it is always those changing perceptions. haidi: we are watching the four-day slide when it comes to level government bonds -- to global government bonds. china emerging as a surprising hedge. the 10 year yield for government bonds touching the lowest levels since 2020. it is hoping chinese stocks look more attractive. let's get more from david ingles in hong kong. at any point we will take anything that looks -- at this point we will take anything that makes chinese stocks look more attractive. david: we have been trying to -- we have been building -- i have a very long list in my drawer of reasons that maybe you should be buying this chinese market. valuations, flows, policy intention. to your point, the global bond rally, the bond rout taking place, and cgb's within that

bond rout standing out as the refuge if you will, really going against the grain because of how different china is in the cycle. there is a reversal of yields pushing higher. the 10 year yield for china at eight 2020 -- at a 2020 low. making this group a lot more attractive than looking at it purely itself. csi 300, the downtrend is quite strong. we hit our heads a couple times on the downtrend. 32.83 was the closing low right before christmas, which takes us back to 2019 levels. we are approaching that within 1.5%, so effectively a bad day away from hitting that low. that is the near term low. the next chart, please, just in context, how bad is this current selloff? it is bad enough that it is

actually comparable to what we had in 2015 when the market effectively collapsed. in this case 46% from top to bottom. currently if you measure that from the 2021 peak, we are down about 43%. on price, it is relatively comparable. that said, 2015 was a lot quicker. this one was more sustained. three straight years of declines. let's close the loop on that one to haidi's point. next chart shows you earnings yields against government bond yields, or risk premium as they say. we are now at a level where the premium is in favor of stocks, so stocks are now the cheapest to chinese bonds, which were at fairly extreme levels. generally 5.5. that typically acts as a buying signal. the last five or six cases have

resulted in substantial gains in the equity market. it is flashing a buying signal. the open is just under an hour away. hong kong, china and the rest of the region, taiwan, singapore and the like. shery: david ingles with what to expect from the chinese open. we are watching geopolitical tensions also for implications in the broader markets. investors watching the buildup to taiwan's elections for clues on the path forward for cross-strait relations and the impact on the global supply chain for semiconductors. our asia stock reporter joins us now. let's talk about taiwanese stocks. we are seeing implications of the outcome of the vote for the broader markets. sangmi: the stakes are high for taiwan and its stock benchmark taiex as it is trading at almost nearly all-time highs. it has performed -- outperformed

most of its peers in 2023 amid the artificial intelligence boon and the chip cycle. the fund managers we talked to tell us the market has already priced in most of the dpp win, so it will look more like a status quo situation. a surprised win -- surprise win from the oppositions that are more china friendly. a narrower dpp could mean it could be a boon for the taiwanese stocks because that would somehow alleviate the tensions, conflict, and more of that risk sentiment with china. haidi: what would a dpp win mean when it comes to the crucial chip sector? sangmi: taiwan produces about 90% of the world's most advanced chips. they just definitely a huge market, and especially when it comes to the chip sector it is very important.

it will be one of the most crucial agendas for the new administration to forge ties with the u.s., because that will be the deciding factors that will allow access to chipmaking equipments from the western providers. a dpp win as some of the analysts tell us will be a better choice for the sector, for the chip sector at least. that will be because it will be able to enjoy its status as an independent location on where you can fabricate chips and assemble the ai servers. whereas a knt win would mean some of the companies could try away from the island and try to -- shy away from the island and try to diversify their supply chain. it is an interesting thing we should be looking out, especially given tsmc makes up more than 27% of the weighting in the taiex benchmark. shery: what about other sectors

or specific stocks investors should be watching in the run-up to the election? sangmi: the energy sector is definitely an interesting industry that the investors are looking at because the presidential candidates have different policies on this very sector. the dpp presidential candidate would most likely follow the ruling party's policy, which is more of a faster shift to the renewables. they want to phase out the nuclear plant by 2025 and have at least 15% of the energy mix coming from renewables. that would be good news for the wind power companies, which have enjoyed their benefits from the ruling party. whereas a kmt win would mean it would be a bit of a slower development and growth drivers for these companies as they

have been pushing for a gradual shift toward renewables. we have the tourism sector. there has been several cross trade restrictions and bands when it comes to mainline tourists coming to taiwan and the other way around. that would have some impact. the kmt presidential candidate said he would open the doors immediately when he becomes the president, so that would be good news for the tourism and hospitality stocks. finally we have some defense names that will be equally good news if all three of them gets elected. any of the parties are pushing for altering military capabilities by increasing defense spending. whereas a dpp presidential candidate is pushing for potentially more shipbuilders as they are looking forward to domestically produced some marines. -- submarines.

haidi: you can get more on her story, a stock investors guide to never getting these presidential elections. you can get more on the election in taiwan on a special report featuring bloomberg's exclusive interviews with all three presidential candidates. catch it on bloomberg tv every thursday in asia and wednesday in the u.s.. it is also available anytime on youtube. plenty more to come on daybreak asia. this is bloomberg. ♪

haidi: take a look at how markets are trading across asia. still early in the asian session but we are seeing the nikkei rebounding 0.25%. this is coming at a time when japan saw the worst two weeks for the first trading session of the year. we continue to watch the level of the japanese yen to see the direction of some of those big exporters. right now it is to the downside of the greenback. the kospi is also up 0.1%. this of course after a lot of volatility this week touched a 19 month high earlier in the week. we had a risk off session in the last couple days. the asx 200 slightly higher. kiwi stocks are not doing that much.

of course there is a lot to digest for investors across asia. economic data releases across the region, including the philippines inflation numbers, cpi readings from thailand, inflation data in taiwan, not to mention hong kong releases its gdp estimates. india also releasing its gdp estimates. let's bring in our next guest right now. she is expecting india to maintain its yearly growth momentum at over 6%. with us is the executive director and senior economist at dbs bank. great to have you with us. we have seen a lot of optimism already about the indian economy for the past year. what are we going to see in 2024? radhika: so 2024, the economy did very well in '23, so if you talk about the fiscal fy24, wh ich india tracks, the growth is

likely to be closer to 7%. i think the advanced estimate that is going to be out later on friday are going to show those numbers as well. if you look at the breakdown, what you are seeing is there is a cycle that has picked up, led by households as well as the government. you have seen a lot more public sector investments going into sectors that are helping to improve trend growth as well. into '24, we expect the growth momentum to be strong. externally, yields have come down and the dollar has weakened somewhat. that provides good news to the external backdrop. the one thing we are watching out for is the demand. global growth slows much more, that could be a risk to watch out for. otherwise, india's domestic dynamics and catalysts are

hoping to offset what is happening in the global landscape. shery: given what is happening globally, how soon will the rbi need to pivot? radhika: i think the rbi has made it quite clear that the policy is predominantly driven by domestic concentrations. to that effect, inflation was consistently above their midpoint of their target, and they continue to tighten policy. since 2023 now they have settled rates, or essentially the rates are on hold. at the same time, to express their price stability stance, they have kept liquidity tight, they have kept bank rates high. overall i think the stance is still hawkish relatively speaking. we don't expect them to pivot towards rate cuts too soon. our base call has been that

inflation nears about 4%, the midpoint of the target, and it is not conditional. if it changes, they will cut rates. we don't see that happening in the first half of 2024. shery: we have seen stability in the indian rupee. how is that playing into the rbis's calculations -- the rbi's compilations? radhika: the central bank has been -- so currency stability is a clear part of the monetary policy mix. what he of -- what you have seen in the rupee is it is very stable. volatility has been low. when you see the broader dollar correct, the rupee maintains the levels it has had. going into '24, i think what the central bank would be comforted by sea and is a stable currency, a currency does not stray

volatility. geopolitics is ever-changing. if you see another leg up in commodity prices, you don't want that to aggravate an inflation problem at home. so a stable currency works really well. again, it allows them space to look at what is happening with inflation, to the macro environment, and to global dynamics. insofar as right now is concerned, i think it plays to the comfort of the central bank. shery: will we see political stability? polls are suggesting that prime minister narendra modi will return to power in elections in april. radhika: india did host five state elections back in november '23. those results were watched closely because that was expected to provide a pre-election glimpse of how the ruling party and coalition is doing. what you did see coming out of those results is the government fared well, much better than

expected in certain states particularly. that kind of put to rest worries that there could be political instability or risks of swing in terms of how the elections go. state elections do not give you a good idea of the fed elections. some of the private sector services are telling us that. what happens is that the economy, cyclically as well as structurally, it helps political stability. the manufacturing sector is taking off quite well for investors as well as domestic -- for foreign investors as well as the mystic -- as domestic. now heading into ev's and semiconductors as well. political stability provides a

backdrop, especially when we are talking about a long-term run for the next five to 10 years. i think state elections held in those directions. we will wait and see what happens in april and may of 2024. shery: good to have you with us. this is bloomberg. ♪

haidi: you are watching daybreak asia. the latest corporate headlines we are tracking. bloomberg learned bridgewater associates's flagship had fund -- hedge fund lost 6% last year, reversing what had been a 7.5% gain in october. the losses corresponded with the biggest to month gain -- two mo nth gain in global bonds since 1990. growing concerns over iphone sales triggered a second downgrade. one recommendation was lowered from neutral to overweight after holding a bullish view since march of 2020. he attributes the cut to a week macro environment in china. the downgrade follows a more bearish move by barclays. the maker of wilson tennis rackets filed to go public in the u.s., targeting an ipo of

more than $1 billion. sources say it could lead to a valuation of $10 billion. the company is backed by china and it drove nearly 1/5 of its revenue growth in the first nine months of last year. tencent has bought back a record $1.3 billion of shares in december, accelerating the pace of the new gaming regulations that rocked chinese markets. it boosted daily purchases after the shock announcement triggered a broad selloff. tencent spent over $380 million on buybacks this week alone. we are watching the consumer tourism hospitality space closely as we start to get both the numbers from the busy festive holiday season across new year's and christmas, but of course then also going into next month's lunar new year celebrations as well. it has not been such a great story when it comes to hong kong.

a lot of these iconic venues sitting pretty empty as we have seen hong kong residents instead making that trip across the border to the likes of change in instead of going -- likes of change in instead of going into hong kong. increasingly facing these mounting headwinds. the city's top nightlife spots being left pretty deserted as residents go to mainland china for cheaper shopping and entertainment options. you can see on that chart the acceleration when it comes to resident outflows in 2023 compared to the blue line in 2019. shery: this really challenges on all fronts for hong kong, that week sentiment translating to -- weak sentiment translating to developer demand being dampened. this is hurting the hong kong government as well. we have high interest rates given the rate hikes coming from

the fed and how hong kong and the fed's monetary policy are paying. we are seeing rising construction costs deterring builders from acquiring land. the hong kong government is not