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vonnie: you are watching "daybreak: asia," coming to you live from new york, sydney and hong kong. annabelle: we are currently down to asia's major market opens. haidi: australia just came online. the top stories. the u.s. securities regulator says it's x account was compromised after a faithful saying had been granted spot bitcoin etfs. caution returning to the market ahead of thursday's u.s. inflation data. plus blackrock cutting hundreds of jobs, blaming what he calls unprecedented challenges in asset management. we have some jobs numbers coming out of south korea. this is the december reading for the employment rate, rising to 3.3%. the estimate was for 2.9%. certainly a significant acceleration from 2.8% in the november reading. when it comes to the number of jobs added in december 200, 85,000 jobs from the year earlier.

labor force participation rate at 62.8% in december, and the population of eight over 15 years increased 0.4% from a year ago. senator lee that goes into question potentially, whether we see that changing of the mood music when it comes to the back of korea. expectations had been given how resilient the job market had been stale, that the market would stay at that record high level for longer. this has cast into question what we could see in terms of the higher-for-longer narrative there. we saw economists from bloomberg expecting a climb to 3%, but 3.3 percent exceeding those expectations. that record low, remember was in august, we are still at fairly low level compared with the post-pandemic average but at 3.2%, we have gone back to the post-pandemic average level. this will be interesting in terms of how much room the back

of korea has to keep rates tighter for longer. annabelle: that's right, something the bok will be tracking closely. continue to monitor signals of weakness in the labor market. here is the open for australia in the session today. we can see weakness creeping through. pretty range-bound as well. it follows the direction in wall street's trading given it was pretty subdued trading throughout the course of the session. traders waiting for any sort of direction. the inflation print will be the big one to watch. yields seem fairly steady. we saw treasuries holding above the 4% mark. the aussie dollar is unchanged against the greenback. let's change on because there is one data point to note in australia. we have the monthly inflation print coming up, in the next hour you can. see the previous reading from october at 4.9%. economists are expecting that to tick down.

it is something that rba will be tracking closely. they are waiting once we get the quarterly figures and the december reading as well, that is due just before the rba next meets in february. it could continue that trend of price pressures coming down lower. so even though the rba is likely to keep rates higher-for-longer, it is still something we will be tracking closely. inflation in australia has been running counter to the cpi print in the u.s. vonnie: exactlyvonnie: , we had a big rally in the monday session, a very choppy trading session on the tuesday session so we will see how things shape up wednesday. right now it looks like we may be to the downside. but it is early going. lots to digest for this market for for example, we just got word that intel is coming out with an announcement. we also got information of the juniper networks deal, that it will be acquired by hewlett-packard enterprises.

the moves those companies have made in the regular session are being exacerbated now in the post-market. hp is down in the post-market. as we look at bonds, you had bill gross soon to do that for percent on the 10-year is a little rich. we may see more reaction from those comments. " doyle, doesn't look like much is happening -- crude oil, doesn't look like much is happening, but commentators say that the fundamentals look more supported at this level. $72. the real action, the dynamite came after the closing bell in bitcoin, haidi. haidi: what a whiplash couple of hours it has been. the sec chair gary gensler saying that the regulator has not, in fact, approved bitcoin eds and that there x account was compromised. let's look at what has been

going on and bring in pdf analyst eric balchunas. a lot happening at the sec in terms of why and how this happened. ultimately i guess the market kind of moved on the rumor and sold on the fact. but what do you make of all of this? eric: i am not a crypto person. i am an etf person. . but i have been in the crypto world for about six months in an entrance way. and this is. par for the course. though this is the sec, so it is a bigger deal, obviously, but their wares a couple of false positive and fixed news events that have happened since blackrock filed the etf application, and today. so i am used to the twists and turns. that said, i think it was hacked. but what is weird about the heck is this, we are expecting tomorrow at this exact time when the tweed went out, exactly 24

hours, for the approval to happen. we heard it would happen between 4:00 and 5:00 p.m. eastern on wednesday. the tweed went out exactly 24 hours before -- felt like a scheduled tweet, but on the wrong day. they aren't saying it's wrong. that is notable. they are saying it was compromised, not saying that this is not true and we will deny them. it says they haven't approved them. we think they will approve them tomorrow. the big reason why is that they have to make a decision in the final deadline is tomorrow. they have to approve them or deny them. so we are expecting this to be just another weird blip in this long and crazy road to approval. at 4:00 or 5:00 p.m. i think we will see this happened for real and we will see the etfs launch come thursday morning. vonnie: we are seeing price action in the aftermarket now taking actual direction, it

looks like people ran back to their computers in the initial stages, as there was a whiplash response. but now we are very much seeing bitcoin up, back up about $46,000. it's not trading too much in the after hours. but there are other ripple effects from this as well. can we take from this that bitcoin will go higher if there is an approval? eric: yeah, this is tough to say. we can't make price predictions anyway, but the short-term price of bitcoin is hard to predict. but people want to know that when the bitcoin futures etf was filed, bitcoin rallied up until it launched, then when it launched, there was a selloff. in fact, that is still the high watermark of bitcoins price. so there is that.

the other thing i will say is, needy and long-term, these etfs will act like bridges to the advisor world and the institution world. the advisors in particular, they trust etfs, they are their preferred format for putting into portfolios. so the fact that these eds exist, they will be some traffic on that bridge. blackrock and fidelity involved really legitimizes this. so we think the advisor market, which is $30 trillion, they will nibble on this in the next three to four years. were thinking $50 billion to $100 billion in assets three to four years from now. then in five years i see it increment two gold etf,'s which is about 100 feet billion dollars -- -- i see it as an equivalent to a gold etfs, which is about $100 billion. it is big attempt to bitcoins market cap. vonnie: bloomberg intelligence

etf analyst eric balchunas, thank you so much. i want to point out that we are getting word from the sec that the false post on the bitcoin etfs was not sent by its staff. the sec is saying that the false post on the bitcoin etfs released after the market closed was not sent by the sec's staff. of course, just to reiterate, bitcoin is up against the dollar, trading above 46,100 dollars a coin. we don't have approval yet from the sec on any bitcoin etfs that are in the works. let's turn to bloomberg markets, kathryn kaminski is the chief we'll strategist and portfolio manager at alphasimplex group. she joins us now. the federal reserve and lael brainard are talking about prices not quite coming down, companies not reducing their prices perhaps in line with how information is being. do you see this as being a

challenge for the federal reserve in the months to come? kathryn: if that is the case, you would expect inflation is somewhat more sticky so it means we may take longer to see cut. if you look at whether market is, the market is pricing in cuts coming in sooner rather than later. i think that's where we will have a bit of a disconnect. i would have to agree. vonnie: if that is the case, when do you anticipate we will start to see cuts? the markets are not fully on board with the federal reserve and its potential three cuts this year. kathryn: the challenge: we have to see more data on the inflation front. i do think, if we look where we are now, we have not gotten to target on inflation and, if you look at signals in general, they have been relatively positive, but there is still a lot of uncertainty. the biggest technical

signals are the fact that stock-bond correlation continues to be positive, bond volatility continues to be very high and elevated. you were just mentioning this, bond's having equity-like returns. it is helping me figure out where bonds have to be. i just don't think anybody knows how we will navigate this yet. so our view is that there is a lot of different outcomes we have to think about this year. we are actually thinking about a soft landing is a bit optimistic. that instead it will be more of a range, more of a pendulum going back-and-forth between different views on how we get there. vonnie: a bit of a bumpy ride, as you put it. one thing you can say with a bit of conviction is that after nine straight quarters, fixed income signals are finally in that long. you are looking for a steepening yield curve. what do we do with that? kathryn: technical signals had been short fixed income for nine

quarters. this has been one of the biggest bear trends in fixed income for decades. what is interesting about that, is that has shifted course and many of the signals have moved directions and asset classes. we are definitely moving to a new trend environment where market trends look more like a soft landing right now. when you think about it fixed income trend, the next thing to think about is the steepener. where you will think about that is being along the short end, and perhaps short the long end of the curve, expecting that you will have a steeper yield curve at some point. . in normalization of yields that we have been looking for, for quite some time now. vonnie: what about stocks. if you are not certain about what is going to happen, but you know there are some signals telling us certain things, are there areas of the stock market where you can be a bit more convinced that we will see better returns? kathryn: this is a good question

, because we have seen much more resilience in the u.s. markets versus asia and china. that trend has worked relatively well. but when he think about how to focus on the equity markets this year, it is going to be a little tricky, because it will really depend on what happens with rates. that is why i said that until right can come down, until we figure it out, it's better to be a bit conservative and also think about which areas in terms of geographically, or sectors which might frothing from this type of scenario. vonnie: interestingly, you are convinced of long japan, short china will be a good trade. give us some context. perhaps the short china portion might be easier to understand than the long japan, given we have seen the runoff on japan. kathryn: good point. the challenge is that signal

has worked well. the nikkei has hit almost a 34-year high, so we are definitely moving into new high territory. but until we actually see a policy change in japan, we are still going to see potential possible upside in japan. this has been the case with the yen, people have been second-guessing the yen trade for two to three years and it has still had some legs. we need to see actual confirmation that that trend is over before we can give up on some of that conviction. vonnie: katie, thank you so much for your time today. kathryn kaminski is chief research strategist and portfolio manager at alphasimplex group. still ahead, taiwan's opposition kmt party is seeking to capitalize on the false missile alert that is raising anxiety levels just days before the presidential election. we talk to their candidate later this hour. but first, boeing ceo says the

firm needs to acknowledge its mistakes after a midair fuselage blowout. and upbeat under all hands meeting, next. -- an update on their all hands meeting, next. this is bloomberg. ♪ to help you see untapped possibilities and relentlessly work with you to make them real.

haidi: the wall street journal is reporting that boeing's ceo dave calhoun has told employees at the company needs to acknowledge its mistake. he called for an all hands meeting on tuesday with a focus on safety. bloomberg's katrina nicholas joins us now. what do we know about the meeting?

we know that for boeing and its leadership, it's a key transition year. katrina: it's a mea culpa moment. they held this all hands meeting at one of their 737 max factories outside seattle and it was broadcast to all employees worldwide. and calhoun is promising transparency, edging to acknowledge the mistakes. he was up there with the chief planes ceo and also michael delaney, who is in charge of safety. employees telling us they were encouraged to speak out if they see problems, not be silent, to speak out, and the engineers were encouraged that if there is a problem, just begot about it -- speak out about it. it is a bittersweet problem for boeing. the other issue they had was their december orders. it was a record month for them. 301 deliveries placed for their

max, their best-selling planes, 301 deliveries in december in total. that brought it up to an annual total of over 1300 jets. so this is something that boeing should have been celebrating, but instead it is being clouded by this alaska air event over the weekend. vonnie: yeah, i mean, news bolts. come on. it beggars belief -- loose bolts. what is the latest on that front? katrina: that is what the ntsb did say last night and another press conference. the focus seems to be around these four missing bolts, that would have held the door plugged in place. ntsb investigators saying yesterday, the question is were they there indeed in the first place? who knows? what happened is the door moved up vertically, and because those

bolts were loose, the doors moved up past the first amendment to hold them in place -- past these fasteners that were supposed to hold them in place. so this is something i think investigators will focus on. that news also came after united airlines and alaska air also said they were finding more loose bolts. we had the regulator in india saying that one of the jets they examined how the washer missing. lots of concerning news around that engineering front. vonnie: you would like to know your airplane was fully assembled before boarding. bloomberg's katrina nicholas, thank you for joining us. meanwhile black rock the world's biggest asset manager, is slashing 3% of its global workforce, about 600 employees. bloomberg's su keenan joins us.

it's a dramatic shift in the industry cited as a reason? su: yes, the ceo and president informing staff that they are seeing the most profound changes since they founded blackrock, which again, is a major asset manager. at this is the latest in a series of staff cuts. they are announcing a roughly six hundred-worker reduction. you may recall they announced cost of 500 workers a year ago in january, then cutting a smaller amount in june. blackrock is among several big-money managers including wellington and t. rowe price who have recently cut jobs and redirected budgets. what blackrock is saying is that they expect to have more staff by the end of the year. . what they are actually doing here is cutting the budget and redirecting. they are saying that etfs have become the preferred vehicle for both index and active investment strategy.

across the globe, including in europe and asia. in your memo, they said that of all the changes they are seeing, perhaps most profound are the, quote, "new technologies for its to transform the industry." ." you have to believe they are referring to ai among others. blackrock thing to expand into the growing market for alternative investments with the goal of doubling revenue for private markets over the next five years. they have stated that. the firm has more than 9 trillion assets as of december and yesterday to see a lot of them report earnings. they report fourth-quarter earnings on friday. haidi: reporting more than $7 million in net trading revenue for the last five month of last year. su: this is according to our bloomberg source who has had access to some of the data. interesting because it shows you that firms such as jane street

that have a proprietary trading mechanism have been at full tour windfall. $7.3 billion in net trading revenue. it follows on the heels of 2022's $10.7 billion of revenue. this was exposed to investors who were privy to some of the debt deal information. they say that the company is expected to generate $3 billion to 3.5 billion dollars in net trading in the fourth quarter, at or exceeding what they made in 2022. it's no surprise, the mix of the recession, the rate hikes, the wars and the geopolitical current we have seen, there has been huge gyrations in trading and firms that use technologies and algorithms to capture profit from the differential in different asset classes have really done well. it is also noteworthy because jane street is one of those companies that can actually create etfs.

this emerged during all the focus of the spotted bdf applicants that they are the preferred broker of choice to be involved in all those potential issuers. back to you. vonnie: bloomberg su keenan, thinking very much. and you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." terminal subscribers, go to dayb . also available on mobile, on the bloomberg anywhere app. you can also customize the settings as well for the news on the industries and assets that you care about. this is bloomberg. ♪

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haidi: you're watching "daybreak: asia." . one of the top stories were

following, amazon streaming site which is poised to cut 35% of its staff, about 500 workers. several top executives have left in this fate of a few months. we are told the business remains unprofitable nine years after amazon's acquisition. hewlett-packard has agreed to buy juniper networks for $14 billion. it will expand its business in networking, but the move is gaining skepticism from investors and analysts alike. there is a 32% premium over jennifer's closing price before jennifer's closing price before it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. vonnie: breaking news now. japan labor cash earnings for

november coming in weaker than to inflated. japanese salaries in november rising from a year earlier according to the ministry of health, labor and welfare. up to percent. the estimate was for them to beat up 1.5%. certainly not keeping up with inflation in japan. we were anticipating we would be less than october's increase because in october, there were different base effects and it was mostly a bonus issue as most -- as to the base salary. adjusted to inflation, real wages actually found 3% year-over-year -- real wages actually fell 3% year-over-year. the yarn was trading weaker, right now at 144.42. futures were higher and continue to be higher after we learned that wages in weaker than anticipated, growth wise, in november, rising 2% from a year

earlier. belle is having a look at the broader market across asia. annabelle: just tracking the reaction in japan stocks. given we have futures that just opened that contract in singapore. pointing to some gains here. it's partly coming down to a boj story because one of the reasons we have seen such a big run-up in different meme stocks over the course of last year was that the boj was sticking with this easing policy settings. you mentioned another data point house that they will be looking to justify those decisions. the yen the changed. equities generally in the dust the yen -- the yen little changed. in wall street, stocks are looking ahead to the u.s. inflation print coming thursday. what else we have been noting on the date upfront is the unemployment data in north

korea. let's take a look at that, because includes into expectations about what they're be ok will be doing. the bank of korea is the first asian central bank to meet on thursday. the expectation is we will see a hold. but when you look at the economic data that has come through, that adjusted jobless rate, for instance, rising to 3.3%, it points to that tell. the bond market, the yield is that an 11 month low. pressure is building on the back of the mayor -- bank of korea to ease. their has been resilience in the economy, but still, consumption is expected to weigh on the course of 2024. it plays into the narrative. vonnie: we will be back with you shortly. the president of eurasia group says washington is incapable of containing geopolitical risk and

is washington itself as the top 2024. he says countries and institutions have suffered decades of decline and now they face fresh threats. >> when you have the former secretary of defense under some saying, this man is a threat to democracy -- he was in charge of american national security under trump. when you have the person who was running having tried to subvert a free and fair transfer of power, doing everything in his power to do so, in a functional democracy, that would be the number one issue of the election. if nothing else would be close. is it that the united states is not a consolidated, functional democracy? because there isn't no other advanced democracies, no one else in the g7 is having the problems in legitimacy of the

political institutions of the united states is experiencing in 2024. >> what do you think it is. do you think it is a functioning democracy? >> no, it's a hybrid system. u.s. democratic institutions have significantly eroded over the course of the past couple decades. we have normalized that because all the things that are unprecedented, as they happen, and we still live here, we are basically saying, ok, i guess that is the way it works now. impeachment doesn't work. we can impeach someone twice and they can still run again? i guess that is how it works. you can have nine indictments? you can post and say things that you never would have heard from -- i guess that's how it works. set against the context of world 's very powerful and very functional economy, in the world very powerful defense capacity, you would say, ok but the united states is not a functional democracy. but it will be different. weekend normalized the dysfunction of the u.s.

political system, the illegitimacy of its institutions and the fact that democracy in 2024 in the united states is in crisis. that is a reality. and our allies know that. they are deeply worried about it, all of them, around the world. and our adversaries see this is potentially a huge opportunity for themselves. >> where do you see us 12 months from now, what two things look like? >> first of all, let's talk about march, april, may. tom, said you need to completely rewrite this then when trump gets the nomination, which is very likely. it will become overnight very powerful on the u.s. and global stage. over the will be loyal to him know that right now they still have hedging capacity. the media that is following and supporting trump. and the ability to raise money to drive that campaign. that means is with of few pronouncements, like there will never be a war against israel if

i was president because i should iranians, i announce the assassination of qassem soleimani -- that will be the policy for trump and, therefore, the republicans. president zelenskyy is corrupt, i will not give him billions and billions of dollars on the back of the american tax payers -- that becomes the policy. so the window of what is acceptable policy-framed debate in the united states is going to change very dramatic when trump becomes the nominee, again, assuming that. in 12 months time the mistakes are a lot higher for both leaders done they ever have been before. so if trump wins, biden and many people around him believe that they will face legal jeopardy. that trump will politicize the fbi, the doj and the irs and go after them. a mccarthyite prioritization. the stakes are much higher than

what we saw in 2020. haidi: the eurasia group president ian bremmer speaking with our colleague jonathan ferro. u.s. secretary of state anthony blinken has his road stop undercutting governance funds settler violence. israel has largely ignored growing calls to scale back the intensity of its campaign in gaza, and is pushing ahead with its plan to target, skip leaders. >> we continue to stand with israel in ensuring that october 7 can never happen again. we believe the submission against israel to the international court of justice distracts the world from all of these important efforts. and moreover, the charge of genocide is meritless. haidi: let's bring in our own david miller senior fellow at the carnegie endowment for international peace. he was previously a state

department negotiator on middle east issues. really great to have you with us. how big is the disconnect now between israel and the u.s.? because we see secretary blinken and president biden continuously pressing for israel to fundamentally change in military tactics. on the other hand, we see operations pushing ahead almost as intensive as ever at a time when we see the humanitarian crisis worsening. is there any room for compromise? >> there is absolutely room for compromise, in large part because the biden administration does not want and will not allow a sustained public site and fundamental discord both on strategy and tactics. the administration has an expectation that by the end of january, the character of the israeli ground campaign in the south and central of gaza is going to change from the division-sized operations with an emphasis on artillery and airstrikes, heavy, comprehensive artillery and airstrikes to, the

more intelligence-driven operations which will minimize the exponential rise in palestinian deaths and allow for much more humanitarian assistance. not to dribble into gaza, but to surge into gaza. in northern gaza, that israelis have their forces, and i think are willing, under some pressure from the united states, to allow for the students to return. so i think there is a real intent, at least in washington, to avoid such a breach. haidi: there is pressure on both sides, of course. it's an election year for the u.s., and for israel, you have said he needs this victory. when does the clock countdown? aaron: for benjamin netanyahu there will be a reckoning. the problem is there is no mechanism to remove him.

israel is in the middle of a campaign of war. he has two governments basically -- a war cabinet which increases his parliamentary majority, benny gantz, foreign minister of defense has been brought in. and he has another government which is the most right-wing government in the history of israel, with two ministers who are in pursuit of policies on the west bank which are annexation in everything but name, actually declaring that they want to remove palestinians from gaza. there is no mechanism right now to get rid of this israeli prime minister. his coalition will not self-destruct. it may well be that he will be prime minister of the state of israel this time. in a year or so, there will be a state inquiry. if it passes any precedent, i think public pressure will win out and at some point there may be either a reconstitution of

government and elections. for the foreseeable future, let's go 2024 the year of gaza, i think you will be dealing with the israeli prime minister. haidi: you talk about the public dimension of this war on public -- and public pressure. it has been across social media, a huge amount of criticism and distress. not to mention cases and investigations at both the international criminal court, and the international court of justice. do these things matter in terms of meaningfully creating change in the way that this narrative is being written? aaron: i think they matter. the question is, will they fundamentally succeed in altering the course that the israelis are on? the answer to that is no. there is only one power center that has perhaps the capacity to do that, and that is the biden administration. and frankly, even though there has been enormous criticism of the administration's efforts, on

three issues, it has done something to press israel. there wouldn't be a scintilla of economic or humanitarian aid into gaza without pressure from the united states, number one. number two, i doubt that they would have been hostage negotiations without the personal intervention of the president. and #3, i think the israelis might have actually preempted on the israeli-lebanese border against hezbollah and we could have easily been -- which we are not now although i still would not without -- a serious and dramatic escalation. the problem is you have an israeli government which cannot engage in what i would call, sober and realistic planning for the day after. because the minute mr. netanyahu does that, agrees to the return of the father student authority, agrees to the extent that his -- to the return of the palestinian authority, refuses to

accept a two state however problematic it is, how distant the negotiations in that space may be, his coalition will collapse. that is the issue. the prime minister has completed his own political and legal travails with the war effort. and that is not a good place, frankly, to create sound decision-making about the future. not a terribly stable basis for the u.s.-israeli relationship either. haidi: secretary blinken said this week that saudi arabia and other nations remain still interested in potentially building, normalizing relations with israel after all of this, but that really depends on the path to the palestinian governance afterwards. do you think that is an enticing enough carrot for israel?

aaron: interesting. it is intriguing that the abraham accords countries -- the uae, the bahrainis, have not broken relations with israel despite the fact that you have almost 23,000 palestinians killed and a degree of destruction that is unprecedented in the history of the listing in conflict between hamas and israel and gaza. no fracture in relations. i think, frankly, that mohammad bin salman will still be very interested in some degree of normalization because of what the u.s. is offering him. what the u.s. is offering him is, number one, a mutual defense treaty. i asked myself the other day, when is the last time the united states concluded any mutual defense treaty which obligated the united states to come to the defense of another country? it was the revision of the u.s.-japan treaty in 1960. mohammad bin salman once help with a nuclear reactor and other

bells and whistles in terms of military systems. so if he gets that from the biden administration or a successor, will he be willing to settle for a sort of palestinian-state lite sort of approach? the answer is overly yes, he would be. haidi: there is so much to talk about. before we let you go, i would like to get your views on, new year, but same issues when it comes to ukraine. is the strategy towards russia of containment still one that is the right path to take? and i guess also with the u.s. indirectly engaged in two wars, how stretched is the bandwidth when it comes to potentially having to deal with something involving china and taiwan? aaron: we have to make it a virtue of necessity. the battlefield dynamic will not produce significant ukrainian advanced.

which will somehow force vladimir putin to negotiate. the alternative is a long war. the long war mandates -- compels containment strategy. -- containment strategy, sad as it may be, i worry about it having worked for republicans and democrats and having worked for republicans and democrats, although these republicans are not in my month, republicans, that depends on american politics and it very much will turn. the national interest of the united states on this issue which is critically important to our defense and security, it is going to turn on this coming november's 2024 presidential election. that is an extremely worrisome state of affairs. when the national interest, frankly, cannot transcend narrow political interests. that, i am afraid, sadly, is where we are now.

haidi: aaron david miller, we great to have you with us. we appreciate your time and insights. senior fellow at the carnegie endowment for peace. coming up next, opposition party kmt is seeking support we will. get an update from one of their rallies just ahead. this is bloomberg. ♪

vonnie: you're watching "daybreak: asia." china has top envoy to the u.s. says beijing has no room to compromise with those advocating for taiwan's independence. the ambassador also urged the u.s. to follow the one china principle. taiwan votes for its next president this saturday. china has previously called taiwan's ruling party, it, lai ching-te, a troublemaker, whose rules risk sparking conflict, relations with china are top of mind with voters ahead of saturday's election stephen engle. reports from a rally for one of the opposition candidates from the traditional beijing-friendly kmt party. stephen: it was a homecoming crash for a position kmt presidential hopeful toyota e as he rally the faithful -- hou yu-ih as he rally the faithful.

the other presidential candidate of the taiwan people's party are making separate last-minute pushes to defeat the more independence's-minded ruling tpp and its candidate. it's a three horse race for saturday's election after the two opposition camps field to form an alliance. a front union that could end up splitting the opposition about. >> they feel like the biggest room for cooperation between kmt and tpp is the number of seats in the legislature. our goals are the same. switch the party in power. the dpp government has not been doing well for the past three years. people are more fearful. stephen: that fear she is referring to was amplified to the afternoon when cell phones island-wide layered emergency alerts erroneously saying that it chinese missile had flown over taiwan, and for citizens to be aware.

that kmt was quick to latch onto the mistake. >> when i first got the alert, i thought it was an earthquake. it turned out to be just a satellite. but the english in the message that it was a missile, so it made people panicked. even though the dpp came out and apologized, it never should have happened especially now when the election is so intense. . it made people feel threatened by china, as though they want to take over taiwan. i feel like the dpp manufactured this. >> these two supporters felt the same way mc closer ties with china as a benefit, not a threat. >> we need to keep good communication with the chinese communist party. stephen: the two main opposition candidates agree that the dpp is putting taiwan at risk and that they must defuse tensions across the taiwan strait. now on the other hand, they cannot show to the taiwanese

people ahead of the selection that they are cozying up to beijing too closely and that people could perceive that their efforts to get closer to china could put the long, hard-fought democracy and freedom here in taiwan in jeopardy. >> i think being closer with china for trade is not a bad thing. but freedom of thought is what i want more. so i don't want to be closer with china. >> it may be the very issue that decides the vote and sets the broader geopolitical tone in east asia. [shouting] > it's very important in this election because it is life or death for the republic of china. because china is our roots. china and us are inseparable. stephen: stephen engle, bloomberg news. vonnie: and we will have from taiwan all week. this is bloomberg. ♪

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the ceo spoke to us at ces in las vegas, saying he now expects driverless vehicles to debut by the end of the decade. hard not announced a joint venture with gm in october with cruise, although cruise's license has been suspended in california, parking its entire fleet. >> we are thinking of sometime in the late 2020's for introducing self-driving nichols. the car we are introducing for 2026 will not have such technology. vonnie: in new system is designed to help automakers. it will allow carmakers to share software more easily across models. the market opens in seoul and tokyo are next. this is bloomberg. ♪

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counting down to asia's major market opens. a choppy session, waiting for the next catalyst. it could be the boj but the talk will be about bitcoin it is fair to say. heidi: monitoring whiplash this morning. we are watching central banks and inflation. he imports like wages will be key. annabelle: a dovish boj is one reason we are seeing those gains. let's take a look at the market open. japanese equities traded at 1990 highs. analysts say there is room for

gains over the course of the year and that is being pushed. you've got equities in green this morning, one of the brighter spots in the asian equity session. what is playing into that is eco-data. another one coming out in the last hour was wage growth. it's an unwanted development for the boj, they're watching wage negotiations over the first quarter. weaker wage growth is a reason to keep easy policy settings in place. still seeing the yen holding at 145 as we continue to see u.s. 10 year treasury holding above 4%. we've also got in korea the adjusted jobless rate rising,

changing what economists had been expecting within estimate of 2.9%. we are seeing cracks forming in the labor market which has been resilient. consumption is expected to slow and that's a reason why there's pressure on the be ok to cut. if you look at what be ok is expecting the first central bank to meet on thursday, all economists expected to hold rates at 3.5%. the kospi is a little higher but let's change on and look at ozzie stocks so far in the session as weakness is coming through from the materials index

which is full. iron ore back down to the 135 mark, historically elevated but we've seen weakness. demand dynamic playing into it so certainly an interesting session so far. haidi: always interesting is japan. the nikkei hitting the highest since the 90's. let's bring in our next guest. joining us is the head of the investment institute who served as deputy governor at the bank of canada. in terms of where the nikkei two trading, it was quite a year for risk assets but now we see stocks rallying to a 34 year high. his progress valid in terms of

this time it really is different? >> very much so. we turn positive for the reasons we already discussed. we have a challenging macroenvironment. that does not apply to japan. inflation dynamic is healthier and corporate governance push is real, continues to happen. we have a boj that managed to move toward tweaking its policy without creating a massive disruption so we have seen evidence that it's nothing to be concerned about. we think that will go into 2024. japan has done well but there is room to do better even compared

to other markets. the u.s. still has some catching up to do. haidi: how big is the risk not just pertaining to japan expectations. certainly pricing for other central banks to cut, do you think markets have gotten ahead of themselves? >> yes, i do think so. but we've had a significant green light from the fed where we had chairman powell basically fully endorsing inflation and while i don't think this is a done deal, i think we will see something more complicated playing out, the reality is this is the scenario that the fed is

going with. they created the expectation that the fed will be able to cut rates despite inflation. and that is the big dynamic that will create support for risk assets that will continue for months. that said, we don't think inflation will go toward two in 2024 but eventually inflation comes back up toward three and that will be something to watch in 2024 as the shifts means aggressive cuts. we will see two or three cuts from the fed, not six or eight as the market has been expecting. haidi: 2023 was the year we saw

global assets shrugging off the war in ukraine and casa. if the u.s. china conflict was to add to that picture do you think assets will be impacted meaningfully? >> we believe that beyond the macro backdrop obviously this environment is different from prior to 2020. one reason is we have geopolitics, a mega force that investors need to grapple with. i don't think this is something that leads to a risk off environment. if there is one lesson from 2023, it's that you've seen volatility driven by central banks, you know, expectations. that continues to be the case

for 2024. that said geopolitics will be a concern. additional volatility, but it does not create a different market environment overall. annabelle: are there contrary and views that would shape up the year? any interest in exposure to chinese equities? jean: the main one is the market has been running aggressively with a soft landing view. i think we are of the view that inflation while it will go to two, is going to be complicated. we see the news going in a direction where we see at play dynamics that would bring inflation toward three.

labor market, wages growth, services price. it will be a story later this year. so that leads us to opportunities to be nimble now. and be bullish. at the same time, we need to be able to pivot in 2024. we need to be dynamic and active. that is somewhat contrarian compared to the systematic optimism you see in the near term but will get more challenging. when it comes to china our biggest surprise in 2023 was the restart that we talked about. a significant rebound inactivity and what we discovered was there was something missing. it was the spirit of consumers and investors.

i think it calls into question the appetite of sentiment about the future. that makes us more cautious. a contrarian view, we are with the consensus that the outlook is trickier for china. haidi: head of blackrock investment institute, great to have you with us. let's get to annabelle looking at how we kick off the morning. a wild ride when it comes to bitcoin. annabelle: to say the least, it has been some pretty crazy statements we have had out to put it in context, if your waking up this morning we had the fcc saying they had not approved a bitcoin etf. there was a post that was on the official account that was debunked.

and so that included fake comments. they were going to push ahead so to recap, saying bitcoin etf's are not approved. the market reaction, bitcoin was trading up again but crypto linked companies, with on them advancing strongly and today a pullback is coming through. more on that but we can change to another story that were tracking in commodities. iron is down for a fifth straight session. fresh dater out from china. that's still in the doldrums. industrial metals, weakness coming through so far for the stocks there. vonnie: up next, boeing's ceo

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vonnie: u.s. securities regulators says it's main social media account was compromised when a post said it was approving bitcoin etf's. we've heard more from the sec, tell me what we're hearing? >> they gave further clarification on what happened with its social meteor account in the last few hours. this statement says they did not have granted approval for spot coin etf's. unauthorized access, unauthorized activity for brief amount of time, the access has been terminated. the sec will work with authorities to try to get to the bottom of what exactly happened in this case.

something that did cause a lot of confusion because earlier we had a statement reportedly from the chair, gary gensler, saying they would proceed. something that he said on his personal account, that it was compromised and there was unauthorized access. very interesting timing because we are down to the countdown now for when we do see something possibly being approved. haidi: does this affect the process for what comes next, the approval? vonnie: yeah, well, i think out of all of this what does not change is the sec is duty-bound to respond in the deadline is january 10. we know about one dozen companies have applied to list etf's and the sec has to take

action on at least one of those applications by that point. the people we spoke to say that even with all the confusion perhaps it wasn't in the cards for today. there is expectation that we will see something approved, that is what analysts are saying. this process has been 10 years in the making and bitcoin throws out a lot of wildcards, volatility. you don't want to count your chickens but it's something we will track closely because the countdown is on and less than 24 hours until they have to respond. haidi: turning to other top stories in the corporate space, ceo dave calhoun says boeing is

grappling with a fuselage below out. bloomberg's katrina nicholas joins us in sydney. what was said in the meeting? i'm. 's about the tone? katrina: boeing held a meeting at its factory and ceo dave took to the stage flanked by the commercial airlines chief and mike don't laney who heads up safety. they acknowledge they made a mistake, saying how serious this was and it should never happen again. also focus on quality assurance, people are encouraged to say something if they see lapses taking place in the manufacturing process. december delivery orders were a

record. they had 301 orders for their best-selling jet 370 orders for december, so i record month. the alaska airlines incident is detracting from a time to celebrate at boeing. vonnie: it could have been worse. ntsb may widen the investigation so what is the latest on the run? katrina: they said that they would consider widening the investigation. the focus is around bolts that have not been found. they would have stopped the door

in my cabin depressurization that we saw. there is a question around where they there in the first place, so that is something the ntsb will look at closely. it came after united airlines and alaska airlines said they found no box. in carriers in india said there was a washer that they did not find. so this is very worrying from an engineering perspective. haidi: katrina nicholas in sydney. more to come, this is bloomberg. ♪

♪ >> i think we have to recognize

how incapable the united states and our present set of global leaders are in containing geopolitical risks and conflicts. the united states has zero ability to make messages land with the actors on the ground to are escalating the conflict. haidi: yen brim are on why he thinks the u.s. is incapable of containing geopolitical risks. china upgraded diplomatic ties last year in a bid to rally support from the global south. they describe ties with 17 countries and territories. the highest number since xi jinping took power over one decade ago. china's envoy to the u.s. says beijing has no room for compromise with those advocating

for taiwanese independence. ambassador said he is urging the u.s. to follow the one china principle. china called taiwan's candidate a troublemaker. his views risk sparking a conflict. relations with beijing are top of mind for voters. stephen engle reports on an opposition candidate from the kmt party. stephen: homecoming crush for opposition presidential hopeful as he rallied the faithful in his hometown in southern taiwan. the other opposition candidate are making separate pushes to the the tpp -- to defeat the tpp.

it's a clear horse race after two opposition camps failed to form an alliance. a fraught union that could split the opposition vote. >> the biggest room for cooperation is the number of seats in the legislature. our goals are the same, to switch the party in power. the government has not been doing well for the last few years and the people are fearful. >> that fear was amplified tuesday afternoon when cell phones islandwide layered emergency alerts erroneously saying a chinese missile had flown over taiwan and for citizens to be aware. kmt was quick to latch onto the mistake. >> when i got the alert i thought it was an earthquake and it turned out to be a satellite.

the english said it was a missile so it made people panic. even though they apologized, it never should have happened, especially when the election is so intense. it made people feel threatened. i feel like they manufactured this fear. >> these supporters see closer ties with china as a benefit, not a threat. >> we need good communication with the communist party so we will not have war. >> to maine candidates agree that the tpp is putting taiwan at risk and that they must diffuse tension across the taiwan strait. on the other hand, they cannot show the taiwanese people that they are cozying up to beijing to closely and that people could perceive their efforts to get closer to china could put

democracy and freedom and taiwan in jeopardy. >> being closer with china for trade is not such a bad thing but freedom of thought is what i want more, so i don't want to be closer with china. >> it may set the broader geopolitical tone in east asia. >> it is very important, this selection because it is life or death for the republic of china. china and us are inseparable. stephen: stephen engle bloomberg news, taiwan. vonnie: special coverage from taiwan all week in the lead up to the vote in the full results and analysis on monday. taking a look at where we stand, equities across asia, one of the only markets higher is japan.

nikkei 225 is climbing after we got base pay growth at 1990's levels. base pay for regular workers rose 1.9% from one year earlier according to the reading. that is on the boj's preferred measure so it strips out sample changes. the kospi is down, australia and new zealand are also lower. we have the yen trading at 14457, fractionally weaker. plenty to come o

♪ haidi: we have he inflation numbers for australia.

we are uh -- really seeing cpr at a month on month basis. also falling from 4.9% in the previous reading. we were expecting a pullback given prices were part of the equation expected to slow in november. bloomberg economics he year on year at 4.4% and the beat softer than that. there are expectations that the rba will wait for december numbers, before making real decisions about whether this is a sustainable downtrend. that shows the dynamic of inflationary pressures. some of these concerns over housing cost, insurance,

utilities, what we see next from the rba. annabelle: likely to wait until december numbers. the quarterly figures in turn. bo set up we are staying in the asian session, australian stocks tread water. we had not seen much reaction in bond yields but the key market to track is japan, that is the highest level for the nikkei since 1990. the big question is whether japanese stocks see gains. analysts are optimistic on the odds of that happening in one factor is the boj staying dovish. you've got corporate governance reform. so the other thing that's standing out is iron ore. let's take a look at five days

because were tracking a five day slide. prices still seeing weakness coming through for the property. iron ore, a clean ingredient for the real estate sector so that is playing into the biggest drag for asian stocks. let's look at the big movers in materials. a lot of those are coming through, you can see the drop in mineral resources down 5% at this point in time. haidi: over the next few weeks the governments from the u.s., u.k., eurozone and japan will flood with a pace rarely seen. let's bring in chief rates correspondent for asia garfield

reynolds. does this run the risk of a reality check against risk rallies that have been sustained? barfield: it is definitely something that the bond market started looking past when rate cut fever struck last year. as we saw in the first week of this when supply concerns are part of the reason for the pullback, it remained one of the key dangers that could mean that bonds don't do as well as six active or even that we see some losses. if you look at last year, we came into 2023 expecting massive bond rallies because the fed was done cutting rates. so that was going to be removed. this year we've got the same set

up, less of a risk of the fed acting as a major pain point. if the fed does not cut as fast, the question is what are the risks that will deliver losses for bonds and this is a key part of it. if investors decide that the amount of bonds are more than they want to absorb then governments don't have a choice. they need to sell the bonds. they rely on investors. if investors become more reluctant that is going to drive up yields. as we saw in september and october of last year if that becomes a concern that could lead to rapid repricing of bonds. vonnie: if the supply side it

matters what would be the drivers? barfield: one driver would be potential that central banks might not be as rapid as expected but the key is partly central banks and partly were banks have brought us to. a lot a lot of central banks bought an enormous amount of government bonds. apart from bank of japan they have stopped doing that and have moved to reduce the bonds they buy, so that is why this is a danger. not only are you getting more bonds, you are getting more plays in love private sector. the other side of things is counterintuitive and that central banks are slowing the global economy.

a slow economy is good for bonds because you know, lower growth means lower yields. but it can also mean that the supplied part of the equation becomes more dangerous because governments have been planning to sell lots of bonds. when growth does poorly it is harder to restrain those bond sales so you get the potential that we've got trading this year that could be much higher. if the global economy worsens. vonnie: it will all be about incentives. that was garfield reynolds there. tying this all in with currencies our next guest is long on the yen. fx strategist joins us now. chris, i'm curious what you make

of all of this data. we had data out of tokyo that showed gains slowing and then on the other hand we saw in our ago data that showed wages increasing without the base of fact that the fastest rate since the 1990's. what shape is japan's economy in? chris: you've got inflationary pressures broadening although the headline is slower, cpi and japan has at its fastest pace since 1993. outward pressure on wage growth is intact. the upcoming negotiation, we should see adjustments in wages. so is going to lead to a potential removal and the boj

stepping away from control. what is going to happen for dollar-yen is between the boj moving in the fed cutting rates. vonnie: it would have been around april seems to be what you are suggesting. what kind of level are you targeting one that does happen? chris: 138. it is pretty much likely. vonnie: 138 through 135 would be stunning. what does that do to the differential because at that point the federal reserve may have gone or be going the following month or maybe not.

chris: if you look at the u.s. labor market data there was a surprise to the upside. but everything is on the downtrend. all of this suggests that the u.s. market is starting to show up and whether the disinflation trend will be more entrenched is something we are paying close attention to. we think the fed is done and it could be as early as the second quarter where there is a rate cut. and that will play out in terms of narrow yields differentials between the u.s. and japan. vonnie: how concerned are you that the market might become

complacent? perhaps inflation is stickier and may even rise again. >> is important to note that this is not a one-way trade. expectations for the fed to ease can result in the dollar overshooting in the short-term term to the downside. you tend to see dollar of word adjustment. it's important to know this is not a one-way trade. the bias to sell rally is something that we are leaning toward. vonnie: i want to ask about the euro because fresh iterations that the ecb will cut this year, there is a wide divergence of views. it could be the first half and then the governors saying we

don't know what it's going to be. probably not going to be until later in the year. when does the ecb cut? >> our view on the ecb in the euro is a case where they will move rates this year but it is likely to be a case of a later time frame as compared to the dollar. on that note if you look at cpi data and some of the pmi's, it is still in contractionary territory but there are some signs so i think they do have some room to keep rates where they are for the time being. temporary support in the interim but we are concerned with the elections calendar.

it's going to be heavy and something we should keep a close look out for. vonnie: thank you for your time, christopher walken, fx strategist. plenty more to come, stay with us on daybreak asia. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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vonnie: bloomberg tracks two thousand companies over a wide range of sectors and analysts have identified 50 firms that warrant a closer look. among those are companies that are exposed to china's property market. francis chan and patrick long join us now. thanks for joining us. patrick, talk about property firms that may be impacted by china's crash? >> for china the property market is challenging for the first half. you see sales could drop year-over-year. this is the yen path. so say for example this is the parent company.

the challenges focusing on lower tiers can be challenging. for tier one cities, may be better. it is agile. those property service company with sales coming down. for those companies, they will have a big impact for the next couple of years. haidi: what are you expecting when it comes to policies support and how it could not meaningfully change the outlook. >> and mainland china we have easing and even for hong kong we see easing happening. but having said that we did not

see much impact for property sales. we would like to see more support from the government in terms of monetary easing or policy. this may take time to resolve and we look at hong kong. we also see another one where sales recover quickly. take a little time and cut rates, this year, for hong kong, take some time to factor in cuts to sales. so it's challenging for the first half. haidi: what do you see as potential exposure to china's banks?

francis: along similar lines with what patrick mentioned, the lingering property downturn in china will spill over or has already spilled over to the banking sector. we expect that to deteriorate. we have not seen a lot of deterioration last year but we expect to see more from the property developing sector in another area good be government financing vehicles, which as we talk about the imf, many economists in the world for years, now we have more prices unfolding this year. icbc which is the largest bank by total assets in china in the world could be the focus. we look forward to worsening

loan quality for the bank and charging more of -- for those sectors, hurting earnings in 2024. vonnie: it's a dire outlook. icbc and 10 other banks could struggle for revenue growth but what kind of risk would this be to the system, the nonbanking system and beyond in china? >> yeah, the top two systemic issues for the chinese banking system would be the property downturn, local governance financing the condition. following that could be the shadow banking industry. bankruptcy. just last week.

it may have spillover impact to other parts of the financial system including the banks. haidi: francis chan and patrick wong across to sectors to watch, properties and banks. more to come on daybreak asia. this is bloomberg. ♪

♪ haidi: ai is unsurprisingly taking central stage and ces. armand ceo spoke to us about the trends that they are seeing in the space. >> if you think about devices becoming smart devices whether it is a smart washer and dryer, tv, they all need a brain that helps them learn what to do. the brain is arm. we were talking about where is arm. those things i just gave you, washer, dryer, digital television, arm is the brain that makes those go. >> the connection between everything is ai. even a beauty and health care company, arm wants to be a part of the ai story so let's start with that.

the story of 2023 was the h1 hundred, the gpu goes into the server design. arm is not in that market but it wants to be so give us the scorecard of where progress has been. >> ai has been with us with some level. amazon alexa, ring camera, things with facial recognition. that is ai. that is running on arm, so we've already been there. what's happening with chatgpt has been that level stepping up, and level of learning and ai we have not seen before. a lot of that work is taking place with trading. nvidia's next-generation device, the gh 200, grace is the cpu.

even in the most advanced training modes are seeing arm being used. >> cristiano was here earlier. what benefit does arm feel a consumer that is willing to buy a smartphone in particular where they can locally run a language model or generative ai tool? >> is early days in terms of applications but hardware has capability now that can run ai algorithms. two areas that people really care about our latency and privacy. if you are running chatgpt or a personal assistant such as pie, every theory -- every query goes into the cloud. people who care about securing data will want the auger rhythms locally. >> trying to assess the

smartphone market in 2024, it is a mainstay but it goes to a functionality level. what can we put into a smart phone or enable a smart phone to do that drives the upgrade cycle and brings consumer enthusiasm? >> one thing which we've seen is that premium smart, expensive smartphones have done well and that is because people are trying to future proof technology and purchases to make sure they last a long time. still early days on these devices. in terms of running applications. but security and latency and power efficiency are very key. those are three areas that arm is good at. vonnie: that was arm ceo with ed ludlow. at ces honda walked back a plan to deploy a self-driving car by 2026.

the ceo told bloomberg he expects driverless vehicles today view by the end of the decade honda announced a joint venture with gm's autonomous vehicle unit cruise. >> we are thinking in the late 20 20's. the car for 2026 will not have such advanced technology. vonnie: that was honda's ceo with our bloomberg daybreak anchor. that is it from daybreak asia. markets coverage continues as we look ahead to the start of trading hong kong and shanghai. standby for china open. this is bloomberg. ♪