♪ haidi: good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories this hour. asian stocks set for gains with astrazeneca, the latest pharma company to deliver positive vaccine results. some analysts question the data, saying they fall short of the high bar set by competitors. joe biden set to name janet yellen as treasury secretary which is seen as market friendly

and someone who would work well with jay powell at the fed. extradition bill abuse and fundamentally unfair, a top u.n. panel slams japan's treatment of carlos ghosn, saying his repeated arrest violated human rights. let's kick off with the markets. australia coming online in hong kong. sophie: we are seeing the asx the aussie 1% while dollar's steady ahead of an online speech by the rba deputy governor. set for the best monthly gain on record we do have nikkei futures pointing higher with staying steady this morning. getting a lift from vaccine news and the prospects of what a yell and lead treasury may mean for stimulus. there may be some effects from risk related to huawei. the latest things around that along with the potential for more u.s. sanctions on china.

the offshore yuan holding steady, holding three-day declines. korean stocks later today, watching to see if that rally will continue after the kospi hit on monday with improving trade and earnings outlook. taking a look at the next board, oil this morning. back below $43 under a barrel. coming under pressure after hitting a september high on monday. we are seeing sometimes spread for crude futures. depression assome we see that curve. new york crude under pressure this morning by one third of 1%. let's look at the results from astrazeneca's vaccine candidate. we heard from the chief scientific officer that operation warp speed in the u.s. seeing in patients that receive

the placebo in the astrazeneca trial, severe disease indications. that's get a reaction from max neeson joining us. not great for the people who got the placebo in this trial but that suggests there is strong at efficacy data for this vaccine? max: it does. prevention of severe covid. not while the primary endpoint of this clinical trial, it is one that is incredibly important for its real-world use. prevent necessarily symptomatic infection which was the primary point of the trial, but it does prevent you from getting severely ill. that is a great result and one that may help uptake or drive broader use of the vaccine, even though they headline data on that primary point was a little more mixed than what we have seen from some of the other leading candidate so far. shery: tell us about that mixed

data because we saw some harsh criticism from one analyst on the results. numbere that headline which is an average of 70% which the company broke out into two different groups that received two different dosing regimens of the vaccine. one of them, a smaller dose followed by a larger one, had 90% efficacy in the trial to date. the other with two large doses, 62%. the criticism came from the fact picking awere cherry baiter to -- a better data set, where there was far fewer trials, tioeers. greater potential for statistical noise. less reliable of a result. that is a fair point. you cannot entirely rely on that 90% but i would say it is

promising and shows potential for results to improve over time if there is really a good rationale and further support for that other dosing regimen. even though there is that bit of uncertainty, i will say there is some positive to the trial of the severe covid outcome and the vaccine in general, much easier to store and distribute than the pfizer or moderna vaccine and cheaper than both of them. something that will be important as we try to vaccinate the whole world. shery: very important for developing economies that are now really looking forward to this oxford vaccine. what do we know about the distribution potential of this shot? max: that is a point that cannot be emphasized enough. pfizer, that vaccine requires super cold storage. something that will be a problem

in many developing nations. the moderna still requires freezing. astrazeneca is more stable than both of them, just needs to be refrigerated. very crucial for developing nations. the company bringing the price lower and signs some deals that will make it more available to developing economies ensures it will be really important. i just have to have enough available. manufacturing is the next big challenge. shery: max neeson. we will have more on the astrazeneca vaccine candidate ahead when we hear from the company executive vice president , the head of the biopharmaceuticals unit. on tuesday, bloomberg is launching the global covid resilience rankings. this project measures of the biggest economies have handled the coronavirus pandemic based on 10 key data indicators. coverage across bloomberg news and media room 8:00 p.m. sydney

time, 4:00 a.m. to new york. we have breaking news at the moment. we are getting headlines from cnn that the gsa has informed biden, president-elect joe biden that the administration is ready to begin the transition process. and was a procedural step the head of the general services administration had to give the formal transition process the go ahead and now we are hearing from cnn that the gsa has informed president-elect biden that the administration is ready to begin the transition. this coming at a time where more states are certifying the election results, showing president-elect biden has won the election. today, michigan certified the election victory. what keytching to see republicans will say, allowing president trump to expand his legal option before applying too much pressure on him.

we have more states certifying the vote totals and making it the vote totals official. cnn coming out with this headline, saying the procedural steps of the general services administration allows the process to happen. now to karina mitchell for the first word headlines. karina: ireland says it brexit deal could be done by the end of the week although more rings to be done and political will must be found. negotiations have been continuing remotely. both sides are increasingly optimistic of agreement. the chief negotiator says differences to remain, but talks continue and preparing members for every outcome. >> we are not in the same situation today as we were in 2019 or before that. people and businesses across the european union have had the opportunity to prepare for the end of the market. we have worked hard to prepare

stakeholders across the eu for this. karina: a former goldman sachs case, sayingking a the u.s. should not be prosecuting in malaysia. he is facing trial next year for bribery and money laundering. is accused of helping the investment of $2.7 million from the investment fund. currently free on $20 million bond. united nations panel says the tension of carlos ghosn was neither necessary or reasonable, calling his 130 days in jail extradition to to be used. the human rights council says the decision to arrest him four times in order to extend his detention was fundamentally unfair and he is referring the case to the u.n. on torture and inhuman treatment. global news 20 for hours a day on air and on bloomberg quicktake covered by 2700 journalists and analysts. i'm karina mitchell.

this is bloomberg. janet yellenahead, has's pick for treasury. the former fed chair will be the first woman in the position if confirmed by the senate. we will discuss what that means for markets, state street global market strategist will be joining us next. this is bloomberg. ♪

shery: janet yellen is poised to attain her next major milestone in a long line of achievements. the first woman to become treasury secretary the united states. kathleen hays is here with the latest. yellen head janet of treasury actually mean for policymaking? kathleen: i would start by saying it will have a lot to do with whatever a president joe biden wants to see for the

economy, wants to see for the banks, wants to see for taxes. the treasury secretary serves the president. one of his key cabinet members. at the same time, we know that janet yellen has important attributes that i think her supporters around joe biden figure she brings to the table. remember, she was at the federal reserve when the economy slid into the recession and became the great recession. when we had the worst financial crisis since the great depression. she knows what it is like to deal with a crisis and dig a weak economy out of a hole. after she had admitted over the years that perhaps the fed did start raising rates and keep raising rates too soon when she became fed chair, but inflation barely reach 1% and was far from 2%, now she will be ready than ever to say do not remove stimulus to early and how could she not work well with the current fed chair and that team when you look at her resume?

she got to the board of governors after serving as san francisco fed president. she became the vice chair and that was her steppingstone to replace ben bernanke as the chair. she was confirmed into bipartisan votes in 2010 and 2014. everybody knows janet yellen come everybody knows what to expect we will see what goodwill she would have been expect to build around the world. she knows all the big finance ministers. any kind of global situation, she will walk into the room and have those relationships built. besides that, investors know who she is. financial markets have dealt with therapeutic -- have dealt with therapeutic she knows -- have dealt with her. famousyo, the very taking analyst at wells fargo said she transcends the pro-bank, anti-bank tribal wars.

in other words, she is not intent on bringing them in, tearing them down. she understands how important the role is viewed i think most people are comfortable with that. she does have little private sector experience or financial market experience which is a negative. haidi: very quickly, we are getting an update from the associated press, saying the gsa, general services administration, as ascertained joe biden is the apparent winner of the election, that is according to the ap. we heard earlier from cnn that the biden camp was told it is ready to begin the transition process. we heard more than 100 executives demanding the gsa affirms biden had secured to the election victory and to issue the necessary paperwork to begin the transition. we do know we continue to see various legal challenges and demands for recounts from the trump administration to try to

stymie these efforts to certify the results by various states. let's get back to the topic at hand. we are talking about and not -- another fed official also in serious contention for the job. we have been hearing about the topic for treasury. what happens now? kathleen: very interesting story broken by bloomberg news today which is that some of joe biden's allies were urging leo to stay at the fed for now. she is the only democrat on the board of governors which is only five people instead of seven people. powell will beay up for renomination at the end of 2021 going into 2022 joe biden could say you were appointed by donald trump and you have been great but i think i need a democrat in that spot. chair jumping into the and know exactly what to do.

also interesting as steve mnuchin last week decided to end some of the key fed emergency brainardrograms, leo has been overseeing three of those main programs. i think it is interesting, it shows that she will be in position to know what the fed needs to do while powell is still there if he leaves. the biden team has to work through janet yellen to get things going. i think it will be handy. thosethere who knows programs well and can move them over if they decide to start them again. hays there with the latest on the potential picks for treasury. let's take a look at what this could mean for markets. joining us is marvin low from state street. on one hand, you have this positive vaccine development suggesting in the u.s., you can see the rollout of vaccinations to high-risk groups in weeks. on the other hand, you have a

potentially fed friendly u.s. treasury secretary. what are the implications for the amount of stimulus that might be available? marvin: absolutely. the markets are going under the assumption that the vaccine will get everything back to normal fairly soon rather than later. and that there is going to be some form of stimulus. a stimulus from washington is the most important so you are still needing to deal with the infighting that is happening in washington. i believe there is going to be some stimulus but in terms of the amount we were talking about in anticipation to a blue wave, it will be much less. there is still time between now and when the administration, the new administration takes over as well as when we actually see the amount of stimulus that congress is willing to pass. we are not out of the woods yet but there's a series of good news and risk assets are performing well as a result of

that. haidi: you can see there is concern of optimism. the south korean finance minister cautioning optimism over a vaccine. south korean stocks are flying, japanese stocks seeing strong gains as well. global equities are still close to all-time highs. what does this mean for the uncertainty as we get into a more convincing rotation or reflation trade? what does the balance portfolio say in the next weeks, months before we get a vaccine, before we get that return to mobility? marvin: certainly be aware of the risks and there are a number of them, in addition to the fact we are coming back to winter and finding ourselves dealing with the vaccine. having said that, it is unusual that the markets dealing with the uncertainty, with as much certainty as we could get with regard to a vaccine generally speaking, what you have economic

data that is starting to move sideways, you go through the models and try to figure out when and what could drive things better. this is almost as if by magic, the middle of next year, we will have widely distribute vaccines. balancing all of that is the challenge we have now. i think volatility will be something that will be with us over the course of the next couple of months. keeping the powder dry to take advantage of that seems to make sense to me. i think we are going to be in better times based on the fact we have a lot of stimulus and we are going to have normalization idling. shery: hold on for a second because we continue to get more headlines related to this process of ascertaining the winner of the election with the gsa saying the apparent winner is joe biden. now we have president trump tweeting this out. he wants to think emily murphy, the administration -- i've been

afraid of her loyalty. they are continuing their case strongly, in capital letters. he says it is in the interest of the united states that he is recommending that emily and her team what needs to be done with regards to initial protocols and told his team to do the same. basically, president trump now saying he has recommended that gsa administrator start transition protocols. and at the same time, saying he does have a strong case, that he has continued to allegedly say there were fraud cases and so forth, baseless claims so far and the president saying he told the gsa to go ahead with the transition process. president-elect biden will now have intelligence briefings. public funds in

order to pay his transition staff. let's return to marvin oh. perhaps increasing political uncertainty in the u.s. and what that means not only for u.s. markets here but also emerging markets. geopolitical tensions perhaps decreasing as we get president-elect biden in the white house. guess it is a step forward that we are starting the transition process. i don't believe the markets have really doubted the transition was going to occur. certainly, there was risk associated until january and the potential that it draws out the vaccine rollout and/or makes it more dangerous on the global stage. i think the markets have looked through that and this is an acknowledgment that the markets were correct in not being overly phased by the numerous lawsuits

and the costs -- constant bickering. it is affirmation we are going to move forward and we need to think about what a biden administration is going to look like from an economic and global relationship perspective. shery: i know we were talking earlier about secretary janet yellen at the treasury, perhaps being nominated and confirmed by the senate. what is happening to those facilities? we have not seen any market reaction in the credit markets so far that shrugged off the fed lending facilities would go away. could that change if we see more volatility ahead? marvin: certainly, the markets have looked past it. spreads around high-yield might have increased a little bit before the announcement but for the most part, the facilities themselves were not that collectively used. i think the knee-jerk reaction is one where the markets really did not get too shaken.

they are backstops. volatility increases the ability to put them back in place, not necessarily as clear-cut as just the fed wanting to do. it was by treasury. there was money provided by the cares act. if we have a divide in washington, it might be difficult to get those facilities up and running as quickly as they did. having said that, it does look like the market is able to look past a lot of the shorter-term concerns as we get ready for the vaccine. the fed is going to look at various other measures that it can take to make sure that the solid remains on footing. haidi: what are you referring in asia because it still feels like there's a relatively lower degree of risk here and potentially emerging markets gaining from the reflation trade, as well as yield differentials and maybe we continue to see that weaker dollar story play out as well. marvin: i still like the

northern asia manufacturing driven stocks from a virus containment perspective as well as a potentially export driven story as much as the western world goes back into various restrictions. services will struggle more affirmed a bitas of the northern patient story. i think once you get more widespread distribution, certainly looking at southern asia becomes a bit more interesting. our emerging markets team has been talking about india lot, not necessarily my area of expertise but it's a part of the world where they find interesting given changes in the current account as well as some of the progress they have made with the virus. shery: marvin loh from state street, thank you for joining us.

we have a quick recap on the breaking news. president trump saying he is the one that recommended the gsa administrator to start the transition protocols process. this coming after gsa ascertained joe biden was the apparent winner of the election. sayingresident trump this was in the best interest of the country, but at the same time saying he will continue to keep up the good fight but he did in the best interest of the united states. we know that president trump has many lawsuits across different states in the election fraud allegations that so far have been baseless and without evidence. here's a quick check of the latest business flash headlines. macy's surged on signs that investors are ready to head back the mall. shares jumped as much as 19%. other department store operators

rose as vaccine progress and decent earnings bolstered optimism that shopping will revive next year. small base retailers have been among the most battered stocks this year amid changes in consumer behavior. reports from new york say there's higher a jp morgan to help with the valuation a possible sale of reebok. the new york times citing unidentified sources and analysts which reebok could fetch about $1 billion. the pandemic has hit both companies with 33% while reebok revenue fell more than 40%. both declined to comment. ever grand can celebrate from their good news with sources saying the property unit ipo in hong kong covered on the first day. we are told the listing could raise more than $2 billion with pricing schedule for thursday. next, we will look at the state

of play in the brexit talks with our economics professor, danny branch flower. this is bloomberg. ♪

this veryilestone in turbulent presidential election process. president trump says he has instructed his team to begin the transition process. he said that in a tweet minutes ago and it comes after the general services administration declared joe biden the winner of the u.s. election. emily wilkins is on the line. when is the concession not a concession? president trump almost trying to take credit for this letter of ascertainment and allowing the process of transition to start. emily: in terms of walking a

fine line with this tweet. i think the take for anyone that is watching is a key part of the biden transition was even -- given the green light today and this is the first time we have seen a federal agency come out and acknowledge joe biden will be the next president, roughly three weeks after the election .ook a spe shery: what other choice did they have given that other states are certifying biden as the winner? emily: to a certain extent, this was always the inevitable outcome. i think the question was at what point does the government decide that there has been enough certification and the process is still going on right now. states have until next month to certify their ballots completely. look for any irregularities and formally lock in their electoral college votes. most crucially for joe biden, the new administration,

you now have some of these funds to be able to pay his transition employees, to get the ball rolling. there was some concern he had to fund this process himself which really blurs the line between campaign funds and funding for a new administration. emily: right. the biden campaign has gone forward with a number of transitions. top advisors. this unlocks the ability for biden to really begin to work with people who are already in the government, allow funding for their transition. it makes the whole process a little easier for biden and his team to begin to really make sure they are ready to go on january 20. shery: our congressional government reporter, emily wilkins and d.c. let's turn to karina mitchell for the first word headlines. karina: sources in washington state joe biden is set to nominate former fed chair janet yellen as his treasury secretary be if confirmed, she would be

the first women and a veteran central banker to hold the top job as the u.s. tries to emerge from the coronavirus. observers say yellen would bring support from wall street and be a less provocative picked than elizabeth warren. coronavirus cases globally are approaching 60 million with claims covid-19 will kill another 30,000 americans by christmas. the cdc model shows weekly u.s. cases and deaths rising every week for the next month. italy is the second european nation to record 50,000 total fatalities. the u.k. is ending lockdown next week in favor of tougher regional curbs. the first airline to demand vaccinations before passengers will be allowed to fly. the ceo told channel nine that it would become a necessary for international travel. the airline is working on a mobile lab that would help passengers demonstrate virus free status, joining global push

for covid passports before flying. tesla has lifted elon musk to the status of the second richest person in the world. his net worth jumped more than $7 billion on monday, taking him past bill gates on the bloomberg billionaires index. musk has added $100 billion to his fortune this year alone. the most of anyone on the index as tesla's value passed $1 trillion. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery: let's turn to brexit talks resuming in london this week amid optimism that an agreement may be struck in the coming days. the eu chief negotiator says differences remain but talks continue and preparing members for every outcome. >> not in the same situation

today as we were in 2019 or before that period. people and businesses across the european union have had the opportunity now to prepare for the end of the u.k. being a single market. we have worked hard to prepare stakeholders across the eu for this. shery: joining us to discuss is dartmouth college economics professor danny blanchflower. who holds a key in these negotiations right now and can we expect a general outline of a deal soon or will it be postponed again? danny: i think so. i think what is almost inevitable now is there's going to be a deal. is election of joe biden what pull this all together. the idea that the u.k. could go its own way was a nonstarter. is inime minister now it

a very weakened position. fired his should have secretary peter politically, the idea you could go along with a catastrophic brexit failure is gone. i think we will see maybe this will be pushed off a little while. maybe they will change the date but inevitably, as i always suspected, we have a new term. brexit in name only. that is essentially what we are going to see. it is not going to be in enormous change for it is so crucial with a relationship with america made clear by joe biden. the issue now is inevitability in scotland if you go along road then we are going to pull aside. the forces on boris johnson to have a deal were always there

and he didn't hold any of the cards. cardsropeans held all the and have forced him to come to the table. i think that is where we are peter it always seemed inevitable. shery: brexit in name only. how has that really, the dynamics of brexit changed because of the coronavirus pandemic and what the u.k. economy is going through? danny: i think this idea of the combination of economic crisis with a pandemic and lockdown that are going on -- in a sense, it is like there is so much going on that the pandemic with wherelockdowns, the issue they will talk about whether he's going to impose a public sector freeze. the governor of the bank of england says the pandemic is going to be much less serious

impact on the economy then potential brexit would be. the only argument has really come down now to how horrible an effect that brexit will be created those things combined together have met that they have no cards. the ideas you would impose some crazy thing where lots of trucks are sitting waiting to get across the border with this giant pandemic going on makes no sense for i think the house of lords has been making them very clear to the british parliament and boris is in a lot of trouble. haidi: what more can the bank of england do? as you rightly point out, we would not even have said this a year or eight months ago. brexit seems to be the least of their worries right now. certainly, the economy seems to be some potential -- yes, a bigger flow.

when i was at the banks, despite the fact the bank of england missed the great recession even six month after it started, at least have some room to maneuver. they could cut interest rates from 500 to a half. now they are at .1 even if they were to go negative, there will not go a lot negative. to -.25.t go from .1 what really can they do? they tried last week to do more quantitative -- to increase the amount of quantitative easing and having to deal with the fact there was a leak about it as well which is pretty embarrassing. i think the bank is in a position where you absolutely need the fiscal authorities to step in and help them and soon that can be done pretty well but he may have gotten cold feet. i think it is cold feet. it is straight back to the bank of england to start buying

assets and do all kinds of things. that does not look very easy for them. they are really on the front lines now. heard in the last few minutes or so, the confirmation that the transition process has been finally triggered in the u.s. after these weeks of protracted back-and-forth and and a lot of states being for the trump campaign. does this give you more optimism about the potential handling of the pandemic in the u.s. now that finally some of those funds can be released to begin the pandemic task force? and a big economic and public health crisis ahead of them. danny: that's a great question. i do feel that. today, you have seen this transition going on. who iseasing of funds

going to do intelligence. all of those will be consummate professionals. the world of the market took a breather. i thought it was fantastic news for janet yellen got announced treasury secretary. about a year ago, i was in her office and we were chatting about a time with the fed and she said the only mistake i really made was my first press conference in answering a question. i think she is fantastic. of the san francisco fed, chairman of the council advisors, chairman of the fed, board governor, great economist. i think in a way, the markets are thinking, gosh, the transition is coming. appears to have fizzled out. they don't seem to have anywhere to go.

what happened is the markets are treating this very calmly. markets of today and i think this feels like, suddenly, change is coming and i think -- i would be very pleased. i have known her for a long time and she's a fantastic, steady hand choice. haidi: always appreciate your time. the french finance minister says he is confident there are no , lastsustainability issue week, hungary and poland blocked approval of eu budgets and virus rescue packages. other than plan b, to convince the two nations to change their minds. he has been speaking inclusively to guy johnson. confidence we will be to lockdown this

crisis and there would not be any problem of debt sustainability within the eurozone. once again because we have the protection of the ecb and decisions by christine lagarde and taken by the board on the ecb. second, because we have adopted that we have decided to launch altogether national recovery plans but we have also decided to have a u.k. recovery plan of 750 billion euros. that is the first time in history to get an agreement. in the european recovery plan. the third reason is that for the ,irst time in the euro history there isecided

solidarity between spain, france , germany and italy that protects us from the consequences of the crisis. for those reasons, i do not see any problem of debt sustainability within the euro zone. guy: you said we don't have a sustainability problem in the euro zone because of the ecb and the european fund. there, arewas not you suggesting that would not be sustainable? mr. le maire: i'm explaining the it is far more difficult and if the members of the support ofthout the this currency and the support of situation think the

will be worse for many countries. it is for all of us. shery: that was the french finance minister talking to guy johnson. why the u.n. calls japan's repeated arrest of carlos ghosn fundamentally unfair and extrajudicial a buse. details ahead. this is bloomberg. ♪

haidi: a united nations panel says that attention in japan of carlos ghosn was unreasonable, calling his 130 days in jail extrajudicial abuse. stephen engle has followed the story very closely since the initial arrest he joins us on the line from hong kong. what is the basis we are seeing from the u.n. report? stephen: it is interesting because there's a battle of narratives going on because there are no legal decisions. his former colleague, executive director greg kelly, is still standing trial in japan in what is going to be a long process. ghosn is a relatively free met in lebanon. both of those have denied wrongdoing. japan's judicial system has become the target of extreme

scrutiny and criticism throughout the whole ordeal, almost two years to the date with its near-perfect conviction record of 99% on a ledge practice of force concessions, hostage justices, how it has been called. that is interesting to get this human rights panel, human rights council working group on arbitrary detention out with a report, determining that ghosn's detention for nearly 130 days in japanese jail was neither necessary or reasonable. the statement saying the repeated arrest, because he was arrested for different times, the repeated arrest appears to be an abuse of process is intended to ensure that he remained in custody. this revolving pattern of attention was an extrajudicial have of process that can no legal basis under international law. the japanese government was quick to put up its own statement and called these

findings totally unacceptable and not legally binding. it was based on limited information and biased allegations. nissan not surprisingly declining to comment on this report. shery: steve ghosn has already fled prosecution so wide would this u.n. report manner? stephen: there are still lawsuits and legal proceeding still outstanding. carlos ghosn has not been brought to justice yet, but a very unlikely to ever return to japan. lebanon has refused any extradition request. the most immediate potential impact may be on the impending x tradition from the u.s. to japan of former green beret michael taylor and his son peter who were sought for their role in helping ghosn escape by private jet last december. keep in mind, ghosn still has a lawsuit against nissan for 15 million euros as part of a dutch wrongful dismissal lawsuit. nissan has a counter lawsuit in japan for ¥10 billion in damages

from those alleged misconduct and fraudulent activity by ghosn. interestingly, the u.n. panel in this report made a bold decision to both urge an independent investigation into ghosn's detention and also stated he has a right to sue for damages so we will have to see how this plays out. shery: stephen engle, our chief north asia correspondent. next, improving trade and earnings expectations send korean stocks to a record despite virus numbers. we will have the latest. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. says trump administration the president's ban on tiktok will eventually succeed. it is stalled in courts amid o'briens however robert says he things the president's authority will succeed even with the possible change of administration. to ann technology plans civil key components for google partces, bolstering a

crucial to bring back to the u.s. it will fulfill its contract with the state rather than china and mass production could begin early next year. it concerned the development of the wisconsin plant but declined to identify any customer. hyundai is teaming up with the richest man in britain to give hydrogen powered cars a post. it will aim to supply hydrogen to hyundai which has been making fuel-cell vehicles and low volume since 2013. the power unit in its new off-road which aims to come to market next year. it currently produces 300,000 tons of hydrogen each year. shery: we are minutes away from the open of korean markets and the kospi has set a record high monday as foreign funds return. this is despite a resurgence in virus infections. we are seeing hundreds of virus

cases daily in south korea and we have this optimism about the markets. even the south korean finance minister coming out and warning about being too cautious about excessive optimism. so what is driving these gains? mentioned,i, as you rallied more than 10%. far, the kospi rallied because of retail investors. elections, its. is rallying. they came back to korea. $5.7 billion of kospi shares were bought this month and that is the biggest and flow into korea this year. the biggest reason is obviously a weaker dollar. pushingnow, that is

passive fund measures to invest in the emerging markets. good korea is relatively and emerging-market equities. are hundreds of those daily cases in korea but successfully controlling the coronavirus relatively than other nations. between 100 and 300. there is nothing when we look at the european countries. now the second wave. it is looking pretty good. the kospi members for the next quarter, for the fourth quarter, it will double from a year earlier. that is why it is seeing that. have good news of the trade data of korea and pretty good exports.

haidi: right. so, valuations are starting to look a little shaky now. do we think this rally could continue and given the breath of this rally which is the broadest in about 11 years, which stocks are in favor. -- are in favor? heejin: honestly, it on the global economy and the coronavirus situation. the point is, the south korean stocks will be the biggest performer in asia if the global economy improves. it is driven by exporters. they are sensitive to global trade. looking at the value stocks, cyclical stocks like petrochemical. those are stocks that can rally a lot with strong signals for

the global economy. haidi: heejin, our asia stocks reporter. ♪ businesses today are looking to tomorrow.

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call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music) "daybreakcome to asia." asia's major markets have just opened for trade. let's get your top stories. a key government agency declares joe biden the apparent winner of the election. that starts the transition delayed by president trump's refusal to concede. is treasury secretary pick

seen as someone who will work well with the fed. more pressure on chinese telco huawei. the u.k. said to be weighing a ban as soon as next year. lawmakers want boris johnson to take a tougher line. japan and south korea coming online. >> japan back in the mix after a long weekend. markets assess the implications of a janet yellen-led treasury, a vaccine rollout, and the transition of the white house for a biden presidency. stocks are gaining more than 1% in japan. climbing toward 2400. we may see weakness as the government announced it will prevent a domestic travel campaign. we saw the kospi close at a record high on monday. authorities cautioning against

excessive optimism. the kospi adding 0.5%. the korean won under pressure. consumer sentiment may take a curbs titan from tuesday. aussie shares are adding about 1% this morning. the asx 200 set for the biggest monthly gain on record. gaining somee favor. you have u.s. treasuries coming online lower this morning. this amid the mood we are seeing with the reopening rotation in view. i want to highlight commentary from j.p. morgan asset management. patrick show its saying investors should buy into equity weakness. over the medium term, infection growth rates will hit a peak.

he is staying bullish on risk assets. mid-2021.rd >> joining us now from new york as a managing director of capital markets. great to have you with us on "daybreak asia. --"daybreak asia p treasuries headed lower. how meaningful is the start of the transition process in the u.s. in terms of the next direction for markets? >> it is a topic that has been weighing on markets, the uncertainty about the elections and who will take office. lessnk having one sort of thing to wonder about gives the market some confidence. i do think what happened with

the atlanta elections and whether or not we will have a split election will matter for the markets. the markets were favorable towards this position, but the idea of what will happen with corporate taxes and what will happen with public policy is certainly something that could leave unexplained volatility. certainly getting good news about vaccines and word on the presidency is something that would support recovery going into 2021. >> i thought it was interesting you addressed the balancing act for markets, to be able to propel forward and continue with positive momentum, you need these factors to continue developing in a positive way. virus numbers come down, vaccine development keeps happening, fed stimulus -- all of these things need to keep in play. is there more downside risk given that we see global equities?

think it sort of depends on what happens with these vaccines and covid. to keep their momentum and drive recovery, the market is still expecting better medical news. we need to see vaccines delivered, utilized, we need to see people will take them in order for that to go away. until we get that we will have some volatility continue. rallye this awesome toward these things and i think the one potential headwind could be if god forbid the vaccine does not work, it is not tested, it is not readily available, that is something that will keep investors' minds fearful of getting back into equity markets. i think what will be really interesting is we have this decision now with the presidential debate. spending will be tough. the consumer -- the consumers

seems to be spending again. the consumer seems to become back into the market. if the consumer is really convinced the virus is coming to an end and there is stability in public policy -- and i think we will see that come up in spending numbers toward the end of the year. that will determine whether we are on a good path and looking at a wider breadth of recovery. we are still on uncertainty volatility. >> when it comes to retail, the focus has been on china when it comes to the asian region, right? is that the narrative that continues as we see this rebound from the economic recovery, but also just coming out of the pandemic faster than anywhere else? you are seeing it in china. the china recovery is holding off. domestic demand is coming up. covid does remain a worry, but for the most part it seems china is the quickest to being on its

way to a full recovery. toward the shock digitalization and innovation, investment, his child locally. locally.-- hits china it is looking like china's central bank after the widespread travel restrictions and covid and whatnot, but i do think china is a good place like alibaba have continuing growing revenue and earnings. salesave increased of year-over-year. the attractive valuation is notable compared to amazon. the increased sales and operating income this year. it is a massive e-commerce story. chinese officials are very

supportive of it. >> what is the story in other north asian economies. the gtv chart on the bloomberg towing when it comes expected earnings, stocks outpaced the s&p 500 growth next year. is this story playing out as well? what about south korea? the kospi sill at a record high. korea is starting to look like one of the world's best economies. q4 earnings at higher levels. is southre seeing korea did really well at actually -- with the virus. handled itell -- well. while they had a short-term recession we are seeing a rebound off global trading. exports jumped 15% in q3. it looks like they are really recovered significantly from the pandemic.

you have business confidence. joe biden's victory in the u.s. sparked optimism regarding the future of the export sector in hopes these global political issues would ease. globally.benefited forhave so much demand tips. companies like samsung and hynek's benefited from that. going from japan, low valuations, political stability, potential first round recovery really makes japanese equities attractive. took a 5% stake in some major names. you have increasing earnings, you have dividend yields. valuations. low

that will be compelling. >> always great having your thoughts. thank you. >> a brexit deal could be struck by the end of the week. more remains to be done and political will must be found. negotiations have been continuing remotely since november. both sides are optimistic for an agreement. michel barnier says differences remain but talks continue. the reserve bank of india has reached a memorable milestone, becoming the first central bank to gain one million followers on twitter. . it reached amid efforts to increase financial literacy. the federal reserve has about 670,000 followers. the ecb a little under 600,000. the bank just over 300,000.

d elon muskifte to the status of the second richest person in the world. musk has added $100 billion to his fortune this year alone, more than anyone on the index. in 30 place -- 30 -- 35th place in january. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> the trump team begins the transition as the president-elect solidifies his cabinet. janet yellen gets a historic nod for treasury secretary. ♪ >> markets don't like

uncertainty. they like certainty. they know what they are likely to get with janet yellen is treasury secretary. >> the most important agenda now is the economic recovery and she is an economic recovery specialist. hashe treasury secretary autonomy to control the narrative at the federal reserve. >> i'm hoping janet yellen takes a page from secretaries like robert rubin, even alexander hamilton, get a musical play named after her. >> she would be inheriting this time forat a difficult anybody in that position. we are far from over. these are sobering times for banks, for the markets generally, for individuals, corporations area -- corporations. >> for all her esteemed compliments, i do not know that we know how well she can navigate those political waters. ♪

>> the formal transition to a joe biden white house will begin after the agency in charge of the process acknowledged joe biden as the apparent winner after weeks of delay and allegations. for more, our government congressional reporter joins us. how significant is this? >> in one way this is a big deal because this is a federal agency giving the green light for the biden transition to officially formally move forward. the team gets access to current agencies, key information, $6 million in funds. the other way to think about this is the biden team has not been sitting on their heels. they have been going ahead giving briefings and talking to key people. we have seen the process going

ahead, but this is another step and makes it clear the federal government is recognizing there will be a biden administration. >> what are the steps from here? we see various legal battles being fought by the trump campaign across various states. does this mean president-elect biden can start the process of addressing the top of his agenda, which is being able to fund a coronavirus task force? >> absolutely. this gives biden the tool to set up what he needs to be ready to go when he does become president on january 20. in the meantime we are seeing states move forward with certifying their ballots and getting ready to formalize. we saw the state of michigan where trump was trying to bring a legal challenge, they certify that biden did win the election

as well as the electoral college vote. we are going to continue seeing things like that going forward. december 14 is the day states will formally submit their electoral college vote. wilkins with the latest. the world bank chief economist says more nations are likely to see sovereign debt crises in the months to come. there is a limit to how much help will be offered by institutions like the world bank and the imf. >> even before the pandemic we frailties in the low income economies and several emerging markets. lebanon, venezuela, ecuador, now zambia. this is a longer list than what we had in years. not everything happens simultaneously, but i think the for a number --

especially some of the lower income countries, but not limited to. period oftracted financial fragility both in the financial, in the banking side, and the possibility in the worst cases, outright sovereign debt crises. they don't need to be with the drama of a default, but they would be requiring restructuring, requiring coming to the imf, someone -- so on. >> your important article, the pandemic depression, foreign affairs this summer, it was without question my essay of the summer. a question for you and it is delicate. do we completely misjudge the percentage of gdp of stimulus aid income

replacement that will be required? elitesinstitutions and completely misjudging the 2% to 3% of gdp is not going to get it done because it is more toward 5% to 6% of gdp? >> it is not entirely a misjudgment. it is also a reality of capacity. you are speaking about the private capital flows have significantly retrenched. i would not say dried up. it is the multilateral's. it is the imf, the world bank. the firepower there is very limited. it is not the federal reserve. ecb. not the boj where the these institutions have

constraints in how much they can deliver. it is not entirely about misjudging the seriousness of what is needed. foralso having the capacity well over 100 countries to deliver that kind of shot in the arm. reinhart speaking to tom keene. coming up next, the latest on the u.k. proposal to institute a ban on quality equipment. the government is proposing a hefty fine to carriers that will reach their goal. ♪

>> the u.k. has proposed a fine of 10% of sales are 100,000 pounds a day for companies that break security rules. the till communications security bill is supposed to oversee 5g

mobile and fiber networks but ultimately it will empower the government to implement and enforce the ban on huawei's 5g equipment. how significant with this legislation be? is it feasible for the telecom companies? difficult forvery the telecom companies, forcing them to do something that was already in motion. before, they had until the 27th to replace 5g equipment before a blanket ban took place. what this proposal would do is essentially bring that up to september of next year. they would have to race to really comply with that. this is coming from the pressure from oris johnson's conservative party.

there is a faction of lawmakers who want him to target huawei specifically and make a point of it. this is difficult for the prime minister who is trying to strike a balance between appeasing his own party and also not angering china to the extent it disrupts trade ties. >> could there be a faction that will push for a more severe outcome? is possible with the way things are going. what the prime minister is looking to do is essentially strike this balancing act. we have seen china go after australia, cutting off exports. johnson does not want that to happen.

huawei officials are lobbying him to remove the restrictions that were already put in place, particularly after donald trump's election. >> i was just going to mention in terms of what we are seeing in the u.s.. formal had the transition process kicked off today. does this give you any indication of how much the global geopolitical landscape has changed for chinese companies like huawei with a different administration at the home? -- the helm? significant factions are opposing this sort of chinese investment regardless of whether trump is in office or not. that is here to stay with us for a while.

haidi: the latest on these potential curbs on huawei. let's get the check of the business flash headlines. it --ump administration attempts to curb tiktok are currently sold in courts amid arguments the moves are election-year politics. national security advisor robert banden says he thinks the will succeed even with a change of administration. a plan held by president trump as crucial to bringing jobs back to the u.s.. sources say the contract will be fulfilled in the states rather than taiwan or china and production could begin next year. sources declined to identify any customer of the wisconsin plant. teaming up with the richest man to give hydrogen powered cards

boost. they will aim to supply hydrogen hyundai.nd a -- ineos produces 300 tons of hydrogen each year. the head of operation warp speed is calling the latest results exciting, but there are a lot of questions about efficacy. take a look at japanese markets, playing catch-up of course on the global rally. the nikkei 225 seeing that gain of about 2% with caused by some analysts to see further upside when it comes to the topix. 2.4%.t up by wither rally overnight reopening rotations traded gaining momentum with the vaccine headline news.

♪

businesses today are looking to tomorrow. adapting. innovating. setting the course. but new ways of working demand a new type of network. one that's more than just fast. you need flexibility- to work from anywhere. and manage from everywhere. advanced technology. with serious security. and reliable coverage, nationwide. forward-thinking enterprises, deserve forward-thinking solutions. and that's what we deliver. so bounce forward, with comcast business.

>> we have good news in terms of vaccines and a chance to overcome the health crisis, but we are not there yet. the next six months in the northern hemisphere will be tough. it might be accelerated, but i do not think it is going to be a game changer. the long-term solution has to

be on a global basis. >> i would hesitate to declare victory now because the fight is far from over. >> some of our guests reacting to the latest vaccine trial results. astrazeneca is defending its vaccine trials after being accused of embellishing the results. the drugmaker reported average efficacy of 70% overall but says that jumped to 90% in one set of participants who were given a half dose followed by a full dose a month later. the therapeutics research director criticized the sample size. found in individuals given half a dose of the initial vaccine, they had better efficacy. that was a very small subset. to0 subjects, which compares 45,000 or so for the pfizer announcement last week. i just do not think you can draw too much in the way of a

conclusion. you had about 30 cases of covid overall confirmed. it is just a lot to make a big of. to bloomberg, astrazeneca's executive vp says that interpretation is too harsh. he says researchers are still studying the results. thee are surprised to see data over the weekend coming in. it,ntists are looking into what can cause it. there are theories you are priming the immune system with a low dose and then if you give -- itll boost, there is will be more effective. this is one of the elements scientists and clinical developers need to sort out. >> do you not know?

is that my take away? some criticism is you are highlighting the really good data, but we don't actually know what that 90% efficacy rate was part of. there were fewer people in the study. what's going on there? >> the most important thing is irrespective of the dosing, if you get vaccinated, it is clear the vaccine is safe and has an effectiveness of 100%. irrespective of the dosing. that is incredibly important to remember. discussion with that -- with the fda as well. and then there is speculation about what can cause the highest -- in the high-dose and low dose regimen. we do not know what is driving exactly. be sure that our scientists and clinical developers do

everything to give an answer on that sooner than later. >> you talked about the fda. let's talk about the united states. regime they tested in the united states is not the more effective one. switch theng to trial in the u.s. for the half full? does that mean starting a new trial or can you do that midway through the trial you are currently running? >> that is an excellent question. in the course of this week we look at the data with regulatory agencies. feedback, we will adjust our clinical trial. the fda is agreeing with our approach. we need to remember the trial in

the united states is still running. it is a very large trial. we tried to get more than 30,000 participants. as we speak we have roughly 11,000 participants in the trial. an extrad to include arm in the trial we have more than enough time. >> one of the analysts had a really -- had really critical things to say. one is that it is never going to get approved in the u.s.. they said you tried to embellish the results by highlighting a reported 90% efficacy in a small subset of subjects. the suggestion by the investors subset only brings discredit to the program. we have noted is insufficient. it goes onto say it is never going to get approval in the u.s.. what is your response? >> i think those comments are quite harsh. the study has been executed by from oxford as

well as astrazeneca. they are working around the tock to give full visibility the different cohorts we have studied. it is far too early to speculate about how regulators will react on that. certainly the fda in the united states are running a very special child with more than so we willicipants, see how the fda will react before such making such harsh statements. bloombergn tuesday, is launching our covid resilience ranking. this measures how the biggest economies have handled the coronavirus on 10 key data indicators. p.m..e coverage from 8:00 let's have a look at the markets in this session in hong kong.

>> green on the screen for asian stocks. the nikkei and the topix adding more than 10%. the nikkei trading at a may 1991 hi. a risk saying there is of the late 1980's. they are penciling in 2400 for the topix. over in seoul, tighter virus graphs. samsung shares at an all-time high. oil shares jumping after hi investment students price target . we are seeing swings to the

upside. --ding gains 03 month high near a three month high. >> coming up next, xiaomi set to report earnings as the stock keeps climbing. it has doubled over the past year. joins us tech analyst next for his call on xiaomi. ♪

>> this is "daybreak asia." president trump has issued a pair of tweets saying he supports the transition to a new administration. insists his case against defeat continues and he expects to win. sayseneral administration does not ascertain the winner of the election. joe biden is set to nominate janet yellen has his treasury secretary. she would become the first woman central banker to hold the job as the u.s. tries to manage coronavirus downturn. observers say yellen would bring support from wall street.

former goldman sachs banker a former goldman sachs banker -- he is accused of helping the embezzlement of $2.7 billion from the 1mdb fund. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> xiaomi is set to report earnings. bloomberg intelligence expects a profit beat a surge in smartphone sales. the stock price is also one of the big stories, up nearly 200% since the low in march. joining us from shenzhen is a veteran tech analyst. great to have you with us.

there is a lot of optimism about xiaomi, whether in the results or the stock price. you have downgraded the stock to a hold in december after upgrading it to a buy in march. what was the reasoning? >> downgrade is mostly related, inhink most have factored the trends of market share from huawei to huawei and other smartphone makers. than 200% share price rise. in the stock market there are different kind of investors who invest differently which will send the stock higher in different phases. we think that is only the share

price. we are more cautious. >> what do you think of the earnings outlook? we are getting third-quarter numbers today. >> xiaomi had a strong third-quarter smartphone shipment according to industry firms. the global market declined and they gained volume more than 40% year on year. indias mostly driven by and southern europe. i think the most interesting data to look at is xiaomi's cross margin is the lowest among their different business lines.

if you look at the shipment number, the additional profit cannot cover the marketing costs and the cost to drive shipments, you end up with earnings shortfall because of high shipment. is shipment supplies mostly come from low cost smartphones even though they did make a progress in the high-end models. the same pattern i described may be happening again. we are more conservative. >> what about the hardware side? do you see prospects for more dominance in the hardware market? >> absolutely. expectedstry firms

huawei to lose 70% of global market share, roughly what we have seen. this might happen over two years. it might happen over half a year. it may happen transferring to xiaomi, different scenarios. it is only going to happen once and once it happens, it is not going to happen twice. xiaomi is a large-cap stock. we are seeing this news getting play. you can see xiaomi's market cap has more than doubled. we just think it should not get rewarded for the same deal two times. open to a new kind of development. iot devices,more more internet revenues, but smartphones --

peripheralut the products, the home appliances? non-phone related? should that have recovered given we have seen consumer rebound in china? >> i think we will. third quarter is actually pretty bad. we think it will have a rebound because there is a real estate market in china that is warming up. i think the consumer is going to look up. market, xiaomi face competition from huawei, which is not restrained by the u.s. embargo. that market, you cannot apply the same logic of transfer in

those markets. >> staying on chinese tech, saying livestream operator joy is worth -- why the new biden needs to delist fraudulent chinese companies. >> what is it worth when they have been lying about everything for years? the lifting they have some value? it is zero. every thesis you come up with is a persuasive one. otherwise you would not make it. you make a strong argument. thesee viewers know that companies do not all go to zero. they go down inevitably on the day you announced the short

position, but a lot of them go back up. aboutyou're talking after itaud like gsx, has tripled, there is clearly something wrong -- a lot of people talk about wirecard being the big story of 2020, it's implosion. gsx's peak market cap after three of us exposed the fraud exceeded wirecard's cap. this is not a question of people say i think the analysis is wrong, it is a good value, i'm going to buy it. this is a question of market technicals when it comes to gsx. when it comes to why why, look at the chart this morning. as soon as we enter the part , --e the volume falls off >> do you think the same thing

is happening with nano imaging? another stock people may be familiar with. >> for no evident reason, this is another one of your short above 60% -- short calls. >> we are seeing technicals and small flows, options markets are driving the prices of stocks. i do want to address the larger point. >> that is what i am getting at. >> when you step back and look at our track record of over 10 years, probably 65% of the names we ever shorted are down long-term. that is in market that has done this. eat alpha.annot on an alpha basis, what we short generates insane alpha. jumping in only because i have to. i want to make sure we get to

this question before we run out of time. you have made the case for years these chinese frauds are systematic. they are part of the strategy, and that strategy is tacitly or will,ly approved, if you or aided by the chinese government. a new president is going to take office. what should the biden administration's action plan b on chinese frauds? get out there is when biden first takes office, the number one focus is going to be the domestic agenda, right? covid, economic relief. >> after that? isthe sec and what the sec able to do and going to do i do not know. the thing is, the sec clearly cannot regulate these companies. this,ou see gsx doing post-exposure in broad

daylight, bloomberg dropped an article and one of the fund managers helping to push this up , this is china and chinese stock promotion, manipulation, fraud machine laughing in the face of the sec. the sec cannot regulate these to delist we need these companies. especially when china put on its books, effective as of this year, that no p.r.c. based company may cooperate with the sec or any other foreign regulator without the express permission of the chinese regulatory commission, which is not going to be given in most situations. ande cannot regulate them it is easy to find case studies tick by tick where they are ripping us off, we need to delist. otherwise this is a total joke

and what is the point of a market? >> muddy waters ceo carson block speaking to bloomberg. next, chinese companies are struggling in the credit space with defaults topping 100 billion yuan. another big wave ivory payments are due next month -- of repayments are due next month. ♪

>> corporate debt default in china have topped 100 billion yuan for a third consecutive year. the pandemic is taking a toll on the government capacity to rein in risk. the number of onshore default is lower than we saw last year. does that mean there is less concern about default risk? >> the overall number of onshore s is about 20% below the last two consecutive record years. it is essentially off the back of the government introducing measures to combat the economic fallout of the coronavirus. what we have seen recently is a pickup in defaults among high-profile services linked to the government and firms with offshore yuan bonds.

took investors by surprise. to some extent, that created doubt about the extent to which companies linked to the state can expect support when they are facing credit challenges and the extent to which a state linked company actually has a guarantee against default. once those concerns start to rise up, it is very easy for that to spread. another important point here is figure, thoughre onshore got the bulk of delinquency, offshore default, there is still that 8.1 billion this year. that is more than double what we have seen last year. flipside, is this a more positive side that beijing -- sign that beijing will allow companies that need to fail to fail? >> certainly there are signs of

an increased tolerance of default from beijing. is a return tois what we saw in 2019 when we saw beijing once again allowing businesses to fail. there has been a shift in the dynamic. we saw the main focus on private firms being allowed to fail. this year toward your end, -- high-profilewe see groups linked to china's top universities being allowed to fail and defaulting, both of those firms have dollar depth. the key question is whether this is an orderly process or whether there is risk of contagion, the fear of systemic risk. >> we will be watching the markets closely. u.s. politics as the

transition to joe biden begins. plus we hear from a venture capitalist. ♪

♪ >> it is 9:00 a.m. in beijing and shanghai. welcome to bloomberg markets: china open. david: we are counting down to the open of trade here in hong kong. the top stories today, u.s. governmentas a key agency says joe biden is the apparent winner of the election, triggering the transition process. janetset to nominate yellen at the treasury.