paul: good morning, i'm paul allen in sydney. sherry: welcome to "bloomberg daybreak: asia." inflation and earnings are in focus today. amick start after wall street snapped its winning streak. democrats argue the size and scope of aid checks. the house aims to vote on the

plan in the next two weeks. you doubts over the delayed tokyo olympics as the ioc and top sponsors tax sexist comments from a leading official. we get started with breaking out of south korea. we are getting the unemployment numbers for the month of january. the adjusted jobless rate coming in at 5.4%, which is a second month of gains for the unemployment rate and also coming after the rate was at around only 4.6% the previous month. 982,000 jobs were removed in january from a year earlier. is not surprising, given that we continue to see social distancing measures and south korea dragging the labor market, services, retail and hospitality industry. the january adjusted jobless rate coming in at the highest level since 1999, at 5.4%. paul: we just had the market

open here in australia, couple of minutes of trading underway. a couple of big stocks to watch as well. here is sophie in hong kong. sophie: a modest gain for the asx 200 after resolve retreat from near one year highs on tuesday. the aussie dollar holding after the dollars appeal faded on u.s. stimulus hopes. we also have chinese inflation dated after we got chinese credit data yesterday which showed a big jump in january. that helps boost the australia when yesterday. and reflation chatter, we had wti inflows after we saw futures -- in focus. ahead of earnings from toyota later today.

futures opening to the downside in chicago as the nikkei is trading around august 1990 highs. after we saw stocks fall to a six day winning streak on wall street yesterday. paul: watching shares of crown resources in sydney, off a little more than 7% after a report was tabled in the new south with wales parliament finding crown unfit to hold a gambling license in the state. a lot of work to do to satisfy the regulator. talks will take at least a few weeks and we see crown shares falling after that report. the report that crown is unfit to hold a gambling license.

that glittering casino on the waterfront standing empty. let's turn to the latest in washington, house and senate democrats are clashing over expanded unemployment support and an early sign of intraparty squabbling. restaurants getting at when he $5 billion help, the president and his team met with ceos including jp morgan's jamie dimon and doug mcmillon. >> we've already lost over 450,000 people. we will lose a whole lot more if you don't act decisively and quickly. a lot of children are going to bed hungry, a lot of families are food insecure. they are in trouble, and that's my job. the senate has their job. paul: joining us is our congressional government reporter, emily wilkins. are we seeing some risk emerging now with the democrats? emily: there has been a lot of

discussion on exactly how much the direct checks to americans should be. there are a couple of differences within the party, but it seems like the biden administration has hit on what they'll be suing in congress, that's the $1400 check going to individuals and married couples but making sure they will not be sending them to families making more than $200,000. that's a little bit of an adjustment from the previous proposal that we saw from biden. shery: we continue to see new elements of the bill from all these congressional committees. what are the highlights? emily: number one is funding for restaurants, specifically for smaller restaurants. the house us proposed between $5 billion program. another 7.5 blue dollars in funding for small businesses. other elements have come out, remember the house proposals didn't need to be adjusted with the components in the senate and

then eventually put together, so we still have a number of steps before we see a final stimulus package that democrats are trying to get past. shery: in the meantime we have former president trump second impeachment trial in the senate now voting that the trial is constitutional. here is what the lead prosecutor had to say. >> they want to call the trial over before any evidence is even introduced. the argument is that if you commit an impeachable offense in your last two weeks in office, you do it with constitutional impunity. you get away with it. shery: what were the key arguments made today? emily: it was really just focused on whether or not it is constitutional to put a former president through an impeachment trial for things he did as president. you did see the senate go ahead and take a vote on that today,

kind of an interesting vote. we did line up having six republicans go ahead and vote would democrats had was constitutional. it's interesting because it's one more than what we saw last time. there was one republican that was persuaded by the arguments today and not persuaded that he change his mind that would be constitutional to move forward. that said, were still not seeing any big signs that donald trump is headed to be convicted. we are thinking that similar to last time, he would be acquitted of the impeachment charges against him. shery: emily wilkins with the latest from d.c. let's get to karina mitchell with the first word headlines. >> blaming transmission of covid to humans from animals or frozen meat. a who official said the virus could have been introduced to a wet market in the city guy a

person who was infected or buy a product that was sold there. the research team comprised 17 international and 17 chinese experts. in malaysia, to ease virus restrictions after month-long nationwide lockdown. retail businesses can now reopen while restaurants can accept nine and customers. the government will also allow some sports teams to resume training. last month's lockdown is estimated to have cost the economy more than $170 million a day. the u.s. navy has carried out maritime exercises in the south china sea, indicating the biden administration will maintain american opposition to beijing's territorial ambitions in the area. theodore roosevelt and the nimitz strike groups were operating some distance from the disputed islands were china, vietnam, taiwan and the lapine's all claim sovereignty. tampa bay super bowl victory over the kansas city chiefs was watched by the smallest tv

audience in more than a decade. it had just over 96 million viewers, in contrast to last year's game that was watched by 102 million. that makes it the lowest tv audience since 2007 when indianapolis beach chicago. the super bowl is regularly the most-watched tv event in the u.s.. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. paul: i just want to keep you updated on a couple of major movers in early trading. crown shares recovering some of the early losses, now off just about 4%. of course we had the news that the regulator found crown unfit to hold a casino license in sydney. the regulator saying talks will take a few weeks and crown having a lot of work to do before the regulator will be satisfied that things might change and an area of focus for

the regulators. and commonwealth bank of australia rising .3%. bad loans up, interest margins getting compressed. the dividend down from last year. crown shares rising about point when he 5%. shery: still ahead, freight costs continue to soar for the world shipping companies. japan's largest shippers tell us how it is dealing with adam -- amid the coronavirus. next, the market outlook as the reflation theme takes over. this is bloomberg. ♪

>> the question for me be, how

persistent is it? how much of a pop did we get as the market open and consumers have money in their pocket? and second is, how sustainable is it? >> we will make big improvements on unemployment and it wouldn't be surprising to see the cyclical elements of inflation build. >> rates will remain anchored. >> there could be some momentum building behind yields. >> we will get the reflation of airfare, hotel rates. most investors believe that the inflation rising rates are out there and there's probably more downside risk than huge upside. paul: some of our guests there sharing their concerns on reflation. joining us we have emily wise.

how is the inflation trade momentum affecting your outlook for emerging markets? emily: it's definitely factoring into the emerging market outlook. there was a lot of misplaced momentum post the vaccine announcements and after the change in the u.s. administration that guarantee more stimulus on the way. we've hit a speed bump on the emerging-market side with the realization that the reflation trade might not come about as quickly as we anticipated. particularly as we started to see the vaccine rollout come through, and also the recognition that the growth slowdown will be with us for a lot longer than maybe we were hoping. paul: i know you also say that some market participants are losing faith that the policy will be enough to stimulate growth. so what would be enough to stimulate growth? more stimulus, or is something

else needed? emily: on the macro side, when we look at the major economies that matter most for emerging-market, the united states, being able to have that guarantee that the fed and treasury will remain accommodative going forward, and something i still have faith and believe in that markets are starting to question it more in recent weeks. we've seen renewed discussion of potential fed tapering and how much additional stimulus checks should be, as you said at the top of the program. and china and how much is tuned to stimulate the economy. there is evidence they are tapering and pulling back on the amount of stimulus they provide. when it comes to emerging markets, that leaves a lot of smaller emerging-market countries to fin for themselves and to have to turn to the fiscal and monetary policies they have available, which in many cases have biddings ousted so far with the prospect of that

pandemic now going on for a year. shery: what about the broad supports from a weaker u.s. dollar? this chart showing we've seen a little bit of strengthening in recent days but we continue to be very bearish dollar positioning out there. emily: i think that bearish dollar momentum to called again today. toward the end of last week there was the consideration of how strong the dollar could get, given their so much expectation for the weaker dollar signal. i think it stems from the fact that u.s. debt has been coming out pretty strong. the blueprint indicated the u.s. economy was returning to normal, despite being in the middle of a pandemic and lockdown. we got that number that put that into question. people are realizing the fed is not going to jump ahead of the market. with that context, i think tomorrow is especially important

more broadly for emerging-market sentiment. shery: we will be watching those numbers closely. how about the fact that all of this could flow through to the debt market? we've seen incredible optimism about what you can find in asia. some calling it the best global opportunity this year. is that a sector that you look at? emily: primarily we've been focused on the government side. given the significance around the fiscal packages that have been announced. and also given the significance of how much longer central banks can remain accommodative. we've seen the turn to really low rates across emerging markets and people tending to follow the dropping rates that we've seen. now we are at a point where that accommodation might not stick around too much longer as we start to see inflation popping up. central banks will start to have to react going forward.

that's making folks a bit more cautious on the government side. paul: also seeing em weakness outside of asia. is that where the best opportunities are as well? emily: if the reflation trade starts again, were hoping those that lack the pack will have further approach. so far i think right now in the middle of this reconsideration of reflation, people are turning to say for emerging-market options. a lot of area standout is offering a safer emerging-market play. when we start to see a slow level growth covering, particularly if it's not led by one or two countries like the u.s. and u.k., then we will start to see an area where broader demand for commodities and exports will be the tide that can lift those emerging-market countries that have struggled so far, with post

asia dining on that recovery. shery: everything is relative and it seems that at least asia is comparatively cheaper than many other parts of the world. emily: certainly emerging-market standout as cheap. it does seem that this time, as you expect growth to continue to improve over the next year, that there are opportunities where unlike u.s. equity markets or other areas where people think it looks like a bubble, we don't have the same sorts of issues in em. it's going to be an enticing opportunity as we get further into the recovery process. shery: great having you on. coming up next, the world health organization concludes its nation in wuhan, providing more clarity on the origins of the virus.

details of the findings ahead. this is bloomberg. ♪

shery: the world health organization investigation and china finds that coronavirus most likely jumped to humans through an animal host or frozen while i product, rejecting the theory that it came from a laboratory leak. this concludes a probe on the origins of the pandemic, a mission that needed international pressure to mount. let's get the details from our health care reporter, michelle cortez. if china had let who investigators into the country initially it would've saved a lot of time, not to mention the geopolitical tensions that arose from trying to find out where the virus came from. michelle: you have to remember that we still don't know exactly where the virus came from. they're saying they don't believe it came out of the bio

containment lab in wuhan, which is something the u.s. suggested was a possibility in the previous administration. they do think it's likely it came from an animal, but they're not sure what it is. they have linked it to a similar strain of a bat in thailand, thousands of miles away. the bottom line is we might have more answers if we had started sooner, and you are 100% right, we would have less geopolitical tensions. paul: so where do we stand in terms of vaccine numbers right now? >> we are doing better. 138 million people have been vaccinated across the world at this point. the most significant part of that is we are starting to see really significant declines in infection rates and severe illness and hospitalizations. we've heard from israel that 97% of the people who have died in the last 30 days and israel were

not vaccinated. and we are seeing striking declines in the number of people who are infected in nursing homes. they have done a great job of getting the vaccine to those nursing homes and making so much of it available that they're giving some of their doses to other people. so we are seeing an impact from the vaccination is going on now. persuading people to get the vaccine soon enough, at this point it still a matter of high-level demand are trying to get enough of it out there. shery: what are we seeing in terms of vaccine confidence? especially as we get more and newer vaccines being approved. riley: a lot of people were very concerned initially. back in september there was a low level, fewer than half the people said they would get it.

in december, about half of americans said they were interested in getting the vaccine, while others said they were not interested at all. we think as more people see their friends and family and colleagues get vaccinated and have not seen a big upsurge in complications that we were expecting, people are a little more reassured that not only is it effective, but it does seem to be safe. hope is that as more and more of that information comes in, people will be more reassured about the safety profile of the vaccine and be more willing to get it. shery: michelle cortez there with the latest on the vaccines and the pandemic. later, hong kong -- the hong kong food -- food and health secretary will discuss the virus situation and vaccine prospects in the city. ahead of that, we will talk to the ceo on how they are adapting amidst the pandemic. here's a quick check of the

latest business flash headlines. lyft extracting more revenue from each rider. losses were better than average estimates. the cofounder and president said deep cost cuts mean lyft will absolutely turn a quarterly profit this year. but he declined to offer a first quarter forecasts. cisco systems fell in late trade after reporting no revenue growth in the fourth quarter. down .4% on the year. just above the street forecast. cisco now sees current quarter earnings per share at $.82, in line with analyst expectations. nissan is trimming is loss outlook for the fiscal year,

having posted a surprise operating profit in the last quarter, as it tries to recover from the pandemics impact. and now sees a net loss of $5 billion for the year ending in march, having reported a profit of 258 million dollars in the december period. nissan is nine months into an aggressive turnaround planned. paul: let's check in on what's happening with crown resorts at the moment, now up 3.15% in early trade, erasing heavier early losses. we have had news that two directors have resigned, stepping down from their roles. a report that found crown unfit to hold casino license, and saying the ceo has demonstrated he is no match for what's needed at the helm. we will continue to watch these

headlines coming out of the regulator. still to come, tokyo's olympic dreams increasingly under threat after a top officials undercut support and drew criticism from supporters. more on that story in a moment. this is bloomberg. ♪

paul: let's get to breaking news from australia now. the consumer confidence index for february showing gains of -- remaining above 100. there is optimism on the economy, family, finances as well as major household items. consumer confidence in australia rising as the coronavirus continues to come under control. the brief break that occurred just before christmas has been put under control. we see consumer confidence rising commensurately.

the aussie dollar hovering at 77.38. > the first day of donald trump's second impeachment trial has wrapped. an event rich in constitutional significance but one that is certain to end in acquittal. prosecutors argue the former president incited the strumming of the u.s. capitol on. january 6 trump's defense is arguing his speech that day was protected by the first amendment. meanwhile, protests have continued in myanmar where security services fired rubber bullets and tear gas and live rounds were also used. 20 people were hurt in the capital while large protest broke out. and police convoy was attacked in man's ally. new zealand is the first country to sever all the medic ties. the search for survivors of a collapsed cam in india continues -- dam in india with more than

150 people still unaccounted for. 32 are known to have died when a glacier fell. they are concentrating on a hydroelectric plant where 30 workers have been out of context since the disaster. no one has been pulled out since sunday. the arab world is celebrating the arrival of the region's first spacecraft to mars. the uae capsule has entered orbit around the planet after seven month, 480 million kilometer journey. two more aircraft from the u.s. and china are set to arrive in mars in the coming days. 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 am karina mitchell. this is bloomberg. shery: japan's vision of using

the olympics to celebrate the world's victory over covid-19 looking increasingly under threat, after a top official -- his remarks, and sparked rare criticism from sponsors. will the tokyo olympics -- need to be resigning in order to get this going again? >> right. it's hard to say at this point. but i think we should say that his job is less secure this week than last week. the international olympic committee has come out with fresh condemnation of his remarks. after saying the matter was closed. and a number of sponsors have harshly criticized what he said. and that is an unusual phenomenon in japan. they must feel strongly if they are coming out to say these things in public. as for the actual public opinion, survey in a newspaper found 60% of responders said he wasn't an appropriate person as

the head of the organizing committee. the organizing is said to have an emergency meeting to discuss at this week. while they have said they are not looking to replace him, you know, it is less than six months ahead of the planned opening on july 23, it may be starting to look like the easier option. paul: if we set aside the outcry over his comments how are the arrangements for the limericks proceedings? -- for the olympics proceeding? >> things are little bit in disarray. we do not know what the situation will be with the pandemic in a few months time. we know that jeff payne's vaccine rollout has yet to start. -- is that japan's vaccine rollout is yet to start. most of the public will not be vaccinated by the time it starts. so, we're looking at issues like whether to allow spectators in the end at the olympics. and in particular whether it

allow spectators from abroad. and that is one of the things that has really concerned the public most. if you look at recent opinion polls, in fact, 80% of them, of responders have said either the olympics should be postponed again or it should be canceled altogether. paul: bloomberg's isabel reynold in tokyo. let's get a check on what is happening in the markets now. over to sophie in hong kong. what are you watching? sophie: price action early in the asian session. kiwi stocks off by .01%. financials helping to lift the ask high -- the asx higher. the aussie 10-year yield holding above 1.2%. futures, you are seeing them flat to the downside, after a solid three year option from treasury bills yesterday.

to longer dated options from the treasury on thursday which may see yields fall to zero. and ahead of that pulling up the chart on the terminal -- piling into junk bonds. that has pushed the u.s. yield below 4% and wider the gap to asian and junk and debt. we have goldman along with ubs tapering asian high-yield. shery: up next, freight costs continue to soar for shipping companies. japan's largest shipper tells us how it is dealing with that amid the coronavirus. this is bloomberg. ♪

paul: it is one of the most important parts of the global economy but the shipping industry is under pressure. that the past year has seen containers in short supply. while there are signs to contain the crunch may be easing they're still concerned about the impact on the world's post-pandemic recovery. >> from car parts to cosmetics to medical equipment, 90% of the worlds trade travels by sea. at any given time around 5000 container ships are on the ocean carrying the equivalent of 23 million 20 foot containers. without them, the global economy would collapse. many of those containers pass

through singapore, the world's second-largest port. it is so crucial that the government made it a national priority to vaccinate all 10,000 frontline workers against covid-19. the industry accounts for 70% of the country's gdp. but the industry is under pressure as demand for specific products changes and supply chains adjust. the uneven recovery from the pandemic is creating a shortage of containers where they are needed most. and driving bottlenecks at major ports. it sent prices soaring. the cost of shipping a 40 foot container to los angeles has risen from $1300 in march 2022$4100 in january this year. the price from shanghai to rotterdam has skyrocketed to more than $9,000. they are signs that cargo crunch may be easing.

in the is watching closely. chinese new year marks the time when rates are renegotiated for the next year. companies must choose whether to swallow the financial hit or not. it is the decision that could bring new headwinds for the global economic recovery. shery: we'll discuss the outlook for shipping amid the pandemic with one of the world's largest container shippers. joining us is ceo jeremy nixon. great to have you with us. we have seen and heard from companies in the u.s., across europe, across asia, of these supply chain strains. what are you seeing in the weeks leading up to the lunar new year, which might be peak season now? jeremy: indeed. and this is really a key part of the year for us and for our customers. when they were trying to move the final production as they close out chinese factories which stand out for two weeks.

then we move our product through to the final destination markets. we'v seene an unusual situation this year were essentially the factories are returning, look to return much more quickly to production. they need to push the inventory out because we have quite a delay in terms of inventory. we have a strong demand for customers overseas, and the supply-side has been challenged in number of ways. we have full production in terms of the capacity site. all the ships and containers are deployed. what we're seeing on the land side is a lot of friction in terms of the operation coming back to the pandemic, down to the shortage of workers on the landside operation, and a lot of the kind of covid precautions we have to put in place on the operations. so -- switch in consumer - shery: right jeremy.

with freight rates soaring recently there have been concerns among businesses, associations now raising antitrust issues with governments. could this be a problem for you? jeremy: i think no. t. we have to be very careful in terms of how we manage the situation. the majority of our customers are long-term contracts. so they are not impacted the same way as some of these headline freight rate indications suggest, which is more the short-term spot market. the end of the day, the shipping lines are incurring considerable extra costs. ships are delayed seven to 10 days, even in l.a. where we have 33 berths. the vessels are alongside anywhere between seven and 11 d ays. we have over 40 ships waiting.

and we are backing up with a lot of additional costs and problems, but we're working through that. but it is inevitable that freight rate costs will have to go up to meet these additional costs that have been incurred by the shipping lines and the overall supply chain process. shery: so, what is the biggest issue for you? you mentioned travel restrictions and surging demand at the moment. what are the things you have to prioritize as you carry on with your business? jeremy: three quick areas. first one is, because of the ocean network is running pretty smoothly but the landside is incurring significant delays. we're seeing the whole schedule of the ships is delay between three to seven days. we are seeing a delay in the shipment process. and it's exacerbated really strongly in north america on the transpacific trade where we have ships one to two, three weeks

waiting to discharge their cargo and turnaround. what that's -- doing, the ships are taking longer to turn around. so the equipment is very tight. that is another impact. the other area just to highlight also on the -- markets where we have situation in australia/china markets where we have a lot of ships on anchor waiting to discharge cargo due to the trade dispute. so, we have over one million seafarers as an industry. we have very high percentage of those seafarers who have not been able so far to be able to change over to crew changes due to difficulties on the operational and the shortage of international transport. so, this is why we formed the neptune declaration. and this is where we have 600 companies working to highlight this problem of the crew change and the need to get the crew off the vessels as smoothly as

possible so that we can keep shipping going -- and continue to be the servant to global trade. paul: that issue has been successfully highlighted. can you give us some sort of idea the stress those mariners are under? what can actually be done to relieve the pressure on them? jeremy: well, we've come up with a program whereby we can quarantine seafarers before they join the vessels. we do that, 14 days in advance. we work to what we call the star protocol. it was actually generated and piloted in singapore. and now we are looking to roll that out globally. this is a safe and secure way to do the crew change. the governments and authorities around the world should be less concerned in the future about how to do the crew change because we saw -- found a safe method. we have restrictions around the actual travel. and we try to work with the airlines to get more flights up and running into locations. in the meantime, a lot of us are

diverting our ships into the ports, like philippines or india, to get the crew off. we have raised it up through the u.n. the ilo, the imo. we have key worker status from 53 countries recognizing the importance. and we need to get that high level profile, port seafarers across strongly, and to make sure we can get more crew changes done, particularly as we now enter a more challenging period with covid variations. we need to keep working on that strongly. paul: your costs have risen but your profits have risen as well. your third quarter profit was risen 18,000%. that is not normal, either. when you seeing these distortions ironed out ? jeremy: container shipping has been over the last 10 years not a very profitable business with

heavy years of losses. so, it is all comparative. to answer your point, we see the situation for the next three, four months being quite challenging. we want to hope very much that the pandemic starts to calm down. we start to see an improvement overall in the herd immunity, the vaccine rollout. and that will allow better operational management on the landside operations. and that will allow us to get the vessels turned around faster and better. so, i think we arein this probably together, all of us in the supply chain. we will have these challenges for another three to four months. then we have to wait to see in the summer, and improvement of the operation -- of the virus and we can get back to what we call a more steady operation and get our ships on schedule and get our customers handled much more efficiently. shery: jeremy, the expectation is that once we get the vaccine rollout successfully around the world, that perhaps we will have pent-up demand all coming back

and more economic activity everywhere. would that make it tougher for you to do business and shipping all of these products? jeremy: well, i think there is no doubt there has been a change in terms of consumer buying patterns. we have benefit on the container shipping side by this transfer to these hardware consumer -- because people have been locked down in their home bubbles. people spending a lot more on diy, items around the home, improvement area, sporting goods, etc. and that has been quite significant in terms of the growth we have seen in the last four months. inevitably, that approach that cannot continue. we expect some change as people hope to get back to travel, back to the more service economies, ability to spend their money on other items. we will see a slight decline at least in those super hardware sides. and that will have some potentially dampening effects on the overall demand for container

shipping. but container shipping is used to the swings and roundaboutss. we're a global business. we have a lot of cyclical businesses going on and activities. in the same way we went to the financial crisis in 2008 other things like that, what goes around comes around. we're resilient as an industry. and we will get through this. and we will adapt as needed. paul: all right. ocean network express ceo jeremy nixon p thanks for joining us. more on the follow-up of the pandemic on the shipping sector. in the next hour, we are joined by the port of los angeles executive. we'll also speak to the international chamber of shipping and the shipping corporation of india later on. this is bloomberg. ♪

paul: a quick check of the latest business flash headlines. top chip supplier time when semiconductor is investing $185 million in a new project. it'll create a unit outside of tokyo for research. and also fundraising to provide $4 billion worth of unsecured corporate bonds. they sold a similar amount of notes last year to pay for research in developing. an appli suppliers hiring newe workers and will resume operations after -- protests in

december halted production. apple an independent -- had worked with the company to improve systems. although apple says western will remain on probation. low pay rates and unpaid wages as apple seeks to diversify beyond china. our chinese delivery giant is planning to buy -- logistics. it aims to take a 52% stake via a cash deal and says it will keep the company on the hong kong exchange. shares of sf holdings have been halted pending the announcement. and crown resorts fell the most in four months after a damning report into monday laundering and organized crime links that damage place for casino. the judge found that the company is not fit to hold a gambling license.

she also called for the departure of crown's ceo. shery: we are minutes away from the opening of japan, and we will be watching automakers. honda and nissan have reported earnings while toyota will be later. our transport reporter river davis joins us. what were some of the common themes we saw from nissan and honda? >> yeah, so the first theme that appeared between honda and nissan yesterday as they are both starting to show signs of recovery. global automotive sales really improved in the quarter ending in december. so that kind of lifted all boat s. both honda and nissan raise third-year forecast for profit. although, of course, in the case of an yvonne that came -- in the case of nissan that came in the form of paring back.

nissan posted a slim operating profit of ¥27 billion. analysts were predicting that it would double that in losses. that was a bit of a surprise. the profit was due in part to improving sales but largely it was on the cost side. they have made good progress cutting costs this quarter. the other major theme that really appeared yesterday is that the global semi to conductor -- semi conductor shortage is starting to show up in automakers earnings results. this chip shortage occurred because automakers on high tech cars are demanding more chips. so, the simultaneous ramp-up of demand is leading to a shortage that is estimated to knock out 500,000 units off of japanese output in the first half of this year and honda and nissan are likely to face the most disruption from this chip shortage with honda estimated to

make up to 300,000 of that 500,000 loss. even nissan yesterday lowered the number of vehicles it would make due to virus concerns and ship shortages. paul: river, what about toyota? what can we expect from earnings there? river: yeah, so, the bright spot within this chip shortage is actually toyota. their chip supply chain is largely located in japan where producers have not face the same disruptions as those abroad. it is estimated toyota will receive relatively little impact from the chip shortage. in the case of two yoder, it really has strong research -- in the case of toyota it has strong research. global sales were down 20% in the first half of last year. but then they flipped positive in september and continue to build recently. they're up about 10% year on year in december. they're also producing a record

number of cars. it's likely to be very strong earnings announcement from toyota. an upgrade in his forecast -- shery: we have to leave it there. the latest on those earnings. let's turn to sophie for what stocks to watch in japan and south korea. sophie: sticking to the e.v. theme. kia, after it announced an investment plan. keeping an eye on st innovation with regulators to decide wednesday whether to ban imports of lithium-ion battery components by lg chemical. it could hinder e.v. production in the united states. you are watching results from -- bloomberg intelligence expecting the company to have a resurgence in china. [indiscernible] shery: yep. you will be watching the market open as we got those ppi numbers out of japan. another month of contraction of

1.6%. a smaller drop than expected. we have rising commodity prices helping that. months and months a gain of 0.4%. this is bloomberg. ♪

>> welcome to daybreak asia. i'm shery ahn. paul: i'm paul allen in sydney. asia's major markets have just open for trade. reflation and earnings in focus today. set for a mixed start, after wall street snapped a six day winning streak. it comes as no surprise for the dallas fed. the president talks about virus

relief and how to lift the economy. we check the output for global trade with the head of the -- north america the port of joins us -- the port of los angeles director gene seroka joins us. >> japanese stocks opening to the downside. we're going to be watching to reaction to results from nissan, honda and toyota. and jgp markets may see some buy, looking cheap after the global trend we have seen for curbs. we've seen yen swap rates rising. broadly speaking, guys, the return to reflation has not quite made a splash. as cyclicals are still lagging. the regional index so far. this month. with the focus going on with bonds, of course, checking out 10-year yields for the u.s. about 1.16.

waiting on more commentary from j power later wednesday. -- from jay powell later wednesday. yesterday move to the upside for the kospi. kia motors rising, e.v. in focus. th jobless ratee dragging to a 1999 high. bok will be holding a monetary policy decision. plus, we're waiting on decisions from south korea on whether or not the astrazeneca vaccine will be approved. kospi opening higher. let's check in on what is going on with sidney stocks. a lot of results out from australia, including from commonwealth bank under pressure following its report that it saw a first half drop by 11%. e-minis are the rise, even after we saw u.s. stocks fall.

new york crude holding at 50 bucks a barrel. we do have inflation data from china on the docket today. paul, after we got credit data from the mainland. 22 recovery on the mainland after yuan. a turnaround this morning. paul: well, for more on the markets we are joined by a strategist. investors do seem to be getting complacent. what could trigger a correction for global equities? >> yeah, i mean, people are wondering. it is almost as if there is a tough line aspect -- a teflon aspect. it is all most of so they are saying, oh, let's look for the next piece of news to endorse this good mood.b ut, eventually, all things have to reverse course.

people will look as to whether it will come from inflation data or risks in the bond market or commodities. where is this trigger going to be? one of the likely places as the u.s. treasury. we got a u.s. inflation report today. the cbo report is only expected to rise very slightly, but this clearly is an indication from the derivatives markets, people are very concerned at some stage inflation will be a considerable risk to the bond market in the u.s. when we see a wobble in the bond market, like a taper tantrum. it's very hard to predict exactly when these things are going to happen but certainly the longer it goes on, the more risk that bond markets won't go down in a study pace. yields rising just gradually,

but at some stage people will get more defensive. they will see that inflation has gone too far too fast, and start selling bonds aggressively and the equity market will get spooked by that. certainly people should certainly consider where their hedges are, what the exits are, because the equity market cannot stay on for too much longer. shery: let's turn to a billionaire investor because his latest strategy involves pitting the pboc against the fed. which assets will outperform? mark: yeah, very interesting conversation we had with him there. when central banks are doing a good job, when they get that kind of plaudits that you see, there will be a currency on the bond market, which is most likely to respond to that. leave seen investors putting a lot more money into the chinese bond market last year. investment have been growing in

general. the currency is very steady. pboc is allowing it to strengthen but only on a slow path. so these things are helping to build the central bank in china. if you look at what they have done over the last for years, they've hardly done any q.e. in china, even after the pandemic last year, they took a gradual approach to it. whereas, in the u.s. q.e. has been around for some time and has been very large. so, this is storing up risks for asset markets in the united states much more -- more so in than china. it will help chinese assets. shery: our strategist mark renfield. you can follow more on the bloomberg. you can get a market rundown with one click but also

commentary and analysis from experts. let's turn to the first word headlines. karina: the world health organization said is a highly unlikely that coronavirus came from a laboratory in china. speaking in wuhan, the w.h.o. official said the virus could have been introduced from a wet market in the city by a person that was infected or by a product sold there. the research team comprised 17 international and 17 chinese experts. malaysia has -- is cutting lockdown. restaurants can accept dining customers. the governor will allow some sports teams to resume training. the lockdown is estimated to have cost the economy $170 million a day. in the u.s., former president

trump's historic second impeachment trial has begun, an event rich in constitutional significance. one that is almost certain to end in a cortical. house prosecutors argue that trump incited the strumming of the u.s. capitol on january 6. trump's defense will argue his speech was protected by the first amendment. the u.s. navy has carried out maritime exercises in the south china sea indicating the biden administration will maintain america's opposition to beijing's territorial ambitions in the area. the theater roosevelt and the nimitz groups were operating some distance from the disputed islan-- islands where china, vietnam in the philippines all claim sovereignty. 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 am karina mitchell. this is bloomberg. paul: still to come, the i'll

look for travel ahead of the lunar new year. with co-founder eric gnock fah. we will find out how the business is adapting to the pandemic and we will get updates on funding. next, more on the challenges facing the global shipping industry with the executive director of america's biggest and busiest port. gene seroka of the port of l.a. joins us next. this is bloomberg. when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store. so you're a small business,

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shery: we are continuing to look at the challenges facing container shipping. the bottleneck of major ports around the world, freight prices have soared. the court of l.a. -- the port of l.a. is experiencing some of the worst congestion globally. this chart -- shows it is the

most since the 2015 strike. for more on the challenges facing global shipping, we turn to the port gene seroka. give us your take of what the situation is on the ground and on seas. what to the bat locks-- the backlogs look like? gene: we continue to be very busy her. some 20 vessels are worked in port today. normally that is between 10 and 12. we have 50 ships at anchor awaiting berthing rights. about 20 are destines for the port of los angeles. the balance to our neighbor next-door the port of long beach. shery: how much is that to do with the peak shipping season with a lunar new year in china coming up? what do you see around flows to china as well? gene: this has really been about three years in the making.

from the trade tensions with china to the fiscal policy including the strength of the u.s. dollar, then the pandemic buying surge that we have witnessed since the beginning of covid-19. these are levels of shipments we have never seen before in our 113 year history. at the same time, we are down 24 out of the last 26 months on exports moving from the united states through the port of los angeles. it -- truly is one way trade. paul: a majority of the containers that leave l.a. ports appears to be empty. can you describe what is going on with production? gene: paul, you are exactly right. the movement of empty containers from the port of los angeles is 2 1/2x those of export continues leaving -- containers leaving our docks. for shipping lines it is quicker to get those empties back at the manufacturers door in asia and

specifically china to wrote -- to rotate them back for american imports. the strength in the market is such that that work has to be done and a cycle fashion. and that is what we are seeing today. what we're seeing container manufacturing is a huge drop. as we left 2020, please remember we were down at the port of los angeles in the fourth quarter by 16%. we went over a cliff year on year really because of the trade policies and the advanced inventories on the import side to avoid that taxation of imported goods. so, the container manufacturers didn't see a strong market. sales and production are down 40%. paul: can you give us an example as well of the sort of challenges you face landside, with all of the covid restrictions and what is being done to address those bottlenecks? gene: the impact has been on the

worker, who has been out on the job since day one when the emergency orders went into place. right now, about 800 of our 15,000 dock workers are out sick or isolating due to covid 19 restrictions. there are limitations on our warehouse workers and we are concerned about our truckers, but help is on the way. we have been calling since early december to get these and other key port workers vaccinated as quickly as possible. shery: how long do you think that will take and when can you get back to sort of a semblance of normalcy and operations? gene: well, it all depends on the intake of the good sharings. a lot of what we are seeing right now is the 12th time -- 12 time -- dwell time, on the docks and in the warehouses. those containers are sitting for longer periods without being emptied and returned back to the port for normal circulation. we have to push the inventory

out of the warehouses into the domestic supply chain, on to store shelves, and to the fulfillment centers. once that begins to happen in earnest, we start to see things loosen up at the port and allow the other modes of transportation to begin approaching fluidity once again. shery: gene, the container business is your primary driver, right? but what about other business lines, and what are you seeing in other areas as well? gene: our other seven lines are down. save our fresh fruit and vegetables that come up from south america. steel and other bulk products down due to the trade tariffs imposed. our cruise industry has been shuttered since march. it is down 75% year-over-year. shery: you mentioned the trade tensions, the tariffs really making a huge difference. now that we have a new administration, you expecting

those challenges to subside? gene: what i do see, number one, is that we will have a meaningful seat at the table, similar to what we had during the abide-bide -- the obama-biden, administration. we have ways to get 10 million americans currently out of work back on the job. export jobs pay more than other segments across the country and we want to do our part to help america's economy recover. paul: you did mention you're seeing still a lot of demand from the fresh fruits side of thing. do you have any issues with agricultural products sitting on the docks? gene: no. our longshore men and women have done a great job to expedite the products, whether it they are vegetables and fruits or parts and components that go into american manufacturing. it is the retail goods that seem to be sitting longer, and we are doing our best work right now to try to segment those commodity

groupings so we can really move the product through that is necessary right now and encourage others to try to pick up the pace on their equipment and returning the equipment to the port. paul: you're seeing any expansion plans being accelerated or perhaps abandoned because of what is going on at the moment? gene: well -- that is a great question, paul. because of our strong fiscal policy, we've been able to advanced -- to invest through cycle. we manage more than $460 million of infrastructure and construction projects through the pandemic, which may be the equivalent of 3000 construction jobs possible all the way through this pandemic. we are continuing. had. -- we are continuing. -- full steam ahead. paul: gene seroka, the executive

director of the l.a. port. we will be hearing from the international -- shipping corporation of india later on. now a quick check of some of the movers we are seeing in japan. got honda rising now a little more than 4.8%, after boosting its full-year profit forecast and nissan also rising by more than 1%. fujifilm also performing strongly. full year operating income beating estimates. japan tobacco is currently off by 8% on the news it will be cutting jobs and closing some of its plants in a consolidation of its business. ♪

shery: here is a quick check of

the latest business flash headlines café pacific is -- cathay pacific is withholding shares. the stock market finding says the fibers 16 payment will be withheld. -- the february 16 payment will be withheld. it will not buy any stocks is so long as the arrears on withstanding. fewer customers by extracting more revenue from each rider. the adjusted loss was $150 million in the fourth quarter, better than average estimates. the cofounder and president john zimmer says that deep cost custs means that lift will-- cuts means lyft will definitely turn a profit this year but declines to offer fourth-quarter profit. taiwan semi conductor is

investing $185 million and a new project in japan to create a wholly owned unit outside tokyo to expand research. it is a fund raising $4 billion with corporate bonds. they sold a similar amount last year to pay for research and development. fiscal systems down in late trade. earnings came in at a fraction under $12 billion, down .04%, above forecasts. cisco sees current quarter earnings in line with analyst expectations. paul: posted fourth quarter revenue that topped estimates but added fewer new reserve -- fewer new users.

let's cross to our west coast reporter. tell us about twitters outlook? ed: the performance was so good in 2020 driven by the effects of the pandemic. there's no way it can be that good in 2021. double-digit growth in the coming three quarters. that is off the back of five quarters where user growth has been 20%. the concern for analyst is what is the driver of the top line going to be? there were questions on the call about having a subscriber model where you pay to have an ad -fre e -- some people might like but the question now is how does twitter innovate? they are committed to spending head counts on r&f. shery: we have breaking news at the moment. we are hearing from the amazon back e.v. maker -- aiming for an ipo this year. it says as soon as september. bloomberg is learning that -- it

has a valuation of $50 billion or more in its ipo. ed, i know you've followed the company. just give us an update on what this means for rivian. electric trucks are backed by amazon and ford. ed: this is one of the best capitalized e.v. stocks. they rate in more than a billion dollars to date. in their last round they were valued at $27 billion. they will start production of their debut vehicles in june. in north america, the pickup truck is sacred. what you see is sedans. tesla is the market leader. i hear from investors in the company. the products that rivian are delivering, an suv, are much more in line with what north american buyers want now.

they have a stellar list of investors, and a retrofitted mitsubishi plant in illinois. they have grown the headcount to around 3600 people. this ipo could happen this year at a lofty elevation, more than $50 billion. the timeline could slip into next year. paul: it all sounds very encouraging, but if the expensive tesla is any guide, i'm thinking about production hell. that will get production levels up to where they need to be? ed: it is one thing you learn covering this beat -- mass production is very hard. rivian unveil their designs in 2018 but they have been working on it for seven years. what i am hearing is that they are being very careful and very prudent and learning from the difficulties tesla had an ramping up its production. based on the interview i had with ceo in december, we know

there are supply constraints through 2023. in other words, they cannot build enough vehicles to meet the demand they have. they've also tried -- hired some former tesla executives who are had engineers, in the manufacturing team. they have a very built out team on the software side which is critically important in electric vehicles. they are feeling very confident in their product, and as are there investors. this is something they want, and have already got there eye -- their eye on a smaller form vehicle for china, for example. shery: ed ludlow, great to have you want to really break this news. next, the dallas fed president says spikes of higher inflation will not be a surprise. hear our exclusive interview with him next. this is bloomberg. ♪

karina: this is "daybreak asia." protests continue in myanmar, where the security services fired rubber bullets at demonstrators, and there are claims that live rounds were also used. a police convoy was attacked in mandalay. new zealand is the first country to sever all diplomatic ties with myanmar. while, the search for survivors of a collapsed dam in northern india continues with people

still unaccounted for. at least 32 are known to have died when a glacier fell into a reservoir. more than 30 workers have been out of contact since the disaster struck. no one has been pulled out since sunday. the arab world is celebrating the arrival of the region's first spacecraft to mars. the uae capsule has entered orbit around the planet after a seven month, 480 million kilometer journey. it took 11 minutes for the ok signal to reach mission control on earth. more manned craft from the u.s. and china are set to arrive in mars' orbit in the coming days. tampa bay super bowl victory over the chiefs had the smallest tv audience in more than a decade. the game had just over 96 million viewers, in contrast to last year's game watched by 102 million.

that makes at the lowest audience since 2007, when indianapolis beat chicago. the super bowl is regularly the most watched tv of into the u.s.. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: no clear direction in this early trading session across asian equity markets at this moment, but let's see what we should be watching out for in hong kong, sophie. sophie: when it comes to regional benchmarks, you have asx 200 leading gains by 0.4%, while stocks moved to the downside elsewhere. the nikkei 225 losing ground this morning. some of these stock movers i want to highlight on the back of their earnings, you have japan tobacco, dropping the most since 2015, amid its revamp as the company shifts its focus as well.

we are seeing nissan under pressure after it missed asked in its -- missed estimates. fujifilm, though, moving to the upside, rising to a record on the back of its outlook boost, and morgan stanley raising its price target on the back of those results. honda moving higher despite the chip shortage we are seeing for the auto industry. i want to highlight what we are seeing elsewhere when it comes to other assets in focus. we have seen a pickup indian swap rates. -- in yen swap rates. treasuries are holding steady after the options that saw demand on tuesday. at pimco, you have robert made saying he is betting on steeper yield curves in the u.s. as well as australia, though he does have caution for markets, saying the biggest risk is premature

calls on inflation as well as a recovery. paul: bouts of higher inflation will not be surprising, according to the dallas fed president robert kaplan. he discussed the impact of more stimulus out of washington and what tools policymakers have to take the country out of the teeth of the pandemic. robert: if we are able to defeat the variance of the virus and we have a reopening through this year, that along with fiscal support is going to mean that we have stronger gdp growth, we are going to make big improvements on unemployment, and it would not be surprising to see the cyclical elements of inflation build. i think you are going to have some supply outages that we are already seeing evidence of -- semi conductors, metals, wood products.

you may see it even in oil markets. i don't think those are going to be persistent. but i think there is no question the cyclical forces are going to build. over time, the question for me is, how strong are the accelerating forces of technology and technology-enabled disruption, which have been muting inflationary pressures for some time? how do those cyclical forces play out over time? that is what i am going to be watching for, the temporary jump in inflation won't surprise me. the question is, how persistent is it? for me, the jury is out on that right now. >> they are talking about a package that would be three times the size of what the ceo predicts the output gap to be. is that too much? robert: i am going to stay away from that topic. right now at the dallas fed, before any new package is

enacted, our forecast for gdp growth this year is approximately 5%. it is going to be loaded toward the latter parts of the year, and it assumes that we are able to vaccinate the population broadly and defeat these variants and get more mobility and engagement. i think what i am hearing in my district is what we need first and foremost, which is being discussed in these package debates. we need more money to help achieve these vaccinations. that is the key right now. it is going to take mobile units, more personnel, but if you can get people broadly vaccinated and get more mobility and engagement, that will help small businesses and get a lot of these people out of work back to work. >> i know that you and all your colleagues, basically, have said

it is too early to talk about qe , but i wonder how you assess the danger of inflating a bubble in financial markets, which is what a lot of people on wall street are talking about right now. and the 100 $20 billion you are buying a month to keep arcus functioning -- the $120 billion you are buying a month to keep markets functioning when they are functioning just fine. do you think the danger of the markets bubble is bigger than the danger of pulling back just a little bit? robert: the way i make that trade-off, why we are in the teeth of this pandemic, and until it is clear we have weathered the pandemic, i think it is appropriate to be aggressive with our tools. however, once it is clear that we have weathered this pandemic, and we are not out of the woods yet by a longshot, but once it is clear we have put this pandemic and the effects of it in the rearview mirror, and we are making full progress toward price stability, i think

it would be far healthier to be weaning off these measures. shery: dallas fed president robert kaplan speaking exclusively to bloomberg. for the latest on the developments in washington, laura joins us. what are the sticking points as democrats move the bill? laura: there are a couple of things that they are moving through this week, namely the $15 minimum wage as well as moving through stimulus checks, $1400 checks for people earning up to $75,000 for an individual or $150,000 for couples. these are areas in which we can see changes once the bill gets to the senate. they are working to get all the measures through the various committees that oversee all these issues. they will package the bill altogether and pass it on the house floor. pelosi said as soon as they are done, they are going to send it over to the senate.

the package will easily pass the house, where the democrats have a wider margin, but in the senate, they have to have all 50 democrats on board as well as getting vice president, harris to sign on -- vice president kamala harris to sign on. they need to follow all these budget reconciliation rules, the rules that allow them to pass it , but every line has to be directly related to the budget somehow. republicans are going to try to play devils advocate and request that certain things get pulled out if they don't follow the rules to a t. paul: fearing all that in mind, how soon could businesses and households see those checks? laura: democrats are aiming to pass this bill in early to mid-march. for the singing was checks, the irs is standing and ready to send those out quickly -- for the stimulus checks, the irs is standing and ready to send those out quickly.

the goal is also to ensure there is no lapse in unemployment insurance. that is a key goal for democrats. there are things that will take a little longer, money for ppp as well as child tax credits, a monthly child tax allowance for households. the irs has directed congress to have until july to get those rolling. paul: laura davison in d.c. next, the outlook for travel ahead of a lunar new year like none other. eric gnock fah joins us next to discuss adapting to the pandemic.

paul: when the year of the ox begins, it would look like no other new year that asia has seen before, and it would prove challenging for those in the travel and leisure sectors. to discuss, we are joined by the coo of travel activities platform klook, eric not far. how is your expectation for lunar new year -- how does your expectation for lunar new year compare with previous years? eric: thank you for having me. we are positive about domestic travel improving.

lockdowns have taken a pause. travel to other cities is discouraged, but we are seeing strong interest in experiences such as surfing, hiking, and rockclimbing. we are positive of that growth in leisure service in your own city, as well as taiwan, where domestic travel is possible. paul: with people sticking to their home cities, how has that affected your business? eric: it has been quite positive for us. we are now traveling domestically. we expanded our services to include things like weekend events, such as massage

experiences, etc. shery: where are you seeing the challenges in this environment? eric: on the investment front, where we are looking to put new funding into. a lot of these investors are on the sides of businesses. we have been trying to calm them in a digital matter, including reservations, etc. shery: why are you going to use all the capital raised? eric: that is one area to develop what we call the merchant's oval solutions. during the -- the merchant digital solutions. during covid last year, 2020, we saw a surge of digitization for

e-commerce players as well as delivery companies, etc. unfortunately, service providers have taken a bit of a hibernation in 2020. with lockdowns coming to an end in many countries in asia, we are seeing service providers try to get on this new trend, because a lot of consumers do not wish to walk into an attraction to queue up, etc., but would likely pre-reserve timeslots so they can get in, etc. definitely a lot of investment we can do. shery: what are the changes in behavior you are expecting to see post pandemic? eric: in terms of booking online for services, we have seen an increase in interest. pray covid, i would say the online booking penetration of experiences is around --

but for countries where we have seen lockdowns coming to an end, that has increased to 20% and we continue to see that increase forward. paul: you did raise $200 million during that e-series funding round. what did you say to investors to commit to that amount of cash right around the middle of a pandemic? eric: while waiting for international traffic to come back, we are focusing on leisure services. we have seen pent-up demand really come on once the lockdown has come to an end, when it is all about going out and spending time with your loved ones. most important, it is around experiences. that is here to stay, this

domestic tourism as well as domestic local leaders service. paul: i know you get this all the time, but do you have plans for an ipo? eric: no immediate plans. the last two years, we raised around $400 million. we are focused on building fundamentals for the business as well as for the industry we are in. the of history is in a very early stage of digitization, which is -- the industry is in a very early stage of digitization. no immediate plan on the ipo front. shery: klook ceo and cofounder eric gnock fah. thank you for joining us. later, hong kong food and health secretary sophia chan joins us to discuss faxing prospects in the city. coming up, dbs strikes an upbeat tone for 2021, even after posting its worst annual profit

drop in four years. we break down results from southeast asia's largest lenders next. -- largest lender next. ♪

paul: a quick check of the latest business flash headlines. we are seeing signs that some chinese owned tech companies remain on good terms with

beijing. tencent has won approval for new game titles despite increasing scrutiny of e-commerce companies at the moment. tencent's distribute entitles on behalf of riot games. crown results fell the most in four months after a report into money laundering and organized crime links that jeopardized a plan for a sydney casino. it was found the company is not fit to hold a gambling license. she also called for the departure of crowns current ceo. -- crown's current ceo. group net profit was just over $500 million in december, compared with a loss of about 140 million a year earlier. sales rose 11% to $5.4 billion. steel slumped in india after the nationwide lockdown brought the

economy to a halt. -- and says it will keep the company listed on the exchange. they are expected to resume trading engine engine later on wednesday, sherry. -- trading chin jen later on wednesday, sherry. shery: south asia's largest lender withstood its largest profit drop in four years. still, the ceo has an upbeat tone. dbs reporting 26% profit drop for the full year. that would be 33% down for the fourth quarter. what do you make of these numbers? >> good morning. i think these numbers should come as a relief for people

worried about singapore banks. profit fell, but the bulk of it was basically provisions. asset quarterly trends seem encouraging. there are a lot of very healthy trends. the other thing with the wealth management, it was down 7% year on year, but i think a key part of it is interest rates. the key number to watch is the eum's, which rose 7%. there is a lot of optimism in the numbers as far as i can see. paul: some healthy trends that you have identified. what does that mean for the 2021 outlook? >> i think the high provisions, 3.1 billion for the year, it takes away from the potential impact of covid in 2021.

provisions should go down this year. trends look interesting, and the wealth management division in singapore is in good stead for a healthy recovery this year. the only worry i have is interest rates keeping margins under pressure, but the base effect and the economic recovery are solid for the singapore banks. shery: they did announce that digital exchange launch in december, and now we have bitcoin touching record highs, so how do you think that plays into the broader strategy? >> currencies are seeing rising acceptance and interest not just in the region, but globally, and that is not just bitcoin, but central bank currencies. the majority of central banks globally are thinking about those launches.

i think these trends kind of help dbs to kind of benefit for that rise in tokenization products. some of the industry projections show growth of 24 times in the next seven years. the other thing it does is it provides hedge against the tail risk that banks get affected by. it kind of goes with their strategy of being a tech leader in the region. paul: just take a look at some of the other stocks we are watching when southeast asia and china come online. sophia's got more. -- sophie got more. sophie: in malaysia, we are keeping an eye on stocks as research and's are eased after a month-long lockdown. in hong kong, hsbc shares may move after its london stock raised to neutral.

and cathay pacific on the radar after the board decided to defer the dividend payable on preference shares that were sold to the government last year as part of the rescue plan. keep an eye on tencent, with the restructuring of its gaming business being reported, citi says that will improve product quality as well as growth. ahead of the new new year holiday in greater china, we have seen stockmarket turnover take a hit in hong kong, dropping to $19 billion on tuesday. fulks taking a break on that holiday where the stock market will be shuttered. let's take a look at what is going on in markets so far. taking a look at what is going on in japan, losing ground with several earnings on tap. the kospi gaining ground this morning

focus. kia gaining ground on the back of its investment update on tuesday, and the asx 200 on the rise, adding a third of a percent. that is just a look at how markets are shaping up so far. shery: and we have plenty more coming up. we will speak to a nobel laureate planning a campaign to end child labor by 2025. plus, hong kong's food and health secretary joins us. we will ask her about the vaccine rollout and plans to ease social distancing restrictions. our market coverage continues as we look ahead to the start of trading in hong kong, shanghai, and chin jen. this is bloomberg.

>> good morning. it is 9:00 a.m. in beijing. welcome to "bloomberg markets: china open." we are counting down to the open of chinese trade. it is all about reflation, all about earnings today, very much in focus, with asian earnings taking someone of a breather.