host: a very good morning. we are counting down to asia's major market open. host 2: welcome to "bloomberg daybreak: asia." hedge funds and online brokers in the firing line as u.s. lawmakers grilled key players and the gamestop retail frenzy. there was a 27% rally. wall street fell to its lowest

in a week over concerns over rising borrowing costs. oil also declined with u.s. refineries remaining shut for days to come. and a new leader -- for the tokyo olympic committee. host 2: let's turn to sophie kamaruddin to find out what to watch for. reporter: a holding -- holding steady. consolidating around the mid-77 level. yesterday, we got an update showing a strong start to sales for the start of the year but they anticipate a slowdown in march. farmers getting a raise on tracking the recovery in australia. also waiting on japanese pmi and

inflation numbers. we do have nikkei futures settling higher. some tepid moves expected on friday after the drop in asian stocks yesterday with tech leading the drop. texas is in the spotlight. the oil patch is resuming operations there. losing some ground, about 1% at the start of trade in asia. and another company sank to a eight month low. we have copper futures moving to the upside after we saw prices move to a fresh eight year high. base metals rallying including tin. given the supply chain issues for electronics.

host: let's get back to our top story. robin hood, citadel, and reddit officials have been testifying. lawmakers want to know why robin hood restrict did limit on the stock. our wall street reporter has the latest. that hearing has wrapped up. there has been a lot of criticism. what we heard was more in the realm of political theater. what were the substantial takeaways for you. reporter: the ceo of robin hood feels most of the questions -- fields most of the questions. the idea that they did not have enough capital on hand to meet the need the morning of january the 28th. that is a whopper of a piece of information.

they were able to raise the capital quickly but you didn't see a lot of backlash from politicians who were saying that they believed people were having the rugs pulled out from under them. with they have had to restrict trading if they had had the capital on hand? i don't know if we have all of the answers. frankly, i don't think the regulators feel that way either, or the lawmakers. they will likely want to have more hearings of this type. host: while we were watching this, you have gamestop moving again. that influence was very visible. reporter: you have to hand it to keith gill. a young man who was probably never been in the hot seat like that. cool, calm, and collected sticking to his convictions about the value of gamestop. people were interested in seeing his appearance. another person that fielded a

few questions was gabe plotkin. he lost a lot of money in the short squeeze but said he believed that what happened through this -- the industry will have to rethink how it operates when it comes to shorting. host: this is just the beginning. we are expecting more hearings and more questions but at the same time, the debate is still out there. how do you protect investors? reporter: the role of wall street. and its relationship to these main street firms given that firms like citadel securities paid some of these brokers for the odor flow. is that a practice that needs more disclosure? another thing is the role of social media. that is something that a lot of people asked about in many forms. is reddit the appropriate place

to have this conversation? what is robin hood doing to make sure its clients get the right information as they are trading stocks? how were they keeping control of that? and by the way, also, similarly, tiktok somehow came up in this also as well as weibel. these trading apps, their relationship to social media. host: thank you for staying up late for us. our wall street correspondent. you can get more on the gamestop hearing in today's edition of "daybreak." host 2: now, we have the first word headlines. we cannot forget the ongoing power crisis. reporter: difficulty in texas continues. oil slowing the most in a month.

the central united states is expected to keep refineries closed for another week. u.s. output is down about 40% with this unprecedented forecast. technical indicators also show current -- crude suggest oil has become overbought. u.s. says it is willing to talk to iran with the aim of finding a diplomatic way forward. the state department says it will accept an invitation to attend a meeting of the so-called five plus one group and iran. iran has called for action and not just words from the new administration in washington. nasa is celebrating its most successful landing on mars as the perseverance aircraft touched down on a mission for inkjet -- on a mission in search for ancient life. sand dunes and clips rising

about 19 meters -- cliffs rising about 19 meters high. it launched last july from cape canaveral. jeffrey is changing his mind on the precious metal and says bitcoin has a better wager. he is turning neutral on gold and the u.s. dollar with bitcoin becoming, as he called, the stimulus currency. 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 vonnie. this is bloomberg. host: chinese markets disappointed in their return from the lunar holiday. the managing director joins us now. australia's investigation into workplace coulter at parliament house says political staff is

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host: volatility may have come down from the retail trading story last month but it remains elevated from pre-covid levels. our next guest recommends using this elevated volatility to your advantage. xi qiao joins us now from san francisco. great to have you with us. our viewers can see this gtv charge on the bloomberg. if you are looking to take advantage of the volatility, where would you act? xi: we are still interested in

staying with equities. that does not mean that we are out of tech. but to diversify, cyclical stocks and global stocks are on a run. focusing on u.s. small and mid capital benefits. they are very attractively valued at this point in our opinion. the global small-cap currently trading at a 30% discount. and also, repositioning for ketchup sectors including energy and housing. energy stands to be a key beneficiary for a pickup in inflation and higher interest rates. it also has a strong capital discipline. we suspect oil prices to be well

supported around $68 per barrel as restrict -- as mobility restrictions are lifted and travel picks up. host 2: let me ask you on the point you mentioned earlier -- not necessarily getting out of tech. given that we are seeing rising rates, at what point do those higher yields make the equity markets, specifically tech valuations, less compelling? xi: tech in general is a longer-term theme for us. the current inflation concerns have raised concerns for tech equities. a lot of that is driven by the expectation of a larger stimulus or relief package. and the progress in vaccine rollout. tech in general -- you have to

be selective with what kind of tech especially in this post-covid world and the digital transformation. some tech is a keeper for the longer term. host: your prediction that cases are falling, normal social activity by the third quarter. does that not seem somewhat optimistic with a lot of risk factors given the unevenness of the rollout and the efficacy of the new variants? xi: new covid cases are falling sharply and we expect the resumption of normal activity by 2022. it is going to be uneven and you are right on that. but we feel that the stimulus is going to bring the economy back to its pre-covid levels.

the bigger package would boost gdp growth. we are looking at it lifting. and faster economic growth will translate into higher earnings growth. as s&p 500 companies' fourth quarter of last year's earnings exceeded expectations. they have also lifted their forecast for 2021. we are seeing with our scenario, targeting a 4300 s&p target by the end of the year. host: one final question before we let you go. let us talk about some of the alternatives. what will still stick around in terms of being viable investment options? xi: because the equity markets

have been so good, investors are looking elsewhere were growth and for yield. in terms of staying with equities, we do like consumers to look global. that includes asia and especially looking into china's broader recovery continuing. adding yield to portfolios from asian high-yield bonds and dividend stocks. and even currencies. looking at post cyclical asian currencies. these are some alternatives. and also -- bitcoin has been a hot topic. bitcoin heading above u.s. 50,000. it is still speculative.

we advise caution on the speculation. bitcoin dipped earlier this week for the first time. the headlines -- an increase in corporate acceptability. we still advise caution because we feel it is not yet a currency and platform companies will not accept in-house payments. we advise caution on that right now. spacs have favorable equity conditions and positive momentum. the current pace of activity is not sustainable in our opinion. host: xi qiao, we appreciate your time. let's get back to the virus outbreak in the u.s. u.s. -- bloomberg analysis saying that the vaccine --

our health care reporter michelle cortez joins us. we have also heard that whatever the u.k. has will be donated. will this help some of the developing nations? reporter: the developed countries that have put out their money and purchased all of the vaccines that are out there -- they have been said to have been hoarding the vaccines. but what has happened is they have created a huge amount of demand. the bloomberg analysis we just did -- 500 million doses by the end of july. the u.s. only has 330 million people. all of that vaccine is going to be out there and it will get to these other countries. it is a little bit of a

trickle-down approach popularized by ronald reagan. what it definitely did was create demand up front so we know we are going to have a huge number of vaccines that will become available. already, we are seeing other countries stepping up to help some middle income and low income countries get the vaccines they need in order to protect their populations. host: as in india. there is more vaccine diplomacy at play. reporter: india has reached out to friends in various places. they are home to one of the biggest manufacturing organization in the world. displacing a little bit of the diplomacy that we have already seen out of china where they have also reached out to many countries to make their vaccine available. there is vaccine coming to many

of these countries and at some point we will have more than what we need. host 2: michelle cortez with the latest on vaccine diplomacy. coming up next, we hear from leon cooperman. he says it is unhelpful to categorize the gamestop frenzy as a battle between the haves and the have-not (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you maintain comfortable, correct form. that means better results in less time. and there are over 20 exercises to choose from. get gym results at home. no expensive machines, no expensive memberships. go to aerotrainer.com to get yours now.

host: lian cooperman says this market mayhem has been characterized as a battle between the rich and poor. speaking to bloomberg, he said wall street fx has been declining for years but this does not mean there should be sweeping interference from lawmakers. leon: there is no stabilizer --

there are no stabilizers. when i came to wall street 50 years ago, the broker role did not exist. that does not exist anymore. for some unexplained reason, the sec eliminated the uptick rule in 2007. >> that is right where i want to go. a bloomberg board member -- arthur, took us from quarter point responsibility down to the rush of the de cimalization. explain why the uptick rule was so important. leon: i think it gave rise to --

and they know nothing about value or price. they exacerbate the trend. when the market goes up, they accelerate that. the fcc has been mindful of the cost of trading but they have not looked at what lowering the cost of trading would have on the market. >> charles cantor was on the other day and made very clear his break is a responsible short interest. leon cooperman, one path to restrict the size of the short interest to protect investors but to put a brake on the high-speed market. leon: no, i would say that we should follow the rules that exist. if you short something, you have to secure a --. the extent [indiscernible]

the rules have not been followed. >> is there anything to admire from the events of several weeks ago? leon: anything to admire? the system survived. no, the ethics have been in decline for quite some time. many years ago, i asked these algorithmic guys to co-locate their computers to give them a split-second advance over the public. that does not seem right. the response was -- if we don't do it, someone else will. the sale of order flow raises questions. i think there are a lot of things that could be done in the last thing we need is lawmakers getting involved in policy. the rules and regulations exist and are in place. just follow them.

>> a lot of people have characterized this as the wealthy versus the poor. how unhelpful do you think that is right now? >> i think that is baloney. the consistent attack against the wealthy. melvin lost a lot of money. he is a very wealthy guy. i don't think it is a battle between the wealthy and the poor. america is a country that became great because poor people aspire to be wealthy. not because they have a negative view of the wealthy. how do you become wealthy in america? you develop a product or service that someone needs and you get rich by selling it. those that have their heads screwed on correctly share that success with those that are less fortunate. host: let's get your quick check

of the latest news. walmart fell in new york after forecasting a slowdown in sales and profit for the year. the retailer says earnings per share will dip slightly this year and walmart will address it by cutting advertising and e-commerce. deutsche bank is cutting back its bonus pool. germany's largest lender had originally planned to pay out around to play $5 billion but says that is being scaled back after talks with the ecb. the central bank says it no longer objects to the payout. there have been no comments from deutsche bank or ecb. tying executive bonuses to diversity and inclusion. along the information -- among the information will be a full break down. mcdonald's is also looking for a

more equity -- equitable policy in its senior ranks. coming up next, a clampdown on lng. we have the latest. this is bloomberg. ♪

host: we do have breaking news out of japan. we are getting the january pmi inflation numbers. it is coming that are than expected in terms of disinflationary pressures on the japanese economy. a deceleration of 0.6%. it was expected that disinflationary pressures would contract the number two 0.7% in january. the core pmi numbers -- the sixth consecutive months of

disinflation. at least the pressure is easing from the previous month of december. it is not surprising given that we do have an underlying trend. remaining weak in japan. weaker wages. infection rates of covid not helping the demand featured. in terms of the suspension of the government's travel -- that is helping. energy pick up has been reduced as well which would be a gain in inflation of 0.1%. leading expectations of a flat number. turning now to sophie kamaruddin. reporter: the yen holding steady in the wake of that report but it is heading for a weekly drop against the dollar with trading

focused on steepening. watching for those moves. futures edging slightly lower. cash benchmark yield in japan -- 10 basis points. nikkei futures moving to the downside. the open in tokyo is in about a half of an hour. and under pressure this morning, resources losing the most ground. tech eking out some gains. on the story around energy, i want to bring up one stock mover in sydney. woodside petroleum. it's energy trading unit in singapore has signed a seven-year agreement to provide lng annually starting in 2025. there was a $4 billion net loss

reported. and the company managing the roller coaster ride we are seeing in the elegy markets which was exacerbated by the cold snap we saw. woodside the euro saying the virus will shift to longer-term contracts. host: the blackouts and deep-freeze plunging texas into chaos. it could take weeks to restart some of the refineries that went down. what is the latest we have been hearing from what is going on in texas? reporter: hello. thank you for having me. the latest is that things are looking at. less than 400,000 customers are affected by blackouts which is down by from as many as 5 million at the peak of this and we have solar power to thank for

this. that is helping the texas grid operators stabilize the system enough that they felt comfortable putting load back on it. the load figures since then have only been getting better. more low disk coming online. it house that the weather is getting relatively warmer. it is still very cold. the forecast shows that things are progressively getting better over the next week. i am careful to not say that the crisis is over. i will note that a lot of people we spoke with are still without power and there is still a problem in many neighborhoods where they are not back online. they don't have water. and there is still a significant amount of energy supply that is off-line. host 2: is that why we are seeing gas prices in oklahoma

drop in wti is under pressure? reporter: the market is looking further out to when this is going to end demand wise. if you are looking at the weather forecast, it is still pretty cold today but it is going to start getting warmer tomorrow and warmer it the next day. if the market is looking out two or three days, they are seeing a much better supply situation than they did yesterday or the day before. that is where you saw that 99% plunge with natural gas prices earlier today. there is still a significant amount of natural gas production shut in from the cold itself as well as oil. we did report earlier a scoop on the fact that some energy producers are starting to turn those wells back on today. reduction has begun to start flowing yet again. host: the fact that we are seeing this slide and oil after the -- slide in after the

frenetic drop, does that suggest a lift? reporter: the demand side is still a bit of an overhang. clearly, there was a lot of concern in the market this week over not how much u.s. oil production was being wiped out by the whole last it also for -- by the cold blast, but also for how long. now that things are getting better, power is being replenished, oil wells are coming back online in a small way, that gives the market a little certainty as to how long this might last. we are hearing that oil production will take anywhere from five-10 days to come back to normal from this cold blast. if you're thinking about it in a

longer-term, central oil futures come of this is not as bad as some people thought it might of been. host 2: thank you for the latest on the power crisis still ongoing across the u.s. the u.s. state department saying the biden administration would be willing to meet with iran to discuss a diplomatic way forward in efforts to return to the nuclear deal that president trump quit in 2018. during the trump administration, there was so much debate about this snapback provision of u.n. sanctions. what does this mean going forward? does this signal the u.s. is ready to get back into the nuclear deal? reporter: what you are seeing here is a question about the u.s. trying to solve what has become a big dilemma which is a

dilemma of sequencing. the u.s. has said it wants to get back into the iran nuclear deal and will lift sanctions but only after iran comes into compliance first. iran says it wants the opposite. the u.s. has to drop sanctions first and then iran says it will come back into compliance with the deal. this is an effort by the u.s. to offer things to iran short of easing sanctions and short of making more significant concessions. let's start the process. we all want to get back into the deal but we disagree how to do it. let's get to the table and start talking about things that we can do to get there together and solve these disagreements. host 2: do we see the river hoping -- do we see the revoking of the trump snap backs as a concession? reporter: we spoke with a couple

of senior state department officials. we asked them -- to what degree are these concessions? they said these are concessions to common sense, not to iran. the same time, the argument is that the u.s. was universally opposed to the security council. 14-1 in opposition to the u.s. moved to invoke snap backs. they argue that the u.s. cannot operate effectively at the u.n. and get what it wants on iran when it faces so much opposition including from any of its allies. what they are doing essentially is clearing the brush to pave the way for more intensive negotiations to get back into the deal. host 2: how will this be taken by iran? they have not been welcoming to the u.s. there is a deadline next week on the iaea being able to continue

to inspect sites. reporter: we do not know what the iranian response is. they have not said if they are willing to meet. u.s. officials say they have not heard back and they are not putting a time frame on windows might take place. host: thank you. coming up on "bloomberg daybreak: asia" taking over at a contentious time. we take a look at all of the challenges facing the tokyo olympics chief. this is bloomberg. ♪

host: this is "bloomberg daybreak: asia." the australian government says it intends to hold more talks with mark zuckerberg in a bid to break the standoff. the treasurer says they are looking for a solution after facebook's decision to block content sharing. tempora will push on with legislation to force facebook and others to pay publishers for news. in myanmar, protesters are being hit with water cannons. a young woman was critically injured earlier this month with shots fired from police lines. the military appears to be

moving to flashpoints. hong kong media mogul jimmy lai has lost another appeal to tencent. there were limitations on bail with a hearing subject to restrictions. lai's trial under the controversial security law is expected to begin later this year. a former staffer at pimco claims they were sexually harassed by male colleagues and their motives. amanda made the claims against -- in a complaint filed in california. she is one of three women making these claims. saying that this operates as a fraternity that favors white males. 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.

this is bloomberg. host 2: let's turn to the tokyo olympics. the organizers have appointed one of japan's most celebrated female stars. she takes the position. our politics reporter isabel reynolds has more. she is a seven-time olympian. she is clearly qualified. will this help ensuring support for the olympics at a time when we have seen scandals over sexism, fatigue over the virus -- what are we hearing? reporter: that is a good point. she appears to be the perfect candidate for this job. she has said that she was born to be an olympian. five days before the opening of the previous olympics in 1954 she was born.

she grew up learning how to ice skate on a frozen lake at her family's farm. she has had a fixation on the ethics which turned out to be her career. she moved into politics later in life. she is 56. much older than her predecessor. there is a big question mark over whether she can turn around this kind of empty olympics feeling which is spreading and japan. signs are not good. i'm looking at twitter in japan this morning and one of the top trends is support for the governor of a prefecture. he has said he will refuse to hold the torch relay in his prefecture and he is against the limbic that he believes the japanese government has not done a good enough job in controlling the virus. host 2: what are some of the

other myriad of issues she will have to contend with if this is to be carried off? in australia, the australian open was a big test as to whether a major sporting event can happen in the age of covid and it has been challenging. reporter: the olympics have set out a gametime for how it is going to deal with the olympics under a virus. for most people, it does not look like enough. they have not introduced a quarantine system for the athletes coming in. which would seem to many people to be a pretty risky idea. the other issue is whether they are going to allow spectators in from overseas. that is not been decided yet. and whether they are going to allow spectators or how many from even within japan. they could end up with a spectator free event, and it will hardly be a joyous

celebration of mankind's victory over the virus. that is what they have been calling for. host: isabel reynolds in tokyo with the latest on the liv-ex. let's take a look -- australian prime minister, scott morrison, has ordered a -- after an advisor said she had been raped in the building by a fellow staffer. this is just a number of reasons why the dark side of conditions for staffers is being exposed. anecdotally speaking to people that have worked in the press galleries and those that of work at the building, no one was particularly surprised. saddened and heart of five. but no one was surprised because of the nature of working there. what have you discovered in your research on the culture of

working at that house? reporter: i have discovered that there have been problems for quite some time. and no one has wanted to do anything about it. it is interesting that it is finally coming out to the public. these have been problems for a long time. it is very challenging now and good that these problems are coming out into the public domain. host 2: to make, there are two parts to this that is why this happened in the first place? ? the second is how it was handled -- what do you think of how the government and the prime minister have handled these allegations? reporter: one of the problems with this type of work is very long hours. people are away from home.

they come to parliament for a couple of weeks. they may be staying in hotels for a couple of weeks. and there is a lot of stress which could lead to people drinking which then leads to vulnerability in terms of sexual harassment. other cultural factor is the nature of the work. these people that work as political staff are not civil servants and don't have much permanency. they could lose their jobs at any time if they lose the confidence of their mp or senator or minister. it puts them in a very powerless situation. they have to make heartbreaking decisions if they want to make complaints. that breeds a culture which is not necessarily a safe culture for the staffers. as for how the government has handled it, i don't think it has handled it well. the prime minister is known for his ability to communicate. when problems arise come he can

de-conflict them or neutralize them without dealing with them. what in this case, he has not been able to avoid dealing with this. and he really has not handled it as well as he could have. host: in your latest article, you write that there is one legal reason for termination at the federal department of finance. that is when a member has lost trust or confidence in the employee. that is pretty broad. what are the options for the staffers? what do they have to be able to report? reporter: that is a big problem. there are contracts for employment between themselves and their member of parliament, senator, or minister. that member of parliament is employing them on behalf of the commonwealth government.

the only person in that relationship is the mp or senator. if they want to make complaints, they can go to the department of finance and the department of finance looks after their conditions. but if the department finds there is a problem, they cannot do anything about it. the only person that can act on the complaint is the senator or the minister themselves which is a problem because they are often the reason for the complaint. people could lose their job easily. and even if they stay in their job, they could lose their reputation and the next time a job comes up, they may find that they are not employed. these are real problems. host 2: you said it. if you are seeing not as being a team player. how do you go about fixing this? is it the federal government trying to implement rules and change the rulebook? even if you do change regulations and rules, how do

you change the culture itself? reporter: there are a number of things that have to be done. the first, bring out the nature and extent of the problem into the public domain. the fact that it is now in the public domain -- people are talking about it. and at the top, the prime minister is saying it is not acceptable. that is a start. but rules are important because at the moment, there is no code of conduct for a member of parliament or a senator in australia. if you don't have a code of conduct, you cannot hold anyone accountable for their behavior. even ministers -- they have a standard but nothing is said about bullying. rules need to be put in place. once they are in place, you can look at how they are held accountable.

the question then is who then follows through on the consequences. it is very difficult. there is a vested interest in no one having power over them. host: i only learned of these allegations this week. do you find it conceivable that the prime minister only learned of these allegations this week? is that something that is believable to you? reporter: i think it is believable because what that is saying is that these are problems that senior staffers are actively covering up or they don't think they are important enough to take to the prime minister. that tells you that people within the building don't think

that the well-being of the staff is that important. so frankly, it does not surprise me. host 2: thank you. much for your insights into this important question an issue. we will have plenty more to come on "bloomberg daybreak: asia." ♪

host: let's take a look at some of the stocks we are watching.

reporter: watching japanese stocks. tesla tried to boost is it feel in japan i cutting its prices and the country by as much as 24%. toyota's mexican output will be impacted by gas shortages. on the other side, when it comes to its investment in car plants, it is going to upgrade a factory in the u.s. there is also a move on a play yoda stake. -- toyota state. we have some price targets on watch as well. nissan was raised as nomura honda was downgraded. keep a close eye on the japanese auto space this morning. host: coming up, an interview

with the founder and ceo of the world largest cryptocurrency exchange. he joins us to discuss this and crypto mania. we will also take a broader look at the markets. this is bloomberg. ♪

shery: welcome to daybreak: asia. i'm shery ahn. haidi: i'm haidi stroud-watts in sydney. asia's major markets have opened for trade. asian stocks are set to retreat after wall street fell to its lowest in a week on concern about rising borrowing cost. oil declining with u.s. refineries remaining shut for days to come. u.s. lawmakers stop retail

frenzy. the stock has seen a any 700% rally. the u.s. says it is willing to talk to iran about the 2015 nuclear deal to find a way forward on an accord abandoned by president trump. shery: japan and south korea coming online. let's turn to sophie for what to watch. seems we are having a little bit of pressure. sophie: risk off mood taking hold here in asia including for japanese stocks, which are off by 8/10 of a percent. the nikkei and topics heading for a weekly gain. and other one for the japanese benchmarks. -- another one for the japanese benchmarks. when it comes to japanese bond markets, traders will be walking -- will be watching for the boj bond buying operation. this as you are seeing the 10 year yield test the 10 basis point line. we will keep a close eye on auto players.

nissan suspending operations at two factories in japan. reuters reporting toyota's output may be impacted. toyota shares slightly under pressure this morning. we are seeing that theme also play out for kia motors. being affected by the gas shortage. keeping an eye on -- we are seeing some moves to the upside for the kospi. up half a percent. the korean you want is -- korean yuan on the front foot. bank of america saying they expect outflows to continue this year. over in sydney, we are seeing downside moves for the asx 200. new york crude is tracking lower. losing more than 1% in the asia session. we have gold in focus near an eight month low.

base metals have been gaining ground. giving a close eye on the space given that crop -- that copper is trading at eight year highs. 10 markets looking pretty tight -- tin markets looking tight. haidi: eli, looking at the week that was, i am wondering if the reflation narrative is threatening the markets. you can see that playing out in the cost of inflation. is this overdone given that we do not see any meaningful inflation despite so much monetary and fiscal stimulus. >> i think as the recovery continues, we are going to continue to see -- the concern is it is driving treasury yields up as well. a lot of focus over the last few

days. especially if you look at the 10 year. it is -- from 90 basis points to 130 basis points. that is a third of the move. the concern is we will likely see inflation coming up further in the middle of this year. what we have seen historically is a sharp move in treasury yields can cause turbulence for the equities market. the first quarter of 1987, yields rose sharply. and of course, in 2013, the temper tantrum where we saw yields increase again. the difference between this episode and those two other historical episodes, this is very important, as opposed to greenspan and bernanke, we think

power is poised to keep the fed policy extremely accommodative. we think the fed -- there could be some near-term turbulence for the equities market. haidi: so you're still overweight u.s. and equities. which parts of asia are you seeing opportunities? >> we think the trajectory of the economic recovery in china is rick -- is positive. we are still overweight in china. over the next 12 months, we believe the cyclical sectors, energy, industrials and commodities will continue to outperform. we are positive on these markets as well. shery: even if perhaps we see

more of a recalibration by the pboc and more tightening in terms of monetary policy? eli: i think that is a great question. i think the pboc is obviously very carefully recalibrating toward its normalization. we have seen in the past pre-monetary normalization could result in a accident. we think they are learning from the lessons this time and we think they are doing a great job. it helps that in addition to a very strong economy in china, especially on the supply chide -- supply-side, that the global economy is recovering and that will add another tailwind to the chinese economy, which is still slightly dependent on exports. shery: it was great having you on. thank you. bank of singapore, head of investment strategy.

later, we speak exclusively to the apex ceo for credit suisse. he shares his outlook for investment banking and wealth management. let's get to vonnie quinn for the first word headlines. funny: oils -- vonnie: central u.s. states expected to keep refineries closed for another week. u.s. oil output is down. refineries struggled to catch up and resume operations. technical indicators show crude is due for a pullback. oil has become overbought. the biden administration is sending $4 billion to kovacs to get vaccines to 20% of people in the world's poorest nations. former president donald trump had refused to join the program over a dispute with the who. washington says it will donate $2 billion this year and another 2 billion in 2022.

china is rejecting allegations it may have blocked taiwan's attempts to buy vaccines. it did not explicitly deny beijing had interfered in the deal. taiwan says it was close to a final agreement for the biontech vaccine last month but quote, things changed amid external forces. unemployment in hong kong is at its highest and a than 16 years as virus curbs continued to hurt business and jobs. underemployment also rising. the economy shrank 6% last year. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg.

haidi: still ahead, we will be speaking with a cio about the outlook for cryptocurrencies and digital wallets. next, the latest from capitol hill as they grill so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

>> how do you misjudge your capital requirements and prevent people from being able to trade? >> i would not say we misjudged our capital requirements. this was a one and a 3.5 million occurrence event. giving people what they want in a responsible way is what robinhood is about. we know that investing is serious. >> do you think we need more

resident -- more legislation as a result of what happened or did the system work? >> i am not so sure about legislation. what i would say is increased transparency could help here this it -- could help. >> this is a threat to the future of our financial system and we have got to get to the bottom. what steps has your taken -- has your company taking to guard against this? >> we spent a lot of time ensuring the authenticity of our platform. we did not see any signs of manipulation. >> i am sorry for what happened. i apologize. i am not going to say that robinhood did everything perfect. shery: some highlights from the congressional hearing on gamestop in the retail trading frenzy. it's get more perspective on what happened during those conversations. this was really not so much about gamestop or the market

volatility. it was focused on robinhood, was in it? >> that is exactly right. even though you had several different testimonies, the person who was in the hot seat was the ceo of robinhood. he was the one that almost every single line of questioning was directed at first and robinhood was a primary focus of this hearing. haidi: so then that takes us to the criticism. this ideal that real-time settlement would have mitigated the issues that took place. what is likely to be the regulatory take away from all this? >> robinhood was facing a lot of different questions about what happened during the gamestop saga. that included some issues like whether the firm is encouraging users to take on undue risk, whether it is giving them enough

support and whether it active in and up -- it acted in an appropriate way when it limited trading of game stock and other -- of gamestop and other stocks during that issue. robinhood has come out and said, reacted appropriately in this case. we needed to shut off purchases of these different stocks because our collateral call from our clearinghouse was so high. it spiked during that crazy wild week. to the question about clearing and settlement time, robinhood has said 1/6 would be if real-time settlement could occur. right now, it takes two days to clear and settle trades. that was one solution robinhood was offering up. it would be very difficult to implement, but it is something robinhood great. shery: we have spent hours watching this hearing today. it seems this is just the beginning.

we are expecting more grilling to come. what could be next in terms of more of these testimonies and regulation? annie: that is right. we are definitely expecting to see follow-ups even though we had five hours of testimony we heard today. as far as the regulatory landscape, it is hard to know. there was a lot of focus on how robinhood earns money in a system called payment through order flow where they send customer trades to citadel securities to be filled and citadel securities pays them for that. this was something there was a lot of questioning about. it is worth noting in the past, issues have come up before with big hearings in congress after flash boys by michael lewis. no practices for payment through order flow has not been stopped. it is an open question as to

whether there would be any regulatory changes in the wake of this hearing. haidi: and we heard from reddit as well as keith gale. what was the overall takeaway in terms of the role of social media in all of this and the role of prominent individual retail investors? annie: it was interesting. the reddit ceo did not get nearly as many questions as vlad tenev. it is true that reddit and firms on wall street played a key role in the gamestop episode. hoffman did give a little testimony on how and why reddit communities allow users to be anonymous, how the site works, how it builds community. there was not too much attention paid to the intricacies of the

social media connection. that might be something we have to wait for a further hearing to see. haidi: annie massa with the latest on the gamestop are really the robinhood hearing. the billionaire founder of interactive brokers said the market came close to breaking during the reddit driven volatility. he told bloomberg why he things regulators needed to have acted much earlier. >> the core options had been exercised, they would head to deliver hundred 70 million shares. -- 270 million shares. as things are today, the loan broker has take it into the market and buy the shares. whatever the price is. that could have pushed the price further up into the thousands.

when that happens, the shorts cannot pay up, so the brokers default. the brokers default on the clearinghouse. the whole thing is a huge mess that is impossible to untangle. there is a simple solution for this. number one, we would have to get the short positions published once a day because we currently have it only twice a month. second, the sec would have to require brokers to charge an additional 1% of margin for every 1% of short interest. that would then raise the margins progressively so high that people would stop shorting stocks. >> margin requirements would have to increase as short interest increases. i am wondering from your

perspective, is there anything you can do to protect your clients before the sec or regulator has to tell you to do it? >> of course we can. that is what we did. we increased our margins. >> what does the regulator need to make that decision on your behalf? i am trying to work through this process with you. i do need a regulator to make that step? >> i do not know the shorts daily. it is important for me to be able to know how much to increase the margins by so that regulators can require the short to be reported daily. that is very simple. secondly, regulators tell us the minimum margin we must charge. we are free to charge more. that is exactly what we did. some brokers may not be -- may not know how to deal with this. that is why i think it would be good if the sec required all

brokers to charge more. >> and other issue that came up as well, a conflict of issue as well. you are not reliant on payment through order flow. can you speak to that? the explosion of commission free trading we have seen the last several years. can we have one without the other? >> can we have the explosion of interest -- >> can we have the explosion in commission free trading or the democratization of markets as we have seen without the payment through order flow factor in all of this? >> but look, the commission between -- we charge less than one dollar and $.95 on the average trade. that difference is almost negligible, right?

the average trade is probably about 40, $50,000. whether you pay zero or two books, that is not much of difference. >> so you think the conflict of interest is not an issue? >> no, i do not think so. shery: interactive brokers founder and chairman thomas peterffy. coming up next, planning a homecoming listing in hong kong. 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.

haidi: a quick check of the latest business headlines. deutsche bank is cutting back its bonus pool after the european central bank criticize proposed payout levels. renminbi's largest lender had planned to payout $2.5 billion but says that is scaled back after talks with the ecb.

the central bank says it no longer objects to the payout. there has been no comment from deutsche's or ecb. mcdonald's says it is tying executive bonuses to targets including meeting diversity and exclusion. a full breakdown of u.s. employees by race, ethnicity and gender. mcdonald's is looking for more equality in its senior ranks and aiming to achieve gender parity worldwide. walmart fell in new york after forecasting a slowdown in sales and profit for the year. the retailer says earnings-per-share will dip slightly this year. it plans to address shortages by expanding advertising and e-commerce. shery: let's turn to weibo. the company planning a second listing in hong kong.

the microblogging service is china's answer to twitter. let's more from julia. really, these chinese homecoming listings all the rage these days. what do we know about this one? julia: they definitely are all the rage these days. further weibo, -- four weibo, it makes sense in following the steps of hours. others. there has been a proposal that could lead to the delisting of chinese companies that do not allow u.s. regulators access to audit papers. these would be looking to have a hedge against a possible delisting, which affects all chinese companies. it is a good way to expand its investor base. hong kong is closer to its home market.

it gets to raise money quite easily and quickly and invest -- and expand its investor base closer to the home market of china. facing a lot of competition for advertising revenue, from other platforms like quite show -- like kuaishou. haidi: what are some of the other companies playing this kind of homecoming listing? julia: some of the other companies, they normally are quite large. they include tencent music entertainment. the companies need to have been listed for two years and after that, some of them have a big enough market cap. they can do these homecoming listings. we have billy billy, auto home, trip.com. if one goes down the list, they are almost all planning a homecoming listing. baidu is going to be a large one

and coming quite soon. as is billy billy. shery: our bloomberg equity capital markets reporter. let's take a look at the state of trading when it comes to this friday's session in asia. a tepid session after u.s. stocks fell by the most in more than a week. technique continued declines. -- tech continued declines. stocks trading in the first hour. the kospi seeing some modest upside. the broader regional story is one of retreat. investors assessing how rising borrowing costs could impact the equity rally. treasuries hanging on said the right -- hanging onto the rallies. australia off 7/10 of 1%. we are awaiting retail sales numbers. kiwi stocks off by a quarter of 1%. coming up next, we get a look ahead to china's market open. the first day of trading

approved -- day of trading proved to be disappointing for the csx 100. this is bloomberg. ♪

shery: we have breaking news on the bloomberg. we do have the japan pmi figures for the month of february. the preliminary number finally back in expansion territory. coming in at 50.6. this is after we had dipped into contraction territory. it has been seesawing for the past few months. the services pmi number still in contraction. 45.8. this number has been in contraction territory since february of last year. really shows you how the coronavirus pandemic has hit the

services sector more than anything. the composite pmi number, contraction. 47.6. haidi: we are seeing a little bit of upside when it comes to retail sales. this is the january luminary number. a month on month number. seeing an uptick of 6/10 of 1%. using expectations of a 2% gain. we had expectations from bloomberg economics. that retail sales would rise during the first quarter of this year. listing of curbs across sydney as well. supporting retail sales. it does look like that recovery could look a little bit weaker. it comes on the back of services composite and manufacturing pmi coming in weaker than expected. a mixed bag when it comes to the job numbers should it does look slick -- to the jobs numbers. it does look like it is showing

some resilience. >> slowdown in retail sales in march. that is a forward look compared to the january number we got. elsewhere, we are seeing stocks women's -- stocks moving mostly slow. apex one of the biggest laggards in tokyo. the nikkei 225 losing half a percent this morning. one highlight has hit a fresh all-time high. some equipment maker's gaining ground in tokyo. we are seeing kospi, the bright spot in asia with chipmakers helping provide a list. samsung gaining ground with lg chemical also on the rise well

financials are under pressure in seoul. shery: let's turn to some developments around iran. the u.s. state department saying the biden administration would be willing to meet with iran to discuss a diplomatic way forward in efforts to return to the nuclear deal president trump quit in 2018. our foreign policy reporter joins us. what exactly does this mean? could we see the u.s. returning to the nuclear deal? >> i think what you are seeing is the biden administration is putting more meat on the bone in terms of how it plans to overcome what is a central disagreement with iran. both sides want to go back into the deal, but the u.s. says iran has to go first. it has to come back into compliance and we will drop sanctions. iran says you have to drop sanctions and then we will come back into compliance. what the u.s. is doing is extending a little bit of an olive branch saying let's get to

the table. let's just talk. several years ago, it was a huge deal to think of the notion the u.s. and iran would talk. that was considered a major concession. they are just trying to get the ball rolling while also saying they are very early in what is going to be a long, torturous process. haidi: do we interpret this as something of an olive branch to move the process forward? nick: i think what you are seeing is the u.s. is looking for ways to offer little concessions to iran without having to let go of its ultimate leverage, which is sanctions chiefly on iran's ability to sell oil. there was a lot of criticism at the time and also in the time since. biden folks have said these are moves that inflamed tensions. they did not have any real-world effect. they just made everybody angry

and isolated the u.s. and did not achieve anything. you could not do a snapback of all the other countries on the security council all disagreed with you and refused to enforce that. what they are saying is we are going to get back to normal and try to find some way toward a negotiation. shery: there was a lot of controversy over that. what about iran? where do they stand? during the whole trumpet administration, iran had been pretty defiant -- the whole trump administration, iran had been defined. nick: we had not heard a whole lot from iran. obviously the iranian economy is under a ton of pressure. u.s. sanctions continue to bite hard. there are going to be a lot of incentives for iran to do that. u.s. officials say they do not know whether iran will agree to accept that invitation. haidi: is this going to be something that is welcomed in

washington or is there also the domestic pressure for how the biden administration moves forward? nick: already, we are seeing criticism from republicans in congress who were opponents of the deal to begin with and are worried the biden administration is going to give away -- you have already started to see some criticisms from republicans saying we always knew this is what they wanted to do and now you see the proof is in the pudding. we asked senior administration officials on a call with reporters a couple hours ago, what you make of that criticism? the response was this is a concession to common sense. we have to get the ball rolling. we are not giving anything away. the sanctions remain in place. they are saying that criticism is unwarranted. shery: nick wadhams in washington.

trading resumed in china after the lunar new year holiday. a muted start to trading in the year of the ox. three expect that to continue? -- do we expect that to continue? >> the csi 200 did open a bit higher. it did kind of touch we'll

high. in the first -- kind of touch the all-time high. the gains filtered throughout the day. as we said, markets are still quiet. -- are still quite high. it was a drop and muted start to the year. not so much to read into. one thing to know is the biggest stock in china fell 5% yesterday. what we are hearing is there is some kind of unwind out of the popular stocks from mutual funds. fell by more than 130% the past year. it is trading at more than 50 times jetted earnings. if you do want to -- mutual funds raised a record among cash last year. they are buying a handful of stocks. they are chasing momentum. if you want to take profit, that means selling it. when these big heavyweight start falling and you see this unwind, the broader rally will suffer. we could get some consolidation. where we see a rotation in butter markets. that record is really close. it sounds like we will struggle to get there. shery: how much are investors wanting with the pboc does? i feel like they felt compelled to offer relief in statement.

saying investors should not pay too much attention to the size of the open market operations. how much of a policy signal are we expecting? >> exactly. the key thing and what was different this year is that the liquidity injection before the lunar new year, the central bank -- typically banks need more cash over the holiday time. there was a very different year. there was less travel. the demand was not so high. the injection was smaller, which means that withdrawals will be smaller after the lunar new year. the pboc does drain short-term funds from the banking system after the lunar new year. it is important to mention they did full over the medium-term funds. the pboc central bank will

maintain liquidity stable after it really kind of -- with the big liquidity squeeze. it is seeking to calm nerves and asking people to not read too much into this. shery: a preview of what to expect with the market open in china. also coming up next, it the mania over cryptocurrencies accelerated this week with bitcoin hitting $52,000 for the first time. we are speaking to the founder and ceo of the largest exchange. this is bloomberg. ♪

vonnie: this is daybreak: asia. deals trillion government says it will hold -- the australian government says it will hold more talks with mark zuckerberg in a bid to break their standoff over paying for news. josh freiberg says they are looking for a solution after describing their decision to block content sharing as all stash as outrageous. -- as outrageous. a former staffer from pimco says she was sexually harassed from colleagues and then demoted.

one of three women who made claims against pimco saying the money management favors males. nasa is celebrating its most successful landing on mars. the perseverance touched down. the touchdown on the red planet -- rising 90 meters high. it launched last july from cape canaveral. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: let's turn to one of the most incredible rallies we continue to see after the run i was surge in one -- surge in the world's largest -- a stellar start. trading volumes were above and

etf's typical first day in canada. let's bring in the ceo of the world's largest crypto exchange by volume. joining us now from singapore. always great having you with us. the bullish news seems to keep coming for bitcoin, especially with this new etf. are you concerned at all their might be some speculative froth in the latest movement or is is a reflection of how mainstream bitcoin is becoming >>? i deftly think this is a reflection of how mainstream bitcoin has become. i think we are just seeing the tip of the iceberg. i think things are just starting. shery: if it is just starting, where does it end? the rally last time around, that did not last too long. what happened was not really pretty. >> if you look at the last

rally, it rallied from the previous peak in 2013. rallied through 2000 15, 2016, 2017 to we had a retrade. a three-year bear market. now we are back in bull market again. we are just past the previous peak by a little bit. right now, the fundamentals are much stronger than a few years ago. we see a lot more institutions come in and more inflation happening outside the crypto industry. we see a lot more activity now in this industry than three years ago. also from the user numbers, i believe the first time i talked with you guys on this channel, we were seeing all-time highs of 300,000 new registered users per day.

no we are sustaining above that peak -- now we are sustaining above that peak. in 2017, you sell a peak. now we are seeing new users coming at a faster speed. i think we are just seeing the beginning. haidi: where do you see fair value then? you have a price target? >> this is the thing about crypto. there is no fair value. you have to represent how much wealth of people using it or people in the industry. if you look at the market, only 11 listed companies have announced they are holding bitcoin. just a very small tip. if you look at the individual holders, i think we are reaching somewhere around 1% adoption globally. probably somewhere around 100, 250, maybe 200 million users

right now. that is probably less than 1% adoption. we still have 80% to go. the crypto market should be larger because with cryptocurrencies, there is a lot more you can do. this is similar to market size bigger than the taxi. it is very clear we are just at the beginning. things have finally started rolling. haidi: let me talk to you about bytedance coin. how are you planning to leverage that? >> it started as a less centralized platform exchange token. it has outperformed bitcoin in the last four years. more recently, it is contributed by the margin, which is a decentralized blockchain.

i think the current boom is caused by that. more fundamentally, because bytedance coin has a smaller market cap, it is easier to grow that. there is more activity happening . i think bitcoin will act as the global reserves in the cryptocurrency space. there is a lambright to what on. understand, binance coin does have a higher risk. i think that is the fundamental. shery: you are offering dodge coin futures as well. i think elon musk is a big supporter. what do you make of that? >> i am surprised e line is so gung ho. this is a descent -- surprised e lon is so gung ho.

it is one of the coins that started as a joke but has been gaining a lot of populated overtime. i think elon really likes it. elon probably likes it a lot personally. we listed a long time ago. we added futures because of the new demand on liquidity. we do where users go. haidi: always great to have you with us. coming up, owning a tesla got a little bit cheaper. the company has cut prices on its model three. a new industry ranking showing we are seeing mainstream auto brands dominate. also, the latest consumer

reports ranking. this is bloomberg. ♪

shery: here's a quick check of the latest does not flash headlines. data software company palantir fell after a flood of shares became available for sale for the first time. nearly all its stock is open for trading. such curbs are common in

traditional offerings. less so for firms that list likely on exchange -- on an exchange. airbus fell after saying it generated almost $6 billion in the last quarter and deliveries beat breakeven targets. investors seem concerned deliveries are said to remain at 20 20's depressed levels. the outlook confirms airbus and other playmakers remain mired in the air travel downturn. volkswagen jumped on speculation it may spin off porsche. sources say the w is talking to advisers on the merits of a porsche share sale. investors say traditional car producers will have to spend billions to develop electric cars to stay in the race.

haidi: tesla has trimmed prices for its cheapest model three. it comes as the company fell in consumer reports. magazines closely watch the assessments. katrina leads the asia transport team and joins us now. where else around -- where else have we seen these prices being lowered and what is the strategy behind this? katrina: around the world, we have seen 13 price cuts. most recently, the u.s. and japan. earlier, there have been cuts in france and germany. in japan, the price of the model three was cut by 24%. elon musk has regularly lamented teslas are too expensive.

at the same time, the cost of the components that go into making electric vehicles are coming down. the market is getting much more competitive. ev is being rolled up by conventional carmakers. there is a lot of competition. shery: there had been some quality concerns around tesla weather in china or the u.s. what are people saying about tesla cars? katrina: there was a consumer report out that shows tesla has dropped in the auto ranking. for tesla, a recurring issue is a failure with the touchscreen. this is the touchscreen that controls many of the car's function. if you lose that screen, you lose major controls and safety equipment on the vehicle. there have been other issues found with build quality.

despite those flaws, tesla did score highly in consumer reports. a ranking that puts cars in order based on greenhouse gas emissions. did very well in that score. also doing well was the prius, the toyota hybrid and the camry. shery: the latest on tesla. we are headed towards the open in china. let's turn to sophie in hong kong. sophie: here in hong kong, keeping an eye on the exchange operator. speculation that weibo will be planning a second listing in the city as soon as this year. yesterday, new horizon health had a strong debut. local media reporting the exchange operator is investigating claims of duplicate subscriptions. keeping an eye on china fortune

lane. shares to resume trading today. it had ended its plans to buy stake -- earnings do this friday. jp morgan expecting the post holiday week will be better from macau casinos. investor expectations are quite low given the evaluations are below long-term averages. concerns that prices are looking choppy. we are keeping a close eye on commodity players. this as wti is tracking lower. haidi: all right. still to come on bloomberg tv, the prospects for the u.s. economy. vincent chan will be sharing his outlook for chinese market as we get day two of trading in the

year of the ox after the first day proved to be somewhat disappointing. we will be speaking to the ceo of credit suisse. that is it from daybreak: asia. this is bloomberg. ♪

david: it is friday. welcome to bloomberg markets china open. counting down your last session of the week in mainland china. let's get to your stories today. hedge funds and online brokers in the firing line as u.s. lawmakers grilled the big players in the gamestop frenzy, asking whe