haidi: a very good morning. we are coming down to ages major market open. shery: welcome to daybreak asia. tech stocks fall on the valuation concerns, dragging the nasdaq to a three week low. the s&p 500 is on its longest losing streak in a year. bond yields climb as investors price in growth and inflation.

asia calling. a new strategy including relocating senior executives as it pares back its global ambitions. in the u.s. -- and the u.s. mourns half a million covid related deaths. president biden is due to speak this hour from the white house. japanese markets close. australia coming online. let's turn to sophie for a check of the action. sophie: already seeing a staggered open. now moving to the downside here. some names under pressure including alumina under the -- on the back of its results. the aussie dollar trading your a three year high. 82 could be on the horizon given the boost to commodity prices and weight differentials. the aussie 310 curve, some steepening with rate steady on the front end after the rba defended its target on the three year.

we are seeing the s&p in many sticking higher after we saw u.s. cap a -- ahead of jay powell's testimony to congress, holding above 105. a three day advance. this is as we are seeing the conversation around yields, where we can go from here, they impact on risk assets. it has accompanied the conversation around reflation bets and pushed commodities to eighth-ranked -- to a 2013. you're seeing a rally across the complex. morgan stanley saying oil markets are set for the tightest quarter in 21 years even the rebalancing happening faster than expected. wti holding around 62 right now. cold holding steady after rebounding from a seven month low overnight. we stall the dollar faltering.

-- we saw the dollar faltering. haidi: sophie kamaruddin and with a look at the market open action. we are seeing u.s. president joe biden delivering remarks on the lives lost to covid-19. and of course, this happens on a day where we have seen death of americans from covid-19 passing half a million as a result of the coronavirus. president biden making those remarks on the lives lost to covid-19. he is joined by the first lady as well as the vice president, the second gentleman all be together holding a moment of silence and a candle lighting ceremony in washington, d.c. you are seeing president biden giving some of those remarks as we mark that milestone of 500,000 american deaths. the u.s. is marking what he calls a heartbreaking milestone

on covid deaths and we will continue to monitor that for you. you can continue watching if you are a bloomberg subscriber. it is that live go under terminal. you can find the diary entry coming up today as well as any of the events you may have missed earlier. let's get to markets appeared our next guest says the rapid rise in bond yields tapers some of the shorter-term outlooks particularly in certain sectors. joining us now is tribeca portfolio manager jim vega's. health care is another one you are worried about as being some of the areas that could be hit by some of the reflation trade in rising yields. >> i think there are two folds of why those sectors might be under a bit more pressure. number one is earnings. they have many health care businesses or growth businesses have done well during the last 12 months.

some of them have been beneficiary of the pandemic. whether it is testing or online and e-commerce. that already going forward perhaps will be somewhat challenged when we do cycle some of those strong earnings. aside from that, the high bond yield is going to put a bit of pressure on evaluation that had been applied to those sectors. these two combined, we are going to see those sectors under reselling pressure as investors take profits in those sectors and by some of the laggards that potentially would do well. haidi: when you take a look at valuation, normalization, you take a look at a market like australia, you consider all positive earnings season has been. you consider your seeing cfos feeling boy and about the

outlook, -- feeling b uoyant about the outlook. >> absolutely. as you said, the earnings season has demonstrated really strong earnings. especially relative to some hefty expectations. the outlook has been reasonably bullish and optimistic as well. if you look at the equity market from january until now, it is up 4%. it is a pretty good performance for a pretty buoyant so far this year. certainly, with the rapid growth or rapid upgrade cycle we are beginning to see, that should underpin the positive outlook for the rest of the year. shery: we also have -- haidi: we

also have the start of the vaccine rollout in australia. the u.k. getting close to their inoculation target. how much has the vaccine optimism been priced in to markets and how much is there greater uncertainty about what this means for a return to normal? >> i think that is a really good question. different sectors all have very different levels of optimism based on the vaccine rollout. for some of the cyclical sectors such as travel and the like, there is a fair bit of optimism going into this sector. perhaps we will not see the real earnings return anytime soon. ultimately, it is about, what is your investment horizon? for investors, if you take a long enough view, if you take a two year view, we will move past the current earnings dip and have double digit growth over

the next couple of years. if you take six months in and some of the sectors have rarely pretty hard. shery: growth has really been under pressure lately. will they make a comeback? is this a space you are still into given that they are structurally supported? >> absolutely. i do not believe skewing portfolio into just value or just growth. it is about buying companies that have strength in its business model. in the low interest rate environment, even though we may have bond yield escalation for the time being, the growth is going to be very difficult to come by over the long time. on the five-year review, a lot of those structural growth winners are going to be a whole lot larger relative to some of the cyclical businesses we are talking to. it is strategic. you need to be able to pick up those growth companies when they are sold off and be tactical in buying some of the stock.

shery: always great having you with us. for now, let's get the vonnie quinn with the first word headlines. vonnie: brazilian market slumped after president bolsonaro removed the head of state oil company. it is the latest find the government is rolling back to bolster the president's sinking positive at a. the decision comes as -- with sources say even the inner circle was taken by surprise. china's top official in hong kong says there is an urgent need to overhaul the city's electoral system to ensure governance is controlled by patriots. legal loopholes in the basic law must be closed as china awaits further curbs on the already limited democracy. reports say beijing will curb the influence and select the chief executive. and tycoon protesters --

anti-coup protesters in myanmar staged the biggest rally so far. hundreds of thousands of people took to the streets after the fatal shooting of two demonstrators in mandalay. the european council is the latest body to condemn the coup as businesses and banks closed in solidarity with protesters. thailand is extending its coronavirus state of emergency until the end of march as it prepares to relet vaccinations next week. it will be the 10th extension of the program. thailand welcomed 5% of growth last quarter as big business raised cash. 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: let's take a look at oil surge. one of the stocks we are watching in the early session.

this is the papua new guinea oil developed. an upside of 5%. a bit more over recovery given the stock is still down a bit over 30% over the past year. we have seen some disappointing results. although giving some clarity to investors. that is creating some of the upside in the stock price. we also heard some of these personnel changes in terms of the director changes and the full-year loss being reported. in terms of the 2021 production, holding steady. it was the loss, $320.7 million as well as a smaller dividend compared to a year ago. we will be getting more analysis particularly when it comes to exploration plans that have downplayed this year and some of these market conditions and their approach to allocating capital and spending. we get those views a little bit later on. karen wolf will be joining us on

bloomberg markets: asia. still ahead, asia's busiest -- will be evaluating earnings. plus, we will return to the white house as the bite administration remembers the lives lost to covid-19. this is bloomberg. ♪ 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.

shery: united states right now is marking its half a million americans death market, a really grim milestone that america has reached as it suffers from the coronavirus pandemic. president biden at the moment giving a speech to the public on what he calls a heartbreaking milestone on covid deaths. in just a minute or so, we will get first lady jill biden, vice president kamala harris and the

second gentlemen having a moment of silence at 6:15 p.m. eastern time. president biden has ordered all flags on federal properties to be lowered at half-staff for the next five days. this as we have seen the grim milestone being surpassed. ♪

[amazing grace playing] ♪ shery: you have been watching

president biden and the first lady as well as vice president kamala harris and the second gentlemen holding a moment of silence to mark the grim milestone of surpassing 500,000 covid deaths across america. let's get to michelle cortez, our health care reporter and discuss this milestone. it is such a tragic moment for america as we see this moment of silence being held. america really having the largest number of deaths and the second largest, brazil, coming eight distant second. -- coming a distant second. michelle: it is important to keep these numbers in perspective. coronavirus is the third reading cause of death in the united states. it has come out of nowhere in two years ago did not even exist. for comparison, second is the -- cancer is the second leading cause of death. 599,000 people die every year from cancer. it is only 99,000 people more

died of cancer. heart disease, the number one leading killer. a lot of people have other conditions and our hearts finally give out. that is why they are written out as having died from heart disease. neither one of them dramatically outpacing the number of people who died from coronavirus, which is brand-new. the next four top leading causes of death in the united states together do not reach the number of coronavirus deaths have had. it is absolutely in a public number. haidi: in the presidential proclamation from joe biden, giving more context, or americans have now died in a single year and a this pandemic then in world war i, world war ii and the vietnam war combined. it is extraordinary and it is tragic. in that proclamation, he again -- uniting a finding and to

defeat the pandemic. are the numbers we are seeing in terms of immunity and improved treatments, the number of vaccines that are being rolled out, is that painting a more optimistic picture? michelle: absolutely. just as fast as this virus came, we are hoping we will be able to get it under control in the coming year. we are seeing remarkable numbers when it comes to the number of infections that are occurring in people who have been vaccinated. incredibly low numbers in health care facilities, long-term nursing facilities. in countries like israel where they have done a great job of vaccinating and even in u.k. were the variant has cropped up, they are seeing dramatic increases in the number of infections in people who are vaccinated and across the world even in the united states, we are seeing dramatic declines in the number of new cases. we are getting reports we are going to be getting more

vaccines. johnson & johnson this week is going to the fda with a request to get clearance for its vaccine. hopefully help is really on the way here. shery: our health care reporter, michelle cortez, as the president, the first lady as well as the vice president and second gentlemen marking the 500,000 deaths milestone. while the country is still him into mass vaccinated the adult population, the vice dean of the johns hopkins school of public health says attaining herd immunity is not so straightforward. >> i think there are models of herd immunity and then there is the reality of herd immunity. people can estimate when we think herd immunity might kick in and what that means for people, but we have to see it because those models are generally based on assumptions. one of the key important points to remember about herd immunity is you can have generally herd immunity, meaning cases really

do not have a good opportunity to keep spreading, but then you have communities where there is a lot of vulnerability. people have not been vaccinated in few people have gotten infected that could wind up with serious outbreaks and hospitalizations and deaths. general herd immunity could leave some serious pockets pair the second question is, what will it really take? that may depend on these variants and other factors we do not know about. >> of the factors is the very lens of what you're talking about. can you change your perception of how vera lynn this virus is given the new variants that are out there? >> there is some evidence some of the new variants may be more lethal. it does not appear to be fundamentally changing the epidemiology of the virus so far in the united states paid right now, cases are coming down. hospitalizations are coming down. we know with 500,000 people who

have died, just how serious this pandemic is and we have to keep pushing it down so we can minimize the chance we get in trouble with the variants or any other kind of problem. >> do you think we are understanding the vaccine at all ? -- understating the vaccine at all? >> i think the vaccine is pretty awesome kid we have incredibly fat -- credibly effective vaccine. you see the data from israel showing staggering declines and risk from people who have been vaccinated. i think there is no reason to undersell the vaccine. we should not think that in a week that everything is going to be fine. there are a lot of risks out there. i am telling people, you know the list of things he want to do when this is all over? you cannot do them all today. if you have been vaccinated and you are through that period, there are probably some things

on that list you may be able to do. >> don't you think it may be more optimal to tell people who have had the vaccine they can do the things on the list? and that be a better way of selling the vaccine by saying them you can start to return to normal once you have had it? >> i think you can say you can start to return to normal. for some people, they are itching to say it is all done. that is not really a great message for everyone right now. you can say for example that people who have been vaccinated can get together for dinner. you can go see your grandkids. depending on the situation with a few modifications but a lot closer than you were before. i am feeling these questions every day from people and they are amazed when i start to tell them after a year of telling them no. >> it has a psychological impact on everyone, particularly younger kids who have seen a significant portion of their life going forward. what is the timeframe you see at

this point given the vaccinations available where you expect anybody to be able to go to their local drugstore or a stadium and get vaccinated? >> i deferred said the federal government. they are talking about the summer for adults more or less. it is going to take longer for kids because the studies have to be done. i think we are going to see this is going to turn from a demand situation pretty quickly in a matter of weeks or a couple months to a vaccine acceptance situation where we are going to be waiting for people to get ready for vaccination. we need to start that process now, offering vaccines, answering questions. there is vast inequity in access to vaccination and we should be fixing that because that is going to turn into the most important end game for this virus. shery: the john's hopkins

bloomberg school of health dean. we will have plenty more to come on daybreak asia. 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.

>> take a look at the huge surge in commodity prices. we have inflation. the bloomberg commodities index now at a multi-year high and continuing to gain ground. of course, the asset class seen as a good hedge against inflation. also, brent and wti above the $60 per barrel level, and goldman sachs predicting that brent prices could advance to the 70's in the coming months. we do get the inventory reports on wednesday. watch out for that. copper futures at a record high, copper futures in london above $9,000 per metric ton for the first time in nine years.

up next, fed chairman powell about supporting the democratic relief plan, playing down inflation fears. we have a preview. this is bloomberg. ♪

vonnie: this is "daybreak: asia." i am vonnie quinn. global infections numbers above 11 million. almost two in the united states. drugmakers do not have to have widespread efficacy vaccine studies. former president donald trump has lost a supreme court appeal to keep his tax returns private

in a criminal investigation. they gave no explanation. last year, prosecutors said they may investigate alleged tax and insurance fraud, as well as falsification of business records. china has again rejected allegations of mistreatment of the -- the human rights council was told that the people living in the province enjoy greater security and freedom from terror attacks and insisted labor rights and personal freedoms are not restricted. bitcoin's roller coaster ride continues after elon musk admitted the price seemed rather high. his wager set prices surging. the latest criticism prompted dramatic declines. a longtime skeptic and treasury

secretary janet yellen warned of an extremely inefficient way of conducting transactions. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi? haidi: we look at the markets in hong kong. soph? sophie: resources and industrials gaining, while consumer names and tech under pressure in sydney, and some earnings driving price action. one jumping nearly a percent after production guidance -- nearly 8% after production guidance. extending a rally, vaccine development in australia. they had chatter. checking at the board to see what is going on with the aussie dollar, we have a holding above

a level, with 82 in focus for the australian currency. we are seeing iron or futures in singapore stall somewhat, under pressure -- iron ore futures in singapore stall somewhat. the rba intervened on yield control targets, and oil is very much in focus, holding below the 62 level. there is an outlook for rebalancing, morgan stanley saying the oil market is in one of the tightest quarters since at least 2000. and with that backdrop, the rally climbing. we have seen that rally track higher in u.s. breakevens, but, haidi, that pickup has reversed somewhat when it comes to treasuries. haidi: treasury secretary janet

yellen has again pushed for president biden's relief package day before the federal reserve is set to talk about this issue. local economic policy with kathleen. we saw a preview. yellen is definitely pushing this bill. kathleen: she was fed. she could not push a policy political stance, but as a treasury secretary, it is her job to do just that. obviously, this is one area where she and joe see i die, going big on stimulus, or she would not -- where she and josie eye -- and joe see eye to eye, or she would not have gotten the job. krugman said we went too light after the great financial crisis, the great recession, in

2008, 2009, on stimulus. now, we have to go big. it has to be strong. she said regarding the $1400 stimulus checks, shouldn't they be a little more targeted? she said there are things that there we cannot see. this is why they seem to be this size, at least. let's listen to what she says. sec. yellen: the $1400 checks, of course, we do not want those to go to very high income individuals and households, but that really helps to make sure that the pockets of misery that we know exist out there that are not touched by the more targeted things, help is provided there, as well. kathleen: yellen also said we need aggressively to make sure those millions of jobs get refilled, there is no economic scarring. she said joe biden may be pushing for a boost to the corporate tax rate, 28% to 21%,

and importantly, there is a lot of concern about the fed stimulus policy creating a bubble a week ago. on cnbc, she said there may be some sectors where we should be very careful, but, clearly, she has got her eye on potential frothiness. haidi: what are we expecting from chair powell then? kathleen: well, he will be in the hot seat. stimulus, how big should it be? this is the question. of course, democrats are going to want jay powell to come out and say, "yes, i am endorsing this $1 trillion package. for relief" republicans are going to be pushing them to say, are you worried? inflation will rise? some are concerned about bubbles and other assets. jay powell is expected to say, you know, the unemployment rate is not very high, probably closer to 10%, and janet yellen

has said this as well, but on the other hand, do what they did at the end of the last fed meeting in january, which is to say, i do not really see signs there is a bubble out there in stocks. yes, we are watching. let's remember one more thing. former secretary larry summers has been on television on friday saying that he sees a risk of overheating, that rising inflation will push the fed to raise rates sooner, middle of next year, and that could affect the economy, shery. >> kathleen hays with all of the details with the testimony this week. and, of course, as kathleen mentioned, the risk becoming the front of the debate. one director argues that the bigger danger now is longer-term damage to the labor market. he exclusively tells bloomberg how they are factoring in those concerns. >> it is a risk that we are

keeping our eye on. certainly, it is something to consider. but if we look at the recent history over the last couple of decades, we have seen that the economy has the capability of running at stronger paces, and we think that the tools exist to manage those risks as we go forward. we could debate different ways of measuring the output gap, measuring the risk associated with this particular crisis, but if you sum it all together, we are at a very precarious moment in economic crisis, and that is why we feel pretty confident that we will be better off if we take these actions definitively. we put ourselves on the trajectory to growth, and then we work with the tools that we have to manage any challenges we face going forward. >> it is about aid, not about stimulus. i think a question many had, brian, is how giving the checks to those with 75,000 dollars a year should be considered aid,

relief, and not stimulus. if i have a job, and i earned $75,000, and you send me $14,000, why is that relief? what is that relief from? brian: if you look at the payments you are discussing, unemployment extension, and then targeted support at the lowest income families with children and essential workers without children, in the aggregate, this is a very progressively designed package to provide aid principally to the bottom half of the income distribution. >> with respect to families out there that will be getting direct payments, those people who have lost jobs, or one of the earners in the family has lost jobs, some are facing additional costs in the pandemic, childcare, other issues, and this provides a bridge, provide support to get families and businesses through to the other side of this pandemic, and to do so in a way

they do not have to take on additional risk or additional economic loss during the interim. >> national economic council director brian deese. we are looking ahead to the hsbc full-year results. we will be digging into the pivot, just ahead. this is bloomberg. ♪

>> hsbc embarking on a huge project. >> in terms of targeting that. >> hsbc has appointed a person to a permanent role. >> absolute turmoil to financial markets. the bank is opting for the study. hsbc at 7.1% in hong kong dividends over the coronavirus. >> it must be changed. did he say hong kong-based bank? >> being hit by a perfect storm here. people are seriously beginning to question whether hsbc in the

u.k. is sustainable. >> 2021 is still uncertain. >> caught in the crossfire, the hsbc chief executive will face u.k. lawmakers this week. they are facing scrutiny over freezing the account of hong kong activists. >> good times and bad times in challenging times. today is a particularly challenging time. walking away from hong kong? the answer is no. >> hsbc is very strong in hong kong and has been a very important part. i would love to ca presence of the bank in hong kong. -- i would love to see a presence of the bank in hong kong. >> you heard from one of our guests, and bringing him back to hear more about his expectations

with the company's full-year results. always great to have you with us. >> good morning. shery: on the bloomberg, we can see clearly how the hsbc markets have really been under pressure. of course, they operate in the u.k., hong kong, where you have a low rate environment compared to the other giants in the banking industry that operate in china/southeast asia, so let me get started with you and ask you about your expectations for some of the numbers that we can see today. >> well, actually, nobody really expects too much from the bank in terms of performance because of the covid pandemic. everybody expects hsbc to have earnings like 40% lower. a little bit more than $8 billion u.s., but a strong

increase in the fourth quarter as things are getting better. of course, in hong kong, everybody is looking at the dividend policy, because last year, the dividend was the lowest in years. and so if the bank announces an assumption of dividend, even $.12, i think the share will bounce back and rise. haidi: let's talk about what hsbc would do going forward, because we have continuing -- we have been continuing to see these signs about asia. will we hear more about that today? francis: yes, the expansion to

the u.s. was a mistake. they had money in the u.s. business, so they will exit that. of course, for years, east asia has been their biggest contributor of profit, especially hong kong. of course, they are concentrating on asset management and wealth management , following things like ups. of course, hsbc, in terms of wealth management, is much smaller than ups. -- than ubs, so some catching up to do. it is a competitive business.

if you cannot generate profit for your clients, clients have no loyalty, so they face a tall order. >> a tall order, and in the past, we have been talking about the dividend in asia, but this company, the bank, has disappointed in terms of the lack of detail, the granular level detail, with regard to a plan. what are you looking for that would give you confidence? francis: actually, the situation improved over the last year, because last year, there was political pressure on hsbc because of the failure to support the hong kong government , and they had been forced to

close a branch in south china, and i think the chinese government, they do not really want to put pressure on hsbc and try to welcome it back, because china has to open the financial markets there. they are trying to open the financial mike it's anyway, so they will well, hsbc back -- financial markets anyway, so they will welcome hsbc back. on the one hand, you have to try to please the chinese government. on the other hand, you have the u.s. government with policy towards hong kong and china, and they put all of these political leaders of hong kong on blacklists, so they had better

come close. they really had to navigate a really treacherous path in the politics. >> we are also hearing that potentially, there will be an acquisition in singapore in the future. will that be a smart move to try to diversify the interests away from greater china a little bit? francis: i think what they are looking at is trying to buy the wealth management business from other banks and similar assets like that, and, of course, singapore is a wealth management center. it is the correct move. but the biggest number of billionaires are created in china. so they should really

concentrate their business in china. but, of course, when the u.s. has such anti-china policy, it is difficult, but, hopefully, joe biden is not as anti-china as donald trump. so that would make life much easier fc. >> francis lun, always appreciate your time. later today, we will be speaking to the head of hsbc coming up at 5:30 p.m. hong kong time. this is bloomberg. ♪

>> and here is a check of the latest business flash headlines. huawei with an eight inch screen when opened out, powered by their own 5g chip. it comes after the founder vowed to stay in the smartphone business, dismissing reports he was ready to walk away. there is a plan for tencent to

be carbon neutral, more aggressive than microsoft and alphabet, aiming for the same by the end of this decade or sooner. they account for 80 7% of tencent's disclosed emissions -- 87% of tencent's disclosed emissions. and the acquisition of future assets taking another turn with the indian supreme court holding regulatory approval of a deal. the ruling is opposed for amazon, which has tried to dominate the indian retail sector. the court is expected to hear further arguments in the next three weeks. >> more nations are grounding an older model of going due to the engines after dramatic pictures of the airline to paris falling

from the air. let's get more from our bloomberg m&a reporter. you talk about this, obviously terrifying. imagine looking out of your window and seeing that in your backyard. is this a story for boeing, or is it more a pratt & whitney issue here? >> i think at this point, it points to a more pratt & whitney issue. it is not another 737 max crisis. this particular model that united has been flying debuted in 1995, so these planes have been around for a while. there are bigger, structural issues, if there had been, they would have been unearthed by now. everything points to that. there is sort of a knee-jerk reaction when there is an aviation issue to think about, oh, is it something to do with boeing?

i think that does reflect on the company and the challenges it has had in the past years and the work to rebuild their reputation. >> so what are the ramifications for pratt & whitney and perhaps even for raytheon, which owns the company? >> it is somewhat longer term, because pratt & whitney no longer makes the engine for the 777. they had a contract in 1999. these are older. they make money on maintenance, service work. so if these repairs prove particular costly, i think you have to start to wonder if it is an accelerated retirement for these aircraft. as of today, there is almost as many of these planes with these pratt & whitney engines in service, so i think that speaks to some of the issues of these

bigger planes in particular. now, whether or not we get to that point, we will have to see. the flipside of that is if you did see a wave of retirements here, that could be a good thing for boeing, because it means once international travel comes back pose pandemic, people are going to have to buy new airplanes, and boeing would only be too happy to sell them. >> what about the budget to be able to replace fleets of airlines at this point? brooke: i do not think this is an immediate turnaround. it will be one of the last markets to come back. i am just saying if we do see a wave of retirements, i do not think that international travel goes away forever, so, eventually, if that were to happen, you would have to keep pace with demand, which would benefit the newest boeings. >> our bloomberg opinion reporter, brooke sutherland.

we have the market open next. japan is on holiday. we will bring you that. this is bloomberg. ♪

shery: welcome to "daybreak: australia." shery: south korea -- haidi: south korea has just open for trade. inflation worries sending commodities to their highest in eight years, it is become the biggest waiter on the class and at least a decade. hsbc will unveil earnings and a new strategy, including

relocating senior executives as it pares back global ambitions. and the outlook for the hong kong economy after the coronavirus economy. we are joined by richard lancaster. let's look at the trading. >> looking at the broad market moves ahead of jay powell testimony to congress, teachers ticking higher while the yen is -- in australia, fluctuations for stocks with energy stocks gaining ground and a pickup in oil. we are seeing aussie bonds study, on anticipated action from the rba. checking on the open in south korea this morning, moves to the downside, checking on auto stocks as well with the government saying they plan on eco-friendly cars and hyundai motors to reveal another ev model. the kospi losing ground this morning. this is the government raised

concern around stock market volatility in south korea. the korean won on the back foot this morning as the countdown to a rate decision. we got a gauge of consumer confidence earlier and we will get household credit for the fourth quarter. looking at china's home prices due later this morning, the offshore yen holding about 646 -- offshore yuan holding at about 646. ocbc chinese copper demand will help lift prices for the metal in 12 months. expectations driving a lot of these moves, and oil is set for the tightest quarter since about 2000 according to morgan stanley. wti around $62 this morning. gold is steady after rebounding from a seven month low.

shery: we continue to see big moves across assets, markets trying to waive those profits for growth and inflation. let's get our guest's take. let's start with commodities, sophie was telling us what's happening with the copper and oil and gold. commodities acting as an inflation hedge but you have the dollar movement. what is your best guess of hair -- of where the space is headed and the outlook for 2021? >> there's a lot of talk about this being a super cycle for commodities, and certainly the performance, some of the major commodities as you mention, oil and copper in particular in the past few weeks, it is getting people excited about the possibility that we are in for a rally in equities that could go on for months or even a couple of years.

it is partly about inflation but also about the outlook for the global economy really being so much stronger in 2021 than last year. not only are we rebounding from the pandemic them up but because vaccines are doing so well, we can see the possibility of very strong growth. we just saw a report saying china expects gdp to be 8% this year. there will be other major economies around the world also posting significant gdp numbers as well. all of that suggests there will be great demand for rebuilding and the commodities at the forefront. copper is a good example, trading above $9,000. certainly the optimism is extremely high. a lot of these things are coming from relatively low basis as well. with supply shocks and certain commodities having restrictions because they won't mind as much as usual during the pandemic. all of these things creating

technical shortages as well, plus the overall demand. it is not surprising commodities are doing very well. it could well get overheated and you make it central banks trying to cool things down, that when global demand is going to be as uniform as this, you can only expect prices will stay pretty high. haidi: and it's all about the u.s. stimulus package as well, we are expected to hear more about that from jay powell when he testifies before the senate. how will we see bonds reacting, especially if we get new commentary from him on the inflation outlook? mark: it will continue to be very much about the yield curve in the u.s. bond market. the fed have got themselves in a tricky position. they are aligned with the u.s. treasury in the respect that they are very focused on unemployment. they want to get the jobs numbers down in the united states and there is still a long way to go in that respect.

short-term rates have to be kept extremely low. they are near zero and the fed has emitted to stay there for a couple of years. -- has committed to stay there for a couple of years. when the economy is already improving, there is bound to be the risk that people will assume inflation has to go higher. on the long end of the bond market, yields will be on an upward trend because people need to price in that real yields have to be higher over time. when you look at the short end of the higher cash along and will have higher volatility, and we see the curve getting steeper. but by historical standards, the curve is not that steep. the difference between 2-30 30 year yields at four basis points. that will happen over time if the fed is committed to the liquidity with steeper and steeper bond curves.

that does not necessarily mean it is a bad thing for equities, it is a reflection that the economy is getting stronger, that at some stage, you will have portfolio investors saying bonds are starting to look cheap in relation to equities and it could be switching, but probably not just yet. haidi: you can continue to follow this story and all of the day's trading on our markets live blog. you can get a market rundown in one click with commentary and analysis from our expert editors. you can get exactly what affects your investment at any point. let's go to vonnie quinn in new york. >> more than half a million people reported to have died from covid-19 in the united states. local infection numbers are above 111 million with almost 2.5 million -- drugmakers no longer have to

perform widespread efficacy trials for new vaccines or booster shots the combat variant strains. former president donald trump has lost a supreme court appeal to keep his tax returns from prosecutors conducting criminal investigations. the judges declined any explanation but refused to block a plea by trump's accounting firm to lock the tax details. last year, prosecutors say they may investigate alleged tax and insurance fraud. brazilian markets slumped after the president removed the head of the state oil company. it is the latest sign they are rolling back friendly policies. the decision comes amid a few to over energy prices with sources saying even the president's inner circle was taken by surprise. in myanmar, they defied military

leaders, the biggest rally so far. hundreds of thousands of people took to the street after the fatal shooting of two demonstrators over the weekend. the un condemned the move. 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 vonnie quinn. this is bloomberg. shery: next, a ceo joins us to discuss the electricity suppliers latest results after prophets met expectations. plus, our first conversation from the mobile world commerce and shanghai and a founder and ceo joins us later in the hour. this is bloomberg. ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach?

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shery: we are keeping our eyes

on the commodities space with the bloomberg commodity index at a multiyear high. this as we see commodity surging on inflation concerns. brent also gaining about $55 per barrel level. remember this is all to do with the gradual resumption of u.s. output following the winter storm in texas. the power grid across several states being knocked out. copper futures right now under pressure, this after reaching multiyear highs and the record high. we will be watching the commodities space very closely, especially as we speak with australian oil ceo. haidi: and of course we will be speaking to some of these other companies releasing earnings, including the larger of hong kong's power utilities, reporting income that met

estimates, driven by higher earnings. this as a coming continues to shift its generation mix to lower emissions. joining us is richard lancaster. great to have you on. what is your take away from this earnings relief? what does it tell you about the macro economic conditions and the level of demand for hong kong? richard: we fundamentally saw the demand for electricity reasonably stable despite covid and despite the downturn in the global economy. i think what that is saying is demand for electricity continues to be stable. but we do see a significant shift in the mix amongst our customer base. hong kong has relatively little manufacturing, so generally it is well insulated from economic ups and downs, but we saw a huge shift from the commercial sector to the residential sector and also quite a big update for data center usage as well. haidi: we are also curious about

the status of the lng terminal in hong kong. do you have any new expectations or deadlines for that and how does that potentially change the way hong kong residents and people living in hong kong get their energy mix? richard: we are seeing a significant shift from coal to natural gas, and building and offshore lng terminal is part of a major infrastructure program we have had. we have already built a new gas-fired generating unit and a second one is under construction. we are making good progress on our lng terminal. these are all projects that need to go ahead. despite the challenges we faced in 2020 with covid, which disrupted supply chains and made it difficult to bring specialists into hong kong, we've managed to keep those projects on track. i think that is an important

task for us. climate change is not going away. we have to keep progressing and keep moving on the transition to zero carbon energy. shery: how did you do on your 2020 targets for renewable generation and capacity? i know you entered the year pretty behind. how did you do and how high does it rank that you get there? richard: it is very important that we get there. we set ourselves a carbon intensity target to get down to .6 kilograms per kilowatt hour of electricity. we managed to achieve that target. we were .57 for 2020. we made very good progress and are continuing to make progress. a big reason for that was shift in 2020 two using 50% natural gas in our energy mix in hong kong. these big investments we are making in as fired generation

and lng terminals are contributing to lower emissions. shery: what are your longer-term goals when it comes to emissions and hong kong? richard: it was announced last year in addition -- ambition for hong kong to achieve carbon neutrality by 2050. this is the sort of target and clarity we actually welcome. it gives us something to plan towards and to work in an aligned way with government and regulators. our ambition has to be zero carbon and it has to be by 2050 because that brings us in line with the paris agreement. the task now is to go the next step. we are looking at more opportunities for renewable energy in hong kong and we are at the early stages of exploring and offshore wind farm in hong kong. this was a project we started

about 10 years ago but we found the technology was not mature enough. technology has advanced and costs have come down. we think this is feasible technology for hong kong. haidi: there have been a lot of accusations as we watch the energy crisis in texas playing out. there has been blame on all fronts. what are the lessons learned? is there something that grid reliability needs to change going forward to ensure this kind of crisis doesn't happen again? richard: the climate is changing and if you work in an essential industry such as electricity production, you have to recognize that and plan for that. this is something that goes well beyond any particular company or regulator.

it requires coordinated planning. this is where all parties need to work together. there has to be an acceptance and a good understanding of the risk. risks now, things that are unpredictable, no one would have dreamt the temperatures in texas would have gotten as low as that but this is happening around the world. it requires good coordination and good planning to build resilience into the electricity system is. shery: globally, how much could nuclear power help, especially as we see this move toward clean energy? richard: we have been a long-standing investor in nuclear power and nuclear power provides about one quarter of hong kong's electricity. it is carbon free, it is very economic, very stable and very reliable. it has been an important cornerstone of hong kong's carbon free energy mix. nuclear power is something which does require scale and it does

require a long-term commitment. it may not be suited to every part of the world, we are located as part of china and we have the advantages of taking part of china's push toward more nuclear power. it has played an important part of our carbon free energy transition. shery: always great having you on, thank you. the chief of clp. hsbc is going to report full-year resorts in just a few hours. the focus on the renewed strategy for asia. this is bloomberg. ♪

haidi: let's get a quick check of the latest business flash headlines. the we work co-founder is said to be in advance talks to settle his lawsuit against softbank. we are told the terms would mean

softbank purchased half of the shares at agreed to pick up in 2019. that means we work could sell half $1 billion in stock and softbank will pay about $1.5 billion overall. lucid motors says it will build a plant in china after agreeing to go public through a merger. the firms are combining at an equity value of nearly $12 billion. the agreement values lucid at $24 billion, and $16 per share, generating $4.5 billion in cash. a los angeles-based electric truck acre is aiming to go public. the deal would value the entity at $2 billion and the stock would raise $220 million from investors. shares currently include --

customers currently include dps and a transportation form -- firm. shery: turning to hsbc, set to announce a new strategy later today. this after its plans were upended the pandemic. it is said to be considering relocating senior executives to hong kong, reinforcing asia as its focus. stephen engle is at the hsbc headquarters in hong kong. tell us a little bit about this asia pivot we are expected here today -- expected to hear today. stephen: there should be a lot of news today from hbc, and hopefully some details on the conference call about this so-called pivot to asia. in 1993, this was the headquarters of hsbc. they went back to london and

canary wharf ahead of the 1997 handover from written to china. -- britain to china. now we are starting to see more of a shift act to asia, which is the home for the most revenue and profits for the bank. we are seeing in the story that came out on sunday, and really fleshed out yesterday, the bank will be sending three of its top leaders of its division, including commercial banking, what management and private gain, and also of course global banking and markets, those three heads will come back here. that accounts for 95% of net revenue for the bank. it really is much more than a pivot to asia, it is a concentration. while the rest of the world is contracting. we have already gotten some guidance from barclays that

revenue is under extreme pressure in the main markets, their home market in the u.k.. we have known that hsbc has been trying to sell its retail banking unit in france. we are hearing there could be downsizing in germany and we hear as well, we might get details on the conference call of an exit of the retail banking business in the united states. lots of news on the pivot to asia away from the previously developed markets around the world. we will also look at the other piece -- other p's, profit affected by the pandemic. we have to hear what they have to say about other aspects of the business. haidi: we were talking earlier, and there may be a singapore acquisition down the track and they need to be focusing on china. especially as we look at

expectations, maybe 8% gdp growth from china. what sort of details on a more granular level would you be looking at and is there also going to be more work to be done on the downsizing, the cost-cutting and redeployment of underperforming businesses? stephen: that's right. about a year ago, they unveiled this dirty 5000 job cuts as part of a restructuring and cost-cutting move. that would move 35,000 jobs out of 200,000 globally. we heard from the chairman last month that that might have more urgency and be accelerated. there will be cost-cutting. will there be more restructuring charges associated with that or will it be offset by the cost

savings from the benefits of reducing its footprint?