haidi: a very good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories, asia looks to extend optimism on wall street after reassuring fed comments on reflation and growth. jay powell signals no change in policy. bitcoin slides back from the $50,000 threshold as investors

bail on risky assets. the fall is heading tesla's elon musk in the pocket. softbank widens interest further with a new focus on biotech and health. the biotech index has risen 37% in the past year. haidi: we have some breaking news crossing the bloomberg and it comes to singapore and earnings. we have ocbc numbers coming through for the fourth quarter, and also looking ahead for the full year numbers as well. taking a look at noninterest income coming in at just over one billion sing dollars. fourth-quarter net income there, really beating expectations, given expectations were just under one billion. and we have seen a beat of 1.13 billion for net income, looking

like it is better than expectations, if just marginally. fourth-quarter recovery is what we were looking for as we are looking for revisions for ocbc still remaining elevated. that beat on the fourth quarter will be very much welcomed. we are also look at some -- also looking at marginal weakness in soft credit demand derived from weakness in the economy from the covid-19 slowdown. loan growth looking to remain sluggish as well. also looking ahead to that recovery in consumer demand in retail sales after the list -- lifting of the strict lockdown resurgence in singapore. let's look at the park it open in sydney though. what are you seeing? sophie: downside, with several stocks including agl energy. keeping an eye out for reaction to woolworths as well as wise tech. we have japanese markets today

back in the fray. the yen holding steady after snapping a four day gain. little change here. u.s. stocks gained ground overnight after powell made it clear the fed is staying the course. we saw a rebound for the nasdaq falter into the close. oil in focus. wti under pressure, trading the aerial -- nearly one year high. -- trading near a one-year high. you have beach energy moving ground this morning. rbnz policy decision very much in focus today, expected to keep rates steady after powell's comments about the fed staying the course. the kiwi dollar trading above 73. we're seeing the 10 year yield losing a little bit of ground, above that 161 level. we have seen the kiwi 10 year triple over a five-month period. shery: here on wall street it

was a pretty volatile day after we got the federal reserve chair jay powell with testimony in the senate. he made it pretty clear on capitol hill that it is full speed ahead on monetary stimulus until the economy is much closer to recovering from the damage inflicted by the coronavirus pandemic. our global economic editor kathleen hays here with a recap. so they are staying the course. kathleen: they are absolutely staying the course. it will be hard to leave, having watched that testimony for about 2.5 hours. let's remember, in the last couple of weeks, larry summers, noted economist, said all this fiscal policy in the pipeline is going to overheat the economy and cause inflation. the fed will have to move up their first rate hike until 2022. jay powell signaled nothing like that is on the way. let's listen to what he told the senate banking committee. >> the economy is a long way from our employment inflation goals and is likely to take some time for substantial further progress to be achieved.

recovery is far from complete and the path ahead is far from certain. kathleen: the fed's new mantra, they are not going to do anything until substantial new progress has been made. getting back to maximum employment, which he defines as something below 4.3% at least. and it will take some time. jay powell was optimistic of course, because the economy shows signs of recovery because vaccinations are starting to roll out. he says vaccinations should speed the economy's return to normal activity. but he said still a long way to go to full recovery. we have heard this many times and we are going to hear and more times. the economy is still 10 million jobs below the pre-virus level. that is a condition has to be fixed, and it is not fixed yet. haidi: and of course fed chair powell dismissing all the concerns of bond investors signaling the fed may get close to tapering. o way, not yet. kathleen: first of all, he is

not worried about inflation, unlike larry summers who thinks it could start rising quickly enough to force the fed hand. but he made a lot of points and said basically coming out of the pandemic and going through the pandemic, prices may rise temporarily, but it will not be persistent, it will not be a problem. and even if it is, the fed can deal with it. let's listen to what he said. >> inflation will probably be a bit volatile over the next year or so due to the pandemic. i really did not expect that will be in a situation where inflation rises to troubling levels. if it does turn out that unwanted inflation pressures arise and they are persistent, then we have the tools to be what that, and we will. kathleen: the fed has said many times now, they will give us warning well in advance when they are even thinking about thinking about tapering. cornerstone macro, former head

of monetary affairs at the board of governors in washington, said harking back to that new mantra, when he says some time until conditions are met, he was talking about conditions met on tapering. that is similar to what he said about meeting the goal, sometime until these conditions are met. finally on fiscal policy, and overheating, the kinds of things summer public and senators raised, jay powell would not even go there. he said fiscal policy is not the fed job. that job belongs to congress. he will not say anything about that now, and probably ever. haidi: kathleen hays, global economics and policy editor with a look at part one of the two senate testimonies to be given by fed chair powell this week. let's get you caught up with the first word headlines. vonnie: president joe biden's pick to be number two treasury is a negating he and the administration may be open to

maintaining trump-eric trade curbs on china. he said china is america's top strategic competitor. he said beijing must be held accountable. iran has begun restricting u.n. access to its nuclear program as it enriches uranium closer to levels needed to use atomic weapons. the iaea says inspectors have detected traces of uranium. tehran is moving to pressure the u.s. to return to the 2015 deal, abandoned by donald trump. president joe biden has said he would be willing to resume talks with iran. goldstar -- golf star tiger woods is in a hospital with serious leg injuries after a car crash in los angeles. he had to be cut free after the accident, which involved no other driver. aerials show the car on its side. the 15 time major champion has

not played since december. he has had a series of back operations, but he has said he hoped to return to golf in april. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: checking in on some movers in the early part of the sydney session, what are you seeing? sophie: we are seeing some movers to the upside on earnings momentum. education rallying more than 11%, hitting a fresh all-time high on the back of its results. has been under pressure by nearly 5% by posting improving earnings and that growth will increase up to 20% year on year, as projects are coming back online. costa group rallying. goldman with 55%, saying they see an improved outlook across key categories.

crown resorts under pressure for a third straight day, as western australia's regulators have banned the crown casino from dissipating in junkets -- participating in junkets. shery: we will have plenty of big interviews coming up this week to discuss the results coming out of australia. the quantum group ceo join us thursday on daybreak asia. coming up next, jerome powell doses part two reassure market, but will it feed through into the e.m. space? and a big test for one of wall street's hottest firms. this is bloomberg. ♪ ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot.

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>> while we should not

underestimate the challenges we currently face, the moments point to an improved outlook for later this year. in particular, ongoing progress in vaccinations should help speed the return to normal activities. haidi: welcome words from jerome powell, soothing the markets in late trade. joining us now is sara moreno. does this also kind of give a sigh of relief across e.m. markets as well? sara: yes. also a very positive sign for emerging markets. we saw the class rebound on mr. powell's comments. haidi: talk to me about what you call the paradigm shift in e.m. equities. historically you talk about it being driven by commodity cycles. we could be in the middle of another super cycle at the

moment. is that still a key driver or is it more the consumer, tech, commerce-driven elements? sara: traditionally, investors are focused on believing e.m. is driven by commodity cycles, export and liquidity. certainly still continues to be the case. we argue increasingly, emerging-market economies are moving up the value team and we are finding more and more innovation in disruptive technologies in some emerging market economies. these new innovations and technologies will drive deep structural changes and improvements that policy reform have failed to bring too many emerging economies. so we see more robust investment opportunity by taking a bottom up agnostic approach to investing in emerging markets and taking a more active, fundamental approach to emerging markets. shery: as opposed to those big

names, especially when it comes to the tech sector? because in the u.s. we continue to see the underperformance with rotation going on. many worry perhaps this could happen across asia as well, as we saw the big tech giants and tech heavy industries bid up lately. sara: when you take an index approach, you are playing more with the incumbent, even if you look at the emerging markets. you see things like alibaba letter big waits in the index that have been underperforming. meanwhile, when you take a bottom up approach, you are able to identify companies that are really in the lower penetration markets across latin america, where we see more robust opportunities. especially driven by the structural shift that covid has unleashed, really bringing in the future forward. and these are opportunities that are missed when you take a top-down approach. shery: of course rising

inflation, especially when you have the fed trying to stay behind the curve, and perhaps we could see more aggressive tightening when the time comes to actually tighten. could that be a problem across asia as well? especially when you have a very solid economic recovery. the timing will happen faster than expected. sara: across asia it has been much faster because they have come out of covid faster. but we take a bottom up agnostic approach. we are focused more on individual companies that are addressing unmet needs of consumers and in sectors like health care were we continue to see a very long, secular growth opportunity and a secular underpin that is less dependent on macro and inflation concerns. these are companies that are actually serving an unmet need, and in some cases are disruptive to the old economy. that is where we think investors will turn to increasingly. there are going to be shocks where value will be outperforming growth, but we

think over time, even an emerging markets, the fundamental strength of these companies will drive investors back to these types of companies. haidi: sara, always great to have you with us. sara moreno there with her take on emerging market opportunities, given the super dovish commentary we had from jay powell. next, softbank's new investment strategy allotting billions to a new sector. all the details, next. this is bloomberg. ♪ 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.

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haidi: softbank is set to be opening a new front in its growing asset management strategy with plans to invest in biotech and health care. this provides more clues that the founder plans to expand -- expend more than $80 billion in assets. let's get more detail now.

softbank's name has become more closely connected to tech startups. this turn to biotech, is there a form here? >> you know what? you are absolutely correct. most of the investments you hear softbank make is down to their business fund. their massive fund. it is usually late stage startups. this is a whole different business line, and it is fairly recent. it is making public investments through a new unit called northstar that has been around only a couple quarters. until now they have been invested heavily in amazon, netflix, zoom. so this focus actually does make that whole strategy a little more interesting and a little more articulated. now, something that has had some success with before.

they have invested in companies that all went public and paid really well. an interesting side note is the person who is leading northstar is a former vision fund investor. he keeps investing before moving to public investing. shery: isn't that the unit also making controversial derivative that's -- bets? pavel: it is. that is part of the strategy that did definitely not pay off well so far. softbank has come under a lot of criticism for going to derivatives and options trading from investors. partly because they present themselves as a long-term visionary who invests in technology over 300 years. he talks a good game. so what did not make sense he would be making short-term bets. in response, softbank has

reigned in some futures as options. they are down to $1 billion from $1.7 billion, but they are still losing money. so it has not panned out for them so far. shery: are asia tech reporter with the latest on softbank. let's turn to lucid motors. it sent shares of the blank check company partly because lucid has indefinitely delayed the debut of its car. this eu -- the ceo told bloomberg why pushing back the release date is not a worry. peter: i was pushing like crazy for spring, and when we met with the churchill capital team and i took alan out in the car, he drove it the very first car off the off the production line.

we had a meeting of minds with alan and all his experience with boeing, with michael klein, and myself. we got on like a house on fire, and recognized that, peter, why are you pushing like crazy for this official start of the spring? what is really important here is to get the quality right. we'll know when it is perfect, when it will truly delight the customer. so they freed me. they said, look, get the product right. don't look to the artificial construct of a specific date. if it rolls on into the second half of the year, we are ok with that. look at the capital. you can pull the trigger when the time is right. we trust you to get it right. we know you want to make it perfect. they are making a luxury car. and when tesla came to market with model s 10 years ago, i

think a lot of flak was cut then, because the electric cart was such a fun experience, people forgave the build quality issues. the market is not going to be forgiving now. this is a very different world. we have to get things right. and the impact of covid is not to be underestimated here, ed. so, you know, we're chasing down a number of suppliers from around the world. we have 250 suppliers, 3000 parts. and that whole infrastructure logistic operation has been affected by covid. so that's had a big impact of just pushing in and out a little bit into the second half. ed: has the global semiconductor shortage had any impact and caused this delay in production? peter: it has not for us, because we have had some very savvy purchases in our purchasing teams, who actually preempted this and had

negotiated supply agreements, which have really mitigated that risk. but i recognize it's affecting some automakers, notably porsche, with their announcement very recently. ed: what about a cash crunch? i mean, how pressing was the need for you to raise funds prior to this deal? you say in the investor deck that you would need around $600 million in terms of bridge financing before the deal with churchill closes later this year. peter: there was no cash crunch. we have got a great primary investor in the public investment fund of saudi arabia. they're in for the long term. they have got markets and they are very supportive as strategic investors. for them, this was a validation point, and validate we have, indeed. we have attracted the bluest of blue chip investors to validate their original investment.

we did not go to the market needy at all. we went for validation. and that is exactly what we have achieved. ed: you say in the investor deck that you are going to spend about $10 million over the course of the next four years. that is a lot of money in a short space of time. how are you going to get those additional funds? peter: well, we have already brought in $4.5 billion from the churchill capital from spac and the pipe. we extended the pipe because it was so oversubscribed. we could have gone for more, actually, but we decided to limit it. that gives us an absolute clear runway well into 2023. and in that time, we can build out phase two of the factory. that is capital-intensive. but we are investing because we are vertically integrated. and it gets us to a situation where gravity will be very near already full production. shery: lucid motors ceo peter

rawlinson there. ne-yo capital beyond you joins us in a few hours. elon musk has lost $15 billion this week as tesla erases its gains for the year as the stock fell for a fourth day suffering is worse session decline since early september and is now down more than 30% since it intraday record on january 25. as seen as a reaction to musk's comments that cryptocurrencies are too expensive. touting a truck that could run for more than 1400 kilometers on a tank of hydrogen when it hits the roads in 2024. it says the cell engine remains on track for production as competition rises among so-called clean truck producers. next, hong kong's budget challenge. the budget will unveil their spending plans as they try to

balance stoking the economy and keeping the deficit in check. we have a preview. this is bloomberg. ♪ . this is bloomberg. ♪

>> but if you look over the last decade, there has been a gradual shift in the business model for asia. we have gone from just over one quarter of our revenues in asia, to over 50% last year. we have currently jot just over 40% of our capital allocated to asia. we want to get that to over 50% over the next few years. haidi: that was the hsbc cfo outlining the bank's big plans for asia. hong kong's financial secretary is expected to deliver a budget later today as he tries to balance the fiscal pressures

over the demands of an economy that shrunk two years in a row. already warned the budget deficit could reach a record, leaving little room for stimulus. let's bring in stephen engle. i want to throw up a chart that visually paints a dire picture when it comes to the budget deficit hong kong finds itself in. given the hole in finances, how much room does the treasury have to do more here? steve, just want to check that we have. -- have you. all right. it does not appear that we have stephen engle. we will get back to him so we can get that preview of the hong kong budget. but of course as you saw on the chart on the screen, not much in terms of flexibility in fiscal stimulus from the hong kong government this time around. let's get even the meantime to

vonnie quinn with the first word headlines. vonnie: thank you. federal reserve chairman jay powell is signaling policymakers will maintain their current on buying program for the foreseeable future, indicating he is nowhere close to reducing it. he told the senate banking committee the economy is a long way from the fed's employment goals. and progress towards those targets is likely to take some time. president biden's pick to be number two treasury is indicating he and the administration may be opening to open -- he holds his confirmation hearing, and argues china -- he says he would be happy to trade and sanction. he said beijing must be held accountable. australia and facebook are beginning a new era of social media partnership after the government agreed to amend its news content the distillation and facebook said it would end his blackout. the government said it would

take into account marshall's -- commercials. facebook said it would lift its australian content ban in the coming days. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: less than half an hour away from the opens in japan and south korea. let's turn to sophie in hong kong for what to watch. sophie: in new zealand we are seeing structs fluctuate while the kiwi dollar holds above 73 and the 10 year yields swinging with the rate above. morgan stanley expects the central bank will push back against tightening. but i do see momentum for the great hawkish in us continuing in the medium-term. treasury futures higher on the back of a report south african virus variant oversee effectiveness of the pfizer

biontech vaccine. japan coming back online this wednesday. k futures moving to the downside. a half-hour into the cash session you are seeing it under pressure with earnings in focus. wise tech gaining ground after they beat guidance. athens has fallen to a one year low after sales in guidance missed. tech shares losing ground as valuations for the sector are looking questionable given the rise you see with yields. aussie stocks taking a stumble. with the yield picture, they are looking to a move towards 175 on the 10 year and if it happens they would buy aussie bonds against treasuries. expect that gap to widen. shery: let's look at bitcoin, because we are seeing prices supported a little bit, but this after they tumbled below

$50,000. the world's largest cooked of currency fell as much as 18% in the latest u.s. session. stocks with ties to bitcoin like tesla took hits as well. the bitcoin bears are out in force. su: that is for sure. if you look at the charts you can see investors are starting to bail on one of the glossy asked outlets out there. serving as a reminder of bitcoin's extreme volatility. you had people like bill gates and janet yellen urging caution. in fact, billionaire bill gates saying that only billionaires such as elon musk should perhaps venture into bitcoin. he is not bullish on the digital coin. the three-day chart shows the biggest cryptocurrency falling as much as 18% in the latest session. the big picture chart however shows that if you go all the way back to october, bitcoin was at $10,000, it doubled in december,

and has been off to the races since, and gaining wider acceptance among professional investors. so there has been you nor miss gains. investors -- enormous gains. investors though worrying this could be the start of a bigger retreat. if you look at the smaller rival to bitcoin, ethereum, also took a sharp drop. the cio of global wealth management issued a statement that they are advising clients to practice caution with crypto speculation, alongside unresolved gala tory risks they say the future usage case remains unclear. treasury secretary janet also urging caution. haidi: tesla shares have now erased all of the year's gains. is this a bit of the bitcoin sideshow and elon's comments on bitcoin weighing in? su: that's a good way to phrase

it. analysts are where -- warning the bitcoin sideshow could overshadow tesla. tesla shares in the past couple days, they wiped out gains, dropping significantly intraday, although paring some losses in the latest session. but big picture, they have now erased all of the year-to-date gains, down about 1% for 2021. they are below the level they were at when they enter the s&p 500 index in december. the decline follows comments by elon musk over the weekend. he tweeted out the price of bitcoin and etherum, quote, do seem high. tesla invested $1.5 billion in the cryptocurrency two weeks ago, and that was the catalyst to drive the calling to unseen highs.'s ironic that his tweet r the weekend, also seen as a

catalyst for this latest pullback. back to you. haidi: su keenan there in new york. we are going to stay with bitcoin and tesla. one of wall street's hottest firms facing a pretty big test amid the pledges. tesla and bitcoin, closing all five etf for slump. cathie wood's firm -- she says with regard to these growth strategies, hit her -- her motto is still to buy the dip. cathie: what i have still been surprised by over the last five months is a cyclicals and value stocks have started to outperform the broad-based market indices. and the surprise to us is we and our innovation strategies at ark outperformed as well. that is very unusual. so the way i have interpreted that is that the market is

broadening out. the full market is broadening out, which is a very healthy development. i think what we have seen the last few days, the correction technology, is perhaps rotational. given how many years value has underperformed, there could be a bit of rotation back into value. if you understand our portfolios, you will be careful in terms of where you go in terms of value space because disruptive innovation, the likes of which we have not seen and what than 100 years, is probably going to hurt a lot of value set errors more than growth sectors. >> so what are you doing on a daily today? are you buying? the nasdaq was down almost 4% today. tesla was down significantly. did you buy? cathie: oh yes. we publish our trades at the end of every day. so you will see them. we bought a lot of tesla today

across any strategy that holds tesla. and we will be publishing in a few weeks a report updating our thoughts about tesla, our excitement about the potential of the ride-hailing service as a bridge to an autonomous service. and the higher odds that autonomous is going to happen for tesla. part of the reason for the higher odds is now that waymo is on the road autonomously, we know it can be done. tesla has so much more data than google or anyone else, or everyone else combined, that puts them in the pole position. shery: we have an alert on the bloomberg happening right now. president biden and justin trudeau are speaking after their first bilateral meeting. president biden saying he had a

good meeting with his canadian counterpart, and that the canadians -- president biden saying the u.s. will work with canada on the release of the china detainees. remember, they had been arrested two years ago, shortly after candidate detained the huawei cfo. prime minister trudeau also thinking joe biden for his support on canadians detained in china. also saying candidate is here to help with the texas energy crisis. of course a lot of bilateral issues at play between china and the u.s., including of course hong kong as well. and we will be discussing the hong kong budget upcoming later today. but up next, we will be talking to washington university professor deborah fuller joining us to discuss the second-generation mnra covid vaccine they are developing. this is bloomberg. ♪

this is bloomberg. ♪

shery: hong kong's financial secretary is expected to deliver a muted budget later today as he tries to balance the fiscal pressures with the demand of an economy that shrunk two years in a row. let's bring in stephen engle. when it comes to hong kong, they do have large fiscal reserves. but at the same time it seems that this time around, the

budget might not be as generous because they are running out of ammunition now. stephen: yeah, they are running out of revenue streams for sure because the borders are closed, restaurants have been closed for the most part. the service industry here has suffered. retail has absolutely suffered. of course we are out of the protest period of unrest, but the pandemic has really hammered this economy. you talk about those fiscal reserve, yes, hong kong traditionally does have a lot of fiscal reserves. at the beginning of january about $155 billion u.s. backstop. but because of all the stimulus paid out last year, they paid $41 billion u.s. in various stimulus last year including 10,000 hong kong dollars, $1300 u.s. per permanent resident each at this time last year. we are not expected to get that, because the fiscal reserves have shrunk down to about $116

billion. for a city of 17.5 million seems ok, but it is a backstop they want to keep for when the borders open up and the economy opens up to do more stimulus measures. but right now, you said it is a muted budget. it is going to be probably stingy, is the word a lot of people are using. because these people here in hong kong are kind of used two cash handouts from the government when things are tough, especially when the jobless rate is at a 16 year high. 7% right now. it has not been this bad since the aftermath of sars. and the economy has contracted now for two consecutive years, including the most recent number we are going to get today, down about 6.1% for the full year, down 3% for the fourth quarter. so things are tough here, but they are going to save the backstops for even worse of a rainy day. haidi: in terms of what we

expect today, what are the measures they can actually roll out? stephen: yeah. if we are not going to get the cash handouts as we are hearing, there might be some very favorable rate loans to the unemployed. upwards of 80,000 hong kong dollars, $10,000 u.s. at an interest rate of about 1%. and if you can pay that back within five years they will waive the interest. so you still have to pay it back, it is a loan. they are also expecting him to -- paul chan i am talking about, the financial secretary. he will be given the budget address over my left shoulder here at 11:00 this morning. he is probably going to do some initiatives to create green finance, and also maybe investment in some more ev vehicles, charging stations and the like. various bits and pieces, but not the big cash handouts that some here, those who are unemployed

and hurting through this pandemic and the aftermath of the more than year long protests, are wanting. shery: our chief north asia correspondent stephen engle with the latest on that budget. and of course you can also turn to your bloomberg for more on the hong kong budget and its details. tliv go to get the commentary and analysis from bloomberg's expert editors. of course as steve just mentioned, it is always about the pandemic. economic pressures all around the world. let's turn to the latest on the pandemic and vaccines in particular. drugmakers at an online capitol hill hearing say they believe the vaccine could be available to all in the coming months, and bottlenecks could soon ease as production ramps up. joining us now is professor of microbiology deborah fuller. great to have you with us. everybody i know here in the u.s. is just counting the days and weeks when we can all get vaccinated. at the current pace of the

vaccinations and the supply out there, when could we all get those shots? prof. fuller: the hope is that sometime between april and june that we are going to hit a threshold where you are going to have more vaccine available than the demand. right now the demand is exceeding the supply. so once we actually have that particular scenario, when we have a good supply, we're going to then face additional hurdles, and that could be including distribution, getting it administered into people's arms. and of course there'll also be -- always be vaccine hesitancy. shery: the homestretch right now. and here in the u.s., it is pfizer, moderna, johnson & johnson potentially very soon. you are also working on another vaccine, right? give us your take on perhaps other companies coming out with vaccines that could get

approved, and what the outlook would be once we get them all. prof. fuller: right. with the emergence of a lot of these new sars cov 2 variants, there is concern that it could be with us for a while. we might need to update our vaccines and administer annual immunizations. so there is a concerted effort, including in my lab and many labs across the world, in terms of developing second-generation vaccines that will be able to address the shortcomings of the current vaccines. our particular type of vaccine is called a self amplifying mnra vaccine, designed to do stronger immune responses with lower doses than the current vaccines. once it gets into your host cells, into your own cells, it makes more copies of itself. if you have an rna vaccine making more rna's once it is inside yourself, it will make more vaccine and more vaccine produced will produce a stronger immune response. so we ended up collaborating

with a company called hdv vial, a biotech company here in seattle, that has developed a new, innovative particle formulation. those nano particles, that is how mnra vaccines are delivered to get inside your cells. they require this nano particle form relation. moderna and pfizer's mnra vaccines require this formulation. they form eluded so that the rna has to be encapsulated inside that particle. once encapsulated, that is what requires that cold temperature to be able to store and ship it worldwide, otherwise it falls apart. what htv did is develop a new formulation called lyon. the rna formulates on the surface of the particle rather than cap solidity. -- than encapsulated. it allows the rna vaccine to be

scaled up much more quickly, and it's more stable so it should be able to be shipped and stored in warmer temperatures. so we are going to confine -- combine that formulation with our vaccine, and this will be the second-generation vaccine. we are looking at trying to get this in phase human trials very soon. actually, the zion to to target these new variants that are emerging. -- designed to target these new variants that are emerging. haidi: these have been referred to copy and paste vaccines. are there the better option in terms of addressing these new variants? as you said, this could be a seasonal vaccine we will need. could the turnaround be quick with this technology? prof. fuller: absolutely. we vaccines which include rna vaccines, they got started about 30 years ago. when they were first started, we recognize immediately their potential as a rapid response vaccine to emerging pandemics.

and that is because you only really require the sequence to update them. traditionally, if you take our influenza vaccine for example, it takes six to nine months to update that, to manufacture that, and get that out to people. with rna vaccines we are looking at only six to nine weeks to accomplish the same thing. haidi: we talked about vaccine hesitancy earlier as one of the hurdles. the anti-vaxx movement when it comes to children's vaccines has been around for a while. how is that different from what you are seeing with vaccine hesitancy in terms of the covid-19 vaccine affecting a broader part of the population? prof. fuller: i think the difference is that we are seeing, because covid-19 and the vaccine development was so much in the forefront of everybody's mind, it has resulted in an pre-'s of misinformation regarding vaccines and -- resulted in misinformation

regarding vaccines. vaccine hesitancy seems to be driven in part not just by the general vaccine hesitancy we have seen in the past, but by an increase in misinformation regarding these vaccines, their safety, their efficacy, and how they work. haidi: all right. deborah fuller, university of washington professor of microbiology. really fascinating details in that conversation. we getting some breaking news. south korea sending an extra budget bill to parliament on march 4 according to the finance minister, saying in a meeting in terms of the timing of the submission, he's already asked senior officials to prepare the submission of the extra budget proposal to parliament next week. that was according to an earlier statement that we had. the size of the extra budget will be decided by february 28, according to the ruling democratic party chief. we're also seeing president moon jae-in calling for the

acceleration of an extra budget so cash handouts can be given to people that have been badly affected by the social distancing rules. both cash handouts they are planning to disperse as early as next month. we had heard from local media including asia business daily, that the size of the extra budget is likely to be around 20 trillion yuan. but we expect the extra budget bill to be delivered to parliament on march 4. lots more to come here on daybreak asia. this is bloomberg. ♪ s is bloomberg. ♪

shery: we are a few minutes away from the market opens in japan and south korea. japanese futures as they return from the long weekend looking like this. also watching trading in -- looking like they will continue to rise. yields taking a breather overnight after commentary, dovish, from jay powell. let's look at what sophie is watching in hong kong. sophie: watching softbank on plans to invest highly in biotech. local media reported the state of emergency may be lifted outside of tokyo earlier than expected. mitsubishi on the radar amid speculation they may reverse. tesla he raced 2021 gains. hyundai in view after they gave

us ideas. shery: watching those stocks as we head to the market open next. this is bloomberg. ♪ this is bloomberg. ♪

shery: welcome to daybreak: asia. i'm shery ahn. haidi: i'm haidi stroud-watts. ages major markets have opened for trade. our top stories this hour. asian stocks set to slide despite fed reassurance on inflation and growth. jay powell says he is nowhere near whining back support for the u.s. economy. the kathy woods fund is testing investors who plowed billions

and said the firm. we will be hearing from them in an hour. we'll be assessing the political and social prospects of the city. shery: japan back from a holiday and korea coming online. let's turn to sophie for a check of what to watch. sophie: japanese markets open to the downside for stocks. the nikkei 225, off half a percent. we consider plans to invest heavily in biontech and health care. check out the yen holding steady while the dollar holds a four day decline following dovish comments from powell on keeping the punch bowl flowing. we will hear from the boj governor who is due to appear in parliament. jgb's are gaining ground with some dip. south korean bonds filing to a

two-year low. the be ok governor has said the central bank would step in if yields rich -- we will get some clarity on march 4. the kospi adding 4/10 of a percent. the korean yuan is edging slightly higher than the greenback. the antipodes, stocks under pressure in sydney. tech and energy among the laggards on the asx 200. stalling oil prices with new york crude hovering above the 61 level. the kiwi dollar is looking heavy ahead of the rbnz policy decision. cash treasuries this morning. we are seeing them come online steady after a choppy session around jay powell's remarks yesterday, which solve the 530 curve steepening to the widest since 2013. haidi: our next guest says

premature tightening remains an investment risk in 2021. he joins us live from hong kong. even after the soothing words of fed chair powell, do you think there is a risk, perhaps not an outside risk but a risk for emerging markets and asian markets there will be some sort of tapering and a tantrum later this year? >> yes, indeed. while we do expect the fed to remain fairly benign, we expect them to lag. we expect them to follow their inflation targeting mechanism to the corporate there is a risk because of short-term factors, inflation starts getting higher. you could get a negative reaction from the fed. we saw what happened in 2013 to

risk assets -- in 2013. we do not think it is a high probability risk at this point. haidi: does the market need to worry about the steepening yield curves? unless you are fully invested in growth strategy and certain tech stocks, is it a broader market concern? >> the steepening yield curve is a reflection of growth expectations. expectations are being powered by the core sectors. therefore, there is a rotation toward financials and energy industrials. having said that, that prevents a risk -- that presents a tight -- a risk to technology as well. to that extent, that is just a viable. the fact that the vaccination

progress creates hope the economy is going to start opening sometime and the second half of this year supports this move. we retain tech as a core part of our portfolio allocation. we see these companies to keep venerating these earnings profiles next five or 10 years. we are favoring tech in certain parts of the world. complementing it with small caps, financials and industrials and of course emerging markets as well. shery: we heard that a lot. perhaps you are not selling off all your tech assets but you are looking at other parts and expecting a broader market rally from other analysts. i do wonder when it comes to the growth versus value comparison, this gtv chart of the bloomberg showing the value has

consistently underperformed. could we see this reversing anytime soon? >> value is beginning to show a reversal versus growth. value has done well as compared to growth. if you look at the expanded time frame, value has been lagging growth significantly. that is driven by the fact that the earnings for the value sector has lagged significantly. it is a conflation of earnings into market performance. any sustained outperformance or value overgrowth the next five or 10 years needs to see this trajectory for value rise significantly as compared to that for growth. the jury is still out about the sustainability for a longer-term learning standpoint. in the near turn, better for value stocks for 2021. shery: with the stronger recon very when it comes -- stronger

recovery, could inflation become a problem down the line? >> inflation could become a problem. at this stage, most of the inflation we are seeing is from a commodity pass-through, which does impact emerging markets. central bankers are willing to see through the transitory effect of commodity prices. on the emerging-market side, you would see sustained implications of what we are saying on inflation. they will probably coming to an end through their easing cycles. we had rate cuts in indonesia and mexico. there would be a little more acceptance and tolerance for currency appreciation. that actually could work to the benefit of investors into emerging markets. shery: the portfolio manager for principal globo asset allocation -- global asset allocation.

it's gets a vonnie quinn. funny: -- vonnie: joe biden indicating he and the administration may be open to maintaining trump era tried cuts on china. he hinted he would be happy to use sanctions directives introduced under the former administration. he said beijing must be held accountable. the congressional hearing until last month's capitol hill riot has heard incomplete intelligence led to inadequate security. senior officials said their planning was based on predictions of civil disobedience among president trump's supporters are they were not prepared for the protests to turn so violent. five people died during the storming of the capital. australia and facebook are begin a new era of social media partnership should facebook said it would end its blackout. the marcy government said it would take into account

commercial deals social media has already struck with publishers, prompting facebook to say it would list its -- it would lift its content been in the coming days -- it's content s content ban. a mounted has been shooting out rocks and -- for more than a week. volcanologists say the power of the latest explosion has rarely been seen before. there are no reports of casualties from the latest. 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, beijing tightens its grip on hong kong. coming up next, we get more perspective on hong kong as it is heading for a record budget deficit.

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shery: hong kong's financial secretary is expected to be the -- expected to deliver a muted budget today. paul chan has more -- has warned the budget deficit could leave little room for stimulus. let's bring in our chief north asia correspondent. the economic situation not getting that much better. at the same time, fiscal reserves being tapped already. right. i think we do not have you at the moment. we will try to get him back because we have to discuss the hong kong budget and the details we can expect from that.

that is stephen joining us in a few minutes. you can turn to bloomberg tliv to get commentary and analysis from expert editors when it comes to that budget. this is bloomberg. ♪

shery: we are looking ahead to the hong kong budget announcement. let's bring in our chief north asia correspondent stephen engle. for we lose you again, what should we expect today? stephen: it is probably going to be a bit of a stingy budget by past comparisons. last year, the hong kong government handed out about 1300 u.s. dollars to each permanent resident. the government tends to do that in times of crisis. when there was a sars outbreak, they did the similar handout.

this is a government that really likes to have -- every government likes to have fiscal backstops for times of even worse economic calamity. let me give you some numbers to put into perspective on why the financial secretary paul chan who will give his budget address in the building behind me at 11:00 this morning, why he is going to be a bit stingy. at the beginning of 2019, this government had fiscal reserves of 155 billion u.s. dollars, 1.2 trillion hong kong dollars. because of the big stimulus payout and the other stimulus measures for the unemployed, for the retail sector, for the hospitality sector, there was 41 billion u.s. dollars worth of stimulus in 2020. we had the aftermath of the protests. protests were still going on have or through the year last year. we had the pandemic.

restaurants were closed. theme parks were closed. that fiscal backstop has dwindled to 116 billion u.s. dollars. still ok, but we are heading for a record budget deficit. paul chan is going to have to pick and choose where he is going to spend to get us through this uncertainty as the vaccinations have not really begun en masse yet. at theme -- theme parks are open again. restaurants can disturb dinner. -- can serve dinner. this is an economy -- it is not even recovering yet. 6.1 percent gdp contraction in 2020. 3% down on the fourth quarter. we have not necessarily hit the bottom. haidi: in terms of the measures we could expect to see today? stephen: we are getting bits and pieces from various local media.

when there is smoke, there tend to be some fire. one of the proposals that could come out is this 10,000 u.s. dollars or 80,000 hong kong dollar loan to the unemployed. if you are unemployed, you can get applied to this -- you can apply to this. if you pay the loan back off within five years, they will reimburse that interest. free money -- $10,000 in the most expensive city in the world to live will not go so far. it is not a cash handout but it is a favorable loan. there will probably be some green initiatives. paul chan wants to create a green ecosystem. that could mean more investment in electric vehicle charging stations. a green finance and additive and the like. we will have to wait and see until 11:00 but it is not going to be the big cash handout some

of the people suffering unemployment want. unemployment reaching 7%, a 16 year high in the three months through january. we have not seen these numbers since the sars days in the early 2000's. haidi: lots of businesses hurting in hong kong. her chief north asia correspondent stephen engle with a preview of budget day. you can go to tliv to get commentary and analysis from bloomberg's expert editors as we count down the delivery of the budget. we will have more perspective on hong kong ahead. the former general to hong kong and macau will be joining us at the top of the hour. let's take a look at bitcoin. trading below $50,000 as investors start to bail on one of the market's most frothy assets. kathy woods says now is time to buy the dip should >> we are very positive on bitcoin.

very happy to see a healthy correction here. no market is straight up. everyone should have some dry powder for days like these. i have been saying that for a wild. -- for a while. haidi: even as all five of its etf slumped on tuesday, the firm has seen a begin dollars flow into its products this year. the fund -- the firm is outpacing the index. >> what i have been surprised by over the last four or five months is cyclicals and value stocks have started to outperform the broad-based market indices. the surprise to us is that we and our innovation strategies outperformed as well. that is very unusual. the way i have interpreted that

is the market is broadening out. the bull market is broadening out, which is a healthy development. what we have seen in the last few days, the correction in technology, is perhaps rotational. given how many years value has underperformed, there could be a bit of rotation back into value. if you understand our portfolio, be very careful where you go in terms of the value space because disruptive innovation, the likes of which we have not seen in more than 100 years, is probably going to hurt a lot of value sectors more than growth sectors. >> so what are you doing on a day like today? the nasdaq was down almost 4% today. tesla was down significantly. did you buy? >> yes. we publish our trades at the end of every day. you will see them. we bought a lot of tesla today

across any strategy that holds tesla. we will be publishing in a few weeks a report updating our thoughts about tesla, our excitement about the potential of a ride-hailing service as a bridge to an autonomous service and the higher odds that autonomous is going to happen for tesla. part of the reason for the higher odds is now that waymo is on the road autonomously, we know it can be done. tesla has so much more data than google or anyone else or everyone knows combined that we think it is in the full position. shery: cathie wood she bought -- saying she bought a lot of tesla. softbank is said to be buying

investment in -- it is already taken stakes in the sector including a $300 million investment in pacific i/o sciences. sources say it is looking to put more money into public companies. the nasdaq biotech index has risen 37% in the past year. reports from hong kong say china's leading travel website is planning a secondary listing in the city, which could happen as soon as april. the ifr is reporting the nasdaq listed company aims to raise as much as 2 billion u.s. from the share sale and has already filed an application with the hong kong stock exchange. hkx is said to be discussing a secondary listing. the stock at the center of the recent retail trading frenzy fell on news a senior executive is leaving. sources say the gamestop cfo jim

bell has been pushed out to let a -- gamestop hit the headlines after reddit field traders sent the stocks to dizzying highs, triggering scrutiny on capitol hill. let's take a look at commodities. prices are hitting eight your highs as investor appetite booms. jeff curry is head of commodities research at goldman sachs and he spoke to bloomberg about what is driving the super cycle. >> we like to call it the revenge of the old economy. we have not invested in old economy production capacity in some cases, five to 10 years. returns to the new economy were so much better. then you overlay efg issues on this. these -- you take oil, depending on where you are in the world, was down 40 to 70% the first half of last year. >> i understand copper.

john and i are arguing about -- let's stop the trio -- the show. do you quote london copper or chicago copper? >> london topper. >> there we go. copper, we get. tell us about the other metals where if price goes up, supply does not come on. >> anywhere from five to 10 years to bring on a new copper mine. it is the last of the old school commodities you still dig out of the ground. that is where we have the real demand push. you have this green that is starting to -- that is going to be behind this energy transition story. we now have a blueprint for energy transition under the u.s., europe and china now. we believe capex is going to be somewhere around $16 trillion over the next decade. put that on par with china,

china has bet 10 billion. >> we have to talk about the energy story. stay on the metals paid we have to talk about what has happened the last 10 years. it started with jso for rio tinto. the lack of investment we have seen in the last decade, how profound is that when you start to think about the dynamics from here on out? >> all these stories have the same story. you have very low prices over the last decade. very poor returns in the sector. underinvestment. no demand. now we are adding demand on top of no supply and we are pretty really tight markets -- and we are creating really tight markets. the core of the demand story is where stimulus is going. stimulus over the previous decade operated through the previous wealth channel. today, it is benefiting lower income households who spend more on commodities.

shery: that was jeff curry, head of goldman sachs commodities research. we are seeing the broader bloomberg commodity index seeing a pullback, a 10th of 1% lower. it has been trading at multiyear highs. brent crude trading a little bit higher. we are seeing a little bit of slippage when it comes to wti in early asian trading after an industry report showing the first gain in five weeks. recently getting the cold blast. it does look like we are seeing animal is asian of the supply demand demand make. copper futures taking a hit. 4/10 of 1%.

reporting and reacting to their earnings. still ahead, the outlook for hong kong. beijing reporting sweeping changes to the electoral system. ♪

haidi: we continue to see signs that china could potentially further tightened its grip on hong kong with officials warning of changes in the elect chart -- in the electoral system. we await the government's budget announcement later today. joining us to discuss this is a partner or the asia group and former u.s. counsel general to hong kong and macau. thank you for joining us today. it seems we continue to see more restrictions on hong kong and they are limited -- and the limited democracy they have going on. what is the future for the city

at a time when there economy is taking such a big hit? >> it seems quite clear there are some impending changes coming at the meeting in beijing next month to change the electoral system even further in the direction of making the electric -- the elected officials in hong kong resemble an unquestioning echo chamber for the government. so the question is what impact that will have on actual governance and policy and of course what impact it will have on business. shery: also, what impact will that have between u.s. and china relations? we continue to hear more from the biden administration continuing some of those tough policies on china. we see more of hong kong's democracy being are voted. will we see a stronger reaction from washington? >> it is unclear.

certainly, the magnitude of what is being envisioned for next month is likely to engender a reaction from washington. they could take the form of sanctions or it could take the form of specific statements. it could also take the form of some additional correctional action on hong kong related issue. -- issues. the congress is at this point fair to say it is tougher on these issues then even the u.s. administration. on the flipside, do sanctions actually accomplish much in terms of impacting china's behavior? to date, they have not really. the question in my mind is, what is the impact going to be on the business community? the business community does not really look to the legislative council or the district councils for that much direct assistance in terms of day-to-day operations. those institutions do have an

impact on broader questions about the quality and transparency of how the hong kong government operates, maintaining the independence of the judiciary and the whole question about data privacy issues. there will be some sort of repercussions but we will have to wait and see what comes down and how it plays out. haidi: when it comes to the future of hong kong and the influence of beijing, a lot of analysts say this is a faded complete to does -- does that add more uncertainty to the business landscape ech i ? >> i think there are certain classes of businesses that will find the new hong kong uncomfortable for various reasons. i think data privacy is an important question going forward. there is a larger group, which we will adjust to the new reality and realize there is a

an enormous business opportunity in the city given its proximity to china and unique access to finance and business. on balance, you're right to suggest that some businesses will just price in these changes and then move forward. i do not think the changes are cost free. haidi: in terms of the areas of collaboration we could see with the new biden administration and beijing, does taking a stand on hong kong and some of the sensitive political topics, does that prevent them from being able to collaborate and build a more substantially beneficial relationship than under the trump administration? >> i hope not. beijing has not clearly signaled

yet whether friction in the area of democracy and human rights will be a dealbreaker for them in terms of entering into negotiations with the united states on economic issues or cooperating on issues like the coronavirus, climate change, north korea and the like. my guess is it will be a mixed picture. the inevitable disagreements on shin jong and hong kong etc. will make it harder to cooperate between the two governments but not impossible. shery: what would be the low hanging fruit at this point? >> i think some of it is outside the region. i think the u.s. might look the china to be supportive on a renegotiation of the iran agreement. look to china to be supportive in other aspects on united

nations issues and then also on the north korea question. china plays a critical if not the critical role in preventing that situation from getting out of hand and i think that there needs to be coordination and a think there probably will be between beijing and washington on those issues. shery: you are a career diplomat. you have been based in tokyo as well. you have worked towards the transpacific partnership, which the u.s. withdrew from. looking at the different perspectives, where does -- how can they balance in this environment where you have this confrontation between the u.s. and china? countries like japan, countries like south korea. >> i think they will successfully. to varying degrees, aligned with the united states on many issues that also pursue their own

course in terms of economic relations with china. i think it varies country by country. in terms of exactly what balance they will strike. if the last few years have taught us anything is that there is room to maneuver for third countries. for southeast asian nations, northeast asian and others to work with both china and the united states. to be honest, that frustrates both china and the united states . it has become a fact of life. if you look at the tpp, the reason that still exists and has gone forward and it's accomplishing a lot in terms of opening up markets in the indo pacific is because other countries, not the united states, not china, stepped in and took a leadership role and that pattern could continue going forward. haidi: we talk about before the

separation of the human rights and democracy frictions and being able to collaborate, we have heard from president biden's nominees saying they are planning to take a more holistic view of that relationship because he says we have to look at it all because that is the way the chinese look at these issues rather than separating economic and security issues as the agency had done earlier. what does that mean to you in terms of some of the tools the treasury would take on putting pressure on beijing? >> the specific toolbox is in the macro economic sphere where it is a matter of coordination with other major economies including china on financial policy where there is a discussion about the degree to which u.s. companies should invest in chinese companies. i am most keen to hear the treasury department speak on that issue. treasury has a statutory role in the implementation of sanctions.

the sanctions policy tends to be set by the white house with the advice of the treasury department. haidi: is that a reaction we could continue to see? are those tools being used particularly when you talk about the security, the privacy, technology related future of hong kong and how chinese influence could play into that? >> i think technology -- hong kong is not a major technology reduce or and only -- technology producer and only a taker of technology. i think this data issue is very important. hong kong is on the outside of the great firewall of china. to date, people have been able to feel quite confident that they have control over the privacy of their data both in legal sense and operational

sense. some of the operational confidence has been eroded. if the legal confidence also falls apart, people will have to at the very least change their method of operations to compensate. i think that is a really important issue for a lot of companies to be paying close attention to. haidi: partner of the asia group and former u.s. counsel hong kong and dekalb. we will be assessing how fintech is faring in hong kong. let's take a look at our markets. what are you seeing? sophie: mid week, we are seeing a down day for stocks. japan leading the regional decline. have health care, industrial materials and tech tracking at lower. we are seeing financials, energy and real estate marginally in

the green. one highlight, shares falling as you are seeing bitcoin losing ground. my next is the second best performer on the topics year to date. japan airlines jumping along with korean air. this as we learned the u.k.'s four step plan to ease the lockdown for the country by june. boris johnson saying their review for international leisure travel will be announced by april 12. a company set to buy a u.s. supermarket chain with the purchaser be wrapped up by april. sk biofarma off by more than 12%. this after parent sk holdings -- flipping for a check of has has this morning. gold holding steady around 1800 and heading for a second month low as you are seeing u.s.

yields, the outlook continuing to move up on optimism that has been fueled by dovish remarks from fed chair powell. u.s. 10 year yield holding steady after a rise on vaccine development. aussie bonds on the watch for any action when it comes to curb control. kiwi yield holding steady above 161. this as we await the rbnz's policy decision. it's price as a central bank likely to tighten by the third quarter of 2022. we are expecting the central bank might push back against that tightening chatter. haidi: coming up next, we get more on the new zealand policy decision. why the rbnz may be dispelling talks on a v-shaped recovery. this is bloomberg. ♪

>> it is not just unemployment or inflation or the employment rate. it is all three of those. they need to be above certain levels. that was the big sigh of relief on wall street. >> it is clear he things we need to go big as president biden does. >> we are at a very precarious and unique moment of economic crisis and that is why we feel confident we will be better off if we take these actions definitively. >> we think inflation is going to be a messy story and that is going to keep the fed on the sidelines.

we are constructive. haidi: some guests on bloomberg television >> -- some guest on bloomberg television earlier reacting to jay powell's testimony. maintain current bond buying program for the foreseeable future, indicating he is nowhere close to reducing support for the u.s. economy. he told us the economy is a long way from the fed's employment and inflation goal. progress is likely to take some time. president biden's pick to be number two at treasuries indicating he and the treasury may be open to maintaining trump era trade curves on china. he said china is america's top strategic competitor and he would be happy to use trade and sanction directives used under the former administration. he said beijing must be held accountable. iran has begun restricting you and access toys nuclear program

-- access to its nuclear program. the iaea has discovered traces of uranium. the deal was abandoned by than president donald trump. president joe biden has said he would be willing to resume talks with iran. the los angeles sheriff says there is no sign golf star tiger woods was impaired when he crashed his car, suffering serious leg injuries. he had to be cut free after the single vehicle accident and needed surgery. aerial shots showed the car on its side. the 15 time major champion, he has needed a series of back operations and had hoped to return to the pga tour at the masters in april. 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. this is bloomberg.

haidi: new zealand is due to post its first rate decision for 2021 at the top of the hour. policymakers are expected to address the need for continued stimulus. alexandra joins us. why are we are expecting any talk of tightening despite how well the economy is running? >> yes, we were expecting the rbnz would follow the playbook we sell overnight and other global peers in stressing it is too early to be withdrawing stimulus. we expect -- over the economic recovery. there is this need for ongoing policy support and there is likely to be no change to the key interest rate into 2022. the rbnz is very concerned about the currency. the new zealand dollar has risen 30% since march of last year.

given that newly -- given that new zealand is one of few global peers closing in on inflation and jobs target, it is going to be increasingly difficult to defend the dovish stance while the economy continues on the trajectory it is on. shery: we have seen standard and poor upgrading this week. >> that is correct. this was on the basis of how well new zealand has tackled the covid situation and how strong the economic outlook is because of stamping out the virus. the v-shaped recovery looks to be maintained even though auckland had the three-day lockdown last week. we are seeing households take advantage of low interest rates and they are pouring money into housing, which is seeing prices soar, supporting spending and construction activity. it is interesting heading into this meeting, taking a step back

from when they last updated the forecast in november. the rbnz was preparing the markets to take interest rates negative at this time. fast-forward to february and we are seeing the rbnz is having to fend off being the first mover. it is highlighting how quickly things are changing in this environment. shery: quite a turnaround. also coming up, ocbc posted in earnings beat in the fourth quarter. the bank remains cautious of the headwinds added. -- headwinds ahead. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. the latest to buy into bitcoin. purchasing more than 3300 digital tokens at a price of 170 million u.s. dollars. square says cryptocurrencies are instruments of economic empowerment, allowing people to secure their financial future. elon musk has lost 15 billion dollars this week as tesla raises against the year. suffering its worst session declined since early september. it is down more than 30%. it is seen as a reaction to his

comments that cryptocurrencies are too expensive. tesla has made a $1.5 billion bet on bitcoin. new energy automaker nikola is building a truck that could run for more than 14 kilometers on hydrogen. the engine remains on track for production. they have no revenue record and is relying on investor confidence to raise cash stocks fell sharply in new york. shery: let's head to singapore. a couple of companies have reported this morning including ocbc and n. let's get more from haslinda amin. start with ocbc because it is a beat. haslinda: we have seen lower operating costs compensating for lower loans and higher provisions. when you talk about ocbc beating, it is a contraction from a year ago, the third

quarterly contraction, suggesting it is difficult. look at the numbers. 285 million dollars in alliances. -- allowances. what we gather, it is still a difficult environment to operate. the recovery is still not broad-based. he said as long as the virus remains, it will be challenging. looking out for headwinds, he says what is helping as the wealth management business has seen record income from wealth management in the first nine. he wants to grow that in southeast asia in particular. what is worth noting is ocbc is in the midst of a leadership transmission. -- transition care that is going to happen in -- transition. that is come to happen in april. she was from hsbc. overseeing its greater china

operations. perhaps an indication of what ocbc will be focusing on under her leadership should she will be the first female leadership -- first female ceo. it is a milestone. haidi: we also had capital went out with numbers. a four euro loss to be concerned -- a four year loss to be concerned about. haslinda: it all reflects a difficult environment for the property sector here and elsewhere i gather in the world as well. we have retail reeling from the pandemic impact. have hospitality. those are dragging down the numbers. also, office rent. office rents came down 10% in the fourth quarter. they are feeling the pain. they are terminating leases early in the likes of dbs. they are requiring less space for their workers and

encouraging more workers to work from home. there has been a change in terms of trends. when you talk about determination, a loss of threat or 30,000 square feet in fourth quarter alone. what is showing signs of improvement is the home sales. we saw that increase by about 2%. haidi: haslinda with the latest in singapore in earnings. we are looking ahead to the hong kong stock exchange. looking set to report after wednesday. plenty of optimism. looking ahead to what the next year could hold. sophie: one of the best performing last year when it comes to stocks in hong kong. up more than 100% the past 12 months on ipo deals and salad trading activity. it is topping the charts when it comes to its peers. you have it with the highest

earnings multiple compared to other global exchanges. analysts are bullish. pulling up the chart on the terminal, the hong kong exchange expected to post a 22% jump. analysts see more upside ahead. revising earnings estimate upward given anticipation around more ipos coming to hong kong. shery: we will be watching those closely. also coming up, the outlook for china's ev sector appeared we speak to a firm focusing on mobility, energy and logistics. the managing partner is with us from shanghai. plus, more markets analysis with ubs private wealth management. for now, that is it from daybreak asia. our coverage continues as we look to the start of trade in hong kong, shanghai and shenzhen. standby for bloomberg markets china open. this is bloomberg. ♪

tom: it is 9:00 a.m. in beijing and shanghai. welcome to bloomberg china markets open. david: we are counting down to the open of the session on the chinese mainland here in hong kong. jay powell says he is nowhere near winding back support for the u.s. e