♪ shery: welcome to daybreak: asia . >> and i am haidi in sydney. we are counting down to the major. the u.s. secretary of state hits out at china, accusing beijing of coercion and aggression ahead of key talks. reversal on the astrazeneca vaccine, hinting they may lift

restrictions if investigators say it is safe. investors weigh the strength of the economic recovery in anticipation of the federal reserve's policy statement. haidi: we start with breaking news out of south korea. shery: the unemployment rate fell to 4%, beating expectations it would exceed 5%. it is also coming down from the 5.4% logged in the previous month. a little bit of positivity coming from the south korean pasted -- labor market. we have seen a relaxation of social distancing measures and a pickup in activity ahead of that lunar new year holiday. still. 473,000 jobs were removed in february from a year earlier and we know there are still antivirus measures weighing on the labor market.

we have the sydney open. haidi: steady as she goes as to the soft handoff from wall street. we saw stocks retreat from record highs after closing at a three week high. markets are on bank watch along with positions from indonesia, brazil, and turkey, so em traders will be watching that very closely. in new zealand, stocks are rising. you have s&p futures moving higher in the asia session. after we saw the vix gauge fall, futures have slid below 24. there is sentiment shift around fears on markets. a survey showed a taper tantrum is the top kill risk -- tail

risk, hedging out covid. in the bond space, you haven't treasury futures little changed while the 10 year treasury yield is unchanged. this is after bonds were up tuesday, after the view that the central bank will maintain its yield program. on the chart is the spread between april bonds. but the pressure is on regarding the rba shifting its program. at westpac, they say the rba to change their predictions and needs to extend november maturity. haidi: geopolitical tensions are also in view for investors, that investors. antony blinken reaffirmed the united states is alliance with japan while at the same time

blasting china for what they call coercion and aggression in the region. obviously, this is of high significance the first asia trip for blinken and by tradition. -- and the biden administration. >> it's going to be a busy week. they are wrapping up the japan visit today. antony blinken and lloyd austin, the defense secretary, are headed to south korea. this is not about building a united coalition towards china. that will get full attention in the korean talks -- north korea will get full attention in the korean talks that will begin. and we have alaska meeting tentatively scheduled by the end of this week -- meetings tentatively scheduled by the end of this week. this is the first time senior

envoys will be meeting with their chinese counterparts and you are seeing blinken here talk about how they are committed to defending japan. shery: hold on a second because we are getting those breaking lines. senior officials are saying the u.s. will be addressing human rights over the issue of taiwan when they hold those talks with china. the u.s. is saying the china meeting is a one of and not a resumption of dialogue. saying they are not there yet on negotiating outstanding issues with china. they also wants to discuss china's economic coercion of australia. they want to be issuing a joint statement after the meeting. the u.s. will be discussing cybersecurity with china in that meeting as well. going back to you, these lines

don't seem that friendly as of yet. especially saying this is a one of. it does not mean they have resumed dialogue as usual. >> of course. before the trump administration, we had the strategic dialogues which were annual events. those have been scrapped and have been ad hoc at best. this is a chance for the sides to get together and air their grievances. you can tell already the tone being set by antony blinken, using tomes like coercion and aggression, in fact, a security council asia ordinate told the associated press that relations cannot improve until they stop that type of alleged economic coercion against australia. it is a term that is being used quite a bit right now. even the taiwan envoy to the united states talked about

coercion involving pineapples that could spread. it kind of sounds like there is bad blood. but one way to get through the bad blood sit down and talk, right? i used a question mark there. >> this is a very critical time in our relationship with the united states. there is a lot happening. taiwan does continue to be a force for good, and important security and economic to the united states, and we will continue to seek opportunities to work together. >> you can tune in and get more of that interview with taiwan representative to the united states. shery: we will be watching that very closely. stephen engle with his update on the alaska talks. let's turn to vonnie quinn with

the first word headlines. >> france and italy say they will resume using astrazeneca's covid-19 vaccine again if the european medical advisory says it is safe. they have repeatedly said the benefits of the shot outweigh the risks. eu countries have been warned the slow pace of vaccinations put restrictions on activity. hsbc has closed its main office in hong kong after three people working in the building tested positive for covid. according to an internal memo, the government is specter to tell people who were in the building during certain hours to undergo tests. hong kong says it will extend virus related social distancing measures for two weeks. bloomberg law says the irs is

reconsidering its tracks -- tax retracement of back targets in the united states. there have been concerns the tax code has not kept up with the popularity of deals, with deals worth around $40 billion in just the first quarter of 2021. north korea could be planning to carry out its first weapons test since biden came into office. intelligence officials say pyongyang intends to go through the test hinging on the outcome of meetings with the secretary of state and secretary of defense in south korea. global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: still ahead, we will be hearing from the former japanese investor to the u.s. about what blinken strip means for the

region and rest of the world. we focus on the feds second meeting -- fed's second meeting of 2021. we get a preview at his balancing act next. this is bloomberg. ♪

shery: the three-day frenzy of central bank kicks off later. there are at least 11 monetary announcements on the docket with brazil poet to be the first in the g20 -- poised to be the first in the g20 to raise rates. central bankers from washington to tokyo will be confronting the enthusiasm of investors betting on the return of inflation and policy responses ranging from tolerance to interest rate increases. this is also the first

opportunity for central bankers to act since the global route and federal debt markets took hold -- in federal debt markets took hold in february. haidi: most economists are betting that jay powell won't change course just yet. our economic policy editor kathleen hays is here. what is inspected to drive interest rates on bond purchases? >> the question is how fast inflation is going to rise and this gets particular focus. every three months, the fed updates its summary of economic rejections and when it does that it moves its dot plots. the question is now, will the dots change based on these factors suggesting the economy in march is much stronger?

cases are going down, vaccine rollout is going out. retail sales are up 7.6% year-over-year. we saw $1400 stimulus checks that are boosting spending. unemployment is down to 6.2%. and then won't all that stimulus help boost inflation? so the fed is expected to boost its forecast. meanwhile, goldman sachs is looking for a gain of 7.7% in gdp to see 7% growth or higher. you can see all of those factors. the question is, when we go back to that. chart -- that dot chart, you can see for 2020, no rate hikes expected. 2021 no rate hikes. 2022, only one person. and in 2023, five out of 17 see

a hike and all the others don't. that is the question. economists we surveyed see two rate hikes but no chagen -- change in the forecast just yet. one guest sees a small change, a sign that a few people are acknowledging the economy is stronger but not much of a change. dot plots are the major forecast for this meeting. shery: what about major expectations? could we see bond yields spike even higher? kathleen: that remains to be seen. but jay powell, in terms of him acknowledging that, he says he wants to see substantial progress on the dual mandate, inflation at target and staying

there before they make a move. and he says yes, the economy is better, but there are still millions unemployed. it's like 10%. and inflation, that's another important question. you can see that easily since the great recession ended, the pce core has been seldom above the 2% target and right now it remains below. jay powell says he wants to overshoot the target, not just get there. that's another reason not to make a move. and larry summers says this massive stimulus will boost so quickly fed will be forced to raise rates will janet yellen says it is going to be a small rise. jay powell has also said the rise in bond yields is a sign people are getting more optimistic about the recovery.

jay powell is going to be hit on this again. aren't you going to see inflation, don't you have to hit sooner? jay powell may just hold his cards so close to the best that we leave knowing more than we did going into this. haidi: kathleen hays there. our next guest says that if the treasury yield moves and the spread widens, he is likely to buy on street. joining us is the fidelity head that is the -- joining us now is our guest. >> the fed is walking a real tight rope here. there's a lot more interest and a lot more investor questions. just as we heard about the stimulus package, we just saw

the bill passed by president bynum. -- president biden. we have spending which investors are getting excited about, but investors are also focused on this big mountain of debt. the fed is going to have to carefully balance these two things and we are really focused on that ladder -- the latter bet. haidi: there is always some revival of operation twist. if you take a look at the operations over the last week's, is there an indication that there is some subtle twist that is already happening?

>> there could be. the question on inflation is the right one. the thing we are focused on here is less about operation twist or what the fed might do, but thinking long-term about where the fed might go and how to balance that. the item we are focused on is real yield as they have moved from -1% to -0.6%. we think the fed is pretty boxed in. they will have to make sure yields stay low to balance out that nominal growth. i think that if we are thinking longer-term, could we see a bit of tapering intention around this? i think it is possible. but the fed is really going to have to manage that level.

haidi: let's focus on those expectations. shery: we heard from the bridgewater ceo talk about the beginning of a major secular change. economic conditions and inflation will adjust faster then even markets or the fed are expecting. and yet we continue to hear this skepticism about inflation. matt winkler, writing this piece saying with the exception of the 70's, we have not seen inflation come back, so what is different now? >> fed infrastructure spending. think about the amount of spending we have already had from the u.s.. the fiscal stimulus, this new package that was passed the we will likely see later on. we are talking $8.5 trillion, well over $8.5 trillion of

incremental spending from the u.s. government from 2020-2024. that is a big uplift that we are focused on. that is clearly causing people to think more about inflation. we are already starting to see that get priced in, as we just heard, with breakeven rates around 2.3%. could that go higher? that hit a touch above 3%? -- could that hit a touch above 3%? if you think about how that initial spending comes through, things are going to balance out a little bit more. shery: where are you finding opportunities? >> we continue to be very focused on chinese and government bonds. bonds in china at 3.2% looks

attractive versus what you might see in europe and the u.s., even. the other area is credit. credit in china is an attractive area. but also, the emerging markets space. commodity prices up that is benefiting emerging markets, also fundamentals still are pretty good. you can think about those three areas. there is still some pretty good opportunities for in those areas. shery: thank you very much for your time. we hear from legendary investor bill gross saying he is short treasury futures and long wants. >> -- long bonds.

>> i am short treasury futures, short the long beach to a certain extent. >> i heard you made a tidy sum trading gamestop in the january short squeeze. >> i got into early. i got in with options like a good robinhood trader. selling options, not buying options. i had around the 150, $200 level. there is wisdom saying sell to the sleeping point. i didn't, but i managed to overcome my insecurities and write it all the way that down. -- ride it all the wy back down. -- the way back down. i am still seeing call options. volatility is superhigh and that promotes the ability to make some money.

>> see you are effectively still short gamestop. -- so you are effectively still short gamestop? it's not like you are borrowing a position in the cash market, but -- >> it sort of is. if the option comes do you are forced short shares. but right now, the borrowing rate on short shares is only one in 5% -- 1.5%. with volatility annualized, you need a doubling and a doubling in order to start to lose money. i think this is the perfect opportunity for option sellers, not buyers. >> how much have you made on that trade so our? >> i was in the hole by 10

million but i am about the same amount above ground. haidi: and co-founder bill gross joining us. later, the disney ceo will be on at 11:40 p.m. hong kong time. don't miss out on the conversation. this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines. germany's regulators trigger compensation for depositors after finding a lender cannot repay all of the cash. the payouts could mean higher costs for german banks, which are members of a guarantee fund. it is reported that a search in income rising to $281 million. the world's biggest dairy

exporter has seen chinese demand for its products increase. don't miss our interview with the head of their apex business. -- apac business. they join us later ahead of the market open. this is bloomberg.

(announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning.

(woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com. shery: the leaders of france and italy say they will resume using the astrazeneca vaccine if the medicine agency advises in a safe. the drug regulator will issue a formal recommendation thursday on thursday -- on thursday. this is quite the u-turn in a matter of days. what has changed? >> speculators are taking a lot of care to make sure they are looking at all of the evidence to make sure there is not anything dangerous with these vaccines.

the reason why is they want to address this issue of vaccine hesitancy. the scientists that have been looking at this, there has been no real data that suggests that any of these vaccines causes significant side effects, because we did see some lug clots occurring after people got that shot, there was the expectation that perhaps they were related even though they might have just happened coincidentally. so we don't want to dive anything under the rug. they're hoping people will embrace the vaccine because we really do have to get out there heard we have to make the most of what we have. that shout there. we have to make the most of what we got. -- get the vaccine out there. we have to make the most of what we got.

haidi: was the concern if the global rollout remains patchy? -- what is the concern if the global rollout means patchy? >> as you point out, there are some places like brazil and india where they are seeing significant numbers of cases. as long as they have a pool or reservoir of infection, we are going to continue to see transmissions occurring. every time the virus goes from one person to another, it is changing and that's when these mutations can occur. that is the thing that has everyone on edge. it seems like the vaccine we have is affect against these novel variants but there is these possibility of mutations occurring that could of ate the backseats we have. that is the peace -- could evade

the vaccines we have. that's why we want to use all the vaccine we have. haidi: our bloomberg health care reporter with the latest on the rollout. the world's biggest vaccine manufacture has shipped out 91 million covid-19 vaccine doses over the past two months. haslinda amin spoke with the ceo about the challenges of getting the shots out to the most in need. >> thanks to the stockpiling i did in 2020, that gave us a head start. right now, we have supplied more than 50% of the doses covax has received. we are trying to scale up as fast as we can and covax is doing a great job trying to equitably distribute these doses

to as many nations. between covax and others, we have reached 50 countries globally. >> we have joe biden committing millions of dollars to covax. to what extent cannot funding address the dire state of inequality, given that the issue is a lack of supply? >> more than the funding, it is down to the manufacturers on who they want to prioritize. if a western manufacture to sell to a richer nation at a higher price, there is nothing really one can do about it. they are trying to balance out their returns and to be ethical at the same time. because we are a privately listed company, i can be as ethical as i want to be. we are selling at an average price of three dollars a dose for our vaccine. to give as much equitable access

as we can. so it is not just the price, it is supplying the product to these nations which cannot get access to these manufacturers. >> it is hard to be patient when the situation is desperate. it takes time to scale up. can covax meet the goal by the end of the year? >> end of this year will be challenging. it may spill over by a few months because there are a lot of manufacturers who have not been able to supply to their commitments and timelines. when india changed its mind that it wanted to consume a lot of doses, we had to dedicate a lot of our capacity, which was not originally planned for india, is now going to the indian citizen

s. for the first few months, we are being directed to prioritize supplies to india and other countries that have a high disease burden. it is going to take another 3-4 months for covax to pick up the large amount of doses they will get. because of vaccine nationalism and a new thing that has started , raw materials nationalism. what the u.s. has done and i sent this message to all the decision-makers in the u.s.. please do not put a ban on critical raw materials that manufacturers need to make vaccines. under the defense act in the u.s., you have got a ban on certain critical items we are all dependent on so that may also slow the exceed manufacturing capacity in parts of the world, including india. haidi: that was the ceo of the

serum institute of india. watch the full conversation when the event begin at 9 p.m. and hung -- at 9 p.m. in hong kong. >> one a president biden senior aides says relationships with beijing won't improve until china stops its economic coercion. the national security council asia coordinator gave the report in an interview. china has proposed tariffs on a range of australian experts after backing an investigation into the potential origin of covid-19 in china. corn prices rose after china bought 1.2 million metric tons. news of the sales reassured market bulls that demand for corn remains intact.

it also eased concerns of impact of a new african point -- swine fever. a ranking american general says russia remains the top threat to the u.s., even as the tension increasingly turns to china. he told the senate that as russian leaders continue to assert their dominance and regain global power, while the chinese rivalry has continued, he asserts it is the russia military continues operations aimed at north america. global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: more on washington's efforts to build a united front against beijing. we will speak with the former u.s. ambassador -- japanese

ambassador to the u.s., ichijo fujisaki. this is bloomberg. -- ichiro fujisaki. this is bloomberg.

haidi: let's get a stock with -- let's get a check of the markets. >> citi stocks are being led lower. discretionary stocks giving back some gains. the aussie dollar dropping. check out ozzie yields, tracking

slightly higher. christopher kent in focus this morning. he noted that the economic outlook still remains very uncertain. this out of the rba march meeting and it's which has expectations the yield program will be shifted to the blonde program over at commonwealth. checking in on treasury futures this morning as markets wait to see aunt yields will resume the trek higher, you have treasury futures staying steady this morning. jgb futures taking lower with rates likely to stay range bound. former boj -- a former boj policy board member says you cannot rule out the possibility of surprise from the boj as

nomura's rate strategists point out. if the pressure can be maintained that is positive and may help the boj avoid taking drastic action. shery: let's turn now to the visits to south korea and japan ahead of the biden administration's first high-level talks with chinese in ministration officials in alaska. our next guest says the world needs the u.s. as a leader in a multilateral world. he is the former japanese abbasid to the u.s., it's euro fuji psaki -- ichiro fujisaki. ichiro: thank you for having me. shery: is the united states back as a world leader? ichiro: i think so, very

quickly. it is very impressive that the u.s. has come back so quick. haidi: what are we expecting from the leader of this multinational world -- multilateral world? relations have not been that smooth. ichiro: that issue between seoul and tokyo should be solved by ourselves, the japanese and koreans. we should be able to solve it. sometimes, both sides politicize that too much. now there is a move by the republic of korea and i hope there will be better relations. we should be waiting until the next administration or whatever eared -- or whatever.

i think we should try to improve relations as soon as possible. shery: haidi: and yet washington has always acted as a mediator. now that we have north korea making noise, what do you expect from the biden administration? ichiro: it is not true that the u.s. always acted as an intermediate or. -- intermediate. it is true that obama came and tried to soothe our relations, but questions should be solved by ourselves and the u.s. is just trying to serve as a place for discussion. but the question itself, for example the west bank, where the u.s. would come in and proposed something -- proposed something,

-- propose something, it is not like that. >> you talk about the relationship moving to controlled competition. does that suggest that the relationship does not change and what is the role for japan given the fine line it has always walked given the trade relationship it has with beijing? ichiro: first of all, yesterday's talks show very clearly that japan and the united states share concerns about the conduct of china. we have expressed concerns on the south china sea china sea -- south china sea, east china sea,

sent copy -- senkaku, how they acted in the united nations, justice between the philippines and china. all of those are china's conduct. the biden administration is changing from total concentration to a controlling one. meeting there is a competition side, a confrontation side, and a corporation side. competition on the business and economic side, confrontation on human rights. haidi: do you expect an increase in military personnel from the u.s. given that we have seen this show of unity from the u.s.

and its regional allies? ichiro: i don't think so. we have agreed that u.s. forces in japan will be increasing. that has not been implemented because of this move of okinawa marine basis. that goes with it. if that package moves, u.s. forces will be decreased. because of the involvement of arms, that would not increase the deterrence of the united states. we still would rely the united states forever deterrence -- for our deterrence. shery: we heard from officials,

saying the u.s. and china will not be issuing a joint statement after the meeting. that this meeting is not a resumption of dialogue. it seems to be a tough approach. what does this mean for japan? ichiro: as long as the u.s. is taking that kind of roach or confrontation, competition or collaboration, that does not other japan. sometimes, the competition side is highlighted with human rights arise. sometimes, the corporation side is highlighted when the planet changes. that is totally fine to japan. haidi: what kind of message is

being sent to not just the japanese government, but the japanese people? ichiro: it is very good that the message returned to such at issue and secretary blinken talked about as well, that he has empathy towards the family. people to people as well. separately, hillary clinton visited japan in 2009 and this time secretary blinken visits first. on top of that, they are meeting in alaska.

the prime minister was the first guest of president biden and that shows how much importance they are placing that is important to the japanese as well. shery: we always appreciate your insights, thank you so much, ichiro fujisaki. at a japan, we are getting the latest trade numbers showing exports have fallen for the month of february. this is a bigger contraction than expected and also a contraction after years of exports. this is quite a reversal for contraction in the past 21 months for imports in japan. -- for exports to japan. trade balance has been adjusted

-- trade balance unadjusted coming in at a surplus of 217.4 union. -- billion yen. when it comes to the breakdown of those exports, we are seeing that to the u.s., it was a contraction of 14% china is rising more than 3%. we are also counting down to the open of trade in japan. we are seeing futures at the moment under pressure. this is after we saw six sessions of gains the japanese nick index. the japanese yen has fallen to its most in nine months and is hovering at that level.

haidi: uber is going to reclassify its u.k. drivers as work. this is after a landmark entitling them to minimum wage and other benefits. our reporter is here with more. shery: this is a huge change to the business model. tell us about it. >> this is a big deal in the sense that uber has been fighting against some of these things its whole life. now they will be reclassifying

all 70 k of their drivers as workers, which is a distinction they have in the u.k. that in the u.s. we don't have. they will be basically setting a minimum wage. so the equivalent of about $12 usd. they will also be stocking away vacation pay and giving workers other benefits such as paying 3% of a drivers earnings into a pension plan. those are steps they have not taken before and it is a big turning point regulators need to watch globally. haidi: these changes are limited to the u.k. for now but we know they are facing similar issues california. are we likely to see a change in terms of policy more broadly? >> since this news came out a

couple of hours ago i saw a california assembly woman tweet why would an american company shortchange american workers? because we let them. we are going to see a ripple effect from this once we see this kind of move in one country , -- from this. once we see this kind move in one country is hard not to see it in others. u.k. has a distinction between independent contractor and worker that in the u.s. does not exist in the law. in the u.s. uber has lobbied for a separate labor class with limited benefits. haidi: potentially implications for other gig economy workers. our bloomberg tech reporter with that story. let's take a look at stocks we are watching as we head to the start of treating. -- trading.

>> while antony blinken is in asia, we are watching stocks as bloomberg intelligence reports north korea maybe ready to carry out its first weapons test since abided became president. we are also checking in on silicon wafer makers, saying outlook positive. this game developing unit is seeking an ipo and bids are coming in for ebay's korea business. local media reporting partners have submitted an initial bid while macau is staying out of the fray. >> shery: up next, we talked to a guest about their latest holdings. plus, the outlook for markets.

and a sophie just mentioned, we do have the market open in tokyo and seoul. lots more to come. this is bloomberg.

haidi: a very good morning. asia's major markets have opened for trade. shery: welcome to daybreak asia. our top stories this hour. ages main benchmark looks set for a mixed start after u.s. stocks snapped a five day waiting streak ahead of the fed policy meeting. the u.s. secretary of state hits out at china on the debut trip to asia, accusing beijing of

coercion and aggression ahead of talks in alaska. france and italy could be making a reversal on the astrazeneca vaccine, hinting they will lift suspensions if medical regulators say it is safe. the hsbc closes its main office in hong kong after multiple covid cases linked to the latest wave of infections in the city. to pin and south korea coming online. let's get straight to sophie in hong kong. sophie: at the start of cash trade in tokyo, adventist gaining ground. softbank a weighing on the new two -- the nikkei 225. we did it -- would get japanese trade data. check out the yen consolidating around 109 ahead of the fed meeting. before the boj policy review on friday. the former boj policy board member says we cannot rule a surprise from the central bank,

which may shift its yield targeted the five-year yield. in south korea, jobs data out this morning showing unemployment rate fell from a 20 year high, coming in at 4% from february. the korean yuan at 1130. the kospi under pressure, reversing yesterday's gains. keeping an eye on defense stocks. this on a cnn report that uss -- that the u.s. intelligence baby prayer -- u.s. intelligence prepares a report saying north korea may be preparing a weapons test. we are seeing downside moves for resource and consumer names weighing on the benchmark. tech bouncing back up. raising the earlier drop for australian tech shares. aussie yields are gaining ground. some lines from rba's assistant governor who says the outlook for australia's economy is still

uncertain. the u.s. 10 year yield holding fairly steady around 162. seeing divergence as to where yields may go. guggenheim's scott minerd saying the balance of risk is skewed to lower bond yields. haidi: let's get more on that exact topic. brett mcgonigal, chairman at lincoln capital joins us. always great to have you with us. want to start out with our question of the day. what kind of yield reaction will we see depending on how much the dot plot? how far do you think the selloff will continue? what about when rate hike? would that be more of a common effect on the market? >> i think it would. the real issue is 2023, people are worried about some sort of hawkish language that puts it

earlier than that. my thought is we go to 175 on the 10 year. i think it happens soon. i think that powell is in a position where he is in box tomorrow. i do not think he is going to try to spook the markets. there is not much he can say that can rally the markets. if he does not pull a rabbit out of the hat, to surprise the markets to the upside, everything else is downside in both markets. haidi: what does that look like? is it an extension of the bsl are? is it a revival of a subtle twist? >> i think twist is what people were looking for at the last meeting. it would certainly be welcome. shorting the front years and buying the elongated years would be good for the market right

now. i don't think they are in that mindset. you may get language around it, which would be positive. i think the dot plot is going to go the other way. when they put all the data together, i think people are going to be more skewed to some sort of inflationary risk. i don't think it is something to worry about. we have been looking for inflation since 2009. i don't think we are going to get runaway inflation. it is very manageable. i do think the market is looking for a perfect answer and they are very rarely delivered by fed governors. shery:shery: does that mean it bodes well for markets across asia? >> i think there is a long asset allocation to asia. what you saw middle of last week was a real -- there was a sell down that was meaningful in leadership names.

you saw some of the real speculative places come off. use all kind of a little fear in what was going on. thursday and friday look like more short covering. you did not get any kind of meaningful bonding out. there is an asset allocation that goes into asia. i think it is coming. i don't know of we get it in the next few days, but china will tract money both in the bond market and equity market for the foreseeable future. shery: this gtv chart on the bloomberg showing the volatility that continues to rise across china given it is not just because of the macroenvironment. but also perhaps regulatory concerns. where would you go for a little bit of more calm? >> to be honest, i don't think there is a bigger play and it a more meaningful play than being in china right now.

there certainly is risk in some of the platform names as they are being called. the one thing about the indexes in china, a lot of the platform names are not listed in china, so they are not going to hurt the index. they may hurt sentiment. the big players are listed outside of china. if you look of that -- look at that in perverse way, markets do not get hurt by that. sentiment does. i love the semiconductor names. there is going to be a battle in semiconductor for a long time. i think those are places where people were work. infrastructure is important. we like the bond market in china. we think it is the biggest asset allocation we have seen. we think we are in very early innings on that. haidi: before you go, talk to me about what you think we are reaching and inflection point when it comes to spacs. >> it is a real respirometer.

what we saw last week, maybe this is wrong context but it took 20 years to make the spacs of last year. it took a week to reconsider valuations. i love the mechanism. i think it is a positive democratic mechanism for the market. i think it has a huge long game. where the inflection point is is things got ahead of themselves. there is a lot of speculative plays adding some huge valuation. things got a little too hot, too fast. the idea is we have come back to life. it will make people be a lot more responsible with their decisions on the big is this -- on the business acquisition side. in any market, there are going to be a lot of zeros. there are a lot of people who reach for very high valuations

and did not do their work. there are a lot of promises that will not be delivered. that kind of rightsizing of pricing will create risks curve. it will pretty functioning mechanism. -- it will create a functioning mechanism. i think the mechanism is a positive one for the global market. i think it is mispriced right now and it will be hard for some of the last year ipo spacs to find a proper size investments. it will work itself out. shery: always great having your thoughts. we have breaking news. president joe biden speaking to abc news, said that new york governor andrew cuomo should resign if an investigation confirmed the allegations he committed sexual harassment. governor cuomo has been the face of the pandemic response from

many states given the lack of a federal response during the coronavirus pandemic. he has been under increasing pressure, seven accusers have raised allegations against the democratic governor and one claim was he grabbed a woman that was referred to police in new york. president joe biden in the interview with abc news saying the government -- the governor should resign if the investigation confirms the claims he committed sexual harassment. let's turn to vonnie quinn. vonnie: france and italy say they will resume using the astros and echo vaccine as the european medicine agency advises it is safe. the regulator is reviewing data ahead of thursday. the ema has repeatedly said the benefits of the shot outweigh the risks. e.u. countries have warned that the slow pace of vaccinations could prolong restrictions on activity.

hsbc is closing its main office in hong kong after three people tested positive for covid. according to an internal memo, -- to undergo mandatory tests. the closure mean staff and customers will have no access to the biggest branch in the city. hong kong says it will extend virus related social distancing measures until march 31. a ranking american general says russia remains the top threat to the u.s. even as the tension turns to china. the north american chief told the senate that russian leaders continue to assert their dominance through deception, economic coercion and the threat of military force. while the rivalry has intensified, he says it is the russian military that continues to conduct operations aimed at north america. prices rose for a fourth trading

session after china bought 1.2 metric tons from u.s. exporters. news reassured market bulls demand remains in tact. a new african swine fever outbreak. inspections of corn surged to the highest level in 23 years. 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: coming up next, we will have more on the tense ties between china and the u.s. as antony blinken slams beijing ahead of their critical meeting. later in the show, a cfo joins us for a look at prospects for china this year. this is bloomberg. ♪

shery: the white house concedes the upcoming face-to-face talks with china in alaska could be difficult as the u.s. seeks to raise the issues of human rights, taiwan and technologies. areas the two sides have clashed over any reason years. stephen engle joins us from hong kong. what is the tone we are already seeing in tokyo and south korea ? >> they have a lot of catching up to do, the biden administration and the chinese. they have not had face-to-face talks. right now, you are seeing antony blinken, the secretary of state as well as defense secretary lloyd austin in tokyo. they will be going to seoul later today and showing china unified front ahead of the crucial talks that antony blinken as well as jake sullivan, the national security advisor will have with their

chinese counterparts. but you're seeing here antony blinken meeting with the prime minister of japan and basically, antony blinken reaffirming the partnership with japan, the alliance he says is stronger than ever. both sides in statement singled out china for behavior that was political, economic, military and challenging. that is where we set the stage ahead of talks in alaska. they go to seoul where north korea is waddling -- we had kim jong un's sister morning the united states better

refrain from causing a stink if it wants to sleep in peace. a busy week with the u.s. delegations here. shery: in terms of these talks, how high do you expect taiwan would be ranking on the agenda ? >> taiwan has always been a potential flashpoint. you heard from the foreign minister early this or late last week that the united states should be careful and not play with fire on the taiwan issue. it is long considered a redline, any talk of independence or arms sales and the like when it comes to taiwan. this will be critical. i spoke exclusively to the taiwanese representative to washington, d.c. who is very close with the president. she says she sees a lot of continuity so far in the early days of the biden administration

on the policy toward taiwan. >> taiwan has certainly been on the agenda because of a number of aggressive gestures taken on part of the prc to threaten the stability and status quo of the region. the united states has been clear about pushing back against such coercive efforts. we hope that will continue to be a matter of significance. it does require good coordination on the part of not just the united states but also with allies and like-minded partners who have a joint interest in maintaining peace and stability and the status quo of the region. >> obviously there is a change in the administration in the united states and under the trump administration, relations between taiwan and the united states had never been stronger. how would you assess the taiwan u.s. relationship under the

biden administration? >> we appreciate the fact that the united states support for taiwan has been bipartisan. we believe that support is based on our common values and our common interests. our values being support for democracy and freedom and our interest being prosperity as well as peace and prosperity in the region. based on these values and interest, the support for taiwan has continued across different administrations and we continue to see a strong commitment on the part of the biden administration in their rocksolid support for taiwan. >> how would you describe the optics of a very visible u.s. support for taiwan on the security and safety of the asia-pacific region? >> security and the defense relationship with the united states is one of the most important relationships we have. it is critical to taiwan

survival as a democracy. this is a very critical time in our relationship with the united states. there is a lot happening in the geopolitical and geostrategic space. taiwan does continue to be a force for good, and important security and economic partner to the knitted states. -- to the united states. >> how confident are you if push comes to shove that the united states will fulfill its obligations in the 1979 relations act and come to taiwan's defense? >> i think what is important here is to emphasize the will and determination of the people of taiwan to defend ourselves. >> why would this be a u.s. national security issue? >> taiwan is on the front line of dealing with multiple coercion's from the prc including military, economic and

political coercion. taiwan has survived against all odds. ever democracy, our freedom, the prosperity and stability of the region are all at stake. taiwan's survival is in the interest of multiple stakeholders in the region. >> would you agree that semi conductors now is kind of the linchpin in the relationship? the united states obviously has a key interest in securing and procuring more semi conductors as there is a shortage right now. it is not an industry in taiwan they would like to see go into the hands of beijing. >> over the past decades, taiwan has built a very vibrant and resilient economy with technology and semi conductors as a very important component of that. taiwan has a very crucial will to play in global supply chains.

as we are working together in global economic recovery following the challenges of the pandemic, taiwan does want to be a positive component of global recovery. we do hope that our strategic strengths including taiwan's progress in the semiconductor industry, that does play a reinforcing role positively with the growth of the american economy. we continue to work with the united states and a deepening our trade and economic relationship. that is a relationship good for both of our countries and also the world. >> as you can tell, it sets an interesting stage ahead of the talks between china and the united states in alaska. the words that have been bandied about in the white house and you heard the representative from taiwan, coercion. haidi: it is a busy week in

geopolitics in this part of the world. we are hearing from christopher kent in australia from the rba talking about the expectations when it comes to negative rates, when it comes to what happened with the yield control program. negative rates are not under consideration in australia. the governor of the rba saying rising inflation expectations are a good news story. with regard to what we have been seeing with record property prices, not in the midst of monetary policy. any type of response they could happen if lending deteriorated would come but not from monetary policy. hearing also from him he does not think monetary policy should control asset prices. he spoke earlier about how he does expect a small rise in business failures. we are also hearing in australia

, westbank banking corporation will be combining retail and banking units to streamline the lender. that is according to those trillion newspaper. westpac will be can vining -- will be can vining -- announcing with details later on today. lots more to come. this is bloomberg. ♪

shery: have now the samsung electronics shareholders meeting ongoing right now. we are getting some lines out of there when it comes to chips, saying chip demand will be expanded as 5g, ai markets grow. they are talking about the 2021 smartphone market to grow on the economic recovery.

it has been this demand that has pressure the semi conductors industry with the lack of chips really not being available for these expansions in cars, affecting every corner of our lives. we have seen these meetings planned between china and the u.s. despite these tensions to try to manage the supply issues. haidi: you think about how semi conductors have become the crooks of these u.s. china -- the crux of these u.s. china tensions. we are also hearing from samsung they want to maximize production efficiency of their factory to supply foundry chips by expanding capacity. we know that is impacted by some of the weld whether we have had in texas. because -- the wild weather we

have had in texas. we have lots more to come on daybreak: asia. this is bloomberg. ♪

haidi: we are getting trade numbers out of singapore at the moment. domestic exports. you're on your coming in at 4.2%. as he expectations of 6.1%. decelerating from january's 12.8% pace. we are seeing the month on month feature. come in at 8.2%. much better than expectations of a contraction of 7/10 of 1%. the lower base would have played in as well. electronic exports, a gain of 7.4 percent. moderating from the 13.5% we saw

in the month of january. pharmaceuticals exports, this is -- typically we see a lot of swings in this number. a contraction of 33.4% to 1.1 2 billion chaired a contraction of over 30% month on month. we will take a look at how we are seeing markets. sophie, what are you seeing ? sophie: the nikkei halting. we digest the latest trade data from japan exports falling in february. the yen trading around 109. the fomc meeting. we are seeing jgb yields come in slightly under the 10 year. no change expected to the central bank purchases today. in south korea, see how we are seeing faring -- see how we are faring so far. data shows the recovery is

making headway in south korea. the jobless rate fell last month to 4%. korean bond futures taking lower amid speculation over potential be ok intervention. let's switch out the board to see how the aussie share market is faring. resource named, consumer companies directly on the index while the aussie dollar is dragging losses. they do see the currency at 83. as we digest the comments from the rba assistant governor, the 10 year yield holding above 172. saying that no rate hike as likely until cpi is within the target. the response will likely not come from monetary policy. the u.s. 10 year yields steady around 162. the target level people are

watching is to percent. the latest survey saying a move to that level on the 10 year could spark a 10% correction or more for stocks. haidi: alibaba is under pressure from the chinese government to sell its media assets including the hong kong's south china morning post. our managing editor for bloomberg opinion joins us for more. what does this mean for -- and the purchase of a cnp -- scmp? >> i think probably nothing good. the reasons to have misgivings -- a lot of that comes down to the timing with this news coming out. there has been a squeeze on the

scope for freedom of speech and freedom of the press in hong kong since the passing of the national security law in the middle of last year. we have seen it in various forms. the government must curb the independence. jimmy lie, the publisher of one of the biggest selling chinese dailies in prison pending trial. there have been various other things happening that serve to constrict free debate and speech. this news coming now does kind of lead to you to suspect that the next owner of the scmp is not going to run it with such a light hand. shery: and yet we have seen the

scmp not be a radical pro-democracy voice. what sort of practical difference would it make? >> at probably slightly -- it is probably slightly establishment leading. it is a century-old newspaper. it was an establishment newspaper when the establishment was colonial. the establishment was changed. it is very much a newspaper in the mold of democratic society. it reflects a diversity of views. it has continued to do that under jack ma. i think there were misgivings when jack ma thought it -- bought it. in fact, i think jack ma's

ownership has been good. invested in the newspaper, new high-tech swanky offices. they have done a lot of hiring. at the same time, the editorial -- some people might dispute that. the editorial line has become noticeably more pro-beijing. it has continued to reflect a wide range of opinions do not see inate media newspapers. shery: managing editor for bloomberg opinion. hong kong's bankers are working around the clock amid a big rush to go public in the city. ipos have already hit nearly $11 billion in hong kong this year. a close to 500% jump from a year earlier.

so what is driving this sir? -- this surge? until >> recently, there was a market rallied. with that, continued the drive we had last year where companies are rushing to go public because valuations are so high. investors were clamoring for shares. right now, people are still trying to do that. they are trying to capture this window while it is still good. even as markets have begun to stumble a little bit. there has also been a boom in spacs, which is cause people to be super busy. all of this has been driving the activity. there has been a boom of health care and technology ipo's. that also continues from lester. so cold pandemic winner stocks.

there are loads of those in the pipeline. haidi: what are the risks to the surge? >> there are risks. chinese stocks are no longer. they have changed a little bit. they have fallen and there has been a lot more volatility because of the risks and the worries about rising treasury yields and rising inflation. this has hit emerging stocks quite hard. so that is it going to be -- that is going to be a risk for these ipo's. also, the problem in boom market like this one is you might have companies pushing to do an ipo when they are not fully ready yet. that can cause a deal not to work well and investors start to become more picky and selective, which is a bad thing. it does mean we could see

listing activities slow, especially if the markets keep seesawing. shery: it looks like china's telcos will be making a comeback given that they are going to be listed in new york. >> after they were delisted in january, they are looking to come back. china telecom said it would be listing in shanghai. china mobile is said to be plenty a listing on the asia. this is quite a boon for the mainland market. it will neutralize in a way their delisting from the u.s. those are very illiquid stocks anyway. it will give similar to many of the other homecomings, it will give chinese investors more dito these stocks. haidi: equity capital markets reporter in hong kong. coming up, we will be speaking to the chinese online realist our platform -- online real

estate platform. this is bloomberg. ♪

vonnie: this is daybreak: asia. the biden administration says the first high-level talks with beijing in alaska this week could be difficult with the u.s. set to raise issues like human rights and tech.

the u.s. secretary of state antony blinken accused china of using coercion in hong kong and elsewhere. he rallied asian allies in his first official trip abroad. he and secretary lloyd austin traveled to south korea wednesday. taiwan is likely to be a major point of contention this way. the type a envoy to washington told us she is confident the new u.s. president will further the work done by president trump. >> this is a critical time in our relationship with the united states. there is a lot happening in the geopolitical ngo strategic space. taiwan does continue to be a force for good, an important security and economic are in are two the night -- economic partner and we will continue to seek opportunities to work together. vonnie: one of president biden

senior aides says relations with beijing will not improve. the national security council's asia coordinator gave an interview with a newspaper. canberra backed an investigation into the potential origin of covid-19 in china. president biden's efforts to increase the use of renewable energy could be impacted by u.s. pressure on china over human rights. factories in the chinese province are a key part of the solar power supply chain, producing half of the world's silicon. america's biggest labor organization has called on biden to block imports, forcing the president to make a choice between the climate and human rights. 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.

shery: chinese online real estate platform posted its fourth set of results after raising over $2 billion for its ipo last year. the softbank and tencent backed company has over 48 million mobile monthly users and saw net revenue up. joining us from beijing is the cfo. thank you for your time today. for investors, a key question will be how sustainable this growth will be. will you be able to give us a forecast in terms of income, sales in your business? >> thank you. increased 2.1 trillion to 3.5 trillion in 2020.

[indiscernible] 2020, reached the r&b 2.78. it will eliminate some -- increase by 245 year-over-year to hit a high of 5.7 2 billion. demonstrating a strong network. the cost of services combine. [indiscernible]

a fast growth rate. in the long run, we will try to make balance between the future and profitability management. haidi: do you have a number for that outlook? >> yes. actually, we will not commit to any number at the moment. the only one thing i will share with you is during our ipo, from 2020 to 2024. all the numbers, we are very confident. haidi: with tightening measures on the way, are you concerned this will wear own business? -- where on it -- wear on business? >> the reality is the china housing policies --

[indiscernible] it is beneficial for the sustainable development. meanwhile, the china housing market, continue to shift and steady growth the next few years. this will create more favorable environment. haidi: some formidable competitors. the likes of alibaba and jd.com starting to enter the space. how do you stay competitive and maintain and expand market share? >> normally we do not comment on

peers directly. the two things we are certain. the first, the baker ipo -- we are very confident. to enhance capability of housing markets. always remember to stay true to our original -- [indiscernible] for example, the 24 hour commission --

moreover, the people that have -- it continues to enhance the people and the customer experience. shery: what are you seeing in terms of buying trends from consumers right now? >> so far, we are still very stable. very stable price with the housing in china. we are a platform company. because we are -- we have the ability to manage the rates.

haidi: really great to have you with us. we appreciate your time. coming up next, while way -- huawei is expected to demand 5g royalties. we will take a look at that next. be sure to tune into bloomberg radio to hear from more of the days big newsmakers. you can get that in-depth analysis from the daybreak team. broadcasting live from our studios in hong kong. you can listen in via the app on radio plus or bloombergradio.com. plenty more ahead. this is bloomberg. ♪

haidi: huawei is looking to create lucrative revenue source by charging a reasonable fee for access. let's cross over toward asia tech editor. we know the pressures the company is under. is that why they are doing this now, a new cash flow stream? >> i think so in large part. it is an interesting development because as we enumerated in the story, there are a lot of reasons why mobile giants are lining up to try to take advantage of the brave new of 5g networking. to go back to your question,

huawei is looking for new revenue streams now that it's smartphone business has been all but obliterated by u.s. sanctions. shery: we have heard of chinese companies really going after these patents in order to win the patent race. what does that actually mean for the 5g landscape? >> that is also a separate story. the chinese race to accumulate patents. in huawei's case, it is recognized as the world leader in technology standards. i think for years, it has been trying to get a seat at the table to be a major voice in determining 5g standards. i think this is a major step in that directions. -- that direction. it is going to charge the smartphone makers, the largest and most lucrative market before

branching out to autonomous cars. shery: our asia tech editor. here is a that here is the latest in business headlines. apple will offer an option to preinstall apps from russian developers to comply with local regulation. starting april 1, new iphone or ipad users in russia will have the option to load the software, which include apps that appear to be suggested by the russian government. barclays is looking at expanding in asia, reversing from five years ago. the ceo says the lender would like to build on its presence in china will continuing to invest in capital markets, an area that brought strong growth during the pandemic. citigroup is urging banking and advisory businesses -- as its

deal makers work with offices looking to get in on the spac frenzy. the ceo is combining the wealth management and private bank offerings with a share agreement as she seeks more collaboration between business lines. haidi: let's take a look at some of the stocks we are watching in the early asian trading session. sophie: watching to see if the advance for chinese property stocks will continue with chief valuations and improving balance sheets a draw. flipping the board, analysts are less optimistic when it comes to z te with a rating on the stock. an analyst saying they may face continuing market pressure. chinese internet stocks on watch with alibaba, tencent and jd.com among top x -- top picks. pointing to strong fundamentals.

the selloff has been overly penalized for lingering regulatory risk. all of these three stocks rated a buy. positive on the earnings outlook for tencent. keeping an eye on chinese ev related names, they are on watch, planning to outpace tesla in the industry leader by 2025. shery: still to come, we talked to some -- a.c.l. about how the company is continuing a sale of assets as it focus on the new zealand daily market. any discussion with the aberdeen standard. about t chinese bonds. that is in from daybreak: asia. our markets coverage continues. standby for bloomberg markets china open. this is bloomberg. ♪

it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.

tom: it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i'm tom mackenzie. david: i'm david ingles. we are counting into the day of trading. our top stories today, top u.s. officials take a tough stance against beijing days before the biden administration's first face-to-face talks with china. the