shery: hello from bloomberg's world headquarters in new york. sophie: we are counting down to asia's major market open. haidi: welcome to daybreak asia. our top stories this hour. asian stocks look to follow the rebound on wall street as traders weigh inflation and energy costs against the pandemic recovery. sounding the alarm on chinese stocks. big firms tell why they are

turning away from the second-biggest market. facebook denies choosing profit over the safety of users after a whistleblower's testimony on capitol hill. shery: we start you off with breaking news out of south korea. we are getting those inflation numbers. this is a faster acceleration than was expected. a 2.4%. it is easing from the previous two months when the cpi came in at 2.6%. it is still the sixth consecutive month we have seen the price inflation in south korea remain above the central bank's 2% target. month on month is a gain of half a percent. a little bit of easing from the previous month. this coming at a time when we have had higher food costs. we continue to see elevated commodity prices. strip out the food prices, the

volatile components and core cpi year on year rising 1.9%. slightly faster than was expected. bloomberg expecting a 25 percent rate hike coming from the bank of korea. haidi: let's get you straight to the market open in sydney. sophie is in hong kong. sophie: we sell the benchmark lose ground. after pay bouncing back. gaining more than 4%. energy stocks are extending gains as oil pushes higher. wti trading above 79 bucks. check out aussie bonds. the aussie 10 year yield back above 155 will the aussie dollar is holding below 73 in the wake of the spending on the policy decision. keeping an eye on banks in sydney after the regulator

boosted buffer requirements to manage housing market risks, we are seeing a rise to the financial index by a 10th of 1%. morgan stanley raised its price target. checking in how markets are faring in new zealand with the kiwi share market bouncing by a third of 1% while the kiwi dollar is holding steady. we could see pressure coming through if the central bank does delay. nikkei futures pointing higher after this losses -- after the losses. the seventh day of losses. unnerving markets given the plans for wealth redistribution. to see japan become one of the three worst-performing markets globally. pulling up the board to show you how we are faring this month. japan, taiwan and korea the laggard in the world. the cost become a turn from what

we saw last year when it was the best-performing market. help have the exodus of foreign institutional fires pushing it below 3000 points. shery: a lot of declines across asia. we have had market strategies being shared by plenty of high profile names. this coming from the bloomberg invest global conference. >> there is not a lot of places to go in a regime like we are now. >> it is a very good time to be liquefying assets. >> markets are liquid. >> i'm not saying it is going to go down to 20% tomorrow but i am saying there is sensitivity. >> do you still want to own equities? >> equities are the only alternative for most people. coco what you don't want to own is long-duration fixed income. >> you are more vulnerable. there is no place to hide.

>> many institutions seeing a home for crypto in their portfolios. >> whether bitcoin and ethereum survive, i'm not sure. >> the risk reward potential outweighs any of the other things they may be able to look at. haidi: more of a cautious tone from some prominent investors. one of those we spoke to from blackstone, the president saying this feels like a good time to start selling some assets. he says it is a liquid environment. he is saying caution coming through from expectations of fed tapering and longer-term rates will start to rise. i thought it was quite a cap yacht because he does not feel this is the top of the market. there are clearly some increasing concerns. shery: i think it has become difficult for analyst investors to make up their minds of where we are at in the economic cycle. we continue to see this stark divide between bulls and bears.

you were talking about uncertainty with the fed tightening, with the debt ceiling in washington and you have improved and covid trends and an economy that is still chugging along in double digit earnings growth. not surprising we are seeing gains and losses in the s&p 500 of at least 1% for four straight sessions, which is the longest stretch since june 2020. a lot of volatility. haidi: i like that chart because it does show the back, the indecisiveness we see in the investor sentiment. it seems the only thing we can be certain of is more volatility on either side is yet to come. when it comes to china, a big piece of that is invested in the west. when it comes to investment opportunities in the chinese markets. i went to bring in our chief north asia correspondent. this idea of whether china is investable are not, what are we

hearing as to what investors are willing to put down moneywise in china? >> if big money managers are pushing the pause button on investing in china or thinking about it, this is a significant move. we know many chinese companies are putting the pause of listing in the united states, perhaps coming back to hong kong for secondary listings. there are lots of questions. there is lots of regulatory issues going on in china with the crackdowns on tech, property, education and the like. there is caution. don fitzpatrick as we heard, cio of soros fund management says we are not putting money into china right now. here the reasoning. >> for 20 years, chinese tech companies having western capital and a western invested interest in their success very much --

china's goals. don't need that anymore. they can take their $700 billion and take it back to hong kong. i think that is what they are going to do. when it comes to the u.s. chinese listings, if i were investors, i would be really careful. >> let me recap a few other comments. luke ellis of man group, the world's biggest publicly traded hedge fund firm. he says investors need to be more nimble. he says it is impossible if you are investing in markets not to have a view about china and china looks less attractive to them then it was a year ago. not everyone was voicing doom and gloom. we had jonathan gray saying china will continue to go faster than the developed markets. you have to have a longer term horizon. the singapore shery: sovereign wealth fund was shery: weighing in on the investments. what did we hear? >> it is rare in all my years

covering asia to get them to comment specifically about their portfolio or their direction. it was a very interesting interview with the ceo. in this bloomberg interview, all this content coming from the bloomberg invest global virtual conference. let's hear what he had to say about what he says investing in hard tech versus some of these more platform companies or other areas under regulatory scrutiny. >> areas that china needs to make sure it has the right expertise. investors look at those more favorably because the policy tailwind would be behind. other investors, gic needs to reposition. >> flow with the regulatory tailwind appeared he says gic

has a constructive view on investing in china and will continue to be active in the market. more caution. shery: our chief north asian correspondent with the latest on china. one of those arrests for china and the rest of the global economy is surging commodities prices, fuels prices continuing to rise. oil trading your seven year highs. asian via -- asian buyers paying top dollar for a variety of fuel. su keenan joins us with the latest. there are concerns about the power crunch spreading. su: a lot of concerns what is happening with the u.k. and asia could happen in the u.s. let's go to the natural gas price chart because we saw a natural gas traded in the u.s. rising 9.5% in the latest session. suddenly, the global gas shortage and its potential to hit here hits home.

if we dive into the bloomberg, you can see the u.k. and asia already facing crippling shortages sending prices to never before seen highs. this as the demand for the furnish feel ramps up ahead of what is forecast to be an unusually cold winter in europe and asia. the shortages threatening to shut down some u.k. factories. there is concern goldman sacks is forecasting a power generator switch to oil, a could add an extra 650,000 barrels a day to oil demand. all this coming on the heels of opec-plus producers deciding to hold to their moderate output i increase. they decided on a 400,000 barrel a day hike for november when analysts thought twice. you are looking at west texas intermediate. it surged to a seven-year high on the decision. a day later, we are seeing in asian trading.

let's go to the holdings. west texas intermediate above 79. in striking distance of the psychologically important $80 level even though technical analysts say it is somewhat overbought. look at u.k. natural gas up almost 20%. all of this showing commodities continue to -- commodities continue to be on a tear after the bloomberg commodities index hit an all-time high this week. we have saudi arabia reducing prices to asia, which is the biggest oil market in attempts to stabilize pricer th runaway rally on the heels of their decision. haidi: let's get you to vonnie quinn in new york. vonnie: democratic senator elizabeth warren has criticized the federal reserve leadership saying jerome powell shows bad judgment by failing to

stop unusual trading activity by top officials. speaking on the senate floor, warren questioned why powell did not prevent officials from making the investment. she repeated her opposition to his reappointment. >> last week, i said i would not support chair powell's renomination because in one decision after another, he has consistently failed to serve as an effective financial regulator. that is not his only failure. chair powell has also failed as a leader. vonnie: chair powell has received the backing of more than half the republicans on the senate banking committee, which could help them secure a second term. a senator of idaho became seven of 12 to endorse the sitting fed chair who has broad support from democrats. powell's term expires in february. hearings and exchange commissioners says the u.s. will not follow china's lead in

banning digital tokens. he told a house hearing the focus is on ensuring the crypto industry adheres to investor and consumer protection rules. anti-money laundering regulations and tax laws. beijing issued -- global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, we discussed the surge in commodities prices with trade flow ceo tom james. what he sees oil hitting $90 a barrel by the end of the year. next time our guest says he expects accelerate story inflation proves to be transitory pit this is -- a proves to be transitory. this is bloomberg. ♪

shery: the family office of george soros is preparing for higher energy prices to become the new normal. in an exclusive interview at the bloomberg invest global conference, the cio discussed a price in -- a spike in energy prices and how that is affecting investments. >> i think on the energy side it is largely a political phenomenon. i think russia had invest -- had a vested interest in natural gas prices being high in the context of nord stream 2 two approval. in the context of china, i think the decision around australian coal -- >> which is to say not to buy anymore. >> to put them in the penalty box. they failed to realize is even though the majority of their coal is domestically produced, things turn on the margin.

while both of those i think are geopolitical causes, i think the interesting thing is when you look forward, high energy prices or high fossil fuel prices is not necessarily a bug of esg but it is by design. you will promote transition to cleaner energy with higher fossil fuel prices. while not the cause here, i think when we look forward, this is going to be the new norm where you see a spike in energy prices and it is something i think we have to get used too. to your question on inflation, i think we have all been surprised at how long this feels like it is going to last. the other interesting thing is a lot of this is supply-side inflation. it is not clear monetary tools

deal well with supply-side inflation. the risks are this can become of -- can become self reinforcing. that is something we are relatively focused on. haidi: the soros fund management cio don fitzpatrick. our next guest expects inflation to be transitory. turning us is the head of equity research. good to have you with us. in terms of the transitory for longer argument, you can see the oscillations in markets where investors do not know what the answer is going to be. are you hedged for longer than expected inflation in your portfolios? >> yes. good morning. absolutely. people a few months ago were defined transitory as into the

summer. the risks soros is talking about are certainly something we need to be mindful of and obviously one way to -- is around energy. this is one of the reasons energy has been a strong outperform or. -- strong outperformer. haidi: saying that energy is an outperformer is downplaying it by a broad margin. compared to anything else. is there further upsid? -- upside? >> if we get oil over $80. it is all driven by earnings. earnings in the energy sector coming off really easy --

they're going to look good for a while. as you mentioned, to other sectors. we think energy could do well to the year end. shery: what other sectors are you looking at when we continue to see higher inflation, higher yields? we have seen growth rollover and catch up to value plays this year. >> for us, the framework we have is for the last five or six months, we have entered a mini cycle in the u.s. where you have got a changing fed regime slowly but well telegraphed. we are at the extended end of a recovery. this leaves the market vulnerable to external shocks and increased volatility. that has played out probably

even more than we would have expected. we have had shocks from china on the regulation side. energy, we talked about. while we would expect positive returns over this time, you need to be selective. directly, we are looking to add selectively in areas such as tech, also health care and as you mentioned, with rising rates up to two, does going to have over the neck to year or two, u.s. banks are in obvious beneficiary. we like that as well. shery: we heard from the bloomberg global and conference some of these chinese tech names may be going back to hong kong. how do you play those chinese stocks? >> for us, i think in the short term we have to be very careful. growth is going to be slower. it is going to be impacted by

extra costs such as worker welfare, higher compliance costs for data, less pricing power for the market leaders. in the short term, it will be short for a little while. we think faces is a reset. after the reset is over, you expect to see stronger names looking at 20 plus percent growth rates over time. we think there is going to be a time where the common prosperity theme reverses back and we will be looking to -- looking for opportunities. we think it is too soon in china. shery: great to have your insights. we have play more to come on daybreak: asia. -- we have plenty more to come on daybreak asia. this is bloomberg. ♪

shery: here is a quick check of the latest headlines. japan's nac corporation is planning more overseas acquisition. the ceo told us the company aims to expand its portfolio of services that help governments and companies digitize their operations with buyouts planned in the u.s. and europe. they are betting on the adoption of wireless 5g technology where it will compete with ericsson, nokia and huawei. >> i wanted to ride on the new wave of the market. that means open ground and open market of the 5g.

shery: capital management said to be planning and asia based spinoff which could become one of the biggest new hedge fund of 2021. bloomberg sources say the unit will be run by the partner and have more than three and a half billion dollars in assets under management when it is formed in early december. they unveiled plans to exit most of the business. texaco's third-quarter sales beat analyst estimates. they are boosting their forecast . they plan to raise prices next year. >> we were somewhat constrained on the supply-side. we were more resilient than most in that regard. i do think we did leave a little bit on the table as a result of some of the input challenges we had. we feel great about the quarter. 9% revenue growth is a strong number and that is a sequential improvement on a one and two year basis.

shery: commodities prices continue to set records. we will get insight on what is driving these moves from the trade flow capital ceo tom james. this is bloomberg. ♪ baaam. internet that doesn't miss a beat. that's cute, but my internet streams to my ride. adorable, but does yours block malware? nope. -it crushes it. pshh, mine's so fast, no one can catch me. big whoop! mine gives me a 4k streaming box. -for free! that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that? 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?

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vonnie: this is daybreak asia. u.s. national security advisor jake sullivan will meet with china's top limit in switzerland this week. u.s. officials say they will follow up on a september phone call between president biden and president xi jinping. a possible summit is reportedly on the agenda. talks are planned between u.s. and chinese representatives. xi jinping is said to be planning to skip the g7 summit.

he will not attend the meeting in person. he has not been outside china since january of 2020. he has attended several meetings virtually. the leader summit begins in october 30. moody's investors service has raised the outlook on india's credit rating to stable from negative. the credit score was kept at be aa three, still at the lowest investment grade. that is on par with russia and romania. the agency says downside risks are receding. australia's banking relator has raised the minimum interest rate buffer lenders need to account for when assessing home loan applications. the australian potential authority sites growing risks to financial stability. it has told vendors to assess at an interest rate at least three

percentage points above the loan product rate. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's get straight to the markets. sophie: stocks are easing earlier gains with banks weighing in. often early 2% after this week -- off nearly 2% after this week. mckay futures bouncing more than 1%. the head of the rbnz decision. the kiwi dollar under pressure here. this as we are seeing interest rates rise ahead of the decision. wti holding above the 79 bucks a barrel mark. pulling out the chart with the

oil rally trucking along at a seven-year high. that has put print above 70. the strong momentum could extend into year end given the training of physical markets. that trend looks to be the same according to the indicators. the white line still sloping. the signal light is not showing any signs of a reversal. as we have seen come time spreads have been looking bullish. at goldman, they are calculating an extra section to 50,000 barrels a day will be needed later this year. shery: sticking with commodities, our next guest says the market looks overheated and is cautious on the upside from here. let's bring in the ceo and cio of trade flow capital. james, -- tom, it is great to have you with us.

we have seen energy leading the gains among commodity assets as this gtv chart on the bloomberg shows. where do we go from here and what would turn you bullish? what would drive the markets from here? >> i think if you look at the energy sector, opec, the oil producer group, they are confirming they are going to be slowly increasing crude oil supply into the fourth quarter. if they stick with that and we do get the colder winter, then we should be above $80 per barrel for brent crude and heading toward the $90 year end target. the overall commodity markets, if you look at the bloomberg commodity index, that has been on a bearish trend for 10 years.

the low point of that was april 2020 as covid hit and started to create the supply disruption. what we are seeing overall, the supply is coming back slowly in some sectors but the demand has suddenly spiked and that is causing this big push up in prices. interestingly, we were seeing the technical charts on crude. if you look at the technical charts on the bloomberg commodity index, we don't actually reverse the bearish trend over the last 10 years until we push up above 118. we are trading at 100 at the moment. there is a lot of upside but we have not confirmed we are in a major idiom to long-term reversal. shery: the bloomberg commodity index at the 103 level at the moment. how does evergrande and the problems related to this company factor into the commodity space

? >> a general indicator of is china going to keep buying? what is the general economic situation? the concern over china demand plus the inflationary pressures as well, that is the only thing weighing on people's minds at the moment in terms of how the demand growth is going to look over the next six to 12 months. people are seeing this at the moment as demand rushing back and supply trying to keep up with things. these high prices will be a strong incentive across the energy sector to produce more. at the moment, people are seeing if this is just a time lag on the supply trying to catch up. the q1 will be very important.

haidi: how strong is the consumer in the face of these elevated commodities prices and is that the demand side story we should be watching out for ? >> everyone has been reading the news in europe for example. particularly gas prices pushing extremely high and that has become a political debate as we come into the winter. people need to heat their homes and need to eat. these on the street inflation with energy bills and food cost is going to be a key thing. you can certainly substitute what food you eat and there might be some changes there. in terms of cost. on the energy side, that is where it is difficult to flip a switch to alternatives. energy will be a key thing to watch as a leading indicator. haidi: what assumptions are you making about the direction of the dollar? >> wow.

on the dollar, we follow the u.s. dollar index closely. that gives us a bit of a lead indicator. a bit of pressure on commodity prices. at the moment, until we see the fed potentially doing something the u.s. dollar has been supporting commodity prices at the moment so we are watching to see if there is any indication of interest rates being able to go back up but we are not seeing that for the foreseeable future. shery: great to have you on. trade flow capital ceo and cio. we are coming down to the start of trade in tokyo and seoul. in japan, support for the japanese prime minister is at 49% in survey. that is the lowest for a new leader in 13 years and comes

three weeks after national elections. japan's largest telecom company is planning what it could be one of the world's biggest ring corporate bond cells ever with plans to sell about $2.7 billion of the note later this month. after several years of record-setting acquisitions, tokyo-based and ec is planning more m&a overseas. the ceo spoke to bloomberg about his drive for profit growth. you can hear more later. in south korea, the latest inflation data came in higher than expected and above the 2% target of the bank of korea for the sixth straight month adding to the case why further tightening from the central bank this year. south korea's parliament continues its audit of state run agencies and the kospi has entered a technical direction driven by an exit is of foreign

investors including increased global scrutiny. haidi: going to stick with the korean markets because we have seen the kospi and japan have had a rough start to october. where we seeing this drought -- why are we seeing this drought? what does it mean for investors? >> it all started with china's regulatory crackdown. the sector was doing well across the pandemic. even navigated the bubble valuations nicely. china's relation came. what is happening is the rising treasury yield are adding to the narrative. yields are weighing on the valuation. entergy prices are feeding into inflation.

you have the whole backdrop of regulations. korea is doing a china style regulation of its big tech companies, which means you may see slower growth. on the other hand, it is going to wait on the valuations. in that context, almost all the markets have dropped. china has already taken the index down a bit. it is now down 12%. korea, japan, taiwan are falling. what this means for asian equities, i want stick my neck out to say there is no downside but the number of things that can cause volatility have been increasing almost every month. definitely there would be more volatility we can expect in asian stocks. shery: which geographies can work as safe havens?

>> if you look at what is happening in terms of flows, you will see that india and some other domestic oh stories are seeing inflows coming in. india, southeast asia -- southeast asia, these regions are low-tech regions. they benefited from rising prices of some commodities. the shares are important. there might be more losers than winners. within that space if one is looking for safe havens, what investors have been telling us our stories might do well. shery: coming up next, facebook denies putting profits ahead of people after a whistleblower testifies before a senate panel. the latest just ahead. this is bloomberg. ♪

haidi: facebook remains in the eye of the tech storm after a whistleblower accused the social network of putting profit before people. here is some of the testimony to a senate commerce committee.

>> they cannot protect us from the harms they know exist in their own system because it is causing teenagers to be exposed to more anorexia content. it is pulling families apart. in places like ethiopia it is fanning ethnic violence. haidi: joining us to discuss is our tech reporter out of san francisco. we heard from senator blumenthal calling facebook morally bankrupt. and number of faith -- number of senators saying they would support subpoenas. does this move the dial when it comes to regulatory oversight yucca -- regulatory oversight? >> historically the issue has been republicans and democrats did not agree on what the problem was. they knew there was a content issue at facebook. in this case there seems to be a middle ground which is that is how facebook deals with children. how facebook deals with teenagers. it is easy to get behind this idea of protecting kids.

i do feel like there is a common enemy more so than there has been any the past which makes me think maybe we might see something. congress has not been very active against facebook despite the drama they have had the last few years. shery: senator booker elizabeth warren had strong words about facebook as well. -- senator it was with a warrant had strong words about facebook as well. >> let us voice in this hall is facebook and the other giant corporations. they make the big campaign contributions. even more importantly, they fund dark money. you never even see their fingerprints on it. they are the ones who undermine basic premise of democracy. shery: what is facebook saying to all of this? >> facebook has been pushing back aggressively. they have painted this whistleblower as someone who was only there a short time, she did not work on a lot of the topics she has been talking about.

she is bringing documents with her. she has brought a lot of documents so i'm not sure exactly how much facebook's pushback is standing up in public opinion. there biggest issue is that they feel like they are being framed as a company that does not care and is not putting resources behind this and they dispute that. facebook does not have a lot of trust among people. i feel like their argument is getting ignored. shery: kurt wagner with the latest on facebook. senator warren spoke to us about her decision to oppose fed chairman jerome powell's renomination to the federal reserve. she says she is not the only person concerned by his regulatory approach. >> i cannot support jay powell for renomination. my view is he ends his term, we put somebody else in place. i think the fed is going to be better off and i think the economy is going to be safer.

>> let's talk about who that somebody else might be. are you talking with the white house and giving them suggestions? you have been impressed by her. >> i'm not going to talk about private conversations. my view on this is right now the question is, powell appeared to dominate or not renominate. >> are there other democratic senators with you? i think we didn't hear sharad brown take a position. republican say they support jay powell. are you hearing colleagues who would be open to resisting jay powell? >> never want to represent some of the else's point of view. i am not the only person who has been concerned about his approach to regulation. i just want to give this a little context. the way i think about this, i think back to 2007, 2008 when the fed would not step up and regulate the giant financial

institutions. good on monetary policy but not step up and regulate those financial institutions. they capture loosening those regulations until those giant institutions took on too much risk and crash the whole economy. i came to washington to make sure that never happened again. what i want to see now is a fed chair who cares about both parts of the job. monetary policy, very important but willingness to regulate giant financial institutions equally important. >> i have not talked to anybody who was around 2007 and 2008 who wants to repeat that. how close are we to that now? how far have we come back from where we were in we had the height of regulation? >> here is what troubles me the most. during the past years of while

powell has been chair of the fed, every regulatory move has been in the same direction. that has been to weaken regulation. not huge headline grabbing every time although there have been a couple. it has been always in the direction of weakening. that makes nominating him for another five-year term a real risk. we know some of the risks are building up. for example, when the economy hit choppy waters last year during 2020 and the fed had to race in and put a lot of support into that economy, the fed's own support said afterwards big banks would have lost 300 billion dollars if it had not been the case taxpayer dollars had been used to buoy them. i think that is a real problem. shery: u.s. senator look --

haidi: u.s. senator elizabeth warren speaking with david westin. bloomberg subscribers go to dayb on their terminals. you can customize settings so you get the news on the industries and assets that matter to you. this is bloomberg. ♪

haidi: a quick check of the latest headlines. singapore's sovereign wealth fund is considering changes to its portfolio in response to china's wide-ranging regulatory crackdown. the ceo says it will favor sectors supported by the chinese government including semi conductors and health care. >> areas that china needs to make sure it has the right expertise. the inspector -- the investors would look at those more favorably because the policy tailwind would be behind. like other investors, gic needs to reposition. haidi: three major ratings agencies downgraded fantasia holdings to level signifying default after it failed to pay a 206 megan dollar bond. s&p and moody's cut the rating

on tuesday as concerns grow about contagion risks from the largest evergrande group. fantasia says it will assess the payment. one of nintendo's most popular games will soon feature a new character. the teenager from kingdom hearts and one of the most popular characters from gaming. she will be the final character addition. the livestrong announcement drew more than 600,000 viewers. let's take a look at what we are watching as the japanese market start trading. sophie: nomura warning the collective move could continue until we get clarity on earnings season especially given the profit margins on bid this energy crunch. the topics sitting above a key support level. a weak start to the market for a month that is typically a good

one for the index. futures this morning could see gains at the start of cash trade in tokyo. three and stocks led by internet names. some analysts to see a buying opportunity. the growth and history not being impacted severely. jp morgan initiating coverage of mikal bank. we are watching lg cam. the ev battery unit agreed to a supply deal with sigma lithium to buy as much as 107,000 tons of battery grade lithium a year. we are seeing demand pick up that metal amid the boost of demand for ev. we'll shery: be watching crypto related assets. crypto back above $50,000 boosted by a bank of america -- a bank of america report. that is the review of the grave

skill investment ceo. >> ficklin price has moved around quite a lot. when we see dips and prices, we often see that as an opportunity and investors weaving in to buy those dips. to change their perceptions and conviction, they can buy an asset 10 or 15% cheaper haidi:. we know the gary gensler is not a big fan of crypto firms but he has had to come out and say the u.s. will not be following china in direct to band of crypto. that is adding to a bit of upside. this is what we are trading when it comes to the major cryptocurrencies as we headed to the start of trading. we did see the upside when it comes to bitcoin above 50,000. sticking above 51,000 at the moment. the theory him, little bit of downside we will continue to

watch the crypto firms as we see trading begin in tokyo and seoul. ♪

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shery: hello and welcome to daybreak asia. haidi: taking a look at the major markets opening in asia. affect stocks set to follow the rebound on wall street as traders wait inflation and energy costs against cover a. of a singapore's sovereign wealth fund says it would buy evergrande funds selectively.

hong kong's chief executive is set to target the cities housing crisis -- the city's housing crisis in the final address of her term. sophie: we are seeing a recovery for japanese stocks after the nikkei to a seven-day decline. that was exacerbated by concerns by wealth distribution. we are seeing gains of a chance of a percent for the benchmark nikkei. the yen is holding at the mid 111 50 level. we have jgb under pressure this morning following the moves we saw in treasuries overnight. the u.s. 10 year yield gain some ground. tuesday, the kospi bouncing. we are keeping an eye on internet giants. kick how gaining ground.

bouncing as the selloff does present some buying opportunities according to some strategists. we do have some data to digest from south korea cpi. coming in at 2.5% boosting the case for a be ok rate hike. the korean you on is -- the korean yuan is gaining ground. ahead of the rbnz decision, we have the kiwi dollar slightly under pressure. we could see declines should the rbnz choose to delay an anticipated rate. in sydney, adding 210 seven percent. financials are under pressure after the banking relator tweaked criteria around loan buffer requirements. check out what is going on with loan prices extending a rally at a 70 year high. while we are seeing the rsi for brent among 70, there is

momentum that could be extended. goldman saying we could see the appetite for a $650,000 barrels a day going into the end of the year. food prices are seen hurting consumer spending. headaches for policymakers from around the world including japan. shery: our next guest has been adding exposure to japanese markets. valuations in korea look more reasonable given the recent correction. james is head of the multi-asset for aipac. great to have you with us. this gtv chart on the bloomberg showing how the nikkei and the kospi have been leading declines across asia and not so surprising given we have seen this regulatory overhang in south korea not to mention the push toward economic equality. we are also starting to see it in japan with them pursuing the new capitalism with the new leadership. is this focus on redistribution of wealth a concern at all for

you in these markets? >> i think rebalancing the wealth in the economy is more like a long-term thing. for the moment, the newly elected p.m., the priority would be to revitalize the economy following the listing of the state of emergency. the concern about rebalancing equality in the economy would be medium to long-term. we are not too concerned for now. in terms of the near-term prospects of the japanese market, we have turned quite constructive recently. progress and vaccination at least for now, japanese vaccination rate is ahead of the u.s. there is a lot of pent-up demand

. the economy recovers and people go out and buy things, there could be truly -- shery: what sectors could give you exposure to that upside? >> we have been quite positive on the hardware semi-conductors semi-chip sector. we continue to do so at least until the year end. this is where it is a more global phenomenon. a lot of these suppliers and users, even though a supply constraint might mitigate a little bit, the situation still favors the sectors of the upside at least three to six months. haidi: when it comes to valuations for the kospi, are they looking more reasonable

given the wrigley torrey headwinds the echo would you expect to see some -- regulatory ray -- wrigley torrey headwinds? >> as we speak, the national audit is still going on. i think over the next two to three weeks. chief executives of leading tech companies are testifying. according to the top officials comments, they are really not hurt but to understand more how they do things. these are new business models. i think their objective is to promote fair competition and make sure users are treated fairly. i think there could still be overhang. probably this month. and perhaps leading to what the election next march. we are seeing opportunities because some of the big tech

blue chips there. valuation is down by 30% or 50% after the selloff. we have to be very selective. haidi: we cannot talk about regular concerns without talking about china and evergrande. you think all of the de-risking has happened and what would you need to see to increase exposure again? >> that is a great question. according to our analysts, they have probably revised down earnings based on regulatory risks. they have raised the risk premium of the chinese market. there is probably not much further revision now for the moment. unless your unforeseeable circumstances. valuation in china is decent but it is not to cheat because earnings -- not too cheap

because earnings are treading water. we are not selling at these levels. it looks like maybe the next three to six months we could see a bit more clarity and a more institutionalized regulatory framework either a document, a big announcement. it would give us better clarity and we would start to see some light at the end of the tunnel. haidi: great to have you with us. head of multi-asset for aipac. let's get you to vonnie quinn. vonnie: democratic senator elizabeth warren has criticized the federal reserve leadership saying fed chair jay powell shows bad judgment by failing to stop unusual activity. senator warren questioned why powell did not prevent individuals from making the investment. she repeated her opposition to his reappointment.

>> last week, i said i would not support chair powell's renomination because in one decision after another, he has consistently failed to serve as an effective financial regulator. that is not his only failure. chair powell has also failed as a leader vonnie: vonnie:. meanwhile, chair powell has received the backing of more than half the republicans on the senate banking committee, could help him secure a second term. he has broad support from democrats. his term expires in february. a former senator in the philippines announced his candidacy via a facebook video. the 64-year-old joined a crowded field that included many pack

yellow -- included a boxer turned senator. hong kong chief executive carrie lam is -- in final policy exactech final policy address. her speech will take stock of the government's worst fear in her term. she has not said whether she will run again after her five year appointment expires next june. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, more on carrie lam's policy address in hong kong. the european chamber of commerce says the city is losing out to singapore. the gic ceo says he did not see systemic risk from evergrande

debt crisis. our interview is next. this bloomberg. ♪

shery: singapore wealth fund gic is awaiting portfolio changes in response to china's wide-ranging regulatory curves fair hearing sectors that are supported -- curves favoring system -- favoring sectors supported. >> we believe that the problem has been well flagged as well. you might recall a number of years china talked about the need to reign in financial excesses, financial leverage on

top of a limiting poverty, on top of environmental pollution. these are the three big evils. this is another case of the first big challenge they are trying to wrestle. if you look at the balance sheet the central government has in the regulatory power, we think they have significant control over the situation. we don't expect that to be systemic. there will be some pain inflicted on a certain segment of the value chain but we don't expect it to be a big systemic problem. >> would you buy chinese ponds right now? would you buy evergrande bonds right now yucca >> through the homework -- right now? >> do the homework. >> is that a yes or no?

>> selectively, yes. any market these days, you cannot approach it on a to help down broad basis. you have to deploy your team on the ground to do so. haidi: that was the gic ceo speaking with haslinda amin. investors in the west are souring when it comes to investing in china. there is this uncomfortable situation where exposure to china is a mess -- to china as a massive opportunity is inevitable. >> invest in china or not invest in china it at your peril. whether china right now is on investable as some have said, even george soros said pouring millions into china would be a tragic mistake. others do see opportunity. let's take the bearish side of the story. at the bloomberg invest global

conference, it combined a lot of very significant and influential money managers and brains. they were asked about the china situation including don fitzpatrick, the cio of the soros fund management. she is not putting money into china right now. it's get her reasoning for that. -- let's get her reasoning for that. >> for 20 years, chinese tech companies have been western capital and a western vested interest in their success very much suited china's goals. they don't need that anymore. they can take their $700 billion and take it back on shore into hong kong and i think that is what they are going to do. when it comes to the u.s. chinese listings, if i were investors, i would be really careful here. >> caution prevailing including from luke ellis who runs the world's biggest publicly traded hedge fund. he says china looks less

attractive than a year ago because of all the uncertainty and rheumatoid crackdown, the politics. you have to be a little -- and regulatory crackdown and the politics. shery: not everyone is so bearish on china. >> not everyone. we just heard the interview that haslinda did with the gic, the sovereign wealth fund of singapore. they are still constructively engaged in china and will continue to actively invest. more caution in certain sectors. we had blackstone coo jonathan gray saying china will continue to grow faster than the developed markets and they cited the entrepreneurial spirit in china as well as the government that wents gdp growth to improve the livelihoods of its people. >> if you think about education, you think about health care, you think about housing, things that

impact lower and middle income chinese people, those are areas you have to be more selective. the same thing around some of the businesses that have a lot of consumer data. as china has traded off, i think it could create interesting opportunities. >> we will take this conversation to a further tangent in the next couple of hours. at the 11:00 hour, we have carrie lam come chief executive of hong kong giving her address. shery: stephen engle what the latest on all those calls in china. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to dayb on your terminals. you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

haidi: in japanese tech giant is planning more overseas acquisitions as it aims for a growth of 70%. bloomberg spoke with the ceo. he told us they are betting on the adoption of wireless 5g technology. it is targeting a 20% share of the global market. >> i wanted to ride on the new wave of the new market. that means open ground and open market of the 5g. nec is sitting in very unique situation. new innovators.

very much pushing into open ground. we are working together with them to create new solution. nec is a very unique -- is in a very unique position to provide solutions. nec will be growing at the pace of the market growth. >> we have a pretty ambitious growth -- ambitious goal of 20% market share. where the biggest challenges for achieving that as well as what are the chances you might beat the goal? >> the biggest challenge is how we can persuade people to accept. commercially and workable

systems, open ground systems. in this sense, we have to be competing with the known open ground competitors such as the current incumbent players. erickson, nokia and huawei. that is the biggest challenge >> . speaking of acceptance of new technologies, you have been in this business for a long time. you have seen a transition from two g to 3g, from lte to 5g. each one took a slightly different time. how do you see the adoption of 5g progressing? >> i very much am optimistic about the pace of the acceptance. as you see, we sold the vodafone -- as vodafone announced, they

are adapting open round systems as a part of their claimant and -- part of their deployment and deutsche telekom. we are now seeing telefonica one of the biggest operators in multiple countries. they have decided to deploy precommercial based sites in 24 countries. i think everybody is getting very serious about it. everybody is believing this is very feasible. >> japan has a new prime minister. i would like to hear your expectations for new policies and things that are relevant to your 5g businesses. >> the most important things is capability for a business like us.

to support science and technology as well as the 20/40 carbon neutral. if things move well, i am looking forward to seeing you stimulations -- seeing new stimulations. haidi: speaking exclusively with bloomberg news. a quick check of the latest headlines. nintendo shares gained after news of one of its most popular games will soon feature a new character. she has a cheerful teenager from kingdom hearts and one of the most popular characters in gaming. she will be the final character addition. the announcement drew more than 600,000 viewers.

in asia based spinoff could become one of the biggest new hedge fund firm 2021. the unit will be run by a york partner and have three and a half billion dollars in assets. york unveiled plans to exit most of the hedge fund business. pepsico's third-quarter sales beat analyst estimates. it is boosting its four year forecast on rising appetites for products and beverages. it plans to raise prices next year, which will become the number one tool to offset higher commodity and supply chain costs. >> we were somewhat constrained on the supply side. generally speaking, we are more resilient than most in that regard. i do think we did leave that on the table as a result of some of the input challenges we had. we feel great about the quarter.

9% revenue growth is a strong number. that is a sequence shall improvement on a one and two year basis. shery: we have an alert on the bloomberg. mark zuckerberg is now posting onto website a recent note to the company and also the rest of facebook users about the recent whistleblower allegations. he is saying the argument facebook deliberately pushes content to make people angry for profit is deeply illogical. he says we make money from advertisers. advertisers consistently tell us they don't want their ads next to harmful or angry content. is coming as i could bring says it is not true facebook prioritizes profit over safety. they care deeply about issues like safety and well-being. frances haugen, a former product manager at facebook, testified tuesday in congress describing research showed the company prioritized profit. zuckerberg talking about the

outage saying it was the worst in years. they have spent 24 hours debriefing how they can strengthen their system. coming up next, we hear exclusively from the brookfield ceo and why he thinks it may be a good time to liquidate

>> we await carrie lam's final speech in some of these policy changes. and we are getting the eye hs market for september -- ihs market for september. this is an economy we have seen suffer under increased lockdown restrictions.

we continue to see the economic drag play out. let's look at market reaction we are seeing. asian stocks are struggling to keep themselves in the front. >> steep losses worsened in asia on tuesday. kospi bouncing back. but it is still below the 3000 level. banks are under pressure in australia. focusing on commodities, oil rallying study around a seven-year high. signals are bullish for crude. copper seeing extended losses in

london. this will hurt construction demand for metals. and kiwi dollar under pressure while bonds are on the move slightly. the two year yield around the 1.17 level this morning. treasuries this morning early in the asia session, bond at the 30 year yield and breakeven rates are creeping higher. shery: brookfield at management ceo says this is a good time to liquidate assets, especially if there is significant done in the debt and equity markets.

>> the good news is health issues are abating everywhere and the vaccines are working on the world is opening up. people are back to business and meetings. we are in the late stage of this, where people are back in the office. they have a plan to be back in the office or will soon be back in the office. that is really good. so i think business is getting back to normal. >> take me outside the real estate. let's break down the brookfield empire and look across the assets. but i have to start with real estate. you are a massive landlord in new york and london. you travel there and to many

more places. what has changed in the world of real estate over the past 36 months and where do we go from here? >> there has been a lot of confusion, which was natural, because things were shut down and you could not use an office. but like everything, things generally go back to normal. urban cities are urban cities and people like to be in them and creative jobs are in the cities. they like to work beside their colleagues and go to restaurants together and most employment in office buildings, people are trained next to their colleagues . so i think we will go back somewhere near to where we were before with maybe a little bit more, as the world changes, a little more online remoteness and a few jobs continue to be

outsourced to india and other places and that will continue. in all of these great cities, the creative jobs always change. i will use new york as an example. 100 years ago, what built the city, then 75 years, 50 years ago, 25 years ago, and today, it always changes. but it is the creative uses and the people who drive them want to be in the cities. >> it's interesting to look at the real estate market and as you dig into the numbers, your numbers especially, it feels like there were a lot of trades going on early in the year. a lot of realization on property changing hands. tell us what you saw from your perspective. >> there were three or four months of 2020 when the world

essentially shut down. central banks pumped a lot of money into the system. what came out of that is that there is significant money in the markets today, in debt markets, equity markets, and funds to put into, assets. so it has been a good time for realizations, renewables, private equity, real estate. we sold 13 billion dollars of assets in the first quarter and $10 billion of assets in the second. so it's not the only thing to be doing, because we are buying things as well, it is a very good time to liquefy assets. everyone had six to nine months where they did not do any realizations. it's just that the wedge has been opening up and people have been realizing assets. haidi: that was bruce flat.

while the reserve bank of new zealand is expected to push ahead with their rate hike, concerns about coronavirus. shery: bloomberg is expecting a rate hike. kathleen hays has a preview. interesting that only bloomberg economics expects the hold. what are the factors? >> the question is if the rbnz will move today and do what they wanted to do in august. it is largely about inflation. the lockdown took a toll on the economy but it did not bother inflation. the white line is the rbnz official cash rate. it was a record low in march of 2020 and now with inflation, the turquoise line, it is back above 3%. home prices in august up nearly

26% annualized rate. a red hot housing market. that is why they were ready to do a 50 basis point hike in august until the government locked down economy because of the outbreak. they had to wait. we spoke with the governor of the rbnz and asked about october. he said they will be watching inflation and jobs and it was definitely a live meeting. >> we retained the right but not the obligation to move policy when we think is necessary. >> they are expected to do a 25 point basis hike.

the 50 point basis hike is no longer on the table. our team says they will wait. the virus is taking a toll and they will signal a rate hike in november. shery: we only have a few minutes to find out. kathleen hays with a preview of that decision. the world is seeing the first energy crisis of the transition, and it will not be the last. how much of this energy crisis has to do with the green transition, and what can we expect over the next decade? >> there are certainly underlying factors that are not because of the energy transition like rising demand after covid. heavy rain in indonesia, problems with russia. but there is a theme in the

energy world where there is not enough investment going upstream production of oil, gas, and coal. that is creating a market in which there is not a lot of buffer supplies so when there are supply shortages, you are going to get price hikes. that will be part of the energy commodity sector for the next decade or so. so for investors, this is a way to see a good cash flow come in. if you are a consumer, especially if you are more prone to commodity inflation, this is troubling because price hikes that are happening in europe and china will happen over and over again. haidi: is there anything that can be done to ease the transition? >> a couple things. you can build up stockpiles. the world did a great job of this in the 1970's after the oil crisis in the middle east of

building petroleum surge everywhere. in china you will see the government doing a similar thing for coal and trying to increase gas reserves. and honestly, you can speed up the transition with flexible supply. invest in not just renewables, but energy storage. batteries are making amazing developments this year. you can make stronger grids so different parts of your country are connected to each other so a shortage in one place might be able to be overcome by a surplus somewhere else. but these cost investment and this will be a costly part of the energy transition that the world needs to make if it is going to stave off climate change. haidi: let's get to vonnie quinn with the headlines. >> u.s. national security advisor will meet with china's

top diplomat this week. u.s. officials say they will follow up on the september meeting between biden and president she. -- president xi. xi jinping plans on skipping the g20 summit and will not attend the meeting in person because of china's covid protocols. he has not left china since january 2020 but has attended several meetings virtually. the summit meeting begins october 30. india has cut their credit rating to stable some negatives. the credit score was at the lowest investment grade.

it is on par with russia and romania. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: up next, hong kong's chief executive is set to release her final address of her term. this is bloomberg. ♪

>> carrie lam delivers her annual policy address in just over two hours. it could be her last ever, depending on if she seeks reelection. she has seen radical change in the city, including putting more focus on law and order. police force spending is up sharply, rising up 43% in the last five years. more than 150 arrests have been made in the last 12 months.

her focus is on aligning hong kong more with the mainland with increasing references to china. terms like central government and national security are up more than 25% from five years ago. with the pandemic, hong kongers are emigrating at a rapid pace. the chief executive says ties with mainland china are more important than international business and global travel is another sign of beijing's growing interest in the city. haidi: let's get a preview of how these new priorities are expected to be delivered today. what will carrie lam likely focus on? >> i think everyone is expecting a big focus on housing but

disenfranchise property tycoon's. the other thing we are kind of expecting is an emphasis on the greater bay area, deeper integration with the mainline -- mainland and also to see if there is a hint on covid policies going forward, whether carrie lam is able to elaborate on how she thinks hong kong can remain a global center with ultra strict travel policies. shery: give a little bit more context when it comes to the speech today and the political backdrop. >> this comes after china imposed a national security law last year. drastic changes to the city's election system, and her speech

will not see any formal global opposition because the opposition candidates are either in jail or have resigned in protest. so we will see a political backdrop with china exerting more political control over hong kong than ever before, which has come out in recent conversations when she talks about ties to the mainland being way more important. haidi: hong kong has been sticking with their covid zero policy by stamping out cases entirely. caret lam -- carrie lam has been saying reopening the border is more important than global travel connections. let's get reactions. this comes at a time where we

see the last country standing at covid zero. new zealand looks like they will embrace living with the pandemic. not for hong kong. you have see it -- you have sent in the past that singapore will continue getting a competitive edge. >> we have made our position clear that we see a risk for competitiveness of hong kong in line with strict quarantine measures. it seems the chief executive does not see or plan relaxation for border opening to the west. we see a situation where xi made clear we are looking at mainland china and for us it is equally

as important to be able to travel to the mainland where european companies have vested interest in it is a major trading partner. hong kong is normally a great place to do business out of. so we are looking forward to seeing measures that will lead to a swift opening of the border, but we have not seen any timeline or anything we can follow in order to support that. we have not changed our position on not being able to travel to europe. obviously that is still a big pain. haidi: is the greater alignment and access to mainland china enough to outweigh being closed off to the rest of the world? >> it seems we do not have a

choice. so i think opening up is already a step forward, which would provide a horizon for people to plan ahead and resume business in mainland china. at the moment, we are de facto isolated in any direction. traveling is tedious. it is possible if you need to but quarantine restrictions do not support swift travel. no matter if you are traveling as a family or executive for a company, you are not going to do it. shery: how seriously are your members talking about veering towards other markets such as singapore? >> it is a serious discussion. you can assume in most boardrooms in europe and hong kong this is a subject of

discussion. you cannot avoid it, looking at the restrictions. covid has been a catalyst in general for companies to restructure. what we do not see is a massive outflow of companies out of hong kong, but we do see a tendency to restructure function, part of your teams, or in some cases, entire companies to other locations in asia. you name singapore, that is an example. haidi: when it comes to economic outlook, how do your members feel about what is going on right now in hong kong and business in the rest of asia? >> mixed feelings. for most companies i would say it is a wait-and-see atmosphere. with developments in china and europe, it is unclear how things will turn out. however, we have seen certain recovery happening in recent

months so i would not say it is doom and gloom, but it remains a more or less wait-and-see atmosphere. shery: energy prices are continuing to climb. are your members directly affected by this? >> certainly some members are directly affected, like the semi conductor shortage, this is mostly the case in the automotive industry where supplies are going significantly down for most manufacturers and it really depends how you met -- how you manage your supply chain. so that is one example where we see inflationary tendencies as a result of shortages in the supply chain.

mid tier goods leading to hikes in prices and shortage of supply. haidi: what about when it comes to turnover of businesses and individuals leaving hong kong? do you see the same commitment to the greater china area as would have done five years ago? >> things are a little bit in between here. i think many people from our community, they are certainly considering their next move. for some, it leads to a decision to leave sooner rather than later. some people are completely changing careers. so the current situation, hong kong is a catalyst for decision-making. the decision making is not

necessarily bad but we do see an outflow of people. whether it will be stronger than and last year is yet to be seen, but we do see the tendency that people are leaving. shery: thank you so much for joining us today. plenty more to come on daybreak asia. this is bloomberg. ♪

haidi: we are seeing a broad rally across markets in asia. the kospi rallying after falling. more to come. this is bloomberg. ♪

>> >> -- appropriate to keep reducing the level of policy