haidi: welcome to daybreak australia. sophie: we are counting down to asia's major market opens. shery: our top stories this hour -- asian stocks set to track a u.s. rally with solid corporate earnings countering inflation fears. gains for netflix, delivering its best subscriber growth for

the year and exceeding expectation. bitcoin nears an all-time high after a link to the cryptocurrency draw strong investor demand. haidi: let's get you straight to the start of sydney trading. sophie: keeping a close eye on iron ore minors. a bumper quarter with output beating estimates and keeping an eye on coal equities in sydney after the top economic planner said an intervention is being considered in the coal market to curb surging coal prices. check out what is going on with the aussie dollar -- holding onto recent highs. moving on to what -- where stocks are moving this morning, as we digest -- so an update

there. check out beach energy. we are seeing it lose ground by more than 1%. morgan saying you have australian energy stocks likely to see a rally given oil prices. a focus on evolution as well. and ahead of the tokyo open, checking nikkei futures come we see some downside moves in chicago. some updates from the be away fund manager, adding allocation to japan. the yen holding steady ahead of japanese trading, likely to show the impact given the commodity

prices we have been seeing. a lot of debate about whether a cut will be forthcoming from the mainland. check out what is going on with oil prices -- w ti holding on to an $83 handle. volatility will likely continue given uncertainty over the demand outlook and what it comes to technical indicators, oil signaling it might be seeing a pullback, showing that it is an overbought territory. haidi: let's get you to the latest when it comes to netflix results. it looks like the streaming competition was a squid game. netflix was the outright winner. the extruder a success of this korean show has held subscriber growth. we saw the stronger subscriber growth topping estimates. we saw strong viewing throughout the corner -- throughout the

quarter. latin america was a disappointment. we see some testing that they would be making more licensing of content and acquisitions as well as signifying -- signaling the fourth quarter will be uncharted territory when it comes to new content. pretty close to perfect if you look at analysts reactions. shery: perhaps it is solid earnings like netflix and other companies we are seeing is the reason we are seeing a shift in sentiment in the markets. more concern about inflation, commodity prices rising, we are seeing this focus on third-quarter earnings and they are coming in pretty strong. we went from financial to consumer staples and other bellwethers and things like ok. goldman sachs saying the backdrop may remain difficult in the near term but expects the

market to climb the wall of worry. haidi: maybe that is due to the comfort levels when it comes to fed expectations. the federal reserve well behind global growth except for maybe that ecb when it comes to rate hikes. the boe is expected to raise four times by the time we get the third rate hike from the fed. in australia, they've tweaked the yield curve measures to make it more expensive to try to push back on these expectations. shery: given the macro uncertainty and inflation pressures, investors have pointed to bitcoin. no wonder we are so closed to the record level set in april. down a little bit in the asian trading section but about $800 million away.

coming at a time when we saw a lunching of the bitcoin etf. we will watch that throughout the asian trading session and we are watching deepening concerns about china. especially given what's happening with property developers, including ever grand. for the latest, let's bring in stephen engle. what do we know about this sovereign bond? stephen: we know it's about $4 billion over three different trenches. this is a sovereign issue and so they are investment grade and they are in high demand because of china's credit worthiness. however, it's seen as a test of sentiment given the shockwaves that have gone through the

credit markets because the problem with the spillover of tightening credit at these developers, whether it is fantasia or others, dollar junk bonds recently soared to their highest in a decade as investors weigh the default risk of these chinese borrowers. still, demand for sovereign offerings from china, the ministry of finance capping the dollar finance in hong kong. this is the 50 year in a row they have done it after a 13 year hiatus. testing it again, $4 billion less than a year ago. haidi: we are also learning evergrande may have paid its

bond do on tuesday? stephen: this is interesting because we played up the fact the dollar bond coupons were not necessarily paid by all accounts according to those who had not received their payment. but onshore, evergrande has conveyed to the market they have met their commitment and now reuters is reporting this 19 million u.s. dollar coupon that was due yesterday, tuesday has been paid. the domestic unit of evergrande has remit the funds to pay this onshore bond coupon. 19 million u.s. dollars, they cited for people familiar with the situation. maybe more evidence they are more committed to meeting their onshore obligations than offshore creditors.

haidi: we are going to get more on china and the economic challenges it's facing with the imf mission chief joining us in the next hour. more now on the highly anticipated trading debut of the first bitcoin etf in the u.s.. a lot of these bitcoin -- they are saying the demand is will far exceed. su: this is the second most successful etf debut in the u.s. and the ladies funds are traded, the way they settle outcome it could be another 24 hours before we know the total net flows. but we saw more than 24 million shares change hands. that's enormous. let's drop it in the bloomberg because the etf trading under

the ticker moves 5% to just under 42. if you look at bitcoin itself, you will see bitcoin made a run at its record highs, just under $65,000. big picture, you can't argue with the momentum bitcoin has had from the beginning of the year to its record high in april and that's at a year today chart. when it bounced back from its july lows come a that is when investors one exposure to -- call it fear of missing out -- investors are looking for ways to get exposure come a so by all accounts, this has been a successful etf launch. the rollbacks, you are not exactly getting the full exposure as you would if you were buying this spot, which is a bitcoin itself.

some are moving away from what people want, which is more exposure to bitcoin. there is a role cost which eats into the etf returns versus buying spot that would give a much figure return. for long-term investors, this is not an optimal structure. bloomberg intelligence estimates to maintain exposure, that will cost 10 to 20 percentage points east year -- each year and you may be better off if you want the wild ride to invest in the actual digital currency. but there much greater protection in an etf and what many bitcoin bulls have been saying is they want an etf so there would be more mainstream appeal. it certainly looks like we've got that right off the bat. shery: the latest on the crypto industry. what's good to vonnie quinn with

the first word headlines. vonnie: u.s. senate majority leader, check schumer, say democrats want a deal on it president biden's economic deal. they are pushing for a framework by the end of the week. back to back meetings happening at the white house to settle on policies to include in the legislation. schumer says the pace has picked up. china is studying ways to intervene in the coal markets. the end erc will take what it calls a zero tolerance approach full top coal prices have doubled in recent weeks. they plan to study specific measures to return them to what they call a reasonable range. singapore taking steps to safeguard energy security. the plan will let them control

additional reserves of needed. they are urging consumers to concern -- conserve power. singapore plans to review measures by the end of march. the international atomic energy agency chief says he will visit iran in the coming days as the u.s. and europe seek to jumpstart talks on revising the nuclear deal. they will discuss nuclear inspections. the situation has been described as fragile. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. haidi: still ahead, more insight into the first bitcoin-linked etf in the u.s.. find out why the etf may be

risky for those holding bitcoin. the investing outlook more broadly, we will be discussing where she sees the opportunities. this is bloomberg. ♪

>> i think we are at a moment in time where we are coming out of the pandemic and there's a handful of things going on. all over the world, there are labor issues that air a reflection of the pandemic. some of the stuff is transitory. there are secular trends we have to watch closely, but i think we are adjusting and dealing with it as anyone else's. shery: david solomon on the chair dashed on the trends he is watching.

our next guest says she's optimistic supply chain disruptions will not derail u.s. earnings recovery. let's bring in the ubs managing director. how do you get exposure to this recovery when at the same time we have so much uncertainty? xi: there's always a lot of uncertainty in this market. we have strong earnings this week and we just want to keep our investors invested and focus on areas that could be potentially affected and some of our concerns right now, two major ones are inflation and energy but we see there's going to be continued upside in energy and with inflation, we hope that's going to come down toward earlier next year, spring of

next year as the economy begins to normalize more. shery: some have said cryptocurrencies could be a hedge for inflation and we've seen the first launch of the first bitcoin etf in the u.s. what do you make of it? xi: we are excited about the first etf for bitcoin but we tell investors to be very cautious with that. it's for highly speculative clients at this point who can withstand a lot of volatility in the near term. we would rather have investors focused on infrastructure or the technology that could support some of these platforms rather than having direct exposure to cryptocurrency. haidi: talk us through some of

the underlying technology that is perhaps a better play or low risk play into bitcoin and crypto. xi: this is not one of the areas we focused too much on for bitcoin. we feel like a lot of the platform companies that could support bitcoin or its peers, these are some of the technologies that could be focused on, but it's not a big part of our allocation or something we want our investors to participate too much at this point because it is highly speculative. haidi: what about the energy and commodities story? where do you get exposure through that? xi: energy, it's going to be a very good time for energy. you can see energy prices and oil prices, it's going to be a strong beneficiary of higher oil

prices and inflationary pressures. etf's are a good way to go and we are looking at large cap energy names. we want to keep a moderate allocation. we don't want to overexpose ourselves, but it is a good investment right now and part of a diversified portfolio. haidi: we see a widening gap when it comes to how consumers perceive the economy. do you expect the gap to close and is it something that worries you when it comes to going into a key holiday season? xi: consumer is huge, it's 70% of u.s. gdp. consumers are doing good, especially with all the savings, about 2.4 trillion right now. that is going strong into the holiday season. we want to focus on energy and

focus on inflation and make sure these highlighted areas are not going to affect consumer demand in the next few months. haidi: the ubs managing rector of global wealth management. howard marks is calling the -- is pointing to significant excess in valuation and the available to cash. he spoke about where -- what he wants the fed and treasury to do. >> the question is whether we will normalize. will the fed and treasury take their hands off the economy and let it run itself or will they continue to drive it? i think i would like to see an economy that did its thing uncontrolled by the fed.

i would like to see naturally occurring interest rates because we believe the free market is the best allocator of resources. i would like to see a free market. >> what's the balance between a free market and government necessity during a recession and a pandemic? >> the action the fed and treasury took last year had some serious possible negative consequences, the worst of which could still be a strong about of inflation and the igniting of inflationary expectations which would become self fulfilling. that's a very negative possibility. on the other hand, you can't argue those actions should not have been taken. if the fed and treasury hadn't done what they did, we would be in a serious global depression right now. shery: howard marks speaking with romaine bostick.

watch those past interviews on our interactive tv function, tv function, tv . you can dive into our new security functions we talk about plus send instant messages during our show. this is for bloomberg some scrubbers only. this is bloomberg. ♪

shery: we're counting down to the start of trading in tokyo and seoul. here are some of the stories we are watching today. in japan, watching for the trade data due later this hour. the deficit likely expanded in september. softbank, the group is said to held talks competing for a stake.

officials in the north saying it was a new submarine lunching a ballistic missile. on the corporate front, we have a process for cash cow pay. the company would list shares in november. samsung holding part two of its galaxy unpacked event later. haidi: let's get you some of the quick business flash headlines. google's online store debuted its new pixel six phone. customers were met what they sluggish website for about five hours. it's been upgraded with a better processor and camera trying to compete with apples dominated -- apples dominance. the company -- that game maker will expand its

ethics and compliance team in august. hundreds of activision were protesting after the workplace was described as a frat boy culture. a bump of production and iron ore nearly 19 million tons in september, more than forecast. that result higher on the quarter. a dip in output from bhp. let's take a look at netflix years after hours -- this after what was a robust set of earnings on the back of the incredible success of squid games. we see a bit of downside when it comes to the session. investors having already priced in that good news going forward.

what the company said about squid games success as well as the content going into that fourth quarter. this is bloomberg. ♪

shery: it was all about squid game. 132 million houses watched the breakout south korean hit come up boosting subscriber growth to the highest this year. our bloomberg intelligence analyst is here. it was september's program slate that change the course of the year for the >> company. we knew coming into this earnings result that it was ramping up nicely.

the production shutdowns were easing up and so yes, we had money heist, which was a big series which came up in september. the real surprise hit was squid game, which drove subscriber momentum toward the tail end of the september quarter, especially in the asia-pacific region. haidi: how significant is the free cash flow this year? >> this has been a key part this year. just a couple of years ago, they were earning $3.5 billion of free cash and what they have been able to do is turn that story around. as they have some -- increase their subscriber growth, they've been able to get more leverage

in their operating model and they are now going to be free cash flow positive. just slightly positive this year and they expect to be sustainably free cash flow positive going forward. that is a huge inflection point in the free cash flow story for netflix. shery: how concerning is that we see the slowdown or is asia and europe enough? >> netflix has said the u.s. is a pretty mature market. they have about 65 million subscribers in the u.s.. this is a mature market. they pointed to about 60 million to 90 million subscribers, so that number might inch up a little bit but as far as growth is concerned, we are pre-much done in the u.s.

when you go to asia, it's a completely different story. we are at a penetration rate of 62% in america, and asia, we are closer to 10%. looking at the opportunity in terms of the number of people getting broadband subscriptions and getting hooked up to an internet connection, the opportunity seems pretty massive. i think they are going to be the focus area for netflix going forward. haidi: you can see netflix stock prices a little lower in the after-hours session. it has been on a 35% tear. let's look at some of the stocks we are watching adjacent to netflix. sophie: the squid game effect has taken hold. the show having rallied, you

have a partner up in the tuesday session. a tiny production company in seoul served by a 30% daily limit. it's show my name was in focus in the wake of the squid game phenomenon. it's check out what is going on with the aussie market. gains of .7% with some consumer names help boost the index this morning. energy stocks, whitehaven coal with the intervention in the market to curb coal prices. we have the 310 yield curve steepening, tracking a move we saw and treasuries overnight. ed of the tokyo open, gaining ground while the yen is trading

at a november 2017 low. japanese exporters have outpaced stocks of domestic peers this year and as we have seen, they have boosted bearish bets on the yen to a six year high. shery: oil prices really not helping the japanese currency. let's get to vonnie quinn with first word headlines. vonnie: the international has cut its growth forecast for the asia-pacific due to the delta variant and lagging vaccinations. it's down 1.1% from its april outlook. it is still the fastest growing area in the world. much of the downgrade is due to slower growth in asia where covid couldn't -- where covid can -- were covid spreads rapidly. a standard that france is

considering full vaccination. the cdc confirms the u.s. order reopening announced will only apply to travelers. it may raise tensions. the fbi raided a washington mention link to a sanctioned russian billionaire. the aluminum tycoon and his company were targeted by u.s. treasury department sanctions in 2018. at the time, he was forced to relinquish control. the largest aluminum producer outside china, a spokesperson said the houses being searched are owned by family members. morgan stanley says elon musk will be lifted to billionaire status. however, morgan stanley has a $200 billion valuation for it. he points to infrastructure and exploration among other

capabilities. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: the pfizer ceo saying mixing and matching covid-19 boosters could work and that would provide likes ability in administering shots. an authorization of the pfizer vaccine in kids age five to 11 is likely by the end of the month. >> this collaboration was pivotal. we may not have taken the money, but it was a collaboration with the fda, in collaboration with the cdc, in terms of making sure we conduct the study the right way and without their collaboration we would not be able to do that. the private-public sector, news about the pandemic, as we had

predicted, this virus is here to stay for quite a bit because it has spread all over the world and it has an ability to create mutations and variants. but also as predicted, we should be able to have it well under control as long as we get vaccinated. large parts of the world are getting vaccinated right now, but within several months, those countries -- those tend to be more highly educated nations, i think we will be able to go back to a normal life. >> before we turn to the world, let's talk about the united states.

with respect to the booster shot, and a booster shot which is not your original vaccine, where are we from what we know about where the fda is on approving that mixing and matching? >> i think they are considering the data. the data was presented to them by some very reliable studies. -- in terms of moderna, they are using the full dose. i think they are reviewing the data. >> you have looked at the data and i don't want to rush the government, but from what you have seen, is it preclear we should be mixing and matching to

maximize roosters across the board? >> i think it is safe to say mixing and matching could work and provide flexibility. >> the other thing people are very concerned about his children. let's start with five-11-year-old. when do you expect a decision on that? >> i expect before the end of the month. i know how long the fda takes but i know when they have scheduled their advisory committee and it is before the end of the month. typically within three or four days max of the advisory committee. so i think it is a question of weeks. >> assuming that is right, when should parent think they can get their children vaccinated. what is the lag time assuming

that it gets approved? >> assuming it gets approved, we would be ready to provide this new formulation. we've done the work to manufacture it at scale and would be able to provide it. >> what about two to four-year-olds? are there data being gathered on that? will we be able to inoculate even children as young as to? >> i do expect but other studies need to be completed. i've seen these results between five and 11. i think it should be completed by the end of the year. using a small fraction of the mrna, two micrograms compared to 30. haidi: the pfizer ceo speaking

with david westin. a potential watershed moment for the crypto energy -- crypto industry. we've got the head of australian digital assets and we talk about the implication. this is bloomberg. ♪

>> i think 70% of the coins out there today are garbage and will go away. the question is, just like the internet bubble, which of the companies will survive? >> we lived together during the pandemic and he gave me a lecture every day on the fact that i opined about bitcoin without knowing what i was talking about, which is certainly true. >> i cannot tell you it is of value but i could tell you you should short it because it's likely to be higher in the coming months. >> you have to go push out the risk curve and go into new things or odd things. >> if you want to belong crypto currency, now is probably not a bad time to get long. shery: guest at the milken institute global conference. bitcoin very close to the record high we saw in mid april. about $400 away or so.

we continue to see the fluctuations after bitcoin entered that territory. you seen 40% just this month. galaxy crypto index is above the 3300 level as we have just seen the launch of the first bitcoin-linked etf in the u.s. haidi: of course it was received with much fanfare. our next guest says there are lots of questions around the sustainability of the futures project. so much of that excitement coming from retail investors. you are saying the idea that they have to understand and conflate with bitcoin futures is

a big risk for them? >> i think so and good morning. thank you for having me. i think the exuberance of the launch of this bitcoin etf, which is a watershed moment for the industry, but i think they are retail investors purchasing to products such as etf's because they come with a degree of oversight and sense of comfort over what it is they are purchasing. however, there needs to be a degree of sophistication when you are buying a bitcoin future for the fact of volatility in the bitcoin price impacts concepts that many in the industry themselves are not familiar with. that's probably not something the retail investor is looking at.

talking to those retail investors, one person who put 15% of their retirement fund into this bitcoin etf. the question would be not necessarily about whether it could do well but more about education around some of this sophisticated conflict they have to grapple with. the fec held off with concern around retail investment and concern therein. perhaps the safer option would have been the physical one. haidi: wooden etf that holds bitcoin be a safer level of exposure or crypto as an asset as opposed to etf that tracks and underlying platform doesn't really mesh? caroline: i think there's probably a place for all of

them, but that question has been around custody, which is a valid point and something the industry has been grappling with. you have other products like in australia, bringing out a crypto innovators fund which tracks companies exposed to blockchain and cryptocurrency. it's a very different risk profile. an issue around custody and price volatility, but it doesn't account for any of those issues either at has to be a question for the sec. what we do know is it has about a 75 day wait time to see what their views are on it and what comes back from that. what was also interesting is

invesco, one of the big names in the etf industry has decided to pivot away from their bitcoin futures fund at into a physical fund. shery: and just hours before the launch of this etf. how much of this goes for regulation in other parts of the world, especially places like lithuania? caroline: for us in australia, we are waiting to see the report . with regards to regulation for the crypto industry, as an exchange, we've been given a heads up that we are going to be regulated under the treasury portfolio. we know there's going to be a market pricing requirement similar to the afx stock exchanges. but what is important is they are going to tailor the regulation to the crypto industry and issues around

settlements due to blockchain technology. there are some peculiarities specific to the crypto industry and this is something i'm waiting to see what reporting requirements are going to be, what technology requirements are going to be, but very much positive forward steps. shery: thank you for your insight into the crypto industry. this as we get breaking news out of japan -- we are getting export number rising 13% year on year for the month of september, coming in higher than analysts had expected. imports year on year, a gain of 38.6%, higher than analyst estimates. still, when it comes to the yearly trend, we see a bit of easing when it comes to the

export numbers. we've seen double-digit growth in shipments in japan for the past six months. double digits but still slowing from the previous month. this leaving the trade deficit at ¥622 billion. adjusted, it would be 600 ¥24.8 billion. we've seen export starting to increase, the import bill higher given the rise in commodity prices. we are seeing more details when it comes to export shipments and a contraction of more than 3% while exports to china anti-e.u. continue to rise in the low double digits. the japanese yen still holding steady at that 114 mid level. this is bloomberg. ♪

shery: softbank has helped talk with a maker of server computer processors, sources telling us it's offering hundreds of millions of dollars -- let's bring in our asian tech executive. how much sense does the steel make?

peter: softbank has been very aggressive in terms of its tech investments. it has several hundred investments that it has made in recent years. semiconductors used a relatively -- semiconductors is a relatively new area for the company. they acquired a designer a few years back and have been building it out stop that has had mixed results for them, but this investment is interesting. they are young company, only about four years old. it's valuation could go to $8 billion. they are taking aim at a narrow niche of that market looking to build chips for servers that would be a direct competition with intel. the founder is run by a former intel executive, so she has a lot of experience. haidi: at the same time, softbank is trying to unload other chip and semi-investments, right? peter: that's right.

they cut a deal to sell on to nvidia. that deal was announced about a year ago and it is still far from done. they need regulatory approval in different markets and the structure of the deal this quite different. it took for control when it wrought the -- bought the company and went into the chips is this whole hog. they would be taking a minority stake like they've been doing with a number of other companies and leave the existing leadership in place as they build out there chips business. haidi: peter elstrom there. let's get you a quick check of the latest business flash headlines. credit suisse has agreed to pay $475 million for an investigation into its role in a fundraising scandal in mozambique. it involves $2 billion of debt deals in the southern african country.

the bank deceived investors by hiding information about the use of proceeds by the debt offering. -- in a memo to staff, the ceo of citigroup says all hour-long meetings should be shortened to 45 minutes. she says the density of the workday is impacting employees along with long hours. let's get a check of the markets as we head toward the start of trading in seoul and tokyo. upside of about .8% as we see asian stocks tracking the gains. the focus on corporate earnings like netflix hitting it out of the all park, helping to ease concerns over the inflation debates. kiwi stocks up about .5%. .6% higher and that costs up.

we will be watching for some of those netflix and squid game related stocks in south korea. the market opens in seoul and tokyo are almost upon us. this is bloomberg. ♪

shery: welcome to "daybreak: asia." i'm shery ahn in new york. >> i'm sophie kamaruddin in hong kong. haidi: i'm haidi stroud-watts in sydney. let's look at the major markets opening in asia. fx stocks set to track the u.s. rally with solid corporate earnings countering inflation fears. demand strong for china's dollar bond sale. emerging in the credit market over the evergrande effect.

call market intervention to tackle shortages and soaring prices. shery: breaking news at the moment. the house committee investigating the january 6th riot at the u.s. capitol is recommending the full household former trump administration advisor steve bannon in criminal contempt. -- and testimony. they voted unanimously to send the recommendation. it would escalate the brewing legal showdown that would mark the first test of the committee's power to counter former president trump's attempts to thwart its inquiry into the circumstances surrounding the attack on the capitol on january 6th. the house committee investigating the riots now recommending the full house hold steve bannon in criminal contempt. japan and south korea getting underway. turning to sophie for all of the

market action. sophie: from japan, trade data we are digesting. we saw the deficit widened more than anticipated. expert growth slowed on a monthly -- monthly basis. tokyo stocks adding on the nikkei 225 and yen trading. keeping an ion stocks after we saw local media reporting that micron is set to invest $7 billion in a memory chip plant in japan. check out nintendo. shares falling as much as 2.1% after it was downgraded to underperform. switching up the board to the south korea session. keeping on peace talks. the latest missile test. also keeping an eye on the stocks. bond markets, we will be watching out for the three year notes. kospi gaining ground by .5%. korean won strengthening firmly

to the 11.77 handle against the dollar. switching up the board to see what is going on. the offshore yuan trading near a may high. staying ahead of the update. soft and -- policy easing anticipating a triple are cut in this quarter. the dollar, a little change. brent opening higher. extending gains above $85 a barrel. energy stocks gaining ground in sydney. whitehaven under pressure. this as china going to the coal market to rein in the rally we saw. when it comes to commodities, benefiting from the commodity prices. the economy does see challenges for the slow vaccination rollout, according to the imf area the headwind for the rest of the aipac region, pumping the imf to trim growth outlook to

6.5% for japan. haidi: the global deceleration in economic growth, optimistic when it comes to japanese equities. particularly banks. great to have you with us. so this should benefit tokyo stocks. >> right now, company fundamentals around asia are in quite good state. but we see these deceleration in growth around the world. that in mind, investors might want to rotate away from the growth stocks into the value stocks. and japan has been a deep value market, also a market with very strong company fundamentals, balance sheets, and dividend growth. with a change in mindset from investors, japan has quite a lot to offer. from that perspective, the head of japan equity strategy is looking for a $32,000 target for

the year end, and through march 2022. that is a decent 8% return, which might sound modest, but in this context, it is not bad. haidi: the other thing playing out which is interesting, this divergence when it comes to central bank expectations. but also, what they are doing, given you have a number of central banks in the tightening cycle. are there opportunities in that divergence? >> i guess there are. if you look at korea, the market which has seen a lot of social as rates are low. if you have been watching "squid games," you can see society problems in korea that relate to the fact you have a big inequality of wealth, and a lot of the korean population attribute the inequality of wealth to the fact you have had low interest rates for so long causing this inequality from a government perspective. the change in government in korea in march might be an

opportunity for rates to be reset, fiscal policy to be reset, and basic income being paid to everyone. there is so much complexity around the region, that with the change in leadership, the new prime minister, wealth redistribution will be a big factor. it is not just central banks. central banks and governments are working together. kind of independence we have had has been unbroken. shery: ongoing tech hearings in south korea, the talk of the new capitalism in japan. how spooked should investors be, given we have to the common prosperity drive in china? >> with japan in particular, it is almost like back to the future. we've had this notion of capitalism locally. this goes back to the 10,000 yen notes coming next year. he was in favor of this idea of

capitalism with a human face. collective capitalism. good countries should not just look after the shareholder, but employees, immunity, and society. it really ties in with esg. i think investors can clear it, but they need to be mindful shareholders would not be the only priority. for that reason, dividends will become more important whether to be invested or not. shery: how important is dividend growth, especially when we talk about equality, also prices rising for consumers? that is really not helping. when you have inflation concerns, how important is dividend growth? >> from our perspective, if you've got a bunch of policyholders looking to receive an annuity income as a hedge of inflation, in countries like the u.k., cpi numbers for percent and 5%. if you get an annuity from some kind of policy, you need to see it grow by 5% to match inflation.

from that perspective, dividend growth -- you can create income in two ways. either income from equity or a bond, or trading something. from that perspective, looking at equities in asia, especially taiwan, korea, and japan, you have seen dividend growth at double digits. it will become attractive and put squeeze on valuation. japan from that perspective is looking in good shape. shery: jim mccafferty, great having your insight. let's get to vonnie quin with the first word headlines. >> thank you. international monetary fund has cut a growth forecast. the surge in the delta variant and lagging vaccination. it expects the region to grow 6.5 percent this year, down 1.1% from april. the fastest growing area. much of the downgrade was due to slower growth in india and southeast asia, where covid

continues to spread rapidly. china is studying ways to intervene in the coal market. the top economic planner will take what it calls a zero-tolerance approach to policing the sector. coal prices have more than doubled in recent weeks. ndrc plans to study specific measures to return them to what it calls a reasonable range. china has been seeking to curtail it for months with little success. singapore is taking steps to safeguard its energy security. it includes standby fuels for some of these which generators can draw additional reserves if needed. the government is also urging consumers to conserve power and warning of rising bills. it said -- may be forced to exit markets. to singapore plans to review the measures by the end of march. the international atomic energy agency chief says -- with iran in the coming days as they seek to jumpstart talks on the reunite -- reviving the nuclear deal.

he hopes to meet senior leadership to discuss iaea nuclear inspections prayed he is described the situation as fragile since iran ramped up uranium enrichment and rollback access to some facilities. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. shery: still ahead, more on the outlook for china and its economic challenges. helge berger joins us. but coming up next, the bond despite mounting credits and property risks. will investors demand hold? this is bloomberg. ♪

>> china is on investable. the republic of china is

throwing a bond issue this morning, 30 years at 26%. if you want to tie your money up with china for the next 20 years for 2.6%, i encourage you to do it. >> people are on a cyclical basis for the last 20 years. when we look at china, we are not focused on the consumer, we realize data and privacy issues involved in consumer data and population data is an issue of every country in the world. >> i would not say it is completely uninvestable, we did a project in london where the sponsor with chinese. i think far excessive alarm about what is going on in china in general caused it to be an extraordinarily great opportunity with very low risk and high yield. haidi: our guests at the milken institute global conference. even with the strings of the mainland credit market, china has sold dollar debt in hong

kong for a fifth straight year. let's bring in stephen engle. what do we know about the bond that more interestingly, the appetite for it. >> you heard a varying degree of opinions on whether china is investable or not. it will be a test of sentiment, given the shockwaves in the credit market because of developer problems. at least through the 30 days with ever grand not paying the dollar bond coupon. granted, there is still the grace. enacted. but there is a sentiment. it will be $4 billion spread out over 3, 5, 10, and 30 year. after midnight last night, it was tighter than the initial price target, indicating strong demand. it is not junk bonds. yields on dollar junk bonds recently soared to their highest

in decades. investors really priced in default risk for chinese borrowers, in particular, developers. the sovereign bond issuance is our investment grade, and the demand has been high since the ministry of finance returned to the dollar bond market in hong kong five years ago after the 13 year hiatus. shery: we are also learning evergrande may have paid on the yuan tuesday. >> that is a report from murders saying -- from reuters, 121.8 million yuan, onshore bond coupon. they have remitted the funds to pay that. this is a long-standing issue. domestic onshore bond coupon payments are taking preset and

over dollar bond, overseas creditors. the jury is still out. but they say they are meeting liabilities onshore while some developers, we have heard from fantasia, cynic, that they are it imminent default risk. that is where we have had these credit shocks. i talked about cynic, s&p has now downgraded the credit rating as it failed to repay the interest and principal on its $250 million offshore notes that were due on october 18. we expect the nonpayment to trigger cross default and accelerate demands for repayments, the last thing i want to say is we have a gong speaking on sunday saying that they feel the evergrande contingent is containable. but there was a story on the

vonnie: -- bloomberg terminal i encourage you to read. i will talk about it, land sales. developers, they are avoiding land sales like the plague in china. about 27% of parcels offered went unsold in september, and no developer submitted bids. it is critical for finance needs. it is the key revenue generator for local governments. if developers are not bidding at auction, it is an unintended consequence and potential contagion to local governments. larry at mccoury securities said developers are hoarding cash to avoid becoming the next evergrande. shery: stephen engle with the latest on the credit markets and those developers across china.

coming up next, we talk about china's energy crunch. it looks to intervene in the coal market amid surging prices. we have the latest. this is bloomberg. ♪ this is bloomberg. ♪

shery: china's top economic planner is studying ways into the coal market as they try to rein in prices. let's go to david stringer. what do we expect, in terms of coal intervention? time is really of the essence going into winter. we are getting reports of an earlier, colder winter. >> absolutely. what we have seen is policy announcements over the past 24 hours. ndrc, china's top agency, and regional authorities, even from suffolk, which controls state owned enterprises. all of it is intended to do two

things. one, to raise coal output, get more out of the ground precisely because we are coming into the winter heating season, temperatures getting cold across much of eastern and northern china. so there is an impetus to get more coal out. the second key thing is to lower prices, really tame this extraordinary rally we have seen in china. double since it started in september. a spectacular run, which saw it fizzle yesterday, in trading, they finally declined after seven straight advances. shery: we are seeing slowing electricity demand in india. how much will it help with a global energy crunch? >> in terms of global, it eased some of the burden. this is very much in india story. and you're really relies on domestic sources of coal.

the energy crunch has been heavy monsoon season, flooding some of those mines. we have seen coal supply recover slightly in india. at the moment, it is only helping power plants. coal-fired power stations. the biggest consumers, other heavy industry that continues to have that supply restricted or not getting any supply at all. so still a way to go for india, but signs are starting to look positive. shery: david stringer there. delta airlines is betting on the revival of travel. it is adding more than 100 flights from new york city this fall. the ceo spoke to bloomberg about when we will see a return to pre-covid capacity. >> the recovery has been a little slower in a new york. with flights we are adding, and up in boston in the last few weeks, the northeast is taking a step up into the fall and

winter season. i expect by next summer, we will be close to a full schedule in new york. >> as a passenger, how should i expect my experience will be changed by covid? there were some reports you alluded to including a new premium version of coach. not quite business class, but better than coach. maybe people are reluctant to be too close to one another? >> there has been a lot we have been through over covid. delta blocked middle seats through the pandemic. we are back to selling those seats now that people are traveling in large numbers. cleanliness standards have improved, quality of experience continues to get better. we have retired over 200 airplanes. they are fresher and younger. we are taking new ones into new york. we have made major strides in getting our new facilities built at laguardia and jfk. we took the downtime opportunistically. by the spring of next year, we

will open up a brand-new laguardia airport, which we cannot wait to unveil to the public. so a lot of excitement in the air. as business returns, international starts to return, i see this industry recovering in a nice manner. >> for those of us who travel a lot out of laguardia, we cannot wait for the new terminal to open for delta. no question. you mentioned business. where is the business travel at this point? are you two thirds back on the business section? when do you get back fully, if ever? >> we have three big segments. domestic consumer business, which is already full. the consumers are traveling at 2019 levels. even beyond that at the current time. business is about 50% of the way back. we stalled when the very end started to pop this past summer. but we are on a really nice pickup we have seen for the last six weeks, the week over week

business bookings picking up. domestic first, international follows. the last of the business that has yet to show much recovery is our international businesses. >> u.s. travelers can go abroad around the world, particularly europe, central, and latin america. international travelers coming to the u.s., a close market. almost half of our international business are from those international points of sale. november 8 is a huge day for us to bring travelers back from other parts of the world to reunite with family, friends, and their businesses. i think it will be a good holiday season. i encourage everyone to buy tickets. we will probably be five -- flying close to fall through thanksgiving and christmas. as we enter the spring, it will be the next step for us to take more signs, in terms of added destinations and flights. by summer next year, hopefully our business will look close from a business, international,

and domestic consumer the 2019. >> do you have any sense of how fast it will come back? you mentioned november 8 is the day traveling overseas, proof of vaccination, taking your test, but will it spring back right away? >> based on our bookings, i do. we saw when international news was announced several weeks ago by the white house. our international point of sales climbed tenfold almost overnight. while it has come down a little bit, it is somewhere between three to five times the level of bookings we had previously. so we know there's a huge demand. i would equate it to what we saw this summer in the u.s. once the cdc declared it was good to travel, people were vaccinated in large enough numbers, we saw our bookings overnight soaring. i think we will see the same with international travel into

this holiday period and in the spring. haidi: let's get you a quick check of the latest business flash headlines. google's online store crashed as it debuted its new pixel six phone. customers were trying to buy and were met with an error message for about five hours. google upgraded its latest pixel with a better processor and camera as it tries to compete with apple's iphone dominance. netflix hosted a stronger subscriber growth of the year. beating estimates thanks to popularity of the south korean drama "squid game." they added over 4 million subscribers in the third quarter. about 142 million households started watching "squid game," making it the most viewed program in netflix history. you can get a round up of the stories to get your day going in today's edition of daybreak. bloomberg subscribers can go to the terminal. it is all about "squid game" and the dominance of those netflix numbers. a lot more to come. this is bloomberg. ♪

vonnie: i know u.s. travel policy will block entry to foreigners who have recovered from covid-19 and had only one shot. that is the standard france and the european commission considerable vaccinations. the cdc confirms the border reopening will only of fly -- apply to travelers with double doses. chuck schumer says democrats want a deal soon on president biden's economic agenda.

bloomberg understands leaders are pushing for a framework by the end of the week. meetings are happening at the white house. the goal is for liberals and moderates to settle on a list of policies to include. schumer says the pace has picked up. morgan stanley says spacex will lift elon musk 2 trillion, status. it currently makes up less than 12% of his net worth, however morgan stanley has evaluation. an analyst sees spacex as multiple companies in one, he points to its infrastructure, earth observation. the fbi has rated a washington man. the tycoon and company were targeted by the u.s. treasury department back in 2018. at the time, he was forced to relinquish control of the largest aluminum producer

outside of china. the spokeswoman says -- global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: let's get straight to the markets. sophie: waiting for the switch. we are seeing moves in the bond space, i want to highlight the aussie yield climbing again, the 310 curve higher by about three basis points. the asx 200 gaining ground by nearly 1%, minors and tech stocks, although energy shares are being weighed by coal as china considers intervening in the market. refiners are falling in tokyo, switching out the board, has been weighing on its game this morning. tech stocks are gaining with tokyo electron rising 1.5%,

among the biggest boosts in the sector, local media reporting micron plans and memory chip lead. nintendo shares falling 3%, the stock was cut to underperforming. the sony ps5 overtook the switch. we are seeing metal players under pressure, aluminum under pressure in london. check out auto stocks gaining ground in tokyo, even after pulling out the chart, september trade this you can see the ongoing slowdown in trade data for japan. this as we have supply chains weighing on growth. china's moderating growth is likely to drag on japan as well. shery: not surprisingly imf has cut its growth forecast for the asia-pacific, blaming the delta variant. however, it sees the region at the rose fastest-growing area.

china's forecast was trimmed to 8%. for more on that, let's bring into kathleen hays. kathleen: very happy to bring in a guest who can fill us in on all of the details. the imf chief or china -- four china, he is assisted in the asia-pacific region. great to see you again. there is so much going on in china. china is the big story for the global economy right now. let's start with gdp. you revise the forecast from a .4% to 8%, then we got a big deceleration third-quarter gdp growth, many analysts revised by a good amount. do you see the possibility that the 2021 gdp number for china will coming even weaker than you thought? >> we third there is additional

risk. [indiscernible] lagging consumption. the risks are correlating, global supply issues, microchips , the property in developing sector. we are accumulating [indiscernible] kathleen: the imf saying the projections reflect financial tightening on real estate investment. evergrande is a big driver. topic of a risk does this post of the economy? >> for the moment the risk is contained. we have seen some firms being

troubled, the risk within the sector and more broadly to banks. i think that has to do with people understanding the outcome as the tools. doesn't mean there is no risk of escalation. there is a reason for deleveraging, it is a high leveraged sector. you have to be careful not to go too fast or slow. kathleen: you are echoing the pboc chief who on sunday said, the government can prevent systemic risks from spreading. what does the government need to do to contain it, i for example, a government advisory triple the

rate again? >> macroeconomic measures with liquidity or fiscal policy. you want to start with making sure the good firms and bad firms get separated. that is where we should be at the moment. that you can do by making the banks understand, and longer-term new can think about strengthening bankruptcy restructuring framework. that is an area we have pointed to for a long time. kathleen: have to pin you down. you think the reserve requirement is a possibility? is there a point where it might

be a needed step? >> the pboc has its eye on the macroeconomic picture, inflation. the growth is slowing, cpi inflation. i do not think that is the time for macroeconomic policy measures. that does not mean other policies aren't helpful. we would have to look into detail. kathleen: another big risk is supply chain disruptions. they are being made worse it seems by the power cringe and china. factory shutdowns reduce supply, the costs rise for transporting goods, ports, docs, ships. when will this end? do you think we will see it by the end of this year or will it last longer? >> we think this is a

transitional issue. there is the question of imports. also the question of long-standing policies to limit energy consumption growth and intensity. it came together in a perfect storm, not sure they find a way to ease the pressure points. kathleen: a chinese policymaker is easing curbs on property, on power that helped contribute to some disruptive forces. do you think they will continue to ease up on more restrictive policies to make sure they can sustain momentum? >> we have different questions. for the power sector, you have

to have technical solutions for technical problems. the property sector, you need to contain this. you do not want this to spread. where is growth going? this year has seen very heavy monetary policy tightening. i think there is consideration given to ease macroeconomic policy which would be the right tool for the right problem. kathleen: inflation, a tale of two gauges. the ppi, 11% year-over-year. the cpi, under 1%. is the ppi problem a supply chain problem, are you at all concerned if it continues it will start spilling over into cpi?

>> interesting problem. traditionally, you have seen large swings of ppi inflation. currently the drivers of ppi are predominantly global commodity prices. china is a demanding country, but mostly this as an external phenomenon. the factors are dividing ppi from cpi developments, and i think one underestimated factor is the fact that consumption is lagging overall headline gdp and recovery. if firms pass on some of these higher -- higher costs to the downstream markets, they look at where consumers are. as long as we do have that slowing growth momentum, we consumption, we are comfortable assuming cpi will not be a large

problem. kathleen: is a question of growth and sustaining momentum, do you think there will be a dramatic move towards reining in firms, maybe easing on those kinds of policies just to give the academy more breathing space -- the economy more breathing space. >> there were a huge suede of regulatory measures starting last autumn. markets said this looks discretionary, we don't understand that this is slowing. there is a lesson here. while you may have good intentions, stability issues are real. you have to go about this in a

comprehensive fashion. some of these lessons will apply for next year. if there is a macro economic slowdown, you want to use macro policy and not this type of regulatory measures. kathleen: one quick final question, everyone is wondering what someone like you sees about the property slowdown in china. doesn't spread across asia? does it affect the global economy? >> at the moment that is not what we would be seeing. if you have major risks in china, that would impact our country. that is not what we are seeing at this moment. the risks are real but they are contained. kathleen: thank you so much for joining us. haidi, back to you. haidi: great conversation.

up next, taking a look at a new high when it comes to bitcoin, the etf launched overnight making a big splash. we get more analysis next. this is bloomberg. ♪

haidi: bitcoin is inching towards a fresh record, the first etf, futures etf making its debut. let's bring in our cross asset editor. a watershed moment in terms of the regulation in the u.s. and adoption by retail. lots of concerns about how it operates and the voluntary -- volatility associated. reporter: there are concerns because bitcoin in general is volatile, they can sometimes behave in unpredictable ways. when people are looking to invest, they should understand what they are getting into. a lot of people say i'm going to

invest straight in bitcoin. that is not something every institution wants to do. shery: the cryptocurrency itself has been moving towards those all-time highs. aside from this etf, what is driving the cryptocurrency given these gains have been going on for a few weeks? reporter: right. there are a lot of whales that appear to be buying, that has been the case since july. a lot of buying interests from people who one might think would know the market pretty well. also, china has been cracking down, people think we might be passed that, the market might have adjusted. we are recovering from that. there is general optimism about the way regulation is buying out around the globe.

bitcoin tends to do well in the fourth quarter. it's a seasonably favorable time. there are a number of things contributing to this rise to very close to its record from mid april around $64,900. shery: right now it is $64,100. that was joanna hazen from with the latest on bitcoin, of course we are talking about the futures etf, the bloomberg -- guggenheim cao sees it as an exciting development. he spoke at a global conference about why bitcoin could go even higher over the coming months. >> i had written a piece about two months ago how i was concerned about the resurgence of covid, and we could get a pullback in risk assets. i think we have it. i think last week the surgeon equities marks the bottom.

stocks to very well between here and may. it's interesting because it's also spilling over into other asset classes like crypto. you see bitcoin and what it has done over the last few weeks, i can't tell you it's of value. but i won't tell you you can shorten it. it's likely to be higher in the coming months. >> would you go into an etf? >> bitcoin in and of itself is very difficult. for us, you end up in something like an etf. i think the etf is an interesting development. especially for institutional and individual investors who don't know how do you buy bitcoin, have you set up a wallet, how do you say keith -- safe keep your

bitcoin. if you live in your wallet, it can be stolen. you have to keep it somewhere. there are companies that do that. that's really complicated. our biggest issue is how would be clear it? if state street did not clear it, nobody cleared it. wind up having to buy it a closed end fund. an etf would be better. joanna: 400,000, you said i see it going to that. do you still see it going to that level? scott: i think so people -- i think so. people say to me, why are you so bullish on crypto. i think 70% of the coins out there today are garbage and will go away. the question is, just like the internet bubble, which companies survive? will amazon be the winner or

pets.com? of course, if you are old enough, you remember pets.com failed and amazon was a bookseller the change the world. joanna: what did you by amazon? scott: that nine dollars, it went to $14 and i sold it. how do you know which of these points? one of the things people forget about money is money is a social good. they think money is something governments create. no, it is something society creates. if you were in a prisoner of war camp, the currency in prison camps with cigarettes. people create this. risa bitcoin back when it was $100 and i do not buy it, i was fascinated because to me, the

virtual currency world is the future. the question in my mind is the central banks see it as a threat. what are they going to do around regulation, what competitive currency are they going to develop like the chinese and virtual rmb. the federal reserve is studying it. central banks just can't sit by and watch this go on. play out without their involvement. will this take outcome -- shakeout come before we get to $400,000? if you want to be long cryptocurrency, probably now is not a bedtime to get long. haidi: that was the guggenheim global cio at a global conference. more to come on daybreak asia. this is bloomberg. ♪

shery: two u.s. cities made it into the top five when it comes to the global competitiveness ranking, talking about this survey that is about attracting talent. san francisco topped the list. this has to do with how cities reacted to the pandemic. haidi: it's interesting to see

the asian countries. asia is probably seeing it due in large part to hong kong flipping out of the top 10, covid zero strategies and border control. it slips for spots. other countries like china under the ranks when it comes to the champions of tele-sector, we are seeing some growth. shery: it has a lot to do with the educational sector. sophie: keeping an eye on

china's new energy vehicle players. requiring the industry to tighten quality control and improve safety management, this after seven players were summoned to meet regulators on monday around concerns there is no compliance on inspections. also reaction to supply shortages in chips which the government says is expected to ease in the fourth quarter. flipping the board, we are waiting on pricing numbers from china, this as raw material markets are caught between coal futures, there are speculation, no change expected. we are seeing the 10 year yield creep back towards 3%. this after we had an advisor -- haidi: that's it for daybreak

asia. looking ahead to the start of trading in hong kong. stay with us, bloomberg markets china open is next. we are seeing trading to the upside in the asian session. lots more to come, this is bloomberg. ♪ this halloween,

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>> 9:00 a.m. in beijing and shanghai, welcome to bloomberg markets china open. we are climbing down to the china open. top stories is morning, china is rising in factory with rrr cuts from the pboc, even as the economy slows, beijing stock economic planner looking at ways to intervene in the coal market with rising prices threatening energy security. and, squid