haidi: a very good morning. kathleen: welcome to daybreak asia. g20 leaders fall short on climate change leaving negotiators to achieve a breakthrough. haidi: kush eta defies expectations of japan, retaining a so grip on power.

kathleen: china's weak manufacturing data may weigh on sentiment. haidi: let's get you straight to the start of trading at the start of a brand-new trading week. we had reassurances of political stability after the japan elections, has another record high close in the u.s. on friday. we are seeing stocks trade dry air -- higher by 1/10 of 1%. we are watching westpac as big bang earnings continue. the aussie dollar -- kiwi stocks lower by about one half of a percent, the kiwi-dollar trading software at 7168. also watching out for the airlines as we have the resumption of international flights out of the east coast of australia. momentous day after a couple of years of isolation. kathleen: yes.

a boost on many levels. very interesting interview done with doug ramsey, he is a chief investment officer, he is looking for a melt up. he says this is a positive seasonality time, that's going to kick in, he knows gains are broad-based. the new york stock exchange index is at a new all-time high. the market is shrugging off tapering, it keeps going. the market is dealing with inflation that isn't expected to move higher, but it is higher. he said it is with so many bellwethers like the dow transports breaking out, it just is not a time to move against the stock market. two things is going to keep moving higher. haidi: what about the china

affect relating to the sentiment impact we see in asia? we do get another gauge of that. as one of our reporters said, it's a bit of a lost year of potential and rebound for the china economy. we are looking for the china pmi manufacturing and composite numbers later today, including the services numbers. we are expecting on the cusp of contraction and expansion at 50, unchanged from the previous month, and october services seeing a slowdown as well. anecdotally we are seeing the impact of covid restrictions, shanghai disney closing two new visitors. that's going to continue to weigh on the coming months as we balance out these issues of the power crunch. we have seen indicators showing further signs of weakness, power shortages, commodity prices being reflected in the official pmi number. kathleen: opec-plus, it's pretty

clear the u.s. and oil hungry nations, cop 26 moving ahead but we are depended on fossil fuels. look at the last month. crude oil price up 11%, the oil consumers like the u.s. and others are saying we need to have more output. they're going to push on opec-plus. with headlines from the angola oil minister saying no to extra oil output, iraq saying they do think opec will give an expected boost of supply. maybe we will see that and get relief on oil prices, but it looks like it will be tough going. haidi: let's get back to one of our top stories, early reports indicating japan's ruling party has avoided a worst-case scenario, they did secure enough seats to keep a majority.

let's get a closer look from our chief north asian correspondent. they did lose some seeds, it did not look like it was as bad as the opinion polls were suggesting. stephen: a couple of them indicating that there could be some tough fights in osaka and other areas where the opposition was seems strength. as it turned out, the ldp to keep its outright majority, and with the help of its partner party, they have held onto a fair mandate. however, total they are losing about 12 seats. they are below the psychologically important 300 seats in the lower house threats told. together those two parties have 293.

outright they have 261, down from 276. it's not a disaster for the ldp, but it does weaken uchida -- toshiba -- kishida. this is the slimmest majority the ldp will have since 2012. he has some work to work out his pledges. he kept the expectations fairly low, he said my number one goal for this election is to keep the majority. he has done that, now he has to build strength. kathleen: with just a majority, is this where leadership comes in, having some charisma? i know he is not known for that. if that's not possible, are we going to start the revolving door of japanese prime minister's? stephen: of course. if you take out abe and the consistency he provided, you have had this revolving door. suba some on lasted one year,

which some predicted was longer than anticipated. kishida does need to work on building support. he got the support internally within the ldp, that is why the selection was such a wildcard. he did not have broad public appeal. this will give a little bit of wind in his sales to push forward with his promises. some would say his priority is a bit conflicting. he wants to raise wages and tackle inequality. the boj just last week downgraded its view. this could be negative growth in the third quarter for the japanese economy. kelso wants to push defense spending. he has a bit of a mandate, not as much as he hoped. kathleen: stephen engle joining us there in hong kong. we will have more analysis i

had. the former vice finance minister joins later. after days of intense negotiation, g20 leaders agreed on a deal that fell well short of what some were pushing for. president biden called out two nations in particular for call -- holding out. >> russia and china did not show up in terms of any commitments to deal with climate change. kathleen: let's get more from our. editor in d.c.. . what did the leaders achieve on climate change? reporter: disappointment is clear among the activists who are always hoping for world leaders to do more, world leaders who have to compromise, deal with the absence of some major polluters.

the biggest achievement seems to be that they got an agreement to end financing for international coal projects. that was something that the u.s. -- even on the front there are many constraints, in the u.s., a coal state west virginia is behind some of the machinations. to widen the lens, that was one of the things they reiterated. the goal of keeping global warming to 1.5 degrees celsius above preindustrial levels. that again was also seen as holding the line.

haidi: in terms of diplomatic style, was it on the usual for president biden -- was it unusual for president biden to single out these countries? tony: that seemed unusual. that wasn't even said in anger. he just pointed out russia and china snubbed both the g20 and the climate summit so-called cop26 starting right afterwards. there was just a sense of, this is a moment where the u.s. can lead, but this administration has always said you need the

biggest global participation to make this work and that was clearly not the case. there is two sides in that respect. he also singled out saudi arabia, the leader of opec in so many words. which the u.s. has discussing putting pressure on to pump more oil. of course there are several strands, and some of them had some irony to them. haidi: let's get to vonnie quinn. vonnie: china's foreign minister says u.s. interference in its internal affairs with legislation and sanctions has seriously disrupted normal exchanges. he was speaking during a meeting in rome with antony blinken.

the foreign ministry says he offered to establish regular contact with blinken and urged the u.s. to pursue a true one china policy in relation to taiwan. china -- latest up to ease an energy crunch that is threatening economic growth. the national strategic reserves administration did not say how much of the fuels would be released to boost domestic supplies, nor did it provide schedules. china has seen long queues of vehicles. the u.s. and european union have reached a truce on steel and aluminum that will release tariffs. officials say the two sides works to balance market demands and climate change. it was reached ahead of a december 1 deadline when european tariffs were said to double. moderna says the fda wants more time to assess its covid-19 vaccine for children over the

risk of a rare heart inflammation. the company says it's fully committed to working closely with the fda as it seeks emergency approval for that age group. some countries have recommended pfizer shots for males under 30, suggesting new data is more common after a second jab of moderna. 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 a check of westpac, falling 5% after announcing a record buyback. the four-year cash profit estimates announced plans for a record $2.6 billion share buyback, this after earnings narrowly missed expectations. 5.3 5 billion aussie falling short of expectations. also announcing $.60 a share.

kathleen: still ahead, we hear from a ceo about pivoting from being a parts and components distributor to being a pioneer in robotics and automation. up next, china's pmi numbers. this is bloomberg. ♪

>> we should expect some sort of joe's -- shortages to improve. >> we should see an increase of semiconductor supply. >> deliveries will come earlier,

but overall it will take a good chunk of 2022 to sort out. >> there is no objection when it comes to the short term. >> in the near term, supply bottlenecks and energy prices are the main risks to the pace of recovery and outlook for inflation. stephen: we are tracking the fallout of the global supply chain crunch. president biden is taking steps to address bottlenecks after addressing issues with leaders. he wants to build up more stockpiles of key materials. supply chain problems are showing up in economic reports. in canada, growth wavered at the end of the third quarter. meanwhile, in china the economy is under pressure from both supply and demand.

pmi data showing manufacturers struggling with rising costs and electricity shortages. bloomberg terminal users can read more about the stories in our newsline. kathleen: let's discuss the outlook for china's economy. we are joined by a lead economist at oxford economics. i know you have had a chance to look at the pmi report, the manufacturing pmi, below 52 months in a row. that means construction, services short of forecast. not so much for consumer spending, although everything seems to fill to with these supply chain blockages. how hard is that hitting manufacturing in china? >> there were a couple of factors. one is some of the policies implementing are

starting to bite. we have seen production cuts impacted manufacturing, particularly for this official pmi which is more heavily regulated, local governments trying to hit the targets. the real estate slowdown with tightening in the housing markets, but also a tense situation. overall, it is a soft picture after a -- we have actually downgraded our growth for q4 from 5%. kathleen: is it getting harder to be optimistic about a rebound next year with so many things that piled on china, including

the regulatory crackdowns which you just noted, self-inflicted, but something chinese leadership feels is very important. sian: we can be optimistic about the outlook or at least the pivoting growth for next year. a couple of things is we think some of these disruptions will ease over q4. we have already seen policymakers make moves towards changing those climate targets. we also are expecting hesitancy should improve with infrastructure investment, we should see that growth pickup next year. that said, we have that weakness in the real estate sector which will continue to dampen growth and to 2024. -- 2022. haidi: that weakness in the real

estate sector. the reticence from evergrande, the structural deficit that is left if you pull out the growth across the property market and every aspect of impact. is that being sized up adequately by markets at the moment? sian: the real estate sector is very important. it's about 24% of the economy. obviously, the chinese government will be working to avoid a sharp slowdown. there were a couple of reasons. one, housing is holding up fairly well. we have a high vacancy rate. policy conditions in the real estate sector are fairly tight. they can be eased to prevent a marked slowdown. as i mentioned, it's extremely important, even a moderate

slowdown, a deflating of bubbles will mean the growth will remain fairly soft. haidi: this chart showing the market is banking on a policy shift, the yield is eight times where the target is. is the market forcing the central banks and or is it needing to respond inflation expectations? sian: the cpi was high, so that in terms of the headline. we are seeing some supply disruptions. however, we do not think the rba will move as fast as the markets are predicting. for one, wage growth will be fairly subdued.

we have prodded forward to the end of 2023, but that is significantly behind where the market is. kathleen: when you look at the asian region, how important is it for other nation's growth not to see china's slowdown, and to what extent do you see this as a cloud over other economies in the region? sian: slowdown in china is a headwind for exports. it's very important for consumer goods, the domestic market, but also exports. if we see disruptions due to any kind of productions, electricity disruptions, or we see holdups because of covid, this will have implications. however, i think there are a couple of things. for the majority of economies,

they are coming from a period where q3 was particularly weak given the restrictions in place. with covid down, we are seeing those restrictions ease and that is going to provide a boost in terms of domestic demand. we are seeing some of that capacity manufacturing come online, that should provide a boost in q4. haidi: always great to have you with us. you can get around about the stories need to know to get your day going in this edition of daybreak. it's available on mobile on the bloomberg anywhere app. it will get the news and industries that matter to you. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. saudi aramco earnings surge. it covered its quarterly dividend $18.7 billion. it ceo expects energy demand to remain high, the results mean aramco is once again the world's most profitable company. westpac unveiled a record share buyback as it unbound pandemic provisions despite earnings narrowly missing expectations. it also announced a final dividend of 60 australian cents a share in a bid to buy back a record 13.5 billion australian dollars as it made a stronger than anticipated recovery from the pandemic. an australian natural gas company has agreed to a binding takeover. the consortium includes

brookfield asset management. the board unanimously supports the offer from the group which comes after $2.65 aussie dollars.

kathleen: counting down to the start of trade in tokyo, some stories we are watching today. let's take a look at korea starting with the october trade data to in half an hour. economists are penciling in a jump of 28.5% -- we will be watching carefully to see what it does to the yield.

let's move to japan. we are watching to see how markets react following a win, we are also in the thick of earnings season and that can move the market quickly. meanwhile, japan will propose a compromise to help form an international agreement on rules governing carbon. on the eco-front, expecting pmi numbers for october. we will see what happens in september, especially after we saw industrial production plunging in japan last week. haidi: sticking with japan and the economic outlook, let's get more on what the markets are expecting postelection results. cover senior editor joins us now -- our senior editor joins us now. a little bit more of a mandate. global will traders be making of this? reporter: i think it will be positive for the markets, futures are up already.

it removes an element of uncertainty people had around the kishida administration, early poll numbers were not impressive, there was data that looked like it might be a lot closer than it ended up being. as you say, it gives him a mandate and he can move forward with an economic stimulus plan and other policies. kathleen: one of the other initiatives that are important when you look at equity investors. reporter: initially, a lot of the focus is going to be on his economic stimulus in the region of ¥30 trillion which is a sizable amount of money. i think we will be looking at the reopening trade in japan,

with possible resumption of travel, domestic tourism. we also might be looking at the borders, the pan is still -- japan has strict border controls in place but there are areas the government will look at. people should keep an eye on kishida's focus on tech, the semiconductor industry. he has put a lot of support behind that. building a factory in japan, possibly with the support of sony, that's a big thing to keep an eye on. kathleen: let's take a look at the markets, how things are shaping up. we are going to take a look at new zealand's stocks. a little bit lower today, bit of

a breather in spite of a record close on u.s. stocks on friday. in australia, nice little gain, waiting for the rba meeting tomorrow. will they get rid of their yield curve control altogether? we see the yield on the benchmark note has risen pretty sharply. singapore nikkei futures are looking to reopening, that has two great optimism. s&p futures after a record close on friday, we see there is green on the screen with all earnings coming in. the fed taper and how jay powell describes it on november 3 is something stock investors are watching very closely. speaking of another market concern, inflation. let's turn to oil. it's declining -- su keenan

joins us now. by all accounts, an intense campaign is underway. su: the intensity of major oil consumers with a plan to somehow pressure opec-plus is translating into lower prices in the asian trade. we are seeing brent crude which was up some 7% in the month of october pullback, nymex crude used widely in north america was 11% in october is pulling back. a senior white house official did confirm president joe biden has been using the summit in rome to address the global supply crunch with other top oil consuming nations, and a key issue in those discussions, how to pressure opec-plus to boost output. you are looking at the west texas intermediate chart, coming

within striking distance of $85 a barrel. the oil-producing nations meet virtually on november 4, when asked how the u.s. would respond to opec governments who don't act, biden said he was reluctant to say what the u.s. would do before it had to do it. you are looking at brent crude nearing seven-year highs. in terms of what the u.s. government could do, reserves, we don't know if the u.s. will release strategic oil reserves as china announced it plans to do over the weekend, releasing state reserves of diesel and gasoline to ease supply shortages. that is an option that some of these nations have. the white house official noted the u.s. hope to see product increase in the short-term, still stands by its longer-term goal of continuing to transition to be more reliant on renewable energy sources. haidi: where do analysts see prices going from here? su: from $50 to $75, 10 within

striking distance of $85. higher and higher and higher has been the trajectory, which explains why there has now been such intense pressure on opec-plus. the fact that we were up 11% for the month of october, it is just another sign the consumption is outpacing supply and draining the u.s. stockpile. traders say crude prices could resume the bullish stance if opec-plus stays with the gradual increase plan, that has been their path so far. you are looking at retail prices in the u.s. which are close to four dollars a barrel in that particular shot, but one of the survey companies gas buddy has spotted in san francisco the highest average gas price ever in the u.s., close to five dollars.

that is raising concerns about inflationary ushers -- pressures. we did have our second weekly drop in commodities, so there is some pause. the week ahead is likely to be volatile. haidi: su keenan with the latest. let's get you to vonnie quinn. vonnie: leaders of the group of 20 nations have agreed on a climate deal that fell short of what some are pushing for. the final communique offered little in concrete action and mirrored prior pledges. one of the key sticking points was coal; some nations wanted a deal to end its use. china's economy showed signs of further weakness in october with pmi coming in below forecast. the manufacturing pmi, 49.2, the second straight month of contraction. the gauge was well below

consensus at 52.4. both manufacturing and services took a hit from power shortages, surging prices and strict covid controls. shanghai disney will reportedly close from monday after suspending entries over the weekend for a coronavirus investigation. the park said guests we need to undergo testing when leaving, and take another test 24 hours later. earlier on sunday, eastern china reported a person tested positive for covid-19 had taken a train through shanghai. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: emmanuel macron is not ready to forgive the australian prime minister for the sudden cancellation of the $65 billion deal for diesel powered submarines. he said he knows morrison lied to him. it looks like this rift is going

to take longer or more diplomatic overtures to heal. reporter: if not over yet -- it's not over yet. he was asked on the sidelines of g20 by reporters if he felt the australian prime minister lied to him. micron responded, i don't think he lied, i know he lied. this relates to the cancellation of the $65 billion deal signed in 2016 to provide 12 submarines to australia, the french got blindsided by the announcement. a part of that was to include eight nuclear power submarines supplied by the united states, that means australian no longer needed french summary. -- french summaries. president biden called the handling of the issue clumsy, he appeared to patch things up with president macron.

prime minister scott morrison pushed back on suggesting he lied, he said he was very clear the conventional subs would not meet their interests. macron said you have to respect your partners and allies. kathleen: not ok at all. it could take time to heal the rift, in the meantime, there are important -- does this hurt scott morrison. paul: morrison was looking for someone to talk to. in terms of the france-australia deal, it's been through worse. the french were aggressively conducting nuclear tests in the 1990's.

the liberal party in australia pointed out that the french have not been shy about pursuing their foreign policy interest in the pacific, so it's really it needed to be shy either. haidi: it does seem like there is a number of key allies? /trading partners not on good terms at the moment. morrison has been criticized in the lack of ambition in this climate plan. paul: the plan has come with huge amounts of criticism both domestically and abroad. australia is one of those countries that is reluctant to completely phase out coal, coal is so important to the altcoin economy. the prime minister trying to strike a balance between appearing to do something on climate change and also protect the interests of australia's

regions, where mining in particular does remain an important industry. it's a tricky balancing act, but the optics aren't great. kathleen: paul allen in sydney. up next, we hear from a ceo about how the pandemic accelerated automation and how he pivoted the family business into becoming a pioneer in robotics. this is bloomberg. ♪

kathleen: they robotics companies as the pandemic has spurred the need for robots. the ceo is pushing robots into everyday tasks. he has to be repented -- spearheaded -- he spoke to juliette saly and singapore for our generation next series of that industry 4.0 and pivoting the family business. >> we grew faster than ever before. the challenge is the shortage in engineers. especially in singapore. the supply chain is disrupted, capacity dropped by 60%.

all of the restricted our growth. the pandemic did help us, and i think people's view on robotics has changed, and i think will only grow faster. >> but talk about sunburst. this is something you have managed to take the worst and make something good. >> the pandemic has accelerated adoption for robotics. we received a lot of inquiries on disinfection. our team got together and we built this in record time, and a few months it was up and running. this is something that is only

possible for a company -- we pride ourselves on being able to piece things together and improve technology quickly. that has always been our strength. >> what else is on your radar? >> because of the supply chain constructions -- disruptions, we will build a few more factories. there are plans to build a big factory in china in the coming months. also, we are looking to expanding and some other locations for r&d centers. not only for manufacturing, we feel it's important to diversify

the r&d piece. currently our r&d is in a few countries, with some countries we find technology that is very inspiring. so the engineers of the country can improve the technology. >> we are surrounded by robots. tell us more about what digital 4.0 is, what you hope to achieve. >> digital 4.0, we believe industry 4.0 means -- in the past, automation and industrial automation is used within factories. what we are seeing is the same kind of technology is being pivoted outside of the factories. being used in retail, supermarkets, snd where you have

robots making coffee, ice cream, cooking fried rice. technology wise, you have to develop technologies outside of the factories. be more versatile, react to unknowns. this part of it is exciting. there are so many new markets that are on top. >> where you always going into the family business? >> [indiscernible]

when i graduated, he did not force me. he told me was you can try, see if pba is what you want to be in. if you don't like it, find another job. he did not force make. he let me make my own choice. >> you have been ceo for almost 10 years. was your father hesitant about some of the ways you wanted to transform the business? >> yes. my dad and i have a unique relationship. we always disagree. somehow if we are in a meeting, we have different opinions. when i first started there were a lot of ideas and my dad did

not agree. rightfully so. >> i believe your father said don't get too cocky. tell us more about how he tried to reporter: reporter: shape your leadership. >> he said was i hope you fail. he thinks we learn the best from failure. don't try and be too complacent, he did not want us to be complacent and go off track. he said i hope you fail. >> you have four children. what is your succession plan? >> i am planning my succession in the company. i am 42. i 50 i want to have a concrete

successor in place. for my kids, if they join the business that's great. my eldest is only 11. they are a bit too young. my dream for the company is it survives beyond me. the only way i can do that as of i create a management style which is professional enough and has corporate governance, so whoever comes in, being young or not young, the company will still continue to grow and excel. that is really what i'm doing. my dad started the business. the role i have to plays keep the business going. haidi: the pda robotics ceo. you can catch more every monday.

be sure to turn into bloomberg radio to hear more from newsmakers of the day and get in-depth analysis from the daybreak team. you can listen via the app, radio plus, or bloombergradio.com. much more ahead, this is bloomberg. ♪

kathleen: dow jones reporting $5.6 billion. coca-cola's primary sports drink is a distant competitor to pepsico which has 60% of the sports drink rocket according to euromonitor. coca-cola bought a minority stake in 2018. american airlines canceled more than 1000 lights over the weekend, blaming weather for your disruption. says two days of severe weather including strong wind gusts cap three out of five runways shot in its dallas-fort worth hub. [indiscernible] the airline will fit its fleet

with engines as it moves ahead with expansion plans. it is also signing a reassurance agreement. haidi: let's take a look at how we are trading. we had a bit of a boost coming from the u.s. session, we saw the s&p hitting a fresh record high. we are seeing sydney stocks trade higher, looking at japan stocks when tokyo comes online to get a boost from a more decisive outcome. kiwi stocks are the laggard, 3/10 of 1% lower and we are expecting kospi futures to be a little bit soft. we are getting trade numbers out of south korea out of the next hour as well. we have the focus on trading in japan after we saw the ldp preserving the outright

majority. kathleen: coming up, j.p. morgan says don't abandon bonds. we will talk about other means of diversification. market openings in tokyo is next. keep it right here. this is bloomberg. ♪ moving is a handful.

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haidi: welcome to daybreak asia. kathleen: asia has major markets have just open for trade. aipac stocks set to gain off fresh wall street records, but china's week pmi data may inject caution. japan's prime minister devise worst-case forecast, ldp retaining its hold on power.

g20 leaders fall short on climate change. haidi: we have breaking south korea trade numbers, it is amiss when it comes to exports. 24% gain, missing expectations of 28 5% but still an acceleration. the imports number also seeing a little bit of a mess, 37.8%. increasing at a slower than expected pace, particularly when it comes to exports and highlights supply chain blockages, we have talked about that as well as well as energy and commodity pressures starting to play. that trade surplus number at 1.6 9 billion, missing expectations.

trade with south korea has been a bright spot, robust element of the economy during the pandemic, it has managed to offset weakness in domestic consumption given the multiple covid waves. that strength has been pushing the bank of korea to tighten ahead of most of its peers, but when he export momentum we are now seeing potentially denting optimism. kathleen: let's see how it looks to the investors. taking a check of the markets, it was miss on the forecast, but everyone knows supply chain constraints are in many ways getting in the way of what countries can export. when we look at the kospi, three on the screen. -- green on the screen. the korean won gaining. there has been a bit of pressure on korean stocks because the

bank of korea is on a tightening path, the fed is on a tapering path. we will see how -- as for japanese stocks, perhaps the fact that the prime minister narrowly held the majority, investors are getting an early response to that. it looks like the yen is at 11420, that's a pretty key level . should begin yen weakened beyond that level, it becomes a concern for investors. it does show some confidence in the incoming prime minister, trillions of yen in stimulus, trying to boost wages. he has talked about a capital gains tax rate increase. that might not please investors so much, but we will see how it plays out for the stock market.

haidi: let's take a look at how we are shaping up in australia, given we have the rba decision. markets that are pricing in policy change forcing the banks hand in the meeting. this is what we are seeing, 4/10 of 1%. we had a dip in westpac after the share buybacks. we are getting some optimism here in asia from the u.s. session on friday, s&p futures looking pretty positive ahead of the monday open. our next guest sees inflation rates falling but remaining sticky. joining us as a global market strategist at j.p. morgan. let me start off with this chart when it comes to what the rba is going to do with heavy market expectations, this is the april 2024 which saw so much price action.

we are seeing the momentum pair back a little bit, but that you'll distill eight times the target. is this a case of the market getting ahead of itself, or do policymakers need to face the music when it comes to inflation? guest: good morning. i think it's the banks feeling pressure from markets, none more so than australia. we did see the rba dip into the market to try and quell these views around rates, hammering home the idea of yield curve control, tbb giving inflation as being something that is a bit higher and not going to work in terms of yield curve control. when they implement that policy, they are just thinking about bonds, they have to think about the behavior of other bonds and maturity.

i think in terms of policy objectives, they will start to focus more on interest rate policy as well as more depended on data rather than [indiscernible] haidi: this is also a week when the fed is going to announce the tapering plan, at the same time we are seeing pmi out of china were waiting momentum -- or waning momentum. is there a bit more uncertainty when it comes to the recovery, and how does your portfolio reflect inflation and possibility for stagflationary pressures? kerry: depending on where you are looking, you're getting different stories. if you look at equities,

everything's ok. if you look at the bond market, there are more concerns. for us, and the last couple of months -- some of that is due to the supply chain disruptions and the curbing growth outlook in terms of manufacturing when you can get input. some of it is the natural shift away from the beginning part of an economic cycle into the mid part of the cycle. that will be the dominant theme as we shift. we have slower but positive rates of activity, and we still have inflation but not as high as today, in the market -- as long as we have positive outlook for earnings and readjust the idea that central banks don't need emergency measures.

neither of those should disrupt the positive outlook for equities in this environment, and challenges when it comes to fixed-income as we see bond yields rise. the recovery will be resilient. we are seeing data that shows improvement of consumer confidence, retail sales. consumers are pretty willing to spend. that is going to be a big source of growth. kathleen: in terms of what you just said, people realizing that you don't need stimulus from the fed, reduce bond purchases. rates are going up from emergency levels. if that potentially a good signal for equity investors, tougher bond market, corporate's versus sovereigns, but for equity investors who are bulls, does the bouquets continue? kerry: it should suggest there is stronger outlook for growth if central banks are moving away. when it comes to the outlook for

equities and a positive outlook, it's largely based on earnings outlooks we are seeing this season. that is continuing to come through. that is going to offset the higher valuations. earnings are at a high level. we don't look at -- it will start to slow down and we expect the market to continue to post record gains even if it moves lower, because earnings continue to grow. it is the shock that comes with central banks moving away from something that has been very easy, uncertainty around the pace, and whether there will be a policy mistake in terms of the fed being behind the curve or if they are moving too fast. kathleen: maybe a bit of a rocky road, but as long as earnings look good, you will have a

positive outlook continuing. thank you so much. moving on to japan. reports indicating that the ruling ldp has avoided a worst-case scenario, securing enough lower house seats to keep an outright majority. the election was seen as a critical test for the new prime minister to solidify m&a. let's take a closer look with stephen engle and hong kong. a loss of some seats, not as bad as forecast suggested. stephen: it could have been much worse, there were a lot of naysayers and doomsayers. there was a lot of uncertainty. we do not have ab the tope -- abe at the top of the ticket.

kishida did not have a lot of broad appeal. there was more uncertainty this time then in past years. however, the ldp fought off some battles according to local media. there was some stiff competition in osaka and the areas where the opposition started to coalesce with some unity. the ldp prevailed as a single party. they lost 15 seats, from 276 to 261. with their partner, net loss of 12 seats. plenty to keep the majority, but also a single party majority in the lower house. looking wounds a little bit, but still majority. haidi: that slim majority, what does it mean for the ability to put through the economic agenda?

stephen: he put a low expectation bar on this election. he said get the majority and move from here. yes, it is the slimmest majority the ldp has had following an election since 2012 when aid came back ahead of the ticket. now he has to go ahead, his new capitalism policy, better distribution of wealth, that has been exasperated by the covid weary economy and people not getting wage gains. he wants to raise wages and grow the economy. he needs to roll out some policies that bridge those differences. how are you going to raise wages and get growth at a time where the boj downgraded its outlook for the economy? there is going to be lots of stimulus coming down the pipe, and we will see how that plays out. he has a mandate. let's go from here. haidi: stephen engle and hong

kong. let's get you to vonnie quinn. vonnie: thank you. leaders of the group of 20 nations have agreed on a deal that falls short of what some members were pushing for, the final communique offered little in the way of concrete action and mirrored prior pledges made in 2015. one of the key sticking point was coal. submissions wanted a deal to end its use, but they could only agree to phase out new investments. china's foreign minister says u.s. interference in its internal affairs through legislation and sanctions has seriously disrupted normal exchanges. he was speaking during a meeting in rome with antony blinken. the foreign ministry says he offered to establish regular contact with blinken and urged the u.s. to pursue a true one china policy in relation to taiwan. emmanuel says australia's prime minister lied to him about a

summer impact with the u.s.. he was asked at the g20 summit about the canceled deal. the prime minister later said he had been very clear in telling france its submarines were not meet australia's strategic needs. moderna says the fda wants more time to assess its covid-19 vexing for children. over the risk of a rare heart inflammation. the company says it is committed to working closely with the fda as it seeks emergency approval. some countries have recommended pfizer's shot, citing new data suggesting myocarditis is more common after a second jab of moderna. 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. kathleen: still ahead on the show, china's property developer facing $2 billion in bond

payments. we will look at who is facing the biggest stress test. plus, further weakness in china amid a power crunch and covid curb. we assess the outlook next. this is bloomberg. ♪

haidi: china's economy showed signs of weakness in october as power shortages weighed on manufacturing. let's crossover to our beijing executive editor. great to have you with us. this is -- reporter: you really had three main issues, covid, shanghai

disneyland close, more broadly suppressed consumer spending. at the same time you have had energy crunches that hurt manufacturing, ratcheting up the cost. you have property prices falling, that is leading to people holding back on investing in a new home. that is feeding into this debt problem we have seen with evergrande and other developers. kathleen: shanghai saying there were 33,000 disneyland visitors, staff all testing negative. how strong of a sign is this? to the rest of the world, the outbreaks look small but they

have a huge am packed -- impact. when you see those headlines coming out, what is the signal? john: the signal is the government is committed to the zero covid policy. anytime there is any one or two, few infections, they are going to take relatively great measures to be sure it does not expand beyond that small group. for all of the damage it has done economically, the country has kept covid under control. kathleen: we will see what happens next. our greater china executive editor. china's cooperation may be the single most important factor when it comes to achieving success at the co26 summit. tensions may force the world's

top emitter to reconsider plans to wean itself off fossil fuels. bloomberg's annabelle takes a look. >> china will strive to -- achieve carbon neutrality before 2060. reporter: china is one of several nations ramping up pledges ahead of the pivotal cop26 summit. but details have been scarce. >> the goal the president she has set out for china are encouraging, but we call for the same leadership on setting out how china will get there. reporter: a concrete plan is crucial, with china responsible for 27% of global emissions. the first major energy crisis of the era is highlighting the difficult balance beijing faces. coal still accounts for more

than 70% of china's electricity mix with the recent shortage hitting everywhere from factory floors to homes. more than half of the nation's provinces are facing their worst power supply disruption in over a decade. shortages could become the new normal if policymakers keep restraining consumption to meet their 2060 zero emissions goal. still, china is the world's largest producer of wind and solar power, and the biggest investor of renewables. in newly unveiled 400 gigawatt megaproject that rivaled europe's entire capacity is an example of beijing's ambitions. china sees the green push is another opportunity to lead innovation, scale technology, and improve security. but the challenge may be getting beijing to put aside diplomatic differences to achieve a real

breakthrough. delegates believe cooperation between superpowers is the only way to reach a historic deal akin to the paris accord. they see tension between the two sides as the biggest obstacle in glascow, and expectations are low for what may be the most important round of climate talks ever. haidi: a look at how china could influence the outcome of these upcoming talks in glascow. you can get around above the stories to get your day going in today's edition of daybreak, bloomberg subscribers go to the terminal, it's also available on the mobile in the bloomberg anywhere app. you can customize those as well to get the news that matters to you. this is bloomberg. ♪

haidi: a quick check of the latest headlines. westpac with a record buyback that unwound pandemic provisions despite earnings missing expectations. it announced a final dividend of 60 australian cents per share. it joins other lenders in a bid to buy back a record 13.5 billion australian dollars amid a stronger than anticipated recovery from the pandemic. aramco earnings surged as high oil output push prices above $30 billion that allowed it to cover its quarterly dividend of $18.7 billion. the ceo expects energy demand to remain high despite economic headwinds, the results mean aramco is once again the world's most profitable company. an australian natural gas company has agreed to a binding takeover worth $7.7 billion from

a consortium including brookfield asset management. they say the board supports an offer which comes out to do dollars 65 aussie dollars per share. they say its biggest shareholder also supports the deal. dow jones is reporting -- will pay $5.6 billion for full control of body armor. coca-cola's primary sports drink is a distant competitive to pepsico's market-leading gatorade which has 68% of the sports drink market. coca-cola bought a minority stake in body armor back in 2018. kathleen: the story that is catching a lot of eyes -- elon musk, we see him on twitter saying all kinds of things. today, he is responding to something said by the u.n., head of the world food program, saying that if elon musk and

jeff bezos would give $6 billion, they could prevent people from dying from hunger. elon musk tweets out, tell me exactly how this would happen, transparent, show me the accounting, i will be happy to do it. it's an interesting idea. he is in the trillionaire club, he is the world's richest man, show me you are going to spend it and make it work. haidi: this is interesting on the back of comments we heard from larry fink last week, speaking in saudi arabia, that they are open to pay more tax if the caveat is they thought the fans were being spent well. saying he would support anything that would have the effect of creating people opportunity and greater productivity. it does seem like with all of the focus on common prosperity, a more equilibrium when it comes to wealth these days, there are

these interesting sentiments coming from some of the wealthiest. kathleen: it seems like it is in the u.n.'s court. they have to respond. haidi: investors of junk dollar this halloween, xfinity rewards is offering up some spooky-good perks. like the chance to win a universal parks & resorts trip to hollywood or orlando to attend halloween horror nights. or xfinity rewards members, get the inside scoop on halloween kills. just say "watch with" into your voice remote for an exclusive live stream with jamie lee curtis. a q&a with me! join for free on the xfinity app. our thanks your rewards.

vonnie: this is daybreak: asia. the japanese prime minister in the ruling lpd reserved their hold on power. they are poised to keep their outright majority in the lower house, avoiding the worst case scenarios that were suggested. they also lead with the slimmest majority since 2012. the u.s. and the european union have reached a deal with steel and aluminum that will remove

tariffs. officials say the sides worked climate change and a deal reached ahead of a december 1 deadline when european powers were set to double. the national food and strategic reserves administration did not say how much fuel would be released to boost domestic supply, nor did it provide a schedule. some regions have restricted diesel sales. shanghai disneyland will reportedly close from monday after spending entries over the weekend for a coronavirus investigation. guests would need to undergo testing when leaving, and take another test 24 hours later. earlier sunday, a person who tested positive for covid-19 taken a train from shanghai.

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. kathleen: pmi's across asia just coming in. most readings above 50. we are seeing weaker readings and south korea. you can look at the numbers across the board. we only have myanmar on that particular list still level of 50. vietnam making a big comeback from 40 to 52.1. when you are that far below 50, you are in a big contraction, so we will be continuing to track this. we also got the final october reading for the japan manufacturing pmi. looks like it has gotten up to about 53.2. again, above 50, holding in there. so let's bring in our chief asian economic correspondent in hong kong. what do you make of this? it is kind of a mixed bag.

most of the numbers are above 50. how much at this point are these numbers still pandemic-driven, supply chain-driven? what are you seeing? >> like you say, these are clearly very mixed numbers sending up very different singers. the one -- signals. you want to watch south korea. it matches what we saw on official export data as well that missed expectations showing slowing in momentum for the south korea export story. that generally is seen as a bellwether for where global trade is going. but for the rest you mentioned vietnam, it has obviously rebounded out of contractionary territory. that reflects the easing of lockdowns there. factories were shut down there, and are now getting up and running again. taiwan pushing higher as well,

suggesting the technology demand story rains in play. when you step back from the pmi's you have to say, hang on, china's manufacturing sector is cooling, south korea's manufacturing sector is cooling. the two bellwethers as far as the trade store is going. haidi: there is that confluence of factors putting stress on the chinese recovery. are we expecting the same picture to play out with the taper numbers today? enda: i think so. the dynamics at play in china are pretty powerful. you have this energy function which is hurting manufacturers and small and medium-sized businesses. clearly showing in the data. and on the other side we have this ongoing supply crunch we all know where raw material costs are going through the roof. there are hints now the output prices are being priced on. people are talking about this pain moving from manufacturing

to services. as aggressive coping strategies continue. the broad story continues to be china's manufacturing sector is under pressure. the broader economy seems to be under pressure and it is all pointing towards a slowing chinese economy heading to the end of the year. kathleen: how about feeding into this mix now what central banks are doing? we are waiting to see if the central reserve of us trillion will do away with its yield curve control and let that three year note go up. we are waiting for the fed taper. even in asia, look at the bank of korea. how is this going to feed into this outlook for manufacturing and so many of these countries? enda: we are seeing some central banks moving away. south korea has already raised rates. australia may or may not be moving away from yield curve control. at the same time these are all

very modest moves. south korea is moving from a record low interest rates. and we should acknowledge the china central bank is bullish. it is not any tightening cap, and neither is the bank of japan. so whatever is going on, it's fairly incremental at the moment and not synchronized. so it is not yet clear that we are seeing should have a spillover effect from manufacturing. however, it globally central banks were to go on an aggressive tightening spree that have not gone consequent is for consumer spending, you would see a clear spillover impact in terms of demand for manufacturing goods out of asia. all the commentary i see about the status we are still talking about is fairly modest. the bigger story remains on the supply chain. where does the energy from china go? where does the broader supply

chain crunch go? those are the key drivers and i think monetary policy, unless it turns aggressively globally, that should be secondary for now. haidi: enda curran there. we're watching nomura falling about 7% after he saw profit slump on the back of the u.s. legal provisions. this is the biggest fall in their stock since we have seen since march. trading at the lowest level in about a year. we saw that reaction coming after earnings plunged. taking a provision for this ongoing legal case relating to a transaction. it also reports 95% slide in net income as well. really the latest blow in what has been a difficult year for nomura. we have seen them take a $2.9 billion hit relating to the

archegos capital management blow up as well. they have been taking some steps to bolster risk management. they have suspended senior staff and stopped offering some cash prime record services in the u.s. and europe. but looks like another historical issue causing a big plunge in nomura stock price today. let's get more on china. the stress developers in the country are facing a collective honda bill of $2 billion this month. investors will be watching for any signs of default as they prepare for the biggest shakeout in years. let's get more from rebecca choong wilkins in hong kong. what are we watching out for here? rebecca: there are a few big names to watch for. firms like central china yield estate and kaiser are all in focus and not just on the maturities but on their coupons, as well as with their other kinds of debt, things like

commercial bills or abs products also being watched by investors to give potential signs of stress. kaiser in particular makes up such a big chunk of the china offshore dollar bond market. more than half of evergrande dollar bonds even though it is continually smaller in size. elsewhere we are looking very closely at evergrande of course. kathleen: so where would you say are we in this whole cycle? the property developer clamp down, then evergrande starts melting down, now you're watching all these other companies. are we halfway through? does not seem like we are getting close to the end. are we getting closer to falling off a cliff or can we see there is some kind of bottom being formed? rebecca: i think particularly

when it comes to evergrande it looks like they are essentially trying to delay an official default while they potentially manage what could be a restructuring with evergrande and chinese authorities. more broadly the idea the evergrande crisis will be contained has been largely disproved. we are seeing a lot ripple through. as much as the china offshore bond market means closed too many developers, that can continue. chinese property developers are used to tapping a market very regularly and being able to access key funding. so long as we see yields well above the 50% level, it is going -- 15% level, it is going to be really hard to see the market be an active and busy place for china's high borrowers. kathleen: up next, the latest on

the outbreak in shanghai as the government raises to contain the spread of covid tied to domestic tourists. this is bloomberg. ♪ is bloomberg. ♪

haidi: moderna announced it will

supply additional vaccine doses in the second quarter as it awaits u.s. approval to be used on ages 12 to 17. earlier we spoke exclusively with the ceo by discussing the fta's approval of the third moderna shot to be used as a booster for the already vaccinated. >> we're very pleased last week when the u.s. fda authorized the booster and the cdc. the numbers we have is already more than one people -- one million people have already gotten the booster. there is a lot of supply in pharmacies. a lot of people i know have already gotten a boost. >> hello also from london. how often do you think we are going to need a boost? stephane: i think it will depend

on your age. if you look at 43, under the coronavirus which has been around since 1890, we believe it was the cause of the russian flu, which was not the flu, but caused a pandemic. people over 50 years of age you get sick again every year. people that are ever younger it is every two to three years. so i could see maybe once a year shot, and younger maybe once every two years. we do not know yet, it's too ealry. -- early. as always, we have to look at the data. but what might be easier is to make a flu and covid vaccine in a single dose. >> you have been saying that the last few times we have spoken. i wonder, how close would you be

to creating something like that, an all-in-one seasonal booster? stephane: we are going to get the data very soon. we're talking weeks, not months now. we're going to start phase two right away with flu, then we combine it. the base case scenario would be in a 2023, 2024 time frame. i expect some countries will be very quick to approve it. some countries might be more cautious. but we're going to make it hard to be -- going to work hard to make it available everywhere. >> -- stephane: the data is very strong in terms of safety. we think the vaccine is safe. our data will be shared with the fda as always and a peer-

reviewed journal. so we think this will not be an issue. >> can you talk about the announcement today you will be sending over 160 million shots to covax in the second sorter? the biden administration has criticized you guys for not sending enough doses to africa. what's your -- is this part of that response, and if not, is there more that you consent and what is the timeframe? stephane: when the pandemic started, moderna was an 800 person company, never sold a product, had no industrial experience. we set a goal to make one billion doses for 2021, this year, which was an extraordinary number. just to bring perspective, the entire flu market worldwide across many companies is 500 million doses. in 2019 we made less than 100,000 doses. at the time we made those

decisions, it was in march of 2020, at the beginning of the pandemic. we thought big from a companies would get vaccines. as we know, several vaccines have unfortunately failed. moderna show the highest efficacy and longest duration of efficacy. so of course we have tried to make more. kathleen: the moderna ceo speaking exclusively with bloomberg. china has been able to beat back successive waves of covid-19 next district containment measures about the streams are showing at their borders. domestically, shanghai disneyland temporary closed to cooperate with a coronavirus investigation. let's get more now from stephanie phang. so what was learned and what does this mean for what happens next with china's restrictions? stephanie: hi, thanks for having

me on. yeah, so they tested visitors to shanghai disneyland over the weekend. and the results just came out. almost 40,000 people have tested negative after the park temporarily suspended entries yesterday. and we will see what they do next. china has been, as we've mentioned, very, very strict in its containment measures. reports we are getting is that earlier on sunday, a city in eastern china reports someone who tested positive had taken a train from shanghai, so we will see if it shows any signs of spreading beyond what they are investigating in shanghai disneyland. haidi: this comes as countries

like australia and thailand are making significant moves to reopen their economies, and to allow their own people to travel as well. stephanie: yes, that's right. thailand has a big reopening starting today. they are allowing vaccinated visitors from more than 60 countries to enter. so, fully vaccinated from the u.s., china, singapore, japan, and more from europe will be able to freely visit if they test negatively on arrival. thailand's economy is very reliant on tourism. they have been devastated by covid and the closure of borders. so this is going to be an important want to watch, how they deal with this opening. australia, too, one of the former covid zero countries that really shut down borders. they are allowing millions of

australians to travel as far away as london and new york. this is particularly significant because australia had to go back to a lockdown situation, which was very tiring for the local population. it's been since march 2020. haidi: stephanie phang there. let's get you a quick check of the markets. we are seeing trading in australia pushing a little higher just ahead of the rba decision, which really markets have already made it clear what they are expecting in terms of 2024 april yield trading at eight times the target. it will be a real test for policymakers for that meeting tomorrow. we are continuing to watch nomura as they see that drop, the biggest since march of this year on the back of u.s. legal

provisions that were reported as part of their earnings also missing estimates. the kospi bouncing back about .5% higher despite earlier trade gary shilling waning momentum both for exports as well as import numbers. taking a look at trading in new zealand, down by about .5%. overall we are seeing the broader regional see a gain of about .6%. as we continue to see japanese markets into new into price in the implications of the election results over the weekend and what it means for prime minister cushy to -- we're going to get more on that election now. i guess this was more of a consolidation of power over the weekend. is it a mandate for the p.m. to go forward with economic reform? >> i think so, certainly. as you say, it is a better

victory than a lot of people had expected and the markets were certainly -- as some polling data indicated it was going to be a tougher slog for the liberal democratic party than it ended up being in the end. they only lost about 15 people, which was a lot that are than people expected. so now everything is in place to go at upstart formulating exactly what his package is going to be pew to we do not know much about it but the figures bandied about, something like ¥30 trillion which will be a sizable amount of money injected into the economy. kathleen: it seems like new capitalism is an idea that the public in japan is supporting, particular workers who feel they do not make enough money. what about support within his

own party though? our senior members also thinking this is the right way to go? gearoid: i think when it comes to the specifics of the package, new capitalism, i do not think anyone knows exactly what is going to be in it in terms of wage increases. i think everyone is behind that. we are expecting to get more details out to a panel sometime early this month. then we will see more. having said that, i think kishida now should have the party support behind him. they just voted him in as leader but now having gotten this better performance in the election i think he will certainly have the party behind him for the near term. next summer will be the next step for him and i think the party certainly will be behind him for now.

haidi: we have more bad news for nomura as we see that stock still trading lower by about 7% at the moment. gearoid: yes. certainly not having the greatest day. they had that provision related to a legal case from before the financial crisis. it goes back to the mid-2000. they were not very forthcoming on details but they have had legal trouble going back and dealing with mortgage-backed securities from that period. so that was another blow to profits. another disappointing quarter from numeral -- from numa. kathleen: thank you. this is bloomberg. ♪ s is bloomberg. ♪

haidi: let's get you a quick check of the markets. u.s. futures looking positive after that record close on friday. after the holiday weekend we are watching trading in taiwan. taiex futures up by about .8%. chinese futures are looking like this, treading water ahead of pmi numbers which could add to a further downside we have seen

from the official pmi readings. this is how dollar china is trading as well. kathleen: that is it from daybreak asia. our markets coverage continues as we look at the start of trade in hong kong, shanghai and shenzhen. this is bloomberg. ♪ s bloomberg. ♪ moving is a handful.

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david: it is 9:00 a.m. in beijing, shanghai and here in hong kong. we are counting down to the first sessions of the week on the chinese mainland and here in hong kong. let's get you your top stories. the october manufacturing numbers out of china signaling contraction as power shortages and covid restrictions continue to bite. the mainland stressed. property develors