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tv   Bloomberg Daybreak Asia  Bloomberg  November 2, 2021 7:00pm-9:00pm EDT

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haidi: i am haidi stroud-watts in sydney in the markets of just open for trade. shery: i'm shery ahn new york, asian traders relentless u.s. stock rally as corporate profit margins rise despite inflation. the fed expected to confirm is going back of its asset purchase program.
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ev becoming a battleground. shares doubling on plans to go electric while tesla falls as elon musk reduces the order. haidi: and mixed start to asian trading despite these relentless highs and it comes to the u.s. session. we await the fed and other central bank action. kicking off this week with that abandonment of the yield target. we are seeing upside of about 2/10 -- .2%. new zealand up by .3% and a little momentum in the kiwi dollar after we did have better-than-expected labor market data out of new zealand this morning. s&p futures looking soft. also on the retreat ahead of the fed decision and the opec output target setting policy meeting expected this week. we are also continuing to watch reactions on the bond market.
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singapore bank earnings, expected to lift profit rebound out of the singaporean lenders. we are seeing income coming in above expeditions, over $1.5 billion. the third quarter coming in higher than expectations, $1.6 billion contrasted against excitations of $1.47 billion. the next commission income also a beat on expectations of gains in year. we expected a profit surge from boosters on credit, double-digit growth in income as we see economic recovery. we are also getting numbers from ocbc, the southeast asian lender, coming in at $1.1 billion on nonperforming loans ratio at 1.5% and the net income
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also a slight beat on expectations. shery: the estimate was 1.17 billion dollars, so becoming in line with what happened. a slight beat when it comes to expectations. loans were up and net interest income of $1.46 billion. we are also talking about analysis and loans, coming in at $1.36 billion. we expected some positive results from ocbc given the management fees in a lower provision charges but a dent given the -- we will be watching for anything on that. in them income, net income of $1.22 billion and beating expectations. haidi: the question for the markets is what the credit investors want to see from the
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fed this week. the rbl showing this is a lesson for banks. we will see capitulation. the yield target is being squashed by the actual yield of the 2020 for bond i more than eight times. we are seeing record low yields, robust issuance, and a lot of market weakness and inconsistencies. the fed is excited to pull back for bond purposes -- purchases and this will be a test of how gently they can reduce market support and whether it offers value investors who have been awaiting this for 10 years. shery: we have seen volatility back into the bonds. especially when it comes to the short-term rate. but the question is also what happens in the fomc and the federal reserve. especially as we head toward the end of chair powell's term. but we got more clarity at this
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week with president biden speaking in glasgow, saying he will announce positions fairly quickly. he is discussing with economic advisers on the renomination to a second term for chair powell. economists surveyed by bloomberg expect them to be renominated first by -- or a second term but he is been modestly heard by the revelation of stock trading by senior fed officials in 2020. this of the will be watching as central banks globally start plans to reduce stimulus. the fed expected to be next in line with the announcement of tapering bond purchases. let's discuss with our global economics and policy editor kathleen hays. everyone says they will not wait longer to start tapering. kathleen: it would be odd if they did way. on any[n[nj■ñjwyi■nv measure --. -- wait.
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six month ago, powell was saying you can't even think about it but then you couldn't talk about it, then they could talk about it in on october 22 he said i do think it is time to taper. that is one reason two thirds see the tapering starting this month, not waiting to the middle of november. what is probably going to be a big question, how quickly do they get there? because 65% see the taper completed by the end of june but a third of people see it being ended in seven months or less. that puts us at may or april. the idea is if you stop buying more than $50 billion in treasuries, you get to the point where you are not buying any quicker. that opens the door to rate and that is what everybody is trying to figure out. in terms of what will the pressure from jay powell say
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about this, people say it's going to be transitory. but right now the risks are that it is going to stay higher amount longer. i think this is -- higher, longer. they're looking for clues in the policy dated. this is not change expectations. the change in dots and out look for the economy does not come until the december meeting. we will rely on policy stamens with jay powell as the presser, slow to catch onto the idea that the fed would be more likely to do two rate hikes this year with inflation rising. the question to me is will they say anything else that could encourage or deepen that idea or pushback? the rba pushback on rate hikes when he spoke toward four hours ago. haidi: the bank of new zealand, financial stability report out
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saying that covid-19 is continuing to weigh on the economy. what are the effects there talking about -- they are talking about? kathleen: many are struggling coming out of the economy -- had to make. but you still there some baggage. -- the pandemic. there is still some baggage. how about business is dependent on support from the government, viable to keep paying workers and buy their goods and etc.? that could hurt those businesses. she transitions from being a covid pandemic to an endemic disease, that could cause financial instability. with the red housing market in new zealand, 30% jump in home prices in the past year, the
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rbnz says they see an increased risk of correction. when the governor was speaking yesterday and today, he indicated these concerns. the government is taking steps at this point and he says the rule is not that large. they still see more removal depending on how inflation and drops look at the medium term. the november meeting coming up, the door still open. haidi: that was kathleen hays. world leaders wrapped uo days of climate talks, protections and curbing emissions as the u.k. prime minister warned that these must be matched with action. maria tadeo has more from the cup 26 climate summit in glasgow. >> a landmark proposal by the united states and the european union to cut down gas emissions. the second largest contributor
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to change. countries agreed and signed on this pledge and they will promise to cut missions -- emissions come 2030. more than 100 countries said they will sign onto thisz÷pz but is the devil in the detail. countries like russia, india and china have not signed on to this proposal. heads of state and they political figures go home and it is time for the negotiators to do the work high the scenes. we will see whether this yields real results by the end of next week. the time of politics is coming to the end of this is about the technicalities and the details behind the scenes. maria tadeo, bloomberg news and glasgow. shery: a big interview later, the u.k. chancellor joins bloomberg tv at cop 26. let's get to it vonnie quinn. vonnie: attorneys man says his
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company faces downward pressures and must curb taxes. this will address problems faced by small and medium companies. during a visit to china's top market regular, he said the company needs to curb cyclical adjustments. there is are seated with a more conservative fiscal and monetary approach. advisors to the u.s. and cdc pfizer shot -- to the u.s. cdc it back to be pfizer shot for children ages five to 11. they only need 10 vials incentive -- the cdc director must sign off before vaccinations begin. the biggest class of new managing directors ever. six under 43 members nominated, a 40% increase from two years ago. goldman says part of the reason for the jump is an increase in headcount at the firm. women account for fewer than one
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in three of promotions and that is roughly in line with recent levels. black and hispanic employees each make up 5% of the incoming class. prosecutors have indicted the former -- and his heir apparent. he owes $2.2 million eight years after he sees working as a consultant for fifa. officials said the payment was made without a legal basis. both men have denied wrongdoing but were already banned from any soccer lidded activities. 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: next with the fed, lori expects to bring and a rate increase in 2022.
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more on her outlook. this is bloomberg. ♪
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haidi: as we have been discussing, the fed is expected to announce that it will start tapering bond purchases. more hawkish central banks have created gyrations across the bond market. that has made investment grade credit more attractive. joining us is laura -- lori heinel. there's a whole team of investors who are poised to await opportunities that may come through with policy normalization. do you see that happening and reducing opportunities in the market? lori: first of all, if they are going to -- we think the fed will follow through on the plan to taper and interest rate increases next year, as many as
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two. but they will remain independent and watching carefully how the inflation trajectory starts to modulate. we thought this would be a good opportunity for value investors for a little while. up one of the things that investors continue to focus on is the visibility of earnings. there is still a cloudy picture there. we basically are looking to diversify our bets because we think there are different opportunities on a relative valuation basis looks attractive. haidi: when it comes to the inflation piece in the supply-chain issues, what are you looking for in companies? are they companies that can really pass costs to customers? lori: one of the factors in the market that has been underappreciated over the last several years is quality. those businesses that have good business models, good, stable brands, good consumer
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acceptance. those are businesses that oftentimes can pass along some of the costs to clients. we are also looking for changes in consumer trends. think we are going to see more of an opportunity in places like real estate where investors have been more shy because of concerns about what is going on in those market places. we also see continued gross input -- both -- growth in places like technology and health care. shery: we see expansion despite the supply chain disruptions. you have actually reduced your allocation to large-cap u.s. stocks. why and where have you for that capital? -- poured that capital? lori: we reduced from a large overweight. earlier we did think the u.s. was handling the pandemic better
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than other countries and from a growth standpoint that is where a lot of this came. repair that back and we are looking we pared that back and we are looking at more diverse opportunities. we think there will be more opportunities for financials. we are looking at europe increasingly, relative valuations there are more attractive. owing back to your comments about as rates go up, values should be better. especially if we see economic expansion which we are expecting in 2022. shery: with these diverging central bank actions, especially when it comes to what the fed is doing and perhaps what the pboc is not doing, we are not seeing using or policies to support the economy there, are your expectations in terms of where you can find more opportunities? would you venture into asia and perhaps regulatory concerns in china? or is u.s. and the u.s. your best bet? lori: the europe and u.s. are
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best bets for the near term. there is better participation in economic whatever there. consumers are very flush with cash. they continue to get better wage growth as well. we see the u.s. and europe as being an anchor for global growth. we try to be more diversified in our exposure. shery: always great having you, global chief investment officer at state street goebel advisors. -- global advisors. shares of tesla dropping, elon musk posting a puzzling tweet about a car ordered from hear st. also unraveling the mystery, su keenan is here. let's start with elon musk and pursed -- hearst. su: he is sending a tweet to allay concerns for the owners,
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what about me? perhaps hearst getting in front of him, they made very big news last week. the rental car company recently emerged from than group c and placed an initial order of 100,000 teslas. 4.2 billion planned to electrify the rental fleet. that announcement sent shares of both tesla and hertz on a big rally. apparently in response to a cap dutch tesla fan account pinking must for stock gains, musk tweeted in a tuesday u.s. session, you are welcome and went on to emphasize specifics that no contract has yet been signed. he also emphasized there is more demand than production, no special deal was given to hertz and he has tweeted that it has zero effect on our economics.
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that bottom line is why the stock took a dive in the latest session. are looking at a three-day run but it is down about 3% in the tuesday session. hertz did not spun directly but they said they are already receiving some of the cards it ordered. it made the additional order and is getting strong response, people want to rent these cars and perhaps love to tesla, it reinforces that these cars are very popular and looking at their shares. they went on a tear in the latest session, at one point they were up 35% today. -- year to date. most tweets are generally aimed at retail buyers and retail enthusiasts of tesla. he wanted them to hear from him directly that demand continues to exceed their ability to produce and even hertz is
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getting a special -- no one, even hertz, is getting a special deal. haidi: also announcing plans to electrify its rental fleet. su: the volume and the share price just took off in a major way. avis reported a surprise beat on a profit and revenue. the stock has a significant short interest. his rental car companies have been under pressure and they got mention on wall street bets, the volume exploded, trading at least 11 times. by the end of the day it had doubled up better than 106%. but at one point it tripled by the close. it was up your to date 858%. avis did not disclose plans to add electronic vehicles but throwing shade at hertz, they
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said the reason we have not -- you have not heard from us public is because of competitive issues, we like to execute our strategy before announcing it. avis has been elevated so many have noticed, particularly in this community. they will be pressured to get out of their positions. notably at hedge fund that is a long time holder of avis wrapped up a 5.3 5 billion gain in hours on the u.s. tuesday session due to the surgeon avis stock. -- surge in avis stock. haidi: this is billoc burck -- this is bloomberg. ♪
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shery: a quick check of the business flash headlines,
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nintendo plans to produce 20% fewer switch consoles that originally planned. according to the nikkei, nintendo has struggled to get enough semiconductors to make new machines. they hoped to make about 30 million consoles as demand has been strong. shares have dropped more than 20% this year a64áo the new switch. netflix has begun its jump into video games, releasing five mobile gains -- games for android. they are included in the netflix it's -- that looks subsection and there will be no advertising or additional purchases required. they are also planning titles for apple devices. zillow is quitting its home flipping business after reporting $380 million in third-quarter losses across the operation. it plans to take down -- and
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reduce the workforce by 25% as it winds down the division. the pricing algorithms sometimes cause them to overpay for houses. less third-quarter revenue 73% higher than last year. the ride-hailing firm lyft only operates in north america, they saw airport rides rise threefold compared to last year. japan's record 10 -- rakuten is one of the biggest investors. you can dive into any of the functions we talk about and become part of the conversation by sending messages during our
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shows. this is for bloomberg subscribers, check it out. ♪
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>> we are tracking the ball out of the global supply chain crunch. let's look at top stories. moody sees disruptions stretching into 2022, affects only diminishing in the second half of the year. there's a risk inflation may remain higher for longer in the united states and some emerging-market countries. with the fed meeting in vocus today, we look at u.s. data, analysis from our economics team shows there is an abrupt shift from supply excess precrisis,
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they are at a 20 year high. the world's largest contract logistics provider says the worst may be over. they are seeing more goods arriving at facilities which means supply chain snags are beginning to subside at least on the logistics front. we want to note this interesting take on the supply chain issue. robin brooks argues that delays are centered in the united states more than elsewhere. he says u.s. supply disruptions are about demand, not supply. he points to this chart of delivery times in different locations and how far they divide than usual. the u.s. delays are at a scale of japan after fukushima in 2011 but little elsewhere. bloomberg terminal users can read more about the stories in our newsletter, supply line. shery: one of the biggest traffic jams threatening to
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derail global economic recovery. bloomberg economics has analyzed data showing the accent of the data -- damage, let's bring in our editor, ben. k■ pandemic, what are the underlying causes of these bottlenecks? >> you have two things going on. the world is still having difficulty making enough stuff because there were no factories in some corners of the world economy that have not been able to produce capacity because of virus outbreaks and workers having infection, and then you have strong demand that is particularly strong in countries like the u.s.. but on most everywhere, demand for goods is high because people are not spending as much money as they usually do on services. they might not be going to the office, the drycleaner, restaurants or vacations. but they do have money because the government put a lot of money into households to protect them from the pandemic into they
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are spending money on goods and things have to be shifted around and they are struggling to cope. haidi: these are factors beyond the control of central bank. what does it mean for the inflation mandate? >> some of these direct causes are beyond the control of central banks for sure. but the central bank dilemma is that they are seeing things well above their target ranges, they have been there for a while. they look like they're going to stay there. and the whole machinery is inflation pricing is kicking into gear. you are seeing the move to policy and it could have some effect but it can't address some of these. i thing central bankers are aware. shery: how and when can we expect to return to a sense of normalcy? >> that is the problem everybody is having trouble answering. mainly because they have been localized disruptions of supply
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chains and logistics before. mentioned fukushima. but there have not been on this scale a disruption of a most everything at the same time. that is making it hard for people to see the roadmap. one answer is probably went the virus is contained in people feel come to both spending more money, they start going back to the office and using services like dry cleaning and buying for lunch, just spending on services, it comes back to normal and maybe some of the demand for manufactured goods pairs back. haidi: been holland -- ben holland. vonnie: the second and final day of the world leaders at the glasgow summit has been marked by two deals that could be key tools in the climate fight. the u.s. plans to cut missions
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and once support from 90 countries, though china and russia held out. 100 countries backed eight u.k. -- u.k. initiative to cut is for -- deforestation. president biden meeting with economic to dutch advisors to decide on the best choices. it's unclear whether he is weaning toward reappointing the fed or repressing him with a favored candidate. he could also have a different nominee altogether. facebook and the meta platform says they will no longer use facial recognition over privacy concerns. they say they need to wait and if it's against glowing -- growing worries. they have used facial recognition since 2010. there will now delete or the one billion templates and has collected.
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hong kong in advance talks with mainland china about a border reopening. the newspaper said officials may make final decision soon. the report says they are discussing a health code system that would only allow certain people to pass the border. hong kong may separate air travelers from the mainland in order to prevent cross-border infection. 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. shery: election day drawing to a close in the states of virginia and new jersey where governor races are being held. outcomes will provide clues on how the major parties are with get more from our political news director in washington. tell us why these votes are important. >> they are important because they tell us something in an off
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year election about what may happen in the midterms next year and maybe even in the next presidential race in three more years. what we will find out in virginia is whether terry mcauliffe who has been a governor there, you are only allowed one.ç you can come back and that's what he's trying to do, but glenn youngkin is making it difficult. the race is too close to call. it had been term a call if -- terry mcauliffe's race, but yesterday the dean of political prognosticators in virginia moved the race from liens democratic to liens republican. it is very close. less so in new jersey. phil murphy is expected to hold on. he would be the first democrat to win back to back terms and more than four decades.
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he is expected to win but it was a closer race then the ministration thought they would have to run. we are seeing republicans make gains. an off year election, we don't have a lot of races so that's why there's so much on these, but republicans made gains that they were not expected to make. haidi: what does virginia and new jersey tell us about what to expect from midterms? >> it tells us about the fact that it's going to be hard for the democrats. typically the party in power loses seats in the congress and if they can't do well in these races just now or in virginia, which is a key race for them, that means they're going to have even more trouble in the dutch and the president has not been helping. he has not been able to get key
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legislation like the infrastructure bill and the bill back better plan through congress. they thought they might have that to run on in virginia, but they have not been able to you and the president's poll ratings have been defining with issues like afghanistan and the spread of covid after cases got down. haidi: our political news director with the latest. let's look at the markets in the midweek session, stronger than expected labor market numbers out of new zealand. this morning we are seeing some withivmr equities training, the financial stabilities report hinting at a longer-term drive to the effects of covid and the ongoing closure of international borders. upside trading up about 1% the day after the rba giving up the yield target. muted reactions so far when it comes to the bond markets that
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sparked this reversal policy from the central bank. futures have another session of record highs. softer but we are talking about holiday with japan park it's been close for culture day. also softer, new york retreating by 1.4 -- 1.25% ahead of the fed. shery: i was going to turn to hedge fund traders. we saw volatility in the bond markets and it was a nightmare scenario for them. some firms have seen enough. they have each routed traders after hitting maximum loss levels. asian finance reporter nabila ahmed joins us. several hedge funds have been caught in the crossfire's. what do we know? >> this is a battle between
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inflation and rates. a lot of the worlds hedge funds have been betting that the inflation and consumer prices post-pandemic would be temporary and that would mean central banks would not be in a hurry to raise rates. but that view was upended last week. we sought turmoil in the bond markets, central banks from the bank of england making hawkish commentary. we saw australia and canada toa9 short, leading to significant losses. haidi: when we go from here and what we see is the biggest impact? >> the biggest firms that were hit were exodus, they were down 2% for the month also -- but still up 3% for the year. bluecrest and others having to grounded traders which is an extra in a move. then you had millennium also
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hit. in interest rate focused hedge fund was also hit. these losses may not necessarily lead to yearly losses for these funds because there is the stock market rally that could offset some of these losses, and in terms of the bigger picture, what we are seeing is that traders are betting that central banks will raise rates. they are putting it at a 90% chance that the u.s. fed raises rates in june. haidi: next, cfo eugene talks about the role of energy transition and the financing aspect of that in accelerating the path to zero. this is bloomberg.oomberg.
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shery: breaking news, the pfizer vaccine has been approved for kids ages five to 11 years old. it got the signoff from the cdc director. remember, we were waiting for the cdc to approve this after it was unanimously backed by advisors to the cdc. they have already voted 14-0 in favor of giving young children the shot.
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it was cleared friday by u.s. regulators ed the cdc director is saying now that the pfizer shot has been approved for kids ages five to 11. this ushers in a new phase in the pandemic response now that we can give these injections to children as well. we will have more on that story as we get it but we are getting those shots approved for children. as the climate summit at cop 26 wraps up, let's discuss clean energy group, the provider of sustainable solutions, cfo eugene chang. thank you for your time. we continue to see commitments coming from cop 26. what does that mean for renewable and clean energy investments across asia? eugene: it is a very exciting
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time. in recent times, we have seen many of these governments coming out with fresh and ambitious targets, vietnam, indonesia have made clear commitments to net zero by 2070. and india, the president gave a clear comment in relation to meeting zero by 2070. all of this will mean more industrial players will have the opportunity to invest and drive goals of renewable energy transition and markets. it also means it will attract more of investment dollars as well as financing sustainable financing into many projects. for example for ourselves, we
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have announced our own transition strategy at the company. we have set clear transition tactics ourselves. i 2025, we will grow our renewables. we are quadruple in the number. if we will also grow our -- we will also grow our sustainability in other ways. this will be financed and we got $5.5 billion in the past years. the first six months, we will have -- we were able to have it over 10 years. shery: let me ask you, how much are you seeing in the translation of these net zero
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commitments into actual policy backed by government? we still have this ongoing energy crunch and it seems a lot of governments have turned to fossil fuels in order to revive their economies during the pandemic. eugene: in many of these governments we have seen they have set clear renewables growth targets and some have increased that. vietnam have increased -- increased the renewables target. that is a very good step forward because that gives us the pportunity. we can grow renewables again. one key challenge is is the energy crunch. a key element the financing --
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we're financing fossil fuel assets toward renewable. the potential for many of these investment come -- haidi: how do these investors hope you transition away from coal? eugene: for example, they have to come together and put together funds to intentionally invest. it sounds counterintuitive, but essentially what that does for us as industrial players is we use equity for two things. we drive renewable growth and also investing in projects. we have done a couple of these things and potentially we will invest into a research and development into green hydrogen
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and cleaner fuel to drive long-term goals. haidi:ap?úñ what has the oil pre story an energy crisis meant for your business? eugene: -- many of the commodities, natural gas, it increases the cost on fossil fuel generation in terms of our portfolios, but we were able to see the cost increase and we saw some of that passing through. we were ok as a business but in the longer term we are willing to partner with others and not pass this to consumers. haidi: what is the government peace in this? there's been disappointed out of
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the hymen talks in glasgow -- there has been some talk out of glasgow. how much can the private sector makeup for a lack of commitment to the government side? eugene: while public policy statements -- while from the public policy simply there has not been a clear committee, but what we have seen within the countries and on the ground is a certain desire to grow renewables. for some of the major emitters, for exhibit china, we see many opportunities for new3;ç1 renewe projects coming up. that will derive -- drive us in the direction.
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haidi: eugene cheng. tune into the radio to get in-depth analysis from the debris team there. broadcasting live from hong kong, you can listen via the app or our website. more ahead, this is bloomberg. ♪
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haidi: bank of america ceo spoke with bloomberg on the sidelines of cop26 about the commitment to addressing global warming. >> this is a transition we all have to make as consumers, a company, everything you do. there is pressure on banks because our clients are demanding this. the politicians of the world are demented this. if you think about it in the context, in 2015, the united nations and all of the country said they want this to happen. now we have to implement it. >> when you look at what wall street and bring -- banks in general can do, can you stop -- >> all of our clients have to make a transition. some extract minerals, some fossil fuels and they are commitments. our job as a financial
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institution is to assess them on a risk basis. here's my plan, here's where we are going to go, and it is hard. we have to stay with them to help -- we can be part of the measurement system. as we underrate them, the risks of underwriting is do they have a plan that meets the standards that we want them to have and if they don't, they will have a problem financially down the road. >> is this an opportunity for banks? >> we did $80 billion in financing last year. we disclosed the difference between our rate and our paid rate is all for wind, solar and low and moderate income housing. it's a billion dollars -- there's a lot of opportunity to make money doing this. there is work we are doing and
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more the charitable work in every thing in between, but as this transition happens, we all work to make it happen. >> are you disappointed you don't have more commitment? >> the government can work in a lot of ways. there's a lot of things to do. they are seeing the private sector is pushing them before they were pushing the credit sector more. -- private sector more. now we are pushing them saying we will do that but we need you. take political risk away, take some of the duration and currency risk and unlock this capital. shery: bank of america ceo brian moynihan speaking with francine lacqua at the summit in glasgow. stay tuned, u.k. chancellor joins us at cop26. we are seeing pressure on oil prices toward $82 a barrel.
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trading ahead of the opec-plus meeting. yes tutors under pressure, ion or under $100 and shrinking steel output in china. the market open in seoul is next. this is bloomberg. ♪
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shery: welcome to "daybreak: asia." haidi: asia's major markets have just open for trade. our top story this hour, corporate profit margins hold up despite inflation and supply chain pressures. investors are also looking ahead to the fed, scaling back on
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asset purchase programs. and will hear exclusively from one ceo. shery: south korea coming online, health care and consumer discretionary, leading the gains. we have utilities and material weighing the index. this coming as the korean won is now under pressure against the u.s. dollar. it was leading the gains among asian peers in the last session because we got inflation numbers out of south korea reaching that level for the first time in almost a decade. and the minute showing a majority of board members agreed to keep raising interest rates so we do have that pressure on the korean won. jet -- japanese yen holding steady after rising ahead of the public holiday today. traders positioned for the fomc
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as well. haidi: we are seeing an update when it comes to trading here in sydney. almost every sector trading in the green at the moment, up by just about 1%. the dovish tone with deepening trade has given a little more confidence to equity markets to forge ahead with these gains. when it comes to the aussie kiwi, things are getting more interesting. that could have another run at parity after that strong new zealand jobs report which traders have taken as providing more momentum for further rbnz rate hikes as well. the jobless rate falling to a 14 year low as hiring really picks up. the fed is expected to announce a long anticipated tapering of
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its asset purchases tomorrow while inflationary pressures remain a key risk. they expect inflation to remain elevated but doesn't see it becoming permanent. this is really the crux of every question we ask everyone and that polymer -- policymakers are trying to work out as well. which element of the price pressure story do you think is transient? >> i think what we've seen in terms of the economic reopening and the surge of consumer behavior, with people rushing out to go to restaurants and purchase goods, i think that has more of a transitory nature. i think that will certainly start to wane as we go over the
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next couple of quarters. there are other elements of inflation that are perhaps a little more permanent or more persistent. those are perhaps on the supply side part of the equation, specifically on elevated energy prices and some of the logistics and shortfall over there. i think there are some tug and pull inflation elements that we could continue to expect elevated levels of inflation. haidi: as interest rates begin to normalize, liquidity conditions start to normalize as well. where do you see being the beneficiary from the idea of a return to real worth? david: i think there's going to be a slide as major economy start to experience more normalized levels of growth. but then inflation continues to remain elevated and i think that could potentially be -- lead to
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a bit of choppiness for markets over the next few quarters as investors try to digest the new normal. there are industries and sectors that we continue to be overweight and bullish on specifically on large-cap u.s. stocks. in places like emerging markets which will continue to see an economic reopening, that should benefit the economy. shery: when it comes to monetary easing the -- we haven't seen ì(lc% we continue to see more trends of the economy started to slow down. what can we expect from the pboc and what will the market implications there be. david: the pboc is the only major central bank in the world that is loosening monetary policy while the rest of central bankers are tightening monetary policy. i think that is certainly
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indicative that they are trying to support the economic rebound in china more so than other economies. i think that investment should follow their too. that said, i think we are perhaps a bit surprised that we haven't seen more easing from the pboc so far. i think many expected a further cut to the rrr rate. haven't seen that yet. the pboc is certainly saving some dry powder in case that over the next couple of months or quarter that the economy slows down more than anticipated. haidi: with chinese tech being we could see more support for those equities? david: i think the pboc, additional liquidity injections that we've seen so far, i think that helps the real parts of the
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economy and further loosening of monetary policy is that to help those households and small to medium enterprises. what would really help chinese tech companies is if there was an amelioration of movement, we saw some of that yesterday in terms of -- any kind of appearance that u.s.-china relations could improve, think that would disproportionately benefit the sector. shery: how should investors position this week even though were headed toward the you -- fomc as well? david: i think all eyes will very much be on whether there is any body language on whether there could be a rate lift off next year. u.s. markets have been
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anticipating this tightening of monetary policy for a while. when it comes to aipac or emerging markets, as people start to remember what happened in 2013 and the impact on em. because the tapering announcement has been hotly anticipated, i think that investors will be able to see through this. shery: david, thank you very much. we do have breaking news, take a look. more than doubling since his trading debut today, gains of 113% after we saw the largest online payment service in south korea raised about $1.3 billion in its ipo after pricing shares at the top of the market range.
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kakao is backed by jack ma's group. it's korea second-largest ipo this year as well. we will continue to watch the stock and we do have an exclusive conversation on thursday at 10:30 a.m. hong kong time with the cfo. don't miss that interview. let's get to vonnie quinn with the first word headlines. >> the chinese premier says his country's economy faces many downward pressures, to address the problems faced by small and medium-size companies. state tv reported the comments and he said the economy needs cross cyclical adjustments and a more physical and conservative monetary approach. hong kong is reportedly in talks
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with mainland china about a border reopening. the newspaper said officials may make a final decision soon. the report says they are discussing a health code system that would only allow certain people to cross the border. the south china morning post that hong kong may separate air travelers from the mainland in a move to prevent cross-border infections. the u.s. cdc has okayed pfizer shots for children age 5-11. the decision widens access to vaccines to 28 million people. pfizer is already working with gsmregulators on distribution of pediatric doses. goldman sachs has named the biggest cast of new managing directors ever. 643 members were nominated, a near 40% increase from two years ago. goldman-s had part of the reason for the job is an increased headcount at the firm.
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women account for fewer than one in three of the promotions. black and hispanic employees each make up 5% of the incoming class. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, the focus shifts to win the fed will hike rates as the supply chain crunch complicates the bigger picture. analysis is coming up next. this is bloomberg. ♪
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shery: central banks around the world start taking steps to reduce stimulus and the fed is expected to be next in line with the long-awaited move to begin tapering its bond purchases.
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kathleen hays is here with the preview. the tapir is widely expected, so what should investors be on the watch for? kathleen: there are things about the taper that will give signals about what might happen with interest rates. i think that's what people are looking for. from the policy statement from jay powell'sqwgq press conferene after that decision comes out on wednesday, but for starters it is true that the fed itself has beautifully set up this taper, on october 22 jay powell even said, i think it's time to taper, not just think about it and talk about it but actually do it. economist see that it will start this month, not in december. they are not going to wait and part of the reason people are betting it will be done by june, they cannot start raising rates until they do the taper, until
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it is over. and what if inflation stays high and investors that have been willing to go slow for a long time, a lot of equity investors have seem to like the slow pace but what if they think it's getting dangerous and inflation will start surging and become more of a problem? that's what people are waiting to hear tomorrow in part. powell's concern about inflation, he's been saying it's transitory. he make knowledge tomorrow as he has in the past, i guess the upside risk is,>n>né■uv(9ú6(9ó:4 gvçu year. bloomberg economics has joined the crowd that saying they will not wait until 2023 for the first rate hike, they will bring into 2022.
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pervasive phonics, wages are rising and the -- they seem to be rising even factor -- faster. that's why they figure they will start in 2022. the summary of economic projections is updated every three months. that will happen in december. remember back in june, fully half the members of the fomc saw at least one rate hike in 2022 and some saw three. it took markets a while to come around. maybe jay powell is coming around, too. we are all waiting to see what he has to say about these things tomorrow. haidi: the property market is always a key concern. what have we learned from the financial stability report from the rbnz? kathleen we look at australia, new zealand, some of the hottest housing markets in the world. it's great if you're selling or
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building a house. not so great if you are a first-time homebuyer trying to get into them. according to the report, they do see a rising risk of a housing market correction. a 30% jump in home prices over the past year. can they do much about it? the head of the rbn said it's really that the government is taking steps, it's more of a bit part but that would maybe support the financial stability report, they do see further removal of stimulus in the medium-term. they watching medium-term inflation and employment indications. they are concerned that even though they're getting past the pandemic and moving from pandemic to endemic disease, that businesses may see the pullback of support from the government as a problem. and what about consumers who
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spending patterns may have changed? all concerns for 30 rbnz, but the door still seems to be wide open for a rate hike at their next meeting in november. haidi: kathleen hays with the latest. world leaders have wrapped up two days of climate talks. the talks have wrapped, what is the scorecard, i'm curious. what do you think has been notable and what has been disappointing for you? >> looking at the most recent numbers, the most positive is the transition package put together for south africa, mutual commitments in the form of advice measures to help south
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africa phase out coal power. it's a good start, and this is the type of package that many developing economies, places like indonesia and india are looking for. this template -- if this template is adopted by others, this will have a very positive impact around the goal of phasing out coal power generation. on other fronts, there are global methane pledges doing well in terms of garnering support. what is really interesting is also the focus of what has been around reducing methane emissions, it's economically positive. we also saw an announcement on stock and agriculture which is harder to tackled. so is nice to see them step up
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and say there going to be looking at tackling that. it was a positive elopement for two reasons. for the prime minister, so far he has come across as being kind of a climate hawk if i may use that term. he didn't seem as proactive as his predecessor so this was nice to see. the 10 billion is on top of the 60 boon dollars over five years that japan ledge the g7 summit over last summer. so it's very good in terms of fulfilling the commitment they have made to developing economies.
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it also included funding for force conservation and tackling deforestation which is another component. haidi: we talked about managing expectations after the g20. has the outcome been better or worse than you expected? >> all these elements have seen progress. in countries like vietnam pledged to go net zero by 2050, that sort of implies, if you want to have an orderly economic transition. that means by the mid-20 30's we will be phasing out internal combustion vehicles. from that perspective it is positive. if you look at the 2030 emission reduction goals as a whole, they
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are still far away from being on a pathway to be able to be well below two degrees. that is something that still needs a lot more effort. if i were the u.k. hosts i would be fairly confident with how the first two days house -- have gone. shery: stay tuned for a big interview later as well. the u.k. chancellor of the exchequer joins bloomberg tv at cop 26. also available on mobile and the bloomberg app. customize your settings so you only get the assets you care about. this is bloomberg. ♪
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haidi: facebook migrating to the round of the meta-verse. emily chang spoke exclusively with the ceo at the microsoft ignite conference. >> it sort of comes down to bringing the world of people, places and things to the digital world. this is lines happening both in the consumer and the commercial space. we talked about the gaming application and the enterprise applications of it. this pandemic, if anything, has made the commercial use cases much more mainstream even though .s(p&h(lc% feels like science fiction.
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i was able to go to the toyota manufacturing plant and to a remote site and even the space station. the ability to be able to have the malleability of digital really helped bring things together. >> you are working with a number of partners including facebook which just unveiled its version of the meta-verse. what do you think of their take, their approach? >> we love the fact that there is so much innovation going in. i hope this is the next big thing that happens after the mobile internet. we will make sure, we would like to continue to be sure that our best applications and platforms
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mesh applications. we want to make sure you can run those applications first class on oculus. that's going to be our goal. shery:kqív the microsoft ceo speaking exclusively with emily chang. nintendo reportedly plans to produce 20% fewer switch consoles than originally planned. according to the nikkei, nintendo has struggled to get enough semiconductors to make the new machines. the company had hoped to make about 30 million consoles as demand has been strong. netflix has become -- has begun its long-awaited jump into video games. the company says there will be no advertising or additional purchases required.
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shery: we're getting the market singapore pmi numbers for the month of october now coming in at 52.3. slightly easing from the previous month but still 11 months of expansion. we continue to see double-digit export gain numbers in singapore as we continue to see a recovery from the pandemic and those supply chain disruptions as well. haidi: meanwhile the loss of
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momentum continues for the hong kong economy. october pmi, and in softer. pulling back from the 51.7 that we saw for the month of september. this coming on the back of disappointing gdp numbers. lower than expectations of 5.7%. this suggesting that the growth momentum is just not pushing ahead the way the government had wanted to. hong kong's borders remain close. vonnie quinn has the first word headlines. >> the second and final day for world leaders at the cop 26 summit has been marked by two deals. the e.u. and the u.s. pledged to
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cut methane. 100 countries backed a declaration for 2030. president biden says china -- his view is that they missed an opportunity to participate in global leadership. the chinese president addressed the g20 remotely but has not left the country since the beginning of the covid-19 pandemic. polls have closed in the race for virginia governor with a tight count expected and what is usually a democratic stronghold. president biden has predicted a when for mcauliffe. prosecutors have indicted the
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former boss of global progress and its one-time heir apparent for fraud. eight years after he ceased working as a consultant. the payment was made without a legal basis. both men have previously denied wrongdoing. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: the u.s. commerce secretary said a truce between washington and the e.u. will help slow inflation in the united states. >> of course we'd want to have a strong relationship economically with the e.u., but we have to protect u.s. history, u.s.
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workers, the aluminum industry. so we maintain the terror of but we also allow for some amount of free trade. the first 3.3 million in the deal will come into the u.s. from the e.u. tara free. beyond that we may pay the tariffs because the real problem here is china, is china's dirtiest deal that has distorted the global market through their dumping and they are also sending it into the e.u.. what we have said is we are not going to allow our steel industry to be hard by china's excess capacity. we will work with the e.u. to protect our workers and their workers. >> how important was it that you band transshipment sub skill -- still coming into europe and
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then on to the usa? >> the technical term is melt and pour. it's a big deal because we essentially said we only want e.u. to come in tara free. it's meant to work with our allies against chinese excess capacity of their dirty steel. what comes next is a global steel arrangement with the e.u.. we've said clearly that over the course of the next two years we will work with our allies to come up with the global steel arrangement that preferences cleaner steel and that preferences u.s. and e.u. steel. >> you said we want to have really good trade relations with europe and we also want to protect some good jobs. there is a third element and that is climate.
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you are also trying to -- how does this deal accomplish that? >> to our knowledge, is the first time that we have set on paper that we are going to work in a defined period of time to come up with the global steel arrangement that actually takes into account the carbon exclusivity of the u.s. china continues to make very dirty steel. the other thing worth mentioning, right now we are struggling through supply chain issues. we are all seeing increases in prices. steel prices have gone up 3-4 times in the past 12 months.
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steel in cars and trucks, dishwashers, washing machines, we will see the price of those gouged on account of relaxing the terrorists. that will help with inflationary pressures and some of the bottlenecks in the downstream supply chain. haidi:ñd■tt]l>6y iron ore futurn singapore back below $100. jim, what is the cause of the latest blowout this year? >> i liken this to dandruff, there's really some of the data that shows that steel output was down in october, down to the lowest level in 18 months. it reinforced that they're trying to crack down on steel instructions at the remainder of the year.
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they want to curb pollution levels ahead of the winter olympics to assure there's clear skies for that big global event. that is also playing into sentiment but really it's all about the demand side in china and curbing the iron ore buying. shery: if that's the case, how low can it go and what are the potential circuit breakers here? >> yesterday was close to the lows that we saw in september. there is potential for a further leg lower, given that were not really expecting the steelworkers to pick up demands, certainly not the remainder of this year. and the level at which producers i■ industry watcherk at, we might see user start to curtail their production.
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the big brazilian producers signaling it might pare back its output in response to weaker prices. so we might see that supply response seen through around those levels. they are still making good money at these levels. they can get iron ore out of the ground at less than $20 a ton. shery: let's stay on the topic of energy because china is emerging as the world's last great believer in nuclear power, after decades of opposition and disasters elsewhere. the company has big plans for the power source. dan, is nuclear the big winner of this drive toward clean energy, not to mention the energy crisis as well?
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dan:: natural gas prices are skyrocketing. #gyit has exacerbated power shortages around the world. the cost of it has not gone out. it comes out of the energy crisis looking like a champion, but because of these really high-profile accidents we've seen in years past, chernobyl and fukushima, really the only place that is embracing it as a champion is china. haidi: so what do we see when it comes to the energy mix with the transition in china, given the energy crisis that we continue to see played out? >> china is a big league -- really big role for nuclear. there are huge roles for solar and wind and almost equivalent for nuclear.
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it's going to get there with different kinds of technology. there is one operating in pakistan and one in china. it is also looking at new kinds of nuclear technology. theoretically it could just be plopped into an existing coal power plant in the future. making that existing infrastructure run cleaner. shery: how long will they be on the push toward china's nuclear? >> not very. that's one of the big problems here. even if china succeeds with the technology, it shown that they can run power plants cleanly and cheaply an accident free. countries that are careful about their critical■w■■w■■w■■w■9&óín& and the tensions exiage]de!s between quote -- global powers
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are putting up a barrier for entry. we see it in the u.k. right now. u.k. politicians are trying to squeeze them out because they don't want china involved in their critical infrastructure. haidi: we have lots more to come on "daybreak: asia." this is bloomberg. ♪ ♪
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shery: take a look at trading, u.s. futures under a little bit of pressure, after we saw a record highs again here in the u.s.. in the futures trading right now, not a lot of movement. kospi stocks are paring back from earlier gains. we are seeing it being led lower by financials, energy, utilities. only a few sectors are gaining ground like health care and tech stocks at the moment. we are also seeing the asx 200 seeing its best day since september 30, as the aussie dollar is still holding at the $.74 u.s.n1:" level after we sae biggest one-day loss since k<
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statement. as we had the financial stability report, not to mention the unemployment rate numbers today falling to a 14 year low of 3.4%. we are watching what is happening with the fomc. let's discuss the timeline in more detail. david, it seems that tapering is priced in but what does this tell us about when rate hikes will happen? david: there has been a repricing of sorts over the last 24 hours, following what the rba taught us about how far traders can price in all this talk is news. going back to march of last year. when will the fed raise interest
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rates next year? back on friday there was an 80% probability that hedge fund futures would move in june. in terms of what it looks like on a calendar, all the fed meetings until december 2022, yellow bars indicate when rate hikes are expected to take place as of right now. the first one in june, and next year, that's a different conversation. ou're looking ad # óíyg"8:changes for a six monm. it takes us to two rate hikes by the end of next year. bloomberg economics really put it forward with superb graphics. we've gone from a lot of supply
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to a lot less supply in terms of measures supply across the board, and across different measures. this is pushing the price down. haidi: just a preview of some of the new messaging we could expect from the fed. a cautiously upbeat turn, let's get more on the numbers. it was expected to lead the profit surge. what did we learn from this? >> both hitting numbers that beat across the board. it was really a story of growth and wealth and comfortable, landing performing ready -- really well. it's about a recovery in credit card use as well.
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we had those great third-quarter gdp numbers and your hearing that from both of these banks. ultimately they see a pretty good outlook from here but of course the caution is still from the pandemic and the fact that singapore has been through a rocky road in terms of trying to reopen, having to take a step back and closing down again. they are very aware if anybody is of just how heightened those risks are. they want to caution on that side while giving a pretty decent set of numbers that investors will be happy with. shery:j֖ how much will it help that global central banks are starting to cautiously tighten policy? >> of course there are many advantages for banks across the world as we get into the next stage of the cycle for global central banks as interest rates start to rise. i've seen in the last few weeks
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where we've had pronounced moves in bond markets, especially at the short in. you do have a situation where markets can get ahead of themselves. they have to rein back those expectations and ultimately no one thinks that in a short space of time it's a gradual increase. in terms of how lenders can benefit from that, since rights having to react to it shifting down again. you would've thought it's a picture of an outlook that is gradually improving. haidi: let's get you the latest when it comes to vaccine development. we heard the way has been cleared for children 5-11 for the pfizer shot.
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the pfizer chairman and ceo told bloomberg that current estimates are based on existing contracts. >> it's a very big part of our quarterly earnings. for the whole year, pfizer gave guidance of a little more than $80 billion of revenue. >> as i understand you are increasing your projections on how sales will do from covid-19. going into next year it represents 1.7 billion doses, but you have the capacity+pbb to produce more than that. is there an upside there? >> as we speak, we are negotiating with a number of governments.
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this $29 billion, $1.7 billion will be delivered next year. projects have been signed but they are noncommittal. the point i wanted to make was that most of the discussions right now are with middle and high income countries. i will urge once more lowering middle income taxes for 2022. the first six months of 2022, i wanted to go everywhere, but i want them to listen to orders. >> how do you allocate?
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no doubt you are over subscribe. you have more interest than you can honor in a given month are given quarter. do you take into account the incidence of covid in the country per capita? >> we are taking inventory of how many doses we have and who wants to get them. they are able to do 3 billion this year and 4 billion next year. if all the orders are placed as is happening right now by high-ranking members of congress, but if they embrace all this now, we will honor them. >> no ceo ever thinks his stock is fairly priced, but as the market fairly appraising right
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now, given your very strong position, you seem to have some comparative advantage. do you think the markets gave you the full credit? >> no, i don't. i think it is undervalued right now but i think the markets, the previous one they want to see. there are? 's and their own more and more products in the pipeline, i think this will be filled. shery: the pfizer chairman and ceo speaking with david westin. if you missed any of those conversations, you can watch us live and dive into any of the securities are bloomberg functions that we talk about, plus become part of the
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conversation by sending us instant messages. this is for bloomberg subscribers only. this is bloomberg. ♪
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haidi: a quick check of the business flash headlines.
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saying it will play aíf big role in the adoption of electric cars in the u.s.. the stock more than doubled on tuesday, bringing -- avis didn't disco -- disclose, executive said it doesn't mean they're not doing potential deals. a rocky path to public progress. after pricing at 90,000 per share, raising $1.3 billion. it's seen as a litmus test for investor sentiment in south korea. don't miss our exclusive interview with the cfo on thursday. 10:30 in the evening if you're watching out of new . that's it for "daybreak: asia." our markets coverage continues in showing -- hong kong and
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shanghai. this is bloomberg. ♪
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♪ yvonne: 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i am yvonne man. david: and i am david english. let's get to your top stories. awaiting word on the timing and the pace of tapering from the fed as it gets ready to scale back its massive asset purchases . yvonne: japan's economy is

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