>> a good morning. we are counting down to major market opens. >> welcome to "daybreak: asia." u.s. stocks extend record highs, the bond curve steepen's, after the fed is in no rush to raise rates. a geopolitical showdown, as washington demands loyalty keep a lid on inflation.

plus, why masayoshi son is struggling to keep partners happy, while many had for the exits. >> the start of trading in sydney, the staggered open for the asx 200, very little change, a 10th of 1% higher, this, as the fed saying they would be patient as they can on inflation, if needed. asian stocks broadly looking to see gains on the back of new record highs for u.s. equities, after that expected tapering plan was unveiled. stocks looking flat, kiwi stocks flap, chicago coming back online after the holiday. 3/10 of 1% higher for the future session. s&p futures look set for further gains, a 10th of 1% higher. >> you said it. we saw the fed releasing policy, that commitment towards remaining accommodative.

it seems markets were happy with that. they gave their approval with the s&p 500, all indices closing at record highs, something we did not see since 2018. treasury yields looking like that, given the curve steepening, also we saw yields rising to session highs. not to mention perhaps that statement, the market not entirely confident, but jay powell trying to differentiate the tapering does not equal rate hikes. >> as most parts of the world start to live with the virus, china's commitment to covid zero being tested, the latest outbreak has been the most widespread in terms of the number of provinces affected, since the original outbreak in wuhan. locally transmitted infections,

more than 600 found across 19 out of 31 provinces. we have seen increasingly aggressive measures from officials. we have heard visitors contained within shanghai disneyland, schools containing students while they get tested from after outbreaks. 93 local cases reported wednesday. that does not sound very high, compared to lots of places around the world that are living with covid, even with higher infection rates. we know china is sticking to that covid zero policy. >> it is something global central banks have to watch, as we see new variants of covid-19. it is not something behind us, as of yet. the fed taking all of this into consideration, considering the economic growth outlook for the world. let's discuss the latest meeting with our bloomberg global in

economics editor, kathleen hays. jay powell saying it is time to be patient, but some worried he is making mistake? >> yes, inflation is rising. bill dudley just brought up a question in the last hour. inflation gets higher, and expectations entrenched, and it gets harder to get inflation to a stable level, and even lower level, but again, he stressed patients, optionality, and was clear. he expects inflation to be transitory. he says some people have problem with that word. he says it will not have a permanent impact on the economy, something he thinks will go away , but he does agree it may last longer. in fact, it may last well into next year. he also stressed this is not your traditional phillips curve inflation could this post-pandemic inflation.

he said a lot has to do with the price constraints that create a lot of uncertainty. >> it is difficult to predict the persistence of supply constraints or their effect on inflation. global supply chains are complex. they will return to normal function, but the timing is uncertain. >> he also repeated something the fed has been making clear for a while, just because we are tapering and would do that $15 billion a month and get to the end of the taper by june, it doesn't mean we will walk through the rate hike door immediately. he said if we have to, we can speed it up. if inflation states,, week get worried -- stays high, we get worried, we could speed it up or slow it down, so he wants to leave it since that we are watching the data, new economy, and another important point was he once the labor market to improve more before the fed starts thinking about raising

interest rates. he was asked, how do define full employment? he did not give us a definition, just employment was lower before, and he feels they can make more progress. a lot of fed officials have been talking about more jobs for minorities, for women, these are the unemployment rates the fed wants to see lower. interesting to me that people i have talked to say this was not a big, dramatic moment. he did not break a lot of news, even though the markets loved what he said. it is giving us a sense, at least for jay powell, what he feels now, and that we will sit back. we have eight months to watch the economy. when we get to july, we will know what we would do or not do. >> kathleen hays, a summary of all the overnight action. let's get you to vonnie quinn for first word headlines. vonnie: thanks. central banks. christine lagarde pushing back

against a rate hike in 2022. she says such expectations are inconsistent with the ecb analysis. she did not call it wrong, reflecting an agreement that doing so could backfire. the ecb will face crucial policy decisions in december, when new forecasts become available. >> in our forward guidance on interest rates, we have clearly articulated the preconditions that need to be satisfied before rates will start to rise. and despite the current inflation surge, the outlook over the medium-term remain subdued. and thus, these preconditions are very unlikely to be satisfied next year. vonnie: opec-plus meets thursday, as they weigh u.s. demands for more oil. the white house is worried that inflation caused by high energy

prices could derail its agenda. u.s. diplomatic pressure has been supported, but key cartel members say they should stick to the current plan of adding 400,000 barrels a day of supply each month. india has made its biggest cut to fuel taxes to boost consumption and keep inflation low, coming after the inflation increase to record levels. the government had previously resisted it, despite the rise in prices this year. negotiations to revive the iran nuclear deal will resume in vienna on november 29, ending speculation over whether world powers and a new government in iran could commit to resolving a standoff that has brought iran in the u.s. closed war. there may be our horizon for the removal of sanctions on iran and its return to oil markets. 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. >> one u.s. assessment by the pentagon says china's nuclear arsenal is expanding more rapidly than believe. report comes after china conducted hypersonic missile tests, in addition to increased tension between beijing and washington over taiwan. let's bring in stephen engle out of hong kong. what do we learn from the report out of the pentagon? >> the annual report to congress is saying the capabilities, the nuclear capabilities are expanding faster than previously forecast by the pentagon. they are saying by 2030 that china should have at least for more than 1000 nuclear-capable warheads in their arsenal. in addition, the report cited three silo fields being

constructed that are capable of containing hundreds of new icbms. china has accused the u.s. of overhyping the threat posed by the modernization and says there nuclear buildup is purely defensive in nature. still, america has been ramping up some rhetoric as well. we had the highest ranking uniformed military officer, general mark milley, in an interview last week, saying china's test of hypersonic system was close to a big moment for the u.s. hypersonic capabilities would be allow missiles to be used around the south pole, avoiding the anti-missile systems of the u.s. china has denied it is for military purposes, but while the pentagon says china may have 1000 or more than 1000 nuclear warheads capabilities by 2030, right now, it pales in

comparison with the u.s. has with more than 3700 nuclear warheads. >> what is the latest on that ramp up rhetoric over taiwan? >> this is an interesting story. when you stir the pot, and i'm not saying any one side of this dispute is stirring the pot more , but we have heard increase rhetoric from china, taiwan, and the u.s. surrounding the conflict across the straits. we have seen more incursions into the air defense own of taiwan by china in recent weeks, so stirring the pot, a lot of speculation starts to emanate, and that is what happened on social media in china. there have been tens of millions of posts in recent days speculating that based on recent statements coming from state media, the ministry of commerce about stockpiling daily necessities, as well as potential reports of increased military movements in china,

there is a report in taiwan about people stockpiling necessities, so there has been increased speculation that some sort of conflict is imminent. state media is coming out and saying back off. these are supply chain issues. this is why the ministry of commerce issued these directives or encouragements to chinese citizens as we approach the winter, stock up at home, but a lot of people on the chinese internet have been reading it differently. that is why we had a statement from one particular state media urging the public not to over, that statement about stocking up. >> our chief correspondent. still ahead, japan's economic recovery prospects with the am cham chair. next, the former atlanta fed president joins us to discuss the outlook for jobs and rates. this is bloomberg. ♪

>> let's delve into the fed decision it would taper out said purchases in november and remain accommodative. let's bring back kathleen hays, alongside our special guest this hour. >> thank you. joining us now from a former atlanta fed reserve bank president. it is great to have you with us. i know you were focused on every single word out of jay powell's mouth today at the press conference. he doesn't sound like somebody who is joining the camp that let's get ready to raise rates in july as soon as the taper ends. did you come away with the same impression that he may be looking at 2023 or 2024 for the

first rate hike? >> we don't know what his views are. it will be the outlook as of midyear next year, not today, that probably dictates was a rate rise occurs. i thought he was very, very evenhanded, and it was clear he wanted to communicate that the committee is positioning itself in order to have a lot of options and be able to respond to whatever evolves in the economy, so i thought that message came across very effectively. >> we want to run something for you from the chief investment officer for guggenheim. he is in the camp, and i think more people that think maybe the fed will wait too long and inflation will get out of control and there will be a policy mistake. let's listen. >> we are setting ourselves up for a policy air. there is no -- there are --

eroor. there is no way there will be a policy that will ultimately be perfect and not because some sort of interruption to asset prices or something else that would be destabilizing. >> how do you respond to that? >> well, i, i understand there are people concerned about policy errors. a policy error is sustained for a long time, really wrong and out of sync with the underlying reality for a long time. it was clear in the press conference today that the committee and chairman powell are ready to move when they get an indication that something is wrong. i doubt you are going to see something actually get out of

control or get out of hand, and people talk about hyperinflation, spiraling inflation, it does call for an explanation of what exactly are the drivers of that, and at the same time, is it likely the fed will be in the dark and not pay attention and stay on hold? none of that strikes me as likely, so i'm not totally in agreement. >> at a time when the labor market still seems to be constrained by people afraid of going to work in getting the virus, or they have retired, or they have saved enough money and moved to the country and don't want to go back to the office, does that mean if jay powell and his colleagues say they have to see a much lower unemployment rate before they consider raising rates that they could be

stuck in the comes still worried about inflation not being high enough, and maybe wait a little too long? >> it is possible, i suppose. the employment objective is not something that is readily observable, not a number, per se, not the unemployment rate alone, it is a number of different pictures of the economy, and as jay powell mentioned today, it is like a synthesis. they looked at a variety of things, then make a judgment call. they could define maximum or full employment at a higher unemployment rate then pre-covid , and at a lower participation rate. i don't think they are ready to do that yet. they seem to be oriented trying to create the conditions of january 2020, but maybe we are

in a different labor market and they will define it differently. if that is the case, it may not take long until they get to a point where we have largely achieved our maximum employment objective. >> let me ask you about the definition of maximum employment. some economists are talking about the first rate hike was it is 6%, or how inclusive could that definition get? >> i think this committee, you can read that from the strategy statement issued last year, is very much looking at data on the unemployment rate, participation rate in such of individual cohorts in the economy, minorities, women, and one team to create the conditions in which those groups are actually

enjoying the best possible employment conditions, so the inclusion or inclusive word in their strategy statement, i've read a lot into that and i think that is very much on their minds. >> how do you read into the fed's inflation view and how nuanced it has become when were talking about transitory? >> a few months ago, you could say they had a simple message, that this too will pass, that elevated inflation will come down, and now they are communicating, as you say, a more nuanced message, that it is a more complicated set of factors at work, and at the same time likely to take longer. i think they have updated their view and recognized it is not as simple as the message a few months ago, but again, they are

adapting to the evolving circumstances, and doing that quite well. >> if you were on the committee right now, how would you be positioning yourself? what would your argument be? going into this, there are a lot of different views and some people ready to start hiking quickly because they are worried about inflation, and why keep the key rate at zero anyway, when employment is 4.8% in the economy is still growing? would you be in that more cautious camp with jay powell or would you have questions about maybe going to slowly yourself? >> if i were on the committee today, i would support the policy positioning as it exists today or as it was presented today. i would be arguing we should keep our options open, that the conditions the committee faces or is confronted with in the spring and summer of next year

are a bit unpredictable, but could call for an accelerated rate hike, but may give enough space to pursue unemployment objective. i don't think you can know now, so i would be supportive, but basically saying let's get ready for any number of different possible scenarios. >> dennis lockhart, thank you. it was a great conversation. if you want to find out more about the fomc and other stories you need to know to get your day going, bloomberg subscribers go to your terminal. those are available in the anywhere app. you can customize your settings so you only get the news on the industries you care about. this is bloomberg. ♪

>> at the talks in glasgow, thanks have pledged to meet the goals of the paris agreement. the alliance is champion by mark carney, and the group says it has attracted 450 firms representing $130 trillion assets and we use science-based guidelines, but activists are not convinced. they interrupted the discussion with an attack on what they call greenwashing. >> yeah, there is a lot of skepticism, but when it comes to those key figures, especially

with net zero commitments, they seem to be increasing. were talking about countries that account for two thirds of emissions with a net zero target, 80 9% of global emissions being accounted for. the skepticism would be what would net zero emissions targets mean when they could be faking their needs to be policy to support it? the headline number looks good, including china aspiring to do so by 2016. >> the greenwashing allegations are these companies mandates are more talk than commitment. this is what china had to say when it comes to the criticism they were not physically in glasgow this year. >> >> [speaking foreign language] translator: what is needed is concrete action. china's response to climate change is concrete. china is staying constructive

and working with the international community. >> also saying that president trump's withdrawal from the paris agreement was more harmful.

>> this is "daybreak: asia." first word headlines. the first democrat in more than four decades to win a second term as new jersey's governor. the narrow win for a party reeling from the laws in virginia. he could face a recount after overcoming a strongly for the republican candidate. donald trump -- the pentagon says china is

expanding its nuclear weapons capabilities more rapidly than previously believed. they say beijing may intend to have 1000 nuclear warheads by 2030. they are planning construction of silo fields that could include hundreds of missiles. report says china is growing its delivery platforms on land, sea, and air. china is seeking to silence online rumors that conflict with taiwan may be imminent. barb's between washington and beijing are feeding concerns. posts have been circulating online. other reports include taiwanese people allegedly hoarding survival supplies per the white house organization granted emergency authorization to a vaccine developed by india in biontech, ending the weight that

added to controversy around the homegrown shop. meanwhile, hong kong has approved booster shots to high-risk group starting november 11, including people over 60 and those with weakened immune systems. 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. >> more on central banks, the ecb president christine lagarde dampening expectations for rate hike next year. >> in our forward guidance on interest rates, we have clearly articulated the three conditions that need to be satisfied before rates will start to rise. and despite the current inflation surge, the outlook for inflation over the medium-term remain subdued. and thus, these three conditions are very unlikely to be satisfied next year. >> our global economics and

policy editor kathleen hays joins us. markets don't seem to be believing her. why? >> mainly because inflation continues to rise, and as much as jay powell has explained why he thinks inflation will be transitory, even though he thinks it will be higher, christine lagarde is challenged by the same thing. last week, she already pushback. the forward guidance was seen as weak, perhaps other councilmembers she should not make it, so they sent convinced they know exactly what will happen with inflation, but we can look at this bloomberg terminal chart and see how much inflation has already risen. it is well above the ecb target, and it does not show any sign of coming down yep, so that is why people are betting it will stay high and force christine lagarde and her colleagues at the ecb to move to make that, this is the key

inflation rate, which is not exactly what we are getting from the ecb. if we showed that one, you would see it looks the same, but it is also interesting that within the ecb, there is a debate with one governing council member who says he does not see any reason they will have to raise interest rates next year. he is convinced inflation will come down, and there we go. in fact, you can see now that the breakevens, the turquoise line, has not gone as high as the inflation has come so not surprising that traders are convinced the ecb will have to start raising rates sooner than christine lagarde things, when you see how far that white line, which is the actual inflation rate, has gone to but even though he thinks inflation will come down, another ecb governing councilmember, who is from slovenia, is getting worried that may be prices will become entrenched.

central banking is an art and science. it is something done around the world. we are hearing similar themes, aren't we? it looks high now, but as pandemic forces tail off, we will see inflation come down. the debates within the central banks and among the investors watching them. it certainly puts a big question in focus. >> let's talk about the bank of england. what is complicating is the lack of visibility on key labor market data. does that mean hikes are on the table? >> it depends on who you ask. economists are divided. the governor of the bank of england has been signaling an increasingly hawkish view that inflation is rising and so high it will stay so high that it is time to make a rate hike. 0.1%, and they're only looking

for a 15-point basis point hike. when the central bank raises rates, it makes waves and markets. what's happening is the official data on what has happened to the workers who were furloughed, how many, what kind of cross, that is what they don't know. that report is not going to come out until november 16, 12 days after the central bank announcement, which is thursday, just hours from now at noon in london. they have to make the decision now, so that is why there is a debate. there are two new members of the bank of england who have been more dovish, more willing to wait and see what happens to inflation, unlike the hawkish ones who think the time to act is now, so that is unique, definitely an idiosyncratic view on what is complicating things for the bank of england. again, you can see the key

inflation metric as well above 2%, but that'll question of inflation expectations, they have gotten higher in the u.k. as well, so that is what they are grappling with. it seems that people are split 50-50 now, they will move, hold steady. either way, one will win and one will lose. >> let's get a check of the markets, as asia digests nuanced messaging from the fed overnight. u.s. equities surging to record highs. some modest gains when it comes to trading in sydney, stocks up by 0.25 percent, as we continue to see some heat coming into the property market as well, so we are watching property developers with expectations that will continue into 2022. in new zealand, a lackluster session.

nikkei futures and singapore, looking like a positive return after the market was closed yesterday for the public holiday. s&p futures looking like wall street coming back online, potentially pushing yet more gains. >> right. we are seeing oil prices continue to fall, headed towards $80 a barrel, retreating on uncertainty about the opec-plus meeting about to take place, and the u.s. once the cartel to take swift action and boosting output. su keenan joins us more with more. what are we expecting? >> the potential for real political showdown. president biden has been pushing the cartel to boost more quickly the output, and has all but blamed the high prices on the cartel, but opec is unlikely to move away from its plans for

gradual monthly increases just because the u.s. is uncomfortable with gas prices politically. the latest trade on oil is lower. asia trading extending the big drop in the regular session. brent also falling in the latest session, right as we count down to this meeting, and the last couple of days of west texas intermediate in new york, there were some other factors, an uptick in the inventories, adding pressure, also word that iran talks are about to begin. that is also weighing on prices. they hope to end the standoff. let's get back to opec. if they rebuff the request in the latest meeting, thursday, virtually, we know he has the support of india and japan. he has been working behind the scenes. there could be a bare knuckles fight with the white house, which is invested getting opec

to heed their demand. joe biden said costs are high because "the refusal of russia or the opec nations to pump more oil." we know that joe biden has refused to speak with the saudi crown prince, who had unfettered access during the trump administration to the white house. that has not gone over well, so most analysts see opec-plus likely to stick with the 400,000 barrel a day tapering plan in place, in other words, to reject the plea of joe biden, and the exception could be a last-minute deal, iraq, kuwait, staying the course of the people close to the matter say the arm-twisting by the white house is continuing right up until the 11th hour. bottom line, a volatile week ahead for prices. it is not clear what the u.s. would do if opec-plus sticks to its course. it is not clear how much above what they are already putting out the biden administration is

asking for, so very interesting meeting ahead. >> we are also seeing the rising u.s. inventories, gasoline prices rising, not only in the u.s., but the u.k. as well. >> this was an issue in u.s. oil prices. the weekly inventory report, which comes out each wednesday show stockpiles rose for a second week in a row, reversing a recent course that added pressure on oil, although gasoline inventories fell to a four-year low in many parts of the country, and a seven-year low on the coast. we know u.k. gas prices rose to a record in october, a further blow to consumers hit by increasing energy cause. san francisco was the price city , $4.84 a gallon, all having to do with the high price of oil, according to the senior energy

official in the biden administration. she joined in blaming opec for soaring oil and gas prices, pointing out they are "controlled by a cartel." that cartel is opec, so the biden administration invested in this showdown with opec-plus. stay tuned. >> coming up next, we will assess the japanese economic outlook with the american chamber of congress. this is bloomberg. ♪

>> supply chain bottlenecks will abate, job growth goes up, and inflation will decline. we should see inflation moving down by the third quarter. if a response is called for, we will not hesitate, so we are watching to see whether the economy evolves with our expectations, and policy will adapt. >> jerome powell, tracking the fallout of the global supply chain crunch. top stories today, volvo sales plunged in october, as the company struggled with bottlenecks, with shipments to china and europe falling amid lack of available points.

2021 could become another tough year for automakers, but there is another sign the crisis is starting to ease, qualcomm gave a stronger-than-expected outlook for the current quarter and said it diversified suppliers to ensure access to input materials. still, electronics firms feel the pinch. nintendo producing 20% fewer consuls than plan. the company is struggling to get enough semiconductors to make the machines and meet demand. let's focus on the situation in the u.s., where the busiest ports are showing massive increases in idle time from 2018 through october this year, idle time has increased by half, according to data. so far this year, there is more than a days worth of idle time for each vehicle. of course, the bloomberg terminal users can read more

about the stories in our newsletter. >> let's talk about how businesses in japan are faring with the global supply chain disruptions. a special advisor to the american chamber of commerce joins us now. great to have you with this on bloomberg television. what are you hearing from your members and your colleagues about the impacts of these supply chain and logistics issues and their impact on business? >> well, they are having an impact, particularly on exports from the u.s. of key goods, particularly in one sector. japan is one of america's largest global markets for a wide variety of products, and the supply chain shortage in the chip area is having an impact. i think everyone hopes that can

be, if not resolved, at least ameliorated in the months ahead, but clearly we are in for a difficult spell. >> it is not just the movement of goods and services that we are seeing with this crunch, but the movement of labor, talent as well. are you optimistic that we will see loosened quarantine requirements and the ability for business to be conducted in person, across borders in japan again? >> you have seen over the past couple of days reports that the japanese government is preparing to change its requirement for entry, and from a business perspective, one of the key changes will be that business travelers will be allowed for the first time in many many months into the country for shorter-term visits and for exchange of personnel. that will be key to help japan

restart its economy, because it's relationships globally with customers and suppliers is critical to japanese economic success. >> how optimistic argue about the cooperation with the japanese government, now that we saw that stronger-than-expected elections victory for the prime minister's party? >> the victory of the ruling coalition actually cheered the markets considerably. you saw the nikkei take a substantial jump the day after. i think the market here is expecting the new prime minister will pursue his pledge to enact a further stimulus, or set of stimulus measures to help the economy recover even more quickly.

so from that point of view, i think the election results are going to be supportive of the economy, certainly in the near term. >> here in the u.s., we have seen the government put in efforts to open up ports 24/7, conversations with business leaders and chipmakers to help with the supplier line disruptions. what level of eagerness and effort have you seen from the japanese government is trying to smooth over these problems? >> supply chain diversity is one of the key elements in the ongoing dialogue between u.s. and japanese policymakers, as you have no doubt heard. japan is in the process of supporting a major investment from taiwan's top chipmaker in a

new facility in southern japan, so the japanese take this very seriously. on ensuring -- shoring is an ongoing effort, and the government is encouraging producers to do that. a senior official, senior officials were discussing how they wanted to ensure that japan was a linchpin in the global supply chain, where it is strongest and can best support its friends and allies, so the japanese absolutely are taking this extremely seriously. >> as always, great having your insights about everything happening on the ground in japan , special advisor for the american chamber of commerce in japan. thank you. softbank group is preparing to

make its first distribution of profits to employees at the vision fund in december. however, the approach to compensation is contributing to a stream of defections. let's get more from our asian tech reporter. so millions of dollars to be handed out, but many people unhappy. what is going on? >> morning. actually, masayoshi son, the founder of softbank has struggled with how to incentivize his vision fund, which he set up in 2017, from the beginning. for a while, he flirted with a $5 billion credit line to management, allowing people to borrow money to take equity stakes, which, the id fell apart with the we work ipo in covid. so what he settled on is a seniority-based structure, where everybody from vice president up will get a predetermined cut of the profits, which we learn will

range between $100 million to $150 million, to be paid out in december, one of the first installments of profit, net profit. this is on top of something else, which is not terrible at all. mid-level staffers get about $500,000, and $700,000 or more for experienced people. that sounds pretty good. the reality is in venture capital, the big-money is in the carry, the share of the profits for the biggest investments, which typically could be 20% of what is being paid on two partners. you take a deal, like one that netted $10 billion, a small group of investors could be

making nine-figure bonuses from something like that, and that $150 million does not sound like much, and quite a few people are unhappy and believing. >> he also took a personal stake in vision fund two, right? >> that's right. about a 17% stake, which he, with his own cash, which he borrowed from softbank group, not only that, he is also rearranging the composition of vision fund two, and actually, not something that has a parallel in the venture capital industry. people will be rewarded on a deal by deal basis, depending on their contributions, but also the upside will be severely capped. the structure incentivize people to work alone and share as little as possible with their partners, which raises questions

whether the vision fund will be successful in the future. >> our asian tech reporter with the latest on softbank. plenty more to come on "daybreak: asia." this is bloomberg. ♪

>> let's take a look at the open in japan and korea.

nintendo has cut its switch target by 20%. investors are debating whether the console has reached its peak. there expecting profits would dip in the second quarter 17%. jal is forecasting a $1.3 billion net loss. we continue to see the impact of the ongoing pandemic and travel restrictions, although japan is slowly reopening. one corporation missed its operating profit in the third quarter. the number coming in at 168.1 billion yuan, a 40% gain, but still below analyst expectations of more than 200 billion we are watching closely, and now we have a big interview coming up.

up. -- coming up. don't miss our interview coming up. this is bloomberg. ♪

sherry: welcome to "daybreak: asia." i am shery ahn. >> our top story this hour, the fed signals it is in no rush to hike. malaysia central bank pauses its benchmark rate. we speak with the finance minister.

plus, how the evergrande defect is blowing up one of the world's most lucrative bond bets as china's junk rated that slides from boom to bust. sherry: japan and south korea are coming on the line. we have the nikkei gaining more than 1% at the moment. almost every sector is in the green. utilities, consumer discretionary stocks leading those gains. the communication sector is under pressure. the japanese ian rallied before japan went away for the holidays that stayed rangebound around 113, 114 level. we have the fomc decision. they are staying accommodative so that would play into the markets. we have been watching the yields very closely, because we had that huge rally when it came to global benchmark yields at that shorthand. we will continue to watch jgbs today. every sector is in the green.

tech, materials, industrials leading gains. we have the korean won under pressure, falling to a two-week low. against the u.s. dollar. seeing a rebound, investors have turned cautious ahead of the fomc. now that is done with, we will see how investors continue to watch them markets. and more global central bank rules, haidi. haidi: yes, take a look at one hour of trading and how that has laid out when it comes to the sydney stocks. asx 200 holding onto gains. investors reacting to similar telegraphing out of the fed. aussie dollar 0.3% higher. the kiwi is stronger but we are seeing the lag continue

when it comes to equities trading in new zealand. over next guest says he remains optimistic about current valuations. let's bring in the asia equity portfolio strategist. we have seen record high after record high when it comes to trading in the u.s.. what is going to be the next driver, particularly when it comes to momentum in asia? >> the fact is that a lot of investors were waiting to see what would happen with the fed, and specifically now, trying to focus and see well here at year end, how things will be falling, especially with asian economies opening up from covid. a lot of investors taking a wait and see approach. but with valuations, the fact is that most asian equity markets right now are trading substantially cheaper than the u.s.. we think it is time for investors to look at everything

of the whole -- as a whole, to look at which markets might be providing more growth and where valuations are more attractive. we believe investors will look at asian equity markets again. haidi: what about the supply chain and the cost pressures? where do you see a discrepancy when it comes to companies that have to contend with that and which ones will be stronger going forward? ken: it will be important to see whether this inflation pressure will continue to last especially in asia. we are seeing pockets here and there of inflationary pressures but nowhere near to what we are seeing in the u.s.. for instance in places like china, while ppi has been up slightly, when you look at cpi inflation, prices as a whole have not skyrocketed as far as

ppi. i think a lot of companies are willing to see specifically what will happen over the next six to -- three to six months, whether inflation is here to stay or if it is very much a short-term correction from the whole supply and demand shock at the moment, then i think companies will start to act to see how they can counteract these high inflationary pressures. shery: we have breaking his at the moment, we are hearing that china evergrande's automotive unit is nearing a sale of u.k. startup protein electric. this divestment by china evergrande could be announced as soon thursday. the deal could help bedeo, which supplies car technology. sources have told us they are planning to sell that protean

unit in order to shed assets and fix the liquidity crunch. we know that evergrande bought protean in 2015 for $58 million as part of the deal they had in a push for vehicles. but with billions of dollars in liabilities, the company is trying to sell assets in a bid to raise cash. ken, let me just asking about the chinese market. we have seen a huge selloff given the concerns in the property sector, given the tech crackdown and so forth. what is a long-term investment prospect for this market when some people are saying that perhaps it is an investable, we don't know what could be coming from the chinese communist party next. ken: we know that the new political powers, will come in. given some of the weak economic

numbers that we have seen over the past couple of months, be it a weaker than expected third-quarter gdp, production numbers lower than expected, we have seen economic activity slowing from the result of whether it be crackdowns or some of the energy shutdowns as well. so as a whole, we believe that because potentially 2022 gdp might have to be down back down a bit, potentially some of these crackdowns and things that have been going on, whether it be within the energy sector as well, could potentially be solved. when we look at it from a valuation standpoint and from where markets have sort of underperformed this year, it very much has been the china market. with valuations going back down to a more attractive level, we believe investors, from a medium term to long-term perspectives, should look at a chinese stocks once again. sherry: what happens with the diverging monetary stocks,

especially with the pboc being more supportive of the economy -- not being as supportive of the economy as other central banks have been? ken: we feel that could change as well. the fact is that the chinese pboc might have to be a bit more accommodative. they are to some extent. we have seen how the 10 year government bond has decreased a bit. he also have to realize that the pboc does have to work with the party. they have to report to them. so as a whole, what is important is to understand specifically the overall direction as to what china will undertake. and they are a growth driver. if the push for gdp continues here at 5% or 6%, the pboc will have to be more accommodative for china to achieve that.

having a high gdp reading is important, because middle-class families really rely on a strong economic growth in order to continue to prosper and push for consumption. shery: can long, asia portfolio strategist at eastspring investments, thank you. let's get vonnie quinn with the first word headlines. vonnie: thank you. opec+ meets thursday as saudi arabia, russia and their allies weigh u.s. demand for more oi the whitel is word that high energy prices could derail its economic agenda. key cartel members, including iraq and kuwait say they should stick to the current plan of adding 400,000 barrels a day of supply each month. india has made its biggest ever cut the fuel taxes to boost come some shut and keep inflation low, after prices at the pump increased to record levels,

threatening a rebound in consumer sentiment the modi government had previously resisted cutting levies on fuels despite a 60% rise in prices this year. the pentagon says china is expanding its nuclear weapons capabilities more rapidly than previously believed. a report to congress says beijing may intend to have at least 1000 nuclear warheads by 2030. it cites construction of three silo fields that could contain hundreds of new intercontinental ballistic missiles. the report says china is growing its nuclear delivery platforms on land,, and air. . phil murphy has become the first democrat in more than four decades to win a second term as new jersey's governor. his narrow victory is some consolation for the party, reeling from a loss in virginia. the former goldman sachs executive could still face a recount after overcoming a strong early lead. the close race may reflect republican party resilience after donald trump defeat last year. 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. this is bloomberg. haidi: still ahead, a big interview. we will be speaking with the malaysian finance minister about reopening the country despite fresh covid outbreaks. next, an analysis of the fed's comment, with a growing number of people saying that jay powell could be making a policy mistake. this is bloomberg. ♪ ♪

shery: the big news from the federal reserve was not that it is starting to taper bond purchases, it was jay powell's reassurance that he is in no hurry to raise rates, even with high and rising inflation. our economics policy editor kathleen hays is here with us. really making that different

clear that tapering does not mean higher rates, not right now, at least. kathleen: exactly. and as dennis lockhart just told us the last hour, the former president of the atlanta fed, it is important what they see now whether they will raise rates. eight months of taper will put them squarely at the end of june. by july, that is when they are most likely to have to make a decision. powell did say that the fed can be patient and rates. that something is going on. if inflation speeds up, they can act. he still sees the inflation surge as a transitory, although lasting longer. as long as it doesn't leave inflation permanently high and rising, he can only end say it is transitory. that is how he is defining it. so a lot of questions at the press conference about the supply chain blockages. even the labor market.

there seem to be a lot of demand for workers in the u.s. and not enough people who want to go back to work. in particular with the supply chain, he said that is where the big drivers of inflation is. but this is another puzzle for the fed too. let's hear what he said. >> it is very difficult to predict the persistence of supply constraints. global supply chains are complex. they will return to normal function, but the timing of that is highly uncertain. kathleen: another important thing he stressed today is in many different ways, he wants to see the labor market improve further, get an implement even lower before the fed starts down to separate-hiking path, a reason to be patient. he thinks that is possible, and apparently as long as inflation is starting to come down next year, he is willing to stay there. some people think mistake made, they have a new framework which

locks them to inflation above 2% and staying there which, instantly doing that, but also maximum employment. he was asked and he cannot exactly define it, but it seems he is sticking to that framework -- it took two years to put together -- we want to make sure inflation is not too high, but you also want to make sure the labor market is healing. haidi:. haidi: what are the risks here? kathleen: the risks to me -- scott minerd has said it again, he has been worried for some time, chief investment officer of guggenheim, that the fed will keep rates too low, and then the fed will have to keep hiking faster. bill dudley, the former president of the new york fed, has been raising the issue for a while. and in an op-ed today saying, the market is misjudging just how much the fed will end up having to raise rates. for a lot of people, that is the risk. that is why you get back to your inflation forecast. if you're in the camp that says,

bond investors and journalists are making too much of inflation, the pandemic will cool down and inflation will go away, if you are in the camp that is still worried, that is where you see that the fed may be fighting an old war instead of looking at the new one, that it will stay too high for too long. shery: our economics and policy editor, kathleen hays. haidi: some are wondering whether the fed is making a big mistake it comes to being to patient on inflation. the former new york fed president and bloomberg opinion's columnist bill dudley did speak to us earlier and said the fed has to do more. >> obviously, if the inflation pressures do turn out to be transitory, than the federal reserve has more time. there actually is more slack in the labor market, then we will be fine. we just don't know the answer to those questions at this point. the important thing here is, the

federal reserve is making it a choice to really strive to find the maximum level of employment consistent with their inflation objective. by doing that, there is a risk that they will be late. ken: how would the bond market take it if suddenly jay powell was to say, we will speed up the taper so we can get to the rate hike faster? would that cause the disruption they have been trying to avoid? >> absolutely. that is the reason why the taper is locked in stone. i would be surprised if they sped it up or they slowed it down. he made it clear today in their communications, not only did they announce what they would do for november, they announced what they would do for december, and they made it clear that they could vary the pace if conditions changed, but that is not likely. we are on a path where the fed has basically eight months to assess the inflation outlook, assess the state of the labor market, and depending how that plays out, whether they will sit on their hands instead of raising short-term rates, or

whether they will have to move in the second half of 2022? kathleen: as an economist, what is the likelihood they will sit on their hands that long, and that inflation will prove to be transitory and this goes as smoothly as they are hoping? >> that is their view. in their statement today, they softened their views. before they said it was transitory factors. now they deem it as a factor that they expected to be transitory. there is slightly less confidence in how transitory these factors are. the key at the end of the day is not whether information is transitory or not -- whether inflation is transitory or not, but does it get into wages. the data is concerning. wages have not accelerated more than is consistent with 2% inflation. and inflation expectations by some measures are starting to show some upward pressure. but we will see how this plays out. the good thing from the federal reserve's perspective is they have months to make a well considered choice in terms of what's next. haidi: in the meantime,

supply-side issues continue unabated. how difficult is it modeling a policy response, when this was quite unexpected and there is concern that there are deeper structural issues as opposed to just coming out of the pandemic? >> i think the federal reserve thinks these are pressures that will turn a temporary, even if temporary lasts longer than what they previously thought. there was a number of things the pandemic did. number one, it shifted demand away from services to goods. you discourage people from working because of fears of getting sick. then you have the big reopening of the economy, as the incidence of covid diminished, and the severity of when people got sick diminished as well. so this is a pretty big adjustment that the economy is going through, and it is not surprising that there are frictions. what the fed is basically saying that we expect there are a lot

of frictions. shery: former new york fed president and bloomberg columnist bill dudley. officials want to purge financial excesses from the property sector, leaving investors bracing for more pain. our china editor rebecca choong wilkins joins us now. it was a great story. but i just want to ask you about this breaking news just minutes how significant is it that evergrande's auto unit is nearing the sale of that u.k. startup protean? rebecca: ultimately, all of evergrande's efforts to raise cash are being closely watched for traders that may have made bets that coupons would be paid out in the next three or four months, they are probably breathing a sigh of relief that it looks like evergrande is able to raise some cash. in the broader scheme of things,

in terms of the 300 billion of liabilities, this is quite small fry, ultimately evergrande needs to raise much more cash in resolving that. it is worth looking at whether or not we are seeing the acceleration of small deals, small amounts of assets that are being sold or cash that is being raised, because i think an acceleration of that could suggest we are closer to a possible restructuring that evergrande. haidi: so the fundamental question is really, why are we seeing china to up such a big out of this financial market? rebecca: it really has been quite an extraordinary story over the past five months, thinking back even to last year when authorities introduced the three redline metrics. we seemed very robust and important means to strengthen the markets.

since then we have seen all forms of tightening measures on the property industry, things like trying to dabble with mortgages and escrows and things like that which have made it very difficult for the property industry itself to continue producing the types of profits and sales that it has. alongside that, of course, the authorities' mission to curb access debt and improve financial discipline in the data markets has added strain onto the market we think. about evergrande, that is just one small part of the story. the much bigger picture is that the majority of the chinese are premarket, particularly when it comes to the high-yield borrowers, are all feeling signs of stress. there are many borrowers whose balance sheets three months ago looked robust. now there bonds are trading anywhere between $.30 and $.60 on the dollar. haidi: our china credit editor, rebecca choong wilkins there. plenty more "daybreak: asia."

, like, this is bloomberg. ♪

haidi: uber is poised to record a loss of $3 billion in its stake in didi. let's cross to our global tech executive editor in san francisco. despite this, didi remains the most vulnerable equity stake for uber in its portfolio? >> you remember, this was uber's way of retaining away in china when it effectively got out of the country and called a truce with didi. it took a steak. so it wanted to have a way to remain exposed to what was there in a very important market for

ride-hailing and still continues to be. but obviously things changed dramatically just after didi went public, when china started making changes in the way -- demanding changes in the way that didi operates along with so many other technology companies. so the strategy that uber engaged in of taking stakes in other regions, giving itself exposure to other markets through equity stakes is really being called into question right now as a result. sherry: ride-hailing was really hard hit the pandemic. how is uber doing right now? tom: we will get a good sense tomorrow. we saw a couple of days ago lyft reporting its results and a much better than expected 70% rise in revenue. tomorrow? >> we are expected to hear? >> uber report is 60% increase in revenue.

a lot of journalists in wall street and investors are looking for more on the upside because of what happened with lyft. ride-hailing is coming back in force after the pandemic. moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at xfinity.com/moving.

haidi: we have september trade numbers for australia. the trade balance, 12 point two 4 billion australian dollars, close to the estimate of 12.3 8 billion. when it comes to export, they fell 6% from a year earlier in september. expectations, that is a steeper contraction than expecting, we were expecting if all of 3% and a contraction from the 4% gain we saw the previous month. imports month-on-month, if all of 2% against expectations of a

gain of 1%, also worsening the fall of 1% in the previous month. split it up when it comes to the retail sales picture for the third quarter for australia -- we saw that fall 4% quarter on quarter. slightly better than expectations. of course, all of this coming against the backdrop in that point where we saw a quarter of three muted retail and consumption activity both in new south wales,, and the lockdowns. shery: take a look at the markets. brought upside for the nikkei and the kospi. the nikkei playing catch up, app more than 1%, being led higher right now by information, tech, health care, and materials. a bit of. pressure for consumer staples and communication stocks. japan's pmi services number, the final data point is coming in at 50.7, which is in expansion

territory for a second consecutive month. the composite number as 50.7. both in line with the pulmonary data. kospi futures at the moment up 1%, this reversing declines that we saw in the previous session. the korean won also rebounding from that 2-week-low. the asx 200 is up 0.2%pkiwi stocks at the moment are unchanged. the unwinding of stacks against chinese stocks may have made the sector a profitable trade last month but investors are turning bullish. let's bring in our guest who is positive about china digitalization and new infrastructure, joining us from the sidelines of the credit suisse investment conference, is the bank's head of china technology. thank you for your time today. the key question right now is given all that regulatory concerns we are seeing against

chinese tech and other sectors, is will this have a lasting impact on the innovation drive in the country? >> thank you, this is a good question. i think the regulatory question has been in the business model. but we are positive because to the enterprise side, we see a lot of stimulation -- stimulation that the government has wanted to push for digitalization. if we look at five-year plans, we think the new infrastructure is one of the key initiatives. 5g networks, industrial, and also data centers and ai as innovations. the regulatory concern would not really temper the

innovation developments. shery: what about regulatory concern, especially when it comes to scrutiny here in the u.s. of china has access to sensitive technology, and not to mention the ongoing global chip shortages. i know you are positive about the new infrastructure themes and the buildup of 5g, but how will these other factors impact the sector? >> yeah. since the u.s. and chinese tensions started in 2018, we think china has already accelerated the domestic. they are building up their r&d capability. of course we still have a gap here. but in terms of the application -- the chinese company has incorporated lots of experience and know-how. in terms of manufacturing, they are capable. in semiconductor, of course there is still a gap.

semiconductors is another industry that they really rely on the global supply chain. either one, they cannot get rid of each other easily. a lot of collaboration is still ongoing and chinese invests a lot in the basic research and also a lot of the ip development in the past five years as well. we see that that is helping china to be more capable, increasing the bargaining power with the global payers. so this will still maintain the competence of chinese companies in the near to midterm. in the longer term, i think the global chip shortage is a more positive, because it provides more opportunity for the system makers, or the electronic manufacturers to adopt solutions

. haidi: so are you saying that the downside factors when it comes to telecom in china are starting to lift? kyna: in terms of the overall telecom sector, right now we see several challenges, like a more moderate investment, more cautious in investment. because they are also waiting for applications on the 5g side. and the global supply chain, these kinds of constraints and also the u.s. and chinese tensions in the technology side will also increase uncertainty of the progress. but these kinds of things they are actually resolving. we think in the near term, the telecom infrastructure side, we see an opportunity a double-digit growth year-over-year in the second half of this year and likely first half of next year given the 5g rollout. in terms of the entity buys, i

see the pressure in the chip shortage, so that we see extended delivery time or some of the end projects, they have extended two different cycles. i think that will still be resolved if the global chip shortage can be relieved say sometime in 2022, then that would still help to push the development of these entity buys supply. haidi: kyna wong, thank you. and etf launched today in australia. bloomberg intelligence believes this could addition australia as asia's gateway for crypto funds. let's bring in our etf analyst, rebecca sims. what is significant about this lunch for you? rebecca: it has been a very

exciting few weeks for the etf industry. several weeks ago we had the first ever u.s. listed bitcoin etf and now in australia, the first asian crypto etf. this is significant because ultimately this gives access to asian investors investments to that crypto etf space during asian hours. historically they would have to wait until europe or north america open to trade crypto etf's. now they can trade this during asian hours. so for the crypto space, we have a full dedicated 24 hours of coverage from asia open all the way to the u.s. close. shery: is this a difference between this etf versus others that are already out there? rebecca: this is a very interesting question, because there are many crypto etf products out there. what this etf offers is access to the crypto market as a whole. data shares crypto innovator etf tracks the index that gives

access to the crypto market which includes cryptocurrencies, crypto exchanges like coinbase, crypto companies like digital galaxy, and mining and manufacturing companies. so it is a lot more broad based and diverse. while for instance, the proshares etf will attract coin. so with all of these different products available, you have a wide range of products to invest into the crypto market, so you can invest in single currencies or you can invest into a basket. so investors have a selection of products they can invest into. shery: our bloomberg intelligence etf analyst, rebecca seven. coming up next, how malaysia is putting plans for a sustainable recovery from covid in motion. we will speak with the finance minister. this is bloomberg. ♪ er. this is bloomberg. ♪

haidi: malaysia's central bank this week maintaining its benchmark interest rate at a record low, supporting recovery as restrictions from the pharisees. that followers the government's unveiling last week of a billion-dollar record budget for 2022. that's discuss now with the malaysian finance minister, zafrul abdul aziz. so great to have you with us.

we appreciate your time. how do you characterize the prospects for an economic recovery? sen. manchin: thank you,? mnstr. aziz: -- ? mnstr. aziz:thank you, hyvee. we are very bullish next year. we have seen the success of our vaccination rate now at 75% of our population. if you look at our adult population, it is 95%. we rejecting gdp growth to be between 5.5% and six point 5%, driven by the strong economic performance of next year. heidi bang: the 2022 budget is a showstopping one in a lot of respects, but there is also concern and criticism as to how this will be funded. what would you say to that? >> if you look at the recent expansionary budget, we feel that it is not -- we should not

pull the brakes too early. we want to make sure the economy scarring is utilized and it returns to its growth trajectory. in terms of dept we have enough liquidity. we are confident that we will be able to raise the bonds required domestically. shery: yet you are collecting more taxes. how will malaysia remain attractive for foreign investors as compared to your peers in the region? mnstr. aziz: we did announce one particular tax, which is the prosperity tax, a one-off tax that involves the marginal increase. it evolves 200 30 plus companies, large companies that

make excess profits during the pandemic. it is a progressive tax of 9%. so it is not a big amount. like i said, it is only one-off and that is to assist in the funding of our health care package for the recovery from the covid-19 pandemic. shery: yet that has already led analyst to cut some of their estimates for companies on the market there. is there concern that your government may not be seen as business or investor friendly? mnstr. aziz: i am not concerned about that, honestly. if you look at where we are today, you look at the strength of the currency, the strength of the economy, the progressive tax involves just over 200 companies that are listed on the stock exchange. we have millions of companies in malaysia. and if you look at the focus on the budget for the businesses, we even have 40 billion ringgit,

10 billion u.s. dollars assistance package just for the business sector, and 4.8 billion ringgit, which is $1.2 billion a jobs program for 600,000 jobs. so do we need to look at it realistically, we are confident that markets will adjust somewhat. but it is really, the key focus now is on the economy and creating employment. haidi: can we get some progress when it comes to settlement talks, explaining 1mdb and abu dhabi? mnstr. aziz: that is still ongoing. we are still in the process of looking at our recovery efforts. as of october 31, our outstanding balance on 1mdb bonds and sukuk is about 39 billion ringgit, less than 10

billion u.s. dollars. we have done a lot in trying to recover the assets since 2019. the asset recovery has been used to pay 1mdb's debt. . . we have asset recovery is now at 15 billion ringgit that will be used so in terms of where we are, like i said, we are pursuing legal action on behalf of -- so it is still in the process, still in progress. we are continuing our efforts to recover all of the 1mdb-related funds that have been misappropriated, with the murray objective of maximizing pay -- with the primary objective of maximizing paying 1mdb's debts. haidi: in terms of the corruption charges linked to 1mdb we are seeing the comeback

of the premier basak. can you tell us what he brings to the table? mnstr. aziz: i am not aware that he is an advisor. we here are focusing on the revival of the economy and creating a, driving growth for next year. so the question for me in the ministry of finance and for my colleagues in the cabinet is to ensure that we continue with reopening the economy safely. we are optimistic that 2020 two with the projection of gdp growth between five point 5% and 6.5%, of our economy will be back on track next year. haidi: can you comment about the reports on the gentleman's agreement between the prime minister and what we're are hearing, that mejia brought zach -- that najib razak has been

offered this consultancy role? mnstr. aziz: i am not aware. like i said, my focus is on the economy. so i am not aware. maybe you can share with me more details. shery: prime minister, let's talk a bit more about the economy. we are seeing central banks start to tighten. the back of malaysia is holding on doing anything with rates. at the same time with the reopening, we continue to see potentially more infections. do you have flexibility to deal with that in your budget and for your support of companies going forward? mnstr. aziz: you are right, the central bank announced yesterday that we are maintaining our opr at 1.75%, so we are continuing with our accommodative policy. we still have room on the monetary policy side. we are looking at deficit going down test 6% next year. so there is room.

in our budget, we assume the oil price to be around $66 per barrel. that is much higher than that today. the new measures we discussed earlier were also not incorporated in our revenue line for next year. so there is potential upside. and we have enough capacity should we need to use that. shery: minister, we really appreciate your time on bloomberg television. zafrul abdul aziz, malaysia's finance minister there, thank you. let's turn to china. . more provinces in the country are finding covid than at any time since the virus first emerged. the highly infectious delta variant continues to spread in the country despite aggressive measures officials have enacted in a bid to fight it. joining us for the latest is bloomberg's senior medical reporter, michelle cortez. michelle, how serious is the situation?

michelle: china is facing its broadest corporate outbreaks since the beginning of the pandemic, and at this point it is still increasing, so we don't exactly know how bad it will eventually get. what we do know is that what they are facing is the fourth delta infection, the fourth delta outbreak in five months. at this point, the steps china has been taken have not slowed the pace of the infection rate. haidi: so what is really the commitment then when it comes to covid to zero? how does that potentially impact hong kong? do we see any alleviation to the restrictions? michelle: china is absolutely doubling down on its zero policy. they shot disneyland without letting visitors know. they kept over 30,000 people in the park to test them because one person who had been there turned out to be positive. they shot schools in numerous

places, same situation, keeping elementary school kids until midnight, allowing parents to bring in blankets and sending hundreds to quarantine, allowing a parent to go with them. because a single teacher in one of the schools had tested positive. when we are looking at hong kong, of course hong kong has had more success in keeping coronavirus out lately. nonetheless, china is saying they want to make absolutely sure there is no risk to china over it seeping in across the hong kong border, so at this point it is still closed. but we are hearing rumblings. hong kong is locking down even more tightly exceptions to people on their quarantine. so we expect in the next couple of months, we will start to see more cross-border happening between hong kong and china. shery: and we have seen china's vaccine diplomacy play out during the pandemic. any details on where we stand in china's push to have all the

world vaccinated with their shots? michelle: china has led the way when it comes to vaccinating the world, they are the number one exporter, they have vaccinated more people than anywhere else. we expected the role to go to india but then they had such a huge outbreak there, they kept other vaccines in country in order to protect their own people, and china stepped into that void. it has been a bit of a challenge because chinese vaccines are less effective than some of the ones from moderna and mark in the u.s.. nonetheless, they are making a huge difference across the world. we are seeing china take that vaccine technology and expand it, going after different types of vaccines as well, going after influenza, childhood pneumonia, hpv, which can cause cervical cancer. china has really established itself when it comes to coronavirus vaccines. we expect they will be getting more power, more market share,

higher sales albeit probably more in the developing world when it comes to other vaccines. ultimately we hope everyone will be safer in preventing variances and other types of ailments from these vaccines. sherry: michelle cortez joining us from hong kong. watch us live and see our past interviews are no interactive function, tv . you can also dive into the securities and functions we talk about, flash become part of the conversation by sending us instant messages on our shows, for bloomberg subscribers only. check us out at tv . this is bloomberg. ♪ is bloomberg. ♪

haidi: quick check of the latest business flash headlines. citigroup is about to apply to set up an investment ranking business in china in the next couple of days, joining its wall street rivals. a source tells us the lender is submitting an application to conduct trading for clients on the chinese mainland. we are told citigroup will also apply for a futures license in the next few weeks. the state bank of india beat estimates in the third quarter boosted by big buybacks and fewer loan provisions. shares rose to records on the news. net income surged 67% in the three months, for just over $1

billion. its retail loan group grew 15.2% year-on-year. this company will pay $6.5 million for if plot along hong kong's victoria harbor. it will include mixed-use, buildings, office space, and retail areas. for the first time, the government looked as design -- looked at the design and price. this comes as hong kong's market struggles with diminishing demand and falling rents. shery: policy direction and the outlook for the asian markets with nancy davis. we will also have more on the potential energy standoff between opec+ and washington, with the van insights ceoda and cofounder. standby for bloomberg markets china open. this is bloomberg. ♪

♪ david: this is my kitchen table and also my filing system. over much of the past three decades i have been an investor. the highest calling of mankind , i have often thought it was private equity. [laughter] and then i started interviewing. i watch your interviews. [laughter] i have learned in doing my interviews how leaders make it to the top. >> i asked him how much he wanted. he said 250. i said fine. i never negotiated with him. i did no due diligence. david: i have something i would like to sell you.