haidi: very good morning. we are counting down to the market open. kathleen: our top stories this hour. countries ramp up covid restrictions. while south africa signals symptoms have been mild, the who urges caution. the exchange market shows signs of stability but the equity

market selloff continues. opec-plus is expected to take a cautious stance as they meet this week. haidi: let's get you to the start of trading. this is what we're are seeing after futures indicated downside, we saw a decline the most in almost two months in the friday session for australian stocks. we are seeing the alias x opening lower. continuing volume, in new zealand we see higher volumes of selling, that is trading down by one and a quarter of 1%. chicago nikkei futures are trading slightly in the positive, three tens of 1% higher. this is we see relative calm and stability in the fx market, although safety being detected across bonds. rally in australia as well as kiwi bonds. let's take a look as to what you are seeing in u.s. futures.

kathleen: it was quite a session. energy down 4%, financials down more than 3%, today you can see the s&p losing two and a quarter percent, looks like maybe overdone, reducing some positive news. treasury bond futures, the 10 year fell 16 basis points on friday, perhaps we are seeing a little bit that are -- better look as the session gets underway there. crude oil had a 10% drop in brent crude, 12% on friday, seeing a pretty healthy bounceback there. 4% on west texas intermediate. three and a quarter percent on print crude. for now, we turn to mark cranfield and singapore.

>> and focus? which assets? looking at stocks, that was so overdone, they have to bounceback, are we looking at currency? i am fascinated by the bond market. mark: i suppose if we have to pick one thing it is u.s. yields because that was the main story going into the big selloff on friday, people want to know which direction the fed is taking and how quickly they are going to be raising interest rates. it's interesting, bostick saying he still thinks rate hikes are likely next year. for now, the fed speakers don't see this issue as being a major derailing to the path they put themselves on. if we hear them staying the course that they are happy with their plan to reduce tapering quicker and they are moving onto

rate hikes, then nothing has really changed from what we were talking about a week ago. that the fed is going to withdraw stimulus and raise interest rates. that is an issue for all asset markets. unless we hear differently that the new strain of virus is going to read lockdowns in major cities, we're still dealing with the fact that the world's most important central bank is going to be tightening and that addresses all asset classes of course, bonds and equities. haidi: does it change the mood for opec-plus? mark: what the fed is concerned about is, will there be a change to the u.s. domestic economy? is the threat from the virus going to change the outlook, what they see on the ground? for now, the u.s. economy is

strong, the job market is tight, inflation is about the target. they have been speaking in that manner. that is why you have bond yields got relatively high, the u.s. dollar is strong. that is why you have equity markets, although you have not seen any bad performance, people are more cautious about the outlook because of what they see ahead in 2022. put all those things together, the fed has not changed its tune. if the december meeting is the platform to speed up tapering, that gives us the window for raising rates in the middle of next year, possibly even twice, that's a factor which the markets have not fully digested even just a few days ago. that changes the outlook. if you are going to raise rates in 2022, how many times are you going to do it in the following year?

have they put themselves ahead of the inflation story rather than being one step behind as they appear to have been so far? haidi: you can follow more on this top story. the who is urging caution after experts from south africa say symptoms linked to the omicron strain have been mild. let's get more clarity from our chief notation correspondent. we just heard from anthony fauci saying we're going to need a couple of weeks before we have sufficient data. emma: that is really true. the jury is still out on whether this is the game changer variant we have all been fearing. there are bits and pieces on either side, the high number of mutations has been concerning people, but that can also make a

variant weaker. the situation we are in now is buying time for the scientists to look into this thing, for virologists to assess it and work out whether it is more transmissible, but sort of impact it has in terms of symptoms and effect on hospitalizations. the big question, whether the vaccines work against it. kathleen: steve, there is a lot of talk from asia, even though people don't know yet what is going on except that it is there, governments are reacting. i still suspect it will take more than two weeks to know where this really goes. stephen: you will see an abundance of caution. many asian nations, namely china, also the territory of hong kong had some of the strictest lockdowns or restrictions for travel on the

planet. you will see an abundance of caution, thailand, new zealand. stopping flights from as many as nine different african nations because of this. we have prime minister modi in india saying he wants to review of whether they can open up international flights as and on december 15. singapore one of the more open nations here in asia, living with the virus, the prime minister said they are going to have to review the impact of omicron to see some of these relaxations have to be reversed. already we had word this morning that the planned vaccination lane for travel from qatar, uae and saudi arabia which was planned for december 6 has been

indefinitely scrapped or postponed. singapore is taking those steps as one of the more open nations in the asia-pacific. japan is on high alert, they raise the level to the highest, they're going to be screening passengers coming from at least six african nations. but again, international travel to and from japan is fairly limited and china is not allowing international travel. kathleen: back to you on what will happen with distributions of vaccines, to places like africa where they are underserved, a who official on friday saying developed nations should not be encouraging boosters when there are still so many people in the world who need them. how do you think the response to that will go? emma: i think this variance is

that call of what the who that it is in the interest to develop -- vaccinate the developing world because it is essentially a petri dish. it puts the rest of the world at risk. countries want to be protecting their people against what is at the moment a pretty small risk from the omicron variant. it's hard to say whether it will have any impact on governments easing away from this move towards boosters, because they need to keep their constituents happy at home. kathleen: our managing editor and chief north asian correspondent. sophie:

vonnie: china's industrial firms rebounded driven by companies in sectors including mining and manufacturing. profits climbed 24.6% to $128 billion from a year earlier. bloomberg says the acceleration was boosted by both the surge in factory gate prices and recovery in output. president biden says americans will see prices at the pump fall but it will take time. he tweeted the message after the u.s. and other nations announced they would release millions of barrels of reserves. the u.s. is decided -- the women's tennis association says it remains deeply concerned about the well-being of a chinese tennis star. according to a statement, a ceo

is worried about her ability to communicate freely. concerns about her safety because international outcry after she was not seen publicly for some time following a post that accused a former vice premier of sexual harassment. australia's prime minister is proposing new legislation that would force social media firms to disclose who was behind posts. if companies refuse, they would have to pay defamation costs. currently, they are not considered publishers of material and are not held responsible. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: we talked to a bain and

company partner. next, concerns about inflation as investors watch out for the omicron fallout. we take a look at the economic impact across asia. this is bloomberg. ♪

haidi: let's get you a look at australia. we had sydney stocks falling by the most in about two months on friday, extending those losses now, trading at close to session lows. new zealand, still seeing downside of over 1%, elevated volumes when it comes to selling

which gives you an indication of what equity traders are feeling. chicago nikkei futures taking more positive, 6/10 of 1% higher, although south korea looks like there will be some downside pressure. we are seeing signs of stability when it comes to the fx side of things, but certainly that rally in bonds suggesting there is quite a bit of caution given all we don't know about the omicron risk. adding to that, inflation. central banks say supply chain issues -- the coronavirus and omicron shot back to the top of these worries. let's talk more about how the variance could change the outlook and asia. that's in addition to the woes that investors and economists need to worry about. does it change the mood when it

comes to reopening? >> there was hope we were done with these things. covid was always in the background, there was always a risk. clearly the impact is going to be felt on travel in sectors that sit around that. in terms of the impact across the region, thailand is in the firing line. we are likely to see a little bit of a knock in terms of domestic spending. the most in line -- clearly we

will know more in the next few weeks if it turns out omicron is not a damaging variant, and most importantly if we can still rely on the vaccine rollout, that will give a lift to confidence and spending going into 2022. we have to wait and see. i think uncertainty is going to be the keyword. haidi: we have a number of hawkish central banks in this part of the world. does the threat of a new variant add to the potential downside of how quickly they are moving in the tightening cycle? >> it's a balancing act, because some of the uncertainty we see

around supply chains and fallout , those could be reinforced by this because if we are not able to shift back towards services, the squeeze there perhaps might continue. i think more generally, until we know more, i don't think this will change in the central banks. we have fairly hawkish positions out of new zealand, the bank of korea looks like they will raise interest rates. i would not expect this to change their opinion on what is happening in local economies. inflation is running pretty hot and they will be concerned about getting into expectations. equally, perhaps on the rba, this is a knocking momentum to normalization. it probably confirms they want to wait and see and be quite dovish. it's uncertainty but uncertainty that cuts and a number of different ways, and given that

i'm not expecting to see major changes from their staff in the next few weeks. they will be waiting to find out more with the variant means then we will see more moves. kathleen: the gdp number on the italian economy this week. how are you expecting will be absorbed by the reserve bank of australia, and also by the markets? sarah: it will be a negative on the headline number when sydney, new south wales were in lockdown. we're going to see a 3.3% decline in activity. that will sound shocking, but it won't be a surprise, and it is exceptional in the circumstances and that indication for what is happening right now and what will happen going into 2022. we already know the economy is recovering, we can see that in the high-frequency data,

payrolls, some of the spending data. we know consumption is bouncing back, these economies are getting back to normal. it will be interesting on how big a hit was to the economy how far the country will go to catch up to the rest. kathleen: it might seem a silver lining is that they would get some relief in terms of investors backing away from emerging markets in the face of the fed tapering faster, going to raise hikes. maybe they will not get that relief because the president of the atlanta fed in an interview was asked about the omicron -- he said no it won't. >> i am open to accelerating the

pace of our slow in purchases. for me, second-quarter is a reasonable alternative for when we might stop purchases if the economy momentum continues. kathleen: he said the same thing to us here on bloomberg television. what does that mean for emerging markets, the omicron variant, versus the fed looking like it won't slow down? sarah: general information on what the impact has been is generally speaking the impact on economies has been less over time. we have learned to live with covid, treatment, a vaccine, in the context of the u.s. economy running pretty hot, clearly moving in a direction of tightening and somewhat want to

go quicker than others. i am not sure in general that omicron will change that view, the near term is definitely a downside risk. unless we get really bad news, i think it's reasonable to expect that trajectory will continue. in terms of what this means for emerging markets and pressure on borrowing rates, as much as we have had the pressure coming through, it's likely to continue. whether or not they respond is an interesting question. some of the central banks don't need to, they don't have the inflationary pressures, there is some coming through for things like food, so there is less need for them to respond. others, we mentioned already the bank of korea is moving in that direction anyway. the thing with omicron is there is risk, uncertainty, we would

need bad news about efficacy in particular for it to really change. it's likely to have this near-term knock, especially around the travel piece. i don't see it derailing that completely. haidi: sarah hunter there. take a look at the plunge across the board when it comes to travel and airlines stocks. qantas trading the lowest since june last year, flight center trading at the lowest since april of 2020. sydney airport one of the biggest he clatters as well. lots more to come, this is bloomberg. ♪

kathleen: counting down to the start of trade tokyo.

here are some of the big stories. in japan, retail sales data for october. expectations, 1% rise in the month on month figure. the nikkei is reporting japan is likely -- on the corporate front, mizuho is in focus. in korea, the president will hold a meeting to assess the covid-19 situation as critically ill patients hit a record. we are expecting department store data in october. telecom stocks have been on a month-long fall. haidi: let's get your check of currencies.

we are seeing a resistance when it comes to the rally we are seeing in dollar-yen that started around september or so, the yen has been holding steady. take a look, relative 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.

sophie: this is daybreak asia. growth that china industrial firms rebounded for a second month. industrial profit climbed 24.6% to $128 billion in october. bloomberg says the acceleration last month was boosted by a surge in factory gate prices and recovery and output from power shortages. the women's tennis association says it remains concerned about

the well-being of the chinese tennis star. according to a statement, the wta ceo is worried about her ability to communicate freely. concerns about safety concerned -- because international outcry after she was nothing publicly following a posted accused the former vice from ear of sexual harassment. scott morrison is proposing new legislation that would force social media firms to reveal the identities of anonymous trolls. under the laws, people who believe they have been defamed could get a court order forcing companies to disclose who is behind the post. if companies refuse, they would have to pay defamation cost. currently, they are not considered publishers of material on their platforms and are not held responsible. the indian prime minister's government will push to repeal three controversial -- when parliament reconvenes. they postponed a march 2 new delhi as a -- they push on with

the rest of their demands. they want the government to include a minimum support price for produce and compensate families for farmers who died. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: take a look at oil. opec-plus is moving technical meetings to later this week to give its committees more time to evaluate the impact of the latest coronavirus train. this comes after the biggest one-day drops on friday. we will take a look at the outlook. what are we seeing that is driving the latest volatility? >> omicron was the catalyst for that big drop on friday. it was quite historic.

wti down 30%, prints down 12%. we are seeing a technical bounce and wti is up as much is 5% off those lows. i have seen that reflect on friday. we went through some technical levels. there are a bit of options and of course the market was quiet. liquidity was not what it normally was. there are negative headwinds facing the oil market with omicron and the increase in strategic reserves which puts pressure on reserves. kathleen: what are you betting? they will go ahead with the output increase or pullback and say we do not need to do it right now, we will wait and see what happens? >> the latest signals we are getting as they are leaning

towards postponing the $400,000 hike. there are certain countries that would like to see it deceived, russia and the united arab emirates would like to see more output to boost their revenues. i think it's ultimately that it is the saudi's who will hold sway, so we need keep a close eye on them for their signals. opec will be watching the market and a bounceback might play into considerations. there will be looking to see what medical professionals say about omicron. the jury is still out, but i would say they are leaning towards a postponement to wait and see how things i out. kathleen: now we're going to move along, counting down to the open in japan and rhea over concerns over the omicron variance.

bringing in our market reporter asian editor. what can we expect from stocks in tokyo? big selloff on friday, when i woke up and saw what happened in the u.s., i could tell japan had a big part in getting it started. >> some of our commenters are saying it might start mellowing out. we had a huge strengthening in the yen against the dollar, 1.7% on friday. it's already starting to weaken a bit. that is one positive sign.

haidi: tokyo has emerged from the state of emergency. is there a greater risk for the country? >> it does not seem like there will be any particular reason for japan to fear about it, it is just that japan's markets are overreacting because we have a large number of these cyclical stocks. so any a threat to the economy, the yen being a big factor. with exporters have been looking

pretty good with the yen down about 9% with the dollar this year. anything that can change the direction in that is cause for concern. haidi: our asian equities editor. we are turning to korea. what about the outlook when it comes to the start of trading today? what are we watching? >> investors are bracing for some correction and markets will likely track the global market rout. the kospi valuation has been pretty cheap because it has been trading sideways compared with asian peers, it's even cheaper than the hang seng. today's correction may not be as severe as some might fear.

they may announce more restrictions on social distancing fears. the second thing would be the movement of the foreign investors, they have been the net buyer of kospi shares this month but given omicron, whether they will switch to net selling. kathleen: a lot of investors are trying to weigh whether or not they should look to buy on all of these declines. what are you hearing on that front? >> that's the big question on investors minds. that largely depends on vaccine makers around the globe and domestically, finance ministry

and government assessment as well. south korean day traders who have been driving the massive rally of the kospi last year may not be as flush with cash at the moment because of the tightening of credit, so even though they want to buy, they might not have as much as cash. kathleen: about the macro backdrop, the bank of korea just hiked its key rates, that was not a surprise. knowing that one more reason? >> that has been another big factors that investors have been watching, and we have seen the margin trading as they prepare for further rate hikes that

could impact day traders. haidi: our market reporter ahead of the start of trading in korea. we continue to hear, cross the markets when you take a look at the currencies side of things. future seeing consolidation i would say when it comes to what we are seeing at the moment. asian markets more broadly, korea coming online over the next hour. we are seeing some downside trading although not exactly the signs of panic selling. of course, the other piece to sentiment is of course how the retail picture shapes up as inflation continues to grip major economies. more shoppers return to stores,

traffic remains well below pre-pandemic levels, we will take the closest look at the shopping trade. this is bloomberg. ♪

kathleen: black friday saw

strong in yourself. let's discuss how omicron can affect that. joining us is our guest. great to have you here. the black friday surprise was online sales did not do quite as well, and the brick-and-mortar did. if we are facing another variant, and no matter how bad it turns out to be, people once again are afraid and don't want to leave their houses, what does that mean for sales moving ahead? guest: cappy cyber monday and happy shopping. i think a lot of people have actually throughout the covid period taken this opportunity to really shop online for the first time and explore new ways of shopping retail. what we saw here in southeast

asia since the start of covid people have gone online. those are wonderful numbers to see. with omicron back in the picture, people may be less willing to go to malls, shifting back online. in this holiday season, people will want to celebrate. people will want something to look forward to. i expect retail sales to be strong. kathleen: what are you hearing about supply chains? that is one reason why, at the same time, that could be a problem for retail sales. guest: good point. we have seen supply chains taking steps towards oncoming

them steps, but even in the u.s. or in asia-pacific, we still have not seen the effects of that, people thinking it will take longer, shifting from all over the world to get it to where they need to be for christmas sales. i think you will see people trying to buy earlier in order to make sure that things are in time for the giftgiving seasons, however that being said, i don't think omicron per se is going to come it up anymore than it is, and i think companies are taking a lot of steps in order to secure supply chains every step of the way. haidi: supply chain issues are continuing. it's not just about buying in time for christmas. people trying to buy furniture. i want you expect this impact the last four? guest: i think you are going to

see it into q1 next year, i expect like you to that the supply chain are going to be resolving themselves, because if you think about it it will have been a whole year or more where people are working with the impact of supply chains, thinking how much better to do ordering. a lot of my clients in the grocery sector do believe that after q1 of next year, they should see restocking of the shelves go back to normal levels. i think it depends industry by industry. groceries, department stores, people do see normalcy returning by q2 of next year. haidi: we also saw black friday in the u.s. was a combination of companies offering less generous discounts because they are facing discounts, and seeing consumers tightening their pockets rings as well because they are facing consumer price pressures. do you see that playing out across asia? guest: was very interesting in

asia is i think we are spoiled for choice is retail consumers. if you go have the u.s. holidays coming in, black friday and cyber monday, but also see from china, i think consumers are spoiled for choice about the really deep discounts they get. i think retailers are starting to see that even with the discounts, they are not cultivating customer loyalty. 50% of people still shot multiple sites even on becca day sales before actually selecting who they are going to buy with. this whole idea of loyalty and cultivating loyalty is what retailers are aiming for. because of that and what they're actually seeing, the revenue per basket is coming down and is no longer a win at all costs 80% to

90% discount. it's now about how to have better margin preservation and how to cultivate loyalty through some of the sales. kathleen: it makes sense. cultivate loyalty, sales. how do you actually do that? particularly if everyone else is doing the same thing? it seems like it's a race to the bottom when it comes to profits and prices. guest: that's a really good point. one of the statistics in the recent report we release from facebook is four out of 10 shoppers on the sales are actually first time online shoppers. this exasperates the problem with so many first-time shoppers coming online, so many people shopping online, how do you cultivate loyalty? that comes down to the idea of personalization, the idea of the

customer, let me carry what i'm recommending you. comes with a whole idea of we look at customer loyalty on what we call the net promoter score. understanding how these people are in their shopping experience. how easy is it to do returns? when we talk about the supply chain issues. think about personalization's, think about delivering a wonderful customer experience, and this is something that the amazons of the world are experimenting and doing really well with, or different delivery options. those are three ways of cultivating loyalty. it's a race to the bottom and we do think it's about the leaders in the market trying to pull up and say it's not about growing at all costs, what they are focusing on his loyalty and something else. kathleen: for partnered with bain and company. thank you so much for joining us. let's take a quick look at what we are seeing in the asian

equity markets ahead of the opening of the nikkei and kospi. australian stocks down half a percent, building on a 1.7% decline on friday, the worst drop and a couple of months. new zealand stocks are off the worst levels of the day. down more than a percent, now trading just a tenths of a percent lower, perhaps the initial reaction to the fall on friday, nikkei futures having a pretty big drop, the kospi down 2%. haidi: little bit of a miss when it comes to year on year retail sales. expectations of 1.1%. the month on month number, they gain slightly better than expected, suggesting that we see japanese retail sales continue to regain ground. we had the sharp drop a couple of months ago, it suggests that retail shoppers are feeling more

comfortable out and about. of course we continue to monitor how the mu variant could change all of that. this is coming as we see a stimulus package announced by the new government. consumption when it comes to department stores and supermarkets sales coming in at 9/10 of 1%, that more or less meets expectations. it really does give a little bit of hope as consumption is the biggest part of the japanese economy, and as we continue to watch this recovery across retail. keep in mind, sometimes gas prices are hitting a boost to retail that we do not see in those headline numbers. more or less in line with expectations. much more to come on daybreak asia. this is bloomberg. ♪

kathleen: the operator of india's payment service says losses widened last quarter as the company struggled to make money off transactions. 197 communications posted the loss of 63 million dollars in the quarter ending in september. they pulled up the biggest ipo days ago, but fell 35%.

shares slumped in new york on friday after the company missed estimates as corona outlooks hit consumer spending. the shanghai retailer posted monthly active users below expectations. however company the company saw the second consecutive quarter of profits. --following criticism over a series of system glitches. the financial services agency issued a business improvement order saying the bank not pay enough attention to its computer system. haidi: let's get a look at futures. seeing a big move when it comes to volatility, friday -- up just

about 54%. it will be key to see whether volatility follows. this is what we are seeing when it comes to the fx side of things. we are seeing some relative stability. some commodities are handing back early gains we saw at the open. resistance when it comes to the dollar yen rally. when it comes to south africa, we are seeing upside given the huge selloff. kathleen: the japanese yen was a real haven bid on friday pulling back a little bit today, let's take a look at the equity markets now. equities in australia down nearly a percent, off the worst levels of the day, quite a

selloff there. perhaps they will rethink as people figure the worst is behind us. we wait to hear more about omicron which is of course what kicked off the big selloff that started actually friday morning in asia and carried over into the u.s. in a much larger measure on friday afternoon. new zealand stocks down about a tenths of a percent, but we are keenly focused on japan and korea. they both had pretty big declines on friday, nikkei futures fell the most in five months, down to 15%. today they were looking for a decline of 2%, that has pulled back a bit. in terms of the kospi, we saw a decline of 1.5% and futures look like they might close or fall more at the open. haidi: coming up, we assess the impact of the virus on markets as we get japan and react coming online.

the city australia head of investment joins us in just a few minutes. we're also taking a look at the risks from the omicron variant. this is bloomberg. ♪

kathleen: welcome. haidi: asia's major markets have just open for trade. risk asset reversals show omicron effect may be fading, u.s. futures rise. travel stocks take a dive. countries across the globe ramp-up restrictions. crude oil is surging but

analysts say opec-plus may take a cautious stance. kathleen: let's take a look at how markets are opening. taking a look at the nikkei, we have a decline of 1.24%, mind you earlier futures have been pointing to a drop of about 2%, perhaps a bit of rethinking about just how much the nikkei and topics had sold off. we're hearing a bit about the buyers coming again and maybe that is -- creating more optimism. it's going to take a while to know what exactly the overground variant is going to mean for markets and governments when it comes to lockdowns and more. not as quite of the selloff as anticipated. interesting to see if this reduces a bit. the yen is continuing to weaken, but remember it was the beneficiary of a big haven bid

on friday in the u.s.. the yen had its best week since june of last year due largely to what happened on friday. the 10 year yield at 0.78, little bit of the decline. not much of a move. the big move and bonds happened in other markets, the u.s., with seeing asian bond markets moving as well. the boj anchor, you can expect it to not move too much. let's get on to korea. the kospi is down 1.5%, again not as bad. reflecting the fact the fed is going to keep moving towards higher rates. this is something that is holding back equity investors. the one weaker today. haidi: we're seeing this

rotation away from opening up in asia. let's take a look at airlines stocks, korean air falling 6.3%, the most in about a year. trading volume surging, that is key as there continues to be pent-up downside momentum. traders lining up to sell at the start of trading. ossie see on airlines selling, another dropping the most in 20 months. we are seeing this with some of the australia travel names, onto his, sydney airport all trading the lowest in a year. take a look at the broader australian markets across australia and new zealand which kicked off the trading day on a lower no. new zealand up 8/10 of 1% or thereabouts, sydney off session lows. perhaps some rebalancing suggesting investors are taking

a bit of a breather. s&p futures up by six tenths of 1%. taking a look at oil, opec-plus moving the meeting a little bit later on to give them a chance to reassess the impact of omicron, there are expectations we will see them pushing back on that output rates. brent crude seeing a bit of an upside. the u.s. 10 year yield is sitting like this. seeing a rally in australia. we are seeing u.s. treasuries falling across the curve. let's get to the analysis more broadly. clearly the risk when it comes to opening up is playing across the market.

what are you seeing as risk particularly because there is a lot we don't know? guest: little is known at this stage but the key difference is the severity side. what is the hospitalization numbers, is there weight on hospitals globally. we do expect the spread to be much wider which will lead to -- we are much more stronger in terms of vaccinations, hospitalization side of things, on the markets however, clearly earlier last week, we saw a rate

hikes priced into the markets and also there is talk about the central banks meetings where we are looking to see if they will accelerate the taper plan. haidi: what are the opportunities in de-risking? guest: one thing we need to remember is price action implies the impact of the new pandemic and shock value, and as we scale back and we look at that u.k. impacted them significantly. the selloff is much smaller than march of 2020. as a result the new variant may

soften markets a little bit but with a lower extent. we are seeing reallocation to stay-at-home. on friday it was down 3.5%, stay-at-home was 9.5%. new will see reallocation going forward. kathleen: do not see this as much of a stumbling block broadly? guest: we do not see a big stumble at all. we know that the market impact has been switched to dovish. having said that, higher volatility is going to be higher. [indiscernible]

many hedge funds and institutional's are closing their books. so yes, volatility will be higher. but what that really means is we are looking to monetize this volatility. kathleen: in terms of the data, emphasis on china pmi and how the world economy performing into going something that may not be a big stumbling block? guest: i agree, it's more about how quick the recovery will be, we are looking at recovery. the recovery will not be even.

we talk about u.s. exceptionalism. obviously, they are struggling and are in a difficult situation. kathleen: thank you so much. let's get to vonnie quinn. vonnie: profit growth at china industrial firms rebounded. industrial profit climbs 24.6% to $28 billion from a year earlier. bloomberg said the acceleration was boosted by a surge in factory prices and a recovery in output. president biden says prices at the pump will fall but will take time. the u.s. announced it would

release millions of barrels of reserve. the indian prime minister will push to repeal farm bill's. farmers marched as a result, however the year-long protest was set to continue as they push on for the rest of their demands. australia's prime minister is proposing new legislation that will force social media firms to reveal identities of anonymous trolls. under the laws, people who believe they have been defamed could get a court order. if companies refuse, they would have to pay defamation costs. currently, social media companies are not considered publishers of material and are not held responsible. 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 vonnie quinn. this is bloomberg. haidi: we have the latest on the virus. we get more discussion on how the new variant should be tackled. an epidemiologist is with us. this is with -- this is bloomberg. ♪

haidi: we are seeing u.s. equity futures rise and the nasdaq futures extend that gain to about 1%. we have been watching s&p futures, futures trading by half a percent. the dramatic plunge across equities and oil and turmoil as

well. seeing some signs of stabilization. let's take a look. this is the picture. we are seeing the nikkei extend the selloff. concerns over the omicron variant. this comes after the who is urging caution. let's get some more clarity. we heard from anthony fauci saying we are going to need to wait a couple of weeks before we

get some more data. reporter: what we know it is very different than what we saw earlier, and there is a number of mutations. the way you need to think about this is mutations can be a good thing or a bad thing. it's different than what we saw before. that could make it more difficult for this variant to create more virus. it could be a milder infection. what we have seen so far is an increasing number of cases. we are going to have to deal with more this and we have seen it in vaccinated people. we are not sure how much the vaccinations will help you and we do not have how dangerous the variant will be. there is still a huge amount of unknown. so much more we need to find out . that is something everyone is studying as intently as possible. right now we only know a few people, cases seem to be miles.

kathleen: if we adopted the u.s. approach we would have 600,000 cases a day or month. what michelle just said, vaccines are not preventing people from getting it or passing it, are they feeling like i told you so? stephen: that study came from a university that was partly funded by the bill and melinda gates foundation. it suggested that if china were to adopt a u.s. style opening up of its economy, that china would have a colossal epidemic on its hands, 600,000 per day would be

the tally according to the study. you can read between the lines, i think it is i told you so, that is why china continues ahead with this covid zero policies that also are -- has has australia, new south wales has two cases. you will see an abundance of caution until we know the full nature of this variant. already, in many faces -- places are already cautious. singapore has been one that is starting to adopt policies to live with the virus, even the prime minister was out yesterday saying we will have to study this. we might have to rollback some of those relaxation of the curbs if it becomes a big problem. there is caution as always in

the asia-pacific, but we have to wait and see. haidi: the stat that jumps out to me is 7% of people vaccinated -- >> absolutely, we are seeing new variants emerge in people who are generally unvaccinated and people who have serious other medical conditions. they are getting better at helping people survive and infection. through that process, you do have people who will be exposed to the virus for a longer period of time and their bodies will adjust and develop these ways to evade benefits of vaccination. really what we need to do is get everybody vaccinated right away, as quickly as they can, and that is what is going to help us get past this pandemic. until we get enough people

vaccinated, we will have to continue dealing with the virus circulating and that is when mutations emerge. kathleen: that is ever senior medical reporter and chief north asian correspondent joining us from hong kong. coming up on the show, brent crude rebounds after friday's plunge and opec-plus delays its meetings this week. more on oil outlook next. this is bloomberg. ♪

haidi: we are seeing a comedown in futures, dramatic drop in volatility. this after we saw on friday the fourth biggest bike since 1990.

it's key in terms of how much volatility pertaining to the omicron variant is in sentiment to see how volatility really plays in the asian trading session. we are seeing some modest downside when it comes to trading in the cash section across the rest of asia, 7/10 of 1% lower. take a look at oil. this is where we see brent sitting. not just concerns about the demand being cramped, but also what opec-plus and strategic reserve moves will due to the supply and demand momentum. we are seeing a downside shy of 18% when it comes to trending in brands. let's get more on the oil outlook. we are joined by andrew. when you talk about pricing, the

huge run oil has had, is it price richly and therefore most susceptible to the kind of plunge we saw on friday? reporter: oil is a bit of a canary in the coal mine when it comes to immediate impact of the virus, depending on the severity of omicron, we could see travel bans, locke downs and so forth. interesting to note, some of the worst disruptions came in the last few hours on friday, and some of that was driven by technical factors when oil dropped through some key technical barriers that set off some kind of computerized algorithmic trade, also the options market, the day after thanksgiving. kathleen: was it overdone?

it certainly seems that way. markets are thin because it was the end of the week and a lot of people in the u.s. taking off the thanksgiving holiday. reporter: that is an indication things were overdone. goldman came out with a note that they think it's overdone. if you look at the shape of the oil curve, it still more than -- a bullish sign. the key point is there is so much we don't know about omicron , there was an element of panic on friday and prices are coming

back, but i don't think they will come back all the way until we get a lot more information. we also have the opec-plus meeting, the main meeting in which they decide how much output to restore to the market. the consensus is they will probably hold back and not restore anymore because they were already leaning towards that a little bit because of the coordinated reserves release, but i think with omicron the uncertainty will hold off restoring supplies. kathleen: thank you so much. i want to give you some breaking news from the prime minister in japan saying they are watching the omicron situation with a sense of urgency, this is after japan's economy has suffered from emergency lockdowns. they are considering further border restrictions as well.

that the portion of the african continent and making other restrictions. haidi: lots of uncertainty for the korean market, we will hear from the south korean vice finance minister and closely monitoring markets, possibly looking at the omicron impact. south korea saying they will take preemptive measures to stabilize financial markets it did. this is the standard messaging we will look from south korea. we are going to continue to watch these travel opening up stocks as they get battered in today's session. kathleen: goldman sachs will be able to claim a one-time subsidy of up to $5,000 to cover stocks of a hotel mandatory stay

starting december 1. goldman is the first global bank to introduce a reimbursement program. the city's covid zero strategy -- the china evergrande chairman cuts his stake in the company for the first time since it went public in 2009, selling 1.2 billion shares worth $344 million last week which reduces holding along with those of his wife to 68% from 77%. it is the latest sign he is liquidating personal assets to help stave off a default. shares are falling in tokyo after it ceo announced its resigning. he will step down in april following criticism from japan's banking regulator over a series of system glitches this year, the financial services agency issued the order saying the bank

did not pay enough attention to risk within its computer systems. next, what has the world learned from dealing with delta? we discussed the risk from the new omicron variant with an

haidi: let's take a look at our mrr function on the bloomberg, taking a look at how we see this bright concentrating in the nikkei, the winners and losers, seeing some of the shipping companies coming out in the green on what is overall a down day, i wouldn't call muted losses for the nikkei there. we are seeing the worst performance there when it comes to some of the are companies, subaru losing the most out of all of those companies, as well as nissan and mitsubishi not far behind. we see, psaki -- kawasaki and

mitsui trailing on the concerns of the omicron variant. lee continue -- we continue to monitor the fallout of the global logistics shortages closer to the critical holiday season there, as well. this also brings me to our mliv question of the day. how will the omicron affect the markets in the long term? we have someone -- you can engage with our blog. you can see the rebound of risk assets relatively to the asian session. but we see a rebound of 4% when it comes to wti. it fell. is there a sense some of the de-risking will state given how high some of these asset classes have run up? kathleen: well, it's going to depend a lot on this new variant, isn't it? let's get onto our new guest, the world health organization urging caution that cases linked to the omicron variant has been mild so far.

our next guest argues is they are -- argues they are justified. so nancy, markets around the world reacted so strongly on friday on something that was already sort of in the air, but now there are governments reacting to it with travel restrictions, etc. as much as the markets may have overdone it, is it possible that the reaction from the virology community is may be just a little bit overdone, as well? some vaccination people who resisted, or people who don't want to get them, feel that there is a move on to kind of scare people. nancy: i don't think it's so much scaring people. i think we've all learned what happened with delta that we di dn't act faxed enough with delta -- fast enough with delta and that would allow us to better understand delta and

protect against it. so there was concerning information coming from south africa, and that's why the who acted quickly. and i think that's a reasonable and prudent thing to do because you always want to be cautious in the face of uncertainty when you're dealing with potentially a very deadly virus. now, i don't think people should panic. i think it's really important that we're cautious but that we don't panic. this is not going to send us back to send us back to march of 2020. that's not what we're looking at. we've advanced along white. there's no one -- a long way. we just don't know how much the effect may be attenuated. so, you know, that remains to be seen. but no one's thinking the effect will be zero. the question will be how much it reduces the effect of vaccines, if any, and does it reduce it enough to the point where we need a new booster. when you look at delta, it does

reduce the effectiveness of vaccines a little bit, but not enough that we needed a new booster specific to delta. the other thing we don't know for sure is how transmissible it is. there are indications in south africa that it is more transmissible, but the rate on delta cases in south africa is really low, so we don't know whether it competes with delta get. kathleen: so when it comes to vaccines, there's a lot of concern now about vaccinated people in the u.s. who are still transmitting the virus. they're still getting it. it's another reason why people say, what's going on here? what's really happening? how should we view what vaccines are or not going to do for us, especially when there's another variant that authorities, health of the race, or already sang, they're wondering if it's going to work on this variant? nancy: let's talk about the covid we know. for the covid we know, we know that the vaccines are very

effective, particularly against dying or getting severe illness, not as effective at preventing transmission, although it works for that, too. but a third dose actually improves all of that. it makes the vaccines even more effective against severe illness or death, but really banks them more effect -- makes them more effective against trans mission. it is important that we think about boosters. we think about boosters for the whole population. and perhaps even think about boosters sooner because the maximum immunity for populations for countries to face a new variant that might be more trans miscible. i think that's -- transmissible. i think that's really important. transmission is important, particularly when you have quite a few people who are unvaccinated. because if the covid circulates among the unvaccinated people, it's going to be more of a problem for the unvaccinated. they're going to be more likely to encounter it. but people who are more at risk

because of their immune system, there's more covid around, they're more likely to get sick and ill. so it means that controlling cases and controlling transmission is important, even with the older variant. with the new variant, we have to be as protected as possible when we go into this. haidi: nancy, when you take a look at south africa, vaccination rate at when percent across the continent, 7% fully vaccinated. is this a wake-up call if we hadn't had one already that developed countries and vaccine makers need to think about vaccine policy? nancy: absolutely. it's often said that none of us are safe until all of us are safe, and i think that's very true. it's not just supply. there is some vaccine hesitancy in these countries and also a delivery problem. it becomes very challenging to deliver them in these settings. one thing i wanted to say is a

huge thank you to the scientists and the public health officials in south africa for making sure we were aware of this variant as quickly as possible, even though that came at a risk to them in terms of travel bans. so i would say that the rest of the world needs to do whatever we can do to support south africa in trying to manage this outbreak of this variant because they really have done us a huge service by making sure we were alerted to this as quickly as possible. haidi: the communication piece is so big, isn't it? dr. factory says it will be a couple of weeks, maybe longer before we get sufficient data in the meantime. -- sufficient data. in the meantime, what to countries need to do? does it seem like the right thing to do to stick to more cautious covid settings until we know what it is that we're facing? nancy: i think one of the challenges is you ban certain countries, but it could spread

outside the country. we've seen international travelers now identified with this variant in many countries, so hong kong, the netherlands, belgium, australia, germany, the u.k. by locking out just a certain number of places, there may be people coming in with the variant from other countries. so i think we need to have a heightened alert for any international travel. so in australia, we had recently not required any quarantine at all. but now i think there's going to be a few days of isolation until negative tests come back in for international travelers. so being more cautious about that, but also remembering we do have tools that affect any variant through covid. so, mask wearing, making sure your ventilation is good, not meeting up with people in stuffy places where you're just re-breathing their air. and socialized relations. so these are the physical adulation's. so these are the things we know work on any variant of covid.

so if you are concerned, then those are steps you can take, safe steps in any setting. kathleen: nancy, you just mentioned boosters and how boosters can potentially make the impact stronger of the current crop of vaccines. christian len meyer, the spokesperson, was on bloomberg television on friday, and he specifically said it was wrong for developed countries to urge boosters at a time when those vaccines, those shots are needed for the people haidi just mentioned in africa who are unvaccinated. how do you square those two points? nancy: well, i would say that we can do point -- do both. we have many countries that are, at the current time, oversupplied with vaccines and wasting vaccines. it makes sense to use those vaccines to boost their population rather than throwing them in the garbage. so i think you can think of it

in a binary way, like either you we focus on though income countries and vaccinate them and we don't boost high income countries. but i think what we need to do is we need to increase production so that we can vaccinate everybody, and certainly high income countries need to take a much more active role in that, undoubtedly. but i don't see this in a binary weight. it's not either or -- way. it's not either/or. we need to do both. haidi: nancy baxter, thank you for joining us. let's take a look at how markets are really taking all of this, relatively, compared to the selloff we saw on friday. we saw a much more stable reaction to sentiment. we're also seeing downside when it comes to trading in japan. some of those are carmakers, really the biggest decliner is that we see her ein australia -- here in australia. at the moment in new zealand, we're seeing downside of .7%,

this as we continue to monitor the impacts of the omicron variant, not just across public health systems, but also travel settings, as well as covid settings, and how we see the market really bouncing back to some extent from the volatility and the selloff across last friday. this is how we see the slit when it comes to the best and worst performance, as well. we did hear from the finance ministry saying they are keeping an eye on the fluctuations in markets and they will step in if they see enormous amounts of volatility. lots more to come on daybreak asia. this is bloomberg. ♪

vonnie: this is daybreak asia. i'm vonnie quinn. bloomberg opinion columnist is urging the fed to acknowledge that inflation is not transitory. he also told fox news sunday it's time for a change in policy and a new person in charge at the u.s. central bank might have found it easier to alter course. jerome powell has been renominated as fed chair last week and repeatedly said the fed is underestimating inflation risk. japan's retail sales increased for a second straight month, advancing 1.1% in october from the previous month and beating economist forecast.

the numbers add to signs that households are resuming spending after a 30's listed an extended state of emergency. japan needs household spending to support the recovery as global supply chain destructions soften momentum from the export oriented industries. hondurans have voted in presidential elections that may upset the national party's 12 year rule and ends the nation's alliance with taiwan. the wife of a former president has been leading the polls. while the scandal hit ruling party has placed their hopes on their candidate. they have severed diplomatic ties with taiwan, but they floated the idea of aligning with beijing if she wins. the women's tennis association says it remains deeply concerned about the well-being of chinese tennis star feng shui. wta ceo steve simon -- steve clement is worried about -- steve simon is worried about.

she wasn't seen publicly for some time following a post that of former vice premier, of sexual harassment. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: all right, let's take a look at the fx trading. we have seen relative calm when it comes to some of these currency pairs, the dollar-yen trading at 113 at the moment. we are seeing resistance in the rally that started in september. we are seeing the aussie dollar and some of the commodities currencies stage a little bit of recovery at .7135. we are seeing that recovery. it was really the epicenter of the omicron threat we saw play out in fx, the volatility on friday. let's bring in david finnerty for a bit more analysis. so, we see this pocket of the

market really seeing more stability. what does that tell us about broader appetite for risk? david: certainly, the moment we're seeing some risk on. i think that's aided by two south african experts saying they're seeing mild-to-moderate. that's making markets relax a little bit. we've seen the yen weakened, the south african rand rebound. whether that happens long-term, as more information comes out on this new variant, symptoms still being mild, or finally pick up more in older people because initial cases tend to be in younger people. kathleen: so david, let's assume a couple of things, number one that it is going to take some time to get any kind of data that will give us a sense what this variant is really like and what it really does, and secondly, maybe it is just more of the same.

you have to be careful. don't do certain things. but life goes on. if that's the case, what does this mean for all of these currency pairs? do we go back to a stronger dollar and wait for the fed to raise rates? what's next? david: yeah, i think if that's the case, again, that's an if, i think he resume back to the trends you did see. again, reason being is expectation takes a hike next year, we still got u.s. payroll data out. that will be very important. but if data and the fed speak indicate faster qe, maybe tapering my end end of q1 into q2, i think at the moment, you expect the dollar trends to continue. kathleen: ok, thank you so much, fx and rates strategist, david finnerty. now we're going to take a look

at how crypto markets are reacting to the omicron variant. joining us to discuss is our asian mliv editor, garfield red -- garfield reynolds. risk was high. it didn't look like a hedge at all. how descriptive look now? garfield: well, that hedging credentials outlook, now it's rebounded along with risk assets. so i suppose you could take that if what you are looking to hedge against his extreme concern about a fresh covid outbreak, then bitcoin isn't necessarily particular useful as a hedge. i'm cautioning that is performed so well in recent times that you're sitting on some pretty fat profits. so if you can take them in time, that can help cover any losses

on some of the other conditions. haidi: what are the expectations then when it comes to people watching the cross-section across bitcoin as to new levels we're looking at? garfield: well, the overall consensus -- a lot of people are expecting bitcoin to bounce back in the longer term. but in the short-term, this selloff actually came at the end fo the continuation -- of the continuation of something that it did, the high that was reached in early november, 67,000 or so. in fact, looking at it, unless there's a strong rebound in risk sentiment, there's some thoughts it won't happen.

in that case, you're a short-term target, some are down around 50,000, where the previous rallies petered out as being a sort of pivotal support or break of support point. so there's got to be someone that's going to head down towards that by the end of the year unless there's a trigger that can drive it back to fresh heights. haidi: our asia mliv editor garfield reynolds there. one stock that we are watching in the kospi is sk telecom, along side sk squared. we see the first day of trading resume after it was halted back in october. now we're seeing the telecommunication operating company and investment company completing that spinoff the first day of trading there, as well, this as south korea's largest mobile carrier sees

durations in the trait there, but resuming trading in the spinoff into telecommunications operating company and holding company. so sk square is the newly created holding company on its first day of trading on monday. we do have lots more to come here on daybreak asia. this is bloomberg. ♪

kathleen: another check of the markets, we can see that the early selloff has slowed down a bit, at least for japan and korea. the nikkei down about .9% after falling about 2.5% on friday. the kospi now down 2.6%. it fell 1.5%. and you can see that in australia and new zealand, stocks are still lower. but the cases of decline seem to be slowing. moving on now, alphabet, parent of google, seeing the search function amid the biggest opportunity. alphabet ceo speaks to emily chang on the latest episode of "bloomberg studio 1.0" about ambitions and why the tech giant is in bracing that work. . >> i've always felt your market cap valuation is a value you

provide. i feel fortunate our mission is timeless. you know, there is more need to organize than ever before. i still see searches as our biggest short as a covenant. people will want more valuable conversation experiences. they will want speak to search. they will look to something and ask for more information. being able to adapt to all that will continue to be the biggest opportunity. we are so excited about youtube, cloud, hardware products, google play. underlying all of the investments we are making in ai, $100 billion in the past five years. and so applying ai in a deep way is probably the way to create the biggest opportunity. emily: google is famous for its campuses, where you can go and never leave. you have everything you ever

wanted. now you said they can be flat civil. they can work from home -- flexible. they can work from home. they can work permanently, perhaps. are you really committed to letting them do this forever? and if so, how does that change the future of work and society? sundar: look, we really embraced the fact that the future is going to be flat civil. -- flexible. google, we always try to give agency to our employees. we do realize importance of bringing people together. the balance where striking is this notion of the strength of our companies as more locations than most of the companies. we are giving people a choice to move anywhere in the world. they can work from anywhere. we are going to accommodate 1% of our workforce to be remote over time. we are going to embrace that flexibility. emily: forever?

sundar: forever, yeah. we are committed to it. through it all, it forces us to design that are product. since people use google workspace, it gives us a chance to innovate and bring all that out. i think there is so much value in giving people more flexibility between their personal and personal lives. and it will lead to people being happier and i think companies can be flexible in that model so we are trying to get the best of both worlds but embrace the flux ability and see where we go. haidi: that was the alphabet ceo speaking to bloomberg emily chang. you can watch the full combination -- conversation on studio 1.0. japan air seeing travel stocks getting back to today even as worst sentiment starts to improve in the asian session. airlines down over 2% when it comes to some of the players across the region.

we're also seeing the lights of korean air down 3%, as well as juju error one of the performers, as well, falling the most in over a year. we're going to have more focus on those travel stocks in hong kong and travel reopens. this is bloomberg. ♪ s bloomberg. ♪

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kathleen: 9:00 -- yvonne: 9:00 in shanghai. our top stories this morning, the who urging caution as the omicron variant is detected in more countries. and travel restrictions return. oil, though, rebounding. currencies stabilize as markets await clarity on the new covid variant and its impacts. and china developers face $1.3 billion of bond