haidi: good morning. i'm haidi stroud-watts in sydney. we are counting down to the major market opens. shery: i'm shery ahn in new york. welcome to "daybreak: asia." asian stocks set to follow wall street lower. traders are weighing the economic threat of virus restrictions against vaccine optimism. evergrande in default as a huge restructuring looms. the pboc says the crisis will be dealt with in the market

oriented way. the u.s. senate clears the last major hurdle to raise the debt ceiling, the legislation could pass as soon as this hour. haidi: let's get you straight to the start of trading. we are seeing weakness across asian stocks, just following that weakness we saw overnight in the u.s. traders are halting a little bit, given we do still have all of this uncertainty over the new virus variant. also getting key u.s. data inflation numbers. we are seeing traders staying on the sidelines ahead of that. we are looking at weakness as we get that trading here in sydney. new zealand, up .5%. also seeing pretty flat trading at this point when it comes to the start of the day in japan and korea. shery: take a look right now at what is happening with u.s. futures. pretty much flat as you said. really not much movement.

this after stocks fell, bonds rallied in the new york session, we have seen consumer leading the declines as concerns of the omicron variant and their economic cost. that for -- that selloff in risk assets being felt in crude prices as well, which are falling toward the $70 a barrel level. we had seen it fall in the new york session as well. we are seeing the offshore are you on, the pboc raising their requirement ratio for the second time this year to rein in the strength of the yuan, which hit the highest since 2018. bitcoin not being able to sustain the momentum we saw since the rebound from the crash of the weekend. below the $50,000 level. we continue to cover all of these risk assets as we head toward more central bank decisions fx week, whether it is the fed or ecb. we also have peru central bank increasing the central -- increasing it to 2.5%.

we have seen lots of normalization of policy, especially around that then we have seen. let's stay with china. china evergrande has officially been labeled as a default or for the first time. they have cut evergrande to restricted default after mess -- after missed payment earlier this week. for the latest, let's bring in stephen engle in hong kong. another milestone in this month-long financial drama. stephen: kind of the worst kept secret. that evergrande was going to default. it seemed like an inevitability. sure enough, after evergrande missed those coupon payments, dollar bond interest that was due on monday after the 30 day grace period had expired on two notes worth $82.5 million, it seemed like an inevitability. i think essentially, this fixed rating was simply waiting to get

confirmation from evergrande that it missed those payments. when stitch made the decision to downgrade evergrande to restricted default, it noted that it had contacted or tried to contact evergrande to confirm that it missed the payment and evergrande did not respond. essentially, fitch said it had to assume it was in default. it is looked -- it labeled it as a default. that is one of the big concerns. the officials in china have been trying to calm the markets and say this is ring fenced, etc., etc., and that it will be dealt in a market way. we will get those comments. one of the biggest concerns is in the level of transparency from evergrande throughout this process. of course, what is next? there could be cross defaults on the 19.2 billion dollars in offshore notes that are outstanding from evergrande as well as potential contagions to others. and the haircuts that the

creditors are going to have to deal with over what could be months, if not years long debt restructuring. let me get to egon, the pboc governor. he said evergrande issued a market event and should be dealt with in a market oriented way, and principles of rule of law. he went on to say, the rights and interest of creditors and shareholders will be fully respected in accordance to their legal seniority. that tells me there will be some people who get preferential treatment and a lot of offshore creditors think they might be the low man on the total pole. yi on was speaking in a pre-video mesh -- message to top level officials on the future of hong kong international finance center. yesterday, i spoke with hong kong's market regulator. the ceo of the ffc, the financial -- excuse me, the securities of futures commission. he told me that this is not going to be a lehman moment.

>> it is a significant event. you can't possibly underplay it. basically, it is not by category of event for the system. stephen: you believe it is ring fenced? >> yes. stephen: but's ashley alder speaking to me yesterday. . the one last thing i yi gang yi gang want to say about what said, he said risks from new firms -- from a few firms in the short term will not undermine hong kong's financial system in the long run. it is not just a few firms. keep in mind, at the same time, within minutes of the downgrade to default by fitch on evergrande, it also labeled kaiser defaulter. before this week, chinese borrowers had defaulted on $10.2 billion of offshore bonds in 2021. with property developers making up 36% of the total the concerns

are still there despite those officials trying to sway investors and creditors concerns. haidi: stephen engle there. turning to the latest on the virus, the cdc recommending 16 and 17-year-olds to get covid booster shots. are managing editor has more. it feels like the booster is being treated as the only protection at this point against omicron. is that why this is being accelerated? >> i think this really does reflect the notices -- the nervousness about the new variant, which looks to be more transmissible even then delta which as we know is highly contagious. it reflects some of the intelligence we have been getting from the likes of pfizer this week which said its initial lab reports showed that a booster on top of the two doses should be able to trigger a high antibody response for the omicron variant, which was good

news. but a little bit of uncertainty has crept into markets and the whole feeling around omicron as we move forward here. shery: what do we know about the transmissibility of omicron as opposed to other variants? emma: not a huge amount that is definitive, but bits and pieces as we know have been coming out from various labs, various scientists over the past couple of weeks. we did hear from a japanese researcher who advises the government there yesterday. he indicated that it could be as much as four times more transmissible, which is reflected somewhat on the ground in south africa. the epicenter of the omicron outbreak that we are seeing, where they are seeing quite significant spread, though milder symptoms as we have noted. shery: emma o'brien there. we continue to see the rise in cases across the u.s. with hospitals starting to develop. the u.s. commerce secretary,

more optimistic that companies that followed vaccine mandates now such as airlines, have had an easier time bringing people back to work. gina raimondo spoke to bloomberg exclusively. >> if you look at the companies like united airlines and others that were first out of the gate to implement these mandates, they have seen tremendous success, more people are applying for jobs, more workers feel comfortable going back to work. they are actually facing an easier time recruiting folks. people don't want to work if they feel unsafe. shery: we heard from the secretary of commerce as well, talking about how we could see some supply issues easing, given some of these vaccine mandates might help. earlier this week, we saw them mandating the booster by the end of january. lyft pushing back. ramon those saying that things are going to get better.

haidi: inflation remains a big unknown, particularly as to how these supply chain crisis elements start to unravel themselves. we heard from bank of america talking about it, saying inflation is no longer up for debate, it is just a question of how we work things out from here. take a listen. >> inflation is sticky as wage inflation because it is hard to get back out. gas prices goes up, supply comes down, you have seen it mitigated. but the real one is wages. because you are not full employment in the united states. 4.2% wage growth is strong, that is harder to get out of the system or hard to mitigate. haidi: encouraging about the levels of growth that he continued to see. he said small business loans were seeing growth, and they were adding between 4000 and 5000 people in the fourth quarter in terms of new hires. he does see an elevated outlook

for growth going forward. let's get you to su keenan who has our first word headlines. su: we start with a drop in u.s. jobless claims. they have fallen to a 52 year low. that scene is illustrating the difficulties for seasonal effect. initial applications for unemployment benefits at 184,000 last week. that is below the median estimate of 220,000 claims. china's pboc has looked into the amount of foreign currency banks must hold in reserve for the second time this year. this as it tries to rein in the surging u.n. it hiked the foreign currency reserve ratio by two percentage points and 9%, which will come into effect from december 15. u.n. declined the most since july on the announcement. on wednesday, it hit its strongest level against the dollar in three years. the german of credit suisse broke warranty rules when he left switzerland before his

period of isolation was over. he has apologized for what he said was an unintentional violation. anyone who deliberately evades quarantine could face a possible prison sentence or a fine. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. shery: we take you live to the u.s. capitol where the u.s. senate has enough votes to pass legislation to pave the way for subsequent measures to raise the debt limit, while also avoiding a republican filibuster. the vote was going on right now. this would basically help raise the federal government 29 trillion debt limit, and eventually avoid an unprecedented default. but this is a fast-track vote which allows democrats to vote later on the debt ceiling with a simple majority. they preemptively art -- are blocking republicans from filibustering the debt limit

will, and 14 republicans have joined all 50 democrats to end the debate on the bill. you are looking at live pictures of the u.s. senate. this after the house already voted on another bill linking a procedure to raise the debt ceiling to a bill to prevent automatic medicare cuts. what this would do is raise the debt limit by $2 trillion for the issue to rest until at least after the midterm election in november. there is a lot of jumping through hoops. eventually, the hope is we will be able to avert the debt limit becoming a problem because treasury secretary ellen has said the government could run out of money after mid december. still ahead, we are exploring the g in esg. her recent her recent -- her recent proposal on gender diversity. we speak to mainstay capital management founder david could

lie about his market outlook. this is bloomberg.

shery: a global equity rally facing further speed bumps, notably from u.s. consumer inflation numbers due on friday and the federal reserve meeting next week that may provide clues on the pace of tapering and interest rate increases. for his analysis, let's bring in capital management ceo david kudla. great to have you back. how are you expecting the cpi numbers to play into the fed's calculation and the broader market implications here? david: we have consensus estimates for u.s. cpi headline inflation of 6.8 percent. which is high enough. it is quite possible we could see over 7% inflation tomorrow on this read. that is a growing concern, and

has been for a while now. the fed, it will probably heighten the chance that they do taper faster. it is really amazing, and it, is a result of cpi of fighting inflation, higher cpi, but we have seen this federal reserve go from transitory to taper, to taper faster in a matter of weeks. there is a lot of attention on this. there is a lot of attention on this number tomorrow. shery: despite the fact that we now have a variant that is much more transmissible than delta, how disruptive will omicron be to the markets? david: i think it is still up for debate and i think the jury is still out on it, because we are waiting on more data to come in. obviously we have seen it is more contagious than the delta variant. but the effects to seem not to be is worse. there could be some consolation.

i have always said, i said this for a number of months, we are always just one new variant away from a stock market decline. that is not just in the u.s., that is globally. that is what we saw lasky. concern about what the fed might do to fight inflation next year. also, what is happening with covid, it is a problem that continues to stay with us. we had the primary covid, than the delta variant, delta plus, now omicron, and we don't know what could be in the pipeline. we may be dealing with covid for many months yet to come, and have those shocks to the system and to concerns that it does cause, and we are seeing it in europe and other countries where those measures will be taken place that have economic impact and result in impacts on the markets. haidi: when in fact, some of

those disruptions have people worried about tendencies that we are starting to see around the data. how do you adjust your portfolio to be hedged against that? david: yeah, there is really a variation of stagflation like we saw in the 1970's, i call it covid-flation. we had a contraction in the economy, now higher inflation with gdp in the u.s. which will be stellar. 9% to 10% gdp for the fourth quarter, but it comes down a lot as we get into 2022. with inflation, we want to have our hedges there. that is where we like energy, especially with the selloff we have over the last three weeks. that is because of the coordinated spr releases. most of it here in the u.s. omicron and what that means. opec, i think some thought that

opec would not increase production if they are meeting december 2. they did. we saw oil fell off significantly, but we have seen it come back up this week. we look for energy prices to go higher into next year. energy is a good inflation hedge. industrial real estate we also like. it is industrial reads. anything -- we like to say to hedging against inflation is anything that you drop on your foot and it hurts. those are the kind of hard assets or real assets you want to be invested in. in addition, we like our growth stories. and we are biased toward gross stocks as we head into next year -- growth stocks as we head into next year. haidi: david, great to have you with us. david kudla joining us from naples, florida. honeywell saying it is navigating the supply chain crunch better than other companies. we look at what the chairman and

ceo said at bloomberg's sustainable business summit. this is bloomberg. ♪ erg. ♪

haidi: we are tracking the fallout of the global supply chain crunch. these are the top stories. both the u.s. commerce chief and the bank of america head say the supply chain crisis is easing. telling us exclusively that disruptions are a short-term issue. however, the bank of canada is more cautious. officials say there is a lot of uncertainty about when the constraints will ease. the bank says it will reassess in january where the bottlenecks and shortages are impacting growth without feeling inflation. the japanese battery maker says supply chain woes are forcing it to ship components by air. it means the business is likely to record a loss, despite the strong demand for its products.

shery: take a look at some after our movers. both broadcom and lululemon have commented on supply chain issues in their earnings call. lululemon says pressures are likely to remain into the first half of next year. lululemon falling after hours. broadcom saying that they are extended and stable. bloomberg terminal users can read more about those stories in our newsletter. haidi: honeywell's chairman and ceo darius adamczyk says his company is -- he has told bloomberg sustainable business summit that he sees a much greater focus on sustainability of the planet. darius: a much greater hope on the parts of government and

society in general. we have much greater levels of sustainability for the planet. i think we have seen that trend initiate in the 17, 18 time frame it is taking off. if you think about esg and its impact on the world, business environment, i would say it has been accelerating ever since 2018. and i would say that acceleration is not linear, it is exponential. for honeywell, that is a great thing. this is a company that is all about controls, automations, energy savings, sustainability, and energy solution. we welcome transformation. now with cop 26, we see that that is going to continue to accelerate, because there is some level of alignment that all countries in the world will do something and it will transform to a carbon free economy. >> obviously it is a massive

effort to solve what is a massive problem. do you find you have adequate solutions for it at this time, or are there things that your customers would like to see in an effort to meet whatever green goals they have set, whether it is carbon neutrality, you name it, are the solutions there? darius: the good news for us as most of the solutions we have today, there are a few we are working on and i will point out a few examples, those solutions are there. we coinvented or invented many of these refuel solutions a couple decades ago. we have enhanced them and upgraded them since then. but we were one of the real innovators in this area. those solutions are there. things like carbon capture, things like hydrogen. we have created hydrogen environment for a very long time. now we are doing it different in the use of gas. and converting it to hydrogen.

then capturing the carbon, which is all about blue hydrogen. those solutions we have, they are here today, they are there. carbon captures, and -- another project, where we have those technologies. and then plastics, recycling, which i gave as an example earlier. many of these technologies are there. there are a couple that we are still doing research on. that is one that is more in the r&d phase of things, and we have a couple of customer partners that they are dealing with. that is going to unlock the potential for using solar, wind energy, and having long-term energy storage at a viable priceline. that is still in development. for the most part, most of these sustainable technologies are out there and we know how to do this. shery: we are taking live

pictures of the u.s. capitol as we are seeing the senate clearing that fast-track plan for the debt limit. this would eventually go to president biden for his signature in order to raise the debt ceiling. this is bloomberg. ♪ every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

haidi: changes at the top of fortescue with this causing the bloomberg. ceo elizabeth gains will transition from the worship row. she will assist in the selection of a new ceo but will continue to be involved as a nine executive director. one of the most high-profile and rare women's leaders in the mining sector in australia having taken on the top job in february 2018, taking over from the previous ceo.

she has spoken at length as to the importance of diversity and gender representation. it is one of the keys to the company's success. it comes at a time when andrew forrest named two female executives. one was elizabeth gains as well as encouraging some of the diversity issues that have plagued the male-dominated sector. we also had her deputy as well. we will continue to watch what this means when it comes to leadership. it comes at a time when fortescue is spending a lot of investment when it comes to the green transition. $600 million pledged. we have seen that big slump in iron or profit margins. elizabeth gains saying they will not be using or getting the warchest from the iron or profitability and the slope will not impact their ability to

invest in green energy. we are hearing she will be transitioning from the ceo role to stay on as nonexecutive director. the newelected. shery: here any of the u.s., we are watching the -- nearing the end of the u.s. debt ceiling drama. the senate voting to pass a fast-track plan to raise the debt limit. let's bring in laura davidson. you will need to explain this to us because congress has gotten creative to try to preemptively block republicans from filibustering. now they have this vote. had the house vote earlier. tell us how this is unfolding and how it will get to president biden. >> earlier this week, they came up with this plan that would allow them to temporarily change the law to get rid of the filibuster and this uses what could have been a big showdown in washington this month over the debt ceiling.

republican said they don't want to be involved in this. the deal meant only a handful of republicans had to vote for a measure a couple steps removed from the debt ceiling. the path is now clear. the house can vote on this next week. they will come back to the senate to raise the debt ceiling. somewhere in 2023 or so. clear this issue off the table for the next little bit. this opens up washington and congress to work on the stuff they want to do versus the stuff they have to do in terms of keeping the government open, making sure the government does not default on its debts. haidi: talk about the stuff they want to do and what else is going to be on the agenda into the end of the year? >> there has been a tone shift in the capital of the past couple hours as this deal has come together. and it was clear there was not

going to be any drama with the debt ceiling. they're focused on this build back better bill. chuck schumer has set the deadline to get this done by christmas. one of the big programs in this bill is the child tax credit. it goes up monthly to parents for a couple hundred dollars per child pay those payments would stop in january. if congress does not act, the irs telling members of congress they have until december 28 to pass this legislation. that is the next target they are looking at. shery: bloomberg tax reporter laura davidson. in the u.s., already hot inflation is expected to have climbed faster on the november consumer price index is released on friday, opening the door to a faster federal reserve taper and more rate hikes 2022. lumbar economics and policy editor kathleen hays is here with a preview. what are we expecting from the cpi numbers? ?

we are expecting them to reinforce what jay powell decided to do. he formally and officially dropped the word transitory to describe inflation. this is what is expected in the november cpi. it is rising 6.8%. it is the highest since 1982. 6.2% year-over-year. that is what october saw. what is going on as price gains are getting increasingly broad-based. new car prices continue to rise. shelter costs are continuing to rise. apparel costs are expected to rise. it is not just food and energy although they do account for half of what is expected in the headline cpi. 5% november on top of 4.2 in october. you had the new york fed one year inflation expectation index up to 5.7%. the highest since they started doing the survey in 2013.

that is where you get a spiral that is hard to cut back on. jobless claims, the lowest level in 60 plus years. showing how tight the labor market is. at the meeting next week, the fed is expected to speed up the taper, double the rate at which they are drawing down the balance sheet and markets are expecting at least two rate hikes next year. the possibility of a third rate hike is rising. there will be wanting inflation. there will be watching to see if omicron has been temped down behind us again -- been tamped down again. haidi: kathleen hays. the u.s. commerce secretary gina raimondo says a delay in passing biden's bill for easing chip shortages can result in devastating consequences. she discussed the build that better plan vaccine mandates and u.s. and china ties.

>> the bill is working its way through congress. it is working its way through the senate and we will let them do their job. it is a priority for the president. he wants to protect american workers. he is always open to compromise. he believes strongly in protecting american workers. i would say the substance of that, providing those subsidies, are incredibly effective. we need america to move forward faster in buying a v occurs. -- electric vehicles. the policy will have enormous impact in being the needs of -- and a meeting the needs of climate change. >> you mentioned the consequences of some of this legislation not passing in they the new year -- in the new year appeared what does that look like of bill beck better does not see the light of day in

january echo there is a point when this gets a lot harder. darker we think it is going to happen this year. there is a lot of momentum in the congress for this to happen. i hear you say it is a social spending bill. this is a bill that allows americans to get back to work. every business from the biggest to the smallest is complaining about a labor shortage. if you want to reduce the labor shortage, let's get women back into the workforce. what women back into the workforce? congress needs to pass this bill so we have affordable childcare, home care for elderly loved ones, public pre-k. you should not have to pay an arm and a leg to send your kids to pre-k. i think of it as a worker enablement bill. it is vital to the economy. i think congress knows that and they will get it done should >> i wanted to ask a little bit about legislation that was passed in the senate last night

against president biden's vaccine mandate. you heard from republicans saying we are pro-vaccine but we are worried this is going to drive workers out of the workforce when we need them. is that a real concern that this mandate for private businesses might do the echo doctor there is no evidence that is the case and there is a mountain of evidence to show mandates work. if you hit companies like united airlines and others that were first out of the gate to implement these mandates, they have seen tremendous success. more people are applying for jobs. more workers feel comfortable going back to work. they are facing an easier time. people don't want to work if they feel unsafe. that is what keeps people from going back to work. they don't want to wonder or worry as my colleague vaccinated or not? the facts are pretty clear.

getting folks vaccinated, mandating vaccinations, work and it is the best thing we can do to put covid behind us and to get everybody back to work. >> somebody who talks to employers every day, what is your biggest concern? is it covid or childcare to get the workforce back in 2022? >> i would say all of the above. we need both. it is not all right that we don't have public pre-k. it is not all right that we don't -- my mom is 90 years old. i have two kids. i am able to work because we have a good care team for my mom and we have had great care for my kids. every american ought to have the even if -- have that even if they can afford that. they should not have to pay out-of-pocket. covid is clearly an issue. the thing is we have a solution, which is our vaccinations.

the quicker everyone gets vaccinated, the quicker everyone gets back to work and the better the economy is. >> i wanted to ask quickly on the u.s. china trade situation. can you give us an update on where the u.s. dance with its trade agreement with china and what might happen if china does not live up to its current agreements under the u.s. china trade? ? we hope they do. president biden has been clear they ought to live up to their commitments to we are obvious -- commitments. we are working on behalf of u.s. industry because we deserve access to that market. china has committed to a certain amount of purchases of farming goods, food goods, airplanes etc. they ought to live up to that commitment, which creates jobs in america. we are actively engaged and we are going to keep pushing on

behalf of u.s. industries and workers. >> what if china fails to live up to its agreement? >> we will deal with that when we get there. we want to access and a level playing field and china to play by the rules because that is what is good for american workers and businesses. shery: gina raimondo speaking with joe mathieu and emily wilkins. coming up next, tackling gender diversity. we talked to j.p. morgan's elaine wu after the hong kong proposal to get more women on board. this is bloomberg. ♪

>> this is daybreak: asia. we start with china evergrande, which has officially been declared a defaulter for the first time. two coupon stashed -- cross default on the developer's 19 billion of the u.s. dollar debt. beijing has evergrande signaled it will not bailout evergrande with the pboc governors saying the matter will be dealt with in a market oriented way. millions more americans are eligible for pfizer's booster shots after the u.s. cdc gave the green light to 16 and

17-year-olds being eligible. the biden administration has worked hard to make those doors widely available as omicron spreads. vaccine makers are seeing evidence a third shot is key to tackling the variant. that is as some developing nations struggle to secure first or second doses of the vaccine. indian farmers have finally ended their protest. this after the government accepted most of the remaining demands. the government has agreed to form a panel to discuss guaranteed prices. and compensate families of those who died in the demonstrations. they had continued their your long protest action even after parliament repealed three contentious formals. -- contentious farm loss. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg.

haidi: with the hong kong stock exchange -- the hong kong stock exchange has proposed changes to improve independence and gender diversity. that includes ending -- our next guest says the old economy sectors, the likes of utilities and telecoms will be the most effective. let's bring in the head of esg utilities research at jp morgan. great to have you with us. with the context of what we discussed, talk us through some of these old economy sectors and specific companies you see as needing a big overhaul to fall in line here. >> what we did was we did an analysis taking a look at the constituents of the local index to assess the independent board directors. there were a couple things we looked at. we look at the number of years these directors have served. a many other boards of they said on and the gender diversity of the boards. we found that old economy

sectors such as utilities, telecom and property were weaker on these three aspects. in some instances, there were independent directors that serve on more than a dozen boards at a time and if that happens, when we question whether or not these people would have the time to dedicate to each of the boards they serve on. shery: which companies in particular will need to make -- haidi: which companies in particular will need to make significant changes and how long-term do you see these directors on the board? how entrenched is the problem of a lack of representation when you look at the makeup of these boards? >> the proposed changes from the regulators. some of the changes relate to how long a director can serve on the board and the gender makeup of the board. on the one -- one of the proposed changes, if a company

has all of their independent directors serving more than nine years, the company would have to appoint a new independent director. the rationale the hind this is if the directors have served on the board for too many years, they might become too familiar with the company and the judgment may be impaired. under another change the regulator is proposing, it relates to gender diversity. if there is a single gender board with no female representation, companies will have three years to introduce a new independent director to the board that is a female. under the analysis we did, about 25% of the constituents in the local index have single gender boards with no female representation. shery: which sectors are the worst offenders?

>> typically, these are the utilities, power,, gaming and property sectors we found to be worse in these vectors -- these sectors whether it be how long they serve for the gender. shery: who is doing better? >> in the female representation, the financial companies tend to fare better. they have about 20% of the board members that have female representation versus the index average of 13%. haidi: great to have you with us. jp morgan head of esg and utilities research. fortescue metals has announced a change in a leadership with the ceo to remain as a nonexecutive director. we have been hearing from elizabeth as well as twiggy forrest.

what was the reasoning that was given behind this change? >> i was unable to listen to that but the sense i get from the statement that fortescue put out as this was a part of the transition the company is going to to turn themselves into a powerhouse in green energy and pivoting away from the core iron ore business that has been such a big profit winter for them over the years. elizabeth came to the job about four years ago. it was a iron ore company and that it is not -- and that is not the case anymore. may be a reflection of her skill set in operations and wanting to find someone with a more global experience in renewables. shery: any idea where they will bring a new ceo from and what some of the changes could be

that the new leadership could implement? >> the changes have largely been flagged. we know andrew forrest has been scouring the planet this year for opportunities in hydrogen and renewable energy. that is going to be a focus. they have hired a globally renowned executive search company. it seems the search will be truly global. they have said they want someone in experience with manufacturing and renewables. it is clear that focused toward the green energy part of the business is going to be a driver going forward. i would expect someone more from that side to get the nod. haidi: jim thorne l. we are getting breaking news when it comes to japanese data. producer price inflation for the month of november coming in

higher than expectations. 8.5% was the surveyed number. rigging a reading of 9% for november and accelerating from the 8% in the previous month. the ppi number coming in at 6/10 of 1%. falling from the 1.2% we saw the previous month. we had seen japanese ppi sitting around a 40 year high. that reading in november was the biggest increase in producer prices and a 40 years. we will continue to watch what that means because we have seen japanese yields lagging with the yields threatening to throw money out of japan and downside risks for the yen ted much -- for the yen. much more to come. this is bloomberg. ♪

haidi: a quick check of the latest headlines. starbucks employees that one of two new york restaurants have voted 19 to eight in favor of unionization. it is the first such labor foothold among the thousands of corporate run stores. underscoring the renewed strength of workers across the u.s. american airlines -- because of delays and delivery of the dreamliner's. american airlines will not be getting as many of the 13 chads

ed counted on. flights to hong kong, edinburgh and prague. entering a debt restructuring program after a -- accepted a position to extend debt repayments. shery: heading for the open in seoul and tokyo. some of the stocks we are watching right now, asian energy stocks after oil dropped on the risk off sentiment. we continue to cwt a move toward $70 a barrel. watching asian stocks tied to crypto. they could be following u.s. tears lower. bitcoin at the moment headed toward the 47,800 level. the market opens in seoul and tokyo are next. this is bloomberg. ♪

shery: welcome to daybreak: asia. haidi: ages major market opens -- major markets have just open for trade. asian stocks at the follow the u.s. peers lower. traders are waiting the virus curves against vaccine efficacy. evergrande in default. the pboc says the crisis will be dealt with in a market oriented

way. we hear from bank of america ceo brian moynihan pugh he says the -- shery: we are seeing the nikkei been led lower by health care and communication stocks. we are seeing some upside for utilities and financials. the index is down half a percent. this as we are seeing a little strength for the japanese yen after strengthening for the first time this week. we continue to see this wave of haven demand as we see concerns growing about omicron's impact. we had japan's producer prices coming in at a 40 year high. we are talking about the ppi rising 9% year on year. the kospi is down 8/10 of 1% shared this would be the first loss for the index in a daze, hold the longest winning streak since april.

we had seen a lot of risk on sentiment earlier this week sending the korean yuan higher. under pressure against the u.s. dollar and trading at the 1178 level. haidi: let's take a look at how we are faring in sydney. a mixture when it comes to trading on they a sex. 4/10 of 1% lower. -- -- on the a sx. 4/10 of 1% lower. i.t. stocks, the biggest decliner. fortescue metals after the announcement of elizabeth gains transitioning. the new ceo will be selected but we don't have a name just yet. new zealand seeing a weakness. s&p futures looking like we may see a positive end to the week ending the u.s. inflation data. take a look at u.s. treasuries. treasuries paring gains after we

had another 30 year auction go awry with a weak demand for bonds. still the lowest when it comes to the yields since january. let's bring in our next guest. joining us from hong kong is the head of aipac equity strategy at hsbc. there still seems to be a catching falling knives type moved to -- type mood to chinese equities. >> sentiment is changing a little bit with regards to chinese equities. two months ago, people were maximum underweight. valuations were low. a market people need to take a look at two i'm talking about the eight share market.

haidi: which sectors in particular? >> the way to look at it is maybe two or three different areas. there were certain sectors were china wants to continue to grow. door renewables. then there are -- there are renewables. then there are babies that have been thrown out with the base with -- with the bathwater. we have seen names. i would look at that as well. selective tech names pin they have come down considerably. -- selective tech names. they have come down considerably. a little bit of value emerging in those segments. shery: do you take in the value of the chinese yuan? we have seen incredible strength but the pboc seems to be wanting to tamp that down and they are raising their foreign reserve requirement ratio. >> the move in itself not so

much. it is the underlying story that is important. what we see is a good strong export cycle coming out of asia. that provides good support to these currencies. inflation is low. this as an opportunity for a lot of central banks in asia to actually go a little bit different from what the fed is doing. the fed talking about raising interest rates. in asia, they don't have to follow as quickly as they had to in the past. you can interest rates lower. that is good for equities. shery: tell us about your indonesia call because we continue to see optimism about asean nations. >> indonesia if i had to make a list of markets are like the

most, we like china but would like indonesia a little bit better. i've been looking at indonesia for over 30 years. it is seldom that we see all the stars aligned. you see inflows as people went to use the nickel. that supports the currency. the inflation is low. coal prices have gone up. that is good for world incomes in indonesia. people have slightly moved over wayland and tunisia. plenty for it to go. earnings growth looks healthy. more retail participation. i have my nephews in jakarta trading stocks as well. it is a healthy market in that sense. shery: it has been interesting to see retail traders across asia ba active. you mentioned india. that market has done so well this past year. is there still room for upside echo >> -- for upside?

>> i think there is still room but not a lot. indian valuations are not only high but if you compare with china, we have not seen india being so expensive as in the past versus china. india is a relative game. you are looking at those sectors that have underperformed. what we do is play certain sectors. private banks, some of the consumer staple companies. maybe a selective internet name as well. the domestic side is where we are looking for opportunities in india. shery: thank you for your time. let's get the su keenan with the first word headlines. su: we start with the latest weekly jobless claims in the u.s.. they have fallen to a 52 year low. that is seen as eliciting the

difficulties of the raw data for seasonal effects. last week, well below the median estimate. the u.s. secretary of commerce says she is optimistic the chip stocks will be approved this year. the consequences could be devastating if there is a significant delay. she has been leaving the biden administration's response to the shortage. she spoke to bloomberg earlier. >> if it cannot be done before christmas, it has to be done in january because the consequences of not fixing this problem long-run are quite devastating to our economy and national security. su: indian farmers have finally ended their protest. this after the modi government accepted most of their remaining demands. the government has agreed to form a panel to discuss

guaranteed prices for crops. any comments a families of those who died during -- and compensate families of those who died during the demonstrations. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. haidi: lots more on evergrande's default. china saying the inability to meet obligations will be dealt with in market oriented way. later, a look at what is next for the nation's property sector. this is bloomberg. ♪

shery: china evergrande has

been labeled a defaulter for the first time. it finally happened. does this change anything for evergrande pragmatically speaking? coming up on it is a miles -- >> it is a milestone moment. materially, it does not have a significance in the company. it has been praised in for many weeks if not months should people have been waiting the possibility. evergrande itself has been approaching the scenario. we have been seeing a restricted default. if a liquidation or broader restructuring or bankruptcy scenario. the other is this lack of committee case and from evergrande itself.

we had seen that. to miss a coupon and so closely watched by the market and not released a public statement has raised some eyebrows. you can see that in the report we saw yesterday. haidi: the pboc gave a nod to this and you're ready. what does that tell us about -- to the seniority. what does that tell us about how this is going to play out? >> it reaffirms the financial standards china has been moving towards. we have seen since 2017 this commitment to increase default curved hazard and follow precise types of market led approach to restructurings. but i do think it is worth pointing out we have seen a quitter to effort from authorities when it comes to evergrande even well evergrande

itself has stayed silent. on friday, we saw the flurry of statements including statements in english. with these comments from pboc, reinforcing what type of ridge treasuring we will see. it has been interesting to see the highest levels of chinese authorities stepping in to manage the narrative around the situation like evergrande. haidi: really fascinating. staying with china. forcing banks to hold currencies in reserve. this is the pboc's most substantial move yet. let's get more from our china fx reporter. does this tell us the pboc has hit the limit of where it is comfortable in terms of the strength in the currency?

>> this is the second time they have done this this year. this is probably the strongest signal we have gotten so far indicating they are uncomfortable with the yuan's gains. what it does is it puts downward pressure on the yuan by forcing banks to hold more dollars. we saw the move overnight on the offshore yuan. it weakened by half a percent. shery: our guest was telling us it does not move the way he sees assets but it is a fundamental message that was important. tell us about the significance of this move. >> what was interesting is the pboc has largely been quiet about how they have handled the gains. i think a lot of this has to do with the fact it has been driven by the fundamental moves especially from the dream trade surplus. a lot of analysts are saying this move is not going to do that much to stem the

depreciation. a lot of us are seeing that coming in to the new year when the fed starts to hike and we have gotten more signs the pboc my ease. all of this might force the yuan to depreciate. >> with the investment and flow, that is not a trend that is expected to stop any time. does that mean this is probably a temporary respite? >> the pboc has many tools to manage the currency. they can implement factors into the daily fixing. this gives them more influence on how lenders give the daily fixing quotes. the other option they can do is create more opportunities for capital outflows to occur so there is more downward pressure on the yuan. they don't quite know what they don't quite know what they're going to do next but we will be watching for the fix coming up. shery: the latest on the yuan's

movement. we will get more signals about chinese policymakers thinking. we have president xi jinping and other top leaders meeting to set the nation's economic agenda for next year. let's bring in the bloomberg greater executive editor. this year has been all about deleveraging regulatory crackdowns. we have seen some signals coming from the politburo meeting that perhaps they may be backing off. what are we expecting now? >> they are going to go into this confab, which we believe will ent -- will end today. the message we believe will get out of it as they will be more of an emphasis on supporting growth. you mentioned the crackdowns on big tech, property, crypto. the economy is slow and substantial. in 2022, we are going to have this party conference at the end of the year. there is a big reshuffle of the

leadership within the communist party. there is a strong emphasis or owners on the party to beget growth to a level that is not going to cause any ump's mask within the public when it comes to jobs, incomes and help people a feeling in terms of how much money they have in their pockets. haidi: what are some of the policy measures that can be taken when it comes to income distribution and to alleviate a lot of the stresses that created the problems and demographic problems the leadership begins to see? >> a lot of the actions the government took in 2021 were very populist policies. making didi pay their drivers more. making meituan pay more.

these are things that will be broadly popular with the general populace. they were also going to hopefully translate into people having more money. potentially more consumption. those are some of the policies that have taken place already. there are actions coming in terms of taxes. give a property tax trial that is going to be expanded heading into next year. we can see more taxes in terms of the top earners in the economy. those are some of the things we are expecting to see. haidi: coming up, we are going to speak exclusively with the bank of america chairman and ceo brian moynihan about his views when it comes to u.s. employment and the supply chain crunch. this is bloomberg. ♪

shery: the bank of america ceo says the u.s. economy unemployment and supply chain problems are starting to normalize. he spoke with david westin. >> we have inflation. that is not the debate. the average inflation for the last several quarters has been higher than targeted the question is where do people think it is going to go next. that is what is on people's minds. what you are seeing is wage growth and the expectation of wage growth. what they are going to earn and what they expect our next year. it is known that we have appeared the question is how do you spring up back in? is you can about the economy growing 4% next year and 2% in 2023, the goal is to glide into that trend growth rate without causing a recession and that is the hard work of the transition. >> you have a particular

viewpoint of the economy because you have a lot of small and medium-sized businesses. tell us about the effect of the supply chain on those companies and perhaps on inflation. >> as a bank, one of the effects we did not like as they are not using their lines as much because they're not putting up as much inventory because of the shortages. people cannot forget there are shortages in labor. not only goods to it also the people who make them. when you talk to clients, it is messed up kid it is getting a little bit better. it has been a problem for many months. the believe it is totally related to the virus is true but there is a tremendous amount of final demand. consumers are buying a lot of things. we are -- businesses are able to increase prices because only so many goods are sold. more importantly, they're starting to see a little bit of

help. the reality is there is a real concern. we need people and goods to manufacture for 2022. that is why you are seeing the administration bring other people into help and figuring out. it has been going on for 10 months. >> i want to come back to the consumer question. you say there is a little bit of improvement. as you talk to customers, how fast is the supply chain problem improving and you have any sense of when we maybe -- when we may be getting back to something approaching normal? >> it is a slow fix. if you went down to two and three, a 50% increase. people don't care what happened two years ago. it is do i have the stuff today and can i get it tomorrow? that is what is starting to get better. you have read the articles or seen the data. people have been on the show talking about appear they have learned to control of their import stream.

it is something that has got to be reckoned with and done. you are seeing it slightly better. haidi: the bank of america chairman and ceo. let's get a quick check of the latest business flash headlines. a last-minute snack for alibaba. jenny's officials are concerned the e-commerce giant could mean sensitive information is disclosed. the struggling chipmaker could turn to the state backed fund instead. the u.s. is said to be adding china's biggest ai firm on an investment blacklist on friday over accusations of human rights abuses. hong kong economic -- says the retail portion is four times oversubscribed.

buzzfeeds plunge after going public is accelerating. shares of the digital media company lost more than 20%, closing at a fourth consecutive record low. buzzfeed was the latest high profile company to list via sp ac. shery: we are seeing broad declines in markets across asia with the nikkei being led lower. the broader topics is holding steady with gains of about a 10th of 1%. we did get japan ppi numbers coming in at a 40 year high. the kospi losing ground for the first time in eight sessions. risk on sentiment propelled the kospi and the korean yuan higher under a little bit of pressure. omicron concerns continue why the asx 200 is being led down by energy stocks as wti is heading toward $70 a barrel. kiwi stocks down for a second session.

haidi: japanese ppi sticking around at the 40 year high. watching the yen holding steady over 113. the korean yuan seeing a little bit of weakness or the aussie dollar is trading unchanged. some of these commodities and riskier assets it on the sidelines ahead of key u.s. inflation data. the dollar getting the most in two weeks. the greenback outperforming most of the g10 peers. we see some of the haven demand as traders continue to way up what we are going to deal with when it comes to the omicron risk. the kiwi dollar sitting steady just shy of 68 u.s. cents. coming up next, more on china. why evergrande will be a controlled demolition. this is bloomberg. ♪

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su: this is daybreak: asia. millions more americans are eligible for pfizer booster shots after the u.s. cdc gave the green light to 16 and 17-year-olds. the biden administration has worked hard to make worcester's widely available as omicron spread should -- to make vaccines widely available as omicron spread. some developing nations struggle to secure even first or second doses.

the chairman of credit suisse broke quarantine rules when he left switzerland before his isolation was over. he has apologized for what he said was an unintentional violation. under swiss law, anyone who deliberately evades quarantine could face a possible prison sentence or a fine. china's pboc has lifted the amount of foreign currency banks for the second time this year. this as it tries to rein in the surging new end. it hikes their foreign reserve ratio by two percentage points, which will come into effect december 15. on wednesday, it had its strongest level against the dollar in three years. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg.

shery: china evergrande group has been labeled as a defaulter. our next guest says we are about to witness a controlled demolition of the chinese developer. the managing director is with us. thank you for joining us. you don't expect a disorderly collapse. how much of a relief as this for bondholders as well as the broader property sector? >> this was never going to be china's lehman moment despite that being the initial reaction should i think that has become clear over the last several weeks chinese state authorities are deeply involved in managing this crisis. all the way from offloading evergrande's project other developers to working with the company to come up with a debt restructuring plan. there will be pain for some companies involved.

foreign investors are the most nervous. chinese households are on the top of the list for people or entities for people that need to be taken care of. there is no lehman like panic or crisis that is happening. there is a broader property market distress story that investors need to keep an eye on because the chinese property market is going to be under pressure for the foreseeable future regardless of what happens with evergrande. shery: did the meeting signal more potential for easing and that change the narrative at all? >> we got back some data in november and there has been some amounts of easing as far as the property sector is concerned property funds are able to get more bank loans, it is a big change. they were able to sell more bonds. you are seeing some amounts of the loosening of credit policy. it may not be enough.

you could see the sector do a little bit better. compared to where was in the third quarter, which was horrible. the long-term picture if the economy is transitioning away from the high growth model, that by definition would mean the property sector is going to have a bumpy road ahead. haidi: that high debt, high-growth investment model has benefited regular wealth holders. what happens to consumer sentiment not to mention the knock on effect for the industries that rely on the property sector. when it comes to the average chinese consumer, what does that mean and the consumption going forward? >> that is what i think are taking households has been such a key priority for policymakers in beijing because you have so many chinese households who are not only waiting on being made

whole but have also bought wealth management at oaks that are tied into evergrande debt and they cannot be made to bear the losses. the reality is whatever is happening in the property sector is most likely going to have some impact on consumption down the road. that is exactly the sort of thing i think beijing is trying to stave off as it tries to -- haidi: was the rrr cut this week any kind of inflection point or does the prudent monetary policy continue? do you see more of a lean toward easing given how politically sensitive this next year is yucca >> -- next year is? >> there is going to be easing in 2022 because it is a politically sensitive year. this week's rrr cut, a lot of commentators have gotten to

giddy claiming this is the inflection point. the cut was a rather small. we don't know if it is reaching the real economy. the question we need to be tracking is, is credit making its way to the real economy? within that, which types of firms are getting access to the loans? is it going to be large firms again or is it going to be directed toward fme's -- toward sme's? sme's are having a hard time getting credit and large firms are not. those are the sorts of things. we need to be more concerned with a rather than what is coming down from the supply side . haidi: as the deleveraging drive serious? as you mention the political sensitivities are going into next year, as they're going to be more or less of a willingness to be able to go hard on these companies? >> 2022 is going to be the exception year because of the

party congress and president xi jinping's third term. there has been a paradigm shift inside of china. the old playbook has gone out the window. a new question if there is a transition away from this, it is in terms of deleveraging. this year, we have seen parked -- corporate borrowing fall quarter after quarter. a slowdown in credit growth all throughout this year. deleveraging and being serious is going to have to be part of the package if the chinese economy is to transition to a more sustainable growth pace. shery: what are the metrics you will be following through the next year to make sure china is adhering to the deleveraging and regulatory crackdown efforts they have had ongoing for the past year or that will be a signal they are veering away from it?

>> it is going to be looking beyond next year. beyond just 2022. we're going to be tracking corporate credit access and looking at could access between state and private firms. also what sectors -- is it the traditional sectors such as the industrial sectors or are we seeing better access for new economy firms? these are going to the key elements of what we continue to look at. same thing with an property. what parts of the property market continued to get some amounts of support and which others do not as we look at the restructuring going on? shery: joining us from new york. let's take a look at the markets because we are seeing downside pressure for the nikkei, which is down half a percent as we have health care and communication stocks leading the declines. ppi coming in as a 40 year high.

waiting for more information when it comes to the party tax planning. we are hearing from the japanese finance ministers saying the ruling party tax plan is a step toward new capitalism. the coalition is seeing a need to review the capital gains taxes to ensure fairness. japan's new prime minister has come in with this drive of new capitalism, prioritizing wealth distribution. haidi: cathie wood anticipating returns will quadruple over the next five years. the ceo and cio spoke to bloomberg earlier. >> this risk off period, which started in february and is still enforced is a very unusual one for us. i have never been in market that is up, has appreciated and our strategies is down. that has never happened before.

this disconnected even more strange when i look at the -- taking place in the private world when it comes to innovation. eubank comes out today. it had an up around this year. ? sorry for interrupting. do you stand your strategy if you've never seen this before and your strategy is not working? do you change your strategy? >> we have a five-year investment time horizon. our strategy is our strategy and we believe truth will win in the end. we believe -- we take the opportunity -- we believe the opportunity is huge. warily in my career have i seen our five-year projections for returns hit 40%. we believe based on our estimates -- they could be wrong. we think we have the best research when it comes to innovation in the industry.

very high degree of confidence as it is centered around rights law. based on our very disciplined research, we expect a compound annual rate of return of roughly 40% over the next five-year. at the peak of our strategy in february, that number was 15%. that is our minimum rate of return. when we go through a period like this come of course we are going through soul-searching saying, are we missing something? we have doubled down on our research. what you should also note is to get to the 40% compound annual rate of return, we assume massive multiple compression from today's levels. if i can just finish, one of the reasons our multiples are so high right now is our companies are investing aggressively to capitalize on the five

innovation platforms involving 14 technologies we believe will scale exponentially during the next five years. we assume the valuations are going to compress to faang like valuations. it is a series of multiples assumed and we still get to the 40% compound annual rate of return. >> i'm curious about the impact of hires -- of higher interest rates. we have seen some of the growth names waiver in anticipation of higher interest rates. i would love some specifics from you on how you think some of your investments might be impacted. >> i think they already have been. i think that is what started in february once vaccinations were hitting critical mass or we could see they were going to hit critical mass. and we were going to get back to work. i think everyone was working very hard but back into the physical world. this assumption that the fed was

going to tighten started to make its way into the markets. i think that is one reason many of our stocks are down. some of them are down 50 to 60%. what we see happening today is the flipside -- it is a little bit like what happened during the coronavirus. as we entered it, there were algorithms out there and this market is i think controlled by algorithms in the short term. what happened in the short term as we went into the coronavirus is algorithms seized on two variables. how much cash to punch dexter companies have and are they burning cash? those two variables took some of our stocks down 50, 60, 70% and those who took those stocks down, the algorithms, the momentum players, the obvious

trade, those people were all wrong. those stocks were some of the biggest rebounders because especially in the genomic space, the genomic revolution helped us get to the vaccine and those tests much faster than would have been the case. today what do we have? we have algorithms focused only on the valuations of stocks today. maybe trailing 12 or this year. very short-term. they are thinking, ok. high interest rates, kill those stocks. we think it has already taken place. i think taylor, you mentioned this earlier. interest rates after chairman powell said maybe this is not transitory inflation. the bond market rallied. so i think the bond market is saying that point of view is incorrect. shery: more to come.

this is bloomberg. ♪

haidi: star health and allied insurance will begin trading in mumbai after it fell short of its ipo target this is the first major listing since the disappointing debut.

our equity capital he reporter is here. take us through the ipo plan. >> this is an important ipo for the indian market. it is the biggest one since last month in dubai. the company fell short of its initial target of $970 million it was expecting to raise with the deal. it ended up raising $850 million. we did hear from analysts the valuation was quite high when you compare to some of the local peers. it will be interesting to watch how the stocks chart -- the stocks start trading this morning. shery: especially since now that there is somewhat skepticism about the indian market. how significant are we expecting this want to be with its debut? >> that is correct. there is a lot of attention over

the indian markets over the past six months. there have been many important and big size ipo's. last month raising 2.5 billion dollars. if we look at the stock since it started trading three weeks ago, it is down to 25%. it comes down to a valuation. this is the point putting pressure on star health. this is an iconic and important company for the local market. it is backed by india's warren buffett. it is a quite meaningful deal. it is probably the biggest deal before the end of the year. if you look at companies that raised more than $500 million in the indian market so far this year, they rose by an average of 17% in the first day of trade good it will be interesting to see if star health is able to get to that percentage. shery: equity markets reporters running us from hong kong.

it is not just india. it is all of asia, which is surprising to see the world's largest equity deals this year have come out of the region. we are talking about the $14 billion secondary sale by tencent and also japan post holdings. kind of showing as the clout of ages market these days. haidi: it has been a record year globally despite the standout from the asian region. i don't want to end this on a downer but we are seeing? appearing to be evident in the past few months. inflationary pressures. hong kong has been hit by china's regulatory crackdown, which has been a shift given what a regional ipo powerhouse we used to see hong kong as.

we saw that indication from india. investors are starting to come down from the froth and be more discerning in terms of where their money goes. shery: similar story in south korea hearing from regulators being more skeptical and apprehensive of these ipo's. we are seeing a little more caution when it comes to the market. watch us live and see past interviews. tv is your function. you can dive into any of the functions we talk about. become part of the conversation by sending us instant messages during the shows. check it out at tv . this is bloomberg. ♪

haidi: where trucking the fallout of the global supply chain crunch and these are the top stories. u.s. commerce chief and the bank of america heads say the supply crisis is easing. gina raimondo and brian moynihan totals exclusively the disruptions are short-term issues. the bank of america is sounding a bit more cautious. officials say there is a lot of uncertainty around when constraints will use. the banks will assess in january or the bottlenecks and shortages are impacting growth without feeling inflation. the japanese battery maker says

supply chain woes are forcing it to ship components by air. inflated costs mean the business is likely to report a loss this year. shery: we saw some big after our moves. broadcom and lulu lamon commenting on supply chain issues. lululemon saying issues are expected to remain into the first half of this year. prod come says chip times are expended -- are extended. bloomberg terminal users can read more about the stories on our newsletter. that is on and i trade nl. haidi: for another aspect of what we are seeing threaten supply chains and transport logistics, in australia, supply chains under renewed threat as the shortages starting to hit. we are seeing the shortage that has pushed fertilizer risers through the roof to on saint tesh in australia.

half of the diesel powered trucks in australia acquiring and exhaust fluid to keep running. this is according to the head of national road transport association saying half of these heavy vehicles that require the blue could see their supplies drive by february. we know this is not necessarily a shortage and a risk isolated to australia. we are seeing those around asia and it has been playing into a disruption of diesel demand ahead of the key season. shery: coming at a time when we have been struggling with global energy shortages. leading to concerns about food prices continuing to rise as these food shortages and a vulnerable parts of the world as well. here's a check of the latest headlines. american airlines trimming its overseas schedule next summer because of delays either the --

in the delivery of the bowen dreamliner's. american airlines will not be getting as many of the jets as it counted on. flights to hong kong, edinburgh and prague are the ones being dropped. a supervised debt restructuring process after jakarta courts accepted a petition to suspend debt repayments to the airlines creditors. the move could pave the way to cut $9.8 billion in liability to 3.7 billion and allow the carrier to renegotiate leasing terms. it is one of europe's most ambitious pale plans. the italian bank plans to return 18.1 billion dollars to shareholders by 2024 as part of the ceo first strategy revamp. a mix of cash dividends and share buybacks on 2021 earnings.

haidi: coming up, we will be billion into the -- will be digging into the default. that is it for daybreak asia. markets coverage continues we take a look at the start of trading in hong kong, shanghai and shenzhen should bloomberg markets -- and shenzhen. bloomberg markets china open is next. this is bloomberg. ♪

♪ david: hello, hello, 9:00 a.m. in beijing, shanghai and "bloomberg markets: china open," "bloomberg markets: china open," hong kong. welcome to -- welcome to "bloomberg markets: china open," i'm david ingles. david: