paul: good morning. we are counting on to the major asian market opens. shery: our top stories this hour -- asian stocks stat -- asian stocks set for a mixed open. china property sector woes are another drag but one developer says they can meet the allegation. legislation punishing china could be passed in the u.s.

house this hour. the bill would restrict imports from chin jang. paul: just open for trade in the australia. a staggered open, but in the early going, just a few points -- flat on tuesday afternoon in australia. keeping and i on a couple of stocks -- a share buyback announced a little while back, westpac facing some lawsuits, but we are keeping an eye on csl after announcing it will be acquiring a swiss pharmaceutical giant. it will be the largest acquisition of there is ever. the index off by two thirds of 1%. we did hear from adrian or

earlier, saying the neutral cash rate is 2% but it might eventually rise above that. nikkei futures weaker, s&p futures kind of flat right now. shery: breaking news out of south korea -- we are getting the unemployment rate coming in at 3.1%, which is below analyst expectations. a survey by bloomberg expected the rate to come in at the .3%. we have seen the unemployment rate slowly edging up in south korea, not necessarily because we see a deteriorating labor market, but because we see increased labor force participation. this after falling to a record low in august. we continue to see the unemployment rate above 3% as we see a stronger economic recovery and social distancing measures luring workers back. take a look at markets because we see a rebound in bitcoin or

-- actually a decline in bitcoin of .1%. we have a rebound in the new york sector which gained about 3%. a lot of volatility for crypto assets with bitcoin. wti continuing to move around, heading toward $70 a barrel. in new york, we had it down because the global market has returned to a surplus. the yuan holding steady with marginal strength throughout the week. it has held around the 637 data -- 637 level with data coming out of china. the dollar at the highest level in two weeks. treasury yields with the fed wrapping up the final meeting of the year. we are watching the chinese property sector continued to rock markets. we are anticipating the data dump i just told you about and a

slew of central-bank decisions around the world set to kick off. there are many top market beams today. we are seeing these concerns about the property sector focused around she mall group. steven: and it extended around evergrande and there was a bit of a rally as authorities tried to dissuade some of the concerns about big developers. but then one of the ones considered one of the more property -- more healthy of the property developers. but there is concern raised to this week on multiple fronts. some of their bonds are maturing in the short-term this week.

maturities do on friday, which the company says it can meet. but that's the equivalent of 4.7 million u.s. dollars. they have 2 billion -- 314 million u.s. dollars in the bond that matures next month and $10.1 billion in outstanding bonds. so there is concern because of the liquidity issues on the one front that these developers are having because of regulation and slowing contract sales in china. the other front weighing on shimao, why we see a downgrade from jp morgan as well as a bond plummet. monday, we saw one of its bonds plummet 50% in one day. that's because of concern about governance as well as the deal announced on monday by the services arm, a separately lifted unit.

shimao property services announced a deal to buy another unit for 250 9 million u.s. dollars come a deal jp morgan says highly over values the purchase and there is concern that cash-strapped developers are starting to rob from the more profitable units to alleviate that cash crunch and that is why you saw the property management arm. they all plummeted by more than double digits in the pain continues in the sector. paul: that is just one of the big stories we will be watching out of china. we are expecting a huge amount of data today. what can that tell us about the retail sector and big picture for china this morning? >> we get the november data and we are expecting it to confirm downward pressure on the

economy. we see it on the investment side of things where it is being dragged by a slowdown in the real estate sector and would we -- we would see ongoing pressure on the retail side even though there is expected to be a lift from the single day bonanza. consumer confidence is continuing to be weighed by aggressive control of the virus. industrial production is getting a lift because china's exports continue to go gangbusters. that's going to offer some offset. at the overall takeaway is that it expected to confirm a slowing economy and that is why policymakers have shifted to ensure they have enough support going into next year. shery: the u.s. price producer inflation numbers? what do we know? kathleen: consumer prices have

already been rising since their fastest -- rising their fastest since 1984. consumer prices show the fastest rate since 1990 when the labor department revamped their support. if you are worried about inflation showing up in consumer prices, goods and services and you see wholesale prices, what retailers have to pay passed on to the people who buy their stuff, you know you've got some momentum there or maybe worried about that -- 10% year-over-year ppi and the core ppi rose at nearly 8% year-over-year and prices for goods and services were rising last month. inflation in the pipeline -- you go in the projection -- intermediate goods prices, people were talking about supply cut constrains, all the things

playing a role here and the federal reserve, jay powell already drop the word transitory. he says he's ready to consider faster tapering of bond purchases which could maybe and in march. put that to one side and now the question is if the federal reserve is going to signal a faster pace of rate hikes next year. the fomc updates its forecast to the economy and inflation is expected to be revised higher for 2021. unemployment revised lower and it may show the consensus of two rate hikes next year -- may be tilt toward three. jay powell will get a lot of questions on this no matter what the dots show. paul: stephen engle, and that

turn and kathleen hays there. let's get to su keenan for the first word headlines. su: we are going to start with the ecb, showing inflation will remain below the 2% target and 22 a three and again in 2024. meanwhile, sources tell us consumer price growth will be stronger than predictions of 2.2% next year. the new numbers are key on post-pandemic policy. they will give christine lagarde ammunition to argue against a swift rise in interest rates. the u.s. house is set to vote on legislation that punishes china for alleged oppression of uighur muslims. this before sending it to the senate where it is expected to past. the bill would create a lift that collaborates with china. companies would need to prove goods from chin jang were not made with forced labor.

beijing has denied using forced labor in the region. there could be more pain ahead for bitcoin. the largest digital coin has dropped 30% over the past month. they typically see have trading volume at years end. however, he's not worried about prices in the medium-term. >> bitcoin, 42,000 is an important level that should hold. we started near 30 and there's been so much of a change in mindset. su: global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. shery: still ahead, the u.s. secretary of state criticizes

china during his visit in asia. we will talk implications with the iss chief. coming up, j paschi joins to share his investment holos fee -- investment philosophy heading into 2022. this is bloomberg. ♪

paul: as the fed gets ready to wrap up its final meeting of the year, a new report shows inflation hitting some of the most expensive portions of the market. the past few weeks have taught us something. we see selling on a major indexes with a lot of dip buying. when do you think we will see a sustained move to the upside or downside? jay: it has been a market that

is up and down. i wrote a piece on friday and i titled it sell the rumor, by the news. that's the inverse of what we traditionally talk about in market, which is buy the rumor, sell the news. we've got the cell the rumor of omicron being bad, we had the market sell the rumor of the fed tightening more aggressively after chair powell's flip-flop on the term transitory, and now we are selling the rumor on what's going to happen tomorrow with the fed meeting and the announcement tomorrow. we need to get through tomorrow. it's going to be pretty uneventful in the sense that markets have already priced in three rate for next year. the fed has told us it's going to accelerate its taper and the dot plot show a couple of spots

next year but i think it's already in the price. what's not in the price is a much stronger earnings profile than people have expected. the u.s. is going to grow nominal gdp of somewhere around 15%. earnings are going to be quite strong for q4 in the early part of january. i continue to be constructive on 2022 and it's going to be a good year for risk assets. paul: i know you see a global synchronized expansion. we just talked about fed tightening but on the other hand, we've got china talking about easing. how do you see this story evolving? jay: i think that's the key -- it starts with the asian reopening. that's something i've been talking about the last month or two. the asian economy has been in

lockdown over the summer into the early fall. that allows asia to join with the united states in terms of dealing with covid. the economy is being very strong and we are seeing that play out with the numbers as recently as yesterday with south korea's export numbers being quite strong. it's an asian reopening, not the end of covid, but an increasingly less important focus on covid and it is an inventory restocking story, it is a story which i believe is going to unfold as a result of climate and infrastructure buildout. those are the main points i'm looking for. shery: what about what is

happening across the chinese property sector? you called it your theme for 2022, the china glide path. what does that mean? jay: exactly. we've become very bullish on china across the board and across assets, equity, bonds, currency, government debt -- pretty much the whole shebang. basically the 22 will be a glide path, meaning a very smooth environment. we have seen that supported by the politburo saying stability is the top priority, what the central working committee saying they want to frontload stimulus, so i think the slowdown in china is effectively over. the market has been massively oversold and everyone who wants to sell china has been able to sell and we are seeing the end of it here with the property selling you have been talking about.

yet a situation where china has a full policy quiver, monetary and fiscal policy is available, political clarity on where it is heading, a very oversold market, very cheap markets as well. shery: we continue to see more moves across global central banks to start normalizing quality -- not so much in china but at least when it comes to other emerging markets and the united states. what does that do to the more speculative corners of the market? jay: you point out correctly we have been a tightening cycle already this year. there've been 150 central bank tightening's, mostly in the emerging markets. the fact china is going to go the other direction is important. china and the fed are the big actors. the ecb is not going to be very active, neither will the bank of japan. the su is we are -- the issue is

we are switching from the markets -- first is the shift from liquidity to earnings and we are underway. the second is the shift from growth to value, also underway. people don't realize it but the energy sector in the u.s. has outperformed the tech center -- tech sector your today. the third transition is a shift from the bull market in treasuries to a bear market and i expect the 10-year treasury yield to yield 2% by the end of next year. shery: we have an alert on the bloomberg -- the biden administration considering sanctions on china's largest chipmaker. we are talking about smic -- the national security council set to hold a meeting on thursday to discuss potential changes. the proposal to tighten the rules on exports to some conductor manufacturer

corporation -- it could find their ability to supply to smic severely limited. we continue to see this geopolitical tension between u.s. and china affecting different sectors of both economies. how do you play this into your trading? jay: as you know, i'm a believer in the trifocal world in u.s., asia and americus -- it's the driving force going forward. i call it splinter net. technology is driving the separation between countries and regions and i think it's only going to continue. it is one of the things creating the tri-global world. each region wants to have its own some conductor capacity.

each region wants to have its own electric vehicle battery production set up. europe, the united states, asia -- it's all the same. that means there are opportunities to position within the different regions and different segments of the marketplace. it is very much a somatic focus of hours, something i think is an area of opportunity for a global macro investors such as ourselves. shery: we will have two have you back to discuss those opportunities. thank you so much for your time today. we have do more to come. this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines -- toyota planning to invest $35 billion to

supercharge its push into electric vehicles. carmaker is aiming to roll out 30 ev models by 2030, by which time they hope to be selling 3.5 million units a year. elon musk says tesla will accept those going for some product on its website. in a tweet, he said some merchandise would be viable and he will see how it goes. it's the billionaires latest support for the meme crypto currency which features a picture of a shiba inu dog. paul: bloomberg has learned wall street's top dealmakers this year are planning for bonuses to keep their members happy. let's get more details on this. bankers at goldman sachs, j.p. morgan are facing big bonus pumps. what's the reason for this? >> that's exactly right. it has been a bumper your for

dealmaking, and with that comes bonuses for the bankers behind these deals. goldman sachs and jp morgan are number one and two in terms of global fees from dealmaking. we see a runaway for morgan stanley which has been eight close competitor in recent years. oldman racking up more than $11 billion in fees and jp morgan, almost $10 billion by the end of the third quarter in september. that translates to big bonuses for their investment bankers. goldman sachs is talking about a 50% jump, that is huge. jp morgan is talking about a potential 40% increase. which isn't so bad, either. shery: they are not the only ones doing that well. will other banks follow suit? >> this will put the pressure on other banks to follow suit if they want to keep their staff. all the banks are telling us at the moment that this hardline

looks healthy going into next year, so they are going to need those bankers to be working on those deals. we can expect to see morgan stanley trying to get somewhere near there and then you've got bank of america as well, which has already said their support will be nice for their bankers. this does put the pressure on other banks to quickly follow suit. shery: coming up next, u.s. secretary of state is trying to rally allies in the region. aaron connelly joins us to discuss his key goals for the trip. this is bloomberg. ♪

paul: just some numbers on the bloomberg. december numbers coming in weaker, 104.3. positive territory, consumer confidence falling month by month, perhaps surprising. internal border restrictions being relaxed in australia. those consumer confidence figures, 104.3. take a look at the asx, weaker

by one third of 1%, consumer discretionary stocks, taking a beating. 12 by 8/10 of 1%. studies show pfizer's pill is highly effective at preventing hospitalizations, but less able to erase mild symptoms. let's get more from bloomberg's managing editor. tell us about maura -- tells more about these study results. reporter: pfizer disclosed the results of two studies on tuesday. one, this treatment known as -- failed to meet the primary goal of reducing what they call self-reported symptoms. which is somewhat disappointing, even though you do have this result of it performing very well against severe disease and hospitalizations.

some have been seeing these covid pills, you also have the one from merck and others, places like china. the answer to making covid and everyday disease. tamiflu. these results, while still in the initial stages, to indicate it might not be that sort of treatment for people with breakthrough infections, so that is vaccinated folks that still get covid that we might have hoped for. shery: we are seeing more restrictions around the world. the south korean prime minister with the latest headline saying the country will strengthen social distancing rules, they are also considering reducing the number of people for private gatherings. this as we continue to see the omicron variant spread. the who is concerned that this

variant is being dismissed as mild. reporter: you had a bunch of folks from the who including the director general coming out overnight and really trying to head off this idea because a lot of the arians of people and what is the original epicenter in southern africa, where we are getting a lot of intelligence about the experience of this variance, a lot of those people are are seeing quite mild symptoms. not a lot of oxygen required, not a lot of hospitalizations. we have had some scientists out of south africa caution against that perception, saying it is early days and there is a high level of natural immunity from other covid variants, covid generally, which could be

playing a role in this mild experience. it's only been just over two weeks. paul: our asian global business managing editor. let's get to su keenan. su: thank you, we start with a chinese property developer. it is confident in can service its loan obligations. earlier the shanghai stock exchange as the company to assess its commitment. it's further dented investor confidence and helps them chinese property stocks to a five-year low. they were recently seen as one of the sectors strongest players. india has lost a wto dispute over sugar exports. the panel found the country offered excessive domestic support as subsidies to the

industry. industry -- india is the world's largest sugar producer after brazil, it has pledged to refrain from subsidizing x words due to high global prices. india can appeal the ruling within the next 60 days. to the u.k. where boris johnson has suffered his biggest in party rebellion. almost 100 tories opposed his plan. johnson was a -- forced to rely on opposition both. it's a significant blow to his authority, also comes ahead of a special parliamentary election this week. in a rare move during peak winter demand, lng prices in europe surged higher than in north asia. gas prices are up almost 600% as inventories have remained slow to build. russia has reduced volumes sent

to the region and tensions over the nord stream 2 pipeline are further hitting prices. 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 su keenan. this is bloomberg. shery: the u.s. senate voted to raise the debt limit by $2.5 trillion, the bill will now be going to the house of representatives and later to president biden in order to be made into law. joining us now is a bloomberg government reporter. this could not have come at a better time. just one day ahead where the government is running out of money. reporter: that is what the treasury officials told lawmakers, this was consider the effective deadline to get this done. as we got closer to the deadline, we learned it's not likely they would have surpassed

the debt limit tomorrow, probably would have at least another week. lawmakers wanted this off their plate. we saw a bipartisan agreement on the process. today's vote was not a surprise, and it appears to have a clear path through the house in a vote that could come later tonight. paul: obviously a sense of release -- really. probably in a years time, we are going to be back here. the clinical landscape might be somewhat different then. reporter: the idea is to get it passed the november 2022 midterm elections, it's expected to take is probably into early 2023. for one, it's difficult to predict exactly when that deadline would be, because this is a debt increase and not a suspension, it's not exactly

clear what the government revenues will be over the next year, especially with the economic uncertainty around omicron. there is an expectation among many lawmakers that republicans will take the majority, at least the house if not the senate. it raises the question, if democrats might try to address this in the december 2022 lame-duck session, or if there are bipartisan talks sometime early in the next congress. right now, there is not a plan. they are happy to avoid a crisis. shery: our bloomberg government reporter. we go from domestic politics to geopolitics. antony blinken has criticized china's aggressive actions and asia, while laying out plans to more closely integrate u.s. allies and security partners in asia. >> open markets.

denying exports or revoking deals. engaging in illegal unregulated fishing activities. countries across the region want this behavior to change. we do too. shery: the speech gave broad contours. the u.s. seeks to rebuild relationships fray during president trump's term. let's bring in a research fellow. great to have you with us. how much headway has secretary brinkman -- blinken made during this trip and repairing some of those relationships with ossian nations? guest: it's worth remembering how far setback united states was when president biden came into office. the trump administration never showed up at any summits, that was seen as a snub. most ambassadorships were

vacant. the message that the united states wanted to put across just was not being put across, because there was not the personnel in place. this is a start. it's a normal visit by the u.s. secretary of state to southeast asia, and it did not include a lot of fire and fury we saw from the trump administration. i think it would have been appreciated, but it's just a start. shery: especially, given that not much was included in terms of the trade agenda. how concerning is that? guest: this is something that seems to be stuck in the interagency process in washington. there is a debate within the democratic party and administration as to just how much the biden administration should do on trade in asia. the strategic people realize this is a key part, has to be a key part of their agenda. there is a debate within the democratic party as to whether

or not trade deals like these are smart political moves, and indeed whether or not they advanced the parties goals of social justice. i think it's going to be a challenge for them to put forth a trade agenda that is not the transpacific partnership, which the trump administration left. but is something that can pass muster in congress, at least serve as an executive agreement. i don't think they know with that is yet. paul: is trade the most pressing issue facing the united states in this region, or is it more -- a more aggressive china? aaron: the two issues are linked. one of the main things pulling much of southeast asia toward china is its economic power. the united states, if it wants to be in that game, need to have an economic agenda for this region. just determining what that is, a digital deal that would not have to pass congress, a broader trade agenda that probably would

run into trouble in congress, that is something the administration does not seem to know what it wants to do yet. paul: then there is another thorny issue. myanmar. have you solve a problem like that? -- how do you solve a problem like that? aaron: it's interesting. indonesia and malaysia were the most forward leading in trying to push the general out of the ossian meetings that took place back in october. they won that debate, and on the others, was thailand. ruled by a government that originally came to power in a military coup in 2014. thailand, although uncomfortable with what myanmar armed forces have been doing, has been defending the right to remain in the organization. it's going to be two very different conversations in indonesia and malaysia, where the united states is strategizing with those partners had to handle this problem.

in thailand, it's more about coaxing thailand to put more pressure on the regime. united states needs thailand if it wants humanitarian aid to those parts of myanmar. shery: how do these nations factor into the broader relationships that the u.s. has in the region, like the quad meetings and other groupings we have seen in recent years? aaron: some would say one of the reasons we have seen so much growth within the quad true, japan, australia, india and the united states, the new arrangement between the u.s., australia and the u.k., is because the united states has been frustrated by what it believes it can achieve. i would argue that the united states, under the later obama administration and during the trump administration, didn't really try very hard to make the

forums more meaningful, more substantive. but, partly as a result of that impression, it was left in washington that axion was not a viable partner. this has caused a lot of anxiety and southeast asia. it's one of the few ways they can set the agenda for geopolitics in the region. they are going to look to ways to strengthen asian, and the united states wants them to do that. paul: arun connelly, thanks so much. still to come, the forbes ceo tells us about his ev ambitions and how he has his sights set on overtaking general motors. this is bloomberg. ♪

paul: shery: paul: supply chain hassles have united an economic boon along the u.s. mexico border. corporate executives are calling it one of the biggest economic transformations sparked by the pandemic. the latest data on supplies shows some signs of easing in

the united dates and euro area. that's according to our team. while still elevated, the numbers suggest shortages are becoming less severe. one exception is the u.k. where indicators are getting worse. one thing that can complicate this is the weather. la niña is causing extreme swings while food supply is top of mind for traders, heavy rains in mining countries. shery: 10 days before christmas and things are getting costly. here is a chart of how much prices have surged in the top categories. new vehicles are at the top. 11% jump in november. prices of all things ranging from sporting goods to jewelry, watches, clothes, shoes, rising the fastest in decades. even coffee. one thing that is getting cheaper our airline fares. perhaps not surprising given the omicron variant spreading, but

perhaps time for some bargain-hunting. bloomberg terminal users can read more about those stories in our newsletter. paul: sticking with transport, the ford motor ceo says he has ambitions of topping tesla. however, supply chain issues risk getting in the way. he told bloomberg his plans for overcoming them. >> we are making more money. our base business is getting more profitable. we are fixing launch issues and quality issues, and we are aggressively moving into battery electric. our ambition is to be the number two battery electric manufacturer, seller and the next couple of years, the first inning of this transition. i think it's both the base business and leaning into these connected electric vehicles. >> as you pick up, how do you manage the danger of getting out over your skis?

i know the mustang maki you had to triple production, the f-150 lightning, you limited to 200,000 orders. i am not sure you have the capacity? >> ford knows how to make things at high volume. once the company makes up its mind, we will figure out how to double capacity of lightning and build more mach e's. it was a moment where the leadership team -- we are a very scrappy company when it comes to scaling manufacturing. this is what we do. we are in the middle of it, it's hard to handicap how it will come out, we're getting to 600,000 units running rate in 24 months. we have our arms rolled up, we

are really putting plans in place to double capacity. >> some analysts question that number. what kind of capital investment will require to get there? >> there is capital investment. we have to increase their capacity at the plant, we have to double it. that means physically building a bigger building. it will be hundreds of millions. the biggest issue is batteries. when you change technology, supply chain becomes a critical and strategic advantage. right now, the biggest issue is getting batteries. that cost a lot of money. battery plants are very expensive. tennessee and kentucky, we are talking tens of billions of dollars. that's the constraint to get to 600,000. to get those batteries. >> you pushed back the launch of the electric ford explorer and

lincoln aviator. with that because of demand or capacity? >> we need to prioritize, we have three hits on our hands. frankly, we had no idea they would be as popular as they are. the demand is probably three times. we need to simplify the focuses and scale these. also become profitable and improve the design of the vehicle. that requires focus. because of that, we had plans to put vehicles in certain plans, we are doubling production of mach e, and now we have to find a place for those vehicles to be built. >> microchips, semiconductors, the problems all automakers have had in the supply chain. i know you announced a big deal. >> it is a big deal. we are the number one producer

of automobiles in the u.s.. we have about one million indirect jobs. it's a big deal. we announced a commitment for global foundries, another company to build semiconductors in upstate new york. that's an mou at this point, hopefully getting to a definitive agreement, and be less dependent on taiwan in importing these chips. shery: the ford president and ceo speaking with david westin. be sure to tune into bloomberg radio to hear more from the days big newsmakers and get in-depth analysis, broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. plenty more ahead. stay with us. ♪

shery: we are counting down to the start of trade. some stories we are watching today. in japan, industry data which measures activity and retail communications is expected to show a gain for the month of october. we are also watching toyota after the ceo said the automaker is planning to invest more than $35 billion to supercharge his ev place, also a pharma company will release third quarter

results, expected to post an operating loss. over in south korea, watching the jobless rate age bloomberg in november to 3.1%. we have virus curbs and higher vaccination rates helping to stabilize the labor market. this of course before the surging covid omicron cases. the bank of korea releasing supply data, samsung. paul: netflix has slashed prices. the price for entry level has been lowered to $2.60 a month. jp morgan says -- payments over the four-day period will be 50% higher. while in-store transactions

surpassed 2019 levels. the market opens in south korea and tokyo next. futures pointing to a softer start. we will have the details in a moment. this is bloomberg. ♪

shery: welcome to "daybreak asia". paul: asia's major markings have just open for trade. our top stories this hour. asian stocks set for in mixed open -- a mixed open. china property sector woes, another drag, but a developer says it can service debt obligations.

singapore sticks with plans to loosen covid rules despite omicron. more workers will return to offices. shery: downside pressures were japanese and korean stocks with the nikkei losing ground for a second session, led lower by tech and health care stocks. we are seeing the japanese yen holding steady, trading in a narrow range, we do have the fed last policy meeting of the year ongoing right now. jgb, watching them. we are watching korean stocks, under pressure, down 3/10 of 1%. we just heard from the prime minister that we will see strengthen social distancing restrictions, we already got the jobless rate easing to 3.1%. given the social distancing restrictions have been loosens, but this was before the rising

cases. the kospi at a one-week low falling for a fourth consecutive session. paul: let's take a look at how we are tracking here in australia and new zealand. the asx is weaker by 4/10 of 1%, new zealand is weaker as well by about two thirds of 1%, we have just had some news out of new zealand, the treasury projecting a return to a budget surplus in 2024, the bond program being cut by $31 billion over the next four years. new zealand at 41 percent of gdp. the kiwi dollar, little changed. 6735 against the greenback. bloom back -- bloomberg has learned the biden administration is considering tougher sanctions on china's largest chipmaker.

let's get more from a semiconductor reporter. in practical terms, what does this mean? reporter: as we reported, it is still to be finally decided. what this really means is a change in the existing rules which will mean smic will not be able to get much in the way of equipment from u.s. companies. they are the leaders in making chip equipment. without that, it makes the job more difficult. shery: just as you broke the story, we heard from my guest talking about this separation when it comes to technological advances. take a listen. guest: technology is driving the separation between countries and

regions, and i think it's only going to continue. what that means is there are opportunities to position within the different regions, different segments of the marketplace. it's very much a thumb out a focus of powers, something that is an opportunity for global and macro investors. shery: this is perhaps an opportunity for investors to position, but how does this complicate matters for companies that have to work within the chip supply chain? reporter: as the situation exists right now, you can't go to a local chinese company and say i can't get the americans to give me the same thing because the chinese don't have that capability. the capability exists in the hands of companies like tokyo electron. if the west, the u.s. partners like korea and japan stay in line with u.s. policies, then there really isn't an immediate

play for china. if they don't, then you look at tokyo electron, you look at europe. long-term, the worry on the u.s. side for companies that i just mentioned is this gives the chinese even more incentive, and an opportunity to try and develop their own capabilities. shery: ian king with the latest on smic, what this means for markets. then powell at blackrock investments joins us now. it's great to have you with us. we heard from tpw advisory talking about this being an opportunity for investors, especially when it comes to thematic trends. i know you are constructive in chinese assets. what do you make of the latest? ben: good morning. for us at blackrock, the u.s.

-china tensions are structural in nature and therefore are going to persist. that will be true for years to come, maybe even decades to come, almost regardless of who happens to be in the white house. the structural nature of the tensions are real, but for us in 2022, we think we can see something of a lessening of tensions, frankly, because both sides are so busy domestically. clearly, very important political years both in the u.s. with the midterms in q4, and china, an important critical year as we all understand. it seems to us the tensions will persist for years to come, that is kind of the mood music for the foreseeable future. however in 2022, we think we could see something of a tempering, just because both sides are so busy minding their own stores with domestic calendars, we think we will see more focus. shery: what to the domestic

narratives in china mean for the markets? how positive and supportive could that be? we saw the pboc turn a little more easier on monetary policy, not to mention fiscal measures seem to be more supporting. ben: at blackrock, we upgraded china equities to a small overweight on september 27. we did that because we expect to see increasing signs of a broad-based loosening, not just monetary policy, rrr cuts, but fiscal, and critically maybe decreasing intensity and regulations. so far, we see more evidence in that direction. we want to see more, but critically over the last 10 days, the economic work conference, kind of a huge deal, suggesting that indeed, china

has pivoted to a more supportive , growth supportive policy over the next six to 12 months. for us, given how bearish sentiment is towards china, chinese equities in particular, that combination of bearish sentiment and a fundamentally pivot towards more growth policy from chinese authorities, we think it's constructive. we remain overweight chinese equities in our 2022 outlook, and continue to be moderately overweight for some of those reasons. paul: i am assuming you have to be pretty selective. there is not only regulatory downdraft, but exhibit a, chinese real estate companies, how long do you see these issues persisting in china's real estate sector? ben: structurally, i think for a

long time. one of the ambitions for china authorities is to create a more market-driven pricing of risk, and to do that, you need to have some risk, which means the potential for a haircut and bankruptcy. if china can achieve that, different prospects. that would be rather constructive in terms of the efficiency of the economy and market and so forth. it's going to be very interesting, delicate and hard for authorities, but if china can land the plane while simultaneously defending growth and keeping it high enough to support employment and social harmony, and simultaneously inject risk pricing, that to me would be quite a constructive achievement. both temporarily, the short-term stimulus stuff, but more fundamentally if china can move

away from the implicit guarantee towards the margin greater reliance on markets, allocate capital, and to do that, you need to have risk, there is no way around that. that would be strategically, over the medium term, and encouraging thing as china moves away from -- towards more of a market-based pricing of risk and capital allocation model. paul: is a less turbulent option japan? i know you are bullish on japanese equities, but how do valuations look for you there? ben: japan looks attractive. valuations seem -- when we look at the equity risk premium one can earn as a global investor, japan is somewhat outstanding by some global peers by comparison. japan should benefit by the double tailwind of the global reopening, of course we are all

watching omicron, but it seems to us that the activity restarts will continue to broaden through 2022, and japan with a fantastic export sector should have some gearing for that. on the other hand, domestic activity restarts, which should continue through 2022. when we consider that an potential for the new government to do a bit more than previously anticipated in terms of stimulus and reform, then the valuation looks relatively undemanding set against the backdrop of those various catalysts we can see start to play out in the months ahead. paul: blackrock investment institute strategist then powell. thanks for joining us. let's take a look at how toyota is doing in the early going in japan, we got news from toyota is planning to invest $35

billion to supercharge its push into electric vehicles, and sell 3.5 million units by the end of the decade. toyota is rising by 3.6% right now. the market receiving that news very warmly. toyota planning to have 30 electric models by 2030, a pretty big step up by its earlier plans. toyota rising, and some other carmakers going for the ride. let's get to su keenan. su: we start with the ecb. it's projections show inflation will remain below the 2% target rate in 2023 and 2024. meanwhile, sources tell us that consumer price woes will be stronger than predicted. they will give the ecb president ammunition to argue against a swift rise in interest rates.

to india, the country has lost a wto dispute over sugar exports. a panel found that the country offered excessive domestics of art and subsidies to the industry. india is the world's largest sugar producer after brazil, and has already pledged to refrain from subsidizing exports due to high global prices. india can appeal the ruling within the next 60 days. cryptocurrency billionaire says there could be more pain ahead for bitcoin. the largest digital coin has dropped around 30% over the past month, he says bitcoin typically sees heavy trading volume at year end with other asset classes, however, he is not worried in the medium-term. he spoke exclusively to bloomberg about the outlook. >> bitcoin, $42,000 is an important level. we start of the year at $30,000,

so there has been so much of a change in mindset in this space. su: to the u.s. where the house to set to vote on legislation that punishes china for oppression of muslims. this before sending it to the senate. the bill would create a list of entities that allegedly collaborate with china in the repression of uighurs, companies would also need to prove that goods from shenzhen were not made by forced labor. beijing denies using forced labor in the region. 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 su keenan. this is bloomberg. paul: a quick check at new zealand bonds, the 10 year yield slipping quite precipitously, down 1.5%. we had a fiscal update from new zealand, including a plan to cut

the bond program by $31 billion over the next four years, net debt peaking at 41% of gdp and at 32% of gdp by 2026, but the trimming of the bond program, seeing yields decline, and along with the other duration as well. shery: still ahead, china's monthly activity data is likely to be in low gear but stabilizing. larry joins us for that. up next, more details about pfizer's experimental covid pill in the latest on the coronavirus situation around the globe. this is bloomberg. ♪

paul: studies show pfizer's experimental pill is highly

effective at preventing hospitalizations, but is less able to erase milder symptoms. let's get more on this from the bloomberg managing editor. tell us more about the findings. emma: this was two pieces of data. basically, the take away is it's very good, highly effective at keeping people out of hospital, but less so at easing, doing away with milder symptoms that are often associated with people who get covid when they are vaccinated. the so-called breakthrough infections. that is somewhat disappointing, because there have been a lot of bullishness around these covid pills. merck has one in the works. other countries like china are also eyeing them. a lot of optimism that they would become the tamiflu of

covid, that they would be part of the real push to make the virus something like the flu, something we grapple with with prescription or over-the-counter medications. shery: any more insight into the severity of the omicron variant? emma: the jury still seems to be somewhat out. a little bit of caution coming out of the world health organization and a couple of scientists in south africa overnight, the who is quite concerned about this narrative that seems to be forming that omicron is much milder than other variants, which is based on anecdotes coming out of the original epicenter in south africa. scientists from their have said it is still early days, that a lot of the people who are getting omicron in south africa were previously infected, there is a high level of natural immunity already area we already

know a lot of those people were younger, and younger people tend to manifest less severe symptoms. it does do it -- us good to remember it's only been 2.5 weeks since the variance emerged, which is early days in scientific terms. shery: our global asian business editor emma o'brien with the latest, staying with health care, in tokyo we are watching asi have best day since june, gaining 4% ahead of an expert panel with japan's health minister next week discussing the approval of an alzheimer's drug which was codeveloped by eisai. right now, up 4%. coming up next, china's property plunges worsening as a deal raises red flags for the industry. we will get you the latest. this is bloomberg.

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shery: chinese property stocks are near a five-year low over their concerns of the company to meet its debt obligations, though the company says there are no issues. joining us now is rebecca. always a roller coaster ride with the property sector, last week we had so much optimism that perhaps the worst was over. with happening? -- >> happening? reporter: the broader context is the rebounds and rallies we have seen in property have been relatively tentative, even when we have seen much more optimism sentiment wise. shimao particularly, this transaction between two units, the firm is transferring cash

from the property management unit to the developer. j.p. morgan out with quite an explosive note saying this raises corporate governance red flags, it implies liquidity issues, and that is compounding concerns that essentially there is not a lot of visibility into shimao. we have seen onshore bonds trade at heavily discounted levels to offshore, which always suggested asymmetry of information. now we are seeing offshore bonds,, some at record lows. the concerns are that our firm like shimao which carries investor grades, a firm could be facing issues of concern about its payment obligations, that could indicate much broader concerns across the sector, and more destabilizing than the crisis we saw at evergrande,

simply because those were so long awaited. paul: what is shimao saying about this? it has a note due on friday which it says it can pay, what is their side of the story? reporter: 30 million yuan that it needs to pay outstanding on that bond, i think further out, 2 billion will be the focus for investors. shimao has said all of the price drops in its shares and bonds have been driven by rumors, trying to push back against that. there has not been a great deal of clarity from shimao, and from an investor point of view, there needs to be a much broader conversation. any issues of governance -- there has been such a crisis of confidence among many investors over the last six months to a year, where we see issues at

fantasia, were some investors are taken by surprise about the financial health of these firms. this is not an environment where investors are particularly willing to be patient or give developers benefits of the doubt. that certainly is weighing further on prices for shimao. paul: let's get a quick check of the latest business flash headlines. bloomberg has learned while -- wall street's top dealmakers are planning bonuses. goldman sachs made boosted by 50%. j.p. morgan may be a 40% increase. wall street bosses face mounting pressure to be more generous, with signs pointing to another figure of work. elon musk says tesla will accept which going -- doge coin. he said some will be viable and he will see how it goes. the cryptocurrency features a

picture of a dog. it's like 33% after the tweet. the ford ceo says the company wants to be tesla's ev sales in america. tesla dominates the market while ford ranks fourth. he says the carmaker is committed to ramping up production to 600,000 ev in two years and that would put it in second place, replacing general motors. ford we need to double capacity at michigan factory. >> we have three high-volume successes on our hands. it will come down to that team breaking those constraints. hard to say, but we count on it. we think we will be number two for some time to come in the u.s., and obviously aiming for number one. paul: coming up next, our next guest gives us a keyword for china's stock valuations, and that word is stability.

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su: this is "daybreak: asia." i'm su keenan with the headlines. the biden administration considering fresh sanctions on smic. sources say the national security council will hold a meeting thursday to discuss the potential changes. the rules would severely limit thelity to supply gear to the company. chinese property developer is confident it can service its loan obligations earlier.

shanghai's stock exchange asked them to -- their debt commitments. they failed to pay funds at and has further dented investor confidence and helped send property stocks to a near five-year low. until recently, they were seen as one of the se's strongest players. to covid issues now. new data showing the covid pill developed by pfizer is highly effective at keeping patients out of the hospital. however, it is less able to erase mild symptoms. results suggest the treatment will be used for covid patients at risk of developing severe disease. a lab test on j&j's shot showed it produced virtually no antibody protections against the omicron variant. u.k. prime minister boris johnson suffered his biggest in party rebellion since becoming leader. almost 100 tories opposed his plan to mandate the so-called covid passes at certain venues.

he was forced to rely on opposition votes to get it passed. it is a significant blow to his authority and comes out of a special parliamentary election this week. in a rare move during peak winter demand, spot listed natural gas prices in europe surged more than in asia. european gas prices are up almost 600% from the start of the year as investors have remained -- inventories have remained slow to rebuild. russia has reduced volume sent to the region and tensions over the nord stream 2 pipeline are further hitting prices. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg. shery: markets trading across asia in the early session. the nikkei bouncing back from the earlier losses and gaining a quarter percent. being led higher by financials

and real estate stocks. the cost preparing back earlier demand. we see the country strengthening social distancing restrictions. not to mention, the jobless rate came in below expectations. the asx 200 being led lower by tech and communication stocks. kiwi stocks losing ground for a third consecutive session. sovereign bond markets is what we are watching right now. the treasury yield is also losing ground. we saw yields advance in the u.s. session. but across asia, we see them under a little bit of pressure. we are also watching kiwi bonds rising right now. they erased a drop earlier as the government cut their plans over the next four years. in fact, we are waiting for japan's plan for next year. the boj is offering to buy a total of 2 trillion yen of bonds

through a repurchasing agreement. they are ready promised to buy ¥9 trillion of bonds. really reinforcing the stand that they want to keep rates low, but it is really all about the federal reserve and what it does when it comes to measuring where yields will go from here. we already have the boj policy decision later this week. they are already taking a stealth your approach than peer s, and winding back pandemic stimulus, including the purchases of etf's. paul: china's november activity data will probably add to signs the economy is stabilizing. an ever slower pace of growth. industrial production should pick up. fixed asset investments might go the other way. that's bring in the head of china economics at mccrory group. we have retail sales, industrial production, when you put these numbers together, what is your outlook for growth in china? >> i think this is probably

going to tell you the china economy is clearly a downturn, partly caught by the property slowdown caused by the supply shortage. that is probably because the data looks weak, that is why policymakers decided to make the policy taper from last week. regulatory tightening to economic growth. paul: new home prices, as well. if you are a chinese person buying a house, looking at what happened to evergrande, what is the future of that metric? >> the property sector is under a big down cycle. the size is similar to what we saw in 2014 and 2015.

so that is a big deal. although, i don't think china will have a systemic crisis or layman moment. but in the short-term contingent risk, it is real, and it will affect those distracted developers next year. property easily can be the biggest headwind. that is why i think a policy pivot is necessary. policymakers want stability. shery: they have turned a little bit more pragmatic. trying to implement those monetary tools. how much will that help? >> that will definitely help on the margin, which means if you look at china's credit cycle, over the past 12 months it is on a down cycle. it has stabilized.

in the next 12 months, it will probably be on an up cycle. that will help the margin. on the other hand, i doubt these measures are enough. given the pressure from the public sector -- if they want 5% gdp growth for next year, i think they have to do more six month later to deliver that. shery: how important is the semiconductor sector for china? we are hearing from sources the biden administration is considering tougher sanctions on smic. >> semiconductors are less important, in terms of china's cyclical movement. but it is very important for china's structural growth in the next 10 years if china wants to

continue to climb up the quality ladder. key imports such as semiconductors will be important. that is why even last week, china policymakers not only talked about the short-term policy, the economic growth, but also talk about the technology policy. that is a key for china's long-term growth. paul: as we discuss china easing, potentially putting in more stimulus, we have a strong yuan. how long do you see that persisting? >> yen has been very strong because this year, china has huge money inflows, partly because of the very large traded surplus, also because of the money flowing into china's bond market. looking ahead, the monetary

policy in china and the u.s. will probably diverge. china just started a new cycle, the u.s. will probably taper and hike rates next year. it means next year, the yuan -- and the pressure -- the good news is the pressure should be gradual. yuan will probably go to 6.55 toward the end of next year. haidi: larry hu it was --shery: larry hu. it was good to have you on. we will have more later. paul: you can also turn to your bloomberg for more on this. go to t live go to get commentary and analysis from bloomberg's expert editors. plenty more to come. this is bloomberg.

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paul: safer, more affordable, and more convenient. for a long time, autonomous technology promised all of those benefits, but progress has been slow and hurt by the global pandemic. ed ludlow hosted three of the industry's top executives at the

bloomberg technology summit to discuss if we are finally at a tipping point for self driving cars. >> one of the issues is when people are talking about cities, we've been testing in 13 cities globally historically. but we also realized the same issue. it is nice to have a different variety of data. that is helpful. but we need to make it real. for people to really use it in their daily lives, the cars have to be, first, driverless. it has to be driverless. it is not the same if you have a safety driver there and call it commercialization. two, you have to have a large odd, people have to be able to go wherever they want. i go anywhere i want, school, home, in the country. third, to cover that large amount, you need a lot of cars. several hundreds of cars is not going to do it for a city, for a

metropolitan city like change and, beijing, shanghai. that is would is a key factor when we talk about real. >> it is fair to say that you have been more pragmatic than your peers in the bay area. more conservative in what your goals are, in terms of the timelines. what is it going to take to commercialize? this technology is it in your control, or are you at the will of regulators on that front? >> in the united states, there aren't many regulatory roadblocks to getting the technology out there. they have been progressive. they came out in 2016 with the world's first guidelines for fully autonomous vehicles. a pretty landmark decision. considering ai can be the driver. that was five or six years ago. many states have also come along with regulations and have tried to pave the way.

what is really preventing widescale deployment is all of us, we have a very high safety bar for this technology. we want to make sure before we deploy vehicles at scale on public roads, that they are meaningfully safer than other drivers. the difference between saying in these situations it is really safe, but we still have these cases, for example, we handle every thing so well we can deploy at scale, that is what we are working on. we showed our vehicle driving autonomously. we have the functionality to do that. in many ways, it is already safer than people. but we want to make sure we have a comprehensive safety case as we deploy it from scale, that is exactly what we are working on. >> we talked a lot about robo eventually, if a passenger needs a ride, gets in and goes from point a to point b autonomously.

but there were other cases. delivery, trucking. which use case to your mind is commercialized first? which case will we see most widespread? >> we actually don't look to see which one will be commercialized first. but we are looking at applications with the most impact to our daily lives. we certainly see the biggest -- and we look at transportation or mobility, the biggest slices are transportation or the mobility for passengers and goods. so that is what we are focused on. we are focused on robotech, and robo truck -- robo taxi and robo truck's. they will have the biggest impact to us. that is another way we try to make our driver to be so general

and expert, so we can drive all different types of vehicles. shery: after this panel was taped, the dmv in california suspended their testing permit following an accident involving a test vehicle. they say the collision did not involve other cars and no one was hurt. it is in contact with the california dmv. let's get a quick check of the latest business flash headlines. ibm says it's huge requisitions were focused on automation, ai security, and the hybrid cloud. ai expected to account from $15 trillion in global gdp by the end of the decade. ibm hopes to capitalize on that demand and change tech talent. the ceo says deal size isn't an issue and it is looking for other opportunities that they acquired in 2018. >> $34 billion, we borrowed money to do that because we did

it in cash. we will be down to our leverage ratios by the end of this year. we kind of paid down the bulk of what we borrowed. shery: bloomberg has learned wall street's top dealmakers are planning bumper bonuses to keep bankers happy. goldman sachs may boost its investment banking bonus pool by about 15%. jp morgan may hit a 40% increase. they face mounting pressure to be more generous with signs pointing to another big year of work ahead. jp morgan says it said a daily record for car payment processing over cyber weekend. the bank says payments at their peak over the four-day period where 50% higher than the average day this year. in-store transactions surpassed 2019 levels. the figures offer signs u.s. consumers are still spending this holiday season, even as the pandemic continues. paul: british handbag designer

and you had marsh says -- with her luxury brands, and she has become known for her stance on sustainability. she spoke with francine lacqua about the drive to be green. >> i'm quite scared by this climate situation. i'm very scared by the climate situation. we only looked at this last summer. look at the flash floods, the fires, the heat waves. measure it with the monthly situation. we all have to change our behavior. i love fashion with purpose. that is interesting. it is hard to imagine anything being luxurious in fashion if it is doing harm. it is my happy place, what i'm interested in. >> how is it working with u.k. supermarkets? you have more of an impact because it reaches more people. >> what is interesting, it is fascinating to me with this project, we are working with

waiters, supermarkets around the world. the idea that it is actually about eco, not ego. collaboration is going to be the way to solve a lot of these. and it is quite hard for all of us, including any supermarket, to think in that way. we are geared and bred to think about our own businesses and shareholders. but it is the solution. that side of it is almost the most innovative aspect of that. >> do you see a big shift in fashion overall? at the same time, you make profits by selling. how do you match the two? you want to sell more, but be more sustainable. >> it is hard to square that. it is important. because we need to maintain a healthy economy. we know the thing that will answer the climate issues the most effectively will be big governments, paying off less wealthy governments to stop

deforestation or whatever it may be. we need to make sure we are contributing to tax and these good things. and we need to employ people. fashion is a fantastic employer. i think we need to carry on buying and purchasing, but buy better. if you want five t-shirts, but by really good t-shirts. the same for bags and for any aspect of any clothing. shery: the ceo and creative director of her brand of designer handbags speaking to francine lacqua. you can catch the full conversation on "leaders with lack" in january on bloomberg television at online. very few markets as excited about luxury handbags as korea. during the pandemic, korea did not hoard toilet paper or food, but one habit they developed was standing in line to get these $10,000 chanel bags. many reasons because of that.

one, koreans love luxury goods, but also because you can travel abroad in order to get them. and also, you have more money. you are not doing anything else i home. you might as well splurge on some designer bags. paul: lucrative trade for resellers. evidence of people buying these bags and selling them later on for a pretty decent profit. it led to chanel even imposing buying limits in october. now you can only have one classic flat bag, one handled bag. i don't know what these are, but you are only allowed one. bags are for carrying things in, not speculating. shery: i know some of them. they are beautiful bags. chanel korea has raised prices about four times this year already. they are still so in demand in south korea. it is one of the top countries that love these luxury bags. i'm talking about the seventh

largest market for luxury brand items. paul: it is a big deal. some fascinating pictures to go with that story. you can see on the bloomberg terminal, people camping in tents outside of the chanel store. read that story and see our past interviews on our interactive tv function. you can also dive into any of the securities or bloomberg functions we talk about. and become part of the conversation by sending us instant messages during our shows. that is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

shery: a data jump day in china. to give us a rundown and a preview, let's bring in bloomberg markets china open call anchor, david inglis. what legendary things are you watching today? david: you forgot your favorite calling and future resident of mars the way things are going here on earth. look at the market, there are two key things. in hong kong, the divergence between hong kong. not just against the world, but midland equities. this is coming after 10 straight days of northbound inflows. so you see a lot of these names in hong kong property, casinos,

tech. 40% below book value. it takes us into this next graphic. that is one stock i'm watching closely. not just because of the company, but what it really represents. the heaviest way -- the heaviest weighted stock in the csi. it has been trading like a champion. almost up nearly 40%. paul: an enormous amount of data. what do you specifically watch? david: usually, i am busy. you also have a new home prices. also within that, property investments. you look at multi-indicators. but in this case, because of what is happening, the slow down primarily as a function, it is what you are looking at on your screen. home prices have been falling for months. they have been negative. it is a proxy for consumer confidence, future policy. we are watching it closer. and mls operation in 20

minutes. shery: david inglis will take you through the start of trading in hong kong, shanghai, and shenzhen. "bloomberg markets." china open is next. this is bloomberg. ♪

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>> good morning. it's 9:00 a.m. in beijing, shanghai, and hong kong. welcome to "bloomberg markets: china open." i am david ingles with yvonne man in hong kong. yvonne: top stories this morning, china data showing economic activity slowing because of the property and consumption slump. markets are weighted down by price inflation,