haidi: i'm haidi stroud-watts in sydney. guy: -- yvonne: i'm sure sh -- shery: i'm shery ahn in new york. omicron is wreaking havoc. for ceo's return to office

plans. they tell stuff to stay home. the u.s. senate passed a bill that would ban goods from china's she john region unless companies could prove they weren't made with forced labor. haidi: let's get you straight to the start of trading, this friday's session, ozzie is looking to reverse three days of losses this week, off to a pretty good start, a mildly positive start to this open in sydney. in the meantime, we are seeing a flat session over in new zealand. we spoke with the finance minister earlier about the impacts of omicron and potentially how that affects the reopening and the economic recovery. he was fairly optimistic. futures looking unchanged at this point. we are watching for that final session going into the start of u.s. trading, a very eventful

week for not just a fed chair, but global and central bank. shery: so many to discuss, but u.s. futures slightly higher after stocks fell. the most expensive parts of the market sounding off because of rate hike concerns. wti at the moment heading towards $17 a barrel, boosted in the new york session given we also had reports of the biggest drop in u.s. crude stockpiles since september. a weaker dollar helped propel crude higher. bitcoin again under pressure for a second session, trading together with stocks and bonds. it was all to do with central banks. haidi: an pretty momentous when it comes to this surprise hike from the bank of england. it's become the first major central bank to start a cycle since the start of this pandemic. there's no other major g7 central bank that has taken that leap. this did surprise markets.

they previously talked about most pressures being temporary or transitory, likely to pass in the next few months. but now they're saying the most persistent element is what prompted that rate rise, and that very quickly having traders repricing for the next year, as well, governor bailey saying he expects cpi's top 6% in the next six months. we also had the ecb acting to what they call a google -- brutal transition when it comes to the exits of positioning to make that exit from pandemic stimulus a little smoother, president lagarde unveiling forecast showing strong economic rebound expectations, as well as faster expectations for inflation. and rounding out the wave, we've got the bank of japan. never change, but we are waiting

to see whether they extend emergency stimulus settings given uncertainty over omicron and just how much policymakers don't know what grappling is. shery: dr. fauci already sang the omicron variant will become the dominant one in the u.s. in the next few weeks, right now surprising we are seeing asset managers who continue to stay-at-home. and we will delay the returns to office rise. even morgan stanley coming out and saying he was wrong when he pushed for the return to office earlier this year as the covid pandemic unfolded. it's all to do with central banks, the omicron crisis, as well. today, as you say, it's the boj decision while the omicron variant threatens. this return to office plans, also risk coming from china's property market, which is on investors radars.

for more on the market risks, let's bring in paul jackson, san francisco bureau chief, and stephen engle. paul, let me start with you. we're not expecting much on the main stimulus side of things that perhaps we could see more clarity on what they do with covid aid. paul: that's right. we're looking to see how to step with the other major central banks, the bank of japan, as you mentioned, the main interest rates settings, they're all going to stay exactly where they are. so the very fact that the bank of japan is considering extending its covid aid beyond the date shows that it is in a very different position to the other central banks around the world. of course, that's partly to do with the inflation dynamics in japan. while inflation is accelerating everywhere else, we are only inching up 0.1% here in japan.

that's giving the boj a bit more room to hold off on stimulus. however, we're not sure we're going to get a decision today. it could come next month. but it could come two path, extend loans and feeling that corporate bond buying. haidi: carl, so many policymakers are looking at the labor force, the return of the workforce to the office. now we have more uncertainty as to what that looks like. >> to describe it -- uncertainty is the best way to describe it. we're seeing warnings of really great rapid rise during the holidays. the u.s. is seen a 48% increase in cases. in new york in particular, at a rapid pace, omicron making 13% of cases, far greater than the

rest of the u.s. as to i -- that's why you're seeing cases, the banks that are eager to help -- have people back, such as citigroup, black center saying you can work remotely and we will figure out the rest of january, and other companies such as apple and google, who i plan for january, are not even sitting base anymore because there's no way to tell what's going to happen. haidi: on top of the omicron risks, china is facing its own property sector crisis. what is the latest in terms of evergrande, or even china fortune the development at this point? stephen: there are 70 different developments and it's been a roller coaster couple weeks for the aussie dollar bond markets, jump on markets for these developers, as well as the stock prices. a couple weeks after we got default from evergrande, relative calm came into the market. then this week, xi mao came out

and started toward. so it's really -- to warn. so it's really been a turbulent time. there's good news, bad news to talk about. on the good side, yesterday saw a call returned to the dollar junk bond market for developers here in hong kong, with the average bond rallying about two cents on the dollar. there's optimism that the government is taking a firmer hand in debt negotiations between the likes of some of these trust companies. and there is also this statement coming from citigroup, citigroup essentially overweight on china credit for next year, 2022, because a lot of this negativity is priced into these bonds. they see, of course, all these maturities coming due in january in the first part of the year. throughout the rest of the year,

citi sees some room to weather that storm in china credit. that being said, ok, kaisa, we are learning from bondholders, has missed its latest payments on two different 30 day grace periods on coupons that were due this week. that's in addition to the 400 million dollars matured bonds that they defaulted on, declared default. so kaisa's another stress this morning. and a court in china has received lawsuits from more than 300 different claimants of trying to get back payments at various different obligations from china evergrande. the tune of $13 billion and counting. so there is more pressure on kaisa. there's more pressure on china evergrande, but little bit more calm in the dollar junk bond market yesterday. today is a different day, though. we'll see. haidi: our japan economy editor,

paul, kara, and stephen engle. chinese fighters have been accused of using huawei in a secret telecom hack. we are hearing they breached key evidence in a push to block how white -- block huawei in stores in australia telecom back in 2012. a bloomberg news investigation has found a key piece of evidence really underpinning the u.s. efforts the past few years, warning that products from huawei technologies has posed a national security risk for any country that use them. this piece of evidence was a previously unreported breach that happened halfway around the world nearly a decade ago. in 2012, australian intelligence officials and formed their u.s. counterparts they detected a

significant intrusion into australian telecommunication systems, beginning, they say, with a software update from huawei, this breach in subsequent intelligence that derived from it, and shared by two dozen former national security officials briefed on the matter in the years subsequent to that. that is according to a bloomberg news investigation. and you can read more on that on the bloomberg. let's get you to su keenan the first word headlines. su: thank you, haidi. the u.s. senate passed legislation that would ban goods from a china region unless they were proving it was not made with forced labor. the bipartisan bill has been sent to president biden for his signature. china has denied forced labor is used and calls the bill an interference in its domestic affairs. the u.s. senate meanwhile has confirmed nicholas burns as the next u.s. ambassador to china. his nomination was approved,

75-19. burns is currently a professor at the harvard kennedy school and previously served as u.s. ambassador to nato in greece. many of the diplomatic posts remain vacant almost a year into joe biden's administration. we're told the biden administration is also pushing european allies to finalize a broad package of sanctions against russia. those would target the nation's banks and companies if they attack ukraine. president biden has talked the crisis with russian counterpart vladimir putin, although pollutant has shown no sign of withdrawing the troops he amassed. the telecommunications sector has been between east. the commissioner is looking to allow companies to operate without multiple bureaucratic. the minister also reiterated

that india aims to start 5g services later in 2022. and u.s. health officials are back to using pfizer and madrona covert shots over j&j. a panel of x -- moderna covid shots over j&j. they say the j&j fact sheets should warn about a rare clotting system -- syndrome. the cdc director will rochelle walensky must ok this. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. shery: still ahead, apple is building a team to build its own wireless chips. will have the details. but up next, michael could you not says the selloff is a short-term adjustment after the fed's inflation comments. we'll ask if you think the

central bank has the situation under control. this is bloomberg. ♪

> economy is so much stronger now, so much closer to full employment. inflation is running well above target. >> inflation is effected to remain elevated in the near term , but should ease in the close of next year. >> there are signs now of more persistent prospects, and that is concerning to us. >> it is likely that we will raise interest rates in the year 2022. >> we are phasing out our purchases more rapidly because with elevated pressures, the economy no longer needs increasing amount of policy support. haidi: global central bankers shaping the great inflation debate. let's bring our next guest, this is the big risk is whether the santa fe -- the central bank has

things under control. michael is with us. that goes to the core of the risk assessment. markets seem to be pretty sanguine, may be complacent about this idea that the fed and other central banks are going to strike this perfect balance between getting inflation, bad inflation under control. is that a big risk in terms of the misstep impossible? michael: yes, in a word. collectively, the central bankers are whistling past hoping ghosts don't show up. the story has been, and they sold it very well in the market, inflation is transitory the extent we see it. it's going to go away when supply chain issues go away, when people are back to work, etc., etc., etc. the problem with the argument is a happened happened -- hasn't happened that way, in the longer

this goes on, the more embedded it becomes, the more it gets into the infrastructure and the thinking of businesspeople, and it becomes more ingrained in the economy. and that's a long-term danger. so yeah, i do think it's a real risk. and i not saying some of the inflation is definitely transitory driven, absolutely. but you can't say it all is. the question is, where is it going to settle? 2%, 3%, 4%, 5%, or more? and what is that going to do to business decision-making and economic growth? that's where the risk is in the market right now. haidi: are you still looking for opportunities that are inflation hedges? and where do you find, given how height valuations are -- high valuations are, where you find the more interesting compelling

opportunities? michael: there are all these opportunities in the market. the way we look at it, there enough uncertain events out there, whether it's covid, whether it's the economy, whether it's unfilled jobs, supply chain issues, fiscal monetary policy, midterm elections next year in the united states, there's a lot of cross currents swirling around. we would advocate a diversified approach right now where you try to beat inflation, but you're doing it in a way you're hedging your bets. you're spreading it around. and that limits your downside risk overall, volatility, and allows you avenues to profit. so broadly speaking, we like precious metals for alternative currency hedges and hedges against inflation, whether it's real or perceived, transitory or structural. on the bond side, bonds are rich across the curve. yields are negative.

we recognize that. so we're, given the likelihood of getting interest rate volatility, possibility that market rates decouple from the fed or the other central bank's desires. maybe the markets don't buy the story anymore. so we want to be short duration and high quality balance sheets and take advantage of that and remain flexible and liquid. on the equity side, we're looking for companies that have controlled pricing power, that can manage their input class -- costs, that may lead into margins. and pricing power. so the big risk in the equity market is, are investors today willing to pay 22% multiple on next year's earnings? are they still going to do that if the equity market appears, or the economy appears to be soft? shery: tell us more about your commodities bet because we have oil trading around $70 a barrel level. have you position energy companies, for example?

michael: energy is a perfect example, we have opportunity in the equity market. as a rule, these stocks are below market multiples, so valuation is attractive. they generally pay dividends, which increase when business conditions are good. instead, you have global growth and we do expect it, even with some inflationary pressures. you're going to have demand for oil and natural gas. the fact of the matter is green energy oil does not begin to account for the supply need to drive the local economy -- global economy. so you need exposure to these amp and the businesses that they run. the companies will funnel research into green energy and all that. but in this environment, you are basically, you need them to perform and their trading at reasonable valuations. so income, as well as capital gains is the place to be. shery: we'll have to leave it

here, but thank you so much for your investment calls. we will have plenty more to come. this is bloomberg. ♪

shery: we are counting down to the start of trading in tokyo and seoul. the bank of japan, of course, expected to keep its main policy levers unchanged with the emergence of the omicron variant putting it into wait and see mode. the main focus is whether it extends or tweaks funding programs for covid hit businesses. we're also watching toshiba after measures to improve corporate governance and relationship with shareholders. they admitted arise to influence voting at its annual jan you -- meeting. and a pharmaceutical company --

chugai pharmaceuticals will work on covid-19 treatment after roche ended development of the drug. in south korea, we will hear from the be ok governor, who gives a press conference on inflation. we are watching the path of monetary policy for the bok while the finance minister is releasing an economic assessment. kia and hyundai falling -- filing a trade after taillights that they say are copies of their own design. and as key innovation and focus, the ruling party is reviewing ipo rules. haidi? haidi: let's get you the first word headlines.

the dutch carrier agreed to buy aircraft from the playmaker. that order is worth about $10 billion. that's just after austerlitz qantas picked airbus for its fleet upgrade. bloomberg learned barclays is planning to boost earnings at its bank by more than a quarter, amid results and intense competition for top talent. the increase would be a significant shift from 2020, when payouts rose by about 10%. it comes after the government and jp morgan announced similar rewards. embattled commodities trade brutal just trader noble group is restructuring towards debt again. it comes three years after the firm emerged from its last multi-dollar restructuring. in september, noble reports it has $1.6 billion in debt and accrued $7.2 million in losses this year. noble previously faced

accusations of improper and counting -- accounting, which it denied. shery: take a look at the commodity space because we are watching space metals with big moves in copper and iron or, this after we saw a jump in copper with some process in peru with some of the minds of starting to wind down, iron or gaining around signs that production will increase this month for the first time since may. we also had a big jump in cotton futures as a rally coming on china buying the biggest gains in two months after demand for supplies for shipwrights in the u.s. will stand firm given chinese buying. also, we'd prices leading to higher grain prices, as well, given severe winds in the u.s. hurt crops always. always about the climate. coming up next, apple hiring engineers to develop wireless chips that could replace

components from broadcom and sky more. we'll have the latest. this is bloomberg. ♪ hey, angie! you forgot your phone! hey lou! angie forget her phone again? yep. lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou! smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season.

shery: we're tracking the follower of the global supply chain crunch. these are the top stories today. growth in u.s. business activity cooled to a stalled pace in early september but manufacturing output growth picked up slightly. ihs markets said market easing in the number of supply chain delays, which also took some pressure off rices of raw materials. still a long way to go to clear that logjam of imports through the port of l.a., at least, as

executive director jean soroka said the scrabble to unclog u.s.'s largest gateway for goods trade is now resembling a game of whack-a-mole where a new problem pops up after they clear one issue. he says no one is declaring victory just yet. one company at the center of the supply chain issue, fedex, posted profits that lead analyst estimate boasted the outlook and higher labor costs in the u.s., aggressive the rate prices this year during the biz -- busiest season of the year. the stocks surged in the u.s. haidi: watching oil after the u.s. reported the biggest crude stockpile drop since september. we're getting conflicted signals on demand and supply. the outlook of consumption appears to be deteriorating globally. the picture looks more positive in the u.s. these national energy agencies say this week, they saw the market already in surplus,

although some still expect prices to rise next year. bloomberg terminal users can read more about these stories in our newsletter at and i trade nl. shery: take a look at markets trading across asia. right now, we are seeing australian stocks gaining .5%, being led higher by energy and material stocks, although tech and communication stocks are dragging the index, not surprising given that we have those big declines in the tech sector here in the u.s., as well, although u.s. futures, at the moment, are muted. kiwi stocks are marginally lower, unchanged after three sessions of losses already. of course, we spoke earlier to the finance minister in new zealand, talking about growth prospects. we'll bring you that conversation in just a bit. nikkei futures down .8%, this of course, as we're headed to the boj policy decision. not much expected when it comes

to the main stimulus measures, but perhaps you're watching what happens with covid aid to businesses. let's stay with japan because the stock market is set to catch up to global peers next year, strategists forecasting the topics will jump more than 10% in 2022 on cheap valuations, low inflation, and high vaccination rates. let's bring in main jong me for more on this. we have heard of japan outpacing gains in other markets for a while now. will we finally see that outperformance next year? >> right, japan has been kind of falling behind its developed market peers for a while now, especially because of the continued delay in the lockdowns and getting listed. but now people are saying japan has high vaccination rates and

low infection cases, plus an extremely low inflation, which sets it apart from countries like the u.s. people are likely to look at japan and see it as an attractive place to invest next year. so yes, we are hoping to see japan kind of play catch up to its developed market peers next year. haidi: we also see a high earnings revision outlook. is that going to play part of that optimism? min jeong: yes, you're absolute right. analysts have optimistic views about the earnings recovery in japan, as well, after they delayed the lifting of lockdowns. analysts are saying businesses will get a lift up from the reopening of businesses, and we'll see the earnings jumping here. so yes, that will provide another boost to japanese equities, hopefully. haidi: our bloomberg reporter

min john lee there -- min jeong lee there. you can get your analysis from our experts there. apple is hiring engineers for a new office in southern california to develop chips that could replace components applied by sky works. let's get the details from our tech reporter. tell us about this investment. what sort of timeline or ultimate end goal is here? caroline: in 2018, -- mark: in 2018, apple's red recruiting in southern california. just about one year ago, the head of apples chip efforts told the company in a townhall meeting that they are developing a modem to replace qualcomm eventually in its devices, iphones, apple rice -- apple devices.

that's near qualcomm. so now apple is starting to recruit for an office in irvine, california. what is in irvine? broadcom, sky works, x peak, and a few other companies that are developing components for wireless chips. now job listings are calling for people to make those types of components. what does that tell us? apple wants to build more for its devices, reducing suppliers, and moving as in-house as it possibly can. shery: it won't help those other companies given we continue to see the labor shortage and this competition for skilled labor. what does it say about apples structure in the future post-pandemic because we had a more centralized version pre-pandemic. what is going to happen to that? mark: the days of apple being

the cupertino company, the days of the apple part being the center of the apple universe, those days are over. they still have tens of thousands of people in the apple park office in that area. but what they've done is they've created satellite offices in other places where people want to live and work, whether in southern california, and l.a. office, beach office, irvine office, san diego office in a beautiful area, austin texas, different parts of florida. they don't want people working from home but they seem cool with people working away from cupertino as long as it is inside of an apple office. that's a big change for the company. shery: bloomberg's mark gurman there with the latest on apple. we do have plenty more to come. stay with us on daybreak asia. this is bloomberg. ♪

we --shery: let's take a look at some after our moves. we get a report that oracle is in talks to buy a records company and that deal could be worth around $30 billion. and that would really push the enterprise software giant further into health care. we are seeing those gains after hours for cerner, which is now soaring more than 20%. according to the report from the dow jones, this agreement could be finalized soon assuming talks

don't fall apart or drag out. and if the deal does come together, it would break as the biggest ever for oracle, which has a market value of more than $280 billion. oracle shares, there's a little bit of pressure right now. let's get to su keenan with the first word headlines. su: thank you. a smooth exit from crisis mode. it boosted bond buying for the next six months, this to cushion the end of its 2.1 trillion emergency program in march in the face of the euro area, the fastest inflation in decades. now the ecb acknowledged the developing threat of the omicron variant. policymakers retained fleck's ability to the virus. >> -- flexibility to respond to the virus. >> i have said before it is very unlikely that we will raise interest rates in the year 2022.

that still stands. su: the bank of england, meanwhile, has unexpectedly raised rates for the first time in three years. it hiked growing costs by 15 basis points 2.25%. governor andrew bailey says an outlook for more persistent inflation was behind this decision. the remark represents a shift in tone to the boe where most prices would temporarily and likely pass in a few months. to mexico now, they have the biggest price hike in five years. officials raised the key rate 5.5 percent, surprising most economists we surveyed. turkey is vowing to end its cuts after its repo rate and a fourth straight meeting. it is now at 14%, this to support president erdogan's unorthodox monetary policy. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries.

i'm su keenan. this is bloomberg. shery: and here in the u.s., the fed has the white house is confident after its hawkish pivot this week. the council of economic advisers cecelia rose spoke with bloomberg about the pandemic's impact on inflation and more. >> it has been our sense since the beginning that the inflation we are seeing is due to the mismatch of the pandemic. this pandemic was a catastrophic blow to our economy, to the worldwide economy. it generated supply disruptions because the supply disruptions because the supply chain was highly calibrated and any disruption was going to perturb that system. at the same time, the president was committed to assuring that the president had the funds to buy food, to pay their rent, to take care of their families, and that demand has outstripped the capacity of the supply chain. so it's always been our view

that this inflation was tied to the pandemic. that's what we always thought of one we thought of the word transitory. i think a careful read of chair powell's statement is he did not change his characterization of inflation, which we get is part of supply and demand disruption, but as the economy needs itself back together, we expect those inflationary pressures to ease. >> you think we will be having the same conversation halfway through next year? i wonder how much 2022 will be an inflation story. >> so my crystal ball is not perfect. but outside forecasters are expecting that inflation this time next year should be about half of what it is now and that it will further ease down to the 2% rate that the fed targets in the coming years. >> speaking of the fed, looks like we are in for interest rate hikes, maybe the next three years. based on your studies now with the fed, this is a tricky job sticking the landing at a time

when there's so much uncertainty. do you worry about a potential recession if it goes too far? >> the fed is an independent agency. it is full of very highly qualified economists who care deeply about the health of this economy. they care about the inflation, so that's where the inflict -- interest rate hikes would come in. what they have a dual mandate. they care deeply about employment. they will be balancing those concerns and we have the confidence that they will make the right call. haidi: let's bring in our mliv strategist mark cranfield for what to watch on this final day of markets trading. so, this confidence that we are seeing in the market, that the fed knows what it's doing, that it will come under control without impacting growth, what is the risk that we see there? mark: i think that's a big

question, mark, whether traders are confident and whether they can get ahead of the inflation story at all. i think that's partly why you're seeing such choppy price trading since the fed decision this week . stocks up one day and then down the following day and movement in other assets, as well. i think it's because you've got traders who are not convinced of a genuinely hawkish period by the fed that raising interest rates by the end of next year, which will still be less than 1%, is still very accommodating. and at the same time, you've got inflation numbers and concerns, which is still very high, which the previous guest was saying. so has the fed really done enough? are they going to be aggressive enough in addressing these issues? because if they don't, it has wide consequences for the dollar, for bonds, for equity markets. i think people are having a

battle with themselves, trying to figure where they should be positioned. because it's not going to be sleuths a. i don't think anyone expected equities to perform as strongly as they have, particularly in the united states. it's going to be much more challenging on bond yields are not higher by cycles, but they are starting from a slightly higher point than they have been. and the u.s. dollar is strong. you put all those factors into your mix, and you are certainly making it challenging for people to have very convicted views for the first part of next year. shery: how are you expecting markets to position, especially with the policy divergence that we're expecting with the boj decision coming up? mark: the bank of japan has remained one of the most easiest in terms of policy among the central banks for quite a while. it looks it's only going to stay that way. that will make people think the

yen can continue to be a good funding currency. it's been used quite a lot by people as a base for getting into leverage positions in various assets, particularly in the currency markets and some of the bond markets, as well. the yen will probably continue to have a weak edge to it. so certainly the bank of japan is coming from a position where small change in their outlook could have a large outlook because people got so used to the idea that the bank of japan is very, very dovish, that should they shift their stance even a little bit, it could have wide consequences. some things will probably have to wait until the first quarter of next year as they assess the outlook for the japanese economy in 2020. haidi: our mliv strategist mark cranfield there. you can follow this story on our markets like blog on the bloomberg at mliv . you can get that market rundown,

commentary, and analysis from our team of expert analysts and bloomberg. when grant robertson says he's optimistic about the nation's ability to about that -- bounceback from covid, he spoke to as earlier on daybreak australia. >> i'm reminded about our ability to bounceback. we're an open trading nation in new zealand, and we are affected by what happens everywhere else in the world. the spirit of omicron around countries we're seeing at the moment has the potential to ripple through to new zealand. but all the indicators we've had so far is that the people, in learning to deal with covid, they know they will come through the other side of it and we will continue to provide a large degree of support. >> could the follower of omicron you mentioned also involve the government delaying the reopening of borders in 2022? >> at this stage, we're

sticking to the plan. we have a plan for new zealanders returning. by the end of march, others coming into new zealand. obviously, we will continue to monitor the spread of omicron and its severity, as well. but for now, we are sticking to the decisions that we've made. we've got some reviews put in place, one of them in early january before we begin that process. shery: the biggest challenge for policymakers has been rising inflation, cpi inflation headed toward 6%. a lot of new zealand is mystically generated. are you concerned a little? are you confident the omicron variant can get a handle on inflation without growth? >> obviously in the forecast the treasury put out, inflation peeking in the first quarter of 2022 and coming up from there and getting back towards the reserve bank's target ban of 1% to 3%, a lot of the inflation we are seeing is driven by those

considerations. we've got higher oil prices, howbeit some of those have been coming up slightly, but also supply chain disruptions. for new zealand being where we are geographically in the world, we are affected by things like building materials and so on. so we'll have to manage our way through that. but the forecasts are we are near to the peak of that inflation and it will start to come off. clearly, the reserve bank has the trajectory that they've already announced around interest rates. but we do have to remember we are right historically extremely low levels, up 0.75 right now. if you took us back a few years, that would be seen as a low level. shery: some could see it as mixed messaging for the beijing winter olympics. should the government have gone one step further for diplomatic by clots -- boycotts? >> we already let the chinese government no in october. -- know in october.

there was a range of reasons for that. new zealanders certainly can raise their concerns about human rights issues in china. in the conversation whether prime ministers are, that we wouldn't be sending ministers, there is a conversation where he raised human rights concerns. we had already taken our decision. you can be sure that new zealand will continue to raise the concerns we have about human rights because china, within the context of a wider diplomatic relationship. shery: new zealand's deputy prime minister grant robertson there. we have plenty more to come. this is bloomberg. ♪

shery: facebook announced a crackdown on companies that used its social media website to spy on people in more than 100 countries. let's get the details from our social media reporter, naomi makes. what do we know about this? naomi: so basically, the type of firms meadow was cracking down our are essentially spies for higher, where clients will higher them to surveilled, essentially, certain individuals. that could be

critics of authoritarian regimes, or even, as been alluded to, journalists and citizens and other sorts of dissidents. haidi: this comes amid quite a lot of criticism over companies that provide services to governments in terms of these surveillance platforms and technologies. naomi: yeah, this is a time where, increasingly, there is a critical lens being cast on the way governments, in particular, are connecting with some of these new technologies. so in the united states, we see it a lot in the conversation around facial recognition. and in china, facial recognition is used very differently. and so there's this larger question about, should governments have the technology to be able to, you know, surveilled its citizens and to what extent?

previously, a lot of times proponents will say this is only to tackle crime and to target criminals. but what other sort of investigations have revealed as the use gets expanded beyond those narrow areas? haidi: our media reporter naomi makes. let's get year -- naomi ni x. it will cut finance a missions for oil and gas companies by up to 22% by 2030, compared to the between 19 baseline. target for oil makers and power producers are even higher. goldman helped organized $10.5 billion worth of lending for oil and gas clients this year. we hear bank of montreal has expressed interest in buying the u.s. banking interest of bnp paribas, a book value of about $14 billion as of september.

bnp paribas shares rose thursday on the report. they were working with advisors on a sale of the units in november. we do have the market open this friday morning coming up in seoul and tokyo next. this is bloomberg. ♪

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shery: welcome to daybreak asia from bloomberg world headquarters in new york. i'm shery ahn. haidi: and i'm haidi stroud-watts in sydney. our top stories this hour, central-bank decisions on tap for the boe and ecb adds to the week's rate action. wage and stocks set to dip up after u.s. tightened monetary

policy buffers investor sentiment. creditors sue evergrande for $13 billion. beijing tells the developer to prioritize paying workers and suppliers. shery: japan and korea under pressure at the open with the nikkei led lower. the only sectors up our utility and energy. and of course, we are watching the boj rate decision today, the focus mainly on whether or not they are going to expand corporate funding.. the japanese yen at the moment under a little bit of pressure. we continue to see that divergence with the fomc. right now, that 113 handle, we're also watching jgb's, given they carried out those market operations, offensive line operations this week for a third consecutive session. take a look at the kospi, which is down .6%, this of course after gaining ground in the last two sessions. the korean won is also holding a little bit of pressure against

the u.s. dollar at the 11.85 level. this afternoon, we're actually watching the governor having his biannual conference on inflation, and hopefully we'll get more insights on the bok's rate past, as well. haidi: central banks remain the key focus until the end of the week. a little bit of an uptick when it comes to trading here, .5% higher after snapping that losing streak for sydney stocks. we are seeing big decision declines when it comes to tech, the information technology sector down 4%. we are seeing strongest gains coming from the energy and mining sectors. we are watching after patent, the worst performer in -- after pay, the worst performer, including the likes of after pay. we are also watching new zealand. we spoke with the finance minister saying they are on

alert in terms of the omicron risk to the economic recovery, but that plans remain intact. we seem out of upside when it comes to trading qe stocks. dollar aussie on the back foot there, and we are seeing weakness in trading in the kiwi, as well. shery: let's bring in our next guest, who recommends looking for unconventional yield sources. with us is the regional cio at ubs. calvin, this coming on the back of the first interest rate hike among central banks with the boe, not to mention the federal reserve trending hawkish. so in this environment, why do you rates to remain low, and how do you position? >> well, i think if you look at the overall environment, despite the fact we are recovering, there are still several forms of risk around the environment. for example, what's raging right now is the omicron variant.

and this could affect growth because of the fact that social restrictions actually increase, it will hurt consumption the next couple of months. now we do think, despite the federal reserve is going to be hiking next year, it will remain pretty yields will remain pretty low -- yields will remain pretty low. we are basically saying credit is one way. the asian high yields is something we like, as well. and a senior loans part, with a benefit, that can perhaps be another way to look for higher yields within the portfolio. shery: what are you expecting in terms of the u.s. dollar given this more hawkish tone coming from the fed? and how do you position in this environment? kelvin: yeah. i think going into the fmoc meeting earlier this week, dollar is trading at an extreme going back to 2015. last night, we saw the dollar

slightly below 96. on a medium to longer term basis, we do think the dollar will likely remain strong given the fact you have basically the federal reserve actually embarking on tapering. we do think rates will rise next year, and yields on the u.s. dollar will likely increase further and widen the gap between the dollar and g4 currencies. investors are concerned. we are likely switching to the dollar looking for higher yields. we do think the dollar will probably end next year on a stronger note. haidi: when it comes to equity opportunities, the seems to be more optimism for japan, particularly if you like cyclicals, persistent lower inflation, and if you like the fact that the corporate earnings outlook has been gradually getting revised upwards. do you see that is a compelling market? kelvin: yes. on a short-term basis, we do

like japan. and if things stand where they are right now, and a semi-japan has not had that leak by another search -- leap by another search, than i do think japan is going to outperform on a short-term basis. actually, given the fact it's lagging, there's still a fair amount of liquidity, and the economy is doing pretty well. last night, the japanese governor basically said if things stand where they are and if the recovery keeps in pace what they're looking for, there's a chance they might have to revise some of their qe just to make sure that the economy does not go into inflationary mode like what we're seeing in the u.s. at the moment. haidi: some of the analysts call for china in 2022 are eyebrow raising. let's put it that way, right? do you think the amount of optimism is warranted? kelvin: yeah.

that's always the tricky part, right, were china is concerned? the chinese market is cheap. if you look at the chinese high yields issuance, it is actually very, very cheap. we do think the list is over for the chinese equity markets. but at the same time, you can't release to certain capitalists. if you look at where things stand, we really need the situation in the property market to actually settle before investors are likely to go back into the chinese market. but if you look at china on a relative basis, china underperformed by about 40% versus the european equities. and 40% is a huge margin. and if you look at valuations, again, valuations in china are cheap. but what we think is likely to happen is that in 2022, we'll probably see a weaker u.n., a weaker chinese u.n.. -- yuan, a weaker chinese yuan.

and it will increase the fx ratio. and that's a signal to the market that they are quite comfortable, the strength of the remit beat against the u.s. dollar. if the yen weakens, coalition between the u.n. is x a very strong. shares seem to be quite undervalued and they seem to be better value compared to asia. haidi: before we let you go, and i'm pre-sure this will be the last time in this year that we will speak to you, let me get to the question of the day. what are your big calls for the new year? how does the pandemic tapering, or the pboc, easing economic growth and rate hikes play out in your market calls? kelvin: yeah. we often think that 2022 will be the year where despite the fact

that the market is tightening, on the chinese side, you're probably going to see the opposite because china was the first economy to be hit by covid-19, first recover, and first to experience tightening earlier this year. we do think that the chinese will have to ease credit growth in the chinese economy because if not, growth in china will come in at about 5.4%, which is way below the 5.8%, 6% target that the chinese government set. we are optimistic that 2022 will be a much better year for chinese equities. haidi: great to have you with us, as always come original cio at ubs. let's get you to su keenan with the first word headlines. su: thank you, haidi.

u.s. health officials are back to using pfizer and moderna covid shots over j&j. they say the j&j fact sheets should warn about a rare clotting syndrome. the cdc director rochelle walensky must ok this. the u.s. senate passed legislation that would ban goods from a china region unless they were proving it was not made with forced labor. the bipartisan bill has been sent to president biden for his signature. china has denied that forced labor is used and calls the bill an interference in its domestic affairs. the u.s. senate has confirmed nicholas burns as the next u.s. ambassador to china. his nomination was approved, 75-18. burns is currently a professor at the harvard kennedy school and previously served as u.s. ambassador to nato and greece. many other diplomatic posts remain vacant almost a year into

joe biden's administration. we're told the biden administration is also pushing european allies to finalize a broad package of sanctions against russia. those would target the nation's banks and energy companies if the kremlin attacks ukraine. president biden has talked the crisis with russian counterpart vladimir putin. however, putin has shown no sign of withdrawing the troops he amassed with ukraine. the telecommunications sector has been between east. the telecoms minister has told bloomberg he is looking to allow companies to operate without multiple bureaucratic approvals. he plans to announce the rebound in february. the minister also reiterated that india aims to start 5g services later in 2022. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. shery: so ahead, bank of america

expects a sharp consumption pickup in japan as manufacturing activity recovers. we'll be live in tokyo for more. also ahead, in-depth analysis of the ongoing stress and china's real estate market. we'll discuss how developers are coping. this is bloomberg. ♪

haidi: of course, focus now on the boj's policy decision. let's bring in paul jackson. paul, really not much expected in terms of the main stimulus measures, but it's all about this corporate funding issue. what do we know? paul: yeah, that's right. we're not expecting any major change on the interest rates. the boj is a long way from doing what the bank of england is

doing, for example. so the focus is on this covid support. this covid aid program is already supposed to expire and end at the end of march, so the very fact that the boj could be considering extending part of this aid shows how out of step it is with the other major global central banks. however, having said that, if it does extend the program, we're expecting to announce some kind of scaling back of its corporate debt purchases. now, it has already been buying less corporate debts this year. and this reflects the fact that the big boys at the big companies, the major names, they aren't really having the difficulty getting the funding of balancing that my have been the case at the height of the

pandemic. however, smaller companies, smaller businesses still very stressed by the pandemic situation. the boj wants to keep providing them with loans via this loan path of the covid program. so that's the bit we would expect to get extended while there's appearing back of the corporate debt. of course, this all assumes that the decision comes today. it could be delayed to january because we've got omicron. we got to consider the impacts of that, though it might not come to that. shery: what about the fact that the boj has found it wanted to pull back from purchases of etf's? do we face the market volatility if they start limiting those purchases? paul: well, to be honest, the etf question, that's already been answered. they did that back in march.

they've already pared back there. so the boj, standing on the sidelines, are ready to buy in bulk if there's another crisis. but, the etf buying is already scale back. so, i don't think that's going to be an issue today. haidi: i would japan economy editor, paul jackson. you can also turn to bloomberg for more on that decision later. go get commentary, analysis from bloomberg's expert analysis. when it comes to the yen, it's on the downward trajectory as we get to the boj decision. the really interesting call is seen as a correlation from the nasdaq to the yen, showing this is a bigger impact, that the

movement of u.s. tech stocks may have a bigger influence on the japanese yen than whatever decision or nondecision we get from the bank of japan. as we look at that downward bias, we have seen the price action messy in recent days, but quite encouraging. and we see this correlation between nasdaq features and the yen rising. that means there could potentially be the hedging bid for japanese yen regardless of what the boj decides. the yen is mostly in the flat path of tech stocks, and we may see further declines going to the end of the year. shery: especially given that we already priced in policy divergence from the fed and the boj. but despite the fact that we might see the japanese yen really under pressure given what's happening with those tech stocks, it's worth remembering that over the long term, these big tech giants have done very well, right? take a look at that gtv chart on the bloomberg, because we can

see the upper trajectory and tech has been holding up despite the fed hike being baked in already at the bottom with the two-year yields. and of course, apple was under pressure in the new york session, but companies like apple approaching what would be an historic $3 trillion market cap, right? you can follow more on this story and all of today's trading on our markets live blog. and you can watch mark raphael, our mliv's editor has to say about the yen and that tech relationship. that's mliv . you can get the market run down in one click. there's also expert commentary. this is bloomberg. ♪

shery: the stresses on china's property sector continues to mount with two kinds of coupon payments overdue. in the meantime, evergrande reportedly being sued for more

than $13 billion. we're hearing regulators a record knitting talks between some trust firms. we hear more with stephen engle. even as we get closer to the holidays, there's never spite for the property sector. stephen: there was a little bit of a spite yesterday -- a respite yesterday in the jump markets. the bonds improved or gained two cents on the dollar on that comment. you just mentioned the government may be taking a more steady hand on the tiller in regards to loan and debt negotiations with some of these trust funds. and we saw sure mall rise yesterday. but the dresses are still there, obviously -- stresses are still there, obviously, as more companies expose weaknesses. yesterday, we talked about our now. there's definite -- rnf.

there's definite pressure on these developers. the latest, as you mentioned at the top there, was kaisa -- i can't remember how many days ago it was -- a little more than a week ago, was declared a defaulter on this $400 million bond that has matured. now we are hearing from bondholders that they have not necessarily yet been paid on two coupons that were due on the last few days on two more bonds. so again, kaiser is in default territory. they are in the third biggest default territory with $11.2 billion outstanding. so there's that with kaisa, still a lot of pressure on that company. also china evergrande, you mentioned that. we're hearing a chinese court has seen lawsuits piling up. 350 or thereabouts different cases claiming no payment from china evergrande on their

liabilities to the tune of $13 billion worth of lawsuits. so that is another weight on evergrande. these things keep on piling up at a time when citigroup is saying they're turning positive. they're turning overweight on china's junk bond market in 2022. yes, there's going to be a lot of maturities coming due in january and the first part of the year. but citigroup, one reason there's optimism yesterday, one reason citigroup saying we're overweight on the china junk buying market in 2022 as a whole. shery: let's get more with our china editor, rebecca. steve was telling us a little bit earlier about how the junk bond markets in china saw a little bit of upside in the past session. but how sustainable is it given, of course, all of the challenges

he talked about? rebecca: well, yes, i think those sort of challenges will be the presiding theme. i think although yes, we have seen a little bit of optimism, and we have seen these bouts of rebounds over the last let's say sort of month in particular. but i think the defining characteristic has been it's been incredibly precarious. and even when we have seen prices cut down, prices,, yields come down a little bit -- prices come up, yields come down a little bit, there news factors, investors, kind of destabilizing things. i think they're worried about shimao is a good example, somewhat taken by surprise. there are two things to watch. our sales going -- are sales exit going to improve?

after two months of terrible sales, it's difficult to see how investors are going to shore up finances without that changing and improving quite drastically. and on the other hand, another key area to watch is the offshore market. so is the offshore bond market actually going to reopen for developers? and if it doesn't, it does look like this sort of wave of defaults the it has provoked is just going to continue. and again, the rnf news we had this week, the debt exchange is, again, are efforts of another symptom unable to access the dollar bond market. it has enormous amount of onshore bonds coming due through 2022, as well, along with all of the chinese developers, something like $6 billion needs to be repaid. shery: rebecca, always great to have you, along with our chief

north asia correspondent stephen engle in hong kong. let's get a quick check of the latest business flash headlines. apple is building of fresh engineering team and a new office in southern california. the move will help and its reliance on supplies by sky work. apple is trying to expand into engineering hotbeds and appealed to employees who may not want to work at its silicon valley homebase. u.s. chipmakers fell on the news. bloomberg's learned our clays is planning to boost its investment bank by more than a quarter amid record results and intense competition for top talents. the increase would be a significant shift from 2020. it comes after goldman and jp morgan announced similar rewards and ratcheted up the pressure on rivals to do the same. goldman sachs says it will reduce their carbon footprint of its fossil fuel clients or cut finance emissions of oil and gas companies by up to 22% by 2030 compared to the 2019 baseline.

targets are even higher. goldman has helped organize $10.5 billion of lending for oil and gas clients this year. coming up, decision day at the bank of japan. we will get lifted tokyo with 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: we are getting breaking news when it comes to singapore. seasonally adjusted number for november coming in at 1.1%, softer than the prior reading. when it comes to urine year, no decks -- year on year -- i might have to get her number and expectations about 15.3%. electronic experts for november,

we see a jump to 29.2%, almost doubled the 14.9% we saw in the previous month. when it comes to exports, we see typically a lot of fluctuation when it comes to the pharmaceutical sector. it will be interesting to see how that gets split up as well. year on year, 24.2%, much better than expectations. as we see the economic reopening really start to take place when it comes to the economic output, we had gdp remaining steady as well. big? when it comes to the economy is imposition of new property curbs for the property market, and how that could weaken the economic import the property sector has as well. that number is very strong. we are getting the exchange margin falling on the previous day from singapore.

shery: it is simply right now, because we are seeing downside pressure for the nikkei and kospi with the nikkei being led lower by technology stocks at health care stocks. the only stock gaining ground our energy and utility. it is a similar picture to the asx 200. you have energy gaining ground, pulling at index higher in australia, all those tech talks -- although tech stocks are at the laggards. tech has led stocks lower in the u.s. as well given potential tightening from banks. some pockets being sold off. kiwi stocks rebounding from three sessions of losses. let's get to su keenan. su: we start with european central bank trying to start a smooth exit from crisis mode. bond buying two cushion

thickened of its emergency program back in march in the face of the euro area's fastest inflation in decades. the developing threat of the omicron variant, policymakers retain flexibility in response. >> under the present circumstances as i have said before, it is very unlikely that we will raise interest rates in the year 2022. that still stands. su: the bank of england has unexpectedly raised rates for the first time in three years. it hiked borrowing costs by 15 basis points to 25%. governor entropy hallie: and outlook -- andrew bailey says not look for more persistent inflation was the reason. indicated most price pressures were temporary. to mexico, the central bank as

its biggest tight and nearly five years. officials waived the key rate by 5.5%. turkey is going to end it cycle of cuts after reducing that one week rate in its fourth straight meeting, now at 14% to support president of the one -- president erdogan's monetary policy. the -- left its benchmark at 2%. bank indonesia said it was staying steady. officials in both countries went to entrench economic recovery. the omicron covid variant poses have downside risk. cases have been reported in indonesia and the philippines. 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 am su keenan. this is bloomberg.

haidi: the bank of japan is expected to stand on its main stimulus today while weighing an extension to its covid 80 program. let's bring in our next guest forecasting growth as consumption picks up. with us is izumi devalier. always great to have you particularly when it comes to boj decision day. let's throughout this chart taking a look at the covid cases , which we have seen come down. we have seen a very low death and reasonable hospitalizations since the easing of restrictions as well. if you look at this, on the balance of things is their expectation that the boj needs to continue covid emergency aid, particularly as we do not know the impact of omicron? >> that is a great question. in terms of the bank of japan

they have been pursuing gradual normalization of their covid era emergency facilities. this year they stopped buying etf's. we think that the next obvious step is to basically ring down emergency purchases of commercial paper mainly used as financing for large corporates. the baseline is whether or not to phase out there massive aid and covid to funding for lending facility, mostly to small enterprises. that is where funding pressures are. financial conditions remain relatively loose, but there are pockets for difficulty in small person enterprises and in person service sectors. generally i do think the bank of

japan is going to be gradually normalizing. haidi: the deputy governor has said the conditions for issuing corporate bonds are extremely favorable. in terms of how much of a callback we expect across the other parts of this program, etf buying for example, what is a risk of doing too much against macro uncertainties and spooky markets? >> the bank of japan has been incredibly careful about the pace at which it normalizes. they have already stopped buying etf's. it has not had a big macro impact. for lending programs, ¥80 trillion, lots of liquidity being provided come but that is where they have to be careful. they will not pull the rug on this facility for putting the squeeze on lending to small

enterprises. they will extend that program by another six months. we continued to see the services to sector -- services sector recovering from covid, they can talk the gradual phaseout for the end of next year. they fully understand some's multimedia businesses are facing difficult these. shery: you have an extended quality comes to gdp growth. tell us why? >> i think in 2021 japan's economy was hit hard by sharp headwinds and we see these headwinds abating over the next year. one big thing is the auto sector come at the most important industry in japan. the covid supply chain bottlenecks were exacerbated

especially when the delta variant broke out in asia. we have had a slump in production in the third quarter, and that is whatever to everything from ip's to durable goods consumption. we do see a pickup in auto related production exports, spending, and then another factor is how quickly consumption recovers, particularly the services sector that are hit hard by covid. as you have shown at the chart i think we will see a robust rebounding consumption at the first half of next year, but obviously the risk of the omicron variant is still the biggest risk in the near term. shery: izumi, how much does the direction of the japanese yen factor into policymaker's calculations? we saw it was weekend -- weakened with policy divergence. >> from the perspective of

policymakers, i think they seek stability. they yen around 110, 115 is perfectly comfortable for them. i do not think policymakers including the government once a sharp depreciation of the yen partly because japan over the years has benefited less from a weaker yen. thousands are facing pressure from rising energy prices and we will see inflation in the coming quarters, so if we get a sharp depreciation, that puts further upward pressure on import costs. i do not think they want depreciation, neither do they want a big depreciation either. stability is the best. haidi: when it comes to political risk prime minister kishida says he has no plans to personally attend china's winter

olympics. they may send a lower level delegation. given beijing as said there will be a price to be paid by the wrong moves of certain countries, how important is this in terms of the economic and corporate impact if they were to attract the fire of a maid -- ire of the major trading partner like china? >> i will refrain from commenting on that. all that i can say is that china is an extremely important business partner. there are a lot of companies that operate domestically within country -- within the country. not just geopolitical tensions but a slowdown in the chinese economy is negative. at the same time, japan has its own diplomatic properties and

needs to navigate its relationship with the united states, which is obviously its most important defense partner and also a big source of demand. it will continue to have two walk the tightrope when it comes to navigating geopolitical tensions especially between the u.s. and china. shery: always great having you with us, thank you as always, head of japan economics. you can turn to bloomberg for more on the boj it later. go to tv to get commentary and analysis from bloomberg's expert editors. coming up next, a key piece of evidence underpinning the u.s. effort against huawei. details about the push to block the tech giant. this is bloomberg. ♪

shery: the u.s. government has warned for years that products from huawei posing as a security risk. a bloomberg investigation it is found a key piece of evidence explaining why. it joining us for the latest is a cybersecurity reported. what can you tell us about this alleged breach? >> what we have found in the course of lengthy reporting is

that the freezeout by the u.s. in particular of huawei was driven in part by an incident that happened in australia in 2012. at u.s. and australia along with other countries regularly share intelligence with each other, and former american officials we spoke to said there was an incident involving an australia to the network where a software update was used was delaware type that sent data to china. it contained malicious code that reprogram the system to record the information passing through the forest to get to china. it deleted itself. it was a very clever self-destruct mechanism. it investors gain access -- investigators gained access to

some of this, and the australian government piece the attack together using a variety of very sensitive sources, including human informants. around that time the u.s. house of representatives intelligence committee published findings that china had a wealth of opportunities to hamper with products from huawei. and a former republican congressman confirmed to bloomberg that national bans had been driven by evidence presented in private. he told bloomberg it is all about access, and the patches that come out of beijing are not to be trusted. haidi: huawei has repeatedly suggested that its networks were used as a conduit for espionage. what are they saying about our reporting? >> huawei declined to address our specific questions but said there has been no tangible

evidence that has ever been produced of any intentional wrongdoing of any kind. we personally did not find evidence that huawei's senior leadership were involved or aware of the tech. and the global cyber security officer says huawei urges governments to review its products and vulnerabilities. the issue here is that patches are not forced it will and huawei has no say. by the nature of the agreement, there is essentially an open channel where these updates could happen automatically, so one of the people we spoke to, the former undersecretary for economic growth said this is a had to bake -- head bake. there was a front door open everywhere and software. at the chinese have told us that

they reject our reporting. the chinese ministry of foreign affairs told us in a statement that china opposes edward crackdown on any form of cyberattack and internet espionage and considers this part of australia's lender on -- slander on china. haidi: you can get around up of those stories. the initiative daybreak -- edition of daybreak as that. go to tv . you can customize the settings so you get the news on the industries and synthetic deal. hong kong citizens will go to the polls on sunday for the first time since legislative council elections were postponed more than a year ago. we take a look at how the political landscape as changed since aging imposed both the national security law and sweeping electric reforms on the city. >> much has transpired

politically in hong kong in the more than one years since the last scheduled legislative council elections were postponed due to the ongoing pandemic according to the government. at roughly nine months after imposing a national security law in hong kong that criminalizes acts of subversion, secession, and cliched with foreign forces beijing overhauled the city's electoral process. only patriots who respect china's communist party wrote will be allowed to serve on the city council. the sweeping reforms mandated by beijing has weeded out opposition pro-democracy factions seen as supporting antigovernment protests. most of the city's formal opposition are now out of office in jail awaiting trial or in self-imposed exile. the legislative council will

expand from 70 to 90 seats, but only 20 will be elective. the legislative body before it was chosen by hong kong citizens. all candidates must now be fitted and approved by a select 1500 member election committee representing business, interest groups, and above all else, china's communist party. shery: be sure to turn into bloomberg radio for more news from today's big newspapers -- newsmakers. listen live on the bloomberg app. plenty more ahead. stay with us. ♪

haidi: a check of that is business flash headlines, a commodity trading group says it has reached an agreement with creditors to deleverage and reorganize after three years of civil and negotiations made the company is smaller and under risky for them. they say the process will cut its debt to $500 million down from $1.5 billion. noble says trading core will cease to be part of the group. drainage creditors have sued evergrande over allegedly overdue payments. the financial times assigned

wendell civil lawsuits has taken on 367 cases. those cases were reportedly accepted between late august and early december. bloomberg is being told china's financial regulators is coordinating talks on line extensions. it is being taken as a sign that authorities want to prevent a gas crunch of the developer. share sample 35% of the full trading session through wednesday on investor concerns about the company's financial help before rebounding. -- still has not paid dollar bond coupons even after the grace. came to an end. it potentially adds to the developer list's of defaulted notes. it was declared in default last week after missing payment on a separate note. jonah's real estate tycoons are suffering their first wealth losses since 2012 led by

evergrande. data from bloomberg a billionaire says that most more than $46 billion combined this year as beijing crackdown on the sector. evergrande's shares had a bonds have been trading near record lows after it defaulted on its debt. shery: look at futures trading at the moment. we are watching some of the stocks today. chinese property developers continue to be in focus. creditors are suing evergrande over allegedly overdue payments. we are looking at chinese pharma stocks, mushu biologics jumping on signs of buyback. u.s. futures rebounding a little bit after stocks fell here in the u.s.

it was led lower by tech, concerns about the most expensive pockets of the stock market as we continue to see speculation that central banks will continue to tighten. we have seen the boe carrying out the first major central bank rate hike today. chinese futures posing on the downside. the chinese yuan has not moved all week, at the 36 level as we continue to see downside pressure for the dollar. take a look at broader and stock markets across asia, a similar picture to what we saw in the u.s. energy is leading the gains on the nikkei. a little bit of pressure right now in the asian session, but tech leading declines on the nikkei and weighing down on the asx 200. that is it for "daybreak: asia." our mortgage -- market coverage continues. standby for bloomberg markets

china open. this is bloomberg. ♪

>> 9:00 him and beijing and in hong kong, welcome to "bloomberg markets: china open your coat we are getting down to the open of trade, our top stories this friday morning. market trades makes as the world's leading central banks bet that inflation is bigger risk than omicron it so. money market signal borrowing because will soon fall as the economy slumps. u.s. lawmakers clear