>> is very good morning and welcome to "bloomberg daybreak: australia." we are counting down to asia's major market opens. anthony fauci says he does not

expect lockdowns in the u.s. despite a spike in covid cases. australia considers more restrictions. and president biden's economic agenda takes a blow as a key senator rejects his spending bill. let's get you a quick check of the markets. we are seeing aussie futures looking a little tepid. 0.4% softer relative to fed value. we had volatility emerging in the u.s. session. future is not helping sentiment. we are also monitoring the covid situation particularly in new south wales. multiple days of record cases. over in new zealand, we are seeing a downside by about 0.1%.

we had consumer confidence showing a return to pessimism falling under the 100 level suggesting optimism. and a trade deficit this morning. exports and imports coming in a little higher than expected. chicago nikkei futures looking like risk sentiment on the back foot as we get to the start of trading in the asia proper session. also watching the lira dropping in early asian trading. we had comments from president erdogan pledging cutting rates. let's get you more when it comes to the covid situation in new south wales. daily new cases in the last 24 hours, 2501 new cases in the

last 24 hours in new south wales so investors are facing a covid resurgence in australia and other parts of the world. and there was also the sharp rejection of president biden's economic agenda. president biden's top medical advisor saying lockdowns are likely to not be necessary though the hospital system will be stressed. >> the thing that continues to be troublesome to me is the fact that we still have about 50 million people in the country who are eligible to be vaccinated who are not vaccinated. when you have that degree of vulnerability and you have a virus like omicron that spreads so rapidly, it is quite likely that we will see in some sections of the country a significant stress on the hospital system. host: let's bring in our

bloomberg editor and our congress reporter. record virus spread globally, the likes of senator warren testing positive. it seems at this point it is who has not tested positive as opposed to where we are seeing this virus spread. >> it feels like over the last couple of days we have seen a bit of a turning point with the omicron variant. it is obviously as everyone noted, including dr. fauci, it is incredibly contagious. one of the issues is how berland it is -- is how virulent it is. in south africa, that seems true. the fact of the matter is it still remains incredibly

disruptive to the economy and generally when people are getting sick. businesses close, kids cannot go back to school and it is hard to travel. daily business cannot go on as normal and there is the big question of hospitalizations. host: a big question mark when it comes to what this holiday season will look like in australia. we saw some of the easing of those last restrictions here in new south wales. angus: today's numbers just shy of yesterday's record. while that is down, the key metric is hospitalizations. 261 in the hospital in new south wales. that figure is accelerating. it was 227 yesterday and 206 the

day before. that is the gauge people are most concerned about. the number of people on ventilators increasing. starting last week, the new south wales eased back on some of the mask mandates that had been in place. he is pushing ahead. omicron is not getting in his way of pulling back restrictions which is leading to some pressure according to local media reports even from within his own government as well as health experts to reimpose some of the mask mandates. host: the u.s. dealing with its own spiking case. that is not the only issue for the government. the move by senator manchin blind siding the white house. >> if i cannot go home and explain it to the people of west virginia, i cannot vote for it and i cannot vote to continue with this piece of legislation.

i just cannot. this is a no. host: what does this mean for the economic agenda? is there a way they can salvage part of this to meet those demands given how fractious everything seems? >> we have a story on the terminal. democrats may try to split up the bill and pass a smaller version of it. joe manchin in the past talked about another measure but he wants every program created to last for 10 years. senator ron wyden, head of the finance committee just came out of assist -- just came out with a statement. i think they are going to go with a slimmed-down bill. the other route is to push in an election year.

host: bloomberg's eric and angus here in sydney on some of these top stories. it's get to su keenan. su: we start with liz trust who will handle the post brexit negotiations with the eu as david frost quit the role on sunday. he implied he was unhappy with the conservative party policy and current brexit thinking. this appointment strengthens her position as one of the favorites to succeed boris johnson. to turkey where the turkish president has pledged to continue with rate cuts referring to islamic teaching as a basis for his new policy push. he also said turkey will not back down from its new economic model which relies on lower borrowing costs and a cheaper currency. the lira is a worst-performing currency and the world for the last three months losing almost

half of its value against the dollar. and the death toll from the philippines' strongest typhoon this year has reached over 140 people. fatalities may rise considerably. extensive flooding and landslides. he also ordered ayers in his province to invoke emergency powers. the president promised 40 million and eight after visiting the region on saturday. and in the u.s., the biden administration says it still sees no pathway back to revive a nuclear deal with iran after the latest talks in vienna. jake sullivan said a silver lining is that the u.s. and europe are finding rare common ground with russia and china and the talks. antony blinken suggested last week that the u.s. could soon shift its attention away from attempting to resurrect the 2015 accord. 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. host: still ahead, we have more on australia's omicron concerns and later in the show, we hear from annette pfizer to the -- from an advisor to the who sing there could be a fourth wave coming. fund flows. we break down key sectors including consumer spending and infrastructure next. this is bloomberg. ♪

>> the economy is so much stronger now, so much closer to full employment and inflation is running well above target. >> inflation is expected to remain elevated in the near term but should use in the course of next year. >> there are signs of more persistent -- and that is a

concern to us. >> it is unlikely that we will raise interest rates in the year 2022. >> we are phasing out our purchases more rapidly because with a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support. >> there are many factors determining the outlook for prices but looking at the current situation, we have no intention to proceed with policy normalization central banks in the u.s. and the eu. haidi: a huge rate -- a huge week for rate decisions. we will see at that holds true with the virus resurgence. let's take a look at what we are watching out for this week ahead. china's defect out benchmark funding rate could be inching closer to its first cut since april 2020. policymakers -- we will see if

that drop in the loan prime rate happens. on wednesday, the eu was expected to announce how natural gas and nuclear energy projects will be classified under its green investment rules and russia standoff with the west and ukraine some of the things likely to dominate vladimir putin's press conference on thursday. attention when it comes to markets squarely focused on the covid resurgence and the holidays almost upon us. omicron cases are tripling daily and the u.k. -- in the u.k. and it has become one of the top risks for investors going into the year ahead. let's bring in our next guest who says omicron poses a particular threat for markets. let's talk more about the risk with the director of research. to be fair, i look across most markets and there are not many that are still pursuing covid zero.

what are the risks and what is the best way to navigate this given that for the most part we have been hearing that lockdowns will not be the new reality again? >> right. you are really looking at a fairly small group in asia that is pursuing that with china by far and away the strongest adherent to this policy. i suspect you have had many experts over the past months explaining the downside to pursuing zero covid strategy which is that you maintain a large pool of people who have no natural immunity to a variant and as we have seen what omicron, the evolutionary pattern of these kinds of viruses does tend to trade lethality for infectiousness. i think it is going to be increasingly hard and as we are seeing in australia when you let

the barriers down even a little with omicron, it is off to the races. haidi: how do you hedge against that going into a new year that holds so much uncertainty? does not affect your view when it comes to consumer names? guest: what we have been seeing through the prism of mutual fund flows is that for the -- it has been institutional investors driving flows in the final four months of the year. the strong footprint of retail involvement in interest we saw earlier has ebbed away so most of the flows we are seeing have come from the institutional side and the flows can to favor markets which are taking a more herd immunity approach.

we are seeing a lot of money in the u.s. with a strong sense that any restrictions will be at the state level and will be fairly minimal. and in europe, there seems to be some selectivity towards countries depending on the severity of their lockdown. the broad narrative behind that is actually at least some financial professionals are starting to talk about almost a goldilocks scenario with omicron which is increased herd immunity while making it a little easier for central banks to minimize their rate hikes. haidi: we are just getting some breaking news. for the tech sector. sensettime has relaunched its --

has revised its prime table -- it's timetable. we had heard most recently it was reportedly getting about $500 million in cornerstone investments ahead of the plant hong kong ipo according to people familiar with the matter. this is creating quite a lot of interest as well as concern given the recent overtures we continue to see when it comes to the blacklisting of chinese tech firms. mixed ownership reform fund has pledged. in terms of this ipo's plans it did hit the speedbump after the move from the u.s. treasury to sanction it for its alleged role in creating the facial recognition software. the company has said those accusations are unfounded and they are relaunching their hong

kong ipo. cameron, let's get to the geopolitical peace and tech -- geopolitical piece and tech. how does that inform the risk appetite? guest: when it comes to tech, at least at the moment, there has been a recovery of risk appetite. enthusiasm protect funds especially u.s. and china wants were fairly depressed in the middle of the year because of the regulatory trends and the feeling that some of the tailwinds may have picked up at the height of the pandemic beginning to ebb. partly in the u.s. because of the omicron notion that there is going to be much more remote working, remote shopping, remote entertainment for much longer has reasserted itself and as i

said earlier, the institutional investors are putting more money into china technology funds on the assumption that while the chinese authorities certainly wanted to lay down a new regulatory framework, they do not want to put them out of business and there is likely to be some upside in the coming year. haidi: how do you view the policy misstep risk from central banks for next year? guest: [laughter] it is certainly there. i think the central banks are acutely aware of it and have certainly errored on the side of caution. the rate hike in england and the expected acceleration of tightening here in the u.s., certainly in float terms, has

been received quite well. there was more of a feeling that the central banks were getting behind the curve, a great deal of skepticism for some time about this transitory narrative. so, i think that what we will actually see as central banks gaining a bit of credibility early in the year. i am not too worried about them turning the interest rate screws all that tight. and i think at the first sign of any real trouble, they will be backpedaling, i think they are keenly aware. haidi: great to have you with us. cameron bryant. looking at the roundup of stories you need to know to get your week going purée this is bloomberg. ♪ ♪

haidi: let's take a look at the day ahead for australia new zealand. new zealand's trade deficit has come in at the widest since february 2019. australia has revised up its forecast for resources and export revenue. on the back of strong coal and liquefied natural gas prices. and the magellan financial group and it is reporting the company may respond to speculation it has lost a key mandate. let's get you a quick checkup of the headlines. rio tinto has appointed dominic barton as chair. he will become chair may 5.

he was most recently canada's ambassador to china announcing earlier and december he would step down at the end of the year. he replaces thompson who declined reelection after rio tinto's destruction of an ancient aboriginal site. nio has announced a new sedan. it is the most direct rival to tesla model three. it is already launched a more expensive electric sedan with deliveries expected in march. >> et five is a key product for us. nio has long focused on sports utility vehicles. we have been looking forward to a model with a more suitable price and a larger consumer base. haidi: while disney reached an

agreement to keep its programming on google's youtube tv site. content from the spn and other networks. tv networks are becoming increasingly reliant on tv fees. the much-anticipated movie spider-man -- no way home posted the second highest revenue in box office history. the movie brought in nearly $122 million and is set to hit 242 million dollars over the weekend which would make it the best december debut of all time. we are back on track when it comes to the chinese facial recognition. they have launched -- they've announced a relaunching of their hong kong ipo. we are hearing that treating could begin by the 30th of december. the ipo plant hit a speed bump

after a move from the u.s. treasury department sanctioning the company for its alleged role in making the kind of facial recognition software used in the oppression of uighur muslims in the autonomous region of china. the company had already flagged it was potentially going to be completing its ipo as planned. he had reported last week that they were going to reopen orders as early as monday which of course we have now heard that offering had been planning to be the same as what was expected earlier. previously they had offered 1.5 billion shares between 3.85 hong kong dollars and -- according to the previous prospectus. watching out for more details on that relaunched ipo hong kong schedule. just about a half an hour away from the open here in sydney this monday morning. as we get closer to the holidays , we are watching the pboc as the next central bank on the block when it comes to potentially building more of

these moves towards using. we are seeing sydney futures up by about 0.4 percent and new zealand is on track for a fifth straight day of declines, the longest losing streak for about a month. downside when it comes to broader asian 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.

>> we will see whether there are new restrictions or not, and we might discuss the omicron variant, but if the government felt further action had to be taken, of course we would present that the parliament and it would be for parliament to decide, as it should be. >> i don't foresee the kind of lockdowns we have seen before, but i certainly see the potential for stress on our hospital system. haidi: health officials on how they plan to deal with the virus resurgence.

several countries tightening restrictions. australia could be next. in new south wales, new records at the weekend, he made calls -- amid calls to relax social distancing rules. nobody wants to go back into a lockdown, particularly days before christmas, does something need to be done given we are seeing 2.5 -- 2500 cases in new south wales? >> absolutely we need to do something, and we need to start giving out booster shots. there was a fantastic presentation from experts around the world that looked out -- looked at what was happening with antibody levels and omicron. if you had your pfizer for six

months or more, you are not protected. the protection has dropped to about 34%. if you had astrazeneca like a lot of australians, you would have had it about six months ago and you would have no protection left at all, it is 5% against omicron. one of the strains pushing australia's fourth wave is deltek, there is some omicron, and delta lowers vaccine effectiveness in the community as well. basically i think the evidence shared with us during the week is demonstrating need to get users into anybody who has had the second shot at least four months ago. shery: if the netherlands is going back into lockdown, the health minister saying we are in

a different situation and it is not winter, is that enough of a reason to not take further measures and is there any reason to expect the hospital system will not be overwhelmed? given at the moment we don't really know -- the bulk of the cases would be delta or omicron? mary-louise: at the moment around the world, omicron hasn't supplanted delta yet. there is a mix of delta and omicron and it looks like mostly delta at the moment around the world. that argument, it is not winter and we are not at risk i think fails to understand it is about behavior. in winter, people go indoors in europe, but in australia, when christmas occurs, people start socializing at a great rate.

it is when you catch up on family and friends you have ignored for a year. australians do enjoy that socialization indoors and outdoors. they are at great risk. we are starting to hear cases where young people have had two doses but are starting to get what is labeled as mild, non-hospitalized, because they are socializing. and their history of vaccination, they do have high viral loads and they can spread at. it is less likely to spread. haidi: should the mask mandate be returned? mary-louise: absolutely. basically we should be wearing masks when we are not at home. when we are shopping for christmas, when we are socializing for christmas, and we should also sadly be looking at the number of people in

venues. that will be very unpopular. the most popular thing they should have done was bring in booster shots asap. israel had a lived experience a bit like australia's experience now. in june and july, the public had mostly been vaccinated and they had their second shot about six months prior, particularly the elder ones, and that is when delta arrived in israel. the elderly got very sick after having the second dose of months prior. the young ones, their infection rate rose at 4.5 months. why not six months? because they socialized more. young adults have been carrying most of the burden of any mutation, any strain, because they get together, they work

with a lot of people, and the elderly are still at risk of hospitalization and death, but their antibodies protect them a little longer because they don't do as much socializing. right now, australia is socializing. of course, so is america and every other country. and they are indoors. our socializing in large numbers will see a fairly equal risk of acquiring it. so mask wearing -- please socialize outdoors. try to not do it indoors. if you are at a restaurant, see if you can do it outdoors. open the windows and doors. one interesting thing about omicron, it hasn't been proven, but unlike delta and alpha, it appears the spike can have a positive and negative charge. that positive and negative charge in the virus is expelled

with us talking, singing, laughing, can hook onto saliva into lung fluid, and therefore stopping it from drying out and hanging in the air as a viable threat for longer. so airflow change is really potentially important. so open up the windows and doors and get a lot of fresh air in. haidi: it is fascinating and somewhat alarming. what does that tell us about the modeling we can use on what future variants might look like? mary-louise sometimes -- mary-louise: sometimes the modeling includes just pure science, but they ought to include behavior. one thing i have learned from my first pandemic, which was hiv, and of course sars and flu, it's not just about the virus,

it's also about behavior as well. with this particular virus and its strain and to the way it has changed, there are 32 mutations of the spike alone. most of them would indicate it is a highly capable of binding and fusing into ourselves. -- our cells. we don't know if we need less of the virus to get infected, we don't know that, we don't know if it hangs in the air longer, as i mentioned, but it is no less contagious than delta. and england and south africa shared at the who meeting that it looks as if it is more likely to cause reinfection. i sometimes think that

assumption of it can get around our immune system may be it is getting around our lowering of our immune system since either you had a previous infection or vaccination. haidi: professor mclaws, wonderful to have you with us. we have an update when it comes to -- just crossing the bloomberg, on kaiser. they did not make payment on the 6.5% note. they missed an interest repayment for the 2023 note. kaiser group saying they will resume trading the 20th and on :00 a.m., but also pointed out a financial advisor. this after the trouble chinese developer had not paid dollar coupons after race periods came to an end.

just adding to its defaulted notes and pressuring to come up with a restructuring plan. their financial advisor saying they miss to the payment for the 23 and 2021 notes. let's get you the first word news with su keenan. su: we start with germany, which has given the germany its highest risk virus designation and titan travel from the country, including a mandatory 14 day quarantine. the netherlands has returned to a full lockdown at least until january 14. only supermarkets and essential shops can stay open. italy is trying to avoid a full shutdown by reviewing its measures to slow the virus spread. the government may make masks mandatory outdoors and step up testing. in the u.s., senator joe manchin has rejected president biden's to trillion dollar tax and spending bill. leading democrats have few

options to revise the economic agenda. mansion called the white house off guard after weeks of negotiation. senate majority leader chuck schumer will determine whether they can salvage some of the till to address joe manchin's demands. >> if i can't go home and explain it to the people of west virginia, i cannot vote for it. and i cannot vote to continue with this piece of legislation, i just can't. this is a no on this legislation. 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. haidi: morning calls ahead of the asian trading day, looking at the yuan ahead of the decision later today. a pivot toward a more hawkish stance and the easing pboc. expecting relative tightness on

monetary policies in the u.s. we could start to see some depreciating pressure on the chinese currency relative to the dollar. a lot of that will ultimately depend on the pace of tightening the fed pushes through, with the pboc going through with easier policy. looking at the longer-term part of the bond market, it seems that traders think that while the fed will move quickly, hikes will be shallow. take a look at what some are saying about that behavior. at the lower end, it will constrain how far the fed goes as they won't want risk inverted -- want to risk and inverted curve. it could result in excessive tightening of financial conditions. so again, that is top of mind it comes to risk. we will be hearing from the cio of a leading australian investment manager on why the current economy is favorable for equities, particularly travel and recreational services. this is bloomberg.

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haidi: australia's economy poised to power into 2022, strong numbers when it comes to employment, consumption and inflation. those could help bring a tailwind for the government as it tries to win a fourth term in may. the special envoy for global

business and talent attractions spoke with bloomberg about how the nation has navigated the pandemic and its place in the global economy. >> australia remains a lifestyle superpower. that is always good. we have to enjoy ourselves. more particularly in the post-covid world, australia has a very clear plan, a blueprint for the future. that is to see industry 4.0, or a fourth industrial revolution, this time driven by technology and powered by clean energy as opening up tremendous new frontiers and providing opportunities for american businesses, entrepreneurs and government, of course, in terms of security arrangements. >> what are you telling the businesses who may look at the covid world with some of the lockdowns, and how do you say it is still attractive and open and you can convince them it is a business friendly environment?

peter: every country has to balance lives and livelihoods, and particularly with economic growth. getting prepared for the future. australia is a country which was willing to sacrifice some of the freedoms we quite rightly expect, and which will be regained soon, in order to make sure people's lives were safe. the prime minister talks about the fact that the lives lost during the pandemic were tragic, but if we had taken european-style model, there would be 40,000 more australians dead. >> let's talk about incentives in the competitive landscape. we have seen in recent months of global minimum corporate tax rate of 15%. you are implementing a futex off concessions to bring industry end, but that rings the rate to 20.6%. does that make you competitive? peter: i think it does. that is an average.

the real question is, what is the effective tax rate for the future facing industries? that we look at the civil space economy, where australia has huge ambitions to become a world leader on developing hydrogen. as the prime minister said recently, 10%-15%, not talking about financial engineering, just looking at incentives provided to australian companies , that is about the right rate. the key is u.s. firms, for instance, need to become australian companies. >> with regards to the focus on clean energy or cleaner energy, i should say, if you look at the legacy industry of mining and materials in australia, how do you reconcile those to an industry that has not necessarily made the shift to the clean energy future? peter: the transition is happening faster than anybody expected. what is interesting is the

traditional industry entrepreneurs are leading the charge into hydrogen, for instance. we are talking green hydrogen. hydrogen which is powered by renewable energy. if we take the solar industry, a company is a great example, being put together at the moment and will be exporting electrons, exporting sunshine. haidi: the australian prime minister's special envoy for lobo business and talent attractions begin with bloomberg. another year a strong earnings growth from cyclicals according to our next guest. great to have you with us. we have to start with the virus, with omicron. what potential risk, headwind, do you see going into next year? >> it is certainly a risk and it

is with us right now. we did identify risk from the virus. clearly right now that is an issue that needs to be addressed and we need to know a bit more about it. the pleasing part, if there is a pleasing part, is there are indications the virus is not -- and something to deal with going forward. if that is the case and we get out relatively unscathed -- i mean hospitalization rates and deaths are low -- that would be a good thing. we would see a rebound into 2022. haidi: the base case for some of the sectors you are positive about, the reopening traits, leisure, hospitality, do not

want us returning to lockdown. paul: that is true and in australia we are in a better position than other places around the world. we are one of the heaviest -- nations globally. we are also advancing your shots as we speak, so a positive at well. -- as well. i think there is a commitment by the premiers of each state to work with each other on the economy. i think that is likely to be the case. there might have to be some requirements, and that will be more on the current strain and how best to address it. that is something obviously that needs to be in balance. if we do, as i said earlier, if we get through relatively unscathed, i think the outlook

remains, for us assuming a rebound, people are itching to get out, demand is very high and people want to get on with their lives. haidi: we have just seen data showing us fossil fuels are still a driver to record revenues for australia. do you see the energy transition happening? paul: i think it will happen and we will see the transition occurring. clearly in our way of thinking, it is a necessary step we need to transition in some way enbridge the step to cleaner energy. -- and bridge the step to cleaner energy. australia is a beneficiary because we are a supplier of the enablers, if you like.

in the instances of rare earth, lithium and nickel and copper are necessary to take that final step in order to deliver clean own -- cleaner energy going forward. but there will be a transition we are experiencing that as well. haidi: great to have you with us. let's get more on rio tinto. dominique arden -- dominic barton is the new chair. what do we know about the appointment and the implications? >> it was announced this morning and the thing about dominic barton is his most recent job was canadian ambassador to china. that aligns with what was required by rio tinto, whose main customers are chinese, nearly 98% of total revenue. so the experience being in

beijing will be crucial to rio tinto at a time when diplomatic tensions are running high and have been for the past year. we've seen china target a number of commodity exports. but they can't target iron ore because there's no alternative on the scale rio tinto supplies. but there is an ongoing threat and dominic barton is brought in with that in mind. haidi: the latest there on the appointment at rio tinto with important relationship. we have more ahead. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. a chinese aia form is relaunching its ipo amid tensions with the u.s. government. the company sticking to its original offering and aiming to start trading december 30. beijing is asking companies owned by the central government to prevent risk and do's debt. they are trying to control high premium m&a and refrain from

taking over high-risk projects. alibaba with growth -- will target growth abroad and in china as it tries to recover from a tough year. alibaba says it overseas business and cloud as he wrote -- as key growth drivers. this is bloomberg. ♪

>>[speaking foreign language]

haidi: we are counting down to asia's major market open. >> welcome to daybreak asia. haidi: dr. fauci says he does not expect locked out in the u.s. to cause a spike in covid cases. asia-pacific airlines director