haidi: good morning. >> welcome to daybreak asia. a global rebound of stocks may continue in asia as risk of appetite returns to the markets. president biden says he may lift travel restrictions. omicron may result in more breakthrough infections. the u.s. may approve two

treatments from pfizer and mark this week. >> risk on sentiment from wall street overnight. we had energy tech dominating in what was a broad rally we saw amid thin liquidity conditions. many closing their books and heading off on the christmas holiday. we also continue to watch the downside when it comes to trading in kiwi stocks. federal leaders meeting to decide how they deal with the omicron spread. the prime minister has signaled that lockdowns are not likely. there are calls for providers to return to amassed mandate.

they're been 3700 new cases over the past 24 hours. we're waiting for bank of japan meeting minutes as well. we are also seeing the boost when it comes to reaching oil prices and higher treasury yields. >> in terms of futures, we might see a continuation into tomorrow. nothing right now for s&p futures. nasdaq futures down less than a 10th of 1%. that has just flipped. a couple of minutes ago, that was higher. we are also seeing money come out of treasuries with the 10 year yield lower. president biden taking more of an aggressive stance on the omicron variant and also he mentioned that we may not be done with build back better. there may still be a path to

getting joe manchin on board. joe biden saying he is considering lifting travel restrictions, but warns of potential breakthrough infections. >> we should all be concerns of -- concerned about omicron but not panicked. if you are fully vaccinated and especially if you got your booster shot, you are highly protected. if you were unvaccinated, you are at a higher risk of getting severely ill, getting hospitalized, and even dying. the best thing to do is get fully vaccinated and your booster shot. >> that's bring in our report for more on this. what is the thinking in terms of loosening restrictions on things like travel in countries where we note omicron has been hyper transmissible. at the same time, mutations are all over the place.

there are cases rising exponentially. >> thinking on the near future getting rid of the travel restrictions from countries in southern africa really is that we cannot field the u.s. off on the omicron variant which is become obvious as of yesterday. 75% of the new cases of the coronavirus were of the omicron variety. that was initially supposed to buy more time. at this point, whatever time could have been bought has been bought and the issue is really more centered around our ability to test our hospital capacity attempting to limit travel from places where it has already come from would not serve a purpose at least for much longer. >> still a lot of uncertainty over the economic agenda. president biden trying to stay optimistic. what are the chances that something gets done after they

were blindsided by senator manchin? is there an opportunity to get the wish list sorted? >> not quite the wish list you have heard of. the crowds are not giving up. house budget chairman who is the primary spans -- sponsor of the back better bill said if they have to comply with joe manchin's demands and make everything fully extended for 10 years, they could do something centered around the child tax credit. then potentially some of the environmental measures they wanted to do and not much else. they may take another shot through the same reconciliation process separately in the year if they have time. these would be smaller bites of the apple. those we have talked to have said they are not giving up, it's just going to be much smaller than what they had passed earlier this year. >> it's not going to be a christmas surprise.

new covid treatments from pfizer and mark -- merck could be approved this year. not just this, but in the last hour or so we have heard novavax announcing development when it comes to their booster shot. also oxford as well as astrazeneca working on the omicron targeted vaccine. let's start with the pills. does this change the way the pandemic is mentioned -- managed? >> absolutely having a pill that can be taken at home with discretion easily obtained and can significantly prevent serious cases hospitalizations and deaths could revolutionize the way the virus and omicron is spreading. we don't have anything that is very effective at reducing the

severity of the disease. that can protect you once you have been infected. that's what is happening here. not everybody would need to receive these the way everybody needs a vaccine. you could get it described easily theoretically over the phone. it could be easily taken and the data we have seen specifically with the pfizer pill are remarkable. hopefully, everyone has their fingers crossed and it's going to home -- hold well especially against omicron. >> in terms of incentivizing boosters, we saw new york city announcing $100 for those who go get a booster. how helpful will boosters be? >> boosters are essential when it comes to any type of coronavirus. particularly omicron variant. we know that it breaks through the two dose vaccine that we have been given so far. getting a booster is really what's going to protect people.

it can boost the antibody levels again. studies have shown that giving people money to do things like get vaccinated or take other health measures, people don't generally embrace that in a large weight like you can imagine. officials in new york and elsewhere are so anxious to get their people protected, they are willing to do anything. we will see an uptick because of this. hopefully, we will see additional protection coming. >> we are seeing lockdowns in europe, but we are hearing from countries like australia and the u.s. that they will not have lockdowns. >> omicron is spreading and we all know what works. you can see that countries don't want to put their economies on

the back burner again. they don't want have to deal with massive swings that happen when you go into lockdown. the bottom line is, there is no mystery. people can protect themselves through all the normal measures. the point is that some people don't take the necessary steps to protect themselves and others. that's why we need to have the government step in. when government step in, they can make a significant difference in terms of spread. in the u.k. and in other places, they are hoping that people will look at these numbers, will have some concern, and will stay home. as it remains to be seen how effective that kind of common sense approach is going to be. i think we will see additional restrictions across the globe. >> that was a senior medical reporter joining us. here are your first word headlines. thailand has canceled a reentry

program. the hold will last until january 4 when the panel will reassess whether to allow entry to vaccinated tourists. around 200,000 visitors previously approved will still be allowed in. vladimir putin has issued a warning to nato saying he is willing to use his military to counter the military expansion. he told senior officers that he is concerned about presence of nato forces near russia's border. he says he cannot allow the alliance to deploy missiles near ukraine and pressures an adequate military response. jurors in the ghislaine maxwell trial have asked for redacted transcripts from three accusers and an fbi memo. the judge says the jury will reconvene next week if a verdict

is not reached by the end of wednesday. she is facing up to 40 years in prison. those are your first word headlines. haidi: still ahead, we will be speaking to one of australia's leading public health researchers. omicron cases continuing to search hitting another record high in new south wales. up ahead, we will speak to a chief economist. one of the top forecasters for arrange -- a range of things including forecast for u.s. jobs. that's coming up next. this is bloomberg. ♪

a quick check of commodities.

the new york crude futures are seeing a nice gain. $71.29 per barrel. we have seeing a little bit of pressure on natural gas futures as europe goes through power crunch. vessels being redirected from china into europe. we are seeing more of those as the week goes on. china seems to have enough natural gas and coal to power its needs and what is becoming a mild winter for china. a difficult winter for europe begin with. soybeans and wheat i want to point out as well. the frost in brazil and south america is not going to be the record crop that we would have expected. in fact, there might be pressure despite dry conditions. that is sending soybean prices higher.

corn is also under pressure. let's bring in our guest to talk about all of this. oil and natural gas prices first. how divorced are the prices here in the united states from what is going on in europe and the difficulty in getting supply? >> the natural gas situation is completely different. it is night and day. we have seen natural gas prices come under pressure in the u.s. in the recent weeks, but their real supply crunches in europe. the concerns over russia and ukraine, russia being a supply -- source of natural gas in western europe at a time when pressures are high. that is driving up prices and causing real crunch. for oil, a much more global market. we are seeing things move quickly depending on the omicron

variant. it appears that a lot of volatility to crude, but that is a more global dynamic. >> do we anticipate that these will continue to rise? >> for energy prices, i think we'll see different things. for the s&p and other financial markets, i think we could see some choppiness around what is going on around omicron expectations. i think we will see a solid economy in the u.s., a solid economy globally, increases in travel and miles driven. the economy in general should be quite strong next year. that could continue to support equities.

even though the fed will be tightening up monetary policy. >> what about the ev related materials and commodities that have seen huge gains and tight supply? is it sustainable? >> there are some major concerns there. the big challenge as we look at the cleantech revolution, the clean energy revolution, is there enough metal to do what we want? weeks ago, the imf released a report showing some of the numbers and underscoring that if we want to get to a net zero emissions world, we may not have enough supply of the lithium and cobalt that many other minerals

for what we want to be. that is physical material science problem. isn't going away, it's going to become more of an issue going forward as we see a focus on ways to reduce carbon footprint which is why something like natural gas has become so popular. that is a much easier way to switch from coal and cut your co2 production in half rather than going from gasoline vehicles to electric vehicles. that is a much more difficult jump to make. >> one said policy diversions -- signaling stronger than a week ago. how deeply that? >> i think there's a couple of things. first is, they are still being relatively accommodative. you look at some of the bond rates right now, high-yield or triple see lower, triple see and

lower, the effective yield is barely into real return rates right now. that is probably an area that is quite risky. we could see the bond prices fall and the yield rise sharply as we see interest rates go up. i think there is a risk there. there's also a risk that emerging-market credit spreads could widen significantly. even if the fed raises rates or as the bank of england tightens up, it could become a much bigger problem for emerging markets. watch for the emerging-market credit spreads potentially kick out. >> we are getting economic data the next couple of days in the united states. what is the chance that the market is going to get another shock before the end of this week and we might see a reaction in the bond market now the fed

has fully and entirely pivoted? >> the bond market, we might not see that reaction this week just because the omicron risks continue to wrap up. it is everywhere, is going to be everywhere in the news for the next couple of weeks. that could prevent the massive move. we could see equity markets again continue to attract capital as we see some people pushing to make retirement contributions into their accounts. as we look to next year, the labor market especially in the united states is very tart inflation. -- tight inflation. that pushes a lot of things focused on automation especially the tightness and supply chain. we're hearing about the inflation coming from justice problems.

>> always good to have you with us. we will see you next year. be sure to tune into bloomberg radio. you can get in-depth analysis from our daybreak team. we are broadcasting from our studio in hong kong. we have lots more ahead on daybreak asia. this is bloomberg. ♪

>> we are counting down to the start of trading in tokyo. in japan, the government is getting set to lift its growth outlook to the 3% range. meanwhile, advisers say the government must do more to revive the chipmaking industry.

he says that tax breaks may spur $88 million in investment. the prime minister is going to do everything possible to encourage firms to raise wages. that includes new disclosure rules for next year. in korea, the market showing signs of more activity. a life insurance company has submitted an ipo proposal. we will also be watching for the latest updates when it comes to covid-19 case numbers and vaccinations in korea. we saw a slew of case numbers. officials will be bracing on that in about an hour. >> u.s. airlines warning of flight delays and equipment interference when 5g is rolled out.

white house officials, regulators, and industry groups are struggling to come to an agreement on how to manage the issue. as if airlines didn't have enough to worry about, there also in conversation with regulators and the white house over 5g and its rollout in particularly large american cities including houston and new orleans. what is the issue? >> you are right, it is shaping up as a huge battle. basically, this new band of 5g signals which is supposed to be switched on january 5 it abuts the signals known as radar altimeters on airplane that since the distance to the ground.

they have a whole bunch of uses including landing and bad weather. the two sides cannot agree on whether there is interference or not. it looks like we are heading for a standoff. >> how is this being dealt with in other jurisdictions is to mark >> the telecommunications companies all say they look at similar services that have been rolled out in the pan and europe and other countries. the airlines and also some u.s. officials at the faa say the difference is those other nations have taken some of the restrictions -- have imposed some of the restrictions that we would like to see. for example, the frequency might be further away from the aviation equipment. it is at lower power levels.

in canada and europe, they restricted cell phone tower placement near l4 -- near airports. >> you would imagine anything a matter of public safety would be fact-based and we would be able to determine what exactly are the fact instead of having to regulators fighting each other. thank you. a quick check of the latest headlines. apollo plans to land -- land $4 billion softbank. the financing will be backed by softbank's $40 billion vision fund. interest is expected to be in the mid single digits. the deal is not yet final. moody has upgraded apple to aaa. apple is on track for its most lucrative quarter to date with revenue expected to be around $118 billion. it joins microsoft and j&j as

the only u.s. companies on the s&p with the highest possible credit score. up next, and epidemiologist joins us to talk about australia's virus response. this is

deja vu moment. >> our guest there on omicron concerns heading into the new year. there is said to be a meeting at the national cabinet today to talk about the omicron variant. a professor of epidemiology joins us now. it stood out to me the prime minister singh on national television that comparing the mask mandate as saying you don't need to tell -- you don't need to mandate people to wear sunscreen and hat in the summer. is that a fair comparison? >> we are still transitioning and what's important is that we have clear messaging about when people need to step up local precautions. in the long term, we don't need to do that with formal mandates and rules, but it is something that the people dial-up and dow

down automatically and that is what we are seeing in the community. people know that the mandates are likely to come and they start wearing masks again. i think at the end of the day, we need to get the messaging and it seems like most states are mandating masks. we are likely to see a national position. even with rules, hopefully we are relying less on enforcement and more on people understanding why it's important how they work and why we should invest in them as a low-level investment to something that can make a dramatic difference to the speed of which -- in our community. >> in new south wales, we are seeing another record high case number. yet the government pushing back

against storing the mask mandate. i am wondering if we assume that in australia that omicron will become the bulk of the new cases, is it a dangerous assumption to think that yes it is more transmissible possibly less severe? does that mean that hospital systems won't be overwhelmed? >> we are still working that out. australia has a different profile of immunity in the community. we have a lot of people fully vaccinated 12 and older. we don't yet have our five to 11 rollout. we haven't had a lot of exposure to the virus in the community, even the case numbers are high. we have yet to understand what the illness profile might look like particularly in the people who are still unvaccinated in risk age groups and have had a prior exposure.

the other part is having very high case numbers. even though it's reduced compared to deltek, if you have 10 times less risk but 10 times more in the community, you will still see the number increasing in hospitals and there could be higher case numbers than that. the other important thing and we saw this and south africa, they were reporting a lot of incidental cases in hospitals. if you have very high rates of infection in the community, it means people have to go to health care settings for other reasons. you still have to manage them in a setting with other people vulnerable to infection. that makes it a complex way to manage people in the hospital system during an outbreak in a local community. just through high exposure rates in the people coming in to the hospital for other reasons.

we have to manage carefully. that's why it matters to protect people from covid cases, but also the indirect problem of keeping infection control working in hospitals to protect the people in one bed from someone who is coming to the next bed who happens to be infectious for covid even though they are there for a different reason. >> in the u.s., it looks like the president and for her agencies are moving toward reducing quarantine time for those who are vaccinated. it's hard to know if this is a way of trying to get people to get vaccinated or if this is just some kind of other device. is that a good idea? should quarantine times be reduced if you are vaccinated or partially vaccinated if you are in contact with someone or if you get it? >> that's right.

we might be seeing shorter infectious times with omicron. people are vaccinated they are still less likely to have serious illness. it also shortens the time it might take for someone to go from being exposed to being infectious and clearing the infection in quarantine. we need to get really good data on this. if you can shorten the imposition on people using the evidence to make sure they are reducing risk of spreading the virus through isolation or quarantine, to make it evidence-based, you might miss the odd person who is a slow incubation story or whatever, but if you get more people testing because they know they only have to isolate for the minimum time to keep this all safe, that is a good compromise for getting more people testing and we are keeping the impact is minimal as we can so doesn't

become a barrier to testing. >> testing is becoming pushed in schools here in the u.s.. is test to stay a good idea with such a transitional mutation? >> pediatric epidemiologist here in australia are trying to encourage governments to look at that. we are concerned about disruption to education. if you are trying to manage the spread, you can use other tactics like test to stay and testing each day before kids come back to school to make sure they stay clear the virus if there has been a local exposure. catching it early can be a good

strategy. it depends how much the virus circulating with the risk is. with omicron where it is circulating rapidly, you may have to do that for a time but then it settles down quickly. hopefully the peaks aren't as big, they will be passing through sooner and you get an explosion of cases in some situations, but then there is difficulty finding people who are still susceptible. hopefully, these efforts in schools to keep them open but safe including test to stay should work. >> we have had some wild numbers in terms of what cases in australia my look like by january depending on the modeling you are using. is there a threshold where it would make you reconsider the necessity for reintroduction of

lockdowns? >> we will be looking at this all the time just to ensure there isn't an issue around escalating case numbers or looking at other new variants. try to get enough information and in a timely way so you can get enough information to slow the virus, if we can slow down the virus through moderate safety measures early, we are in dirt -- under a better position to keep it under control before we see a rapid rise in cases that we have to respond to. what we have to do in australia is not easy in omicron but better to keep things in check by dialing up those more general population -- and avoid having the lockdown. >> thank you so much for joining us and for another variation in

this theme. boris johnson has ruled out pandemic rules ahead of the holidays although he said the government could impose further curves after the holiday if cases spike. the u.s. could be set to approve covid treatments found to reduce hospitalizations in infected people. the fda is poised to sign off on three pills from pfizer and merck which would be at home treatments for the virus. trials led to an 89% reduction in hospitalizations.

the energy crunch is threatening to derail europe's economic recovery as cost surged. the indian government has proposed new rules to raise the marrying age for women to 21 from 18. critics say the bill will address the issue of underage marriage which is still common in rural areas. it argues the bill will penalize adult women. you can get a roundup of the stories you need to know to get your day going in today's addition of daybreak. it is also available on mobile, in the bloomberg anywhere app. you can customize your settings

so you will only get news on the industries you care about. this is bloomberg.

we are tracking the fallout of the global supply chain crunch. one of the latest -- largest

ford operators is looking to expand. i cpsi says the company is having its best year and is looking for expansion around the world. meanwhile united airlines has agreed to buy 19 -- ups has agreed to buy 19 boeing jets. mcdonald's is being forced to ration fries in japan amid a shortage in supply. the fast food chain will only offer fries and small sizes starting friday until the end of the month. explaining flooding at a vancouver port for the shortage. >> i'm still trying to process that story. that's devastating, things are

getting serious now. let's look at china's retail sector. car sales it posted -- supply chain likely persisting through the first quarter. bloomberg terminal users can read more about the stories in our newsletter supply lines. >> the government of japan approves $7 billion in supplementary spending for domestic semiconductor investment. our reporter has more. what is the former chief of tokyo electron suggesting?

>> just saying it has to do a lot more over longer-term may be over a decade asking for ¥10 trillion more investment for the chipmaking revitalization. he is making that call because he thinks that it shows how serious it is to support the private sector will not be able to be able to invest on their own. >> we have already seen the japanese government prioritize this sector and support chipmakers at home. >> the japanese government has made a big change in terms of where they want to spend support the industry. they have made it clear that this is a national project this year and they are aiming high.

aiming to maybe increase the revenues by about three times in the decade. >> our economics reporter in tokyo. you can watch us live, catch up on interviews on our tv function. you can also dive into any of the securities that we talk about. this is for bloomberg subscribers only. this is bloomberg. ♪

>> jurors are continuing their deliberations in the trial of elizabeth holmes. >> we got our first communication from the jury half an hour ago. it was a little anti-climactic. after 14 hours, they asked the judge if they could take their jury instructions home parted its at 39 page document they have been given to follow over the course of their discussions as to whether elizabeth holmes is guilty or not.

the judge said no, i'll deliberations have to happen in the jury room. they are not scheduled to deliberate tomorrow. they are scheduled to come back on thursday. that is the day before christmas eve. the jury decided to go back to deliberations, they are scheduled to deliberate for at least 10 more minutes until 4 p.m. pacific time. they could decide to go longer than that. right now, it is a question of time. we are not just heading into the holidays, but they are weighing three to four months worth of evidence in a trial that has dragged on for an incredibly long time. >> 39 pages of instructions. at least 30 government witnesses and more to consider. the deliberations could go on for several weeks. does that make a difference according to experts as to her chances? she could face up to 20 years in prison if she is convicted.

>> our legal reporter who has been in the courtroom every day of the trial says not guilty verdicts are returned more quickly, but there is nothing we can read into this question from the jury. the amount of time it has taken, it could go anyway. going into this trial, the thought was that this was the government's case to lose. after elizabeth holmes testified, a lot of folks inside the courtroom agreed that she was compelling and a cast a degree of uncertainty over the outcome of the case. the folks in the courtroom every day if you ask most of them, they say they cannot predict the outcome. these deliberations could continue. they could go on after christmas and the jurors as i understand it have been quite serious.

they have been taking copious notes and it looks like they're taking this very seriously. >> one of the compelling aspects of this story is the characterization of her relationship. what do we know about when we could see him on trial? >> his trial is scheduled to start in february. she will likely not be a witness in that trial because if she testifies, that could undermine her own case. we expect him to advance a different defense. we know she had alleged sexual and emotional abuse by him in her own defense. she has had quite a widespread defense. they focus on technical financial arguments around the lab, investments and those, and allegations that he emotionally and sexually abused her. according to legal experts, it risks diluting the defense but

also if successful, her testimony could speak to just one juror. that's all it takes to prevent a guilty verdict. all 12 jurors would have to agree on a guilty verdict or not guilty. if for example a certain amount of jurors don't agree, there could be a hung jury which would not necessarily be a vindication for elizabeth holmes, but it could be a win that she wouldn't go to jail for now. >> we have an alert in terms of a deal we are seeing when it comes to canada and australia. this is a toronto-based canadian software firm striking a deal saying it is agreed to acquire an australian firm. the group develops software

monitoring and controlling systems. we are hearing that is for cash consideration of 3.2 trillion canadian dollars. that represents a 15% premium op shares. this is the second proposal we are seeing from diane durham. we also have crossing the bloomberg, in october policy meeting saying it's important to keep supporting corporate financing. where hearing from the minutes as well continuing to see the bank of japan staying consistent when it comes to the amount of monetary stimulus.

given that unlike other parts of the world, we are seeing low levels of inflation and inertia when it comes to wage growth in japan. there has not been a whole lot of momentum for the yen. the risk on sentiment in the equity session and the move in treasuries overnight is putting a damper on when it comes to the haven demand for the yen. we are hearing in the policy minutes a little bit more elaboration when it comes to the importance of keeping the support to corporate financing in particular. this as we continue to monitor the growth outlook. the impact of what we are saying of the omicron variant. it is been reported that they would be lifting the growth outlook to the 3% range. >> we will see how all of this

news is digested once the japan markets open in a few minutes. coming up, we will hear from the ubs head. this is bloomberg. ♪

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vonnie: welcome to daybreak asia. from bloomberg world had gores in new york, i'm vonnie quinn. haidi: asia's major markets have just open for trade. our top stories this hour -- the global rebounded stocks looks ahead to its second day in asia. president biden could be set to relax some covid restrictions even as he warns omicron infections after breakthrough inoculations.

and the u.s. may approve to covid treatments from pfizer this week in what could be the biggest milestone in the pandemic. vonnie: we may yet get the rally. you wouldn't have said that the last trading state -- trading sessions, but it was risk on in spite of omicron. it is highly transmissible and wreaking havoc across the united states and the globe as governments try to do border closures and all sorts of things. as one of the countries with one of the strictest border measures, japan -- we just got the minutes from the boj meeting. the nikkei up, the topics up a minute or two into trading. the lines we have from the boj meeting from october -- these are minutes that have just been released. one member should watch how

corporate bond buying affect markets. i don't know if it is the same number but it doesn't sound like other members were too worried about keeping the covid program in some way. this was before omicron became a global phenomenon. arise in commodity prices becoming a factor as we see some of the oil and natural gas markets rise. moving on to korea, we see a gain -- that is following from the u.s. session where we saw a great day for semiconductor stocks. it's not just a supply crunch story, we see looking for tips everything from carmakers, looking for tips -- supply and demand will help prices.

we are keeping an eye today on the likes of samsung and other korean stocks. the dollar a bit weaker versus the korean currency. the opposite for the yen -- a little weaker as you can see the risk sentiment. haidi: we are seeing the underperformance when it comes to the session in australia and new zealand. not a great deal of conviction but i will point out some of the sector leaders, the likes of energy and information technology and tech stocks are the big gainers today. when it comes to new zealand, we are seeing a bit of downside, a reversal of some of that sentiment. we are seeing the aussie just on the back foot a bit along with the kiwi, but they did manage to hang onto the bulk of the overnight recovery. that overall risk on sentiment pushing upside when it comes to these risk currencies.

it really seemed to range between the december low and looking to the end of the year. looking at those latest developments in china, the easing measures fueling that rally and that could boost a bit more positive sentiment when it comes to the aussie dollar. our next guest says asia is set to return to outperformance in 2022. he's the head of aipac equities and credit at ubs wealth management. other than the inflation debate, it feels like we are still trading around the same themes we've been talking about all this year. as 2022 going to be different and what new trading dynamics do you see? >> different in a sense that we have very high gdp along with very low basis hikes. but it will be a year to half,

so the second half of next year, we will be more normal. i think it also argues for market performance, not necessarily a negative, but it will be difficult to repeat. we are hoping certainly to see china the big market in the region be the tail end of the sometimes harsh regulations and when that happens, you will see some re-rating and that could be another in the region. haidi: we have the gold dragon with the best day in four months after what had been a big selloff. will there be consistent trading when it comes to chinese names?

>> it is going to be consistent in the next couple of weeks. when is the macro front in china, it will take one or two quarters for the bottom to form. certainly positive for any market would be arguably the only economy in the world that is easing. that should work in favor and if we don't get any massive regulation, then there is potential for a re-rating in china. vonnie: we are hearing nhk reporting the government may be preparing to up its assessment 3% for the japanese economy and we had positive comments from the prime minister earlier today . does japan get out of the

environment it has been stuck in for the last decades? >> at least technically, i would say it's quite interesting. we are getting a stimulus that is bigger than many market observers thought and that was a big issue for the japanese market. the low vaccination rates not higher than most other places in the world but we've seen further weakening and it is set for japan to catch up. we could see a catch up and outside. vonnie: and the october boj meeting, one member concerned about international commodity prices, saying it would be appropriate to keep the covid program in some way. how much support with the japanese economy need, given the weakness in the yen?

>> the yen in that sense is supportive, the stimulus, as a matter of fact, perhaps we have a different view than colleagues at the boj, but a little more inflation would probably not be a bad thing for japan. although we are cautious it's going to be close to what it is in the rest of the world. vonnie: always a pleasure to speak with you. now to your first word headlines -- russia saying it may extend default to gas supplies in the europe -- in europe. prices surge more than 20%. the energy crunch is threatening to derail europe's economic recovery is gas and electricity

soared boosting inflation. u.k. prime minister boris johnson rolled out stricter pandemic rules ahead of the holidays but urge caution, saying the government could impose further curves if cases spike. meanwhile, the german chancellor is set to push for restrictions. the latest measure could include a limit on gatherings of 10 people. china has canceled its quarantine free entry program after concerns about omicron. it will continue until january 4. about 200,000 visitors could enter without quarantine will still be allowed in. jurors in the sex trafficking trial of his maxwell have asked for more information. asking for an fbi memo.

the jury will reconvene next week if that it decision is not reached by wednesday. maxwell faces up to 40 years in prison for her alleged role grooming young girls for jeffrey epstein. haidi: coming up, it has been a busy year in china. frazier how he tells us why he thinks the key thing will be politics. the ceo of novavax expect fresh data on his vaccines effectiveness against omicron the coming days. our conversation with him is next. this is bloomberg. ♪

vonnie: new covid treatments from pfizer and merck could be set for approval this week. it would be a significant development in the fight against the pandemic. it's get details from michelle cortes. how much protection with these pills offer against omicron, for example? michelle: we still don't know how effective these pills will be against omicron. it does give us another option in terms of fighting the virus. not only that, these are for people who have been infected, so not everyone would need to get them. it's an easy prescription. there pills you can take at home and they are quite targeted. we know that they are antivirals and they should help people recover more quickly from covid and reduce the risk of severe illness and hospitalization and hopefully deaths as well. haidi: bill de blasio offering $100 as incentive for people to go get their boosters. how much does that help? michelle: medical studies have shown giving people incentives

to do things like quit smoking and lose weight really don't work, but there are some unique things about this situation. it is the holiday season and people could probably use a little extra money. this is one little shot that you could get in and hopefully we will see an increase in the next couple of days and weeks as we get this hundred dollars to get a booster. every single person who gets a booster is not only protecting themselves but is reducing the risk of keeping the virus spreading. hopefully you see more pickup than the science would perhaps suggest. vonnie: do we need to return to forced curbs and lockdowns? michelle: we all know what we need to do at this point in order to reduce the spread of the virus. you need to wear a mask coming do not go out, you need to not

go to big events. the situation is a lot of people are not taking these threats seriously and we know that governments have a significant might to wield when they do put these shutdowns in place. i don't think we are going into the serious lockdowns we had at the getting of the pandemic but it is absolutely going to require some sort of restrictions in terms of closing down big events and preventing people from eating indoors. bars and restaurants might need to take a pause in the middle of winter and as we get to the back end of this, we will be able to ease up again. haidi: michelle cortez in hong kong. covid-19 has upended retail around the world, hitting a sector that was already in decline. for so many businesses, pandemic has driven overdue changes, including tech and e-commerce.

romaine bostick reports. >> the pandemic shock to the global economy disrupted every sector of business but it was a severe blow to retail now proving to have the most transformational industry upset. >> retail, it is like 9/11. it's a hurricane. >> physical sores -- physical stores close their doors. what was supposed to be a temporary sacrifice turned into more than a year-long struggle to remain viable. the struggle was insurmountable for some chains and many mom-and-pop stores seemingly disappeared overnight. but the pandemic spurred overdue change being seen as a net positive for global retail, which is already seeing a startling turn from where it was in mid-2020. >> retailers are giving them debate of products. >> the pandemic created

incentives many needed to fully commit to e-commerce rather than just dabbling around the edges. >> the business that is flexible, whether it's a box in the doorstep or classic in-store trip. >> in china, stores started selling goods via live video stream. in brazil, retailers turned to instant messaging platforms to offer promotions and finalize transactions. in the u.s., chains added features like video calls to ease the reticence to making big purchases online. while at allowed companies to regrow in an unprecedented time, brick and mortar physical stores are where the overwhelming majority of goods are bought. chains with more than 50 stores are expected to add or than 4000 locations this year. that will mark the first increase since 2013.

many are drawing more shoppers, target and bath and body works -- the comeback is a big reason why the spider s&p retail index has surged, beating the s&p 500. it has allowed retailers to, stronger than ever. will the changes stay resilient in the face of omicron? haidi: romaine bostick on this urge there. some of these numbers saying in-store visits, traffic to some of these stores are down .8% compared to the same time in 2018. it seems some people still prefer to do their shopping in stores and for me, as much as i embrace online ordering, during the christmas season, it's a time of year where you want to

be in a department stores and look at christmas windows and feel the festive vibe and decorations. you can't really replicate that clicking check out on your cart. vonnie: not unless you are having a drink while you do it. this is one, i was stunned to see that. one of the reasons is stores have gotten so much better at letting you order in advance and pop in to pick up your grocery or home depot goods and you can choose where they should go. target will put your bags into your car in places that you've chosen. definitely more people are ordering online. haidi: we have a list of what you need for your shopping. hear what haidi is going to be

ordering online. bloomberg subscribers go to your terminal. it's available on mobile. you can customize your settings so you only get the industries and assets you care about. ♪

haidi: we are tracking the global supply chain crunch in our top stories today. one of the world's largest port operators looking to expand despite a challenging environment called a war against its invisible enemy. that company is probably having its best year and is on the lookout for expansion around the

world. ups agreed to by 19 of boeing's freighter jets. the deal is estimated to be worth about half $1 billion. the planes will be delivered between 2020 three and 2025. this year's energy crunch is turning to derail europe's economic recovery as gas and electricity costs searching more than 20% tuesday. russia curb gas flow to europe and france. vonnie: taking a look at china's passenger car sales after a 12% drop in november. bloomberg intelligence believes the sector may fall as much is 15% as supply chain constraints keep things restraint to the first quarter. outbreaks could mean a ramp-up in 2022. and you can read more about

those on -- speaking of supply lines, i had to laugh when i read this story. people who want to order fries at mcdonald's only can order a small. medium and large, you cannot do it until the beginning of the new year. the reason is because of flooding at a vancouver port that has snarled the supply chain for mcdonald's fries apparently. haidi: that is not going to hit the spot. just a small serving until december 30. the reason most people were indulging. but you we did this out -- the shortage would not be affecting their hashbrowns and you raise a good question. what's in the hashbrowns that is different? it is all potato. but is a quality thing. they want to illuminate the medium and large offerings to

make sure as many customers as possible will have access to our french fries. a different story when you see inflation hitting where it hurts. everyone knows about the one dollar pizza slice you can get on all the street corners that is a cheap and cheerful treat at the end of a big night. a lot of pizza vendors are saying it is no longer possible to serve one dollar pizza slices in new york city. they are going to $1.25. vonnie: at some point, i guess you go back -- the irony is not lost. it seems this payment never goes away. would you rather a small fries or a large hash brown? haidi: the question of the day. wells fargo performing its

return to office plans. they plan for employees to work starting on january 10, but that has been scrapped with the surge of omicron in the united states. wells fargo joins the likes of apple and uber in delaying the return to the office indefinitely. bloomberg has learned apollo plans to lend about $4 billion in what would be a record for the private credit market. interest on the loan is expected to be in the mid single digits. terms of the deal are not yet final. moody's was upgraded to aaa, citing strong growth and exceptional liquidity. apple is on track for its most lucrative quarter with revenue tipped to be around $118 billion . the tech giant joins microsoft

and johnson & johnson is the only u.s. company on the s&p 500 with the highest possible credit score. all three major u.s. credit rating -- rating agencies may drop the rating if it loads up on debt. bloomberg data shows the software provider has more than $73 billion in long-term debt. up next, a conversation with an author that wrote three books on the chinese financial situation. he says 2021 has been a rude awakening for those who think china would be a different story. we were speaking when the offshore yuan was trading around 628. we will ask him about it in just a moment. stay tuned. this is bloomberg. ♪

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haidi: let's get you the latest first word headlines session president biden is considering to relax covid curbs despite hospitals being overrun by people getting infected. he said he may loosen travel restrictions on southern african nations where the very it first identified. his administration is weighing shorter isolation recommendations were vaccinated people who fall ill so they can return to work sooner. >> we should all be concerned

about omicron but not panic. if you are fully vaccinated, especially if you got your booster shot, you are highly protected. if you are unvaccinated we are at a higher risk of getting severely ill, getting hospitalized, and even dying. the best thing to do is get vaccinated and get your booster shot. haidi: the u.s. could be set to approve to covid treatments found to reduce hospitalizations in infected people. sources tell bloomberg the fda is poised to sign off on a pill from pfizer and merck which would be the first at-home treatment for coronavirus. the pfizer pill led to an 89% reduction in hospitalization while merck was not quite as effective. a warning to nato, saying he is ready to use of a terry to counter the expansion. putin told senior military officers he's concerned about the presence of nato forces near russia's border.

he says he cannot allow the alliance to deploy missiles in the ukraine and threatened what he called an adequate military response. the indian government has proposed new laws seeking to raise the legal age when women can marry to 21 from eight team. it's to bring greater social and educational benefits to women while lowering infant mortality rates. codecs say the bill won't address underage marriage in rural areas and will penalize adult women. those are your first word headlines. vonnie: let's get a quick check on some currencies. we will start with the yen. we got the boj minutes on the october meeting. we have seen some weakness for the yen in the last session. unchanged versus the u.s. dollar but expected to see more weakness. some risk off trade, the australian dollar weaker against the yen. we will see how that plays out

throughout the day. an appreciation of 50% for the lira this week. we saw a little bit of a reversal and perhaps another reversal in the next few hours. investors asking can turkey deliver? mohamed el-erian writing today that the moves will need to be backed up by a more conference set of policies. to our next guest with more on the offshore yuan, last time we spoke, it was at 6.8. let's bring him and now -- the co-author of red capitalism and privatizing china. in terms of monetary policy and movement over the last few days, the most recent action we have seen is a change in five basis points for the prime rate.

is that going to make a difference in terms of monetary policy? fraser: i don't think it's going to make any difference at all. you look at that move, 4%, 5% increase -- it is well within historical levels and around the edge of the economy. your previous graphic with retail sales or car sales at 12% or 15%. i don't think anyone should be looking at the chinese currency is a prime barometer of what's going on in the chinese stock market. vonnie: is this a signal that they are in charge and the markets should be worried? what was the impetus? fraser: frankly, they have to show they are doing something.

they want to show they are still active and just do something. but five basis points is not going to make a difference to the chinese economy with stories like evergrande and chinese property. haidi: almost everything in china, the impetus is political. if that is the lens through which we look at 2022, what are the expectations? fraser: i don't think you are being cynical at all. the chinese themselves think everything is political. everything is toward that goal. when you look at 2022, the big event is probably going to be october or november. xi jinping is basically going to take on his general secretary ship for the third time and extend as president for life.

at that technically comes in march. china will do everything to try and maintain a stable economy, stable olympics, stable everything to ensure congress goes off without a hitch. haidi: do the populist crackdowns continue? that has greater effects when it comes to -- we've had education, we had tech, we've had a livestream star -- what does that tell you about what still in the pipeline when it comes to beijing? fraser: there is though they that the chinese economy don't feel like they can assert control over. that crackdowns will continue in some form or another like cracking down on education

expansions. but the flipside is you see stories about the communist party having locked up -- telling people to have more children. keeping this ideal of chinese society, in that sense, that is not going way at all. vonnie: offshore bond defaults, $13.3 billion thanks -- more than half of that thanks to developers. can china manage this? fraser: i think they can manage it but they can't call it. fundamentally, a lot of money is being borrowed against projects. this is not leading to a lehman brothers were global financial crisis. it's manageable that you don't have this precipitous drop in the economy or financial system. the property sector is clearly

going to be under a lot of pressure and the belief that things can default in china. i would like to think china is going to be re-rated and risk will be better managed and better priced. haidi: you touched on demographics and how the response seems to be more intrusion. in this desire for global hegemony, what's the biggest risk for china? is it an internal policy misstep, is it pure demographics or is it the war with the u.s.? fraser: there are a number of things, but these issues are chronic. an aging workforce and it is still roughly a poor and middle income country with greater ambitions. it's popularity is failing because it's models -- has

closed itself off with a covid policy which will continue for at least another five years and possibly longer. it's hard to see how china is going to take on a global leadership role when the chinese can't go out and oh people can go into china. haidi: always great to have you with us. be sure to tune into bloomberg radio to hear more and get in-depth analysis from the daybreak team. you can listen on bloombergradio.com. we do have more ahead. this is bloomberg. ♪

haidi: let's check in on rio tinto shares -- news it's buying a lithium mine in argentina for $825 million, doubling down when it comes to its investment in the future facing commodities to provide these in demand ingredients for ev batteries and the like. bhp group a little softer in the day's trading. the underperformer across the rest of asia which is seeing

better risk appetite. for iron ore, volatility continues -- the performance is very dodgy. we did see an uptick in sentiment over the past six weeks alone. with the longer-term outlook going into next year? >> we expect prices to fall broadly lower due to a deepening crackdown or sometimes -- we don't see much from australia, especially. we do expect prices to move lower, however we might see in china might have to pump up iron ore prices.

still making raw material above $130. vonnie: what does it mean for major miners -- i'm thinking bhp or rio tinto. >> we do see earnings for the minors, but mining costs right now i don't see trading above $100. we have two remember it will have more of an impact on the smaller minors. having to consolidate this year, we might see more consolidation next year. vonnie: that is our asia metals and mining reporter. more coming up on daybreak asia. stay tuned. this is bloomberg. ♪

haidi: novavax says it should be able to reveal its efficacy against omicron within the next few days. in an interview, the ceo says the company is working to determine how well the shot works against variants, after getting clearance to be used in europe. >> after generating a great deal of efficacy and safety data, we

have great stability data which means we can get our vaccine out globally without freezing. we can get it stored at normal refrigerated temperatures. it can be at room temperature and that's going to be very helpful to get it to all parts of the world. point number two, we have shown the vaccine boosts very effectively. there is going to be a lot of boosting going on with omicron and we think our vaccine is primed for that. those are some of the advantages we've got. also, there is vaccine hesitancy. for people more comfortable with more traditional vaccine, that will hopefully expand the population of people that get vaccinated. >> we have the pfizer, moderna

and j&j, where do you fit with that in terms of efficacy? >> in terms of efficacy, we've generated probably the best efficacy of anybody. we did it at a time when the variants, alpha and made a variants were just emerging and we had 90 plus percent efficacy. we are quite comfortable with that efficacy profile. >> where you able to test against omicron? do you have any idea when you might get that kind of data or a do you need to update the vaccine to hit individual variants? >> we are evaluating the serum from people who have already been vaccinated, looking at the antibody responses. we will have those data within days and our expectation based upon what we saw with alpha, beto, and delta is we will have a robust protective level of

antibodies with omicron as we have had with the others. in addition, we are making a new variant and the data from the trials we are doing now, the evaluations we are doing now will guide us into whether we should add a new variant strainer sticking to what we have. this data will come out fairly soon and we will work with the world health agencies to determine the pathway forward. >> we learned the double dose of astrazeneca vaccine only had about three months until you need a view -- until you need a booster. do you have a sense about the novavax vaccine as to when you need a booster? we are already starting to hear rumors about a fourth booster --

second booster, fourth shot >> >>. we have some data showing we have a roof -- an effective response that lasts up to six months and beyond. we do know boosting gets us a strong immune response above the levels of the second dose and those data are being generated over time. what i expect is we are going to be seeing covid vaccination on some regular basis, and so what we are doing is we started our trial last year where we combined our flu vaccine with the covid vaccine and we will have data on that coming up by the end of the next quarter and show maybe the best way to do that is to have an annual, seasonal respiratory vaccine which would involve covid and flu. vonnie: the novavax ceo speaking

there with alix steel. a check of the latest business flash headlines -- postponing plans to return to the office. that has been scrapped with the surge of omicron in the u.s. -- wells fargo joins the likes of apple, google and uber in delaying the return to office indefinitely. hs bp has offered to buy london energy and a $10 billion deal. the combined companies would pump 400,000 barrels of oil a day. bp would have a 16% share. oracle sees its investment rating fall to near junk. all three major u.s. credit

agencies said they may cut oracle's rating if it loads up on debt to fund the transaction. bloomberg has learned an attempt to lend $4 billion to softbank and what -- the financing was backed by softbank for vision bank and interest is expected to be in the mid single digits. the terms of the deal are not yet finalized. and mcdonald's japan will offer french fries only in small sizes until december 30 due to a potato supply shortage. the fast food chain is temporarily removing medium and large size serving. mcdonald's japan says it hopes to supply issues can be resolved by new year's eve. all i can think of is

vancouver's ports looking for not drugs but potatoes. haidi: i think it's time to have an end of show snack. what are you watching other than the fries shortage in japan? >> the great potato famine of japan. we will be talking about it in 100 years. massive move up in the golden dragon index overnight. things like e-commerce with a hang seng index, another benchmark we will be tracking closely. i know we say this a lot, but the green on your screen just below 23,000. that's a critical level because

it is a retracement up to 20 years ago. looks like we will continue to move up from that level. vonnie: any specific thoughts on semiconductors? >> semiconductors, we have e-commerce which caught a lot of interest overnight. some of these energy related names, you talked about the bounce in oil prices. solar stocks have really come under pressure. real estate stocks, a massive move up in the real estate index. a really long list of sectors we will be tracking today. haidi: are we getting more guidance toward this easing bias? >> it looks like some measures

they might announce soon as far as stabilizing consumption. that's why we are tracking consumption related names. the bond market has not picked up on this pivot. with the 10 year yield -- that takes you back to the lowest level since early so number. vonnie: we will be looking at you again in just a few minutes. you will be explaining more about the market day ahead with the china open coming up in just a few minutes. we want to bring a little information about u.s. futures -- noncommittal action here very early in the session. the dow jones many futures down three points. obviously, that is after a whopper of the day.

the ftse futures up .8%. we are looking at some action after we saw a risk off day in the united states. let's not forget joe biden's comments because that is something we look for more clarity on. haidi: when it comes to the rest of the markets around asia, a mixed picture. that positivity carrying through from the u.s. session when it comes to trading in japan. closer to home, australia and new zealand both laggards in terms of regional trading. we are watching out for that cabinet meeting in terms of what living with covid and any restrictions if any might be reintroduced.

in new zealand, we are seeing more consideration that the national border will stay close. we do have a pretty flat yen at the moment. lots more to come. this is bloomberg. ♪

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>> good morning from hong kong, it's not :00 a.m.. welcome to bloomberg markets "china open." ivanka: the global stock rebound loses steam as investors weigh uncertainty over the virus and stimulus measures. china could be set to announce measures to boost consumption and stabilize the e