host: a very good morning and welcome to "bloomberg daybreak: australia." we are counting down to asia's major market opens. >> the top stories this hour.

traders brace for a volatile week as u.s. inflation figures are due after the jobs report adds pressure to the fed to act. host: investors eye the rise in global covid cases. australia reports were then 100,000 new daily infections for the first time. >> novak djokovic heads to court but australia warns he could be detained again. a full pun intended, if he does not make it to the australian open. we had such a hectic year. we are seeing the wobbles affecting not just talk markets but also we are seeing equity markets questioning the strength of the local recovery in the face of omicron. new numbers from new south wales.

new covid cases. down markedly from the past few readings we have had. keep in mind i'm a we are seeing a lot of people, the majority of people doing these at home antigen test's that are so hard to find. there is no requirement in new south wales that that has to be reported to the government. that is why we saw the spike in victoria. at home test had to be reported to the government. we continue to see the huge strain on the hospital systems. victoria state, 34,888 new cases in the last 24 hours. keeping in mind that a lot of those cases came through the online reporting system. shery: how our we back here?

you are working from home. our hong kong colleagues are working from home and this omicron wave is a different monster. we are talking about working from home but a lot of people calling out sick. in the u.s., 5 million people were estimated to have not been able to work last week because they tested positive or they were sick. we are talking about the jobs market that has already been tight. the unemployment rate fell to another record low last week in the jobs report. that does not count the fact that we have the omicron wave. what will happen when you factor in the impact from this pandemic? alaska airlines canceling about 10% of their flights for the rest of january. it has been to uw will years on -- it has been two years on and we continue to struggle with the pandemic and china even, successful at keeping an

factions low has now recorded its first local case of omicron. just weeks before the winter olympic games are set to begin. for the latest, let's bring in stephen engle who is also home in hong kong. it seems like 2020 all over again. and china may have a harder time containing this pandemic. stephen: absolutely. it is really challenging, the zero covid policy that china has. we have outbreaks in four major cities. there is one big locked down but there are also restrictions in place in shenzhen in southern china and now another city is the latest to have an outbreak. across china on saturday, they had 92 new cases. that does not sound like a lot but when you have zero covid policy, 92 is 92 more then what

china wants and that might be a conservative number because of the size of china. and the dense urban populations. and the potential for omicron to spread through these populations. in particular, tianjin is a concern. it is just 70 miles to the southeast of beijing. the main port city of the capital. there could be shipping disruptions. there could be manufacturing disruptions. this is the time of year in china when the factories are cranking, cranking ahead of the time off during the lunar holidays. if there is going to be production disruptions, that will hurt the economy already showing signs of sputtering. it is a concern. there are two omicron cases of the 20 found in tianjin, the

first local case is found. they are in the midst of tracing those cases as well as testing. other media reported that the entire city, you are seeing shots of the port, the entire city, 15 plus million people as of yesterday morning started mass testing of every resident to see if they can get this zero covid policy in action and in place and working so close to the olympics. haidi: a crucial time. stephen engle with the latest on the covid situation in china. goldman sachs, citi and others weigh in on the situation. paul allen joins us. we were talking about this robust bounce back from the

lockdown. paul: the robust ounce back is still in the cards but delayed. as you mentioned, numbers coming down a little in australia though the true story is probably masked by all of the chaos happening around this. not just pressure on the hospital situation, the omicron surge but also the supply chain. so many transport workers told to stay home. leading to empty shelves again in australia but for different reasons but the rules being changed where some transport workers are being told the come to work anyway even if they were in close contact. as far as the investment houses are concerned, damage done. goldman sees 38 million hours lost in january. it has cut its growth outlook for australia down.

citi's has cut its outlook to 1.3%. the banks see growth recovering in the following quarters. shery: i don't follow sports but this is one story we continue to watch. novak djokovic finding out today if he can leave immigration detention to play in the australian open. what are we expecting? paul: it has been a long few days for novak djokovic. he has been in and immigration detention hotel. you need to be fully vaccinated to enter australia but he thought he had an exemption. you could enter if you had had covid. a lot of the hearing will deal with that, whether or not he was allowed into the country and whether tournament is about -- tournament officials granted an exemption they were not authorized to grant. novak djokovic is caught up in a huge web.

he will find out later on this morning probably if he can stay in australia and play in the tournament. but he may have his visa canceled again even if he wins knowing that all of this could have been avoided had he been vaccinated. shery: we will bring you the latest as we get that. take a look at the markets on wall street. the s&p 500 posted the worst start to the year since 2016. the nasdaq 100 losing more than 4% on the week. hedge funds loading up on value shares and dumping expensive tech names. treasury yields climbing across the board. the five year yield rising to pre-pandemic levels. the 10 year yield topping the 2021 high. oil also under pressure on the friday session but we have to keep in mind that we are talking about a good start to 2022. this is a market that we were

thinking was going to suffer from a surplus. instead, we are seeing $80 a barrel being possible at this point. and that is just intensifying inflation concerns as we got the cpi numbers here in the u.s. on wednesday, the expectation is for the right to rise to the fastest in about four decades. we have already the friday jobs report. the jump in wages, fall in unemployment. we will see what we got this week. we are also hearing from a slew of fed speakers this week including chair powell testifying before the senate thinking committee on his nomination. he will get a lot of questions about what he will do against price pressures. haidi: and that is what markets are worried about. that is why we are seeing the caution reenter for the start of the gear. a lot of people are saying, we have been talking about a

decade-long period of cash a- plenty. we are seeing the likes of the meme stock frenzy and cryptocurrency. some say we might see simultaneous popping in the assets including cryptocurrency and other historically risky areas of investment that have drawn the premium as we see the risk premium and rate start to rise. if you take a look at some of the charts we are bringing up, could we see the return to speculative investments? let's get over to vonnie quinn. vonnie: the biden administration

may slap export controls on russia if it sees more war in ukraine. it is discussing what allies. we are told the new trade rules could apply to shipments from the u.s. to russia and possibly to some foreign made products. some big european powers are said to be concerned about the economic follow of any russia sanctions. there is the risk of a split with the u.s. on how strongly to hit moscow in the event it in bait's ukraine. western allies are entering high stake talks this week aimed at defusing tensions with the kremlin. the eu is still weighing the impact of any trade restrictions. u.s. troops stationed in japan will no longer leave their bases a second -- except for essential reasons. areas close to bases are seeing record virus outbreaks.

the problem is being blamed in part on u.s. forces. an emergency is in place across parts of japan including okinawa. sri lanka wants to restructure its debt repayments to china. the country is searching for funds to bolster its foreign exchange. sri lanka hosted chinese foreign minister over the weekend and reportedly made at the request then. sri lanka has turned to china for loans and assistance to build infrastructure since civil war ended in 2009. china life insurance company the biggest insurers on mainland says its operations are normal. its chairman is under investigation by the country's top anticorruption walk dog -- watchdog. it will hold a board meeting soon. the company says it will cooperate with government officials and supports the anti-graft crackdown. 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 vonnie quinn. this is bloomberg. shery: still ahead, the outlook on the pandemic as the previous daily cases have passed 100,000 for the first time. repressor robert booy joins us later this hour. up next, we hear from an analyst who says analysts are still complacent about potential real rates. this is bloomberg. ♪s. this is bloomberg. ♪

>> it is a confusing report. >> i am not sure if it is a complete all clear. >> there is nothing to report that will change what the fed signaled. >> the signals are that the labor market is tightening. >> we are still moving along

around a full employment dynamic. >> it means the fed should normalize its monetary policy. >> it is all about inflation which is really on the fed nerves. >> they are going to chase this thing and hike aggressively. >> the march rate hike is definitely a go. haidi: some of our earlier guests. time for the week ahead. the big data point this week is the u.s. cpi print which is expected opposed the stronger year on your advance in four decades. it would put additional pressure on u.s. policymakers to take action. senate confirmation hearings will be held for jerome powell and brainerd. we are still waiting for the rest of president biden's fed nominations which could come in the next few days. in asia, we are getting china reads. and a close bank of korea rate

decision is expected on friday. shery: it is that time of year again. earnings season getting underway amid omicron concerns. major wall street banks lead the way after a banner year. investors will be on watch or how that is carried through in the fourth quarter as well as a talent war and whether the fed's hawkish tone will factor into outlooks. tsmc results on thursday will be a reality check on the chip shortage. the biggest chip maker will be waiting for a forecast. stock hit a 10 month high and has widened its lead over tencent as asia's largest company. those are the major events in your week ahead. let's bring in our next guest who says the biggest issue facing markets is inflation. with us is al lord great to have

you with us. i know that you have been warning about inflation for a while. about a year ago, you liked real estate and commodities and they have outperformed in 2021. they still have room to rise? --do they still have room to rise? albert: as we go back and look at how the year went last year and what we think will happen this year, i am sorry to be a broken record but the calls i made, i am sticking with them. they both outperformed last year and are set to outperform again given where we are with inflation and the economy. as you said, that was real estate and commodities. real estate as the index shows was up 37% last year, the best year since 1995 and specifically multifamily. they are set to outperform again this year. and commodities, that was up 27%

as reported by the bloomberg index. at will also continue to outperform given where we are with inflation. shery: and given that we have seen treasury yields continue to rise across the curve. and now we have the cpi numbers coming on wednesday and we saw the jobs numbers on friday. where do you position? albert: a half hour ago, you had larry summers on. i feel like someone gave him my talking points for tonight. he said exactly what i had written and what i feel. i think the fed as well as the market have gotten inflation wrong now. they got it wrong last year and have it wrong going forward. inflation is the biggest concern. you have to brace yourself for added inflation. talking about interest rates, and you noted where the 10-year was, it is the highest in almost two years though low relative to

historic rates. it is well below inflation. you have negative rates. looking at fixed income as an investment, the coupons you are receiving, you are losing purchasing power. you have negative real yields. rates are going higher. no doubt. we know what the fed has signaled. it is behind the curve. they have to increase the pace -- they will increase rates, they stopped bond buying, they will increase rates and the fed is showing they may start quantitative tightening by selling off some of their purchase with -- purchases which will have an impact on the rates. haidi: the warnings about speculative bubbles popping, bank of america saying simultaneous popping as what we will say. how quickly does that pullback

liquidity conditions? albert: i wish i knew. we have to brace ourselves for volatility. this is unprecedented. we have had the fed stimulus pumped into by over 40%. we have had difficult times in the past. we have not had this kind of fiscal and monetary stimulus. we have history as a guide but who knows what is going to happen. we have had three periods of hyperinflation, after world war i, world war ii, and after the jimmy carter years in the 1970's. the first one ended in a depression. the other two ended in a recession. we are headed at some point to a recession. because the fed is telling you will have to raise rates. they will have to cool the economy to control inflation and

that is what we have ahead of us and that is why you have to prepare yourself. history is not a great guide in this instance because we have never seen this kind of stimulus in the past. haidi: you referred to the modeling as to what the inflation cost is two the average american family. how does that play into opportunities and what you expect to happen to the consumer investment opportunities? albert: if you look at the unemployment rate, and the numbers were just out on friday, you also had earnings grow at -- percent. you talk about the cpi that grew in december and is expected to be 7.1%, earnings are not keeping up with inflation. the wharton business model shows the average cost to families was an increased $8,500 last year

simply due to inflation. you are losing purchasing power you have an increased cost of goods. we know what is happening at the gas pump as well. it is where you have to figure out how to position yourself and outpace inflation and protect your purchasing power. haidi: great to have you as always. you can get the roundup of the stories you need to know to get your day going. today's edition, we have bloomberg subscribers accessing that on the terminals and it is also available on the mobile. you can also customize those setting so you only get the news on the industries and assets that matter to you. this is bloomberg. ♪ this is bloomberg. ♪

>> huma group has commissioned hong kong to speed up dismissal of its assets. the chinese profit -- developer

is known for his commercial properties. amazon has had to be appealing a spring court halt on arbitration case against retail. amazon urged to alleviate the order last week. it is trying to block the sale of future warehouses and stores. sophie: novak djokovic will have his court date ahead of the australian open. keeping a watch on recommendations to dubai. we are watching some eco-data coming out later including the inflation gauge for november, looking as the trillion economy continues to struggle. we have a lot more coming up,

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>> cosmic forces backed by russian led troops are pressing him with operations to restore control after crushing the biggest protest in decades in the central asian nation. almost 6000 people have been detained. the official death toll stands at 154 people. the real number is thought to be higher. u.s. inflation has headed the fastest in four decades.

economists say ubi is rising and up .4% from the year earlier. consumer prices surged. more covid cases as the united states -- u.s. delay cases almost doubled over the past week with hospitalization rising rapidly. nancy pelosi says there is an opportunity to add coronavirus relief aid to a package in federal legislation if the white house asks. china has launched a blitz as it strives to maintain a zero covid policy after confirming two locally transmitted omicron cases. hong kong warns the city's economy will take a hit as he hong kong -- omicron.

variant takes hold. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. haidi: with the pandemic and australia is learning about expenditure growth of covid you hard way. more than 100,000 new covid cases on saturday. on sunday, the australian vaccination program will be expanded to children ages 5-11 through friday. robert, great to have you with us. this chart is showing this exponential growth when it comes to that huge boom, we see the catch up of registration of antigen tests. it is hard to know what the question is to ask.

is there a way that australia can come back with its -- this after letting it room for all of december -- root for all of december? >> the actions taken in december were somewhat imprudent. we should not have been opening up when we had of the most spreading covid virus in history. that is a super-spreader event. australians were celebrating the end of the year. office parties and the like. we can come back from that, we will peak probably within a couple of weeks. my the end of january, beginning of february. -- by the end of january, beginning of february.

those who are vulnerable, they're going to get sick and spread it to other people. the number of susceptibles are going to fall in the next few weeks. that is going to combine with the vaccination of children and vaccination of adults and it will get it under control. haidi: 2.5-year-old daughter in my family was who contracted it. do we continue to see this vulnerability until all children are under -- are vaccinated? >> i'm a pediatrician, i have been to infections -- i have been doing infectious diseases for years. in children, it is quite mild. debate protected -- to be

protected, but when they get covid they have such strong immunity, adaptive community, a less likelihood of having covid. a good proportion of them get it a symptomatically. the rate of hospitalization is 31%. the death rate from covid in children is tiny. most of the deaths we are seeing our children with a host of medical problems. if a 2.5-year-old has it, she should recover in a few days. haidi: the problem is that they spread, she spread into adult members of the family. is it important for the public health messaging to start focusing on getting children vaccinated because they are that

missing puzzle piece when it comes to vaccination? >> public health is a complicated science. it is important to do no harm or the you are in hospitals or general communities. we have to be absolutely sure that the safety of vaccination in young children is confirmed. we know from north america that 5 billion 5-11-year-olds have been safely vaccinated. they have gotten good benefits by the way of drug protection and preventing the indirect transmission of viruses. as omicron has gone through, infected people has seen a portion of the population will be immune. even though we do not have heard, the outlay could -- the likelihood of outbreak becomes shorter in length. we are going to have to keep on

vaccinating to maintain high levels of protection. it is possible that the disease and vaccination together will give high levels of protection. in the next 3-6 months. haidi: with every other person that i know now seemingly infected with omicron, i cannot help but ask what happens if there is another variant? most of the population, especially low income countries are still unvaccinated. why are we getting more dangerous variants as we do not have the majority of the people on this earth having access to these shots? >> it might seem incredibly important, giving third and fourth doses to which, first were people while most of the planet has not had their first dose, the mutations, variations in the buyers is happening. they are spreading aware people

are not vaccinated. that is what omicron is. if we have a new variant, they come around every six months. the hope is in virology, the next time around mrv more christmas but even less severe -- next time around it is more transmissible but less severe. that is good news. the bad news is it is spreading incredibly widely. we need to get on top of it. we can be reassured that viruses, in general, they tend to mutate towards milder disease in their direction of being low in number and less in severity. haidi: that is good to hear. perhaps we could see an end to this pandemic, thus is what many

people have been hoping for for the past two years. is a picture of the end of the pandemic has changed, what now? >> we are very hopeful that we are ending in the right direction. that the buyers is getting more manageable. -- and that the virus is getting more manageable. we have prevented deaths, we can prevent. the virus will not be eliminated. we will learn to cope with it. haidi: from your mouth to god's ears. let us hope you are working his way towards it -- we are working

its way towards it. time for morning calls. despite the virus infection and mounting headwinds, global stocks may have more upside. -- upsides. 8% increase in the ms ci all country world index. citi shows room to buy the dips and strategists show that u.k. over ways of japan who is more sensitive to higher rates than the u.s.. we continue to watch u.s. stocks because the near-term outlook may not be as rosy. chris harvey saying this cathartic object with the s&p 500, correcting 10% in the first half, spurred by higher real rates and threatening fed. normalization will be the name

of the game and harvey suggests investors look to qualify and reduce risk in their folios. -- portfolios. nancy pelosi says there is an opportunity to add cold relief paid to a package of the white house asks. kathleen hays is here with the details. what is the speaker proposing? >> it seems pretty specific in the sense of more money to help offset the impact of the coronavirus surge. at the same time, no real plan or sense of what could be done. she is confident that something could be done if it is needed. let us listen. >> the administration has not made a formal request for more funding. it is clear from the opportunity that it is there and the

challenge that is therefrom the resilience of this virus. >> we do not know if she has talked to the biden team about this or if they have talked to her. we will see where this goes. one thing that she talked about was the stopgap funding bill that was passed at the end of the year. it has to be -- it will run out, it will be replaced by the appropriations bill. they could more money out to offset the impact on the economy. emergency funding, get it through. she did not specify uses of funds are to be allocated. bipartisan leaks suggested for money for restaurants and services industries. another thing is interesting is that so many experts say by the

end of january, the search could be up and gone -- surge could be up and gone. it will be over, it raises a question about how much more money will be appropriated this way. haidi: for us by touting the success of his economic plan in creating jobs -- president biden touting the success of his economic plan in creating jobs. give us your thoughts. >> it is true, joe biden said america is back to work. he was looking at the annual going up, 6.4 million jobs. and other president in history has had that big of an annual gain. -- any other president in history has had that big of an annual gain. nor has any other president had those circumstances.

it was 4.2% in november. the previous low was 3.5%. joe biden said he is confident they will do what they need to do to have full employment, stable prices, make sure that inflation does not get entrenched. it will be interesting to see what kind of grilling by senators jay powell gets when he faces his confirmation hearing. and the vice chair, already a member of the board of governors faces the same thing on thursday. that will be a big highlight in addition to the cpi report. that will be a big one too. haidi: we will be watching. coming up next, the world's cup tennis star going to court.

this is bloomberg. ♪

haidi: here is a quick check of the latest business flash headlines. india's the biggest budget airline is set to set back -- scaled back operations.

it will waive the fee for customers who are changing flights. other has been movement curves of under 680 new cases since sunday. new oriental slashed jobs due to huge losses. sales plunged by 80%, citing the crackdown on the tech sector and the pandemic. the company spent more than $3 billion on staff servers packages and other expenses -- severance packages and other expenses. of a popular online social community is working with morgan stanley and goldman sachs and maybe valued. fidelity management rate at $10

billion in 2021. other top investors include tencent. nearly $100 million for controlling stake in oriental new york, a unit over lines will acquire a 73% share in the business, and also seeks to purchase the remaining stake from other owners at the same evaluation. a transaction is expected to close by the end of march. the ceo of virgin orbit expects the company to conduct its first u.k. space launch earlier this year. richard branson spoke to bloomberg on friday. >> our company, we pierced the pandemic and drove a new technology into space launch. we have to continue to do that. in the last eight weeks, we

penetrated the market. out of japan, we signed agreements with new space companies like hyper set or hyperspectral imaging of the earth. quantum encryption from space. speier, boeing, other companies. it is an exciting time for us. we need to continue to do this and we have a rocket in mohave ready for launch. we will launch that. we have lodges coming behind it. we have the first launch out of the u.k. coming this year. we can launch from pretty much any airport that can handle a 747 across the world. >> we will be circling back with you guys for the u.k. launch. there are different aspects to

space, what is deeper space exploration by going to the moon and one is low-earth orbit. that is satellites that are closer to earth. that is where the fundamental moneymaking ability is wood to be. -- is going to be. >> the market for space is growing to be well over $1 trillion from about $400 million right now in the next 14-15 years. lowers -- low-earth orbit and satellites are the biggest part of that growth. we want to make sure that they are getting to the right orbit at any time. that is to do critical missions. >> is there a plan to involve the business model beyond launching rockets?

is there a different model you could ultimately end up pursuing here? as an extension to the question, if not, do you see yourself in a different market to spacex? >> we have reached into very unique markets. we can set up shop and give countries the capabilities to launch from their sovereign shores without them doing much besides using an existing airport. there are issues like affiliate ability -- affordability. only about 10 countries have space launch. that is a huge business opportunity. in national security, you have read about the russian antisatellite tests. we can be available in case of a satellite that is threatened or

damaged and put them up in a moment's notice. we hope that this disincentivizes aggression in space. haidi: australian government has signaled that novak djokovic could be detained for a second time if he is successful in his bid to overturn his fees in the coming hours. they say that he should be deported before the australian open. thank you so much for your time today, first of all comments give us your assessment of what is happening with novak djokovic . how did it get so far? >> he has caused this problem by his vaccination stance. on till the fifth of january, 2021, the policy was to not look

behind the exemptions rated by the individual states and in particular this instance, the victorian government. we know that because the prime minister said so. that was the government's policy. we know that because prior to that, a number of tennis players are allowed into the country without border force looking behind the exemptions that they had. on the sixth of january, they have announced a new policy that they will look behind these exemptions and the person who was impacted was novak djokovic and had his visa canceled. border forces look behind the extension and came to a view that the exemption was not valid. haidi: what precedent would this set if he is deported or if as

the government is indicating, he is detained again? >> if he is deported, it will not be a good look. either way it works out, it is a bad look for australia. emesis looked quite petty and disorganized. -- it makes us a look petty and disorganized. he will have to sit in detention because he is given national justice. by the time that he would be released from detention, his visa would be re-canceled and he would go back into detention. it would make the australian government look very petty. if it would be better for the us trillion government -- it would be better for the australian government to sit down with him and work through these issues.

haidi: do you have any idea how long this could drag out for? >> it is a complex case. the courts do not generally make rapid decisions and this judge has made it clear he is not going to be rushed by anybody. one thing the judge could do is make an interim border while the case proceeds further. every chance that novak djokovic might appeal the decision. haidi: it was great having her insight into this ongoing saga. that is the deputy secretary and he was giving us his views on what is happening with novak djokovic and how that could play out. we have the virtual court hearing coming up. we will also be discussing the gdp with an economist from apd

capital. we also talk about wealth management with one of the speakers of the annual form in hong kong. daybreak: asia is next. this is bloomberg. ♪

♪ haidi: i am haidi stroud-watts in the and we are counting down to the market open. shery: i am sherry in new york. welcome to "daybreak: asia." bracing for volatility this week with u.s. inflation figures do after the jobs report adds pressure on the fed. investors by the global rise