haidi: a very good morning. we are counting down to asia's major shery: shery: market opens. welcome to daybreak asia -- our top stories this hour -- asian stocks set for a steady trading ahead of china's gdp data. expectations are for the weakest growth in more than a year. china also grappling with the spread of covid-19 -- omicron

reaches beijing just weeks out from the winter olympics. and more details on japan's new capitalism plan. haidi: let's take a look at how these stocks are getting the trading week underway -- a tepid start to trading. losses ended the friday session of over 1%. starting off pretty flat. we are watching new zealand as well. some of those session lows -- certainly not much momentum when it comes to trading in kiwi stocks. so much on trade with beijing, we are seeing the key gdp number expected to show the impact of the real estate downturn we saw in the fourth quarter as well as electricity shortages and as we start to see the omicron cases spread to beijing a week before the winter olympics.

we will be watching keenly for the economic fallout for that major economy. japanese futures -- we see chicago and nikkei futures trade just a bit higher. shery: let's delve deeper into that report of the omicron variant in beijing. this adds pressure on authorities to stem a potential outbreak three weeks before the olympics is set to begin. how disruptive will the latest case be for china's olympics plan? >> they have not said much about their olympics plans yet. it was just last week when they said they vowed to host a stay splendid and simple olympic games in contrast to the spectacle that was the beijing summer olympics in 2008. they mentioned if they get low scale infections in these high

concentrations port zones, that may force them to adjust. but they say the current restriction so far are effective in containing omicron. you mentioned the first case in beijing -- what we know so far is they are testing people and there were contact with this person at different locations and the person also visited as well. this is not just beijing over the weekend. we heard omicron cases being detected in big cities like shanghai. so this is spreading, but we are just seeing a handful of cases. the latest in beijing, it's another headache for the beijing olympic games with just three weeks before and this is already a game facing a lot of headwinds, including the u.s.-led diplomatic boycott and it has prompted policymakers vowing to boost consumption ahead of the lunar new year holiday.

they are encouraging people to go out and said if you are in a low risk area, you are going to be able to have some mobility to do normal activities. they are encouraging people to actually go online shopping and do some e-commerce. they are saying this is their push during lunar new year to try to get people to do something and boost the economy and talk about those gdp figures coming out. this is the tweak they are doing with covid 0 -- not so much a big tweak but it is dynamic clearing -- a buzzword we are hearing and china where they are making these restrictions localized, focusing on cities dealing with these outbreaks so the rest of the country can still operate in a pretty normal matter. that is the statement and direction china is going at the moment.

haidi: the latest in hong kong. let's get to the latest in australia and the world of tennis -- number one men's player, novak djokovic has been deported from asteria. they have canceled his visa and over the weekend, the tennis star lost his court battle to overturn the decision in front of the federal court. we heard from the prime minister this morning, speaking to local radio saying that this deportation does mean a three year automatic banned from entering the country, but he or someone else in the situation could be allowed to return under special circumstances. >> it is a three year ban, which sounds severe but you are quite right. just as the minister had discretion to throw him out about show your, the minister

has the discretion to take another look at that band. it is entirely possible he could compete in the 2023 aussie open if he felt he wanted to do so, but 2022 now officially toast for him. a full bench of the federal court heard this case and it was unanimous upholding the decision to deport him. the government argued he's a high profile anti-vaxxer skeptic and might stir up anti-vax sentiment and disregard for the rules. his lawyers argued there was little evidence u.s. and anti-vaxxer and kicking him out was more likely to stir up anti-vax sentiment than keeping him here. it's important to them or the context of this as well -- they've had a terrible time with coronavirus. it has been one of the most locked down cities in the world and as a consequence, 93% of the population has gone out and got vaccinated. the prime minister hailed the

court's decision, called a great tribute to those australians that had gone out and got vaccinated. we heard from karen andrews today who pointed out this whole thing could have been avoided if novak djokovic had also gone out and got vaccinated. shery: the latest on the tennis star -- let's get to vonnie quinn for the first word headlines. vonnie: u.s. surgeon general says that countries covid outbreak could worsen in the short term. they called on health officials to close the gap in a severe shortage of testing. an increase in testing is not enough to meet the spike in infections, adding the country faces a tough few weeks ahead. billionaire investor bill ackman says the fed should raise its key rate by 15 basis points to resorts credibility. in a series of tweets, he said the market is anticipating three

or four hikes of 25 basis points each. he argues a 50 basis point hike would reduce inflation expectations and moderate the need for more economically painful tests in the future. the u.k. labour party leader says prime minister boris johnson broke the law and lied regarding parties at number 10 downing street held during a national current virus lockdown. some members calling for him to step down. the concern murder -- conservative party chairman says now is not the time for a leadership battle. iran president has seen a huge rise in oil sales. this, despite array and oil experts -- exports being subject to sanctions. they are currently trying to revive the landmark nuclear deal which eased restrictions on iranian crude.

global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still to come, the prospects for growth and the bank of japan's coming policy meeting. we will discuss that with a former be a g -- boj monetary policy board member. coming up, as beijing comes down for the start of the olympic come we look at how the spread of omicron and weakness in that housing sector will be dragging on the economy. this is bloomberg. ♪

shery: another busy week on the economic calendar for asia. central banks holding the first decision of the year with the

boj already signaling they are nowhere near normalizing policy. at the big event will be china's gdp data. fourth quarter growth likely slows to the weakest level in more than a year amid the virus outbreaks and property turmoil. retail sales sputtered last month, adding that the economy needs more support. haidi: china's economic prospects in particular -- let's bring in a senior asia economic economist. we know there is weakness and more downside given everything going on with the property sector and the presence strategy in the face of omicron. how much more support to expect from policymakers and what is the form of that support? >> we are in the midst of what we think is a time of the

slowest expansion since q4 of last year and q1 of this year. gdp is expected to come around 4%, perhaps below 4% and absolutely below 3% as we see a lot of omicron-related risks. growth is expected to be around 5% and they will have to do quite a fair bit of monetary and fiscal stimulus to come. most likely, what that entails is targeted monetary support. expect up to 100 basis points and one more broad-based interest rate cut. we only cite five basis point cut to the long prime ratio, something that would inject liquidity in the system. also, and inflection point in

term of growth and credit. we've already seen both picking up from prior levels. although we are going to see more accommodation, and additional targeted for school soon -- fiscal stimulus to ensure it doesn't completely slowdown in 2022. haidi: what is the risk of the further spread of omicron amid the closed border strategy? even concerns over supply chain and logistics issues come we have massive numbers the last year. can that be sustained? >> honestly, i think we will see today at 10:00 but the exports they will be more supported than expected. i think the risks in 2022 will be more related to domestic

consumption not being able to pick up results of the localized lockdown measures we are seeing in cities. so naturally, those are big centers and it's going to prove difficult to stimulate consumption while china maintains its strict zero-tolerance approach to managing omicron risks which are on the rise in the country route this delegate time, considering we have winter olympics and a series of important political events. it is definitely going to be the main drag on activity in our opinion, together with weakness surrounding the housing sector and ongoing regulatory risks. but we do think the zero-tolerance to covid is what's going to drag on activity. shery: a little more loose in terms of restrictions on it

comes to covid, but japan is saying they will weigh stricter covid measures for tokyo and others -- other areas as well. will this be the main driver of declines across japan as well? we have a weaker japanese yen on the diversions policy from the boj who we are expecting to really tell us about monetary policy this week and what could be the saving grace here. >> we are feeling a bit of a diversions in terms of monetary policy in asia. the u.s. dollar has been quite strong through out second half of last year, at least if you expect dollar strength to continue in the first half of this year and that's going to weigh on some of the asian currency. -- asian currencies. we saw the bank of korea last weekend emerging markets will try to remain on hold as long as

possible. there are three risks -- omicron is on the rise in the region and we expect to see more measures from japan to australia to malaysia and we have slower growth in china and key equity markets in japan, that's going to weigh on the export front in 2022. this fear of tapering, which is not as big a factor for the japanese economy, but overall, we expect to see positive growth in japan, albeit the consensus might have to adjust slightly in case we see a much bigger omicron outbreak in the region as a country. it remains much more cautious in terms of its response. shery: we are expecting the bank of malaysia not to make a move this week. what's the risk of capital flight given that these are developing economies? >> we expect both central banks

will try to remain on hold as long as possible. the risk of capital flight remains more subdued than previous instances of fed tapering because fundamental improvements over the region. in the case of indonesia, there's a small deficit. but not in a worrying way. the region is better positioned, we've seen a lot of that depreciation absorb most of the impact for the second half of the year, so we do expect to see some outflow, but overall, the region is going to be better positioned and we are seeing that in terms of the positive real rate inferential. still very positive. within that asia, it's one of the most positive real rate inferential's with the u.s. and asia, which is -- real rate inferential's with the u.s. and asia. it all depends what's happening in march and if the fed decides to be much more aggressive as

well as a reduction --. shery: great to have you with us. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. you cannot go to your terminal and customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: we're counting down to the start of trading -- the meeting with the abu dhabi crown prince on monday has abruptly been canceled by the uae. it's due to an unforeseen matter of state. the u.s. international trade

commission says it is launching an investigation based on a patent infringement complaint from lg electronics. the comfy is looking to block imports of water filters used in its high-end refrigerators. they are sold on the elegy website for $50 each and are supposed to be changed every six months. south korea's biggest budget airline is preparing for -- is delaying delivery of boeing planes until sometime around 2027. haidi: let's take a closer look at u.s. banks -- the latest lenders earnings season is in full swing after results from jp morgan. as we look ahead for more results, let's bring in our senior editor. how big an issue is rate inflation? what is the outlook?

>> higher expenses were a big factor for the share price decline. the stock is down 6%, a very unusual fall for a u.s. bank, particularly jp morgan. jp morgan has expected expenses to rise to 77 billion, almost a 9% increase. there are also modernization costs. wells fargo says the expenses due to -- but there is pressure on pay across the spectrum. junior bankers got a lot of attention when they crossed the $100,000 a year mark. bloomberg had a report on friday that the top 1% of goldman sachs ranked the best 400 people and all will get special payouts on top of their base and bonus pay. that's millions of dollars of what they are earning in multimillion dollar pay

packages. they are doing this to fend off poaching from other corners of wall street. shery: the competition for talent is really heating up. the issue is the loan growth was expected but that hasn't materialized. what happened? >> there's some indication loan growth was going to be picking up but it was flat on the air, especially where the consumer was concerned. loans were down 10% on year for wells fargo, up only 1% at j.p. morgan edits consumer businesses. wells fargo says they haven't seen loan growth yet. at citigroup, their ceo said similar things about corporate lending. corporate client still have strong balance sheets because they can rely on stimulus money rather than fresh borrowing. they were all optimistic loan

growth would bounce back this year. jp morgan today have huge firepower and -- look, this is generally very good news for the economy. merck is still flesh with cash. -- americans are still flesh with cash because of the pandemic. haidi: the other major things that have emerged out of the great resignation when it comes to the junior ranks, what are we seeing in terms of recruitment and the market for talent from the junior to senior ranks? >> jamie dimon vowed to pay whatever it takes to get the best talent. he cited global lenders, citadel, paypal, a range of

fintech. he said there's a lot of competition and they intend to win and sometimes that means spending a few bucks. we know about goldman's generous compensation season and we will know more when they report their quarterly results. shery: the latest on bank earnings. you can turn to your bloomberg for more on earnings season this week. go to get commentary and analysis from bloomberg's expert editors. haidi: let's get a quick check of the latest business flash headlines. hpsc -- india's largest private and are reported -- lender reported earnings up 18% from a year ago. loans jumped 5% with the bank stepping up retail lending after the rba list today and on issuing new credit cards. the bank of nanjing is planning to boost its holding to take

control of its finance since. the lender says it intends to hold talks with shareholders about acquiring stakes. another deal would need regulator approval. it accounts for less than 1% of their asset as of june of last year. unilever is said to be talking to banks about more finance rates after the pharma giant rejected the third and latest bid of $68 billion. unilever is considering eventually selling some non-core assets to help fund an acquisition, but the drugmaker says it is sticking with plans to spin off the portfolio. coming up next, agencies in china's property debt crisis united. the lid -- the nation's largest

developer plunging. we have the latest. this is bloomberg. ♪

>> we are tracking the fallout of the global supply chain crunch and these are our top stories. material and labor shortages are being exacerbated by the surge in covid infections. mining and utility output are falling. there is a temporary blocking of

investors by the pandemic. italians are facing a crisis. costs are expected to jump 40% in the cost of grain. inflation is at the highest. >> cotton prices soared to a high during the time of shrinking crops that are driving prices higher for diapers, t-shirts, and genes. only china -- jeans. only china is projecting a decline in prices. haidi: we have some breaking news. a change at the top when it

comes to credits. antonio horta or serio has resigned. credit squeeze has faced increasing controversy and pressure after a probe into repeated violations of antonio's quarantine rules. we have seen discussions about the issuance of a report -- a reproach for his conduct but now we are hearing that the chairman of credit suisse has resigned. he intentionally broke covid protocol last year. he also breached rules while

attending some tennis finals in july during quarantine. he was appointed chairman in april and has been behind the disastrous year at credit suisse. billions of dollars in losses and the department -- and departure of numerous senior level people. we will get more details as they get to us. let's head to china. concerns have reached to the largest property firm, country garden. let's bring in stephen engle.

this in a lot of ways has been survival of the fittest. but now what are we seeing with country garden? >> as we get gdp numbers from china today, property makes up a quarter of domestic gdp so it is a big concern. it has been under pressure for a year. it is the largest property developer by contracted sales, surpassing -- overtaking evergrande in 2017. it has binged on debt to fuel growth, like other companies. last week we learned the convertible bonds had very weak demand that raised concerned. -- concerns. this is one of the healthy

property firms, even though it is indebted. it is perceived to be relied upon by their peers compared to those who have defaulted like evergrande. so when a big company like this with over 200,000 employees and 3000 ongoing development projects across all of china, this raises concerns on a day where we are reporting a slowdown in gdp. it raises concerns about the economic health of china and the social stability. if you have 200,000 people employed and all of these projects. they do not have short-term liabilities coming due immediately and they do have cash on hand. but it still raises a lot of concerns, especially when a healthy developer, the number one developer, is faced with the

liquidity crunch. shery: what is the endgame for president xi jinping? >> that is the big question we've been putting to everyone. it is a quarter of gdp. will they switch out from this development model to more r&d and green finance like some say? it is a large chunk of the economy to make up for. and state backed developers are coming in and cherry picking development projects out of the more stress to developers. this is a run-through of some of the comments about the potential endgame. that the transition to a state model will be long and painful and developers will gain and already are. one said a slowdown is

inevitable. the best we can expect is a soft landing. another says the outsized influence on the economy should fade out within 10 years. another says the property market will undergo a dramatic transformation and become more sop dominated. shery: let's get to vonnie quinn with the first word headlines. >> a new poll says most americans find fault with biden's handling of covid and to the economy. u.s. headline inflation is the highest since 1982. biden's popularity among black americans has plummeted.

novak djokovic has been deported from australia after a court upheld the decision to revoke his visa. he hoped to compete for a grand slam title at the open starting monday. the australian government said he risks boosting anti-vaccine views. novak says now he plans to rest and recuperate. jake sullivan said it would not be surprising if russia was behind the hacking of ukraine websites and the white house is working to determine who was behind it. several ministries and public services were attacked on friday and officials say all evidence points to russia, who denies the allegation. the tsunami in the pacific is receding. the eruption saturday was so powerful in tonga it was felt in

alaska. the number of casualties in tonga remains unclear. surveillance flights have been sent out. 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. this is bloomberg. haidi: next, boj january decision highlights the week ahead for japan with focus on an updated forecast. a board member gives her outlook when it comes to japan when it comes to inflation prospects. this is bloomberg. ♪

haidi: you are watching daybreak asia and japanese markets will open in about 20 minutes. this is how trading is shaping up to start the week. early trading after a huge wave of volatility last week. nikkei futures looking mild -- monetary -- moderately positive. we are looking at boj for guidance as we see potentially

more restrictions related to omicron and hospital cases arising in tokyo. we are watching to see if the impulse is continued, according to the doj. -- boj. shery: the japanese prime minister reopens parliament today and investors will be watching for more policy after share buybacks. more than 4500 new virus cases over the weekend, the highest daily tally since last august. and a relatively young career -- employee has had to turn around

to the bank after a series of mishaps. more on those stories and the moment. japan has struggled with deflationary pressures for decades. our next guest says inflation could get closer to 2% this spring. it is always great catching up with you. i have to ask, if we get close to the 2% inflation target, how long would it last? >> i think it will start in april may be for a few months. for the second half of this year i think inflation will decelerate. and then it would rise to 4%

because [indiscernible] this already reduced japanese inflation of 1.45% for the year. current inflation is 0.6% -- it was, but now it is closer to 2%. so it will materialize in april but the numbers are already picking up from late last year. in the second half of this year i think it will decelerate. shery: we are talking about the five year yield climbing to the six year. and away from boj target. will we see them do anything?

will we hear from the governor? >> boj is targeting 10 year yield that -- a range of 0.25%. [indiscernible] they can increase purchases over one year. they are already reducing purchases of the jgb. so i think it is controllable. one thing is boj monetary basis started to decline this year so this might be inconsistent with the other guidance that says it will continue to rise until

inflation goes above 2% in a stable manner. haidi: the prime minister's back in parliament today with previous comments about capitalism and reform. world market investors are worried. what do you expect to hear? >> economies are starting to pick up since last october. so it will go above 6%. we are not worried about japan's recovery process. the governor is already providing cash to some people because of covid. so he might say he is doing the best to control the growing number of covid. otherwise this year economies

will continue to grow i think and earning will pick up. if we can control the growing number of covid, globally we will see a strong pickup in consumption. haidi: he is also being supportive of stakeholder capitalism. does that help get the wage growth going? >> he is trying to push harder on companies to raise wages because wages are stagnant. with rising inflation, everyone is worried about deterioration in wages. so he has been pushing harder since last year.

they are worried about uncertainty. it is not stable economic growth. they could increase bonuses instead of wages. if they just increase the bonuses, the wages are not constantly rising. it is difficult to materialize if you're talking about constant stable wage growth. haidi: always great to have you on the show and we appreciate your time. you can listen to these conversations again on tv , available to bloomberg terminal subscribers.

and you can continue every week for in-depth analysis. you can hear from the biggest ceos. the prime minister is set to return to parliament later and elaborate on his new capital policy framework. let's talk to isabel reynolds. in the past he has said what is on his mind and does not think about if it will be digested well or is market friendly. he has been -- what are the risks we are looking at? >> that's right. even before he became prime minister, he has espoused a different type of ethos on market compared to his former

boss, shinzo abe. in 2013, shinzo abe went to wall street and gave a famous speech and was focused on making markets go up. he succeeded. but now he says the reliance on markets has gone too far and he repeatedly criticizes neoliberalism, as he calls it. his specific policies are narrow , setting guidelines that could limit share buybacks. it has triggered a fall in markets. he is giving a speech today at 2:00 p.m. japan time and he might not mention these policies but it is likely opposition lawmakers will ask questions in the coming weeks and markets

will be alert to what comes out of it. shery: how will that play into an economy already battered by the pandemic? virus cases in japan are nearing a daily record. what does it mean for the country? >> as you say, infections are reaching close to records in turkey and nationwide so i think we will see more restrictions on businesses as we have had over the past year. in tokyo, we could see as soon as wednesday some lighter measures. not the full state of emergency. but even that could mean restaurants close earlier or maybe a ban on alcohol sales. the same cycle we have been through before. we do not know how long it would go on. in japan one thing that could affect it is almost no one has

received a booster yet. it is very delayed. so we do not know how that will play into the number of infections and how serious they become and how high hospitalizations rise. shery: the covid cases are having an impact on eco-numbers. we are getting japan numbers. 3.4% growth month on month. better than expected for november. almost double what economists expected but still a slow from the previous month. the year on year is a surprising jump, 11.6% for november. the expectation was growth of 6.7%. also a big jump from the previous number of annual growth of 2.9%. the japanese economy has trended toward recovery but covid cases remain a concern.

we are watching what the boj will do next. that decision is coming up this week. and the prime minister speaking in parliament means we will get more hints about the economy as well. this is bloomberg. ♪

shery: here is a quick check of

the headlines. walmart's filing with the u.s. patent and office plans to create their own crypto currency. they are preparing to make and sell virtual goods. they refused to divulge more information but says they are continuing to sing -- continually exploring new opportunities. and a takeover by a semi conductor company in tokyo and a rage -- a range of remedies. sil tronics says it has received limited feedback from authorities and that -- authorities. fast retailing will raise the annual salary from this year,

more than double the company's founder and ceo. they mean to attract e-commerce and supply chain. japan and south korea open next. this is bloomberg. ♪

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shery: welcome to daybreak asia from headquarters in new york. haidi: asia is maker -- asia's major markets have just open for trade. we are waiting china data expected to show the weakest growth in more than a year, one fourth of the pboc. property wars -- property woes

are another issue. the nation is facing a crisis with county garden. and and apex ceo will be sharing his plans for softbank. shery: the nikkei is led higher by real estate and materials. all sectors are in the green when it comes to the numbers we saw in eco-data. surprisingly on the upside. we may be feeling the impact of some geopolitical tensions. we are hearing from the japanese coast guard that north korea might have fired ballistic missiles. south korea says north korea fired and unidentified projectile. they have been firing missiles

this year. it would be the fourth missile launch in january. the kospi is losing for a third session of losses. bond futures tumbled after the warning inflation will remain elevated. we are watching the korean won losing ground against the u.s. dollar. haidi: lots of focus on the labor markets on the supply chain situation in australia. a hit to the recovery in the first quarter as a result of the spread of omicron as implications we see as a result. this is how the start of the week is looking in australia. a mixed session when it comes to trading in the equity session. outperforming of oil prices continuing to push ahead.

gains in descriptive -- in discretionary stock. the biggest loser is materials and real estate and we will see if that changes after the numbers we get at of cheetah -- out of china's gdp. the dollar opening up the session this morning mixed at of the g10 pairings and we are looking at the deepening growth slowed down in china. let's bring in frank who joins us. always great to have you with us. looking at the downside of the chinese growth as we get into gdp today, how much of it is coming through from the risk of the property sector and how much risk do you assigned to the spread of omicron which has hit capital cities?

>> we have slow down related to the policy response of omicron spreading to a large number of cities. [indiscernible] on top of that, underlying weakness and slow down. we could see some bottoming in the slow down with fiscal policy stepping up to loosen further policy. haidi: one popular position

going into the new year has been deep recovery seen in chinese equities. how selective would you be in terms of looking at the sectors that could see the rebound? >> we start the year overweight on policy in china equity. trying to understand the reason, the contribution to the decline has been ease of internet. what we see is number one evaluation, at a very low level today. positioning has become underweight and there is still a negative news flow on the

tightening of the regulation. but there has been at least some stabilization and clarification. so this is one part of the market that we think the worst is behind us. the other, we saw massive discretion last year in return and we think this year will be a little less favorable for high valued stocks but expanded to a more common prosperity theme, we

see something on that chinese market. shery: and we also have the new capitalism drive-by the new prime minister. what are you looking at in the country? >> we look at the global macro backdrop. the yen is undervalued. s&p is resilient on the back of rising yields. [indiscernible] we could expect looking at the

domestic catalyst, it is less favorable. you were mentioning a new style of capitalism and the ax -- and the incentive to boost wages. maybe it is too early. after the election in july, what we could get, i would not play the market now based on this. you also have the green transition. you could have at some stage a green-led capex. it's a little early. shery: it is good to have your thoughts. we have to leave it here. let's get over to vonnie quinn. >> u.s. surgeon general says the

country's covid outbreak could worsen short-term. he said an eightfold increase in screening is not enough to fight the inflections and that the country faces some tough weeks ahead. boris johnson is said to have broke the law and lied regarding numbers regarding covid lockdown. this is stoking rage and some are calling for him to step down. oliver doubt in says now is not the time for a leadership battle. djokovic she is deported from australia after his visa was revoked. -- novak djokovic has been deported from australia after his visa was revoked. the government says he risked

boosting anti-vaccine views. in a statement, novak djokovic says he respects the decision and will use the time for rest and recovery. and iranian oil exports have been subject to sanctions. world powers are trying to revise the nuclear deal that had eased restrictions on a rainy in crude. -- on a rainy in -- iranian crude. 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. this is bloomberg. haidi: still ahead, our interview with apac ceo about what the company plans to do with the nearly $150 million investment by softbank. and omicron has arrived in

beijing three weeks before the winter games. how authorities are dealing with it and the impact on the economic outlook. this is bloomberg. ♪

shery: china's economy is reeling from the property market slump and disruptions from the outbreak of covid cases. kathleen hays has a preview of china's fourth quarter gdp report out in less than two hours. >> these are mighty headwinds on all fronts. so no surprise the fourth quarter gdp is expected to grow at the lowest rate since the

second quarter of 2020. the blue bar, 3.3%. that is a number you would expect to hear in the u.s., not china. 18% as china roared back from pandemic lockdowns and the havoc. but when you average this out, momentum is receding and that is the problem. when you look at the various factors, it reflected in the indicators today, the virus. beijing getting their first omicron case right before the olympics. a supply chain slowdowns hurt everyone. sluggishness in consumers to pick up last year. so that's a problem. a power shortage.

and property developers real estate. so in terms of economic indicators, retail sales, not that big of a slowdown. but it is where you are heading as you get more lockdowns. that is not going to make people spend more money. property investment, china's reduction strong but slowing. manufacturing has been holding up pretty well and had a rebound. but with the uncertainty with the omicron variant and what will happen in the economy, you have to wonder. and china exports a lot. if other countries have less demand, that could be an issue for china as well. haidi: and as a result we think

the government adding more monetary stimulus? >> the stimulus ad is growing. last year pboc said they would follow prudent economic policy. one story is divergence. china is getting ready to slow it down. as far as a tool they might use today, medium-term lending facility. most people think they will wait. bloomberg economics thinks they could cut it to 2.90. rrr cut not likely. they just made to cut last year. -- two cuts last year. probably waiting to see what the impact of omicron is. if it comes down quickly it

might not require more stimulus. but then looking at all of the other factors like property development, it seems like some kind of stimulus is big in the cake. or the economy, you might say. haidi: the economic cake. kathleen hays, economic editor. other stories you need to know, bloomberg subscribers can get it on tv . you can customize settings so you just get news on the things that matter to you. this is bloomberg. ♪

shery: a new ceo is going to be

named on monday and he will be the banks third new ceo since 2011. this ahead of a board meeting later monday. for more, let's bring in the bloomberg managing editor. what is different about the new ceo home and can he achieve what his predecessors did not? >> as you said, he is 56, which is relatively young compared to the peers at other major banks in japan. the reason he was selected was because of his background in risk management and his youth, which should help him detach himself from the power structure that has been at the root of the problem of the bank since the merger 20 years ago.

it was a three way equal merger and that power balance has been maintained carefully so that no one bank takes control. but it led to a corporate culture where employees have felt more loyalty to the original bank rather than the combined one and basically created a system where people were not able to speak up if it reflected negatively on their bosses. so his challenge is if he can change it and focus on what is needed for this company, not the original three banks. haidi: a deeply entrenched problem. is it a matter of integration? as you say, there is three of everything. is that the way forward? will it help? >> that is one way of doing it.

the one thing about the japanese banking system is the employment style, essentially their last 10 years for those not in senior roles is outside the bank. so with the system, the original three banks still hold very strong say in where employees go. so from employee perspective, they want to make sure they are satisfying their bosses and get a good second job when they are around 50 will be key. so whether he can change that is one key thing that people will be looking at. shery: a big challenge ahead. haidi: thank you for the latest. credit suisse has appointed a

new chairman effective immediately after antonio resigned after an investigation. let's bring in jesse westbrook for more. over the reported breaches of quarantine, we were expecting a reprimand, not a dismissal. we got a resignation. what happened? >> it shows banks are under the microscope in terms of personal conduct. we have all been dealing with lockdowns and quarantine and if banks are not also abiding by the terms and situations the rest of society is, they are under the microscope. obviously this was a big embarrassment for credit suisse. they seem to have one after another. whenever they get on the right

foot, something else happens. it is quite an unfortunate development for them. shery: a disastrous year when the collapse happen. so what will this shakeup mean for company performance going forward? >> the chairman who is leaving was in the midst of the cleanup of the collapse and there seemed to be more shareholder confidence. now he is gone. so every time credit suisse seems to be making progress, it is one step forward, three steps back. so it is hard to see what it will take to get the bank on more stable ground. haidi: given that we have seen a mixed bag when it comes to bank earnings so far, what do we know from the season informing us to

the biggest challenges for credit suisse, as they struggle to get past a terrible year? >> it looks like the fourth quarter was not great for trading, which drove a lot of bank earnings throughout the pandemic. the volatility we saw in markets was good for the bank. so it's a little unclear where the banks go from here with some of the volatility receding, some active trading markets we have seen receding. it's not a great time to lose your chairman when you are midstream dealing with rehabilitation. so it is quite unfortunate that this happened to credit suisse. shery: good to have you on the story, jesse westbrook. here's the headlines. hdf see banks rose in the third

quarter as asset quality improved in india. up 18% from one year ago. the loan jumped 5% during the time with the banks after the rba lifted -- rb i lifted a ban on issuing new credit cards. walmart revealed plans to create a cryptocurrency. application shows it is preparing to make and sell virtual goods. they have not divulged further information but says they are continuously exploring how to reshape future shopping experiences. unilever is said to be talking to banks amid more financing for glaxosmithkline after they rejected the unit of either --

the third and final bid of unilever. the drugmaker says they are sticking with their plan to stave off the portfolio brand. and boosting a 15% holding in sunni.com to take control of finances. the lender says they plan to hold stocks about acquiring shares and would need regulator approval. next, china's property crisis is hitting country garden, the nation's biggest builder. details on that story and we are ahead of the fourth quarter gdp

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haidi: getting the latest data points out of singapore. not only domestic exports -- coming in well above expectations at 3.7%, beating surveyed estimates of .8% gain and also a strong acceleration from 1.1%. the headline number also stronger than expectations at 18.4%. that is a little bit of a

slowdown but still more than the 12.9% that were expected. splitting up the electronic exports, 13.1% gain. that was a miss on expectations. a pullback from a 30% reit we had for the month of november. that tends to be hugely volatile. singapore really taking a pretty balanced approach when it comes to omicron. we have seen that recovery which has seen the fastest gdp growth in more than a decade that we had at the start of this month. economic recovery gaining pace in the final three months of 2021. that is being seen in some pretty strong numbers in those domestic exports and trade numbers for december. let's get you to vonnie quinn. vonnie: thank you.

china is likely to post its weakest economic growth in more than a year when it releases data in the coming hours. a boom break -- bloomberg survey shows that it expanded amid a deepening property market slump and disruptions from virus outbreaks. that will be the slowest pace of growth since the second quarter of 2020, boosting the case for a rate cut. the hong kong budget deficit for this fiscal year could rise to as much as $23 billion. original estimates record $13 billion. the bigger shortfall may happen if factors including debt issuance are taken into account. housing reserves could contribute to a larger figure. hong kong is making a steady economic recovery. bill ackman says the fed is losing its battle against inflation and should raise its key rate by 50 basis points to restore credibility.

in a series of tweets, he said the market is anticipating three hikes to four hikes of 25 basis points each. a 50 basis point hike would reduce inflation expectations. the tsunami threat around the pacific from a huge undersea volcanic eruption is receding. the eruption was so powerful, it was heard as far away as alaska. information on casualties remains unclear as australia and new zealand sent surveillance flights to assess the damage. 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: worries about contagion from china's property prices have reached all the way to the nation's biggest builder, long seen as one of the more financially viable firms.

they are caught up in the industries liquidity crunch. let's bring in stephen engle. what is happening with this company? stephen: emblematic of the problems in the property sector as we saw in the recent data, showing property prices falling for a fourth consecutive month. that really representing the liquidity crisis in the property sector for the poster child being the likes of evergrande with its dollar bond default. china country garden is the largest for four consecutive years since overtaking evergrande in 2017. it has long been regarded as more financially viable and its bonds are investment-grade. along with the share prices on the screen, there's concerns in particular because a 300 billion

dollar convertible bond saw very little demand. they have relied heavily on overseas debt markets to fund its expansion. more than 3000 ongoing projects in almost every single project. any crisis here where it's not able to tap into these credit markets, it is having a potential liquidity crunch and could have economic impacts on the country. we will get gdp numbers later today showing a deceleration of growth and cracks in the armor for chinese economy as well as societal pressures. we have to watch this closely. it, like evergrande, has expanded into fourth tier cities at a breakneck pace.

haidi: we keep asking what is the endgame here? saying we fast-forward to five years time, 10 years time, what is the contribution to economic growth going to look like for china? stephen: that is the interesting question we put two a lot of different economists. there is a common thread, common theme as we have already started to see developers make a bigger push---chary pick certain assets -- push to---chary pick -- push to cherry pick certain assets at the expense of these private developers like evergrande who have relied heavily on overseas borrowing to grow and there is an ongoing crackdown. does not seem to be much relent from the government on this pressure. they summit up fairly nicely in

lockstep. the transition to the state owned enterprise model will be long and painful. nomura says a slowdown is inevitable. shery: stephen engle there. coming up next on "daybreak australia," we will --"bloomberg markets: china open -- "daybreak asia," our guest will share how he is using cutting edge computing to drive investment decisions and getting his thoughts on what his plans are for the funding for softbank. this is bloomberg. ♪

>> turning to simtech, they closed at 146 million dollars investment from softbank last week. craft is a simtech company which manages $1.7 billion through u.s. listed etf's. joining us now for an exclusive conversation is francis oh. it is good to have you with us. that is a huge investment from softbank. what are you planning to do with that? >> thank you very much for hosting me. it has been very exciting,

raising a massive amount of capital infusion from softbank and we are planning to accelerate our global expansion by adding up our u.s. office. at the same time, we want to expand our footprint in the asian market as well. we have been building a great amount of success in the south korean market. we want to go into the market at a fast pace. >> there has been some criticism about data analysis tools, that they can give an edge to investors for a very short period of time until others catch up and spot those new trends. what makes your company different? francis: that is the key difference for our technologies. there are many companies trying to solve the big problem or big issue in the market right now, how to generate out of it.

only a few companies have been delivering. we are providing solutions for the brokerage. at the same time, we have been missing our etf and delivering possibilities for the u.s. equity market. that made a distinctive difference compared to the others. >> what sort of expansion plans are you looking at and in which geographies? i know china and south korea are major focuses for you. francis: we have been building in south korea. we want to expand in the southeast asia market for hong kong, singapore, and china. our primary focus will be the united states.

our ai technology could be similar to the esg. everyone is talking about esg. there has been a lot of skepticism about applying esg's. -- inflection point that can be broadly and widely adopted by managers because it gives scalability and efficiencies and the possibility to find -- -- through the technologies. haidi: what are the biggest investment themes you see your technology being most useful? francis: so far, our technology has been applied to u.s. equity spaces.

while we are seeing the fundamental changes in the global macro market, we are seeing interest hike and some of the other experts are expecting more than that. we do see a possibility in the current market environment. we are in the midcycle. off-site potential -- that is typically the active strategy of working fast compared to the others. by having our technologies, we are trying to provide a solution to approaching the market with a different approach compared to the conventional approaches. >> francis oh joining us there.

reporting some pretty tepid loan growth numbers in the fourth quarter but said that borrowing is likely to pick up. government stimulus begins to wane. a cfo told bloomberg that consumers still have a lot of liquidity to grow the economy. >> we did see in the quarter continued progress in the recovery and we saw that through the loan growth. it was really across the board both on the consumer side as well as the commercial side. on the consumer side, we saw growth in cars, underneath, not confirming mortgaged portfolios as well. >> i just want one quick follow-up here. can you kind of give us a little bit more perspective? a lot of it was higher value for

the loans themselves. was the volume in loans also higher? mike: we had a record origination quarter in the auto business. about two thirds of our auto business is used cars so we are benefiting from higher used car prices. we are seeing the volume really strong as well. new-car car markets constrained but we are seeing growth come through in used car volume. >> on one hand, you have inflation which could impact consumer spending and on the other hand, higher interest rates. i'm wondering how much those higher interest rates could intentionally stifle some of this loan growth and deter some of the consumers from taking on more loans? mike: you have to start with the fact that we are talking about raising rates means that we have a really strong, you know, economy underneath it. consumer spending -- you see

that in the equity markets. you see that in loan growth. coupled with that, consumers still have a lot of liquidity. off the peaks that we saw a couple quarters ago. on average, 30% more in consumer deposit accounts. that should help consumers continue to be out there, growing the economy. it will be helpful for us and we talked about that in terms of our net interest income, but i think it's a good sign that the economy continues to be pretty strong underneath it, which should be good through the rest of the year. >> beyond the consumer business, you did show some strides in your investment banking business. i'm curious about plans to grow that business more into this year and how competitive you think you can be. mike: we think we have a lot of opportunity in the investment banking business. in particular, going after the opportunity to work with our middle-market and commercial

banking >>. we talked about that opportunity for the last few quarters. we think there is a lot of room to continue to grow, both in the commercial bank, in the investment bank. the context of us continuing to execute on our efficiency initiatives. we are able to make those investments to go after that opportunity which we think will be significant over time. >> talk to us about getting those investments, getting that talent, adding those people. how are you having to compete with the right talent right now? >> it is a competitive market and we have seen some wage inflation. that $500 million is above and beyond the normal increases we see. part of that is increasing minimum pay across the board, somewhere between 18 and $22.

that part of it has an impact on recruiting and retention across that part. we will have to continue to be competitive. we are able to do that. we have good ability to attract people to the platform and that is in the -- as we look at 2022. >> the wells fargo ceo, mike sent to mossimo -- mike. you can see us and watch our past interviews. you can dive into any of the functions we talk about and become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

>> we need to work through attribution this is part of the russian playbook. and yes, of course, if it turns out that russia is pummeling ukraine with cyberattacks and if that continues over the period ahead, we will work with our allies on the appropriate response. shery: jake sullivan on the cyberattack on the ukrainian government after the biden administration said russian actors were preparing for a military move if diplomacy

fails. the tensions adding to europe's energy crunch with gas prices urging again. oil prices higher, about $80 a barrel for wti and brent prices. this as we have opec and eia reports due this week. in the commodities space, we have the bullish sentiment around metals. we are seeing gains although at the moment, we have seen declines after the massive rally we saw given dwindling reserves are actually a concern at the moment. a metals trader saying supplies could falter critically momentum. gold extending declines for a third session after we have seen the dollar strengthening given the disappointing economic numbers last week. haidi: let's get you caught up today with some of the latest business flash headlines.

bloomberg learned that mizuho is set to name a new ceo. the company insider will be tasked with turning around a bank that has been plagued by a series of technical disruptions. sources say his experience with risk management helped him to secure the position. credit suisse has named a chairman. he takes over from the previous, who resigned following scrutiny over repeated quarantine breaches. the bank acknowledged he had left before his isolation period ended. later, he had attended the wimbledon tennis finals in london last july at a time when european rivals were meant to quarantine. germany's -- carved out $5.3 billion takeover. the proposed semiconductor deal

raised antitrust concerns in germany and the companies have offered a range of remedies to resolve concerns. however, they said they received limited feedback from authorities and the transaction can be closed if the takeover is not approved by january 31. we are just over 30 minutes away from the opening trade in hong kong and mainland china. let's cross to richard frost for a preview. plenty for investors to digest including fourth-quarter chinese gdp numbers. the markets, also a decision by the pboc on the medium-term lending facility. richard: that's right. china is looking out to see whether they will cut their policy rate. there has been a lot of pressure on the central bank to alleviate some of the tightness there has been an weakness we are seeing in the economy, particularly

driven by the property slowdown and we have the spread of " complicating the picture for policymakers, too. haidi: we are also hearing that casinos are in focus, soaring after the sixse changes to the lock -- these changes to the law. richard: i would expect a very strong rebound. they did rise in hong kong after a report late in the trading day on friday that the government would release this much-anticipated bill. when they first announced they were going to do this back in september, a gauge of casino stocks fell 23% in one day. it was quite phenomenal. we saw u.s. listed casino stocks rallying very strongly once that report came out. there were no negative surprises. you would expect a pretty strong rally today. shery: the resiliency of the

yuan has been phenomenal. what are we watching? richard: we are watching the fixing for signs that the central bank is uncomfortable with the strength in the yuan. we saw on friday, looks like -- state banks stepping into by the dollar. -- buy the dollar. it seems the current level, they are not keen to see it rally sustainably beyond that. that was a very strong signal. if they don't, perhaps they are not too worried about it. i would also send a signal. >> richard frost ahead of the china open. more coming up on "bloomberg markets: china open." more on the big day ahead for china as we await fourth-quarter gdp numbers. potential move from the pboc following some of the data as well.

ocbc and fidelity will be giving us their outlook for the chinese economy. that is it for "daybreak asia." our markets coverage does continue as we look ahead to the start of trading in hong kong, shanghai, and shenzhen. do stay with us. "bloomberg markets: china open" is n this is bloomberg. ♪

>> happy monday morning from hong kong where it is 9:00 a.m. it is also 9:00 a.m. in beijing and shanghai. i am david ingles with yvonne man and we are counting down to the opening trade on the chinese mainland and here in hong kong. yvonne: investors away china's gdp data that is expected to underlie the economic slowdown, boosting chances of a rate