>> good morning. you're coming down to asia's major market opens. shery: our top stories this ever appeared u.s. stocks stormed back from a deep selloff. dip players rescuing a section of explosive volumes and wild swings. president biden and european leaders work to strike a new five position on russia.

-- a unified position on russia. plus, ibm posed its best sales growth in a decade as the 110-year-old tech giant transitions to ai and the cloud. we are getting gdp numbers for the year out of south korea. 2020 one, south korea grew 4% year on year, which is in line with expectations. we have seen double-digit growth numbers when it comes to export demand from outside. we are seeing the fourth quarter numbers year on year expansion of 4.1%, which is a much faster acceleration than was expected at 3.9%. also a small increase from the previous quarter. when it comes to the quarter on quarter numbers, a growth of 1%. much bigger growth than expected from the previous quarter, which grew only .3%.

it is not just exports. we are seeing sentiment and mobility recovering in south korea despite the are just fire his way we have seen yet in the month of december. manufacturing grew more than 3% year on year. we had a wholesale retail trade and other sectors also growing. at the same time, getting more breaking news out of south korea. the country will be extending trading in the foreign exchange market and ease restrictions against overseas investors. this in order to encourage more foreign participation. this would be reversing a policy intended to limit volatile capital flow. yuan onshore dollar stock trading hours will be changed. this is according to a statement coming from the finance ministry on tuesday. restrictions against foreign financial firms trading overseas will be. paul: trading has begun here in

sydney. a couple minutes into it. already off about 2/10 of 1%. we have a staggered open. we will be watching rio tinto when that stuff begins trading. the boards of the mine in mongolia in a messily approving the commencement of underground operations. sustainable production expected and of 2023. the 2.4 billion dollar loan to the mongolian government will be waived. production going to be getting underway in rio tinto's giant mine in mongolia. exits turning positive after a sulky start shared higher by 2/10 of 1%. reflecting to some degree the crazy final hour we saw in u.s. markets. nikkei futures in positive territory. will recovering.

we did see wti selling down earlier today any terms of a risk-averse sentiment should the russia ukraine crisis supporting gas prices at the moment. the oil price recovering. the aussie dollar a little stronger against the greenback. the big one we are watching out for in australia is fourth-quarter inflation numbers, which are expected to continue an upward trend. shery: take a look at teachers trading. we are seeing needed u.s. futures. same for the nasdaq 100, which is under a little bit of pressure. this is after the bullish reversal we saw in the new york session. that momentum to the upside taking the s&p 500 from correction territory into the green. same thing for the nasdaq composite, which was in correction territory. we could have been much worse. we are seeing bitcoin reversing losses, gains we saw in the new york session.

still above $36,000. this after we saw a massive selloff in cryptocurrencies and in past few days as we head toward the fomc meeting. for more on what we can expect from the asia trading session after the wild u.s. session, let's bring in our correspondent for asia, garfield reynolds. what will you be watching today? >> i will be watching the trend market closely. it has often been a good barometer for how much weight to place on the overnight action. the u.s. is a decent read across from that. i do think yesterday or the topics actually recovered nicely during the asian day. that to some extent sent a signal you could get an end to the bleeding of the u.s. session. the u.s. session started off poorly. at one stage, we had a series of indexes that had broken through

some long-standing supports. the u.s. had a very strong rebound. the question is, was that i did count rebounds or are we going to get something more sustainable? how willing are players in asia to put some fresh risk on the table when we have the ewa mc due to start its meeting in the u.s. today and conclude u.s. time on wednesday? it is a nerve ash weight to see whether the fed is going to be as hawkish as at times -- as it times of fear. we have ongoing concerns about what might come with regard to the ukraine tensions between russia and the u.s. paul: as i mentioned, we have fourth-quarter cpi in australia today. we have seen a hot cpi print force the rba's hand before. what are the implications if today's reading comes in hot as

well? >> if today's comes in hot, that is going to do more than simply confirm what is now the extremely dry expectation which is that the rba will strap quantitative easing at next week's meeting. if it came in slightly some beer than expected, as long as it shows some continue acceleration, expected to come in at 2.3% year on year. anything above the 2% reading from last time will be enough for players. the rba has to stop qe. if we get something stronger than that, we will see an explosion in those bits. we have traded rates as early as may.

i think we would see that priced even then, even looking at april as a chance. like you put a lot of stress on the home markets and create a very nervous run to next week it's rba meeting -- next week's rba meeting. paul: president biden says he had a great meeting with european leaders on a unified position on russia and the ukraine. this comes as the u.s. put thousands of troops on alert to bolster nato forces in eastern europe. let's bring in our political news director for bloomberg tv and radio, jodi schneider. what is nato's plan in europe regarding russia and the ukraine? >> they are first trying to stop this from happening. trying to put force behind this method of trying to get them not to go in by having troops on the

border. by repeating from the u.s. side what would happen if they were to go in. for instance, these sanctions the u.s. keeps talking about. it is first a deterrent good there were a lot of threat today if they do go in, what would be the consequences? that unified strategy is really important both from nato and there was a call later this afternoon with the president and emmanuel macron and other leaders who where they were saying to dado, they were saying some -- saying from data in the west, don't fill in. you will suffer the consequences. shery: what could be those consequences? what is nato's plan for eastern europe? >> talked about bolstering those borders. the u.s. has put 8500 troops on alert to try to stop an

incursion by putting those troops on alert in eastern europe. but then sanctions. the u.s. has made it clear and president biden keep saying how they would go ahead and have really tough sanctions, sanctions russia has not yet seen from the u.s. we have not heard as much from the european side what they would do with sanctions but they have altogether made it clear that they would be unified and they would take some strong action against russia. which at the moment by the way says it is not going in. that it does not have plans to go into ukraine and saying the west is making more of this at the moment than it should. shery: jodi schneider with the latest on tensions over ukraine. let's get to vonnie quinn with the first word headlines. vonnie: a run says it may consider dealing directly with the u.s. if significant progress is made toward what it calls a good nuclear deal. envoys are into their eighth

round of negotiations in vienna with iran and the u.s. negotiating via the european union. tehran has called for any deal to guarantee a future generation -- a future administration would not dismantle it to the u.s. is recording the most covid deaths in as 11 months. the nation may be turning a corner. cdc data showed the seven-day average of fatalities reached 1975 people on friday paired that compares to the winter peak of january last year when the daily average topped 3400. the cdc has raised its japan travel advisory to three that indicates a high level of infection should china is easing covid testing requirement for participants at the winter olympics. it is a sign organizers want to limit the fallout from more and more stakeholders testing positive. 78 cases related to the games have been picked up including marketing personnel and other support staff. the first infection among an

athlete or official was detected at beijing airport on sunday. u.k. prime minister boris johnson is facing further allegations of holding parties during the pandemic. i to be reports up to 30 guests attended a downing street birthday celebration during 2020 when most indoor gatherings were banned. johnson's office says staff gathered but the prime minister was present for less than 10 minutes. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. paul: let's take a look at what is moving on the a sx to -- on the a sx. this is on reports there may be some potential interest in a two milk. shares up the most and a two weeks. rio tinto weakening despite this report work will commence on the

underground part of the long-running confusion over what is going on with the oil mine in mongolia. sizzle rising as well. of 14% to the best performer. zip higher as well. this is to do with sip confirming talks with sizzle on a potential acquisition. both stocks performing strongly. still to come, washington readies troops has president biden works with allies to respond to russia. up next, it was a wild day for the markets. it sets us up for an interesting asia trading session. we are going to talk about that with tribeca investment partners. this is bloomberg. ♪

paul: our next guest says 2022 will be a more difficult year for investors to navigate but the bull market is not yet dead. joining us is a portfolio manager at tribeca investment partners. today was almost what you might expect for 2020 two. a microcosm. investors finally deciding the last hour or so in the u.s. that stocks were worth more today than they were yesterday. what actually changed? was this dip buying or something else? >> it is absolutely defying. i think most of the investors started 2022 knowing we had a couple good years. there is a lot on their mind. taking some off the table heading into a u.s. reporting season. perhaps a little bit tougher given the supply chain and some of the short-term pressure. that is what we saw in the first

few weeks of january. there have been a lot of investors sitting on the sideline waiting for opportunitie to get in and find outs from great companies to buy. that is what we saw last night to wednesday night, wednesday is incredibly important because of the fed should we do expect them to reaffirm normalization in terms of policy. i don't expect them to be more hawkish than what they have been. investors need to be mindful that this is a year where we will have the lift off of the normalization of the policy. very loose policy that had been taking place around the time when the pandemic was hit. at the economic activity had picked up significantly around the world.

it bodes well for a positive few weeks. paul: markets do seem to be getting their heads around the fed tightening narrative. we have ongoing supply chain pressures. new variants of the coronavirus. inflation continuing to rise. what is your outlook for earnings in that environment? >> you just highlighted all the risks and worries that investors do face at this point. there is a lot of risk. i think we will have ready good demand environment. the revenue front, we will see pretty good growth. there will be a little bit of margin pressure especially with this upcoming reporting season given the impact from the omicron disruption. we should see that easing over the next six months so will be some of the temporary inflationary pressure as well

should ease and at the next six months. we should think horowitz will still grow. -- think corporate will still grow. we should see capital return come through for the rest of the year as well. shery: is that both for developed and developing economies, that sort of earning support you are expecting to see? >> yes, so we should see strong earnings support coming through for all the economies. however, if you look at earnings growth and corporate earnings growth as well as equity, emerging markets have lagged save you only compared to the likes of the u.s. economic activity is running pretty hot at the moment should that is why the normalization of policy. we think the e.m. market looks pretty good given how far they have lagged.

we are also positive on this trillion market or we have lagged as well because of the lockdown. economic growth will be stronger across e.m. australia relative to others. the policy stats will be quite loose. shery: we'll be watching for those cpi figures today. it was good catching up with you in the 2022 new year. where looking ahead to the start of trade in tokyo. some of the top stories we are watching. the u.s. raising its travel advisory for japan to its second highest level in the covid spike. the centers for disease control had previously listed the country at the lowest level of warning to hitting toyota even harder with the carmaker adding two more days of production halts. that brings the total drop in output to 65,000 units in january.

a big deal for music fans. bob dylan has sold his entire catalog of recorded music to sony. terms of the sale were not disclosed. but board estimates the material is worth at least $200 million. this is bloomberg. ♪

shery: we are tracking the fallout of the global supply chain crunch. global supply chains nearing a turning point set to help determine whether logistic headwinds will keep restraining the global economy. that is according to several barometers being tracked by economists, where show the peak shopping season that coincides with the lunar new year. six and a half percent more than the year earlier. industry group says the easing of business restrictions and more tourist arrivals will spur

demand. they point to the chip shortage and the latest virus outbreaks as key risks. a poll of global management taking the plunge into a corner of finance that underpins global supply chains and i the latest expansion of the sprawling lending empire. the investment firm has joined forces with the bnp paribas to create a new platform that will provide loans backed by venturi to large multinational companies so they can bolster their stockpiles without tying up too much cash of their own. paul: let's take a look at some commodities affected by supply issues. the nickel -- nickel plunged. on the flipside, and key metal, lithium, extending gains to hit an all-time record in china. european natural gas jumped by nearly a fifth amid worries about ukraine. we are also watching crude oil as saudi aramco says demand is

back to pre-pandemic levels. bloomberg terminal users can read more about those stories in our newsletter, supply chain -- supply lines. shery: it is really a busy week for earnings season. ibm shares jumping in extended trade after posting the best sales growth in a decade and better-than-expected revenue. let's bring in a software and intelligence senior analyst. what drove these gains? >> enterprise corporate spending is very strong. that is what is showing here. you saw consulting growth. the big surprise was the pickup in software spending, which bodes well for ibm's sales growth rate in 2022. paul: let's talk more about the software unit results. how is that playing into ibm's

plans to get more into cloud and artificial intelligence? >> you look at it, the real growth rival is the rate hike acquisition, which grew about 21% in currency this time. this is impressive because this is where we think the future of the company is. it needs to go and sell this hybrid cloud model pitch to customers where they can come up with new products that can help them connect the dots between their older system and cloud providers such as microsoft and amazon. paul: bloomberg intelligence software and i.t. services senior analyst. let's get a check of the headlines. evergrande says it needs more time to come up with a restructuring plan.

evergrande had 305 billion of liabilities as of the middle of 2021 and was deemed to be in default in december. for to skew metals says iron ore shipments rose 4% last quarter to 47.5 million tons. in a state may come of the ceo highlighted a focus on caused management to medicate inflationary pressures and supply chain restraints. fortescue is keeping guidance of annual iron ore exports. still to come, president biden says he had a great meeting with european leaders in an attempt to strike a unified position on russia. we will have more on the situation next with democratic congressman ami bera. you will also discuss his efforts to smooth over u.s. relations stick. with us for that conversation. this is bloomberg.

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paul: president biden has held what he deemed a great call with european leaders including french president emmanuel macron and german chancellor olaf scholz as the allies worked to strike a unified position on russia. the e.u. does remain split on some issues including supplying weapons to ukraine. more from brussels. >> the unit at states live by president biden and european allies which rated full support for the territorial integrity of ukraine and warned russia and

vladimir putin any incursion into the country would lead to massive economic sanctions. nato's deploying military equipment to eastern europe yet all of these next hope is all of these measures combined will serve to deter russian aggression on ukraine. i spoke to the ukrainian ambassador to the european union and he told me the country feels fully supported by western allies. >> we appreciate the european union, that it keeps its embassy working as usual. it is a strong signal also to the rest of the embassies. it is business and -- business for each and every country how they run their business and what level of precaution they are taking to >> that is the ukrainian ambassador to the european union speaking exclusively to bloomberg. all of this is happening in day of major turmoil for markets. in particular, russian assets. we saw the russian ruble tumble

and major signs of stress in the stock market but also the credit market. a lot of this pointing to a repricing of risk in the country as concerns about a possible invasion at a military confrontation escalate between the two sides. the european union insisted last night it does not see the need to pull out its embassy personnel from the country saying ukraine needs people on the ground. shery: let's bring in democratic congressman ami bera who is a member of the house foreign a force committee -- house foreign affairs committee it a lot of the recent debate has been focused on president biden's comments last week about not being -- about not meeting a unified western response. what do you make of it and what are you seeing now? >> i think the western allies are coming together. it sounds like the president had a good meeting with the other nato leaders.

i think everyone is going to come together at i think we have today. both he or did states and the e.u. countries in the west have to have a unified response. perhaps our only chance of getting prudent to perhaps back out a little bit. shery:shery: is there any consensus within congress on what the next steps should be? >> were trying to adapt house and senate legislation that would give authorities to give deep sanctions. russia's economy is not in a great place as it is. it would cripple the economy and we want the president to have the authority so he can act immediately. paul: we are seeing sanctions used before in this situation when russia seized crimea and eastern parts of the ukraine and experience suggests russia learns to live with them. is this an effective way forward? >> i think these actions will be bigger and broader than anything that has happened.

i think if the unit states and europe -- deleted states and your work together, you cannot exclude them from the financial markets. you so what is happening to russian assets. i think that is an vance of potential invasion. i think this sanctions would be swift, would be broad and would be painful. the hope is there are enough folks around vladimir putin who can moderate and make sure he understands the risk to their economy and the russian people. paul: as things stand, there are 109,000 russian troops around the border with ukraine. how do you see this playing out in the best or worst case scenario? > the worst case scenario is a full-scale invasion from the eastern front but also the russian troops in belarus. there are -- there is some speculation --

if there is a full-scale invasion of ukraine, this will be bloody. you have ukrainian people ready to fight to defend their country. the economic sanctions on the west and european union, i think it would be crippling. it may not be limited there. we have certainly had conversations with japan, korea, other countries. the hope here is if his goal is he does not want more nato troops on his borders, he is going to get the exact opposite. that is what you're starting to hear right now. certainly if he invades ukraine, i do think nato will mobilize troops to the eastern european countries that are part of nato. shery: you're sticking around. we have much more to talk about. coming up next, we will discuss with the congressman the latest push from washington on

legislation to counter china's growing influence. his outlook and rationale for his bipartisan bill is coming up. this is bloomberg. ♪

vonnie: this is daybreak: asia. the u.s. is reporting the most covid at sign 11 months.

cases and hospitalizations indicated the nation may be turning a quarter peds cdc data shows the seven day average of reported fatalities which 1900 75 people on friday. that compares to the winter pick of january last year when the daily average helped 3400. the cdc has raised to the japan travel advisory to three. that indicates a high level of infections. a new study shows a fourth vaccine dose for older adults gives better protection than three shots. a study conducted with people 40 and over. people with extra dose were found to have twice the protection and a better protection against severe illness. fund managers without a cfa qualification may perform better over the long-term term than those who have taken the famously tough exam. that is according to a study that looked at the careers of 6000 managers.

the cfa says other studies had opposite conclusions. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: still with us as congressman emmie berra. he is a member of the house foreign affairs committee and introduced recently the countering china and economic coercion average. thank you for sticking around. we are days away from the launch of the beijing winter olympics and we have seen a number of countries include in the u.s. caria a boycott of the games. are we going to see a greater fracture between china and the west from this? >> the relationship is not in a great place right now. we have got to find a place where we can de-escalate some of the rhetoric.

it does not look like there are very many common areas we could work together. china has said it does not intend to cooperate with us on global health or climate change. i think that is a shame because that is not isolated to one country. it is all of us that are connected. you mentioned the economic coercion bill. that bill is a response to how china retaliates. you think about what is happening with lithuania. all of the whinny is deepening ties with taiwan. china is doing what they can to isolate lithuania. what they've done with australia, even the koreans a few years ago. they'd applied missiles to protect south korean allies. shery:shery: what are we going to see any terms of legislation? we have won against china on tech supremacy and other

movements within congress. both need to be passed by the house and the senate as well. where are we in terms of progress? >> the hope and we spoke with the speaker of the house and two blows you must week is we will move fairly quickly in the next few weeks on some version of the u.s. innovation competition act. i don't see this as a china bill. i see this as a u.s. competitive bill to certainly part of the competition is bring industries like the semiconductor industry, other critical teck resources back to the united states and investing in r&d. this is an investment in the united states to invest in our competitiveness. paul: in terms of the economic

coercion act, what are the mechanisms in that bill young go how is it going to work? -- in that bill? how is that going to work? >> set up an interagency task force to better understand how china uses economic coercion, what tools they have and come up with the best strategies and tools we would have at our disposal to counteract some of the -- some of that. paul: just want to talk about taiwan as well. we have already discussed a potential conflict. does the u.s. and is -- what does the u.s. anticipate from china in terms of its desire to unit -- to reunify with taiwan ? >> the intentions and aggression out of beijing across taiwan have been higher than they ever have been picked our hope -- have been.

we have not changed our policy. we respect the ability of the people of taiwan to choose their path forward. if china is forcing the u.s., australia and japan to rethink approaching this. there is no reason to change that status quo. you cannot guess what xi jinping is going to do. as much as we are doing with ukraine trying to signal to vladimir putin, in the 21st century, and invasion like that should not happen. we signaled the same thing. the economic damage to china, the isolation, not to say an invasion of taiwan would not be easy. hopefully they think better of it. shery: we have recently led a congressional delegation to

southeast asia. you have also been to south korea recently. what world of these countries play in the u.s. strategy to push against beijing? >> we did. we went to bangkok, thailand as well as jakarta, indonesia. southeast asia itself is a vibrant economy, vibrant region. they will have relationships both with the united states and china but we do think an increasingly hear from the countries in that region they want deeper ties with the united states because they also see that the rules of economic engagement, the rules of trade are much more open and fair and transparent as opposed to the way china does business. they are not -- they are part of a strategy both up strategy deep in u.s. and southeast asia ties.

when he think about korea, we are seeing saber readily. -- we are seeing the saber rattling. anytime you take your time off north korea -- or i of north korea, kim jong-un sets up missiles to bring your attention back. paul: thanks so much for joining us today. the credit congressman. -- democratic congressman. netflix's vice president of content for asia joins us to discuss the content pipeline for the streaming giant. also a rate decision to out of pakistan today. the central bank governor joins us exclusively. this is bloomberg. . shery: we have some stories we are launching in south korea. the finance minister will beat the -- will meet the bank of korea governor to review financial markets appeared he is winning senior officials to get

ready for a rising market volatility after the fed's next meeting. sk hynix is denying media reports it will invest in sci-fi. it says it has not and will not dissipate in the current funding round. we will be watching simpson biologic shares after the firm hosted fourth-quarter profits paul:. another thing to look ahead to 10 lg energy is the second-biggest battery maker in the world did the plans to use its nearly $11 billion windfall from its ipo to take the throne away from china see atl. for more on the significance, let's bring in head of aipac research. what is the thinking behind this move? >> like any ipo, this is about increased access to capital. lg energy solution needs to

continuously invest in expanding its battery cell production capacity. it also needs to watch out for its battery supply chain all the way to mining's of lithium and critical materials. you have to keep in i on next-generation technologies. you have to fun internal r&d and look at potentially investing startups. these requirements to be able to attract investment from investors as those investors looking at esg metrics, it will be difficult to do that as lg. the investors who have gotten excited about the lg energy solution ipo, they would not want to have exposure to the legacy petrochemical business or its expansion into life-sciences. we want -- they want that exposure on its own. just offering less than 20% of its ownership stake, lg camp has been able to attract a lot of funding.

shery: or the implications for other battery manufacturers in the broader eb market? >> in a large sense, the better industry is getting more funding. which it critically needs. we saw ev sales last year more than doubled despite the pandemic. two men for batteries is rising and that means more funding for building out the supply chain. for individual battery makers, it signifies intense competition. by the end of the year, they will have annual production by city of thatcher 15 gige our. to put these numbers into context, if you look back 10 years ago in 2012, the annual production capacity at that time, was only six gigawatt hours. the entire lithium battery industry back then, capacity was

less than 35 gige what our. -- gigawatt hour. paul: what are you watching for next? >> if you look at among the top 10, there are few diversified players left. the bedroom -- the battery agency was pioneered by japanese conglomerates like sony, toshiba. if you look at it, here in korea, last year as kahan divisions already separated the battery business and created media reports have said there are discussions around a potential ipo later. the only notable name that remands on the list is panasonic. shery: head of aipac research.

we have plenty more to come on daybreak asia. this is bloomberg. ♪

shery: there are signs the latest wave of covid in the u.s. is peaking even as the country posts the highest death toll in 11 months. the johns hopkins school of public health says the virus

should become milder with successive variants. >> there are some parts of the country that are still in the upswing. we do think it will go down pretty quickly. i think others have said they expect it to go down over a matter of two or three weeks. from the peak down, hospitalizations will probably lag a little bit. that is all generally good news the question will be how long we last in much better place. >> i believe we had delta and we did not see omicron coming. we have omicron. can we see what is next? >> we are not sure exactly what is next, what the virus will do. so many people got omicron that there is a hope that whatever comes next we will be better prepared for and just like omicron was milder and a part

because there were so many vaccinated and exposed people, we will have an even milder time with whatever happens to come next. that is the hope. the world health organization has also expressed that hope. i think we can start to think about 2022 being different than 2021. >> when is the all clear sounded? for people out there, we all have them, friends who where and 95 mask and don't want to give anyone hugs. how long does it take before they can start to act normally? >> normally has to be defined here. the most likely as the cases come back down to the levels before the omicron surge, i think many more things will be possible. one of the challenges we have is finding the new normal wear people feel comfortable. you run the risk that you say we

are going to be fine doing a, b and c and have the people think that is too restrictive and have the people think that is not restrictive enough and no one is happy. part of this challenge is saying the risks are reasonable to say the following things for most people. under certain circumstances, you may want to take extra precautions. if you're going to see someone who did not respond to the vaccine because of the medical condition they have, they may what winter break out a rapid test. >> public transportation, airplanes? is it -- you have a sense? >> what has been pretty stable is when people are not wearing their masks and they are talking with each other indoors, that is when the virus spreads. people wearing masks on public transportation turned out to be relatively safe. on the other hand, a pizza party with 20 people in your house,

which has happened to a number of students, that turns out to be everybody gets covid and it is omicron. i think we just have to keep an eye on the virus even as we are returning to doing a lot more. shery: johns hopkins bloomberg school of health speaking to the and and lisa abramowicz. the school is reported by michael bloomberg. here are some stubs we are -- some stocks we are watching. toyota, the january output dropped. has risen by 65,000 units. panasonic with a mass production of new lithium-ion batteries according to a nikkei report. we are watching sony. bob dylan sold his entire catalog of recorded music to the company. take a look at broader markets. futures looking like this. asx 200 losing ground for a third session.

down -- pressure throughout as we are headed perhaps toward a bear market in korea. new zealand in correction territory. the market opens in japan and korea our next. this is bloomberg. ♪

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♪ our goal welcome to daybreak asia from bloomberg's world news headquarters in new york. posco asia's major markets have just opened for trade. our top stories, investors brace for new market volatility after geopolitical worries with of a wild session on wall street. european leaders to strike a unified position on russia and ukraine as the pentagon goes on

heightened alert. australia's fourth quarter inflation numbers with fuel and construction costs in focus. shery: japan and south korea coming under a little pressure. we are seeing the nikkei lower by utilities. -- is also down. we are nearing the 10% correction from its september peak. we are watching this very closely. we sell weakness for the japanese yen, holding at 114. we are watching stocks like toyota because of issues around shortages, not to mention covid-19. take a look at this. interestingly it is higher by .8%. we are seeing companies rising at the moment, although on the other hand we continue to see 920 stocks or so really falling.

280 losing ground. the korean yuan is not doing much. we had seen 2021 gdp numbers come in. an extension of 4%. >> we are seeing a quite a bit of setting. rio tinto, the big mining company, losing ground. .8% after the announcement that it is going to proceed with the underground mine in mongolia. that comes with the writing off of a 2.4 million dollar loan to the mongolian government. in australia, up by 7% right now. there is a media reports that the dairy company could be a target from -- take a look at new zealand. heavy selling their earlier in the day. those look flat right now.

we saw crude prices dip initially down to $82, but recovering strongly. as texas $84.03. -- stabilizing as well. earlier we saw the spread between the two into the 10 year dropped to 70 basis points. 78.428. a long time market watchers says the rocky is stretch for u.s. stocks is far from over with the tech candy -- tech heavy nasdaq to fall to bear markets. jeremy siegel told us why he thinks there is more to come. >> by do not expect good inflation news this first half. i think they are going to be more than four fed hikes. i suggested they make a have to go up to 2% by the end of the year to really stop the inflation. at this point, equities are not really priced for that amount of

aggressiveness. i think they are going to have to get used to it. the nasdaq will probably enter a bear market which is described as 20% and probably correction territory for the s&p 500. shery: our next guest says clients may be underestimating earnings risks. senior investment stratagem and for equities at alliancebernstein. rate to have you with us. earlier we had david coston from goldman sachs telling us he was disappointed about netting -- about not getting enough earnings guidance during this earnings season. where do you see the downside pressure coming from? >> thank you very much for having me on the show. we are generally still constructed on global markets including the u.s.. we agree with that other david that the earnings guidance so far has been opaque.

i think it reminds us that although a lot of the selling pressure we have seen to start the year has been driven by the 10 year yield, we need to recognize also that there are really two risks out there this year. there's obviously the inflation and rates risk which is now well understood, but also the other one, conviction on earnings growth. i think the opacity of that earnings guidance reminds us that there are a number of sources of earnings risks. very quickly, one would be the lockdown business fatigue. companies like peloton that have come under pressure in recent months. you have the slowing of the anniversary of stimulus checks.

normalizing supply chains that reduce pricing power. margin pressure from labor prices going up. and of course, war, which we have been hearing about in recent days. shery: we are getting the monetary authority of singapore upon monetary policy statement right now. they are further of, or shifting their inflation outlook in singapore, saying they are revising forecasts for 2022. core inflation is projected to be two to three per -- 2% to 3%. the monetary authority of singapore sees that will be appropriate to make another preemptive stance adjustment. going back to you, these inflationary concerns seem to be pretty worldwide. even mas having to adjust their guidance on price pressures. how much of that has already

been priced in by the markets? >> when you hear people like professor siegel speaking earlier about the rates being lifted up to 2%, then obviously people are already starting to make hawkish predictions of what happens to monetary policy. from an equities perspective, it is important to remember that what has been driving the value versus growth debate in u.s. and global equity markets has not been the 10 year yield, per se but actually the shape of the yield curve. what you believe is that the 10 year, which we can see is still off of its highs, it doesn't go up too much further. maybe up to two. whereas we get a lot rate hikes

between now and the end of the year that suggests a flattening of the yield curve, which is good for growth stocks. we recommend investors be disciplined on valuations. avoid the unprofitable tech parts of the market. one needs to strike a balance. what we are suggesting is a middle-of-the-road between growth and value where the most important thing is quality and the predictability of earnings. that is actually the x factor we can control as portfolio managers and investors. >> we are continuing to get information from the monetary authority of singapore. it will therefore be raised, the rate with appreciation of its policy, the width of the policy band at the level which it is centered is going to be unchanged as the mas looks to ease.

let's get back to what you were talking about. in the environment that you just sketched out for us there and the sellout we saw initially, do you feel like there were quality names and that selling got offered a good opportunity for dip buyers? is equity still the only place to be if you are looking for opportunity? >> there is still this preference that we have for equities simply because of where rates and credit spreads are. it is, i think, the asset class that also tends to work better and inflationary environments but one has to accept the volatility that comes with it as that monetary safety net we have so enjoyed the embrace of over the last couple of years. so, we think that there are a

number of interesting sectors and companies that are looking quite attractive today. one sector that we highlight in particular right now are some of the defense of one's. one of which would include global health care continues to trade at a 20% discount to the market. we think that some of the political risks associated with the sector are somewhat overblown. >> how about a regional perspective? what is your -- towards china and emerging asia? >> i think coming into the year, there were a number of people that were quite cautious on china and asia because of the economic adjustments going on. and also broadly because into a hiking cycle, one would expect a stronger dollar, which has

generally not been good for emerging markets. we have seen that a lot of that was priced in earlier and the dollar hasn't been particularly strong to start 2022. there is something of a decoupling of asian economies from other parts of the world in that we are earlier in the cycle of recovery. while there are certainly still risks in asia as well, i think one can actually invest with a somewhat different lens. that is really why we favor more of the value trade, not just in china, but broadly, across asia for asian equities. shery: it was great having your insights. senior investment strategist for

-- at alliancebernstein. we have the alert coming from singapore's airing there will be a shift towards inflation outlook. they are raising slightly the rate of appreciation of the policy. this would be the appreciation of the singapore dollar. remember, the dollar is allowed to rise or fall against currencies of trading partners within an undisclosed policy band, effectively implying a little bit of tightening given we have these price pressures and now mas is saying core inflation could reach 3% by the middle of the year. you are seeing the -- dollar strengthen. the other policy criteria that had been left unchanged our remaining unchanged, although we are seeing tightening moves from the mas to comply, slightly raising the rate of appreciation of the policy band. let's get the vonnie quinn with headlines.

vonnie: president biden has spoken to european leaders including emmanuel macron and the german chancellor as they work to strike -- on ukraine. nato is planning to boost claimants and the pentagon has put 8.5 thousand troops on alert in a bid to deter russian invasion. russia has amassed an estimated 100,000 troops on the border. olaf scholz is holding firm to supply weapons to ukraine despite criticism. he said germany will stick to its long-standing policy against exporting weapons to conflict zones, adding that berlin is prepared to support ukraine in other ways including training. the u.s. is reporting the most covid deaths in 11 months. cases had hospitalizations indicate the nation may be turning a corner. cdc data showing the seven day average of covid related fatalities reached 1975 friday,

that compares to the winter peak of january last year when the -- fell 3400. the cdc has raised its japan level advisory to three, indicating a high level of infections. south korea will extend trading in a foreign exchange market entities restrictions against overseas investors to encourage more international participation. officials say onshore stock market trading hours will be extended and limits loosened on trading abroad. korea is planning -- developed market equities index. 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. >> still to come, the inflation print just outside the target bad is expected out of australia. we get immediate reaction from bill evans. up next, u.s. forces on alert.

the pentagon says russia is not showing signs of de-escalating. we will have the latest. this is bloomberg.

>> today, we discussed russia's continued military buildup around ukraine. the risk of conflict remains real. we continue to call on russia to de-escalate and to choose the path of diplomacy. >> be faced a very serious crisis. everybody is very much worried here about the risks of this crisis in the heart of europe. we must deter him by clearly

indicating that -- would have as a consequence, very serious consequence. pres. biden: i had a very good meeting with european leaders. >> tensions. ukraine. the impact of the crisis playing out across markets. we did see oil weaken a little today but eu energy prices have been spiking with the potential cut off of supply and russia. natural gas is where we saw the action today. .75%. of 4% over the past two days. aluminum suffering. russia is a key producer of that. we saw aluminum prices declining ever so slightly but the ruble has taken an absolute hammering. the u.s. dollar now with the most bearish we have seen since april 2020. we are seeing an etf that tracks

those as well. russian stocks, needless to say, the worst performers. off by more than 8 percent. let's get more on commodities with andrew. how are commodity markets reacting to this potential invasion of ukraine? >> as you just said, most of the -- at the moment is in the european gas price which is shooting up, not surprising given that russia is the main gas supplier to europe and they are already struggling with a shortage. a lot of that russian gas runs through the ukraine. goldman has warned that flows could curtail for an indefinite time. if there is an invasion. that is obviously going to have a huge impact. americans have reportedly been talking to qatar about

replacement. another impact would be the nord stream 2 pipeline. that has been built but it has not been approved. it would unlikely to be approved if russia did go ahead with this invasion. week prices have been going up. russia is the biggest wheat producer after the eu. ukraine is also a wheat producer. those have been the major market impacts so far. >> what other long-term implications are here, especially for an energy starved to europe? >> yeah, the -- implications depend on course -- depend of course on if the evasion -- invasion actually happens. the implication is definitely

not good. in things like wheat, nickel, aluminum, palladium, it depends on the strength of the response. i think during the russian annexation of crimea they had a huge market impact. russia is also a big oil exporter. i mean, biden and his counterparts in europe will be weighing the need to be firm with russia against a global economy that is already struggling with a lot of inflation. -- is going to push that up even more. shery: andrew james there with an outlook on the commodities space. given all of these tensions between russia and ukraine. european leaders ready to pull sanctions if russia invades ukraine. the ukrainian ambassador spoke

to bloomberg about the plan. >> our task is not to predict but to be ready and to -- aggression. i am happy to be a foreign affairs consul. very strong conclusions. there is confirmation of unity in the european union and a confirmation to help ukraine to address this crisis and also there is a readiness to take measures, if necessary, and impose new sanctions both in -- and sector sanctions of russia. >> we saw the u.s. has seen some of -- family members at the ambassadors in ukraine -- whoever wants to leave can leave but ukrainian officials argue this is premature and nothing has changed. this could to some extent create panic that is not needed. do you agree with this move,

pulling out people? is there perhaps no round trip? >> what we tried to do, we tried to be prepared and also the -- patients. we appreciate the european union that it keeps its embassy in kiev working as usual. it is a strong signal to the rest of the embassies. -- how they run their business and what kind of level of precaution they are taking but as you said, yes, we would like to concentrate on one hand on the security issues but on the other hand to continue doing normal things that i government has to do. >> another big debate is what to do with weapons. what is striking is that every time i speak to ukrainian officials, they say we are going to fight. like, we already. we do not feel like a small

power against a big country. is it a good idea to provide more weapons to ukraine? is that the right thing or perhaps could it escalate things further? >> this is a big misunderstanding and a big mistake thing that helping ukraine is a provocation to russia. indeed with ukraine and -- is a provocation to russia. and now we are really glad that -- in the european union is happening. it is changing. there is more adam is to help. to provide a new package of assistance for $200 million. those are concrete steps both on the level of european union and i would like to mention the decision in december to help ukraine with the european -- but

also on the literal level. >> you say there is some misunderstanding as to what weapons mean. do you think they get the message? would you hope or wish there was more assistance coming from germany? >> definitely we will work on that and we hope the messages getting through. we hope that position will also change because it is not carved in stone. the situation on the field this dynamic. we hope we will get to have more understanding in berlin. paul: ukraine's eu ambassador speaking with bloomberg's maria tadeo. plenty more to come. this is bloomberg. ♪

paul: let's just take a quick

look at our markets tracking around the asia-pacific and australia. we are off 1.8%, all sectors on the market lower. the nikkei up b every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

paul: breaking news at us trail you, fourth quarter coming in hotter than expected. cpi on year, 3.5%. the expectation was three .2%. this is the metric the reserve bank of australia watches. that is hotter than expected as well. 2.6% on year. the survey was for 2.3%. the increase we saw in the third quarter, it was that reading that forced the bank of

australia's hand in terms of abandoning yield curve control. let's take a look at some of these other numbers. 1.3% increase. the survey was for a 1% increase. inflation coming in somewhat hotter than the surveys expected. we are seeing the iss turn weaker, down almost 2%. no real move in the 10 year. picking up a little for the aussie 10 year. the two you're moving higher. just about .9% right now. the five-year pushing higher as well, a shade below 1.7%. yields in australia approaching levels we haven't seen since the start of the pandemic. we've got a lot to unpack. joining us to help understand these numbers is bill evans. bill, those numbers as i

described, coming in hotter than expected including the trend mean up 2.6%. the one that the bank must really a watches. last week, you forward your expectations from february to 15 basis points in august. with these numbers in mind, are you ready to change again? >> no. we know that they -- we are still missing the wages side of the puzzle. they can certainly play a straight bet and say inflation's are booming now but we do not have enough evidence of a sustainable wages numbers. that would be a policy mistake but it is why -- it is one the central bank might play. they will have to accept the fact that the global tensions on inflation are clearly coming through australia. they forecast the 2.25% through 2020 two is looking way out of

line now. i think they need to really change their rhetoric on policy. as i mentioned, when we had third quarter inflation nobles -- numbers, that forced their hand. was it mean at least for the end of qe? is that going to be a hot topic when we have our first meeting of 2022 next tuesday? >> doubtful. basically, if you base it on the governor's speech back in december, i think he wanted to get rid of quantitative easing but he was a little cautious. let's see how the data of olives over the christmas period. of course since then, we are expecting the unemployment rate to end the year at 4.2%. expecting that core inflation was can a win the year 2.25 instead of 2.6. there has been massive progress

towards objectives on inflation and unemployment which makes it a very easy decision to lower qe. shery: is it also assumed that the impact from the omicron variant is not as bad as what was originally expected? >> this is the december quarter, before omicron really gathered momentum. there are questions as to whether omicron will change the story going forward. on the inflation front, inflation comes about as a result of the interaction between demand and supply. omicron is affecting supply. that does not give me the comforts that the inflation story will settle down again. i really do not think that omicron is a good case for overlooking what we are seeing on the inflation last year. shery: a few minutes ago we had the monetary authority of singapore tightening out of cycle, meaning given the gains

in cpi, the governor of the bank of japan is also saying that rising commodity prices are pushing inflation up. are we going to see more unexpected moves by central banks across asia? >> without a doubt. i think asia is so dependent on what is happening in the u.s. in terms of monetary policy that they don't have much option. once the fed moves, and we are supremely confident they will tighten in march. asian central banks will be watching that and wanting to provide their currencies with a little more protection with higher domestic rates. i think that is more response to what is happening in the u.s., whereas what i am expecting and australia will very much be a response to what is happening domestically around the unemployment target, which is being achieved much more rapidly than expected.

in november, they expected unemployment to be 4.5%. it is already 4.2%. as i said, they are expecting underlying inflation to remain. it would be 2.25 in 2022 and we have seen 2.6 and stronger momentum going forward. it really has changed the story quickly. all credit to the financial markets that predicted this before the economists did. it is certainly playing out in favor of their views now. paul: we are seeing the assess -- asx sink lower. the 10 year now is 1.97. the two year is that 91 basis points. where do you see yields settling over the next few months? >> in the note you referred to before, we -- our profile. we got to 15 basis points in august.

they will be cautious and will need more evidence around wages. but i did increase the profile for the terminal rate for australia from 1.25%, very much driven by the selloff in australia which is a big constraint to the economy. i think the fact that the u.s. is clearly going -- we've got 1.875 on the terminal. australia has to be close to the terminal. we've got 1.75, reaching that in the first quarter of 2024. four rate hikes in 2023 and moving into what i would call slightly contractionary territory. all of this is predicated on the fed's forecast that they will be able to settle inflation to the 2% range in 2023 which will allow them to avoid moving into strong contractionary territory.

we are prepared to accept that at this stage, but the risks are that they are unable to achieve that and then of course you are looking at contractual -- in the australia in the u.s.. shery: thank you for joining us. we are also watching the singapore dollar. we are seeing it strengthen to levels we have not seen three months. this as we mentioned, single possum monetary authority announcing they were -- they will further taken policy let's bring in our chief correspondent -- how that is the picture right now in singapore that they have -- they actually have to go and try to tighten out of cycle? >> it is clearly in response to the cpi numbers we saw yesterday. inflation there hit an 8 year high. quite broad-based from transportation to food costs.

stay ahead of the fed. we know the fed are signaling rate hikes in the year ahead, that is going to flow through to asia as well. interestingly, they did say in a statement that they think core inflation will be higher than expected in the near term both for external and domestic reasons but they still expect inflation to moderate in the second half of the year. it looks like they are trying to make a preemptive move. paul: this was unexpected. what do we make of the timing of this? >> most people when the inflation data came out, most are saying tightening would be inevitable. but there is no doubt about it. [indiscernible]-- is certainly unusual but it does speak to the

idea that they do not want to rate around or that you're not going to wait and build a narrative that near-term inflation pressures dissipate. they clearly feel they don't have time to do that. they have to get on with tightening now. it's not just inflation, we have the fed's first meeting of the year coming up this week. that will likely signal that rate hikes are going to begin for march. several central banks will be watching that. it all stacks of quite neatly to make the move now, which is -- much -- than expected and the fed has made a very hawkish turn. paul: chief asia economics correspondent let's get the vonnie quinn. vonnie: china is easing covid testing requirements for participants in the winter olympics, a sign that organizers want to limit the fallout. 78 cases related to the games have so far been picked up,

including a marketing personnel and support staff. the first infection among that an athlete or team official was detected at the airport sunday. a new study shows a fourth vaccine dose for older adults gets -- gives better protection. israeli study compared data from about 400,000 people aged 60 and over against a control population of 600,000 who had three shots. people with the extra dose were found to have twice the protection against infection and a better defense against severe illness. u.k. prime minister boris johnson facing allegations of holding parties during the pandemic. up to 30 guests attended the party for the leader during the lockdown in 2020 when most indoor gatherings were banned. johnson's office says staff gathered but the prime minister was present for less than 10 minutes. 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: up next, we talk to the netflix content executive who bought -- brought squid game to the streamer about her plans for new shows in asia. this is bloomberg. ♪

♪

shery: concerns and slowing growth. our guest from netflix says the content strategy for asia is solid. let's bring in the vice president for content. thank you for your time. could you give us any guidance right now on netflix's investing in content in asia this year? >> what i can definitely say is we are increasing our investments in asia. not only on content, but also innovating our product as well. -- compared to the other regions is one of the most diverse. which enables us to work with dynamic pool of storytellers. our fans also are very open to a wide variety of content, of different genres and formats.

this enables us to make great shows and innovate and experiment in many different areas. what we are really aiming for is to make sure that our domestic service is really accessible and appealing to our members and audiences in this part of the world. shery: are you concerned about the subscriber stalling? >> not really. what really drives our growth is strong -- if i think about the slate coming in asia in 2022, me, my team and all of our employees along with the fans of content made in asia are very excited for what is coming. in covid, we had headwinds in terms of production. there were production delays and omicron had unfortunately set us

back a little bit. i am confident we will be able to bring another set of strong sites in 2022. if you look at 2021, apac was at the forefront of driving growth for our service. i believe that will continue in 2022. paul: korean language productions were the breakout hits of 2021 you've recently announced korean content lineup. how does this deal with your strategy around korean content? >> last week was an exciting. we had an announcement that pleased a lot of members on netflix and outside of netflix, who really enjoy korean content. we announced about 20 five shows, a very wide bore -- wide variety.

last year i think we all know that the world has actually responded in huge numbers on their love for korean content. squid game really helped us drive that love and excitement. on the 25 slate, we have shows like, all of us are dead. money heist korea, which is an adaptation of our popular spanish series. we are also excited to present our first original film production and our unscripted programming followed by the recent success of singles inferno. what i want to emphasize is when it comes to local content, what we are aiming for his local impact. we want to make sure that we program hours service around great content to please our korean members.

i think it is exciting that with increased demand on korean content, the world is enjoying what we are watching together. how about -- paul: do you have plans on how the company is going to invest in the rest of asia? >> korea, japan and india is where a lot of our -- [indiscernible]so that's where we invest the most in our content and product innovation. but we do have plans in southeast asia around the chinese language content. and also in else trail yet, we have shows coming out this year and we believe these are the countries where what our local audiences are really want is love variety of different types of shows. but they really want to see the

local content. their life reflected in the story they are enjoying. we do have great plans in thailand around local productions and we have a couple of shows that hopefully will be announced soon. paul: vice president of content for apac and india at netflix thanks for joining us. still to come, evergrande asks oversees bondholders to hold off taking aggressive legal action over repayment. this is bloomberg. ♪

shery: evergrande urging offshore bondholders -- over repayments. this comes as they say they are working with the government on a detailed debt restructuring plan. let's bring in stephen engle. what is evergrande doing now? >> again, they are trying to buy some more time as -- along with the chinese government, to work on this expansive debt restructuring plan. but a lot of these offshore creditors, one in particular, ad hoc group of foreign bondholders

are getting impatient and they have talked about carrying out some sort of enforcement action because they alleged opaqueness and not much transparency in this restructuring process. they want to see possible legal action if their demands and interests are not met. what evergrande is doing is essentially saying, urging them, do not take legal action. we are processing with this debt restructuring but it will be perhaps asia's largest debt restructuring ever. they need the time to work through all the details but we will have to see how this plays out as we see a number of asset sales from other developers -- with a flurry of deals. it seems as if the chinese government prefers asset sales

as the best way for these indebted developers to ease their liquidity crisis. what is -- on that front? >> sure mouth is interesting. it defaulted on a trust product and it has a lot of deals in the works. it is working on offloading at least 34 different projects, asking price, not necessarily what they are going to get, asking 44.2 billion yuan. for just 15 of those 34 projects. the other 19 projects are still in development. but -- has already forked over more than $5 billion for those other 19 projects that are either joint ventures or in the development stage. -- is in dire need of that cash but again i'm a bloomberg intelligence has a hot take on

this. asset sales and policy support from the government could surmount last hope of pulling itself back from the brink of default. in fact, the $6.7 billion worth of potential projects sales, that might not make a big dent on their cash needs because they have already been pledged for other levels of financing. paul: stephen engle there. get a quick check of the latest business headlines. -- says iron ore shipments rose 4%. that was slightly above -- the ceo highlighted a focus on cost management to mitigate inflationary pressures and supply chain constraints. rio tinto has struck a deal with mongolia over a copper mine. the company and its subsidiaries will cancel millions in debt owed to them by their local

governments for each -- for its share of construction costs. the first sustainable production expected in 2023. ft reporting major shareholders are considering submitting proposals for a major overhaul of the company's structure. it is the owner of japan's largest convenience store chain. reporting to be frequently frustrated with the company's outdated governance. shery: this singapore dollar paring back from its earlier gains. it climbed to a three month high after the monetary authority of singapore tightened its policy. this was a move. we are also seeing the aussie gain ground also in yields in australia gaining ground after all so we saw cpi beating expectations of the

second-highest inflation reading since 2008. futures trading at the moment. the u.s. futures falling .7%. really not holding to those gains we saw with the upward momentum in the new york session. we are seeing asian markets under pressure. the china open is next. this is bloomberg. ♪ this is bloomberg. ♪

tionz

>> it's 9:00 a.m. in beijing, shanghai and here in hong kong. welcome to the china open. i'm david i thinkless with evan counting down to the open they have session. on the chinese mainland and here in hong kong. yvonne: our top story this morning, asian stocks and u.s. futures fall intede-spite wall street's biggest comeback since the 2008 financial crisis.

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