haidi: good morning, we are counting down to asia's major market open. shery: our top stories this hour, asian shares set to rise in the tailwind of the best wall street session this month, the yield curve flattening ahead of inflation data. a handy beat estimates, theme parks and subscription growth

boosting the bottom line and major u.s. toymaker tell jumping after hours as brands like barbie push revenue above estimates. breaking news south korea, we are getting the account surplus coming in below the previous month for december, 6.06 billion dollars for the current account surplus, narrowing again from the previous months. when it comes to the rates surplus, also narrowing to $4.48 billion in december and even the previous month has been revised down for the current account surplus and the goods trade surplus as well. not surprising even though we have seen the biggest monthly trade deficit in south korea recently. or than three decades, costly fuel and imports outweighing export growth, though they continue to stay strong.

haidi: let's get you straight to the sydney open, a weak start to trading when it comes to the cash session. at this point, reversing two days of 1% plus gains. we have seen exuberance when it comes to asian trading, they are trading at their best in just about over a month. it comes to australia, we are watching for the rba, marking the end of the quantitative easing program. it leaves them with more than 40% of government bonds on issue. balance sheet tripoli to about 406 $5 billion -- tripling to about 406 he 5 billion u.s. dollars. the kiwi dollar holding up. when it comes to the trading in japan, nikkei futures pairing some of those early gains. crude seeing an advanced -- new york crude trading about .3%

back. shery: futures muted at the open after u.s. stocks were relatively calm, gaining ground for a second session. tech stocks covering -- recovering about half of their losses this year. down futures up by 2%, the treasury futures remain steady. this after the 10 year yield fell from the 2019 high. hitting session lows after the one session, we watch after hours trading as we see upside for companies that have beat estimates with earnings. in particular, walt disney, shares surging in after-hours trading. this after posting fourth-quarter results that beat estimates. analysts were happy with strong subscriber growth disney plus. listen. >> and is almost directly a function of what the new content is that is flowing into the service.

obviously that content was impeded and made a little challenged by the fact that we had covid and it interrupted our production cycles. shery: let's bring in our media analyst. we have seen this and it seems most of the sectors we follow with disney, but executives are more cautious about the future. what were your key takeaways? >> definitely results give confidence to investors in terms of what the streaming narrative is. people had soured on the streaming story. we saw some cautious numbers, really soft numbers out of netflix, so after that i think this is a huge sigh of relief from disney. what they pointed to is something that we have thought a lot about, which is the streaming story is not necessarily going to be a smooth, linear story.

it will be choppy and that is what they said with their projections are for the year. they said expect every acceleration in the second half, but don't expect a steady growth. haidi: ♪ it was interesting to me because he talked about the runaway success of encanto. what was -- what does that success tell us about expectation for the theater business? >> it looks gloomy for the theater business, that is what the ceo bob chapek suggested. they said the young adult has come back to the movies, but families have not, especially with young children and that does not bode well for disney, which relies on younger audiences for their movie ticket sales. which is why, i mean, encanto had a muted performance in the

theaters but was a runaway success on disney plus. so many of their family oriented movies have done that, which is why they have seen the huge pixar release for this year is turning to streaming. they are keeping the strategy, we've had summoning movies come out and commit to the strategy, but disney is playing it safe and keeping all options open. i think they will keep adjusting as we get a clearer picture on what the movie theater demand is going to look like. haidi: bloomberg intelligence u.s. media analyst, thank you. hong kong urging residents who suspect they have covid to avoid swapping overwhelmed hospitals. it is the latest wave, cases saw about 1100 on wednesday. stephen engle in hong kong.

the infectiousness of omicron is at play even that number went from over 600 day ago. stephen: absolutely, it is about the numbers and hong kong put all of its eggs in basket, zero covid in know what they are: dynamic zero covid. to keep it out in contain it. but while they were able to keep delta relatively out of hong kong, omicron has been posing a different challenge, especially over the last five days. the numbers tell the story right now because there was 1100 621 cases, confirmed positive cases yesterday alone on top of 800 preliminary positive cases in addition to more than 600 on tuesday, 600 on monday, nearly 700 combined over the weekend. over the last five days including the preliminary positives yesterday, you have nearly 4000 cases. there are about 5000 or

thereabouts hospital beds that are set aside for covid patients and until this latest wave, hong kong hospitalized, put into isolation wards amount all people who came down with covid regardless of whether the work asymptomatic. they have hit the ceiling. have no more hospital beds and are urging residents not, if you feel sick or test positive with home testing kits, which you can hardly get at any store anymore in hong kong, do not go to the emergency room. they are swamped. go to your private doctor, stay at home until instructed otherwise. and a lot of mild cases are being transferred out of hospitals, out to the quarantine center which is supposed to be for close contacts or arrivals of that lengthy quarantine process. it is a mess and hong kong is in

a pickle on policy. that's why they are launching new rounds, the tightest restrictions yet. but it puts into serious question, can hong kong maintain a zero covid policy when they convene or of the executive council yesterday in an interview told me we can't do what china is doing and walking down an entire city? that seems to be the only way to meet the criteria of a zero covid policy. so hong kong is in a pickle and the latest to downgrade the outlook for gdp, they cutting it in half because of the restrictions from 3% to 1.5%. it will be knocked down consequences of consumer spending, everything. haidi: our correspondent stephen engle there with the latest on the virus situation in hong kong. we are watching monetary policy as well. asian central banks in focus today as much for what they

don't do to what they do. our policy editor kathleen mays is here. we are talking about bank indonesia and are b.i.. kathleen: let's talk about boj, they are not expected to raise this, the governor of the bank indonesia sounded hawkish to people. it was saying they could let bond yields rise to support if needed, but subsequently made it clear that with inflation low he is not ready right now. but they said we've got to wait and see what the fed does, -- reserve bank of india, what are they not expected to do? they are not expected to raise the key rates. they are expected to raise their reverse repo rate, to 3.55%, holding steady. they just passed a big budget,

they don't want to mess with the rate and it sends signals that will push the yield higher and make it more expensive for the government to finance its big deficit. they're going to go with the reverse probate that will take liquidity out of the system and put a lid on inflation, which is tame. the bank of japan, traders are pushing, the head of the boj, to make it clear he will support yield curve control even if they don't elsewhere. yesterday, the boj did not come in, the 10 year yield is back down to 0.20 and was up to 0.21. they're going to wait. speaking of a hawkish tilt, it got deeper as big stories from our team in europe, more and more of the governors -- the board members are doubting the

inflation forecasts, like some of the staff economist at the federal reserve insist it will peak by the end of the year. but we heard from one of the board members today who said inflation will remain hyper longer than anticipated. they may have to recalibrate what they are thinking and the newest members of the ecb saying he thinks rate hike is possible by year end if it does not improve. to the hawkish tilt may be getting more hawkish, which is putting pressure on the boj and india in the bank of the tunisia today. haidi: kathleen hays, our global economic policy editor. it's good to vonnie quinn. vonnie: the boston fed has tapped susan collins to be the next president, the first black female to lead one of the central bank districts. she is the provost and executive

director of affairs at university of michigan and earned a doctorate in economics at m.i.t.. she will start july 1. the u.s. commerce chief says china will be held to account to -- for failing to meet price targets in the trade deal forged under former president trump. they said aging is not planed by the rules. china is more than one third short of its purchase commitments. this is in the midst of negotiations to correct the imbalance. >> american entrepreneurs and businesses can outcompete anyone if we have the level plainfield. what we saw in the data yesterday is china is not doing that. so we are going to hold them to account to live up to the commitment that they made, that they signed up for. vonnie: u.s. lawmakers say the progress iran is making with its nuclear program, even as talks

continue to cap efforts. they focused on how long it would take for iran to produce nuclear weapons and lawmakers from both parties expressed concern about the timeframe. it is not clear if the u.s. and tehran are close to resuscitating the accord. -- they are blocking the ambassador bridge. talks on going with several groups, in an effort to get them to leave voluntarily, the bank of canada says extended shutdown of this bridge because of protests could worsen supply-chain snarls. 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: let's take a look at some of the movers in the early part of the asia session, anp the embattled manager in australia.

upsides my comes to its stocks to the tune of free percent. they confirmed interest from at least one potential buyer, the management unit. they're reporting underlying profits for the full year coming in better than expectations and showing strong both. you're also watching energy names, ag oh in particular narrowing -- agl narrowing. the stock prices up about 25% year to date. you're also looking at a lender that also reported earnings today. still ahead, toymaker mattel says it is in growth mode after profit and sales. the ceo joins us later. plus chinese credit positions, snapping nine straight years of gains. a founder talks with us on how he plans to rebound on bloomberg wealth. this is bloomberg. ♪

shery: chinese shares continue to gain ground with investors reacting positively to signs of intervention by state backed funds. our next guest says this will detract compared to the u.s.. joining us is the ceo of mainstay capital management, david, great having you with us. there is a belief we have seen the floor for chinese stocks especially now that we have those so-called national team back in the markets. what do you think? david: i think we have.

we heard kathleen talk earlier in the show about what the asian central banks are doing or not right now. and that is one of the key is. the pboc has been stimulating the economy. they are in using mode -- easing mode at least until september when xi jinping comes up for reappointment. we compare and contrast to last year when there was a crackdown on industries. we have the real estate crisis that was led by evergrande and now we see that we have a runway for several months, a year or more, for a market that was down 25% of the last year. we see it relative price appreciation a lot of to u.s. shares, which we have the fed in tightening mode, european shares, ecb is now pivoting to tightening. we think there are a lot of catalysts for the trend

stockmarket. what about in the chinese market,-- shery: what about the a versus eight shares? david: one term we like in the u.s. is the fsx -- fxi. it focuses on large china company is and is done quite well in positive territory this year, that is what we like about the shares in china right now. they are rebounding over the past month and a half and we expect that to continue. haidi: david, when it comes to the property issue, that is still a drag when it comes to sentiments. is that something that has been managed well, that will continue

to cause concern for investors? david: i think there are three headwinds really for china as we look at it now. omicron being the most serious issue because of the policy that china takes about covid. we are seeing complete cities of one million or more people locked down. the number one issue currently. but we believe covid starts to fade more in the past and all countries will find ways to deal with that better. real estate, i think it has been largely -- it is still a potential headwind for china shares. so that and if we look at overall monetary policy and where we come from, we think we have longer way ahead for china shares. haidi: when it comes to the way forward for energy stocks, we

have seen outperformance already. does any pullback or repricing when it comes to crude suggest that we may have seen a peak or is there further to go? david: i think there is further to go. last year we were calling for $100 oil in early 2022. when you go back to late november and early december when they were trading in the high 60's, that seemed lofty. some were calling for it later this year. but when we look at the overall environment, inventories are continuing to tighten, demand continuing to increase and there are questions about opec capacity. they are increasing their targets month by month but they have shown over the past several months they are not meeting those production targets. so we think we see $100 per barrel oil early in the year. it is a matter of how far above that and how long we stay there.

with brent crude trading as high as the mid-90's just last week. haidi: always great to have you with us, the ceo of mainstay capital management. get a roundup of the stories you need to know to get your positions of daybreak. some scrubbers can go on the terminal and it is available on mobile in the app. you can also customize it so you just get news on the industries and assets that matter to you. this is bloomberg. ♪

shery: america is buying pilot freight services for nearly $1.7 billion. it spoke to bloomberg about the strategy of growing on land and higher margins. >> we have built in the last few

years quite and attractive and profitable growth in logistics, selling logistics product to our ocean products does clients. we are building out the -- clients. we are building out in particular when it comes to fulfillment, all of our clients that sold to consumers require a logistics chain that can help them keep their brick-and-mortar stores stocked also a channel strategy that can help them serve the consumer directly. we are putting together our logistics offering so we can do both for our customers. the freight services gives us further capabilities in that space and that's why we are acquiring the company. the way we will pay for it is to supercharge the growth of the company by selling the services to 10,000 customers. >> how is inflation in terms of

wages and the labor market, how is that affecting your cost of the company? >> it is reflecting or impacting our business and will certainly do so in 2022. we are impacted by the oil price, we spent the last year around $5 billion in fuel, so when it goes up it is a big ticket item. our cost is clearly going up and the same for labor and warehouses. so on one basis we are seeing costs go up and it will be with us for a while, particularly the cost associated with shipping where we have to pay higher prices for container ships and that will stay with us. haidi: the ceo speaking with

bloomberg. coming up, the mattel ceo says the company is in growth mode after completing its turnaround efforts. he joins us to talk about their earnings. this is bloomberg. ♪

haidi: we are tracking the fallout of the global supply chain crunch and these are our headlines. reports in los angeles expect u.s. supply chains to normalize after replenishing in the next quarter even if summer demand arrives sooner than usual. there will also see ocean freight coming down by the second half of the year. ford says it's this ugly plant is working on reduced schedule because of the furnished blockade. trucker process -- protest will have a widespread impact on

automakers in u.s. and canada. japan already sold out of production capacity for 2026. dutch surpassing supply for years to come. shery: bad news for coffee lovers like us, but it looks like futures continue to rise. we are talking about a tight supply, sending futures to the highest in 10 years. we might be getting more expensive coffee. the supply chain crunch coupled with dry weather in brazil, downgrading supply and stockpile levels show roasters are tapping into inventories to cover short-term demand. there is a lot of demand for coffee lovers like us. users can read more about the stories in our newsletter, supply lines. haidi: mattel reported

fourth-quarter quarter earnings that exceeded estimates buoyed by revenue from traditional toy brands like barbie and polly pocket. they also expect it to rise eight to 10%, let's bring in their ceo. great to have you with us. i look at barbie and polly pocket in the return of princesses and it is nostalgia all wrapped up in there. what was the key to the turnaround of the success and do you expect that to be maintained? ynon: this was another exceptional performance for mattel. we have continued to outpace the industry globally for the second consecutive year and in every measure we have had the highest annual growth rate in decades. the headline is our turnaround is complete. but that is in growth mode and

our strength is growth based. do expect to continue gaining market share and achieve strong growth in 22 and 23 and i'm not stopping there. haidi: what was the impact of the supply chain logistics and price related issues. if you see any impact on your business, do you expect that to go away going forward? ynon: we were impacted by global supply chain issues, it did impact our performance. but even with that we were able to outperform the market and continue growing. our strength is foundational, our supply chain is part of our core capabilities. we have developed a flexible model. we went more capitalized to give us more agility and we were able to work through the disruption across the of seven categories and in each of our brands, barbie, hot wheels, fisher-price

as well as american girl. shery: another big win for you guys was the rights to princesses. how are you going to leverage that? ynon: this was a big win for mattel. disney princess and frozen together are one of the crown jewels of the world disney company. -- walt disney committee. there is a wealth of characters and stories. it is important for three reasons, it scales our portfolio as a global leader in the dolls category. it adds another growth report for topline and profitability starting in 2023. and it is also symbolic, a sybilla gross milestone in our strategy, but it is important to say we do expect to grow the franchise from its current levels and leverage our capabilities, expertise and our proven track record in developing and growing evergreen

franchises. it will be a great addition and we are excited by the opportunity. shery: you have been forward-looking when it comes to the digital space. i remember you released those in fts and now we have the new buzz word over the metaverse. what does that mean as a company like mattel? do you see any opportunities in that space? ynon: absolutely, this is an exciting opportunity. we own one of the strongest catalogs of these franchises in the world. part of our strategy is to extend what we are doing in the toy side into other verticals that are adjacent to the toy industry, but driven by big franchises, big brands that have a built-in fan base with a lot of engagement. and the metaverse, and fts and

other digital experiences -- nfts and other digital experiences will create an opportunity for us to commercialize brands and entrances. it is driven by big rounds. we are in a great position to do that given the strength of our catalog. haidi: as you mentioned, the nfts, you had a big clog. do you expect this to be a big piece going forward? how much do you expect the digital space to be part of your overall revenue? ynon: mattel was the first toy company to launch nfts with three of our most iconic hot wheels cars in june. in the fall, another range of hot will nft collectibles with 17,000 trading card packs that sold out immediately. last month, we had the barbie nft collection.

this was another example of how we extend the experience for our consumers in the digital and physical space. for us the digital opportunity is an exciting part of what we do. growing our joint venture, mobile games are already doing well. we have two games fully launched out of the gates since we established it. there is more licensed sponsorships -- partnerships and still publishing, when we targeted platforms, all of which gives us an opportunity and a priority for mattel as part of our strategy to extend our brand beyond the toy aisle and extend our reach and touch as many consumers as possible all over the world. shery: you have lots of positive views, but what does this mean for shareholders in terms of dividend payout or share repurchases?

ynon: we have made important progress in strengthening our balance sheets. we are now a 2.6 leverage ratio, down from 25 just four years ago. we are close to achieving investment and credit metrics. we put out a strategy for capital and vocation -- allocation and priorities in the near term, with greater financial instability to manage our capital structure, invest in growth opportunities and is scale long-term shareholder value. we are not looking to offer dividends, we are looking to invest in growth opportunities, continue to pay down debt in order to improve our leverage further. we believe there will be opportunities to drive further growth and ultimately we will realize our share repurchases to

manage for our shareholders. haidi: in the transition into a content powerhouse, how much cost saving do you see that in that versus an acquisition route when it comes to producing content and do we expect more films? ynon: we are excited about the progress we're making on the content side both in film and television. we have a capital light strategy. we are not looking to -- we collaborate with the best creative partners, the best to sugars and producers. given the strength of our ip -- best producers. even the strength of our ip, we attract the best talent. already going into production, barbie will start principal photography in march and masters of the universe will start in

the summer this year. we also announced several shows we are developing for television and streaming platforms. in 2022 expect to have 13 series and specials that will be on air and another 20 in production, more than 25 in development. a lot of scale, a lot of opportunities for us to extend our brands and franchises and formats in film and television and continue to deepen our engagement with consumers. but important to say these are commercial verticals. we expect them to be commercially creative in addition to what we do on the toy side. shery: it is always good talking to you, thank you for joining

us, the ceo of mattel with his insights into earnings. let's get to vonnie quinn with headlines. vonnie: two fed officials say all options are on the table when it comes to the march meeting. atlanta fed president said policymakers are not locked in on the nest -- next rate hike and they will decide what is appropriate. his views are echoed by his cleveland counterpart. she added she does not see a compelling case for a 50 basis point hike. a growing number of ecb policy makers reducing inflation forecasting. they say the modeling is reliable, but sources say several governors are cautioning against over reliance on the projections in a changing environment. the projections will be prioritized at the meeting in march. hong kong urging residents who suspect they might be infected

with covid to avoid emergency rooms. cases topped four figures for the first time. they had a record of than 1100 infections wednesday, up from 625 a day earlier. hospitals are asking citizens to go to private doctors first. 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. shery: next, the hedge fund that sees nine years of gains coming to an end on its credit bed. the founder tells us how he plans to rebound in volatile markets. this is bloomberg. ♪

shery: this week we speak to the head of a prominent hedge fund in hong kong. benjamin manages over $4 billion. almost an 11% loss for his strategy last year, even with challenges posed by the highly leveraged chinese market. benjamin is with us, how have your positions changed and what do you like going forward? benjamin: thank you for having

me. happy chinese new year to everyone. a tough year in china, the second half last year, a lot of people have been on the ground for a long time that were caught on surprised -- cut by surprise i reg of tory action we saw in ecology, education and real estate. we think it has created fantastic opportunities for 2022. one interesting thing about the divergence with asia in the past six months is that the rest of the world has opened up and is starting to move beyond covid and thinking about how to live with that, and that is still ahead of us in asia. we are optimistic that we will see reopening in asia in the coming months as we go through 2022, and i think you will see asian markets will get a good benefit in the same way we saw from local markets as the economies reopened. i think that's going to be the key. shery: does that mean you are

adding to your positions given the opportunities you talked about, especially given we have seen a huge challenges in the chinese property sector as you mentioned? benjamin: yes, we are a multi-strat. we have a big volatility business, great with volatility. our focus if you look across our core strategies, convertible bonds, credit, volatility trading, there are a lot of opportunities in the other segments. in china, it is still definitely touch and go on with the regulatory front is and they are still pursuing the covid zero policy which is putting pressure on the real estate sector. so we would want to see i would say some change to that policy in china that could allow the real estate market to rebound more before you dive in and get bigger. but i'm optimistic on what we see on the ground. the headlines have been way worse than the reality and i

would say the market reaction, certainly the bond market you saw chinese high-yield bonds down 30 or 40% last year. those are overshot versus where the fundamentals are. haidi: how do you play the divergence between the monetary policy environment in the trading environment between china and the u.s.? benjamin: i think that will create a lot of what we call frictional disequilibrium and that is what a multi-strategy hedge fund thrives on. you took a step back, we must focus on what stock is going up and down but taking a vintage of the environment where there is confusion. we have seen more volatility out of the u.s. earlier this year, that has created great trading opportunities for us and this year will continue that divergence in monetary policy but also regular gas regulatory policy.

and as we look at asia probably all the way from new zealand to japan, in relation to covid we have seen strict lockdowns, people could not travel out of certain countries like australia, nobody is open for tourism, we are just starting to see that with australia saying we are going to open up. i think that divergence is going to cause significant outperformance in engine markets, both across credit and equity. we are looking to take it vantage of that. haidi: went rates volatility trading is where the opportunity is, i think that's what you are saying, what positioning are we talking about here? benjamin: i would say less, if you saw like this month we have seen spikes in the s&p, so long volatility positions and equity indices, one volatility positions in underlying stocks,

especially technology stocks, in the big stocks, alibaba, tencent, these companies, there has been a lot of opportunity, not so much -- which has been it's a vessel trotted -- strategy, trading on volatility and being able to hedge as stocks go up and down. that environment is definitely conducive for hedge fund type of business. haidi: one of the things that is surprising maybe not long-term china watchers, but debt related to the credit market, particularly with everything that has happened with property. does that tell you about the development of onshore and offshore credit markets in china, the risks involved and the associated opportunities if you are willing to swallow that risk? benjamin: that's a great question. short-term it has created a lot

of volatility downside and it has been painful for people that have been involved in china for 10 or 20 years and watching these markets develop. in the intermediate term, i think we are seeing the markets mature and part of that is going through down cycles and seeing how the systems and in the various companies deal with sector stress. in china real estate particularly, it was interesting just because it has mainly been ticked off by -- as opposed to fundamentals collapsing. we think there is still strong demand from the chinese middle class, strong wealth creation in china. they have been a big beneficiary -- when you look at the tech sector, what they're trying to do and try to -- in china 2025, china is trying to move forward in these areas and the global supply chain is getting more

dependent on china, not less. that is creating a lot of wealth locally. so while the macro numbers can be tricky, at the local level, i think there is a lot of wealth creation in china. that story has not changed. i think what you are seeing is a more dynamic resolution of some of these credit strains we are seeing then we may have seen maybe a decade ago where the system would not be set up to cope with the stress it is going under now. there are still things we don't know. we have not seen what will be the final resolution for bigger developers like evergrande, what the signs are positive in how the government will resolve those, similar to when the government got involved in 2008 and 2009 and sorting out financial issues in the u.s.. we are going through the tough times in that market but i think we are closer to the end of the stress than the beginning and i

think it is going to make the market more skeptical coming out. capital will be more rational and for people willing to do the hard work, they will stick to their guns and do your research in china, there is a ton of money to be made. haidi: benjamin, great to have you with us, benjamin fuchs, a ceo and cio. we have numbers, japan's placing price inflation, ppi rising higher than estimates. .6% month on month. also slightly higher than the .4% expected. : steady, that we are pointing out factory prices in japan, still highest in 40 years as you can see on the screen. we see the omicron outbreak in the country, having unbalanced impact on prices. apply chain constraints have probably boosted commodity prices as part of that but we also did see the effect of

weakened demand in the service sector that would have weighed on the final prices of goods. we continue to watch the yen as that gets pressured on risk on sentiment by u.s. consumers. more to come on daybreak asia, this is bloomberg. ♪

haidi: undertaking --

shery: samsung undertaking changes to take on apple. what is the strategy? >> it is two-pronged. one is the familiar iphone rivaling series which the company launched, and the other is vulnerable's. -- foldables. there average price is much lower than apple iphones so this is their push to get closer to apple and get into the premium segment. haidi: what is going on with foldables? >> as i said, they are the key for a cheater. samsung is replacing its galaxy note series which used to be its letter half of the year device with foldables, but today in the

new launch of the new series is for the first half of the year. haidi: the market opens in seoul and tokyo next. this is bloomberg. ♪

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>> welcome to "daybreak asia." >> asia's major markets have just opened for trade. asian shares set to ride with the tailwind of the best wall street session this month. the yield curve flattening ahead of key u.s. inflation data. hong kong covid cases top 1000 for the third time. a worsening outbreak crippling

health care facilities across the city. >> and don't miss our interview with northern star. tightening labor markets and strip -- strict virus rules. >> we are seeing real estate and materials leading gains on the nikkei while the topics is up 6%. japanese yen holding at the 150 level against the u.s. dollar. narrow trading this week. we continue to watch the bond space because the end here yield continues to hang around that six year high. the boj has refrained from stepping up bond purchases. we are watching that 0.25% level, given that that could be the threshold when the boj actually starts to act. when it comes to the producer price numbers earlier today we saw a gain of 0.6% month on month for japan, which came in higher than expectations. look at south korea, the kospi gaining 0.7%.

we have seen the korean won trading around a two-week high. it continues to extend gains, now below the 1200 level. we saw the december current-account surplus continuing to narrow, coming in at $6.06 billion. >> let's look at how we are seeing trading in australia. mostly a good picture. we are seeing leadership when it comes to tech stocks, up by over 3.5%. the biggest laggard being consumer space. we are seeing green shoots when it comes to energy and materials. we continue to see crude on the upside again. when it comes to the bond space we will see the end of the qe program here in australia, the reserve bank of australia less than 40% of government bonds on issue with that balance sheet tripling throughout the course of the program.

watching of course u.s. treasuries ahead of the key u.s. cpi. the 10 year holding. we are seeing more of a push higher when it comes to the oil realm. >> we have a reshuffle at the top of the british life insurer now saying the ceo mike wells will be retiring and mark fitzpatrick will become the interim group ceo. we are also seeing changes to james kerner, the chief risk and compliance officer becoming the group cfo as well. prudential now conducting a search for a ceo to be based in asia. big business across the region as their current ceo is set to retire and mark fitzpatrick becomes the interim ceo. >> back to the markets. our next guest says she is focusing on stocks that will benefit from rising rates, infrastructure spending, and

economic recovery. as discussed. -- let us discuss. it seems you are calling for those long-term structural changes. where in the region and which sectors are you seeing those winners? >> obviously we continue to be very positive on wealth creation within china. i think the other big market we have not necessarily discussed as much would be india. that is a market that is perhaps less battered by, for example, regulatory pressures or geopolitical tensions that a market like china has. the past week they released a budget that is going to prioritize growth. we do see certain sectors, select financial names will do quite well within that frame.

>> what do you see in terms of quality names, especially when we continue to see some valuation plays as well? >> i think as we mentioned, the has been quite a difficult balance to deal with. we have seen cost to value rotations. policy value rotations as well. growth and quality have been out-of-favor versus some of those names within the value space which are quality names that will grow in the longer term. you see within the tech space, you look at a company like samsung, it is not expensive at all for the kind of growth that it has. when we are able to find opportunities like this, that is what we will try to focus on a bit more. >> how bullish has the reports of the state fund, the national team in china coming in, to put a floor under volatility in

china? does that give you more confidence? >> yes, you are absolutely right. that data point comes through and has been quite encouraging for many people in the market. having said that, while valuations have come off to more palatable levels across many names, it is quite a tricky market to deal with because as we discussed before, they are facing many geopolitical tensions and regulatory pressures that have not really gone down. just this week we saw three chinese companies including the u.s., a sharp selloff on the back of that. even with some support domestically we cannot take our eyes off the ball here. >> we have heard a lot of analysts quite sanguine about the inflation risk that either the fed is going to recognize limitations when it comes to addressing and not be to

hawkish, or that these inflation ratings are going to start coming down. you are not quite so convinced this is the case. >> inflation has been a risk -- well, not just a risk. something that has pressured many companies and has been that way for quite some time now. companies try to restart. inflationary pressures will probably stay for a while. when we look at the current earnings season as well and see many of the companies that have reported, this is something we don't see going away at least in the next quarter or so. something investors do need to watch out for, from a margin pressure perspective when we think about inflation and rising material costs.

>> let's get to vonnie quinn who has our first word headlines. >> the u.s. commerce chief says china will be held to account for failing to meet purchase targets pledged in the trade deal forged under donald trump. beijing is not playing by the rules. data show china is more than one third short of its purchase commitments. trade representative katherine tai is in the midst of negotiations to correct the imbalance. >> american entrepreneurs and businesses can outcompete everybody if everybody plays by the same rules we have a level playing field. what you saw yesterday is china's not doing that. we absolutely are going to hold them to account, to the commitment that they signed up for. >> susan collins the first black female to lead one of the federal bank's 12 districts.

she earned a doctorate in economics from m.i.t.. she will replace eric rosengren. new york state is lifting a mask mandate for businesses, citing high inoculation rates and low covid transmission levels. the governor says local minas apologies can determine their own rules. face coverings will still be required in schools and health care facilities across the state. >> at this time we say it is the right decision to lift this mandate for indoor businesses and let counties, cities, and businesses make their own decisions on what they want to do with respect to mask or vaccination requirements. given the declining cases, the declining hospitalizations, that is what we feel comfortable to lift this in effect tomorrow. >> global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm vonnie quinn. this is bloomberg. >> still ahead, we will be speaking to northern star as the company grapples with a tightening labor market and strict border controls. next, a growing number of european central bank policymakers are losing face on inflation forecasting. we will be looking into central-bank decisions next. this is bloomberg. ♪ ♪

>> right now, it is unpleasant because the regime has shifted. people are getting used to it. not long ago central bankers were not going to raise rates at all. that is clearly off the table. normalization has begun, so the market is trying to find its way. as we have seen, that can be pretty unpleasant. i think we're going to have volatility perhaps for a while, but at the end of the day i continue to believe firmly that this cycle will be muted relative to a normal monetary policy. >> the blackrock vice chairman. taking a look at bond markets across asia as we continue to watch this bond rout globally. a little but of calm when it comes to the 10 year yield in australia.

we are seeing it just that to 118 at the moment. we have seen four days of declines when it comes to bonds. we are watching for any development out of japan as we see pressure on the yen, but risk off sentiment ahead of u.s. inflation, and of course concerns over the target and how the bank of japan is going to manage that. we have seen the bank of japan being tested when it comes to their commitment to extraordinary monetary policies with that conviction around the world that we will see inflation and rates jump around the world even in japan. we have seen that upticks in producer price inflation as well. as we await the big -- taking a look at what we are seeing at the moment. >> interesting chart to show you ahead of inflation numbers. we are looking at the relationship between the 10 year

yield and u.s. core cpi. yields should follow inflation higher but that has not been the case since april 1 price pressure began rising to decade highs. the u.s. ten-year has barely responded. with inflation set to rise further, we may very well see an even bigger breakdown. terminal users can plot this relationship using hra go. let's get more on that inflation price with garfield reynolds. bloomberg also reporting that a growing number of officials at the ecb are losing faith in their own inflation forecast as we await the u.s. as well. there is a lot of conflicting views when it comes to inflation around the world right now. >> the difficulty investors at central banks are having -- and central bankers are having is we are facing this whiplash from what the pandemic did to the global economy.

the global economy was quite dislocated before covid by the u.s.-china trade wars. then you have a situation where even after jay powell and others have dropped the talk of inflation being transitory, everyone expects some sort of a transitory nature. we are not going to have 7% cpi. central bankers will act and the expectation is that rate hikes will help to cool the economy. so balancing between those -- you know, hard -- that rock and a hard place for central bankers is part of why bonds have been very volatile and yields are to the upside.

>> when we look around asian central banks, you look at the likes of the rbi, what they are doing or what they are wrapping up in australia. >> australia's going to conclude qe purchases. it's going to buy 1.6 government securities and that will be the final bit of qe. the question going forward than is wind they move to actually raise interest rates? they and a lot of asian central banks are very reluctant to end up front running what the fed and other central banks do. australia did lead the way out of the global financial crisis in 2010, 2009, and it paid a heavy price for that. that is part of why today's cpi is so key for those central

banks. they want to see where the fed is going to go before they start motoring on removing -- actually raising interest rates rather than simply duplicating stimulus efforts. >> a nobel laureate and columbia economics professor says raising rates will slow the economy and negatively impact the jobs market. he spoke to bloomberg about the idea of a one time tax on corporations. he said that could help americans who struggle during the pandemic. >> americans were living hand to mouth. money that was going to them just enabled them to get by. people at the top were making literally billions and billions of dollars. one of the things in the article

that you mentioned i advocate is we are going through a very tough time. prices are going up. it is hard for those at the bottom and the middle. why do we have an excess profit tax on businesses that have done very well during the pandemic and use the revenue for that to help those who are really struggling? a one time tax, a pandemic inflation adjustment tax. >> america has moved on from that kind of like which to love of the individual. let's say you can't get through an excess profits tax area what is the second best thing to do? >> i can tell you what the second-best thing not to do is. it is not a good thing to raise interest rates to kill the economy in order to beat what is

still moderate inflation. you look at inflation numbers, they are all distorted by a huge increase in the energy price. that's not going to continue. the price of oil went from below normal levels because of the pandemic to more normal levels. it is not going to go to stratospheric levels. and car prices. we know how to make cars, but it is a shortage of chips. >> is an important distinction within what you are saying which is as you look toward the fed and the way they should handle policy, they should continue to rely on fiscal policy makers to try to help the lower class, but that their policies are more helpful for lower income individuals than they are harmful in terms of widening the

gap, fueling market gains that led to the bigger dispersion between the wealthy and the poor. can you explain that? a lot of people view the fed is the instrument of widening this wealth disparity. >> the fed, whatever it does has this effect. it tries to pretend it is absolute neutral, but what it does has big distributional effects. when it lowered the interest rate, as it did in the great recession of 2008, the gainers were those in equity markets. the losers included those elderly people who put their money in tebow's. the return they got went to zip. owners of equity overwhelmingly the upper 1%, they did very

well. at the current juncture, if you raise interest rates, it will slow down the economy and the first order impact is going to be on unemployment. people who might otherwise have jobs will not get them. >> joseph stiglitz speaking with bloomberg. over in japan we are seeing honda surging more than 6%. this would be the biggest gain since november of 2020. this after their operating profits beat estimates. they also filed strong earnings from other japanese automakers. we are seeing big gains for a major auto chip supplier. profit did miss estimates. chip orders fully booked through 2026. that sector continues to really get a boost given the semiconductor shortage.

coming up next, our interview with disney ceo bob chapek as stocks surge following positive earnings boosted by themepark performance and subscriber growth. detailed ahead. this is bloomberg. ♪

>> a quick check of the latest business flash headlines. uber revenue rose 83% in the fourth quarter. beating estimates. amongst active users across the ride-hailing food delivery and freight services, an all-time high. delivery gains helped offset disruptions from omicron. but uber offered a tempered forecast because of the pandemic. china evergrande's ceo in the

early month of the developers debt crisis. evergrande told the hong kong stock exchange the notes were sold in late july and early august as prices of about 36 to $.52 on the dollar. some of those notes now trade at about $.10. hsbc is building its business of financing hedge funds as it looks to boost growth in its asian wealth position. the expansion will focus on catering to western clients that are increasingly looking for investment opportunities in asia . hsbc plans to hire more staff and invest in technology. sources tell us a french telco has offered around $12.6 billion for vodafone's italian unit. the ceo says the company was

looking for merger opportunities across europe. sources say vodafone is keen to help consolidate the italian wireless market but it is unclear whether it will accept the bid. nasa is warning that spacex's star link satellite fleet could put the international space station at risk. crowding in low-earth orbit would impact ground-based systems and that could also add to efforts to watch for that hamper efforts to watch for asteroid strikes. >> let's look at one of the big movers we are watching in the korean session. samsung is on the move. change to its smartphone strategy. we are seeing upside for the heavily weighted stock. we are hearing there is a $100 billion cash move fueling m&a talks. certainly when it comes to the

phone line up, we are hearing the latest generation of its smartphone family and the largest tablet upgrade yet. lots of changes with investors digesting and feeling positive. next we take a look at

>> northern star has reported results for the first half with income rising. take a look at underlying net profit. that came in below expectations. the bond buyer facing a tight labor market and stricter virus measures. we are joined by the managing director and cio at northern star. we appreciate your time with us on earnings day. talk us through the mixed picture and how the impact of some of these pandemic

restrictions, supply chain issues, and of course the labor market really kind of weighed on the bottom line. >> thanks for having me. all those things play into the constraints and challenges faced by the sector. i'm very pleased to be publishing first half results in earnings that 430 million and we are very well poised for a stronger second half as we grow productions. both things are real. the constraints on labor in western australia particularly given the border and restrictions, but they are being relaxed. mobility is improving. the has also added to cost pressures in the forward plans for a lot of businesses. >> do you expect more m&a in the sector? where do you think we are at when it comes to the investment and acquisitions we see in the cycle? >> you have seen some consolidation, particularly across north america. it is important, recognizing

what is driving that. northern star is well-positioned in regard to our reserves and resources. growth comes from organic operations. m&a is not necessary to continually build and grow the business. we still will continually look at the opportunities. you will always see some element of m&a getting into why is that occurring under what circumstances. >> what about investment in people? we continue to see labor shortages. whether it is the u.s. or western australia. >> it has been tough. the sector generally across all commodities would already have had a head start in framing and

development of new employees into the sector. but because the last couple years, the typical imports to supplement the labor call have not been there. there has been a lot of rubbing between businesses. added cost pressure in the labor we continue to stick to. internationally, mobility of staff, we have still been able to move between the u.s. and australia. >> are you putting also efforts in replacing workplace culture? we had that scathing report from rio tinto as well. >> that was very transparent, those findings. it is useful for everyone to see the benchmark and the full layout. things that in society people value generally.

we also invest heavily on inclusive environments, and try to address and improve proactively as opposed to when things go poorly. i commend the sector for stepping up and addressing this. no one likes to hear or read those things, but it is important. >> right. what about when it comes to the overall industry itself? we continue to see gold prices rallying. is this an opportunity for you to do more? >> yes. you have seen that across the process, but market consensus

still has a strong outlook in regard to gold equities. prices are still very sound and solid. producers are generating significant cash flows. we can fund exploration. we can continually build cash on balance sheets with a cash positions. -- net cash positions. for our business generally, it has been under significant cost pressure. >> rio tinto's report into workplace culture was a damning one and it adds to the toxic nature of a lot of these workplace practices and cultural issues that afflict mining in particular. is this something you are actively trying to address as well? are there policies in place to

try to improve that side of the business? >> absolutely. one of the largest challenges is the large percentage of the workforce. it is typically around 80% male-dominated. investment and effort in educating acceptable behaviors and those things -- and it is not just sexual harassment. it is just generally. the inclusive environment, we have invested heavily over the years to do that. part of northern star's culture is investing in that. hearing from teams, addressing those things early, and again, i commend rio forgetting that external review, also sharing the findings to make sure that flows across the sector for everybody. >> stuart tonkin.

we are talking about gold pricing. right now holding steady, but this after rising to a two-week high. it is acting as an inflation hedge. we have seen a massive rally when it comes to silver platinum, futures as well at the moment under a little bit of pressure. >> china renewing its campaign to keep commodity markets in check as the government tries to prevent raw material prices from overheating. let's bring bloomberg oil editor andrew james. why have iron ore prices been surging and what are chinese authorities doing with the rally? >> a bit of context on iron ore. it is down a lot the second half of last year. prices started picking up from mid-november. that is mainly due to monetary easing by china, infrastructure

spending pledges, and a bit of a relaxation on targets, environmental targets, to curb oil production. authorities are concerned prices are too high. officials on wednesday talk about price disclosures. prices dropped wednesday. they went up again today. many ways, iron ore kind of symbolizes or highlights the balancing act that china has got here. on the one hand, it wants to stimulate a slowing economy. on the other hand, it is very mindful of the inflation rate. >> there is also the property piece as well. has that had an impact on a long-term outlook for steel, copper, aluminum, so many industrial commodities that are linked to property demand and

construction demand? >> it has been sort of a dampener on prices for a range of metals in the second half of last year, the second week started. the outlook for this year is not good. property is very important in china. it accounts for a third of chinese fuel demand and 20% of the demand for copper, aluminum, and zinc. property sales and prices are expected to drop again this year. fuel might be harder hit -- than other metals. developers are expected to focus on completion, which focuses on metals rather than new landor or new projects. -- new land or new projects. the outlook is better as infrastructure spending comes in . in the five-year plan, there are

electricity networks, transport, green energy projects. a lot of those are using things like copper, aluminum, so forth. >> hong kong's covid response is under pressure. cases are surging. hospitals say they are overwhelmed. we get you the latest ahead.

>> walt disney posted earnings ahead of analyst estimates. the entertainment giant got a boost from theme parks and new subscriptions to disney plus streaming service. we spoke with see po -- ceo bob chapek on the jump in new users. >> it is almost directly a function of the new content flowing into the service. that content was impeded and made a little choppy even more by the fact that we had covid and it interrupted our production cycles. but as we stated last earnings and this earnings as well, the flow becomes a little more steady, more predictable, more optimal during the second half of this year, and we expect that we are going to have more subs

in the second half of the year than the first half. it will still be choppy or -- choppier then a perfect linear line but when you have great storytelling and brands like we do, it is going to draw a lot of people across the globe. >> i want to talk about parks. you hit all-time records with revenue. but attendance is still lower or is in-line depending on the park you are talking about. what is the outlook ahead as omicron wanes? are you repairing for new variants? is all about revenue? >> we are preparing for anything. the if the last two years have taught us anything it is to remain flexible. if we have a focus on our guests, we believe it is going to turn out just fine. one of the reasons we have had such recovery in demand and attendance at our parks is a function of the fact that

consumers, our fans trust us. not only do we deliver great experiences and tell great stories, but they trust us. we are going to move slowly when it comes to attendance increases because we feel we want to be very responsible. >> disney is getting into the metaverse. i wonder if you can give us more details on your vision. how can disney offer products that fit into this? is it about lucasfilm? industrial light and magic? paint the picture. >> it is all of those things. if you step back from it, regardless of what you want to call it, we believe there is a world where we can have a third dimension of storytelling. i call it a three-dimensional campus. we can take folks that make our great television shows and make great music and make great movies and great theme park attractions and what happens if you enable them, you give them the degrees of freedom to paint on that third dimension and do not constrain it with typical

definitions about what is a book, what is a recording, what is a movie, you let them explore and use the physical world and disney's uniquely postured to create in our theme parks, but also take virtual pieces and use disney plus as an opportunity to take those things together so we can tell stories in the third dimension. it is great opportunity for us, it is the great next horizon for disney. the next route horizon in entertainment. >> disney bob chapek. let's get you to vonnie quinn. >> a growing number of european central bank policy makers be losing face on forecasting. philip lane is defending the bank's projections saying modeling is reliable. sources say several governors

are cautioning against overreliance on the projections in a quick changing environment. new inflation estimates will be prioritized at the meeting in march. the united kingdom is putting more troops on standby to support nato. government officials say 1000 soldiers will support military response in the region should it be needed. boris johnson is set to meet with the u.n. secretary general -- the nato secretary-general. u.s. lawmakers say they are stunned by the progress iran is making with its nuclear program, even as talks go on in vienna. a capitol hill briefing focused on how long it would take for iran to produce a nuclear weapon. afterwards lawmakers from both parties expressed concern about the timeframe. it is not clear if the u.s. and tehran are close to a nuclear record.

the protests blocking traffic from detroit into canada could drag on. police say they prefer to negotiate instead of telling away vehicles blocking the bridge. talks are ongoing with several groups protesting mask mandates in an effort to get them to leave voluntarily. the bank of canada has warned an extended shutdown could hurt the economy and worse and supply chain snarls -- worsen supply chain snarls. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> hong kong's health is ours as emergency services are overwhelmed as covid cases surge as the territory reported its first step in five months. -- first death in five months. we know how quickly things change when it comes to omicron.

how does this play out? >> is not looking good. cases doubling within a matter of days. then again, more than 1000 cases yesterday are expecting numbers around that again today. we had the first covid death for five months in hong kong. it is all pointing to this being a crisis point, particularly if they are still targeting raining this in -- reining this in and bringing it under control china style. which is their plan. they are still targeting the elimination strategy. to me, i think they will keep trying to bring it under control, but without the sort of authoritarian measures that china can deploy, you know, very

hard-core lockdowns, more control over the population, it is going to be difficult in a very dense place like hong kong to put omicron back in the bag. >> one strategy was quick, mass testing. how is that going? >> we are seeing them rolling that out. it is something china pioneered. it is a very successful way to find chains of transmission you might have overlooked than the past. we saw them issue a mass testing order for ex-pat enclaves in hong kong yesterday. out of some 20,000 people lining up to get those tests, we think it will last about a week and they will be tested twice trying to reduce cases. they will issue orders for other

cases as well. they tend to focus on housing complexes in the past. the remit has been outbreak accelerating. >> what is the situation outside hong kong at the moment? >> it is really interesting you still have outliers of china and hong kong targeting elimination, keeping borders closed, really trying to stick to that 2020 if you like a book of reining in covid. you have an in outbreak that came a little bit out of nowhere but is by no means big in china, in southern china where they have moved straight to a lockdown, not really politically or practically possible in hong kong. but elsewhere in asia, you are seeing much more living with the virus, by korea for example, saying a huge number of cases every day, almost 50,000 today.

but deaths have been going down, under 30 today. one of the highest vaccination rates in asia. a really high booster rate as well. quite a similar situation in singapore. cases up again, but deaths under control because of the higher vaccination rates. that is some thing we are seeing in southeast asia but without high vaccination rates there are more for tallies -- fatalities and more cases. >> china's credit market starting the new year with a fresh bout of -- and fear of hidden deaths. this is bloomberg. ♪

>> china's credit markets are ushering in the new year with a fresh bout of stress, this time with concerns of hidden debt. bloomberg's latest china credit tracker shows stress levels onshore and offshore debts remaining at the same level as december with you on bonds at the highest reading -- yuan bonds at the highest reading. this ahead of earnings season in china. >> absolutely. we are still seeing very elevated levels of stress in the offshore market. we have seen concerns about hidden debt.

researching with a vengeance, continuing through february. one of the key factors as logan group, which has repeatedly denied having private debt guarantees, with other media reporting and identifying private debt guarantees. that has really weighed on the bond prices. it also spilled over into the broader universe of property bonds. also last month, property firms are going to open the book since the liquidity crisis began. we saw this spate of resignations from auditors, and the concern is that may continue to pick up. we may suffer an exodus ahead of earnings and that could lead to delays or could reveal hidden risks that investors previously had not been aware about. >> what are we expecting in terms of more government measures to try to contain further fallout?

>> the sentiment around that ultimately is rather fragile. we saw that lifting of close to some property firms. of course, the bulk of private developers don't benefit. that puts the social agenda and the common prosperity agenda at the heart of all the policy crackdown we have seen on real estate. ultimately this is about making sure sales and homes are more affordable for the average chinese citizen. if you are a distressed developer, it is not going to help. rather than being a signal of easing, we are seeing a fine tuning focused around this initial ambition, this type of campaign. >> coming up we will be discussing hong kong's first covid fatalities in nearly half a year.

that is it for "daybreak asia -- "daybreak asia." the china open his next. this is bloomberg. ♪

>> it is 9:00 a.m. in hong kong, beijing, and shanghai. welcome to "the china open." >> our top story this morning, markets await key inflation data out of the u.s. that could shave the fed's rate hike timeline. plus, the u.s. commerce

secretary tells