>> very good morning. i am haidi stroud-watts in sydney. >> i am shery ahn in new york. welcome to daybreak asia. a choppy session on wall street, yields jumped as traders waved to the fed and geopolitics. concerns that russian talks should go on despite warnings

and attack is imminent. and, the head of the impact airline's association. >> let's get you to the start of trading in sydney. we are expecting a volatile albeit cautious session ahead. there were a lot of swings with the interpretation of that ukraine tweet. diplomacy at least from moscow settling some nerves. we see that in the bond markets. bonds opened lower. treasuries fell after we heard russia indicating it would continue to talk when it comes to the situation in ukraine. taking a look at the open, big earnings. bhp coming out and impressing the market. asx 200 opening zero point 1%.

new zealand stocks paring gains, up 0.1%. interesting property asking prices jumping to a record high in january. chicago nikkei, japan gdp higher. we expect a robust recovery in the japanese economy after that fed emergency. >> take a look at futures trading. s&p and nasdaq 100 futures slightly pointing upwards. this after a volatile session in new york similar to what happened last week with that sharp risk off shift. we had market swings after comments from the ukrainian leader. futures are open because yields are led higher with the 10 year surpassing the 198 level. crude prices rebirthing earlier gains. new york topped $99 a barrel

since -- for the first time since 2014. russia signaling the talks will continue to ease tensions over ukraine, countering u.s. warnings and attack may be imminent. markets were spooked further when ukraine's president made what his office calls a sarcastic comment. let's get the latest from our reporter, emily. what do we know about how russia is hoping to deal with the situation in the coming days? emily: there are high tensions all around. russia has taken additional steps with the narrative they are not planning on invading ukraine, are winding down military exercises. putin is meeting with top officials and having discussions about the area. this is an area russia has tried to push from the beginning, that

they were never going to invade the ukraine. the u.s. saying they have intelligence that russia could invade ukraine at any time and has sent warning signals to those in the country as well as temporarily relocating their embassy from kyiv to somewhere farther away from russia. definitely mixed messages today. with the now reportedly sarcastic comment about an invasion within this week. >> what is the intelligence we have when it comes to the military presence and build up and how long that could stay around? emily: as far as u.s. troops in the region, the u.s. has said several thousand troops. none of them are in ukraine. they are within other nato allies. we are talking about trips, but also sanctions.

what sanctions if any should be levied against russia. there was discussion about north korea, too. a sticking point not just between democrats and republicans in the u.s., but between germany and the u.s. there is no idea what the repercussions will be. lawmakers have been trying to put in legislation for weeks, but have not come to an agreement. they want to impose sanctions now and not wait for putin to invade ukraine. they want to send a message this buildup along the border is not acceptable and they want putin to feel pain for it. >> that was emily wilkins with the latest on ukraine. when it comes to monetary policy, the fed prepares for a rate left off. on how aggressive we can move, kathleen hays is here with her latest remarks.

we heard again from the st. louis fed president. what is he saying? kathleen: he told bloomberg news last week that steve matthews got him to talk about what he sees. he says he wants to see 100 basis points of rate hikes by early july. that would mean 150 basis points over the next three meetings. he says i do think today -- let me express he is talk into cnbc in an interview. i think we need to frontload more our planned removal of accommodation than we would have previously. our credibility is on the line, it is not under control. we have to react to data. the 7.5% year-over-year increase in the cpi. he said the fed can remove accommodation in a way that is not disruptive to markets.

the volatility of markets already, especially after the recent remarks. a lot of worry about the fed doing much in the economy. they want to normalize policy. he does not sound like he wants to go too fast. recent readings show it is distant. i think it is time to get back to pre-pandemic levels. does not sound like a 50 basis point hike does it. the amount will be determined by what inflation does or does not do. the fed of kansas city is ready to raise rates. she said it is always preferable to go gradual. given where we are, uncertainties around the pandemic, i would be hard-pressed to say we have to get to neutral fast. she is echoing other fed officials. she is talking about the fed starting to look at not just running off their balance sheet,

but selling securities. you quantitative ease when you sell a bond, quantitative tighten when you buy them. it could be done not only to help fight inflation, but managed short-term rates, long-term rates. we are talking every day about the flattening of the yield curve. probably a big topic at the fed meeting in march. >> kathleen hays, with the latest. let's get you to vonnie quinn with the first word headlines. >> ecb president christine lagarde insist there is no rush in the region. she highlighted the limits of the bank powers with volatile prices, saying it needs to be open about what is feasible. lagarde turned more hawkish, rolling out an interest rate hike in 2022. >> in view of the certain uncertainty, we need to maintain

flexibility and optionality. we are always data dependent. >> justin trudeau has a sweeping emergency powers in an effort to quell anti-vaccine protest. trudeau says the federal government is jumping in. the government is seeking to choke off the protests to cover -- cryptocurrency platforms. -- believes the nuclear accord with iran is in sight and wants to revive the deal. he tweeted comments after a phone call with iran's foreign minister who told reporters he was in a hurry to revive the accord to allow iran to return to global oil markets in return for curbing activity.

hong kong topped 10,000 for the first time, throwing the zero covid push into disarray. 4500 preliminary infections. authorities say thousands are waiting to be admitted to hong kong. there is a backlog at testing facilities. 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. haidi: let's take a look at bhp. how investors will be responding. a robust set of results. we are seeing an upside of 2%. this as we see the stock trading at a seven month high. it is up over 17% year to date. profit dipping 3% compared to the prior half. saying its discipline and a

strong performance helped whether the drop in oil prices and boosting dividends by 50%. lots to talk about when it comes to the dividend of $1.50 per share, and whether more m&a could be in the works. china's demand for iron ore should moderate to lower in the medium-term, when it comes to crude steel production. still ahead, the head of asia-pacific airlines shows us to talk about how omicron is impacting travel across the region. and, thornburg investment talks about funding asian equities. this is bloomberg. ♪

>> global investors have been ramping up expectations for more aggressive fed hikes to combat raging inflation. look at this chart showing market expectations for a cut are pulled forward. signaling the fed may reduce rates between december 2023 and march 2024. these shifting expectations as the likes of j.p. morgan say markets may be overpricing. our next guest says it the fed tightens too much, in a recession in -- then a recession in 2023 is likely. really great to have you with us. we appreciate your time. looking at the chart i had up before, that makes sense. with these hawkish expectations

you pull forward concerns when they need to start using conditions again. combining that with the flattening curve, is there a legitimate concern of a policy misstep? >> there absolutely is. one of the biggest challenges of the fed, they truly believe inflation is transitory in nature. the challenge is, it is no longer willing to call it transitory because it becomes a political concern for the fed. the fed is a political organization. biden has taken away the ability to sit and wait and watch inflation come down naturally. the question about that chart, do we were is -- reach above neutral before inflation proves to be transitory? that is a concern markets are that if the federal reserve becomes more hawkish and is forced to raise rates, they are forcing into an already slowing economy and that brings with it a slow down and repricing of

earnings. >> in this uncertain environment, where are you finding opportunities? our previous guest said it seems they are heading to china as a safe haven which is an unusual framework to think about. >> in the fixed income markets, the biggest opportunity is to pair back risk broadly. you talked about potential curve inversion. we have seen it among 0.7%. we are really close on 0.5%. the cost to pullback potential volatility is not high. that is what we at thornburg are recommending to investors. remind yourselves what the outcome is supposed to be. bond funds are meant to be preservation of capital, meant to be stability. there is a lot of opportunity to

pare back. it does not cost a lot while the fed gets back on the right sidelines. >> you talk about the political nature of the federal reserve. the markets are expecting faster tightening. with the fed advocating for transparency, predictability, can it veer off sharply from what markets are expecting? jeff: central banks will be data-dependent. the fed does not have two mandates, it has a third. we talk about price stability and maximum deployment, but the third is moderate long-term interest rates. the fed has used this to talk about financial stability and ensuring the recovery reaches all levels of the spectrum. one thing markets are not correctly discounting, if

inflation proves to be less than perfectly transitory, we are at a higher level of inflation, but not problematically higher. if it does not result in the lower income population earning more than usual, the fed might call that good inflation. systematically undershot their objective for some time. i think they are willing to systematically overshoot it. the fed might be more patient than markets are expecting and stopping at a slower rate as inflation goes down. shery-anh: our markets correctly pricing in the ukraine-russia tensions with oil prices and inflationary concerns? jeff: all of these act as a natural break on the economy. prices rise and that translates to a lower propensity for the consumer to spend on other goods and services. the challenge comes in the

multitude of tweets as we have seen today. nobody knows the timing. there is a full-scale invasion of ukraine, that would be challenging on financial markets . we have not seen a full-scale invasion of this magnitude in many decades. the primary way we would fight this is through financial sanctions, which would bleed through financial economies, perhaps more than traditional war. shery-anh: when it comes to being able to hedge against that kind of risk, what would you be advising? given there is a great deal of uncertainty as to how this plays out. jeff: as we watch the markets unfold, watching the growth value dynamic inequities is interesting. a guest earlier was talking about that. it tends to be that prices file earnings revisions. the company we are seeing revisions out of tend to be

value-based. we saw that with reports today. a couple companies we like that we think they have a ways to go, but there are hedges among high multiple stocks. one we are watching is cme group. they act as a natural hedge, with people looking for ways to hedge volatility. it filters into their earnings. as well as focusing on the u.s. consumers still benefiting, albeit less so, but benefits from the high stimulus payments. shery-anh: jeff, it was good having you on. from thornburg investment management with his views of the market. you can get around up of information to get your day going in daybreak. you can customize your settings only get the news on industries and assets you care about. this is bloomberg. ♪

>> we are counting down to the start of trade in tokyo and seoul. in japan we watch for fourth-quarter gdp numbers coming in in half an hour. consensus forecast is a return to growth in quarter on quarter data. there'll be an appearance in parliament the top of the next hour. we will watch for comments on yield curve control. kioxia and investor bank capital plans ipo instead of a sale to a foreign buyer. investors will also be monitoring earnings from asahi, toyo tire and others.

in south korea the ruling democratic party will continue on the extra budget vote after the opposition party demanded more financial support for merchants, according to reports. investors making a big bet on korean chipmakers. south korea etf picked up $418 million in inflows for the week ending february 11. videogame earnings, some topping estimates. haidi: let's take a look at the's nest flash headlines. bloomberg has learned intel is closing in on a $5 billion deal. the reported move is part of their push into the outsource chip manufacturing business. as much as 58% in u.s. trade. they compete with tsem, but are much smaller.

77% to just over $10 billion. the miner mentioned -- announced a dividend. bhp expects supply chain issues to remain challenging in 2022. they see china-related headwinds easing. airbus expects booming demand for planes in the asia-pacific region as travel rebounds from the pandemic. the plane says the region will need more than 17,000 aircraft over the next few decades. airbus sees china as a main growth driver with india and vietnam also emerging as hotspots. >> the singapore air show is back after a two year hiatus forced by the pandemic. let's bring in haslinda amin for a preview. please set the scene.

haslinda: the upside is that 2022 is happening. it is a physical event with people meeting in person. the downside, it is much smaller scale compared to previous levels. we have 13,000 participants. at the outset of the pandemic two years ago we saw participation of 30,000 and before that, 50,000 people. it is a scaled-down event. it is important to host this event. it is a platform for executives to discuss how to navigate out of the pandemic, how to ensure travel returns. it is the right platform to discuss key issues like sustainability. the aviation industry accounts for 2% of carbon emissions, but 12% of all transport emissions. it is important to look ahead

that travel becomes more green. airbus have talked about how they are looking at zero emissions by 2035, but we are not there yet. we are limited by technology like batteries for instance. it is important to have such events slowly open up to make sure people meet and talk. shery-anh: things are changing quickly. what are you hearing about the outlook for the recovery? haslinda: recovery is expected to be uneven. asia, europe, we have seen how airlines in europe and the u.s. have talked about getting to pre-pandemic levels. not so in asia. there has been a great divergence. take a look at where we are in hong kong, still practicing zero

covid policies. in singapore as well. things are looking pretty uneven. shery-anh: haslinda amin at the singapore air show. folks will be joining us from the sidelines later this yep, it's go time on the most reliable network. you get unlimited for just $30 bucks. nice! but mine has 5g included. yep, even these guys get it. and the icing on the cake? saving up to $400 bucks? exactly! xfinity mobile. it's wireless that does it all and saves a lot. get the new samsung galaxy s22 series on xfinity mobile. and right now, save big with up to $750 off a new samsung device. switch today.

>> the ukraine-russian tensions, we don't know how far that goes. >> the russia-ukraine headline. >> it creates a dynamic in the market. >> it has increased uncertainty and volatility. >> there is not enough conviction, hedging ability, against to manage -- mitigance to manage risk. >> these are tumultuous weeks.

this will go down in the hall of fame. shery-anh: our gas on the ongoing russia-ukraine tensions. growing geopolitical worries have an impact on oil prices. futures above $95 for the first time since 2019. brent crude at $96. su keenan has more. su: a bit of a break in this rally as asia trading gets underway. west texas intermediate posting above the $95 mark, the first time since 2014. falling back about 0.5% as trading gets underway. it shows volatility is at its peak. brent crude also inching closer to $100. which is now the consensus among

all oil analysts and major banks. the market spooked by the sarcastic comment from a ukraine official about the rest of the world, supposedly predicting a date for russian attack, which russia has repeatedly denied and all news organizations have reported they denied it. nonetheless, the uncertainty is pushing risk higher. a head of commodities research at citigroup says he sees oil perhaps going as much as 10% higher if russian troops were to mobilize and the ukrainian capital is involved. he remains bearish on oil. even if it goes to $100, a key reason he believes there will not be interruption or military action from the flow of oil and natural gas in and out of

russia, he says both russia and european allies of the u.s. penned economically on that trade. he expects it to continue and therefore, the long-term supply-demand issue will stay the same. he also believes opec-plus's projections of 400,000 barrels a day is a fiction. he says there is no structural change for the market though others may disagree. shery-anh: we are seeing big moves in gold and natural gas. what is driving the price? su: ukraine. let's look at the bloomberg. breaking out of its recent range, even though many will tell you the fed's hawkish stance, sharp increases in rates likely will bring gold back down. it is now attracting many as a haven site. natural gas shooting upwards at one point better than 6% in new

york trading. that perhaps one of the issues spurring the bite and white house to announce in a recent press conference that they are in contact with natural gas suppliers and other nations to ensure there is a steady flow of natural gas and to avoid or mitigate against price shocks while these tensions on the russia-ukraine border remain. shery-anh: su keenan with the latest on the commodities space. let's get more on ukraine. earlier we heard from leon panetta who said unity between the u.s. and nato allies is key to keeping russia in check. >> putin's strategy has been disrupted. he operates by power. that is how he gets things done. he usually uses that power in the dark. what is happening is that a lot

of his moves have been made public by intelligence sources and others. the unity of the u.s. and our allies and the price that will be paid if he does invade, all of that has disrupted his strategy. he still is intent on trying to get some effort to improve his security. that is the goal. he is not going to get nato to back off. the question will be, if he is willing to accept something less that will provide for the security of russia and nato, whether he is willing to call that a win and walk away. that will be the issue to look at the next few days. >> from your expertise and background, give us a sense of one important issue. the precipitating event was 130,000 troops moved toward the border of ukraine, including in

belarus. how long can putin keep those in place? you cannot keep them there forever, presumably. >> this is a dangerous moment, no question. we have the largest concentration of forces taking place in that area since probably world war ii, between what the russians are doing and nato. this is a huge concentration of forces. the more you have this concentration, the more you build it up, the more there is a chance a mistake can be made of a wrong move that could explode the situation. when you put troops on the front lines and when they are armed for battle and prepared for battle, they can only maintain that for a certain period of time. they cannot constantly be in a state of battle-readiness.

that is the gamble putin is taking. how long can he keep those forces online and ready for a possible attack? >> mr. secretary, there are talks of economic sanctions being discussed with nato and western allies. putting aside the question of how effective they are, when you plan sanctions like that in the white house, do you take in effect the impact on the u.s. economy? that could interfere with a swift payment system. >> you would be wrong not to consider the full consequences of sanctions because the reality is, if we impose heavy sanctions, as i believe we are planning to do on the russians, with regard to international banking, but most importantly, with regard to north stream 2 and their ability to get fuel.

there will be consequences for that with the united states and other countries. shery-anh: leon panetta speaking earlier with bloomberg. let's get to vonnie quinn. >> st. louis fed president jim bullard says the fmoc needs to raise interest rates. speaking to cnbc, he urged that rates should be raised by 100 basis points by july. another said jobs and inflation data show it is time to standardize monetary policy. retail inflation in india reached the tolerance limit for the first time in seven months. consumer prices rose 6.01%, driven by higher food and fuel costs. it is unlikely -- the are b.i. is likely to raise interest rates.

indonesia may list all quarantine requirements for inbound travelers in april as fatality rates and hospitalizations remain under control. officials say the required quarantine period would be reduced to three days from five for incoming passengers who have received a booster shot. u.s. investigators said to be probing block trading on wall street. according to dow jones regulators are seeing if there were tipped hedge fund plans ahead of largest sales. there were subpoenas to morgan stanley, goldman sachs and hedge funds, asking for trading records and information about communications. 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-anh: up next, while china

and hong kong stick with zero covid strategies, most countries across asia making efforts to reopen. we will ask how that impacts travel with the leading association for airlines. this is bloomberg. ♪ ♪

>> my view is that sustainable

aviation fuel should be manufactured and consumed within the same region to keep emissions generated in transport as low as possible. in that sense, capacity in asia and africa is underwhelming lay underdeveloped relative to europe and the u.s. shery-anh: the push for sustainable jet fuel. the biggest aviation firms are gathering at the singapore air show where one key focus is cutting emissions in the sector. let's discuss with commercial transport analyst. where does the industry stand on reducing carbon emissions? >> we found some major airlines want to cut emissions between 2040 and 2050. last year an industry group set that goal. there is a stronger goal for

emissions reduction in the aviation industry. for now, there is no competitive technical option. carbon offset and renewing aircrafts are the most common measures. airlines are proactively ordering new aircrafts, like airbus 8 320, which are 20% more fuel-efficient. airlines are also investing in fuel or zero emission aircrafts. these technologies need to overcome challenges such as scale, cost, and other hurdles. shery-anh: how do airlines in this region compare when prioritizing these environmental challenges? >> in apac regions, japanese and korean airlines are working with

chains for sustainable aviation. we investigate hydrogen powered aircrafts for domestic groups. for china, there is no notable announcement yet, but we think they will be urged to take actions. the chinese government aims to achieve this by 2030. in terms of commitment to new technology, asian airlines are lagging behind the u.s. and europe because of policymaking and action plans. most technology startups in this field are in the u.s. and europe, which possibly have smoother collaboration between airlines in these countries. shery-anh: asia's largest and most influential aerospace gathering begins in the coming hours.

the singapore air show brings together government, executives and military to forge partnerships and seal deals in the region. haslinda amin is standing by with our first guest. haslinda: even as we talk about sustainable issues a key issue is, when will travel resume and get back to pre-pandemic levels? our guest joins us from sydney. good to have you with us. your take on when travel were resume? what is the outlook? subhas: the end of november 2021, several governments were working on reopening their . governments probably delayed

their plans until they got an -- a handle on omicron. now that it spread across the region and world, governments of the region are ready to get back on the saddle to start reopening borders. 2022 should mark the start of many of the closed borders, and seeing the most stringent restrictions across the globe will once again see international air travel. haslinda: can you quantify? what kind of growth are you anticipating in terms of travel and the demand for travel for 2022. give us some numbers.

subhas: domestic travel within the region would probably get back to 2018 levels. as far as international levels, i think it will be a gradual process. it is important to bear in mind the largest markets in the region, china and india, have not announced plans to open their borders fully. china is critical because they are pursuing a zero covid strategy. china is a big producer of international visitors as well as the recipient of international visitors. if you take that into account, we cannot expect travel to return to previous levels so soon. we would only get back to 2019 levels by 2024.

you also have to take into consideration the vaccination rate. only fully vaccinated people would enjoy restriction-free travel. 2024 would be when we get back to 2019 levels. haslinda: even as we talk about borders reopening, it is complicated to be traveling. i experienced a that personally. in december, malaysia had a sandbox system. other parts of the world adopting other testing strategies. can there be standardization as the world opens up? subhas: there can be, but we need governments to start talking to each other. we need multilateral solutions. even if all the measures are not the same, there must at least be some streamlining and

coordination based on risk assessment. if you look at omicron, omicron's spread is spread by community infection, not air travel. you could say most countries in the region are becoming exporters. if you don't have any restrictions in the domestic economy, why do we have restrictions for international travel? you don't have to do a test before you step into a shopping center, so why do we need a covid test before we travel? these restrictions have to be removed. then, whatever you have is coordinated in terms of policies and practices. haslinda: we continue to see the oil rally to multiyear highs. intentions are not helping.

how are your members dealing with rising prices? do you expect any disruptions in terms of flights around eastern europe? subhas: fuel prices have been trending upwards for a while now. it is par for the course as far as airlines are concerned. they need to be able to operate within restrictions. that is the immediate challenge. when travel starts, it is natural to expect prices will be attractive because airlines will be trying to get there, get people to travel again. as far as ukraine is concerned, [indiscernible] the industry began able to come

up with safety measures to ensure the flightpaths are free and open. haidi: let me interrupt with breaking news out of japan. we have the latest fourth-quarter preliminary gdp numbers, missing to the downside, below analyst estimates in an advance of five point 4%. the expectation was for a rise of 6% for annualized growth quarter on quarter. it is an improvement from the previous quarter when the economy contracted more than 3%. after we saw covid restrictions easing in the fourth quarter, we were expecting a bigger rebound. the growth annualized only 5.4%. the nominal number is a growth of 0.5%. gdp deflator at a contraction of 1.3%. we have restrictions again this quarter, so we are expecting the

economy to contract again. haidi: we will get back to subhas. just wondering how tough it has been for aviation the past couple of years, having taken such a big hit, does that put sustainability on the back foot? subhas: not at all. the airlines are committed to sustainability goals. there is no better time than now to make sure we don't lose the momentum so airlines are working towards the goal they have set for themselves last year, which is emissions reductions by 2050. a lot of ground work has to be done in the industry. especially government. sustainable aviation fuel is a very important element of the

strategy to achieve the net zero emissions target. for this we need governments to work with industry to provide land, allocation, production of sustainable emission fuels. we have the carbon offsetting reduction scheme in aviation to offset whatever emissions we are likely to produce as aviation recovers. shery-anh: always great to talk you. we have plenty more to come on daybreak asia. this is bloomberg. ♪ loomberg. ♪

shery-anh: to watch ad of the open. in japan, a project to build a chip plant in japan. according to a report, denso is making a decision soon. also, japanese travel stocks could move on nikkei story that japan will cut back requirements for business travelers. they won't have to submit a detailed itinerary of their trip for screening before arrival. we will be watching for any reaction to the gdp numbers from the fourth quarter. backward looking, but a big mess of growth. five point 4% on an annualized basis. estimates were for 6% growth for japan.

the market opens in seoul and tokyo are next. this is bloomberg. ♪ is is bloomberg. ♪

♪ shery: welcome to daybreak asia. haidi: asia markets have just opened for trade. asian stocks are set for a -- start after a choppy session on wall street. treasury yield jumped. ukraine tensions top the list of concerns. russia signals talk with the u.s. could go on despite white

house warnings of an imminent attack. asia's most influential airshow show is underway. we go live to singapore to hear from the world's largest defense contractor. shery: we are seeing gains on the open in japan with tech and health care leading the gains. we are watching travel stocks as well as we get local media -- local media reporting japan will be cutting back requirements for business travelers. also, reaction in terms of fourth-quarter gdp numbers which missed estimates, growing only 5.4%. we have to keep a close eye on the 10 year yield which continues to rise. we had seen it a little set -- a little steady after the doj offered to buy government securities at a super long and continues to rise. take a look at the coffee, which is up .4%. reversing two sessions of losses. the korean yuan continuing to lose ground against the u.s. dollar.

it is very close to that $1200 level again. we are watching for any steps from south korean officials as they continue to emphasize they will minimize financial volatility if we continue to see the ukraine situation worsen. we are watching videogame earnings. haidi: we are seeing this kind of trading action. big earnings there. including the big, really not so surprised from bhp, setting the tone. bradley seeing a downside of .4%. that is being led lower by energy and utility. we are seeing nice gains through materials as well. a bit of a recovery in tech. when we take a look at the -- i should say, the sovereigns market, we are seeing that calming somewhat as we watch the

pullback from concerns over russia and ukraine despite uncertainty when it comes to the outlook there. new zealand up .3%. we had conflicting data, but one point showing new zealand property up at a record high in january. the 10 year yield holding steady. let's take a look at the picture when it comes to wti. one of the main concerns when it comes to the exacerbation of russia-u.k. -- ukraine tensions is how that will potentially impact global inflationary readings. we are seeing a pullback on new york crude. it was trading above $95 a barrel for the first time since 2014. brent crude, just a bit of calm being restored when it comes to u.s. treasuries. shery: to your point, our next guest says that will create more volatility in the markets. let's bring in ken wong, asian

equities portfolio specialist. where did you see the biggest impact from the ukraine tensions on asian assets? >> right now it is really uncertainty in regards to what happens there because obviously further tension could create spikes in oil prices and create potentially unwanted inflationary pressures. as a whole, we believe that is going to create more volatility and uncertainty into the marketplace, especially approaching earnings seasons. haidi: i want to talk about china. our former guest was saying china is a safe haven given the national party congress we are expecting later. amidst this uncertainty, is this the place to be? >> it definitely is. the fact that during the year where we have a national congress where specifically new

leadership's will be formed, we have seen that over the past two times this has happened, the fact is that the markets actually do go up by roughly 20% or 30%. even the fact that chinese equity markets did underperform last year, couple that with valuations where right now chinese equity markets are trading roughly around 15 times -- earnings, there's definitely opportunity. especially for the fact that in a particular policy year like this year there's probably going to be a lot more accommodative measures in order to help stimulate the economy in china. haidi: how do you -- that infrastructure push? >> the infrastructure push could be something that continues but the fact is that we continue -- we believe the push is going to be more toward consumption. we believe that push is going to be more towards some of the new

economy, the push around ev and solar and batteries. this is going to be where the policy tailwinds should take chinese corporate's this year. >> do you feel the property sector is adequately --? >> somewhat. looking at initial numbers that were reported during the holiday period, when maybe not everybody was good to go out, be it tier one or tier two, we have seen signs of gradual declines in terms of overall property sales and potential property demand. we know that regulators are in much more control in terms of allowing the amount of gearing. we do add to the whole the government would seem to have control over supply as well as demand over the property sector in china.

shery: all morning i have heard about the strength of the u.s. consumer and its spending power. what do you think of that when inflation is rising and it seems that is finally starting to hit consumer sentiment? is this a place you can wager on? >> it is to some extent. that is very much a u.s. consumer type of culture right now where services sectors are not doing a strongly as the goods sector. the fact is when you look at pressures in this part of the world, and china, -- inflation in china is actually low. inflationary pressures across a lot of countries in asia, while it is a bit higher than the past couple of years, they are still in a much more controllable -- print to fix -- typically right now, the shift in pressure has to do with what we are seeing in the u.s. and in some extent europe.

shery: ken wong, investments asian equity per folio. let's get the vonnie quinn who has our headlines. vonnie: [indiscernible]says there is no rush to remove stimulus. speak into the european parliament, -- limits the bank powers at a time of high volatile prices saying it needs to be more open as to what is legal. lagarde refusing to rule out an interest rate hike in 2022. >> in view of the uncertainty, we need more than ever to maintain flexibility and optionality in current monetary policy. our monetary policy is always data-dependent. vonnie: the daily virus tally in hong kong has topped 2000 for the first time with the worsening outbreak throwing the country's covid zero push into disarray. new cases were announced monday

as well as 4500 per limiter infections. authorities say thousands are waiting to be admitted to hong kong hospitals as cases exceed capacity. there is a backlog at testing facilities. justin trudeau has invoked sweeping emergency powers for police in order to quell anti-vaccine protests. trudeau said the federal government is stepping in because local authorities had trouble enforcing the law. the government is seeking to choke off funds to the protesters, going into money laundering rules to attack crypto platforms. -- according to dow jones, regulators are examining -- examining whether bankers perhaps improperly tipped hedge fund managers ahead of sales. it included morgan stanley, goldman sachs and several hedge funds, asking for trading records and information on communications. 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. item vonnie quinn. this is bloomberg. shery: ahead, we will be live at the singapore air show to speak with the world's largest defense contractor lockheed martin about its sales and growth outlook. up next, put and picks diplomacy, for now. as tensions over ukraine ratchet higher, why russia is pushing for talks with the u.s. this is bloomberg. ♪

♪ >> we are told that february 16 will be the day of the invasion. we will make it a day of national unity. we will -- put on yellow and blue ribbons and show our unity to the world. shery: already markets are

spooked further with the remarks the president made. this sarcastic comment over the timing of invasion. russia signaling talks will continue to ease tensions over ukraine. the country reporting an attacked may be imminent. obviously if that backfired, with a heavy dose of sarcasm, but he has a point. the west keeps putting this time frame the expected invasion. we hear from moscow they are giving more of a not to continue diplomatic efforts. >> the latest is that putin was talking with lav raw of and putin said all right when the foreign minister talked about a proposal that russia continue talks with the u.s. and nato allies on the security guarantees russia has demanded. it is significant that the

security guarantees the west has dismissed as non-starters. but what lavrov said was it has opened the door to talks on other things like missile restrictions and other issues moscow has long sought. potentially this could provide them with good reason to continue negotiations. the other important thing that came out of russia was the defense minister saying that some of those military exercises have concluded and that others will end later. the significant date we need to look to is february 20 because that is the date that the exercises in belarus are scheduled to end. the question will be, will the troops go back to barracks right afterwards, or will they stay? shery: what you make of zelensky's comments and the global reaction to it? >> as we know, these are times

when people are rather nervous. any indication that things will go one way or another could really move markets. zelensky's office very quickly tried to assure everyone that the president was not speaking in earnest, that he was being sarcastic and the ukrainians do not expect an imminent russian invasion. it is important to note that russia has said repeatedly that they have no plans to invade. most likely we will see president zelensky -- it is worth noting, was a comedian in his prior career, most likely he will be speaking more carefully in the days ahead. shery: these growing tensions having a direct impact on crude prices. wti futures suddenly above $95 since 2014.

we have seen a pullback in the asian session. brent crude closing your $96. -- closing near $96. we have seen that volatility continuing asian trading. >> for their very reason you just mentioned. there is that will they won't say -- will they won't they? the markets were spooked by the ukrainian official's sarcastic comment about an imminent attack. as you can see, we are seeing about a .75% pullback. the rally took west texas intermediate up, trading pits, as we call that, up above $75 for the first time since 2014. brent, similar story, racing toward $100. every analyst and bank official now pretty much viewing $100 as

the consensus and the next stop for oil. there is a notable bear on the market, that is citigroup's ed morse he who spoke with bloomberg today. it is his view that if the russians were to take any military action, which they have consistently denied they will, oil may go up to about 10%. that is if the ukrainian capital is involved. it is his view even if oil goes to 100 it will come back down. he sees oil much lower, 62 dollars on average for 2022 and mainly believes there will not be any interruption, no matter what happens along the ukraine-russian border, of the transfer, the expert -- export of gas out of russia, and european allies importing. that is because he says the economic incentive for both sides remains very strong. that is his goal as a hedge end

he is not concerned about supply at this point, does think that opec's 400,000 plus dollar monthly gains is no different than in the past. he always saw those numbers as somewhat of a fiction. there are many that would argue with him at the structural aspects of the market are very tight. shery: what else are you following? su: golden natural gas both moving on these ukrainian tensions. gold at a three month high. it has broken out of its range and -- as a typical safe haven in a time like this, though many analysts have pointed out it is not going to stay in this range because of the fed's hawkish stance. interest rate increases, not a bullish situation for gold. natural gas on fire once again. blame it on ukraine. and you had president biden going through his press

conference, that he is now meeting with different countries and different oil and natural gas producers to make sure there is some insulation for many price shock that may result if tensions escalate and to make sure that natural gas continues to flow despite what may or may not happen. interesting week for energy. shery: we continue to watch the commodity space with su keenan. we have remarks coming from the bank of japan governor, speaking in parliament right now. he is saying the global economy is facing big challenges, that it was appropriate for the boj to continue with easing. also saying the fixed rate operation was expected. we saw them promise to purchase -- limited number of government securities to combat rising rates as the 10 year yield rose to a six year high.

at this point we are seeing more downside for jgb yields, although the superlong the end of government yields in japan continues to rise. we will monitor the latest remarks from the boj governor saying the fixed rate operation was effective. this is bloomberg. ♪

shery: breaking news, we are getting the latest lines from the u.s. state department saying u.s. citizens should depart belarus immediately. you have seen tensions over ukraine rise in the past few days. already the united states is temporarily closing their embassy in kiev, the ukrainian capital and moving operations much farther away from russian territory. the latest we are getting ours

from the u.s. state department saying citizens should depart belarus immediately. this is as we continue to see the buildup of russian military forces around ukraine and belarus' border with ukraine. the state department saying that due to the arbitrary enforcement of laws, the risk of detention and the unusual land concerning russian military buildup, those in belarus should depart immediately. haidi: let's turn to a very high profile trial ongoing. the credito -- credibility of tim leisner as the former -- the trial of a former banker starts. he is accused of conspiring to violate u.s. law to steal billions from malaysia's one nbd fund. patricia, how does this go?

>> it is surprising. we all expected there would be a description from both sides about what was the crime and who did it. it was surprising because a defense lawyer for the defendant roger yang came back -- came out swinging and promised to make cross-examination of the star witness tim leisner, who was his boss he called him a double bigamist who lied repeatedly and was only going to testify against an to save himself. ghaidi: what are the expectations on what else we can hear through these proceedings? we are expecting this to go for potentially another month or longer? >> what the government is starting to do is they have a current goldman sachs banker that worked on the three bond transactions behind one ndb.

they are laying out the background of this multiyear investment involving malaysia, but which the government argues was perverted, or money was siphoned off by joe rogan -- joe roe who wanted to live large end party and started hanging out with the likes of leonardo dicaprio and buying extraordinarily expensive master paintings by the likes of van gogh. the government has gone -- which involves officials in abu dhabi, and american bankers, working in singapore. it is quite massive and it is going to be a long haul but it

progress is to be interesting. shery: what is the timeline right now? what should we be watching out for? >> right now, the government has basically had their first with this, but we are expecting leisner is going to be, in a couple of days, he is going to have to get on the stand and explain himself. the government argues that he was part of this scheme along with jho low and ang. the defense says leisner was doing all kinds of fraud with all kinds of people, suggesting that he had a romantic liaison with a former general counsel of 1mdb. he named her, so leissner is going to be questioned over a series of days. you will be hearing cross-examination, as promised by the defense. haidi: that was patricia

hurtado. we will continue to monitor that as things develop. let's get you a quick check of the latest business headlines. -- underpinned by strong prices for all of its commodities. interim dividends of $1.50 a share was up from around one dollar a share a year ago. -- expects supply chain issues to remain challenging in 2022. rather than a net positive. china-related headwinds easing. -- still trying to get six auto plants back to production even though -- close to the ambassador bridge linking the u.s. and canada. all three production lines of his canadian factories are down and output has been curtailed at plants in alabama, kentucky and west virginia.

shery: big movers in japan, toshiba falling at the moment after prophets missed estimates. we are seeing -- rising after declaring share buybacks. -- falling after a

haidi: we're just getting the minutes from the latest rba meeting as of the rba. we heard -- testimony to the government last week, really trying to continue to strike this balance between conveying that clearly there's going to be issues if they waited too long when it comes to tightening but he didn't want to pull the trigger too quickly, saying given the inflation levels in australia are not as high as the

u.s., there is a bit of a buffer space. we are seeing some of these lines coming through from the minutes of the february 1 meeting. prepare to be patient as it monitors the inflation situation. we heard from the chief investment officer of jb we are saying the rba did -- could actually see it being rushed into a short sharp tightening cycle which would leave a with less fiery -- leave it with less fiery power. some economists out there. the rba saying in those minutes that the uncertainty over how persistent recent cpi could be and to distortions when it comes to pricing pressure due to the supply chain and due to australia being hit in an outsized way by this huge jump in omicron and covid tests and how it has played out across services, tourism and hospitality as well.

broad consumption trends as well. you are seeing not much of a reaction on the aussie dollar, bouncing back a little bit, given we saw decline of about .7% overnight. one of these casualties of the risk off reactions to these ongoing ukraine-russia tensions. [no audio] [please stand by] [no audio] [please stand b>> -- remaining d aggressively to move. let's get the story from kathleen hays. we just heard from st. louis that jim bullard did, what was he saying? >> he is definitely ready to move on rates. he wants to move aggressively

and is looking apparently for a 50 basis point hike. this broke thursday last week, he spoke to cnbc today and what he added to the mix, not that he just wants 100 basis points which means a 50 basis point hike and 220 five point hikes over march, may and june, it also means he wants to frontload it. he we were -- heat things we were so far behind come our credibility is on the line. we have to react to data, reassuring people who were worried about a recession, saying we can move in a way that is not disruptive to markets. when he was president of the richmond fed, he said he was getting ready to normalize and he sees the need for it. inflation is high. more readings suggest you're getting broader and more persistent. he thinks now is the time to get started and move more steadily,

with an emphasis on steadily, back to pre-pandemic levels. not a 50 basis point hike, but definitely get moving and get moving out -- get moving now. chairman george from -- said she is ready to go because it is always preferable to go gradual. she is talking about the uncertainties around the pandemic. so, you can't say now that you're going to have to get to neutral really fast. she said the fed must be systematic with rate hikes, be careful not to over steer. she also said to the wall street journal friday, published monday, that she thinks it is time to start looking at the fed's balance sheet from the point of view of not just letting it run off, but selling securities. that is going to be a big step. she mentions the fight against inflation, the move-in short-term rates versus long-term rates, the steeper yield curve. selling securities could put that kind of pressure on yields to keep them high even as the

fed is moving in the direction of hiking rates. haidi: as they are debating that, the people's bank of china set to debate whether to cut a key rate today. what is the balancing act? >> the balancing act is, do they need to move again right now? they are taking a look at the medium lending facility. it is at 2.85%. it was cut by 10 basis points last month. they also cut the one year and five year low prime rates, one by 10 basis points and one by five points. have moved rates lower and we know they are worried about the economy. there has been weaker consumer spending. we know their autonomy is under pressure. since they just cut the mlf last month by 10 basis points, bloomberg economics saying we do not think they are going to do it. they are going to wait until the second quarter. 15 of 16 economists surveyed by bloomberg think that they will

hold. there are 10 who see a 10 basis point cut. five who see a five basis point cut. it is in the works, but bottom line, sooner or later, it has been clear from the various reports that pboc and the government has put out recently that they are ready to boost credit expansion. they are ready to tolerate higher debt levels. one of the big things here is how long are you guys going to wait? wouldn't you rather start doing more rate cuts before the fed starts hiking its key rates? that is the question, one that maybe will be answered today. they could still wait a month and get ahead of the fed. haidi: kathleen hays, let's get more from these meeting minutes. they really point out the key issues when it comes to bond reinvestment. cpi jobless wrapped up the mammoth qbe program recently. the achievement of gold in sight for the first time in several years. we have had a pretty strongly

premarket as well as that rise in inflation, distortions from the pandemic driven slowdown notwithstanding. the rba noted there was rising bond market strains from the qe program. some moderation of inflation is expected as supply-side issues are resolved. we have seen more or less kind of look -- looking through the spike we saw the most recent quarterly cpi readings that came in at 3%. the preferred underlying measure at 2.6% in the fourth quarter. the rba is just wanting to see more when it comes to that inflation data. shery: we continue to get the latest from the boj governor, speaking to parliament, saying an exit talk should not be linked with anyone's term ending. we have heard him say already the fixed rate operation is a very powerful tool. they offer to buy a an unlimited number of government securities and we have the 10 year yield

steady after rising to a six year high. we continue to see long end yields continue to rise. government -- now saying the too low super long yields to affect pension funds. a week yen is not raising import costs that much. and that he is also watching for any geopolitical risk over ukraine. let's turn to hong kong. it securities and futures commission will meet with local industry groups this week to discuss other topics and measures to deal with potential disruptions due to covid. that is a coding to sing town news. stephen engle is in hong kong. what do we know? stephen go -- steve cohen there is growing concern in the business community. this is a major finance center in the securities industry is concerned, as is hospitality. all -- are concerned about the ongoing restrictions and the

ongoing seriousness of the outbreak. no end in sight is not a good business model, obviously. tsingtao reporting that the securities commission will be meeting to discuss all aspects of pandemic restrictions and how the industry is coping. we are getting other reports from the financial times that the -- was asking if the executives here are asking to relocate temporarily to buy. as a possible destination, this comes after last week he had the fd reporting the mandarin oriental ceo, the hotel chain, encouraging its executive team to relocate outside of hong kong at least temporarily. said the environment for doing business here with these restrictions is poor, out -- according to the financial times. this as this number of new infections rose past 2000 yesterday for the first time.

confirmed infections, 2071, plus an additional 4705 hundred per luminary positives. we also had four more deaths reported including two elderly gentlemen who did make it to the hospital. it is a growing concern and the hospital situation is overwhelmed. we are hearing it is at capacity. south china morning post reporting there are 10,000 covid positive cases awaiting hospitalization. thousands are waiting. another local media is reporting that the hong kong convention center, the big convention center on the waterfront of hong kong island, could be used as an isolation center. haidi: can we deduce from this surprise approval that the -- perhaps they are looking at a horizon that moves beyond covid zero? stephen: it is interesting

because of course, china, even though the application for approval was submitted months ago for the pfizer biontech comirnaty branded mrna vaccine has not been approved by china. the headline that came across over the weekend that they have given conditional approval to paxlovid, the antiviral pill to combat covid from pfizer. that indicates, and according to sources in china, including the former chief scientist at the chinese centers for disease control and prevention, saying that this move by chinese authorities to approve paxlovid for use in china is a sign that perhaps authorities in beijing are perhaps look at ways to potentially move on or adapt zero covid. if they can reduce the cost both

to and lockdowns, that would be a sign of flexibility. i am not endorsing paxlovid, but it is an indication that perhaps china, and therefore hong kong -- keep in mind last week we got news hong kong is ordering paxlovid as well as another antiviral for use here. that could be an indication there is, behind-the-scenes, not publicly, an openness perhaps to move on if you could lessen the hospitalizations and burden on the health care system we are seeing. shery: -- haidi: stephen engle with the latest out of hong kong. -- plans to as much as double bonuses for some junior investment bankers and traders in a bid to catch up with -- on compensation. let's get the latest from -- can you give us more detail as to what is happening and how competitive these changes make the bank?

>> good morning. as you said, the bank is planning to double bonuses for select junior investment bankers and some of its traders. basically they are trying to play shop with world's -- they basically paid way less in terms of discretion payouts, what we call bonuses. they have been cutting the bonus pool of investment buying in the previous years, in contrast to the firm that it competes with by huge miles. companies like goldman, they spent an average of 23% more per employee last year. the biggest jump in more than a decade. similar stories at other firms. in a way, hsbc is playing catch-up to a certain extent for the past two years or so. shery: how would this play into the overall strategic overhaul

we are seeing at hsbc? >> basically, there ceo noel quinn and his top lieutenant -- last year that the pandemic had starved large parts of the local economy and eroded the bank's overall performance. meaning they couldn't pay people more. it is still in the middle of a strategic shift to asia. you may see restructuring of overall business, moving people here. they have moved more than half their senior management to hong kong. in terms of pay, i guess this year they are more settled. the pandemic numbers are reflexive from the pandemic in terms of earnings. they have been doing pretty well. in a way, from what we have heard, they feel like they can probably pay more this year. last year, maybe they -- but it looked bad given the rest of the

world suffering. it is not a good look to be paying huge bonuses. that is the stance noel quinn was taking. this year in terms of actual pay for its investment bankers and traders they are essentially playing catch-up with their rivals. haidi: and marine chaudhry. this get the vonnie quinn. vonnie: vladimir putin signaling there could be more negotiations with the u.s. and its allies. in a televised meeting with its foreign and defense ministers, prudent agreed with her proposal to continue with talks on security guarantees. comments are the strongest indication that the prime -- will continue diplomatic efforts to ease the crisis on the border with ukraine. the eu top diplomat says he believes the nuclear record with iran is insight and does urging world powers to reach a compromise. he tweeted, any comments with a

phone call after iran's foreign minister who told that she was in a hurry to revise the accord. those ideas would let around return to global oil markets in exchange for rolling back its nuclear activity. the situation in india has reached the central bank for the first time in seven months. consumer prices rose 6.0%, driven by higher food and fuel costs. the increase is unlikely to -- the growth focused rbis who raised interest rates. -- is already likely factored in. indonesia may lift all quarantine requirements in april. covid hospitalizations remain under control despite a resurgence in cases. in the meantime, the required quarantine period will reboot -- will be reduced to three days from five. test mandates will stay in place for visitors. 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, lockheed martin's tim cahill joins us from singapore to discuss the defense contractor's hypersonic weapons ambitions. this is bloomberg. ♪

♪

>> >> [indiscernible]we cannot expect international travel to return to 2019 levels. shery: let's return to the singapore air show where our chief international correspondent for southeast asia is standing by withur next guest. >> let's delve deeper into the industry. lockheed martin senior vp joins us right now. good to have you with us. as we speak, we know that tensions are escalating in ukraine. geopolitics, the news of today pretty much. is that prompting greater demand for weapons? what are you seeing at lockheed?

>> certainly -- and by the way, it is wonderful to be with you. certainly, events like ukraine and elsewhere in the world bring attention to this. i think there is longer term trend. there's a lot of entities began small who are threatening security in a lot of different ways. there using high-tech not -- hi end technology and that has -- a broader interest in national security. that rises the broader market more than individual blips, but they certainly bring attention. >> what are they wanting when it comes to these weapons and aircraft? do the -- do they go beyond f-16s? >> i think certain they across this region we see everything from maritime surveillance and anti-submarine warfare, helicopters, combat aircrafts, f-35's, air defense are big certainly within this region. a drive toward connecting

systems together, you drive towards getting the most out of what you have, including your heritage system. all of those are factors. by the way, air left at helicopters are important for response to humanitarian disasters. we see these things happening across this region and across the world. >> lockheed martin has been looking for partnership. a $4.4 billion deal with aerojet. where you go from here? >> of course we are disappointed the aerojet deal fell through. we thought there were great synergies and benefits for the u.s. government and international partners. there are so many places to build partnerships. it does not always have to be mergers and acquisitions. certainly partnerships with individual companies, for example, throughout this region we are building f-35's in partnership with nhi in japan. we are building helicopters in japan and south korea. we've got things going on with

the australian government to build systems. and india. there's a lot of other partnerships, we don't have to just rely on mergers. >> let's talk about the partnership with airbus when it comes with the strategy to take on boeing. why? >> the why is, there is tremendous opportunity to take 60 years of experience in airlift capability at lockheed martin with a proven system coming out of airbus. and the ability to build that within the united states for the u.s. air force, which has great need for air tanker capability in the future. i think we've got a great product and the time is right. we've got a great partner. now is as good a time as any. haidi: we know through your business, consider

security restrictions make it more difficult when it comes to supply chain. how challenging has it been on that front? do you see any improvements? >> i think it depends on the product. certainly any time we are exporting product out of the united states, it is clear that is a key element to work with our partners in the u.s. government and make sure our allies can get that capability. we just need to take the time to get that through. we are continuing to build capability with an individual countries. we are building australian capability, japanese capability, indian capability. the more we do those kinds of things, the easier it is for us to overcome some of those technological barriers and ensure our customers get the capability they need. shery: we talked about how you are looking at supersonic weapons. this has been in discussion for years. what is --? is it for real? >> i think it is real. we see this technology coming to the forefront. we see nations around the world that are already fielding those

systems or developing them rapidly. now is the time, from the united states and australia, under nations are saying we need to have that capability to deter war and ultimately we need to be able to defend against those systems. >> quick question, so many questions about where travel goes from here. how does travel change over the next few years? >> i am concerned maybe it won't change much. certainly some would continue to be safe and response to these variances going to be important. you can leverage what we have learned. virtual calling is the norm. fundamentally still, engaging with partners and customers, working to tie our systems together and interoperate them, that all requires human to human contact. we are going to have to keep traveling and we will see where it goes. >> have a great show.

tim cahill, lockheed martin. heidi, back to you. haidi: we will have lots more coming out of there. for the meantime, a quick check of the business headlines. intel closing in on a $5 billion deal to buy -- semiconductor. the move is part of intel's push into the outsourced chip manufacturing business. shares jumped 58%. -- competes with the likes of tsmc but is much smaller. monster beverage said to be continuing merger talks. an agreement could be reached in the coming weeks. i deal would combine a range of products including energy drinks, alcoholic beverages and potentially marijuana. still to come, we speak with shep jones about the political risks as tensions shimmer over ukraine. morgan stanley's robin steen will look at rates and the

outlook for china's economy. that is it for daybreak asia. our market coverage continues. we take a look ahead at hong kong, shanghai and shenzhen. do stay with us. the china open is next. this is bloomberg. ♪

>> it is not :00 a.m. here in hong kong, beijing and shanghai. welcome to the china open. i am david ingles with yvonne man. there could be sentiment on chinese stocks into the brick air territory. the simmering russia and ukraine tensions keeping markets on edge.