haidi: a very good morning, we are counting down to asia market opens. shery: fed minutes doing better to alter the prospects for tightening. treasury yields in the dollar retreat. investors worry of the ukraine

standoff .2 signs of russia continuing military buildup. hong kong may carry out covid testing on 8 million people as the city struggles to bring cases under control. haidi: let's get straight to the start of trading. asian stocks looking to a slow and steady start for trading action, we are seeing potentially a third day of gains when it comes to trading on the asx. we will be watching the likes of whitehaven, some others as well to see reactions from the latest numbers. kiwi stocks up by 5/10 of 1%, the big driver when it comes to data will be the israeli chops numbers, could give an insight as to what the rba will do next when it comes to raising interest rates, concern moving to early could derail recovery. we are getting singapore gdp as well as exports, japan numbers

when it comes to trade and machine orders. before that, we are seeing a muted picture when it comes to trading of nikkei futures in chicago. just before i handed over, we are watching the aussie dollar. citibank is bullish, saying buy the aussie. shery: we have seen some interesting trades in the currency space, we have this big divergence ongoing between central banks. we are watching u.s. futures, not really moving that much, after we saw the s&p 500, in the u.s. session erased losses after the fed meeting minutes. slightly more dovish than expected. we are watching treasury futures, we so the two year yield lead declines in rates, at some interesting moves on wti, we saw its bike given some geopolitical -- we saw its bike

-- ikt spike. let's turn to the latest fed minutes. marcus took the last meeting in stride, they did not signal a more hawkish tilt. kathleen hays is here. after seeing the fed minutes, what are we expecting to happen in march? kathleen: nothing we saw surprised us, but it reinforced important things. we know the fed, the first of the year, look at the second meeting of the year, they are ready to move rates faster if they have to. inflation, look at what they are seeing, it is high.

if inflation does not move down as they are expecting and praying, it would appropriate for the committee to remove policy accommodation at a faster pace than anticipated. rate hikes, tapering the balance sheet. two things i want to point out. number one, this reinforces what jay powell said at the meeting. he would not commit to a rate hike, but he said a hike at the next meeting would be appropriate if things turned out, higher inflation. that meeting occurred before we saw the january jobs report. nearly half a million new jobs, jumped in the cpi to 7.5%, the highest since the early 1980's. take a look at the chart, what people are expecting, probably about six rate hikes. we don't know yet, are they ready to spring for the 50 basis point rate hike?

as for the balance sheet runoff, we know it will be done by june, but are they going to speeded up? we don't know, but we should know after the march meeting. there are some doves on this committee. mary daly is one of them, president of the san francisco fed, she said she is ready for a rate hike, but we should look at the data, see with the data is telling us. the president of the minneapolis fed, another dove who is on the rate hike side, he said inflation is rising, we have to do something, but let's not move to aggressively. he said he thinks inflation is not going to be 2% at the end of the year, but is optimistic. >> my guess is, by the end of this year, we are not back to the 2% target, but by the end of this year, we should be well on our way towards that. katheen: that is one reason why a lot of people are not betting on a 50 point rate hike, unless

something extraordinary happens. there is a discussion, they will do the rate hike, signal they are open for another one at the next meeting. for me, the interesting thing is to get more clarity on not just finishing the taper, but when are you going to start reducing it? you have a yield curve that is flattening, if you were to sell long-term securities, you would help that curve invert of it. the fed does not want the curve to go flat and lower while they are trying to slow down inflation. haidi: kathleen hays. let's turn to the situation in ukraine, high-level diplomacy continues this week. the nato secretary morning that europe is facing a long-term securities crisis -- security crisis. >> moscow has made it clear it

is prepared to contest the fundamental principles that have underpinned our security for decades. to do so, by using force. i regret to say, this is the new normal in europe. haidi: let's get more from our washington correspondent. there does not seem to be a great deal of conviction from western leaders when it comes to these peacemaking overtures. reporter: quite the contrary. to think at this time yesterday, we were talking about a possible de-escalation. things have not taken a turn for the better. the u.s. secretary of state, antony blinken, he said no, not pulling out, not de-escalating, they are adding to true presence based on what we are seeing from our satellites and people on the ground along the border. the russian government, the

defense ministry released a video showing a train loaded with tanks and armored vehicles that they said was crossing a bridge to get out of the area and bringing troops back to basis. everything we are hearing from the u.s. and nato, that is not true, and it's a dangerous situation to hear the secretary general suggest this new normal is a security crisis, there are concerns about where this is going. shery: this is coming at a time where ukraine says it's been attacked in cyberspace. reporter: that is true. one of the biggest cyberattacks in history landed there yesterday, and there are questions in washington on capitol hill and the white house about how exactly those should be handled. is that an act of war? if it is, there are concerns in the intelligence committee that could trigger an article five response by nato. if the cyberattack when outside the borders of ukraine, which is

likely to happen, and impacted government functions or the economy of poland, would nato countries be obligated to defend our ally who is attacked? even though it was a cyberattack. this is part of a new battlefield, new front of war we are dealing with. it's unclear how that is going to be handled. there will likely be more of these. this is straight out of the russian playbook. shery: our washington correspondent with the latest. we will have more insight on the ongoing situation there. don't miss our -- conversation with the ukrainian ambassador to the united states. let's turn to hong kong, covid infections keep hitting new records. the worsening situation combined with some of the world's toughest restrictions are forcing more businesses to make contingency plans and move staff. for more, let's bring in stephen

engle and hong kong. we are hearing from local media that all residents of hong kong will be tested. stephen: this could be the most significant development in comes within 24 hours of comments we got from a newspaper saying that hong kong government must make this their top priority, and use all necessary measures to combat the buyers. that came within 24 hours of carrie lam saying it was out of the question they would do a citywide lockdown, but now we are hearing from local media, including the same town newspaper, that all seven million residents of hong kong will be tested for the coronavirus over the next few weeks. to be completed, reportedly, by the end of march. anybody who test positive will be sent into isolation. that poses a question for hong kong, which is grappling with

and overwhelmed health care system, and isolation boards are in short supply. there is one lawmaker quoted on local media saying that perhaps some positive cases could be sent voluntarily across the border to be cared for in mainland china. that will not necessarily go over well with many people. that is not what that -- they are reporting today. one of the issues is carrie lam is said to be asking the largest property tycoons to open up hotel rooms to isolation boards -- wards. the largest hong kong property developer that operates the ritz-carlton, w hotel, would

they be willing? we are hearing perhaps they would be. that would also dense the number of rooms that would potentially be available to incoming travelers. dwindling number of incoming travelers. we have a headline saying hong kong is going to ban all flights from singapore until march 1. i only saw the headline, i assume that is because singapore's widening issues. there is lots of pressure on the city, as the death toll mounts, 4085 new confirmed cases, but 7000 new preliminary cases. it's a tough situation. haidi: stephen engle and hong kong. let's get you to vonnie quinn. vonnie: covid cases in malaysia have reached a new daily record, nearly 28,000 wednesday, compared to the previous high of 25,000 in august.

the country is grappling with the omicron variant as our neighbors such as thailand. malaysia has fully vaccinated nearly 18% of its population. singapore is easing covid travel rules and launching travel lanes in an effort to reclaim its status as a travel hub. fully vaccinated travelers from the philippines and israel will be able to enter quarantine-free, as well as visitors from qatar, the uae and saudi arabia. people from low risk countries will be required to take a rapid antigen test instead of a pcr test. the g20 summit starts in indonesia thursday, bringing together finance minister and central bank chiefs. the pandemic, inflation, and taxes are set to dominate talks. discussions on capital flows, financial stability, and sustainable finance are on the agenda. the communique is scheduled to be issued friday afternoon in

indonesia. taiwan's latest risk assessment shows china is too focused on party politics to launch an attack right now. according to senior officials from taipei, there is a low risk, but -- with the president prioritizing domestic stability. the u.s. had earlier warned china may exploit this shift in global attention to ukraine to ramp up efforts to destabilize taiwan. 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. haidi: let's take a look at some movers so far. we are watching origin energy, the loss narrowed, but making headlines, the accelerated plan to exit coal power, saying it would be seven years earlier

than previously planned. the surge in renewable undermining the economics of the aging call asset fleet. also watching south32, underlying profit meeting expectations, it's up by 2.5%. woodside petroleum tracking higher today, the full-year net income seeing a beat. wesfarmers, we expected pressure, posting tougher earnings. the covid-related disruptions, lockdowns, high levels of absentees, hit by omicron. overall trading conditions were very poor, and we are seeing that reflected in the loss we are seeing at the moment. shery: still ahead, rogers investment advisors tells us where it is seeing opportunities in japanese equities. we will get insight from ed rogers later this hour. up next, wells fargo investment

institute gives us its market outlook in light of the fed's latest minutes. that is just ahead. this is bloomberg. ♪

>> the number one issue is inflation. >> are they intent? whether or not the fed goes 15 in march. >> they are only going to do it

if the market allows it. >> the dual mandate of the fed. >> the dual mandate. >> investors are mortified. >> what is the policy? >> there are questions. >> they want to find one that makes inflation come down, the stock market goes up, and everyone is happy. >> they have to regain control of policy. >> all options are on the table. >> they have to pick one. haidi: guest speaking about outlook for the fed. let's bring in our next guest. with us now is gary schlossberg, a global strategist at wells fargo. great to have you with us as always. which a.m. -- which ems given we are in for a bumpy ride? gary: after today's meeting, there was not too much clarity from the federal reserve.

the hope was we would get a better read on the trajectory, the balance sheet wind down, perhaps some clarity on the size of the first rate hike which is almost certain to be announced on march 16. our feeling is the federal reserve will come in fairly rapidfire, rate increases perhaps early on, but we are more cautious about the number of rate increases we can expect to see over the course of the year. we are anticipating four or five, but it depends on the economy's trajectory, inflation. given our outlook for more moderate growth, inflation winding down but staying above the long-term average, we think the fed may become a little bit more cautious during the latter part of the year. haidi: talk to me about china. that seems to be a bit of a darling for strategist at the

moment, given the divergence between the pboc and the fed. do you see opportunities, or do you think there is uncertainty associated with the gains we are seeing? gary: there is uncertainty about the extent of the growth slowdown. we think growth is beginning to stabilize, by china standards, that will remain moderate by 2023. the country is undergoing a change in development strategy, which should become more apparent over the next 12 to 18 months. the shift towards more consumer-driven growth, less imports, less driven by exports and investment spending. so far, the people's bank of china has begun to ease up on policy, and we expect to see more of that providing an underpinning to economic growth. all in all, moderate economic growth over the next 12 to 18 months on the order of about 5% to 5.5%, which should provide a

good setting for the asset markets there. shery: what does a shift in the economy signal in terms of asset positioning? gary: we see, in terms of the focus, really those sectors of the market that really lend themselves are consistent with the direction that the government would like to see the economy go. the internet, consumer-based internet becoming less popular, health care becoming more popular. really, an investment strategy that is more consistent with the goals of the party. of the government. shery: inflationary concerns not so big and china, but other parts of the world, they continue to see price pressures. we have seen traders cried commodities as an inflation hedge, and what is happening in ukraine, can this be a trade for you? gary: we do favor commodities

for the longer view. we think we are at the beginning of a super cycle reflecting underinvestment over the past couple of years, we could see demand for commodities low for a time, but that we see as more cyclical. we think that strategically, commodities are more attractive based on what is happening in those markets, the underinvestment we see. what effect that has on overall inflation, i think is more difficult to say. we do see inflation moderating the next couple of years, perhaps not moving down towards the pre-pandemic average, but moderating nonetheless. driven ultimately by services and more moderate economic growth and demand for goods. within that, we still view commodities as an attractive investment. shery: gary schlossberg, great to have you on.

you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to the terminal, also available on mobile. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: we are counting down to the start of trade in tokyo. some stories we are watching. in south korea, the president is set to meet with companies at the blue house to express appreciation for investing despite global uncertainties. samsung mechanics is boosting funding for a plant in north vietnam by $920 million, brings the total outlay to almost $2.3

billion. we are watching for the bank of korea's latest release of monthly money supply data. in japan, travelers will face three-tier quarantine rules starting in march, according to nikkei reports. depending on negative test, some may be able to end quarantine early. stimulus will be in place and conduct further bond purchases if needed to keep yields in the target range. bloomberg has learned softbank is asking banks wanting an armed listing to underwrite an $8 billion margin loan. haidi: let's get you a check of the latest business flash headlines. apple shareholders are being urged to vote against a pay package awarded to the ceo. an advisory firm says that is because half of the compensation is time based. sources tell us shumao wants to

extend repayments a $950 million of high-yield trust products. we are told the developer has proposed spreading payments across three years instead. there is plenty more to come here on daybreak asia.

>> we are tracking the fallout of the global supply chain crunch. the cost of transporting and warehousing goods in the u.s. rose another 1.4% in january from a month earlier. it surged 16% on the year. the cost of shipping jumped 18% by truck. american companies are paying workers more, offering new benefits and increasing automation but the labor supply crunch continues.

bloomberg economics says u.s. job openings for december suggests the labor market is substantially tighter than the official unemployment rate and that means red-hot wage growth is unlikely to slow down anytime soon. arava co. coffee prices are nearing the highest in more than a decade on continued signs of stress in world supply. brazilian growing regions remain dry and columbia's production could be hit by damage from excessive rain this year. >> this is a topic close to our heart. let's only second. -- only second? haidi: they could see copper prices fall out of control, saying they would not be surprised to see that inventory

side 2.5 million bags in three months time with the fast pace of deterioration leading to uncontrolled price spikes in the short-term. we know about a cup prices have doubled in the past year in new york after a lot of climate related issues. drought, frost damaging brazilian output. reduced output potential. you have the supply and transport disruptions weighing on top of that as well. bloomberg users can read more about these stories in our newsletter at supply lines. shery: we continue to watch the after our action because we had doordash surging after earnings. they had record high order numbers. users ordering more often in the value of orders also increasing. they will be investing heavily in new verticals and global expansion. we have seen pressure for nvidia. they underwhelmed with the results.

this is the first set of numbers since walking away from that $40 billion acquisition of the company. the nvidia ceo saying he gave the approval the best shot but regulator headwinds were too strong for the deal to go through. we are continuing to see that drop in extended trading. cisco is projecting strong sales growth by robust orders. the company is announcing a $15 billion addition to share buyback plans as well. let's get a little bit more on tech earnings and the initial investor reaction. that bring in nick turner and start with nvidia because shares did not really react positively despite the fact that we did see strong results. mix: -- nick: this is not uncommon with nvidia. they beat pretty much every metric.

people were still a little disappointed. obviously, they are coming off of the attempt to buy arm for $30 million which they walked away from earlier this month. i don't think that is weighing on people's minds too much. investors were never betting that that would be a massive growth engine for the company initially. obviously, they wanted a little bit more than what we saw. shery: what are cisco react -- investors reacting to? nick: a little more positive. the forecast is better than expected but they also have the $15 billion repurchase that you mentioned that i think is probably fueling some of this reaction as well. shery: what do these set of numbers from the broader industry really tell us about tech right now? nick: it is may be hard to draw too many conclusions. in nvidia's case, you have this

massive growth engine as they expand into data centers -- data center chips. that is a huge growth market for the industry and that tells you how healthy it is that they are putting up these kind of numbers. cisco is kind of coming from a little bit of a different direction. they were the king of networking for so many years and they still are but they are trying to pivot to software and services. this latest quarter is not giving us a massive indication of progress yet. but it'd still something they're aiming for in the coming years. shery: nick turner there. >> minutes from the federal reserve's last meeting shall officials concluded that they would start raising interest rates soon and they were on other for persistent inflation that would justify a faster pace of tightening. they show the fed balance sheet -- later this year.

the january meeting came before u.s. consumer prices rose to a four decade high. at least six rate hikes this year. nato says the situation in ukraine shows that europe is facing a long-term crisis over russian aggression. the secretary-general says vladimir putin still has a massive invasion force around ukraine, adding that there is no proof of de-escalation with moscow's military buildup appearing to continue. russian officials have dismissed all warnings from the u.s. of an imminent attack on ukraine. >> moscow has made it clear that it is prepared to contest the fundamental principles that have underpinned our security for decades, and to do so while using force. i regret to say that this is the new normal in europe. >> senior executives knew that a

financier was involved in transactions related to malaysia's 1mdb scandal. he described his role in the scandal -- billions for malaysia. he is a key witness. he is the only goldman employee to face charges. 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: billionaire activist investor carl icahn told bloomberg television's erik schatzker that the fcc is throwing the baby out with the bathwater with some of its proposed rule changes for activists. take a listen. carl: what they are doing is throwing out the baby with the bathwater when it comes to activism because i completely and totally believe this that this country, one of the real problems with this country -- i said it before. one of our problems is we have

great corporations but many of them are terribly managed and that is one of the problems we have. and there is no way to get rid of them. there really is no corporate democracy today. it is an oxymoron because you really don't have fair votes. i'm not saying something people have not almost agreed about. you really, to go in and fight a company costs a great deal of money. first of all, they beat you up with p.r.. they beat you up with p.r.. it is more of a feudalistic system. >> which is the rule specifically that you think would affect you and perhaps other people, to? >> they are trying to push the 10 day rule. if you buy stocks -- activists.

he says, ok, i'm going to face all these problems. i'm going to go in there and i'm going to have to spend a great deal of money. in a political election, you put the guy in jail. if you are the president, you use the government's money to go fight in the political arena. you have to do all these things. you buy stock first and then he gets 5% and then they let you buy stock for another five to six days so you accumulate some stock. and then he gets the company to do all these things and make some money for all the work he did. otherwise, why should the activists even do it? >> it is this incentivizing activism.

>> it should be done. i do agree because i want to be fair about this. i do agree with some of the criticism. there is a criticism basically is some guy comes in. i am sort of a known guy. i'm going to buy this stock. you know, and is going to get it. i'm going to get the pr out there and some of these activists do it. i just want the stock. the stock goes up and then he sells it. i think that is a legitimate question. >> the short-term game in other words. carl: short-term game. i'm going to say this. it's fair to say that the activist cannot make the short-term gain. in other words, if he is an activist, he is buying it. for the good of his shareholders, for the good of the company, i'm going to wage a

proxy fight, whatever. he has to keep it for a certain amount of time. he has to keep it with a certain amount of time. let's say he buys it and gets that extra five days, seven days, accumulates some stock and the stock does go up, at least he is going to make some money if the company does go out or does other things. otherwise, what this rule is going to do is discourage activism even more than it is discouraged today. shery: carl icahn speaking with bloomberg television's erik schatzker. coming up next, one veteran investor in japan tells us how he is building long-term gains in the country. rogers investment advisors joins us on bloomberg wealth. this is bloomberg. ♪

shery: our next bloomberg wealth guest is a long time investor in japan. ed rogers trades in public markets but has been more active in private investments over the past two years. wealth management in a low growth and aging society like japan. it is good to have you with us. we continue to see the demographic challenges in japan, right?

perhaps also serving to put a strain in the social welfare system there. is there an alternative approach to long-term investment in the country? >> good morning. thanks very much for having me on the show. i appreciate it. it is a great question to start off with. having been in japan for most of the last 35 years, it is a commonly accepted view that japan and agencies in general are always taking a longer term view on their investments. we reached a very interesting point in time where they actually have to make some critical changes in order to secure that long-term future that is part of the social contract, if you will, cradle to grave care in japanese society. shery: what does that look like in terms of investment themes and the opportunities that you see there? ed: it is fascinating. we think there's a lot of private opportunity now. as you mentioned, we have been

getting much more active in private investments. there is a generational change that is impacting two or three ways that are important. there's hundreds of thousands of small businesses that are great businesses here that have an ownership challenge and generational change challenge because the population that would support this generational change is withering, frankly. we are projected to go from a country of 130 million people to potentially a country of less than 100 million people. that is a lot of management talent gone, labor talent gone, a lot less money coming into the pension fund system, so the demographics are really driving -- we believe the demographic change is going to drive a tremendous change in the way company succession runs and the way company assets are built, managed, and how all this contribute its -- contributes to

japanese society as we know it. haidi: you mentioned opportunities in private investments. we were talking to money forward, japan's second most valuable start up. they were saying even with their profile and track record, they struggled raise funds within japan. do you see that risk aversion, that traditional mindset still taking place? or is there more of a shift now? >> it is a real problem. definitively, you can say the whole purpose of public equities and stock exchanges, for example, is to help final retained earnings, the savings of society, into appropriate risk vehicles that build the wealth of society. japan is just not very good at taking that kind of risk, especially the earlier stage risks. but we see that as an opportunity for ourselves and our investors. boots on the ground. i have a business here, i have a business in hong kong.

the advantage, especially during a time of covid when travel restrictions are having a real impact on the due diligence process, it's about finding the right ways to take risk and we think that there are many investors globally who look at japan and recognized some of the tremendous value that is here but it is a struggle to figure out how to identify, especially in the earlier, private pages, the right types of investments. we think that the japanese corporate culture, particularly the traditional asset management culture and pension fund culture , it's clearly risk-averse for lots of different reasons, some of which may be very good reasons but what it means is they have not developed a tadpole of people who are good at this. private equity, private investments, hedge funds, activists. you had mr. carl icahn talking about for decades, we have seen activists in the united states have a tremendous impact on the

way certain industries are run. none of that change has happened yet in japan, driven by the financing of businesses. we think we are at a moment of change where the opportunities for the finances of businesses, activists, early-stage, private venture capital, we think we are at a moment of change and they have to change. japan has to take trillions of dollars in jgb's and start to develop more talent in japan. >> when we talk about japan, it always comes back to the question of demographics, the inevitability. you said it is almost a humanitarian or social imperative to get better returns on the savings as the population ages.

ed: absolutely. this is the most successful socialist democracy or capitalist democracy with regards to cradle-to-grave care. i have had four children here. i put my children through the japanese public school system, on the national health graham. certain things about japan, they simply work better than they do anywhere else in the world. there is equality of access to public school education to the highest levels and it is fantastic. there is a reason why the average japanese person is living to be 95 years, old. that is a problem from the actuary point of view. insurance company policies, pension fund policies. they have been modeled on people living much shorter lives. to be perfectly honest. it is a tough thing to say. but the japanese are living longer and longer lives which means the pension fund assets, no one is coming into contribute more on the front end and pay

their pension fund taxes, if you will. shery: when you are actually positioning your portfolio and you are allocating into your assets, what are you looking at? are you looking at smaller businesses, esg strategies? what are some of the themes that you like and some of the assets that you like? ed: to begin with, i will start at the end of that. the esg space, especially things in the energy space, japan has been very proactive on the development side. some of the largest solar farmers in the world, very aggressive tax policies in response to really fukushima, the earthquake in 2011, which sidelined most of the nuclear power industry that at one point was providing over 30% of the energy in japan. there is an ongoing energy issue and that has spawned, if you will, and anonymous amount of

development in the energy space. some of these companies are still private and they are excellent investment opportunities. we see further government support for this movement given the global decarbonization goals for japan. that is one as a theme, if you will. the energy space is very attractive for us. the demographic change issue means that if you can have a good due diligence process, identify the right types of companies, and be helpful with additions to management, additions of board members, nonexecutive directors, to sort of acknowledge the push that is real in japan by the corporate governance code, to help change the mindset for how companies are run but in not an aggressive -- kind of more traditional activists -- american view of activism. we are here to help. we are not trying to tell you to

change your business entirely but hear hr policies that will be helpful. even english-language marketing to advertise to the world how well you do what you do. shery: always great to have you with us on bloomberg. ed rogers at rogers investment advisors. we have japan trade numbers crossing the bloomberg. when it comes to exports, we see on them a bit of a this and expectations. when it comes to january exports, a month on month rise. when it comes to the overall headline exports number rising 9.6 percent year on year, missing expectations of over 17%. we did suggest that in the last pmi set of readings that we would see more of an expansion when it comes to export growth still, the base case at bloomberg economics is to see a greater export recovery going into the next month as covid-19 cases have started to fall in

the overseas market and perhaps the external demand should have come in a little bit stronger. when it comes to imports, we see month on month, a figure at 4.9%. you're on your, that number coming in at 39.6% and that was stronger than expected. we have been expecting more of a weakening momentum when it comes to imports in the month. taking a look, when you split up, oil import volumes. that likely played a big part given that we have reduced domestic consumption but also surging prices, share a. shery: is the mist because of the acceleration of the omicron spread? when it comes to the december numbers, export numbers, it is january, but the december numbers actually are eating expectations. the expectation was for a contraction of 2.4% month on month but it is not actually a gain of 3.6%. year on year, he jumped of 5.1%

for core machine orders instead of a gain of around 1% or so. we are following the numbers out of japan closely as we are also following what is happening on the russia/ukraine front because we are hearing from the u.s. officials that russia has actually added troops around ukraine. plenty more to come. this is bloomberg. ♪

shery: alert on the bloomberg on russia. the kremlin's claims that it had begun to remove troops from ukraine's borders are false. the market opens in seoul and tokyo are next. this is bloomberg. ♪

shery: welcome to daybreak asia. i'm shery ahn. haidi: asia is maker markets have just -- major markets are just open for trade. asian stocks set for a steady start. treasury yields and the dollar retreat. investors are wary of the ukraine's standoff. nato and the u.s. pointing to signs of russia continuing its

military buildup. hong kong may carry out citywide covid testing on at least 8 million people as the city struggles to bring cases under control. shery: breaking news out of singapore. breaking numbers for gdp for the year of 2029. reports economy expanded 7.6% year on year. this would be the fastest acceleration of growth in more than a decade. for the fourth quarter, gdp grew 2.3% quarter on quarter. the estimate was for growth of 2.9%. when it comes to the fourth quarter final numbers, it is a little bit of a miss right there but for the annual gdp numbers, it is a growth of 7.6% which is actually faster than the preliminary numbers showed and of course, this coming at a time when we are seeing strong manufacturing out of singapore with growth of more than 6% quarter on quarter.

singapore did maintain their 2022 gdp outlook growth at about 3% to 5%. fourth quarter numbers were affected by the pandemic and we are expecting singapore to ease covid travel testing rules and launch new vaccinated travel lanes so we might see more improvements in the economy this quarter. take a look at how markets are trading because japan and south korea is coming online. we are seeing some downside pressure with real estate and financials leading the declines on the nikkei. the topix is down .4%. we have not really seen that much movement when it comes to the japanese yen but what we are watching very closely is what is happening with those yields. the 10-year really has remained in the narrow range given we have seen boj action but we continue to watch the super long yield if they continue to rise because markets are shifting their attention because the boj

kept their purchase amount unchanged at the regular operation this week. take a look at the kospi as well because we have seen it seeing its best today since june of 2020. we are seeing a little bit of downside at the open right now but the kospi is muted at the open. slightly higher, i guess. the korean won, unchanged. we have seen significant weakness as well, haidi. haidi: let's take a look at the trading session when it comes to sydney. a bit of a mixed session overall. pretty big losses when it comes to utilities as well as consumer discretionary and tech. energy seeing a bit of weakness as well after pretty heavy gains over the past few weeks. we are seeing the big gainer's health-care and real estate. outside of just about .25%. the tenant -- 10 year yield, we

are seeing quite a bit of stability holding. new zealand, also modest upside in the equity trading session. we are watching the australian dollar holding pretty steady in this session but more and more analysts and strategists are saying that the aussie dollar is a good bet for the global recovery. citibank is saying that they should go long the aussie dollar. their target price is up to 76 u.s. cents there. let's take a look at the broader treasury markets. as we mentioned at the top, not much was changed when it comes to moving the needle from fed minutes. more or less a sigh of relief. he does not potentially change the measurement when it comes to how hawkish the fed is an these market expectations making it pretty clear that they are extremely likely to hike in march and keep tightening until inflation shows signs of cooling. we saw a rates traders signaling that means policymakers will make haste slowly and that could

potentially restore some of that, to markets that we see at the moment and also watching crude, seeing a bit of downside and pull back when it comes to trading in new york. shery: that is put into context that we do have a 20% surge of oil prices so our next guest actually believing that that surge will lead to a cyclical upturn, boosting chinese earnings this year as well. let's bring in the investment director at fidelity international. what do you like in china? >> it is a combination at this point in time in terms of the new china opportunities as well as old ones. with expectations coupled with robust production as well as a cyclical upturn, we are expecting to see energy and materials offer interesting opportunities. given that there is a lot of regulatory flow would have been placed in, we are finding

interesting opportunities when it comes to retail. shery: how much support have you seen from speculation that we will see more easing for monetary policy and -- policies on the fiscal side of things? is that enough to give sustainable support to the chinese markets for this year? catherine: theoretically, it should. going into 2022, the fact that the chinese government really was moving or had shifted from the third quarter two this easing bias, monetarily and physically speaking, the announcements have been shrugged off by investors. while equities are doing better, you get the sense that it's -- investors are wanting more in terms of them really getting a lot more positive about the market. shery: to that end, is there a

risk there will be downside surprises? catherine: probably not from a macro perspective. we are seeing this tweak in whether it is related to the properties segment. opportunities if we see this further policy support. in general, you get the sense that because policymakers are being quite cautious about how they ease and the measures they put in place, you are not going to see this kind of stimulus program we have seen another parts of the world since the pandemic or indeed what china did many years ago. it is crucial. you're beginning to see a slight improvement in certain earnings. valuations in china look very attractive. this is a weighty and see game in terms of a stronger rally in the market. haidi: does the value bias continue? you right off growth and tax

completely? catherine: i would not write it completely off. those sectors are not going to be necessarily rewarded in terms every rating but the fact that they do deliver earnings, on the other side of the spectrum, you have strong fundamentals. they might have changed their business models accordingly given the regulatory performance we have seen. valuation wise, they are looking attractive. what is really key and what we are really looking for, i should say, is that earnings. dividend yields support investment in china with a bit of a cushion given this period of volatility is something things are very much positioned towards. shery: we have seen significant resilience but at the same time, when we are talking about easing and more fiscal support, where

does that leave the currency? catherine: across china in terms of policy, it aims for stability. it will see further stability when it comes to the currency. when it comes to chinese exports, they have surprise on the upside with last year and the year before last. as we see other economies remove their bottlenecks, you are going to see manufacturing pickup. exports could decline this year and that is why when you look at the currency, it's going to be very balanced. take into consideration the potential decline. haidi: always great to have you with us. catherine young. let's get you to vonnie quinn. vonnie: carl icahn says he cannot predict when a bear market will happen because there are too many variables. he told bloomberg television that they cannot keep handing out money. the wall street veteran sounded a pessimistic note.

carl: sooner or later, a situation like this is going to end relatively badly. some less badly, somewhat more. you cannot keep printing out money because you have what you have now which you cannot control. you cannot control inflation. vonnie: the g20 summit starts in indonesia on thursday. the pandemic, inflation, and taxes are said to dominate talks. discussions on capital flows, financial stability, and sustainable finance are also on the agenda. there is a schedule friday afternoon in indonesia and must be agreed upon by all members. hong kong may carry out citywide testing on its population next month. the government hopes to finish the program within 14 days within the help of medical workers in china. other reports say that testing will be conducted once a week for three weeks.

hong kong reported more than 4200 cases on wednesday and 7000 preliminary infections. singapore is easing covid travel rules and launching new travel lanes in an effort to be claimants status as a major asian travel hub. fully vaccinated travelers from the philippines and israel will be able to enter quarantine free on march 4 as well as those from qatar, the uae, and saudi arabia. those from low risk countries will be required to take a rapid antigen test upon arrival. 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. haidi: let's take a look at some of the movers we are following in australia. we are taking a look at utilities. the loss actually narrowed in the half that they reported numbers for but we are seeing downside reaction to news that

they want to accelerate the coal assets quicker than expected. proposing the exit seven years earlier than the previous plan when it comes to this coal plant to be retired in 2025 potentially. we are watching the diversified miner seen outside of 1.6%. results were better-than-expected on the net income side. same kind of story when it comes to petroleum as well. wesfarmers, this was the major retailer and market operator being hit hard by the covid-19 and omicron surge. they had high levels of supply chain disruptions as well as a depressed retail environment. that stock is being hammered today. shery: take a look at asian semiconductor stocks. we had nvidia's results failed to impress investors with the latest forecast. it was a sign of lofty expectations. the results were actually pretty terrific.

that failed to impress and we saw the downside after hours so we are seeing a little bit of a mixed picture when it comes to asian chipmakers. we do have some of the asian suppliers for nvidia including sk hynix as well. still ahead, with tight covid restrictions adding to reasons for people and businesses to leave hong kong, we will speak to benjamin about the future of the city as a financial hub. u.s. officials say russian claims of a true pullback from ukraine's borders were false. the details, just ahead. this is bloomberg. ♪

>> you heard us say a number of times that we are committed to article five and the principles of collective security and so,

you can expect that commitment will remain rocksolid going forward. >> moscow has made it clear that it is prepared to contest the fundamental principles that have underpinned our security for decades. to do so by using force. i regret to say that this is the new normal in europe. haidi: lloyd austin and the secretary-general. u.s. officials are saying the kremlin's claims are false. let's bring in our national security and foreign policy coverage. we had quite a lot of doubt from western leaders with regards to this claim. what is the latest? >> we have been hearing questions about it all day here. with the nato chief starting off today saying there were signs of

a continuing russian buildup. tonight, on a briefing from u.s. officials, they are saying that they have seen as many as 7000 russian troops be added to the forces already surrounding ukraine's are not just rejecting the idea that there has been a draw down by russia but also saying that as many as 7000 new troops have arrived. >> how much progress are we making on the diplomatic side of things? bill: well, there have been a lot of calls today. president biden spoke with the german chancellor. thursday will be a key day. we will have a lot of foreign ministers gathering in munich for a security conference and that will give a chance for everybody to sit down and hash out the approach, the reaction to this latest news about the troop buildup according to the u.s., so i think thursday is going to be a key day but this is definitely not the direction people wanted to see just two

days ago when the announcement of a potential russian drawdown first emerged. shery: bill faries, who leads our coverage with the latest on ukraine. we will get more insight on the ongoing situation later on bloomberg tv. do not miss our conversation with the ukrainian ambassador to the united states. in hong kong, covert infections keep hitting new records with more than 4000 cases confirmed on wednesday. the situation is forcing the government to consider drastic measures to stem a surge that is overwhelming the hospital system. let's bring in stephen engle in hong kong. we are now hearing that all residents in the city could be tested. what do we know? stephen: this could be a significant development. hong kong has not done mass testing of the entire city which has been done in mainland china to contain various outbreaks, whether it was in other places

that have seen these kind of pocketed outbreaks hong kong has not done that. it has encouraged people to get tested and it has encouraged people to get vaccinated but the vaccination rate is not necessarily high enough. this is a report from other media saying that starting next month, there will be testing for potentially one test for every week for three weeks to be completed by the end of march. we are hearing from other people that a team of experts, covid experts, will be arriving in hong kong today for discussions with hong kong officials about how to carry this out but we are understanding that it would be conducted with the assistance of mainland officials. they are reporting that those who are noncompliant and those who refuse to be tested could face fines of upwards of 10,000 hong kong dollars. 1300 u.s. dollars. this comes within 24 hours after we also heard from the newspaper

which is tied to the chinese government that xi jinping is calling on the hong kong government to take all necessary measures to combat the virus. it should become the government's top priority even though charity -- carrie lam indicated that they do not plan a complete, citywide lockdown like they have done in mainland china. this would be a significant step forward to essentially mandate all residents, upwards of 8 million people here in hong kong, to be tested. this as we have 4200 new cases reported yesterday including 10 deaths. the most on record for a daily tally as well as 7000 preliminary infections. it comes at a time, you know, it raises more questions. mass testing, you lift up a rock, you will find a lot more infections and you don't have the health care facilities to handle that.

shery: our businesses coping -- are businesses coping? stephen: businesses are coming up with contingency plans. citigroup is the latest. at least six equities executives will be moving out of hong kong. perhaps some of them to singapore, others to london and elsewhere. that being said, citigroup tr told bloomberg news also within the last 12 months that they have hired 300 employees in hong kong but still, the move of officials out of hong kong to other places, because of the restrictions, because of the pandemic response, would be probably the biggest move within the banking community that we know of what others are showing signs of stress. the securities and futures commission, the market watchdog, is talking about how they had 12% attrition and they are having a very difficult time to fill much-needed critical

positions within the financial regulation. haidi: our chief north asia correspondent, stephen engle, in hong kong. we will be finding out how the surgeon covid-19 is affecting business outlooks at 9:40 a.m. in hong kong. this is bloomberg. ♪

>> oil traders in london and new york saw big swings in the latest trading sessions with geopolitical headlines a key driver pitted let's get more from su keenan. let's start with a pullback in wti futures. in the new york session, we saw a spike. what is going on? su: after the new york session ended, there was a tweet indicating that perhaps there was a deal in the nuclear talks

with iran that was imminent and that caused oil to plunge. we are seeing that in the asian trading where it drops 3% right off the bat. as you mentioned, it was up as much as 95 in the regular wednesday session. you're looking at the close for brent. it was up as much as 96% in the regular session. traders appear for the moment at least you have shifted their focus from the ukraine/russian situation which has caused a lot of fluctuations. let's look at the last few days of trading. they are focused on the iran nuclear talks for this moment. iran's top negotiator tweeting that efforts to reach a deal are "closer than ever" in terms of reaching agreement. that could mean the u.s. lifts oil sanctions had a lot more oil on the market. the u.s. state department issued a more circumspect statement that is not quite as optimistic about a deal.

the crisis looms. this is the kind of uncertainty that drives traders crazy and causes those swings. it could rally to the highest since 2014. importantly, brent crude which is the price of cargoes bought and sold in the north sea, $80 a barrel according to s&p. so many derivatives and other products, millions of barrels of oil are priced based on the benchmark it set. shery: let's take a closer look at how oil prices have roared back from that spectacular crash at the highs of the pandemic. su: it is an amazing story. no question oil has been on a wild ride. a lot of things happened during the pandemic that put us on a path to $100 oil. take a look at the two-year chart. 18 months ago, we were in a global apocalypse for the energy sector according to one veteran

and he says we are seeing outside returns. you see on the left-hand side, we dropped below zero at the height of the pandemic and it is -- at the same time, the whole industry began to cut back because demand was dropping like a rock due to the global lockdowns we were seeing. all of this has now changed and it is not just the price swings that have shocked motorists but opec and others struggling to put more -- more oil on the market to meet these rising demands. back to you. haidi: su keenan. let's get you a quick check of the latest business flash headlines. softbank could be seeking a margin loan of $18 billion from banks wanting roles in a potential listing. the debt financing is one option being considered. we are told the banks are planning to pitch ipo valuations

of at least $50 billion. nvidia posted fourth-quarter revenue and adjusted earnings that beat analyst forecasts. it generated sales of $7.6 billion for the period ahead of estimates for 7.2 billion. adjusted

shery: breaking news out of singapore, we are getting the latest numbers when it comes to experts in january year on year, a growth of 17.6%, the x rating -- the expectation it was run 4.1%. it is above consensus. electronic exports taking about 1.12%. we have seen a little bit of a slowdown in the previous month of december.

although was chart television pharmaceutical shipments did ease some of that downturn. we are seeing the first indication of what this year might look like for singapore. haidi: taking a look at astray's shares, a -- australia's shares, a robust jobs market. we are seeing more added to that implement change in terms of job added. 1900 jobs added to the economy really pulling back from the exd 5000 number we had in the previous month. we saw part-time employment judging by 30,000. that was more than the 23,000 we saw in december. the unemployment rate holding steady unchanged at 2.4%. taking a look at the participation rate, we are seeing that to kia, 66.2%.

a little bit higher from december as well. marginally, probably in upside surprise given expectations we were probably not going to see any jobs added last month. the unemployment rate not change. let's take a look as we are seeing much of a reaction when it comes to the market set of things. the aussie dollar as been steady all morning, we are seeing a little bit of upside expected when it comes to how the aussie will continue to dread, citibank very bullish. elsewhere of the rigid we are seeing downside trading to come been, the kospi is continuing to add to gains as the australian 10 year yield seeing a move up in tandem with treasuries as well. shery: let's delve into those numbers. joining me is our policy and

economics editor kathleen hays. what a message as its end rba? >> when phil lowe is willing to be patient, see what happens with wages, see what happens to the pictures, it reinforces. the job picture is a bit mixed because we did see part-time jobs up more than expected a, 30,000 of january from 23.3. overall employment down from about 65,000. let's focus on the unemployment rate because the rba place is so much focus on it, staying steady . some outliers were looking to get close to the 4% level. what a fellow said recently is he is ready for unemployment to

go lower at that possible just a short time ago. let's move to another chart because everyone is wondering what the first ray died will come. the rba has signaled that some people are looking to come as soon as august. this is where the patient's comes in. even inflation is in the middle of the target. the debt today saying it is possible rate hikes could come this year, i am not sure if it is inevitable. it does contrast the dovishness of the rba with the hawkish notice of the fed. the minutes reinforce the message we got from jay powell or in spoke after the breast or that they're worried about inflation and they're going to be ready to hike rates faster because inflation is eyeing keeps rising.

there is no definite confirmation of anything, not even the margin rate hike is expected. the markets are looking for six rate hikes this year. nothing in the minutes that would confirm that, but we know where they are heading. in a margin we are going to get the furthest i get a lot more guidance on outward they they will go, and out quickly they moved to make the balance she reduction of more active tool of monetary policy. shery: kathleen hays, inflation prices in columbia, we see that accelerating to the fastest in five years and that has led to the biggest increase of race in two decades. i talked to the finance minister about some of the measures going to be is planning to do in order to reign in price pressures. >> inflation for columbia is an

international this year -- international issue. united states, higher than gone begin inflation. i we are dealing with that? one of those is by increasing interest rates. we are outperforming our physical numbers, we are improving. just not to get some pressure on the exchange rate, which by the way good to be a reason for inflation especially in terms of costs. at the same time we are reducing costs. that is going to be in place dicey. shery: will that be enough or too much? your president is saying these factors are temporary, the central bank should not hike too

fast. your of the size board bank. what do you think? >> the constitutional obligation of the members. they have one way to do it, which is by increasing interest rates. we have to dig a drink out that if we increase a lot that is going to be gain for the economy. what we have to do and members of the board is trying to avoid the increasing expectations of more inflation in the medium term of the economy. >> how did you do that? christ not only through better communication but more information. the tactical analysis that the central bank does we are analyzing what is the reason for this inflation.

it is inflation that is increasing expectations or inflation that is reducing the output gap between potential growth federal growth. there from that we make the analysis and would take a decision. >> i went to ask about the shift in your economy government you are mad that knows well business . doctors about what you were telling business away from oil. perhaps one thing to be focused at doris cement home. is that the riep of it? christ the future of the columbia economy is more related to the stable economy. accompanied company that highlights the most important assets of our society, biodiversity. that is why the president is supporting a sustainable economy .

also to be carbon neutral by 2050, that is part of the next growth we have in our future, a non-conventional energy. shery: the columbia finance minister speaking with bloomberg earlier, we are following to let is knows when it comes to coronavirus pandemic. in south korea we are seeing daily record cases rising by 9 3,135. 389 critical patients, 36 deaths in the past day. we have seen of exit rate of more than 80% in south korea. this is the markets continued to rally. we have seen contingencies when it comes to you reign in

geopolitics, and that being to more consolidation. the kospi jumped the most in 20 months at a receive those gains extending the session, a really good recovery with the kospi up by as much. let's get to vonnie quinn. vonnie: net assessed the situation with your grade is showing that europe is face to be a long-term crisis over russian aggression. a secretary-general says russian president vladimir putin so i say massive invasion force her in ukraine, adding there is no proof of de-escalation with moscow's military buildup debuting. christ moscow is rated -- cracks-- introduce so by using force.

i regret to say this is the new normal in europe. vonnie: taiwan's latest risk assessment says that china is too focused on body politics -- party projects. according to a survey there is a low risk of attack on beijing. the u.s. warned china may -- obligation to malaysian everly's new -- raised a new delhi record. that compares to the baby as i have 25,000 back in august. the country is grappling with the omicron variant as our neighbors such as thailand where governor evers writes five month and thi malaysia's fully vaccinated 80% of the population. a former southeastern jail and said former executives knew that -- was it evolved into a larger

draft negative instead of the volatile that you his role in the scam. for u.s. prosecutors and the time for a former member. 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 am vonnie quinn. this is bloomberg. haidi: hong kong's development as an international hub going to be at risk. we will analyze the talent exodus. this is bloomberg. ♪

haidi: a company is that the report fourth-quarter results on sunday, and less will be getting best giving watch at whether it will commit to revenue growth of 5.7% in 2022. this comes as hong kong's zero gravity approach is separating base. it is leaving have equity staff. we heard from the top bunk i were a rare what in the city's

involvement as an international financial center is at risk. let's bring in the ceo of financial services, a former banker in hong kong. read have you with us. in your view the role as a financial is not affected in the medium-term, but the international aspect of it could be. >> that could be. major sources of capital, huge swords were china and a very clear regulatory framework and environment for financial services and organizations operating in the city. gay challenges around telling, but talent is an important part. what you are seeing in hong kong in the past six to 12 months are

worrying signs unattractive doubt in hong kong as well as net migration statistics. they probably drop by two thirds in the past two years. less people wanted to come in. the other side of that is the net emigration, which is more worrying. probably 85,000 people left hong kong or emigrated out of hong kong between the middle of 2020 in the middle of 2021. we expect that number give to the end of 2022 to be closer to a number like 300,000. that is pretty worrying. that is where percent of the hong kong population. haidi: let's tackle the talent, but the prevention and attracting talent do hong kong given coveted hurdles. what do banks have to do?

the big trend has been for wall street banks to show me the money what he got into attracting and retaining get down. >> gobbet says it is obviously one thing. banks are creating more flexible work environments. depending upon the particular function of the urine, working for mocon alleviate pressures on where your. other aspects, for families or executives with family offshore, particular the western society subsidizing cause. mad that the red quarantine at the flights are expected and that of hong kong. the final thing is opening up the idea of allowing staff to have delivered locations to be about their specific goals. as you mentioned for those that need to travel, those that need to be on the ground facing clients, there is more of a

contingency plan allowing that staff more mobility around the region. shery: it is so important when it comes to motivation. what is this doing to the start of seeing there? life's -- >> about two thirds, the fintech startup are -- hong kong is still a natural focus area. lots of emphasis around gda, huge government support in the space. it often may require be able to operate a hub out of hong kong where you deploy those teams to go's word.

-- to go on shore. that is more judging. shery: it was good having you on. bloomberg is learned that morgan's role in a collapse waste u.s. regulators to ramp up their investigation into blocked threads. morgan stanley finds itself at the center of the probe. do a breakdown the story let's bring in our correspondent. we have seen scrutiny of blood threads were yours, right? why are regulators honing in a morgan stanley. -- stanley? >> [indiscernible] it is part of a long-running probe. they buy stocks from investor like a hedge fund.

[indiscernible] the u.s. securities and exchange commission justice department announced how these block trades were. they are gathering information on activities add morgan stanley and one other competitor. it has arrived at this investigation import because of the slow up which is focused on the block pretty complex. shery: haidi: it has been a year since hong kong listed chinese stocks

less big. we will review what is coming next. this is bloomberg. ♪

haidi: today marks it if it one year since hong kong listed

chinese stocks big before been put up. we are joined by our coanchor. debussy returned to that big over the next 12 months? good news or bad news? >> let's start with the bad news, but the short answer is no , although the silver lining is we are expecting a rally. we dropped 35%. we still need to rally about 40%, so that seems like in a lot of ways i at this point in time. we have taken a look at where the damage again these past 12 months. the five biggest point drags on the index, a lot of these art deco names. that is about 64% of the damage. we have taken those five names and we have each looked at the price targets for mentalist on each of those dogs, and what

that tells us is with the likes of alibaba, tencent and another one, the price targets over the next 12 months do not even get too close to the 52 regard. yes, we are going to get a rally. not to the extent we were told months ago. shery: what does the data show you in terms of where the best opportunities are? >> so far, when you look at the same metrics it is in the lives of a company in china. specify an limit you miss universe. there is substantial upside seen by analysts. a lot of it is not intact, -- in tech. these are based objections and

if you had followed your brokers and advisers you would've sent them a written letter this point. haidi: in case we forgot there are still problems in the property sector. >> yes, and the two stories with draghi today as you have general questions about his being able to redeem that. very quickly another company with a big development, it is teaching -- seeking an extension. 35 figure after that the rest in 2024. shery: stay with them because markets coverage continues. that is it for "daybreak: asia. we will be watching the markets

open in shanghai and shenzhen. this is bloomberg. ♪

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david: good morning from hong kong where is that :00 a.m. welcome to the china open, i am david ingles. yvonne: fed minutes confirm mr. while avoiding nasty surprises. measured comments easy market sentiment. always so policies -- oilce