haidi: good morning. we are counting down to the major work it open. >> a dramatic escalation of russian tensions with the west. it expects to send asian stocks south as oil jumps. china is renewing scrutiny of

ant group. banks must report ties to the group. it is a geopolitical risk at front and center. futures falling by 2%. the dow contracting down by 2% as we get further news when it comes to what is going on it with the u.s. reaction to these moves from putin on ukraine. usa is moving the embassy out of ukraine and we are hearing about the investment as well. here is what we are seeing with the first few minutes of trading in australia. see the move when it comes to the australian 10 year yields as well as kiwi bonds. there is concerns about ukraine, boosting the haven play. australian note dropping.

kiwi notes falling as well. ahead of new zealand decision, we are expecting further tightening there. chicago futures, about with that lead of a third or downside when it comes to trading in u.s. futures. we are saying they open a looking pretty soft in japan. >> one, this is a presidents day holiday in the u.s.. we've only seen futures, european stocks got hit pretty hard today. even before president putin recognized the eastern ukraine separatists. you can see s&p futures are signaling a drop of 2%. during the actual market open, the 10 year treasury rallying. we will see how that feeds through to the cash 10-year note yields.

matt has gotten well below 2%. -- that has gotten well below 2%. 4.3% rise, four dollars, $95 on west texas intermediate futures. this is quite a move. we have the ceo telling bloomberg over the weekend that he sees oil well above $100 a barrel. the ruble is weakening again. it is back over 80. it is at a key technical level. this is another sign that the market is taking a beating. putin does not seem to worried. we will see how investors process all of this. let us get more on the situation. u.s. warning if it will take further action in response to russia's latest move. washington is considering moving the embassy out of ukraine.

keeping track of all of this, what does this mean? more sanctions? best putin care if we move -- it does putin care if we move the embassy out of ukraine? >> we have a bit more news and contact about what the u.s. response would be to president putin today. recognizing those stakes within -- states in ukraine as separatist states. we also have news agencies saying that russian troops is calling peacekeeping troops are entering. we have the executive order, this would be no trading, taking place or investment in the contested areas. they are going to take more

steps tomorrow. these steps are likely to be including economic cinches but will not be the more severe, mother of all sanctions that they have been talking about. they would impose those if vladimir putin moves forward with an invasion of ukraine. there has been a russian troops in that part of ukraine already over the past eight years. >> how much ado further sanctions worry russia -- do further sanctions worry russia? >> i spoke to officials who are still there who are part of putin's government as well as executives who say that since 2014, the annexation of crimea and the sanctions that followed, they have worked hard to make sure they could sanction proof their economy. to say that sanctions would not hurt would be naive. it is an economy that is intertwined with western

financing. especially when we look at how the banks operate. if you are looking at borrowing a secondary trading for bonds when it comes to the russian banking system, look at the oil and gas market, all of that is done through u.s. dollars. this will have pain in russia. officials talk about the pain that everyday russians felt after the sanctions following the to the 14 annexation of crimea -- the 2014 annexation of crimea. it would be hard russia but we are not there yet in terms of how harsh the sanctions may be following the events of what happened today. >> the very latest, let us bring in the senior strategist at bluebay asset management. we appreciate you being here.

how concerned are you about the threat of further sanctions? what is the impact that you see for the russian economy? >> i am worried about the stress of a major european war. markets have not taken that on board until the last few days i think. if they are wanting european allies to be correct, it will be a significant war, the most serious conflict we have seen in europe since the second world war. perhaps than the previous session. secondly, you mentioned sanctions. i think your correspondent mentioned likely is a sentient related to the pr and annexation and the presence of the russia recognizing their independence,

it is likely to relatively modest. we could see some sanctions on banks. and that is a possibility. tomorrow, it sent a shock that a lot more is going to come. i think there is a real willingness from this administration to rollout significant sanctions. further incursion of russian troops into ukraine, they're willing to hurt the russian economy fairly significantly and i think it is notable that they are willing to take pain themselves. from potential backdrops of imposing very large sanctions. magnitude of the loss.the the largest since the start of the pandemic, the selloff in 2020. we see the largest drop from the peaks in that we as well.

both sides feel that markets have been thinking this is strategic to and fro from the two sides. is that underestimating the real threat? >> we should do what our own governments are telling us. for the biden administration, it has been crystal clear. the record shows that the minsk agreement perfected the cease-fire. i think more particularly, the agreement was putin's approach to stop ukraine's organization. it was a federal solution to pension -- vladimir putin. he has thrown out this idea of a federal solution. what is he going to do to stop

ukraine westernization? we heard it in press conference, this is an angry person who is determined to change this status quote. -- quo. that is a clear message from our government, provided, from fourth johnson and for putin himself. -- from our government, others, and from boris johnson and putin himself. haidi: western nations feel economic pain, that is fine. is that the riskier? -- risk here. we have oil going up to $100 a barrel. vladimir putin is not so cash-strapped as a last time he took on the u.s.. >> the guy wants to pull ukraine back from its western drift.

it is central to what russia seems to consider the russian identity. it is determined to stop that. this is a decoration by putin about ukraine and i think he is determined. he seems very determined to use coercive diplomacy to limit and go beyond that. he has to have troops trying to get to ukrainian troops for seven years. he has proven a willingness to secure his objectives already. we are lucky to see that. haidi: one of the headlines across bloomberg's is ukrainian president saying that he will talk to others. do you see any scope in that? what would that do for him? how are into into this -- how

would turkey enter into this? >> he will speak to putin and putin does not care anymore. the negotiations are dead. putin is saying that you either do what i want or i resort to other means. it is crystal clear. the messaging from potent. it is very worrying. markets should wake up to what we are seeing. >> if you have exposure to emerging markets, how worried you need to be right now? where you see the most risk of contagion with this coming out at the same time as people worried about what the pet is doing too -- fed is doing too. >> there is potential conflict,

it is very vulnerable. it has external financing programs -- problems. it is very dependent on energy and modern tourism. if it is a conflict, it has continued escalations. regional services are under threat. another interesting point people are missing is if putin gets away with this it is the escalation in ukraine and press to take ukraine back. what kind of message does that send to china about taiwan? is taiwan? -- is taiwan next? >> there is a major risk to europe. almost a new iron curtain will

extend across the region. vladimir putin is carving out his influence. durable will have to think about increasing defense spending for the next few years ahead and significantly. haidi: just when we thought we had it all figured out. he will your eloquent recap of what is going on and what -- thank you for your eloquent recap of what is going on. let us get to paul with the first word headlines. paul: the biggest opec-plus producers are pushing for another output hike. sources are looking to continue their current strategy and want to add another 400,000 barrels a day of crude oil to the market. the nation alliance has been gradually increasing supply since the start of the pandemic. they meet on march the second to make a decision at all members need to reach consensus. -- and all members need to reach

consensus. flagging a 50 basis point hike. bowman said she favors forceful action to quell inflation and supports raising rates in march. she says it is too soon to see how big of a hike is warranted. china may be reviewing scrutiny of the ant group. authorities are telling the nation's biggest firms to start a fresh round of checks on their financial exposure and other links to the group. the process is the most thorough and wide-ranging look into deals with ant group. it is unclear what triggered the inquiry. hong kong is excited to run a budget that is headed further into the red. the covid spy has push authorities to what in travel measures that will leave a heavy toll on growth. hong kong financial secretary

has expected to drive the government budget to its fourth fiscal deficit in a row. they announcement is expected on wednesday -- the announcement is expected on wednesday. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. >> how it is find the -- how it is plain the qualities market. also get the outlook for the fixed income as policy between the fed and toc diverges. stay tuned. this is bloomberg. ♪

>> we are checking on how adr is performing in the u.s. session. this is what everyone is concerned about china's technology crackdown continually against the alibaba. losing 4%. tencent losing 2.5%. it may be facing at an impending crackdown on social media and gaming companies. people have not quite believed it yet. the golden china dragon index is down. we will see how this looks when the market opens a couple hours

from now. let us get more on the bloomberg's group that china is asking banks and state owned enterprises to report their exposure to ant group. jon liu joins us now. you have broken the news, what kind of reaction are you getting? >> i think what we have been reporting, that has been adding suspicion to a market thinking that the technology crackdown may not have ended as expected. we had these warnings about scams on the metaverse over the weekend. we had these rumors online about tencent. adding onto that is the news that state owned firms have been told to review all of their links to ant group. the report back to authorities as soon as possible.

we do not know what the catalyst for the investigation was, we do not know if it is would result in some sort of legal action or bring little reaction. the people we spoke to called this the most far-reaching examination of ties between ant group and state owned enterprises they have been a part of. >> there is more for crackdown, this indicates it is not over yet. >> it definitely does not seem like it is over yet. it is probably likely the more action is coming down the line. -- that more action is coming down the line. we chat, the super app that is used from everything from talking to friends to pay for groceries and calling a cab. having that much data about that many people makes these companies are prone for scrutiny from regulators.

-- more prone for scrutiny from regulators. haidi: we tell you what to expect as the lender grapples with issues in hong kong. this is bloomberg. ♪

haidi: a momentum from positive third-quarter results. interest rates, covid impacting china to feature predominately in the outlook for the year. now we go to our correspondent who joins us in hong kong. what are you expecting? >> there going to see if they can continue that momentum they

build up in the furthered quarter -- third-quarter. they saw all regions possible in 2021. demonstrating earnings adversity. things are changing a little bit, they got most of the profits from the asia-pacific, three point $3 billion from asia-pacific. the u.k. was about 1.5 billion pre-text -- pretax profits. the interest rate environment has improved for the bank. u.k. having a couple of interest rate hikes. the fed is about to take off and lift off and that will impact hong kong. it follows fed policy. the interest rate could improve going forward in the outlook. we have to see how that plays out in the fourth quarter. our guest who will be on later, the cfo, back in october he

predicted this. he said we think that we are close to an inflection point in revenues. if we do get rate rises, he will be a material cake or -- kicker to our performance. there is a lot of moving parts with this. they bank that is headquartered in the u.k. but the bulk of the business is in hong kong and greater china. the outlook is that better outlook that we saw in the third quarter and the stock gains we have had since then, stock is up 34% your today. -- year to day. results have not replanted in revenue upgrades expectations. that has concerns about momentum. there is concern about revenue coming out of china and we have a border closed between hong kong and china. because ofstctions and we have

potential impacts. that is what we are looking at. the regular things we always get at the end of the year, dividend outlook, buybacks, etc.. >> what is the biggest risk? >> i think it is going to be the asia outlook. this is part of the business that produces the biggest blow of revenue and profit. -- bulk of revenue and profit. the credit impairments, they did reduce the ecl in the third quarter. in asia, there are potential losses and at the deterioration because of the impact in this part of the world. haidi: thank you. we will be speaking to the cfo about those results once as a break in a few hours time. you do not want to miss that

conversation. you can see right there. finco, a strong year of games -- against. why and

>> let's take a look at the reaction when it comes to some of the equity markets that are trading at the moment, firmly risk-off as we have further developments that are really starting to -- escalation when it comes to the geopolitical situation. the asx down by over 1%, 1.4% at the moment. we are seeing pretty broad-based downside when it comes to the segments that are trading lower but technology on the back of an extended fall in u.s. futures.

in particular, text, down by 3%. consumer stocks trading lower, weakness across financials and when it comes to the broader asx, we are seeing the biggest declines since the end of january, trading at the slowest levels in two or three weeks at the moment. we are seeing some of those moves when it comes to the safe haven play. we have seen australian bonds and kiwi bonds rallying and the upside when it comes to trading in u.s. treasuries as well. we will see that pent up selling mood when u.s. markets return to trading. crude markets are looking pretty resilient, up by 4% as we continue to really assess the impact of this escalation on global energy markets. let's discuss whether geopolitical risk is overshadowing other concerns and whether this would potentially change the course for its rate hike past. joining us now is stephen chang, pimco portfolio manager for asia.

so much focus has been on the inflation outlook and really what happens to the treasury curve and if we are looking at a potential misstep by the biggest central bank in the world. how do these geopolitical implications way into back now? -- weigh into that now? stephen: inflation has been much more of a domestic concern so i think the russia-ukraine situation bears watching to see if there's any scope for escalation or de-escalation from here onward. the market will be, you know, assessing that, and what kind of impact to energy prices and on broader economic impact, particularly for europe. from asia, where we stand, it is more of a beta move, watching for reaction of credit markets around the world and also in the

equity market. >> do you see much contagion when it comes to em debt? stephen: the russia portion probably already has reacted to some extent overnight. i think asia, in particular on the credit side, we are experiencing, particularly for the high-yield segment, more of the idiosyncratic nature since last year, more of that led by the china property segment so it might have a little less influence from this em risk-on, risk-off type of move, but more reliant upon what china might do in terms of their easing policy and how they might target economic growth for 2022. that said, we are anticipating some issuance of sovereign debt by asian countries possibly this week or next week.

hence, that might be driven more by the em investor and that would have some implications from the russia situation. >> in terms of the china property market, we had another property developer who looks like they were in pretty good shape. suddenly not in good shape. is that a red flag or is that the tail end of what is going on there? >> i think what you are referring to is -- in january. in general, i think the property market has been quite weak for end user demand. some of them are coming through from december and january sales numbers. the liquidity situation for many of the developers has been very tight since q3, q4 of last year,

and there is a maturity wall coming up over the course of the next two or three quarters but what we are seeing is the market is already pricing in for that weakness to continue. there is considerable discount or stress in the market so we will be watching for any policy changes around that. we believe china will value stability quite highly this year with the joint sessions in march. they would reiterate a growth target of around 5%. housing will need to be a critical part of that to continue the stability mantra and we are watching already a number of fine tuning measures on the property segment. we noticed that in selective

cities, there has been a lowering of mortgage rates, lowering of down payments, and there are other relaxations that might be coming through on certain presales. those are all indicators that it might be slightly more positive but it might take time to take effect. >> now we have focused on ukraine. you and your team are pretty positive on india and indonesia. are they sort of almost in their own world to a certain extent where there is reason to be looking at them? stephen: both of these countries, we would expect economic growth to be in decent shape this year. they don't have some of the policy changes, crackdowns that we are noticing in china since last year so it's almost a safer , more defensive area to be,

particularly for indonesia. we see the country having kind of established themselves and could be re-rated as they have economic growth with pretty benign inflation if you look at the currency market and great market. it has achieved quite a stable behavior at this point with all the noise around the world right now. >> do you still keep chinese sovereigns in your portfolio as a diversifying element? i know you sort of called on the divergence play between china and the u.s., given the drip freed -- drip feed of easing measures. stephen: we have been very positive on china in the onshore interest rate market. they have outperformed so we are taking some chips off the table at the moment. they had a window before the fed tightening to ease and we have seen some rate cuts along the way.

we are looking at this now as more of a fair value rather than being cheap. in terms of the overall dynamic, as some of the easing measures come through, maybe the economic growth will also kind of respond to it. the easing measure might also entail more credit growth and necessarily more monetary or rate cutting in terms of that action so the interest rate market may have less room to go down from here. >> thank you, stephen chang, walking us through many parts of the asian fixed income world. now, we are going to get over to the first word headlines. paul allen. paul: let near pruden -- vladimir putin has -- moscow's standoff with the west. he signed cooperation pacts with separatist leaders at the kremlin and demanded ukraine's

government stop all military action. russia's military said it killed five ukrainians they called saboteurs. boris johnson has confirmed the covid rules will come to an end in england in a move that has drawn criticism from opposition lawmakers and health experts. darting on thursday, people infected with the virus will no longer be legally required to self-isolate or inform their employers and free virus testing will end in april. >> until april 1, we will advise people who test positive to stay-at-home but after that, we will encourage people with covid-19 symptoms to exercise personal responsibility. just as we encourage people who may have the flu to be considerate to others. paul: japanese prime minister uchida says -- kushida says

benefits of growth should flow to more stakeholders. he was fielding questions about policies some say are negative for stock prices. in the so-called new capitalism program, he talked about a shift. he says capitalism must be something that belongs to all. mike pompeo is scheduled to travel to taiwan next month and that would make him one of the most senior u.s. dignitaries to visit the island in recent years. he is said to have accepted an invitation from a taipei based foundation. local media reports he will meet with another president. pompeo was a vocal advocate for a hawkish china policy. 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 paul allen. this is bloomberg. haidi: breaking news when it comes to the ukraine. justin trudeau says canada is to impose economic sanctions

against russia. this coming as we see the flurry of western allies looking to really react after the russian president, vladimir putin, signed a decree officially recognizing two self-declared separatist republics in ukraine. canada strongly condemns russia's recognition of so-called independent states in ukraine, a blatant violation of ukraine's sovereignty and international law. he says canada stands strong in its support for ukraine and will impose economic sanctions for those actions. we will have to see what the details of those sanctions will be given that we have also heard other western allies suggest the same. we saw -- we had a report out earlier that the u.s. is considering moving its embassy out of ukraine. we saw the latest update when it comes to the white house banning investments into areas of ukraine as they continue to think about further action. we heard from the canadian finance minister, really using that g20 meeting to issue an

impassioned warning to her russian counterparts as well about the threat of invading neighboring ukraine. we continue to watch for updates on this very much developing story. kathleen: i'm sure they will be spilling out, headline after headline. max, tensions in ukraine are adding to bullish oil. $25 a barrel. more on the commodities complex, just ahead. this is bloomberg. ♪

haidi: tensions over ukraine have whipsawed markets, exacerbating an already stretched supplied, complicating efforts to contain inflation, underscoring the impact. for more, let's bring in our guest. and a senior oil associate. let me start off with the crude market. how much of this is baked into prices? how much further worsening could we see when it comes to the impact here in asia? >> russia is top three largest oil exporter in the world and half of their oil exports end up

in europe. they rarely account for a quarter of imports so russia is europe's largest oil supplier i quite a wide margin. any sanction plays on russia depending on the extent of costs and could send prices blowing past $100 per barrel. a refiners. as you come in as a close second. they are already struggling in a very high price environment. now, we think it's quite likely that prices would already be in the triple digits if not for the progress of the iran nuclear talks and keeping a steady

supply of oil and gas from russia to europe and other parts of the world will be neutrally beneficial for all conflicts but we think that any tension or restriction plays on russian oil and gas and would send prices blowing past $100 per barrel. kathleen: let's look at gas and natural gas. how will the situation impact the asian lng market specifically? >> good question. you think in asia, you will not have an impact. you are going to see chain reactions. you are going to see markets reacting to the situation if there is an escalation. in the event of an escalation of the tension, you will potentially see pipeline natural gas disrupting supply flows to europe. however, that has already been happening for the last couple months. we have seen natural gas pipelines flow through ukraine.

you have seen lng coming in to compensate that so you have seen u.s. lng arriving in europe. this is already happening. in the event of an escalation of tensions, there is only so much supply in the world so what -- the thing the market will have to look at is how the asian buyers are going to react to this situation specifically. not necessarily europe. the tensions will make european gas markets -- you will see volatility. the big driver is going to be potential competition with asia for the finite supply of lng so what is happening here is right now, if you look at bloomberg's forward curves for prices, the price spread between the dutch gas benchmark and asian spot lng sprite -- price index is less than one dollar.

that is not currently necessarily enough to incentivize u.s. production to come all the way to asia so we are going to see this competition heightening depending on what asian customers want. kathleen: thank you. followed by the perfect guest. for more analysis on the impact of ukraine tensions, we are bringing in the ceo and cio at trade flow capital, a financing firm. tom, let's dive in on the latest turn of events with vladimir putin deciding to go ahead and recognize the separatist regions of east ukraine. crude oil in rally mode. where are we going from here and how significant is this? >> yes, it is great to hear the details about the oil and gas market. we have not seen prices like

this for brent crude out of the north sea since 2013 so almost a decade in terms of price levels here. aside from oil and gas, russia is a massive exporter of wheat. the wheat market had already seen potentially great crops coming out of russia this year and out of europe. if there's any embargoes or problems with russia, it will be food prices impacted as well as the energy bills at home. also, russia is a massive exporter of nickel and we are seeing very low inventories of nickel and prices have been quadruple 2019 prices because of electric vehicle production and the reliance of nicole in battery technology so there is quite a broad scope of impact here if things were to escalate further. kathleen: is there a way for an investor or trader to make money on this? tom: the volatility traders

would be in there. we are certainly looking for some good volatility in the markets to continue. so some option strategies on volatility is the safest way. i think in terms of hedging, we are at record high prices. i was thinking of the world bank's report, the pink sheet, with a whole load of commodities all over the world. everything is higher than pre-pandemic levels. some considerably so. a lot of agricultural markets, all higher, so we are already at high-end prices. the upside is quite dependent on these tensions. if i had to protect something, using calls for investors. volatility strategies look like the best bet at the moment because we are guaranteed to some of that. haidi: there is already the shortage when it comes to the

lme. is it possible to discern at want -- at what point in this cycle would be for some of these metals? tom: electric vehicle production, also with commitments on climate change, etc., you know, after the paris climate change meetings, etc., until we find alternative large-scale battery technology, nickel will be in demand. in terms of inflation, hopefully, that will peak around the middle of this year. the other thing which might dampen the upside of commodity prices, if there is not any big sort of tensions with ukraine and russia carrying on, would be the fact that the u.s. dollar is going back up if we look at the index futures. that is trending higher, looking

at fed rates coming up again this year. some of that is already factored in but the u.s. dollar going higher does tend to put some of it on the rallies and commodities prices to slow things down a little bit. haidi: tom, great to have you with us, trade flow capital ceo and cio. you can get a roundup of the stories you need to go in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals, and we have lots more ahead. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. india reiterated plans to list this year despite the volatility in global markets. the state run insurer says it is keen on having the ipo in march, signaling urgency from the government to boost cash inflows and plug a bunch of deficits. india is planning to raise $9 billion by selling a 5% take. the indian spirits manufacturer

is said to have chosen banks to manage its ipo this year and sources tell us the firm includes securities and access capital with more banks likely to be added to the lineup. allied lenders plans to raise $300 million in the share sale and is seeking a valuation of $2.5 billion. reliance industries could intensify a bidding war that could be worth $5 billion or more. sources say they are in talks to include james murdoch funded -- as well as comcast in a consortium to outbid competition. amazon is said to be in the fray. sony is expected to join the race for the rights held by disney. kathleen: japan opens for trade in a few minutes. after a drug you develop with astrazeneca was shown to prolong the lives of some breast cancer patients. we are watching japan petroleum and cosmo on rising oil prices

tied to russia-ukraine tensions. market openings in seoul and tokyo. watching bond markets, currencies, risk-on, risk-off. we wait to see president putin's next move in ukraine and the u.s. response. this is bloomberg. ♪

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kathleen: welcome to "daybreak asia." i am kathleen hays. haidi: i am haidi stroud-watts in sydney. asia's major markets have just opened for trade. president putin recognizes separatist areas of ukraine in a dramatic escalation of russia's tensions with the west. those geopolitical risks look set to send asian stocks south. investors are taking refuge in havens. oil drums.

china may be renewing scrutiny of jack ma's ant. kathleen: breaking news now. the latest on ukraine-russia. the un security council is now saying it is going to hold a meeting tonight, monday, u.s., on ukraine, according to the ap. remember that around mid afternoon today, everyone was waiting to hear about the potential summit between president biden and president putin. the french president managed to get on the table and suddenly, putin had his security council meeting on television and announced that he would recognize the two separatist regions in eastern ukraine, a very contentious, a political hot potato, you might say, so now, after the u.s. announced more sanctions, threatened to move its embassy out of ukraine. trudeau in canada saying more

economic sanctions from them. this is what we are getting from the un security council. watching this and running all the headlines we get. let's take a quick look at the markets in japan. one of the most important things you see, the nikkei is already down one point -- nearly 500 points. it closed yesterday much, much higher and you can see the yen actually -- that is a haven play but that is what people have been expecting. government bonds. you can see the benchmark is trading at zero point 10. it is actually rallying as well. this is a big story around the world. you can look at a story like the fact that two more japanese companies declined to issue bonds just yesterday overnight because of all the volatility in the markets. this is something that is the

focus now. what happens next? until we see more clarity, markets will continue to react like this. let's look at the kospi to see where it is trading now. again, down 1.5%, a quick move. looks like actually the korean won is weakening a bit. we will take a look at those now. haidi: that flight to safety and quality continues to play out as a broader theme. no surprise. nasdaq futures, s&p futures, the aussie dollar, the kiwi dollar, some of those risk and, the ruble, crude as you mentioned, gold, treasury futures, australia and new zealand bond futures as well as some of the flows into the yen as well. when it comes to trading across the australian markets, we are seeing a downbeat session when it comes to tech on the back of the drop of nasdaq futures as well and in new zealand, we have the rbnz meeting and a big

question, if things really escalate to the worst possible scenario, do we see a delay to tightening by some of these central banks that are full steam ahead looking to start tightening? let's take a look when it comes to the trading in the ruble. in particular, further downside. you have to wonder how much more weakness across emerging markets and russian assets we can see. the ukrainian president, zelensky, is addressing the nation, saying the russia decree legalizes troops in separatist areas, that -- it undermines peace as well as the ongoing talks as well. at the same time, we are hearing, as you reported by the associated press, that the un security council will be meeting tonight or perhaps, given it is monday night, i guess right now, as an emergency gathering there. all of this coming as we hear more moves from allies from the u.s. when it comes to potentially removing its embassy from ukraine, when it comes to the banning of investments in

certain parts of ukraine. we heard from justin trudeau really saying there will be economic sanctions coming from canada as well. the finance minister has warned of these crushing sanctions if russia was to pursue this path of invasion. we are looking for more developments as we hear from the ukrainian president speaking to his nation and, kathleen. kathleen: when it comes to that meeting, we can assume it will be zoom. they can meet just about any time, at any place they need to end this is a critical matter, time not being wasted to figure out what the official response will be. for more on the impact, let's bring in goldman sachs asia-pacific equity strategist. i know you have been watching all of this i'm sure for hours on end as all of us have. where are we now in terms of what it means for the markets? >> good morning. thank you for having me. obviously, they are

understandably concerned about the geopolitical tensions he appeared what i would say is that you could see near-term pressure on the markets because of this, as we are already seeing here in the open. people should look at the longer term and stick to that. however, in the near term, what is very clear is this could put upside pressure on commodities prices or energy prices in general as you are already seeing and that basically means you could see prices for energy and commodities. because of the demand supply reasons, so on the margin, we think this could -- some of those views. kathleen: when you look at central banks, and right now, the federal reserve and others are drivers, right? for what happens across many asset classes. to what extent will you be looking for this situation in ukraine versus russia and the world response and the fact that

it could push up commodities prices which stokes inflation and could be very bad for consumers and businesses? it is very important. how might that alter the path of the central banks and your sense of what you need to do now? stay in cash or put some money on the table? >> i think that is a great question. on inflation, i would say, i mean, at the macro level, the fact that, if you sort of look at higher inflation, that usually puts pressure on equity markets in general but i think the key point here is at the same time, equities in asia, you have china center banks, the pboc is easing policy. in the macro context, wherein, the pboc easing policy and even in markets where we are expecting rates to form, central banks to tighten, they will not tighten as much as they are tightening in the u.s. so our view remains that markets should

be able to do fine. we have a low target for equities but at the more microlevel, you are right. inflation is an issue for companies, corporate profits, and margins, and to that extent, we favor upstream areas or downstream areas in the markets and in general, one of the favorite themes we have is the theme of pricing power. we stick to companies with a better pricing power. they will be able to pass on higher prices to consumers and protect their margins. haidi: we continue to monitor some of these lines from this speech we hear from president zelensky to his nation of ukraine, saying russia is violating ukrainian territorial integrity. he earlier said within that space, it really legalizes these troops in separatist areas and it undermines peace as well as diplomatic talks at have been held between allies, with moscow to try and find a

solution out of this crisis, and all of this coming as we see this kind of perceived escalation and the backlash when it comes to various sanctions from western allies as well. let me take you to our question of the day which we alluded to earlier but it plainly asks, will these geopolitical tensions have an impact on rates? what does it mean for rates? does this heighten the chance of a policy misstep? could we see central banks go ahead with tightening, that they will have to, you know, rain back policy -- rein back policy if it is worse than feared? >> you are right. think about this in the context of global growth and to the extent if there is a tightening in financial conditions because the markets selloff that could sort of basically mean that central banks may not go as -- tightening as perhaps before the geopolitical tensions came into

the picture but i will point to the fact that when you look across the region, especially for asia, you still have parts of the region which is easing policy and there's huge implications for how we think about markets in general and even for asia, many of the central banks which we think will tighten, they are not going to tighten as much as in the u.s. inflation in general is not a problem for the most part. our base case still remains that as long as the growth comes through, markets could go higher. in the near term, there could be pressure but we are looking to the near term, focusing on the longer-term trends here. haidi: when it comes to china, there seems to be a cooling to do with the opportunities that a lot of investors have gone into.

that underperformance coupled with more of a muted approach to easing. does that mean we need to be more selective when it comes to the chinese market now as well? >> on china, we have taken a more constructive view coming into 2022. onshore markets and offshore markets. on the underperformance, to be fair, if you look at the markets year to date, the china offshore market is basically flat, down 7%. china is outperforming here. last year, it was up 27%. in general, i think that the main key point for china i would mention is that when we speak to investors, and we have been talking to investors over the last couple of weeks, people generally agree to a more constructive view on china partly because of the fact that it is probably going to be the only major central bank which is

still going to be easing policy. people, there is still a gap between sort of the -- even though people are generally sympathetic to the idea that china may outperform here, they not -- they have not necessarily put the money to work. a lot of people significantly underrate china. as markets start to form up, that could force investors back in. in general, our view remains that china should be able to have a better year and outperform global markets. haidi: great to have you with us. goldman sachs asia-pacific equity strategist. we appreciate you putting up with the flow of breaking news we are getting this morning. we continue to hear from the ukrainian president saying that the ukraine has a different military than it did in 2014, reiterating that the russian decree is a violation of ukrainian territorial sovereignty, that the decree

legalizes troops in separatist areas and undermines peace and talks and all of the diplomatic efforts we have seen over the past few weeks. let's get the latest on the situation in ukraine with our bloomberg reporter. we are hearing about this emergency national security council meeting to be held at guess anytime now. they are saying monday night. we are also hearing about various allies scrambling to put in place more sanctions, expecting to hear more details from the white house on tuesday. how do you -- what do you make of this, really, and how much of an escalation is this? >> it is significant. what we are hearing as far as sanctions go, we already know that president biden has issued an executive order to ban trade and investment financing by u.s. citizens from these breakaway regions. the white house press secretary said these measures are separate from and would be in addition to sanctions that the u.s. and

allies would impose if there were further invasion from russia into ukraine. we know that the u.k. is looking to impose sanctions on russia as soon as today. the e.u. is starting a process of initiating sanctions, so many things now happening from the western response to this latest announcement from russia. haidi: does this show that vladimir putin is -- diplomacy means next to nothing to him? he has just been playing a game and this was very possibly his game plan all along, suggesting that is for the game plan -- diplomacy may not be able to affect him at all and you even have to wonder if sanctions are going to make that much difference. >> well, that is something that we have heard certainly from the white house, that president

putin had already made a decision to invade. that is something president biden said last week. we do not know at this point where the diplomatic efforts go. antony blinken is supposed to be meeting with his russian counterpart, sergei lavrov, this thursday. so a lot depends on just what happens with russian troops, if russian troops do move into this region, with that concert an invasion? does that mean diplomacy is done? president putin has said that russia intends on sending what he calls peacekeeping troops to these regions. as far as the ukraine is concerned, that would mean russian troops are invading his territory. kathleen: -- haidi: bruce einhorn with the very latest. let's get you a look at european stock futures opening up at the moment. we saw that tumble along with the biggest tumble in russian stocks since it crimea annexation of 2014. he had european stocks closing

at their lowest level in four months and it looks like the selloff in risk assets will continue. seeing your stoxx 50 futures down by close to 2%. dax many futures down by just about 2% and we have seen the broader underperformance when it comes to german growth, just not catching up compared to some of the other equity indices around the continent. ftse 100 futures also softer, probably the best performer by about .5% and tech stocks and automakers, some of the biggest decliners in the european session so we did also have volumes lower with u.s. markets closed for that holiday as well so that is clearly skewing some of the numbers that we see but those continuing tensions, the the escalation that is being perceived between russia and ukraine, clearly weighing on sentiment. kathleen: the nikkei down 2%. these numbers are similar across the board, aren't they? still ahead, chinese tech shares slumped.

our exclusive reporting. companies are being -- outline their exposure to jack ma's ant group. this is bloomberg. ♪

>> you are watching "daybreak asia." i am paul allen with the first word headlines. opec plus producers pushing for another output hike next month.

sources say they are looking to continue their current strategy and want to add another 400,000 barrels a day of crude to the market. the alliance has been increasing supplies since the start of the pandemic. they will make a decision on march 2 and all members need to reach a consensus. the fed governor is the latest policymaker to flag a 50 basis point hike at the fomc's march meeting. speaking at a conference in california on monday, she said she favors forceful action to quell inflation and supports raising rates in march. she added it was too soon to tell how big of a hike would be warranted. bowman is a voting member on the fomc. boris johnson has confirmed covid rules will come to an end in england in a move that has drawn criticism from opposition lawmakers and health experts. on thursday, people infected with the virus will no longer be legally required to self-isolate or inform their employers. free virus testing will end in april. >> until april 1, we will advise

people who test positive to stay-at-home. after that, we will encourage people with covid-19 symptoms to exercise personal responsibility. just as we encourage people who may have flew to be considerate to others. paul: hong kong is expected to unveil a budget that is headed further into the red. the covert spy pushed authorities to implement some social distancing and travel measures which economists protect will leave a heavy toll on growth. paul chan is expected to drive the government budget to its fourth fiscal deficit in a row in the coming years. the announcement is expected on wednesday. 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 paul allen. this is bloomberg. kathleen: it bloomberg scoop now. china asking its banks and state owned enterprises to report their exposure to jack ma's ant

group. our executive editor for greater china, jean-luc, joins us. latest -- may this story out again for us, what we know and what we think is driving this. it seems surprising to me that the authorities, if they continue on this path that they keep pushing so hard, when do they stop? flex what we know is state owned banks and companies have been asked to examine whatever links they have to ant group all the way up until january of this year. they have been told to report back to authorities as soon as possible if they find anything. the people that we talked to have described this as the forest reaching examination of ties between state owned enterprises and banks the ant group that they have ever seen. we do not know the exact catalyst for why this is happening nor do we know indeed if any regulatory or legal action will result from this examination. it does add to this general

wariness about regulatory scrutiny continuing in the tech industry. we august the have action against meituan on friday. there were warnings from the government over the weekend about scams involving the metaverse. there was a rumor earlier this week around tencent that the company did come out and denied but causing the market to sell off. haidi: that response from tencent after the selloff was really quite interesting. very aggressive. does this mean that even though tencent, for example, was so oversold, that there is such cheap stocks in this space that we are not going to see much of recovery -- of a recovery yet? >> i think the key here is if people think the regulatory environment is going to settle. given what has happened recently, a lot of people i think understandably so are worried that more action is coming down the pike. the rationale for that would have to be that tech companies

like tencent and alibaba, their businesses are so large and expand so far into all parts of chinese society that they are prone to regulatory scrutiny because of all this data that they have and because of all these points that they touch throughout everyone's lives. haidi: bloomberg's rated china executive editor there. 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 can go to dayb on their terminals, and this is bloomberg. ♪

haidi: we are seeing that broad risk-off theme, the flocking to havens, really consistently playing out for another day as we hear that the u.n. will hold an emergency meeting on russia's move on monday night. the session will be open so we will be expecting some lines and updates out of that as bob but taking a look at just a sea of red across asia. the nikkei 225 off. we are seeing the selloff brought in through to the kospi as well as here in australia, where we are seeing off session those, the losses being dominated by tech as we see mastec futures bearing the brunt of some of those losses. s&p futures as well as european futures that had just come online also seeing the extension of the selloff. the question being of course when it comes to the rbnz and the fed and some of these other central banks that are

tightening trajectory, does this escalation and a potential worst-case scenario when it comes to a military conflict change the outlook when it comes to policy and rates? hong kong considering tightening social distancing measures. we will get at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity.

>> hsbc expected to build on momentum from positive third-quarter results. earnings in a few hours. the interest rates and covid impact and covid impact in asia are likely to figure prominently into the bank's outlook. let's bring in our chief north asia correspondent. what can we expect? big pluses and a couple minuses? >> there always are with banks. they have many different fingers in different pies.

hsbc domiciled in the u.k. but the bulk of its revenue and profits from the asia pacific which has its own challenges. we are entering an interest rate hike environment with the fed about to lift off and the u.k. having a couple rate hikes. that is improving the interest margin outlook. for the fourth quarter results and the full year 2021, likely to build on that momentum we saw in the third quarter. i pulled up the statement, the group's ceo saying the strategy remains on track with good delivery in all areas and all the various regions were profitable in the third quarter, demonstrated continued earnings diversity. he talked about the external environment, they retain a conscious outlook but they believe the lows of recent quarters are behind us. can they continue that momentum which, the stock has had

momentum. it is up about 42% in hong kong since september 30, up 24% year to date. bloomberg intelligence says stock gains since the third quarter results haven't yet reflected in revenue upgrades to 2022 expectations. perhaps because of external issues. bloomberg intelligence says the interest income growth of 6% this year, 5% loan growth and flat costs are facing a consensus but the wildcard you talked about prevails in asia. it will drag on asian growth in the u.k. takes center stage in this report card after those two interest rate hikes. the travails and asia, well documented, whether it is in hong kong, a fifth wave of covid and the lockdown of the border between hong kong and china and also the debt issues we have seen cascading among those property developers.

we might get guidance on potential exposure. more details on the credit woes of developers. in the report card we will get the standard outlook perhaps on dividends, a return to quarterly dividend payouts as well as the share buybacks which they announced in the third quarter, up to $2 billion, another share buyback. what further buybacks are in the pipeline with noel quinn? i will end with the cfo. we will speak with the cfo this morning, or this afternoon in hong kong. in october he said we think we are close to an inflection point in revenues. if we do get the rate rises, it will be very material kicker to our performance. as i said, rate rises are in the cards. from the fed, to the u.k., the interest margin should be impacted positively for the bank. that impacts hong kong.

they follow the fed. haidi: when it comes to hong kong, lenders have exposure to that marker. what do we see as the impact of omicron on business and operations? >> that is a wildcard. we have to look at whether there is asset deterioration. we are looking at, the interesting thing with wage growth, i think it was morgan stanley analysts were talking about the issues about obviously, on wall street the banks have been paying bonuses to junior bankers, trying to attract talent and retain talent . hsbc over the last couple years through the pandemic, noel quinn commented, they haven't necessarily been able to pay more and they have been lagging their wall street peers. that is a tangible impact in hong kong. that

recruiting talent abroad. morgan stanley analysts say wage inflation may offset benefits to margins from those rising interest rates. again, you can offer more money but can the bank in hong kong actually recruit and get good talent? that is also facing competition from other big banks they are trying to recruit and retain. haidi: a big issue for lenders at the moment. stephen engle with the latest. we will be speaking to the cfo himself. the results breaking in a few hours so you might not want to miss that conversation. covid in hong kong, one of the concerns for hsbc and other businesses, we are hearing hong kong officials are weighing

tighter social distancing measures and preparing for universal testing. for more, let's bring in our senior medical reporter. great to have you with us. you don't envy hong kong policymakers, having seen this experiment -- experience across other economies. what could be some of the ways they are trying to get this under control? >> the outbreak is increasing exponentially in hong kong and they know they need to do something in order to get it under control. they are thinking about doing things like increasing, tightening of where they allow people to go, perhaps closing shopping malls, reducing even further the amount of time and numbers of people allowed in restaurants. most significantly they are talking about different types of lockdowns they could roll out across hong kong. nothing kind of firm hard lockdown we saw across china, where people literally can't leave their property, but more like what we saw in the u.s. and europe and other places, where

everything is closed except grocery stores and restaurants not to eat in but to do carry out. they are thinking about rolling lockdowns, doing them in some parts of town as the outbreak moves. they are trying to be creative to get the virus under control. kathleen: from the u.s. standpoint, in this country, it has been realized that given this path, you don't stop this virus by locking down periodically, particularly as it gets to be more transmissible, and when people are vaccinated, they stand little chance of dying. do you think ultimately, that is what the hong kong authorities will have to realize? >> in all honesty, i think they do realize that situation. the problem in hong kong is, it is caught between a rock and a hard place. we know no one in the world has ever gotten an outbreak of this magnitude under control and back

to zero, ever. what hong kong is trying to do is something that has never been done. not only that, you can go into a restaurant and eat in a restaurant here. you can go to a shopping mall. which again, you are trying to do something that has never been done but you are allowing things to happen that allow the virus to spread. it is difficult. the problem is, in hong kong, many apartments are very small. it is hard to keep people in them. they don't have things like kitchens. how do you get food to 7 million people? it is an incredibly difficult situation. i do think they are trying to think creatively about it. in the end, you are right, the virus will do what it will do. the chances of it being successful here is pretty small, getting back to zero, especially without the kind of hard lockdowns they did in china. kathleen: so many hard choices. no easy answers in any country

or any neighborhood. michelle, thank you. our senior medical reporter. let's get to paul allen. >> ukrainian president volodymyr zelensky says russia is violating territorial integrity after vladimir putin recognized separatist republics in eastern ukraine. in a televised event, putin signed cooperation pacts with separatist leaders and demand ukraine's government stop military action. ukraine criticized the decree for undermining peace. china may be reviewing scrutiny of jack ma's and group. authorities are telling the biggest state-owned firms and banks to start a fresh round of checks on their exposure and other links to the group. the process is described as the most wide-ranging deals -- look into deals with ant. it is unclear whether this will prompt action. the japanese prime minister says

the benefits of growth don't belong to a limited group and should float more stakeholders. he was facing questions over policies some say are negative for stock prices. in a new capitalism program, the premier talked of a shift from shareholder focused wealth and a bid to expand in the middle class. he says capitalism must something that belongs to all. former u.s. secretary of state mike pompeo is scheduled to travel to taiwan which would make him one of the most senior u.s. dignitaries to visit in recent years. he is said to have extended an invitation -- invitation from a type a based foundation. reports that he met with the president during the trump administration. he was an advocate for a hawkish china policy. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. kathleen: analysts are predicting china will announce a

large economic stimulus in 2022. our next guest sees indirect ways of partially -- partial economic support or what because shadow stimulus instead. the details, ahead. this is bloomberg. ♪

>> we are taking some chips off the table at the moment. they had a window before the fed tightening to ease, and we have seen rate cuts along the way. we are looking at this as more of a fair value rather than being cheap. easing measures may entail more of a credit growth than necessarily more monetary or rate cutting coming in terms of that action. the interest rate market may have less room to go down. haidi: downgrading the outlook for chinese bonds after a strong year for chinese bonds on bets for more chinese easing. analyst -- andrew is an analyst. you called this shadow easing. i am reading through, the under

the hood types of monetary stimulus looks awfully similar to what we have seen in previous years. >> to some degree that is true. everybody is waiting for a huge stimulus, the typical interest rate cuts are fiscal -- or fiscal injection we saw in the united states but we are not getting that. i'm watching analyst reports and what i see instead is a wave to stimulate the economy without explicitly increasing government debt. they are doing that mainly through what i call shadow companies. the biggest our local government financing vehicles. these are half state-owned local companies. they are levering up about two thirds of the increase of debt to gdp over the past couple years. that has come from these thousands of companies spread across china. therefore, the central government can claim it is not increasing the debt load because they are concerned about a financial crisis and a crash in the property market muscle they

are trying to keep their fingers out of the big stimulus pie. haidi: you called this a political solution to an economic problem. we know with china, you have these rolling balls of debt. does this mean the problem of bad debt we have seen in previous years, that have been most vulnerable, is going to continue at a localized level? >> exactly. rolling balls, you have a lot of good metaphors. a lot of the debt will be stuck with the local banks. the state owned banks have about a trillion, i think it is $1 trillion worth of capacity to lend to the property sector. with a general default, they had a credit line with the bank of china, which apparently didn't give the money because they defaulted. there is a credit allocation but state banks are probably ordered not to lend to the property

sector. you have a lot of local banks, you have bonds, a bunch of local capital. if they default, they can isolate the problem. i think that is what is going on. they are saying we will let a few profits suffer because they can handle it, the party officials will have to figure out how to deal with unemployment. that will be a local problem. if we can handle it in that way we won't have a systemic national crisis. kathleen: is there any point where the government acknowledges that it helped create the situation by the way they went about it? if you wave a red flag and say, you have problems and we aren't going to help you, and no one wants to rollover your debt for you, you create contagion. seems like the way the government instituted the policy has been part of the problem. do they acknowledge that in any way? would it help if they did? >> what is contagion is when the

national press starts publishing stories like in the united states in the mortgage crisis. you don't have that in china. contagion is it you have a wall street bond run like in the united states. they have some of that but a lot of the debt is held by local banks. nobody knows what's going on with them. they can isolate it more effectively in china. if there is massive unemployment, the local party provincial chief will go to beijing and say we have a problem, and it trickles the money down to try to solve the problem. you don't have the same transmission mechanisms for systemic contagion like you do in the united states. kathleen: how long until this is done? because it isn't helping the economy when it is 25% or 30% broadly speaking, and it is weighing down the economy. >> you have a mounting debt problem since the stimulus into

thousand nine. the government is putting a stop to the debt problem. they have been growing gdp through debt. the way of solving this, with the southside economists want, that is more debt. that won't solve the problem. xi jinping is aware that if they have a systemic crisis, they will run away with it. in order to stop that mounting problem, they are trying to allocate capital more widely and scare the market. i have been surprised. no one expected the three red lines policy that happened a year and a half ago to continue until now. haidi: we talked about metaphors. here is another one. whack-a-mole. the property meltdown, zero covid, we still see downside when it comes to the tech crackdown. what is the policy priority in a key political year? >> i'm finishing a book on the

tech crackdown. control is the main issue for xi jinping. he is running for a third term and he wants to make sure there are no problems on his watch, which would be protests, a debt crisis, that type of thing. the second thing, i think they are concerned about financial contagion. i think top advisers are aware of these issues and they are trying to stop the debt bubble, even though frankly, ahead of a party election, they would usually flood the market with credit but they are not doing that. the whack-a-mole, that is a little overused. we won't use that one. but they are not whacking moles, they are letting the moles die. they don't have anymore moles anymore in certain areas. kathleen: thank you so much for not only an interesting and

informative conversation, but one we could try our metaphors on you. we will have more next time you are here. andrew, global source partner analyst. next, we look ahead at the market opens in china and hong kong. the latest developments in ukraine and china's crackdowns on tech. keep it right here. this is bloomberg. ♪

haidi: a chip -- a check of the latest business flash headlines. a bidding more for a premier league team rights. it could be worth $5 billion or more. reliant is in talks to include a founder as well as comcast and a consortium to outbid the competition. tencent denied rumors it is facing a new crackdown from chinese regulators. the company poked fun at an anonymous post from a tencent employee that hinted that a potential clampdown without -- and reports sparked the worst two day selloff in tech shares in china. tencent closed more than 5% lower.

kathleen: just over half an hour away from market opens in china and hong kong. fresh scrutiny on chinese tech giants and the ukraine crisis escalating. let's bring in our chief china markets correspondent to break it down. we know if it weren't for the not just escalating tensions in ukraine, but president putin deciding to recognize east ukraine provinces and create another layer of issues, we would be totally focused on china. what is the story today? >> i love that you say that. i'm always focused on china. you know that is what i do. there is so much going on. you mentioned the regulatory crackdown on tech, that is a story that is very much in the spotlight. you can see how nervous markets are. you mentioned the drop in tencent shares yesterday, 5%. there was no actual news, it was

online speculation that regulators were planning to target two up its most profitable businesses, the metaverse and online gaming. tencent has come out in full kind of denying the speculation, and the language is quite angry against this kind of rumor in the market. we also saw mate one -- another company dropping 2%. an online delivery firm as well. news that china has asked companies to check their exposure to ant, owned by alibaba. a lot to digest on a risk off day with what is happening in ukraine and russia. you would expect the hang seng tech index to be under pressure today. there is just so much uncertainty in the sector. and really, it is a cell now and find out later story for the space. haidi: are we seeing i guess

some rewriting when it comes to investors being disappointed in more muted stimulus from beijing? >> that is a good question. the problem is that there was an expectation of china would kind of deploy very aggressive stimulus measures at the start of the year, and that was priced by the market. that is clearly not the case. china won't want to cut interest rates when it doesn't have to. it has done so already in january. after the credit data, the strong credit data we saw a few weeks ago, we have a front-page journal saying china is unlikely to cut interest rates more. haidi: our bloomberg chief china court -- markets correspondent there. what is happening with the markets that are already

trading? not a great set up when it comes to hong kong and mainland china joining the fray. firmly risk off. heightened demand in the usual suspects, the yen treasury, sovereign bonds around the region as well. that is it for daybreak asia. markets coverage continues. this is bloomberg. ♪

>> welcome to the china open. i am david ingles with yvonne man. yvonne: president putin recognizes separatist republics in the ukraine and orders the deployment of his so-called peacekeeping forces. oil