>> a very good morning. we are coming down to asia's major market opens. >> welcome to daybreak australia. the west expand sanctions over ukraine. geopolitical tensions set to send a do stocks further south after volatile wall street

trading. oil in focus. the u.s. is eyeing a reserve release to counter a price surge in tensions from eastern europe should haidi: get you straight haidi: to the start of trading in australia. we have lots in focus when it comes to the rolling in of earnings. qantas is 12 watch should -- is one to watch. showing the bumpy recovery. that should flow through to other australian tourism shares. we are watching the 10 year yield holding steady at 2285. so much of that pricing action has been when it comes to kiwi yield plates given the flock to haven demand. his eiland assets after the

aggressive move from the rbnz and more aggressive expectations of tightening going forward. chicago nikkei futures paring some of the session lows to trade more or less flat at the moment. shery: same thing around treasury futures flat at the open. really continuing to get deeper into correction territory. we continue to see the narrowing market across the u.s. markets down the 10 year yield continuing to rise toward the 2% level. we are seeing the japanese yen holding steady. it is trading within a narrow range. we are awaiting the market open in japan coming back from holiday. crude prices higher with wti above $92 a barrel. this after we saw some volatile

price action given it did rise in the new york session. the news that the u.s. is considering a potential relief. it is all to do with geopolitical tensions around ukraine s. . -- ukraine. you penalizing 22 prominent russian figures. let's bring in our political news director. this has been a fast developing story. where do we stand? >> the u.s. today up the ante on the sanctions. some said yesterday's were a modest set. president biden in a statement said the u.s. will now increase what he is calling an initial front of sanctions to sanction

the company behind the nord stream 2 pipeline between germany and russia. the germans yesterday said they would not certify the pipeline, making that sanctionable against russia. we sold the u.s. saying -- we saw the u.s. saying there are robust conversations about releasing some of the emergency petroleum reserves so that if there was an increase in oil prices in the world market. no decisions have been made but they are saying the conversations are ongoing. haidi: what further developments do we expect when it comes to the sanctions front as well as the diplomatic moves we saw? france looking to advise its

citizens to leave ukraine. >> it looks like the diplomacy part of this scenario is coming to an end. we saw the talks that were supposed to happen between secretary of state antony blinken and his counterpart. those fell apart. we have not seen and the outlook branches -- any all of wrenches extended to -- any olive branches. yesterday he said this is the start of an invasion. he said this is the start of the invasion. it is hard to see there will be much diplomacy. i think we are going to see the increasing drumbeat of these sanctions, which is all the u.s. and its allies, the only tools they have in their toolkit at this point is -- if diplomacy is

over and we don't see much evidence there will be any more diplomatic talks. at least right now -- at least not right now. haidi: our next guest says the current crisis is a buying opportunity. he sees markets recovering six to 12 months after escalation . where do you see the opportunities right now and how do you play this market given the risk of policy mistakes and the rights environment that is changing? -- the rate environment that is changing? >> in the short-term, this situation is far from resolved to the uncertainty remains high the situation could deteriorate a lot further so we can seem downside in markets. it is a case to be cautious. if you are concerned about it, to invest in some hedges like bonds or gold. obviously timing is going to be

very difficult to the history -- very difficult. the history of these events as we tend to see a sharp -- is we tend to see a sharp downfall. then you get a rebound and a recovery taking place, which becomes fully evident after six or 12 months. that is the extent to which it is a buying opportunity. very hard to time these events. the key for investors is to look at the opportunities this brings up. assets that may have an hit just the cut -- may have been hit because of the risk off tone in cyclicals, they will benefit over time. it is a time in the short term for investors to be cautious. haidi: what about some of the

emerging market opportunities around this part of the world given there is still some concern about contagion and when it comes to china, there are some idiosyncratic concerns there. >> geopolitical tensions with china remain. some would draw links between the situation with ukraine and the situation with taiwan. those links can be taken too far . the broader picture is still one of global recovery. i don't think the situation in ukraine will derail the recovery. it will threaten higher inflation and growth in the short term. asian markets benefit from global recovery. i am positive about the outlook for asian shares generally over the next six to 12 months. shery: there seems to be a growing expectation that the loosening of monetary and fiscal

policy in china could be the next leg up for asian markets. are we a little too optimistic about what beijing might do? >> by the same token, china is ahead of much of the rest of the world. it eased perhaps more aggressively. they were covered of everybody else. -- they recovered ahead of everybody else. if we are moving into a situation where china starts to take its foot off the brake, which seems to be the case, then i think that will benefit asian share markets through the course of this year. it is not going to be as simple as it has been in the past.

it is not going to be an overwhelming stimulus like in times past. shery: is it still the best we can hope for when it comes to the chinese markets given that other markets seem to be moving in the opposite direction? we saw the rbnz hiking rates good we sell the rate as agents coming from the be ok. -- from the bok. >> the problem in the short term as central banks have to respond to the surge in inflation. i would be watching for signs inflation might start to flow. at least by the second half of this year. there are some signs if you look at the business pmi's.

that supply delivery times are starting to improve. still a bit mixed in the pricing components. there are some signs that input prices may be starting to slow . transport costs, shipping issues, semi conductors and so on. in the near term, central banks are going to be rising rates. through the second half of the year, we make it into a phase where pressures might start to abate. there is a good chance that will combine with what might have been several months worth of easing in china to give a stronger market into the end of the year. that aligns with hopefully the crane situation settling down and markets recovering from the turmoil ukraine has calls to.

-- has caused. this is a midterm election year. we did have a good year last year. shery: always great having your insights. the economist with his outlook on the markets and broader economies. we will get to vonnie quinn with the first word headlines. vonnie: ukraine says several banks and government websites have been hit by another cyberattack. the attack has been a distributed denial of service. the white house statement confirmed the event is similar to another cyberattack last week which officials attributed to russia. that outage was the biggest in ukraine history. iran says its invoice is returning to consult with islamic leaders of those negotiations to revise the nuclear record reach a critical point. senior officials will return to

their capitals for consultation. washington's top up on that says he will not be traveling should the e.u. and russia have suggested negotiations include this month. the u.s. justice department says it is ending the so-called china and asia to start under -- started under former president trump . that asian americans. -- it was criticized for offending discrimination against asian americans. hong kong has unveiled a -- as covid infections continue to hit records. the city will boost support for consumers and businesses to hong kong's economic growth is expected to slow to as little as 2% this year. the city reported more than 8600

cases and 24 deaths wednesday. 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. on vonnie quinn. this is boom -- i'm vonnie quinn. this is bloomberg. haidi: let's take a look at some of the movers pretty volatile session when it comes to qantas. that stock is falling after the first half results indicating a bumpy recovery. watching more broadly some of the tourism and travel shares in australia but we did see on the optimistic side, a return to domestic capacity to almost 100 sent in june. qantas is off the session lows should sigma -- the session lows. this after the engineering construction services company is to receive an unconditional and final takeover bid to buy the rest of the shares it does not

already on. 22 australian dollars per share in cash. we continue to be in the thick of earnings. full year net income, 22.5 million dollars. one of the underperformers. they collect and label images, text to speech audio and other data for artificial intelligence systems. that company down 15%. will be hearing from the ceo of qantas to talk through the results. talk through the impact of australia's international border real thing and how he sees how quick this recovery can be shery: have lots of conversations coming up. we explore long-term investment opportunities in china's greater bay area including ai and the metaverse.

plus, the u.s. may release emergency oils applies as tensions over ukraine drive prices higher. details next. this is bloomberg. ♪

haidi: we are tracking the full of the global supply chain crunch. scrambling to make up for three days of suspended operations at port terminals in northern europe. the harsh weather caused 26 empty containers to amble overboard. raytheon will delay shipping about 70 jet engines to airbus. they will make up shipments as the year progresses. kraft heinz abuse price hikes as the last option to do with inflationary pressures. other options on the table include using different ingredients and reducing packaging should shery: taking a look at at surging prices for agricultural staples, soybean and wheat futures both sword to nine year highs. -- potential supply disruptions per both ukraine and russia are

key ring producers. bloomberg terminal users can read more. geopolitical tensions continuing to rise. energy prices remain in focus as we continue to see oil futures closer to the $100 mark. let's bring in su keenan for more. given the rising prices, they may be tapping emergency supplies again. su: we did see the price briefly slip. here is what we know at this hour. according to people closed to the matter, the white house is engaged in robust conversations about a release of oil from the strategic reserves and accord nation with other countries. no decision has been made yet did the key questions that need to be answered is what the target price for oriole with you

that would trigger such a relief and how to coordinate and similar moves. the u.s. released about 50 million barrels to counter soaring prices as economies were recovering from the pandemic. you're looking at the year to date gains to all very much associated with the geopolitical conflict between russia and ukraine and what that will do in combination with the increasing demand we have seem should you jump into the bloomberg and sherry just mentioned some of the commodities prices. the bloomberg commodities index shows us what we are seeing in terms of the premium on prices for what is called backward eyes asian, premium on prices -- it is 6% above the record. that is what one a minute analyst called super.

it is a bullish situation. morgan is raising price targets for the next quarter. seeing analysts raising practice. what they are saying about crude , which is already in striking distance. not seen at this close since 2014. they are saying you count on oil above 100, most likely at winter 10 on average for the next quarter for nymex to, crude west texas sang an average of $107 is what you can expect. the latest forecast is an increase in $22 compared with what they have said before. haidi: you can get a roundup of the stories you need to know including the latest on oil in today's edition of daybreak. subscribers can go to dayb .

can customize the settings so you get the news on the industries and assets that you care about. this is bloomberg. ♪

haidi: the trial of the x goldman signings banker is on tax x goldman sachs banker is on pause -- the ex goldman sachs banker is on pause. what is going on now? >> the child is going -- the trial is going to be on pause as soon as the former anchor finishes and the defense is going to get a chance to review the thousands of pages of documents because they were belatedly turned over by a separate government team should the defense said it was

inexcusable and they may ask for the charges to be dismissed if they decide they have been hindered in such a way. shery: what are the ramifications here and what is not? -- what is next? >> next step could be the defense would ask for a trial and they would dismiss this current jury hearing the case for five days and they would possibly start over again but the defense is also considering a more brutal punishment for the government to dismiss the indictment. haidi: how does this procedural oversight happen? >> this is a case that spans the globe. abba dobbie, malaysia, singapore and the united states. he had a wide swath of criminal activity. the government has collected millions of pages of documents from goldman sachs regarding these bankers and apparently

there was a separate team of government lawyers looking through the information should they with -- the information. they withheld it from the prosecutor said they would not be hindered. they were still in the hands of a privileged team that was not related play turning these. -- not lately turning these documents over. shery: we will continue to watch of these developments. here is a quick check of the latest headlines. yet to reach an agreement to extend repayment deadlines on $948 million worth of debt according to an investor statement that the chinese developer missed a payment on products that were due last week. the bonds are set for the biggest drop in seven weeks. new zealand plans to raise capital by the end of march. the airline forecasts a record

loss of $540 million. new zealand's government owns half of the airline and ask their capital plan. this is bloomberg. ♪

shery: i keep policy decision from the boj. the growing covert outbreak is in focus. daily infection numbers due in an hour. new cases served -- surged to a record with 171,000 recorded. the fatality rate is continuing to fall. health authorities are expecting the outbreak to peak. the pandemic is clearly a major concern for the bank of korea ahead of this rate decision today. the bank is expected to hold its

key rate steady after hiking it three times since august. kathleen hays is here with the preview. what are you watching? kathleen: you have to watch inflation and virus cases. the economy is still growing even with those virus cases surging. that's why the bok could lean towards a rate hike today. they are not expected to. they've raised their key rate 25 basis points three times. they are way out in front of other major central banks as they do this. 17 of 17 economists say they are going to pause now, they are going to leave the key rate at 1.25%. their big problems like household debt rising and property prices, those things have been cooling off. on that chart, what you saw was the three year bond yield.

it's up near a seven-year high. way ahead of that 1.25% key rate. why is that? they expect more rate hikes. inflation is the story. inflation is well above target. the green line is the 2% target. the pink line is ppi, way up. it has peaked and come down a bit. the problem is, since november when the bok said that they were expecting 2022 cpi year-over-year at 2%, the year-over-year number has been 3% or higher. investors and traders, what will they do with their inflation forecast? it seems like they are going to have to raise the forecast. we are expecting to get some kind of signal over what future rate hikes we may see, what the path may be. it's not just the fact that the economy has held up well among the virus.

look at the latest 20 day export numbers for korea, they are brought -- strong. the economy can withstand more rate hikes. what we see in the inflation forecast, what we hear from the governor after the decision comes out at his press conference, what kind of signals, how we will -- he will flesh this out here. haidi: this is the last meeting. does this factor into the decision today at all? kathleen: economists think it does. the bank of korea has a message today, higher inflation forecast, suggesting more rate hikes are coming. the latest bloomberg survey, economists were saying april or may. that puts the path for the next governor to stay on this path. economists say it's a big challenge. you have to bring down inflation

and make sure the economy keeps going. you are getting a new president in early march. there's also some conjecture that this decision may come after the election. he or she gets a chance to have a word and who this person will be. it's like when trump had to ok jay powell. you want the kind of person in that position that's going to do the right thing as they support your policies. that's one way to look at it. shery: kathleen there. the u.s. is pulling back on restrictions to prevent the spread of coronavirus as many states are dropping roles. achieve white house medical advisor told bloomberg that this is thanks to high vaccination rates and the wide availability of tests and treatments. >> the good news is that we have vaccines that are highly effective and quite safe. the reality is, the protection over time wanes.

we see that particularly in the situation where the protection to begin with with omicron is not as good as against delta. it does wayne which is the reason why we tell the people who have been vaccinated to please, when your time comes up, get that booster shot. we tell the unvaccinated, please get vaccinated. the data is so clear. when you look at hospitalizations and deaths, the curve of the people who have been hospitalized who are unvaccinated, the people who are vaccinated, in the people who are vaccinated and boosted, the overwhelming percentage of the people who are in hospital, i see units are among the unvaccinated. we have a very effective tool. if you combine vaccination and the availability of good

antivirals such as packs among others, newer antibodies that we will continue to develop, and the wide availability of tests, particularly at home 15 minute tests. i think we are in a much better position right now to deal not only with the ability to pull back on mitigations but also in case we get another variant. very much better prepared right now than we were a year or so ago. >> you said the data is there for the third booster shot. what about a fourth shot? do we have data that indicates whether that's effective? particularly for the elderly and more vulnerable. how much more effective visit? >> when you have waning immunity , you look now for example four to five months following the

third shot of an mrna. the hospital protection still remains high at around 78%. it waned a bit. remember, it was up there at around 90 plus percent. it's down still at a pretty high level. that's the reason you heard me and others say, for the regular person, you really don't need right now a fourth boost except if you have a severe degree of immuno compromised, such as transplant patients and patients who are on chemotherapy for cancer. that's for the people in one category. for the people that have no underlying conditions, we have to keep an eye out on that 78%. that's good. that's at four to five months. on a month by month basis, the cdc is following whether that

durability of protection against hospitalization stays steady at around the 70's or if it keeps coming back down. if it comes back down at some point, you will have to make a decision, do you want to give a fourth dose to the most will durable? those would be the elderly, those have underlying conditions , those who are at a greater risk to get a serious outcome. really, what we are doing is monitoring it on a month by month basis. shery: chief white house medical advisor anthony fauci there speaking with bloomberg's david westin with the latest on the pandemic. let's take a look at australian assets now. the market is trading lower at the moment. down by 1.9%. we are seeing the asx 200 currently trading at the lowest since february 1 and down the most since january 26 this well.

we continue to see this risk off sentiment flow throughout the start of major markets across asia. we are really just seeing one part of industrials trading in positive territory. we are seeing tech growth stocks , materials down by over 3%. energy off by close to 3%. crude producers will be in focus as we get to the start of trading in tokyo. let's get you to vonnie quinn with the first word headlines. vonnie: russia has been hit by a fresh round of sanctions from the west. joe biden expanded upon them with new sanctions on corporate leadership. the eu formally approved a package of sanctions on 23 high-ranking individuals including defense officials, bank executives, media figures, and kremlin officials. china has expressed opposition

to sanctions on russia, criticizing the use as -- you ask for escalating the crisis over ukraine. a foreign ministry spokesperson blames the u.s. and nato for placing weapons near russia, suggesting that vladimir putin was left with few options. he says washington actions were irresponsible and immoral. the u.s. could be set to tap its emergencies a ploy of oil again. sources tell us discussions are underway within the bond administration including on potential price point triggers. no decision has yet been made. president biden said the u.s. is prepared to act to blunt gas prices. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. shery: coming up next, should long-term investors work -- look

to the metaverse? what value prospects they freak -- they see for that and other tech trends on bloomberg wealth. ♪

haidi: new records, reaching $130 billion despite worries over scrutiny. we speak to a guest who invest in startups and the greater bay area. we are joined by our guest. what is guiding your investment outlook right now? what are your key themes for allocating funds? >> thanks for having me. the funds that i manage really focus on the greater bay area of china. the greater bay area has nine cities on the mainland, also hong kong and macau. the two opportunity sets are different, given the different positioning of the markets and regulatory frameworks. we are looking a lot that ai and deep tech. advanced manufactory and also

sustainability. if we look at the opportunities here in hong kong, i think financial services and fintech are key opportunities and we are investing heavily in that. shery: when we talk about ai tech and digitization, we can't help but also talk about the metaverse. what is this to you? is it something that is feasible in terms of investments right now? >> yeah. i'm a big long-term believer in the metaverse. i don't think that there's going to just be one. i think there will be many. a multi-verse so to speak. we are invested in a company which is based here in hong kong . it's the leader in the world in terms of nft is, blockchain aiming ecosystems. trying to bring a lot of metaverse to reality. as you look forward, i think

that metaverse offers a wealth of opportunities, bringing people into a digital realm to work, live, and play. i think there's a lot of opportunity that we are investing in. haidi: can you give us an example of some of those opportunities? if you are interested and adventurous, what would be some of the ways that you could gain exposure to this new technology? >> i main, -- as blockchain is introduced, there's a concept of digital assets. there's an ecosystem being built. one of the portfolio companies is called sky mavis which has introduced a game. there's actually digital assets where users can go in and play with them. within the ecosystem, they are

able to generate tokens and earnings. there's a new concept of play to earn that has been introduced and proven by these nft blockchain ecosystems. in the future, you can imagine that there will be real segments of the population that would actually be professional gamers just playing games to receive tokens in return and these are digital assets that they can trade and liquidate into real fiat currencies. haidi: the gap increasing between private and post-ipo valuations, particularly when it comes to these asian listings over the past year or so. does that change the nature of what types of investors are coming in at what point in the cycle? >> yeah. with so much uncertainty in the public markets and the performance of late, i think we are seeing a lot more later stage investors moving into

these early stages. the other day, even tighter global, late stage investors are moving into these routes. that has traditionally been the realm of very early stage mental -- venture capital. these later stage guys are trying to get early opportunities to try to democratize the valuations. yeah. i think that the later stage assets are getting a little bit more -- it's more difficult to make money at the later stage. shery: investors that want to have that exposure longer-term to china whilst sidestepping some of the micro policy development, what are the opportunities that you see? >> i think it's very clear. the chinese government makes it a point to publish and rollout what they are supporting over

the next five years, every five years. if you are looking at china, basically do what the government says. you are investing in a id tech that spans everything from a thomas driving to 5g to semiconductors. those are areas that we are looking at. sustainability, green tech as china drives towards carbon neutrality. those are opportunities we are looking at. the greater bay area has been known as the factory of the world. there's a lot of factories and supply capabilities. those are areas where we are looking very closely at as well. haidi: coming up next, it pays to work at goldman sachs. now it costs to leave. the bank is going to great lakes to keep its top talent. we have the details next and big

tech. this is bloomberg. ♪

haidi: goldman sachs is not depending on bigger bonuses. it's forcing executives to think twice before handing in their resignation letters. that story is the focus of

bloomberg's big take. let's get details from sally bakewell. what is goldman trying to do now? sally: yes. we've seen a return to the big old days of bonuses on wall street. banks are desperate to retain staff. this is a fascinating tale of the darker side to this. things can turn a little bit nasty. the pandemic is a big reason. it has helped fintech firms to become greater competitors to banks. here, we have an example of a culmination of all those things. we have a goldman who helped build the bank consumer banking division. he left to go to walmart for help with the company's fintech start up. that move incurred the wrath of the ceo who even called the

walmart ceo about this move. as retaliation for the move, goldman is exploring some unprecedented moves, including confiscating his stock which is usually reserved for cases of misconduct. not usually thrown against executives. it's one of the ways that the bank is playing hardball with those who are leaving. haidi: do we know if it works? typically, in high demand targets, that would make it a part of his next sign-on bonus. sally: that's a great question. from some of the executives who have left goldman and faced similar measures, you could almost say it hasn't worked because they have gone on. we've seen former division chiefs, they left the firm for

businesses who would technically be considered clients and also saw some of their sectors called. we've seen other banks take steps towards similar measures. bank of america recently went for a plan to issue bonuses but would be exempt from the rule of 60 tradition which enables you to retire and take your bonuses, depending on the tenure that you're there. perhaps it's a little too early to say whether these nuclear measures will stop people leaving. the market is so competitive. perhaps it won't have a great effect. shery: we've seen pretty interesting employment agreements. some infamous incidents as well around people leaving those firms. sally: we do. we have.

i should say, goldman sachs says that equity awards are governed by the agreement that is signed by the recipient. saying, these were the terms in which they were offered in terms of their compensation package. the more infamous incident is andriy marcel who move from an baking head to become ceo of banko santander. that created a big problem because there is an assumption that the swiss bank wouldn't see the spanish retail lender as a direct competitor. the ubs chairman said at the time, he had to forfeit certain awards. shery: sally bakewell with our big tech story. let's get you a big -- a check

of the business flash headlines. alibaba halting talks with potential investors over its valuation. the chinese economy's giant was trying to secure financing before potential spinoff and ipo. we are told that alibaba remains intent on spinning off their mall in the future. a narrower than expected first-half loss of $926 million. the ceo says there have been a short -- sharp uptick in the past few weeks. he expects international capacity to start rising. fully vaccinated tourist are now able to enter australia without quarantine. shery: these are the stocks we are walking. those with exposure to russia and ukraine. russia is a key energy exporter to japan industry -- city saying that japan could be hit by

weakness, given russia accounted for 7% of sales in 2021. the market opens in seoul and tokyo next. this is bloomberg. ♪

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shery: welcome to daybreak asia. haidi: asia's major markets have just open for trade. our top stories. the west expands sanctions against russia over ukraine. moscow says separatists want his help. geopolitical tensions set to send asia stocks further south. wti is pushing higher.

the bank of korea rate decision due shortly. economist expect to hold while traders are pricing in more hikes ahead. shery: japan and south korea coming online. they are down and being led lower by communication stocks and industrials. the japanese yen also holding about 114 levels. a narrow range of trading after touching the strongest level in three weeks just recently. we are watching those jgb yields at the moment. given that we've seen that huge rally in yields on speculation over a change in boc -- boj policy. we are seeing the 10 year yield at that point. take a look at the kospi right now. we are seeing it lose ground by more than 1%. this reversing those gains that we saw in the previous session. the korean won steady. korean bonds have gained in this

past week, given that we are watching for that bok rate decision today. we are expecting no change when it comes to the policy rate after three hikes since august. that should come in later in the hour. haidi: in australia, we are seeing the biggest slump when it comes to the asx 200 and month. just about accurate -- every sector trading in the red. -- consumer staples seeing a gain of 1%. tech and materials up. energy seeing lots of downward pressure as well. we continue to watch the 10 year yield as well. this morning, we have seen kiwi and aussie yields following treasuries higher as well. this is what we are watching when it comes to new zealand. we are extending losses to 1% off of the back of a more

hawkish than expected rbnz decision. the kiwi dollar also seeing a bit of weakness there as well. taking a look at how the futures session is setting up. we continue to monitor the developments between russia and ukraine. joe biden expanded on sanctions. the kremlin saying that separatists and ukraine sought help from president putin. we are seeing a pretty flat session when it comes to the trading of s&p futures as well. nasdaq worsening. u.s. 10 year yield on the 196. an upside pro -- push in growth -- crude prices as well as gold. shery: let's bring in julia wang from j.p. morgan private bank for more clarity on what's happening in the market. as we continue to see geopolitical tensions and uncertainty about where central bank's around the world are going, how do you position amid

all of this volatility? julia: thanks for having me on the show. i think that one of our near-term focuses is definitely to right size risk exposures entity risk to some degree if possible. that's exactly what you said earlier. obviously, the market has been quite volatile on the back of geopolitical headlines. underlying all that has been a trend of worries about more aggressive tightening by global central banks. from a market perspective, that seems to have raised a much slower growth trajectory toward the year end. we don't think that will happen. that seems to be the direction of markets at the moment. as a result, i think that we have been looking at strategies that have a bigger balance

between protection, some exposure to maintaining growth, and our overview overall of markets has been one that tries to boost returns and what we think will be a great stock market this year. really focusing on practical opportunities, the optimistic trades. shery: lots of investors talking about china as a ray of hope when it comes to further pressure on the markets because we are expecting the loosening fiscal and monetary policy as well. what are your expectations of how much support the chinese markets and policymakers can actually give to the markets, especially among ems? julia: sure. we have been looking at the china market as well. so far, the amount of policy easing has necessarily really surprised us. it has fallen short of what some

of the analysts have expected on the fiscal side as well as the monetary policy side. as we head into this more volatile environment, as we head into what will be the first rate hike by the fed in many years, it will shorten the window further in terms of how much further policy easing we can see after march. we think there is some downside risk to earnings and gdp growth. we think it could translate further into downside risks for global growth. coming back to an overall environment where we have seen multiple headwinds to grumble growth this year. that reinforces the expectation for returns this year and focus on finding protections. haidi: will there be any

managing of expectations or an attempt to inject more confidence in china's recovery, one we hear from policymakers at the mpc? julia: i believe there will be. i believe there will be a lot of structures in terms of trying to support corporate confidence, trying to shore up consumer confidence. we think that there are practical challenges and policymakers perspective. covid continues, diverting a lot of policy attention. there's a global environment which really isn't getting better from a geopolitical side. you also have a fed hike that's probably going to be a lot more hawkish and faster for rate hikes. the pboc tends to respond to those fed policy rate hikes.

you don't tend to see a huge diversion terms of direction. there's room for further easing. given these constraints, i think there's a practical challenge in terms of how much easing can be delivered. there are limits in terms of how much easing we can actually offer here. haidi: how optimistic we can be about attack recovery for these chinese names. julia: yeah. the assumption in markets is that tech regulations are behind us. it will not see any dramatic

changes. i think some of that optimism is a little bit wasteful. there hasn't really been a great official signal. i think that that remains a source of risk. think about external environments from a geopolitical side. they can be quite volatile. they will still try to use this window as much as they can to do all the reforms and changes that they want to implement. i think we are still in that window where they are trying to squeeze as many policy changes as possible. it's a little bit premature at this point to say that all the regulations are behind us. some of these regulations are pretty long-term in nature. in terms of understanding how their impacts are, it will continue to be a really big challenge. shery: always great to have you

with us. let's get you to vonnie quinn with our first writ headlines. vonnie: thank you. ukraine says several bank and government websites have been hit by another cyberattack. the attack has been identified as a denial of service which aims to exceed capacity to handle multiple requests. a white house statement confirms the event is similar to another cyberattack last week. that outage was the biggest in ukraine's history. iran says they are returning to consult with leaders as negotiations to revise that when he 50 nuclear record reach a critical point. the foreign ministry reported that senior european officials will return to their respective capitals for consultations. the top diplomat says he won't be traveling. negotiations should continue this month. the u.s. justice department says they are defending the china

initiative started under former president donald trump. the program focused on chinese researchers, accused of stealing secrets while hiding their linked to beijing. the boj says it will counter espionage threats from adversarial nations. hong kong has unveiled a raft of measures to stimulate the economy of covid investing. the bit -- city will boost support for consumers and businesses. hong kong's economic growth is expected to slow to as little as 2% this year. the city reported more than 8600 cases and 24 deaths. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. haidi: we are seeing losses when

it comes to trading in australia. down by 2% when it comes to the asx 300. the biggest fall in a month. just about every sector other than consumer staples hanging onto that gain. losses coming through from tech, materials, the energy sector. part of this would be that risk aversion with the continuing development on the geopolitical front between russia and ukraine. we also have individual earning stories coming through. it's been a really volatile stock. we had signs of an uneven recovery today despite the narrow loss. we are watching some of the big -- other big losers, tumbling the most since december. four-year profit sliding 2% and travel stocks in general seeing some of that contagion as well. also watching aia as well in terms of the us trillion assets. that's having a little bit of a

ricochet effect when it comes to the related companies as well. still ahead, the global hunger for rechargeable batteries is fueling the outlook for key materials like lithium. we will discuss the demand picture with the ceo. up next, the latest development on ukraine including u.s. sanctions on the builder of the nord stream 2 gas pipeline. this is bloomberg. ♪

>> it sends a strong measures to prudent but it doesn't stop him. we need more attention. until he gets clear that he should not make any steps further. haidi: that was the ukraine foreign minister speaking exclusively to bloomberg.

take a look at european futures, just opening for trading now. this is the picture across the continent. we saw stocks in europe falling. the market remaining hostage to the news flow when it comes to ukraine. we saw a russian seeing its biggest inflow since june 2018 amid these sanctions as well. such an interesting market reaction that we are seeing. euro stoxx 50 futures down by another 1%. dax futures are down by over 1%. we are seeing ftse 100 futures just holding to a little bit of positive territory. european equities are seeing the roller coaster ride. we saw earlier investor optimism that we saw a measured approach when it comes to western sanctions. that fell apart after we had renewed concerns about another flareup intentions. further sanctions being announced as well. it looks like we expect that push pull when it comes to european stocks.

we will continue adding to that ball of worry after we had record inflation, hawkish pivots by central banks and their earnings back as well. china has expressed its opposition for sanctions on russia, criticizing the u.s. for escalating the crisis over ukraine. our opinion columnist says that president putin could be risking his support from beijing. how do you view this really interesting relationship and the deepening ties that we've been seeing? >> putin arrived in beijing at the beginning of the month for the opening of the beijing games. two leaders who have remained isolated through the pandemic, meeting on most no one. the fact that he went to beijing in person was a big deal. prudent needed support and xi needed a significant world leader at an underpopulated olympics. what has happened since then has

been a significant deterioration and ukraine and the attitude towards the region, this rambling mandate. that puts china in a very uncomfortable position. few things matter to china as much as property and the idea of noninterference. shery: what are you expecting from beijing now, given that they are in this awkward position? they do have a partnership with russia, right? >> absolutely. they remained civil. if you look back to the statement they issued at the beginning of february, full of agreements. we are both democracies, china and russia share an idea of the two countries as human rights defenders against the west. all of that remains in place. the two economies are complementary.

extremely significant partners. on this issue, what we will see is two things. the propaganda machine ramping up in support for russia against the west. china can support the sanctions for -- considering it's facing its own issues. we won't see explicit support for what putin is doing. china has its own issues with ethnic minorities and it certainly will not. haidi: the un security council will meet at 9:30 p.m. on ukraine. there, we expect to see this alliance and the dynamic play out as well. you talk about china's redlines.

they are pretty set in stone during this key political year. is that going to determine how much further development we see in this alliance? >> absolutely. russia did not attend during the olympic games. we still have the 20% congress. the last thing that china needs is $100 oil and a european war. it's the instability that is preoccupying. what we will see is what we saw earlier in the week which is united condemnation from the global south which doesn't matter to china. from the western nations. a very brief statement from china calling from also -- calling on all sides to show restraint, trying to a race itself from the picture. shery: the latest on the ukraine tensions. of course, we have now heard

that the unc could counsel will actually be convening at 9:30 p.m. eastern on this very issue on ukraine. this has we are also hearing from the japanese prime minister saying that the ukraine situation is a problem for the international order. you can get around up of the ukraine situation and stories that you need to know to get your days going in this edition of daybreak. you can also customize your settings so you only got the news on the industries and assets that you care about. this is bloomberg. ♪

shery: true mao has missed some trust payments and has yet to reach an agreement on extending deadlines on about $948 million worth of debt. let's bring in our china editor

rebecca john wilkins. we know that this company is one of the largest issuers of debt in the sector. how concerning are these missed payments? rebecca: yes indeed. we are seeing some mistrust. looks like more of these payments. she mao unable to reach an agreement so far on extending these. the real question is whether their ability to deviate these payments buys it time and frees up cash to serve it. that's a big question for investors grappling with it now. they have two more bonds due this year. the next one is due in march. it has a very big dollar bond test market. one billion coming to you in july. really, the question and focus is whether or not they can focus and push out some of these

payments on a blur obligations in order to prefer -- preserve and raise cash. as you look at the prices, they are relatively high compared to some of the other players in the space that are also experiencing stress. 50, $.60 on the dollar. they are holding up relatively well so far. haidi: we haven't talked about evergrande for a while. is the founder going to turn up to the ppc? rebecca: [laughter] indeed. that is the big question that people are looking at now. he was there last year. the home 100th anniversary celebration of the communist party in july. much has happened. there is a question, in what role will he play in the collapse of evergrande?

we look at cases, we can see that leaders are increasingly held to account when it comes to these private, reckless, irresponsible behavior or borrowing. all eyes are on whether he appears. some experts think he's unlikely. if we do see him, it could be a sign of confidence that evergrande is going to surprise -- survive in one form or another. it will play a key role in the country's real estate sector. haidi: let's get you a quick check of the latest business headlines. new zealand plans to raise capital by the end of march as pandemic losses mount. a loss of $540 million. new zealand's government owns half of the airline. new zealand says the government

will participate to maintain its majority holding. hong kong said to be considering a sale of its unit energy australia. they are working with the financer advisor on the development which would value the business at about $2 billion. we are told they have reached out to potential bidders to gauge their interest. alibaba is set to discuss rising $1 billion before halting talks with potential investors over its valuations. the chinese e-commerce giant would try to secure financing before potential spinoff. they have lost fundraising for now but they remain intent on spinning off southeast asian online malls in the future. coming up next, lithium prices soar. the ceo gives us his outlook in a moment. this is bloomberg. ♪

♪ haidi: numbers crossing the bloomberg artist appointment for fourth-quarter capital expenditures in the country, falling to four point 1%, missing expectations, still a bounce back from the contraction of over 2% in the third quarter. but not quite the heft of recovery and business confidence we were expecting. before omicron, we saw

businesses in australia from various sectors to sting spending plans for the fiscal year, in what was seen as a positive sum for the economic outlook. this does add to the further case of dovishness from the rbnz, numbers this week already giving doubt to the pace of tightening we are expecting from the reserve bank of australia, a miss of numbers from the fourth quarter just now. not a miss from the commodities boom. lithium rises have surged more than fourfold over the past year, pushed by governments and automakers for low carbon sources behind that. it has also been hit by pandemic shutdowns and labor-related shortfalls here in australia. our next guest is pilbara minerals ceo ken brinsden.

thanks for joining us. what price levels are you seeing? ken: it is an incredible time in the market. and you are right, and respect to the balance, the imbalance is tight, that is driving incredible pricing outcomes. headline chemical products in china have just gone through $70,000 u.s. per ton. the last price was about $25,000 u.s. per ton, so incredible supply and demand pressure driving really high price outcomes. that reflects well and we are seeing that flow through to our operating cash flow. and as a result of profit numbers we have just published. haidi: at what point though does

ramping up demand result in demand distractions. are your current customers feeling a squeeze? at the current prices? ken: -- at the current prices? ken: it is a logical question. if it was just lithium, i don't think that has much impact on the ultimate price of the end product it is fair to say end-users might be feeling uncomfortable, but i don't think that changes the buying behavior of the average consumer when they are buying an ev. the problem for the end-user starts to become cumulative though, if all the battery raw materials, by reference nickel, cobalt, in some circumstances phosphate, if they are all expensive. then, yes, that starts to present a challenge for the car industry and for the cell phone makers. but just lithium on its own, not so much because demand is not

that strong for lithium. caroline: -- shery: you have been critical of makers not fully engaging without stream -- with upstream producers. has that changed? ken: i am pleased to say there is more engagement. it still feels like too little too late. critical is one way to put it, but i have been disappointed if you like, and the extent to which, in the time that we have been building pilbara minerals, that battery companies and car companies engaged in raw materials supply really feel like they have missed a trick now. it is fair to say the level of engagement has ramped up, but the truth is, the industry on the supply side cannot respond at the drop of a hat. there is going to be supply

pressure for quite some time. shery: no wonder we are seeing this price volatility. we have seen the bms online auction platform become a great success so far. could this be a model for a deeper spot market in lithium? ken: yeah,, absolutely, -- yeah, absolutely, and that is our objective -- more price points, more volume, more trades that are transparent to the industry. we think that is what is required to mature the market. and ultimately, price discovery is the right answer to support supply, the supply-demand balance. in the signal the gas and the signal the bank sent today is that there needs to be more supply to meet you overall market. -- two much you are t-- to

mature the overall market. haidi: depending on which part of the cycle we are in, how does that inform investing in the cycle? ken: there is big change being wrought all the way around the world around electric occasion, and the battery is one of those key support mechanisms that is going to drive further electrification. and the ev is, in the scheme of things, at a relatively early stage paid with that as a backdrop, my view is that overall, with battery raw materials, we are in early stage. i know that people would say hang on, there is incredible, record pricing. of course, that is true, but it doesn't mean it is still a early in the cycle. an industry coming off a relatively small base can take some time to find it

supply-demand balance. we are in the relatively early stages of that. it makes me optimistic about the industry, the price support that is required to grow the pool of raw materials supply. haidi: you are joining us from paris. i hope we will all be able to join you in paris. i wonder how the covid situation has impacted your operations, your ability to do business, and what changes you expect when borders reopen. tell us about operational and supply challenges during the pandemic. ken: there has been a very real impact year. we as an industry have been getting further constrained as a result of what is going on here in western australia. growth is well underway in the natural resources industry in wl i. the pool of available people has been shrinking, putting more

pressure on pilbara minerals and it has been more acute because we have an ramping up substantially production throughout our supply chain, mining, permit processing, transport, so that means we have been under pressure. i feel some rut -- somewhat relieved, although not expecting that to be an immediate panacea. it will take some time for people to get confident about that movement from wli, and i like to think that will provide some relief during the course of the year, but not the immediate panacea we were all desperate for. shery: great to have you with us, pilbara minerals ceo ken brinsden joining us from paris. we will be going through qantas numbers, alan joyce will be with us on the impact of national borders reopen, and the bumpy

recovery we continue to see. let's get to vonnie quinn with first word headlines. vonnie: russia hit by a fresh round of sanctions from the west. u.s. president joe biden expanded on penalties announced tuesday with new sanctions aimed at the builder of the builder of the nord stream 2 pipeline and corporate leadership. the european union formally approved a package with sanctions on 23 height-ranking individuals including defense officials, banking figures, media figures and a top kremlin official. china expressed opposition to sanctions on russia, criticizing the west. speaking in beijing, a foreign ministry spokesperson blames the u.s. and nato for placing offensive weapons near russia, suggesting vladimir putin was left with the options. she also said washington actions were immoral. the u.s. could be set to tap its emergency supply of oil again in coordination with allies to

counter the recent hike in prices. sources tell us discussions are underway in the biden administration on price point triggers and tout to coordinate releases from reserves with other nations. we are told no decision was made. president biden earlier said the u.s. was expected to last for months with gas prices. the cdc is recommending younger males and older, healthy people under 65 awake eight weeks between the first and second doses off an mrna vaccine. the new guidelines reflect evidence that longer intervals can heighten effectiveness and reduce the risk of side effects most commonly seen in younger males. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: look at chinese tech adrs, we have seen them really be pushed lower given the broader downside we have seen in

markets across the u.s., whence -- with tech stocks leading a decline. alibaba reporting its slowest sales growth on record. they are releasing earnings in the next day and they will offer investors a chance to gauge the broader impact of a chinese economic slowdown and not to mention the regulatory crackdown that has weighed on the tech sector since 2021. let's talk more about all of this because jack ma's financial empire is facing renewed scrutiny with banking regulators . our bloomberg opinion columnist finds that it is odd given ma's compliance over the last few months. >> ant has restructured, has agreed to be regulated like a regular bank.

and a consumer lending business. it is interesting that regulators are looking at bank exposure with ant subsidiaries and stakeholders. i think it might coincide with china's anticorruption inspections of all the big institutions. they may just be doing a checkup, but i think it is unfortunate that ant is a financial institution. it is at the center of china's financial system, providing credit to china's middle-class. we have seen a lot of anticorruption crackdowns in the financial industry. so basically, ant's fate is

beyond jack ma or alibaba's control. haidi: what else could authorities be looking for? you point out there is a lot of passive and he when it comes to beneficiaries of corporate structure. >> if you like at ipo's in november 2020, when all the crackdowns began, there were a lot of minority shareholders that were very opaque in equity funds. and perhaps china is just not comfortable with who owns china's most valuable company, unicorn. it was floated at over $2 billion in valuations, and there could be those who benefit and become billionaires instantaneously. and alibaba, they called it a

common testing ground for the president's prosperity drive. the businessmen in that area are going to be scrutinized more than like, in tibet or something. there could be a a lot of gray areas alibaba will be touching on. and also, the anticorruption watchdogs, they just released guidelines of 100 potential crimes that they can investigate. so, the could be a lot of investigations. haidi: our bloomberg opinion columnist with the leader. hong kong's secretary announced a slew of new covid measures, including vouchers to residents. this is bloomberg. ♪

♪ shery: take a look at the hong kong dollar. it is at his weakest level versus the u.s. dollar in nearly two years as traders way consequences of a covert outbreak and possibility of a

march rate hike by the federal reserve as we just at the city outline new support measures for consumers and the unemployed in its latest budget. haidi: let's get more of these key measures announced in the hong kong budget with our bloomberg china reporter. were there any surprises? >> the budget was in line with expectations. consumption vouchers were already expected. in terms of surprises, some people might feel [indiscernible] but if you think about it, the hong kong economy has been doing really well in the past year before the latest virus outbreak. [indiscernible] shery: you said it, that you just break of coronavirus at the

moment. what did they say about the economic outlook from here on out? >> that fine -- the financial sector for -- the financial secretary for economic outlook said the expectation for the quarter is not optimistic. and that is in line with expectations. for q2, hong kong expects gdp growth of between 2% and 3.5%. it will depend on the virus policy. shery: our china reporter with the latest on hong kong as we get breaking news out of south korea, the bank of korea rate decision. they are leaving their key interest rate unchanged at 1.25% , as expected by 17 economists surveyed by bloomberg. and remember, they already hiked three times since august, the

latest one being a 25 basis point increase in january. inflation still well above the 2% target for the be ok that bok , but it appears to be on a slowing trajectory. let's bring in bloomberg economics and policy editor kathleen hays, not a surprise when it comes to the key rate, but still waiting for the outlook on prices. kathleen: that is going to be key. the decision, unchanged at 1.25 percent, three basis point increases in august, the november, than january. remember, bank of korea had been in vanguard of major central banks hiking inflation -- hiking rates as they see inflation moving higher. we will see if we see any movement in the korean yuan, but we have to wait for the press conference which starts in an hour. the inflation start helps us understand inflation start helps

us understand. inflation is well above the 2% target. the cpi year-over-year peaked a couple month ago at 3.8 percent, is back down at 3.6 percent, but the target is 2%. in november, bank of korea, when they put out their policy outlook forecast for 2022 inflation, it was that it would get back down to 2%. we are going to wait to hear what they have to say. bank of korea is raising its 2022 cpi forecast to 3.1 percent. that is a big, big move. but it still reflects a little optimism. they are maintaining their gdp growth forecast at 2.5%. that is interesting. they are looking far ahead to 2023. right, the economy running at 4% annualized as of the fourth quarter. maintaining the gdp growth forecast this year at 3%. so, again, and optimistic view

on growth. somewhat optimistic, but what is interesting is that, if they are going to get inflation down to 3.1%, it is going to be, i guess you are doing more rate hikes. in the most recent bloomberg survey of economists, they were saying they expect a 25 basis point hike to come next in april or may. we will be looking for signals from governor lee about what he will be expecting. shery: the 2022 cpi forecast hiked from 2% to 3.1% when it comes to the 2023 cpi to 2% from the november forecast of 1.7%, and the maintaining of the 2023 gdp at 2.5%. this is governor lee's last meeting. what are we expecting? and what are we expecting for his unknown successor? kathleen: i can't imagine how

anybody would choose his successor, except to be someone who would be putting the inflation fight out in front. the economy is holding up well in korea right now. they are having an omicron surge. exports are still holding up very well, showing the global economy is helping that economy move along. household debt is coming down a bit, property prices increased and are easing up a bit, and right now it feels like every central bank of the world, bank of korea was the first to start fighting inflation above target and it is not nearly as above target as it is in other countries like the u.s. whoever succeeds governor lee is going to put the inflation fight first, but in a gradual way where they don't overdo them this economy that is doing so well in the face of the virus. haidi: our global economics and policy editor kathleen hays with the latest on the bank of korea, the rate unchanged but a big upward revision when it comes to

inflation expectations. this is bloomberg. ♪

♪ haidi: take a look at assets being traded right now, a sea of red and the equity space, little green in the commodities space. not surprising. we continue to see commodities rally. i am looking at the cosby falling -- kospi falling to

session lows. the be ok rates unchanged but the forecast being raised for 2022 to 3.1% from 2%. this is bloomberg. ♪ -- haidi: quite unexpected. it gives us an idea of what we could see from a successor to the be ok governor. here in australia, the biggest drop in a month when it comes to trading in sydney. lots of individual earnings stories have been to the downside as well, but no doubt, we continue to see the geopolitical story, escalating tensions between russia and ukraine, increased actions as well, that flight to safety sticking as a key in trading at the moment. we see potential for the nikkei 225 headed toward a reversal, that late 2020 rally as well. this is what we have seen in the past if there is significant risk aversion in conjunction

with a geopolitical event, and higher energy prices. that is it for "daybreak: asia," as we look at the start of trading in shanghai, hong kong and shenzhen. this is bloomberg. ♪

♪ yvonne: you are watching "china open," yvonne man with david ingles. stocks trading lower after the u.s. sanctions russia. ukraine has declared a national emergency. ukrainian separatists are asking the kremlin for help along the border as well. china,