to diversify especially as not only is gas from europe -- from russia in question, there has also been heavy decommissioning of nuclear power plants and coal power plants. power needs to come from another source and gas is a good -- what does nord stream 2 mean for russia? parks it makes it -- it makes it less likely and possibly ever. that has been one area where you have seen more willingness recently on the part of the germans to make a more definitive pause on that project. that is why especially now russian gas is really dependent on traveling through ukraine to get to russia. any risk of infrastructure

supply disruption because of the conflict in ukraine really could jeopardize -- because that's the main transit route. >> always great to have you with us. the reserve bank of new zealand is -- the governor told us earlier that the tensions in eastern europe only add to the upside risks for inflation. >> in terms of early considerations. in terms of the economic implications in the short-term and more medium-term, it still all the direction of supply being constrained. the large rises we have seen in commodity prices feeding into general consumer price inflation. they are all upward. we feel that the reserve bank

convinced that we need to do more to contain inflation here. these one-off upward prices really add to the risk of inflation expectations giving weight. >> what about the risk that the surging oil prices doesn't just die back down? i think people were expecting that until we saw a russia attack ukraine. it doesn't look like it's going away in a matter of days. in that case, if consumers and businesses are facing higher energy costs, is there a risk that you have to look in the other direction? >> a relative price shock is exactly that.

that is reflective of relative scarcity when it comes to the oil side, supply constraints that are artificially put on the sector. the level of prices have been forward-looking. the activities in europe today were being very priced into markets. while the oil price levels may remain high, it's unlikely they will keep rising forever. eventually, they fall out of the consumer price inflation measure and it's nothing -- we have no influence with monetary policy. on one part, you have the inflation expectation component. but also link ups to household negatively impacted. it's costing you more to go about your business. your scarce income is being used on higher oil prices. there's a balancing effect over the medium-term.

>> let's get to vonnie quinn. vonnie: the fed still looks at two rate raises next month. officials including the cleveland president and atlanta's president are stressing the need to confront inflationary pressures. meanwhile, another says it's yet to determine whether ukraine will change the policy outlook. you see the policymakers are signaling that stimulus may be delayed but not stopped. the austrian central bank governors told us that russian invasion is not fundamentally change the outlook for the eurozone economy although it may slow the unwind. his view was echoed by officials from at least two other central banks. hong kong's covid cases continue to climb. the city has made a rapid

decline in the covid resilience ranking which tracks the best and worst places to be during the pandemic. the rate of covid-19 shocks -- shots in the united states has plummeted. it is the latest sign that the nation may be nearing maximum uptake. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. >> we are hearing from the japanese prime minister speaking about the increased sanctions that japan is imposing on russia saying they will continue to coordinate with the international community on future sanctions. also mentioned some of the targeted sanctions being related

to semi conductors in particular as well as the impact on energy supplies. the russian sanctions do not impede the implement steps to ease the burden on gasoline prices. that is huge when it comes to the inflation picture. just announcing these broader sanctions on russia. sanctions that already included things like the issuance of russian debt in japan. now they include semiconductor exports as well as raising -- the prime minister speaking at a press conference in tokyo. he says russia's aggression in tokyo is unacceptable. we are expecting more details from the responsible ministry. lots more to come on daybreak asia. this is bloomberg.

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haidi: today we will be focusing on domestic migrant workers in hong kong. 400,000 people providing childcare, cooking, cleaning, to more than 10% of households before the hip pandemic.

that number has dwindled and some have been left homeless after being diagnosed with covid. their employees -- employers firing them or not allowing the back into their homes. joining us is the executive director. give us an indication of what things are like on the ground right now some of these workers and the stories you have been hearing. >> good morning. what we are seeing at the moment particularly over the last few days has been domestic workers finding it difficult to self-quarantine. this is because the numbers of mandatory testing notices have increased and a lot of domestic workers are testing positive. given the density of hong kong

and how small the living quarters are, employers are fearful of what would happen if domestic workers return. we have seen a number of domestic workers losing employment and enforced to sleep outside two or three days. that's what they're trying to work with at the moment. haidi: the fact that there is no infrastructure or support network or safety net in place for this kind of thing, what does that tell you about the positioning into status of these workers that are so integral to making sure the city and the economy runs smoothly? >> ideally, it was envisioned a facility where they could go and self-isolate. over the past few days, there have been a large number of people testing positive and the supply hasn't been able to keep up with demand. when people are being asked to

go quarantine, unfortunately domestic workers fall into a specific category where where they live on a day-to-day basis is in their own residence. they become victim to the owners of the residence. that is of concern because we have heard stories of domestic workers having to sleep in parks. the last few days it has been extremely cold. it has been a very difficult situation. shery: what sort of support are they getting from the government , ngos, and what else needs to be done? >> with help, we have been working with a coalition. we have been working closely with the labor department which is the department primarily engaged with supporting domestic workers and the consulates, the philippines and indonesian consulates. the issue is the supply of

facilities hasn't been keeping up with the demand for community isolation. we are trying to wrap those up working with the government. in the meantime, the nonprofits are filling in the gap by providing temporary isolation spaces for the domestic workers who can't self-quarantine at home. shery: we have seen more support measures coming from the government of hong kong budget. what have you seen that is encouraging and what more do you want to see? >> particularly for us, what's encouraging is the support being provided for the employers. it is unfortunate that domestic workers aren't getting direct support, but it is great that employers are getting support because for the last two years, one of the things we have seen is domestic workers being under a lot of stress because of the financial instability. employers losing their job and having financial difficulties. that has a direct impact on

domestic workers. with home residents getting help financially -- shery: thank you so much for that insight. we have plenty more to come on daybreak asia. this is bloomberg. ♪

haidi: let's take a look at russian stocks. to billion dollars have been wiped out amid the conflict including a 33% drop in the last session which was the fifth worst in market history. that really did see just the local currency, the ruble also sitting at a record low. investors are dumping russian assets after the invasion of ukraine. msc i said it will not be implementing changes for russian securities. we are just minutes away from the start of trading in tokyo and seoul, korea. trying to digest the latest developments in ukraine. let's bring in our chief rates

correspondent for asia for more on what to expect. there are so many conflated factors and the market is reacting in an interesting way. >> is particularly notable that the mood in asia early even with australian bond yields jumping backup to mostly erase yesterday's declines, there is still plenty of caution out there. perhaps a sense that some of the late search in u.s. stocks was a classic buy the dip moment. maybe algorithm driven. there have been a few rallies in the u.s. recently that asia struggled to believe were worth following. that is been the case when asian investors are facing the risk of another day of headlines back and forth about what might be going on in ukraine especially

what the fate of kyiv might be. >> tell us about what is going on when it comes to haven demand. >> with the haven demand, bully a big influence is the way that crude oil came way back down from the extremely elevated levels seen overnight. crude is still pretty high compared to recently. the massive gyration is over so that is easing the haven demand that we had seen. it's interesting to see the way that u.s. treasury futures are little changed after they ended higher yesterday. that emphasizes the highest quality havens could still see some demand. even as australian bonds new

zealand bonds have sold off. they have been cheap, getting cheaper to treasuries recently and that highlights there is this undertone of long-run concern about what the impact of this crisis will be on global growth. we haven't uncertain growth -- uncertain outlook for global growth even before the fighting started in ukraine given the potential that central bank rate hikes which are still on the table could end up slowing growth quite rapidly in order to combat inflation. shery: our chief rates correspondent for asia joining us with his outlook for asian markets. we are seeing the asx 200 being led higher. consumer discretionary stocks as well. the 10 year yield rising. we continue to watch kiwi markets as well. we see the huge rebound in kiwi

stocks of almost 2%. we are setting up for the opens in japan and south korea after markets tumbled, we saw the nikkei the lowest since 2020. u.s. futures at the moment seeing a little bit of downside. we will see what happens in the asian trading session. the market opens in tokyo and so, korea our next. this is bloomberg. -- market open in tokyo and seoul, korea are next. this is bloomberg. ♪

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shery: welcome. haidi: asia's major markets have

just open for trade. our top stories this hour. russia sees more sections, china refuses to condemn the ukraine invasion. investors are assessing the situation in europe. the oil rally is in focus. alibaba reports its lowest cells on record following beijing's tech crackdown. shery: japan and south korea coming online. we are seeing the nikkei being led higher by industrials and have care and rebounding -- at health care and rebounding from the lowest levels on geopolitical tensions escalating around ukraine. the topix is also higher. we saw the tokyo core consumer prices also rising more than expected, by about 0.5% year on year. in japan, we are watching the japanese yen, which is holding around that 115 level after really strengthening to that three year high against the u.s.

dollar, given safe haven demand. we continue to watch the bond space as we saw treasuries extending a global rally here in new york. take a look at what the kospi is doing because that is gaining ground of more than 1%. we had seen those chipmakers in south korea really feel the brunt of the geopolitical tensions around ukraine, given that they source some of their materials from the country. we continue to watch what is happening with the korean won, which is weakening against the u.s. dollar, and really past that 1200 level. this as we continue to watch for any more news on sanctions coming from all of these nations against russia. haidi: they have been coming through fast as a show wakes up to the latest state of affairs -- as a show wakes up to the latest state of affairs -- as asia wakes up to the latest

state of affairs. in new zealand, we are seeing some pretty good gains, but trading under 2%. certainly at one point we saw gains of 3.5%, which was the biggest jump since 2020 as well as we see this haven demand rollback as you look at the future when it comes to australian and kiwi bonds. australian bond yields jumping back up. the haven story is fluctuating. the 10 year yields almost fully unwinding on declines we saw on thursday as a risk sentiment saw that rebound following the raise in global markets overnight. taking a look at the kiwi dollar as well. still relative stability at this point. switching it out to take a look at some of the other aspects that we are looking at this conflict through when it comes to markets. sap futures looking pretty negative. it does look like volatility is

here to stay, at least for a little while. taking a look at new york crude as well. we saw the pullback when it comes to gains in the oil markets, given that russian crude was spared from the latest round of sanctions. we are seeing some pretty healthy gains now when it comes to crude traded in new york. pretty flat futures when it comes to the haven story as pertaining to gold demand. let's bring in the regional cio at dbs. it has been such a wild ride. that late stage reversal when it comes to u.s. markets was really something to see. what does that tell you about volatility potentially being here to stay? how long does this play out for, do you position for, given that markets see this as a short-term thing? guest: i think in the near term, it is going to be really tricky because you have the russian-ukraine question happening and in the not so

distant future, you have the first rate hikes of the year. the markets will probably have the russian ukraine crisis and the potential for hikes in a three to four weeks time. you need to maintain your portfolios so that you do not get caught in any one risk event. i think the best way to deal with this current situation is to look at commodities, given that commodities have run up quite a bit. still, they should give us positive returns in light of what is happening. haidi: how do you get exposed to these view that commodities edge? guest: you can get it via oil. don't forget that russia is one of the biggest, if not the biggest producer, of wheat.

you get exposure to the commodities index, we can hedge against some of the volatility risk that is happening with the russia-ukraine crisis. but bear in mind that geopolitics on a longer-term basis usually do not have a negative impact on capital markets. shery: on the flipside, where do you see the biggest impact on all of these different assets across asia given that we are expecting profit margins to get pressured as well? guest: i think if you look at asia and japan, the leading affect will remain if oil prices do not correct. you have countries like thailand, india, and to a certain extent indonesia and the philippines as well. if oil prices continue to run where they are, it will be

vulnerable because they are the biggest net importer of refined oil in this region. it is an issue that crude prices are going up as well. but if oil prices remain higher, the current accounts will also be affected by that. shery: how do you feel about the semiconductor space across asia? we saw chipmakers under pressure yesterday, given that some of the materials were sourced from ukraine, not to mention that now we are hearing that japan will impose controls on semiconductors in this move. guest: this will affect semiconductors on a short-term basis. we don't know how long this conflict is going to last. if we put extensions in for an indefinite period of time, some of these semiconductors, their margins could be affected by the fact that they supply what is

needed to the market right now. that will have a snowballing effect on automakers, some others as well, because of the fact that demand for electric vehicles and consumers and electronic goods remains very high. that could affect some of the electronics makers up the road. shery: we have heard with all this volatility calls that we should be increasing exposure to china, given that they are trading like safe havens, especially with the chinese yuan. what do you make of those comments? can china actually act as a hedge? guest: i think to a large extent it can, largely because of the fact that valuations in china are very attractive. the market is trading at 12 times more right now. china's exports remain at all-time highs.

if you look at the chinese yuan, it gained 14% against the u.s. dollar over the last 12 for the 14 months -- over the last 12 to 14 months. for that measure, china can actually afford to cut rates further and it is likely they will be able to do better than some of the other economies, which are getting squeezed with high inflationary pressure leading to these higher interest rates. shery: kelvin tay with his insights on where to go with this volatility in the markets. let's get to vonnie quinn with the first word headlines. vonnie: the federal reserve still looks to raise rates next month, despite uncertainty posed to the global economy with russia's invasion of ukraine. officials are stressing the need to confront inflationary

pressures. meanwhile, the richmond fed president says it is yet to be determined whether ukraine will change the policy outlook. etv policymakers are signaling the exit from stimulus may be delayed, but not stopped this year, given the conflict in eastern ukraine. the australian central bank governor told bloomberg that russia's invasion does not change the outlook for the economy, though it may slow the unwind. his view was echoed by officials from at least two other central banks. hong kong's cases continue to climb with nearly 9000 new infections reported thursday and 50 deaths. the city has made a rapid decline in the covid resilience record and a second to last among 53 locations that are scored. canada is lifting the emergency powers that enacted more than a week ago to get anti-vaccine mandate protests under control. prime minister justin trudeau

says they authority is no longer needed. he invoked the powers earlier this month after hundreds of trucks barricaded the downtown area of ottawa and keyboard are crossings to the u.s. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. 1 shery: still ahead, alibaba has posted its lowest revenue growth since going public. we will break down the results and alibaba's plans with our guest. but up next, china has so far avoided criticism of the russian invasion of ukraine. we will discuss beijing's double medic strategy next. this is bloomberg. ♪

pres. biden: have cut off russia's largest bank, a bank that holds more than one third of russia's banking assets by

itself. we cut it off from the u.s. financial system. >> we will use britain's position in every international forum to condemn the onslaught against ukraine. pres. biden: we are actively working with countries around the world to elevate release from the strategic petroleum reserves of major energy countries. >> we will continue to squeeze russia from the global economy piece by piece, day by day, and week by week. >> we are not going to harm the world economy system we are a part of as long as we are a part of it. i believe our partners have to understand and not aim to push us out of the system. shery: world leaders talking about russia's invasion of ukraine, and you also saw president putin talking about his incursion into the country. we saw more sanctions coming

from the biden administration today. where do we stand on all these penalties? and when are we expected them to have an impact on russia? reporter: that second part of your question is a good one and we are not getting a specific answer from the white house on that. this came up a number of times in a press briefing today, with one of the president's economic advisers. they are making it clear it will be a long-term turn here, that it will take time as far as this investment is concerned. but what is going on is a two-pronged approach and this is the next layer. we heard earlier in the week from president biden on the first tranche, now we are looking at sections on five major russian institutions, including the country's biggest lender. they want to cut off russia from the financial system but also shutdown access to high-tech, and that is another part of this export restrictions, which could -- according to the people i was talking to earlier -- could have

more of an impact. we are talking about semiconductors, geer used in electronics and a some of the things that might seem obvious, but specifically in the military hardware. trying to make it difficult for russia to replenish its military gear, much of which is getting sent to ukraine. but there was also news about what is not being done. there is not a sanction on the flow of energy, nothing to disrupt the flow of energy from russia, which is still something that could be done. we have our european partners in mind with that. but also calls to push russia out of the swift financial communication system did not come from the president today. that is despite some of his most important democratic allies calling from that. bob menendez, bob casey, congressman adam shift and the intelligence committee, all allies of joe biden calling from the other end of consulting avenue to throw russia out of the swift system.

in many cases, we are hearing from lawmakers, asking the white house, what are you waiting for? haidi: how challenging is this position for president biden, particularly ahead of midterms later this year? reporter: this is a big challenge. it is a largely bipartisan move here to stand up to vladimir putin, but we heard from donald trump earlier in this week and his former secretary of state mike pompeo that vladimir putin appears to be a genius. he is acting in a smart way, according to donald trump. mike pompeo called him elegantly sophisticated as a carter part -- as a counterpart in russia. that raised some eyebrows. there are folks who are doubting our approach to russia. the real criticism from republicans, they say that vladimir putin does not have enough respect for joe biden and therefore is acting flagrantly and applying more aggression to ukraine. but the fact of the matter is, the president has a very important speech in less than

one week. next week is the state of the union address before a joint session of congress, and the speech the president was working on last week i expect will sound differently by the time he is in the speaker's room next week. it will be an overriding factor in the second year of his presidency. haidi: our washington correspondent joe mathieu. china has refused to condemn russia's invasion of ukraine, instead urging restraint. let's bring in our columnist for her analysis. is that really telling us everything that we need to know? they keep talking about the role that they think the u.s. is playing as having hyped, i quote, this invasion? reporter: this is going to be the chinese position. what we will see is a

condemnation of the west, a condemnation of sanctions. they are ideologically aligned with russia. but when it comes to the actual invasion of ukraine, the support of separatists, these are two things that china absolutely will not do, these issues of noninterference and territorial sovereignty, which is essential to chinese thinking, to chinese foreign policy. it's position on taiwan and hong kong. it will continue to walk this line as long as it possibly can. shery: we are seeing these protests erupting around the world, but also even within russia. antiwar protests in more than 40 cities. what is this telling us about president putin's position domestically? reporter: it is extorting her to see because it is hard to underestimate how difficult it is for people to protest in today's russia. remember, growing repression of navalny and the navalny

imprisonment. much of the people who went out, they knew their chances of being arrested were very high. to see them come out in any event tells you something about this feeling. russia has strong links to ukraine. this is one nation until not that long ago. for many russians is seen as a familial dispute that they cannot really understand. officials polled to strong support, but there is reason to doubt that. what i believe you will do is respond with increased repression. shery: clara ferreira marques with the latest. we have seen the market reaction pretty swift, especially when it

comes to european stocks that fell on thursday. we are seeing futures at the moment open slightly higher with the stoxx 50 futures and the dax futures pointing higher by 1.8%. this follows the huge fall we saw in european stocks, which closed at the lowest since may of last year. we saw energy stocks outperforming. brent crude surging up above $100 a barrel for the first time since 2014, although we are seeing those gains being paired back a little bit as we also heard from the biden administration that they may be releasing some more emergency oil reserves, given the price action in the energy markets. of course, we continue to follow closely as we are now seeing u.s. features now under pressure -- u.s. futures now under pressure, staging an amazing comeback during the new york session. haidi: extraordinary. it does look like these extraordinary swings will continue, even when it comes to gold as a safe haven. we saw gold prices surging to the highest after tumbling among the weaker than expected sanctions on russia. goldman says the rally for

gold has longer to go when it comes to the impact on ukraine, saying prices could surge to $2350 an ounce if growth slows. the expectations out of risky assets are in the early stages. there could be material slowdowns in markets and investors could be investing in etf's as well. it just another voice in what we can expect to see of continued volatility in these markets. lengthy more to come. this is bloomberg. ♪ -- plenty more to come. this is bloomberg. ♪

haidi: the bank of new zealand

is sticking with its rate hike calls even as the ukraine crisis complicates the outlook for global central banks. the governor told bloomberg the tensions in eastern europe only add to the upside of risks for inflation. >> in terms of early considerations, but they are all in terms of the economic implications both in the very short-term and more medium-term, it is all the duration of supply, the constraints, the large rises we have seen in commodity prices speeding through to general consumer price inflation, they are all upward. we feel at the reserve bank convinced we need to do more to contain inflation here, and these one-off upward prices add to the risk of inflation expectations getting away. reporter: what about the risk that this surge in oil prices doesn't just die back down? i think some people who were --

i think some people were exciting that until we saw russia attack ukraine -- i think some people were expecting that until we saw a russia attack ukraine. is there some risk that you might have to look in the other direction, saying we do want to have an aggressive rate hike path but maybe we need to slow it down a bit, cool it off a bit for now? >> there's the ups and downs. the most important thing first is a relative price shock is exactly that, the price relative to services. that is reflective of relative scarcity when it comes to the oil side or supply constraints that are officially put on. the level of prices have obviously been forward-looking. the actual activities we see in europe today have been very priced into markets, so the oil price levels may remain high,

but it is unlikely they will keep rising forever. eventually they fall out of the consumer price inflation measure. we have no influence with monetary policy around that relative price. on one part, you have the inflation expectation components of the near term price rise, but also real incomes for households negatively impacted. it is costing you more to go about your business. your scarce income is being used on higher oil prices. it is a balancing effect over the medium term for us. shery: adrian orr speaking with us earlier. here is a look at the business flash headlines. alibaba is shifting focus from high-growth to retaining users as it recalibrate its strategy. the tech giant reported a sales growth of just 9.7%, thus lowest since the 2014 ipo.

income tumbled 74% to $3.2 billion in three months. profits rose by an estimated 21% in the three months since september despite the regulatory overhaul. the higher earnings are mainly due to an increase in net gains from the fintech firm. it is based on ant's contribution to alibaba's earnings. ♪

>> what we see in this escalation is a rise of uncertainty, and that means a rise in hysteria. >> that will not help consumer confidence. >> the markets are pricing a big

slowdown. this position has become quite negative. >> i think china is going to be a safe haven because they have continued to produce and grow. interest rates are going down in china. i'm >> >> not sure this takes the fed off the table. >> it will be appropriate to move the funds rate up in march. >> it is time to normalize policy. >> policy is poised to return to a more normalized sands. >> we have to see if this ukrainian situation changes that narrative. i just think time will tell. >> the amount of rate hikes in this cycle should and will be in our view a lot more muted. >> we will try to avoid surprise. haidi: market washers -- watchers discuss the invasion of ukraine. let's bring in the national security and strategy expert at a university in perth. great to have you with us.

i know you say that ukrainians see it as a proxy conflict, a buffer between the u.s. and russia. but i keep going back to the speech from putin earlier in the wake. does that tell you that his vision from ukraine is more to do with how he visualizes the territory of mother russia? guest: i think the appetite is growing by the day. it was a russia's control over the breakaway regions of donetsk. he wants to transform ukraine completely because he wants to deal at ukraine. also, he wants to punish those who are allegedly responsible for committing all sorts of crimes against russian nationals against ukraine and a

pro-russian sympathizers in ukraine, and that requires having full control over the country. the let me propose to you for this. this may be part of his future strategy in terms of the lifting of sanctions. it may also be a part of negotiations with regards to that. haidi: is there anything the u.s. can do now that would deter a further incursion? guest: we have to be quite realistic. i think we misunderstood the resilience of the russian economy and the resilience of the russian state.

if we continue to put faith in sanctions, it will not do anything. sanctions can be misinterpreted as a form of appeasement because the initial sanctions proposed by the biden administration were almost laughable because there is no u.s. interest of business that was going there or is going to be there in the considerable future. i think relying on sanctions is not going to stop russia in the short or medium term. russia was under sanctions since 2011 and the soviet existed under sanctions since the year it came in to existence. on the other hand, russia is too strong militarily to be challenged openly on a battlefield. shery: more targeted sanctions against russia's natural resources, either stopping the

purchases of those materials or even stopping the payments as well, wouldn't that help? we have seen this really dynamic -- this dynamic between russia and saudi arabia a couple years back when saudi arabia went at it with moscow in terms of oil production, and moscow actually had to back down. guest: we also need to remember that the russians managed to establish a significant strategic presence in the middle east and they negotiated an agreement with opec-plus. we need to remember that the regime that was put on russia and the initiation of hostilities in ukraine was

signed by 30 or so countries. they signed an agreement with china on the opening day of the winter olympics, also in terms of the sales of russian fossil fuels to china over the next 10 to 15 years. this deal is worth billions of u.s. dollars. we need to be realistic about that. shery: let can we expect in terms of domestic pressure? we are seeing protests in dozens of cities across russia right now. guest: it will very much depend on the skill of the protests. the russian ministry -- at this stage, putin well continue to enjoy quiet domestic support. i think things might change among reports of heavy civilian

casualties, because it is important to remember that even though russia and ukraine are in bitter geopolitical struggle for the past seven years, it is income principle for both the russians and ukrainians to fight each other -- it is inconceivable for both the russians and ukrainians to fight each other because of ethnic, religious, and family ties. it will result in collateral damage on both sides of the conflict. this is going to be the change in opinion. but if it is going to be a swift and clean campaign, i think people continue to enjoy it and to be supported by russian society. haidi: what are the spillover risks when it comes to regional security in eastern europe, and

it do you see nato able to manage that risk? guest: i think nato made a strategic mistake like the majority of the western militaries. they abandoned the idea that a major state to state conflict as possible and plausible. i think nato finds itself in a space of pluralities. it has significant confines, but is it significant enough to deter the russians? we need to remember that up until recently, ukraine's president was described as the strongest military -- was describing the military as the strongest in europe. i think they will be left feeling incredibly nervous and vulnerable. whether russia wants to continue to expand its military venture beyond ukraine is a big question. i think they will take their

time absorbing ukraine and consequent management for ukraine. it is too early to say they will take on neighboring countries. ukraine has been in russia's calculus for a long time. just like belarus. it is part of russia's buffer of what was left after the soviet union, after the disillusionment of the warsaw pact. the russians clearly demonstrated they are prepared to restore its. haidi: we continue to hear about these tensions and russia trying to change the post-world war ii international order. could we see beijing trying to change their tune? so far, they have criticized the russian sanctions, given that china has been trying to portray itself as a global leader. they have upheld some of that order that has been seen, held by you and agencies in person world war ii -- by you in

agencies in post-world war ii. guest: the joint statement the country signed was with regards to expansion or russia's security interests in europe or in regards to taiwan. they made it very clear, the countries will work on the new international relations. they are carving the new world order. they are charla and the world order. they welch -- they are challenging the world order. we expect that the chinese will somehow act as mediators. i think it is a bit optimistic. i think we should be concerned if the chinese will take advantage of the current situation, given the fact that u.s. exposed strategic weakness by demonstrating there are limits to u.s. global power and the americans find themselves

overstretched. shery: it was good having you on. curtin university assistant professor of national security and strategic studies joining us. let's get to vonnie quinn with the first word headlines. vonnie: russia's invasion is complicating efforts to revive the iran nuclear deal with sanctions being leveled in washington risking spilling over. that is according to tyler -- ireland, which has been appointed the facilitator of discussions. the vienna talks are in a holding pattern with iran's negotiator returning to talk with negotiators. hong kong's covid numbers continue to climb. the city has made a rapid decline in blue bricks covid resilience ranking, which tracks the best and worst places to be during the pandemic, and is now second to last among 53 locations that are scored. the rate of covid-19 shots in

the u.s. has plummeted since the start of the vaccination campaign. the seven-day average of doses administered fell last week. it is the latest sign that the nation may be hitting maximum uptake. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: alibaba is shifting a strategy to focus on user retention after posting its lowest growth since going public. more on that next. this is bloomberg. ♪

shery: take a look at some tech adr's from china because we saw that huge plunge when it came to alibaba given that their earnings came in at the slowest growth since they went public in 2014. sales rising just 9.7%. this of course as the company and the rest of beijing, the chinese tech sector really is dealing with the regulatory crackdown ongoing across the region. let's talk about alibaba because it is recalibrating its strategy after more than a year of

beijing restrictions on every facet of china's internet sectors. the company says it will now focus on retaining users rather than expanding its market share like past years. we will discuss with joseph berger, ceo of pacific epoque. it is great to have you with us. the seems like a big shift for alibaba. will it be successful? guest: if you think about alibaba's trajectory going forward, obviously they are facing some pretty big headwinds with discretionary spending going down in china overall. when you look at the categories where they see the largest share in the market, apparel, sportswear, skincare, shoes, luxury, they represent about 40% of overall transaction sales for alibaba, and that is impacting them right now. whereas their competitors are obviously doing a little bit better, where jd is more focused on fm cg, home appliances,

electronics. in addition to that discretionary spending slowdown, and you look at our data, one of the other issues they face is they are not very competitive with their pricing. as the price leader being the biggest in e-commerce and china, our data indicated they were not being aggressive in reducing their prices to try to augment and to try to address this lack of spending and be more competitive. so, with these two variables being spending and pricing, we think there is clearly room for them to turn on the growth engine and get consumers back to spending in the long-term or midterm. but clearly, these are catalysts that they are challenged with. shery: any idea why they could

not be more competitive with pricing? could it have been the regulatory crackdown they continue to face? guest: exactly. i think the regulatory environment has put some constraints on alibaba's competitiveness, so they did want to play by the rules. they were very cautious about how aggressive they were in the market over the last quarter, clearly. and that obviously hit their ability to perform. i think in the long run, they are playing by the rules. they are showing they are not being super aggressive. i thinks what -- i think once those types of dynamic start to move in their favor, they can turn on the growth engine once again. haidi: we have seen so many big tech and e-commerce moves, including in fintech, including playing by the roles. it is a combination of compliance and contrition. we are still seeing further downside, though. is there a gauge where we might see a bottoming of the negative impact? guest: i think with alibaba, it

is a question of they have a lot of different levers in their toolkit right now. they are very diverse, they are the biggest e-commerce platform. they are obviously facing marketplace, whether it istive livestreaming market taking away some of that growth away from them, being very competitive and taking the apparel and cosmetic spending away from alibaba. then you have jd also being competitive. i think from a where is the bottom for baba, i think we are seeing it now and i think that they can turn on that growth engine when they decide to. and obviously, with consumer discretionary spending starting to potentially increase in 2022, if that does turn on as well, they could see accelerated growth once again. haidi: in the meantime, the

competition, how strong are they performing? guest: they are doing very well. i think jd is proving that they are making significant gains on their main competitor in the market. their focus is in areas like fmcg, food and beverage, and home appliance. we looked at our data just in january, and jd saw 40% growth in growth sales over last year. jd is definitely the one to watch right now. they are in the right place. they are being highly competitive, and they are taking share. they own their distribution channels. they are able to control that across the consumers so they can decide where to distribute, whereas alibaba does not have that same control. we think that jd based on our data is taking share and growing

at a much higher rate. haidi: great to have you with us and your insights are appreciated. let's get you a quick check of the latest business flash headlines. citigroup is the first major u.s. bank to eliminate overdraft fees. they are removing the penalties along with overdraft protection charges by the summer. politicians and consumer advocates have criticized the charges for their impacts on low income consumers. orders firm adjourn as covid-19 shot -- orders for modern a's covid-19 shot has increased. it is up from $18.5 billion announced in january. options for orders this year are half a billion dollars lower than previously announced. the sec are investigating whether elon musk and his

brother violated laws when selling tesla shares last year. according to sources, they are screws stashed scrutiny scrutinizing -- they are scrutinizing transactions. he is targeted with what he calls -- more to come. this is bloomberg. ♪

shery: take a look at the yuan as we had to trading in china. the offshore yuan holding at 632 levels after we saw weakness against the yuan-dollar given the news of the russian attack on ukraine. but it has been more muted. this chart showing the onshore yuan near a 60 year high against a basket of currencies. it has been interesting to see the yuan standing up for its resilience. this correlation to global volatility has dropped to a three year low. we have heard some saying that perhaps it is a good idea to increase chinese exposure event that it is less at risk from the conflict in europe. haidi: it is fascinating when it comes to either seeing opportunities in china and the bottoming out as well as the additional attraction as a safe

haven away from geopolitical risk. and the other side really disagreeing with that. this is what we are watching when it comes to china and hong kong. we do see some calm returning to markets. rusal down. we are also watching china energy stocks with the massive crude price move. we are seeing volatility when it comes to pricing. we are also watching alibaba after the tech giant reported its lowest revenue growth on record, seeing if investors feel like this is a bottom when it comes to the downside of the regulatory impact. let's take a look more broadly around the region. we are seeing investors pushing stocks modestly higher in asia. this as we saw the late stage turnaround in the u.s. u.s. equity futures also wavering at this point. the nikkei 225 is up in japan

after sanctions impacting energy in russia. the kospi up by 1.4%. continuing to see these covid-19 cases climbed to close to a record in south korea. in australia, reversing some of those losses, although we are giving those up fast given we saw a decline of 3% yesterday. not the strong rebound we are seeing in other markets, like new zealand, where we see that job. although for new zealand, i should point out, we are well off those session highs as well. some of that volatility still remaining, but we are seeing asian stocks higher by about zero .5%. shery: what a reversal for those risk assets, especially as the s&p 500 raised more than 2.5%. we are seeing u.s. futures under pressure at the moment, although european stock futures are higher by 1.5%. perhaps that is surprising given that european stocks fell into technical correction.

chinese futures finished the session higher by 0.5%, but we are watching those internet giants because we saw the selloff ahead of alibaba earnings. when they reported they saw the slowest growth on record, the resilience of the yuan is pretty impressive. that's it for "daybreak: asia." market coverage continues as we look to the start of trading. stand by for "bloomberg markets: china open." this is bloomberg. ♪

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>> printer because has become a haven for cryptocurrencies. here is one in the street a few steps from the beach.

looking pol pot imagine 2021. this is about what their modern-day colonizers looked like. once the visitors become permanent residents, they pay zero tax. that is why the island is particularly attractive. now, puerto ricans fear losing their home with little intervention. good morning from the asian-pacific. in beijing and shanghai, welcome to the china open.

i am david ingles with yvonne man. >> president biden imposes tougher sanctions on russia as the rest could fosun. china refuses to condemn moscow's actions. fed officials signaled they remain on track to raise interest rates n