>> good morning. in sydney we are counting down to asia's market open. >> i'm vonnie quinn in new york. the union -- you in general assembly holds an emergency session of our russia's invasion of ukraine. >> sanctions towards russia's

economy and financial system after initial penalties failed to force a withdrawal. and, investors anxiously await the start of another trading week. the euro slides. australian bonds signal demand for havens. it is really the haven demand playing out in particular when it comes to the strength of dollars under the asian session monday. usually when we see this demand it pertains more to the yen. we have not seen classic cave-ins like the yen over the past week or so and it is all about demand per dollar at the moment. when it comes to the equity sessions this is what we are seeing at the start of trading in sydney. 3/10 of a percentage higher. futures indicated higher over 2%. it will be interesting and challenging to see whether some of the equity gains could be held given all of the negative news. haidi we are seeing exactly what

we were anticipated. s&p futures pointing to a decline of 3% at the open tomorrow morning. there is a lot of time between now and then. oil, and almost 7% jumper wti. the same when it comes to brent crude futures trading at 104.32 now. and, a massive move in bond futures as well. the u.s. two year note is up seven basis points and down in yields. same for the 10 year note futures. we are seeing those move one and 3/8, a massive move there. search for safe haven demand as western allies ratchet up penalties against russia and its central bank and potentially some of the country's wealthiest tycoons. we are joined by our editor in d.c.. tony, what is the situation now? the balance of the war in

ukraine into the next week? we are hearing more from europe this evening. tony: a lot of the action in the last 12 or 24 hours has been on the european union side. there were historic moves over the weekend by germany, for example to arm ukraine and also just to step up its defense spending which has been historical particularly with the previous u.s. administration. there has been a rash of actions, sanctioning russian tycoons and estate company leaders including some who have not been sanctioned by the u.s. yes. they have agreed to send almost $.5 billion worth of a military aid to ukraine in addition to individual e you government aid and there was that e.u. government aid and there is also a plant above ban all action with russia's central bank after

a coordinated move to put the squeeze on russia financially, at least, with this initial incentive of drastic measures. >> andrea, we are seeing market reaction across treasury futures, gold, oil prices, what are you watching? andrea: haidi, we are seeing a classic risk off day here. we have u.s. futures opening sharply. we have equity futures opening sharply lower. we have a rally in australian bond yields. as you mentioned, the treasury futures are also showing rally in the market opens in an hour. of course, the focus will be on the russian ruble. that is not trading for a few hours but it will be of focus in this plunge to a record low last week.

russian assets from bonds to equities were hit. we are seeing a little uptick in australian markets, but not of the size that futures has indicated. so, very much, this is a risk off day. the other thing investors will want to see is how russia will be able to service its dollar debt and what the impact of the sanctions on the central bank will be on holders of russian dollar debt and amongst the biggest of them is black rock. you know, so far, russia's international reserves are very high. have low debt. -- you have low debt. so it seems insulated because it has moved from a reliance on the

dollar. but it is early in how it will be able to service its debt. also, given that it's bonds have been raised. this will be a major focus for investors as of the week unfolds and as the markets are trading. haidi: tony, the situation on the ground. what we know about these peace talks that might be happening in the next few hours on the border between belarus and ukraine? tony: it is very hard to gauge him of course. -- to gauge, of course. the russians have said, yes, we are ready to talk to you, basically, if you surrender in so many words. but there is this effort underway. last we heard it was on the border with belarus that has been hosting russian troops for

some time now. so that is kind of a stay tuned situation. we will have to see if there is any real hope of progress there. i think i racial -- i think in russia itself you see people lining up at atm's. you see those images. within the bigger picture there has been an unprecedented wave of support for ukraine and communal, standing up to russia, especially in europe, but certainly also in the u.s.. the u.s. embassy in russia said its citizens should consider leaving russia now. because, of the anticipated decline in the number of flights because of the flight bans being imposed on russia by western countries. vonnie: we are seeing enormous

dollar demand at the moment. what does that tell us? adreea: look, i think this tells us this is a very, very severe crisis and it is worrying investors a great deal. as you mentioned, some of the other havens like the swift banks have not quite performed, or the yen, have not performed to the same degree as the dollar. again, i guess it shows that markets are incredibly worried about how this is going to unfold. where you go? you go into stronger currencies, u.s. dollies -- dollars. this shows increasing worry of investors about from you know, -- about, you know, how this is

going to unfold and what it means for access around the world. vonnie: let's get you to paul allen with the first word headlines. paul: global governments remain reluctant to sanction russian energy. e.u. officials are set to convene monday to discuss the u.s. proposal for a coordinated release of emergency oil reserves. states are divided on whether the block should take part. the u.k. is also considering tapping reserves. opec plus could only gradually increase oil production even after russia's invasion of ukraine sent prices surging. civil delegates told limburg -- bloomberg price jump does not reflect the supply and demand of balance and the group should add 400 balance -- gallons of crude per day.

>> a record number of covid infections while shifting the strategy for dealing with the vilest -- virus. the city is adopting an online self reporting system for residents who will be allowed to isolated home if they have no symptoms or mild symptoms. hospitals will discharge covid positive patients in stable condition. indonesia is bid to allow covid -- quarantine free travel to bali. fully vaccinated passengers will known longer -- no longer need to isolate. they will need to take a pcr test and isolate until they know the result. it is set to begin mid-march. the goal is to lift all requirements by april. local news 24 hours a day on air and on bloomberg quick take powered by more than 100 -- 2700 jenna ellis and nls for more than 120 countries. >> asian trading is underway.

vonnie: look at u.s. futures. treasury futures, big movers. we are seeing asian investors this morning flocking towards australian bonds. treasury futures are surging. ukraine is turbocharging the haven demand treasury note -- demand. treasury note futures are serving -- surging. tenure yield notes are climbing. on friday we are seeing the move when it comes to australian and qe bonds. let's -- kiwi bonds. >> and why crude is up 6.7%. the same for brent crude. we are also having a look at natural gas futures. up-and-down 1.2% at the last close.

they are higher on the futures market now. palladium is another one rising quite strongly. there is a lot of demand for safe havens. there are a lot of question marks about where the supply for some of these metals, base and higher quality metals will come from if this continues. palladium up 6%. ahead, more on the impacts of sanctions targeting russian banks. we will speak with johns hopkins university professor jeremy farrell. i look at the future for the future of asian economies. the potential spillover from the war in ukraine. this is bloomberg.

haidi: russia's invasion of ukraine is contributing to some of the highest prices ever for commodities. taking a global economy already experiencing decades high inflation. let's get analysis of the potential impact of the conflict on regional economies with our

chief asian-pacific correspondent. let's start with the impact of these sanctions and moves more broadly on both russia and the west. >> well, sanctions are of course terribly disturbing to say the least for the russian economy. except that, of course, russian policymakers will react to price blocking in ways that will be more costly capital controls if not even suspension. we already hearing about suspension of payment of foreign currency debt at least. so for russia, this is a massive shock. how much can russia shoulder? this is still an economy of war. this will not substitute all the

other issues that the russia economy will be confronting. for asia, it is more limited, and that is good. because, we sit in asia. but of course, asia is not fully shielded from what is happening. it is directly less concerned compared to europe but there will be things happening here other than commodity prices. i think we will clear a -- ca clear bonta safe haven -- ca clear run to safe havens. more those with dollar debt, frontier markets in asia, sri lanka, you name it. so yes, there will be consequences. we are not completely shielded in asia. vonnie: you talk about the extraordinary level for the dollar at the moment, rallying

alongside gold. the last time we saw this, this is sovereign debt crisis levels where you see these asset classes rallying at the same time. does this indicate how worried investors are? given the potential stress on dollar liquidity are we going to see central banks stepping in as market makers to ensure stability now? >> yes. --alicia: yes. i think they are ready gave the signal by saying that liquidity will be there no matter what. the fed will need to step up and if we see inflation continuing, which is very likely, russia still has 54 billion in euro bonds, a big chunk of the eurobond market at the end of the day. so it will have crippling effects. the fed set the map in march of 2024 different shock, covid.

i think all of this will come back. the dollar will remain very strong. haidi: vonnie: -- vonnie:\ will the u.s. allied nations have to include all of the transactions that have to do with energy? >> energy is excluded because not everything can be decided. the decision on the central bank comes in. sanctions are valuable. given the unity, they have been strong. what about energy? they are working on releasing strategic reserves. so far, we have seen china will not play a part as long as many others do. think about saudi arabia, qatar, of course, the u.s.. then sick of norway, the u.k..

-- think of norway, the u.k.. if this works, i think the nuclear threat remains high. hopefully, before the threat actually, you know. i think there will be sanctions, commercial sanctions. that will be extremely costly for russia to the point of i am not sure whether that will be even possible in a sense for the russian economy in the short run. that is a big shock. haidi: how does the russian central bank deal with this? you mentioned how massive of an operation it is. what happens next? are they paralyzed? is there anything the central bank and do to shore up other financial institutions? alicia: the first thing the central bank must do and i think they are doing is to stop dollar payments.

i hear that they are asking intermediaries in russia not to accept a bid for foreign currency for russian debtholders. that is what they need to do because of not they will bleed. they have about 20% in other currencies. if those currencies have cls currencies, that will not last long because they will follow, very likely, you know, the cls arrangement. so, they only have the dollar and gold left. gold will be more expensive. that's nice, but they need to sell it. basically, they will need to stop making payments and that is an economy of war. imports only. this is just not sustainable. i will say, in the medium run, maybe even in the short run it

is a very extreme measure. but these are not permanent measures, i believe area -- i believe. that is what the sanctions are trying to achieve, a reaction from russia. haidi: we have seen chinese assets behaving like a haven play even before the geopolitical crisis worsened. is that the case going forward? is there a greater risk for beijing depending on how it continues to position itself in the conflict? alicia: well, i mean, there has been this reaction because in a way it is inflated, another game. portfolio inflows were at a record high so this is a trend. but how long that last, i think it would offend -- depend very much on first-come how massive the shock is. the dollar might end up being a

safe haven or currencies that are very liquid because this is now becoming a liquidity issue. you might not want to be trapped in a nonconvertible currency. my sense is that will not last long. the second thing that will be enormously important for china is china's stance. we had the u.s. security council. china might find itself isolated because there is already the impression that india by change. if that happens, it will not be good. haidi: we will see that tomorrow. chief east asia corresponded alicia garcia herrero joining us from taipei. you can get the stories you need on today's edition of daybreak. customize your settings so you

only get news on the industries and assets you care about. this is bloomberg.

>> it will be a big week on wall street. checking u.s. futures. s&p futures pointing to a decline of 2.5% as 2.2 pifer present -- 2.25 percent at the open. dow futures a drop of more than one point 25%. nasdaq futures a drop of 2.65%. it will be interesting to see

company reactions from bp and norway sovereign oil fund. the euro is off of it slows. it is weaker by 9/10 of a percent versus the u.s. dollar as people look for havens now. bond futures in the u.s. are seeing massive gains. we will see a big drop in yields tomorrow. haidi: we are seeing that across bonds in australia and new zealand as well. the rally is extended. this is the early education of the haven play early in the asian session. the rally in the benchmark down 10 years by 10 basis points. also a move to the three year. we have seen seesawing. seven basis points are more in -- or more as we get a reversal of sentiment. it is the rba decision week so

we will see how that factors in two central bank decision-making later. we will get you the latest when it comes to world risk off moves in the market as well as the

>> innovation, money, and power collide in silicon valley and beyond. berg technology with emily chang. weekdays at 5:00 a.m. in new york and to accompany him in sentences. -- 2:00 a.m. in san francisco.

>> under this package important russian banks will be excluded from the swift system. we will also ban the transactions of russia's central bank and prevent all his efforts from financing putin's war and target the assets of russian oligarchs. >> we want to take every step to maximize the impacts on president putin while minimizing the impact on the american people and global community. >> dear colleagues.

you see that not only are western countries engaged in unfriendly action towards our country in the economic field him about the top nato -- field, but the top nato officials allowed aggressive stations towards our country as well. that's why i'm ordering the defense minister to switch the russian army forces onto high alert of combat duty. vonnie: let's get more on the market fallout. we are seeing big moves. most interesting to me as the demand for dollar. mark: the news over the weekend is pretty serious for people involved in this market, especially to do with russia being excluded from the swift system. certain russian leaders -- lenders.

the unintended consequences could be severe. it could take quite a while before people are able to figure out which items may be missed. central banks will be on high alert to make sure there is extra liquidity in short-term money markets. that would mean in the near-term traders will not only be thinking too much about what they need in hedges they will go for the biggest, most liquid things they can get their hands on. that is why you saw s&p futures lower this morning and treasury futures higher. it would not be surprising if we see the u curve flattened further because getting prices in cash treasuries is easier in asia than the sorte -- shorter areas of the curve.

after a while people will think about more precision, but for now you will see people grab oil futures, contracts, treasuries, the dollar across the curve, all the traditional things you would expect in the first wave of risk aversion. that could last for hours. it might go through european trading. of course, you will season probably change directions a couple times during the day but the main thing is traders will want regular hedges on quickly and they will go to the simplest ones. haidi: how much does this competent the picture for the federal reserve? mark: a lot. because, the federal reserve has clearly been trying to prepare the market for rising interest rates. this means that interest rates have to go up quite a bit and quite quickly. now, they have a disruption to

the basic money market system. apart from all the things the fed does, one of their most important jobs is to make sure that on a day-to-day basis, the u.s. dollar funding system moves as smoothly as possible. if they see any disruption they have to come in quickly, provide liquidity, and to stabilize things. today, probably for the rest of the week, the fed will have to provide excess liquidity to make sure that everybody is calm and nobody fears that the day today working of the u.s. dollar system is at risk. now, that is really contrary to what they have been trying to sell the market. the idea they need to remove liquidity to raise interest rates. so in the near term, it really does come looking for your -- comp ok'd the picture. the fed will be hoping that by the time they have their march meeting that some of this has died down and they can cool money markets and go ahead with

a rate hike in march but it depends how long it takes to sort out the system. if they cannot stabilize the money markets, they may have to consider postponing the rate hike in march. vonnie: wow. that would be something else. mark cranfield we will be checking in with you every couple hours. our next guest is joining -- our next guest is a professor of international affairs at johns hopkins university. henry, we are seeing an aggressive use of the dollar as a weapon here. explain how it proceeds from your given that the u.s. does not want to hit any banks that deal with energy transactions. in re: it will be very complicated. -- henry: it will be very complicated. clearly, russia will be badly hit. we are not just talking about swift, but the actions to freeze

the assets of central banks. we have to ask, how will russia respond? will it responded to economic retaliation? is this going to continue rattling the saber of using future forces, which of course will create much greater instability? haidi: we just heard that this will create problems for the fed. if we look to the central bank in russia it has a huge headache of its own now. if you were running the russian central bank, what on earth would you do? henry: you would be in big trouble. first, they have to worry about, what will happen? will there be a bank run because of the consequences of swift? will people want to get out hard cash as quickly as possible? in a bank run, what options do they have in a world where the central bank is not able to get access to the reserves that might have? the consequences could be very severe.

the options russia has whether this is to turn to inflation, to try to impose some kind of currency controls or controls on abilities of actors to withdraw money, none of them looked powerful and all of them come with downside. vonnie: henry, does the weaponization of the dollar by swift encourage some u.s. rivals like china to reconsider what it can do to create an alternative? henry: very much so. the problem i think china has is it does not have much in the way of options because it was not part of the global interdependence system at the time when globalization really took hold in the 1990's and the 2000's. so, we have a lot of powers centralized in the u.s.. the dollar system gives of the u.s. the ability to shape financial institutions and banks around the world. swift, based in belgium, but the

board is dominated by u.s. political entities. if china wants to respond, it has to try to create its own network from scratch. that will be very difficult to attract other countries or financial institutions abroad unless they have a very close relationship pre-existing with china. vonnie: there is a lot of chatter heard about the digitalization of the you on --yuan. what about the role of crypto? henry: crypto is interesting. of course, crypto does provide opportunities to engage in transactions that are much more difficult to monitor, albeit, not as difficult to monitor as a some people who have used these systems might help. there is a strong -- might hope. there is a strong push with crypto to create decentralized currency arrangements. we see again and again that centralization comes in and when you try to turn cryptocurrency

to real currency you have to go through a variety of financial arrangements which provide opportunities for states and the u.s. in particular to begin to reshape and to affect what you can or cannot do. so i think that, for example, we will see a lot of interesting things happening around the politics of stable coins over the next few weeks and months. if we see these becoming politically more important, what kind of things in the u.s. and other regulators might do to try to make sure they can plug those in? vonnie: henry, 360 banks or roughly in russia, how many weather there have to be swift engine on for it to make a difference? does it matter it is only five at the moment or five we know of? henry: as far as i can see, no. i stress, i am not an expert on the russian financial system but my understanding is if you are looking at russian links to the global economy you really only have to go after a number of major players in order to really

make it far more difficult for russians to move money back and forth. one of the interesting things i think will be whether we see sanctions or action directly. to what extent are the loopholes of the u.s. and europe trying to create for energy transactions mean they will go for banks like gas pump banks more directly related in energy transactions. we will see some transactions happening, but, it probably is enough for them to go after major institutions rather than worrying so much at this point about minor ones. vonnie: henry farrell, i appreciate your time, the professor of international affairs at johns hopkins university. we are just now getting an alert. press meant -- president zelensky has spoken with ursula

bonder lien on the issue of ukraine ember ship in the eu, on strengthening ukraine defense capabilities, micro-financial decisions and their mission in the european union conveyed by his twitter account. vonnie: news out of the european central bank and other banks. we are beginning to see the ripple effects of all this movement. the ecb is saying that a russian bank in europe and subsidiaries in croatia are likely to fail. sberbank subsidiaries in europe, croatia, pennsylvania are likely to fail. the central bank is limiting withdrawals from sberbank for two days and sberbank in the near future the european union -- unit is a monthly to pay its debt.

we are already seeing ripple effects from the swift action. haidi: russia's attack on ukraine leaves its close ally china in an awkward situation. how to still support vladimir putin while limiting reputational damage globally. less bring -- let's bring in our chief agent corresponded stephen ingalls in hong kong. how is beijing walking this tightrope? stephen: very delicately. state media has been muted on the issue. yes there are editorials, but it remains fairly neutral in the reporting. this shows me there is not necessarily a consensus in the top leadership in beijing on how to play this endo forward. this will be a very critical week in beijing in how it

illustrates its stance on russia. prior to the olympics when vladimir putin went to beijing the two leaders talked about their relationship having no limits and there was no forbidden cooperation. of course, lots have changed since then. since the attack on ukraine. beijing has to walk a very delicate type or -- tightrope as you rightfully said. the phone -- the foreign minister had a call with his russian counterpart friday and says that china respects each country's sovereignty and territorial integrity but we understand russia's concerns on security issues. a little later in a readout of his conversations with other global foreign ministers outside of russia he said it is absolutely imperative for all sides to exercise restraint and to prevent the conflict from getting out of control. the present situation, he said, is not something china wants to

see. so it will be an extremely interesting week because of the olympics are over. that goodtime show is over. now we have the national people's congress at the end of this week, the annual session of parliament. we will have to see what area from beijing will be this week. vonnie: a lot of responses are expected from a lot of people. next, once among japan's cornerstone companies, toshiba is looking to rebound from years of scandals and missteps. the shareholder and the company's top executives have their own plans for a turnaround. that's next on japan. this is bloomberg.

>> it's time for japan ahead on daybreak a job. vonnie: we take a look at that haven demand. yen demand, dollar demand, treasuries, bonds up. this is what we are seeing when it comes to japanese equity futures. serious downsides when it comes to reach -- risk aversion. nikkei futures in chicago down by nearly 12%. the dollar is trading steady. king dollar. other traditional havens as well.

we are also watching any kind of pricing action when it comes to japanese sovereign bonds as well given we have seen that rally for australian bonds so far this morning and treasury futures. trading higher as well. let's get the top stories now for japan. vonnie: the prime minister says japan will join western nations in blocking some russian banks from the payment systems, freezing assets held by some russian government officials including president tuten. former prime minister shinzo abe says japan should discuss a pop -- a possible sharing of nuclear weapons similar to nato members in the wake of the russian invasion. abe says this should not be treated as taboo. japanese cabinet approved the first economic security bill and as protecting supply chains shamed at protecting supply

chains and enhancing autonomy. the bill further aligns japan with security partners at the u.s. and tries to cut reliance on china. once among japan's most revered companies toshiba has been in crisis mode for years amid repeated scandals and management missteps. that opened the doors to activist investors. they are calling for management to sell off units. toshiba's top executive says he cannot condone that plan. the ceo told bloomberg why splitting the company in two is the best idea. >> the reason for the revision from the 322 company split is to aim for certainty and security. i should explain why it is important to propose a split plan. over the last few years we have

had various property shareholders. we have given a sense of distrust to shareholders with the various issues. i have pondered how we should change toshiba to regain trust of shareholders. expertise -- managers with expertise on each core business should run the business. that's the best way to run the company. toshiba is a large organization and we operate as many as 420 subsidiaries. the spinoff and organization plan we came up with is the best option. there is much difference in improving the value of core businesses when it is divided into three companies or two. shareholders who say we should go private either through a sale to private equity or by proceeding with the reorganization plan amendment proposed, we have the option of not changing our portfolio, not changing the shape of our company or moving forward while maintaining the status quo. i believe this butto transfer -- split off based transformation

we have considered is the best option and the last chance for the company to appeal to shareholders. we have never excluded the idea of going private. it will be considered. however, there are disadvantages. it is irresponsible to choose session option -- such an option. we have -- was -- we must have countermeasures before the option. public enterprises such as electric car companies and local government must increase. for economic security we would be focused to isolate the latest technologies like nuclear power and the defense industry. in that case the stability of our business would be carved out. second, funds with buyouts, so, borrowing what increased. there is a risk of the repayment of borrowing would be the first priority for the fund.

the process of going private makes it longer than spinning off. but, the most important thing is whether we can keep employees and outflow of human resources. i expect a chaotic situation for a long time. the company's value will be damaged. we cannot force our employees to be in this challenging situation without proper plans. i think it is irresponsible management. >> a meeting will be held on this plan. -- will be held on march 24 on this plan. are you confident? >> the revised plan has been made based on proposals by shareholders. we have considerably increased the discount, replacement -- portfolio replacement and shareholder return. i feel we have done the best we can so i am confident. i consider this the last chance for toshiba to change. i am confident we will obtain

the support of shareholders. >> if the company proposal is approved, but i do process will you take going forward? -- what kind of process will you take going forward? >> we would like to proceed with various applications with the aim of completing the spinoff and listing in the spring of 2023. >> how do you view the new toshiba after the device business is separated? >> it is a risk for a large japanese countries to use spinoffs. there are successful cases in the u.s. and other country so we want to be a good example. >> how has your communication with holders been since you have become a ceo? do you feel you're talking enough to them? >> since the shareholder meeting last tuesday i have been active in communicating with shareholders by holding different kinds of meetings. i believe my communication with them has doubled compared to

past management. >> what kind of person should take over your position when it is time for you to step down? >> i want to head over to the next generation as soon as possible. we have come up with big picture plans. but individual growth strategies can be adjusted in the future as needed. i want to have people with expertise in core businesses to take over as soon as possible. >> what change does your planet need most now? >> countermeasures is a pressing concern for not only japan but globally. we would like to contribute realizing carbon neutrality. we want to be a company that solves social issues. >> the toshiba ceo speaking there. there is plenty more to come on daybreak asia. this is bloomberg.

vonnie: ahead of the japan open we are seeing future significantly lower. we are getting downside when it comes to the industrial output numbers. a contraction of 1.3% month on month. that's much worse than expectations of a fall of 7/10 of 1%. this is worse than the slight

game we were accepting. -- expecting. vonnie: we are seeing a lot of currency trading tonight. euro was one point 2% we cover that is the dollar. it has come off a little bit, but you can still some stronger dollar is the scene. the markets open in seoul and tokyo next.

vonnie: welcome to daybreak asia. i'm vonnie quinn. haidi: i'm haidi stroud watts. an anxious start to the week as fighting continues in ukraine. the euro slides. investors turn to havens. the west moves to further isolate russia and unleashes a new sanctions after initial penalties failed to force

withdrawal. the un general assembly plans an emergency session for the first time in decades over the invasion. haidi: we are watching the open for japan and korea. the nikkei is down to 10th of a percent --2/10 of a percent and u.s. futures are lower. the turn is negative as well, vacillating between positive and negative. the yen at 150.59. a lot of safe haven demand today. the japan government bond yields are lower by 12 basis points. we will watch that. we are seeing a lot of demand for liquid assets over the last couple hours. in terms of what is happening in korea, down more than six tens of a percent. we have a weaker cory and juan -- korean yuan as well.

>> in equities we are seeing in advance when it comes to energy names. we are off the session highs when it comes to trading in sydney but we saw a reasonable gains for materials as well as energy stocks. we saw oil surging after the issuance of war sanctions and surges in the israeli bond space and gold as well. look at the 10 year yield over 2.17 at the moment. we see the rally in australian and kiwi bonds tracking treasury futures. gold futures rallying alongside demand in the u.s. dollar. that theme is suggesting quite a bit of fear amongst investors. new york crude up by just over 5%. we are hearing from opec five delegates if they will be sticking to the initial gradual addition plan. vonnie: we are seeing this

scenario but saying it is your politics and is not fundamentally change supply and demand, vonnie. vonnie: let's get the latest on what we know at this moment on ukraine. national security editor for bloomberg larry joins us from washington, d.c.. there is a meeting at the border of belarus and ukraine. do we know that -- when that will take place? a: it looks like later in the day monday. the details are a little sketchy because of the russians say, as you mentioned, they are meeting in belarus. ukrainian say, no, we are not meeting in belarus. we are meeting near there. but there are some reports that the negotiators are en route, may be a torturous route to get there. but that seems like that will happen. the other thing that may worry markets or reassure them is we have yet to see the paperwork, a

lot of the details of the u.s. and the eu sanctions. what exactly will be the restrictions on russia's central bank? whether there are loopholes for energy transactions for the russian banks being barred from the swift banking message system. so, there may be some encouraging news in the hours to come in terms of both what is happening in the dutch in ukraine, talks between president zelensky who is indicating he is not holding out a lot of hope for the talks and the russian attacks remain relentless. haidi: we have heard that the un security council voted for the emergency session of the general assembly, the first time in decades we will see this happen. do you expect anything effective

or practical to come out of this given we know russia has used its veto power in previous meetings? larry: i do not think anything practical will come out of this. there is always fascination with china's position. they abstained when the security council voted to condemn the invasion. but, they are also at some pains to say they believe in respecting the sovereignty of nations. so, they are always watched with particular care. by the general assembly cannot intervene or impose sanctions. this will just be another airing of where things stand. an unusual airing, as you mentioned, from the general assembly to have an emergency session. but i think it will not change the situation on the ground, or, in the banks or the markets. vonnie: our national security editor larry liebert there.

let's bring in our asian macro strategist. we see a clear trading theme so far in the asian session. how long does the risk on sentiment last? what are the biggest casualties you see as we see an interesting and dynamic year when it comes to dollar demand in particular? >> we are a few days into it once in a lifetime reorganization of the world order. this transition will not be smooths. we have to end set -- except that uncertainty will remain high in the following weeks and that will be the story of the political demand for the next months and quarters. in terms of ukraine, which is essential for the markets, it is clear that there is now an

overwhelming argument in favor of a negotiated settlement. we have to assume attempts will be made again despite the setbacks. so, in the early innings of the conflict we as investors hope for a quick resolution but we have to be humble and in knowledge the scope for even more troubling escalation, even outside ukraine, remains open. for sanctions, we have extremely punitive financial restrictions apply to russia. but, we will have significant harm for the russian economy and disruption in the global supply chain. under our assumption of lack of negotiated settlements, you know, we should expect a crisis like condition in the russian economy.

40, 50 basis points. and, further inflation. for the markets we have a situation where the most substantial buyer of the russian ruble is missing from the currency market due to the new freeze in russia's central bank. we will see a dramatic day for the currency markets for sure. for the asian markets, of course, we will continue to have to grapple with significant disruptions to global trade and pressures on the global supply chain. visibility is very poor. we are set for, you know, at least a few more weeks of volatility in the markets. vonnie: visibility is very poor and that is key for central banks as well as a look to work out the next steps. i want to take you to our question of the day. how long before the next global recession? we already know the risks were building if you look at the flattening of the treasury curve and also the moving forward of potentially the next fed rate

cut, as we see the increased hawkish this that hawkish nest. does this increase the risk of a policy mistake and move forward the possibility of a recession? >> so, we think one of the new things about the fed policy framework and maybe to a lesser degree other central banks is that they are quite more flexible compared to the previous rate hike cycle. so, we really think that assuming an inertia for said rate hikes is -- for fed rate hikes is the right thing to do at this point. they are quite open. inflation is -- inflation tightening is the main goal and many central banks will start tightening this year. next year we cannot assume this will continue. bond markets are already looking through this episode and as you said, pricing a degree of possible recessionary outcome on the horizon. the u.s. yield curve, look at

the one year, the two-year, completely flat. already, there is pricing for geopolitical disruption as well as potential policy gridlock in d.c.. the impact of the tightening that will be done this year. so in our view, the tightening is definitely a story this year but we should not assume too much or extrapolate too much here. so, that is one key mantra we have. haidi: you're going to get a lot of calls today with mark about the search for liquidity, that that will be all on investors mine in the next couple days. is there enough of it out there? >> that is the central question for the market. we have a situation where the

usual land of dollar liquidity is suddenly missing from the market because of the new restrictions on for -- russian central banks. our thinking here is that this will require reaction from key central banks including the fed. so for the global markets to navigate this environment, you know, that will require, you know, the u.s. to mastic markets, you know, the fx markets. it is probably necessary that the fx flat lines and the repo lines are now open for the other banks to use. this is potentially a decision that could happen as early as today. so, all are watching that irrelevant. >> great to have you with us. on such a busy day, we are seeing some movers in the early

part of the japanese session. general electric, suzuki, korean shipbuilders. europe will need more seaborne national gas amidst this crisis. up over 1%. a bit of downside when it comes to trading in renesas. >> global governments reluctant to sanction russian energy for now. e.u. official set to convene monday to discuss a u.s. proposal for a release of u.s. emergency oil. the states are divided on whether the block should take part, with the eu law making any discharge conditional on strict criteria. the u.k. is also considering tapping reserves. opec plus could stick with the plan to only gradually increase oil production even after the russian invasion sent prices surging. delegates told bloomberg the price jump does not reflect day supply and demand imbalance and

the group should add 4000 barrels -- 400,000 barrels a day of crude as planned. opec plus meets soon to discuss prospects for april. hong kong reports a record number of covid infections. more than 26,000 new cases sunday. 83 deaths. the city is adopting an online self reporting system for residents who will be allowed to isolated home if they have no symptoms or mild symptoms. hospitals will discharge covid positive patients in a stable condition. indonesian will allow quarantine free travel to bali. vaccinated passengers will no longer needed to isolate but they will need a pcr tests upon arrival and isolate until they have a result. the program will take in mid-march but could be brought forward if virus numbers improve next week. the goal is to lift all requirements by april. global news 24 hours a day on air and bloomberg quick take powered by more than 2700

journalists and analysts in over 120 countries. i'm a paul allen. this is bloomberg. >> asian markets is set to -- that for a while start to the week. -- a wild start to the week. of next, china makes an attempt to distance itself from moscow calling for a whole to the violence. we look at beijing's role in the conflict as legislators prepare for the annual session.

>> under this package, important russian banks will be excluded from the swift system. we will ban the transactions of

russia's central bank and freeze all of its assets to prevent it from financing putin's war and we will target the access of russian oligarchs. >> we want to take every step to maximize the impact of the consequences on president putin while minimizing the impact on the american people and the global community. >> european commission president and white house rest secretary there on the latest sanctions against russia. where we are standing now in terms of futures markets. in the u.s., well lower in terms of vehicle stocks. a downward spiral for futures pointing to an open tomorrow about 3% lower. it did sink european and u.s. futures. the euro is trading at 11183. >> this asian angle is key. russia's attack on ukraine is

leaving its ally china in an awkward position, how to support vladimir putin while limiting mutational damage globally. for the latest let's bring out our teeth north asian correspondent stephen engles in hong kong. we see china potentially just sitting itself from the reality of the conflict. what is the tightwad -- tightrope beijing is trying to walk? >> there is a diplomatic tightrope but a global and economically with the sanctions. friday the sanction started being rolled out. we are seeing at least two of the four big tanks in china telling bloomberg news they have started restricting some of these u.s. dollar denominated letters of credit for purchase of russian commodities. it will be interesting to see this week how that plays out, whether it expands or pulls back as the sanctions have not yet

necessarily targeted the russian energy sector. but it shows beijing's willingness, willingness is probably the wrong world. their respect for the sanctions. in the past, china has stood, you know, in line with u.s. sanctions on, say, for example north korea and iraq. it will be interesting following vladimir putin and xi jinping's big get together before the olympics while they talked about is where they talk about their relationship having no limits, we know that china has been one of the main diplomatic allies of vladimir putin. but again, they are starting to walk back a little bit of the support we saw following the invasion, which is a word, by the way china is not using. they are also not necessarily outwardly condemning the action in ukraine. and, they abstained on the un security council resolution on that condemnation while of course, russia did veto it,

obviously. the foreign minister of china had a call with his russian counterpart sergey lavrov friday. he said china respects each country's sovereignty and territorial integrity but at the same time we understand russia's reasonable concern on security issues. that was his conversation with lavrov. he also had phone conversations with other foreign ministers around the world and walked back some of the support essentially saying, it is absolutely imperative for all sides to exercise restraint and prevent the conflict from getting out of control. the present situation, this was friday, the present situation is not something china wants to see. it will be interesting to see this week's towards the beginning of the national people's congress, the annual session of congress saturday what the beijing narrative is going to be. on state media this weekend it was fairly muted. that tells me they are still trying to reach consensus on what their narrative will be on russia. >> our chief north asia

correspondent stephen ingle --engle joining us there. more than 360,000 people have fled ukraine into poland and other neighboring countries in the wake of russia's invasion. one journalist drove to the border where she and her daughter found long lines of others waiting to cross. >>[child crying] >> it is a huge line. with the woman with a lot of kids. they are trying to reach the border all night. it was cold outside. we were inside the car trying to help them, but they wanted to reach the border and not stay in the cars. so, were crossing the border. the cars were moving like one car, two cars per one hour.

>> we have reached the border. >> i was standing in line. one man asked me to take his daughter because he needs to reach to the border and any man cannot reach the border. so i took his girl. and a little beautiful dog. my daughter and his became friends. we are helping each other. i also want to tell about the volunteers. it was so great to see some women who walked up and began to prepare food, tea and coffee. we are not tired. we were exhausted, really. cars are taking refugees

reaching the border by foot. all of those lines were only women and kids area -- children. we are happy to reach the board about -- the border but we left our houses, our father, my mom, my brother. they are still hearing the alarms every few hours. friends of mine are staying. it is awful. it is surreal. they are hiding themselves in shelters during the last three days. they are very frightened. it is the first time in my life i have felt like a real refugee. it is awful. awful to me. i hope other ukrainians will

stay safe. >> marina is a freelance journalist detailing her escape from ukraine. there is more to come on daybreak asia. this is bloomberg.

>> you are watching daybreak asia. let's check the latest headlines. bp is down with a russian oil giant taking of financial head of more than $25 billion. bp has been in russia for three decades and weeks ago was defending its presence there. the british firm came under growing pressure from the u.k. government over the alliance. bp has a 20% stake in rosneft. a bank used by exxon mobil to pay russian staffed was sentient by the white house -- sanctioned

i the white house. the biden administration sanctioned five of russia's largest banks hampering their ability to operate internationally. >> we are taking a look at what we are seeing when it comes to the fx space. really it is the dollar. we see the gain against just about every other major currency. look at where the dollar is at where the dollar is at the moment. so much weakness, particularly when it comes to commodities, currencies, the lights of the aussie in particular. the euro is softer, 7/10 of 1%. broader economic risks for europe remain. regional currencies, the yen is pretty steady. demand has been for the dollar rather than classic haven currencies like the yen or even the swiss franc. the kiwi and aussie currencies

are seeing some downside in the slide away from risk. coming up, why the risks of supply disruption to the energy market are low despite the switching wireless carriers is easy with xfinity. just lean on our helpful switch squad to help you save with xfinity mobile. they can help break up with your current carrier for you and transfer your info to your new phone. giving you a fast and easy experience that can save you hundreds a year on your wireless bill. visit your nearest xfinity store and see how the switch squad can help you switch and save. switch to xfinity mobile and get connected to the most reliable 5g network. talk with our helpful switch squad at your local xfinity store today.

haidi: we do have australia retail sales crossing the bloomberg. seeing a gain of 1.8 percent. stronger than what was projected and bouncing back from a contraction in december. we see the reopening weighing on

those numbers. stores and some of the festive and post christmas season. going into the bank of australia meeting tomorrow, we are looking at potentially the rba holding rates. geopolitical risks are one of the factors they will have to maintain. vonnie: let's have a quick look at how markets are performing across asia. look at japan. we are seeing some downside but not as much as might be anticipated if you are looking to the u.s. futures for direction. in korea, the kospi is down 0.5 percent. australia unchanged and new zealand positive by about 0.1%. stories on the minds of investors across the globe.

let's look at commodities. we saw a massive spike in crude futures when they started trading. wti up about 5%. brent the same. metro gas futures, european futures up to .9%. gold futures up. this is the closing price for wheat. this is where we will start to trade at the next open. haidi: investor scrambling to assess how the latest sanctions will affect flows of energy and pricing across other commodities including metals. let's talk to daniel hynes. when it comes to oil, we are seeing quite a bit of upside when it comes to pricing as the new sanctions and potential disruption get priced in. opec-plus may not be swayed by this. do you think there is an

argument that ultimately the disruptions will be slight? daniel: yes. we certainly feel like that. it is obviously a lot of supply at risk. 10% of global supplies, as big an amount of risk -- supply at risk that we have seen historically. it clearly warns a lot of attention -- it clearly warrants a lot of attention. previous events like the goal for -- the gulf war, the prices rallied quickly on those initial events but essentially gave up all of those gains subsequent to that within 3-6 months. this could be a relatively fleeting moment i suppose in the broader oil market history.

the impacts that could have on the countries that are looking to place these sanctions is really the key here and certainly what the u.s. and the fed there struggling to contain this persistent inflation, the specter of very high gasoline prices would just be too politically unpalatable for the officials there. it is unlikely i feel that the industry will get caught up in those but clearly, the move by the european and the u.s. officials two on certain banks -- to ban certain banks from the swift system. vonnie: where else do you see potential disruption either short-term or more elongated across the commodities complex? daniel: certainly, this

russian-ukraine conflict does present an issue around the medium-term investment. with russia being such a large producer. we have heard of some of the partners pulling out of particular projects or investments in russian companies themselves. it does present a risk to that medium-term growth and supply. more broadly, we are seeing issues related to a lack of investment particularly in opec producers. i think that is the crux of why that group is reluctant to raise output any further considering they have been struggling to raise output over the past few months because of that issue. it looks like an outlook or backdrop to supply will struggle

and i suppose that is why we are seeing these elevated prices. vonnie: i want to point out that we are seeing the oil stocks future slide by as much as 3.3 percent. a very choppy day tomorrow. we saw the dax in germany point two a lower open by about 3% for those futures as well. talk to us about lng. we are not seeing as much impact on lng futures. should there be? daniel: i still think it is in a pretty fragile state. at the moment, we did see some increased flows from russia through ukraine into continental europe on friday. and it does look like consumers there are really grabbing any sort of gas they can under the current contracts. i does probably going to place a little downward pressure on gas

spot futures. the whole energy complex is going to be upended i think in the next few months. we are not expecting to see the weakness in gas prices persist. i think if europe does try to diversify away from russian gas, the lng market comes into focus. and with that being relatively tight particularly in asia, i think the competitors for lng cargoes will skyrocket and put pressure on those prices as well. vonnie: what is the likelihood do you think that those energy transactions will continue? at some point will the u.s. have to spearhead stopping those energy transactions taking place? daniel: that is going to be a difficult one to manage. they appear to want those to continue.

but it is certainly going to be caught up within the financial sanctions that we are seeing come through at the moment. we are hearing of companies either refusing to ensure particular cargoes or in fact placing a huge premium on that. we are already seeing that impact come through at the moment. it will be a difficult one to manage. considering the risks the u.s. could see with an even tighter oil market, i think they will try to keep managing that but it is going to be a difficult task for them. haidi: what sort of broader questions does this conflict raise about global energy security and the way we could see a restructuring to try to fill some of the vulnerabilities? daniel: obviously, this is

focused on the european energy markets and they have done a good job in diversifying their energy sources when you look at it from a prospect of gas,, coal and renewables. the gas side has been transfixed on the russian market. that does represent a risk which has been emerging and other sectors and industries the last couple of years during the pandemic. i think the energy market will need to look at diversifying not only sources of fuel but where that comes from so they are not really beholden to one particular producer and the like. i think it means that transition we have already seen struggle in recent times is going to be even more difficult i suspect now

that this energy security, geopolitical issue needs to be plugged in. certainly going to be interesting times. vonnie: dan, thank you for joining us and good luck for the rest of the day's trading. daniel hynes. let's get to paul allen. paul: thank you. russia's plans for ukraine are facing rapidly rising costs as it encounters tougher than expected resistance on the ground. military hoped for faster progress. but u.s. officials see russia having only committed about two thirds of its assembled firepower so far. the kremlin has not commented on details. ukraine is set to hold talks with russia on the border of larose. zelensky said the meeting will take place with no preconditions. security guarantees have been made. zelensky later questioned the

talks but said he has to explore every chance for peace. the eu has explored halting transactions with the russian central bank to isolate russia's economy and financial system. the work economics estimates that the bank would lose access to much of its $640 billion of reserves except for its gold and chinese yuan holdings. some russian leaders also being excluded from the swift messaging system. the eu has agreed to send aid for lethal weapons. more money will be provided for nonlethal purposes. the eu foreign policy chief says the package may include supplying fighter jets to the ukrainian air force. member states that do not want to provide lethal weapons can abstain. global news 24 hours a day, on air and on bloomberg quicktake,

powered by more than 2700 journalists and analysts in more than 120 countries. i am paul allen. this is bloomberg. haidi: once one of japan's most revered companies, toshiba has been in crisis for years opening the door to active investors including 3d who are calling for management to be taken over. he told bloomberg why splitting the company into two is the best idea. >> the reason for the revision from the 3-2 two split company plans is to aim for security but most of all, it is important to propose the split plant. we have had various problems with shareholders the last few years. i understand the distrust from shareholders over a number of

issues. i pondered myself how we could change toshiba to regain the trust of shareholders. i came to the conclusion that each core business should run the business. toshiba is a large organization and we operate a wide range of businesses. we have as many as 420 subsidiaries. i believe the plan we came up with is the best possible option. there is not much difference in improving the value of the core businesses whether it is three or two. shareholders say we should go private. either through sales of private equity or through pro -- proceeding with a management plan. i believe the spinoff transformation we have considered as a best way to increase shareholder value in the future i think it is a last chance for the company to appeal to shareholders. we have never excluded the idea

of going private as an option. it will be considered. but there are disadvantages. it is irresponsible to choose such an option knowing there are such disadvantages. we must eliminate those disadvantages. there are five. first, orders from public enterprises such as electric power companies and local government have decreased. second, from economic security perspective, we will be forced to isolate related technologies such as nuclear power and the defense industry. this ability -- the simplicity of our business would be cut out. foreign affiliated funds -- borrowing would be increased. there is a risk that repaying -- [indiscernible] it cannot be used for future investment funds. fourth, the prospect of going private might take longer than spinning off. the most important thing is

whether we can keep employees and avoid outflow of human resources. i expect it will be a chaotic situation for a long time and the company's value would be damaged. we cannot force our employees to be in this situation without proper plants. i think it is irresponsible management. vonnie: toshibas ceo speaking to bloomberg's reporter. goldman is changing its call for brent crude and has raised its one month forecast to $115 per barrel. goldman is warning of worsening supply shocks in the commodity sector because of ukraine and goldman strata are saying oil, gas, wheat, and corn are all going to rally because of the situation in ukraine. haidi: titanium as well. japan's titanium stocks surging in the tokyo session. jeffries hiram -- highlighting.

you are seeing the likes of korea aerospace industries also trading higher insole. -- in seoul. coming up next, a top covid expert is heading to hong kong to get the latest on the spiraling outbreak. this is bloomberg. ♪

vonnie: hong kong's worsening coronavirus situation is draining the health care system and morgues with authorities warning that cases have yet to peak. let's bring in emma o'brien. hong kong continues to report record numbers of new infections over the weekend and now deaths are starting to pick up also. tell us more about that. we had thought omicron would not be as fatal. >> you are seeing the first really major outbreak in hong kong so far of the pandemic. it is their worst outbreak since this thing started. or than two years ago. and as you said, deaths really picking up at a record number of 88 yesterday. many of them among unvaccinated older people which are a particular achilles heel when it comes to the hong kong outbreak because they were not prioritized in the vaccination

rollout and had particularly high levels of hesitancy. you have less then 50% of the over 80's in hong kong vaccinated which is what one expert said is a ticking time bomb when it comes to the outbreak. haidi: china sent the head of its covid task force to hong kong. what does that mean? >> china is doubling down when it comes to its support. it does not want hong kong to move away from the zero covid fold that it is pitching its wagon to and it is prosecuting a lot more successfully. they are sending a key official to containing the outbreak in wuhan early on and some local media in hong kong reporting thousands of mainland health care workers to be sent into hong kong to really reinforce the situation there. it shows they are worried and they want to get it under control whether it is possible

with the particularly elderly low vaccination rates and the numbers we are seeing, it is hard to tell. haidi: emma o'brien with the latest when it comes to the covid outbreak and the situation in hong kong. let's get you a quick check of the headlines. sources tell us that fwd is close to filing an ipo in the city after u.s.-china tensions derail plans for the listing. the company may try to raise $1 billion in a share sale and the filing could be as early as monday. berkshire hathaway reported an 11% rise in fourth-quarter earnings topping off a year that saw profit more than double. net earnings attributable to shareholders was just shy of $40 billion. up from the same period in 2020. warren buffett says there is little that excites us in the current investment climate. steve schwarzman took home $1

billion in dividends and compensation last year. one of wall street's biggest annual payouts on record. blackstone brought its assets under management close to $1 trillion. he made $611 million the year before. coming up, we are counting down to the start of trade in mainland china and hong kong. we will look at which stocks are emerging as safe bets. this is bloomberg. ♪

haidi: the crisis in ukraine is sending asian stock investors searching for hedges and shunning names that could get hammered. for which sectors are in focus, let's look at the sectors that are considered within our risk asset category relative to havens. >> people wanting to be in the commodity space as safe havens. goldman sachs has recommended people to locate into commodity have an australia and energy stocks. we did see energy resurge

gained quite a bit last week. and in terms of logistics stocks , shipbuilders in korea. [indiscernible] there is more demand for shipping services from asian shipbuilders. benefiting from increased tensions because ukraine and russia -- vonnie: what are investors avoiding right now? >> a lot of asian companies have exposure to russia and those are the stocks people are avoiding such as japan tobacco.

they pulled operations there. a few other japanese companies have halted operations because of the word. other than that, we are seeing japanese banks [indiscernible] vonnie: incredible. good luck for the rest of the day. here are some stocks we will be watching when stocks in mainland china open. rusal up 0.75%. we will see gaps across the board all asset classes when trading opens in each one. we have already seen that with bond futures began just one example where we have seen huge moves and it will all be about ukraine and what happens in the

next few hours. haidi: absolutely. we will see how much we see the continuation of this risk off sentiment. dollar up. yen up. demand for treasuries and bonds up as well. also watching the hong kong virus related stocks as well as hong kong records a record number

david: good monday morning from asia-pacific, it is 9:00 a.m. in beijing and shanghai, welcome to the china open, i am david ingles. yvonne: oil prices surge as commodity markets are thrown into disarray as more sanctions are unleashed to isolate russia. bonds sort as the financial