haidi: good morning, we are counting down the major market opens. shery: welcome. jay powell backs a quarter-point rate hike this month despite ukraine uncertainty while leaving the door open for a bigger height. >> to the extent the rate -- inflation comes in higher, we

are prepared to move more aggressively. shery: asian stocks may get a boost. treasury yields hint at growth concerns. commodities surged to multiyear highs, traders shunning russian purchases. we will start you off with breaking news out of south korea, the gdp numbers coming in , growth of 1.2% sequentially. this is from a revised 1.1% increase for the advanced number. this is coming and better than the advanced estimate, same for the year on your number which is 4.2%. the advanced estimate was 4.1%. it shows that the fourth quarter manufacturing numbers grew 1.1%. suffice to say, this is a big

rebound from gains we saw in the third quarter which came in at .3%, also suggesting the momentum could continue into 2022. we have seen double-digit export growth for the month of february. fourth quarter gdp numbers preliminary coming in slightly better than the advanced estimate. haidi: it's not going to change the track when it comes to how asian markets are going to open up, we could see the lift following the turn and risk on wall street, comments from jay powell, on track with hiking from the fed. we saw australian government bonds tumbling, crashing back down to the earth. benchmarks jumping, some declines we saw, three years soaring 13 basis points more than reversing the previous day

drop, 10 year rising 10 basis points after the 12 point drop. risk appetite piling into asia, seeing upside when it comes to the staggered open in sydney. watching coal, coal producers. we saw benchmark thermal coal in asia soaring almost 50% to a record high on concerns about disruptions to supply from russia. new zealand up by 1.5% at this point, chicago futures looking to the downside. shery: perhaps following u.s. futures, because we are seeing downside there, down to dense of 1% for s&p futures, nasdaq futures down 3/10 of 1% after we saw u.s. stocks climbing in the new york session. markets are reacting to powell's commentary that the u.s. economy will be able to withstand rate hikes. we saw treasury continuing to

fall with the two year yield rising above 1.5%, 10 year above 1.9%. this follows the rally that continues in the commodity space, wti in the asian session above that $110 a barrel level. we continue to see concerns with disruption to russian supply. all of this adding to inflationary pressures. let's get more on all of the top stories with our kathleen hays, su keenan. chair powell backed a 25 basis point rate hike the march meeting, but what could lead to a move?

kathleen: he said inflation is out of control. he did open the door to a rate hike. what will determine that? what disinflation do. let's listen to the most important thing he said. >> i think it will be appropriate to raise the target range and a couple of weeks, and i'm inclined propose a rate hike. to the extent inflation comes in higher, we will be prepared to move more aggressively by raising by more than 25 basis points. kathleen: meeting or meetings. he didn't just open the door, it seemed like he opened it to more than one. notably, a ranking republican was tough on jay powell, asking

him, did the fed make a big mistake? did you blow it on inflation? jay powell said we miss estimate of the time it would take for supply chains to go away, most economists did, but bottom line, he made it clear they will get inflation back down to where it is now. february expected to come in at 7.8%. another thing that is important, don't worry about the labor market. it's tight, conditions are met for maximum employment jay powell said, that is important. on ukraine, that right now is just one big uncertainty. too soon to say how the russian invasion, how sanctions will affect the u.s. economy. they have to get inflation under control, oil prices will make it worse. the risk is they could do too much, but for now the fed will watch it, they will been double and raise rates as much as they

need to. haidi: we are getting breaking news when it comes to the reaction to the russian invasion. this is what we are seeing when it comes to the equity indices. they have been reviewing what they were going to do in terms of treatment from russian securities, we are now hearing russia will be deleted. this follows from the decision for msci, after consultation with major institutional players, they will be removing russia indexes from emerging-market status indices as well. we continue to see the global reaction on a corporate level, financial markets level. the pressure is not having too

much of a reaction, and impact when it comes to the actual fighting we continue to see. jodi: that's right. we have seen developments on the military, geopolitical fronts. it's looking more like it will be increasingly hard. at the same time, on the geopolitical front, the u.s. general assembly -- u.n. general assembly condemned the invasion of ukraine and ordered to withdraw. there were only five countries voting against that, russia among them. we are continuing to see diplomatic efforts, even though

it's a long shot, ukraine says they will meet with russia as soon tomorrow with russian officials. he is going to offer support to u.s. allies. starting to deal with those waves of refugees. the u.n. estimates as much as 4 million ukrainians could be going into countries including poland and romania. shery: markets deal with potential disruptions. we continue to see oil trading $110 a barrel. su: it briefly hit $111, what

you are now hearing, we are in a very serious situation. we have not seen this in more than a decade. it indicates we are seeing major option prices like 110. the iea release of 60 million barrels was enough to get the market through lunchtime. it is seen as a drop in the bucket. there are so concerns about supply chain shortages. opec-plus had one of the

briefest meetings on record, 13 minutes, the new york times called it surreal. no mention whatsoever of the situation. they rubberstamped 400,000 barrel a day monthly increase for april, and cut off an attempt from the mexican minister to bring up the issue. it appears opec is guarded with its relationship with russia, although many feel it might be forced to address this issue. back to you. haidi: kathleen hays, jodi schneider, su keenan. take a look at the early movers in sydney. so much dominance when it comes to a strong rally from energy producers.

call jumping 46%, the russian invasion, futures are being traded in newcastle doubling from friday's closing price. we see this as european coal is surging to a record. some oil-related names as well as holdings, one of the few non-energy names. let's get you to vonnie quinn. >> according to -- supply problems will slow growth and drive up prices.

u.s. treasury secretary janet yellen says congress can boost growth if it passes the remaining biden administration proposals. her comments echo those of the president in which biden urged lawmakers to reconsider parts of his legislation. western australia has reopened to vaccinated travelers. all of australia is now open to tourists and foreign workers. western australia is bracing for new cases and is introducing limits on surgery and wrapping up containment measures. hong kong recorded 55,000 covert infections on wednesday. this as chaos and confusion grow around plans to test the entire population. carrie lam has hoped to reassure residents.

she is that to clarify more details. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: one of the biggest and most prominent blockchain brands is raking from its peers. we will find out more from the cofounder and chairman. up next, we looking to who is winning and losing. this is bloomberg.

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>> the near term effects on the u.s. economy on the invasion of ukraine, remain highly uncertain. this offense does seem to be one that is a game changer. haidi: jerome powell speaking earlier on the ukraine risk, energy commodities are surging. let's discuss with the ing chief

economist and head of asia-pacific research. big jumps when it comes to call producers, across the commodities complex in particular. for countries like china and india, what are the implications? >> there are a number of channels through which this conflict can have impact. if you look at the direct trade of countries in asia, one of the best news for us is there isn't that much. we don't do a lot of direct trade with russia, korea, vietnam are three of the countries that do the most. we're talking about small numbers.

russia is just one supplier of energy across the region. we have a couple of net energy exporters as well, you took about coal, australia is in that market. on some basis you can say it's a game, but you have to be clear we don't see any economic winners. the report you mentioned earlier about $1 trillion knocked off global gdp, no one feels good about themselves. haidi: having said that, we heard from powell that he is confident going ahead. you say the fed will try to contain could inflation. will they be successful? >> the important thing to bear in mind is it's interesting in

looking at the market. they seem to be relatively sanguine. overall, we're above the lows of the year. bond yields have come down a bit from recent highs. the important thing to remember about the u.s. is inflation is not entirely supply driven. for lots of the world, ukraine, russia, how it will impact. with the u.s., there is a demand element. to get inflation down, fed powell and the fomc have to slow the u.s. economy. they have to raise rates enough to slow activity to the point that it does start to bite into inflation. i'm not sure that has sunk in yet. shery: how much of the inflation we are seeing in asia is supply driven? fourth quarter gdp numbers out

of south korea are coming and slightly better than advanced estimates, 1.1%. the inflationary picture thereto evolved much higher than the be ok expectation. >> that's true. the other thing to bear in mind is korean inflation is bubbling around 3.5%, compare that to 7% in the united states and most of asia looks relatively a lot better. the other thing is, if you look at swings in inflation, there are countries in the asia region the typically have higher inflation, india, the philippines, more emerging markets tends to have higher underlying inflation.

moderate by their standards, much higher rates. that is now having an impact, dripping into inflation. you see less of that in em countries. shery: will we finally see inflation in china accelerating more? we know russia is one of the biggest oil sellers for china. they get grain from ukraine as well. >> the impact of commodities for china's cpi will be a complicated one. let's bear in mind russia produces oil, metal, palladium, platinum. they are producing a lot of it. you will see a lot more bleeding through. if you think of china cpi, we

have to extrapolate the basket to figure out what it is composed of. not sure it is published outright. they do not have a very strong food and energy component. it's towards the lower end when you compare it against the region as a whole. everyone is going to see some drip through from this. china will probably not see as much as other countries, like india for example. shery: the ing chief economist and head of asia-pacific research. you can get a roundup of the stories you need to know to get your day going on today's edition of daybreak. bloomberg subscribers go to the terminal, customize your settings some of only get the news you care about. this is bloomberg. ♪

haidi: we are tracking the global supply chain crunch. japanese carmakers have joined the pulled from russia. they will seize vehicle shipments. honda and mazda stopping exports. u.s. lawmakers are weighing options to crackdown on the concentration of market power among ship it carriers after president biden called for an overhaul of the industry in his state of the union address. a senate panel will consider a package of ocean sipping changes on thursday. shares of rivian tumbled 14% after they become the latest to warn about unprecedented supply chain shortages. they said they will raise prices on its debut vehicles for retail buyers. shery: take a look at this chart.

freighters paying the highest premium on record to supply -- russian supplies from everything struggle to find buyers. spot commodity prices are the highest ever relative to delivery one year from now. this is a widely watched market condition known as -- bloomberg terminal berg -- terminal users can read more about those stories. here's a quick check of the latest headlines. ford is separating its electric vehicle operations from its combustion engine vehicles as it doubles down. the carmaker is planning to spend $50 billion and raised profit margin outlook to 10%. outlook has announced plans to unveil new product at an event

on march 8, it's expected to reveal a low-cost iphone with 5g capabilities, and ipad, and updated mac. the unveiling will happen virtually. this is bloomberg. ♪ at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity.

>> they're looking at taiwan and asking themselves, if he can get away with this in face only sanctions, resume oblate we can get away with taking control of taiwan. that is an issue that could come up as early as next year after the communist party converse concludes for the end of the year. haidi: senior fellow and bloomberg opinion colonist niall ferguson speaking with us about china's plans for taiwan.

fishing is concerned about the harm to civilians in ukraine and talked about its desire to prevent further escalation of the war. bloomberg also learns that chinese stakeholders and buyers have tried to store energy and commodity supplies. let's bring in philip. we have a separate report from the new york times suggesting there is knowledge of what russia was going to do in ukraine and the timing of that around the olympics. we were speaking to niall ferguson and he said look at the balanced wording from beijing. how do you interpret what we have heard versus what we have seen? >> early on, china really struggled to lay out a position amid the your dutch the war in ukraine. in the early days it is attacking the u.s. and saying the u.s. was hyping this up. it did seem they did not really believe that russia would invade. that was early.

cochin's last trip outside of russia before this started was to china and he met xi jinping at the only bics. they said that this friendship between the two countries has no limits. it seemed like china was caught off guard early on. shery: but at the same time china, because of those ties, products and imports from russia, and they get a lot of grains from ukraine, what is beijing doing to try to secure supplies? >> we are hearing that top government officials have sent word to state buyers to secure energy and commodity supplies. we have seen aluminum prices, oil prices go up. it seems like economic planners

are concerned about this and the impact it could have on the economy down the road. it looks like china is guarding itself for the economy to suffer or struggle with the result of the invasion of ukraine. shery: philip lyman -- glammann with the latest. china talked about how can it examine the best position after the zero covid policy, but the wall street journal says any change likely will not happen until next year. hong kong reports its highest ever daily total of new infections. bring in our chief north asia correspondent in asia. talk about how they could consider living with the virus. stephen: they will have to transition out of the policy at some point, but the question is

how and when. and what the state of the outbreak is in china. this is a wall street journal story and anonymous sources are quoted as saying authorities in beijing have begun the process of discussing options and how a chinese style exit would look like. according to the wall street journal, it would probably employ the use of travel bubbles like used during the olympics and a closed loop system of various cities and various parts of society. also they are exploring the use of antiviral drugs. we know that they have bought a number of pills from the pfizer antiviral for covid. they are also scouring sites according to the wall street journal, sites around the world to produce homegrown mrna vaccines. they have their own mrna vaccines in trial stages with

mixed results, but most of the people who are vaccinated in china are through the traditional style of vaccination, sinopharm or sinovac. it also says that hong kong is being seen as a stress test scenario, a difficult one to say at this hour. about 90% of hong kong dutch of china is vaccinated. but about half of the elderly. about half of elderly about 80 years old have vaccinations. so they are looking very closely about what is transpiring in hong kong with the surge of viruses here. they don't want this evening to happen to their large urban populations. haidi: there is so much confusion when comes to these reports, testing, lockdown, under lockdown. we do know that the death is continuing to search, though. stephen: yeah, in hong kong.

one less thing i want to say about china which does pertain to hong kong as well, any kind of exit from zero covid policy likely would not happen until next spring. so more than a year from now. they could have extreme mental trials in various cities by as early as this summer. but that extrapolates to hong kong as well. as hong kong hitched its wagon to the zero covid policies of china and also opening the border with china before opening to the rest of the world. that throws a lot of caution and confusion, continued confusion in hong kong on what the exit strategy is of zero covid and whether with this wave, 55 55,000 new infections wednesday alone, 100 17 deaths, 64 article condition, there is so much confusion and a bit of chaos at the supermarkets, panic buying. because the government has not come out and given the details of the massive testing campaign. what kind of lockdown, when the

lockdown is going to happen, they said yesterday it will not be a wholesale walk down of the city, but there could be interpreted many ways. there is tons of conclusion -- confusion and hong kong when people are dying in the caseload is rising at a rapid pace. there is no place to put infected people besides hospitals and morgues that are at capacity. haidi: our chief north asia correspondent stephen engle with the latest in hong kong. more on the covid strategy in hong kong later, the chairman will join us and he will get his takes on covid rise of mass testing. let's get to vonnie quinn with the first word headlines. vonnie: federal reserve chair jerome powell is making the fight against flesh his priority over the risk from russia's invasion of ukraine. he backed a 25 basis point hike later this month, adding a bigger or more persistent rate

hike path would be warranted if inflation stays high. >> i do think it will be appropriate to range our target rate of the march meeting in a couple of weeks. i'm inclined to propose and support at 25 basis point hike. to the extent that inflation comes in higher or is more persistently high, we would be prepared to move more aggressively by moving the federal funds rate by more than 25 basis points. vonnie: opec and allies have agreed to a modest revival and supplies for april, they increased output by another 40,000 barrels a day, continuing the gradual restoration of supply during the demo. the meeting was overshadowed by architect amazed by the russian invasion of ukraine. the issue was not heavily addressed. eurozone inflation has hit a record just as russia's invasion of ukraine has threatened to send energy costs soaring at a faster pace. consumer prices jumped 5.8% on the year in february, up from

5.1% the previous month. a core measure that other components also accelerated. officials are set to meet next week. the russian billionaire is set to sell chelsea football club with the am, he says, of donating proceeds to victims of the war in ukraine. sources say is looking to receive about 3 billion pounds for the premier league team that he bought in 2003. the disclosure came hours after the prime minister of the u.k. fielded questions over why he has not yet been sanctioned for his links to russia. global news -- global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: next, breaking from crypto peers by cutting off russian users. our conversation with the cofounder yat siu. this is bloomberg. ♪

>> the sanctions will go swiftly. whoever is on the list will not be able to use our platform and whoever is not can. we work very closely with international regulators, very closely. but we view that we do not have

a lack of power on our own, just know more people dutch normal people's accounts. that would not be good for us to do. shery: one of the biggest and most visible blockchain gaming companies is cutting ties to russians response to the ukrainian invasion, the stand out among major crypto related businesses which have continued to serve russian users. let's bring in the cofounder and chairman, it is good to have you with us. tell us about the reasoning behind your decision. yat: thanks. first, i think is a company we are still part of the global society here. so we have response abilities. and russia is on the section list as well as other countries. to us it is different than not being able to do business in iran or north korea. and this has nothing to do with people in russia, the majority of them are not involved.

it is something we are legally obliged to and we have to remember that russia is the aggressor here. while we are doing humanitarian efforts and other things to help ukraine, we have to be mindful of the legal status. at the end of the day, if we end up providing services to a sanctioned country as a company we run the risk of being sanctioned ourselves, no different than if we helped north korea or iran, we would be in that situation. we think that is a bigger disservice to our community, the majority of whom are not in russia. it is unfortunate, but we have response abilities we need to abide by. shery: it has been raised the possibility of expanding sanctions to prevent russians from using cryptocurrencies. team expect those to start hitting digital assets, and what happens to the broader crypto space? we are seeing a rally in anticipation that perhaps there will be more use in order to invade sanctions. -- giving -- they -- invade

sanctions. yat: in russia, and ukraine, we are able to continue to survive because they have access to crypto -- i don't think that will change. but within the countries that is fine, but what happens when used want to start trading little because that's going to become more than issue. i also think there is a bit of risk for the changes they are in. the country is on the section list, it is targeting itself to open -- sanction list, it is targeting itself. otherwise, if you can't do this, the pressure on sanctions will function but at the end of the day, we exist physically and we have to abide by local laws. i don't think that changes regardless of whether you are in crypto or the metaverse.

haidi: is this for the crypto compliance? yat: the way crypto was from thinking about decentralization, so you have the freedom to move assets around without these restrictions. this is interesting and delicate. some leaders have said we should not be cutting off russian users and while we have and that at the end of the day, to do taxes, you have to follow the law. this is a chance for the industry. if you look at historically, the industry has been falling into line anyway. people are looking for licenses, they are not all saying we are against the law, they are saying we are in compliance with the law or moving toward it. so broadly speaking the crypto

industry has been looking to move toward being more in compliance, especially -- if we don't, the industry will not grow and expand. because they will be a contradictory effect, we will start fighting the establishment, which i don't think is the right approach and many peers will agree with that. haidi: the establishment and the greater community of crypto are struggling of the definitions, and how compliance should play into it. where here, the fcc is crude -- scrutinizing the nft market. as a security or some other type of -- does a lot of the mainstreaming really depend on being able to come to these common agreements? >> i think this is -- because this is a new area, a lot of discussion has happened. but because of the programmable nature of digital assets, it can represent many things.

most nft's do not have any sort of notions of being a security because they are treated like ownership of other this goal assets. owning a painting to comic and, nor a car or utensils in your home. but because of the programmable nature, you can then things, so owning an entity could entitle you to a derivative right and summing else. that becomes a security. it is not simple to say if they are securities or not, you can make an entity become a security if you give it qualities because you can program those in there. but most of them do not. it was a generally speaking there fine. most countries have already said not fungible tokens are not -- not fungible tokens are not in the purview of security the weight fungible tokens would be. shery: speaking of entities, we are seeing reports that the mitsubishi ufj financial group banking unit is planning to

enter the business with you and other brands. can you confirm? yat: that is interesting. what i would say is we did open an office in japan and we are establishing lots of partnerships. however, nothing that is announced at the moment, so we will not comment on market rumors at this moment. haidi: can you confirm these are opportunities you are looking at question mark this is the next step? yat: yes, it is true we want to work with established players. we want to on board the next billion people onto the metaverse. because we need to work with the biggest institutions in the world and have some form of trust for that universe to on board. while we can't confirm who we are working with, we are seeking partnerships with those type of groups. haidi: we very much invite you

to come back when you can confirm and when you get into those partnerships to break the news on bloomberg. great to have you with us. more than a billion people around the world visit tiktok every month but with immense growth comes scrutiny and competition. tiktok ceo has been discussing how he plans to stay ahead of competitors. this is from the david rubenstein show peer-to-peer conversations. >> we are a very young company at this point. and we are still very -- we have been competitors in the market, some have been around for a long time with a lot of resources. but the way we look at it there is a long way for us to go in terms of achieving the mission we want to achieve. we think there are a number of things that make us unique in the market. the first is that we are pioneers in what we do. we have innovated this form of short video combined with a are you feed -- for-you feed.

we are confident we will continue to innovate on that front and bring the best and most interesting-- for us we are more focused on ourselves. over the long run, the biggest competitor we have is going to be ourselves. we have a mission, to inspire creativity and bring joy. and we believe our most important focus is to focus on delivering their mission. david: most chinese technology companies, alibaba, tencent, they have gigantic market values and are prominent in china but not as prominent outside of china and certainly not in the united states. tiktok by contrast is not in china but is gigantic outside, the united states and

everywhere. what did tiktok do that enabled a chinese based company, parent company at least, to do so well outside of china? >> we think it is challenging to build this in general, the best so far are ones that take consistent global earnings and adapt them to the local countries they are operating in. you need to be global and local at the same time. it is something we are investing in. here in the u.s., we have a sizable team in new york and austin, l.a. at this point. and becoming more local is something we will continue to invest in. shery: watch more of the interview with the tiktok ceo on the david rubenstein show, peer-to-peer conversations at 9:00 p.m. in new york. plenty more ahead. this is bloomberg. ♪

shery: counting down to the start of trading tokyo and some stories we're watching. honda is holding exports of cars and motorcycles to russia, joining a list of global firms choosing not to do business there. the government is considering raising the daily cap on overseas arrivals by as much as 7000 people 42 kyoto.

we will be watching for economic data and bank pmi readings and consumer confidence. in south korea, we will watch markets as morgan stanley warns that korean stocks are vulnerable to oil prices. the korean finance ministry will hold several meetings to discuss the economy and the impact of the war in ukraine. they will also resume discussions for free-trade pack in the first half of the year, when mary talks planned in march. >> let's get a quick check of the latest business flash headlines. south korea leading e-commerce company saw a rise in the fourth quarter, loss to just under $400 million in the period ended december 31 as the company continue to spend on infrastructure and services in the face of rising competition. that helped to boost active

clients, sales rose to over $5 billion. google is asking employees in the bay area san francisco work from offices three days a week starting in april. this is after a decline in infections and improved safety measures. they have pushed the return to office date back multiple times, most recently in january due to omicron. a new investment banking group will boost esg sustainable efforts. it will be across europe, asia and the middle east. we will be watching these stocks when trade opens in japan and korea. many are reacting to the increased geopolitical risk, the commodity risks to russia and ukraine, including tokyo, reportedly halting production in russia given issues resorting -- issues sorting parts from overseas. there also suspending exports in

russia. canceling passenger flights to and from frankfurt that crossed the russian airspace. and temporarily suspended operations at the export terminal in ukraine, according to a spokesman from posco. this is bloomberg. ♪

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shery: welcome to daybreak a show from headquarters in new york, i am shery ahn. haidi: i'm haidi stroud-watts in sydney. our top stories this hour, asian stocks set for a boost as jay powell sticks to plans to leave the door open for a bigger rate rise. the war in ukraine prompting

traders to shunt russian purchases and fueling fears of shortfalls. china is exploring an exit from the covid zero saturday -- strategy while cases surge in hong kong and residents brace for lockdown. shery: japan and south korea coming on line and we are seeing japanese stocks gaining ground, being led higher on the nikkei buy materials and information tech companies. every sector is on dutch in the green on the nikkei and reversing losses we saw in the previous session. the japanese yen is holding steady at 115, a little weak compared to last week versus the u.s. dollar. we are seeing the 10 year yield also continuing to gain ground. this after we saw downside pressure with them rallying across the curve on concerns over what is happening in ukraine in the previous session. you have u.s. stocks climbing, not to mention treasury yields continuing to rally. we are seeing japanese yields following suit.

also gaining ground for a fourth consecutive session, the korean one -- korean won. -- fourth quarter gdp numbers expanding from the previous quarter, slightly better than the advance estimate. haidi: we are seeing as he said that normalization it comes to treasuries, trading, the pullback of that risk off trade seeing australian and kiwi bonds responding as well. bonds in this part of the world crashing back to earth to track the slide we saw in treasuries overnight and that we are seeing across this as well. the equity session coming across nicely. we are seeing some outsized gains when it comes to quality, coal producers in particular as we saw the asian coal benchmark jumping almost 50% and just about doubling from the friday closing price on supply constraints as a result of the

war in ukraine. new zealand stocks up by just over 1% and pretty much a steady trading when it comes to the aussie dollar. looking at u.s. futures, this is the picture as we look ahead to the presumption of dutch resumption of trading after a volatile session. s&p futures looking flat, after a big session of yields going right back up. crude remains interesting, taking a breather just closed at 111. you can see it's just under as we continue to watch how the russian invasion upends the market. opec-plus facing a reckoning on russia despite trying to maintain consistency in its policy aside from geopolitics. gold is trading flat at the moment, we did see a decline after chair powell bashed rate hikes his battle against

inflation. the united nations has denounced ukraine as the u.s. ways sanctions -- weighs more sanctions. the latest from our reporter in the white house. ukraine says it will take part in the second round of talks in russia on thursday in belarus. what do we know so far? >> we know that these talks are going to take place on the border between poland and belarus, and there appears to be very little common ground between the two sides. it is not optimistic that the violence would end. but they are still going to the second round of talks. shery: we saw president biden calling putin a dictator during his estate of the union speech. are we going to see more action from washington? courtney: secretary blinken, the secretary of state in the u.s., is headed to eastern europe on

thursday. he is going to visit poland and i believe -- excuse me, poland and a few other countries in eastern europe. it will be speaking there in that could bring more action. we also saw that the u.s. imposed export controls that restrict the sale of oil technology. biden officials have said they will not sanction russian crude imports even though congress is pushing them to do so. haidi: as we hear the rumor -- here that the russian oligarch is selling off or trying to sell off a chelsea football quote, or hearing signs of discontent from the russian elite? courtney: two russian billionaires today called on russia to end the war in ukraine. they stopped short of criticizing putin but they spoke out about the violence and what seemed to be a turning point for them. shery: courtney rozen in

washington. chair powell has confirmed the fed is ready to embark on rate hikes to get inflation under control. kathleen hays is here with more details. we know that chair powell supports a 25 basis point hike, could we see a 50 basis point one? kathleen: it depends on inflation. that was made clear today because jay powell took tough questions from republican senate dems on the house banjo services committee. he said inflation is indisputable he too high. he made it definitely clear on march 16 we will see between five basis point rate hike, at least that's what he is expecting, and if inflation stays too high, the fed could get more aggressive. let us listen to what he said. >> i think it will be appropriate to raise our target range at the mars -- march meeting in a couple weeks. and inclined to support a 25

basis point rate hike and to the extent that inflation comes higher or is more persistent than that, we would be prepared to move more aggressively by it raising the federal funds rate by more than 25 basis points at a meeting or meetings. kathleen: sounds like 50, doesn't it? and not just at a meeting. meetings. the jay powell has definitely opened the door to the fed getting more aggressive as he tells congress the fed will get inflation back under control. when he was pushed about did they make a monetary policy mistake, he said we thought the supply chain constraints would end sooner. clearly they are ready to do something now. february consumer prices expected to come in at 7.8% year-over-year. we get that number in the next week or so. powell does say he expects inflation to start coming down this year because he is ready to be aggressive and make sure it does. people say what about russia's invasion of ukraine? what about

everything that is going on, all of the reactions? jay powell says it is too soon to see how soon the russian invasion and sanctions will affect the u.s. economy so he is ready to move aggressively and again, watch inflation. if it stays persistent we hire as he said, there could be more aggressive action but he expects it to be a gradual process and achieve a soft landing. haidi: kathleen hays there. q note reporting wing -- toyota halting business with russia. a japanese company canceling passenger flights to and from frank for the cross russian air and we are seeing quite some strong gains. temporarily suspending operations at the export terminal in ukraine according to

a spokesman. let's get you to vonnie quinn with first word headlines. vonnie: the war in ukraine could knock $1 trillion off global gdp and 3% of worldwide inflation according to a new study by the u.k. national institute for economic and social research which found supply problems will slow growth and drive up prices. it says europe is the most exposed region due to its reliance on russian commodities and energy. the euro zone inflation has hit a record just as russia's invasion of ukraine and threatens to send energy costs coring at a faster pace. consumer prices jumped 5.8% on the year in february, up from 5.1% the previous month. a measure that excludes volatile components also accelerated to 2.7%. ecb officials are said to leave next week. opec and allies have agreed to a modest revival of supply for april. it will be another 400,000 barrels a day, continuing the restoration during the pandemic.

the key meeting was overshadowed by market turmoil unleashed by the invasion of ukraine. but the issue was not heavily addressed. hong kong reported a record 55,000 new covid infections wednesday at 117 deaths. this as chaos and confusion grow around plans to virus test the entire population three times in march. chief executives seek to reassure residents, urging a stop to panic buying and ruling out a lockdown. but there are terrifying more details about the campaign. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg.. shery: as brent crude surges the most since 2008 following russia's invasion of ukraine, we will ask whether the rally can ask -- last. jp morgan's mixo das about

global markets and risk and volatility with inflation. this is bloomberg. ♪

haidi: -- shery: let's look at how futures in europe are opening, some upsides for the futures as well as msci and dax. you've seen european equities gained ground on wednesday. saw a spike in commodity prices driving energy and minors higher. we saw the stoxx 50 up more than 1.5% in wednesday's session. we continue to hear concerns about commodity prices rallying inside the south korean minister speaking, saying korean is

seeing disruptions and shipments from ukraine. haidi: our next guest from jp morgan is absurd -- is overestimating the affect of inflation. mixo, thank you for being here. last year we were underestimating, now we are overestimating price pressures. why and how do you adjust your portfolio to reflect that? mixo: right, i think the issue it just means that inflation is not going to stick around at current levels or even elevated levels over the course of this year. if you look at the factors driving inflation, there is an underlying trend higher and core services is moving higher, there is a large component coming from extra demand because of stimulus immediately after the pandemic, which is going to roll off. then there are supply chain issues which are causing

supply-side inflationary pressures, which are also going to hold off. inflation is going to start to significantly roll off into the second half of this year and this is very typical of markets. they tend to extrapolate what they are seeing in the near term well into the future. i think that is what is happening now. coming into 2021, markets work underestimating inflation and we were suggesting they should look otherwise. coming into this year it is the other way around. haidi: there is modeling being done when it comes to the impact of the russian invasion in ukraine and what it will do to global gdp and inflation levels. do you think we are underestimating the broader impact of that, but it is beyond bringing this to europe? mixo: if you look at the conflict in ukraine and global markets, it is just part of fundamentals and economic impact

of gdp. we don't think it is very were large, russia and ukraine make up less than 2% of global gdp and a lower percent of various commodities and goods. but you when you look at other effects, it's limited outside of europe especially in asia and japan. linkages to russia are minimal. you start to think about commodity prices as being the main channel of impact in asian markets, and we do think commodity prices are going to remain elevated even in the structural super cycle in the case of oil. that is going to remain the case it's not going to be enough to drive inflation to get the higher. if you look at u.s. cpi, energy, all that is part of that. shery: we are getting south korea's finance minister sank the ukrainian war is impacting exporters and importers, that it is materializing. he saying there disruptions of

grain shipments from ukraine and that they will strengthen liquidity management and financial companies, it will take measures to stabilize markets if needed. korea is one of those big oil importers across asia. along with india. this graphic shows our viewer. which is the need for their equity space? we are seeing outflows right now. will this continue? mixo: india, korea and the philippines on the markets that will be largely impacted because of high oil prices. you talk about grain and food prices, that is something we do worry about, but i think if you look at the connections between beef prices and other food prices, it is slightly less because in asia, the staple, the consumption of carbs is the rice and not wheat. if you look at the collection -- connection to asian food prices,

tend to not move in line with europe. probably asian food prices can continue to remain relatively stable. but ukraine and russia are large exporters of beef, corn, vegetable oils which will put upward pressure on food prices overall. shery: it very interesting. what about the energy stocks? we have seen a huge rally in oil prices over the past couple of years. we have not seen that sort of rally what it comes to energy stocks. they have lagged. mixo: they have lagged commodity prices but they are the best performing sector within the equity market. energy and financials are by far the leaders in terms of the last six months and 12 months of performance within the equity market. the way to think about this is that equity markets are discounting longer-term prices of these commodities. in the expectation is that the

spike is somewhat transitory and can come down to normalized levels over time. you could make a case that oil prices in particular probably can sustain higher compared to markets, 80 to $90 a barrel. so there is an upside to energy equities. if you look at our overall mission's, brush commodity stocks and growth stocks. it works very well in the context of what is happening in ukraine. we think the lasting impacts will be on commodity prices. and in terms of the fed, we think the first chapter, where the fed moves from easing, that has come to an end. with a value stop getting crowded by the middle of february, that is a consolidation pace of the value and also growth stocks could do well. haidi: -- shery: good to catch up with you, jp morgan asia equity strategist mixo das with his

views. toyota halting production in russia, given issues sourcing prices -- part from overseas, we are seeing that from most, they will expend -- they will stop exporting our prices in russia. but we are seeing a rebound in japanese stocks and reversing losses from the previous session. japan's ama canceling two passenger flights to and from france -- frank read that across the russian airspace. also temporarily suspending operations at the grains export terminal in ukraine. a spokesman from the south korean company as we get more confirmation from the vice finance minister that there are some disruptions in those grains shipments. haidi: coming up, we take another look at bitcoin, the latest in price volatility after russia invaded ukraine. we will break down where crypto is headed from here. this is bloomberg..

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>> we are still part of global society, so we have response abilities as well. in russia is on the section list as well as others. feis sanctioned list as well as others. it's the same as not doing things in north korea. >> whoever is on the section -- sanction list will not be able to use our stuff. but we view that we do not have unilateral decision power of our own to freeze normal people's accounts. i think that would be hard for us to do. shery: major crypto players is

split on their plans. -- preventing russia from using assets to circumvent sanctions. for more on where the crypto roller coaster goes from here, let us bring in cross asset team editor john austin. given the recent rally there has been a break from the narrative that crypto is only a risk on asset. but any sanction to stop russia will not be price positive. >> right. it has been a decent rally as you said in the past few days. so if it is selling out a little, it is still in the mid 40,000 now, briefly across 45,000. bitcoin is holding in there, starting to look like something people are going to, as a geopolitical hedge, and it is a

new financial technology. we are figuring out how it works in a conflict that has not been tested this way. as u.s. senators get interested in whether it is being used to evade sanctions, this is all very new. so everyone from consumers to crypto exchanges to regulators are trying to figure out just what an impact crypto is going to have. haidi: what about broader crypto markets, how are we seeing the price action being affected? joanna: it looks like bitcoin has, in the past few days, gotten very popular. in stable coins are also seeing more action as well. and jp morgan pointed to this as 42 an upside -- pointing to an

upside, because it is an on-ramp to traditional currencies. caboose things but bitcoin has been trading as you mentioned before like a risk asset very often. it remains to be seen whether it can become the geopolitical hedge again. haidi: joanna ossinger there. a check of the latest headlines, a russian energy giant is in the process of settling a $1.3 billion debt due on monday. the settlement bank will release funds on friday after a transfer earlier this week. the bonds lost half of its value in over a week on concerns over its ability to settle next week's pinkett -- payments. south korea commerce company suffering losses in the fourth quarter, just under $100 billion for the.

period of the summer 31st, they continue to spend on services in the face of rising competition, helping them boost active clients. nomura has formed a new investment banking group to boost its esg, sustainable technology and for structure efforts. it combines existing teams across the u.s., asia and the middle east and will have about 150 bankers. nomura says esg is creating growth opportunities and dominating industries. shery: coming up, we speak to an oil analyst about energy security in light of russia's invasion of ukraine and when opec -- what opec might do next. this is bloomberg. ♪

haidi: we are getting australian trade numbers crossing the bloomberg. when it comes to the picture of economic recovery, so much reliance when it comes to commodity exports. january exports rising 8% from a month earlier. we are seeing when it comes to imports a decline of 2% from a month earlier. that leaves the january trade balance to $2.89 billion, a wider expectation of just over

$9 billion. we are seeing a strong demand for core exports like iron ore, but also other types of commodities like wheat and coal are rallying so strongly on the back of these supply chain locations and the russian invasion of ukraine is casting that further upside pressure when it comes to the -- when it comes to trading here in sydney, many of those help gain and are those related, oil producers and the like? the aussie dollar had some good gains on the back of the rally in commodities. shery: i do have pmi numbers out of a few places across asia. hong kong numbers coming in at 42.9 for the month of february which would be a second consecutive month when the market pmi has stayed in contractionary territory. this as the city is reporting a

record of daily cases of more than 50,000 bracing for potential limited lockdown according to local media. there was a japan pmi numbers, japan composite numbers, 45.8, number 44.2 would be the final figure for the month of february. really a second month of contraction already for japan as well. when it comes to singapore pmi numbers, still expansionary territory but easing from the previous month, february coming in at 52.5. haidi: looking at the reaction across the rest of markets, we are seeing a good day of gains, climbing equities, tracking the rally as we heard from fed chair powell saying the economy is expanding.

and there are rate hikes despite being judicious when it comes to taking away the pandemic stimulus. we are seeing when it comes to the tokyo session, electronics and automakers are the biggest gators. we are seeing the likes of tokyo electron and some of the heavyweights rising on the nikkei. again, little changed in the wake of the -- the yen has little changed. energy, mining and oil dominating the rally, in new zealand we are seeing we are seeing positivity. shery: numbers for a few commodity assets, including aluminum which hit a fresh record. wheat rising to the highest since 2008, thermal coal continuing to rally. this as russian purchases are

being shunned by traders and given the ongoing invasion of ukraine and the potential instability there, which is what is pushing all the prices in the asian session above $110 a barrel. this of course as we continue to see concerns of disruptions. let's bring in our next guest who says it gas is most at risk of the zero -- physical disruption. joining us is neil beveridge of sanford c bernsein. -- bernstein. what are you expecting when it comes to gas prices as well? neil: we are seeing gas prices at record levels in europe, close to $40, and $240 a barrel, really unprecedented levels of gas price in europe. it reflects the dependence

europe has on russia. 30% of the supply comes from russia and russian supply, roughly 25% code so there was a disruption to the pipeline, it would have an impact. in terms of physical disruption. but also, unprecedented action, sanctioning russian banks, and removing some of the russian banks from the system. others which are key to payments have not been removed. you can still have payments allowed and that will keep oil and gas flowing in the short term. for a number of other buyers, it's going to be increasingly difficult. shery: do you at this point look at the long-term impact? we might be seeing these

commodities, oil and gas, but at the same time perhaps the russian invasion of ukraine is setting up for all of these countries to veer away from russian oil and gas and start to transition faster toward green energy. neil: i think that is a great question. and it's interesting to see this enter potentially protracted period. the risks are increasingly russia is going to be marginalized from the rest of the world, cut off. because russia is the biggest energy export in the world. 10 million barrels a day, the largest gas exporter the world. and in the short-term there is nothing that really can be done to make further -- to make up for what russia provides. it would lead to higher energy prices. the lesson from this is going to be a pivot harder toward renewables. that will take time.

in the short-term, i think we could be looking at higher prices as russia gets marginalized. haidi: the inflation picture complicates the transition in terms of being able to build out the infrastructure. what can policy do to be able to alleviate some of these pressure points? neil: there's very little that can be done on the inflation rate side. both governments need to continue -- what governments need to do is to continue to support some of the key solar wind, hydrogen, we are seeing some countries much germany talking again about nuclear. and certainly in areas like hydrogen, it's going to be critical in developing those industries. this is going to take time and the infrastructure that is required the pivot away from fossil fuels, it will take

decades and not years. in the short-term, i think the key issue is the underinvestment that we see -- coupled with the crisis today. haidi: who is vulnerable in asia? some of the enforcements by china are going to be tricky. neil: there are a lot of countries in asia that have a high oil intensity enters the economy. the use a lot of oil to drive gdp growth. for china, there is resilience from other countries, like india faces a bigger challenge. what we are seeing in china is interesting. we are seeing them turned down in portfolios -- import volumes,

china is pivoting back to call which is viable source of energy but one that does not help reduce carbon emissions which the world needs to see happen. haidi: neil beveridge, always great to have you. with get to vonnie quinn. vonnie: an official says russian forces appeared to be stalled on the outskirts of kyiv possibly due to food and fuel search it -- sources. they expect little change on the battlefront over the past day, bill russian troops have made modest progress in ukraine's the south. russia has fired about 450 missiles. u.s. lawmakers are looking at russian oil and gas over the

invasion to ukraine, representative andy barr a republican and member of the committee says there should be new sanctions that allow them to conduct energy related transactions. jerome powell making the fight against inflation his top priority over the risk from russia's inflation -- invasion of ukraine. they will have a basis point hike, adding that another bigger one would be warranted if inflation stays high. >> it would be appropriate to raise our target range for the federal funds rate at the meeting and a couple of weeks, i'm inclined to support when he five basis points. and to the extent that inflation comes in higher or is more persistently high than that, we would be prepared to move more aggressively by moving by more than 25 basis points at a meeting or meetings. vonnie: western australia has reopened to vaccinated travelers after almost two years of travel

bans intended to stamp out the coronavirus. all of australia is not open to tourists and foreign workers. there is a surge in cases and they are issuing limits on nonurgent serve -- surgeries. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: next, hong kong is breaking for -- bracing for potential lockdown in march after reporting a record of more than 55,000 daily infections. more coming up. this is bloomberg. ♪

haidi: china is examining how the country can transition out of its zero covid policy, but the wall street journal says the change likely won't happen until next year. kong reports its highest ever daily total of new infections. let's bring stephen engle in hong kong. confusion seems to be raining it comes to mass testing, lockdowns. continue to see a surge and the death toll as well. steven: yeah, everyone i speak to says the same thing. there is just an exhaustion and there is confusion because the government has not been able to

properly articulate when and how they're going to do this testing campaign and whether they will be wholesale lockdown while the chief executive is saying there will not be. constant different reports every day, different reports from different media, and the government is saying we are still trying to figure out different plans. stop going to the supermarket and panic buying, china will have food and necessities brought in through ever -- whatever period they will have, a four day lockdown, nine days, so any questions right now. right now, the latest rumor is that the testing and lockdown, not wholesale lockdown will happen at the end of march. we have potentially another three weeks of this kind of speculation at a time when we have more than 55,000 new daily

cases and 117 new deaths. most of those are the elderly, who are under vaccinated. even the morgues are at capacity. the facilities, you can see these are a couple of weeks old, the footage, but it is a similar situation. people who are a symptomatically -- but the arrangement is temporary. a bit of a mess and a health crisis and a crisis of medication. shery: could mainland china be going in the opposite direction, instead of lockdowns, starting to consider living with the virus? stephen: they will have to transition at some point, right? can china remain closed off is unity? no. no one is saying that. the question is how and when and what kind of china policy

remember living at the virus, and we are looking at various ways to do it in a chinese way, meaning perhaps travel bubbles like the one at the olympics, they could expand that to various parts of society. they are looking at these new antiviral drugs like from pfizer. how that could be used to help contain virus outbreaks, and they are really pushing this homegrown mrna vaccination right now in trial, but the results have been spotty at best. they have not been as good as mrna from pfizer. it is a long process but the wall street journal says this would not happen until next spring.

there could be extreme mental trials as soon as this summer but it will be a long haul for china and that has direct percussions on stock -- on hong kong because uncle has stated we are aligning our policies with mainland china so we can eventually open the border with mainland china first. the wall street journal story says hong kong is china's stress test scenario. what is happening here, the crisis happening here is what china wants to event that should prevent happening there. shery: stephen engle with the latest on coronavirus cases across china. as we speak, you're getting thailand numbers as well. cases rising, 23,618 new cases being reported out of china. this would be the highest level of deaths since november 2020. we have seen the strength in the time market given the reports

that he mentioned about china potentially limited just to covid, but case numbers and death numbers continue to surge. haidi: we are also hearing of more actions being taken by japan to freeze more assets, from japanese finance minister, there four more russian banks, we will be hearing -- but the finance ministers saying they support seven russian banks being excluded from the swift messaging system. this comes after the weekend when they announced japan will join other western nations in its exclusion of russian letters from this web system. this web system. shery: the latest headlines, google announcing they will start having people in the san

francisco bay area work from the office three days a week in april. there are declined infections in improved safety measures at its mountain view campus and neighboring sites. they have pushed the return to office date multiple times, most recently in january due to omicron. ford is speculating electric vehicles -- as it doubles down on the new strategy, they will scale up production as late -- they chase a target of 2 million by 2026. they're planning to spend $50 billion on ev strategy and has raised its profit margin outlook 10%. citigroup ceo warns that profitability will fall in the near-term as the company pursues a transmission that will raise expenses. she and her team detailed a planed expansion deafblind extension.

there will be investment in technology. she asked investors to be patient. haidi: more than one billion people around the world now visit tiktok every month, but immense growth has come with tighter scrutiny. the ceo tells bloomberg how the company is managing the extra attention from chinese and u.s. regulators. >> we believe that our approach to all the governments around the world is to be collaborative and transparent. to be available to ask blaine what we do and who we are, and answer any questions that they have. that is the approach we have taken and that approach has been an approach that has been very beneficial for us over the course of the last two years. david: but there was a proposal the required you to sell the tiktok business in the u.s.. i think it was going to be sold perhaps to oracle. is that off the table, and right now you're not being forced to

sell anything? >> we have moved beyond that. david: and the bite and administer should, have the picked up and said we want to engage in the same fight or do you not have to worry about that? >> we are taking the approach out to be transparent, engaged, collaborative and answer any questions they may have. david: the biggest concern that people had, at least some people in the trump administration, maybe other people, is that the data you had on your computers about who is watching what, i presume, would somehow get fed back to china and china would have it for its use. the chinese government. is it true that your data is being given to you or you are forced to give it to the chinese government? >> we disagree with that. the way tiktok is set up today, it is not available for download in china, it operates outside china. the data for tiktok users is stored in virginia and in singapore, the backup in

singapore. we believe we have a rigorous and robust system to protect data security of our users. david: let's suppose i go on tiktok and i like certain kinds of things to watch, you presume your deck do you sell the data to another company? >> it is a recommendation engine, the best way to think that it is pure mathematics. it digests the behavior that our users have on our platform, including likes, what videos do like, comments, how long you stay on the video, so forth. behavioral signals like that. and it recommends content that you could potentially could be most entertained by. so that is really how the data is being used on our platform. shery: watch more of david rubenstein's interview with the tiktok ceo on his show, peer-to-peer conversations at

9:00 p.m. in new york. morehead. this is bloomberg. ♪

shery: just a half-hour away from the opening china, property developers in focus as the sector is spilling over to some of the stronger developers. more from asian stocks managing

editor. what are some of the key things we are seeing emerge among property stocks? >> hey, yeah it was a good week so far, a good two weeks i should say. the property stocks have plunged almost 10% in the last two weeks. overall it is about them potentially hiring financial advisors to address their date -- data -- debt. the wall coming up this month is also -- they see themselves falling first-rate seven months and that is not good news. overall, i think the long-term holders, the buy-and-hold crowd are out of the stocks. most of the players now are hedge funds retail investors. and they are not trading on the fundamentals of the sector anymore. overall, the ratio is at 0.3%. a deep discount on the asset

value. haidi: how long do you think th at pain will last? >> i think there is no light at the end of the tunnel right now. traders are playing the short term. haidi: we got to leave it there. more to come, this is bloomberg. ♪

>> it is not :00 a.m. in hong kong, beijing and shanghai. welcome to the china open. i am david ingles with yvonne man. >> jay powell backs a quarter-point rate hike this month with the fight against inflation remaining his top priority. >> inflation comes in higher or is more persistently high then that, we would be prepared to