quick's a good morning. we are counting down to asia's major market open. the global stock selloff is said to continue in asia after u.s. equities plunged and commodities surged amid fallout from the vladimir putin war in ukraine. sources say the u.s. could decide to act on its own.

and beijing warns washington about trying to build and into pacific version of nato, cautioning the u.s. against boosting time with taiwan. u.s. futures down right now. this after we saw the s&p 500 losing about 3%. the dow lost about 800 point. we will continue to see the surge higher. jumping to the highest in 14 years, remember, wti has gained 26% already. now we have these sources telling bloomberg that the biden administration is considering whether to prohibit russian oil imports into the u.s.. that is sending oil prices even higher. we have yields continuing to

rise. gold under a little bit of pressure. this after reaching that level as oil is biking. raise a concern of higher inflation and slowing economic growth as well. >> i am a theme here. look at the open. take a look at energy. that sector is up, straight out of the open materials. just one of three sectors including utilities to be trading higher at the moment. we are watching some of these nickel related companies. we saw nickel surge into the record high. all these russian supplies leaving buyers exposed. we have been witnessing this historic squeeze. bonds are falling again,

tracking the dropping u.s. treasuries tonight. taking a look ahead to the start of trading in japan. we had a pretty wonderful day. the nikkei hitting the lowest since november of 2020. we are expecting further downside when it comes to the start of trading in tokyo. global stocks, look at this big picture. you really know we are in an oil shock when sectors look like this. >> it could not paint a clear picture of the dynamic. let's get more details from the markets reporter. >> wti is coming online a little

bit. a very volatile session. brent crude is surging as much as 18%. a lot of it down to this commentary on the button administration. we did see the reaction from the likes of germany in particular. olaf scholz said the eu needs to diversify. a lot of that goes to the supply issues. very specific to the eurozone because as russia exports around 4 million barrels a day, a lot of that is going to the eu, places like germany. very much reliant on that, extremely capable.

that is also across the commodity complex. still fractionally to the upside. the longest since july of 2020. they are looking at how that feeds into inflationary pressures and growth shocks to the global economy. another headwind or that could be noted in markets, the gold market is suspending all russian refineries. they will no longer be sold or exchanged. that association joining what is a growing list from moscow. >> let's delve into the geopolitics of the story and bring in our

to diversify away from russia. >> and the u.s., all the talk has been about the been. there was certainly talk about it in the press secretary said they were deciding -- people familiar with the matter tell us it is a scope issue, that this is where it is headed. in congress, they were much more definitive. there was a proposal to ban russian imports. nancy pelosi is one of the people that has been pushing for that. the u.s. only imports about 3% of crude from russia. it percent of petroleum products. i different story in europe.

they are not talking about the outright ban. they said that would be too drastic. >> that was jodi schneider with the latest. this is the focus turning to geopolitical issues. the prime minister warned washington about a nato like lock in the asia-pacific, echoing vladimir putin's comments. let's bring in stephen engle from hong kong. what stood out from this annual address? >> the foreign minister passed up the opportunity to criticize russia's invasion of ukraine and also when you call it an invasion, he essentially said the relationship with beijing

and moscow is rocksolid. he did go on to reaffirm that beijing will pledge humanitarian assistance to ukraine and help facilitate dialogue between moscow and keep -- steve -- k yiv. on taiwan, he resist any -- resisted any parallels. this is what he had to say on the taiwan matter. >> an issue arose from contention. namely russia and ukraine. some people are being vocal about the principle of sovereignty on the ukraine issue. this is a blatant act of double standards. >> he is saying that ukraine and

russia are separate countries, taiwan and china are not. it is a similar status quo but also warning the united states about ratcheting up the rhetoric and what beijing has said about alliances in the asian-pacific. he won against that. he spent much of the to our press conference blaming the united states for much of the world's problems. >> let's get to vonnie quinn with the first word headlines. >> hong kong's covid-19 death rate is the highest in the world after fatalities surged in the under vaccinated elderly population. 25,000 new cases and 161 dents on monday alone. more than 5000 people left on

sunday. a new study once even mild cases of covid-19 can damage the brain and effect thinking. researchers found covid lent brain damage months after infection. the scientists also found brain shrinkage equal to 10 years of normal aging. as opposed predicted that moody's already will retain power in this crucial state. all of this after the latest round of voting ended on monday. the victory margin is expected to be tighter than five years ago. severe flooding has returned to australia for the second time in a week. evacuation orders are in place for 13 suburbs in sydney.

they are expected to top $1.3 million. global news, 24 hours a day on air and bloomberg quicktake. i am vonnie quinn, this is bloomberg. >> we are seeing u.s. futures down .3%. this is after the s&p 500 lost about 3% in the new york session. we have the dow losing almost 800 points. this has turned negative for the first time since september of 2020. this is a potential game changer. morgan stanley saying we are firmly in the grasp of a bear market. still ahead, the demand for ev's has shown a surge in prices for rare earth minerals. more on the impact of russia's

work in ukraine and have that might affect supply. many russians and ukrainians are moving their assets into cryptocurrencies. we find out more from the market ceeo just ahead. this is bloomberg. ♪

>> you are watching daybreak asia. look at crypto acids right now. this after falling to that one week low. reversing session two losses and very close to the 2500 level. we have seen a lot of volatility in cryptocurrencies and flat for the week after surging as much as 20% last week. >> let's get some more from caroline. we have to start with geo policy and the latest data.

in your analysis, is it institutional trading, retail trading, other concerns around using crypto to get around sanctions? >> i think those concerns have been overblown and repeated many times by the industry. if you look at blockchain, they have the technical know-how. also, the relevant security forces. we have the capability to enforce sanctions at the crypto exchange level both in terms of the indigent -- individual companies and transactions. the other major crypto exchanges always block out the russian

sanction entities. what we are seeing in the data, this uptake in bitcoin in particular relates to retail. they are aggressively out there buying in small amounts but they are out there are aggressively buying bitcoin in particular. >> what do you see as we see this work continuing as a longer impact on the asset class? crypto's behavior to being a risk as has been quiet enticing. >> we are probably seeing the test case for cryptocurrency and bitcoin in particular, we have often talked about it being decentralized. also, being globalized at any one point in time. i think this particular crisis in the ukraine is showing that. i think it could go to international standards but we are not cutting out the regular

russians or ukrainians or other people who are trying to access store value without the fluctuation in currency. look at what happened recently in canada. they have cut out at the stroke of a pen without any legal recourse. the cryptocurrency industry circumnavigate that and gives people the opportunity to retain their wealth. >> has the status of cryptocurrencies really changed after seeing how u.s. dollar holdings can really be sanctioned? so quickly by centralized governments. >> it is like a test case for the industry. i think people are looking at it and saying the opportunity that is there. it is not that cryptocurrency is going to overflow -- overthrow

the system but i think both can operate side-by-side within our global financial infrastructure. certainly as you look at the scale of engagement worldwide with the ukrainian government offering cryptocurrency. 118,000 individual donations to their appeal. you can see a lot of appetite out there amongst regular people for the use of cryptocurrency. i think this is probably something that would sit alongside our fee it infrastructure. >> what you are seeing on the ground is this retail driven demand. what about some of that narrative that perhaps russia is using this as a systematic way to avoid sanctions? >> i don't think that is warranted. i would question where that narrative is coming from. one thing it has done is it brought the issue of

cryptocurrencies to the floor. you look at the u.s., we have had some very direct questions he asked about the direction we are taking cryptocurrency regulation. they are trying to push micah toward sanctions. in australia it as to the report that came out around the regulation of crypto acids. it goes to that point of how cryptocurrency is pushing forward to take its place amongst the global financial services system. unfortunately it has taken this opportunity to do that by the industry is responding accordingly. they are kind of outlining the approach to currencies. do you think that will give a

positive post to the profile? >> absolutely. i think that has been one of the final pieces. it is that he's around regulation. it is that piece around reputational risk. i think there is a lot there that is going to be there from the institutional point of view but likewise i think it is important that we get the steps in place in the industry so that they can benefit from prudent and proportional regulation coming in. >> give me some of your reflections on women in the crypto industry. what is good and what progress needs to be made? >> thank you. i think for us here in australia there is a very active and vocal women's group and i am very fortunate to be cast among that.

we are equally fortunate in blockchain and australia. they demanded they step forward in the role of women in the industry. they look for gender balance in all the events they run. these are small steps but they are important steps. it is important that the wider industry sees this is an -- an open and inclusive sector. something that is transformational from a social point of view but i very positive about the role of women in blockchain and australia in particular. >> thank you so much for joining us. we do have breaking news at the moment. hong kong may be dropping their masks as a priority. this according to the hong kong world launch, positive rapid test. remember that hong kong's death rate is the highest in the world.

we are talking about 27 deaths per one million people as of sunday. this according to bloomberg calculations based on john hopkins university data. we have more than 25,000 new cases on monday alone. hong kong really struggles to bring the omicron outbreak under control. right now we are also hearing that the hong kong government is rolling out plans to require private hospitals to provide beds in designated clinics for covid patients. that being arranged -- an arrangement similar to asking hotels to offer this. plenty more to come, this is bloomberg. ♪

>> we are seeing this rise.

>> the u.s. is planning to been imports of oil. request to see that they are talking about putting sanctions on russia and russian imports -- exports, that is them being serious about this. >> the united states might go it alone because of better support here. because there is recognition from the biden administration that this industry could do a lot to help mitigate many impacts to the consumer. >> we do not have the capacity. >> the numbers just don't add up. that is why prices need to go to the point where demand stops and that is well over 150. >> guest on bloomberg tv way the impacts of a potential russian oil pan. let's get you the latest check of the business flash headlines. a $1.3 billion bond produced

monday. the sources tell us that the dollars they received gave issue after the option of repaying currency debt. there were concerns that prudent's decree would disrupt repayment. jp morgan says it is removing russian bonds. the u.s. banks as it was making moves in response to market disruption. $7 billion of exposure to russia and ukraine. it is the latest -- it says the exposure represents about 0.6% of the overall commercial lending portfolio. >> the asx 200 became higher.

we are talking about the first gains in about three sessions as stocks continue to lose ground for a third session as well. futures trading at this moment under pressure. this is bloomberg.

haidi: breaking news out of japan, we are getting the january cash earnings, year on year grew 9%. the expectation was for growth of only zero point 1%. we are coming off from a contraction the previous month. this is higher than expected growth when it comes to labor cash earnings. real wages also grew 0.12% instead of a contraction. inflationary pressures are felt across a very tight labor market

across japan with cash earnings near growth of zero point 9% despite the fact we have some businesses seeing virus restrictions and the story of the sector is pressure. take a look at what commodities prices are doing. it is the commodities space where we see the greatest inflation. at the cusp of another record high as the ukraine war continues, russia and ukraine supplying more than 1/4 of the world's wheat. iron ore at the highest in seven months. the latest gdp numbers this year set at the mpc. nickel at a record high. some fears over russian supplies as well as wti above $120 a

barrel. we might see the u.s. prohibiting russian oil imports into the u.s. without the cooperation of its allies. we are joined by tomorrow as in her -- we are joined by tamar e ssner. if we were to get a ban on russian oil imports, the u.s. and europe, what would that mean for prices? tamar: the market is expecting the u.s. will go forward with a ban on russian oil imports, that is largely priced in. most buyers are not taking russian crude oil exports. i think the market is poised for this and will go higher as it locates other barrels.

for the u.s., this will limit the number, it would be problematic for europe if they went ahead with this on a formal basis and put an embargo on russian oil. that really ups the ante for russia in terms of their threats to weaponize natural gas, which would be much more difficult to replace. shery: do your points, european natural gas, the oil equivalent of $500 per barrel as our chart shows. how much more difficult will it be to replace russian supplies? natural gas is more difficult because of infrastructure related to the transportation of it. for europe to import natural gas from sources other than russia, seaborne sources, there has to

be liquefaction capacity, and it takes a long time to create those terminals for importing and exporting. the u.s. could be the largest exporter of natural gas. those were terminals that took years to develop. arguably, europe does not have enough import terminals to displace russian gas they are getting via pipeline, so that is a problem because russian gas -- europe gas can only be transported from contiguous countries, or it has to be shipped, which is a more difficult process. haidi: every time we have this kind of situation -- this is a very extreme side of the market we are seeing, we talk about u.s. shell coming back. is there adequate ability to respond from shale? tamar: shale is in a difficult position. prices are expensive, but at the

same time, there are a lot of labor shortages, inflation in cement, sand, steel casings. there are not adequate rates right now. i think producers in the u.s., you have to remember, shale production is distributed and dispersed across many independent companies that are answerable to shareholders, not governments. it stands in contrast to suppliers in russia and saudi arabia, which are answerable to government policy. in the u.s., the regulatory buyer meant -- environment has not been friendly to shale producers. shale companies have not been able to produce returns, so they need higher prices on a sustainable basis. we are talking about prices plus 100 for a while, but they need to see that for three or four

months before they can budget accordingly. especially in this inflationary environment where other items will be higher as well. shery: you talk about regardless of what happens in the longer term, in the shorter term you're seeing a redrawing of the energy map. what does that look like and what are the implications for russian import -- input? tamar: we are having a conversation about energy policy in europe and the u.s. that is really constructive. longer-term i i think russia is at risk of becoming a pariah state. looking at venezuela or iran as comparable, they are mega oil producers who have been sidelined for many years. that is a real risk for russia as europe moves more towards u.s. natural gas for power.

we think their power market in terms of nuclear and other sources as they navigate their energy transition, there will be a long-term pivoting away from russia and interdependence between the u.s. and europe, particularly on the natural gas market. shery: tamar essner, always good having your insights. recapping the news that hong kong could be dropping mass testing as a priority in its covid fight. local media saying the government is considering a drastic shift in its efforts to contain covid-19 by cutting the number of deaths as a top priority instead of a compulsory mass testing. hong kong's death rate is at the highest in the world. we are talking a seven day rolling average of 27 deaths per

one million people as of sunday, according to bloomberg calculations based on johns hopkins university data. hong kong might be shifting strategy. let's get to vonnie quinn with first word headlines. >> a third round of talks between ukrainian and russian officials made little progress for the cease-fire. both sides say talks will continue. negotiations amid a growing humanitarian disaster. several attempts to create a safe passage for civilians has fallen apart amid mutual recriminations. russia will be one of the most sanctioned nations in 10 days following putin's invasion of ukraine. russia became the target of more than 5500 sanctions compared to 3300 against iran.

putin says the sanctions are akin to war. europe planning to end reliance on russian gas. the e.u. planning to cut imports from russia by 80% this year. the plan will be presented tuesday and could include plans to increase energy efficiency and tap new gas lines. warning the u.s. against building an asian bird out -- version of nato saying taiwan should not be compared to ukraine. the foreign minister's briefing on monday reiterated beijing is an important strategic partner. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: prices of rare earth

minerals have been surging with additional pressure from the war on ukraine. we are discussing that and its impact on supply with lynas. this is bloomberg. ♪

shery: the presidential election

in south korea could reshape the energy strategy with candidates having different views on decarbonization. let's ring in a research specialist. what are the main energy and climate change policy differences among the leading candidates? david: the leading candidates both agree on achieving net zero emissions in the long term, but there are different ways. the democratic party wants solar and wind speed to be the main drivers of decarbonization and transition to the 2035 target. the main opposition party wants nuclear power to be the main driver of decarbonization and support transition slower that would lower impact on car prices. he could revise down the 2035

target -- the 2035 target. haidi: the candidates compared to the current government? david: in 2017 one of the main campaign pushes by current president moon was his nuclear phaseout policy. this time around the candidates are more focused on the pace of decarbonization and new technologies. with the current situation in ukraine it is raising korea's car prices. there is high interest from the general public on how the new government will reshape energy policies and affect the voting this sunday. shery: as we continue to look ahead to that key presidential

election in south korea and all the various issues they will be contending with. russia's invasion of ukraine has upended world commodity markets, but prior, elements that were key for the manufacturing of electric vehicles, wind turbines, have been surging. we are joined by the ceo of one of the biggest rare earth producers outside of china, lynas ceo amanda lacaze joins us from sydney. great to have you in person now that australia has opened its borders and people are allowed to travel. how has the war and ongoing prospect of this conflict changed demand and a certainty when it comes to your business? amanda: a couple of things. concern about global supply chains was heightened with the pandemic.

i think humans being as there are, there was a great deal of interest, demand, that settled back a little, particularly among government. this morning the prime minister talked about instead of just in time supply chains having just in case supply chains. thinking about the ukrainian situation is a real reminder that we need to be prepared for uncertainty. global logistics systems have not recovered from the pandemic yet. we won't have any specifics -- specific logistics challenges because we do not have business in that part of the world, but we will expect that if the conflict continues or, god forbid, expands, our business will suffer many of the same logistics challenges, but we

will also be an important part of western response. shery: talk to me about the agility of the investment cycle. with something like this that brings questions about security, given that china controls such a big part of this market, does that change capex spending investment plans going forward? amanda: one of the really good things about being a human is human ingenuity. if we look at the response to the pandemic, five or six different vaccines developed within a year. that tells us that when we decide to do something, we can do it quickly. if there is uncertainty or conflict on the world stage, things we might think about

doing over a two or three year period when it is not resource constrained by money or humans, it will come in a shorter timeline. we already have governmental participation in our business and growth plans in a variety of ways. we have approved status facilities in the u.s. funded by the dod. japanese government is a senior secured lender to our business. we are closely in contact with the australian government. we understand how government can influence development and i think this crisis combined with the pandemic will see even western governments, who it is

not in their dna, we will see more of it. shery: do you think there'll be a bump up in defense spending for these governments and is that mean more demand for your products? amanda: even though rare earths are in every modern device, definitely they use it, the actual consumption of rare earth is relatively small compared to many other applications. you need them in every form of motor vehicle and the defense industry does rely on it. we are the only separator from

china. we hold a unique position strategically in the supply chain for all industries, including defense. shery: you talked about developments in the u.s. there has been uncertainty with how that is going and how the share price has reacted. there is local processing and investment going on. what is a better strategy? is it better to capture the local value chain? we saw that with nickel and lithium and other commodities lately. amanda: once again, this comes back to capital and the rate at which you want to execute. any time we add capacity, if we do it on the ground side, it will be faster and more cost effective and more value-added for investors. on the other hand, we balance that against the fact sovereign

risk and risk associated with these various international unpredictability says diversifying our footprint is a good idea, too. we balance these two things. any of us in business need to hold these two concepts in our head at the same time. we need to balance these things and at times accelerate money. the facilities we are building will allow us to increase throughput. it is taking time. we had at that time. maybe if government needed to fix things really fast. shery: great to have you with us, we appreciate your time. happy international woman's day.

that was lynas' amanda lacaze. breaking news crossing the bloomberg, the japan current account balance. it is coming through on the bloomberg for january, we are actually just waiting for those numbers to come through at the moment. 1188.7 billion yen when it comes to that january number. we were expecting a deficit for that january number. coming up, japan has one of the highest gender pay gaps in advanced nations. keeping wages down for everyone else. this is bloomberg. ♪

shery: japan's gender pay gap one of the largest among developed nations, but as they see a rise of the number of women in the work lace, there is a stagnation in wages for everyone. japan is heading into annual

spring wages negotiations. why is the gender gap a key issue for the country? >> it is a major reason why japan's wages have not risen in recent decades. japan is suffering from a lack of significant wage gain for three decades. one key reason, there has been an evident rise of women in the labor force on one hand, but at the same time, they are not being paid the same as men. there has been an increase in working women the last decade, but the reality is, they fill jobs that are more often unstable, part-time and pay less. female dominated perfections tend to have lower pay around the world, but in japan it is compounded because the gender pay gap is worse. haidi: what is the significance

when it comes to the new capitalism agenda? yuko: it potentially has major significance. the prime minister has made raising wages important to the new form of capitalism. without it it is hard to see how he can create that virtuous cycle leading to economic growth. closing the gender pay gap has the potential to raise all overall wages. shery: we are watching some stocks at the open in japan and south korea, many react thing to russia's invasion of ukraine. manufacturing suspended until further notice. nissan expects production to stop soon at its plant in saint peterson. -- st. petersburg.

other company's mutual funds have grown the list of growing lenders. the market opens in seoul and tokyo are next. this is bloomberg. ♪ this is bloomberg. ♪

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shery: welcome to "daybreak asia." i'm shery ahn. haidi: i'm haidi stroud watts in sydney. asia's top markets opened for trade. the selloff continuing in asia. u.s. equities seeing their worst day since 2020. equities surging amid putin's war on ukraine. the u.s. weighing a ban on russian oil.

they could act on their own with europe divided over the issue. beijing warns washington about trying to create an indo pacific version of nato. japan and south korea coming online under pressure with nearly every sector in nikkei on the red. the sector is down 0.4 percent. the japanese yen to weakening against the u.s. dollar past the 115 level. we saw some weakness, sentiments it would weigh on the trade balance. the balance came in higher than expected, the labor cash earnings for january beat expectations. look at jgb's, rising 1.6%. take a look at the kospi.

a third session of losses, down more than 1.5%. for the kosdaq, weakens after saying its worst day since june. korean authorities warned they are watching for speculative movements offshore as we head towards the presidential elections this week. we had already seen some numbers earlier today showing where korea is headed in terms of the economy. inflation numbers unexpectedly accelerated, that puts the bok squarely in focus. haidi: take a look at what has been playing out with trading in australia and new zealand. modest downside when it comes to trading in sydney. look at the breakdown, energy up

1.5%. it is now the biggest decliner, down by over 2%. we see health care and consumer staples balancing out some losses with modest gains. when it comes to new zealand, downside of over 1%. the aussie 10 year yield at 2.2 05. kiwi bonds falling in the early part of the session. the spike in oil prices spurring concerns over inflation this part of the world, and of drop in government bonds, tracking the drop in u.s. treasuries overnight. concerns over inflation and stagflationary pressures. the kiwi dollar holding steady. we would need to have the dollar rising for the third day, for a measure of greenback strength, as that continues to attract haven demand. as we watch developments out of

the russian energy band potential from the white house, the yuan putting on one point 7%. gold steady. we did see a volatile session for gold topping $2000, and back to gains. as a chance of the russian oil ban adding to inflationary concerns. the precious metal headed for a third straight gain. shery: for more on trading, annabelle. we are eying a bear market for asian stocks. annabelle: looking at research from bloomberg economics they say looking at countries most exposed to the fallout from the war in ukraine and sanctions on russia, out of the top 10, we are looking at five coming from asia. vietnam, the philippines, thailand, south korea and china.

these are all to varying degrees. what does matter is the driver's, particularly in energy and natural gas and oil. those prices as well as commodities like wheat. that feeds into food prices and inflation. there are factors in the market reaction we saw. asian stocks taken out in a bad day on monday. we are seeing losses as well. shery: where are we seeing gains? are we seeing opportunities yet? there is the scope for uncertainty in this scenario wid ening rather than narrowing. annabelle: it is interesting because there are some benchmarks that managed to outperform in the weeks since the war started.

these are in indexes linked to commodities. or commodities make up a large part of their benchmarks. canada has outperformed the last couple of weeks. saudi arabia is another index. you compare that to the benchmarks in europe. we saw the dax fall in bear market territory as well as the euro stocks. they are seeing the biggest fallout from sanctions, which is expected because europe does import the vast majority of its energy needs from russia. we will see how those stockmarkets do when we see futures opening in under four minutes from now. shery: let's bring in the asia equities portfolio manager at j.p. morgan portfolio manager in

asia. it seems consensus is there is greater uncertainty in terms of coming up to two weeks for this war after the russian invasion. how are you hedging? what do you do about the energy space? is it too early to say there are opportunities? aisa: the sharp rise in oil prices is something that caught us off guard. we are very light in the energy space. in the short-term, it will have an impact on the region. it may be too early to look for opportunities, but that is what we will do in the longer term. usually it opens up opportunities for us where we see longer-term earnings growth. definitely in the short-term it comes with a negative near-term impact. shery: we are also seeing earnings' downside as a result

of the oil story, across commodities, potential inflationary or stagflationary impact of the price pressures. does that play out for asia as well, or is this region more shielded? aisa: within the region there are variations as to commodity price. when we talk about asia, our focus has to be on china. china's growth rate has been softening. we just heard from the leaders there their targeted to .5% gdp growth -- 2.5% gdp growth, we are looking forward to increasing stimulus this year,

which will help the region. shery: any potential crackdown we may see in some sectors, like tech? aisa: last year that was a big impact to the market. i would not say we are over the tech crackdown or policies that affect those sectors, but i think we are in a stage where it has become more predictable. we are able to put those assumptions into our earnings numbers, for example. we think the fiscal stimulus, the effort to achieve the 2.5% growth would be a target for china this year. shery: whether it is exiting those risky positions, given those crackdowns in certain

sectors, as well as perhaps adding to their portfolio when it comes to more favored sectors like renewable energy and ev. what does the ukraine crisis and the spike in oil prices do to such sectors and the focus on renewables? aisa: this would certainly accelerate, not just in china, but across the globe. china is home to a major supply chain of renewable energy parst -- parts. this would accelerate that trend. as we have seen in the past, the shift to renewables will take time. the near-term impact of the oil price, it is hard to say that the renewable shift would cover all of that. shery: good to have you with us, aisa ogoshi.

let's turn to vonnie quinn with the first word headlines. >> a third round of talks between ukrainian and russian officials made little progress toward cease-fire, but talks will continue. the negotiations, amid a growing humanitarian disaster. 1.5 million people have fled ukraine since the war started. efforts to make safe passage for civilians has stalled. russian has surpassed iran and north korea had to become the most sanctioned nation in just 10 days following putin's invasion of ukraine. in a surge of action from u.s. and european allies last month, russia became the target of 5500 sanctions, compared to 3300 for iran. hong kong considering a shift to their covid-19 strategy with their death rate the highest in the world. they will focus on cutting the

number of deaths instead of mass testing. the seven day average rose 27 per one million people with 25,000 new cases and 61 deaths reported money. i new study says even a mild case of covid-19 can damage the brain and thinking. they found covid-linked brain damage especially in the region linked to smells with a also saw brain shrinkage related to a decade of normal aging. they link the changes to cognitive does klein -- cognitive decline. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, founder and ceo of market kurly sophie seula kim joins us to talk about ipo plans and how covid impacted her business. coming up, the latest on the war

in ukraine, and limiting reliance on russian gas and how the u.s. is closer to banning russian oil imports. this is bloomberg. ♪ ♪

shery: take a look at european futures, under pressure down more than 1%. germany, dax, both closed in bear markets as we see uncertainty over the russian invasion of u.s. -- ukraine u.s. futures down 0.1 percent. very volatile trading across the world. hackers targeted almost two dozen natural gas pipelines ahead of the russian invasion of ukraine. we have data that shows the attacks were the first to infiltrate the key sector. for more, let's bring in a senior foreign policy reporter. what do we know about these

attacks? >> i think what you are seeing is u.s. administration officials have long feared a key part of russia's retaliation to u.s. sanctions or a push to lay the groundwork ahead of an attack on ukraine would be a cyberattack. not entirely unexpected, but certainly from the administration folks i have spoken to, a disturbing harbinger of what may be to, as the u.s. wretches up -- ratchets up its campaign and nato has more troops and weaponry. it is not a situation where putin will fight officially, but cyberattacks are one of the ways he knows how to do that. shery: and what about cutting off gas suppliers? nick: this is a huge issue.

the german chancellor today saying cutting off gas supplies would be too much for european nations, it would send gas prices spiraling and would crush those economies. even though european nations have been really gung ho about ratcheting up sanctions, that is one place they say they do not want to bend. however, european officials say they are trying to embark on a plan to wean themselves off of russian gas and oil over several months. given the volumes, that is something that will take a lot of time, not something they could do right away without tanking their own economies. shery: china has taken numerous swipes at the u.s. as the national people's congress turned to ukraine and taiwan. one warned washington about

forming a nato-like bloc in the asian pacific, echoing comments from putin on eastern europe. steve, this is the annual address from the foreign minister to read what stood out to you? steve: he had every opportunity to condemn the war in ukraine by russia, which the relationship is being tested after that olympics meeting between vladimir putin and xi jinping where they solidified their relationship as having no limits. that is in question now with a war in ukraine. china is playing both sides. on one san -- on one hand, he supports humanitarian aid and assistance to ukraine and respects the sovereignty of ukraine, but said the relationship with russia remains rocksolid. the press conference was

centered on his criticism of the u.s. you mentioned the nato equivalent in asia. the u.s. building alliances with south korea, japan, australia, india in the quad. that is according to wang yi a bit of a threat. here is what he had to say about the issue in taiwan -- >> namely russia and ukraine. some are vocal about the principle of sovereignty on the ukraine issue, have kept undermining china's sovereignty on the taiwan question. this is a blatant act of double standards. steve: again, he said the relationship between taiwan and china is very different than the relationship between russia and ukraine because russia and ukraine are separate countries,

taiwan and china, not separate countries. he goes on to say expanded ties between washington and taipei would not only put taiwan into a precarious situation, but bring unbearable consequences for the u.s. shery: stephen engle with the latest on china, taiwan and that ukraine crisis. you can get a roundup of all these stories to get your day going in today's edition of "daybreak." you can customize settings to get news on industries and assets you care about. this is bloomberg. ♪

shery: here is a quick check of

the latest business flash headlines. gas bondholders said to receive dollar payments on the $1.3 billion payment monday. they received dollars even after vladimir putin issued the option of repaying debt in rubles. there were concerns putin's decree would disrupt the payment. one of europe's largest natural gas buyers will not enter into new long-term supply contracts with russia and they will resume the divestment of its russian subsidiary to recognize impairment loss on its loan with the nord stream 2 pipeline. russia counts for nearly 1/5 of their earnings last year. shall starting to limit payments of heating oil to wholesalers in germany. the company wants to ensure a can meet contractual obligations . in an email, shall said it could

stop selling at delivery points. shell operates two of europe's biggest oil refineries. boeing halted titanium purchases from russia last week. the airline manufacturer gets about 1/3 of its titanium from russia and was said to be stockpiling the metal recently. they do not expect long-term disruptions. airbus is still sourcing from russia for now and has suspended moscow operations. we are saying volatility when it comes to the oil price continuing to rise, pushing above $121 a barrel, and further downside from asian equities, the nikkei 225 down a further 0.25%. u.s. futures trading lower as well. asian pacific stocks seeing that

inability to find footing. so much of this on concerns commodity costs will increase inflation and stoke stagflationary and choke off the economic recovery from the pandemic. the topix is off by 0.5%. south korea there is the upcoming presidential election and the kospi down 0.7%. in australia, a reversal of fortunes and the energy sector, it was a big gainer, up five percent. now one of the worst performers across the asx 200. crude continuing to hold firm, up 1.5%. $121 and changes where we see new york crude tracking per barrel. a wild open to the week as we monitor any move out of the white house. the u.s. is considering that ban on russian crude exports. buyers continue to shun russian shipments over that continued war in ukraine.

gold pulling back a little, but this is after it hit that 2000 u.s. dollar an ounce. nickel trading in london. we had an extraordinary amount of volatility and swings, that surge causing nickel to lunge toward a record high, the supply risk out of the russia-ukraine war sending so much fear through the market as we see exposure to what is a historic squeeze. shery: take a look of the futures space, we are paring back losses with s&p futures flat at the moment after losing 0.2% earlier. we have seen u.s. stocks plunging in the new york session, losses of about 3% for the s&p 500, the dow losing almost 800 points. chinese dropping to five year lows. reversing gains we saw and under

pressure in the 10 year yield below that 1.77% level with the dollar redo -- dollar reversing gains after we hit the highest level

haidi: we're getting some breaking news, an extension on it nickel margin call situation, having been given some extra time to pay hundreds of millions in margin calls on monday. we've seen historic squeezes happening and were now seeing the reprieve that it is not

totally in default, according to people not to be identified as the matter is in public. it isn't necessarily an indicator of problems at the parent company. one of china's biggest lenders is more likely to make those margin payments. this may have let them struggling to arrange that payment. we see that huge swing for it nickel, jumping to a record high responding to that short squeeze. shery: volatile groups with the commodity index near that eight year high. annabelle droulers has more on this. we're seeing those gains being pared back a little bit in the asian session.

annabelle: just fractionally, west texas coming on line with at 1.3%. a lot of volatility remaining in the market and a lot of traders thing we could see more volatility price fluctuations ahead and that high prices could also be on the way. russia is such a large part of the supply chain, particularly in europe, and already were seen companies impose their own sanctions even though they are still just in talks and not actually in place yet. the question is how to replace those exports, something the opec secretary-general lady and on earlier. -- the secretary-general weighed in on earlier. >> it can replace 7 million

barrels of exports. >> it does place extra emphasis on the iran nuclear talks but there are places that will continue to buy russian crude, the likes of china, saying they will continue to purchase russian crude. other places could continue to import, but that does carry a supply at risk instead of sending it through pipelines. haidi: annabelle droulers there, are bloomberg markets reporters with the latest. let's get the latest on russian oil imports, what is the potential impact on markets?

>> i think the important thing is they have reached an agreement for a possible framework for oil and this is the first -- previously the oil market was central with traders and shipowners staying away from russian oil but now it could become official from the u.s.. it's not that big in volume, were talking about 700,000 barrels per day which is around 10% of total russian exports, but the market is keeping a close eye on whether this could induce follow-up steps from u.s. allies. shery: so you are saying if the u.s. goes a has and does this

perhaps european allies could eventually join. what sort of action could we see? >> i think the e.u. member countries are having a debate between its leaders on whether to ban russian oil and oil products. we were talking about earlier that u.s. is only 10%. e.u. countries could take it to over half of the russian oil market and that's a big chunk of the supply-demand equation. shery: of course we continue to talk about the outcomes of the global oil strike, the higher inflation, but it may not -- it could spur a global recession as well. kathleen hays has more on this.

here in the u.s. we talk about how gasoline is becoming more expensive. nobody will want to spend anymore. kathleen: it's a double edged sword. we've been talking about this, i love this chart on inflation breaking in the u.s.. we can see they've hit the tenure inflation breakeven, a record high. oil prices are up, they could go even higher to $200 a barrel. at the same time it's interesting because yield curves are flattening. the yield curve is actually coming down because of the fact that stagflation, growth and

inflation at the same time, and you see the recession of 1990, 2001 and 2008, those red bars, were all preceded by a doubling in oil prices. some people say what we are seeing right now is like the 1970's in the u.s., the oil embargo. the slowdown and then inflation that caused the big rate hike. it's a double whammy in terms of the effect on recession. if the fed starts raising rates, it could really be a problem, and not just a problem with the u.s.. europe will be hardest hit by the surgeon oil prices and natural gas prices as well. even in asia, a lot of net import nations, it will hit manufacturers and exporters. so it's hitting everybody around

the world and definitely something being watched not only by investors but by central banks. haidi: the trajectory that we thought most of the central banks were on. >> the ecb were expected to hike their key rate this week but there was a lot of conjecture that by september the ecb would be getting ready to talk about a rate hike for the end of the year, but we've been seeing today the 10 year breakevens in germany also at a record high. again on concern of rising oil prices and how that will feed through. bloomberg economics says the ecb will try to push out any expectation of rate hikes until the end of next year because of the negative impact on growth. the federal reserve meeting is next week. they're expected to do a 25

point basis -- 25 basis rate hike. you can see the expectation of the trajectory of fed rate hikes has really slowed down, probably fewer rate hikes this year and maybe next year. it's too early for jay powell to signal in terms of rate cuts next year but he will be asked a lot about the risk of reflection -- inflation and what it will mean on rate hikes which so many had been expecting before all this hit. haidi: kathleen hays there. vonnie quinn has the latest business flash headlines. >> sources say that use executive office working on a path to cut imports by almost 80% this year. the plan will be presented later tuesday and could include

increasing energy efficiency. china has warned the u.s. about trying -- against trying to build an asian version of nato saying it should not be compared to ukraine. the foreign minister said that's the real gold behind the strategy. he reiterated moscow as an important strategic partner. and predicting prime minister narendra modi's party will retain power, after the latest round of voting. the victory margin is expected to be tighter than five years ago with 80% of the seats. severe flooding has returned to australia's east coast for the second time in a week. evacuation orders are in place for 13 suburbs of sydney. people are being warned to stay home.

the intense rain increasing the risk of flash flooding. total damages are expected to top $1.3 billion. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: coming up next, the outlook for e-commerce amid the pandemic and fundraising ambitions. this is bloomberg. ♪

haidi: we're seeing improvements when it comes to the equity session, the nikkei to 25 adding to declines from yesterday's drop another .5% lower and the topix also seeing some of those declines. broader commodities choking the economic recovery that still negative because many economies coming out of the pandemic. u.s. futures when it comes to the equity side are seeing some wavering.

here in australia were seeing big volatility swings when it comes to utilities and energy in particular in the wake of continue to see that push higher when it comes to oil costs. oil continuing to add on some of those gains in the asian session after closing at a near 14 year peak stemming from that warren ukraine after the invasion by russia but also on the back of continued expectations and speculation as to what the white house with or without europe might do in terms of putting sanctions on russian energy imports. a broader impact on many companies, evaluation about $16. surging food and oil prices have

impacted producers and supply chains and the pandemic is playing its part as well. sophie, it's good to have you with us. first of all, just give us an overview of what the surging prices mean for your business when you're actually trying to bring some competitive prices to the market. sophie: thanks for having me, first of all. as you pointed out, we always try to provide the best quality at the best price, so we have -- what we have to do is get things right all the way down to the end of the supply chain. and then make sure we take out any of the activities we have in the middle. to make sure it runs as smoothly

as possible. so you have to get the basics right and the rest of it, you just need to leave it open to the market, i guess. shery: what is the market telling you right now terms of demand, as you continue to see rising prices and the pandemic raging on as well. sophie: i think at the end of the day there's always upside pressure, and food at the end of the day, we see that consumer trend shifting away from raw in -- raw ingredients to ready-to-eat and ready to cook. these products are less impacted by the immediate food price increase, so were trying to see how it impacts secondary products. haidi: what is your ipo timeline

and what would you do with those proceeds? sophie: we're carefully monitoring the market situation is a company, you would like to cap the market at the most profitable time. in terms of the proceeds, will continue to invest heavily on our technology and also the logistics necessary to provide value to shoppers who come every day. haidi: do you have plans to expand to -- expand to non-grocery products and what about expanding outside of the home market? sophie: consumers prefer to do nonstop shopping for many of their needs from a trusted retailer. it's one of the most trusted online grocery platforms. our customers have always asked for -- our customers have asked

if we could buy personal care items. we introduced these atoms over the last few years and it already accounts for over 20% of our total products. in terms of outside of the home market, we see a lot of potential coming in from the home market, so for now we focus on making sure we get our potential in the home market. haidi: when do you expect to be profitable and what would you expect the profit margin to look like? sophie: and a lot of the mature markets we are in, we are

already profitable. that means we've already proven our bays -- biggest model that can be sustainable. in the long run, in terms of market share, we think we can achieve high single digit operating profitability. shery: joining us on international women's day, we were speaking with a guest earlier from human rights watch who were telling us about the challenges of gender equality in south korea. give us a sense of what female leadership and what female challenges look like in start ups in the country right now. sophie: as you pointed out, there's not much representation from the female side of startups, less than 20% are

female. the number needs to be higher. for the number to be higher, you need a lot of support from society, and especially families. many female founders have difficulty -- one way to encourage female founders to achieve their dreams is to make sure that we have enough support from both society and the family. haidi: sophie kim there joining us, we appreciate your time on this international women's day. coming up, we saw u.s. and chinese shares experiencing the worst day in five years. this is bloomberg. ♪

shery: we are counting down to the start of trade in china and hong kong. shares falling to the lowest level since december 2016, losing ground for a fourth consecutive session. there is a lot on their plate for investors to digest, including concerns over inflation, the warren ukraine, rising covid cases in china and hong kong as well. this as were now eyeing a bear

market, the msci asia-pacific index down to its lowest level in -- since 2020. we had u.s. stocks plunging, futures at the moment not under that much pressure. what are we expecting in trading in china today? >> as you mentioned, traders have much to digest. people should have been more confident about chinese stocks but in reality, people have not seen much housing stimulus coming out and that is a very important part of the chinese economy. there is no concrete policy to shore up that's out of the

economy, traders are finding it hard to get into chinese stocks. it was underperforming the broader asian markets. in the case numbers yesterday, i think today we were expecting to see more. with lockdowns in major cities, port cities, all of these things are something that traders are really worried about. haidi: we also saw yesterday that china fell below a key technical support level. does that mean there is further pain ahead for growth stocks? >> for talking about the chinese, basically compelled -- composed of a bunch of startups

and stocks. battery makers and some others, solar panel makers are being dumped hard by traders, so those stocks are taking heavier waiting and it's having an impact. overall i think people are not very optimistic, despite the high oil prices. haidi: a look ahead there as we count down to the start of trading. also, one analyst saying the west is funding russia's war machine by not focusing on oil and gas. will have more on that and the latest from china's national people's congress.

what they will do to reach that 5.5% gdp target. that's about it for "daybreak: asia." as we count down to the start of trading in hong kong, shanghai, insurance and. this is bloomberg. ♪

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>> good morning from hong kong and also shanghai. welcome to "markets: china open." let's get your top stories today. crude, oil, gas, metals all surging, stoking fears that hiring -- inflation could choke the global economic recovery. goldman