>> good morning, we are looking down to the market open. our top stories this hour, the u.k. and america has banned russian oil exports and it will further strain crude markets. another follow from the ukraine war, new zealand positron and

the declining treasuries as investors buy up haven assets. south korea votes for a new president, it would manage relations with nuclear armed neighbors. >> we are seeing wti extending those gains we saw in the new york session around $125 a barrel. fossil fuels did send -- the ban on russian fossil fuels has sent prices higher. they will allow natural gas and coal, we are watching the developments around that space. s&p futures falling a quarter percent at the moment after turning lower in the last hour of trading. we are now seeing the u.s. ratings has been affirmed by s&p and the outlook is stable. s&p now fighting ratings on the u.s. reflecting the diversified

and resilient economy after the unprecedented fiscal stimulus we saw recently and they net general government debt. -- the net general government debt. we are seeing acid futures under pressure and we are watching the treasury space because we have 10 year yields jumping along with germany after the report that the european union is considering joint bond deals to counter the fallout from the war. >> we saw that fall along reactions when it came to australian bonds, it is extending that selloff this morning on these inflation concerns, the big news of the day, looking ahead to what we hear from the governor and his speech on the economy later on today, we have already seen that he has to talk about a rate increase, being plausible although really reaffirming that he can remain patient that they

can wait for the incoming data to arrive and be processed before they make that decision. we asked the market pricing for a rate hikes in 2022 and despite the position. a big sling to the downside when it comes to energy, energy at the open by over 3%, utilities down by 1.5%. over in new zealand, we are seeing a session highs at the moment of a quarter of 1% higher. -- .25 of 1%. higher. wti extending gains into the market session. russian imports, we look at the -- and do we continue to see much of a price reverberation across markets?

is it caught up with the trading we are seeing on the rumors? >> it was priced in heading into the day and a lot of people had heard that this man was a likely coming and it was announced as expected. wti closed up more than 3.5% which is a big game. nobody is expecting it to stop here. many refiners in the u.s. already stopped buying russian oil. it only accounted for about 3% of u.s. crude imports last year, 8% of product. it is not a lot but it is not nothing, prices could continue to rise here even though we have an indication this might have been coming. >> u.s. consumers already feeling the impact at the pump. the record high gasoline prices. >> gasoline prices are rough right now and people are feeling that, the average is around

$4.70 a gallon. that is the highest it has ever been, there may be some relief, a nuclear deal which may remove all into the mobile market -- oil into the global market. they may go to venezuela, and that is weird because they are sentient but they are looking more attractive because of russia. we are a huge producer of oil and there is a lot of oil in texas that is not being drilled, companies are sitting on drilling permits, waiting on signs from president biden to see if he is positive on oil. >> let us get more on the oil import bans from the u.s. and u.k., let us bring in jodi schneider. when it comes to the

geopolitical dynamic, how significant are these import bans? >> it is significant from the standpoint of this is a move to further isolate vladimir putin and russia on the world stage. the harm to the economy, that is the big takeaway, u.s. crude from russia only accounts for 3% of u.s. supply, 8% of total petroleum products. it is not a huge amount but the point that the u.s. is making is we are not going to buy any of your commodities. the u.k. will still buy coal and natural gas, but they will put in an oil pan. -- ban. they are trying to do the hundred they can do which is economic harm and even though it will need -- mina some pain at the pump in the u.s. and more

instability in the global oil supply which is going to have an effect on oil markets. >> we are seeing a bombardment when it comes to kyiv. what are we hearing about what the strategy is here? >> the strategy appears to be the same strategy that vladimir putin has used since they began the invasion of trying to bombard large cities like kyiv, stopping the resistance. to go ahead and do whatever they can in terms of artillery fire and hitting neighborhoods, whatever it takes to try to cause -- quell the resistance. we have heard from western military analysts that putin has been caught unaware by the amount of resistance and the unification that the nato countries and the west,

particularly the u.k. and he as would have in isolating russia -- and u.s. would have in isolating russia. he thought he could go in and take the cities and it would be surgical, the rest of the world were not going to assist militarily. they would just accept this but that has not happened on two fronts. the assistance of the ukrainians and the intent to isolate russia economically, we have seen mcdonald's and starbucks saying they will no longer operate in russia. >> let us get you to vonnie. >> raw materials in response to sanctions, vladimir putin signed

the order with details to follow on what parts will be affected. the kremlin has instructed the government to draft the sanctions in two days. retaliatory sections have been vague. the u.n. is planning to issue bonds to help with energy and defense spending. the proposal could be presented as they hold an informal server -- summit for size. versailles. a major chinese lender, sources say at least two banks held urgent internal meetings for their exposure on tuesday after regulators have data on their derivative holdings. india will resume scheduled

international flights after two years from march 27 and the arable arrangements. this is as covid restrictions improved and encouraging travel. indian carriers have already been adding max capacity. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. >> take a look at the historic surge in the commodities space. marching up higher, $125 a barrel after u.s. announced a fan on russian fossil fuel, the energy sector at the highest share since 2020, we see oil marching higher and natural gas is above that for dollar level. we see every sector in the energy space continuing to rally on these geopolitical tensions

as russia continues to invade ukraine. we are talking about the trade deficit in the u.s., the rhetoric on the energy imports, gold at the moment, muted, but above the $2000 level. the metal rallying to the highest since 2020, this would be a 19 month high above the 2000 level inflation, economic growth concerns adding to the price pressure. we are seeing palladium at a record high, platinum as well, precious metals continue to rally. russia is a major reducer of all of these commodities. >> inflation is top of mind, we have been hearing on the economy and the session, he is addressing these deadly floods we are seeing, it has ravaged many parts of australia saying it will lead to higher fruit and

vegetable prices from the impacts of the flood. a building from the flooded area will likely boost construction going ahead, saying additional cash from the high commodity surge is likely to be taken. there needs to be a better top of climate disclosures, he stresses the importance of patience, he talked about the possibility of a rate hike this year. off of the record low, he is reiterating the idea of being able to state patient and wait for the incoming data. we saw the bond markets declining, that was following the treasuries overnight as well. up ahead, why equities are bracing in a likely recession -- pricing in a likely recession,

and elections in south korea, what that means for the crypto industry. this is bloomberg. ♪

>> the rise in oil prices is something that caught us off guard, volatility, at least in the sort -- short-term is here to stay. >> you see the market is processing the unattended consequences of economic warfare. >> this negative feedback loop. >> it could take the s&p 500 down to around 3900 in the

short-term. >> in the longer term, a selloff like this usually opens up opportunities for us where we see longer-term endings -- earnings growth. >> asian markets already seeing the start of another day of jumpy trading, equities are collapsing. market strategist jessica joins us, great to have you. it is not much optimism in your outlook. >> it is not very good and something that has been exacerbated by the war in ukraine, we are starting to see clients wrap up the shift and technology and towards commodities. we are saying that intensify over the past 10 days. more or less, markets are indeed

pricing in a recession, we are pricing in slower growth, higher inflation. what does that mean? it means we are going to see commodities continue to rise. we are going to see trade balances get a bit out of hand. that is a major concern. >> how do you invest on that? how do you hedge against the inflation risk? >> the first thing is we are advocating that clients be overexposed to commodities, we are staying upside in european wheel and gas, also in u.s. oil and gas on the back of the announcement came overnight. we are seeing further upside in the markets. we are also stinger commodities, we are saying the upside involved. real yield now being completely

diminished on the back of out of hand inflation, we tend to see gold are performing and we are seeing the gold price chased down brand-new records and the all-time high, the gold price will continue. it will march march 4 become clients physically back gold and gold stocks listed as well as globally. >> that is why it is taking you to the commodity rich markets? >> absolutely. if you take a big picture, take a step back, the isx and brazil's markets are the only markets who are outperforming. the only in public trade, but that is highlighting it is not just those commodities that we spoke about. it is also -- we are seeing a chinese stimulus ramp up.

that is supporting the iron ore price and the other thing worth highlighting is we are increasing talking about building a diversified folio. -- portfolio. we have to be cognizant of what is going on and unfortunately, this means that we are seeing nations like germany increasing the portion of their spending so that they have raised a portion of q gdp boards military spending. we are indicating that clients should take a few in defense, military related stocks, unfortunately, as there will be a long-term trend. another thing to be mindful of, we are looking at logistics and stock securities, still holding

up in the way that the market is collapsing. >> good having you with us. the list of companies boycotting pressure grows with starbucks, paypal, and mcdonald's among those suspending operations. this is bloomberg. ♪

>> those who have not planned for it, supply chains and industries in our country and around the world is going to cause issues for anybody that thinks about trying to start wrapping up now. it is too late to do that. >> the president of occidental says they are facing level output, we are tracking the fallout of the supply chain crunch. the world top oil services says

it expects a profit hit as well as with logistics constraints. some analysts see the wheat market as broken and comparing it to highflying meme stocks with more than a quarter of supply effectively shut off by the were in ukraine, how that might alter the world food economy. a bipartisan group of 142 lawmakers are asking to secure 52 billion dollars in funding, for the chips industry. >> importers from london to warsaw will face longer delays and an obstacle course of sanctions to navigate as russia is widening the assault on ukraine complicates the movement of cargo between europe and asia, the high price of shipping

physical goods forces them to rethink if the demand for goods justifies the cost. bloomberg terminal users can read more in the newsletter on and i trade nl -- ni trade nl. >> starbucks and mcdonald's will close doors across russia, coca-cola and pepsi also halting business there. more on this, why are these -- what are these companies saying? >> they are ceasing operations and closing locations, there has been pressure for the past two weeks and some of them have come out and made statements before this but we are seeing more companies saying, we are actually stopping operations here, restaurants are closing.

>> how difficult is this decision for some of these companies given the political environment? is there only one way to go about this at the moment? >> sent is a great question, these companies have spent decades building up their global brand and it spent so much money doing this, so much effort and time, to stop operations, to close doors and halt sales, in a large area of the world is a huge deal to them. they face backlash, either way, whether they close or do not close. >> this is a difficult decision, especially given the backlash on social media for days ongoing in some of these -- and these companies having to relent. how difficult it is this to play around the reputational risk and

doing the right thing? >> that is a great point, there is a huge reputational risk of not saying anything but at the same time, this is a complex situation, especially for these companies. mcdonald's is a company that owns and operates its -- the majority of the stores in russia and ukraine, they have to consider their employees there. the impact on the labor market, the supply chain, the corporate map that they employ in russia as well. they have to consider all of that and the ripple effects it will have foreclosing. what i hear from people talking to experts is that these companies want to proceed really cautiously, they do not want to accidentally contribute to this humanitarian crisis.

>> a quick check of the latest business flash headlines, a china security watchdog and said to be packing a tech firm u.s.'s ipo plans. it is a crackdown on overseas listing, e-commerce giant is working with banks to revise the ipo which could be worth up to 20 500 million -- $25 million. it will be allowed for companies that meet certain criteria. apple introduced 5g versions of the low end iphone and sea and air tablet and the mac desktop computer at a virtual event on tuesday. it included a new apple processor which the company has called the most powerful personal computer chip ever. google has agreed to purchase cybersecurity company -- a cybersecurity company. it will bolster the technology

giant's cloud computing business. there is a lot more to come on daybreak asia, this is bloomberg.

>> the conference taking a hit, consumer confidence from march, falling to 96.6 from a prior rating of close to 100. we are seeing the decline of just over 4% month on month for the month of march and continuing to watch that as being key given that we have had to steadily flood which is impacting consumer confidence at retail spending as well. talking about the need to remain

patient but acknowledging that given all of the inflationary pressures and global economic uncertainties that we could see the possibility of a rate hike later on this year. part of the inflation story is the global oil price hike, continuing to reverberate in central banks around the world. threatening to take a bite out of global growth. kathleen is here with more, we heard from them come opening the door, reiterating that he is patient and the market is pricing in five this year. how will this play out and what is he trying to juggle here? >> he has opened the door to rate hikes and there are many things he is watching. in keeping with his sense of the oil price hike, what it means for the global central banks, he also said that he is watching the supply chain shock from the oil price spikes, from the war

in ukraine is self and he says that he thinks the main effects from ukraine will stem largely from this and higher commodity prices. he is sensitive to that aspect here and that will have something to do with what he would do in terms of rate hikes. when you look at your -- where inflation is now, that is the first thing people are looking at. there was criticism from the former treasurer of australia saying that the rba is behind the curve. when you look at inflation, it has moved up, that chart showed you that the headline inflation, when you do not take our food and energy is over 3%. it is outside of target. what is also interesting is as you just mentioned, what phil roe is worried about, what

economists who are looking at the rba are worried about is the inflation moving up, why do you not hike rates because you are confirmed by the impact on the economy -- concerned by the impact on the economy? inflation was lacking and there was no reason to think about hiking rates, wages are starting to show a bit more oomph. traders are looking for rate hikes. when he talks about patience, the ukraine war, commodity price spikes, that is what he and others are waiting to see. >> this is putting china in a difficult position when it comes to achieving the ambitious growth target. >> isn't it funny how the economy guards will get you when it seems like an aggressive growth target, weight lower than it was, it is still higher than

most economists are looking for. rising oil prices means and there needs to be more government spending with the government has already promised. maybe even more rate cuts or monetary stimulus. the problem is if you have oil prices going up, you are going to have a harder time doing that and not worry about boosting your consumer prices which are so comfortably low. china figures we have high energy supplies and good ties to russia, they'll give us a discount. we have the low inflation rate, that is why they do not seem to concerned. let us look at the chart because we are waiting for the cpi, you can see there that the producer price index is supposed to fall, 8.6 percent in february from 9.1

in january. the cpi is steady at 0.9% there is not a central bank in the world who would not be pleased to see inflation rate like that, even though there is a difference between that and other central banks, they do not have some of the problems with the super high inflation, the ukraine war, searching -- surging prices is complicating things for them too. >> when it comes to the oil shock and the war in ukraine, it is having physical your -- fiscal complications for europe as well. funding energy and dispense -- defense spending. francis zimmerman told bill burck that nothing is off of the table -- told bloomberg that nothing is off at the table. >> has oil markets, that is on

the table, the possibility of sanctions there. this will be something that will be discussed by our leaders next thursday and friday in versailles and paris. nothing is off of the table below are not taking the same position as biden is taking today. we have announced we will reduce natural gas imports by two thirds before the end of this year. >> i am wondering about the funding to do so, you said when asked about the bloomberg report about point -- joint debt issues, you said that the eu had no plans to do so. how do you make this transition and shift away from the dependency on russia? >> a lot of what we are doing is already in our plans, that we have presented in our recovery and resilience plans we discussed with our member states. i am sure that our leaders will come back to the issue of

financing next thursday and friday. this enhanced energy transition we will now be going through, the need to revisit some strategic choices we need to make, the world has changed on the fourth of february and we need to bear the consequences of that and that will have financial consequences. this is typically for our leaders to discuss later this week. >> you are not saying this is off the table. it could be discussed, some sort of joint financing to deal with the current energy crisis that europe is facing, it could be discussed in our sales -- versailles? >> it depends on what the french presidency will bring to the table. let me be clear, we do not have the luxury to say anything is off of the table as of the 24th of february.

we are confronted with a russian leader who has invaded a neighboring democratic country. this is a threat to our collective security. i am really happy that we have found such common ground with our transatlantic allies and we have been working, putin tried for 20 years to create division in europe and between the u.s. and europe and he has failed completely. we are more united than ever before, we do not have the luxury to say that some issues will be off of the table. we to be able to confront everything and there should be notables in terms of finances. >> the first vice president speaking with bloomberg. >> the european union discussing new sanctions targeting russia's national wealth fund, more than

a dozen wealthy individuals, the eu is discussing banning russian maritime and land transport as well as access to european reports. germany has expressed concerns about the destruction that would cause it to non-sanctioned trade. $29 billion in an auction, it will be spent on the military and assistance to russia's invasion. the body heals have a nominal value of about $33, that is in line with other ukrainian debt sales. it is considered extremely low for war bonds -- bonds issued by a country in the middle of war. trading was suspended following the unprecedented surge in prices, plm 80 says trading does restart, it expressed to open for -- it says it will be open

for european trading only. it will take care of outstanding short positions. a chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in losses after the metal surged 20% in two days. he controlled the world largest -- world's largest nickel producer is considering to exit the bat altogether. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. >> more than 14,000 falling stations open as of korea heads to the polls to elect a president that will steer the economy. ♪

>> we are getting some lines from the opec secretary-general, that there is no physical shortage of oil. this is from our interview with the secretary-general, he is saying that there is no physical shortage of oil as we continue to see surging prices. wti holding above the 100 what he five dollars a barrel level

-- $125 a barrel level. opec will continue to secure supplies in the physical market. we have seen opec continuing to increase supplies, gradually as was expected. sectarian general saying that there is no physical shortage of oil and telling bloomberg that opec will continue to supply the physical market. >> south koreans head to the polls to elect a new president, let us bring out the editor -- . do we see anyone in particular having an edge here? >> the final polling according to the election released last week showed that the conservative opposition

candidate was slightly ahead of the progressive ruling party. one of the minor conservative candidates has dropped out and shown his support to the first which makes him a slightly ahead but the polls have shown it has been a net and net race. -- neck and neck race. many in south korea are not enamored with either of the two top choices being offered. >> what are the key issues that south koreans are looking at right now as they head to the polls? >> one of the key issues is the price of housing which has exploded during the current president, apartments 80 s

oeul have doubled--apartments in soeul have doubled. this is an area outside of the city, it is also seeing rising costs for housing. there are things people are saying in the pop-culture such as this divide between the have and have-nots and a lot of people feel that they are being left behind. they are not able to catch up with the people who are on the death elite and privileged track. we have a very similar set of factors going into this race which makes it really an unpredictable race. >> south korea presidential candidates are trying to woo voters by using digital assets. we discussed this with the

greater of one of the largest crypto descriptors in south korea. what are you expecting out of this election? >> i think -- first of all, thank you for having me. i think that the crypto industry is going to move forward. whatever or whoever wins, i think that the policies that they are proposing are very bullish and the policies are realistic. green politics is extremely receptive to popular opinion and 20% of our population are crypto holders. policies against it will be harder than introducing wealth taxes for 1% of the population. crypto is regarded as a legit asset class by the political and

financial community. the policy driver crypto is going to be stronger. -- four crypto is going to be stronger. one risk is going to be a nationwide scandal involving crypto. unless there is a large scandal that could upset voters, at a magnitude like impeachment, i think this is going to stay intact and move forward. >> do you see the likelihood of that happening given that we have seen sauternes of public sentiment when it comes to korea, especially with income inequality being a big issue and a very small number of people profiting from this utah rallying in cryptocurrencies, 20% of the population, we are talking about agency and the younger people, right? >> yes. all in all, i think for the

people in the 20's and 30's, what crypto is is a help. people want to live in the crypto community because the cannot find a space for themselves -- they cannot find a place for themselves in the real world. people who held it, they became better off. >> do you expect policy changes after the election and how does that potentially change decision-making investments for your business? >> i think what we have been doing has always been popular. what is going to change is first of all, they have been discriminating crypto assets into stock investors, etc.. i think people address it and on top of that, we will be more --

there will be more measures for consumer protection which we will be marketable with. also, potentially, following the capitalistic tradition of the asian tigers, there can be policies that promote positive net capital info on the crypto end. like regulation. >> sorry i wanted to talk about the decision to join the list of asian crypto platforms to target russian account holders, can you talk me through that decision and how you reached that point? >> we did it almost immediately after the war broke out. it is the right thing to do. secondly, i believe that it is easy, some exchanges given their libertarian stance refused to do

so, but in our case, we believe that it is the better way forward and advance into the mainstream. liberty is only valuable if it benefits the most and if libertarianism is not there it disregards human rights. >> it was good to have you with us, thank you for your time. we are watching bitcoin prices continue to hold gains in the asian session. breaking news out of japan, we are getting gdp numbers, annualized order growth of 4.6%, fully interesting, this has been revised down more, the expectation was it would be revised upwards. we saw a boost from private capital expenditures but that is not happening. we are now seeing annualized quarter on quarter growth of 6.6

percent and the estimate was 5.6% when it comes to the headline quarter numbers as a growth of 1.1%, missing those expectations and also that preliminary estimate, perhaps because we have seen the steeper drop in blood investment in the fourth quarter, that could have led to some of those discrepancies between the preliminary and final number. the fourth quarter growth number four japan is -- for japan is a lower considering the preliminary number. it is still a rebound from the fourth quarter, we saw a contraction of more than 2%, we watch those numbers given that japan continues to deal with virus restrictions as well as more spread of the omicron variant. we have more to come, this is bloomberg. ♪ >> when you get to the kinds of

prices we are dealing with today, you are starting to encroach upon the area where demand is starting to -- demand destruction will start to occur, motorists filling up cars or heating their houses, this is a level that consumers will push

back a little bit. we have seen it in the past. >> every lng facility has been letting flat out since the fall of 2020 when prices recovered after the pandemic. i could imagine for the short-term, it is not good for our environment, but the short term, their only choice is getting through next winter. >> speaking to bloomberg on the sidelines in the conference in houston, texas. mcdonald's is closing all of its locations in russia following criticism that it failed to act quickly after the invasion of ukraine during the fast food chain says it will continue to pay employees and it cannot print it when it will reopen the restaurants, they have also shut the locations in ukraine.

coca-cola and pepsi have both suspended some business and sales in russia, it will apply to soda drinks and advertising activities, it will continue providing products like milk and baby formula for humanitarian reasons. coca-cola did not specify which products would be affected, 2% -- it was 2% of coke's operating revenue. we are watching when japan opens for trading in a few minutes from now, holding onto investments in russian energy projects for now, they plan to buy back 70% of shares for around 175 million dollars. mishima plans to part with its entire stake. we are seeing another round of volatility when it comes to trading in asia, we had an

attempt to rally into the close but futures are slipping as we continue to see upside pressure on oil prices. this is bloomberg. ♪

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>> welcome to daybreak asia. >> the major markets have just open for craig, our top stories this hour, the u.s. and u.k. have a band of russian oil imports to squeeze president putin -- have banned russian oil imports to squeeze president

putin. beijing abbe by stakes in russian energy firms including the gas giant gasprom. >> we are seeing some upsides for the nikkei, which is higher by the consumer discretionary and consumer stocks, we are seeing the rebound after geopolitical tensions and they were in ukraine have intensified the flight to safety. the japanese yen loses ground against the u.s. dollar, this is as we are seeing the inflation expectations keeping the outlook for heights -- hikes in u.s. rates and that keeps the japanese yen of lower. we did have the fourth-quarter gdp growth numbers coming in, 4.6% in annualized basis which

is slightly below what the preliminary numbers were showing. korea today is away on holiday, they are headed towards the p olls on the election day -- on this election day. >> the chinese inflation number, the big risks to look out for, in australia, we are seeing a good session i miss all of the volatility. -- amid all of the volatility. 2% gains, technology staging a rebound of about 2% as well. we have been watching the movies when it comes to australian bonds, declining on the global inflation concerns as well as tracking the selloff we saw in treasuries as well. we had australian sentiment australian consumer

sentiment coming through, and a lot of concerns over the pandemic and the localized flooding and the war in ukraine weighing on sentiment. also, watching currencies, a bit of a pullback after strong gains when it comes to the kiwi dollars. it doesn't look like we are expecting to see more volatility ahead, futures taking a bit of a slight but s&p features are starting to fall back to a little bit of a cane, watching the 10 year yield, after the selloff in treasuries overnight. fueling inflation concerns and seeing the big move as well, when it comes to new york crude, we saw some gains and whether the prices we are seeing have sufficiently priced in some of the impacts of the u.s. and u.k. van on russian -- ban on russian energy. >> on how the asian trading

session or impacted by those oil import bans, mark we are seeing the korean won rebound. we are seeing the in the past, the u.s. dollar is releasing its first dropping in four sessions, the submission from all of the geopolitical tensions being played out in the effects side of things. we are the biggest moves we are expecting to see -- where are the biggest moves we are expecting to see in regard to import bans and so forth? >> it will be the commodity space back in focus, the sanctions are well telegraphed and were not as severe as some people had expected, that is why you are seeing more calm this morning. the bigger issue for markets in the near term is about margin

calls. this is exemplified what you are seeing -- by what you are seeing in the market. because of the extreme movements in the market, there is a particular story that bloomberg is running about one and nickel trader who is extremely short of the market and is having difficulty in meeting margin calls, all of the major exchanges increase the market requirements in recent days, this is a real headache for people involved in the market, we have seen extreme moods in crude oil, wheat, positioning has become extremely stretched. this is where risk management takes over and telling people to close out positions and that as to short-term volatility. -- adds two short term volatility. >> does it feel like with the --

does it feel like we have a proper level of activity? >> it is extremely high and very stretched by recent standards. so far, a lot of the terms have been very hard for people to forecast -- twists and turns have been hard for people to forecast. it is understandable, people are having difficulty in making sense of it. the nature of the developments of not going according to what people had originally thought. all of that uncertainty will just give people even more reasons to be cautious in the weeks ahead. it does not mean that we have seen the end of extreme moods. the commodity complex is something that a lot of traders in the rates of market and effects market are not used to understanding what happens in those places. when they see headlines coming through, oil prices jumped 10%,

it gives a lot of reasons to adjust their positions in other places and we have not quite seen the end of that scenario yet. >> another look at the markets, let us bring in the ceo of aim, mainly serving south koreans. great to have you with us, tell us about the levels of volatility you have been seeing. >> we are seeing the volatility picking up and what we are seeing now is not a surprise. what is helping us is the dollar is gaining against the won. we made some sectoral rotations into energy stocks at the end of january. volatility is bound to come, we

will see a lot of short-term talks, factoring in the korean presidential election happening today. the cycle market application, watch out for your portfolio drift on top of -- i will talk more about that later. >> what are the big portfolio rebalancing moves we are seeing? it is the prefers -- is preferred hedge two lumbar energy -- to go long on energy? >> gold commodities, real estate, have your target asset allocation, in our case it is 10 percent or 20% alternatives. in equities we are seeing growth opportunities with inequity. inflation is coming, you are

still searching for making active bets. in our portfolio, we are keeping assets, and seeking the equities market and also through some active bets and sectors like energy. we keep energy exposure for the time being, we will closely watch how much drift that asset gains over other asset classes. we will rotate out slowly in the next six months. >> you mentioned the risks and potential outcome from the presidential election and that brings us to the question of the day which is what we are watching, the south koreans heading to the polls. what do you see the major risk for investors during the election season in asia? we are looking at the potential new chief executive in hong kong

with poles set for may, we are also looking at japan, can he complete the election wins? a number of other risks coming out of china as well. presumably, the president will achieve the unprecedented third term. >> if you look at your market perspective, -- pure market perspective, how to control money supply, especially in asia, export industries that are heavily influenced by european policies and the sentiment that voters feel. all of the policies are in the standstill mode and depending on how much delay has happened in the execution of the right

policy, it can have a longer-term impact. especially for instance in korea, the housing bubble. how do you taper command and time the taxation changes? there is always the rosy pink propaganda policies coming in. people have different perspectives about korean being promoted. that will point it out. >> of course, there are so many different risks and many factors to consider, but what is interesting about korea is the role of the retail buyers. you see during the episode of geopolitics, globally, we continue to see all of the retail buying. do expect that mentality of the buying strategy to continue this year? >> yes.

you are seeing some flights to safety for investors. you have to get the recent trends in the past two years, people got into tesla stock, people have very strong stocks covered. they are going to into this negative asset classes and sectors -- speculative asset classes and sectors. it is a kind of irony, if you feel, where do you go along versus speculative and come in and out? learning that in the ant market and it may not be as positive as they would like to think. >> words of caution there, we are watching some of the stocks over in japan, a bit of downside pressure as the company holds

onto its russian energy products -- projects for now. i think is plenty to buy back around 90% of its shares for around $155 million dollars. >> russia responding to sanctions, vladimir putin signed the order with details to follow up on us will be affected. the government is preparing a list of countries for deeper restrictions in two days. retaliatory sanctions have so far been vague. the european union is discussing new sanctions that would target russia's national wealth fund, over a dozen wealthy individuals and more than 140 members of the russian parliament. the eu is also discussing

banning russian maritime and land transport and access to european forts. germany is worried about what that will cost to nonsanctioned trade. wild claims in commodities that emerald and major chinese lender, at least two banks held urgent internal meetings about their exposure on tuesday, regulators have asked a major state claims to provide data on derivative holdings and losses. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. >> still head, north korea and the pandemic and the run-up to the south korea presidential election, we speak to a candidate. the war in ukraine, banning oil

imports from russia, the eu is considering a new round of sanctions. the latest, next. this is bloomberg. ♪

>> let us take a look at futures, we continue to see a mixed picture when it comes to the asian session. s&p 500 seeing features flat at the moment -- futures flat at the moment. euro futures up by 50%. we watch the reaction when it comes to the inflationary pressures being gauged after the ban on russian energy by the u.s. and u.k..

potentially a bond issuance and purchase program there as well. we are seeing a further upside, crude trading at a 2% high. read crude holding close to -- red crude holding close to shanghai composite125 dollars -- >> we are joined by white house reporter -- eight white house reporter. a white house reporter. how are they feeling they supply ban? >> that being said, even though

russia is not such a huge energy exporter to those two countries, they will have to find a replacement for that energy in the u.s., those exports made 8% of those supplies. the u.s. has turned to countries who are traditional adversaries like venezuela and countries who have strained relations like saudi arabia and the uae to persuade them to either produce increased production or increased exports to the unit states. -- united states. >> moscow will be inflicted if europeans enjoyed -- join the embargo, is that likely to happen? >> the europeans are going to try to do this gradually. continental europe is too intertwined with russia in the energy market for this to happen overnight. even the u.k. would try to phase

out russian exports by the end of this year. i would not look for that in the near term, there will be a lot of pressure if putin keeps up this invasion for the europeans to do more from the united states and others to cut down their reliance on russian energy. >> an oligarch has sent western europe has been dependent on russian oil and gas for far too long. he told bloomberg it is time for the eurozone to diversify supplies so that green energy alone will not be sufficient to flood -- plug the gap. >> the issue is -- i reiterate, it is not a matter of stopping the war. you need to stop money rolling into masha -- flow into russia.

western europe has made a huge mistake, becoming a dependent on russian oil and gas and forgot the alternative energy sources. i mean a nuclear and lng. this was a huge mistake at the time and something has to be done about it. green energy alone will not be sufficient for western europe. as for russia's ability to supply oil and gas to china, there are limited because of transportation costs alone and russia is not on good terms with china. the latter would pay the same price as the west. the global nature of the energy market means there will not be not much affected by this. >> china's commodity soe's

have a different take from what western allies are doing. let us bring in stephen in hong kong, what are sources telling you, especially when it comes to china's stance on russia given the invasion of ukraine? >> it is a tricky one. china has put a huge priority on energy commodity, food security in these volatile times. they have not backed down from the no limits relationship that xi jinping and vladimir putin had described before the olympics. china doesn't need to have these commodity imports -- does need to have these commodity imports of oil, gas, and coal. it will be interesting to see how this plays out and whether it could potentially be a violation of a broad range of

sanctions. people familiar with the situation is saying that turn is considering buying or increasing their stakes in russian firms such as gas giant gazprom. the government is said to be already talking with its commodity esso ease -- soe's. they are exploring potential investments in russia. we have to see how this plays out, but bloomberg news did report that top government officials have labeled energy and food and commodities as a top priority. >> the nickel story, losing millions of dollars in market losses, what is the situation here? >> you do not get to nickname --

get a nickname of being a big shock without being meek. he is an aggressive player in the commodity space. he runs a holdings, a nickel company, he built this massive short position in nickel futures. he is struggling to pay the high margin calls. the exact scale of his losses are unclear but essentially the short position could be in the region of 100,000 tons of nickel or even larger based on intermediaries and their accounts. we could be talking about more than $2 billion of daily losses after the two date run-up in nickel prices. -- day run-up in nickel prices. >> plenty more to come, this is bloomberg. ♪

>> take a look at how the markets are trading at the moment, we have the presidential election day holiday but the nikkei is gaining ground by consumer discretionary and energy stocks. u.s. features rebounding after the s&p 500 loses ground in the wall street session. i surprising energy -- it is surprising that energy is the big leader. the korean won is rebounding from the low. the japanese yen losing ground against the u.s. dollar.

interest rate hikes are ability rate differentials play into the affects space. the ruble continues at the record low. 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.

♪ vonnie: this is "daybreak asia," on vonnie quinn with first word headlines. the u.s. is banning russian fuels including oil and a major effort to hobble the russian economy. the washington move will be matched in part by the u.k., which is banning russian oil imports but will continue to buy oil and natural gas -- natural gas and coal from the country. >> we are enforcing the most significant package of economic sanctions in history and it is causing sick if it can damage to

russia's economy. it has caused the russian economy to frankly crater. vonnie: you can -- ukraine has raised 220 $9 million in its second auction of war bonds. the money will be spent on resistance to the russian invasion. the individual bonds yield 11% and have a nominal value of $33, in line with other recent ukrainian debt sales, considered extremely low for bonds for a country considered at war -- a country at war. the european union is considering to finance bonds for energy and offense spending amid the fallout from the war in ukraine. sources say the proposal could be presented after the leaders hold an informal summit. we are told officials are working on the details including how debt sales would work and how much money they intend to raise. the london metal exchange says it doesn't expect to open the nickel market before friday.

training was suspended following tuesday's unprecedented surge in prices. when trading restarts, it expects to open in european hours only to begin with and set a 10% limit on price moves and to try to reduce outstanding short decisions. 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: china, counting on its close relationship with china to help it either the surging global oil prices, which threatened to boost consumer prices. bloomberg economics and policy editor kathleen hays is here. kathleen: inflation numbers are probably going to be not bad. we will get to it in a minute what is interesting about china and inflation in the oil price

spike is that they are at a crossroads. they has to booth -- they have to boost growth by adding stimulus, but oil prices spiking, doesn't that challenge your ability to do that? china says we are insulated this because we have high levels of domestic energy supplies and long contracts that protect us. very strong ties to russia in case you hadn't noticed. if we need discounts, help on that front, they are surely going to give it to us and we go into this with our consumer price index and key inflation measures looking pretty good. so, that is why they don't seem to be worried on the surface. but again, rising oil prices in and of themselves are going to make it harder for them to get by with less stimulus. they are going to need more to hit the 5.5 percent gdp forecast, very aggressive barclays figures the global oil price spike could got 0.3% to

0.5% of a percentage point, a mouthful of words, off the 2020 to gdp. that is a big amount to take off when you are trying to get 5.5% in most economists don't even think you will get to 5%. the fact the fed is going to hike rates will make it tougher for the pboc to provide stimulus and the suitor the fed hikes and the more aggressive they get, that is another thing that is what to make it more difficult. haidi: what this today's report tell us about china's inflation dynamics? kathleen: first of all, this is a february report. the invasion of ukraine was february 24 and what prices were already rising as people got were concerned generally would invade ukraine. nevertheless, so much of this oil price spike, crude oil at $130 per barrel, has, in the

days after the start of the invasion. bear that in mind, that this report is not going to fully reflect what we have seen in oil prices over the last weekend i have. -- week and a half. that's go back to the chart, i nt you to focus on the cpi. it is expected to rise to 1.1% in february on 0.9 percent. any central bank around the world would die to have such a low consumer price index. nevertheless, the gain in february was holiday driven, food and energy costs rising. but now, when you throw on the expensive pass-through of higher global oil prices, imagine what the march number start looking like. on the consumer price index, it is expected to fall to 8.6% from 9.1 percent, year-over-year comparison. last year, electricity got expensive because coal got so expensive, shortages, china has

gotten past those and that is why the cpi's expected to come down. but again, look forward, look at the globalized oil price spike. that's go to feed into producer prices as well and that is a concern. for today, we are getting a good encz mark to compare what we saw in february and how well-behaved it was, to what we might see in march. haidi: kathleen hays with a look ahead at the chinese inflation print. the outgoing opec secretary-general says there is no physical shortage of joy even as the moscow or on ukraine field a surge in prices. speaking after the u.s. and u.k. announced bans on russian oil imports, the secretary-general told bloomberg exclusively opec will continue to guarantee supplies. >> we decided that blessed year, it was time for us to bring back to the market 5.8 million

barrels a day. the last tranche would be 9.7 billion -- 9.7 million barrels that we withdrew from the market at the height of the pandemic. and we made the decision to come every month, bring back 400,000 barrels a day. and we are continuing, but it is also noteworthy that not all our never countries are able to fulfill their obligations, even their monthly obligations, because of capacity constraints. we go to the massive underinvestment. the underinvestment is not only in the united states or europe, it is globally. it is a global challenge that requires a local solution, and

we will continue to mate come at do whatever we can to contribute in mitigating this catastrophe that is facing the global energy industry. >> are you still in conversations with the russian energy minister, alexander novak? can you shed light on the negotiations? >> yes, i have been in contact with alexander novak after the breakout of hostilities on febrile bird 24th -- hostilities on february 24. we discussed the situation as of that time and he assured me that they will continue to cooperate with opec, they will continue to participate in the opec

declaration of cooperation -- the opec-non-opec declaration of cooperation. haidi: the outgoing secretary general of opec speaking to bloomberg. up next, rimage corporation's soo kim --the rand corporation's soo kim joins us to discuss geopolitical ramifications. this is bloomberg. ♪

♪ shery: south koreans are set to elect a new president after the phthisis campaign since the shift to full democracy 35 years ago. the democratic party candidate lee jae-myung is calling for investments in green energy to reduce nuclear power, a formal end of the korean war and additional radar to counter china. his opponent, yoon suk-yeol is from the conservative people party power candidate who supports nuclear power. investors will be keeping a close eye on the korean yuan to any reaction. the currency fell to a 2020 lug just before election day and is at risk of falling further.

north korean chairman kim fired two rockets in the past few days and seems to be resuming work at main test sites for the first time in years. let's bring in soo kim, rand corporation possibly -- policy analyst and former member of the cia. good to have you with us. how big will foreign-policy shift if we go from this progressive administration to a conservative one? soo: the expectation is that, with a conservative administration, we are going to see recalibration toward a harder line on north korea. i think that is going to be possible. but i also think that in light of all these other geopolitical issues, it is good to take time for a conservative administration to bring back inter-korean relations and our dealings with north korea on the nuclear issue, back to where it was circa three trump

administration. shery: how is the ukraine war affected the narrative inside south korea as we head towards the vote? soo: of course, it is going to shift the dialogue, as in any country dealing with not just the broader implications of the russian-ukraine war, but questions as to what would happen to south korea if, let's say, north korea were to ramp up provocations to a point where we see armed confrontation between the koreas? and i think that is going to encourage people to think about security. economic security is important, but we have to think about how well south koreans will be able to fend for themselves if a bigger crisis erupts on the korean peninsula. haidi: are there already

implications for u.s. influence in the credibility of the u.s. alliance in asia, given how we might expect your situation to play out? soo: i do think that, in some circles of the elite, there are concerns about potential backlash on the alliance. as i mentioned, let's say there is a crisis on the korean peninsula, would the u.s. be able to assist south korea in the way south korea expects it? we don't know what is going to happen, but we have the alliance that has guaranteed south korean security for seven decades. there is going to be hope this will sustain the relationship and also sustained south korea's security. obviously, it is natural, i think, for south koreans to doubt the u.s. security guarantees. but i do think that the alliance, due to the time it has

taken to preserve the alliance and relationship, that south koreans should be in good shape if something were to happen. but nobody knows what is going to happen. haidi: what about the role of china? soo: so, china is the sticking point, i think, and south korea's relationship with the united states. south korea does not want to take a firm position either way. the security alliance is the most important thing. but you can't ignore economics. and we know south korea enjoys a robust trade relationship with china. and for south korea to take a firmer position either way towards the united states on security, they are going to be concerned beijing is going to show a backlash similar to, let's say, the thaad incident. let's say we do see a

conservative president. the expectation is that we will see south korea be more unequivocal toward the alliance. but on the flipside, i don't think this resetting of south korean foreign policy is going to take overnight. south korea has to take into consideration not just security needs, but also the ongoing crisis with coronavirus, the russia-ukraine crisis and many other things we haven't anticipated until now. shery: how does korea play into president biden's indo pacific strategy announced last month? we have reaction from beijing warning against an asian version of nato. soo: hopefully, korea will play, i wouldn't say a leading role in indo pacific a strategy, but i do think that because of the seven-docket alliance and south korea's growing stature that there will be a role and an expectation that south korea will play not just a partner,

but a leading country. so, washington and i think all the other countries surrounding the region would expect and want south korea to step up to the plate. but it depends also on whether we see a conservative or progressive administration. and i think that will make the call. shery: do we see further saber rattling -- haidi: do we see further saber rattling from the north, sink that it seems to be taking that global uncertainty and using that opportunity? soo: you know, north korea is always going to look for opportunities. i would say with the russia-ukraine crisis, it is another scene that north korea would want to exploit. but i also want to say north korea won't continue to play by kim jong-un apostate -- will continue to play along kim jong-un's timeline and that

coincides with this satellite development that will be done at a time and place that kim jong-un determines. international crises are an opportunity for kim, but i also think he is going by the timeline he set her his nuclear weapons program, and how advantageous these incidental occurrences happen to be for his strategic intentions. shery: does north korea even matter now? and i am talking about south korean voters going to the polls. it seems not only north korea, but foreign policy is not really high on the agenda of a lot of korean citizens out the moment. soo: you know, and you can't blame them because we have been going through two years, possibly three years of the

covid-19 crisis and economically, it is not just the businesses, but individual south korean citizens that have been impacted so, the first thing on their mind is not going to become is north korea going to be more aggressive towards our country? they have been living with the north korean threat. and that is not to downplay the potential for greater tension between the two countries, but you have to think about, what is the average south korean more concerned about? and foreign policy, if we had the leisure right now to think about it, it would to be topping the agenda. but right now, it is the economy, the covid crisis, from the u.s. perspective, of course we want to see resetting of the alliance, improved relations, about the biggest factor is going to be which candidate is going to help improve living conditions of the average south korean. shery: soo kim, rand corporation

policy analyst, good having appeared coming up next, china's direct exposure to russia may be limited, but contagion in the markets is starting to appear. this is bloomberg. ♪

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haidi: we are just over a half-hour away from the start of trading in china and hong kong, stocks on a five-day losing streak with tycoons and state-owned firms caught in commodity volatility. let's bring in our chief china correspondent. what are you watching as we get into the open? what impact could we see the inflation print having? sofia: there is so much news right now. we are looking at which futures companies are the biggest players in china. a bit of a concern there after what happened with the nickel market. it is unveiling a bigger exposure chinese institutions have. we had the regulator asking banks to report the risks due to the volatility. so, a lot to watch there.

also key to watch is what happens to china's government bond market. it is that china has set a 5.5% target. if investors do selloff in that market, that will be very hard for china. that is essentially how china will fund economic growth this year, so a lot more coming on that front as well. shery: when it comes to funding economic growth, what is the expectation in the markets when it comes to the pboc? because the oil spike is going to be felt through inflationary pressures. sofia: exactly. that could complicate things. the expectation is still that the pboc will maintain its cautious stimulus measures. we could get an interest rate cut next week, on tuesday, when the pboc does its monthly meeting on facility operations. we could get a larger injection,

or the rate maintained as it is, which is what happened in february. but the pboc will not shoulder or bear the brunt of stimulus, and the indication is very much it would be on the fiscal side, more spending, and on the local government side as well. i wouldn't expect a big move coming from the pboc come a but we could get more interest rate cuts and more liquidity. shery: our chief china correspondent sofia horta e costa. stoxx we will be watching when markets open in about a half-hour, tencent. jen cu hung reportedly considering revising its ipo after china securities washed support for u.s. listings by its homegrown tech firms. semiconductor manufacturing reporting preliminary revenue of $1.2 billion, 59% year on year gain.

so, we will be watching the stock at the open. meanwhile, cte reporting net income for the full year that missed average analyst estimates of $1.1 billion. haidi: our top story, oil continuing to dominate the inflation picture as we see crude continuing to push higher. that rally, bob $126 a barrel, just under $126. president joe biden, saying the u.s. will ban the import of russian crude and we saw a similar move from the u.k. when it comes to gold, the precious metal holding near a 19-month high following the ban on russian oil imports. there are concerns over inflation and growth, really boosting haven demand for gold at the moment. and nickel topping $100,000, really testing the lma. shery: let's look at -- lme. shery: let's look at the fx

base, the aussie rebounding for the first time in three sessions. we had risk off sentiment being felt in the aussie dollar and kiwi dollar as well but now a little bit of gains. and the yuan, at that level after advancing the most in a week. coming up,, tommy xie on the prospects of chinese inflation. prospects of chinese inflation.

♪ david: good morning from the asia-pacific. non-:00 in hong kong, beijing in china. welcome to -- 9:00 in hong kong, beijing in china. welcome to