♪ hi coke welcome to daybreak australia. we are counting down to asia's major market opens. >> good evening from bloomberg headquarters in new york. tough source, russia steps up it's a bombardment of ukraine and offers a go alterman surrender of muriel pull. >> kyiv wants to renew -- as --

>> shanna debt bouncing back after the worst offload on record, let's get a chicken wall street it was quite a day. for the major market indexes friday. all three closing the green. the s&p 500 and nasdaq, it was their best weekly gain since november 2020. there was optimism on hops with the presidents of china and joe biden, -- that then msa, the amazon posted smart rallies. the china good does it stick? after the bond market, the 10

year note at 2.5%, the biggest two week jump since november 2016. the 2-year note is really with the story was. hawkish comments from officials friday. it traded as high as 2.04%. it started the day at 1.75%, has been up on them for trips and over the past two weeks and has doubled since the beginning of the year. haidi: chris wallace renminbis see saying data in the markets, the economic data are screaming for the fed to do a 50 point basis i, but uncertainty over your current. [indiscernible]

haidi: we had a trade deficit of 380 5 million kiwi dollars. sydney was indicated at about .8% put in -- 20% s&p 500 posting their best week since november, 20 20. cruz, a little downside really comes to trading in new york as we continue to oscillate on these gains and losses for crude, posting its first back-to-back weekly decline since december and the geopolitical threat continuing markets when it come so oil. -- is where we are seeing a pricing in the action.

naturally being played out when we come seann, so setting above $190. the aussie dollar, despite downside pressure in the early session monday, is the best performing g10 currency, above or 2% over the greenback. we are seeing strength in the kiwi dollar. 1.2%, but a little the -- a little downside. >> ukraine and russia are moving with talks to for -- for cease fire. per born this, let's bring in tony. what is the latest? we have seen glimmers of hope, but dashed within hours of us -- our for kathleen, the -- seems

to be set for monday. there is shakiness from the ukrainian side. -- track seems to be going on, but at the same time, we see what russia's intentions are, this all to medium -- this ultimatum fray

mary opal to be cleared out tomorrow. according to the russian defense ministry. how much good as can you read into that? the talk seemed to be going on. at the same time, russia is clearly pursuing its military goals after hopes of a quick defeat of ukraine. >> [indiscernible] what does the chinese ambassador in the u.s. say? >> there's a lot of parsing to be done on china's positioning. the chinese the -- the chinese ambassador to washington wanted to be a u.s. -- gave quite a long explanation of beijing's position saying essentially, repeating that china does not want to see this war, which according to this call is what xi told biden, but also, to de-escalate the situation. although i was not clear how china is doing that. at the same time, china, you have to understand that china is connecting normal business with russia, including financial business as sovereign countries would. the real question is, will china supply arms to russia to help them fight into crane? that has been the subject of u.s. warnings that were allowed in clear last week. >> in particular, focused on investors after the role of -- the country's prime rates declined easing. let's bring on gas. what a week it was. when it comes to chinese assets. what are we setting up for? >> in general, what we are

looking for in china and elsewhere is calm after the -- the downs and ups. leslie, china was particularly volatile. on that, the theme, what we are looking for with the loan prime rate is the potential that it will come down again. if it does not come down, then they will be signaling that just because the prime rate has not come down means that the easing process has stopped. it is very clear that one of the things that investors -- very strongly, bonds and stocks last week -- not just the rhetorical flourishes of china wanting to create a more stable platform,

but also the single european -- that there was going to be policy easing. china, in this extremely high risk relief at the moment, you want that alternative reason to go to china because if they've got a reason to ease when other markets like the u.s. are facing tara policy, bitcoin is up. the need for tighter policy. >> what did you make of the big moose in u.s. treasuries friday >> --. >> it was fueled among other things by the very specifically hawkish comments about the need for more tight thing, more fed tightening by a couple of stocks. the market listened. >> firstly, the market on the

short and, in a of ways, if letter yield: is what you would expect. even given that chairman powell put on this display at last week's decision. i think the fed, he had promised the fed would be nimble at fighting inflation. people needed to be noble last week. -- because after the steady as she goes, yes we have got to raise seven times this year and we are going to be determined about inflation, you have a sense that the treasury that the message has been delivered. now we know what the path ahead is fitted -- speakers --

vonnie: china nationwide spiking virus cases. china disney is shut as the city sees record infection. hong kong reported the lowest number of covid cases and more than three weeks. just more than 14,000 cases were reported, the second day before

the 20,000 level. carrie lam says it may present a review of measures before monday, as a sign this wave has peaked. look committee assists this has -- her [indiscernible] >> global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> still ahead, china seems to have appended itself into a quarter. next, what's in store for markets with medley global

advisors. we discussed key invest and more. this is bloomberg. ♪

>> the war in ukraine continues to dominate headlines as the invasion enters its fourth week. nato members meet in brussels thursday to discuss further actions to stop russia's aggression. president joe biden will join in person. we will hear again from fed chair jay powell after he lifted interest rates and signaled hikes at all remaining meetings this year. on wednesday the u.k. chancellor of the exchequer delivers has spring statement to parliament outlining spending plans and priorities. >> chinese markets and focus again after a crazy ride last week. loan prime rates set to remain unchanged monday.

analysts do see there is a pause in a gradual evening cycle to resume. tencent headlines the start of the chinese earnings season. the tech giant escaped any direct regulatory probe until they report this munch of dodge this month. key risk remains for major chinese banks, including exposure to commodities and the property downturn. those are your major events in the week ahead. >> let's bring in ben, managing director of global macro strategy at medley global advisors. markets have been moving wildly on the headlines out of ukraine. is there a sense that it is calming down and could open the door to some trading strategies you are advising right now? >> we see diplomacy being

stepped up. there may be headlines that can confuse that, but you can incrementally see the change happening. the market caught onto that as one of the changes last week. we are moving to a stable stage two markets. uncertainty period we went through from the start of the invasion up until 30 march. >> i was just talking to garfield in hong kong about the wild ride in the treasury market on friday, spurred by the comments from two hawks and a former dove on the need for the

fed to move quicker to get the rate up faster to fight inflation harder. jay powell speaks on monday in the u.s. what do you expect him to say? more of the same from last week? >> they are talking a similar message about the media has to frontload our policy. the shock that happened because of ukraine, energy prices coming through april and may. we are too far away from neutral and have a long way to go. we can hike and normalize our policy rate without significantly damaging the

economy. that message is getting credibility in the equity market. that is a strong message on the inflation front. >> the other big risk has been the chinese asset story. is it hard to see a meaningful recovery given that risks and fundamentals seem to point downwards? >> what happened in europe is not a positive thing. the effects these sanctions have on russia also come back to europe. the pmi data coming out this week will be the first indication of what the slowdown could mean. china having to juggle the situation.

the chinese economy is on a stabilizing path but cannot expect these 6%, 7% growth rate. it is still an economy that is not so affected by high energy prices. >> how much are you seeing concern about looking for a hedge against geopolitical volatility and what we are seeing across commodities pricing? is there places to hide that is your preference at this point? >> what we have done last week, the article was right, inflation on geopolitics and market instability that you are getting this positive momentum.

materials and staples and energy remain in favor, but you can think of the sectors that are benefiting from this conflict. i think markets are discounted as the fed moves faster to rate hikes. we are not out of the virus yet. some of that will come back to play too. >> don't forget there is still covid. we have not talked about that for a while with everything else going on. ben emons, managing director of

global macro strategy. you can get these stories you need in today's edition of daybreak at dayb . you can customize settings so you get the news you care about. this is bloomberg. ♪

>> romar bram veg could be set to refuse any bid for chelsea football club -- club from a country that has imposed sanctions on russia. he will be able to influence the sale despite having his assets frozen by the u.k. chelsea fc has generated interest from more than 20 developers. the world's biggest oilfield service providers are halting work in russia.

baker hughes and schlumberger are both cutting new investments while continuing existing work while halliburton is halting current and future operations. more than 100 u.k. listed companies have issued warnings on the impact of the war in ukraine. research by bowmore asset management shows a majority of forms -- firms cautioned about effects to their business while others cited broader risks. the companies include bp, shell, and british american tobacco. >> prime minister scott morrison's liberal party has lost power in south australia to the central left opposition. this will be a concern ahead of the national federal elections on or before may 21. the treasurer is set to release terms for a border taxation review on how cryptocurrency and

-- review is not expected to increase the overall tax burden. australia will ban ship dumb of alumina exports to russia in response to the invasion of ukraine. >> a guest joins us to discuss the latest geopolitical situation surrounding the war in ukraine. ♪ this is bloomberg. ♪♪

haidi: the world's top aluminum exporter is betting shipments to russia. that would leave the company with a train percent shortfall in supply. paul allen is here in sydney with the details. >> there are challenges imposing this. we take queens brand aluminum ventures -- rio tinto has to entangle itself from this relationship, evaluating its options and a new partnership if it does have measures in place to ensure the plan from queens

bank continues to operate. it is a major employer up there in queensland. at this is going to be more of a problem for russia, 20% of its aluminum supply from australia -- this is going to seriously disrupt russia's ability to produce aluminum. not targeted by sanctions right now but we've seen the supplies pulling back regardless. kathleen: what is in the latest package? paul: there is thermal coal for ukraine, shipments of 70,000 tons. the austrian government will cover the cost of that shipment and it's in a response to a request to keep the power plants they are running as the invasion continues. also additional humanitarian aid going to ukraine, and further

military support. so you has pledged 50 million, but there is an additional 15 million u.s. dollars on top of that and that's going to cover arms taken from the us trillion defense forces stockpile. this is going to support a courageous resistance for the people of ukraine. haidi: ambassador's comments come on the back of president biden -- president biden's morning of the implication and consequences should china support russia's invasion. china has been caught in a bit of a bind. great to have you with us. is there a sense xi jinping did not know how this is going to play out? if you read between the lines, how does that direct what we can

expect from aging now? >> i think it illustrates just how difficult it will be for anyone in washington dc to stop this war. u.s. leverage over china is very limited. the to hour phone call suggests on both sides that nothing much was achieved. yes, china was surprised by two things -- one is the invasion itself. perhaps it expected a more limited campaign in eastern ukraine, but not the full-scale occupation. second, the setback russia has experienced militarily, this was going to be a swift war but it has been a much more prolonged one and that left beijing guessing as to what would come next. but clearly, beijing has a lot of patients. it is biding its time. you might say it is waiting on the sidelines as this disaster unfolds and is hoping russia will not be defeated or

humiliated. nor does it want to be too much a book a and what is going on. i think it sees it is potentially at that stage with china but does not want to be embroiled. it is pro-kremlin neutrality we are seeing out of beijing. haidi: if the situation worsens and western allies fail, does that and if it beijing? >> i think it does. it suggests we will have a russia that is far more dependent on china ultimately. the soviet union was a much more dominant partner in that bilateral relationship. but what we have now between russia and china is a form of quasi-alliance, there is no mutual defense treaty but certainly a hardening partnership, but one in which china is far more dominant, where china is 10 times as large

in terms of gdp and population as is russia. and if the consequence of this work in ukraine as you have a more chronically dependent russia on china, that could be quite advantageous for china and china will probably be making demands in the coming months and years from russia, things like speeding up transfer of military technology to china, submarines, air defense technology, these areas where russia has been reticent to fully engage china on. i think china now since is an opportunity. kathleen: how do you assess the geopolitical bound in asia? a big story now is india not wanting to offend china by condemning what they are doing and they are so dependent -- sorry, with russia -- they -- the quad want india to be with them, japan, show you, u.s. how is that being affected by

the war in ukraine and what do you think the long-term result of this is? herve: the u.s. strategy is coming under stress for various reasons. the foremost reason is that now with europe being at the center of global attention for the united states, there's going to be less bandwidth to dedicate to asia. secondly, what we have seen among the quad partners, india, japan, and australia, is a huge division in terms of how to approach russia. india has closed and historical ties with russia and it is also guarded to become too involved in this. you might say it's a form of neutrality, perhaps a little less pro-kremlin then china but still very much grounded on neutrality, calling for a cease-fire and dialogue among both parties but reticent to call this an invasion. what that means is india is

worried this will serve as the cause for rapprochement between russia and china and that would sever ties. india needs for its defense capability as well. kathleen: today, the head of nato speaking on meet the press was pushed repeatedly to say if russia using chemical weapons on ukraine is a redline. he refused to say that. my question is if nato and u.s. won't draw any redlines on anything putin does, will this war ever end in any kind of form that is favorable in the least to ukraine? herve: i think what we are seeing out of washington dc now is humility, it is apprehension, it is a recognition that u.s. military power, though still the most dominant in the world, is actually very limited as a

policy option when it comes to ukraine. on the one hand, there's been a lot of support for ukraine in terms of military aid and other forms of humanitarian support, but clearly, america does not want to escalate that and neither does the europeans into a full-blown crisis that could involve nato and russia. nuclear weapons as the dark cloud that hangs all over this, so there are real limits that apply in terms of how far the u.s. will be involving itself in this crisis. but it is also hoping russia will be humiliated, it will be isolated, it will become bogged down in an unwinnable war and sometimes doing nothing is actually the best option or the least worst option. haidi: it's hard to see how russia can hold ukraine at the end of all of this. what is the endgame if there is no boots on the ground from the west? herve: the endgame -- and this

is in some said -- in some sense what the united states and china, they are not sure -- for china, the endgame is one in which brute force, russian force will avail, perhaps kyiv folds and maybe it doesn't, but putin has been saved from an outright humiliation and thereby can create a cease-fire favorable to his terms. for the u.s., it is the opposite, hoping ukraine and president zelenskyy will endure, that the russians will eventually tire and declare some form of cease fire more favorable to ukraine. it's very unlikely that ukraine would ever regain its full sovereignty pretty 2014, including crimea and the donbass region. but there is the hope that ukraine emerges largely intact with its independence held firm. haidi: great to have you with us

as always. let's weave on this as ukraine says it is counting on many from sanctions against russia to help rebuild its economy. president zelenskyy's economic advisor spoke to bloomberg as fighting continues to destroy infrastructure and assets. >> the economic problem has risen dramatically. there are bombing attacks from the air, president zielinski was clear when he was delivering his message about no-fly zones. our cities are under bombing all the time from the air and you have to understand that. it's not just economic price, it's a huge price. $100 million in assets at the beginning of the war, each day

bringing us more and more destroyed assets. for example, it is almost destroyed -- we don't have any houses, we don't have people there. people -- i'm saying every day we are losing more and more and more. but it has united assistance to us, which is provided by our international allies. we do count not only money but sanctions against russia. >> those sanctions are in place

right now. i'm curious as an economic advisor, how do you deal with the current economic situation trying to guide your country through a war? at some point, whatever the outcome of this is, has there been discussion about how any sort of rebuilding process explains? >> yes. we are discussing with different international partners. we have a working group that has created a plan and it is also true that you have to understand [indiscernible] because of russia fighting against ukraine, what are they planning to do? we have to rebuild the economy, we have to rebuild the country.

we are counting on those money. we are planning to accumulate this money and we count on the money and also count on the possibility from the arrested property of russian oligarchs. haidi: the economic advisor to the ukrainian president there. coming up, new presentations and on -- in hong kong are on the decline but in shanghai, forcing the closure of a theme park. we have the details ahead. this is bloomberg. ♪

vonnie: though he does not expect this urge to prompt widespread restrictions. he called on congress to pass a stalled covid relief package worth to be $2.5 billion. the omicron variant is driving up infections in europe and asia and counts for 30% of u.s. cases. japan is set to end did state of emergency and will allow coronavirus restrictions to expire in tokyo later monday after a drop in daily infections. in an interview with bloomberg, the tokyo governor said restrictions help to ease the strain on the city's hospital system. >> the shorter business hours and limit the number of people. now, thanks to everyone's

cooperation, we've seen improvement in the state of infections. we plan to relax existing restrictions from march 22. vonnie: 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. kathleen: hong kong reported over 14,000 new covid cases on sunday, the lowest daily total in more than three weeks. the chief executive said case numbers appear to have hit a peak. >> having gone through a month and a peak you have seen here, a responsible government should regularly and vigorously review these measures to see whether there is room for adjustment. kathleen: on the mainland, the shanghai disney resort will close as infections soared to record highs. let's bring in our chief north asia correspondent and let's

start with hong kong. what can we expect from the covid briefing? stephen: a lot of people are expecting some sort of relaxation on some of the world's toughest covid restrictions, including the 14 day hotel days for arrival and those who test positive need to isolate for seven days. so there are some discrepancies there. there is just a fatigue, if you will, that she acknowledged late last week, that there is growing impatience, and growth -- including among the business community that these are further isolating hong kong. she is going to give what is considered to be a mid fifth wave review and acknowledges she will be getting that today. people are looking for relaxation, for a abolishment of the flight bands. there are still flight bands to nine countries, including the

united states, including the u.k. and many business leaders have been calling for that to be scrapped. why have that in place when the city is faced with such a large outbreak? when you have 50,000 cases, for optics reasons, it is hard to open up the city is the government's mindset. but now that the numbers are down to 14,000, it is the second straight day we've had fewer than 20,000 cases and it's the fewest number of daily infections we've seen in hong kong in nearly a month. so there is no room to relax. we are not guaranteeing she's going to say that, but the expectation is we could see and abolishment of the flight ban, the length of quarantine reduced to seven days and more guidance on a road map this fifth wave. haidi: in china, the focus has

moved from changing to shanghai? herve: shouldn't -- stephen: shenzhen is lifting the citywide lockdown. that put the pressure on supply chains in and out of manufacturing areas. but in shanghai, they are seeing a rise in the number of cases. 17 confirmed local cases but 492 a sum to medicate is as of saturday and disneyland in shanghai has announced it will close as of today. we don't know how long. it just opened up in mid-march to limit capacity but will now temporarily shut as the city goes into its own mass testing campaign. two 5 million people in the city of shanghai. probably a conservative number. but authorities can test up to one point 9 million people a day

and that is what they are going to embark on. haidi: stephen engle there what the latest. still ahead in the next hour, hong kong deputy to the people's congress says people's quality of life cannot wait for the procurement of export requirements to relax social distancing measures. this is bloomberg. ♪

kathleen: we have had him as a guest on our show many times. he is so knowledgeable and knows so much about every economy, every central bank in asia. i'm not -- certainly not a surprising choice.

one that i'm sure the imf will miss him, but there has been uncertainty about who would replace the current governor when they've been on a hawkish path. so it's important to get someone to make that job continue. haidi: steady hands during the monetary policy issue is so key at the moment. let's take the morning call ahead of the asian trading day and we are watching investors maybe should take a step back and look at fundamentals after all the volatility. treasurers say they possess fund metal strength in earnings growth. city says alibaba looks undervalued. kathleen: global markets may be getting too relaxed about the downside risk on the war in ukraine.

moods no longer reflect the negative scenario and this could see energy fraud -- energy supplies see disruptions. china's evergrande onshore unit says it could delay payments on its bonds. the unit says it could still pay the coupon on its note. they delay will trigger default according to the proposal. saudi aramco will increase capital expenditures up to $50 billion. the oil giant said net income soared $10 billion, more than double one year early. aramco said its cash dividends last euros $75 billion. haidi: head of the open in sydney, we are seeing the plant

-- majority owned by bhp. the fine imposed by chile and an investment board clearing out its stake. lots more to come. this is bloomberg. ♪

haidi: a very good morning. we are counting down to asia's major market opens. kathleen: welcome to daybreak asia. our top stories this hour -- ukraine says russia is turning toward destructive artillery. going -- the global stock rally set to provide asian markets

with a tailwind.