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.

hong kong may announce a measure as that's monday. plus don't miss another big interview with it tokyo governor sharing her plans to let virusc. haidi: let's get you straight to the start of trading in sydney. a cautious start to the week. we are watching how chinese markets might be roiled for another week after the roller coaster ride last week. we are seeing a rough start to the open. a pretty strong lead after the friday session. the aussie dollar is seeing a little weakness, just over 74 u.s. cents but for the year, it has become the best performing g10 currency, up 2.1% against

the greenback. we are watching new zealand at the moment when it comes to the kiwi dollar, a little pressure. we did see the annual trade deficit widening to a record. the kiwi dollar is one of the best performers against the u.s. dollar, up one at a quarter percent year to date. kathleen: movement in the asian stock markets coming out of what happened to the u.s. on friday. the s&p 500 having its best weekly gain since november 2020. you can see futures indicating positive momentum may continue there and the opposite for the bond market, where there is a big selloff in the 2-year note. a substantial selloff, and that may be continuing that sentiment, concern about the tidying ahead of jay powell speaking again on monday. will he be seeking a more hawkish tone or not?

the dollar actually gaining again. one of the big losers has been the japanese yen, hitting a six-year low versus the dollar last week. brent crude continuing to rebound, little higher on friday but for the week, it was down. a consecutive two weeks of losses for oil, kind of unusual. but for now some positive momentum going into the trading session. living on to this -- turkey's foreign minister says ukraine and russia are moving closer to a cease-fire after russia says it used hypersonic missiles, signaling but may be a new, more bloody phase in the war. for this come let's bring in our national security editor. what is the latest on the peace talks? it seems like russia is escalating the air war. anything it could do to destroy ukraine without putting troops

there. what is putin looking for and what is he actually going to get? >> it's all up to president putin and that remains a mystery. on the one hand, turkey says it is seeing progress in the talks. ukraine officials say they expect the talks to resume in the coming hours, providing the working groups make progress. so you have these talks going on where they are groping to some sort of consensus but is that all upfront as russia's attacks grow more serious and deadly and they move on. right now, they are giving and ultimatum to the port city in the south and that suggests things are picking up in their potential deadliness and and russia's determination. haidi: we heard from china's ambassador to the u.s. speaking after the call between president

biden and xi jinping. >> this is disinformation about china providing assistance to russia. what china is doing is to send food, medicine and not weapons and ammunition to any part. we are against the war, as i said. we will do everything to de-escalate the crisis. haidi: he also said condemnation would be naive. does this give us a bit more insight into what beijing started? larry: he had a point literally in that china is not sending weapons to help russia and ukraine yet. there are many reports russia is asking for that help because the

war has gone badly initially. at the same time, this neutrality, it is hard to argue for this when china has not taken a stand on the invasion of ukraine. they won't call it an invasion, they won't criticize russia in any degree. china may not be sending weapons so far but they are clearly loath to put any distance between themselves and russia that would upset their strategic commitment to russia. haidi: our national security editor there. investors will be evaluating the impact of the russia-ukraine war. a signal that some of the volatility we've seen is starting to pull back, at least for now. what are your expectations given the strong rally at the end of the week after lots of

volatility? >> it is perhaps one of the slightly under appreciated impacts. a fairly clear decision about where it is going and even some of the fireworks for the rate market on friday did not take us away from that. markets famously hate uncertainty. you can see that came down in all markets, including treasuries. that is a reasonable basis for those initial rallies. last week, they were partly driven by the china turnaround. to be able to consolidate, if nothing further, the big question -- you just had larry talking about what is going to go on and ukraine. that's the other major area of

uncertainty and until we get something sustainable as far as where we go from here, any rally is going to remain out of the question and it would be a sense of complacency coming in because although the war is still going on, there have not been any major dramatic developments, so markets are starting to become a bit used to this state of the war. kathleen: let's move on to china's decision today. the bloomberg economic team doesn't think they are going to move because they just moved in january and are going to wait. they didn't do anything with that medium-term lending facility, so how much does this mean for the markets right now? is it fine if it happens are fine if it doesn't or is the big deal if they decide not to do something? larry: i think if they decide

not to do something, that's going to be seen as reasonably ok. as far as how euphoric markets got on the equity side, what was said there, and the fact the bond market has come bouncing back, that helps set a reasonable stage. the main thing is the signaling around these announcements, there's a question of what they do with the yuan and what they do in coming days with other decisions they might have to set money market rates. as long as it's not a signal that because it didn't move this month doesn't mean it won't move in the coming months, i think that will be fine. kathleen: thank you so much. garfield reynolds. you can follow more on this story and all the day's trading on our market live blog. you can get a market rundown and

there's commentary and analysis from bloomberg plus expert editors. let's get to vonnie quinn with the first word headlines. vonnie: shenzhen has lifted its weeklong loss now. officials say the latest covid wave is coming under control and the city will allow government agencies and companies to return to normal operations. bus and subway services are set to resume. shanghai disney is temporarily shut. hong kong has recorded its lowest number of covid cases and more than three weeks. more than 14,000 new infections were reported. the chief executive said officials may present control measures as soon as monday. local media say that's going to do the roadmap for quarantine travel. pan has asked the united arab emirates to increase oil exports

as importer step up pressure on opec to keep ringing down prices. the uae has yet to comment, but the opec group has so far resisted those polls, saying there is more due to geopolitical tensions and imbalance in supply and man. the world top aluminum exporter in australia's banning shipments to russia. they say that will leave the country with a 20% shortfall in supplies. aluminum has so far not been targeted by sanctions. however, they have ruled out -- the company has pulled back from doing business with russia. 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 may announce a roadmap out of covid as soon as monday. we hear why social distancing

measures need to be relaxed. this is bloomberg. ♪

kathleen: let's take a look at some key events over the next two days. you the members -- eu members meet to talk about further actions to stop russia aggression. president joe biden will join in person. in the u.s., we will hear from fed chair jerome powell after he lifted interest rates last week. chinese markets will be in focus after the wild roller coaster ride last week.

for more, let's bring in them is a bank head of economic strategies. in your notes from last week, you're talking about markets -- you said hope, fear, uncertainty. i hope i got the order right. two of your main focuses were ukraine, but china with the crackdown on tech, it seems to have started lightening a bit. let starting ukraine. where are we? hope, fear, uncertainty and what does it mean for traders? >> i think i'm going to be playing this by the week and this week, we are on hope and the hope is deriving from the hope turkey claims it is going really well. so i think hope is where is and the truth is a bit more complex. we have major devastation going

on on the ground and that means in the background, there's uncertainty. kathleen: in terms of the crackdown on tech, the steps, the announcement the government made, it helped move the nasdaq higher on friday, but you are pointing out how much china pot fears have a way of effecting emerging-market asia. what does it mean for those kinds of stocks? >> for markets, it is hopes, hopes, hopes. they hear this campaign style statement and think it is going to drive markets higher. for me, it is still a lot more uncertainty. primarily because we don't know exactly what we will encounter

with the regulations. maybe it is just a case of keeping quiet for the time being or is it something that is going to be durable? these are the inconvenient questions not answered in the euphoria of the blanket campaigner marks. haidi: can you find some of those commodity supply chain hedges? you point out there's a lot more vertical integration. >> i think the hope is to double export here. on one hand, it means there could be a lot more preciousness rippling through the financial markets. on the other hand, what it also means is the supply disruptions

and demand disruptions and consequence of that, the ability to contain inflation. the upshot is what kind of equity and just boosting the economy. however, the way to go about boosting the economy by property and tech needs to be emphatic than is currently being signaled. haidi: talk about the winners and losers out of the energy and commodities story from an fx point of view. the aussie dollar is the best performer against the greenback. is that going to be sustainable? >> that depends on a few risks. what we have going on now is

hope that the talks will come to some kind of positive resolution. for the time being, the sanctions will remain in place. i think it is the so-called goldilocks land fall. particulate in the last five to 10 years, the aussie has aligned itself with the gas markets and so on and so forth. that means that kind of sensitivity will be even higher. at the moment we fear uncertainty idly, the silver lining is it is now a proper currency and we don't have to worry as much about carry trade unwinding, but the commodity back and forth depends on everything, the hopes and the talks. but still [indiscernible]

on the aussie dollar. haidi: great to speak with you. you can get a round up of all the stories you need to know. you can customize those settings. this is bloomberg. ♪

>> on the 23rd day of war, russia's position in negotiations has become more adequate. the key questions are security guarantees for ukraine, cease fire, troops withdrawal and a political resolution of disputed territory. russia had a firm position on those points but it had started to change.

ukraine will not give away any territories. haidi: the ukrainian negotiator and advisor to president zelinski there. let's take a look at commodities this monday morning in asia. we are seeing a little pressure when it comes to crude oil. a little more upside now at the start of trading here. new york crude up just over $106 a barrel. brent trading close to $110. we have seen a back-and-forth as traders continue to gauge the situation when it comes to the war in ukraine nearing the end of its first month. we are tracking geopolitical tension in the middle east as well. we had two weeks of declines when it comes to trading in wti, watching the situation after turkey said moscow and kyiv are moving closer in negotiations to get to a cease fire and find a diplomatic solution.

when it comes to gold, we see a downside. the impact of the fed tightening as well as these broader concerns around the central bank policy is setting gold up for weakness after we had the weekly drop in bullion. taking a look at the fx side of things, we see the aussie dollar one of the strongest performers at the moment. it is the best performer against the greenback out of the g10 cohort. the yen also seeing weakness, sitting close to a six-year low. we have not had that haven demand material. that outlook between the fed and boj is weighing more on sentiment. the kiwi dollar just shy of 69 u.s. cents. the aussie trading solidly at 74 u.s. cents.

kathleen: let's get a quick check of the latest business flash headlines. according to the mail, he will be able to influence the sale despite having assets frozen by the u.k.. he's generated interest for more than 20 bidders with a british property developer making the first offer. the world's three biggest oil service providers are helping future work in russia in response to the invasion in ukraine. they're both cutting new investments while continuing existing work in russia. meanwhile, halliburton is halting current and future operations in the country. saudi aramco will increase bonus years to help boost productions. in earnings, it will increase capital expenditure to up to $50 billion. more than double the figure of

$49 billion a year earlier. aramco says it's cash dividend for last year's $75 billion. more than 100 u.k. listed companies issued warnings on the impact of ukraine. the majority of firms cautioned about the business in the region. 100 companies sounding the alarm include bp, shell and british american tobacco. general motors has bought out the softbank vision fund one in the self driving start up cruise for 12 billion dollars. this ends the japanese investment group involvement and gives the automaker 80% ownership. jeep will invest an additional 1.5 billion dollars, an amount softbank has pledged to put in the company. haidi: let's take a look at treasury futures.

expecting a lot of fed speak this week as well as a lot of moves when it comes to u.s. credit. treasuries tumbling around the 2% level. prospects of a hawkish fed in u.s. ten-year futures, that yield a little lower, but momentum toward higher yield has been forestalled when it comes to the treasury market and tells us how rapidly traders priced in the hawkish measures by the federal reserve. now there has been a little more disappointment. the selloff ended when it comes to the two-year in particular. when it comes to the new zealand tenure, we are seeing that hold steady at the moment. when it comes to us truly and new zealand, new zealand reporting and annual trade

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haidi: this is daybreak -- vonnie: this is daybreak asia. i'm vonnie quinn. a top adviser to the ukrainian president says russia is using more destructive artillery, including hypersonic missiles. this is the first official response to russia's claims that use the missiles to destroy an underground weapons cash. the minister told bloomberg peace talks with russia may last several weeks. >> the peace talks may last several weeks or longer because

of mutually excluded legal issues. >> the world top aluminum exporter in australia's banning shipments to russia. alumina is a key ingredient which has not been targeted by sanctions. the aluminum giant is facing disruptions to its supply chains. japan has asked the united arab emirates to increase oil export to help bring down food prices. the uae has yet to comment on the meeting but the opec group has so far resisted those call saying the runoff in prices is more due to geopolitical tensions and an between supply and demand. the u.s. is likely to see a rising covid infections but does not expect widespread restrictions.

abide administration's chief medical advisor called on congress to pass a stalled covid relief package. the omicron subvariant is driving up infections in europe and asia and counts for 30% of u.s. cases. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: hong kong reported its lowest daily infection count in two weeks on sunday. case numbers appear to have hit a peak. >> having gone through a month and having gone through the peak we have seen here, a responsible government should regularly and vigorously review these measures. to see whether there is room for adjustment. >> let's talk to stephen. we are expecting a review into

the pandemic response. we've seen these numbers trending in the right direction. what are we seeing? stephen: we are expecting, and it is not confirmed yet, we are expecting them to announce a reduction in the number of days rivals to hong kong will have to stay in quarantine to stay in expensive hotels for most places around the world. in addition, we are expecting slight bands on nine countries including the united states and the u.k. to perhaps be scrapped. we might be getting ahead of ourselves, but i want to bring in our guest, a lawmaker here in hong kong and the deputy to the national people's congress in china as well as the founder of the g 2000 clothing chain. a lawmaker and businessman. thank you for joining us. what do you expect to hear later

this morning? is it going to be enough to a suede concerns? you are pushing for compulsory testing and a locked down. is it that enough? michael: there are several points i have been advocating lately. to be in sync with the chief executive today. to what degree do we match at this point? a lot of experts in hong kong have said hong kong should start relaxing social distancing measures. 95% of our population has received free vaccination. to me, i don't know how long we have to wait for that. i don't quite support that idea.

technically, i don't the people's government would support opening up hong kong without a compulsory universal testing which must be controlled and i don't agree with experts advocating so-called mandatory self testing, which to me is an oxymoron. experts have said mid april is the best time, so i use that as a roadmap for recovery. do that for nine days and by the end of april, we should be able to start relaxing and opening up. what would that mean? yes? stephen: sorry. we have a bit of a delay. do you advocate an immediate

lifting of the flight banned from those countries? do you think carrie lam will announce that today? michael: i will get to that. but i was going to finish my so-called roadmap. i think immediately, all hong kong or's should be allowed to return to hong kong from anywhere. subject to i think at this point, quarantine hotel. so much the better. i don't think the policy we want to see in terms of in the long term will they open up the border with us? this omicron variant, i think

the hotel quarantine time for anyone should be reduced to seven days instead of the current 14. that is the publicly recognize intubation time and that is what our omicron team is based on, which is seven days. that has a good chance of happening, reducing quarantine time. i think -- whether they will reduce the quarantine to seven days is unsure but they say with the omicron variant, there is no need to go beyond seven days. so let's go back -- stephen: let's talk about that

because you say opening up can't happen until you have completed the compulsory universal testing. that is probably not going to happen until mid april at the earliest. you are talking about a nine-day process coinciding with a lockdown. we are talking about end of april before opening up. michael: i'm talking about the latest. if the government can convince the expert to do it earlier, so much the better. don't forget the initial discussion we had when i last floated this idea, we were talking about the end of march. it's only a difference of two weeks. in those days, the number of cases were not as high as what we are seeing currently. the number of cases currently, let rate -- let me remind you, it's not based on mandatory testing. it's based on a lot of self

reporting, which everybody knew -- they did not want to risk going to quarantine because they did not want to do anything. that's why this thing never goes away. stephen: i think carrie lam address that. she said they could be seeking legal action. if they test positive and don't report it to the government, they could be facing legal action. at this is the root of the problem, people would rather leave the city. 50,000 people leaving the city than run the risk of testing positive and being put into what is being equated to a concentration camp. michael: they try to make that better now, but any kind of mandatory self testing, don't you think this term is an

oxymoron? it doesn't make sense. what i am advocating is those tested positive will be sent, the more severe ones will be sent to the isolation camp and the rest will stay home. roughly 90% will stay home and wait for recovery. until such time, there's no way i see the number of cases going down. until mainland also opens up, which everyone suggests will not be before the end of this year. that is something we have to live with, this zero covid policy. but once we set the two cohorts within our population, the rest can start relaxing the measures. we can open up the restaurant.

the key is we have to keep masking up in public places where we are not eating or drinking or anything. that is a basic condition for the zero covid policy. [crosstalk] stephen: go ahead. haidi: i just wanted to ask as a lawmaker and as a business person, are you confident hong kong harbors a vibrant hub for talent because we continue to see over the past couple of years more and more record highs when it comes to people leaving hong kong permanently. michael: yes. there are concerns about that.

probably has a lot to do with what kind of policies the central people's government. what kind of special privilege, how they want to see hong kong turn in the financial sector compared to shanghai. i think that's more important than anything else because as you know, it is a highly regulated sector anyway. stephen: you just mentioned the central people's government. you have an ear to beijing and vice versa. do you feel or do you know beijing gives a blessing to this kind of opening up of quarantine days in hotel and a complete scrapping of the flight ban almost immediately?

michael: it depends on whether you relate this to the issue of the border. a few are basing along the line of beijing opening the border any soon, no. it's going to be very tight at the airport. it's going to be mandatory testing. it is going to be very slowly relaxing social distancing measures. at this point, opening up the border with china is going to be a secondary consideration, so we are not at a point where everyone was so optimistic they think about opening the border with china. if you open the border with china, you have to tighten up

the airport. stephen: has the priority changed? we know carrie lam talked about opening the border with thailand first and you said that's not likely to happen this year. can we switch to all those international flights that have been waiting to be resumed and those international minded individuals who want to come in and out. can we switch to that if china is not going to open up? michael: yes. i think that is probably the right thing to do at this point. everything is a balancing act. it's balancing connecting with the world and balancing connecting with china. at this point, i think letting people come back and relaxing the quarantine to seven days is more important for hong kong. but later, when you want to open the border with china, we may

have to think about someday -- stephen: were you one of those people that carrie lam talked about, their business community finding their tolerance fading? the pace at which the government relaxes or doesn't? michael: i am one of tens of thousands or maybe millions. stephen: final question. the chief executive election has been delayed until may 8. the nomination is opening up april 3. are you putting your name in the hat? michael: no way. this job -- stephen: why not? michael: all kidding aside, the

central people's government would want someone they can trust, somebody who obviously will look at the one country more than the system. although at this point, i don't see any sign of them totally clamped down on hong kong. loyalty is very important and it has to be someone they know for a long time and will probably come from the administration. i don't think any outside lawmaker or anyone not from the administration will gain their trust because they need somebody who can work with 200,000 civil servants, who can actually enforce regulations and restrictions and get a lot of needed support, so somebody has

to have that clout. i'm not one of them. stephen: is that person carrie lam for a second term? michael: she is a contender. the nation's secretary is a contender. those are the two contenders currently. stephen: thank you so much for joining us. we will be checking back with you. he's advocating compulsory universal testing in hong kong over nine days which would coincide with a partial lockdown of the city. which carrie lam, the chief executive said there would not be a wholesale lockdown. haidi: stephen engle there. great conversation. coming up, took is governor is welcoming more foreigners to the capital after -- entries this

month. this is bloomberg. ♪

haidi: japanese markets are closed today for a holiday, but the yen remains in focus after trading at the six year low

against the dollar. holding steady in the monday session but we did hear from the bank of japan governor suggesting it's not losing much sleep over the weaker currency. we could see the yen gravitate lower if traders see that is a green flag for more weakness. kathleen: that governor of tokyo is welcoming more foreigners to the japanese capital after a ban on new entries was lifted this month. the country is recovering from its worst wave of covid-19 infections yet and has maintained a daily 7000 person limit on arrival. she said she's looking forward to the return of travelers as the situation improves. >> the most important thing is to protect the lives and livelihood of the residents. tokyo is a large city with 14 million residents, but each person has taken basic

prevention measures like wearing masks and washing hands. the number of infected people has been kept under control so far. the national and local governments in japan are based not on leader enforcement but voluntary cooperation. these are not orders, rather people are aware of the risks of covid-19 and have followed these directions to keep themselves, their families and society as a whole safe. in order to prevent additional if actions -- infections by omicron, business had been requested to shorten business hours and limit the number of people at their event. now, thanks to everyone's cooperation, we've seen

improvement in the state of infection as well as health care vision system. >> you mentioned these measures are voluntary. is there a risk covid cases could rise and you may have to enforce restrictions again? >> it is up to how we keep on these measures without legal requests. thanks to our people's wisdom and cooperation, i think we can do it. also, the vaccination rate is going up. up until now, 33% of all the total tokyo's population has already vaccinated. also the new medicine from the

state and our new medicine will be ready, hopefully by the end of this month or next month. >> you have worked really hard to make tokyo a financial hub but because of the tokyo instructions, you have faced challenges. how do you plan to continue this effort? >> even under the pandemic, we are strengthening measures for financial firms. this is because we believe it will create not only economic benefits but contribute to tokyo's sustainable growth. regarding border control measures to japan, the restrictions of the entry of foreigners has been east this month and the situation is constantly changing, becoming

more comfortable. >> foreign arrivals raised to 7000 -- do you want the cap to be raised further and what does it mean for tourist arrivals? >> it all depends on how the infection situation will be better and how we keep the society and so forth. we will see, but as the governor of tokyo, we would like to receive more people from outside , including the foreign tourists. >> strategically, what change does japan right now need the most? >> first of all, we do our best to reduce the stability in the

area right now. the european situation is very difficult. this will set the international situation as a whole, so we will see how we manage the cases with international cooperation. we have to decide we are firmly against this outrageous activity with president putin. haidi: the governor of tokyo speaking with shery ahn earlier. you can get more from this interview on tv come available to all bloomberg terminal subscribers. hear from the leading names in japanese business. we do have the market opens in

seoul coming up with tokyo on holiday today. we will be watching to see whether that optimism that ended the trading week last week can be sustained. this is bloomberg. ♪

>> welcome to daybreak asia. i am kathleen hays. haidi: our top stories, asian markets are set for a rally and growing efforts between -- as growing efforts towards a diplomatic resolution boosts. moscow demands the surrender of

a ukrainian port city. and a monetary policy split between pboc and the rest of the world. kathleen: korea and the asian region, south korea's first 20 day exports for the month of march were up 10.1% year-over-year, a slow down from that 13.1% reported in february. there were concerns that given the situation with ukraine and what he has done to supply chain, currency and commodity, we would see a slowdown and that is what we see. at the same time, imports for the first 20 days of march have risen substantially. 18.9% year-over-year in march. no surprise that the trade deficit has widened quite a bit.

it looks $2 billion u.s. up from 1.67 in the previous month and imports are still rising. part of that is the cost of imported oil and other commodities. let's see if this is -- let's see what this does. the kospi is starting the day with wind that it basked -- with wind at its basked -- at its back. things are not improving much for ukraine yet but maybe not such a destructive force for the market. textures are moving higher. nasdaq had the best week since november 2020. stocks around the world are taking it as a positive sign. speaking of u.s. stocks, after such a big movie and the --

biggest move in the s&p having -- bond futures turning a little lower, not much, 1/10 of 1% but there was a big selloff in the 10 year and to year and a lot of inversions now. the dollar looking a little stronger. hawkish news from the fed. nj palo -- and jay powell speaks again tomorrow. the yen is moving in the other direction. six-year low against the dollar. haidi: we are seeing steadying of risk sentiment when it comes to trading in australia. asx broadly higher. strong gains on stocks like technology but weakness across energy. the australian government has

looked to banned shipments of aluminum to russia. seeing recovery with oil prices. traders continue to balance prices between the war, tensions in the middle east and weeks of losses. but more buoyancy in the market at the moment. currency is where we see a recovery in risk. aussie dollar and kiwi dollar outperforming. the aussie dollar despite weakness in the last session or so is the best performing g10 currency to date. the kiwi is not far behind. the yen is one of the worst. bold, still concern over fed tightening. the dollar yen holding at just over 100 $.19 and we have seen current t -- seen currency

trading steadily. the next guest attempts to rein in -- our next guest says that trying to rein in. do you think markets have overpriced the hawkish notice from the fed? will that have to be reined in? >> good morning. great to be back with you. i think the key is what kind of inflation dominates at the moment and many growth indicators are starting to roll over. the stagflation backdrop among several banks are hard-pressed to address what the tools are at their disposal. in the fed is tightening as it prioritizes high inflation we

think it will balance that trade off of slower growth, higher inflation by lagging the market pricing in terms of the pace, the magnitude, and duration of the timing cycle. haidi: when you look at cross pressures more broadly, which ones do you see pullback because of the resolution of shorter-term issues driving price pressure? >> it depends on how you define resolution. from most military and logistical experts, there is limited resolution. look at the markets. equity, it looks like there is some resolution being priced in but the physical markets, commodity, look at fertilizer prices. no backing away from making

highs. the more broad-based index says the same story. the financial markets are very disconnected with the real market. i think part of that disconnection is due to the fact of talking about quantitative tightening or imminent tightening cycle more aggressive. $43 billion, the highest, the biggest ballast -- biggest balance sheet expansion and very much tied toward the relief rally we have seen. kathleen: jay powell said quantitative tightening could start as soon as may. we heard chris waller and others

suggesting quantitative tightening should start now. not just the taper, but start selling treasuries. the fed seems bent on a hawkish path. jay powell says the u.s. economy is in good shape. but what does it mean for emerging markets? are they ready for that kind of move from the fed? >> one way we will roll all those dynamics into a very simple easy to follow measure is just look at global liquidity. global money supply. the growth in global liquidity has slowed from a record high of 21.5% last march and now 5.5%, the slowest pace of global

liquidity growth since the height of the pandemic in april 2020. this has enormous implications, less so for the u.s., but for emerging markets. we see that in the volley in terms of asset, class performance. emerging markets do not perform very well without the marginal liquidity growth and there is a huge constraint. add in the geopolitical risk and stave -- and stagflation, it is a very challenging backdrop for emerging markets. kathleen: and part of that is the fact that the u.s. yield curve is sending its own signal. parts of the curve have already inverted. the three to five on friday and the 10 year has gotten close to making the curve local flat and

possibly converting. you say some emerging market countries are cushioned from this. >> yes. when you look at the impact of the russian invasion of ukraine, the withdrawal of global liquidity, it will impact the global economy evenly. we see many opportunities for rally. the way in which market has traded the outbreak -- treated the outbreak of war is overweight to the economies that benefit in terms of trade shock. indonesia, malaysia, australia, new zealand. these economies are ultimately food and energy exporters, items currently in short supply. they are insulated from the

dynamic prevailing at the moment. kathleen: thank you, sue. let's get to vonnie quinn. >> top adviser to the ukrainian president says russia is using more destructive artillery and hypersonic missiles. this is the first official response. peace talks with russia might last several weeks. >> peace talks might last several weeks or longer because of mutually exclusive legal issues. >> japan has asked the uae to increase oil exports and opec under pressure to bring down crude prices. the uae has yet to comment but

the opec group has resisted goals, saying the runoff and prices is more because of geopolitical tensions then the imbalance of supply and demand. the latest covid wave is under control in china and companies will be allowed to return to normal operations. china is grappling with a spike in virus cases. china disney is temporarily closed. hong kong might announce the results of a look into their pandemic response. community was frustrated and a lawmaker has shared his recommendations for the path forward including the length of

time inbound passengers would have to isolate. >> ending the pandemic is almost sure but whether or not quarantine would be limited to seven to 10 days, it is unsure. experts say with the omicron variant there is no need to quarantine for seven days. >> global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalistsh and analysts in more than 120 countries. this is bloomberg. haidi: breaking news. run son china says they will not -- an audited result march 31 and audited results will be released at the end of the month. they are unable to publish full year results by march 31 and are in the process of appointing a new auditor.

there auditor has resigned and now there is the delay of results. russia and china holdings had a note due march 1 and heard from fitch giving ron shine china a downgrade saying the total amount of loans outstanding is just shy of $5 billion u.s. and now we are hearing there is a delay to those full-year results following the resignation of their auditor. we saw the dollar bond due august 2024 last week see the biggest rise since the start of december 2 17.3 cents trading in fallout in the real estate sector and the slow down in

china. still ahead, we will speak with the cfo of property guru after the new york debut. next, the latest in the war in ukraine. president zelenskyy renewing our efforts -- -- renewing offers to negotiate with putin. this is bloomberg. ♪

haidi: in europe opening, top futures, a muted start to the season -- to the session.

a flat start to trading. european futures raising the losses since the start of the invasion of ukraine, approaching their best weekly gain since november 2020, joining in on the global recovery rally friday. stocks closing 1% higher. the return of tech games and leisure outperforming. the rebound almost 10% since the start of march. there is still optimism over continued negotiations despite what we hear about the peace talks between russia and ukraine. not making much meaningful progress at this point. but tokyo's foreign minister says you canaan russia are -- says it ukraine and russia are moving closer to reaching a cease-fire. let's bring in our asia

government editing manager. what a rehearing when it comes to prospects of compromise in talks and fighting closing out almost a month and seemingly getting more and more brutal. >> that is right. different tracks. turkey is optimistic there is progress being made on a potential cease-fire that would include some sort of neutrality for ukraine and pledge to not pursue nato membership. that is where that stands. there is also what happens to don voss and other territories that remain in dispute. those are still unresolved. there was a lot going on in the military side, including russia's demands that ukraine

abandon the port city of marable and the use of hypersonic russia's -- hypersonic weapons from russia for the first time. kathleen: and zelenskyy says they will not abandon that port city. what could come from biden's trip to meet with nato next week? it seems their position, no matter how much hope and military support they give, no one is willing to go beyond that and do anything to stop this. correct? >> yes. and i think they have been very clear about the fact that they do not want nato to get involved, even accidentally, in this war. to have some way to make this a russia-nato war would be very dangerous for the world, potentially having two nuclear

powers go at it would severely escalate things. so yes, the stances pretty much to provide as much military support and diplomatic support and sanctions and everything else they can do to pressure russia into some sort of diplomatic solution that stops the fighting and allows ukraine to rebuild somehow. kathleen: thank you for the latest, daniel. up next, evergrande. details ahead. this is bloomberg. ♪

kathleen: investors are

refocusing on monetary policy. security is among the top five best performing since the war began. this after the worst flow of chinese bonds on record, potentially setting up for strong inflow in the future. evergrande onshore unit says they have bondholders approval. let's bring in rebecca wilkins. how much does this delay on evergrande help comp -- help the company and their investors? >> given that we are heading toward some restructuring, i think it is by the by. i think the real focus is when they can expect to see a full restructuring plan. originally told it would take six months which means we would

see it in the next couple months or so but there has not been much communication between bondholders and the offshore space and the company. there is not a lot of clarity around when that could come. some delayed coupon payments here or there to some extent takes off pressure but ultimately creditors are not expecting to get paid at this point. haidi: is there more appeal with the expectations of policy easing when it comes to chinese bonds? are investors coming back? >> it is interesting. the fear around multiple lockdowns in china and the worst of the covid outbreak had frightened people but now that we are seeing a divergence between china and the rest of the world when it comes to rising rates, china might not be heading for that very strict lockdown which we initially saw

coming is boosting the chinese bond. in broader context, chinese corporate credit is still under pressure. we are seeing first signs of property stress spilling into the space. china's corporate bond market is larger than the offshore so if you start to see pressure there it could create further risks. haidi: rebecca with the latest. let's get the latest headlines. [indiscernible] according to the male, he will have assets frozen while in the u.k.. interest from potential bidders.

the three biggest oil competitors are halting and russia in response to the invasion. some are cutting new investments . one is holding current and future operations in the country. more than 100 new companies have issued warnings of the impact of the were on ukraine. the majority are cautious about stakes specific to their businesses while other companies site broader risk. next, hong kong says they are past the peak of this wave of the virus. this is bloomberg. ♪

>> china's top envoy to washington pledged his country will do everything i can to de-escalate the were in ukraine and says it relationship with russia is not part of the problem. these comments follow bidens warnings to president xi. >> there is disinformation about china providing military assistance to russia. what china is doing is sending

food, medicine, sleeping bags and baby formula. not weapons and ammunition to any party. we are against the war. we will do everything to de-escalate the crisis. >> the world's top aluminum exporter is banning supplies to russia. aluminum has not yet been targeted by sanctions. this will cause greater pressure on a japanese aluminum company. the u.s. is likely to see a rise in covid infections although not enough to prompt widespread

restrictions. congress has been called on to pass a covid relief package. the subvariant of omicron is driving up infections in europe and asia and accounts for 30% of u.s. cases. japan is set to end there because i state of emergency and covid restrictions will expire in tokyo -- japan is set to end they are state of emergency and covid restrictions will expire in tokyo and the rest of the country. >> with everyone's cooperation, we have seen improvement in state of infections and the health care system. therefore we plan to relax existing restrictions march 2022. >> 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. this is bloomberg. kathleen: hong kong reported over 14,000 new covid cases sunday, the lotus -- the lowest total in three weeks. carrie lam says case numbers have appeared to hit a peak. >> having gone through the peak you have seen here, i think a responsible government should regularly and vigorously review the measures to see whether there is room for adjustment. kathleen: the shanghai disney resort will close temporarily be today as infections sorts of record highs. let's bring in stephen engle. let's start in hong kong. what can we expect later today in the covid briefing? >> we will likely get relaxation of quarantine rules and possible

complete scrapping of the flight banned from nine countries including the u.s. and u.k., some things the business community among others in hong kong who have been waiting out some of these restrictions, have been calling for this. carrie lam had a different tone in her voice last week, almost exhaustion. many had pushed for a relaxation . most countries coming in had to beep up in a hotel for 14 days at their own expense and given the numbers, it did not drive, acknowledged by carrie lam. we will hear part of the

interview. it is almost a foregone conclusion they will scrap the ban but the question is when they will relax the 14 day quarantine in a hotel down to what he expects to be 70's. there is still a fifth wave. the numbers are down. over 14,000 new cases, the lowest in weeks but still 246 new deaths. there are more deaths from covid in hong kong than the rest of mainland china combined, at least the reported cases from the government. so they are possibly winding down from the peak but they have to be vigilant but there could be relaxation coming this morning when carrie lam speaks at 11:00 this morning.

shenzhen was locked down for a week and that has been lifted. authorities feel the wave is under control there. it raises questions about supply chain issues. that is the hyatt manufacturing area. the focus shifting up north to the financial center, shanghai. 17 confirmed cases as of saturday but 462 other asymptomatic, 492 asymptomatic cases. they are concerned it is a microcosm of a bigger outbreak. so disneyland and shanghai has been temporary closed as of today and the city is embarking on a citywide testing campaign and targeted lockdown. but they say they can test 1.9

million people per day. they will be doing it. haidi: stephen engle there. we are hearing the apple supplier in shenzhen has resumed normal operations after the lockdown has been lifted while keeping some restrictions in place but saying the spread is under control and the go-ahead for government agencies and companies to resume normal production and operation. as we wait for the results of the review on the covid restrictions in hong kong, we spoke with a member of the executive council of carrie lam's government. >> i think starting immediately until -- going until mid april, all hong kong residents should

be allowed to go anywhere. if they allow hong kong or's to do their own quarantine -- hong kongers to do their own quarantines, so much the better. for the omicron variant i think the hotel quarantine for anyone coming in should be reduced to seven days instead of the current 14 and sometimes 21. because that is the publicly recognized incubation period and that is what our quarantine is based on. so i think that has a good chance of happening, reducing

the quarantine. canceling the flight banned i think it is almost a sure thing but whether or not they will reduce the quarantine to seven days is unsure but i have talked with a lot of experts who say with the omicron variant, there is no need to go beyond seven days. so now let's go back to the c.o.p.. . >> right. you say opening cannot happen until you complete the compulsory testing. you are talking about a nine day see ut process coinciding with the lockdown. so we are talking about the ending of april before opening up. >> at the latest. if the government can convince

experts to do it earlier, so much the better. but the initial discussion, when i last spoke about this idea we were talking about the end of march so mid april versus the end of march is only a difference of two weeks. and in those days that normal cases are not -- were not as high as what we see currently. haidi: breaking news about evergrande, suspending trading this morning in hong kong. evergrande services and other related units suspending trading in hong kong. we had heard evergrande onshore units had received approval to delay coupon payments on a bond.

a real estate group is using a payment coupon and that will not trigger a default on the bond. we are watching key dates for later this week. march 23 a $2 billion bond is due for china evergrande and we expect a debt restructuring framework and deadlines when it comes to repayments due for the associated entities but we see china evergrande suspending trading in hong kong this morning. kathleen: up next, property group began trading, marking a major milestone. we will speak with the cfo just ahead. this is bloomberg. ♪

haidi: property group shares are higher in their first trading in new york. despite a recent selloff in a challenging stock market. joe, thank you for being with

us. a challenging market is probably underplaying the amount of volatility and disappointment we have seen. were you surprised by the reception? what does it tell you? >> thank you for having me on today. we are always expecting some volatility. bearing in mind the market conditions, we are pleased. our focus is on the fantastic position our company is an the strong tailwinds behind us. new and exciting areas. haidi: beyond the trading action what do you expect for longer-term growth prospects and trends? >> we are focusing on the core marketplace, back to business. we are benefiting from the tailwinds and we have increasing

wealth and gdp growth. a strong foundation so we are focusing back on the market place and great products for our consumers and also offering out the fintech offerings. back to business. kathleen: singapore is one of your strongest markets. how are the property curves affecting what is going on the ground? how has that affected user behavior on that side? >> it's interesting. we still see fantastic numbers in terms of property. the market has been strong for some time. a strong asset class in this region on a phenomenal level of interest, particularly post-covid.

it was challenging when we could not get out and view the properties but since restrictions have been lifted, there has been soaring interest on our side. kathleen: you have been around for 15 years. you expect 44% revenue growth this year. when do you expect to get net profit positive? >> we will be profitable in 19 and 20 despite covid. investing high in 21 to get to the position now. profitability increases as we go ahead. those of the major metrics. haidi: you talked about doubling down when it comes to southeast

asia and data analyst sticks -- data analytics. where will you put that money to work? >> we are looking at fintech and data. we have a fantastic growth in business in singapore. asia is a massive opportunity for us, unlike many markets in the u.s. looking beyond that we look at areas like home services which is complementary to our core business. other markets really establish products that area. and focusing on operating systems for developers and facilitating the digitalization journey for them.

kathleen: now a quick check of the headlines. gm has bought out a self-driving startup called crew. this ends softbank's involvement in this business. saudi aramco will increase spending on issue bonus shares to cope with surge in oil prices and will probably increase capital expenditure up to $50 billion. aramco kept the cash dividend last year at $75 billion. see apl is considering north america for a plant. they would supply tesla and 10

eventually employ as much as 10,000 workers. plenty more to come on daybreak asia. this is bloomberg. ♪

kathleen: let's look ahead to the market open in hong kong and mainland china.

a stunning turnaround from last week. sophia is here for more. i am on the edge of my seat. we have the big move in u.s. stock market friday, big move up in the big tech game. what do you expect and what is most in focus for investors this week? >> it will be a big day today. we are looking at a stronger start here on monday. we just saw the headlines that china evergrande is suspending trading. ron shine is not reporting earnings on time because their auditor had issues so there is still a lot of risk for investors. there was a dramatic turnaround last week. we restored confidence in markets and there has been commentary not just from authorities in china but also

hong kong, the financial secretary saying the government is looking at developments in markets to ensure that markets remain stable and we do not have what he called an unhealthy development or buildup of derivatives trading. so stabilization i think is the word for this week. we could also get some clarity today on pboc stimulus, china announcing the benchmark lending rates in half an hour so that could give us some signals of what concrete support measures will come out of china. kathleen: had expectations changed over the past few days? >> the primary is not a policy rate. it is essentially set by banks

and that has guided lower, it should be guided lower by cuts in the mlf rate. we know the chinese central bank decided not to do that last week. so there is they debate. will? ? banks lower it if they do and the mlf rate has not been lower they effectively get a hit and their margins are squeezed. will they do that today remains to be seen. the central banks wait until april to do this so it will definitely be interesting. there is not a consensus on whether we will get a cut or not. haidi: we are also looking at ron shine, the bond do down after the developer said they are unable to publish their year results after

pricewaterhousecoopers resigned and was unable to complete the work. the supply of requesting information has fallen behind schedule, according to the hong kong stock exchange so that is the latest developer to announce an auditor change amidst a huge amount of turmoil for chinese developers. we continue to look at issues regarding transparency, accounting concerns, governance concerns, and concerns about developers ability to repay debt after a record number of defaults last year. so we are watching the ron shine other stocks we will be watching

at the open in half an hour, reporting preliminary net incomes, chinese stocks linked to economic reopening and tech could be active. shenzhen emerging from a week long lot down, sang operations and factories have gone back to normal. this is what we see with u.s. futures trading up at the moment after a furious rally at the end of the week with the return of risk sentiment and rebound. a little downside when it comes to trading in s&p futures at the moment. dollar china holding steady. kathleen: coming up, william warner joins us to discuss how the recent volatility has discusses his business. and the forecast on china's

growth and what to expect from that pboc. that is it from daybreak asia. our market coverage continues. standby for bloomberg markets: china open. this is bloomberg. ♪

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♪ david: good monday morning from the asia pacific, is 9:00 a.m. in hong kong, also type a. i am david ingles with yvonne man. yvonne: our top story, china's top envoy to washington says beijing will do well it can to de-escalate war, however, he steers clear of condemning russia's invasion. the pboc will announce the