haidi: good morning, we are counting down to the major market open. >> the top stories this hour, u.s. stocks fall while record losses after bearing the brunt for the first central bank action on inflation. haidi: gas prices while russia

demands payment in rubles. tencent what is to embrace beijing's stricter control after reporting is slower -- slowest quarterly growth on record. it is a like stocks and bonds traded places today after gaining five of the previous seven sessions, the s&p 500 closed lower today. a little bit of it has dropped, there is a bounce, a little bit of risk off profit today for the stock market. almost every sector was down except utilities and energy. energy has been up more than 5%, a couple of things going on here. the u.s. and eu getting ready to propose or sanctions on russia. there was a shortage of inventory in the government report today and an important black sea export terminal has had to shut down and it could

take one million barrels of oil exports off of the market a day. until he gets up and running again, the bond market looks like a breather for the bond bears. in your yield is back on the 2.29%. -- the 10 year yield is back on the 2.29%. we have seen a record drawdown for global bonds. let me give you the numbers, this is a global aggregate index. a low set corporate bond and sovereign bonds, it is down 11% from its high, the biggest drop from the peak in a series of numbers which started back in 1990. it is 11% down compared to 11.8% in 2008. one after another says aggressive rate hikes, we are ready for a 50 basis points, the latest model on bloomberg

television, mary daly from the san francisco fed, let us listen. >> i will confirm what jay powell confirmed which is i have had everything on the table right now. if we need to do 50, 50 is what we will do. the data will help us determine how much is necessary. kathleen: it has been interesting, we have these been officials on our shows for the past year or longer to see how they evolve, we do not know if inflation is going to be temporary, we will start looking at the balance sheet and then some rate hikes and one after another with the 50 basis point hike maybe as soon as may. it all evolve so quickly. if they wanted to make sure that markets were not surprised, they have done a good job of it. haidi: going steady as she goes, i remember when we talked about transitory when it comes to the inflationary pressures. we are getting a lot more people

worried about bringing forth the next recession as well. the energy piece is such a big part of this puzzle and we are hearing about vladimir putin planning to force european nations to pay in rubles for natural gas purchases, that could trigger major price rallies in both assets come all of this is ramping up expectations for an u.s. allete energy packed with nations. -- with an energy pact with nations. let me start off with you, what is the impact of this demand for payment in rubles? >> the fact that they are asking for payment in rubles is a sign that the sanctions are hitting the kremlin. the sanctions are working. they are stinging the russian pocketbook. it is a clear sign that there has been a cause and effect with

war in ukraine. that being said, this demand to receive payment in rubles has had an upward effect on gas prices. you saw a similar upward climb on natural gas prices in the united states. kathleen: quite a reaction in the ruble today, i do not want to steal your thunder, what exactly did the ruble do today? >> the dollar ended 5.6 percent weaker against the russian currency on the local exchange. that is the biggest day for the ruble in at least seven years. it was a huge reaction under the currency, we will have to see what it does tomorrow is all. haidi: what are we expecting when it comes to the potential energy packed and the next round of sanctions? >> president biden, one of the

things he is going to be speaking about and highlighting in his talks with european allies in the next few days is that they are succeeding, that even though it may not always seem like it, given the fact that russia continues the invasion of ukraine that the sanctions are working and that they need to double down on them. the u.s. has banned oil imports from russia into the u.s.. the u.s. has a much lower dependence on -- less than 10% on its energy, 6% of crude energy needs and less of petroleum products, european nations are much more dependent. what president biden is going to announce in the coming days is some way to these european countries to work with the u.s. to become a less energy russia. there'll be sanctions about

oligarchs and that will be in concert with this. that will be a big message that we will be making to his european allies. we need to continue to keep up the pressure with sanctions on russia. haidi: thank you for the latest. global markets reporter, sydney and our director jodi. we are expecting sentiment and stocks to fall, we see for global equity rallies take a stumble, commodity prices are dumping back up again. the market is beset with volatility very -- wish voluntary and inflationary concerns. optimistic about job opportunities, the employment confidence index at the highest since the second quarter of 2019. sydney futures of looking lower

at this point, recommending an early decline at the open. we do see a renewed strength in the new zealand dollar. this is psychologically key level for the aussie, the second-biggest trainer against the currency cohort good we see risk on when it comes to commodities, more generally, the 10 year yield for australia below 2.7%. chicago and indicate futures looking -- nikkei futures down in asia today. let us get you over to vonnie. vonnie: the airline that has crashed has been found and sent to beijing for analysis. all of the pilots had licenses, health certificates. all people on board the boeing

are presumed dead. san francisco head president is -- fed president is echoing calls for a hike. she supported a 25 basis point move and to shrink the balance sheet. she cautioned against moving too quickly given broad global risks and noted the fomc would have to take tightening by other central banks into account. >> i will absolutely confirm what chair powell confirmed which is that i have everything on the table right now. if we need to do 50, 50 is what we will do. if we need to do 25, that is what we will do. the data will help us determine how much is necessary. >> covid vaccine is showing modest effectiveness in reducing omicron in children. it showed a raised immune

response in children under the age of six. moderna is planning to submit the data to u.s. regulators and will apply for clearance to administer it to children 5-11 years old. the first signatory -- the first female secretary of state has died at 84. she was a using voice for the use of force during the balkan conflict. that was consistent with the hardlines you press when she was clinton's ambassador. her family interpreted her death to cancer. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. kathleen: still ahead, we get analysis on the bond market from matthews asia, which expects yield curves to flatten even more. we speak with someone who sees the no risk of a policy mistake shaking up -- real risk of a

policy mistake shaping up. ♪

>> stocks have been relatively

resilient. >> markets are good and allow more comfortable. >> tightening is happening right now. >> the fed doubling down on being extremely hawkish. >> and what of pressure on markers to expect more rate hikes going forward -- a a lot of pressure on markets to expect more rate hikes going forward. >> go to bonds? >> 50 basis points starts to make a lot of sense. >> they are in the mood to raise rates. >> not reusing the allocation but to increase them. there is no increase to u.s. equity. >> that works as long as we stay in a relative space. haidi: let us bring in our guest, a real risk of policy mistakes right now, if the fed is too aggressive it could push the economy into recession. with us and now is the director

of investments at corolla's. we have taken a more hawkish term, we are seeing the recession being pulled forward as well. >> we are in a similar environment to the late 70's where we had the iran oil embargo issues and high inflation. volker was aggressive in raising rates and it is the first time we have had a recession occur less than a year after the fed started to raise rates. there is a risk here that the fed by acting too quickly could induce a similar response is not a guarantee and the market has been resilient. it is just a word of warning. when people your money? -- where do you put your money. being very careful and selective about equities and paying close

attention to the quality of the company and their evaluation is imperative right now. managers should do better in these environments but i would also say in our case i would look at alternatives as the way to manage and hedge risk in portfolios. one of my favorite positions at a volatile time is something like the tell which is the iq equity market neutral entity beta fund. it does really well in the markets matter super volatile like this. haidi: one of the interesting things is when people are seeking cover, you dump the stocks. your stocks are still the big tech names? >> in a rising rate environment, growth typically underperforms because rising rates are the headlines to growth stocks. it is especially a negative for not earning growth stocks. you want to stay away from those. there are going to be

opportunities, bigger technology names with stable earnings and still having earnings growth that also happens to be trading at a reasonable valuation. something like apple which is everybody's pic right now but that is a good example of that or any much nvidia where they have plenty of opportunities for growth. it is diversifying its segment exposure and it is doing really well despite the environment. those are names in the tech space i'm bullish on right now. i would pick my spots and stay away from those non-earners, even if improving revenues, if you are not earning money, that is a headwind in a rising rate environment. kathleen: one of the classic things right now is value when rates are rising. when you look at how much the bond market has sold off, versus how much the fed could raise rates in an relatively short period of time, the bond market

has a lot more to go? do you think this is it for a while? >> the bond market has some weird dynamics going on. there is some feeling to see rates continuing to go up because we have a geopolitical event and treasuries are traditionally seen as a place to be when there is this type of risk in the market. you can see them trading in range and it is the flattening of the yield curve and the risk of inversion that is a little ficult to maneuver. you have to think about that when you decide to go into fixed income where you want to be on the curve. for me, it is hard to figure out because you have these two very different dynamics going on in the bond market. i am focused on where i can add value to manage risk in my equity and fixed income. >> a couple of things that you said you like is financials

which can do well in an environment like this. the commercial property, i can think about it and housing and real estate, mortgage rates are up so much. i am learning how that will affect that as well? >> i actually like the residential rates and more the commercial rates, we have rising mortgage rates, have some issues that are headlines -- headwinds for the housing sales. we have kb home's reporting it was disappointed in both revenue and earnings. they had a missed there. i am not saying that i want to buy homebuilders or anything in that room but it does not change the fact that there is demand for housing right now. people are going to rent instead of looking to buy. residential apartment rates like camden properties which is not only from -- attractive from a

evident perspective but a john coffee perspective. -- geography perspective. that is a stock that i like right now. kathleen: i have to ask you about crypto. people are ready to invest and a lot of people are going to wait and see. >> i like crypto, i own some crypto, it is more of like a set it and forget it. i do not look at it ever come up crypto long-term is a game changer, that technology is a game changer. in an environment like this will we have volatility, it is not a great hedge. people like to compare it to gold and they have performed in complete different directions in that particular environment. i do think for a small amount of money if you do not mind if you lose the money, it is a place where there is a lot of long-term possibility. goldman made their first trade

in that space, there is opportunity there. longer term if you put a small percentage of the portfolio and never look at it, it is worth doing. right now, if you are trading it, i do not think it is worth the time. kathleen: thank you, great conversation. you can get a round of the stories you need to get your date going in your addition of daybreak -- day going in your edition of daybreak, get the assets and news that you care about. this is bloomberg. ♪

haidi: let us take a look at the bond market will we have seen treasuries and the market taking a breather as a callback of

historic losses. investors and fed powell sees a beaten-down fed treasury auction. a ciber jump in yields. -- a small jump in yields. the australian 10 year yields, the stabilization across the three year and the 10 year and a similar picture when it comes to new zealand as well. we are seeing a little bit of a pullback for the aussie dollar. it tested the 75 u.s. sent level, for the first time since november. given that the aussie has risen about .5 percent and is the best performer today in the g10 space. the kiwi dollar has seen reasonable strength as well. looking ahead for australia and new zealand and indigenous groups from the qe islands are taking south korea's state

financiers to court in an attempt to hold funding for what they described as one of the world's dirtiest natural gas projects. there has been an agreement with moderna to access a cutting edge mrna treatment. -- the second woman to retire while holding the top ranking, we know the other woman to have retired came back after 16 months only to retire again. i wonder what the future holds for her now. kathleen: we hope it is bright, she is quite a bright star. let us get a quick check of the latest business headlines. a paradigm of stricter government oversight after reporting quarterly growth in single roads -- digits for the first time ever. tencent also dismissed speculation of a share buyback,

a move that was announced by alibaba earlier this week. ubs upgraded the stock to a buy, ubs says chinese e-commerce platform business model is sustainable and expects the company to stay profitable. it is often the lower -- it is off of the lower competitive price and cutting back on investment losses. japan's top refiner's. importing russian crude due to the invasion of ukraine. they have not signed contracts for russian crude since the war began. there also be no longer striking new deals for russian oil. pressure mounts on the french automaker to stop doing business in russia. it is halting operations in the moscow plate and is considering

the local venture. there has been a pullback from the second market and ignore profit margins and pre-classico -- and cash flow this year. more on that just ahead. we are going to be taking an in-depth look at the part market with teresa from -- after a big selloff. we are wondering if she thinks -- what she thinks about yield curve inversion. the latest on evergrande, the road to recovering from value on the evergrande u.s. dollar bond she says is long and difficult. she thinks the government has been a poorly run business and this could get in the way of some solutions. keep it right here, we have a

lot of questions and answers for you coming up next. this is bloomberg. ♪ if you're a small business, there are lots of choices when it comes to your internet and technology needs. but when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose fiber solutions with speeds up to 10 gigs to the most small businesses. that's virtually everywhere we serve. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™. >> russia is planning to demand

ruble payments by european nations in a step that could aggravate the energy crisis and steepened moscow's standoff with the west. vladimir putin demanded the bank to set up a ruble payment mechanism within a week. both sides use russian energy supplies as a weapon. a record along shutdown, the moscow exchange will resume trading in 33 russian equities

including 9:00 a.m. russian time -- local time. trading was halted from february 28 two showed investors from the sanctions impact -- shield investors from the sentience impact. a respected reformer known as the architect of the 1990's, under putin he was in big state companies until being named head of sustainable development last year. president biden to reinstate sanctions on trump era duties. ranging from tv parts to backpacks, bicycles, and even

pillows. trump administration originally granted over 2002 hundred waivers but they were allowed to expire in 2020. -- granted over 2200 waivers but they were allowed to expire in 2020. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. kathleen: mary daly says that a rate hike may be needed in may. she spoke with michael. >> a traditional way that we have done it over the past couple of decades is you raise to interest rate and rest the meeting. it is the gradual approach power the men to see what is going on and then make adjustments. the sep meeting was seven increases in 2022. that suggests quite a bit of frontloading on policy. i remind people that we are going to make balance sheet adjustments as early as in the main meeting.

that has not been decided completely but that is another equivalent to at least another rate hike. and then, this is something we often do not talk about, we are making these adjustments at the same time other central banks are making similar types of adjustments, tightening policy, we could get a lot of tightening and financial conditions globally. that is something we have to think about. i think relative to previous periods of tightening, this is quite a bit of frontloading as the sep has indicated -- scp has indicated. >> are you willing to support that? >> i think the data will tell us whether 50 basis points of 25 basis points in the brown's sheet is the right recipe or 50 basis points. the data will help guide us.

i would need to front run those deliberations but i will absolutely confirm what chair powell has confirmed for himself which is i have everything on the table right now. if we need to do 50, 50 is what we will do. the data will help us determine how much is necessary. the important thing i think everybody listening would like to know is we are committed to moving the policy rate in line meant -- in alignment with what the economy needs. it is not need the support that have been offering. >> what do you think the is going to do to the global and u.s. economies! we had governor waller say that he did not vote for 50 basis points last time because he was unsure. jim bullard told me we cannot wait to find out. we have to act now. what do you think? >> when i look at the -- i put a couple of risks in front of

people, the invasion of ukraine and the ensuing difficulties, my heart goes out to the ukrainian people. it is a global headwind on the u.s., the domestic economy, i see it as a risk to inflation. further upward pressure on prices, gasoline, also other commodity prices which ultimately are goods that are we -- that we are finding high prices for. i think it is an modest risk to growth. not the kind that would produce anything like stagflation. we are an oil exporter. when prices rise, we get the offset on growth. this is a big uncertainty shock. you also have this happening when it is clear that covid is not completely behind us. haidi: speaking exclusively with

michael mckee. let us look at the rates market. we had a surprise when it comes to the u.s. treasury selloff, reaching historic levels. we have the 20 year auction really attracting a lot of bidders to come in and pick up this option for the cheapest level in about a year. we saw the 20 year sale and that led the treasury rally in the long end. we are seeing some stabilization when it comes to asian sovereign training at the moment. australian 10-year is holding pretty steady at just over 2.7 percent at the moment. we are seeing a similar picture when it comes to new zealand. 10-year gilts also trading at 0.466 at the moment. we also see the currency side, and low-price action when it comes to these commodities like

the aussie and the kiwi dollars as well. kathleen: let us bring in the portfolio manager at matthews asia. i am thinking about bonds and what i want to ask you and it is this. the two year yield was up 145 basis points. it was a huge move over the course of the quarter. you could not see anything like that unless you go back to 1984. something the fed has done, they are saying that they might do seven more. or eight, they do not know for sure, it depends on the data. when you look at the 10 year note yield, is it where it needs to be? does it need to rise further? is there a way you could calculate that? >> i think what the market was doing was actually saying that the fed really needs to frontload these rate hikes.

the reason has to do with the fact we are saying inflation. i want to say it, or is inflationary. what people are coming to is the realization that this ukraine -russian conflict is going to be lasting longer than most people would want. the fed needs to actually build up its ammunition. it is likely that overall global growth is going to be dampened. they need to actually be able to cut rates later on, should this have a greater than expected effect. kathleen: if you are a long-term bond investor, you keep your powder dry? i assume that you do because it is going to have an recessionary effect at some point. you could make money depending on how high the yield gets before you jump in. >> here is how we look at it. if you think about the 10 year

yield, it is driven by global pmi. the u.s. bond market really encapsulates all of the risks globally. what we have seen in our model is as inflation has actually going up, we need the yield to go up. it is being counteracted by the fact that global pmi's are slowing somewhat. we are seeing fair value of the tenure at around 2.7. if anything, i expect that to go down a little bit. maybe we have another 20 basis points before i think it is time to buy duration again. haidi: when you take a look at bank divergence, part of this entire policy adjustment cycle is what other central banks are doing. the likes of the rba, where is the opportunity for rates to be part of the treasury market? >> i think it is hard to call at this moment. there is a lot of uncertainty

right now and all of the central banks are really looking at the risks and how the numbers will be looking before they really move. there is going to be substantial amount of volatility. the only market where we are actually not seeing substantial inflation right now is china. because china has stockpiles of so much commodities over the past two years, like grains of come all the way up to energy, as well as metal, they may be the most inflated from this commodity price hike. as such, we think that the chinese rate market may actually have more room to fall. if there is one market i could point to where you are not going to be hit as much by inflation, it would be the local china rates market. haidi: i want to get your thoughts on evergrande. is it representative of the broader property market and broader distrust by lepers --

broader distressed developers? >> i think for most of the on investors in the property market -- i think for most of the investors in the property market, evergrande, we think, has a real solvency issue. they have more liabilities than their assets can cover. that is not the case with most other china properties developers. most of their issues sent from a liquidity problem, externally driven by poor sentiment. but the implications are if you do own good companies with strong fundamentals, there is potential to look at the liquidity problem, recovery was going to be so much stronger. they're talking about power recoveries here. for many of the high-yield names, we think you are long-term holder, it may not

necessarily be a bad time to start dipping in and buying. kathleen: great to have you with us. we do have some breaking news when it comes to national australia bank. not planning another further share buyback, that is with the additional buyback to cut the ratio by 58 basis points. we are also hearing that the framework will change their capital held, starting the next buyback after the next half results are announced on mace if -- may 5. they are working for a target of 11.5 of 1% of time. completing the buyback and a further buyback expected after may of up to 2.5 billion other -- aussie dollar's.

revealing the financial toll of china's crackdown on big technology. this is bloomberg. ♪

haidi: take a look at the aussie dollar hitting the 45 cent level for the u.s. dollar since november.

this is a key level as we saw the all the moving as the second biggest gain or. it is the best gainer so far this year. they say it is due for a correction, they are calling the gains overstretched and the rba meeting could be a catalyst for a move lower. we will wait to see what the rba has to say about a potentially strengthening aussie dollar in their outlook. let us look ahead of the asian trading day, the gentle becoming to an end -- the yen could be coming to an end. growing headwinds could include more escalations in ukraine and the worsening conditions of the global economy. kathleen: chinese stocks are not

on investable -- un investible. line up with areas that will get policy support. tencent has promised to align itself with the paradigm of government oversight after reporting the slowest growth on record. what are the key takeaways? >> tencent declaring that this is an end of an era. the years of reckless growth, are behind them after more than a year of this bruising crackdown. you saw that, numbers, there were not pretty. revenue only grew 8% for the first time ever. they saw single-digit growth in sales since the 2004 listing. that income, even though it tripled in terms of its

estimate, there was a huge beat, that was a one time gain. adjust the income, it felt 25% year on year, that was a huge mess -- failed 25% year on year, that was a huge miss. it was weighed down by the technology crackdown, as well, that decline for the first time on record. the company saying that the sales trend is going to continue outlays for the start of the year. they do see some recovery at the year and, -- end, we saw that revenue only grew 1%. reflecting the curves we have seen when it comes to the playtime for minors, this gaming approval free which has been going on for months now, for tencent, they are saying that these challenges are temporary. there is a stockpile of gaming titles to launch as soon as

these regulatory hurdles ease but don't -- but no timetable was given on that front. kathleen: the company seems to be taking a different approach to alibaba which has been buying its own dip. >> after that 25 billion dollar buyback from alibaba, there was speculation that tencent was going to follow. they seemed to brush that off a little bit, they did not commit to any of that. they said they would rather spend money on investing in parts of the business as well. when it came to spinning off businesses, they say they are not in consideration at the moment. that is different than when we heard from alibaba a few weeks ago. quite open about fitting suitable business. units into separate entities. they are taking a different approach, these two rifles, as to when it comes to issues that linger for tencent, the fintech business that is the big question mark. all they have to go through a

big overhaul? they are looking to meet these requirements. they will comply to all regulations. haidi: coming up, we are discussing what is next. the number one tennis player, a shocking retirement from the professional circuit. this is bloomberg. ♪

haidi: ash barty has stunned the world with the announcement that she is retiring. it is unlikely that her off court presence will dry out because she has left tennis. it is really interesting where this leads her sponsors and all of the support she has had from the corporate world. she is a normal sleep popular. she has usually likable -- she is hugely likable. >> in the short-term, the medium term, there were not be a sniffle -- significant impact on her appeal.

i think the retirement provides an opportunity for her to talk about the relationship on how it has tough it has been from the start. you also have to think about their brands and relationships, in this next phase of her career. she is going to be a favorite of australia for a long time. she is going to be the last time winner of the australian open for a long time. she will be in the conversation and it will be about what she wants to do and what opportunities -- haidi: we have so much commentary about how much money she is leaving on the table in terms of the future being lucrative and opportunities she gets from the very lucrative

sport. has there been examples of these very high level athletes retiring but still managing to keep that earning capacity? i am thinking about australia, pat with his bonds contract and all of that. >> there are numerous examples of retired sportspeople continuing to have lucrative careers beyond the court or field. a lot that is driven by their transition to the media and using that as a platform to retain relevance with an australian audience. we see a lot about it now. in cricket and a lot about it in the market. ash is inclined, it is interesting to see what she does decide to do and how much of those commercial obligations she

wants to commit to going forward given she is looking away through the intensity of what comes with it. kathleen: serena williams is investing in companies, technology startups, we are starting to see crypto ventures. ash is talking about pursuing her dreams. what do you think there might be? -- that might be? >> i think that is probably a life away from the spotlight. it is no secret that her priority is to get married and spend more time with her family. it will be interesting to see ash beyond this, it may be more in the community, around something that she is particularly interested in and

passionate about. it may lean into those opportunities. kathleen: do you think that your she had to spend away from her family when she was on the tour and she had to be because of covid, she had to go from grand slam to grand slam, do you think that took a lot out of her? >> absolutely, life on tour is physically and emotionally taxing in the best of times. let alone throw in the challenges of freedom of movement, there is no doubt that the years she spent on the tour and the residence of that has led to the retirement. she admitted that she does not have the physical, emotional, energy to keep going in that state. kathleen: thank you so much, joining us from sydney. we discussed the likelihood of an economic recession with an

investment group as energy prices continue to spike. the national bank of australia tells us about their euro and pound forecast. daybreak asia is next. this is bloomberg. ♪

haidi: good morning, we are counting down to asia's major market open. kathleen: welcome to daybreak asia. our top stories, asian stocks set for a weaker start as the global rally stumbles. the commodity prices for fresh inflation worries. natural gas surges as they demand payment in --s