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 -- as vladimir

putin demands payment in rubles. tencent embraces tech sector control after reporting the slowest quarterly growth on record. haidi: let us look at the start of trading, overall downsides when it comes to the equity session in asia. all of the rallies, coming to a halt. getting a slight recovery, expectations are tied to policy and a strong demand for that 20 year auction given that jeep levels we are seeing -- cheap levels. pretty flat at the moment, we are watching when it comes online, planning the further market share buyback. it wraps up its last buyback as well, looking ahead when it comes to the start of trading in japan, we are seeing the nikkei come off at the 11.5% alley --

rally. we have to watch to see how much of that can be sustained as well as the weakness in the yen continuing strength in some of these commodities including that aussie yen pairing. kathleen: it will help exporters. we are saying the japanese stock market doing so well. the dive down into the futures, you can see that some green on the screen, it was not such a big decline today. every sector was down except for energy and utilities. that jump in our five dollars a barrel that -- that jump in the five dollars a barrel, nasdaq futures were down today on the cash trade. about 2% after rising 2.5%.

the treasury bond futures after our continuing then. we are looking at the price rising as people continue to bet that this bond rally could continue. the demand for the 20 year bond auction, investors are saying that these yields are looking attractive and they are buying some. crude is up, people are thinking in the futures market, maybe that was a little bit too much, they are ready or we were looking at the price, 100 for -- $114. there was a out of the rally and a bit of caution in the e.u. meeting starting hours from now. take a look at this, speaking of russia, the u.s. is set to announce further sanctions aimed at russian political figures and all the carts as president biden meets with european leaders. dan, what are we expecting? >> obviously, biden is traveling

to europe in the coming days and he is set to announce some new sanctions on oligarchs and political figures. presumably those closest to vladimir putin. this is following a barrage of sanctions we have seen in recent days on russia. it has been a few days since we have had a big announcement like this. i think at this point there has been some pressure from congress and others to sort of tighten the news around putin and to cut off a lot of his support. also to tighten some of the sanctions that have already been announced. there are some transactions that are allowed to go through. based on the sanctions of the have been enacted so far. there are voices in congress that are calling for secondary sanctions, those would be sanctions on entities that do

business. it could be some combination of all of the above or perhaps a targeted oligarch or people who are close to putin. there is a desire to tighten up the sanctions regime and make the pressure even greater on putin at this point. haidi: what are we expecting in terms of getting closer to an agreement amongst allies as to the extent of energy being included in this round of sanctions? >> national security adviser jake sullivan said earlier today that on friday, there will be some announcement about an agreement between the u.s. and the european allies are natural gas. this follows is a meeting earlier in the week in washington with some major natural gas ceos and bank ceos

including jamie dimon who encouraged the biden administration to come up with a marshall plan for natural gas, to ship natural gas to europe but who also ramp up domestic production or the u.s.. this goes to show how important and how central energy is to the strategy that the u.s. and its allies have taken to put pressure on russia. energy is one of russia's biggest exports, one of the biggest commodities and this is the point of leverage and pressure that i think most people feel will be felt most acutely by president putin and russia. we need to have some agreement among u.s. and the you e.u. -- and the eu allies in the coming days. haidi: russia is escalating the energy sites, demanding ruble

payment to those it deems unfriendly. that since european gas prices and the ruble soaring. sydney is with us as well. this is escalating the energy tensions? >> it certainly does and it seems to be having the potential to hurt europe at a time when they are suffering from the gas prices. we are seeing soaring energy prices at the moment. the idea to force natural gas purchases in russia's currency could have devastating effects if it ends up that would affect supply. kathleen: does today's rally change the picture for the ruble? what are the implications for

the country if countries did start paying in rubles? we are seeing pushback in europe. >> at least for the training on wednesday, even the rallies that we are saying in the day in russia, it would not be a huge loss in the ruble so far this year. the dollar is down 31% against the ruble. it is the worst-performing currency in the whole world. if this demand plays out, payments in rubles, that could stabilize the currency, especially in terms of adding additional demands to it. although the political element is russia making life a bit more difficult for parts of the country, i was looking to do that too. kathleen: let us get to bonnie with the first word headlines. >> russia's envoy has been the

largest person to leave russia over the war in ukraine. he is citing his opposition to vladimir putin's work. he was known as the architect of russia's privatization. he was named envoy for sustainable development last year. russia will restart training in some -- trading in some local stocks after a shutdown. it will resume trading in 33 russian equities between 9:50 and 2:00 p.m. local time. it is adding to a research and on foreigners trading local shares. the chinese plane that crashed on monday has been found and sent to beijing for analysis.

all the pilots had current licenses, current health certificates and proper experience. all 132 people on board of the plane are presumed dead. the first female u.s. secretary of state has died at the age of 84. appointed in 1996, she was the leading voice for the hard line during the war when she was lenten's ambassador to the united nations. her family and printed her death to cancer. -- attributed 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. haidi: we have a look at the bloomberg lamp saying that they will be delaying the london apo -- ipo. and this is amid the ukraine were, they are committed to

pursuing that public listing but say that they do not expect to have that ipo take place until the second quarter. we have heard earlier in the year that they are in a 2 billion pound london ipo in the second quarter. between 1.5 trillion to 1.5 billion pounds. they had disclosed there would be a concerned listing on the singapore exchange. we have had not any more details on that. they have already appointed banks to that unit which is a value of about $18 billion for that business. the evaluation for that business included 2 billion pounds from that listing. a great deal of uncertainty, but the planning for that london ipo was underway. the fight, being committed to that public listing, it has been delayed and moved to ukraine more. kathleen: we will get the current -- we will get the

global currency outlook. that is later this hour, and up next, as it manager riverfront investment group tells us how energy prices are affecting its strategy. this is bloomberg. ♪

>> i will absolutely confirm what chair powell has confirmed, 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 invasion of ukraine and the ensuing difficulties, first, my heart goes out to the ukrainian people. if you think about the effects on the economy, it is a global headwind on the u.s.. i see it as a risk to inflation, further upward pressure on prices, gasoline. you see it at the gas pumps. kathleen: mary daly speaking at the global equality summit. our next guest does not see an

inflation -- does not see a recession but she sees concerns. this is a two sided coins. no matter what side you look at. if the fed itself knows that it does too much it will cause a recession. what can consumers and businesses -- if you are an equity investor, what do i do? >> thank you for having me. we are not in the recession cap at this time. we believe equities can move higher. as we go into 2022, into the strong underlying fundamentals in the economy in how corporate profits have recovered. the consumer is still strong, even a sentiment is a little weaker and you also have an appointment down to pre-pandemic levels. we are encouraged to have a

neutralized equity like 50% in a 50-50 portfolio. we also have cash to buffer against the volatility in the near-term. kathleen: you are moving more into cash, are you getting rid of some of the investments you do not think are going to farewell? are you actually seeing any reason to say, that price looks good? we are going to add that? >> selection is going to be critical as we move through this period. we have thought that since the beginning of the year. prior to the more recent conflict driven issue. we have this approach, we are still overweight in technology, software services, we also added back to our energy holdings. we have been steadily doing that for the past several months. we have also, even though we are

underweight internationally, added specific areas inside of canada, latin america, norway, we are getting energy exposure without necessarily boosting our sector exposure in the u.s. even more. kathleen: can you talk to me more specifically about how you get that exposure to commodities? is that the ideal stagflation risk hedge for you right now? >> we believe that is the best way for our investor base to play it. we have gone underweight to deliver -- eval up international at large. we do want leverage to that commodity play. that is why those countries make the most sense in addition to our energy exposure. again, i think it varies. those exposures are in our longer horizon portfolios. for those more cautious

investors, we did not make those specific moves. haidi: where would you be repositioning in terms of the consumer affected exposures? are you waiting to see how the inflationary environment plays out for consumer confidence and behavior? >> we are probably going to slow walk that one a little bit. we have exposure there but we are not significantly overweight. any consumer facing areas because to your point, the sentiment has weekend. the retail sales numbers have held ups we are back to be pandemic levels as it relates to how consumers are spending money. the university of michigan preliminary data for february that came out a few weeks ago was very low expectations. we have the final numbers coming out this week for march. i think that we need to hit pause until way further into

that to see how these higher gas prices are going to play out in terms of spending. haidi: great to have you with us as always, you can get a roundup of the stories you need to know in today's addition -- edition of daybreak. you can customize settings that you get the news on the aspects that you care about. this is bloomberg. ♪

haidi: a lot of news for the end of this week, pushing volatility higher. new york crude is pushing higher

in the previous session. u.s. crude inventory is dropping and we had a storm damage to a vital plexi export terminal worsening some of these supply risks. we are hearing warnings from veteran traders for a supply shop. -- supply shove. adding to the demand side issues. when it comes to natural gas futures, down about 2% at the moment. we saw the demand for ruble payments forecast really escalating the energy fight. european energy prices soaring after the demand. it deems -- it is for suppliers that it deems unfriendly. it is for coal prices as well as the subtle bank developed a mechanism to make ruble payments

forecast within a week of meeting with his government. kathleen: we are going to take a look at a chart showing europe and u.k. gas prices versus these global supply chain crunch. a new homebuilder says supply chain issues are intensifying in the u.s. as demand picks up. they are forecasting prices to increase as conditions will ease. the wind industry built 22% capacity in the u.s. compared to 2020. a global trend that is a record amount of wind power added worldwide. that is according to a bloomberg report which points to supply chain constraints as well as uncertainty over taxation as the main causes for postponement of projects. prices sparked by the law -- war

in ukraine has spiked coffee prices. it threatens global yields. bloomberg terminal users can read more about those stories in our newsletter, that is on and i trade and now -- nitradenl. haidi: a growing list of energy companies shunning russia's oil due to the invasion of ukraine. japan's biggest refiners has not purchased oil since the work began and it will also refrain from striking new deals for russian oil. an exit from russia as pressure mounts on the french automaker to do less business there. it is halting operations at the moscow plant and it is considering the future of its local plant. it pulls back from the second biggest market, it has lowered its outlook for free cash

flow this year. ups says a platform business model is sustainable and expects the company to stay profitable. there are lower competitive pressures as e-commerce firms focus on optimizing offers. julia bank has announced a share buyback as it looks to list the equity pier 1 capital ratio for the target of 11%. the program is worth 2.5 billion australian dollars, able sell after results are released in may -- it will sell off after results are released in may. some u.s. employees are to work remotely full-time, offering flex ability to staff as it seeks to retain talent. this was make expects 10-15% of its workers two remote.

more than 70% will be in hybrid rules -- roles. kathleen: breaking news for the city of new york, the new york mayor announces thursday here is exempting athletes and performers from the city's vaccine mandate for private workers. in will allow unvaccinated -- it will allow unvaccinated baseball players to take the field. he says he thought the vaccine rule was unfair for athletes and performers because there is a loophole in what was passed previously under bill de blasio that allowed visiting players and performers who do not work in new york to play or perform if they are unvaccinated. the nets star cannot play, he will get that going. he will be benefiting as well.

tencent posted the slowest quarterly growth on record. regulations on beijing, the end of an era. this is bloomberg. ♪

kathleen: as the u.s. prepares were sanctions on russia the secretary of commerce as china will face dire consequences if it violates any export controls. she spoke exclusively with jenny landlord -- leonard. >> we are preparing what might come next both from treasury and commerce in terms of escalation. however, we always knew from the beginning that the power of

sanctions and export controls takes time, and you were starting to see that. in only a few weeks, so, for example, you are seeing airplanes not being able to fly into russia because they cannot get the parts to fix and service the planes. you saw just a week ago putin essentially commandeered all of the private planes into russia for their spare parts. you see companies shutting down, a lot of manufacturing facilities. i think it is as much about staying strong and being vigilant on enforcement and keeping the coalition strong and tight over time. if he is struggling at that level in a few weeks imagine where he will be in a few months? yes, we are thinking about what

is the next piece of escalation, but i think we just have to stay strong, vigilant in a tight coalition and focus on enforcement, because he is already feeling pain and every week that will intensify. >> on enforcement, we have heard strong warnings, including from you, that the chinese, who are reportedly considering bailing out russia might actually take that step. in that regard, do you have contingency plans in place for secondary sanctions against the chinese just to be ready for those to be implemented immediately should they actually go down that path? >> we are planning for every scenario, obviously. which we have been doing for months. of course, we are doing all of the scenario planning. that being said, president biden was crystal clear with president

xi that there will be consequences for china if they do that. i would say this is not just about china. for export controls that i'm working on, we are very serious about this. we are going to use our tools, civil and criminal penalties to the fullest extent possible in any country we find violating export controls. haidi: the u.s. secretary of commerce speaking exclusively with jenny leonard. let's get to vonnie quinn. vonnie: the biden administration set to reinstate exemptions on some chinese goods. exclusions will apply to more than 35 zero manufacturing components and consumer products ranging from tv screen parts to backpacks, bicycles, even to pillows. the trump administration had

granted -- but those were about to expire in 2020. russia is demanding rubles exchange for gas prices that could aggravate the energy crunch. gas prices surged after president putin urged the central bank to develop a mechanism within a week. the specifics of the new arrangement are not clear but russia says it is ready to hold onto energy supplies rather than accept euros or dollars. russia will restart rating -- trading. it will resume in 33 russian equities. a ban on short selling will reply -- apply. trading was halted on february 28 to shield investors from the sanctions impact. russia's climate envoy has been the latest official to break with the kremlin over the invasion of ukraine.

bloomberg has that he step down, citing his opposition to vladimir putin's war. he is a respected reformer. under vladimir putin he was named envoy for sustainable development last year. boeing's former chief technical pilot for the 737 max has been acquitted. he was charged with manipulating and deceiving u.s. air regulators about safety, a texas jury found he knew nothing about major technical changes blamed for disasters. it is the only criminal case tied to the crashes, which together killed 346 people. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. kathleen: tencent has --

oversight after reporting its lowest growth on record. yvonne man has more. >> tencent declaring this is the end of an era, years of exceptional growth, reckless they have termed it are behind them right now. you mentioned this new normal, cautious expansion that we heard from alibaba as well just a few weeks ago. it just goes to show fourth-quarter results this year of crackdowns has been was not pretty when it comes to revenue, grew only a percent, first time they have seen single digit growth since its listing back in 2000 and four. when it came to net income, that looked better. that was based off a one time game -- gain.

adjusted income fell 25% year on year, a huge mess -- miss. online advertising revenue declined for the first time on record, tencent saying this trend will probably continue for the start of 2022. they might see some recovery by year end. we have seen competition weighing on this part of the business, and in bread-and-butter, domestic gaming business, revenue only group 1%, reflecting this gaming freeze, curbs on playtime for minors. they saw the stockpile of gains raised to launceston is these regulations these. haidi: -- >> they did not commit to that.

although there was market speculation that they are going to have to do these buybacks and returns back to shareholders and may be steer away from the traditional route of investing a different businesses but they did not do that. even when it came to spinning off separate businesses, they did not embrace that either. they say that is not in consideration right now and that is the review we heard from alibaba just a few weeks ago, daniel jong said he was very open to spinning off businesses into separate units. there are lingering issues with tencent specifically regarding its fintech business. tencent saying they are in talks with regulators on meeting those requirements and they are working to comply to all regulations. kathleen: that was yvonne man.

we discussed further weakness in the japanese yen as traders anticipate that hikes -- fed hikes. more on that ahead. this is bloomberg. ♪

kathleen: the ruble having quite

a day after vladimir putin said he is moving forward with plans that dozens of countries use it for natural gas purchases. in fact, it jumped, ending the day down 5.6% on local exchanges, the biggest move since 2014. it helped prepare some losses. even with the gains the ruble ended the trading date significantly weaker than before. haidi: commodity rate of currency is getting the blues from rising energy prices, the aussie dollar still operating at -- just under that u.s. level that it has not hit since november. we are curing >> from nova scotia bank saying that is unlikely. we are also watching the impact

of rising energy prices as we watch for implications of the next round of sanctions from the u.s. and eu allies. also seeing robust gains, sterling seeing downside, the dollar at the moment and we are watching dollar-yen. we are also curing potentially stronger gains when it comes to the aussie yen macy strong -- may see strong growth. we continue to wait the divergence between u.s. monetary policy and what that boj does and does not do. the san francisco fed president saying a 50 basis point i may be needed at the next meeting in may. she spoke at the bloomberg equality summit. >> the traditional way we have

done it over the last couple of decades as you raise the interest rate, rescue meeting, raised interest rate, rest meeting and it is that gradual approach that is meant to see what is going on and make adjustments. the median was seven increases in 2022, and that suggest frontloading on policy. i remind people if i may that we are also going to make balance sheet adjustments as early as in the may meeting. that is considered equivalent to another rate hike. this is something we do not often talk about. we are making these adjustments at the other time central banks are making similar types of adjustment policy so we can get tightening conditions globally and that is something we have to think about. relative to previous periods this is quite a bit of frontloading. >> germany posted on monday that

he is open to a 50 basis point move at the next meeting in the market is taking him at his word are you willing to support that? >> the data will tell is whether 50 basis point or 25 basis points in the balance sheet is the right recipe. these are all of the tactics of how we get the policy rate adjusted, and the date it will help guide us. i will absolutely confirm what chair powell has confirmed for himself. i have everything on the table. if we need to do 50, that is what we will do. the date it will help us determine how much is necessary. the important thing everybody listening would like to know is that we are committed to moving the policy rate in alignment with what the economy needs, and right now it does not need all of the extra neri support we

have been offering. >> went to think the war in ukraine is going to do to the global and u.s. economies. we had governor waller on the board saint key did not vote for 50 basis point/time because he was unsure, but jim bullard said we cannot wait to find out. what do you think? >> i put a couple of risks in front of people. my heart goes out to the ukrainian people, but if you think about the effects on the economy, it definitely a global headwind. in the u.s. with the domestic economy i see it as further upward pressure on prices, gasoline but also other commodity prices which ultimately are goods that we are already finding high prices for so i think there is an upside risk to inflation. i think it is a modest risk to

growth but not the kind of thing that would produce stagflation. we are a net oil exporter right now so when prices rise production in the u.s. also increases. this is a big uncertainty shock, then you also have this happening when it is clear covid is not completely bind us. kathleen: mary daly speaking exclusively, we have breaking news, the white house is going to be seeking $813 billion for special security budget, an increase of $31 billion, 4% more . one is the increasing military joints from china, the development of quasi-new defense systems, and it is interesting,

it was completed with the expectation that russia was likely to invade ukraine so defense spending was adjusted accordingly. very interesting, clearly governments around the world are acknowledging the need for more military and defense spending. plenty more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

kathleen: a check of the latest business flash headlines. ubs will allow some of its employees to work full-time offering flexibility to staff as it seeks to learned talent. the swiss bank expects 10% of its workers to the remote as the program is implemented in phases. 70% will be in hybrid roles. lg energysolutions and cilento is our investing more than $4 billion to build an electric vehicle battery plant in canada. it is said to begin operations in 2025. lg energy will own 51%. japan says they will stop importing russia grid growing -- joining a growing list of companies shunning russian crude.

it's closest domestic rival will also refrain from striking new deals for russian oil. were not -- renault is preparing from -- for an exit from russia. it is considering the future of a local venture. this is a pullback from its second business market and has lowered its outlook for profit margin this year. haidi: let's look at the covid situation in china, more cities going under various sets of lockdown, we got the latest cases that have shanghai, importing 983 local cases were much 23rd. we have had a couple of days of record highs when it comes to cases and we are close to a record high with new numbers. china imposing a strict lockdown to stamp out this rise in

omicron cases. we have seen a full lockdown in a steel hub and further restrictions in shanghai with a lot of rumors about a city wide lockdown on the financial capital. we have seen also mandating of testing in certain areas. kathleen: -- haidi: joining us now is the head of affect strategy ray attrill. the energy surge, commodities remains another. do you think what we see key moves, upside in commodities related currencies, are these themes that will continue to be traded over the next couple of months? >> it looks that way, but when it comes to the u.s. dollar, one of the interesting features of the current landscape is that the dollar is not on a strongly

appreciating trend, and one of the observations we are making is going back to the early 1990's the u.s. dollar as tended to be around the time of initiation of fed tightening cycles. commodity currencies are going to draw support from the ongoing strengthening in commodity prices, but there is a limit to how much that can continue insofar as if we do see rising expectations that this may all end in some form of global recession, but that is not a good news story for commodity currencies. i think the tailwinds will continue to flow. dollar-yen getting significant uplift, arise in yields, but if you look at the whole curvature of the u.s. rate structure and

how that relates to the yen, we do think these levels are above 120 even though they may prove to be on borrowed time, so we are not rushing to chase the weakening in the yen. haidi: we are getting the minutes of the january policy meeting from the boj at saint it will not hesitate to add to add easing if necessary and added further coordination with the government is needed. the condition of using is an interesting one. we are finally getting reflationary push. these super high levels we are seeing in energy prices. do we see a level where the boj and authorities are comfortable when it comes to the yen? >> i think they are probably getting uncomfortable at these current levels but there was not much they can realistically do about it. although we are getting

reflation coming through from energy places -- prices this is not good inflation. the kind of inflation japan once to see is driven by strengthening in wages. all this is doing is adding to household burdens, and the weakening yen is aggravating that trend. this is not a welcome development. problem that the boj has right now is if they want to do something about it, they lifted the tolerance ban, it will be seen as pecking away from easy policy at a time when the economy is in a weakening phase. for the time being they will have to suck it up and tolerate this. kathleen: i will about iran? a lot of people think it will cause financial instability.

what do you see there? >> the pboc does seem to have called time on the ongoing strengthening or basket of trade-weighted terms. there has to be an engineering or tolerance of stronger dollar one levels. we are forecast for the rate rising up toward 650 later in the year at the risk is a good arrive sooner rather than later. they are protested that they aren't happy with the moves. we will see more monetary policy easing coming through later. the time being underlying trade forces are still there. i think it will be a slow grind. haidi: what is with target for aud? >> long-standing forecast for aussie was for her to spend most of the first half of the year in a 70 to 75 range. momentum is there, commodity

prices are trumping all other issues on the currency. 75 when outlets were too long. haidi: great to have you with us. lots more to come. this is bloomberg. ♪

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kathleen: welcome to "bloomberg daybreak: asia." i am kathleen hays. haidi: i am haidi stroud-watts, age's major markets have just a bit of her trade. opec+ is set for a weaker start as the global really stumbles, treasuries bounce from record losses but commodity prices experience fresh inflation worries. president biden adds to europe starting further sanctions on my

scalp -- moscow. tencent embraces stricter controls after reporting is slower quarterly growth. kathleen: let's take a look at the opening of japan injury and markets, pretty quick drive, the nikkei225 done more than 1%, the topics down just under 1%. this is breaking a seven consecutive trading session again -- gain. the pullback in the u.s. stock market, the s&p 500 at been up the last five trading sessions. bonds rallied, and at the very least maybe japanese investors are taking a chance to take some profits. the dollar yen unchanged, at its lowest level since 2016. a six-year low, and again the

japanese bond, look at that now looking a bit lower there, perhaps because the bond market in the u.s. -- actually is turning around, kind of a mystery, although we know that when is tethered to just under 2.5%. let's take a look at korea, the kospi is also lower, less than 1%, but the same thing for tech stocks. the won is getting stronger here , and we can see. bonds are looking better too, so they are getting a lift in the japanese market. japanese bond yields cannot move very much. interesting when you look at korea bonds and stocks, that governor li just in the last 24 hours says he sees a hit on the

korean economy because of the russian war. that may be something factoring into the trade today. haidi: and of course, factoring in when it comes to rate markets across asia, these moves that we saw klein back losses from treasury, both that two year end 10 year -- and ten year, we have seen reprieve being led by the long and. traders are seeing the cheapest levels that we have seen all year. we had a record high, ratios were on the lowest level as we saw very aggressive bidding. s&p futures looking positive at this point but the downside sentiment is playing out with the big drop in japan. we have had such a strong seven days out of tokyo trading.

unsurprising we are seeing money being taken off the table. crude seeing a bit of downside although those losses are better than what we saw earlier but a bit more push and pull when it comes to crude as we await for more details of potentially more sanctions on russia and whether that affects crude. a u.s.-eu energy impact as well. a lot of moves in the yen, but it is the aussie dollar front and center leading the pack when it comes to commodity expose currencies as we get risk on with commodity prices. the aussie trading just shy of $.75 u.s. look to the next rba meeting for a potential unwinding of some recent gains, but the aussie dollar the best performer today,

second best performer when it comes to the overall fx just behind the real -- riyal. we had optimistic -- let's get more analysis, i want to bring in michael wolff. there are a lot of themes to contend with right now. where are you at? how is this divergence between equity performance and sentiment and what we see in rates markets gone too far? >> i do not think we are at the point yet where we can say it has gone too far. some of it is somewhat puzzling. to see some of the correlations we are seeing is a bit puzzling at the moment, especially in

terms of market pricing, a broadly weaker growth outlook. they are still waiting for more details in terms of what is the action impact in terms of the ukraine crisis on inflation sustainably. we are still expending -- expecting economic closed remain strong. haidi: what are your picks if there are concerns about stagflation? concerns about more aggressive and coordinated policy and we see recessionary conditions being fold -- pulled forward? >> with this bounceback, given how highly unusual it is, if you are looking toward the end of the cycle, it does not work when

you are facing so much stagflation. we are looking at specific areas that provide a hedge against inflation. within equities we have become much more accepted if -- a cceptive. we are also looking at broad assets. historically it provides a hedge when you see periods of high inflation. asset allocation moving more as we approach the end of the cycle. kathleen: many people say it where you going to put your money if you do not put it in stocks? i guess you can buy commodities. people say that will continue to be one of the big forces supporting stock markets this year.

>> is a difficult mix for allocation. you do not want to go to inflation -- cash where inflation where it is. recession probabilities rise. what we are looking at is being more selective to higher-quality companies with healthy balance sheets still growing, positive cash flows. being more selective and making sure they are will to survive. kathleen: is there a country in asia, in industry and asian that you say we will be most likely to find those kinds of companies? >> at the moment we are still on

for china. semiconductors we like as well. if you look at data in taiwan or korea, that is still relatively healthy. onshore intranet at a much more different part in terms of fed hiking and the pboc on an even path. you can look at china but more selectively as well. given where we are with the commodity price, whether in the material sector or energy sector provides a buffer with high commodity prices. still unsure china and semi conductor exposure in korea and taiwan. kathleen: thank you, that was alex wolf. let's get to vonnie quinn.

vonnie: thank you. san francisco fed president mary daly is coming because were 50 basis point i get a may as warranted by data do in the coming weeks. she says she would potentially support a 25 basis point move in the decision to shrink the balance sheet. the fed official cautioned against moving too quickly given broad mobile risks and noted the fomc have to take tightening by other central bank to give account. >> i will absolutely confirm what chair powell as confirm for himself, 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 and balance sheets, that is what we will do but the data will help us determine how much is necessary. vonnie: russia restarts trading in some stocks on thursday. the moscow trade will resume trading in 33 equities. a ban on short selling will

apply adding to foreigners exiting shares. boeing's former chief technical pilot for the 737 max as been acquitted. mark fortner was charged with deceiving -- it is the only criminal case tied to the questions, which together killed 346 people. the voice recorder from the chinese eastern airlines plane as been found for analysis. officials say pilots have current licenses, valid health certificates and qualified experience. all 132 people on board the

boeing 737 are presumed dead. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. haidi: some of the movers we are watching at the moment, look at unity considering and indicative proposal of five aussie dollar's per share, a company making the offer to buy at unity group for $2.5 billion. we are hearing get he is considering the proposal. we are watching samsung electronics seeing downside, selling 19.9 million shares at $60,300 apiece. we are keeping an eye on the sydney session also seeing downside, adding to another

buyback announced mid last year. we are expecting that to take place after first-half results are released on may 5 and they will be buying back $1.9 billion of their own shares. down today when it comes to nab but the lender's shares have been trading at an advantage compared to their peers since the third of 2021. still ahead on "bloomberg daybreak: asia," tencent trading at a low. our guest joins us later. coming up next, president biden as to brussels to announce new sanctions against russia and measures to stop moscow from sidestepping existing penalties. this is bloomberg. ♪

>> we always knew from the beginning that the power of sanctions and export controls takes time.

yes, we are thinking of what is the next piece of escalation, but i think we have to stay strong and build a tight correlation -- coalition and focus on enforcement. haidi: that was gina raimondo speaking about sanctions under pressure. taking a look at the european stock futures, some major indexes, you can see they are lower, and following the pattern in the s&p 500 having a down day after having five days out of the seven previous sessions. in european markets, already falling yesterday as a rotation away from bonds showed signs of easing. record inflation ratings, so you can see euro stocks, 50 futures down.

msci europe futures down almost a full percent. german tax -- dax future stent marginally. it investors reassessing what this means but perhaps getting defensive before the meeting with president biden and european leaders to impose sanctions on russia even if they do not add additional oil and natural gas sanctions work limitations, what they will do. if they had prophets taking them and waiting to see them next. the u.s. is set to announce further sanctions against russian oligarchs as president biden waits to meet with political leaders let's bring in bruce einhorn. what will complement those that have already been put in place?

>> we had from president biden's national security advisor jake sullivan that the u.s. will be announcing more sanctions today. no specifics other than that. these will relate to political figures and oligarchs. we will be hearing more about that at the meeting between president biden and the nato leaders. the wall street journal reported that the u.s. treasury was preparing sanctions against roman abramovich, a russian oligarchs who owns the chelsea football club in the u.k., but president zelenskyy spoke with president biden and urge them to hold off because he is so full roman abramovich may be able to serve as a go-between. president zelenskyy will be speaking at this meeting

remotely. president biden is scheduled to go to poland. a nato ally right there on the front lines. haidi: when it comes to this eu-u.s. deal to curb reliance on russian energy, what are we expecting there? >> this is a very important issue, because europe relies so heavily on energy imports from russia, particularly gas, so the u.s. is looking for ways to increase gas production, looking for ways to get more lng to europe. this is something that is not just a long-term goal, we are not talking about years. the goal is to start doing this quickly in the months. at the european commission wants to be able to have 80 percent of

their gas storage field in time for this coming winter. at the european commission announced that wednesday, and by the following year they went to have 90%. prior to this trip jake sullivan and janet yellen met with energy executives, including the exxon mobil ceo to talk about ways that they could address some of these issues, speed up production all with the aim of getting more gas to europe so that they can reduce the reliance on russia. haidi: we are expecting that announcement as soon as friday according to jake sullivan. bruce einhorn there with the latest. russia also escalating the energy site demanding ruble payments for gas from countries

they deem unfriendly. what do we know about the details, the intent of putin's plan? >> putin making demented and hooters -- importers of russian gas pay in rubles. he has given russia's central bank a week to sort the refined details and come up with a plan. in response the ruble did again on wednesday. we sought european gas prices surge amid expectations that all of this would cause further disruption of the flow of gas to europe. a really critical source of energy for europe. at the moment the specifics are in flux. what we know from germany, the biggest importer of russian gas, they have already said any stipulation that they have to

pay in rubles would be a breach of contract. we have also heard from italy, the italian prime minister saying they are not looking to switch into paying in rubles. kathleen: thank you so much, very important story, david stringer. 20 more ahead to come -- plenty more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

haidi: tencent has placed a embrace china's new paradigm of stricter government oversight after reporting its lowest growth on the record, a declaration that could signal the end of an era of chinese tech which nurtured some of the world's largest and most profitable operations.

let's bring in peter elstrom. we are well into this new era when it comes to the explosive growth we are seeing from big china tech, but when it comes to tencent it does not feel like they had a choice to lean into this new normal. >> this was a pretty sobering earnings report by tencent. revenue growth was the slowest on record for the company, revenues grew only by a percent. prophets were modest, they beat analysts' estimate but only because they took a big gain on the vestment -- divestment. overall it was the tone of the executives in the conference call with a sent a clear signal to investors that they should not expect anything like a return to the growth of the

past. they say there is a new paradigm for chinese internet companies that will mean slower growth, what they call healthy growth and they uploaded beijing government for getting involved. kathleen: what do you think they can do? what does this mean for fintech? >> they were asked a couple of times about reports from bloomberg and other organizations that they would have to separate out their fintech business. they say they are in discussions with regulators about what will be required. wechat is the big messaging service that pays the digital payment business that has been very successful for them and promising for them. they say they are in talks and they will comply with what we regulators require. they were also asked if they would sell off additional stakes in companies. kathleen: ok, thanks so much,

that was peter elstrom. it security company says growth for tencent and gaming company. that is just ahead. this is bloomberg. ♪

kathleen: taking a look at event's purchasing managers index, bmi for services, manufacturing, the composite looking pretty darn good. if i were at the boj or sitting in the commerce department of the japan government i would say thank you. a major exporting nation, the previous number for february was 52 .7, and now we have got 53.2, stronger for services, a big

jump. that has been a concern as the lingering virus has stunted the growth of service companies to some extent. the composite is that woody 9.3 versus 45.8. anything above 50 means growth, anything below 50 means the direction. that is a pretty big positive move, and people are watching the impact on the weak yen. that should help manufacturers and boost that number further. the big question is this is a preliminary march number, although the ukraine war started in february. you have taken that impact of higher commodity prices under the concern. so far a thumbs up. haidi: you mentioned the yen,

and it continues to break all sorts of technical milestones and boundaries and expectations. dollar-yen getting -- hitting the third highest level. the yen getting better -- battered, reaching that point where we see the trend line being reached. if we see that getting beat -- we heard earlier from the bank of japan, saying they would not hesitate to add potentially more stimulus. that will not help at all. to the contrary when it comes to gaping rate differentials and expectation differentials between the boj and the fed. take a look at what we are seeing when it comes to trading

in equities in the tokyo session as well. we have had a strong seven days of trading from japanese stocks. perhaps it is unsurprising we are seeing profit-taking for the nikkei coming off of that 12% rally, seeing downside of 1.5%. we have had the weak yen fueling gains and giving support to exporters. even that, we are not seeing that player today. kospi down by about 1% as we see a broad risk off sentiment across asian equities. sidney stocks are keeping their head above water, we have that count down to the delivery of the federal budget in the coming days, but when it comes to the breakdown in sectors, it is very telling that energy is one of the big gainers. getting back to the interest

rate differentials and fed expectations, mary daly saying a basis point rate hike might be needed at the next meeting in may. she spoke with bloomberg at the bloomberg quality summit. >> the traditional way we have dented over the last couple of decades as you weigh the interest rate, resting interest rate, and it is that gradual approach meant to see what is going on and make adjustments, but the median was seven increases in 2022 and that suggests front on policy. i remind people that we are also going to make balance sheet adjustments as early as in the may meeting, that has not been decided completely. that is considered the equivalent to at least under the rate hike. this is something we do not often talk about either. we are making these adjustments

at the same time other central banks across the globe are making similar types of adjustments, tightening policy. we could get a lot of tightening in financial conditions globally , and that is something we have to think about. relative to previous periods of that and think this is quite a bit of frontloading -- front look -- front loading. >> german val said he is open to a rate hike -- german val said to his open -- >> i think the data will tell us whether it is the right recipe or 50 basis points in the balance sheet. these are the tactics of how we get the policy rate adjusted, and the data will help guide us. i will absolutely confirm what chair powell has confirmed for himself. i have everything on the table. if we need to do 50, we will.

if we need to do 25 of the balance sheet, that is what we will do. did it will help us determine how much is necessary. the important thing everyone would like to know is we are committed to moving policy rate in alignment with what the economy needs, and right now it does not need all of the extraordinary support we have been offering. >> what do you think the war in ukraine is going to do to the global and u.s. economies? we had governor waller on the board say he did not vote or 50 basis points last time because he was unsure, but jim bullard told me we cannot wait, we have to act now. what do you think? >> i put a couple of risk in front of people. the invasion of ukraine and ensuing difficulties -- my heart goes out to the ukrainian people but as you think about the effects on the economy, it is definitely a global headwind. in the u.s. i see it as a risk

to inflation, further upward pressure on prices, gasoline. other commodity prices we are finding our prices were. there is an upside risk to inflation, and i think it is a modest risk to growth but not the kind that would produce anything like stagflation. we are a net oil exporter. when prices rise production increases and we get offset on growth. this is a big uncertainty shop, then you also have this happening when it is clear: it is not completely bind us. kathleen: that was the san francisco fed president mary daly speaking with bloomberg. let's get to vonnie quinn. vonnie: roger is going to demand ruble payments for natural gas prices and a step that could aggravate the continent's energy

crunch and deepen the stand up with west. gas prices surge after president putin forced the central bank to develop a payment system. russia says it is ready to old onto its energy supplies rather than to accept euros or dollars. what's comment on what has become highest official to break with the kremlin the invasion of ukraine. he has stepped down and left the country, citing his opposition to the ukrainian war. he is known as the architect of gretchen's privatization in the 1990's. each of top jobs epics to companies until being named as head of sustainable development. the biden administration is said to reinstate exemptions on chinese goods. the occlusions will apply to more than 350 manufacturing components of consumer products.

the trump administration had originally granted more than 2200 tariff waivers but those were about to expire. madeleine albright, the first female secretary of state is not at the age of 84 and was appointed by president bill clinton in 1996. she was clinton's ambassador to the united nations. a statement attribute introductory cancer -- attributed her death to cancer. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. haidi: one of the two black boxes from the crash of the chinese flight as been found and sent to beijing for analysis. this is severe weather enters rescue and recovery efforts. let's bring in stephen engle. this is obviously key to any crash investigation.

what do we know? >> absolutely, this is key. they are bright orange so they can easily be recognized. when is the cockpit's voice recorder. the other is the flight data recorder, which has not been found yet. because the crash happened at such a high velocity, by most accounts mo stated we have seen, a straight vertical nosedive into the ground, that makes the wreckage quite obliterated to be frank. we are curing the cockpit voice recorder as external damage. that box will go to beijing and the analysis will begin. extremely bad weather, every rain -- heavy rain is

hampering the rescue as body parts have been found along with some parts of the aircraft. that is hampering the entire process. secondly we are also curing through state media and aviation officials that they outfitted the three pilots in the cockpit. one was a 32-year-old, a captain. he had 6709 flight hours. the copilot was the senior in the cockpit. she was one of the first pilots to be trained in janet to be a commercial pilot. he had more than 31,000 flight hours i should say. the authorities are saying they got their current licenses, valid health certificates. they had very strong family

connections. no issues there. now it is just a matter of identifying from at least one of the black boxes of this airplane crash. kathleen: the photos i have seen fma members -- family members getting as close to they can to loved ones on that plane. this black boxes is so important. what is protocol for the analysis? are boeing officials going to take part in the investigation too? >> there is an initial national treaty which would allow the nation that manufactured the aircraft, in this case the ignited states, the faa and ntsb along with boeing, and there is an international treaty, which we are curing china as enacted allowing and ntsb -- an ntsb official to go.

representatives from three agencies, boeing, ntsb and faa would be allowed to come to china to aid in that investigation. since this crash did happen on chinese soil, the civil aviation of china and chinese regulators will be the lead role in that investigation. kathleen: stephen engle. , changing security says they see growth in the gaming sector. this is bloomberg. ♪

haidi: let's look at china adrs, we did see a jump, ir after an upgrade from ubs, the index in janet now up more than 50% from its march 14 low. missing out on that rally was tencent after it declared the reckless era over, revenues rising a percent -- 8%.

tencent continued to grapple with some of the issues. kathleen: let's go through those tencent results with karin kong, chief global analyst at young thing securities -- tianfeng securities. revenue rose 8% in the quarter, the first time we have seen single digit in the quarter. we know they acknowledge that china tech crackdown will limit their future growth. what kind of future growth can we expect now? >> for tencent, we have to notice for the short-term, they still have potential because almost everyone in china uses

wechat. it is not just a single product. it has a lot of different products and it and a lot of functions. we will expect the marginalization of wechat will be in the short term for tencent, and in the long-term, the industrial internet. for tencent it will be the new engine port for 10 years. we know that tencent expanded their business overseas, especially for the global market . we have seen international revenue grow this quarter. that is what we expect in the future. kathleen: is that going to

offset what the government -- how it is reined in big tech so that their revenue in the future is going to mask what they had in the past? >> they put emphasis in the long-term. recovery in the future it may be two or three years. kathleen: so if it is that the or three years, if you are a long-term investor, you will get the same kind of earnings, the same kind of return on your investment that tencent had prior to the government crackdown on big tech? >> i would say there are four sectors. financial sector, the gaming

sector, under the sector and -- we are looking forward to other sectors to increase in the future. haidi: we saw a company get an upgrade and that led to the last leg of recovery. who do you think benefits most and comes out of this best from the restructuring of the industry? >> from my point of view i think tencent will recover the quickest because they have a lot of different businesses, and as i mentioned, in the long term the industry has great potential for the economy. it is very important and has a large market or in the future.

the company can recover and also have record growth. they will focus on industry internet. that is my view. haidi: great to have you with us, karin kong. coming up next, can the china tech rebound continue after those tencent results? we take a look at opens in hong kong and mainland china. this is bloomberg. ♪

kathleen: a check of the this business flash headlines. japan's top refiner say they will stop importing russian crude due to its invasion ukraine. japan's biggest refiner has not signed a new contract for richard accrued since the word began and its closest domestic rival will also refrain from striking new deals for russian oil. national australia bank has announced another share buyback as it looks to get its target around 1%. the program with about 1.9 billion dollars u.s. will start after results released in may. it follows completion of a similar buyback of a grunt 87 million -- buyback of around 87

million shares. nab says a model is sustainable and expects company to stay profitable. bank analyst say there will be less -- haidi: investors watching tencent, other china tech stocks when markets open in mainland china, the company posting its lowest growth on record. let's bring in our managing director for more analysis. leading the rally against other names including alibaba. is the brunt of recovery in the china tech sector going to be more important? >> good morning. i think it is more of the latter. tencent's open will be what traders are watching out for today. it is taking aim, the biggest name in the china tech space.

if you look back in tencent's check record the stock felt every single time it reported earnings in the last four quarters. if you go back 10 quarters it only rose three times. the question is how much it is going to drop. overall if you look at sentiment, it arose 3.1%. sentiment toward the china tech sectors is still singling -- sanguine. writers -- be prepared to open books and be prepared for more audit disclosures. kathleen: beyond tech, what do you think is driving china's stocks and what should we be expecting at this open? >> people are still digesting incremental measures that came out of march 16 last week.

if you look at stock performance onshore, the shanghai composite index rallied every day since that announcement for six days in a row. that is the longest winning streak since january 2021. i think sentiment is positive. people are watching up for what more is to come. they believe more measures will come, more specific measures. the next big thing that they are watching for our rrr cuts potentially next month. kathleen: thanks so much to our asian correspondent. in addition to tencent we will be checking alibaba, which plans to focus on retaining users rather than pursuing aggressive market share. the black box of a plane the question monday as been sent to beijing for analysis. china's mobile income for the full year be consensus by $1.3

billion. our markets coverage continues as we look ahead to the start of markets in shanghai, hong kong and shenzhen. stay tuned. this is bloomberg. ♪

♪ david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind, i've often thought, was private equity. and then i started interviewing. i watch your interviews, so i know how to do some interviewing. i learned how leaders make it to the top. >> i ask how much he wanted. he said 250. i said fine. i did no negotiating. i did no due diligence.