>> good morning, welcome to daybreak australia. we are counting down to asia's market open. >> the fed lays out its plan to shrink its balance sheet, reducing assets by more than one chilling dollars a year as we look to ease inflation. >> u.s. stocks and bonds fall as traders flock to risk off sectors. >> the u.s. tensions russia's

biggest banks and vladimir putin's family. rising u.s. interest coming online after the s&p 500 fell throughout the session, we have consumer discretionary and technology stocks leading the declines with the nasdaq 100 losing more than 2% after the fed signaled it would be cutting its bond holdings by as much as $95 billion a month. we saw treasury yields a surge a little bit with the 10-year yield finishing around 2.6%. we have the dollar strengthening for the fifth consecutive session and we are seeing in the asian session, crude oil rebounding a little. still below that $100 a barrel level. we have heard from the iea that they will be releasing 60 million barrels more from the reserve in order to add to the biden administration's relief. all of this as we continue to

see those moves around the latest fed minutes. look at the vix because we have seen volatility in that section. we saw it rise to that 22 level during the pandemic. the normal or average was around 25. we are seeing it pretty low given that -- this is not the right chart. we have seen the vix around 22, 25, as we continue to see retail traders coming into the markets, but not necessarily institutional investors, which is pressuring volatility. haidi: pressuring and volatility some of those names we are watching in asia. asian equities are in the red. this is what we are seeing when it comes to kiwi stocks. sydney futures looking lower as well. we see that drop of 0.3% suggesting a decline about 0.5%. u.s. stocks maintaining those losses after the fed showing

that they are focused on the inflation fight. chicago and ek futures looking soft as well. dollar future trading again, starting to creep into more yen weakness. we also saw that extension share of the bond a selloff with the australian 10-year yield, at one point hitting 2.90%, the highest since november 2015. shery: we had a little more hints coming from the fed minutes from the latest meeting. really signaling what we had heard from fed officials so far, a hawkish tone, but perhaps a tad less hawkish than what we have seen in the last few days, which is why the yield curve steepen a little bit today. suffice it to say that we are expecting the fed to have that willingness to raise by 50 basis points, even at the may meeting,

and approve that. haidi: we continue to watch the situation in ukraine as allegations of war crimes are being leveled, we see that u.s. putting in place more sanctioning and tightening existing sanctions as well. they are sanctioning better produce children as well as two russian banks over reports we have seen of atrocities committed against civilians in the outskirts of kyiv. what we know is two are the largest banks are being targeted, therefore blocking sanctions will be imposed on russia's largest financial institute as well as alpha bank, the country's largest private bank. all u.s. entities will be barred from transactions with them with exception of the energy sector. we are seeing the screws gradually being tightened and we are seeing vladimir putin's

daughters along with the russian finance minister's wife and daughters and family members targeted by sanctions. let's get back to what was moving the markets, the federal reserve revving up its monetary policy engines to do whatever it takes to win the battle against inflation. that is the message from the march meeting. kathleen hays is here. the balance sheet reduction, 50 basis points on the table, how hawkish on the range of hawkishness is the messaging? >> i have to put our rates team saying that the fed is reaching maximum hawkishness, he did not get much more hawkish. money markets are pricing in 225 basis points as the total this year, that would be the most aggressive tightening since 1994. 50 basis point rate hikes are on the table, but we knew that from

the fed speakers. the balance sheet, what are they going to do with that? they are going to start reducing it and they are going to start reducing it fast. the $95 billion a month, safety billion dollars in treasuries, 30 billion dollars in mortgage-backed securities, and they could phase in these caps over three months or longer if market conditions warrant. that is moving quickly, that is nothing like the previous 2019 cycle where they did this over a couple of years in terms of the cap than, they were set at $50 billion a month. this fed knows it needs to move fast. many on the u.s. ofm -- u.s. fomc would have voted for the 50 basis point rate hike in march had it not been for the uncertainty on the global economy and commodity prices. they also said in the sense of

hawkishness, they want to move policy towards the neutral rate, could be 2.5% expeditiously. they see the inflation to the upside when they look at energy prices, consumer demand, supply chains that are disrupted. we don't think the fed can get much more hawkish, especially if it delivers on several 50 basis point rate hikes on euro -- in a row. the fed has the titan financial conditions and they may have to make sure stocks don't keep rallying, that they move lower. let's listen to what he said earlier. >> financial conditions have not tightened much, stockmarkets only 4% or so off its high, still up sharply from where it was a couple years ago. yields are still really low, especially when you adjust for inflation. >> that is one thing the fed

could do with its balance sheet runoff, especially if it starts selling treasuries, that could keep the yield curve from flattening, even inverting. that is going to be big at the fed's next meeting. shery: kathleen hays there, and adding to the uncertainty, the u.s. and dissensions to sentient on russia include and penalties on two of the smartest banks and president putin's daughters with president biden accusing moscow of major war crimes in ukraine. joe biden said the sanctions will crush russia's economic growth for years to come. >> in one year, our sanctions are likely to wipe out the last teen years of russia's -- last 15 years of russia's economic gains and because we have cut off russia from important technologies like critical components of quantum technology that they need to compete in the 21st century, we are going to stifle russia's ability to grow for years to come. shery: let's bring in jeremy

schneider -- bring in jodi schneider. >> these tensions are intended to further isolate russia, isolate economically, as president's remarks showed. how much each one of these does is unclear, but clearly the effect is to have a continued list of these and keep bringing them onto keep the pressure on. today, they were against the largest bank in russia, modest financing to church and -- financial institution, and private banks as well, and also against president putin's daughters. the intent of that is to make sure that if there are russian officials who are hiding their wealth as some u.s. officials have been saying off the record, that they would not be able to do that if they are sanctioning those individuals. his daughters as well as the foreign minister's daughters and

his wife were also sanctioned as well as some other officials in russia. haidi: treasury secretary yellen justified before the financial services committee. what did she hear from lawmakers in a comes dissensions? jodi: she got an unexpected railing, three hours -- grilling, three hours. she was asked, what more can the u.s. do to put pressure on russia? what can they do economically? how can that you separate itself more from russia, from any companies doing business with russia? she basically said, they will continue the pressure and they will do whatever they can. she was also asked if the u.s. would go to the g20 if russia

was there, and she basically said they wouldn't, later clarified that she meant -- a big administration clarified that she meant from a finance ministry meetings that will be held in washington later this month. both sides of the aisle wanted to hear about whatever steps can be taken, whatever more sanctions, whatever more ways to make it difficult for u.s. businesses and individuals to do business with russia is what the lawmakers wanted to hear. haidi: jodi schneider with the latest. let's get you over to vonnie quinn. >> thank you and good morning. china's central bank says it will set up a fund to rescue troubled financial firms without specifying the size of the fund. sources tell bloomberg the video see is raising funds to shore up confidence in the country.

the funds could indirectly help other sectors including distressed property developers. hong kong's number two official has announced his plan to run for the top job. he is a veteran law-enforcement officer who oversaw a clamp down on the pro-democracy opposition and introduction of the national security law. media reports he will be the only candidate to receive backing from beijing at a set to stand unopposed. hong kong's next leaders take office july 1. u.s. allies in the international energy agency plan to contribute 60 million barrels the oil announced by president biden. the action is intended to soften the blow from energy prices since the invasion of ukraine. the iea sees russia's oil production slumping by a quarter this month. president biden's top economic advisor says last year's semiconductor shortage probably saved one percentage point of the country's of gdp.

gina raimondo will fall declassified briefing -- will hold a classified briefing on supply issues. congress will enact a bill that was $32 billion for the chip industry. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, president biden vowed sanctions on russia will stifle its economy in that the war could continue for a long time. we will discuss with georgetown university. economic forecasts could be wishful thinking. more on that with aegon asset management. this is bloomberg. ♪

>> big slide from the bond market. >> starting to respond. >> a frothy patch. >> this is market to be adjusting to a faster pace. >> having brainerd reno rate the fact that they want to move quickly. >> they are trying hard to get a soft landing and retain inflation credibility. >> eric investment is being

followed. >> moving into that phase. >> the balance sheet is going to be an important tool. >> the fed may not have to raise rates significantly above neutral. >> we are inside the uncharted waters. >> does inflation decelerate? >> this is an extra problem investors are having to grapple with. >> that is causing volatility and volatility in the bond markets means other people cannot hold one markets. the whole thing has been thrown up in the air. shery: weighing in on how the fed is tackling inflation. our next guest says the forecasts are wishful thinking. frank rybinski at aegon asset management, good to having with us. what part of the fed's forecast you not agree with and are we risking ace -- risking a recession soon? frank: i think with the policy actions, we are risking a recession. when you look at their forecast

that came out a couple weeks ago, they have rates going well past neutral up to 3%, they have growth staying above trend at 2.25% next year, 2% in 2024, and unemployment does not move. we have never seen in the history of economics tightening policy that much above neutral and you still have this goldilocks outcome. some people have to give. if they want to stop inflation, growth will be affected. you will stop the economy at the same time. unemployment will start to go higher. one thing has to get there. shery: we find ourselves in a situation where growth is difficult to find, what does that tell you about which assets will do better? frank: we are not at that point yet. we are looking -- the curve is inverted. it is extremely flat.

which tells us we are in the late cycle. that can last from six months to over two years. we are going to be looking at the labor market to see that degree of slowdown. labor market, we saw payables growing at 5% year-over-year, so still strong, but once that starts to slow down, growth going below trend, possibly negative, is a concern, that you are going to want to be in quality, duration, treasuries will look attractive, especially how much they have backed up. when you look at equities, it is alpha over beta. early in the cycle, you can write a market as the market is going higher but now it becomes stock selection, which companies have pricing power, which companies can get through a slowdown in growth. haidi: give us an example of those companies. i know you feel like you can

sign those companies and the opportunities so when the u.s. can outside the u.s. frank: i would not speak on a company specific level but i will talk about the industries. when growth is scarce, we pay a premium for growth. companies like tech that have relatively low input cost especially on the software side, high margins, that becomes a valuable asset, especially given how their cash flows can grow. you look at reach, you look at the housing market. you look at intellectual property. defense spending is going to be higher. you have a customer who is not an economic buyer, that gives you some insulation. those types of industries are ones that you could look for as well as your classic health care or consumer staples. haidi: you want to continue getting exposure to energy and commodities as well? frank: that has been a huge

boost this year to forecast, but over time, the amount that energy is contributing, their earnings growth will start to come down. we had oil at $130, today it was weak. the more that that normalizes, that is going to slow their earnings growth. we think energy in the long-term makes sense, but in terms of the change, rate of change of earnings, if we are looking out a couple years, especially as the economy is slowing, because demand for energy starts slowing , it might not be the first place we go to. haidi: frank rybinski joining us. you can get more on the other stories you need to know to get your day going in daybreak. terminals of can get that as dayb go. traders ramping up for the

spices as early as next month, we get more in a moment. this is bloomberg. ♪

haidi: taking a look at the day ahead. the deputy governor michelle bullock says the reserve bank of australia has a good opportunity to get inflation sustainably within the two to 3% burn. we are joining a group of investors making it to her 60 mother equity bid on a startup that aims to harness wind power to make a gasoline substitute, the company is investing $75 million for a 12.5 percent stake in the electricity based developer. one of australia's largest investors is seeking to raise $3 million over the next 18 months to back projects renewable and

sustainable fuels. traders are ramping up these fats, the rba will list in june, possibly as early as may. we have had some watermarks from board members pushing bets on rising rates. >> you mentioned michelle bullock, that deputy reserve bank of australia governor talking about an opportunity to get inflation within the target band, labor markets types, but the missing piece of the puzzle is wages growth. bullock told that panel that liaison from the rba on the ground suggests employers are looking at wages and the wage rises can be on the way. the system governor also spoke, he said the liaison program is hearing of rising prices on the ground. this information, they are getting in advance of official statistics numbers david this sees traders fitting, we are going to see a rise sooner rather than later, a 70% chance

of a 50 basis point rise in may, and goldman is talking about a rise in june, subsequent rises after that which will put the cash rate at 0.75% in august. shery: we have an alert on petrobras, we had seen recently the head of petrobras, the oil company in brazil, being sacked by president bolsonaro over if disputes. we are seeing breaking news, the brazilian government has appointed marcio weber as petrobras german. we had seen petrobras down almost 2% this week given the uncertainty about his nominations. one of those nominated by the government to the ceo role had declined the job. this is a difficult job because we continue to see fuel prices

rising in brazil as president bolsonaro heads to an election. we have seen controversy around fuel prices, we now have some new names at the head of trouble. -- head of petrobras. ed global said to be in talks of manufacturers of electric vehicles, the ride-hailing giant is discussing a partnership with timeout automobile which used to present vehicles. didi is trying to break into the electric car market, it has been hiring rnd staff in beijing and shenzhen. spacex's application for expansion of its launch site has been suspended by the u.s. army corps of engineers, this after the company failed to provide requested information. in a letter, the army corps informed spacex that the process can be initiated once the data is submitted. haidi: next, we speak with one

of the world's latest -- leading russia watchers as the u.s. steps of sanctions on moscow. 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™. (announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy.

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vonnie: you're watching daybreak australia. the federal reserve has signaled it will reduce bond holdings by $95 billion a month. minutes show many officials would have preferred a 50 basis point hike but held off because of russia's invasion of ukraine. the maximum runoff total is composed of $60 billion in treasuries, $35 billion in expect securities. as compared with a $50 billion monthly rate in 2019. that you is imposing new

sanctions on russia -- the u.s. is imposing new sections on russia. president putin's daughters and members of the security council bill face penalties. president biden will sign an order prohibiting new u.s. investment in russia and sanctions on russia state on firms will be announced on thursday. the white house is warning india against aligning itself with russia. the national council said he is a point -- he is disappointed by the response to train and they could be long-term consequences if it supports moscow by increasing trade. and yet is continuing to buy russian oil and weapons -- india is continuing to buy russian oil and weapons. janet yellen says the u.s. will not participate in some g20 meetings if russia is allowed to participate. she was also asked about actions against china if it moves against taiwan. she said the biden administration would be prepared

to use it sanction to was against beijing as it has done against russia. >> the girl from the outset has been to impose maximum pain -- the goal on the outset has been to impose maximum pain on russia while shielding the united states and our partners of undue economic harm. we are working with them on sanctions and want to remain aligned with them. vonnie: global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: let's talk to the next steps on the ukraine war, bringing in angela stent. she previously served as national intelligence officer for russia and eurasia at the national intelligence council. rate to happy with us. -- great to have you with us.

we see more targeted sanctions. we have allegations of war crimes, given those disturbing images and reports we saw surrounding kyiv. what is the next step? we have seen sanctions have a limited impact as a deterrent so far. prof. stent: they affect the people who are sanctioned, there will be no new portfolio investments in shock, that will be one of the sanctions and apparently putin's two oldest daughters but they do not deter, they punish. there is little one can do at this point due to their russia -- to deter russia. it is going to go on the offense in the southeast part of ukraine where they want to secure the whole of that territory. then we don't know, will they go back to the kyiv area or have they left it go and the carnage they have left in its wake -- they have left?

and the carnage they have left in its wake. nobody knows what the next move is but i doubt the sanctions bill debtor them -- will deter them. haidi: does the resolution or any kind of ability to find an offramp depend on whether this is a war being waged for economic, security, or ideological reasons? prof. stent: i think it is being -- if you like -- ideological reasons or national reasons or putin showing the west how ingrid he is, he believes he is at war with the whole of the west and particularly the united states. remember that russia has been at war with ukraine since 20 teen since they first invaded -- since 2014 since they first invaded the donbass region, that has been going on for eight years.

if you look at previous russian engagements, the playbook has been maximum civilian casualties, destruction of cities, raising capital to the ground until they were exhausted and claimed they had won. shery: how much were the pressure on the russian economy pressure putin? prof. stent: that is an interesting question. we really only see the full effect of those sanctions further down the road. export controls on semiconductors and other industrial goods will affect the russian economy. the economy is already being adversely affected. russia is struggling to make payments on it sovereign debt. it remains to be seen whether any of that would persuade putin and the people around that it is time to stop this war. they will need to come out of this claiming victory. shery: how resilient is ukraine when it comes to pushing against

russia's offensive? prof. stent: i think they are resilient. their reaction to the atrocities we have seen is to fight back harder. as they say, they need more help, more weapons, they need the wherewithal to stand the russians, they have the will to fight, they know what they are fighting for, was of the russian conscripts do not know what they are fighting for, they are told they are fighting nazis but they have not found any. without more help from the west, it will be difficult for the indians to continue. -- for the ukrainians to continue. haidi: does china remain a potential way into find a way out of this when it comes to western allies? we have seen disappointment be expressed when it comes to the reluctance of china, india to take a firmer stance. prof. stent: we have not seen signs that the chinese are

willing to intercede as media areas. they repeat the russian talking points about this war being the product of nato and u.s. aggression. they did express for her at what they were shown at the united nations security council -- did express horror at what they were shown at the united nations security council but they have not taken any actions to initial russia, to go along with -- to punish russia, to go along with sanctions. the chinese are going to face dilemmas about how long the this up or whether their economic interests with the rest would -- west would persuade them to act otherwise. shery: thank you for joining us. we are seeing instability in peru, the president has lifted a lockdown post -- lockdown he imposed in an attempt to curb

inflation. we have seen political instability for a while. why do we continue to see these protests despite the fact that he lifted the state of emergency? >> there are a few things going on. from the beginning, his administration has been volatile and difficult to implement a program of government. he started in july and since then, he had four cabinets. that has led to mismanagement, a battle with this -- with congress. it has to do with food inflation, increases in fuel prices, the export sector, other sectors of the economy.

he has been slow in reacting. the government has been dismissive. he reacted over the weekend, increasing minimum salaries, but that was not enough to tame these protests and that led us to that situation at we saw yesterday, these lockdowns, they closed the capital city for almost a whole day. haidi: is the central bank meeting tomorrow? >> the situation is not easy from that side. the inflation means the central bank has to lift interest rates. they have been trying to do it as soft and slowly as possible but inflation is close to 7%, that is a lot for peru, and has led to problems. it is likely we are going to see another increase, most economies are expecting another half a

point. that means there is much more to go. haidi: juan pablo there. a veteran hong kong law enforcement official announcing his plan to run for the city's top job. we look at the latest next. this is bloomberg. ♪

shery: a veteran law enforcement official has announced his candidacy to replace carrie lam as hong kong's next chief executive and he could find himself running unopposed. let's bring in our chief north asia correspondent. does this say no beijing could be -- does this signal that beijing could be more focused on cracking down on dissent? >> we should have seen the writing on the wall when he replaced the chief secretary june of last year. we also heard from carrie lam this week that she informed beijing of her decision not to seek a second term in march of last year. it looks as though john lee the last year of chief secretary, the number two position after

chief executive, used it groom himself to become the chief executive. his background is almost entirely in law enforcement. he has been a police officer, he rose up to deputy commissioner in terms of the minute -- in charge of the management branch, and became secretary of security. he is the man who oversaw the implementation of the national security law in 2020 as well as the crackdown on pro-democracy activists. his resume reads that of a security officer, not one of knowing much about finance or government policy. this is what he had to say when he announced his candidacy for chief executive. >> having been in the government for over 40 years, to serve the people of hong kong, is a glory. >> the election by select

committee of 1500 individuals which are heavily pro-beijing, essentially all probation because of the patriotic requirements, would happen on may 8. the next keep executive, it looks like it's going to be john lee because others have not put their name in the hat and local media is reporting that john lee is the only one who has been or will be formally endorsed by the government of xi jinping. haidi: what about the restoration of business confidence? that will be a priority as well. stephen: you would think so after the trials and tribulations of the last few years. the estimates of many people. the sapping of confidence of hong kong as an international business center. some would say that the financial secretary would have been the better choice for pro-business angle, but this

signals, the choice of john lee indicates that national security and security issues, deepening perhaps of national security legislation such as banning sedition and theft of state secrets, good becoming with john lee -- could be coming with john lee. he will have to address this record population decline, people have to articulate a clear vision for the city's covid strategy, but this is a man whose resume reads of security jobs, not business, not government policy. we will give him the benefit of the doubt given the highly unpopular tenure of carrie lam, but he will be asked to explain his agendas and government policies as soon as july 1. haidi: let's get you a check of

the commodities complex when it comes to energy prices. look at the bti, trading in the early part of the asian session, rode off by 1.6% after we saw oil fall to the lowest since mid-march, we had international oil agency saying it would deploy 60 million barrels of oil from emergency reserves to bolster that historic release announced by the by the mr. risch and. -- announced by the biden administration. we are seeing a little bit of a recovery. gas futures up over just 1% viewed the u.s. pricing -- 1%. gasoline futures up by 1.4%. the iea adding 180 million barrel release by the u.s.

>> that did selloff, perhaps overdone because we are seeing oil rebound but it is what into out the coordinated release of oil which had been announced earlier still came as a bearish factor, traders saying if we drop into the bloomberg, you will see wti prices have weakened both in terms of technical, falling below the 50 day moving average, and even though we are seeing a rebound above 97 in asia, trading after falling below 97 in the u.s. session, this is indicative of how oil prices are struggling to find correction in a market -- find direction in a market with lower liquidity. higher margin requirements are reducing the number of esters -- of investors in the market. we saw oil prices plunged after the u.s. announced it was releasing hundred 80 million barrels from its reserves, the size of that release

unprecedented. prices rebounded within 24 hours on concerns about russian sanctions and lower demand from china due to the resurgence of covid. one commodities veteran says that china covid outbreak is the most perish factor. he says you look at everything house and the renewed sanctions being discussed on russia and they point to a market in a difficult place on the supply-side, a market that is structurally bullish. shery: high energy prices also a big topic and oil executives defending themselves today. su: they don't call it the hot seat for nothing, we saw the executives of major oil companies take major accusations from house democrats. they were blamed for price gouging, exploiting the ukraine war qamar taking advantage of higher oil prices.

to generate windfall, one block maker from new jersey said we are here to get answers on why big oil is ripping off the american people. that gives you an idea of the tone of the hearing. let's look at why this is a big topic for democrats, and there is concern about whether it will affect the midterm elections, gasoline prices have become a major issue. there has been a dollar increase at the consumer level in the past couple weeks. in california, there are even seven dollars a gallon readings. we did hear from the oil companies that they do not concern -- they do not determine the consumer price, that is determined by the independent gasoline station operators. europe taking a gamble and the two russian coal, absent european coal prices soaring and some believe that is going to jam up european coal imports. russia is the biggest supplier

of gold to europe -- of coal to europe and it is used to power electric generators and manufacturing plants. shery: we have continued to see some countries buying russian oil despite these sanctions and international condemnation, india and china. now that you asked top economic advisor coming out -- the u.s. top economic advisor coming out and saying india could significant costs from its alignment with russia. india is also russia's biggest buyer of weapons. haidi: it was not specific, but alluding to these longer-term strategic costs and the partnership costs when it comes to this alignment with moscow and i'm fairly certain that that

approach would be taken with beijing as well given we know that these ongoing talks with beijing, every time ukraine has been raised with eu leaders, that beijing has been keen to make its diplomatic overtures, but sidestepped the issue. we have more to come. this is bloomberg. ♪

>> let's get your check of the latest business flash headlines, boeing is hiring the three biggest cloud computing companies. the agreement will ship hundreds of applications to the cloud from their current network. boeing wants to address production gremlins that drive up the cost of developing the aircraft. exploring a bid for et al. infrastructure company atlantia, the u.s. private green giant is in talks to take atlantia public. atlantia has attracted interest from other investors including a spanish construction tycoon. a power company rate $6.1 billion in the second biggest ipo this year modifying a

slowdown in listings. the company sold 9 billion shares with a market value of almost $34 billion. the stocks should start trading in dubai it will 12. -- april 12. shery: jeremy grantham wonder that oil spikes could trigger a procession -- warned that oil spikes could trigger a rest session. price increases are set to continue which will not only threaten global growth but could disrupt political systems. he adds the war and ukraine will cause food prices to rise as well. pickett asset management has cut its rating on u.s. stocks to negative amid growth risks. the chief strategist sees u.s. equities bearing the brunt of any selloff, this with rising inflation and slowing growth. he sees value in chinese stocks

as valuations have declined to a point where regulatory routing shifts and economic slowdown appear fully discounted. haidi: greatest looking like a tricky open as we head into the start of trading in asia. we have u.s. stocks falling, the s&p 500 down 1%. the fed out late its plans to shrink the balance sheet by more than $1 trillion a year and bill raise rates expeditiously. we are seeing downside when it comes to trading in new zealand. sydney seeing downside. chicago and dk futures looking flat -- and nikkei futures looking flat. nursing dollar yen -- we are seeing dollar yen moving towards 1.24. shery: take a look at futures.

we are seeing muted in early asia trading after we saw the s&p 500 fall today, technology stocks declined. this is bloomberg. ♪

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>> good morning. we are counting down to asia's market open. shery: welcome to daybreak asia. our top stories this hour, asian stocks set to fall as the fed plans to raise balance sheet by $1 trillion a year and hike rates. the u.s. addition -- latest edition of cinches on russia