shery: you're watching daybreak asia. haidi: we're counting down to

the major market opens. asian stocks are separate week start after a sixth session of losses on wall street. the dollar is stabilizing near a new record high. investors rattled, visuals reaffirming -- sabotage is suspected after the nord stream pipeline is damaged, escalating russia's energy conflict. shery: u.s. futures rebounding marginally after stocks struggled in the new york session. the s&p 500 gained. the vix ending above 30 again today. treasuries rebounding slightly, that did not last. a lot of it because jim bullard commented and added to the hawkish rhetoric out there.

wti rallying in the new york session. we heard the report that russia might be pushing for a cut in production. geopolitical tensions over the nord stream pipeline. annabelle: it is setting us up for a mixed start. the japan nikkei futures are in the green. keeping an eye on japan. moves in the yen. the yen weakness was something that helped in the prior session. we saw asian stocks were covering for the first day in for sessions. let's take a look at the terminal chart. we have stocks in asia amongst the lowest in around two years.

capital markets are saying headwinds remain in place, most oversold conditions, march of that year, a lot of fears around what the fed is doing. they need to continue with rate hiking, what that means for the dollar. shery: we had early positive sentiment in the new york sentiment, that did not last given that officials adding to the hawkish rhetoric. >> we have a serious inflation problem and we are missing our inflation target and credibility. we are moving very aggressively. there is a lot of tightening in

the pipeline. we are committed and recognize there is a risk of overdoing it. haidi: with a pivot nowhere in sight, our next guest is raising alarms. kurt to have you with us. fed expectations. if you look at the blue line, it shows the evidential -- eventual levels will be held the rest of the year. is there a risk of overshoot given how fraudulent indicators -- fragile some indicators look or is this a sign that the fed wants markets to understand how serious it is? guest: thank you for having me.

given how consistent the fed has been, it's the latter. the market was discounting this dovish pivot over the summer, and we were surprised. they were expecting cuts. chart has changed. not only is he getting to a great, but it is staying there. despite the problem inflation. the fed is on the right path and the market is expecting that. when you look at the labor market, the fed is very specific addressing the market. it is slowing down. we are growing at a 3% annual rate. compared to other cycles, that's a fast rate area we're going to need some more cooling.

the market is finally coming around to what the fed has been saying. haidi: you're saying a recession is likely. what does that look like for your portfolio? guest: we think there is a high probability of a recession here in the u.s.. as a result, we are underweight equities, overweight fixed income. it's going to be tilted towards away from low-grade credit. the sweet spot is investment grade or brits. more yields than treasuries. shery: we are seeing the u.s.

dollar's relentless rally. how long will that continue? guest: i think the dollar has been an underappreciated story. the big risk is something similar to what we had in the mid-1980's. eventually created a problem in debt markets. we are already seeing the boj has stepped in with interventions. we're starting to see that. the further it goes, the more risk you have exposing further nerves. if you import commodities, they are prohibitively expensive. from an earnings standpoint, 40% of sales are overseas. that's going to be a drag.

we have never had a recession where earnings have not decreased in the averages between 10% to 15%. that would put s&p earnings at 200. that puts the s&p at 3000. that's on our firm price target, but just to give a zip code of where it could go if that scenario plays out. haidi: let's get to vonnie quinn. >> president xi has reemerged. state media says -- the absence is consistent with fix covid protocols.

saudi arabia's king appointed his son to replace him as prime minister. it formalizes prince mohammed. the overseas major portfolios. his father remains head of state. more than 400,000 people have evacuated central vietnam. the strongest from the country has seen in two decades is due to make loud wednesday morning bringing heavy rain and flash floods and landslides. officials say it threatens to delay harvests. kamala harris is visiting the demilitarized sun between north and south korea. she will make the trip on thursday. they're scheduled to meet with the south korean president where

regional security is expected to top the agenda. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, the latest reports to discuss deflation risks. up next, sabotage suspected after the nord stream pipeline is damaged as russia threatens to cut off gas supply. details are just ahead. this is bloomberg. . ♪

at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

shery: russia's energy conflict with europe has claimed damage that it might be delivered. gazprom is warning it's at risk. su: this sting is much higher. what we learned from european counterparts indicating leaks in

the baltic sea and swedish authorities indicating blasts have been heard. since on the nord stream pipeline. it delivers a lot of natural gas to the european nations. russia has announced maintenance and has been cutting off the flow of gas, stoking concerns president putin may cut off gas supplies completely. there is concern of this specter of sabotage, yet a cut off could be in hand. a tweet indicated the damage is sabotage. video has been released showing the natural gas bubbles and if you can see closely are forming on the surface and one of the

areas, and activity associated with gas leaks. it was taken off an island that runs hundreds of miles under the baltic sea. if you drop into the bloomberg, it's going to be a tough winter. deutsche bank is concerned because the eu has been encouraging member nations to get up to speed to get ready for the winter. there are concerns they are just not ready. storage is below where it needs to be. it's only ratcheting the price higher. haidi: there has been a lot of different factors. you mentioned oh pack -- opec, the dollar. what are we seeing? su: oil prices are getting a bit of a break from the selloff.

he we saw a huge spike. they will not only push for opec-plus to cut production, it's going to be cutting off gas applies to all european allies of ukraine as it moves aggressively. meanwhile, if you take a look at the big picture, the big story has created an absolute crisis as europe heads into the winter. in terms of brent crude, we saw futures settling higher. west texas intermediate settling above $78. there were some oversold gauges when the dollar ended up

strengthening later in the session. brent crude we are -- hurricane ian approaching the gulf. all of this is secondary, very bearish, commodities. there is the issue of the underlying tightness of supply. the goldman sachs estimates for brent crude was $125 because of tight supply concerns, they/that to $100 by the end of the year. still bullish but shows how

analysts are regrouping. all of these currency gyrations are the major story and energy. shery: su keenan the latest. take a look, all to do with the strength of the u.s. dollar touching fresh record highs. that's leading to everything like the british pound to continue lower. having no pets -- that's at a level that was unthinkable. we had a chief economist speaking, u.k. assets are under pressure. the aussie is trading at the $.64 level. to new to watch at a level that

lets an intervention last week for the first time since 1998. get your day going in today's edition of daybreak. terminal subscribers go to jd go , you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: we are counting down to the start of trade in tokyo. the prime minister just attended a state funeral for shinzo abe. there is reporting that airlines and south korea will increase flights to japan as they begin

excepting visa-free torus. we will get details for the month of august after a healthy 9.7 year on year jump in july. haidi: white house officials say kamala harris is set to meet with industry executives. let's bring in our tokyo bureau chief. reporter: kamala harris is meeting with industry representatives. we have big japanese chipmakers to promote investment. this all comes on the back of the chips and science act in the united states, promoting investment in the u.s. and the

concern here will be twofold. are they going to be penalized or setback in any way for not investing, does it make it more difficult for them? are they going to see a more binary situation when it comes to security with china? the vice president is scheduled to visit, a positive note for the japanese and south korean chipmaker that the vice president is meeting here on the trip. the idea is this alliance on chipmakers, the u.s., south korea, japan and taiwan to

strengthen the chip supply chain. keeping an eye on those concerns with chinese chip companies as well. shery: tell us about the discussions with the prime minister when it comes to taiwan, north korea, russia as well? reporter: the vice president had a meeting yesterday, much of the same language was used that you would have heard with discussions between the u.s. and his predecessor. the vice president was here and we saw this commitment to a free and open into pacific region, talking about language from the

abe administration. repeated ballistic missile launches this year has fired off more ballistic missiles, north korea may fire a summer in-based missile, a chance that it could carry out a nuclear test. in march, the test is believed to have failed. whether the technology is all there, we are all on high alert. haidi: we're hearing the vice president is planning a trip to the dmz.

this is a high-stakes visits. reporter: she is the first senior official to visit, it is a show of friendship to south korea, the strengthening of the alliance between the u.s. and south korea, and that has widened. the vice president herself as a big diplomatic chance. we are reminded of uphold it out from the washington post showing a majority of democrats would prefer someone other than joe biden on the top of the ticket in 2024. that is certainly in the back of everybody's mind, defense

concerns these economic concerns about boosting the economic and key materials in the u.s. supply chain, those are on the top of everyone's mind. haidi: car deputy bureau chief. let's get you a check of the business headlines. a rideshare or says it expects revenue to grow sharply as profitability -- the company used its first investor day to forecast a 49% growth in 2023. >> there is excitement.

we're being cautious, but the budget in southeast asia is one of excitement and people are continuing to take advantage of economies reopening. haidi: coming up next, we discussed china's economy and find out why they see emerging inflation risks. more on that in a moment. this is bloomberg. ♪

>> this is daybreak asia. three more nord stream 1 pipelines have been damaged by suspected sabotage.

they were found leaking after reported explosions. the damage makes it more likely europe will have to do without russian gas this winter. sources say the union is considering -- turkish state bank is set to exit russia after u.s. warnings. hurricane ian is poised to be one of the top storms in u.s. history as it heads for the coastline. it has caused thousands of flight cancellations across the florida and thousands of evacuations. the storm is set to make landfall around tampa bay and

send flooding through the southeast. 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. >> kicking off with breaking news across the terminal from a japanese drugmaker in partnership with biogen. the major take away from a study is the first medicine to show a slowing of cognitive decline. the company is reporting the new drug helped to curb the progression of alzheimer's compared to the placebo. this is a very significant result and major breakthrough because reachers have struggled for decades to discover treatment. they will be applying for u.s.

approval by march of next year. the treatment does have serious side effects including grade -- brain bleeding. but it will be a new drug and a name to watch closely when japan opens at the top of the hour. looking at japanese stocks, a bit of a boost from weakness in the japanese yen previously. little change after three days of weakness in australia but traders are on high alert for further intervention when we reach the key level but it could have a further downward bias from the moves we saw in treasury yields in the previous session. [indiscernible] the yield gap we see in terms of

the u.s. and china putting further pressure on the chinese yuan and our economics team said we could see further downward pressure on the currency near term but it appears it could be more buffered because other factors are at play like the wide trade surplus china has and stabilization efforts from pboc. >> they have leeway compared to other central banks and the fact that inflation is a nonissue. a new survey from facebook says china faces increasing risk of deflation as the ongoing property crisis and covid restrictions continue. we have seen a pickup when it comes to wages across china but where is the bulk of the pressure coming from? >> the world is really concerned

about inflation and in china the risk is deflation. most of it comes from the property sector. property prices are crumbling, residential or commercial. outside of that you also see significant amounts of price weakness in the manufacturing sector and this is true across different industrial sectors. if we see further pressure on the chinese economy from declining export, on the factory side this can only get worse. shery: some covid restrictions have been rolled back. we see this on the retail and services side of things >> you definitely see it better in the

third quarter than the second quarter. if it weren't for the covid zero policy, pent-up demand means there would be serious tailwinds but as long as covid zero remains the policy, even if it becomes more targeted and flexible, i think a serious rebound is a low probability at this point. shery: do you expect the covid zero policy to stay entrenched? >> yes because the conditions for it to be gotten rid of have not been met. we cannot have major china's cities face outbreaks. with a massive inoculation campaign i do not think you get a full scale covid zero.

haidi: what is the timeline? thanks predicting next year we will see the reopening in the country. is that a more feasible pathway rather than something happening quickly? >> well into next year is what i would say. it is going to take a long time. china is trying to develop their own vaccine. and it is trying to purchase and usher in this national campaign of shots, that will still take a long time. this is a populous country. well into next year is reasonable at this point. haidi: in terms of when that comes, what do you see as the damage to the chinese economy? in previous downturns there is a cyclical impact of what happens in china and at this point it is

still somewhat cyclical but not in the high stimulus ways we are used to. how much damage will be done by the time they open up? >> let's start with the property sector. it is in all sorts of trouble and a deep hole and i do not think we will get property as a growth drive all or -- growth driver. on the manufacturing side, it depends on what happens with the global economy. if you get a bad reception in europe and a shallow reception in the u.s., it will still have an effect on the chinese manufacturing side. that lets household become the only contenders who can drive growth. households and a struggling labor market where people find it hard to find work, i don't think they will open their pocketbooks and spend left and right. i think the chinese economy will

continue to struggle. comparisons next year might look better but i think there is serious weakness we will be contending with in the coming year or so. how -- haidi: how much pushback what we see from the pboc in terms of the fall of the yuan? >> this is ultimately a strong dollar story, which is the fundamental problem. with the fed trying to get more aggressive with interest-rate hikes. maybe 7.2 is the line in the sand. there are a lot of factors right now weighing on the yuan and i think the pboc does not have a lot of options. i do not see them really stepping into use a lot of reserves to boost it and trying to hike interest rates in this environment to protect it.

so i am not sure how much they can do, especially with continued dollar strength. shery: we have seen the pboc trying to get money out but no uptick. what about corporate borrowing? >> money is not making its way to firms and that is because banks are still charging high interest rates. it is discouraging companies from taking out loans, especially in an environment where there is no guarantee your investments will pay off or if it makes sense to go on a hiring spree because tomorrow you could face a shut down and then you are out and unable to operate so i think the macro uncertainty driven by covid and the high rate of capital is discouraging firms from going out. shery: it is good to have you in the new york studio. up next, another round of

executive departures. and this year's steep price plunges are not over yet. that is coming up. this is bloomberg. ♪

>> let's look at bitcoin. we briefly saw a break in the

correlation we have seen between bitcoin and the trend for equities but that is turning lower along with -- bitcoin really failed to sustain. we see some upside, one quarter of 1% higher when it comes to the big disc cryptocurrency. we've been trying to watch to see if there might be a divergence. shery: many deals with traditional financial firms will not hinder profitability this year. here is some of the conversation we had. >> obviously it will not be perfect and we have made an

extensor through that but we have not used the majority of the cash we have on our balance sheet. we can say there are other things imminent here so much as that we want to be flexible and in a position where we are looking forward at where we can be most helpful. i think how i would describe us right now, i do not know if it will necessarily read anywhere. but we will continue poking around. >> reminds me about what bravo said. he thinks people in the industry are disturbing in terms of lack of transparency. you are not that, he is willing to invest in that again. what free cash flow are you generating? >> we were profitable last year

and will likely be profitable of this year. we raised a couple of billion dollars last year. we have done a number of acquisitions and generated cash flow with revenue. when you are trying to buy all of those things together at the end of the day i think you are left with upwards of a billion dollars and there are some issues around regulatory capital . but we still have a fair bit of [inaudible] >> i want to talk about regulation as there have been a lot of stories circulating, including the new york attorney general accusing the xo of

falsely claiming it was a licensed broker-dealer. and then freezing assets. the latest upgrade known as the merge. and the chairman of the said earlier talked about the need for more crypto oversight. listen to what he said. >> there is a need for more appropriate regulation so that as it touches more retail customers, appropriate regulation is in place. >> more regulation is needed and it is something you have worked on. do you feel we are closer to a real framework or having organized jurisdiction? >> i do think there has been a lot of progress made.

i think we have made a lot of progress. looking at where we were a year ago with little going on the regulatory side, now there are proposals in congress. we've been applying for licensure and are in discussion with the sec. it is a world of difference and i think that is exciting. i agree there needs to be clear federal oversight to protect consumers and to provide clarity for the industry to operate. shery: [indiscernible] after less than 18 months and

the role. the ceo of celsius is also exiting. let's bring in john. what does this tell us about the state of industry and confidence right now? >> it tells you there is a lot being done now. crypto is such a young industry. there are a lot of people who stay in jobs a short amount of time but celsius was not entirely unexpected, given the trouble they have had. ftx was more of a surprise but it tells you there's a lot going on and these companies are trying to deal with the crypto winter. shery: tell us about the pricing. we've seen a little bit of a rebound now.

>> bitcoin made a run at 20,000 yesterday but it had a difficult time and especially with stocks declining, the macro narrative just being tough with the fed it continuing to hike rates, it has not done that well but at the same time, if you look at the third quarter, crypto actually has done pretty well relatively. so over that timeframe, you are actually holding on in crypto. shery: up next, japanese authorities are said to have bought millions of dollars of worth of yen. we will look at the market impact, next. this is bloomberg. ♪

shery: japan might have thought more yen since 1998 to support the currency. let's bring in some in flint. what are we seeing -- simon flint. what we see?

>> a little nervous that it costs billions of yen to bring the market under control. it has been estimated they have 110 billion u.s. dollars worth of assets not invested in u.s. treasuries but are in the u.s. currency. so the indication is we might only get three similar sized interventions in the markets before it starts getting tricky. so that's making people a little nervous, that they won't be able to hold on [inaudible] shery: and it's not just the yen feeling pressure. haidi: what other central banks to be expect pushback from? more of a reaction from the pboc? >> yes it is surprising that yesterday they let the fix as much as they did.

in terms of what to expect, i think there is a risk you see with regulatory change in the middle of this week and shadow intervention possible friday afternoon and china might want to set the scene ahead of the long holiday to quash expectations. haidi: we are getting the minutes from the july policy meeting from the boj. they will not hesitate to add easing if necessary. so really to just really sticking to the same narrative and the commitment to the monetary policy, let's -- what fundamentally is the issue? you get the short-lived intervention effects. will we continue to see the

downside as long as the policy divergence remains? >> boj has been very clear they are not going to alter policy and kept forward guidance unchanged, suggesting they will do more. so i think when he finishes his term, bet on the boj changing the policy will remain limited and even then it becomes tricky because the kind of interest rate hikes you need to stabilize the dollar yen is too large for the economy to take so it is a very difficult spot that the banks are in. haidi: simon flint. these are some of the stocks we will watch when trade opens in six minute time in japan, asia,

and australia. a japanese pharmaceutical company announced the results of an alzheimer's drug trial, indicating the drug helps slow the disease and is the first medicine to clearly block the projection -- block the progression. shery: we will be watching when stocks start trading. nikkei slightly higher. japanese yen trading near a range this whole week of the 145 level. we will see if it nears the level given the strength of the dollar. sidney futures under pressure. the kiwi stocks gaining ground.

a mixed picture overall given that it was a struggle to find direction in new york session. u.s. futures -- asian futures were slightly higher earlier but now it is neutral. stocks ended lower today, giving up more than 1.5% of gains. coming up, we will talk market strategy with credit suisse and why they see the number of millionaires surging in the next five years. plus more with tv security. this is bloomberg. ♪

shery: this is daybreak asia and

we are counting down to asia's major market opens as we watch whether regional stocks will continue rebounding. chinese regulators are warning that they should not have large stock sales ahead of the congress. haidi: we count down to the major event and really industry that -- interesting that speculation is up and perhaps we start to see pathway to reopening. it would come to a huge relief to a number of sections, according to morgan stanley. let's look at the market open given we had more from wall street overnight. >> big moves in the treasury

space in the previous session. we are watching one stock, sci-fi. a big report coming out that this japanese drugmaker has partnered with biogen and they have developed a new alzheimer's drug that shows a slowing down of cognitive decline in the early stages of the most common kind of dementia, which is alzheimer's. other sectors we are watching, moves higher for japanese exporters of the previous session the we see some weakness at the open here but it is something that has helped japanese stocks is what we see in the yen because we are still on watch for it to hit the 145 level. it's a major focus for us and perhaps another level the japanese authorities could intervene into the markets and more details coming through on

the size and scope of the intervention we had last week. authorities spent $25 billion buying up the yen, more than they spent during the financial crisis in asia in 1998. let's look at korea at the start of trade. still watching for authorities to intervene in the one and we saw the currency rise in a previous session although it is weaker this morning. strategists weighing up the risks of authorities limiting further losses though some say it still could settle around the key level. in terms of the kospi at the start of trade, some weakness. closing in the red. still around a two-year low. in terms of what led the losses,

we are watching tv makers closely. recession risks and that sector. asx 200 is a staggered start so we will be watching for what happens with retail sales. it is a key data item in asia today. they are expected to go higher moderately. they gained in the prior month. consumer sentiment starting to improve in the australian market . it seems the economic fundamentals are more solid. inflation is more subdued. and watching brent crude, a little weaker this morning but still above the key 85 level. shery: let's bring in the cio of international wealth management and credit suisse.

in the u.s. we've seen investors leaning toward cash. we have seen 5 trillion dollars of inflow in u.s. money market funds. is this similar to what we see in asia? or are there better opportunities to ride out the turmoil? >> i think many investors have this instinct during uncertainty to raise their cash holdings, just to have more flexibility and to whether food insecurity. we have been underweight to the benefit of holding more cash than usual. haidi: how does a strong u.s. dollar as opposed to crumbling asian currencies factor in? >> most investors are globally invested so having the u.s. dollar exposure has been helpful to them.

for example we've looked at different regions, including asia in terms of the performance of single family offices and have noticed in both cases in asia and europe there has been a trend to outperform. there is a strong dollar helping more the investors in different spaced currencies rather than in the middle east where it is related to the u.s. dollar. haidi: what about the volatility we see across bond markets? much of it is driven by the dollars story but in your clients is there concerns about a currency crisis? >> there are two things to consider. both conversations in asia and

internationally have been to -- been pointing toward a yield levels. as they open up gradually an opportunity and bond market so there is much more leaning toward using the investment entry point rather than [indiscernible] and fearing a major bond crisis. when it comes to currencies, the fact that we have such a strong rapid increase of u.s. yields is tracking into the u.s. dollar and as long as monetary and fiscal policy, they're not coming to strengthen their own currencies, we should be anticipating a very strong dollar. perhaps the one currency to highlight here that is firm on

monetary ground and fiscal ground and sound economic policy is softbank. haidi: how much is that reflected in terms of outflows from emerging markets? >> for sure there are outflows in certain regions. current account deficits and when u.s. yields become more attractive but emerging markets are not homogenous. there are big differences in emerging markets who are exporting oil and related to the whole cycle in commodity prices holding up much better. the middle eastern countries

impact in the emerging market debt is quite appealing because of the fundamentals of the country with stronger growth rates easing better. haidi: please stay with us. we will get more views with you. but first, vonnie quinn. >> president xi has reemerged after not being seen in public for two years. he was at an exhibition in beijing on tuesday about china's achievements. saudi arabia is 86-year-old king has appointed his son to replace him as prime minister.

he already overseas saudi arabia is major portfolios including internal security. his father remains head of state. bank of england chief economist says u.k. government tax cuts will require a significant monetary policy response. he said changes have caused a repricing of asset. [indiscernible] >> there is a rebalancing of the macro policy environment and anticipation of looser fiscal policy. i think it is hard not to draw the conclusion that all of this will require a significant monetary policy response. >> three nord stream 1 pipelines have been damaged by suspected

sabotage, further risking outflow to europe this winter. the damage makes it more likely europe will have to survive the winter without russian gas. 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 look at early movers this session. >> looking at how we go across the board, so far most sectors are in the red except for the energy space. energy is leading market gains across asia. we are seeing moves in oil prices. wti is fractionally in the green .

we've seen moves to the outside based on what we hear from russia that they will push opec-plus for supply cuts at the next meeting. that adds to concerns and brings into the for. we will see whether supply concerns outweigh what we see from recession risks and if it will dampen demand that has dragged down commodity. we will see if it holds but so far we see energy names in asia moving to the upside. shery: still aside, a ridesharing giant says it will be working on enhancing their ecosystem. we will have an interview with the seatbelt so. -- we will have an interview with the cfo. this is bloomberg. ♪

haidi: the number of millionaires globally will grow by more than 40% in the next five years.

still with us is the net, the cio of international wealth management at credit suisse. thank you for staying with us. what demographic shifts do we see and where do you see the biggest gains coming from? >> year after year the biggest increase of high net worth and high net worth individuals, millionaires and billionaires, has been in the united states followed by asia with china having a substantial number. most of the growth in wealth and how it has fed into these trends is coming from the rapid rise of financial assets.

we've been looking at 2021 and the full effect of measures taken throughout the pandemic. it has fueled rapid financial asset growth which led to wealth increases worldwide. shery: tell us about the distribution, whether it is between rich countries and poor countries, or within those countries the 1% against the rest. >> one encouraging observation is that over the last decade there has been an increase of median wealth driven by the catch-up of emerging markets showed by way of household wealth. in particular, china has played a very important role of the decade to move the distribution

into more equally distributed wealth. the second point to make is within countries, 2020 showed a slight increase of inequality in terms of distribution in the number of countries and that is related to the share that financial assets have had in total wealth. the higher the share of financial assets, the higher the share of the 1%. shery: good to have you with us. take a look at how futures across europe are trading at the moment. a big downside given the broader market selloff we see. cheap valuations in europe not

helping with the possibility of a recession and escalating energy crisis. coming up we will have more of that crisis. this is bloomberg. ♪

shery: russians energy conflict with europe has intensified. your claims damage to three nord stream 1 pipelines was deliberate. su keenan has more. there are allegations of sabotage. >> and these are coming from european authorities and u.s. bubbles coming up from the baltic sea are typically the

sign of natural gas were indicative to damage to the pipeline. we are talking about the nordstrom pipeline that runs over 700 miles under the baltic sea from russia to germany in a key pathway that is a way to get gas into europe which is currently heavily dependent on russian gas. this is a cat and mouse game that has been going on for several months where putin's russia has narrowed the supply. this changes the game. vulgarly issuing a treat calling it sabotage and warning there will be serious consequences. as a result, you -- the eu is working in concert with other organizations to find a way to secure a better source of natural gas and impose a ban on

russian fuel as the ukraine situation continues. let's look at the video. danish authorities provided this and it shows the bubbling up in the baltic sea. that is a sign of natural gas and that is one of the key indications or evidence we have that this might be sabotage. you are looking at the bloomberg. deutsche bank has now issued a note of concern about european gas storage. a lot of european nations are getting ahead of winter, trying to store up natural gas to get through what is expected to be a very cold winter night and russia they are cutting off the natural gas supply to europe would be catastrophic for the economy. haidi: the latest when it comes to the energy crisis. >> natural gas is going higher

because putin is threatening there might be a risk of the rest of supply to europe. natural gas prices have surged higher in the last few hours. it has increased tenfold in the past year and that spells out the major issue facing europe. looking at oil, it has halted a serious decline in prices. we saw a big rebound in the new york session for wescott and at one point oil was up more than 4%. we saw a bounceback and brent crude. it is technically a bit of a bounceback and there is also a concern of a big hurricane in the u.s. but the bottom line is

that analysts say this is about the stronger dollar. it eased early in the u.s. session and then strengthen did that appears to be driving oil and all commodity trades in the past few days. in terms of outlook, goldman sachs is bullish, seeing 125 brent crude by the end of the year and now they have cut it back to 100. still bullish but still with strength. haidi: let's get a quick check of the headlines. a dozen u.s. drinks -- banks have agreed to pay the fines of unauthorized ads on a messaging app. this includes bank of america, citigroup, and goldman sachs. elon musk is being accused by twitter of having a text message

exchange. the subpoenaed texts -- the checks had been subpoenaed. morgan staley was musk's chief financial advisor. we are watching shares in tokyo after results from a final phase study showed that biogen and their partner have found a drug to significantly slow down the progression of alzheimer's disease. >> this is the first results to be significant and successful.

a positive surprise for them and they will apply for full u.s. approval. it is already in front of the fda. the debate now will be the side effects. it slows the progression of the disease by 27% compared to the placebo. shery: and it comes with serious side effects. >> yes. brain bleed has to be monitored

carefully. this is just a press release. they will presented as a medical meeting on november 29 and plan to publish it in a medical journey -- journal and they will file for full approval next year . [inaudible] haidi: what does it mean for other pharmaceutical companies and for patients? >> other companies are developing similar alzheimer's treatments. similar drugs and we expect to get the results of the trials in the next year. the drug is likely to be approved by the fda and other regulators and the u.s. is more

likely to use it than previous drugs so patients will probably have an option to talk about with their doctors once it has been approved. shery: robert with the latest on the alzheimer's drug and the excitement in the market. trading at the upper limit after the final results. still ahead, recession fears have triggered big gains. the discussion on the king dollar and the impact in emerging markets, next. this is bloomberg.

bonnie: this is "daybreak asia". more than four hundred thousand people have evacuated their homes in central vietnam ahead of the arrival of the typhoon.

the strongest storm the country has seen in two decades is due to make landfall, leaving heavy rain and potentially flash -- flash floods and landslides. it will a harvest in the world's coffee producer. hurricane even -- ian is u.s. history as it heads for florida's western coastline. a prompted mass evacuations, school shutdowns and thousands of flights cancellations across the state. damage and economic losses could exceed 45 billion dollars. it's forecast to strengthen through wednesday, bringing storm surges into the tampa bay with heavy rains across the u.s.. sources tell us the european union is consider banning its citizens from russian state owned companies and turkish bank has said to exit the electronic payment system after u.s. warnings. we are told all three remaining lenders have decided to pull out.

u.s. vice president kamala harris has divided north and south korea. she will make the trip on thursday becoming the first senior white house official to visit during president biden's tenure. harris is scheduled to meet with south korean president where retail security is expected to tell the agenda. south korea is moving to free bitcoin assets moving to crypto. to crypto exchanges to free bitcoin worth about six to $7 million at current prices. officials have located him, whose ecosystem collapsed in may. he tweeted monday that he is making no effort to hide. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is bloomberg. shery: a little bit of a mixed

picture and asia. what are you seeing? >> looking a little bit weaker 30 minutes into the session for japan, australia and korea. a lot of factors at play. you have those more hawkish ones coming through from fed officials. jim bullard among those saying that tighter policies are needed for the reaction we had in treasury yields with a stronger dollar. it's picking up, even though it was softening slightly. still around a 2002 high. all of these are a confluence of factors that leads to weakness that we are seeing in the session. energy uses one of the things moving hi. you it cit materials, some of the sectors that are in the green. but energy is more of a picture of what's happening in europe. specifically, this speculation that russia could push for opec-plus to reduce production out the next meeting. so that brings supply concerns back to the fore, even though investors have been more focused on the recessionary fears.

wti, you can see there higher, traders are focused on hurricane ian, it is expected to make landfall on florida's east coast on wednesday, later wednesday. but brent crude is fracturing well. in terms of others we are watching, if you bring up the terminal chart we have been focused on what's been happening in europe, and also continental europe and the u.k. and the impact it's been having on asia, but more focused on what's happening with the pound. you can also see individual companies have been feeling the pain here. hs pc, you could see and why is one of the more obvious names. headquartered in the u.k., but listed in hong kong. other companies are also focused for the ck. the investment company down around 4%. this week you could see that line and yellow. it does get 55% at its revenue from europe. thicker assets holdings. india's group is also not alone

here. that's also one of the other companies very exposed to what's happening in europe. it does really indicate just how much of an impact the issues in europe are having. it's not just what we are seeing in the fx space. haidi: speaking of that, dollar surge against asian currencies is putting more pressure on the reach of the shares, especially commodity importers. let's bring in the head of emerging-market strategy at pc securities. it doesn't help when you say this is the dollar story. the impact on e.m. remains the same. does that matter that emerging markets individually are probably a lot less fragile than previously? >> good point, clearly emerging markets have been hit by the strength of the dollar and higher u.s. strength.

it's a fair point with the pace of rate hikes and the turn of the dollar has been significant, yet you are not seeing crisis developing in any particular emerging-market. we have had some blowups on the frontier market, but in terms of main street e.m., it has been measured in terms of reaction. central banks and looking a latin america have been aggressive in terms of tightening. as well as height rakes. asia is playing catch-up. it could provide some defense and better external positions. emerging markets, i don't think -- i don't doubt they will put more pressure on emerging markets in the next few weeks and months. is still unlikely we will see any new blowups coming through. haidi: you've got the yuan seeing further and further levels of weakness. pboc is not necessarily pushing back.

i guess in previous times you would expect that cyclical support of china and the pboc for emerging markets. >> i think china clearly has the rmb and we have seen substantially stronger fixings on a daily basis in the last several weeks. but i think one thing to note, yes, the yuan is under pressure in china's growth continues to remain very fragile, but it's still very much on par with the rest of asia. and you look at the trade basis, the rmb is still fairly flat and relatively stronger level with historical levels. obviously china does not want -- and 2016 where we had weakness in the currency and obviously slowing growth and a rapid outlook, it was not just pressure in china's mike it -- markets. again, this is the time around

where china hasn't had a bigger impact on the rest of e.m.. although i would argue that trade countries will come under more pressure as chinese exports and imports slow into the next few months. shery: they worry about slowing demands overseas, but chinese regulators warning about not going through a large stock sales ahead of the party congress. what can we see in terms of market movements in china around the national party congress? >> i think that is kind of hitting the nail on the head. we are seeing china will probably want to keep pretty much a stable market, therefore they will want to avoid sharp depreciation of the currency, so i expect fixing, perhaps intervention. and at the same time, there could be potential support for the equity market as you alluded to, as well as the bond market. what we will see is probably the national team coming into play

for the markets around the congress. again, great to see pressure intensifying as we approach the congress. i think expressing to stash expecting to see a sense of stability. china's process growing whichever way you look at it. it will be much weaker than the initial expectation of the forecast at 5.5% what we are looking at 2.9% this year and hide that weakness in the economy, even with the progress coming up. shery: we are also seeing some developing economies now stopping their tightening cycles. we heard from hungary, giving an indication that they are done in wrapping up. europe's most aggressive tightening campaign. we saw brazil still holding rates in september. what's your key takeaway about these markets that have preempted the fed? >> as you said, they have preempted the fed, brazil is a classic example.

brazil had hike rakes aggressively -- hike rates aggressively in the last several months, much more than the fed, and they managed to provide positive rates given support to the currency and support to brazil's markets. so while inflation looks like it will move lower, that means that's the -- brazil will gain some credibility. central banks in brazil and some in india have been hiking. probably bought a little more room to not be as aggressive. now with the fed becoming more hawkish and a being around 4.75 percent in the u.s., i still think most emerging-market central banks will have to keep tightening policies going forward. shery: head of emerging-market strategy at td securities. the ridesharing giant says they will focus on expanding into new areas, such as groceries and

advertising as it becomes profitable. the cso told us more about the company super app ecosystem. >> indonesia has one of the biggest populations in southeast asia, and we have the operation in indonesia. a lot of this actually ties to the super app and all the ecosystem we've created. in indonesia we treat other countries no different. we have a competitive mode and that's how we have been able to drive, whether it's mobility in terms of our different services, where there's deliveries. as we get into grocery deliveries, and also other on-demand delivery capabilities for our consumer base, and then we have financial services. in indonesia, we also have with our partner, we will be entering the digital pen space also. again, we will continue to be

very focused and enhancing our ecosystem. we will continue to enhance that. >> give me the big picture on the economy in southeast asia? what are you seeing with the consumer? what are you seeing as we see covert restrictions starting to lift, the strength of the consumer, the impacts of inflation? >> a lot of excitement here and southeast asia. in the last two years we have been in such a severe locked in various parts of our country. tourism here is starting to flourish. people are starting to travel again and people are starting to head to the airport and starting to get back to the offices in the commute is starting to pick up. people are dining out and enjoying things where they could have before. there's a lot of buzz and excitement in southeast asia, but we are also very cautious. macro economic circumstances.

we are taking steps to make sure we got at how we are being cautious. the overall i would say the bludgeon -- buzz in southeast asia is of excitement and they are continuing to really take advantage of where the economy is reopening. haidi: he was speaking to bloomberg's ed ludlow. as get back to the fed speaker that directed a lot of what we saw when it came to the session overnight. take a look at what we hear from mary daly, the san francisco fed president speaking at a banking symposium in singapore. mary daly saying the struggle to bring down cpi and not attribute to the downturn is what they are dealing with at the moment. has to balance inflation and employment. mary daly also saying inflation is high in just about every country in just about every country and that the fed remains resolute in reducing

inflationary pressures without long-term damage. really echoes the commitment we see from a number of fed speakers including fed powell about the fed's commitment to getting prices down. we had from the fed chief in james bullard warning that there credibility is on the horizon and they need to keep raising rates to restore price stability and it was really that sentiment that was echoed by the chicago fed chief, as well saying the bank should deliver on the rate increases that have been forecast and then hold them there. take a look a euro-dollar pricing when it comes to fed expectation expecting 100 basis points in rate hike in november and december and expecting that level to be held they're going into the next year term. and we are hearing from mary daly. and it is bringing down price pressures without long-term damage.

there has been much of that debate in terms of the decreasing likelihood of being able to get that false landing on that your -- increasing debts on some sort of recession in the u.s. coming up next, crypto currency exchange giant says it is exploring more m&a opportunities after the recent spree. our exclusive conversation with the ceo is next. this is bloomberg. ♪

haidi: we are getting more lines from san francisco fed chief mary daly speaking at this virtual moderator symposium q&a session in singapore. also alongside her is the managing director. we are hearing from mary daly, really talking about the resoluteness of the federal reserve in bringing down cpi without long-term damage to the economy. also talking about how inflation is high in just about every country, not just the u.s. the fed has to balance low inflation. that goal is the goal of full employment. also really acknowledging that it is a struggle to bring cpi down and not trigger a downturn with recession risks growing. but clearly just reiterating the commitment we have seen from a number of fed speakers. including charlie evans in the

past few hours in terms of just reinforcing the fed's commitment to raise rates as forecasted, and then potentially hold rates at that level once they reach that point. we are also hearing from the monetary authority of singapore. the managing director saying the reality is that monetary policy can't do much about things like labor supplies. really talking about that the slowdown is really needed to relieve that demand pressure, and we keep coming back to this question of the irony, the saying that the recession is necessary to secure inflation and that these policymakers are really trying to strike that balance without getting a recession, but really bringing down demands and price pressures. shery: they are saying the slowdown is needed to have demand price pressure. the monetary authority of singapore is been removed several times this year, really following the fed. as a quick check of the business flash headlines.

the cofounder and ceo is stepping down as the crypto startup works its way to bankruptcy. the company cfo has been named interim ceo. it is one of the casualties of this years crypto market meltdown, disclosing a $1 billion deficit in the bankruptcy filing. shery: asx in biogen say their out timers jug -- alzheimer's drug slows the disease. it's a major milestone for researchers who have been working for decades to find a reason to blunt the most common type of dementia. it comes with serious side effects, including brain swelling. it is looking for full u.s. approval by the end of march 2023. hong kong-based asset manager value partners looking to double its headcount in singapore. the firm plans to hire staff and relocate some of its portfolio managers and investment analysts to the city space where it now

has more than 10 staff. the co-chair says, we are following the money. bloomberg sources say chinese hydrogen fuel cell company is settling a hind -- hong kong ipo as soon as next year. the ipo could raise a few hundred million dollars in the preliminary perspectives could be filed as early as next month. the ipo activity has slumped globally, hong kong has been receptive to the ev battery makers and lithium minors. haidi: why china faces increasing risks from inflation amid ongoing property crisis. we get more on that in the market open, next. market open, next. this is and it's easier than ev■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews.

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shery: china taking increasing risks from inflation as demand crumbles under the weight of an ongoing property crisis and continues covid restrictions. it's rain in bloomberg's chief china market correspondent. first, we have seen a pick up wage wages and import costs, but not enough to offset this pressure. sophia: exactly, china is the only major economy in the world that's dealing with these pressures. most of that is coming from the

market. housing prices down for 12 straight months, so we are headed into the second year of this downturn, which would make it the longest downturn in the property sector since private ownership came about in the 1990's. so this is really pressuring the economy. property is such a huge part of growth, and that's not ending any time soon. so according to this report, china could actually be in a chief -- in a deflationary cycle because consumer demand is not strong enough. haidi: there's also other weak spots. manufacturing looks like a worry, as well as the weakness in corporate borrowing despite all of the pboc's efforts. sofia: exactly. this really speaks to what we have been talking about for a month now, which is a problem with the stimulus is really pushing on the string. if the economy is shut, if we do have covid zero, it does not

matter how much stimulus the pboc throws at the economy, there won't be demand for borrowing and there won't be confidence among consumers to really see that make an impact. so, the bright side is obviously it won't take much for this to reverse, and some economists, the majority, the consensus is that this won't happen until at least the earliest, spring next year. march is the key month that china could roll back some of the strictest covid measures. so a few more months of covid zero in the works now. haidi: our chief china markets correspondent. we are watching the markets open and hong kong. the ev maker has $772 million from the ipo. offering shares at six dollars u.s., 11 cents each. competitive. they will also be in focus.

watching for shares as well. bloomberg gauge from the casino has gained 15% already this week on the reopening plans are shares of companies tied to natural gas will be a key focus. germany is expecting the nord stream gas pipeline -- it has been damaged by an act of sabotage. we saw the impact overnight. shery: of course we will continue to hear that virtual symposium ongoing right now between san francisco fed president mary daly, alongside the monetary authority of singapore's managing director. it this is on the sidelines of that asian banking symposium. mary daly saying pre-pandemic the fed thought they would have low neutral rates, but our tools are designed to bridle demand. they need to find balance and supply chains, and that that will not be easy. there will be more pressure now on central break -- central banks to bring cpi down. we heard them saying that the

slowdown is needed to relieve demand pressure. the monetary policy can't do much about labor supply. this ongoing conversation is more hawkish fed comments including from jim earlier today, talking about inflation being a serious problem. that's it from daybreak asia, market coverage continues as we look ahead to the start of trading for hong kong, shanghai and shenzhen. standby for "bloomberg markets: china open." this is bloomberg. ♪

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