kathleen: you are watching

daybreak asia coming to you live from new york, city and hong kong. haidi: they are just coming online and the chinese party congress, headlines going into the week. stronger u.s. jobs taylor deep -- data heightening concerned of tightening on china. of course china's leaders are holding their final gathering for the crucial party congress set to hand xi jinping a third residential term. plus we hear the impact on yen as supply chains snarl corporate japan. annabelle: one market in asia online -- us trail yeah, bit of a decline, down .2%.

futures had been indicating a drop of 1.6%, so we will see how we go. in terms of the overall direction of trade today, it is looking like a risk off session. given the moves we had in wall street, a reasonable follow-through for what came through in the jobs numbers. we did see the labor market still looking tight and the supply of new workers coming into the economy not enough to cool the growth there. in terms of other markets we are keeping an eye on, we've got to offline, we've still got new zealand trading down 1%. currencies, keeping an eye on the japanese yen. very close to the level of intervention at the end of september. 14590 is the one to watch. the yuan looking flat, but still a big day for chinese markets.

they are back online a couple of hours from now. kathleen: that strong jobs report pushing the dollar higher yet another reason to be watching dollar-yen so closely today. for the stock market, the s&p 500 down nearly 3%. 95% of the companies on the index lower. the nasdaq down 3.8%. the momentum to the downside, down about a full percent five minutes ago but double the amount of decline we saw in the s&p futures and nasdaq futures an hour ago. the bond market up about 3.88%, close to 3.9. you can see we've got the red arrow pointing to pressure to push higher again. nymex crude after hitting nearly $93 a barrel, the 15% increase

in nymex crude last week. just a little pullback. a lot of pressure now as we look at the opec-plus output cuts. we just had a guest in the last hour that likes energy stocks very much right now. haidi: let's get more with our chief rates correspondent for asia. is this a time of consolidating expectation for investors as we get the labor market numbers? what is the relevance of cpi in the near term? >> there is still some relevance but that jobs report on friday really was an almost certain death sentence for up ms. him that the fed is going to be pivoting anytime soon to slow the pace of rate hikes.

there's been a lot of focus on the idea of what if they do, how long do they keep rates at a high level? we want to push back from fed speak on the idea they will be cutting rates next year. the jobs numbers the focus back on the likelihood the fed hikes 75 basis point in november and potentially follows up with another 75 in december because when you got an unemployment rate at 3.5%, why are you going to slow down in rate hikes? any softening in cpi is almost encouragement to the fed because the rate hikes are working on the inflation front, not hurting the job market too much. the job market remains a risk. that sets up a rough outlook for assets which way cpi goes.

if cpi was a surprise to the upside, that would cause a lot of turmoil even if it is priced to the downside. i would expect fed officials to come out and reinforce their determination. kathleen: the market hasn't even begun to come to terms with the fact more than one fed official is -- i said we are not going to cut rates. maybe until the end of next year. it means they are probably going to have a foundation for the dollar even if it doesn't go higher. this is causing a lot of concern and we are going to be here at the world bank meeting that this strong dollar and the potential to move higher is roiling a lot of markets. this is a big deal. it is tough. garfield: it certainly is and that's one of the things a lot of investors are watching. a lot of economies spent decades building up for chests and

reforming their economies and decision-making processes so they don't respond with a sort of restrictive, trying to fix things, trying to fight the market when they do have capital outflows, but just trying to manage things appropriately. a lot of economies have traveled reasonably well, but as you said, with the full realization of how aggressive the fed will be and how likely to keep rates higher, those stresses will keep living and the question is which emerging markets start to crack and how much contagion might there be? i'm looking mostly at european and latin american markets among the most vulnerable, but some of

those start to give way and there is a sense even asian markets such as indonesia, malaysia, india who have been a good job of shoring up their situation, they might face some fresh, severe pressure on the currency by association. kathleen: let's move on to chinese president xi jinping, opening the party meeting. covid cases nationwide are mounting and we see new evidence of slowing economic act of any. stephen engle joins us to tell us what's happening behind closed doors as this whole thing gets going. stephen: i wish i knew. the communist party is a very opaque organization. it's fairly predictable. with its plenum held with the

big speech from xi jinping where he will likely outline some of his priorities and the parties priorities. what is happening this week is essentially all the backroom negotiations and fine tuning of policy to unveil at the party congress and then they will be legally formalized at the session of parliament not until march. this is behind closed doors and there are lots of challenges in the chinese economy and chinese society, with covid zero being the pressure weighing on all kinds of growth, manufacturing, tourism and the like. there is also the social stability angle we can't ignore. covid zero has had a dampening effect on sentiment and a prolonged pressure on the chinese economy. he has to balance expectations.

you heard about this lying flat mentality. there's talk in chinese social media that it's no longer lying flat. it's let it rot. people just not engaging whatsoever. that's a big stress for xi jinping who is going to be maneuvering for an unprecedented third term as general secretary and president. lots of challenges. look at these scenes from shanghai. that is a big threat to the chinese economy. haidi: so much of that social malays has come as a result of covid zero and the impact on mental health. we know the discontent there. how do we expect that to be addressed, given that the shadow cast over everything? stephen: no doubt xi jinping is

going to trumpet the successes of covid zero. they are trying to find the right euphemism to balance the expectation and not necessarily pick them off. even the former editor-in-chief of the global times who is often times a staunch supporter, he has come out and said static management as it is called is becoming intolerable in society. so we will be trying to see if there's going to be any relaxation. society as a whole, we are starting to get some of this frustration seeping into social media even though it's a highly censored social media and it is controlled by the party. bmi fell in september. we were expecting 55 and it was 55 in august.

tourism, we just came out of a weeklong national day holiday. tourism and spending during the weeklong holiday is way down and it is not just in isolation. all of these holidays, tourism is down. these are some serious pressures and covid is starting to flareup. what's going to be the policy response? none of these binance polities, all three of these big cities who have covid zero lockdowns in september which dampened consumer sentiment, none of these units pallet he want to see a big flareup during the party congress. it might get tighter before it relaxes. far away from beijing but eight

cases in beijing on saturday and several different transmission chains being detected. so you are going to start seeing things tighten up closer to the party congress rather than relapse. haidi: let's get you to vonnie quinn with the first word headlines. vonnie: china is criticizing the expanded restriction on its access to semiconductor technology. the spokesperson called them unfair and said they will hurt the interest of u.s. companies. she believes the world economy. recent measures speak to developing military capabilities. south korea says it will boost military cooperation with the u.s. and japan. this comes after north korea testfired two more missiles on sunday. it violates a u.s. that she went to council resolution.

russian president vladimir putin is blaming ukraine for the attacks on the key bridge linking at -- linking crimea to russia. putin blamed the ukrainians -- he has not officially claimed responsibility though said the explosion was a postage stamp. u.k. prime minister to speak to the conservative party. a poorly received tax cut at a fractious conference has trust fighting to regain control of the party. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, a look at the risks for global commerce

and the threat of recession. we are joined by the canadian trade minister. coming up next -- kathleen: a big trading week as china returns from a weeklong break. this is bloomberg. ♪

>> i think we are headed for a

collision of some kind or other and we just have to manage that collision carefully. i think the sooner we start managing for some slowdown, the better we are going to do. i think chairman powell was way late to come to that recognition but now has that recognition and he should be supported in that. >> we will get inflation back down. i'm confident of that. it doesn't mean prices are going to revert to the old prices. 0 former -- haidi: former u.s. treasurer larry summers. our next guest is looking at bonds as alternatives. it's the division director of look korea wealth management. when you look at the jobs numbers from friday and we have

cpi, you wonder if it's going to change what the fed is committed to doing, does it heal like they are finally getting it? >> different markets are taking into account what we are seeing. i think there is a hope that they wish we will see the peak of these rate rises soon but it told chair -- until the narrative starts changing, it's way too early to anticipate. the market has slowed considerably in the last number of weeks and we had the bare rally. at the end of the day, we have to wait for indications from the that and other central banks around the world before we can be more confident. haidi: in the absence of a meaningful policy change, how are you maneuvering in these markets? a lot of people still like energy. you are looking at alternative asset classes altogether. martin: we have been checking out our portfolios for some

time, shifting more toward sovereign debt and certainly trying to hedge portfolios away as best we can. there's no doubt that there is ongoing downward momentum and that is going to continue. we doubled our allocation to that class and that includes things like private equity, hedge funds, long-duration infrastructure. it basically last right through this cycle. that's not to say we haven't stopped looking at the big picture. it is all around market timing and that's a particular component of managing that. kathleen: after opec-plus made its big cut in output, you liked

energy stocks. do you like them better now? martin: we have to be more specific. i think we are -- when you think of what is happening around climate change, clearly the transition material is going to be gas. to some extent, there's been a lot around the decision for opec plus and we have to take that into account. we've seen the oil price come off quite a bit from those heady levels back toward the 80's. that's going to work its way into inflation numbers as well. despite that announcement, we haven't seen any significant move in the energy complex. i think that's worth noting as well. haidi: when you talk about bonds

and credit, what are the more appealing types of bonds to you or bond markets? martin: we've shifted away from credit toward sovereign debt. we think that's a better way to think about assets at this time. particularly in a growth slowdown scenario. investors ourselves, we see bond yields rising higher than anticipated. haidi: what is the biggest risk investors are not comprehending at the moment? there's almost a view that there is perhaps a policy mistake. are there things we could see

sooner than expected? martin: i think it's more in the hope and wish category. i think there's been more than enough from central banks on what they are setting out to do, particular when investors see inflation rates are high as they are. australia seems slightly better than other economies. but i think investors totally understand that inflation at those levels that are well and truly above where central banks manage inflation, there's enough -- there's a lot more work to be done in terms of rate rises. i think it's going to come out of investors expectations. haidi: what are you seeing in terms of the arbitrage trade? martin: what was interesting last week was the bank that cut but only cut by 25 when the market was expecting 50. that's probably a combination of

wanting to be sure the central bank is not pushing the economy too hard but still trying to fight inflation as well, so that balancing act is important. it will be interesting to see how the central bank is getting more active in markets, specifically central bank currencies. the depreciation of their own currency, or at least slow down momentum of depreciation. we see central banks becoming more active at this time. kathleen: when i'm looking at the world, what i'm trying to figure out where to put money, do you think it's going to last? how long is it going to be an issue if i'm trying to figure out what to do with my money or someone else's? martin: currencies are very important part of the overall scheme of what we are looking

at. when you get these big currency moves, that's where issues and valuations start to rise. they are painful in the short-term, no doubt about that. it's more about moving through the cycle and positioning clients right through this year. kathleen: the division director of mccoury wealth management. you can get a round up of the stories you need to know to get your day going in today's edition of a break. terminal subscribers go to the bigo. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

haidi: chinese food delivery

giant said to be considering expanding into hong kong international markets. our sources say they have not responded to request for comment. speculation about their expansion and hiring an executive earlier this year. india's men is reporting they are in early discussions to raise at least $10 billion. potential investors include gic and other funds. it will be used to fund the groups expansion. more to come on "daybreak asia." this is bl as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year. and it's only available to

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>> earnings expectations have fallen sharply for the third quarter. we believe they are going to be

better than expected. the official for the third quarter at 2% gain with several sectors in the negative territory. we think 2% is too low. >> the savings rates at a decade low, credit card rates at eight decade high and a steady acceleration. >> nevertheless, the economy is on a more solid footing and earnings still look attractive. >> the next flow will be a realistic assessment of earnings by analysts. >> going into this earnings season, if we have some surprises, the market is looking for good news. kathleen: those are some of the responses to our people question of the week about corporate earnings. annabelle: picking up on some of the results of that survey, going into more details, more

than 700 people answering the questions ahead of what will be a key earnings season. we already had a lot of analysts downgrading earnings forecast but corporations warning on the outlook, fedex very much trying to sell off in the u.s. as well as microsoft. doesn't seem like enough of the damage. more than 60% of the people saying the next move by the s&p will be lower and have of the respondents saying equity valuation will pull back even further from their average of the past decade given the fed is sticking with its flattening campaign. as for stocks to watch come a clear company came through in the numbers and that is apple. 60% of people saying this is the company that matters most this earnings season.

what will be important is that will give us insight into a number of important things to be watching. the impact of the stronger dollar and higher rates. jp morgan, you can see there. we have walmart and microsoft in the other categories. so where are investors putting their cash? take a look at the split of growth versus value. more were inclined to invest in value but bring your attention to what we saw in the neither category. what citigroup has been saying and others, the equity markets are just starting to come to terms with the risk of a recession and that's expected to be key as his earnings. haidi: china has criticized the

u.s. move to expand access to semi conductor technology, saying it will harm supply chains in the world economy. president reitan announced this on friday. the leadership has some other matters to contend with in the next week or so, but what has been the reaction from beijing? >> i think there has not been a great deal of surprise. this was well previewed. there have been many reports about the administration. there's been a lot of restriction on buying semiconductors. this is a step up from that that particularly targets ai and supercomputing chips and also tightens rules around kind of equipment china is allowed to buy. china's responses this is going to be bad for an industry

already suffering from higher rates in slow growth around the world. china for these restrictions a couple of years ago used to be the world biggest market of semiconductors. kathleen: what do you expect to happen next? is this going to summer on the back burner? do you think the chinese are going to have to come out with something more aggressive than they have so far? john: i think the chinese strategy is to go out and produce their own chips. whether they are able to have any success in that initiative is still in question. most recently, they've added a number of high-ranking officials either in the government side of the semi conductor push as well as taken into custody on allegations of corruption and bribery.

there are questions about whether or not china is going to have any success building these more advanced chips and the u.s. initiative is not going to be changing anytime soon. even if another administration comes into a power, they are going to try to stop the flow of technology into china. kathleen: talks around the u.k. continued into the weekend as the group met in singapore to discuss new cooperation and digital initiatives. global uncertainty is cited as a major risk to trade and investment flow. our next guest was part of those discussions, canada's international trade minister. sounds like you had a busy weekend and your talks continue. in terms of what canada is trying to achieve right now, you

are having bilateral meetings, you've got a free-trade agreement you are working on. what is this going to do with -- due for canada's economy? mary: thank you so much. it's terrific to talk to you in new york. i've been here over the last number of days with my partners and let me just start there. for canada, this agreement really does work for canada. we are see increased trade and investment into this region both ways and what was really terrific was to see the growth in this region into these companies outpaced those and it is an agreement that really works. i would point out the

progressive element is what canada fought for when we joined this agreement. they are additions canada felt strongly about when we entered into the agreement and it's a high quality agreement precisely because of those additions because who doesn't think about the global economy without thinking about how we can transition into a greener, more digital economy benefiting our people and entrepreneurs who wish to get into markets like this one in this region? kathleen: the u.k. session is important. how important is it to this whole trade arrangement? mary: this is the first session request. we've always said the high

quality of this agreement, the gold standard agreement that it is, we encourage any aspiring economy to meet those high standards and that they would be welcome. we are very much working with the united kingdom on this agreement and japan is the chair for the u.k. process and they are taking a leadership role as part of it. we are absolutely working with the united kingdom on this. haidi: what about when it comes to china and taiwan and their involvement? mary: we have always said this agreement is a high standard agreement. but this was also the first session and the first session is with the united kingdom. we want to get it right and so we are taking our time to make

sure we do get it right. haidi: there's a big push into southeast asia. why they focus on this region? particular where do you see the growth opportunities for canada within southeast asia? mary: terrific question. i'm canada's trade minister and the mandate i have from my prime minister and my government is to diversify and grow opportunities for market access around the world. canada is the only g7 country that has a trade agreement with every other country. this region is dynamic, it is growing, we are ready, we are at the negotiating table as well as financial negotiations with indonesia, which is where i'm headed this afternoon. making sure we diversify and

grow into this market and region is extremely important. canada is a trading company. as a trading country, trading opportunities into this region is important. i announced a canadian trade gateway and that will work -- i want people to see this as canada's front door to the region. i want to see the region have a place to learn more about canada . how can we collaborate so the trade is both ways benefiting the region but also canada. kathleen: i'm wondering about progress made with the minimum corporate tax of 15%. i know that is important to canada. how's that going? mary: we are working very hard

and focused on this important multilateral agreement. we are at the table, working hard and hoping what we will get at is a conclusion of this multilateral agreement with the partners, including the u.s. haidi: i'm wondering how important multilateral approaches in asia? that this multipronged strategy could counter china's wake across the region. is that significant in terms of avoiding a situation we see multiple trading partners being put it against each other? mary: for canada, it's really important we continue to diversify and provide opportunities for our exporters. we often talk about creating an

economy that works for all. helping businesses, whether they are women entrepreneurs, small to medium-size enterprises to get the benefits of trade and make sure the workers get the benefits of trade means diversifying and looking into markets that are high-growth markets. we are talking about opportunities in the digital economy. we are increasingly finding partners to grow the green economy and diversify and create those in canada but doing it in the region. whether it's here or in singapore or many partners, we have seen the growth in trade with our partners here and we are looking to do more of that. haidi: canada's international

trade minister. a huge leisure. let's get you to vonnie quinn who has the first word headlines. vonnie: china is praising elon musk's proposal -- in a financial times profile, musk said he would support a zone for taiwan. on twitter, china's ambassador to the u.s. said one country, two systems was key. the minister will pledge on monday to strengthen the economy . the biden administration says it remains ready to talk with north korea about removing weapons from the korean peninsula. washington is increasing military cooperation to counter kim jong-un. with korea fired two missiles, adding to 10 that it fired in the past two weeks. the french president is urging

citizens not to panic after shortages left some stations completely drain. they may release additional fuel stocks. it affected almost two thirds of the nation's capacity. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: coming up, our exclusive with the president and ceo on their climate change initiative. this is bloomberg. ♪

haidi: we are seeing the dollar trade pretty mixed versus most of the u.k. cohort, seeing the decline when it comes to the euro, which is playing out when it comes to euro-yen. dollar-yen holding just at the 145 handle. we are looking for the tolerance for japanese policymakers to see increasing yen weakness. the aussie trading at the 90 to

handle but there are expectations we could see the testing of the intervention levels for the yen. that intervention is expected, the appetite to resist intervention, i should say could be tested this week. >> absolutely. if you talk about intervention, it lasted about a week in terms of its effect. as we continue to trade dollar yen heading into that critical 14519 level, incidental risks are on the table. investors will be keeping their eye on the path. kathleen: let's move to a japanese electronics giant saying they may be forced to raise prices because of chronic supply chain deals.

we also got an update on the company's move to reduce the company's environmental impacts. >> we are steadily making progress to renewable electricity for next year. it is all on track. we have people around the world can share -- and understand our contribution to mitigating this >> problem. when you talk up a greater focus on climate change, how would you see the shifting consumer pattern generally? >> to help relieve the climate change problem, we believe we have to put a lot more effort into making products more recyclable and easy to use. we want our customers to use our products much longer than they did in the past. if we achieve that, i believe we can help people deal with climate change. the eco-printer does not use

cartridges. there's significantly less energy use as inkjets do not use heat. people could contribute to the environment by choosing a product with far fewer replacement parts. commercial and industrial printing uses a lot of resources. by converting to digital technology, we can dramatically cut down on waste. we can also make a shift toward much more on-demand printing. these are the kinds of areas epson is putting a lot of effort into. >> i would like to ask a few more questions about epson's business because it is of interest to our viewers, starting with higher material and logistics costs. they have been a big drag on the company's profits in previous quarters. do you see that being an issue now? >> logistical issues are continuing.

there has been improvement. both of these issues are still impacting our overall business. epson is trying to respond to these difficulties. we are making adjustments. design changes to help mitigate logistical issues. annabelle: in terms of demand, you've got three key markets -- the u.s. japan and china -- how willing are you to pass those high costs onto consumers given the concern around the overall health of the segment? yasunori: this is a serious concern for us. costs are rising significantly and we have strong demand. we do our best to control cost as much as possible but we cannot do as much as we would like. annabelle: one of the factors we are watching closely is the drop off in demand in the pc market. does signal a demand slide for

your market as well. yasunori: we are not feeling a significant impact there. we see strong demand for working from home products and print in demand is robust. annabelle: what about the weakness we see in the yen? we see a lot of companies forecasting a rate much stronger than today. how do you see that impacting epson's next set of earnings? yasunori: weakness in the yen has an impact where we have to purchase parts and materials from overseas. on the other hand, when we export our products, it's cheaper for people to buy them abroad. the impact on the weak yen is pretty much balanced. haidi: that was the ceo of epson speaking with annabelle earlier. you can watch the interview on our interactive studio function. this is bloomberg. ♪

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kathleen: let's get it quick check of the latest business flash headlines. maurice blackburn has filed a complaint against optus, claiming it failed to protect the personal information of its customers. last month, the data of almost 10 million former and current customers with hacked.

thousands of customers already register their details with the firm in the complaint to the australian information commissioner is said to be one of the largest ever. leon lee has sold his entire stake in the crypto firm and will seek -- will cease to be involved with the operation. he sold to a buyout firm. he was once the most active bitcoin trading platform but it retreated from china after beijing band crypto transactions. india's meant is reporting there is early discussion with the investors to raise at least $10 billion. the capital would be used to fund expansion into clean energy , ports and cement. coming up in the next hour, more market strategy with k2 asset management.

speaking of china, william ma discusses what is at stake at the twice a decade party conference. and we will be examining the state of world trade in the post-pandemic era. stay with us for all of that. this is bloomberg. ♪

>> you are watching daybreak: asia. good evening.

i am kathleen hays. >> asian stocks are under pressure with strong jobs data supporting expectations of further aggressive fed hikes. china's markets are returning after the golden week holiday. they are holding their final gathering. they are said to have xi jinping a third term as president. and beijing saying this will hurt the budget and the world economy. >> heidi, kathleen, australia is the major market in new trading. this is very broad-based this morning. we are watching the biggest losses with the ones essentially advises here.

u.s. futures also lower, that should indicate that because of that big selloff with the wall street, this is the reaction to the jobs data that came through. also, what we are seeing in terms of the supply workers, not enough to look at the wage growth there. certainly a lot of recessionary risk. this is also bank on sectors that are a little bit more sensitive when we do have a rising rate environment. also looking at what we are seeing in the bond space. let's look at what we are seeing in terms of yields, the aussie and the 10 year and also the kiwi tenure. both of those are moving higher this morning.

we do have japan treasuries here. a lot of concern for risks of prolonged contraction. you can see the offshore yuan. we will be looking at the mainland markets here. >> it continues to be about the role central banks.

does that deliver another got punch? i was talking about charlie brown and the football. certainly the football is back in their hands for those who are up with that cartoon. there is very little in those jobs that would encourage any of the fed presidents out there. markets still have some pretty strong expectations that inflation has peaked and therefore at some stage, a bit of hawkishness. but until labor market shows a serious sign that it is weakening, there waiting for an easier set up here.

that is the key thing. they want to see sustained data going down. and something where inflation goes from 8.3 or so down to even under 8%. is that going to be enough? >> i think it will go a lot lower than that. let's move onto what is going on in china. xi jinping will open up the commas party's final meeting before sunday. our chief north asian correspondent stephen engle joins us to look at this backdrop and give us some sense of how all these things may or may not affect what will be happening this week and next. >> essentially what they are

doing behind closed doors is getting other ducks in a row and fine-tuning xi jinping's big speech on sunday, coming up. but also, getting some policy, crossing these -- crossing the t's and dotting the i's. it is just getting the aussie right. that is the big question. what will xi jinping likely say on sunday? he will most likely trump at the successes of covid zero even though it has taken a severe toll on the economy. what he says on taiwan will be significant. what he says on the property slowdown will be significant. this week will be a lot of prognostication and expectations for what he might say and that is being done behind closed doors today and tomorrow and the rest of this week by essential community -- by essential -- by

a central committee. >> covid zero looms large. how do we expect that to be addressed? >> he will be trumpeting the successes of that. even though patients is starting to wear thin in society. he has been fairly strident. static management, that is the monism for covid zero essentially becoming intolerable in society. we have seen that being reflected in the economic data of late. the services pmi is the latest service numbers we got, all of this in other major cities in september. they really took its toll. especially the time that we usually get spending by

consumers on the weeklong national day and holiday that has been completed. spending is down considerably again for another big holiday in china. they went into contraction, 49.5. that is well off those numbers. it is ridiculous for the, his is putting across china on covid zero. in outweighs the short-term negative impact on the economy. how long is short-term? covid zero policies to continue her static management continues on the national people's congress. that could be a further drag. 1600 cases worldwide. that is the most since september 2.

still, a lot of people outside of china are saying 1600 and a nation of 1.4 billion people. that is not allowed. >> let's get you to vonnie quinn. that is your first word headlines. >> china is expanding. they will also hurt the interest of u.s. companies. recent u.s. measures seem to stop china drive and advanced military capability. vladimir putin is claiming ukraine, thinking -- thinking annexed crimea to russia. they alleged they had unarmed foreign states.

the biden administration says it remains ready to talk with north korea on removing nuclear weapons under korean peninsula. john kirby says washington is increasing military cooperation. north korea fired two short-range list of missiles sunday, adding to attend a lost the past few weeks. view cape prime minister is planning to speak directly this week to mp's and the conservative party. they were sent to address our regular men with lawmakers on wednesday but a poorly received tax cut have trusts fighting for control of the party. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

>> a look at where chinese equities are headed after a weeklong holiday. william thinks the valley will continue and up next, the key to asset management is still underway in china. this is bloomberg. ♪

>> i think we are headed for a

collision of some kind. we just have to manage that collision carefully. i think the sooner we start managing for some slow down, the better we will do. he now has that recognition that he should be supported in that. >> we will get inflation back down. i'm confident in that. it does initially mean that the prices will revert to the old prices. close the u.s. treasury secretary larry summers there and nail on the that inflation fund. our next guest expects an elongated u-shaped global recovery. joining us now is the head of

research at k2 asset management. always great to have you. it sounds like there is a consolidated. of expectations. how do you navigate the uncertainty? quick this is the million-dollar question. the u.s. economy is unforgiving. this makes the u.s. dollar earnings a little bit better to have in your portfolio.

they will collect flak in the economy. valuations are reasonable. enter the credit numbers that are still growing. we will release that slowdown. >> valuations are reasonable. are there low enough in terms of where expectations might be the season? >> they are low enough for us to say they're going through equities here. reasonable either way. i discount. growth at any price won't work.

there is some growth at a reasonable price. as we are doing that, we have to be cognizant of the macro drivers, job level drivers. what does it look like going forward? this is very hard to second-guess. physical policy hopefully could talk to their steamer toward monetary policy. again, coming back to the federal reserve, they are delivering consistent to their work.

>> is there a point where you're going to say it is time to buy long-term bonds? so many portfolio managers want to be a very short duration. is there a point where you see -- say time to move that trade from the short and to the long and? -- end to the long end? >> if you are looking for guidance, we take it from the short perspective. we think this is the placement at the stage of the cycle. great value there. we are not quit there yet.

>> yes, i would like to be thinking it would be great enough to extend durations. >> it sounds like there is no rush to make a move. what about energy? opec-plus output? it seems like a lot of advisors and portfolio managers are looking where there is crude or gas. >> opec will probably not cut. it just means the u.s. will really not let this effort. it may listed effort to reinforce energy security. if i could have a quick backdrop

on that, if there is nothing we could do like exxon, chevron. for a good 50 years, the transition bill is energy. that is some for the developing world. obviously -- [indiscernible] there was stronger cash flow there. it is a key part of the transition for the emerging and developed world. >> they will carry on for a while. let's have a look at the

weekend. bloomberg having another story about have a lot of emerging-market assets are just at the point when they are looking more attractive. they probably may be bottomed. a lot of the central banks have been successful in attacking inflation and still allow some growth. what you think of that argument? is there any emerging market you like? >> not quit there yet. a lot of damage for the u.s. dollar that will continue into emerging markets. emerging markets in parts of central america and south america are good and also bad. emerging markets that are made her seem to be a good transition

for the next 50 years. and there is competition between qatar and they are changing economies. manufacturing and south -- south east asia, saving energy in the region. it is probably meant to be better value going forward. just seeing what the german equity is like. all of this until we get some certainty on u.s. dollar weakness, that is enough to create some stability that will filter down. >> you have done a very thorough job of looking at different parts of the road with us. thank you, george.

you can get around about the stories you need to get your day going in today's addition of daybreak. it is also available on mobile. you can also customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

>> at the end of the winter, storage will be senseless. it is of paramount importance that we have procurement of gas so that we avoid this and have the collective bargaining power to put that in place. >> ursula, let's check in on how futures in europe are opening. we see a lot of downside

pressure in the u.s., the s&p, nasdaq, futures. you can see this negativity carried over from friday after the jobs report dipped into the early week of trading. they closed down to improve -- 1.2% on friday. this is so healthy relative to what the fed expectations are and what they're looking to do on policy. they completely supported that so you can see your stoxx 50 futures down. close that reality checks out. that's get a quick check of the latest business flash headlines. this is because of the chronic supply chain of people.

demand is robust and the company is doing its best to mitigate production losses. >> statistical issues are continuing and the cost of materials such as semiconductors, that remains high. this is a serious concern for us. costs are rising significantly and we have strong demand. we are doing our best to control our costs as much as possible. sometimes we cannot do as much as we would like. >> they are said to be open to cutting. the department are ramping up talks to put them in early november. they will reduce the state to up to 15%. changes in the economy and pressure on the banking sector

causes the ceo of goldman sachs to abandon plans to dominate in the road of retail banking. su keenan joins us. >> this was the name of the big dream. you don't have to think back to far to end sin tech was of the range and david solomon spent the better part of the last four years pitching the benefits of a full-service digital bank. now with the bank under pressure, the changing environment is forcing golden's ceo to shake up his own source of business, that before i into main street, handling money for the masses. at one point, he jumped on a flight to meet reese witherspoon, this -- meet reese witherspoon.

solomon was thinking that marcus could do the trick but look at the trajectory of goldman sachs stock, downwards 20% this year, all of that has created an environment where the shareholders are not that happy with markets. a little slow him down.

>> let's get to the first word headlines. how could reassess its military but there a security cooperation in japan including u.s.

strategic assets. they violate the security council and will strengthen sanctions across -- against his neighbor. china praising elon musk's proposal for a communication system for taiwan. the financial times profile, muska said he would support a special ministry of zone for taiwan. on twitter, china's ambassador to the u.s. thanked musk. taiwan's president will pledge on monday to strengthen the economy and even ties with democratic allies in a national day speech. emmanuel macron said not to panic and to act responsibly after shortages caused by refinement strikes. gas stations completely drained. the transmit minister says the government released additional strategic fuel stocks.

those were your first word headlines. >> chinese traders returning, set to face conflicting signals mitigating market chances of playing catch-up to the small advancing global equities. let's bring in catherine. when you take a look at retail across golden week, that was year earlier. what are the trends that we are seeing? >> on a year on year basis, it will be really surprising -- surprising to see china coming in with stronger than expected retail sales.

they have been restrictions in place with the encouragement and advisory to actually stay put, do not travel too much. we are seeing very mixed pictures. you do see an uptick. the entire appetite to spend is more restrictive. >> we saw the indexes fall sharply. it went from 50.5 to 49.3. that is a strong signal that consumers are losing some confidence and that is having a negative impact. >> absently. notwithstanding. we saw it increase their.

they are not encouraged to actually stay put. we do have the outdoor activities. through the month of october, i think china retail sales is not something i am very optimistic about. >> we are taking a look at our markets, we are putting in less than a half-hour past time. it has been a big week. there has been a mixed signal for investors. price that is right. there is a weak readthrough that came in, the china golden week and you have that spike in. there are negatives ahead of the open. you can also look at what we saw on the proxies. we saw the offshore market perform during this time. particularly with what we saw

listed in new york but also for the futures there any more than 2%. we did have them globally for stocks. they were still higher over the past five sessions even that we did see that some follow u.s. jobs. we did have those u.s. job numbers. also, possibly in december and that risk off tone is going to be really hard for traders in china to be ignored. we have a private meeting on the services pmi. president biden expanding the restrictions on china's access to chip technology.

that really sets us up. also on the offshore yuan. the fix is very important. we will have about a half-hour of time for now. we did have that record run of stronger-than-expected fixes but losses in the onshore currency. >> let's discuss what to expect now, joining us is the cio of the investment group. i heard you just -- haven't you heard in the report from catherine how the holiday sales were. then we get the services number having a pretty bad pullback.

>> we are filling exposure in particular. just one more point during the golden week. we have seen a mixed message. they are going to the mountains, the theme park. when you look at the theme park tickets increased by about 100%. having said that, we are building exposure ahead of the party. we are expecting more announcement support after the party congress. >> look on a positive policy announcements are you expecting? >> there are three very important indicators.

we have been very supportive to the market center and stimulus. they are also watching out for the potential step by step announcement of the covid policy changes. what are the steps of opening up? people are waving. the new premier will announce the budget for next year. whether the budget will be huge, i think those are the three factors that people are watching for. we are expecting a market rebound after the party congress because that indicates there would be more -- >> i think the consumer stable sector or --

the vehicle will continue to go up. the overall sentiment would be quit rippling. people actually expecting more of a zero covid policy update. that was one of the key indicators people are expected to change the economy outlook for next year. >> when it comes to tech, value -- our valuations low enough? is there further uncertainty?

when they come to china and asia, they're looking for growth. we are not expecting earnings growth anymore. they're looking for the most stable sector. the domestic consumption, i think the iraq for high-tech and high-growth is going on so they go back to the earnings growth. >> there are a lot of property companies. >> we are seeing a change of the consumption. the retail safety developer is telling all assets at 30 plus percent discount. those are the opportunities we are expecting in the china market.

i believe the investors could be dealing with this opportunity. >> really great having you with us. coming up next, the current economic climates. this is uniquely challenging times for policymakers. we are taking a first look at our g20 spotlight next. this is bloomberg. ♪

>> with just weeks ago, we are putting the spotlight on some of the key issues they're facing in the post-pandemic europe. they are making a uniquely challenging time. today, we are looking at how these are affecting world trade. the wto will slow next year and multiple shots including the ukraine work, high-energy price and central-bank rates that squeeze house was. we will also show some of the biggest trade data out this week including japan, china and the eu.

>> one of the big economic stories was extraordinary. consumers buying into the performance. the demand for merchandised goods is coming up. we are seeing that in pmi readings. we are seeing it in south korean trade data. we are already seeing it in china's trade data. there is so much going on now. you have that post-pandemic shift happening. you have higher mortgage repayments, the european energy crisis. the were in ukraine, all of these are pointing toward a big slowdown in trade.

all of this after last year's trade growth was around 10%. it is a big shifter that is happening and i do mean one of the big drivers of the global economic recovery from the pandemic is the trade that is coming off quiet sharply. >> what is that going to be for global trade relationships? we are looking at canada's trade minister and you are pushing hard to get the -- get this off the ground. there are all kinds of trade agreements in asia broadly. is this going to -- is this slow down going to snow those kinds of measures down question mark is that going to make for global trade any further? >> in merchandised trade, there is a lot of conversation about fishermen, onshore, companies are looking at ways to cut costs and bring production home and away where customers are

actually buying. we know that is the headline take away from what is happening. the data is showing a dramatic shift in terms of merchandised companies pulling the production out of asia. i don't think anyone would expect multilateral trade agreements to turn around the global trade story. that is all about -- there are some bright spots. it should be said. people are traveling again for tourism and education. that is the case in southeast asia. when we talk about the economy trade, that is due to slow down and demand for merchandised. multilateral trade agreements will change that. what is going to happen to

tourism and education? those are big expert box. >> the chief asian economic correspondent, we will talk around the u.k. succession that continued over the weekend. the international trade minister says the u.k. bid to join one of asia's big trade pacts will take a little bit longer. >> this is the first request. we always said that the high quality of this agreement, the gold standard of agreement that this is, we encourage any aspiring economist to meet those high standards and that they would be welcome. we are very much working with united states, rather, the united kingdom on this agreement and on their session. japan is the chair for the u.k. procession process. they are taking this as part of the partners. we are working with united kingdom on this.

price what about when it comes to china and taiwan? >> we always said this agreement is a high standard agreement. we welcome those wishing to join. this is also the first session. the first is with united kingdom. we want to get it right. we are taking our time to make sure we do get it right. but there is a big push into southeast asia. they want to use singapore as a trading hub. by the focus on this region? where do you see the benefit of all the parties involved and particularly where do you see the growth opportunities for canada and southeast asia?

the mandate is to diversify and grow opportunities for market access. canada is the only g7 country that has a free trade agreement with every other country. this dynamic is growing. we are at the negotiating table. making sure that we diversify and growth into the market and into this region is extremely important. two thirds of our economy is dependent on trade. as a training country, creating opportunities into this region is important. i announced a canadian trade anyway. the way that will work is that i want people to see that as canada's front door to the region. the door swings both ways. i want to see the region have a place to learn more about

canada, where to invest in canada and how we can collaborate together so that the trade will benefit both ways including the region and canada. >> i am wondering about progress for the u.s. to bring it into the -- to bring the corporate tax in line. i think that is important to canada as well. how is that going? >> we are working very hard and very focused on this important multilateral agreement that the u.s. is part of. we are at the table and working hard. we are hoping that what we will get at is a conclusion of this multilateral agreement reached with the partners including the u.s.. >> i'm wondering how important the multilateral approach is in asia. that this multipronged strategy

could counter china -- could counter china's weight across the region. is that very significant in terms of a situation where you see multiple trading partners? >> for canada, it is really important that we continue to diversify and provide opportunities for our exporters and our businesses. we often talk in canada about creating an economy that works for all as a small business minister but also canada's trade minister. having address whether there are women entrepreneurs, small and medium-sized enterprises get the benefits of trade that means diversifying and working into high-growth markets. we are talking about opportunities in the digital economy. we are increasingly finding partners to grow the green economy, to diversify and create

that growth, green growth in canada. by doing so with partners in this region, whether it be korea or japan or whether it here in singapore and with the many partners that are there. we have seen the growth in trade. we saw partners who are here and we are looking to do more of that. >> as we count down to the g20 summit, we will be having more analysis on the challenges the roof faces on monday at 8:40 am hong kong here on bloomberg television. ♪

>> welcome to mainland china, 30 minute away from the reopening. let's bring in bloomberg managing editor. what are you expecting? >> it does not seem very positive at the moment. the global markets ended with a whimper with a very strong u.s. jobs data. they are eking out a tiny gain

and then over the weekend, we actually saw a drop of really bad news in terms of consumer spending. we see tourism spending a quarter of the year. and also down around 36% from a year ago, the biden administration is issuing the chinese tech sector to make it more difficult for u.s. suppliers to export technology and their products to china. we will be watching very closely at the chip sector as well. overall, i think we will see a bit of a pop at the open. i don't think it will last. >> he doesn't seem like a lot of negative sentiment in the world right now. that is it from daybreak asia. our markets coverage continues as we look ahead to the start of trading in hong kong, shanghai and shenzhen. standby for bloomberg markets.

we will see if this negativity is going to seep through asian markets. we know the holiday week spending was not so great. we have strong u.s. job numbers which depresses the stocks pretty sharply on friday. glad you joined us, this is bloomberg. ♪

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