shery: you're watching daybreak: asia coming to you live from new york, sydney and hong kong.

annabelle: we are coming down to the market opens in tokyo and seoul. haidi: australia has just come online. asian stocks facing headwinds after a fourth day of declines on wall street. chip stocks sinking to 2020 lows after fresh restrictions on china. fed officials voice caution on inflation as the imf warned higher rates could inflict a $4 trillion slowdown. japan reopening its doors after three years of covid controls. haidi: we have aussie stocks online. unchanged. functionally higher as we get into the first minute of trade. perhaps reflecting some of the momentum that came through later in the u.s. session. down to this more optimistic town or more positive tone by lael brainard. sort of running counterintuitive

to what we have heard from other fed officials pick keeping an eye on on what we are seeing the bond space. treasuries closed monday. we did see an aggressive selloff against the guilt curve. driven by what we had from the boe concerning it will end it's long-duration buybacks from friday. if you change on now, interesting moves in the currency space. the aussie dollar extending losses being driven by what we are seeing in china. the aussie dollar the weaker on monday. a weak spending during the holiday period. the service sector deteriorating. all of those conspiring to seeing traders looking at $.60 to the dollar. the yen, watching that as we are good close to the level in

september. japanese futures also looking a little bit higher ahead of the open in one hour. shery: no wonder we have seen that haven trade with the u.s. dollar at the one-month high. we continue to see a rebound in the u.s. futures training session after the s&p 500 lost ground for a fourth session. we get pear back from session lows after lael brainard found it more cautious when it came to rate hikes. we have inflation numbers on thursday. we have the start of third quarter earnings season. we have that concern about the chip space given the latest measures from washington against beijing. all of that scent markets tumbling in the new york trading session. we are watching treasuries trading closely. the cap trading was closed today on holiday. we are going to see the cash open in one hour.

given the global selloff the bond space. any to see pressure on wti prices in the asian session. already we have sold all for the first time in six sessions. even though the global demand concern offset potential production cuts coming from opec plus. haidi: let's bring in more live strategist. for these markets that proved decidedly more dovish, potentially coming from lael brainard, does that change the calculations investors are doing about a pivot? shery: very -- >> not very much. they would like to hear from jerome powell. he was the one that set this all in motion. until you hear a change of tone from him, i suggest traders will not take it too seriously. it certainly is good to hear what fed speakers have to say.

nothing is going to change their decision from november. that seems to be baked in they will do have a jumbo rate hike and lester is a complete shock from the cpi data. there is no reason for the fed not to go ahead with another big rate hike. they have made it clear they need to get to at least four and a half percent they could be talking about 5% because the jobs market is so strong in the united states which was confirmed last week. we have a lot more fed speakers coming up in the next few days but it is really jerome powell who is going to set the tone. we may hear something from him during the imf meetings. bloomberg has a story that he is not going to push back in of his views. even for gets pressure from the central bankers around the world. the u.s. has a job the do of fighting inflation on its doorstep. jerome powell has committed himself to that. he is going to continue to go all the way through until either

inflation starts to break on its own or the data starts to show there is some kind of recession coming in the u.s. that he may have to withdraw and step back. until then, it is going to be full steam ahead and no change from the fed. shery: what do you make of the vice chair's comments given at the same time you have charles evans of the chicago fed talking about the fact front loading was a good thing? are the markets again getting ahead of themselves? >> there was a hint of caution from lael brainard. no doubt about that. she made the point it is going to take a while. these rate hikes are impacting the real economy. she spoke about keeping an eye on the data. she gave a nod to global risks. she was not talking down market pricing for another 75 basis point hike next month but she was giving a nod to risks and suggesting at some point officials do see a point where

they will have to slow down a bit. similar to charles evans, he made the point they were racing to catch up. perhaps getting closer to the point where they will reach a stage where they have to keep an eye on the economy. as mark said, it is all about inflation this week. that is not expected to be immaterial game changer. it is expected to add to the view the fed will go ahead with a 75 basis points hike at the beginning of next month. we had hints of caution from the fed officials overnight but i would not say any real change of direction or hint of pivot in the near term. haidi: quite a lot of caution from the imf and world talking about this real risk of a global recession. >> definitely. i might have tallied up around 4 trillion worth of economic out what will be -- output will be lost this year and next in terms of those countries falling to a recession.

we know what the reasons are behind all of it. price for gas in europe. what is going on in china with thousand mark and the impact of covid zero. in america the imf says the labor market is strong but starting to show some signs of softening. they reckon it will take time. that goes to what lael brainard is saying. interest rate hikes take a well to impact. employment data is a lagging indicator. the u.s. could be an interesting one to keep an eye on in the months ahead. it could be in few months the world bank morning a -- warning of a global recession. shery: have topics that investors have to digest. we have the semi conductor side of things. what will you be watching out for in the days ahead when it comes to asian trading? >> we will certainly be paying attention to what comes out of the world bank imf in case there

any hint the u.s. is being pressured to weakening the u.s. dollar. there is been no sign so far the u.s. has any appetite for talking down its own currency. it has been quiet in that respect. clearly the u.s. dollar is hurting particularly from the emerging market currencies already. behind the scenes you can expect a few countries may be japan included speaking to the u.s. saying is there anything you can do you to stem the strength in the u.s. dollar? any handset we get this week out of washington the u.s. is paying attention to that be very material to the foreign exchange market. i suspect traders are not holding their breath. there is been no sign from janet yellen or other officials they are ready to talk the dollar down. we could get a surprise. there will be a large reduction in the markets because that is not priced in at all.

shery: mark cranfield and enda curran with our top stories today. we are watching geopolitical tensions as well. president biden has condemned what he calls the utter brutality of russia's missile strikes on civilian targets in ukraine. the most intense since the early days of the invasion. president putin is threatening more tax. let's bring in jodi schneider. in this environment what more can you do other than pure rhetoric? >> that is really the question. we have been asking that for months now. today president zelenskyy and president biden had a phone call. in that call president zelenskyy said he asked for more weaponry, more serious weaponry for ukraine. president biden in his speech condemned as you mentioned the brutality of that attack.

he did not say what steps the u.s. would take so he had signaled there may be more weapons on the way to ukraine and there may be more sanctions for russia. haidi: we are dragged into a 7, 8 months of a war that was not expected to be this long. have we -- running to the limits of the effectiveness of what the rest of the world can do at this point? >> that is the question because we continue to see these escalations. every few weeks we talk about another escalation in this war. and firing missiles, this barrage of missiles on civilian targets is something that has gotten condemnation from the u.s. and allies. at the same time what can be done is really an open question.

president zelenskyy did have that call with president biden today. tomorrow he will be having a call with g7 leaders. we presume for him to ask for more weaponry and the kind of weaponry the u.s. and allies have not necessarily wanted to give so far because they don't want that to be viewed as a direct intervention in that war. ukraine's president zelenskyy says time is past that and if the ukrainians are going to defend against these escalations they need more intense weaponry. haidi: what was the real significance of the destruction of the crimea bridge? much has been made of it. is there increasing concern the risk of a nuclear response grows with every such development we see? >> they are certainly concerned about that. you know president biden last week said if president putin was to go the nuclear route there would be armageddon he said in

world -- in way the world has never seen should russia is trying to point to ukraine saying they were the ones that went ahead and made that bridge impassable and the road impassable to crimea and therefore they are the cause of it. they are saying president putin is that is the reason for the attacks. that is not necessarily what other world leaders would say, would not call that a provocation. he is using that and he is threatening further -- he did not make a nuclear threat today but he did threaten with dramatic language if these kinds of what he calls provocations continue, russia will continue to take steps to prevent that.

the war of words certainly from all sides is escalating. russia's attacks are escalating and the world -- u.s. and allies are deciding what to do about it. haidi: jodi schneider with the latest. let's get you to vonnie quinn. vonnie: a selloff in u.k. bonds has deepened after the bank of england's move to extent a and emergency backstop failed to assure the markets. it also confirmed the first round of emergency purchases would end as planned october 14. the chancellor will unveil a new fiscal plan on october 31 ahead of the boe's next interest rate decision. malaysia is headed for early elections this year after the prime minister announced the dissolution of parliament. his ruling is seeking to strengthen his position.

he says the election commission will decide on the date of the vote which must be held within 60 days. japan reopens its borders today to vaccinated visitors from 68 countries. with a week en and -- a weak yen, hopes are high for international visitors. bloomberg expects a could take two years for arrivals to reach pre-pandemic levels. former federal reserve chair ben bernanke and two his u.s.-based colleagues have an awarded the nobel prize in economics for the research into banking and financial crises. they will share the $885,000 reward. the committee took an unusual step of recognizing an actual practitioner of economic policy. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg.

shery: still ahead, we will get insights from goldman sachs on how a weak yen will help pent-up demand. market outlook from winthrop capital management who sees china returning to growth next year. this is bloomberg. ♪

>> the risk and the real danger of a world recession next year. the advanced economies are slowing in europe. the debt levels for the developing countries are getting more burdensome. the rise in interest rates put added weight on it. inflation is still a major problem for everyone but especially for the poor. haidi: the risk of a global recession. our next guest says the chinese economy will be returning to expansionary growth for the second quarter of 2023. joining us is the chief portfolio manager at winthrop capital management. i have to ask, is your outlook for china and chinese equities based on an eventual opening up from covid zero? does that have been after the party congress?

>> that has to be the best case. you cannot have an economy began to boom again without reopening. i think we are seeing that in japan. the outperformance of the japanese markets. we begin to see that flow through china as they roll back some of their covid policies. additionally, you have to look at valuations of chinese equities. that is the largest driver of our thesis. haidi: the same times, you're hearing from the likes of the people's daily, the state voice any the media saying they must speak to covid zero, that it is a sustainable way forward for the economy to keep the country protected from a covid outbreak. there is a good chance we don't get a loosening of restrictions. you still see opportunities with the pretty low valuations across the plethora of chinese equities? >> we do. the best case is eventually they will return to a more normal economy but that is not the sole

reason for investing in china. when you look at the entire beat down stocks have had in china, you have 10 times forward earnings. has never been cheaper than it is right now. we are not trying to take the bottom. what we are doing is looking at opportunities across the globe and when you look at europe or japan or even the u.s., the opportunities are getting smaller and smaller. we still like the u.s. but when we look outside the u.s., you can't overlook china and the advancements they are making. when you see valuations this cheap, you have to see it as a buying opportunity. it is likely you could see markets moved lower. we are not trying to pick the bottom. if the u.s. economy goes into a recession, it will have effect on the chinese economy but the chinese government has shown time and again it will move in to prop up the economy. when we are modeling growth, we

are seeing a 6% grow of gdp. this is coming off some lower base effects which helps as well. we sell this with the u.s. market as well. it can really propel a market whether there has been enormous amount of pessimism and a lot of times when you see overly pessimistic markets, that is a buying opportunity and that is what we are seeing right now, an opportunity to get in when we are at mass pessimism. shery: what about pessimism at the u.s. economy? continue to see recessionary fears. you mentioned the potential of the u.s. falling into a recession should that the reason you have tilted from short duration to long-duration? >> we are not here to try to figure out the fed thinking every single day and every data point. it is not how we manage portfolios. we are looking at it from a longer-term perspective and the

overall secular trend of interest rates across the globe we do not see changing. this is a short-term event where the fed has taken liquidity out of the global market. that is driving rates substantially higher. we see 4% on the 10 year as the peak in this cycle. we will likely get and other of that as the markets try to digest every debt of the comes up. we think the number the comes up this week is going to be lower than estimates and will see the narrative move forward. we will likely get another rate hike in november but at that point we will start to see inflation numbers actually declining at a fairly fast clip. we will see more data points on the economy weakening. every one is using this word it. i think it is going to be a pause. that will be enough for markets to begin to say enough is enough and the likely path of the fed

will either be remaining where they are or beginning to reduce interest rates. shery: so far, it seems markets are pretty pessimistic about what is to come before the pivot. whether it is an economic recession or should we prepare for and earnings -- as well? >> it is starting to pick up steam in the narrative but a lot of investors have missed. why we are seeing the market is the outlook for earnings per we are about to look at this massive wall are the outlook overall is likely and we are seeing signs in and earnings recession were corporate earnings are going to decline. the fact of the matter is wages have increased. you are seeing excess inventory. all of these things are going to weigh on margins. it is undoubtedly going to pressure earnings for the next two quarters. we see the worst of it in the

first and second quarter in the u.s. which plays into the china thesis as well when you talking relative value. we see the u.s. economy moving into a recession in the first and second quarter of 2000 23 and earnings recession in the same time. conversely you're seeing china begin to pick up in 6% growth. . that is a large part of our shift. shery: good to have your insights. chief portfolio manager at winthrop capital management with his view on the chinese and u.s. economies. you can get a roundup of all the stories you need to know to get your day going shared terminal subscribers go to dayb . you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

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shery: we are counting down to the start of trading. in tokyo and seoul. over in south korea, we will get a reading of the trade numbers for the first 10 days of the month and we will be watching for chip shares. this of course as equity markets reopen after fresh restrictions on chinese access to u.s. technology, which is the reason we will be watching out for semi conductors stocks in japan. we will also be watching for those travel and tourism shares, as vaccinated visitors from 68 countries can now enter without 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 comcast business internet customers. so boost your bottom line by switching today.

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♪ haidi: we are taking a look at what is essentially a nice day. a little gloomy at the moment. looks like we are expecting more

rain again ahead of this la niña summer. we are getting consumer confidence numbers for october. the previous month, 83.7 is where the number is sitting from a 84.4 in the previous month. we are seeing that singly adjusted month number, seeing a contraction of just about 1% from a gain of 4% in the previous month. so when it comes to many of these consumer related, retail related gauges. the impact of the rising interest rate by the rba, the cost of inflation clusters -- pressures are creating a great deal of uncertainty going into the holiday season as well. let's get you to annabelle who is taking a look at the markets and watching chip stocks with the bad news continuing. annabelle: that's right. we've got the open for korea and japan at the top of the next hour. they were shut on monday, all

these moves happened late friday in the u.s.. it really has been over the last week because we saw that morgan stanley report saying the second half of next year. what he did not take into account our geopolitical risks because we have stocks rising amid friday, president biden and concerns that the u.s. will expand restrictions on china's access to advanced chip technology. we have seen these names -- these are the names we are watching at the open. not a great tailwind coming through in the u.s. session, because we did see the philadelphia stock exchange semi conductor index slumping 3.5%. it is down around 10% just on the last three trading sessions. 40% over this year. and a lot of this stems from what we have already seen from the biden administration, but also the risk of retaliation. how exactly will china respond? taking a look at what else we

are seeing ahead of the start here, so of course the chip sector will be want to watch. otherwise we got trading online for australia and new zealand. nikkei futures in singapore come online at six or 7% higher. but something could be supporting that, what we see in the yen. because the weakness that we are seeing for the currency has been a big used to -- a big boost to the biggest exporting names in japan. it's interesting when you exit are -- when you consider volatility. and a look at quite a bit of surprise in his solar, given that we are close to intervention levels for the currency. but traders are saying that basically, any invention that we seen has a big impact over the longer term. shery: they are being resilient to that. perhaps more intervention to come, given the level that you mention and given that the weaker end. what we're talking about has also been a big attraction.

for tourists going to japan. our next guest is an inbound -- says inbound tourist in japan spending could reach its highest level in six months. japan reopening fully to tourists today. let's bring in a senior japan economist of goldman sachs. good to have you with us. so how much of a real boost can japanese inbound tourism have for the japanese economy when at the same time, we are not expecting chinese visitors, who usually spend more than tourists from other countries, to come? >> basically the same. we expect the revenue. we think that those towns are a good benchmark. open borders and travelers came back to the mediterranean quickly. so we think in six months,

businesses will recover 60 to 70% of normal highs. so maybe we can expect something similar in japan, so as you mentioned, we still cannot expect any businesses from china because of the zero covid policy. 75% of the total travelers in 2019 was made by mainland chinese. but there are some other factors that were just mentioned. travel depreciated a lot. the dollar yen depreciated by 40%. so that kind of makes travelers more nervous because they are looking now at a bargain find. overall, we expect that in the next six months, businesses will recover 50%.

shery: talking about the weaker yen, which will affect people from other countries on the others of the coin, we see japan improving when it comes to balance of payments. japan provides some support for the week japanese currency? tomohiro: to some extent, yes, this could be a support. but is limited to some extent because we expect that but -18 trillion in deficit, even after the travel consumption recovers to the normal level from 2019, it took one quarter of the trade deficit. trade deficit, because we -- other than the trade deficit, we have a system which provides a surplus.

and basically, this comes out as travel related and we will maintain our current account balance. trade surplus, trade deficit plus the surplus, that will be a boost for travel. we expect that the current account balance will be positive sometime soon. haidi: inbound tourism, do expect to have a rather meaningful impact on domestic demand? inflation, potentially even connectivity when it comes to wage growth? >> yeah, today, we actually had to policy changes. one that we just mentioned, the reopening. this is a positive change. but we have another big change, that is the nationwide travel subsidy.

so this is very generous. including myself, from today on, if i travel somewhere in japan, then the government gives me some amount in my account. so if i stay at a hotel, the discount rate will be 60%. 60% of the total cost. so i believe that this could boost japanese domestic expansion as well, because this is what we saw -- we had similar travel campaign, i estimate that boost in domestic travel will be 25%. that is a big number because domestic travel is bigger than four it travel consumption, which we discussed earlier. -- foreign travel consumption which we discussed earlier. this will give a big boost to travel industries that are behind in the japanese stock

exchange as they gather with other sectors. but for the impact on wage growth and inflation, we have negotiations in february and march of next year. haidi: clearly, there is no expectation of a policy change until they hit what they see as being sustainable. it'll be interesting. we heard from the boj when it comes to monetary policy and she said we are more likely to see a reconsideration of policy, potentially an abandonment of yc c after they failed to hit their price targets. do you think that is a possibility? tomohiro: definitely, yet. that is the billion dollar question, indeed. we do not expect any meaningful changes as long as the governor stays in this position. in april 23, they already

mention federal banks. even if by the year end, inflation could reach 3%, the boj expects it will get to 1.5% in 2023. and given that we cannot change the policy, it means that immediate inflation cannot be changed in the boj's policy. they also mentioned that wage growth, they hope to see that. but it is still very, very slow from the tracking of wage growth in the last 20 or 30 years. we cannot really expect a big change right now. haidi: great to have you with us. senior japanese economist at goldman sachs. let's get you to vonnie quinn with the first word headlines. vonnie: chicago fed president

says policymakers need to reach a level where officials are cultural with housing. brainard says data is key with previous price increases working their way into the economy. >> in light of elevated global, economic and financial uncertainty, moving forward deliberately and in this manner will enable us to learn how economic activity, employment and inflation are adjusting to cumulative tightening in order to a form -- inform. vonnie: a global recession is more likely as inflation forces higher interest rates. imf's managing director says a strong u.s. labor market is losing momentum with higher borrowing costs and fights. one third of the global economy went into a recession this year in may. >> the recession has gone up. the total amount that will be

wiped out by the slowdown of the world economy is going to be between now and 2026, $4 trillion. this is the size of germany gdp, gone. vonnie: u.s. president joe biden has contempt the utter brutality of russia's missile strike across ukraine. the attacks marked dangerous new escalation in the war and are the first strike on kyiv. vladimir putin is threatening new actions. leaders are hurting an emergency call -- holding an emergency call as they continue to provide weapons ukraine. iranian oil workers joining protests over the death of 22-year-old woman last month in the custody of the so-called morale the police. verified social media videos show dozens of uniformed workers marching through a plant on the persian gulf. international pressure on iran's leadership is also causing the u.k. to impose sanctions on security forces. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700

journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: coming up, bloomberg says europe is ready to weathered the winter without russian gas. more on that exclusive research, next. this is bloomberg. ♪

haidi: europe is likely to have gas to make it through the next winter. there is an impending shortage but bloomberg's head of global energy research joins us now. so, what is your outlook when it comes to european gas going into this peak season? and why do you hold the view that gas in europe and asia -- is the situation as dire as the market consensus seems to be? >> forecasted europe will be able to survive this and it can end the season at historic levels, higher than the average. [indiscernible] the two key drivers are continue to high energy imports to

europe. meanwhile, production at all of the gas centers in europe. having lower gas is going to be extremely important to survive. we do expect prices to ease from a level in -- no longer worst-case scenario, but prices will be at historic levels. we expect europe's prices to continue to be at a premium of buyers in europe. and then when the next summer comes, there will be an even larger amount of energy to fulfill its gas demand. and stop pressure -- and pressure will remain. shery: asian economies have been competing for these supplies. how do you think energy demand could evolve in a asia this winter?

abhishek: we expect energy could fall in japan this winter. japan would [indiscernible] there is also higher nuclear generation because of the nuclear reactors. and korea could also see higher energy demand, because it is stockpiling more energy. for china, we are expecting a big drop and there are two reasons for this. the first is [indiscernible] covid shutdowns and also energy prices. the other reason is growing domestic production and [indiscernible] . haidi: we take a look at supply

growth, the outlook for the next few months, what does that look like to you? abhishek: we think it will slow down from last winter. we are expecting 20% growth this year. most of this growth is coming from normal operations from plants that were operating last year. so that is what is likely to show most growth this winter. and at the current level, to create a supply, it would be followed by u.s. supply growth. the ongoing outreach [indiscernible] supply accrued from the u.s.. and issues could [indiscernible] cuts.

shery: with the latest in the commodities space. a quick check of the latest business flash headlines, macau casino offerings plunged in the u.s. after data showed sharp declines in tourism spending. during china's golden week holiday. overall, revenue fell 26% on the year as beijing's strict covid zero policy cap travelers at home. 12% for its worst slump in more than two years. mgm resorts also fell. visa may be set to invest between 500 million and $750 million in electric vehicle business. the japanese company viewing the french carmakers and ovations have a chance to reshape their decades old alliance. we are also told they are willing to gradually reduce ownership of nissan to 15%. from the current 43%. tiger global was among hedge

funds to report september losses. as the market tumbles. our sources say it fell 4.4% for the month, extending its decline for the year two 52%. the funds tumbled in september, to bring a year to date slide 257%. --tp 57% seven quarter profits, to about $1.3 billion in the three months since september. ip rivals avenue so far remained positive on north america and europe. a sense of caution because of recession concerns. right, we are getting those japan breaking numbers. when it comes to the current account surplus, we are getting

it at 58.9 billion yen, which is actually coming in higher than the estimate of a trade deficit for japan for the month of august. this is a slight contraction from the previous month, when we had 229 billion yen surplus. the current account remaining in surplus territory has defied economists expectations that it would fall into a deficit. this is quite surprising, given the higher commodity prices that have been inflating the imports in japan. we were expecting that deficit, but perhaps the week and has supported those export numbers. and we are going to get those trade balance numbers very soon. at the moment, current account surplus of ¥58.9 billion for japan. this is bloomberg. ♪

♪ haidi: facing headwinds when japan and korea open after the usa has been dropped for the fourth day amid heightened concerns, geopolitical threats as well as volatility. japan and korean equities returning to trade today. what are your expectations? >> good morning. it futures in japan are pointing

to a weak start. and also the korea etf fell more than 1% for two days in a row. it triggers some of that from this long holiday and we are having the first chance to react to this news. there are very few bright spots. this news is disappointing. there is this morning about recession from jamie dimon and a strong u.s. jobs report also not using fears about recession. the fed's rate hike as well. in china sticking to covid policy and this huge losses in u.s. chipmakers to all of this will be reflected as traders come back from the national holidays. shery: also in japan there has been a lot of optimism about the reopening of borders. how much of that has actually been priced in already and how

much can we still get today? >> these types of positive news tend to be reflected in the market much sooner than when it actually happens. we have seen some strong -- trades along the airlines and travel stocks in japan. we may see some of that if that is going on when the markets open today. this is the first time japan will be reopening exporter to individual travelers. there will be a lot from korea including myself. some of these stocks in the sectors such as cosmetics and retail, may not see as much boost because those sectors rely heavily on china and travelers from china who are still restricted to travel due to their zero covid policies. shery: of course we continue to watch those japan numbers when it comes to current account surplus that we got in the trade balance that is fallen into deficit.

the 2 trillion -- ¥2.5 trillion. that was pretty much expected, but just the deficit in the trade numbers moving and widening at the moment. we are getting south korean at trade numbers as well, of course, 10 days of this month. export falling 20.2 percent year on year. imports also falling 11.3% year on year. we will continue to watch the market open in seoul and tokyo are next. this is bloomberg. ♪

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>> this is daybreak: asia. we are counting down to asia's

major market open after a long weekend, with plenty to digest, including data from a few minutes ago with south korea's exports. falling 20% year on year. not surprising the fed vice chair more cautious when it came to rates. >> really worrying when it comes to the global trade. really a bellwether for what's to come around the rest of asia, certainly, adding to the caution being sounded by the imf and the world bank. let's take a look at the trading. >> this is a big session for us today. we do have japan and korea both back online after public holidays on monday. also taking a look at how treasury stocks traded. they were closed also for columbus day in the u.s. and japan trading. the 10 year yield, bang on line with estimates. what we were expecting. we saw two factors, the

aggressive sotloff -- the aggressive selloff, ending the long duration long buying program for friday, then we had as you were saying these comments coming through from brainerd, that the fed should perhaps take a more cautious approach to raising rates, certainly being reflected in what we see across the screen this morning. a big drop this morning for the nikkei and the kospi. we actually had been eyeing for a higher start here. but as you said for the korean trade numbers, a deteriorating outlook for the global economy is what is weighing this morning. he have the tech heavy index here, the cause deck, reflecting the laws -- the kosdaq, reflecting the losses. that move from the white house

not only has ramifications for chinese nus u.s. chipmakers but also for global economies as well, like the ones in japan and south korea. perhaps unchanged. we could be seeing a bit of a divergence on the spread this morning. . we will see if they start to trade. in terms of the losses, you can see the hynix, not only are these changes drifting further escalation, we still don't know how china will react in this scenario either. let's take a look at what we are seeing in the currencies base this morning. we did see a deterioration in the japanese trade accounts. and the numbers released the last 15 minutes. we are seeing losses here for the korean won, also the aussie dollar against the greenback. brent crude as well. we didn't have that opec-plus with the production cut. the recession risk that is really front and center. we are seeing that across the

asset classes this morning. >> to your point on the treasury's trading, we are seeing the 30 year yield spiking to 3.93% at the moment, which will be the highest since 2014. perhaps not surprising, given all the turbulence we have seen a global -- seen in global bond markets. is disappearing at an increasingly rapid pace? joining us to discuss is the managing partner at fpi partners. good to have you with us. what are you seeing in terms of this volatility that has really gone through most asset classes at the moment, and particularly in the bond space? >> i think we are seeing a little bit of destruction and bond markets -- in bond markets. getting led by the hawkish fed.

a hugely rough session again. 10 years are up 24 basis points. 30 years are up 30 basis points. this is unheard of type of numbers. this is one the bank and -- when the bank of england of england and the treasury are trying to calm markets. what are we in for here? i think looking at the u.k., the short end of the curve, they are trying to play catch-up. ---- i think we are looking at the u.k., the short end of the curve, they are trying to play catch-up, the fed, trying to present a fiscal view from the government, a three to five-year area. trying to price and what is expected to be a paper delusion to pay for all the government splurges.

where do you hide in this? i think you take cover and don't really put a been in the market right now for any bonds. >> is that why you are actually, one of we are big phrases is shorting in the british pound and of course on the others of that trade, where do you see the u.s. dollar going? >> i do. i think we are in for a little bit more tumult, especially as we move into what i think will be a winter of despair in the northern hemisphere, with a further energy crisis. i do think energy goes up and i think this will contribute to a lower pound. probably the interest rate hikes from the bank of england are going to be sort of aggressive. they are going to tank the economy for sure. my bestia right now is the pound around 105 could be a fair value going into your end. -- year end. >> we are all expecting some

sort of announcement, you hear from the people's daily, releasing today that covid zero must be maintained. that there is a sustainable path going with covid zero alongside economic growth. what are your expectations and what are the implications for any hopes of a recovery across chinese assets? >> we are always hoping that they are going to step back from these covid policies. especially here in asia. where a lot of the economies are very much dependent on travel. we are doing quite well on the tourism sector. i think this permeates a lot of other industries within the asia complex. i think markets were hoping we could see a pivot. look at what happened in shanghai yesterday. look at people returning from the golden week and. policymakers are scared that these people returning from the golden week can spread covid. what does that mean? does not mean we are going to remain in open emergency state forever and china? probably not -- in china?

probably not. we may see some easing into the new year. but attention will be paid to the rhetoric coming out this week and from the party congress. -- we -- this weekend from the party congress. >> how are you playing the energy story? >> i think we are getting back into the demand cycle. offsetting the type markets. i think this is only temporary. as we move forward here, i think demands in the u.s. will continue to remain strong. it seems consumers are very resilient. china's a little -- they are moving back into covid zero. economies continued to do ok. not great, mind you, but still holding up somewhat. largely we are looking at the pmi numbers that came out, they are quite dreary. remember those are backward looking data. we are actually looking to play a little bit forward here on the old market. so the feeling is, as we move

through to the next couple of quarters, i think you can stay long through option markets or you can stay long through the cash markets. both exposures we are in right now. i am thinking oil could move higher than $100 per barrel. certainly into the $110 level. with the china covid related situation we are in right now. >> managing partner at sbi asset management. always great to chat with you. let's take a look at these highly anticipated moves for chip stocks. >> that's right, heidi. such big moves. we did not have trading for some of the biggest names in japan at the open. now we are just trading in the last minute or so for those names. you can see the big losses at the open. overall this is not a great story for the chips sector today, reacting of course because japan and korea were shot on monday for public holidays. reacting to the white house expanding the restrictions on

china's access to chipmaking technologies. a lot of ramifications here for the global chipmakers. it does impact business opportunities over the longer-term. the big question now will be how will china retaliate? let's change on now -- the other sector we are watching at the start of trudy's the automakers. -- at the start of trade is the automakers. worries for the sector here overnight. we had four gown, downgraded by ubs. both ubs and rbc capital markets noting concerns for the auto making industry. tesla, as well, missing auto estimates. in terms of the reaction this morning, we are also seeing these companies lower, including nissan, also reacting to these talks it is aiming to review its alliance with renault. >> actually, i really wanted to take a look at the korean won. we are seeing a huge downside against the u.s. dollar. we are talking about levels of

$14.31 against the u.s. dollar -- 1431 against the u.s. dollar. this is really not surprising given that we have the 10 days trade numbers from south korea for this month, releasing again the deficit of 3.83 billion dollars. exports falling more than 20% year on year in the first 10 days. imports falling, but not by as much. really weighing on the korean won. we know they have heavily intervened in the markets. fx reserves are also under pressure. all of this really playing into the korean won/u.s. dollar trade. this just also doesn't help that that the u.s. dollar has been pretty strong. even those haven flows on geopolitical uncertainty over young ukraine. over what the fed -- over in ukraine. over what the fed will do to slow global demand as well. >> let's get to vonnie quinn with the first word headlines. >> u.s. president joe biden has condemned the utter brutality of

russia missile strikes across ukraine. marking dangerous and escalation in the war, the first strikes on kyiv and months. vladimir putin is threatening more action. g7 leaders are holding an emergency call tuesday as they face more pressure to provide weapons to ukraine. a selloff in u.k. bonds has deepened after the bank of england's moves to extend an emergency backstop fails to reassure the market. the boe announced new measures to ease the pressure on pension funds caught up in the route. it also confirmed the first round of emergency purchases would end as planned october 14th. the chancellor will now unveil a new fiscal plan october 31, ahead of the boe's next interest rate decision. japan reopened its border today for a vaccinated visitor -- for vaccinated visitors from 68 countries ending almost three years of pandemic travel restrictions. with relatively low inflation, hopes are high for a rebound in visitor numbers, as airlines ramp-up international flights.

echo take two years for arrivals to reach pre-pandemic levels which peaked in 2019 at a record 32 million. reports have emerged of iranian oil workers joining protests over the death of the 22-year-old woman last month, and the custody of so-called morality police. unverified social media reportedly -- video reportedly showed laborers and uniformed workers marching through a plant on the persian gulf. international pressure on iran's leadership is also mounting, with the u.k. imposing sanctions on its security forces. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. >> still ahead, we take a look at

>> the risk of recession

has gone up. the amount that would be wiped out from the slowdown of the world economy is going to be between now and 2036 $4 trillion. this is the size of germany's gdp gone. >> the risk and the real danger of a world recession next year, the advanced economies are slowing in europe. debt levels for the developing countries are getting more and more burdensome. the rise in interest rates puts added weight on it. in the inflation is still a major problem for everyone. but especially for the poor. >> the heads of the world bank and imf, on the risks of a global recession there. let's bring in our correspondent with more.

really quantifying the loss of outputs through the 2026 there. >> yes. they are warning of the global economy warning into recession either this year or next year. we know a lot of the reasons behind all of this. interestingly, the imf things the u.s. labor market is starting to show things -- show signs of softness. that of course has been really critical in the global story, the strength of the jobs market there. the imf thinks there was also warning on the dollar for those poor countries having to pay back the dollar loans have taken out around the world. that was a new wrinkle coming out of it, as well.

i think we at it altogether, including the back story we know about that is happening and china with covid zero and you real estate and the price of gas in euro, it adds up to a very downbeat global picture. and importantly no sign of a circular breaker or a turning point from either the imf or the world bank and the outlook just yet -- in the outlook just yet. >> is that one reason why the fed officials with the likes of vice chair brainard sounded more cautious when it comes to hiking rates for the fed? >> it was really interesting, she gave an ounce of global story as well. no doubt about it. she was making the point that it will take time to see how these rate hikes will impact the economy. she spoke about keeping an eye on the data. keeping an eye on the jobs market. we know of course there's a logging affect -- lagging effect in all of this. they had to catch up really fast. but maybe they are reaching a point where they need to wait and see how these rate hikes do play out.

for all of that, i should say they did not signal a pivot. the u.s. inflation story is a expected to login. the markets are betting that the fed will go with 75 basis points at the start of next month. some him tough caution from those fed officials but no hint of a turning point -- some hint of caution from those fed officials but no hint of a turning point. >> our chief asia economics correspondent there. the covid zero policies and china is a factor when it comes to the global economic picture. lockdown fears have returned to shanghai, as national covid cases rise. fences appearing around some residential compounds. local authorities are taking few chances of resurging outbreaks. for more, let's bring in our asia correspondent, stephen engle. what will happen to covid zero? there are expectations that they

could be relaxed, after the party congress. but at the same time, today was on the people's daily coming out with rhetoric that china must stick to these covid restrictions. >> well, i will guarantee you there will be more speculation on this front, as we had to was a part of congress on sunday and through the party congress. and in between the party congress and next march, when the national people's congress, the annual session of parliament kicks off in the first week of march. there's going to be lots of speculation that now is perhaps the time because the political premium has been taken off the front burner and put to the back burner. perhaps xi jinping could relax covid zero. but the people's daily article really indicates -- and that is the mouthpiece of the party, that it has served the economy well, to stabilize a turbulence economy. it is a guessing game right now. especially ahead of the party congress, you are going to see

more tightening. none of these mena super leaders -- municipal leaders want to be blamed or caught with a flareup so close to the party congress. so you are going to see tightening of curbs already and shanghai -- in shanghai in several districts. they have shut entertainment venues, designated some venues as a risk, meeting some residents cannot leave compounds. shanghai had 34 new cases outside of quarantine reported on sunday as part of 1875 cases total nationwide on sunday. that is a concern because it is the most in a couple of months. still not a lot. but again as we approach the party congress, there's going to be more tightening. i want to add one little anecdote here -- there is even a city in a province with 400,000 residents which has locked down, but it has no cases. simply the authorities there are

worried that after the weeklong holiday of the golden week, that residents would return and bring the virus into the city. so they don't want to take any chances ahead of the party congress. have left the entire city down. -- they have flocked to the entire city down. -- they have locked the entire city down. that is the extreme we are in right now. >> steve, japan and the main is joining the ranks of the fully reopened exporters. we know a big chunk will be missing from the chinese tourists that would usually be headed there. >> look, japan is one of the richest nations to come out of the strict pandemic curbs, the latest. they are going on with -- going in with a bang right now. they will allow external visitors to come in from 68

countries without visas. they are hoping it will be a boon to the tourism industry. they had a boom in tourism in 20, just before the pandemic. a record number of tourists came in. now they are hoping that the week yen against the dollar will also team -- and also team inflation will help boosted beyond the pre-pandemic levels as a jewel to the economy, as a boon to the economy. i should say. as goldman sachs was estimating, inbound spending could rise by 32% on an annual basis, after the first full year of opening, compared to 2019 levels. so that would be an obvious good sign for the japanese economy. >> achieve north asia correspondent, stephen engle there. take a look at what samsung is doing right now. it fell as much as 3.9% at one point today. this would be the most in a year. south korea coming back from a long weekend. we know that chipmakers are

under pressure. that it was on the philadelphia semiconductor index in the new york session at the lowest level since 2020 because of fresh u.s. restriction on china assets to u.s. tech. already last week we had samsung, disappointing in earnings. we have south korea's trade numbers for the first 10 days of the month already plunging 20%. really not boding well for this electronics giant. this is bloomberg. ♪

>> we have to avoid falling into the same dependency from china, as we were with oil and gas from russia. and we have to start now. and that is why we are working on a european critical raw materials act.

it will help to diversify our supply chains towards trusted partners. semi conductors and every digital device, from cars to phones to medical equipment, without chips, no modern economy. this is clear. semi conductors are crucial. . therefore our aim is to increase our global marketshare by 20% to 20% by 2030. >> the european commission president there on global supply chains and chipmaking. checking on how futures and europe are opening up at the moment -- we saw european stocks along with others dropping for a fourth day, investors continuing to mull the risks from the tightening trajectory of the fed. we heard from vice chair brainard sounding more cautious when it comes to the policy risk. we saw the retreat for the fourth straight day. traders really bracing for a likelihood of a maintenance of that hawkish path.

we are seeing a flat start to trading in the future session -- the futures of session. off by about a quarter of 1%. dax futures looking flat at the moment. we saw weakness across semi conductor stocks. dropping in that part of the market as well, after we had those fresh u.s. curbs on china's access to u.s. tech. that is also within we are seeing across the asian markets -- the broader asian markets as well. >> i can't help but be fascinated by the semi story. you mentioned the geopolitical tensions over the china and u.s. tech story but also the bones a bus cycle we continue to see -- the boom to bust cycle we continue to see in the space. >> is not just a geopolitical fears but also the global cyclical downturn we are seeing in the sector playing in. as you take a look at the asian broader benchmark this morning, one lower sector is the it1, led

by the decline's we are seeing in hardware names. this is the picture we have for the biggest stocks and japan this morning. they are slumping here at the open. a lot of these were untreated. if you change on and take a look at the names we have in particular, the other sector we are watching as well a very carefully, also the ones we are watching in career as well, we do have samsung slumping the most by about -- the most in about a year. if you take a look at the names we had in korea this morning, this is really playing into what we are seeing for the millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan, or see for yourself how easy it is to save by talking to our helpful switch squad

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>> this is "bloomberg daybreak:

asia". i'm vonnie quinn with the first word headlines. the imf and the world bank are warning a global recession is more likely as inflation forces higher interest rates, adding to debt pressure on developing nations. the imf managing director says the strong u.s. labor market is losing momentum as higher borrowing costs by two. she says one third of the world economy will enter a recession this year and next. the federal reserve official sounding a note of caution as the central bank hikes rates. the chicago fed president charles evans it says policymakers need to quickly reach a level where officials are comfortable with pausing to reduce the risk of an overshoot. vice chair brainard says data is key, with previous increases still working their way through the economy. >> in light of elevating global economic and financial uncertainty, moving forward deliberately, and in a dated manner, will enable us to learn

how economic activity, employment, and inflation are adjusting to the accumulative tightening in order to inform our assessment of the path of the policy rate. >> malaysia is heading forward early elections this year after prime minister -- after the prime minister announced the dissolution of parliament. seeking to strengthening its position following a run a successful local polls and the budget for next year that lowers taxes. he says the election commission will decide on the date of the boat and that must be held within 60 days. the former federal reserve chair bernanke and the colors have been awarded that -- been awarded the nobel prize in economics for the research in economics and financial crises. they will share the $885,000 reward. the first committee took an unusual step of recognizing an actual petitioner of economic policy to honor bernanke. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn.

this is bloomberg. ♪ >> let's turn to the market action. what a reopened bell when it comes to japan and south korea coming back from that long weekend. hoping investors had a good rest. it is getting busy. >> that's right. they are definitely going to need their energy for the trading session today. we are watching what is happening in the bond space this morning. we did see the 30 day yield, with a bit of pressure building. not only did you have the boe confirming it will end the bond buying program for the longer durations. the 30 year, the big spike in yields. but we also have the comments coming through from the fed vice chair, lael brainard, also saying perhaps we should be taking a more cautious outlook with rate rises. we are seeing similar moves across the aussie tenure and the kiwi. also playing into the currency space this morning. we want to focus on what we are seeing in the korean won. this morning, not on the concerns around the recessionary backdrop. a global while better here

for the economic outlook. we had the trade numbers coming in, the plumbing everyone's, dropping off a cliff -- the preliminary ones, dropping off a cliff, led by the decline in chip exports. we've got big losses for the kospi and japan. this is the trade. being led lower by what we see in hardware stops. that is what we had in the u.s. session. most of these names, concentrated in japan. big slumps in the open. down around 5% for the names here. also keep an eye on korea this morning. we also have the likes of samsung, slumping by the most in about a year here. the hynix, lower. you have to emphasize a correlation that we have seen between selling on the tech names in korea and the losses we see in turn for the currency, haidi. >> let's get more on the outlook for the chip sector.

we are joined by randy abrams, the head of taiwan equity research joining us from taipei. great to have you with us. i want to give -- i want you to give us the context. how you see the scope of the curbs from the u.s.. how does that impact china in ways including their localization efforts that we have seen be a strategic priority? do they still have access to the advanced foundries in the likes of taiwan and korea for example? >> thanks for having me on. the way i would say for china is, one thing i will say is the area that they can keep doing a lot of the mainstream technology, a lot of the restrictions really cap china's advanced technology development. we are just getting restricted here on china's ability to make those advanced memory chips, advanced logic chips. a lot of those used in this high-performance computing, the high-end gpu, the high-end

processors. that is one of the limiters. tell -- to your other question, it will also be there ability to access advanced foundries overseas. there are more restrictions, in terms of getting that high-end computer locally. on mr. technology -- on mainstream mobile, china will continue to localize that. will continue to drive a lot of growth there. but there's quite a big cap i would say at the high-end. ability to design chips, access to chips for the high-end computing applications. >> we already saw that shift and the headwinds in the industry and the post-pandemic era. long-term, to the china curbs really change the outlook when it comes to business opportunities for global

semiconductor makers? >> ok, there is a bit of a loss globally. i liken it -- with what we saw with huawei. ultimately, some of that is replaced. you find mitigate or's. -- you find mitigators. a little bit less aggressive technology. here you have the second largest economy getting cut off from high-end a.i. so i would say for overall industry, there has not been a loss on innovation by putting these caps on. but really all companies contributing to the upgrades, the competition, that has actually led to the fastest innovation. so that is i think the piece that does get lost. that is the peace we saw with huawei. which was up there with samsung is one of the top and rebrands. after the restriction, we did see an impact. apple's gain share entry volume

is about 20% below, for other factors, too. what part of it was the innovation loss. >> so there is a negative on restrictions being put in place on these chinese companies. but what about sort of the positive factors in a sense that the u.s. is also trying with the chips act to bring more production and r&d locally? how is that going to affect not only chinese chipmakers but also taiwan and south korea chipmakers as well? >> ok, yah, -- yeah, so actually, there's different opportunity. when we get back to the big picture, there's not a lot of big winners. but where the opportunity, where china's opportunity is, with, have actually had pretty strong growth with the chip industry, but it's been most of the revenue on the midstream technology. i think that is the expectation

the next few years. which china is able to produce. what they can get technology for, they will be aggressive to localize. from manufacturing, we are seeing the diversification of manufacturing. like the moves with tsmc samsung, with the factories in the u.s. that is going to continue. as well we are seeing these actions, micron and intel also stepping up investment. one piece out of this, more of a diversified chain. you will see more capacity on the ground. >> randy, the signs that we got last week when it came to the results from andy and samsung were not that positive. it seems that in a matter of months we went from boom to bust, shortish to glu, when it

comes to the semi conductors industry. are there any bright spots investors can look forward to? and how much of all of this has been already priced in? >> ok, yeah, that is a good question. for the impact, as we go through the results, it is still going to be a tough results season. because really the fear of the supply chain, the supply here to demand for your with the concerns about recession, but also demand fear because of a slow down pc or smartphone. as demand slows down, we see other levels push up. now it will be reduced inventory. back to the opportunity. stocks champion well in front in terms of selling off. we have seen a 40% correction in average asian semiconductor names. traditionally stocks are a good

one to two quarters ahead of fundamentals. the market is somewhat healthy. even though it is painful now. we are seeing very sharp action to finally bring down interest rate consumer tech, for pc's android, smartphone, tv display. really sharp correction. a demand slide is what gets us into stabilization. demand plus and inventory correction. the correction is two to three quarters. as we get to the first half, we get to stabilization. once investors have visibility on the stabilization, with stocks down as much as they are, due to the opportunities, a lot of stocks are looking beyond the correction, already a good valuation levels. >> so, what sectors are you seeing the opportunities, when it comes to appliances or electronics the semi conductors can go into? of course we are talking about ev's, cars, the growth of the

metaverse -- where are the bright spots? >> from a demand side, part of the reason they have not corrected that much yet, auto plus ev, we are seeing content growth for trips over 10%. where there's consumer or industrial, there is more processing and connectivity. that is a broad market that spans across the industries. semiconductor units have grown 8% -- that part doesn't go away. i think i see proliferation across general markets. whether consumer industrial i think continues. another area i point to, if you look at the wooden part of the amazon, microsoft, google cloud business, that looks to be a relatively better

area. china has restrictions, but the broad computer growth is still there. as we look beyond interest rate correction, i point to auto, cloud. >> randy abrams, really good catching up with you. coming on in a very interesting time for semi's. coming up, president biden has condemned russia's missile strikes on civilian targets in ukraine. vladimir putin is threatening more. we have the latest on the ukraine war. this is bloomberg. ♪

>> president biden has condemned

what he calls brutality across ukraine. several cities were hit by a barrage on monday, killing dozens of people and wounding over 60. put in says the bombing targeted ukraine's energy and communication infrastructure and has threatened to escalate the attacks. g7 seven leaders -- g7 leaders will hold a call on tuesday. >> when you take a look at everything president putin is doing, intensifying these attacks, what this is actually telling about him is his grip on power in russia and what is happening in the country -- what is this actually telling you about him, his grip on power in russia and what is happening in the country? >> the exclusion zone is

very significant. it was a personal blow to president within. back to the weekends, we have the explosions on the bridge. very strategic and personal blow to president putin. not only that, but also the appointment of the air force jungle, he's been appointed to run russia's invasion forces in ukraine. this all resulted in this very forceful retaliation and the strikes across ukraine. it relates also said he has been under pressure from the hardliners. he has aligned himself with them. he is out of options. we should expect to see a lot more of this on the ground. very uncoordinated, but the artillery is still there.

>> vladimir putin feels like he is running out of options, with these symbolic attacks of victories coming to the ukrainian side -- how much does the site and the risk of a nuclear option? >> i think we still have a -- if you think about the nuclear option, what does that really solve for putin? it does not solve his strategic problem or his political problem. he still has a number of extremely brutal and unpleasant options before he gets to tactical nuclear strikes. also remember that if he does do that, he will not only eliminate some of his own people, but others. he will also alienate the globe. there are many unpleasant options associated with that. >> all of these developments come at a time when we are also headed towards the 20th party congress in china. and of course, clara, this is a time when president xi jinping is expected to get his third term. what are the lessons that president xi could be taking from what is happening in russia

with vladimir putin? >> that's a very interesting question. from the war perspective, a military perspective, definitely they are looking at this, wondering what that will mean for the pla. china has not fought a war in several decades. as the ability of the russian economy to resist. -- also the ability of the russian economy to resist. the sort of instability that putin is creating, very unhelpful. around him of course, perhaps some of the chinese leaders will be looking to what longevity he has done for the putin regime, creating a very unreliable, a very difficult leader to control. >> opinion columnist clara marques. coming up next, a grim reality, after leak holiday spending that i with -- spending data, and

concerns about the global economy. that is next. this is bloomberg. ♪

>> a quick check of the latest business flash headlines -- the richest russian in silicon valley says he has renounced his russian citizenship. he says he completed the process in august. the bloomberg billionaire index estimates his wealth at about $3.5 billion. his venture capital firm was an early investor in companies such as alibaba, meta-platforms, and twitter. the u.k.'s financial watchdog is asking banks more questions

about their use of private messaging services, and the financial conduct authority inquiring about the frequency and content of exchanges through texting and apps such as whatsapp. regulators handed more than $2 billion in penalties in the u.s. to some of the world's largest banks for failing to monitor employees' communications on unauthorized messaging apps. shares tumbled as the ev maker said it would recall all the cars that has relive -- it has delivered after discovering a defect. while the issue was only found in seven vehicles, it is recalling about 13,000. rivian recently overcame production problems and parts shortages. the chairman of evergrande is set to be putting london's most expensive home up for sale. the family are the alternate owners of the luxury property over looking hyde park.

it was purchased in april of 2020 for $232 million. he has seen his net worth slide after a collapse in china's real estate market. pushing evergrande and other developers into a default. >> chinese stocks stumped the lowest since april of 2020, let's take a look at the tuesday session with her agent stocks managing editor. with a sea of red on monday, which is had this report from the people's daily, really reaffirming covid zero should say -- what is the mood out there? >> yeah, heidi, we basically saw two seconds of green before we saw a sea of red yesterday. the mood is bleak. investors were greeted with a slew of public holiday spending data. and it really has dampened the mood. we were talking about yesterday

the tourism revenue, down about a quarter. holiday home property purchases, also down about 38%. that is all adding to another big thing, which is geopolitical tensions with the u.s., with a biden administration having fresh curbs contacts -- fresh curbs on tech exports into china. all that is basically hurting the nation's reopening session really badly yesterday. >> on that week holiday spending you mentioned, no wonder we have macau casino operators getting pummeled here in new york. >> yeah, it is probably the worst we have seen in many months. again, it is weak spending. the spending for the first nine days of the holiday was down by about a quarter, compared with last year. and compare into -- compared to pre-pandemic levels,

they were done about 50%. analysts had bearish views, slashing the october sales in macau. that is why you see such a but session for the casinos. the sector has been battered for a couple of years now. and the shares are down about 60% from their peak in february of 2021. >> bloomberg's asia stocks managing editor, lianting tu, with a preview of the opening and china. take a look at some of the stocks we will be watching. we mentioned chip stocks. they continue to see downside in japanese and korean chip stocks after president biden revealed new restrictions on the china semiconductor technology. there are concerns over earnings for the auto sector. we will keep an eye on singapore

and developers. we will review policies to help first-time homebuyers. heidi. >> taking a look across the rest of asia, it is a pretty murky tuesday session, i have to say. we are seeing chipmakers really dragging down broader industries, when it comes to the u.k. heavy stocks. the nikkei, a big laggard. utilities, up over 2%. real estate up by 1% as well. when it comes to samsung, really weighing there. we are seeing some big gains in materials. new zealand, also seeing an uptick as well, as was a potentially a bit more of a recovery for both the kiawi and the aussie dollar -- the kiwi

and the aussie dollar. >> this of course after we had already seen the fourth session of losses for the s&p 500. it was really choppy trading. we saw a pair back some of the losses after comments from the fed vice chair, with caution when it comes to previous rate hikes, really still working through the economy. markets are perhaps a little bit more optimistic when it comes to the future path, given those recession concerns. >> that is it for daybreak: asia. our market coverage continues. we look forward to the start of trading in hong kong. "bloomberg markets: the china open" is next.

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>> it is 9:00 a.m. in beijing and hong kong. welcome to bloomberg markets china open.