haidi: you're watching daybreak asia.

annabelle: we are counting down to the market opens. haidi: australia has just come online. the top stories, the economy set to dominate tuesday's midterms with democrats bracing for losses. elon musk telling his 120 million followers to vote republican. japan and australian to open higher after a choppy session. now leaning towards a 50 basis point fed hike in december. and with cop27 under way we speak to the cfo of one of the world's largest climate funds about bankrolling the battle against climate change. shery: and we saw a breaking news out of south korea. the current account moving into a surplus of 1.611 billion dollars for the month of september. this of course is coming off the back of a deficit in the previous month of more than $3 billion. when it comes to the goods trade numbers, also rising to $494 million. we had also seen the trade

deficit widening and the month of august. this is not really surprising given that imports have exceeded exports in korea since april. we have rising energy prices weighing on the korean won. but for the month of september we are seeing current account moving into surplus up $1.611 billion. trade also rising to $494 million. belle, what are you seeing in the markets and how are we setting up right now? annabelle: we just got the open up asx 200 and so far the start we are modestly higher. if this holds it will be the third straight session of gains. of course we didn't have that tailwind in the u.s. and you will get the details in a moment. there is also a lot of optimism we have seen in the past few sessions about china possibly reopening. the mining indexes around a one month high. of course we will see whether that holds, given the pullback that we saw in china stocks listed in the u.s. in terms of the bond space, we have the three year antennae are year moving higher this morning. so, the yield that is moving

tracking what we saw in treasuries, but also we have a new note out from goldman sachs basically saying when you have this long protracted inflation overshoot, you combine that with a smaller pace of rate hikes from the rbi, it does mean we could see a higher terminal rate. they are thinking it will reach 4.1%. speaking of central banks and changing on, there is another central bank news this morning. congratulations to adrian orr, another five-year term as the rbnz governor today. that does mean we will see a more aggressive policy ahead. rbnz, a frontrunner in the tightening cycle, so continuity is the name of the game. otherwise we are seeing g10 fx fairly range bound. also what is happening in the offshore you want, given we have seen weakness coming through. we had the exports miss that was not expected and we also need to see some sort of certainty around covid zero. some saying expect. until then, more volatility.

shery: seeing a little bit of volatility in the u.s. markets as well as futures under pressure at the asian open. we had the s&p 500 rising for the second session. meta rallying on reports they may be cutting jobs. oil saw pressure in the new york session, given the risk off tone. but we are seeing a little bit of upside in the asian session. of course we are really setting up for the midterm elections on tuesday. the usual history of the s&p 500 is during midterms in november. we are seeing outperformance in the month as opposed to just a month without an election. but 10 year yield also condemning to rally about 4.2% and the treasury slump continuing for a fourth consecutive session. this, as we are headed towards the inflation numbers later in the week as well. haidi: it is a lot for investors to contend with and unsurprisingly we are seeing caution at the moment.

let's bring in garfield reynolds in sydney. midterms and cpi is going to be key. the question as to whether what we are seeing in equities is a series of bear market rallies. i thought it was interesting that goldman has a much larger excitation of a hard landing than anyone else. garfield: that was something of a surprise. and i think it does speak to, there is still a very strong underlying expectation that the fed is going to pivot, and is already pivoting, as it were, and it will not end up being quite as harsh as it's warning, and part of it is because it will not have to be. you look, for some time now, markets have been pricing for a serious slowdown in inflation next year. and from an economist point of view, that is partially the base effect. there was extraordinary shock

the beginning of the year where we had all the demand and supply shocks, plus the war in ukraine sending petrol and gas prices soaring. so, those gains aren't going to be repeated. so you start to see the momentum coming off the inflation numbers, you start to think, ok, we're going to get lower inflation, that is going to make the fed be easier than it's actually signaling it will be. it's scaring people because it does not want financial conditions to get too loose, too fast. but if you look and have that, to some extent, towards the better end of the best or worst case scenarios, if you get sustained slowdown inflation and the fed easing off, then there is a lot of optimism about the u.s. economy because the jobs market is still fairly tight. there's resilience that has been shown in the face of what has happened. the big question is, has the

amount of tightening that has already been put into the pipeline piled up enough lasting damage that when you come out the other side of it, it's going to actually be a more anemic economy than it might look like it is going to be right now? shery: what does that mean for the treasury space? we continue to see the slump right now. garfield: yeah. in the short term, treasuries are doomed to keep on slumping, partly because the equities are looking attractive, and even with yields at multiyear highs we have had so many instances of every time investors buy in, they get a rude awakening from the fed. this week we have also gotten an absolute flight of corporate issuance, which they get solved -- companies are rushing to borrow before the event risks of the midterms, and the cpi come along

to potentially send yields higher. they will want to do that. there is also that ticking time bomb of the year end funding crunch looming, the potential of lots of volatility there, there's a lot that these to be done before the year-end. they are rushing in, that is sending yields up. in particular, do you really want to be taking out big positions, or even moderate positions that are long treasuries? you have a holiday on friday as well. might be better to sit back and wait and let things cool down before you go in. haidi: as we count down to the u.s. midterm elections let's bring in courtney rosen for a preview. top election issues, clearly the cost of living is looming large. what are we seeing from most recent polling? courtney: about a week ago a poll came out of people who

already voted or were expecting to vote and they said, 70%, said the economy matters a lot when they are deciding how and who to vote for. the economy issues tend to favor republicans. voters tend to trust them more with the economy than democrats. that is kind of a signal what issues will be at play tomorrow when people vote and over the next couple days as results get announced. shery: what are we expecting at this point, especially you given how the economy looms large, but we still have other issues like reproductive rights, religious freedom, and other potential topics that could make a difference? courtney: there are definitely a few races where the candidates are running on the issue of reproductive health. in michigan, governor gretchen whitmer is running against the challenger, and she has made her campaign centered on roe v. wade, the case that was overturned over the summer i the

supreme court on abortion. so she is making it a centerpiece of her campaign. vice president kamala harris has been doing dozens of events around the country on reproductive health, making the case to voters that this election is essential to the future of that issue in the u.s. so it depends on the race you are looking at but if you look at the picture overall of what voters are using to determine their vote the most it is definitely not reproductive health, it is looking at the economy and inflation. shery: courtney rozen here with us on what to expect from the midterm elections. let's now get to vonnie quinn with the first word headlines. vonnie: new zealand the central bank governor adrian orr has been reappointed for a second five-year term, giving him the opportunity to complete an aggressive tightening cycle. the finance minister says he reappointed him after a unanimous recommendation from the reserve bank board. orr's second term begins march 27.

the imf managing director says global inflation may be close to the high point of the current cycle but might yet prove stubborn. she told bloomberg he was inflation for october is likely to show another outcome close to 8% and officials will still struggle to bring price gains to a more palatable level. >> it is very possible that we are renouncing central banks, very united on fighting inflation's top priority and rightly so. if we do not succeed, the foundation for growth, which is price stability -- vonnie: south africa is spearheading a new plan at the cop27 clement schama -- the plan is a potential blueprint for other middle income nations to move away from coal. south africa would use 90% of funds to close coal fired plants. it's backed by the u.s., u.k., france, germany, and the eu. the eu is set to propose a new

mechanism to provide ukraine an $18 billion financial lifeline in a more particular manner. it follows criticism they have been slow to support, but the vote needs to be unanimous and hungary is withholding support. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, we will discuss the opportunities and pitfalls in climate financing with the cfo of the green climate fund. first, we talk market strategy with jim mccafferty. hear why he thinks traders may have to wait for a sustained stock recovery. this is bloomberg. ♪

>> it is very possible that central banks are very united on

fighting inflation. if we do not succeed, it would be anger and then the foundation for growth, which is price stability. shery: the imf managing director talking about the challenges central banks face. our next guest says given the delay and any side of a fed pivot, a sustained recovery in stocks could have to wait as well. joining us is jim mccafferty, joint head of apac equity research. always good to have you with us. you say you could still potentially see a mechanical bottom in asian stocks but that this is not sustainable. explain. jim: ok. so what we think is inflation is a real problem. we believe there will be another three incremental rate hikes in the u.s. between now and next summer. we typically see that if we see a recession, stocks bottom during the recession period

rather than pricing them hells ahead of the recession, terminating. so we think the positivity could come towards the tail end of q1 next year moving into q2. so that is a scenario we are planning for 2023. shery: there are so many sectors that depend heavily in the u.s.. who will suffer the most across asia? jim:the two or even three geographies most tied to the u.s. are korea, taiwan, and number three to a lesser extent, japan. the one country that appears to have a domestic consumption immunity from the west aussie enough is china, and in the case of china there are two things which are opposite from the u.s. number one is there is no real evidence of inflation. and number two, given xi's new

senior management team, we now hav perhapse a new guard coming into the pboc. i guess in terms of those tied to the u.s. is japan, korea, and taiwan, the country which is not appear to be slightly different is china. haidi: when it comes to china he talked about looking at risk reward opportunities in asia. that seems to be the ultimate session. susan which may be back. jewish here in hong kong are changing quick. the dynamic down from the narrative we have in the last couple of years. i was in japan for a while, in t

back to hong kong. last week i met >> the deputy ceo was here for a big event with other owners who are preventing investors from being involved in china for ideological reasons, for example, physical and ideological proximity to russia. but at the same time, china is big. 60% of the worlds economy. haidi: try to get ahead of the pack given that compared to historical levels, the selloff was brutal for chinese equities, or is it still too early? it is a matter of getting the timing right, which is difficult for china at the moment? guest: that is vital to the whole thing.

in an ideal world, if you are a global investors, many global investors are prevented from participating in the chinese equity market, evidenced by the data around ownership. forward investors own 30% in japan. in china it is sad 10%. msci china, even less. the average approach towards addressing internet china is probably the right one. if you have $1 billion to invest $100 million a month in the next 10 months might be the way to do it. shery: here in the u.s. we are very much focused on the midterm elections on tuesday. how much do you really watch the political dynamics within the united states, if republicans take over one chamber of congress, for example, and how they behave towards china, or the implementation of president biden's policies, is this substantial for markets across asia? is it consequential? guest: i think the smarter

investors are trying to get a wider source of information. we have seen a lot of commentary that portrays china as this aggressive, totalitarian beast that has a policy agenda of its on. in the 1980's, the china bashing which we saw with the u.s. and japan. this is happening again on a different scale. i do think that the agnostic of who wins the election, the narrative is here to stay. smarter investors try to see beyond that. also a lot of continental european countries are trying to forge stronger alliances economically with china right now. china is here to stay and the u.s. has to deal with it. haidi: thank you for being with us. head of asia equity research at nomura. terminal subscribers can get the day's news at dayb . we are also making that available on the mobile as well, on the bloomberg anywhere app.

you can customize the settings so you just get the news on the industries and assets you care about. this is bloomberg. ♪

trend changing anytime soon. and i know that one of your goals has been really to pursue business travel higher grade travel. i can call that if there is a slowdown in economy, what do you anticipate that might do to that segment of your business? i don't think it's going to be a garden variety recession if and indeed we see one next year, because as you you know, david, business travel is usually the first thing that's cut because it's discretionary. you can you can cut it immediately. these are cutting jobs or cutting other types of cost. but our business has been in a recession for the last couple of years. businesses have not been spending on travel and business. travel is a very important ingredient to growing businesses and growing their their top line, improving the quality of the relationships of their people as well as their customers and business ceos,

certainly. and many business leaders haven't been able to get out with their people. so unlike past recessions, i think this is one that will people will say, well, we've already saved an awful lot on travel. we actually need travel to get our top line moving again, to try to buffet the storms of the recession as compared to saving costs, which candidly are not not significant in the environment they've been through the last couple of years. no doubt as the at best in the. plenty more to come here and daybreak. asia. this is bloomberg.

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go to dav.org. ♪ >> breaking news out of japan, we are the spending numbers you're on your for the month of september, growth of 2.3 percent which is below what economists

expected. it is deceleration from the previous month when household spending rose more than 5% you have to count for the year on your comparison, we had a higher year base given the relaxation of covid related border restrictions. there's a revival in tourism helping with household spending in japan. labor cash earnings, growth of 2.1% among much more than analysts expected around one point 7%. it is accelerating from the previous month you have to consider cash earnings when you account for inflationary pressures. you are seeing a contraction of 1.3% for september. haidi: we are seeing a contraction what it comes to the west bank consumer confidence. the australia november confidence, we are seeing a fall of -- a contraction of almost 7%. current contraction --

conditions falling almost 4%, expectations falling steeply. 8.6%. household finances, we are seeing versus a your head, expectations have fallen over 11%. we are starting to see the dance up when it comes to consumer and household sentiment. this is also due to the fact that we see property prices falling, household wealth is tied up with the property market, you are seeing signs of a broader economic slowdown from that as well as a loan growth as well as some of the consumer spending numbers. shery: we are looking toward the japanese market open. there may be a pop when it comes to stock rises in japan, futures are higher while the japanese yen is holding at the 146.70 nine cents level. really a lot to do with what is happening on the other side of the trade, the bloomberg dollar

index is higher, but after seeing two sessions of a pressure already, we are seeing the offshore you want at the 723 level. narrow for the japanese yen, the aussui. let's bring in ruth carson. you're talking about pressure on the dollar earlier, two sessions of losses already. debate is heating up whether the dollar is near its peak. >> yes. absolutely. there's a shift in narrative when it comes to trading the dollar, a month ago, it would be hard to find any dollar bears out there. today you've got money managers from morgan stanley to citigroup saying, it might be time to put money to work in other assets other than the dollar. there is debate about color peak -- dollar peak. no one is saying we are definitely there when it comes to the dollar's peak strength.

but there is a shift in view that with the fed's interest rate hike being so aggressive the bulk of that is done. with that, the bulk of the dollar strength could be done. to put it into perspective, energy investments which is a for $40 billion fund, they were putting that money to work and back to work by taking money out of long dollar positions and putting it into and buying being down emerging market parent -- currencies, there is nuance to the dollar trait to watch. haidi: citigroup and morgan stanley are more positive when it comes to developing assets. what has changed to credit this shift in sentiment? >> it comes back down to the flipside, the shifting narrative on the dollar. morgan stanley for example is betting on peak u.s. inflation. citigroup is saying, we are going from overweight through to neutral on the dollar to buy

cheaper emerging market currencies. don't forget that governments and central banks in emerging markets have spent billions of dollars every single day to defend their currencies against the onslaught it dollar -- onslaught dollar. with chile and rupee, plunging to record lows, investors have to ask themselves, is it time to get a new buy? we are seeing that and let markets, people saying it is time to buy. shery: how do you bet on the yuan, when we don't know what is happening with covid zero strategies? >> absolutely. that is the million-dollar question. trading, volatility, is the name of the game when it comes to the yuan, if you are happy to hold onto a currency that could fall 2% and swing up 2% within minutes of the trading session, feel free to bet on the yuan. it shows how investors are really hoping for china's reopening and pinning so much

hope on the world second-biggest economy and the engine for global growth that people are willing to bet on any rumors out there. we saw the action last week when china -- asian came out to say we are sticking to our covid zero strategy. if your currency trader, brace for volatility ahead. haidi: bloomberg's ruth carson in singapore. muskets vonnie quinn. vonnie: they are stepping up pressure on the fed after recent fx losses, she has written to powell after two more incidents she calls agree just an embarrassing. atlanta fed president revealed he has revised his financial disclosures and jim bullard attended a citigroup event with no media present. brazil's president-elect lula will unveil a multibillion-dollar spending plan to pay for social aid, the first test before taking power

as he needsb constitutional cap. lula promised to boost economy for poor families and exempt people from income tax and increase the minimum wage. new york prosecutors say they seized almost $3.4 billion in bitcoin for a property developer who scammed the dark web could place, silk road. investigators found more than 50,000 coin, he was arrested last week and pleaded guilty to wire fraud. it's the second largest crypto seizure for the u.s. justice department. elon musk is telling his twitter followers to vote republican. the twitter owner says he recommends a republican congress to balance democratic presidency . most ceos stay away from political endorsements. he tweeted his party --global news 24 hours a day on air and on bloomberg quicktake, powered

by 2700 journalists and analysts in more than 120 countries around the world. i am vonnie quinn, this is bloomberg. shery: let's delve into the midterm elections and the implications for the markets. we heard from morgan stanley's mike wilson already, more bullish on equities when it comes to trading. and about: that's right -- anabel: that's right. here some context for those in asia, it's for republicans to win at least u.s. house and maybe also the senate. that would mean gridlock but it is not such a bad thing for investors because it can mean continuity of that status quo and it can reduce uncertainty. some of the key sectors where focusing on, dig tech is one of them, alphabet, meta, they are targets for potential regulation . we understand that the biden administration preparing a

poster midterm push for antitrust regulation. the gop has already said it will not support if it takes control of either house of congress. the tax break for rnd, put in place by the trump administration, expired last year. if we see republicans taking control of either the u.s., house or senate that could mean that is back in focus and it could be a positive for investors in the sector. another area we are watching is what is happening in the energy space. so, we understand that if republicans win at the house or senate, it means they will not -- there will not be. any changes to policy the biden had been threatening to have a windfall profit tax on some of the energy or oil producers. we are looking at the net income at records for the likes of exxon and chevron. but that's unlikely to really go

beyond to any sort of threatening areas there. where focusing in on of the u.s. listed chinese stocks that have been focused, given the chance of reopening. in terms of this, if we see again, the republicans taking the house and senate, it could mean we could see more tensions around this, not just about mainland companies opening up there books for audit inspections, it could mean a big conversation on whether the likes of alibaba or pinduoduo, should be listed on american exchanges at all. haidi: coming up next, we have the latest on climate change negotiations underway in egypt as cop 27 gets into full swing. this is bloomberg. ♪

>> a flu want to achieve the objectives of the paris agreement, four times as much as what is being invested as we speak now. there is a gap we will need to be intelligent in terms of deploying public investment and leveraging significant amounts

of the private sector. shery: speaking at the cop 27 summit. as the meetings going to full swing, lemon negotiators are making a framework for the damage caused by climate change. loss and damage are now on the official cop 27 agenda. why is this important and why is it so controversial? >> this has been a request from small island in developing nations and to those who are already suffering from impacts of climate change due to rising seas. we are seeing non-island countries like pakistan it's over -- suffer through recent floods. the challenge with a controversy , if you look at camilla to

emissions -- cumulative admissions -- emissions, it's complicated. there are countries clearly responsible, like the u.s., which accounts for 21% of emissions since the industrial revolution, even to today, it's number two in terms of its annual emissions. it's accounting for only 12%. when it comes to some of the higher emitting countries, take china, china's number one today. but it's historical cumulative emissions is almost one quarter of emissions, it's about 14%. how do we do the math? it's a bit of a challenge and an issue of domestic political acceptance. in the u.s., it's unlikely the republicans will go to any measures for the u.s. paying for past emissions. haidi: we hearhaidi: up in green

projects in developing nations, do these initiatives help when it comes to the broader discussions around reparations? >> anymore climate funding helps. as we have seen with energy partnerships with south africa, this will help, but it doesn't address loss and damage, all of the discussions are around more funding for mitigation. in terms of our -- our primarily western countries that are responsible for past emissions, are they willing to directly provide funding for loss and damage? we are hearing more positive signs from the u.k. we heard announcements for adaptation. there is no agreements to directly fund loss and damage. haidi: bloomberg anef head, of a

bloomberg research, ali izadi-najafabadi. let's bring in the chief financial officer at the green climate fund. according to bloomberg, new energy fund assessments, we are expecting the cost of the global energy transition to top $114 trillion, more by 2050. do you think the reality has sunk in? has the message been sent by the -- that the amount is filed stripping the amount of what is being provided? >> i think that is a bit of apple pie and motherhood. people do understand that there is a lot more needed on the ground than there is available currently. the question is whether countries can work together, whether governments can work together to come together and solve this issue. i think that this is where

private sector financing and creating projects that are investable will be important. haidi: are you seeing anything that could potentially match the magnitude of what is actually required in terms of resources for investors and donors you talk to right now? >> thanks for that. it's a good question. what we are seeing at cop, there is huge demand. there continues to be discussions in terms of providing more resources, particularly with green climate fund, one of the things we are trying to do is create catalytic investments through a lot of these investment platforms that we are developing. what we mean by investment platforms is looking at not just the projects of trying to invest

into a particular project or program, but really the entire ecosystem. if you are looking at fisheries in the blue economy, you also need to think about how do you create an off taking market through blue bonds? those are things we are trying to do to bring in much more catalytic programming and more catalytic financing. shery: reports of breakthrough when it comes to the loss in damage discussions about the cop 27, what is your key take away? >> so, i think as the previous speaker mentioned, it's incredibly controversial. we continue to focus, it's where we have 50-50 mitigation versus adaptation programming. it's important to continue

focusing on both sides of it, where mitigation does allow us to reduce carbon emission whereas from adaptation programming, that really allows countries to continue to be resilient, as that climate impact really hits home. shery: what is your fund doing to try to work with the resources you have in order to be more efficient in this disbursement of finance needs? >> thanks for that. especially for your viewers, bringing in private sectors is so critical. when i think about the private sector, there is over 200 trillion dollars in investments, so little of it goes into climate investments. when we think about what we are trying to do, our fund, we are about two to 3% of the mandate

from the u.n. triple c -- u.n.c. c. and we are sitting at $11 billion. with cofinancing, it's been about over $40 billion, nearly $43 billion of cofinancing. about a third of our portfolio is invested in private sector. what we tried to do is, our investments are based on long-term patient capital. we are capital agnostic. we are able to really fill a space in the market that no one else can. we are able to deploy first loss capital and that does provide signaling to the market that there is something bankable out there. we are also looking at secondary markets, supporting the bond markets, bond issuances, the

ecosystems around their. when you look at that lifecycle, it's not just about on the back of looking at investments but trying to develop bankable projects at the front end, working with countries to look at their climate plans and turn that into climate action. there is quite a bit that you have to really think through as part of that whole project lifecycle. shery: hong paterson, good to have you with us, chief operating officer of the green climate fund. be sure to tune into bloomberg radio to hear more about the big news rate -- big newsmakers, broadcasting live from our studio in hong kong. listen to the app or bloomberg.com. ♪

at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. shery: here's a quick check of the business flash headlines, a consortium led by japan industrial partners has submitted a $15 billion offer for toshiba. the nikkei newspaper will get around -- so they will get around $7 billion from other japanese companies interested in the buyout. saudi arabia's public investment fund is said to be among suitors weighing a final bid for network

towers, being sold by -- the tower assets would span the gulf region could be valued at $5 billion. the towers are also said to be considering offers. bloomberg has learned u.s. owners of liverpool football club are weighing a sale. fenway sports group is working with goldman sachs and morgan stanley to determine buyer interest. the club could fetch more than $5 billion. fenway took control of liverpool in 2010 for $344 million. haidi: nintendo is expected to post an earnings rebound for the latest quarter, helped by the success of the games and benefits from the week yen. talk us through what we see in terms of market expectations and

the currency effect is going to be a big one. >> right that's exactly right. the market expects nintendo to raise its forecast, for the full year profit, it is based on an exchange rate of ¥150. that exchange rate is now close to 150. it is likely nintendo will rise up. unlike sony, the other big japanese consul maker, nintendo has a very distinct advantage to the yen. most of it comes in domestic currency and most of its sales go out to japan, 80% come from overseas. it's going to get a boost unlike sony which has more of a diversified cost and sales. shery: with the latest on nintendo. we are turning to some live

coming from the be oj. we have the summary of opinions from their october policy meeting. one member saying they need to continue with monetary easing. we have seen an ultra dovish stance coming from them for a while. another member saying they need stability in the bond market, that is important. they need to monitor the bond market and watch the side effects of policy the fx currency policy should be decided by fundamentals, as we are getting lines from the ministry of financing that japan only intervened on september 22 in that month. this is bloomberg. ♪

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shery: this is daybreak asia where counting down to asia's

major market opens, as the be oj is releasing a summary of opinions -- boj i releasing a summary of opinions. ultra-loose monetary policy continuing. another member saying they are seeing a virtuous economic cycle. annabelle: we can only hope for that. haidi: we are where you're watching the u.s. midterms, do we see more of the political division and what are the implications of what markets? they're watching out for inflation, keeping some investors by the sidelines. a lot of questions if this is bear market bounces we are seeing. annabelle:. that's right we've got the open of japan, track cash cash treasuries coming online, we are the t year -- two year yield rising, rising ahead of the u.s. inflation print. otherwise, we are keeping an eye on what is happening on the yen. basically traders out there are

saying they're getting closer to a discounted fed pivot because we had seen the diversions between the u.s. and japan. we are unlikely to see any further yen weakness. sharp u.s. dollar yen decline may be the last big fx trend of 2020 two, according to strategists at soft agenda. the nikkei is coming online, big bounce on the open. let's take a look at what is happening in the korea. we had the current account data coming through. a surplus for september, swinging from the previous months deficit. it was much smaller than a year earlier, not only import costs elevated, there's also a lot of outbound travel growing as the covid restrictions these. we saw foreign travel spending up 25% in the month of the year. in terms of what we are seeing, equities seeing further strength coming into the korean won this morning. some strategists are saying we could see a rally further,

giving expectations for a fed pivot. some calling for it to strengthen 21380 against the dollar by the years and. let's take a look at what is happening in australia. we are still. in the green this is a third straight session of gains. that is moving higher for yields as well, given we had goldman sachs saying we had the inflation overhang plus the rba is sticking to a smaller rate of hikes. goldman saying it will reach 4.1%, continuing to watch what is happening with brent crude, it's weaker. that is down to the expectations of china's reopening. we really have not seen any sort of major pivot away from covid zero from officials. haidi: a lot of rumor and hope and prayers. any stock rallies we see, given

that you are usually in hong kong we will get to that in a moment. is it the still underlying expectation that we will see the fed pivot, that's why we are seeing the clinging to optimism? >> scratching my head at trying to work out where this fed pivot is coming from. i think it was proven right last week with jay powell's apparent pivot, then coming back and saying, maybe we will not go and do that. some say he is clever but to my mind he looks as if he is uncertain and doesn't know what to do. what we know as inflation is going up. it may be coming down periodically. what it is going up. we know the fed are unable to control it in a volker fashion we have seen in the past. we are in a situation where the market is uncertain and it is

hoping for the best but preparing for the worst. haidi: speaking of, the other pivot away from covid zero. unsubstantiated rumors, so much price action to the upside. is it too early? do you see hong kong as a softer way into getting into that? >> i think there's hope on the covid pivot in china. but at the moment, not a lot of evidence. the greater evidence seems to be that they will be holding out until the chinese new year. senior chinese policymakers every day are saying we are going 40 covid. -- going for zero covid. why should the market think anything different? the only thing certain is when these policymakers say something. why is that the people are trying to bet against it, no, we are likely to see zero covid remain for a reasonable amount

of time and we will see signals from policymakers if it will change. shery: you usually based in hong kong. you have been traveling for the last 5.5 months. when you're on the ground at talking to investors and seeing how the economies operate, what is your key take away? >> well, the key take away is it's business as usual around the rest of the world. i came through last week and it has about as many flights as hong kong has. but it's been very restrictive. both hong kong and china, having the zero covid policy most people i know have had covid. i've had covid. yes, these things come through and yes occasionally they are serious, but sooner or later china has open up. in a sense, that is the point, china will open up. there will be revenge covid

spending coming down the line. at the moment we don't know when. as i said, we will get plenty of warning when that actually happens. the policy has been so strick, the policy makers will give signals when they are likely to ease. shery: many parts of the world are going through, not only the supply chain disruptions, causing inflation but the energy crisis, deepening in europe, here in the northeast of the u.s., heat oil and gas taking a hit with supply shortages. can you play that? >> i think it is quite difficult to play, partly because these things are changing all the time. we've seen prices come off and some commodity prices have come off. we are in the situation where prices are reacting to prices previously. we've had a bid -- big rally in petroleum products, going back

to august and they have come off. we are seeing these over shoots and under shoots in prices. it's difficult to relate take a long-term view on such short term pricing. the long-term view appears to be , inflation is here to stay, it's a problem and difficult for central blanks -- banks to control it and it will affect the real economy down the line. that may mean is where we have full employment now and indeed, real employment shortages in many cases. we could snap quickly and have serious unemployment issues. that will be dangerous for the market. another year, maybe first or second quarter next year. but that is the long-term view. haidi: how are you feeling about that universe? at this point we have reached a point where we are seeing lt directional pressures on -- across all tech. >> tech has had a good run over

the last few years. there's a recoil to that. the tech sector is the thing that will lead us to the next recession. it will be variable, if you're an active manager you will do better if you are a passive manager but it's difficult to see if the googles, amazons, microsofts, will be knocked off their perch. we will see tighter regulation, some coming back of the high valuations, but looking forward into the future, that is where the money will be invested. i think i will be tempted to accumulate technical -- tech stocks as we go forward. but i think you need to be careful about where and when. we are in a position where we are catching falling knife at the moment. haidi: great to have you with us in sydney. richard harris. let's get you back to bill -- belle.

annabelle: taking a look at toshiba, dropping at the open, the nikkei is up at .7%. what is behind that. we have local media reporting that jip is being led by japanese industrial partners has had a bid to buy out toshiba for $15 billion. that would be below the current market -- market, it slightly above that at $15.1 billion. in terms of where the money is coming from, beginning around one trillion yen from japanese companies, more than 10 of those have expressed interest. let's change and take a look at the asian natural gas shares. they are moving mostly higher. i am feeling sorry for you because i had a look at the weather forecast for new york. i had no idea was going to be so freezing from this weekend onward. because of that we are taking a

look at some of the companies that could be benefiting. fortunately for your cold misery. shery: we had the warmest weekend ever in a very long time. i was thinking, is this just the last bit of the warmth? anyhow we are bracing for a heating and oil crisis. let's get to vonnie quinn. vonnie: new zealand's central bank governor has been reappointed for a second five-year term giving him the opportunity to have an aggressive tightening cycle. the finance minister says he was repointed after the -- a recommendation from the fed bank board. imf managing director says global inflation may be close to a high point of the current cycle but might yet to prove to be stubborn. u.s. inflation for october is showing another outcome closer to 8%, officials will struggle to bring consumer price gains to a palatable level. >> it is very possible we now

see central banks very united on fighting inflation as a top priority. if we don't succeed, it will be anger and the foundation for growth, which is price stability vonnie: south africa's spearheading a new plan after the summit to shift from coal to green energy. the billion dollar energy adjustment plan is a blueprint for other middle income countries to get rid of coal. they will use 90% of the funds to develop new renewal -- were noble energy, the plan is backed by the u.k. -- renewable energy, the plan is backed by the u.k. and the u.s. in what is called a productive obata. it follows criticism that the block is long supply was promised earlier this year. the vote has to be unanimous. hungry is up seating --

abstaining its vote. global news 24 hours a day on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries around the world. i'm vonnie quinn. this is bloomberg. shery: still to come, we discussed the outlook on the chinese economy with jing liu. up next we will get the latest from washington as we count down to the midterm elections. this is bloomberg. ♪

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shery: we are counting down to the u.s. midterm elections, let's bring in our white house reporter. there have been many election issues. one is the change in the political dynamics in the u.s. and what that could mean for the u.s. relationship with asian economists and especially at a lot of china criticism out there. >> i haven't heard a lot of china criticism on the campaign trail. the main focus has been on inflation. there was a poll taken last week of people who had voted already who are likely to vote, 70% said inflation -- the economy is influencing their vote. that is above all the other issues on the list. reproductive health, inflation itself, foreign policy, the economy is the top issue here.

haidi: we are seeing some interesting maneuvering when it comes to elon musk ahead of the vote, telling his followers to vote republican. is this a worrying development, given we have seen big ceos and those with influence stay quiet at times like this? >> president biden steam did let on that they saw it as a big issue. a couple of hours ago the present secretary got the question from a reporter about her -- press secretary got the question from a reporter about elon musk encouraging his followers to vote republican. she said eligible americans have the right to vote for who they wish. so, outwardly the white house doesn't appear to be worried. haidi: courtney rosen there. let's take a look at what we are

following in fx trading. we are seeing the dollar declines over the last couple of days, risk on trade ahead of the inflation data. we are seeing the bloomberg dollar index looking flat. we are seeing dollar china trading a bit higher and dollar yen it's a stable level of weakness we see at the 146 handle. ozzie dollar unchanged -- aussie dollar unchanged. we got the consumer confidence reading showing a deterioration of consumer sentiments in the country. let's get some more from our senior reporter, with carson. the debate heating up, ongoing, this is what we talk about every time we speak to you about this. is the dollar near its peak? >> yeah, that's -- there is a

sense that the dollar narrative is indeed shifting. a month ago if you had spoken to me i would have said it would be hard find any dollar bears out there. today it is different. morgan stanley and citigroup saying it is time to go from overweight to neutral on the greenback. a big fund manager with $44 billion of assets is putting money to work i taking money out of long bears and putting them into emerging-market currencies. there's a sense that the bulk of the dollar strength is behind it. the bulk of the federal reserve interest rate hikes are behind it as well. watch the space, there's a shift to the strong dollar. shery: is that why we are seeing the shift in citigroup, morgan stanley, turning positive on developing assets? >> absolutely. we have to remember, the currencies are two-way trade. with a strong dollar in

emerging-market currencies, we are seeing the chilean peso to the indian rupee file -- fall. this has to break. investors think it's time to buy these beaten up assets. central banks and governments across the developing world have been spending billions of dollars, every single day, to defend their beaten-down currencies. perhaps the efforts are bearing fruit now. and investors are going, this is the time to buy. haidi: we are seeing the yuan weakness again. what's the positioning investors should be looking at given that there is so much uncertainty? >> absolutely. volatility is the name of the game when it comes to the yuan, especially offshore yuan. it is such a gauge of

investor sentiment. if you are happy to hold onto a currency that will swing 1% to 2% within minutes of each other, hold onto your yuan bets. investors are definitely trading on rumor. they're happy to do so, as we have seen last week on china's reopening. plans. they were rumors. on saturday we saw a reversal. on monday we saw everything reverts to yuan weakness. watch the space when it comes to yuan volatility and bet on that if you're willing to. shery: bloomberg's ruth carson with the latest on all of those important fx moves. you can get around of what we have been discussing. go to today's addition of daybreak, day b . 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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haidi: brad smith says the company may have to trim cost areas in the face of economic headwinds, but it is not as exposed to at revenues other tech giants. adapting to climate change will require a global effort to efficiently use ai for predictable modeling, he says. >> i think it's important, i think about the problem we and others are trying to help solve. so much of the work that is needed, especially to adapt to climate change really involves better use of more data, better predictive modeling. you look at predicting wildfires whether you are in the u.s. or india or africa, if you look at things like responding to floods, you need to be able to predict these things and give

people early warning systems. if you look at africa today, for every 14 data scientists that there are in developed countries there's only one in africa. we have opened up. we are announcing today, 2 million datalabs one in egypt, and kenya. we are partnering with planet labs in san francisco which is doing extraordinary work with new satellites to bring satellite-based imagery and data, including for africa. we put our ai capabilities, our data scientists, planets imagery together. now, we can be a bit of an equalizer. we can help climate scientists on a continent like africa. >> in the meantime the economy continues to go south. we are seeing layoffs in the tech industry, we are exciting thousands of people to get laid off in meta. microsoft has dumb -- done say -- microsoft has done some

layoffs, are you planning to do more layoffs and how are you thinking of spending? >> i think the most important thing for a company like microsoft is to recognize the role that we play. we are not in the advertising business to the degree that some of the other companies are. you're focus on providing the digital infrastructure that companies, businesses, nonprofits governments need. in a world with increasing economic headwinds, there are many, the kind of technology we create is one of the better tailwinds which people can rely and we are seeing that. to answer your question, we will continue to manage through this recession, the same way we have managed to with every recession since 1975. we identify technologies that will be important to the quarter in the year and the decade ahead.

we will make sure that we invest and we may invest more in the technologies of the future, things like artificial intelligence. we may have to trim some other cost areas because it is a recession, but i think what you will do is see us trim if we need to and use that to free up resources to invest in what we regard as a long-term creation of value, not only for ourselves but for our customers. shery: microsoft president, brad smith. here's a check of the latest business flash headlines, a consortium led by japan industrial partners has submitted a $15 billion offer for toshiba. the newspaper says they will get around $7 billion from other japanese companies interested in art is a painting in the buyout. the bid is below toshiba's market value as of markets -- monday's close. the u.s. owners of liverpool football club are weighing a

sale. fenway sports group is working with goldman sachs and morgan stanley to determine buyer interest. the club could fetch more than $5 billion, fenway took control of liverpool in 2010 from $344 million. haidi: let's take a look at eu futures. this is trading across the stocks. see of modern -- a sea of modest green looking to extend the rally in european stocks. traders are weighing the optimism when it comes to china's stance on covid zero. we saw european equities getting to the highest levels we have seen in two months in the previous session. we saw quite a lot of gains when it comes to travel and leisure stocks as well as tech and automakers, are performing. we saw the clans when it comes to consumer names -- declines

when it comes to consumer names. we see an extension of three weeks of gains, the longest this year. is this an early santa claus bounce? is it a bear market bounce? it looks like european equities will continue to open in the green. more ahead on daybreak asia. this is bloomberg. ♪

haidi: we are getting more data across bloomberg. consumer confidence numbers came

in sopping unexpected. -- softer than expected. business conditions are falling according to the latest numbers. we saw the business confidence number deteriorating and business conditions falling in october. narrowing some concerns, households are pulling back on expected spending for large items, conditions for household web. we have seen inflationary pressures. some major concerns for businesses as well for household in australia. >> elon musk is telling twitter

followers to vote republicans. the owner says he recommends a republican congress to balance the presidency. most ceos stay away from endorsements. elizabeth warren is stepping up pressure on the fed, has written to jay powell. the inventive fed president revealed he has revised his financial disclosures in the st. louis chief attended an event with no media present. new york prosecutors say they have seized been born a property developer. investigators discovered 50,000 bitcoin and the home of a georgia resident. it was arrested last week. as the second largest seizure ever for the justice department.

the brazil president-elect will unveil a spending plan to pay for social aid. as the first test of his support . during his campaign, he promised to boost cash transfers for poor families, exempt people from the end contacts and increase the minimum wage. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: seeing some upside in equities trading early in the session, what are you watching? annabelle: pretty good talent coming through from the u.s., we are awaiting midterm election results, of these polls are indicating republicans could take at least the house of not the senate as well. that lends is the idea we could see for policy continuity given a will maintain the status quo

and reduce uncertainty. we have the nikkei leading, we are awaiting key inflation prints that will lead us to more questions or give us more certainty around how aggressive the fed is to be. with some more appetite for risk assets, pullback in the dollar has been reflected given we have the korean won and some strategists say it could continue to rise given the expectation for a fed policy pivot is nearing. will we see the rally extending? we have an answer to the downside. the question is really whether china will in fact pivot away from covid zero anytime soon. that is playing into risk, take

a look on a shorter-term basis, take a look the terminal chart is more volatility in the weeks ahead. haidi: the schizo more from charlotte yang. -- let's get more from charlotte yang. the dual pivot, the fed and chinese authorities. is this going to continue driving a rally? reporter: traders want the rally to continue, considering the market has been trading at extremely depressed valuations. the hong kong government is considering to shorten covid tasks for torus -- torus, and that could be positive.

there are signals the city could be back in business with that we had over the weekend, as long as hong kong is considered as well. shery: we have seen the best month four saying since 2008, we have more room for upside? reporter: china property sector is about positive signals from the long list of concerns, we have heard authorities say china would stick to covid zero about

incremental improvements where we see with international increasing and authorities telling local governments you cannot get excessive, all of that is about that together. shery: hsbc is seeing economic growth topping 5% in 2023. joining us is the greater chief economist for global research. great to have you with us. wonder what their growth means when you have authorities in beijing, doubling down, leaning in to the covid zero policy. guest: we think it will be a gradual process.

while covid zero is in place, what we have observed is a disruption to production and supply chains has been reduced substantially compared to april and may during the lockdowns. at the same time, we see gradual changes down the road. probably, we will continue to see the shorter inbound traveler quarantine requirement along with other changes. shery: you can see the cpi numbers, potentially the consensus, where expecting october numbers tomorrow. are we going to see deflationary pressures in china? guest: our forecast is in line

with consensus that points to negative ppi. that is based on last year. october, 2021. the inflation was 13.5%. it's important to look at the housing market, inflation has something to do with that. going into next year, we will see infrastructure lead to the recovery, stabilization of the housing market. in will stabilize. we have seen a different picture than that of the other major economies. haidi: i would likely to see the

chain from the pboc -- change from the pboc? guest: for the monetary policy, the overall stance of accommodative policy will continue, especially because now china is facing headwinds. in that regard, we think the pboc will ensure there is ample liquidity in the market. probably, able do it from the so-called structural monetary policies like the liquidity injection. rather than directly the policy rate. haidi: when it comes to the yuan, there is so much weakness. what other signals we have seen from policymakers in terms of the tolerance?

guest: policymakers have more tolerance for the exchange rate fluctuation. this year, we could depreciate over 10%. if you look at yesterday's release, that seem to be quite stable. it's important to know this time around, the depreciation comes from a strong dollar and yield differential. haidi: we are seeing the debt to gdp ratio rising to a record high. efforts to deleverage the

settlement of them will become a policy priority? other structural concerns? guest: the conference is normally held every five years. probably, change in leadership as well as financial regulatory, probably the meeting. last time around, the focus was deleveraging. that was in relation to high leverage, some of the answer rises and local government. at the same time, shadow banking was the focus. this time around, we will shift

to more balanced risks and stimulating growth. this you might be the first year china will meet growth targets. haidi: the chief economist for greater china. coming up next, emerging nations will be forced to compete with gas prices and country several times their size. detailed's on that next. this is bloomberg. ♪

haidi: could have ramifications that stretch into the next decade. for more, let's ring an hour energy reported. this is rewriting the rules of global energy security and procurement. reporter: absolutely. it's a case of the rich countries are able to afford this energy and there is not enough supply to go around. it is capitalism and motion and the poor countries cannot afford it. they are facing an immediate term, pakistan had outages,

bangladesh dealing dealing with the issue. depending more on oil and coal which is not cheap. the crux of the issue is in order to replace the russian pipeline gas, they must import more liquefied natural gas. that is the crux of the issue. shery: we get see this coming. i spoke to the prime minister, that was a key issue. they're looking to rush it get supplies. they were desperate. the responsibilities are to their people. what are we going to see in terms of changes to energy flows? absolutely.

with russia being less of a natural gas supplier via pipeline to europe, russia looking for new customers, you are seeing the situation were india is increasing imports from oil because it is cheaper. pakistan and discussion with russia to sign an lng deal. when it comes to securing energy, the geopolitical implications, the war in ukraine takes a backseat to making sure they have power for the citizens and heat for the household. because of that, you could see a reimagining of relationships with russia or other countries who were able to supply them with more affordable energy. you're already seeing relationships being forged. this is not a short-term problem.

they're expecting shortages. this is going to be an issue and it could only get worse. haidi: this hastens the need for a regional energy grid. what are the challenges in being able to maximize the growth? reporter: southeast asia with make sense to great a power grid where you're connecting nations with electrical lines. there is talk of sending electricity from australia where they have vast amounts of space for renewable energy and sending it to singapore, and connecting from india to japan. the big problem is, getting this built is not easy.

cables are expensive, costs a lot of money. in terms of the energy crunch and shortage nations are facing,. when the his not enough natural gas to power pakistan and they are dealing with rampant blackouts. shery: the head of the wto says the u.s. and trading partners should resolve disagreements without resorting to trade conflicts. he spoke to us at the climate change conference in egypt. >> without trade, you cannot get to net zero. without technologies, trade

helps to move. without trade, you cannot do it. without trade, this will help the adoptions. >> the eu and china have criticized the u.s.. two think this violates traits? >> i want to make clear that the wto encourages members to take steps to reduce carbon emissions. we do not rules that discriminate.

there are elements of subsidies. there talking to each other, and that is what we prefer. i think we will wait and see. >> you think country should get a free pass when it comes to climate change? >> it depends. there are subsidies that are helpful towards reduction of carbon emissions. it is fine. that is it. if you have subsidies that can help us in this fight we don't have any problems with that, we just need to make sure other members do not feel this is against them. we do not want a subsidy war. we do not want the lowest

denominator were countries cannot compete because they do not have the money. haidi: the wto director general. be sure to tune in to bloomberg radio to hear more from the newsmakers and get in-depth analysis from the daybreak team, broadcasting live from hong kong where you can listen to the out, or bloombergradio.com. moorehead, this is bloomberg. ♪

shery: here is a quick check of the latest business flash headlines. lyft shares fell. the company had just over 20 million active writers in the third quarter, missing estimates. lyft sees adjusted earnings of $80 million to $100 million in line with analysts. activision blizzard has beaten estimates, adjusted earnings per share were $.68. the company is stocked with new

releases including the latest call of duty. saudi arabia positives public investment fund is among suitors . sources say the tower assets could be valued at $3 billion to $5 billion. haidi: property shares are in focus, logan shares are set to resume trading today. shery: take a look at how markets are trading, brought upside for the exception of new zealand. the nikkei is seeing its best, highest level since

mid-september. we are seeing two sessions of gains for japanese stocks with communications and health care sectors leading the gains. the kospi is up one quarter of a percent. the asx 200 is up 4/10 of 1%. we have a lot of economic data to digest. september households bending, surplus to deficit. we talk with a chairman about joe witt's -- china's covid policy and the chip or with the u.s.. this is bloomberg. ♪

david: welcome to bloomberg markets china open. >>