>> welcome to dietrich asia.

we are counting down to the opens in tokyo and seoul. >> asian stocks extended the rally after the latest uscp i. elana mask says there is a possibility of twitter going bankrupt. more key executives had to the doors. ftx founder sam bankman-fried closes the trading half as authorities in the bahamas freeze the firm's assets. >> the paris central bank raises the reference rate to 7.25% from 7%.

some economists had expected peru central bank to start slowing down but that has not happened as annual inflation is around 3.8%. it also follows mexico's central bank hiking rates to a record 10% there. also struggling with inflationary concerns. we are seeing brazil starting to show signs that inflation is to celerity sharply. >> huge implications for emerging markets if we do see a continuing downtrend, if we do see this is the start of the fed having moved to maneuver to something that looks like a pivot to slow down.

we are watching the aussie dollar. the aussie holding just over 66. >> all to do with the cpi here in the u.s.. we are on the deceleration,. it was enough to send markets on a frenzy. we talking about the s&p 500. we are continuing to see gains being relayed in the asian session. the 10 year yield fell. the five-year yield. we are seeing oil prices at the moment under a little bit of pressure.

>> let's get some more from our contributor here in sydney. >> very much as expected. the cpi did not seem like it was that big of a surprise, but it actually was. in fact, headline annual inflation came in weaker than the weakest estimate in the survey. that has not happened since late 2020. we had both in bonds and stocks a lot of shorts that got slaughtered. there is very much a feeling that yesterday's rally may well

turn out to be too good to be true even though it is also got to be seen as a potential pivot for markets. that from here on in, even if you do get some downside, it will not be as bad as some of the downsides we have had. some people will look forward to the idea that makes your will not bring some of the relentless declines that this year brought. you might see it hesitate a bit after this, so that will add to the hesitation. >> we have seen a massive and fast repressing for rates as well. -- repricing good -- for rates

as well. >> we expected to get the pivot and we did not get the pivot we were looking for. we are going to have a higher terminal rate than we were expecting back in september, the last time they issued the dot plots. to some extent, that remains in play. they still want to avoid being too loose. it is better to over tighten than to under tighten. it is looking for markets as though they expect the prevent we thought we were going to get we now will get because the data will allow the fed to go on the path that markets were expecting. having had that disappointment with the promised pivot being taken away, now we have a return

to where a lot of investors and traders were positioning for the likelihood that this was the part the fed was going to go on that is helping to explain the relief. the underlying worry remains that part of the reason why you would expect the fed to slow down its pace of hikes is because there was a lot of economic pain in the pipeline. the fed is now expected to cut rates within the next year and a half. as the chairman said when he outlined what that was a key indicator, that means the u.s. is going into recession. that little bit of bad news has been hit by the good news out there -- has been hidden by the good news out there. >> we continue to see the pain

across crypto, especially as the venues keeps coming for sam bankman-fried. we have learned that the authorities in the bahamas has frozen ftx's assets. what does this mean? >> the bahamas froze assets for ftx.com as a way to stabilize the company, which is really trying to stave off bankruptcy right now. there also looking at mismanagement of funds and transfer of funds between ftx and alameda research. >> what does this mean for the broader industry? >> the industry is reeling right now from what is happening with ftx. it is a huge company within the space. sam bankman-fried is one of the most recognizable faces within the industry. the fact that this company has

had a major downfall is sending a ripple effect across the industry. ftx does business with major players in the space. customer funds are at risk here. this is a fascinating story. >> we have seen retail traders being burned. what does this mean for them? >> traders are very uncertain about what is happening right now. the relationships between voyager and alameda and ftx are just unclear. we do not know what is going to happen next. i think that uncertainty has really helped deepen the route in crypto markets. >> bloomberg's hannah miller there with the latest. let's get you to vonnie quinn. >> president joe biden will meet with china monday. the white house says it is expecting talks when the two

leaders meet. joe biden vowed to make no fundamental concessions to the president and what will be the first face-to-face talks since he became president. china's top leaders have reinforced the need to stick with their covid zero approach while urgent officials to be more targeted with restrictions. the statement came after a meeting chaired by president xi jinping. it was the leadership's first comments on the covid policy since the congress less month. in the u.s., republican leaders could be moving on from donald trump as they look ahead. according to newt gingrich, ron desantis is emerging as an alternative to trump. he was reelected after gaining votes in democratic strongholds.

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. >> still ahead, crypto traders. the worst case scenario. -- crypto traders faring the worst case scenario. here why paul christopher thinks it is not yet time to buy equities. this is bloomberg. ♪

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>> this is an extremely welcome piece of news that we have been waiting for. >> this is a good number. it indicates where we are heading. >> there is a lot to like in this inflation report. your starting to see put prices not rise that much. >> this is what everybody has been hoping for. >> it does support leaning towards wanting to downshift in december. >> it looks like the market is pricing that in. >> i do not think the market is

going to stop because of that one number we have seen. >> i think the likelihood of soft landing has gone up. >> bloomberg tv guests reacting to the latest inflation data. let's bring in paul christopher, head of global strategy at wells fargo. what do you make of it all? >> it is an overreaction. suppose in december the cpi misses, what do you think would happen to markets then? i do not think we would get the kind of reaction. >> how would you be positioning in this environment where we

could get inconsistent cpi data. we have heard from policymakers this lays the groundwork for the ability for the feds to have room to downshift. >> we agreed there is room for the fed to downshift, but first comes the tapering of rate hikes. and then the fed goes on hold waiting for inflation to show that continued progress down toward that 2% reading. the readings we are getting now are still very high, especially in core services. we would preferred the u.s. over international. within the u.s., we would focus on health care, really good quality sector. energy, certainly.

the only sector to generate positive cash flow so far this year. believe it or not, we still like tech here. we would be a little bit more selective obviously. that is how we would position here a little bit more towards quality. >> you mentioned tech and it reminds me of the layoffs we have been seeing. not to mention the investment bankers also being laid off. what is that telling you about the merchant pressures these firms are facing? >> -- we're seeing margin pressures in other sectors of the economy as well. looking at an economy that continues to slow, we will see more of this happening. for large tech companies, the dollar is also a big headwind.

for a long-term investor, we think it is an ideal time to position a little bit of additional cash in tech and waiting for the adjustments those companies will make to get ready for the lower rates and stronger economy. >> not to mention the valuations still do not look back great. -- that great. >> this is a sector that is so large you have lots of room to pick from. we still like tech. we would be much more selective. same thing in energy. we love the sector, but we might not be so cool on the upstream. we might like midstream better, refiners better. stick with quality. do not going to cyclicals. >> is there room to be selective

when it comes to international, which you do not like over the u.s.. perhaps looking a little bit better in terms of growth. >> the problem there is still the strength of the dollar. if we could get the dollar to come down a little bit, then i think investors could average into, that is to say put money in incrementally over time. >> paul christopher, good to have your thoughts. he does prefer the u.s. over of their markets. coming up, elon musk morning bankruptcy is a possibility for twitter. we will have the latest. this is bloomberg. ♪

>> elon musk has told staff that bankruptcy is a possibility in his first address to twitter employees since his takeover. let's bring in sarah. we are hearing about more exits. what is the latest? >> we have been told by our sources that gail roth who is the head of trust and safety, has departed twitter now. this is a turbulent time for the company. the company is facing possible bankruptcy. elon musk set if they do not get their clash flow -- cash flow problem in order. we are seeing these twitter blue subscriptions, which give users a check mark on service,

confusing a lot of people because a lot of advertisers are getting impersonated. a lot of celebrities are being impersonated. just a lot of turbulence at twitter today. elon musk also told employees they would need to be more hard-core. he said it you do not show up to the office, we will consider it a resignation. a lot of harsh words in his first major address to employees of twitter. >> he went to all this trouble to acquire twitter and now he is talking about bankruptcy. what does this mean for him and is this just a scared tactic to get twitter workers to work harder? >> it certainly could be. i do not profess to know his interest in saying this right now, if he thinks it is possible or iffy -- if he is just using

fe or tactic to get people to come into the office. it is a time when advertisers are pulling back on their spending. advertisers are very concerned about elon musk's ideas, about his some content that he has been posting if he promotes those who harass others, advertisers are thinking it does not matter what you tell me you are going to do. what you are using a platform for is concerning to me. i think we are seeing these advertisers pause their spending and even say they will stop spending on twitter because in part it is a tough environment for them anyway. they are pulling back their digital budgets.

elon musk is causing uncertainty at twitter and advertisers do not like putting their money in uncertain environments. >> where is elon musk getting his counsel from? where -- who is advising him? >> we reported even just hours ago that a few people had risen to the top of his leadership. two of those three people have now departed the company. i would tell you there're a lot of parts of twitter that are currently being led by musk himself or considered rudderless by the employees. there is a lot of uncertainty about who their managers are. a couple of days ago we were hearing that if people wanted to

submit the resignations, they did not know who to submit them to because they did not know who the boss was. he needs to figure out who he wants to be this two words for his new vision for the company. it seems like he had picked some , but he has to contend with the fact that there are people who may not want to continue to work there. >> sarah with the latest on the chaos at twitter. we are counting down to the start of trade in tokyo. over in japan, october ppi numbers expected. softbank also set to report third-quarter results. they are racing to calculate

softbank's exposure to ftx. over in south korea, we are waiting for trade data for the first 10 days of this month. exports fell for the first time in two years in october. financial regulators will hold a meeting to discuss credit markets. the corporate bond market has shrieked the most on record. -- ranked -- shrinked the most on record. >> wall street banks are feeling

out investors about their interest in funding twitter's bio. some are expecting discount to take on the debt. we are told twitter's lenders have found bids unattractive as they struggle to offload the debt. crypto traders are fearing the worst now with the future of ftx still up in the air. yat siu from animoca brands will be with us. this is bloomberg. ♪

>> bitcoin is now headed to $17,500 at the moment. we heard officials in the bahamas where ftx is based have now frozen the assets of ftx digital. authorities ours scrutinizing the local subsidiary. >> we continue to watch the impact when it comes to some of those asian related crypto names. let's bring in our next guest. yat siu out of animoca brands. great to have you with us. what comes next for the broader industry? >> i think the biggest disappointment here is the shock

of what happened with ftx and how quickly it unraveled. the number of people treating on ftx, the broad crypto segment itself is not as affected. the number of people on the platform are less than a million people, so i think the impact is not as large as what happened with tara. right now, it is more the image here. sam bankman-fried is somebody who had a high-profile reputation. >> this is the issue because sam

bankman-fried was seen as the savior. even as a lot of his peers collapse, ftx seem to be resilient. >> i think what we're seeing here is the case of the centralized exchanges that failed because they did not have to disclose their positions. it appears there was extreme leverage that was unchecked and you could call it human fault. that is why centralized exchanges need to have regulation.

the decentralized exchanges actually function just as intended. i would say what we saw in d5 actually worked. he was seen as a white knight. for a lot of people who do not understand what is happening in crypto, they look at that and say if somebody like sam bankman-fried cannot be trusted, who can you trust? that is the biggest collateral damage. >> which is why we are hearing from some traders that they are moving the tokens to off-line wallets. will that be a trend we will continue to see? >> i think what you are seeing

right now, it is going into self custody. it is an interesting trend as well. if it is not in your wallet, you do not have control over them. there is more conversations around that. >> when it comes to the blockchain technology itself, what could be see in terms of growth in other sectors that could have more mainstream use? >> the biggest thing we are seeing at this moment in time, the largest adoption we are seeing has come from gaming and metaverse. over $3 billion was invested in gaming.

the trend is really clear, not just in terms of capital, but the talent that is going to the space. they understand the value of owning your digital stuff. we will continue to see adaption happening there. >> really good to have you on. thank you so much. putting the crypto meltdown into context with us. let's get over to vonnie quinn. >> china's bank loan growth expended by the smallest amount in five years of the latest sign of an economic slowdown. loans to companies also slowed sharply from september. aggregate financing was the lowest since 2019. the u.s. treasury department has no issue with trading partners

including japan and korea. the treasury refrain from designating any country's exchange rate manipulators in its report to congress. imran khan supporters have demanded a push for early polls. the former cricket star will join the convoy once it is closer to the capital. he addressed his followers for a video message. 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. on vonnie quinn. this is bloomberg. >> coming up, as foreign trouble recovers, regional carriers are racing to meet runway demand. we speak to the association of asia pacific airlines next. this is bloomberg. ♪

>> taking a look at treating when it comes to equities as well as the bond markets here in australia. we are seeing the risk on approach continuing.

we are seeing kiwi stocks extending the gains by over 2%. we are also watching the gains a process trillion bond markets as well. -- across australian bond markets as well. chicago nikkei futures also looking quite positive there as well. >> here is a quick check. ralph lauren's revenue in china rose 30% less quarter. despite a third of its stores being closed. the ceo says the brand is benefiting from popularity among younger shoppers. china only generates about 5% of total revenue. but it is a critical revenue for the market. because prices are higher.

smic's third-quarter earnings missed expectations despite seeing the 47% jump in income. the chipmaker also forecast revenue to decline 15% sequentially. in its earnings statement, they blame the tepid outlook on weak demand along with the u.s. curbs on access to chip technology. elon musk has told twitter staff that bankruptcy is a possibility in his first address to employees since his takeover. elon musk talked about twitter and the fact that we know the company has significant debt burdens. this has seen a pullback from some advertisers. two senior executives have resigned. >> china's top leaders have

reformed -- reaffirmed their commitment to their code zero approach. -- covid zero approach. perhaps this is baby steps toward a potential for a fuller reopening. >> we have seen at least the market react positively to any signs that we may see some easing in the covid zero strategy. when it comes to authorities, we have not seen that much progress being made. >> let's get some views from our managing editor.

these comments about the targeted nature of lockdowns. >> it is very important that there be a shift in rhetoric before china does any steps toward easing covid zero. covid is very feared in china. they have reinforced what a scary disease it is. they do need to slowly start to adjust that. they did not include some of the more hard-core references to covid zero. that said, this does not really

lay out an exit path. there going into a pretty interesting winter still very much with the mentality that they need to crush outbreaks and use lockdowns to do it. they will be a little bit more targeted. >> what are we hearing from the broader public? >> it is a little hard to say. china is a big place and while there are daily reports that lockdowns -- of lockdowns, does not mean all of china is locked down. in the biggest cities is where

the outbreaks are flaring. you are seeing a rising level of tension. you see almost daily reports about fights, physical fights. people angry about the lines for mass testing. there definitely is an exhaustion with covid zero and a desire to know what is next from leadership. >> our next guest says asia's travel recovery outside of china is strong, but signs of the weakening global economy still remain. joining us now is subhas menon from association of asia pacific airlines. always great to have you with us. during the pandemic, we saw air

cargo remained pretty strong. now your telling us this is a segment seeing weakness. how concerning is this? >> air is always a win for the global economy. it is susceptible to the supply chain and people's ability to spend money. it is not that concerning because air travel is booming and air travel is usually the dominant part of the airline business. air cargo, while it is on the wing, the load factors on the flights for cargo are still quite decent. on the revenue front, i think air cargo is still doing well. >> that must be a relief given

the airline industry has suffered so much. we do have high inflation rates and high energy prices. >> there is a disconnect between the bleak global economic picture and the boy didn't air travel picture. -- buoyant air travel picture. if the economic picture is too true to be good, is the air travel picture too good to be true. the underlying demand is there and for months to come, we see there is a surge in bookings. >> do you see the momentum carried through to 2023? >> yes, the outlook is pretty

strong. we usually go by the forward bookings trend. they are up all the way to the end of march. that is a very strong indication. at the same time, i think the pent up demand has been driven by two main business segments. they are usually resilient. >> we have seen quite a few plane orders been announced as well. i am wondering when it comes to the labor market, the staff shortages and disruptions, do

you see that turning a corner? >> yes, i think so. the airlines have been working at it for quite a while now. it is all a matter of motivating people. the training for getting them to be in a position to meet the operational demands of a sudden increase in flights is taking a little longer. i would say by the turn of the year, we will find most of these problems behind us. >> what about margins given rising costs everywhere? >> margins are really under pressure. and fuel costs are on the rise. and also because the u.s. dollar, most of the big ticket items are denominated in u.s. dollar. that is a concern. margins are going to be under pressure.

>> what about the forecast and this relates to margins, but you mentioned a couple of things. fx currency effect and also feel hedge and in terms of the energy costs we have been seeing? >> some airlines to hedging, some do not do hedging. but i think the basic revenue situation is very strong, both from the passenger side as well as on the cargo side. i think airlines are banking on that. i would say they are moving forward with cautious optimism. the economic picture will ultimately have some impact on the demand. we hope we can have this for as long as possible. we have not seen china back in

the market yet. they say it is the elephant in the room. but actually it is the elephant not in the room. when it does get up, it will move fast. >> subhas menon from association of asia pacific airlines, great to have you back. we do have breaking news. we are getting those ppi numbers. inflation rising 9.1%, which is much higher than economists had expected. already the previous month in japan, the ppi number was to the upside. we are talking about the jump in import costs and someone pressure overseas and a tighter squeeze on profit margins for firms leading to producer price inflation coming in higher 9.1% year on year. we are also seen machine-tool

orders contracting. this is bloomberg. ♪

>> softbank is due to report third-quarter results.

our tech reporter joins us from tokyo. what are we expecting in terms of these calculations and the ftx exposure? >> we do not expect softbank to give us an exact figure, but when it comes to earnings, the private holdings including ftx is expected to have a negative impact. softbank is expected to report billions of dollars of losses. but we have yet to see exactly what those figures are. analysts estimates tend to vary widely. >> it is going to be an interesting earnings call. what is going on? >> we did have a surprise announcement about two weeks ago

that it will be the cfo doing most of the presentation. so it is going to be the first time that the cfo presents the whole earning session, including the q&a. we do not expect any big surprises. the message is that it is the balance sheet that will be porton for investors and they plan to keep it healthy going forward. >> what are you looking for in terms of comments on the outlook? >> one of the key things investors are focused on this time around is what the revenue figures are going to be for the

chip unit arm. there are a lot of questions around when the ipo will be and what the potential valuations could be. people would be very tuned into what the outlook looks like to gauge the prospects of its potential ipo. >> do not miss the fifth bloomberg economy form taken place in november 15-17. we will be there. >> you can watch the full thing on bloomberg new economy.com.

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>> this is daybreak: asia. counting down to major market opens as we see investor optimism post u.s. cpi. the best rally in a decade. october inflation numbers easing a little bit. haidi: is it overdone? are investors going to be worried? we know the potential for patching is when it comes to base cpi readings is high. we could be back to more sustained cost pressures. certainly it was a big move when it comes to equities and risk assets. downside for the dollar. shery: japanese ppi numbers coming in higher than expected. 9.1%. the estimate was 8 .02%. we could be talking about

continuing inflationary pressures but at least the market of reaction across asia is positive with the nikkei jumping 1.5%. japanese yen holding at 141. we talked about weakness despite the fact the dollar has fallen, the worst day in 10 years. also watching the 10 year yield in treasuries. we saw that huge tumble overnight. the 10 year yield holding at 3.8%. we have seen treasury yields plunge with swap traders -- expectations. we are watching the jgb markets as well as we have the 30 year this week. the korean markets open, gains of more than 3% as we see the korean yuan also jumping to percent against the u.s. dollar. this comes on the back of big losses in the previous session.

we saw the korean yuan under pressure with risk off sentiment. continued uncertainty over crypto. haidi: that is the ongoing narrative as things get bad to worse. take a look at australia. two point 8% is what we are seeing. a big surge in australian equities and bonds surging as well as the cpi forcing ephedra reprise across the curve. the aussie dollar a little. .1% after closing up almost 3%. it is set for its fourth weekly gain. despite macroeconomic headwinds including a weakness in iron ore prices. we are seeing that recovery underway.

shery: this as we are getting the trade numbers for the first 10 days in south korea. the deficit coming in above two point billion -- $2 billion. this -- despite the fact we continue to see rallying in the korean you, which would be the best since march of 2020. exports faltering end import costs rising given energy prices weigh on the currency. this is one of those headwinds we are seeing across markets. goldman sachs expects a largely flat performance over the next two quarters. let's get the latest from sunil koul. we have heard from analysts that despite the fact we may see that her valuations across asia, a strong dollar does not help. is that part of the equation why you are not positive about performance? >> you are right.

dollar is a part of the equation but it is a combination of the fact that even though inflation overnight with's softer than -- or was softer than expected, you still have more than 100 basis points of fed tightening. you also have the world going to slowdown. expecting a recession in the u.s. expecting recession in europe. u.s. growth has slowed down and earnings have been downgraded. i think the dollar could continue to remain strong in the near term as the fed continues to hike. the combination of slower global growth, higher rates and oral dollar which may remain strong is the reason for being -- i think given the markets have rallied 7% or 8% because of reopening in china -- near term

may be markets are flat. maybe modestly. -- back and loaded. >> how much really depends on what happens in the u.s. given that any time i ask where does asia go, most people say where the u.s. goes is where asia goes. we have seen a huge relief rally from the cpi numbers. >> to us, obviously it is a strong -- across -- and maybe some of that flows to asia as well. the earnings picture still looks pretty soft to us. given the rally with the markets, we think in the near term probably the markets will consolidate in the next three to six months. before the market starts to anticipate better macro in the

second half of next year. >> you have made no changes when it comes to being overweight on china. can you explain that, given we continue to watch very carefully when it comes to any kind of narrative that changes covid zero? clearly this is going to be a medium-term bet and timing will be crucial. >> you are right. timing is crucial. we had our annual channel conference last week with 2500 participants and the single most question from clients was the timing of the policy. i would say look, the market is already excited about potentially fostering reopening in china. so, we saw china rally almost 50%. hong kong rallying from lowe's.

ottawa timing is fully opening second-quarter next year. partly because health-care contradictions and political consecration's. but that is what our timeline looks like. maybe the timeline splits a little earlier. however sense is that a full reopening from china could give a valuation of around 20%. more so in reopening. that is part of the -- being positive on the offshore stocks. having said that, there's a better case for onshore stocks because most of the market is geared towards common prosperity and the policy beneficiaries. for us, onshore chinese equities is a medium-term bet whereas offshore equities are more reopening trade from low

valuations. >> interesting. perhaps less of a risk hedge. we are getting the latest numbers out of beijing, one hundred 14 local covid cases. trending in the wrong direction. 59 on the previous day. 95 earlier this week. we are starting to see those numbers creep up. you talk about policy priorities. one of the arguments is that with new leadership consolidation in place, the execution of policy will actually be more streamlined than ever. how do you align your portfolio while covid zero is still happening? >> you are clearly right. that is our expectation, that as zero covid policies get relaxed, you would also see better implementation of policies especially after the party congress has concluded. we expect that to flow into the

fundamentals. we expect china part growth recovery in the second half of next year and maybe the market will react in the first quarter of next year as well. the risk-reward for china could start to improve in terms of where you position. you have to be in some of the reopening pockets which will include cyclicals in china as well as the consumer sensitive sectors that are more sensitive to the reopening. at the same time, we have been emphasizing the team of local giants. companies which are in the areas of common prosperity, supply chain sufficiency, high-tech benefits from the policy push from policymakers. these are the companies that still have made small cap right now but have the potential to

compound at a high rate, or the next three to five years. >> great to chat with you and get those ideas. just recapping those numbers, 114 new local covid cases being reported for november 10. a pretty big jump. the most we have seen in more than a year for beijing. this as we get the meeting of the standing committee of the -- bureau deciding on decisive measures of covid zero and need to be mindful of the economic ramifications in terms of making targeted measures for lockdowns. let's get to vonnie quinn for headlines. vonnie: president biden will meet with xi jinping monday on the sidelines of g20. the white house is expecting in-depth and substantive talks. wednesday, biden vowed to make no fundamental secessions.

biden's health security aides is the u.s. will brief taiwan on the outcome of the meeting. the u.s. treasury has signaled that has no issue with recent currency interventions by its partners including japan and korea. the treasury refrain from designating any companies as manipulators in its latest report. it acknowledged that dollar strength is primarily related to u.s. economic fundamentals. in the u.s., republican leaders could be moving on from former president trump as they look ahead to 2024. according to newt gingrich," ron desantis is emerging as an alternative. santos was reelected after regaining votes in democratic strongholds. some of trump's favorite candidates suffered humiliating defeats. imran khan's supporters demand early general elections. the marchers set off in the same place where he was shot a week before.

the former cricket star who is recuperating will join the convoy. he addressed followers through video message and gave an update. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: we speak to apac's executive director ahead of the summit in bangkok. she will discuss key issues with xi jinping and vladimir putin, both expected to attend. first, looking closer to moderating rate hikes after welcome news on inflation. this is bloomberg. ♪

♪ >> why libel >> the upcoming months, i would expect we would slow the pace of our rate hikes as we approach the sufficiently restrictive stance. i want to be clear, a rate hike of 50 basis points would be significant.

our stepping down is appropriate. it is not to be confused with adjusting the terminal rate. i do not mean the end rate, but the rate at which we would raise of the whole. >> the more measured approach might be particularly useful as policymakers judge the economy's response. already we have seen the committee's policy answers lead to a sharp tightening of financial conditions. >> officials moderating rate hikes cooler inflation. our editor kathleen hays is here. what was the take away from all of those comments? it seemed like they were open to discussing slower rate hikes but they are not there yet. >> what they are saying is they are open to discussing, looking seriously at lower rate hikes. inflation has not improved enough for them to do the kind of stopping of fed rate hikes,

saying we don't have to go higher, we are closer than we thought. let's look at the numbers. all of these numbers came in weaker than expected. seven point 7% was the weakest since january of this year. that was before the war in ukraine started and pushed up commodity prices but still the highest since february of 1982. it is true that the core cpi came in weaker than expected. if it is easing, that is an important sign that may inflation is easing. we saw the prices of furniture, cars, clothing and electronics easing. maybe supply chains are getting better. maybe demand is easing, that when you look at core services which did moderate, one of the biggest was medical care costs aired what it was the cost of

insurance. it was quirky and it had to do with how the government calculates them into the cost of health care companies. . . bottom line, the discussion is going to be much hotter if the december meeting on doing 50 instead of 75 but it is not going to stop the fed from getting to the point where it knows it is restrictive and can get its fight against inflation done. let's listen to the president of the cleveland fed. >> now, focus can shift to the appropriate level of restrictiveness that is going to return the economy to stability. given the current level of inflation and the fact it is broad-based and persistent, we are going to need monetary policy to be more restrictive and remain restrictive for a while. >> i think it is importantly clear when she said that pausing rate hikes is not the discussion, the discussion is stepping down.

welcome signs if this continues, the fed is on course for where it wants to get. even investors realize this is a move in the right direction, but that is all it is so far. >> it's not like markets at all to get ahead of themselves [laughter]. [laughter]speaking of, china's top leaders have reaffirmed their commitment to their covid zero approach well urging officials to be more targeted with restrictions to avoid damage to the economy. charlie, it is interesting. the consensus seems to be the fact that this is even being mentioned by the committee is a positive. clearly it does not indicate an imminent way out of covid zero. >> you can see the difference in languages they use.

it emphasizes more exiting saving the economy rather than the need to fight the virus and downplays the threat to people's lives. if you compare the two statements, the last one by the committee was back in may. here is the difference. the latest statement left out of the vowed to fight against any speech that distorts, questions or rejects our country's covid control policy. they also left out the note saying that relaxing controls will lead to deaths. instead, the statement says the epidemic's impact on social and economic development must be minimized. it also emphasized that efforts

must be made to adhere to science-based and targeted response. basically, the -- if you read it carefully you can since a shift in tone. interns of covid control. the restrictions have cost heavy damage to the economy. the markets also. >> where on the ground across china are we seeing more targeted restrictions? >> so far, lots of people are feeling that restrictions have been tightened across the country. covid cases have been surging. as the statement last night put out, chinese leaders are expecting the covid situation to worsen in the upcoming cold season and the spring because

the virus enters more fast. having said that, the leadership was trying to send a message that they are expect that to happen but at the same time doing whatever they can to minimize the impact on the economy. i want to add, the significance of the latest statement, this is the first public comment by the new leadership after the 20th party congress. xi jinping and other leaders have said before that it is necessary to be mindful of the impact on the economy while carrying out covid zero but this is the first time after the congress and also the first public statement about a policy since may. it has been a long time. >> charlie with the latest. coming up, crypto markets reeling from the news that ftx.com may be heading towards bankruptcy.

this is bloomberg. ♪

♪ >> a sea of red across crypto. going -- bitcoin gains not holding in the asian session. as we heard from the bahamas, ftx.com assets frozen digital markets while pointing -- a pointing a liquidator. the japanese looking into their global subsidiary. as you can see, they are in freefall. for more, john dawson george joins us. this is a fast-moving story.

what is the latest on how these assets are trading as we hear from the bahamas? >> it looks like we have a bit of a respite. of course we had good performances from stocks overnight in the u.s.. that helped a lot of the cryptocurrencies come back. bitcoin had been around $15,500 at its low. it is back above $17,000 but there's a lot of uncertainty when it comes to the entire system, given the issues with ftx and potential things that could come from that. >> what are their broader implications in terms of credibility for the crypto sector more broadly? as well as the market reaction? what we make of the pricing action?

>> it is -- the implications are not great. this guy was one of the well most regarded in the industry and ftx looked solid. this is going to worry a lot of people and make investors hesitant. it is going to make regulators say this is what we were looking at. it will probably have knock on effects from counterparties, investors, groups that alameda invested in. it is not great for crypto. anyone who is participating, a lot of people are suffering right now. >> the latest on crypto. let's look at fx at the moment. the big plunge in the u.s. dollar index is having reverberations across the

broader trading pairs we see. in particular when it comes to trading in dollar yen the moment. the weakening yen trend may not last long even as we saw the biggest move and a quarter-century when it comes to trading for dollar-yen. it was a torrid period of trade. just over 141 to the trading against the yen at the moment. we are also holding that level just above 66 u.s. we saw a jump of 3% overnight, correcting by .1% but it looks to finish the week out for a fourth straight week of gains. also watching the hong kong dollar. ust dropping below the 200 day moving average for the first time 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.

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>> looking ahead to a busy earnings week in china with tencent and alibaba reporting off the back of china's biggest shopping holiday. felix joins us now with the latest. what are we expecting when it comes to tencent? >> tencent is going to report earnings wednesday. investors are trying to see whether the downturn will continue as the company reported their first revenue decline last quarter. take a look at the share price. it dropped to the lowest level in five years. analysts lowered their price targets. they cut the target price by 20% saying domestic and international gaming businesses are under pressure. although there trying to adopt more video content for advertisement businesses, it seems the catalysts are limited. >> what are the prospects for

share buybacks? >> multiple reports point out that tencent may sell some of its stake in listed companies in order to fund the share buyback and signal new growth drivers. although tencent said the reports are not true, speculations are mounting because the company has long been expected to reduce its equity portfolio in order to adjust beijing's anti-monopoly campaign. shery: what about alibaba? how much are we expecting singles' day to help? >> for alibaba, it may reported a 4% jump in revenue this quarter. businesses like food delivery, pet food service asia unit lasagna is narrow. china reiterated the covid zero

policy will stay with a more targeted approach. investors are trying to gauge their impact to see whether -- buying sentiments and consumer markets are cause logistic disruption. more they are like the sales warriors today. also there earning forecast this time is something we are watching. >> felix tan. for more on the all the corporate results, you can tune into what is coming out next week. our asia earnings week is -- and terminal subscribers can find it there. [indiscernible] breaking news when it comes to this top story we have been tracking which is the fate of ftx. now faking an sec probe. there has been a number of

different probes underway already relating to different components of his business operations. this is the latest development. we have seen a number of different developments including ftx reaching a pact allow users to withdraw some of their tokens. we also heard ftx digital markets assets were frozen by the regulator in the bahamas seeking provisional liquidators for ftx digital. we are now hearing that -- is facing a second probe tied to his crypto empire. we will bring you more details on these developments but let's get the vonnie quinn. vonnie: china's top leaders have reinforced the need to stick with covid zero while urging officials to be more targeted with restrictions to avoid damaging the economy. the statement from the committee came after a meeting chaired by xi jinping. they were the new leadership's first comment since the commonest party comments last

month. bank been freed shutting down media research. -- told investors that ftx may have to seek bankruptcy if it does not get a rescue. ftx is doing everything it can to raise liquidity. china's bank loan growth expanded by the smallest amount in five years. the sign of economic slowdown. medium and long-term slow september sluggish -- aggregate financing was the lowest for an october since 2019 due to covid curbs and a housing slump. 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: following toyota, sony and softbank trading across japan. these companies are going to invest ¥1 billion each in a chip

venture. the japanese government will also provide ¥70 billion in subsidies for next generation chip technology. we continue to see this raise for high technologies in the chip sector, semiconductor air is a huge part of the geopolitical tensions between the u.s. and china. we heard from japanese media that toyota and other companies would launch a new entity altogether to develop and manufacturer those semiconductors. we are hearing the investments will be ¥1 billion each in chip ventures from toyota, sony and softbank. let's talk more about the race for texas premises. this will actually be one of the key topics at the fifth annual bloomberg economic forum taking place in singapore. new economy editor erik schatzker is already there. we are looking forward to joining you next week. what are the things we will be following?

>> you have so kindly been helping me beat the drum for weeks. as you say, the new economy formed bloomberg's flagship event is about to be reality. in singapore starting tuesday. this is where we draw on the best of bloomberg including mike bloomberg himself to bring together the private sector and the public sector. we join east and west and north and south to explore the most urgent issues facing the new economy and the global economy. you talked about the battle for technological supremacy. that is the focus of our coverage. the u.s.-china rivalry and the rewiring of global supply chains , an issue that is important to singapore. we will be examining the doubts about esg.

can sustainability as a push in the investment community survive the market shakeout? and of course we have to look at the impact of the war in ukraine and how it has put so many countries in a desperate position. starved not just for energy but for food. shery: the other great thing about this event is the conversations we get to have with our guests. television, radio, panelists. take us through the highlights. >> i talked about the importance of bringing the public sector to the table. we have the u.s. trade representative katherine tai joining us. we also have the deputy prime minister in singapore who has been tapped to succeed prime minister lee. we have japanese economy minister coming. we have the first managing

director of the international monetary fund. the honorary chair of the bloomberg new economy forum, henry kissinger will be with us again. at the age of 99, it is amazing how much dr. kissinger continues to contribute to the international dialogue. what he has to say about the u.s.-china rivalry will have everyone on the edge of their seats. >> what about some of the discussions we will be having with those big panels? >> one of the most important things about the new economy forum is not just bringing the public sector to the table, it is also bringing the private sector and capital to the table. nothing happens in this world without capital. you can have great ideas and policy, but money needs to be part of the equation.

we've got ken griffin of citadel coming. neil shen, managing partner of sequoia china, a man you hardly ever see will be with us. as will the ceo of hillhouse. from the secant -- singaporean sovereign wealth, the ceo of gic as well as dylan piller. in the corporate world we are bringing david mcclendon of cargill to the table. noel quinn of hsbc. bill winters. michael knee box. the list goes on. it is quite a parade of boldfaced names and i expect they will not just be drawing the world's attention next week, but setting the agenda for the weeks and months to come. >> the bloomberg forum gets better and better. erik schatzker in singapore ahead of next week.

daybreak: asia will be live from singapore next week. sherry and i will be there. catch our exclusive interviews on tv and radio and watch the full event too on bloomberg new economy.com and on live go on the terminal. this is bloomberg. ♪

>> in a weeks time, leaders and vips from apac will gather in bangkok for the summit. xi jinping will attend. vice president harris will represent the u.s. the tie foreign ministry is awaiting word from vladimir putin. one of the top items on the agenda is taming inflation which has hit record highs. price increases in the region have been moving above central-bank targets. growth is decelerating on the back of rate hikes and geopolitical tensions. let's bring in rebecca santa -- rebecca fatima. right to have you with us. sherry just went through the laundry list of challenges that face leaders as we go into the year -- the gathering.

what are your expectations? how do you gauge the state of the economy as well as crucial components of the economy like trade? >> thank you for having me. this is a challenging time for all of us. the significance of this year's meeting is that this is the first time since 2018 that the leaders will be meeting in person. the last thing that was stashed 2018, much has changed since then. the challenges are there. those are real. but what is important is apac is a platform where you provide that opportunity for these leaders to meet could buy for these officials to meet, these ministers. what we need more of now is the building of trust. we have seen this is a currency that we need right now and apac provides that opportunity for us to do this.

in this challenging time. >> we have seen the war in ukraine splitting members of the g20. whether you talk about leaders or finance ministers. do you see that division taking place when it comes to these conversations we are looking ahead to? it sounds like you are optimistic you can get cooperation that is going to be impactful. >> the cooperation has always been there. yes, we realize that there are issues, there are challenges. these are not new. we have gone through crises in the past. whether it was the asian financial crisis or the global financial crisis. we have lived through the u.s.-china trade tensions. the important thing is that we are able to bring the parties together. because we are nonbinding, we

have the ability to have folks at the table discussing issues that matter. yes, conflicts are there, but there are also things we need to work on together and that is the value that these meetings have. the fact that you can bring parties together. you can have them discussing these matters candidly. in the ministers meetings, nobody is held back. what is important is that in spite of this challenges, they have managed to focus their work ticket business going. looking at structural reform. looking at matters of the economy. sustainable development. these are strides we have still been able to make despite the background of the conflicts. the background is there. it is upfront. but in spite of that, we have

managed to have conversations and that is important. >> somebody who will not be at the table this president biden. will that concern you? >> we have had situations in the past where leaders, for some reason, have not been able to attend the summit. but, they have had representation. we have always had representation whether it is the vice president, vice minister's, we have -- we have always had high levels of representation. it is not unusual but what is important is the fact that they are represented in those conversations will still be held. >> how is apac ferrying as a place where all these leaders get together? it used to be the shining light of the diplomatic calendar but now we have so many groupings. the u.s. trying to promote ipf.

what role will apac play in the next few years? >> for us, we see all of these as complementary. it is about the region. building regional economic integration. it is not zero-sum. it is not a one or the other. all of these end up in the big goal we have for free trade. all of these are pathways. we do not see them as competition, but complementary. if you look at the membership, there are similar members. most of us in apac are in ipf. it is still early days, we are also being watching and engaging to find out how we can work together. it is not zero-sum. >> is pugin going?

>> i think the foreign ministry of thailand is waiting. but we know for sure he will not be at g20. whatever it is, there will be representation. >> good to have you with us. we are looking forward to that summit in thailand. we have breaking news, we are getting the gong show -- new covid cases. 2500 -- this coming at a time when we continue to watch potentially more targeted measures in china when it comes to those restrictions. her covid-19. as cases rise. beijing seeing the highest levels in five months or so. stay tuned for more insight and analysis as we count down to the

apac leaders meeting. reopening after covid-19 will be a key issue as well. this is bloomberg. ♪

>> wall street banks set to be quietly sounding out investors about their interest in the debt

that funded the twitter by out. sources say some are demanding a discount as low as $.60 on the dollar to take on the debt, which would be one of the steepest markdowns in a decade. smic earnings missed expectations despite a 47% jump in income. china's largest chipmaker forecast revenue for the current quarter to decline 15% sequentially. smic blamed the tepid outlook on weak demand along with the u.s. curbs on access to chip technology. >> china's credit growth in october was the lowest since 2019. bank loans expanded by the smallest amount in five years. but skip more from kevin kingsbury. we continue to see this play out. they can either keep turning on the credit tax, but the demand just doesn't seem to be there. >> exactly.

urges, a proxy for mortgages fell 90%. if people are not borrowing to buy homes, we are not going to see home sales pick up. that is the key problem with the properties sector. that has been driving down dollar bond prices and this virtuous cycle that has been going on and these low numbers continue to show that the chinese economy is struggling. >> you have an update when it comes to the china credit tracker? >> offshore bonds remained at the highest stress level in october. dollar bonds lost 12% last month, the second-biggest loss ever on a monthly basis on a bloomberg index tracking the high-yield sector. investment bonds also had its worst -- or, second worst month. it lost 3%.

there appears to be contagion. we have been talking in the last few weeks about perpetual bonds in asian banks after the korean insurer decided not to call back a bond that investors were expecting it to repurchase. there have been various issues in the bond market and the credit market which seem to be spreading and it is not just chinese property developers. >> there's a tendency in this market to think the exit out of covid zero is going to solve everything. it is not, is it? china's gdp is going to be a mess. it wouldn't completely fix systemic issues with the property market. >> like i said, we need home sales to pick up for builders to get the cash flow going to start servicing debt.

we have local government financing vehicles that are also debt laden. there are concerns for things like tax revenue and whether they will ultimately be able to serve. there are debt issues going on largely focused on the properties sector. if covid lockdowns continue and we have data like today with beijing cases at the highest level in a year, how are the opportunities going to be for homebuyers to be able to feel confident enough to go purchase a home? how were builders going to have enough cash flow to finish? >> china credit editor kevin kingsbury. all of those concerns that kevin talked about, we are going to see them reflected in the stock markets today at the open in hong kong and china. one of those sectors, retail stocks. in focus not only due to covid concerns, but china's biggest shopping season is edging to a close.

plus, keeping an eye on crypto related shares. ftx hurling toward bankruptcy as its crisis snowballs. i can't focus on anything else than the fact that we are going to get to see each other next week. woo hoo. we will be traveling to singapore for the new economy forum. i have not seen you in person since the beijing nef. >> that feels like a lifetime ago. covid-19 was not even a thing. it was months before all of that would explode. [no audio]

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