♪

kathleen: coming to you live. haidi: we are counting down to the market open in japan and south korea. australia has just come online. concerns about stricter virus restrictions in china after the first covid related death animal six months. also ahead, court documents reveal new information. >> hear the clock is ticking for a viable government.

so far australia just coming online. it appears that investors appear to be shrugging off this hawkish and as we have had. some are not ruling out a 75 basis point move in december. you have yields moving high in the bond space. the dollar here as well. let's take a look at the current outlook from new zealand. already trading this morning. the u.s. is coming online to the upside this morning. oil is higher. but you have to put it in context. we are coming off one of the worst weeks we have seen. there are a couple of factors at

play. there are concerns around a recession being induced. but also what is happening in china. the demand outlook there has not fully come back online. concerns around covid zero in the country. haidi: we are hearing a bullish consensus for chinese equities building on wall street. newfound optimism. let's get some more from our guest here in sydney. he is our chief correspondent for asia. the possibility of a return to stricter covered procedures is always a concern. >> there are some concerns. but we have had a very strong high as recently as april. this time it is different precisely because of that shift.

and the idea that they might push through even in the face of what was a big surge. they were still talking about being a little bit less doctrinaire about it. that makes this unfortunate case of a death very pivotal. for china's economy. will china still stick with the idea that it needs to adopt a somewhat different approach when it comes to covid because of the economic damage that goes along with that? making sure you are pursuing the right health outcomes. there is still quite a strong case. but there is no talk of going back to restrictions.

will china stick with its pitted on the covid front? that is a key question for the people who have been piling in. haidi: is it more of a sustainable basis when you look at the energy market? >> the fed and other central banks, we have korea coming up later this week. the thing that has been an overwhelming relief for emerging markets has been the way the dollar has come off. even as other markets have gone up and down.

there are a lot of concerns for equity investors. the constant has been a waning in the dollar strength and done so much damage to emerging markets. that will be the key. keep your focus on the u.s. dollar. if that stays calm, then carry on. [laughter] kathleen: that is good advice in many ways. what is looming ahead for crypto? >> i think still looming on the margins. there are certain parts of the market that are already under pressure. you think of the tech space, which has its own concerns.

crypto is wrapped up with that. it is a concern there. the crash has happened. there are some second-order effects. possibly some other bankruptcies. crypto matters a lot less. the whole crypto market was worth $2 trillion or so at one stage. now it is worth significantly less than that. crypto is becoming a smaller and smaller part of that world. and therefore the ups and downs of that space can be set aside, mostly. haidi: we will get some more on china. the first covid related death animal six months. a concern that this could bring heightened restrictions.

this is the first death since the shanghai lockdown. we had just started to get some optimism. could we see some backtracking now? >> fatalities were always going to be very key to determining how china moves forward. whether they dial back a little bit the more targeted approach. or whether they keep pushing forward. it is a bit of a make or break time right now. we are closely watching to see what they do. cases have been rising quite sharply. and they have been met with very stringent restrictions. much more targeted than before. what people are fearful of it is the uptick in cases coupled with more deaths among the elderly population will lead officials to panic and revert to those more brash citywide lockdowns.

the massed testings that were so disruptive before. >> vaccination records remain the puzzle piece we are looking out for. i know the data has been more optimistic. >> i think vaccination has been coming out. boosters are still very low. compared to other parts of the world. there are still fundamental things china needs to address. including its hospital system. before it can reopen in a way like other parts of the world. australia only started to reopen when key parts of the country had more than 90% of the population vaccinated. we are nowhere near that in china. this is not the big bad

reopening that people might have hope for. haidi: the latest on china and covid zero. let's get the first word headlines. vonnie: malaysian political leaders have to inform the king of their choice of prime minister. the country has its first ever hung parliament. they say their coalition can take power. the imf says the rise of trade barriers could cost the global economy trillions of dollars. the potential loss for asia could be more than 3% of gdp because the region is more generated.

>> the world is going to lose 1.5% of gdp just because of divisions that may split us into two trading blocs. this is $1.4 trillion. for asia, the loss is much more significant because asia is so integrated. >> the world cup has begin in qatar. there has been intense scrutiny about the treatment of migrant workers and concerns about human rights. it was not the start the hosts were hoping for. their team was the in its opening match. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. kathleen: thank you.

still ahead, he is confident in forming a government. but a former prime minister also says he has the numbers. before that, a look at the trading week ahead in asia. this is bloomberg.

♪ kathleen: let's look at the week ahead. we will get minutes from the fed meeting and more details on a rate hike for the fourth straight time. the bank of korea is expected to

raise its key rate. european union energy ministers will meet on thursday. on friday, the strength of the u.s. consumer will be tested once again with black friday sales. on monday, china's big banks are expected to keep their prime rates unchanged. that is your week ahead. haidi: our next guest says the big story next year will be the return of the chinese consumer. great to have you with us. i like your vision for next year. i think we are hopeful that it will be the year when we see china returning.

that cyclical affect for global growth. we just set the first death from covid-19 about six months in shanghai. those that worry you that we will see a return to stricter curbs? >> i think china has been extraordinarily careful when it comes to covid and how they have managed it. in the context of a very large population. officials seem to understand that there is a certain political and economic calculus at work here to think about. that drag on a continued basis on the economy. if they do not reopen. i think they have done everything they can to reopen as safely as possible. we have certainly seen them finally say to people who are

under vaccinated to get their shots. i think everything that we are seeing suggests that china is preparing for handling a significant increase in the number of cases. i think all of that is why we feel fairly convicted that next year will be the year for the return of the chinese consumer. we have seen in every market that has experienced a reopening that there has been significant strength attached to it. what china has that other markets don't is it does not have an nation problem. i think we can actually go at that with a greater degree of confidence. certainly that because is going stronger. morgan stanley has to be more

cautious. i wonder when it is about aligning with the timing of the reopening. how hard is it to get that? >> one cannot be exact in timing. but i have always found that when you have valuation extremes and sentiment extremes, that is often a time to invest. we have seen a rather significant bounce. we need to bear in mind and careful about what we saw proceeding that. kathleen: an interesting point you make is you think the old road style approach toward investing in china has been discredited. this is at a time when growth

has greatly slowed down. is it because you think growth is going to speed up? > so much not necessarily. there could be a tactical bounce or chinese equities across the board. but what we have seen is the old approach to china of saying it has high gdp growth. that is a link to better revenue and earnings growth. that is not really worked out for people. especially those who want to buy more expensive growth style stocks with high valuation. what we think china reminds us of today is korea 20 years ago. when it was slowing down from being the asian tiger to a slower level of growth. when you combine that with relatively lower return on equities for the market overall,

that means we need to approach the market with a value style. instead of it being value versus something else for china. kathleen: are there any sectors or industries where you would advise people who do want to invest in china to put their focus? >> we do like a variety of different asian opportunities. we don't think it is as easy as just saying that. we do think that consumer oriented parts of the economy are like the to have much better fundamentals next year. when we look at the return, when i spoke earlier of policy alignment, we really think that

green and net zero relied strategies of investing in the chinese equity market make a lot of sense. that is because china is certainly aiming to be a positive actor on the green global stage. but they also obviously have their own energy security foremost in their mind. investing alongside the chinese government in ensuring that it becomes the saudi arabia of wind and solar as well as electric vehicles is a very exciting long-term growth prospects. haidi: great to have you with us. i hope your bullish views on china come true. sticking with china, at the

moment things are not necessarily trending in the right direction. they will start to have mass covid tests in certain areas. the recommendation is for all residents to stay-at-home. they will be halting in person classes and locking down universities as well. we have only recently seen a loosening of pandemic restrictions. we had policymakers looking at potentially shifting away from some of the less targeted measures. we see so much investor enthusiasm. maybe even to clear the way for that big rebound. kathleen: maybe it is a lot of things in life. two steps forward, one step back. trick-or-treaters -- trader

clears the way for the return of donald trump. this is bloomberg. ♪

♪ haidi: a mass exodus of workers from twitter caused a shutdown last week. let's start off with the latest staffing issues. and all the concerns this is raising. su: sources inside twitter say the takeover turmoil continues. there is concern with so many thousands of workers leaving that the platform is increasingly exposed to hacks and other potential problems.

elon musk is considering firing more employees. he could target the sales and partnership side of the business. friday, twitter officers had to close after a exodus of workers that was not expected. many chose to leave. sources have told us there is concern that twitter is increasingly exposed to bugs. kathleen: meanwhile, elon musk says donald trump's account is being reinstated. i guess it pays to declare your run for the presidency. >> elon musk said he wants is to be a platform for free speech.

he held a 24 hour poll. 52% voted to allow former president trump to return. more than 15 million users cast votes. trump was permanently damaged our -- banned from twitter after the insurrection of the capitol building. many would say it is not a done deal he returns to the platform. trump was quoted as saying there is not a reason for it. he said maybe he well, maybe he won't. there is increasing speculation that twitter is facing insurmountable odds. the naacp issued an urgent advisory for many companies to suspend their advertising on the

platform if trump initiates tweeting once again. that would put further financial pressure on the platform. kathleen: the latest on elon musk and twitter. we are counting down to the start of the trading day in seoul. the finance minister will hold a press briefing later today. he has been meeting with the governor. plenty more to come. this is bloomberg.

♪ haidi: they are competing to

form the next government after a hung parliament in malaysia. they have until monday afternoon. >> it is looking like malaysia's first ever hung parliament. great to have you with us. you thought there would be a clear winner by saturday. so obviously this is surprising. what do you think happened and what is next? >> let's start off with the polling done before the elections. most people thought he was way ahead. most people thought he would form a government on saturday night. everything turned out to be

wrong. there were three big blocs. two of them were basically similar. >> they both say they think they can get to the majority. you were telling me it is more likely. tell us what this means if we are to see a pro-islamic government. >> it will be exactly the same place we were in the last government. they are a smaller coalition. i think what it means is this time around, this coalition will be the islamic party here.

they night win up to 50 seats. >> a lot of the new, younger voters really want their leaders to be focusing on economic stability and moving away from racially based policies. do you think we are likely to see that in malaysia? >> some of the early numbers show that the young people who came out to vote voted for the islamic party. some assumed that young people were more assumed in bread and butter issues like economic opportunities. not concerned with religion. >> what can this mean for foreign influence?

>> basically what we have is a new prime minister who is an old prime minister. that is good for him. he will serve as a prime minister for the second time. a lot will depend on which ministers will he keep? the former finance minister lost in a recent election. you can actually be appointed a senator. but it is too early to second-guess. i am sure there will not be any major disruptions. i think over the long-term people will worry that they will control the key economic posts.

>> we saw the longest ruling prime minister lose his seat. what is his legacy look like? >> unfortunately, this is consistent with the saying all political careers and interiors. if he had stayed away from the selection, historians would've said good things about him. but now he lost. he was rejected. his son also loss. this is a clear signal from the malaysian people that they do not want him. >> we are looking at the young voters as you were talking about earlier. it is interesting to see how much of a role social media played in the selection. give us your assessment of that. >> it was clear that social

media played a big role. in this election most of the politician set up tiktok accounts. it played a major role in setting the narrative. but those were not the key reasons the vote went the way it did. this is consistent. social media only reflects those people who produce social media. it is not reflect what is happening on the ground. >> we see a lot of dealmaking happening today with the two parties. >> the regions will play a very important part. that coalition has solid

numbers. everyone is looking to them. my understanding is that their leadership has already decided that. it is highly unlikely they will get the numbers necessary to form a government. >> we thank you so much for your time. kathleen: now let's get a look at investor reaction to the selection. annabelle: taking a look at what investors are saying so far about this hung parliament. they said this was the worst case scenario for investors. it will depend on how long the

power vacuum will extend for. and the parliamentary majority of the eventual government. they will have their work cut out for them. investors will be looking closely at policy stability and continuity. there will be cautious trading in equity markets in the weeks ahead. the strong performance that we were discussing of that coalition was a surprise. they say regulatory risks are spiking higher. investors should also be wary of any risk to the construction sector given that it depends on policy. let's take a look at the broader markets. australia is still in the.

new zealand also trading into the upside. investigators -- investors a try to see how serious people are about inflation. some are not ruling out a move in september. haidi: let's get the first word headlines. vonnie: on that same theme, the first covid related death in china animal six months has sparked return about heightened restrictions. a man died on saturday after his condition worsened. officials in shanghai reported one fatality. more than 23,000 new cases were

logged on saturday. this agreement creates a fund that helps developing nations face the devastation of climate change. negotiated failed to get more ambitious cuts of greenhouse gas emissions. some buildings in ukraine were damaged. but not critically. ukraine says russian forces struck the facility. turkey has carried out airstrikes against kurdish militant groups in iraq and northern syria. these, after a deadly bombing that targeted civilians in istanbul.

global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. haidi: the prime minister of papa new guinea says china has never expressed interest in a dilatory base in that nation. we spoke exclusively with him. >> china has never expressed an interest for a military base here.

we spoke on what they can do for business. nothing about the military. china stay clear of those conversations. >> are you concerned about the politicization of this region >> >> i am concerned. but finding a mutual ground for respect is important. the big leaders met and i talked. things may not change overnight.

but there is a place for securing a better future for the children of our planet. >> what is the risk of possible militarization of this part of the world? >> i don't think there will be any other nations coming into the pacific. we hope those nations will help guide. china has not proposed that. to have a military base here. >> is there any dialogue on a security pact with china? >> no. >> the prime minister of papa new guinea. up next on the show, why it is

highly unlikely to be worth what it is touted. details ahead. this is bloomberg. ♪

haidi: the prime minister of japan says the international community must continue to work together to pressure russia over

the invasion of ukraine. he has sacked his internal affairs minister and will announce his replacement later on monday. japan postbank could join with partners in an effort to acquire toshiba. kathleen: let's look at softbank now. it's a vision fund posted more than a $7 billion loss on tech investments. let's bring in the senior market strategist at asymmetric advisors. great to have you joining us today. the ftx fiasco has hit many investors. what does it mean for softbank? >> it is a drop in the ocean for softbank.

compared to the losses that softbank has been seeing. ftx losses are very small in comparison. not big in the individuals scope of losses. kathleen: what is determining your view on softbank right now? >> the market, for a start. things could turn around fairly quickly if the market does turnaround. there is a huge amount of money invested. the values have been determined by the next round of financing.

there are a number of big investments. obviously we can see what has been going on there. it is just the market conditions more than anything else. obviously the investment picks by softbank have been far from stellar. they are in a fairly tough situation in regards to some of the loans they have secured. for example, alibaba. that is good news. generally the market does head down again. softbank is in a bit of trouble. haidi: that feels like a little bit of an understatement.

we have seen his personal stakes in these investments. >> you see what you don't read in the financial times. all that money that was borrowed from the corporation itself. what they did not address is the fact that his stake in softbank has been put up as collateral to banks which is borrowed against. there was a revelation that he has lost $4 billion of his own money. that was not really big news. he has not paid the money back

to softbank. that is something we did not know. he has huge amounts of loans outstanding. he has used his stake in softbank. he used a big chunk of those things as collateral. that was not really addressed. haidi: do we know where the bottom is in regards to his unlisted valuations? >> we don't know where the bottom of the market is. i would love to know. but the answer is no. we do not know. we don't know when businesses are going to find the bottom. that is not fair to them.

some of these firms have seen big losses this year. the view on softbank is very much on the market itself. one thing we can say for sure is they will be aggressively buying back shares. we think that has been very destructive. and then using that money to buy back shares. that is a risk. by doing so. it seems very unusual at a time when they are facing capital constraints. in completing their buyback

programs. to keep the share price from falling. that is a major concern. kathleen: thank you so much. a senior market strategist at asymmetric advisors. stay tuned for more key interviews on japan and. that is every monday. haidi: we are continuing to monitor the covid zero situation in china. one province will be locked down for five days. this is to curb the spread of covid-19. it comes as we saw the country's first covid death in months. that has raised more fears of a more targeted approach.

that the eventual reopening could be pulled back if we continue to see more deaths. this is the first covid related that it almost six months. this is where we have seen violent protests, protesters tussling with covid workers. just an indication of the this fattest -- dissatisfaction growing in china. this is bloomberg. ♪

♪ kathleen: a quick check of the latest business flash headlines. postbank considering joining forces with japan industrial partners in their bid to acquire toshiba. a newspaper reports that the investment could amount to more than $350 million. we early reported that the jit consortium wasn't talk with more co-investors. in examining has found a bankrupt crypto lender was lax across two services. that will make it difficult to determine how users will be reimbursed. they made no effort to separate assets. the italian economic ministry is saying it is not working on a

fixed line network. local media reported they would sell a controlling stake while holding on to a holding to sell later. haidi: coming up in the next hour we will be talking asian market strategy. taking a closer look at korea where you are. leaders of two coalition say they have the numbers to form the next government of malaysia. we will take a look at what is ahead of that deadline. the market opens are almost upon us. this is bloomberg. ♪

♪

>> this is daybreak: asia. we are counting down asia's major market opens. i am here in seoul. a lot of big numbers this week. the exports, 20 day exports are down 16.7% in november after being down nearly 6%, a worse than expected number. haidi: we are seeing some increases in numbers and it comes to new covid cases out of beijing. almost a thousand. two deaths being marked. this is china's first fatalities in about six months because of the shanghai lockdowns, so calling into question whether we will see a rollback of the easing measures when it comes to covid zero and what we are seeing, various measures being announced, including a recommendation to stay at home, mass testing as well. let's get you straight to the

market open. annabelle: i'm just going to recap those trade numbers as they came through from korea, because they were a significant drop. exports down 16.7% in the first 20 days of november here. taking a look at how that is affecting trading sentiment at this time of day, we have the open of korea and japan upon us. we are keeping our eye on what is happening with the korean yuan. we have seen that strengthening considerably trade it was one of the worst performers in asia over the past year but that has now changed direction in terms of what else we are watching, we do have the kospi inching high at the start of the day as well. again just to recap those trade numbers, really quite a big contraction in the first 20 days of november. of course, korea is considered a bellwether for the global economy. it really does tell us about the factors that could be hurting, including what is happening in china.

this is a real test of officials there, to start to ease possibly from covid zero, when you do have more places locking down a district. and also the death toll beijing, even though at 2, that global scale, quite small. but still a significant one for mainland china. let's turn to what we are seeing in japan as well because we do have the open of the marketeer as well. dk coming online also higher this morning. it does reflect the friday close that we had for the u.s. session, even though futures are looking a little bit weaker as we get underway with trading. the yen also in focus. the worst of the yen losses so far this year are over. that is with this expectation that we could start to see the dollar peaking, given that the fed is predicted to slow the pace of hikes. even though we do have more hawkish commentary coming from fed officials, including the boston fed president. susan who is not ruling out a 75

basis point hike in december. to australia, where one hour into trading for the asx 200, it is another day higher so far. although obviously a little bit modest. still a third straight session in the green. watching what is happening in the oil markets, given we did have that huge selloff, brent crude down nearly 10% over the past five days. given that these concerns are still in the markets around recessionary fears, even though we do have of course expectations that china still could possibly be starting to ease some of its most harshest covid zero restrictions. haidi: to that end we are getting these numbers that you also just touched on when it comes to these numbers. almost a thousand from beijing. second fatality also in terms of the hong kong leadership. hong kong leader, the announcement that he has tested covid positive after his visit to bangkok as well. we will continue to monitor

those lines as we get more details but let's take a look at the effect on the markets. our next guest, china and korea equities, says the dollar will weaken as the fed downshifts in december. obviously that has enormous implications for emerging markets. joining us now is david, global marketing strategist for asia-pacific investment. obviously, we have this consensus on wall street of the case for china. when you take a look at these developments this morning, the fact that we are now getting fatalities as being the real test of covid zero, is there a risk that markets are getting ahead of themselves on being exuberant about the reopening and the rebound for china next year? david: yes, i think there could be some of that. china is reopening and the rebound is going to be bumpy. we are starting to see some of the bumps occur now. now, whether the government and policymakers stick to a reopening plan over the next six

to 12 months, i think that they will. the impetus to reopen is so strong and to get the economy back on track. and for china to reengage with the rest of the world, i think that that is their priority for policymakers. haidi: we have seen so much turbulence when it comes to the global chip sector over the last six months. when it comes to these chips specific markets like taiwan and korea though you are quite bullish. why? david: i think that the semi conductor industry is very cyclical. and we are currently at the bottom of that cycle. and so, investors should think about dipping their toes right now, given where valuations are. and i think that the race or -- for the future and the tensions between the u.s. and china are going to be tech oriented. we are going to see continued policy support and investments into that cycle. into that sector over the next couple of decades.

kathleen: when you look at these latest numbers on 20 day exports, it is a bellwether indicator not just for korea, but the entire region. is this temporary weakness? what is driving it? particularly, what does that mean for your bullish outlook on korean equities? david: i think that investors will most likely see through some of the near term challenges. that both the economy and semi conductor cycle phase. and certainly, markets are forward-looking. i think that we can actually see additional weakness in the korean and north asian of colonies -- economies as the macro backdrop is driven by the u.s. and europe. i think that what we are seeing is a recession that could be more shallow than previously predicted. kathleen: and you are watching for a weaker dollar, that has

been an issue over the past couple of policy meetings for the bank of korea. the weakness of the yuan. this is potentially a plus. how do you see that playing out, the policy steps that the be ok can take, if the fed does start to ease back a bit on the size of rate hikes? david: i think that gives the asian central bank the view of ok, a lot more wiggle room. and that is what they're looking for. certainly as long as the fed is hiking, most central banks will have to hike in response. and as the macro backdrop deteriorates, certainly several banks want to have that wiggle room in order to ease off on some of these hikes. haidi: is the profit recession over? david: i think that we are still going to see a bit of pain, especially from earnings. earnings have been somewhat disappointing, both in china and the u.s. and the region as a whole.

but when we look out next year, earnings, especially chinese corporate earnings are going to be a lot more powerful. csi 300 should be growing around 15% on a year-over-year basis, whereas some places in the u.s., earnings are not going to be as impressive. haidi: always great to chat. global market strategist for asia-pacific at invesco. we do have some moves at the moment. we have the malaysian currency falling after the election on the first ever hung parliament. the king has requested party leaders to name a p.m. by monday. they need to inform their choice of prime minister and various alliances that they have formed. we know the two contenders have both said that they are unable to form the coalition. the decision from the king though when it comes to the appointment will be final in line with the constitution.

the coalition got the most parliamentary seats. 82 out of 220 against the former from your not far behind at 73. we continue to watch that very keenly after that saturday vote produced malaysia's first ever hung parliament. and we see that uncertainty being played out now. let's get you over to vonnie quinn with the first word headlines. vonnie: thank you. as you are saying, the malaysian elections have until 2 p.m. until -- to be a monday abid the first -- amid the first hung parliament. they fell short of the simple majority for the former prime minister also says his coalition can take power with the support of two regional powdery -- parties. powerful blasts have shaken the area around ukraine's powerplant. this includes more than a dozen on sunday morning. some buildings and systems were

damaged, but none critically. ukraine's nuclear regulator says russian forces struck the facility and russia's army issued a statement blaming ukraine for the shelling. the imf says the rise of trade barriers against china and other countries over the past year could cost the global economy $1.4 trillion. managing director christine says the potential loss for asia could be more than 3% of gdp because the region is more integrated into the global value chain. she wants asian countries to work together to overcome. >> the world is going to lose 1.5 percent of gdp, just because of divisions that may split us into two trading blocs. this is $1.4 trillion. for asia, the loss is much more significant, because asia is so integrated in global value chains, it could be 3% or more. vonnie: the world's biggest single sporting event, soccer's

world cup has begun with a lavish opening ceremony. they've been under intense scrutiny over the treatment of migrant workers who built seven new stadiums, as well as concerns about human rights and its criminalization's of homosexuality. 2-0, ecuador in the opening match. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. kathleen: thank you, vonnie. let's go over for a look at asian crypto stocks. annabelle: that's right, taking a look at the biggest movers in asia that are linked to this industry or exchanges themselves. because of course, it is a sector that is very much grappling with its case and general downgrade for the overall outlook. we had coinbase, for instance, that was cut to neutral. bank of america on friday. not because it is facing the same issues as stx necessarily,

but bank of america is still concerned about just generally the broader ecosystem and it is still as i said just justifying or trying to justify its use case, even though you have the likes of the minneapolis fed president, also saying that basically, this whole sector is nonsense. that is a quote that he had out on twitter. let's change now and check in on the energy sector that is also grappling with commentary from fed officials around the outlook for tightening. specifically they plan to stay higher for longer and of course, we know that markets are at least pricing to end up around 5% by the end of the second quarter. so this is the outlook for the major energy companies in asia today, given that we did have that selloff in oil last week. brent crude sitting flat at the start after losing 10% over the past five sessions or so. haidi: still ahead, the bank of korea expected to raise its key rate this week. continuing the battle against hot inflation.

jp morgan chief economist a little bit later. coming up first, and 87-year-old man's covid related death in beijing is re-creating fears of lockdown spewed reports of two deaths and cases added. we get more on what the officials are calling a grim situation, next. this is bloomberg. ♪

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inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done. haidi: let's get you the latest when it comes to covid-19 in beijing. of course, we had the first covid related death in almost six months and we are just getting the latest numbers when it comes to almost 1000 new cases being added. the covid death toll now rising to two people as of sunday. 950 people with local covid cases as well. in hong kong, the leader tested

positive for covid as well. all of this playing into fears that we could see a return of heightened restrictions in china. our greater china senior executive editor joins us from the chinese capital. in addition to that we had new measures being taken, measures to lockdown in remain at home. and mass tests parts as well. so does all of this throw a bit of cold water on the bullishness for -- you know, you would think that the reopening is imminent? john: well, it is certainly challenging. we have not had this many cases in a long time. we have yet to get the national numbers for today. over the weekend on a daily basis, they were hovering around 22 or 23,000 if we get to 29,000, that would be the highest number of daily cases we have ever had in china throughout the pandemic. and you mentioned two additional debts today in beijing. a 91-year-old woman in an 88-year-old man.

we had an earlier death on saturday, which was the first death in almost half a year. and so, you do see things that would normally trigger the government to take a more aggressive stance. we have also seen the city near beijing starting to do mass testing in many districts. you mentioned a lockdown. now, the question is do growing numbers of infections, rising deaths, trigger a return to where we were before with lockdowns and mass testing? and a closing of the economy? kathleen: we've been getting so excited about the covid zero starting to transition away. consumers can spend money. what is the situation on the ground now, is that going to pull that dream back? john: well, certainly the current uptick in infections is going to, i would think,

continue to depress spending by the consumer. we have, for example, schools in many parts of beijing today going to online classes. the same is happening in many other parts of the country. the lockdown of the district is obviously going to stop people from going out and spending. there is a lot of uncertainty and in times of uncertainty, people tend to save, as opposed to spend. kathleen: that was greater china senior executive drowning joining us from beijing -- john joining us from beijing. sam bankman-fried's bankrupt crypto empire owes its biggest 50 creditors unsecured creditors that is more than $3 million -- $3 billion. the details from bloomberg's finance reporter, was this a surprise? it is much more money than he has that he could possibly begin to compensate these people with. >> hi.

thank you so much. there are concerns about compensating these people. the recent backdrops and court filings do say that ftx owes its top 50 creditors $3.1 billion to be precise. and off of that, $200 million each to a couple of creditors, which shows that the list is pretty big and we remember that they are more than one million creditors for ftx. so it shows that this is a long john out bankruptcy process. lots of money owed to lots of creditors and also, there is a global asset, you know, review that is going on on ftx's books. so there are a lot of regulators involved, and a lot of creditors involved. it is going to be a long drawn out process ahead. yet. haidi: what are we looking out for next in terms of the next developments in what has just become the widespread impact of this failure? >> well, if you see that, you

know, already, we're seeing concerns across the different kinds of crypto workers and crypto exchange's. we have seen genesis and gemini, the latest ones that are at that . we are also expecting more news on genesis. we do not know, but there are concerns as well. the contagion is still far from over. we cannot look for more risks and of course, the markets will also show those risks in its time. haidi: bloomberg's finance reporter there with the latest on ftx. getting a roundup of that story, all of the top stories in the day in daybreak. bloomberg subscribers can find that at dayb in your terminals. also on mobile and you can always rearrange those settings so you just get the news on the asset classes you care about.

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haidi: let's take a look at how futures in europe are opening up. futures are looking like this after we saw on friday and exuberant session. it euro stocks really climbing on the investor optimism over china's reopening. central banks locally will slow the pace of hiking. euro stocks, futures looking flat at the moment. this is we saw the blue-chip index just almost closing in a bull market there after briefly rallying 20% from those september lows. europe up by about one in a corner of 1%. futures sitting softer at about a 10th of 1%. we are watching really those cyclicals in some of the laggards, retailers, travel, leisure, or releasing the

outperformance. the euro is flat at the moment. getting back to china and the president, xi jinping started the weekend mending ties with the u.s. and ended it with eu leaders making the case for resisting washington's chip codes on china. a bloomberg reporter joins us now. of course, it began with that momentous biden meeting and then a number of meetings with key partners and allies within about the asian pacific and europe as well. xi was at these meetings. out of we gauge the approach to the rest of the world now? >> well, i think that we should be looking at what we are hearing from some european leaders, for instance, french president micron gave a speech on friday, warning about not allowing the world to go into two different orders, saying that we need one order. essentially saying that there needs to be some pushback

against efforts to decouple the western world from china, which is something that some people think the united states is trying to do. that is similar to some comments that we heard earlier this month from german chancellor schulz, when he was visiting china. and then, we also need to be looking very carefully at what the dutch are saying. the dutch are important in all of this, because the dutch company asm now one of the largest makers of semi conductor equipment. so the dutch are in talks with the u.s. about whether the dutch should be following along with the u.s. strategy of imposing strict curbs on exports to china of this kind of technology. the dutch foreign trade minister has said we are not going to just follow what the americans are doing one-to-one. that said, they are going to be having talks with the americans later this month and so, there is a possibility that the dutch will do something similar to what the americans are doing.

of course, this is something xi jinping is really trying to avoid. haidi: do we see european partners bulking at the pressure coming from washington? this is as you say one of the biggest motivations for those 20 leader meetings that president xi jinping held last week. bruce: yes. i think one big difference is that europe of course is much more exposed to the higher cost of energy, as a result of the russian war in ukraine. inflation of course is high in the u.s., but very high in europe. so the europeans probably have less interest in having an additional conflict with china. that said though, there are european countries that are warning about the risks of getting too close to china, most notably the prime minister of finland warned about becoming too reliant on china's technology.

this was just a few days ago. lithuania of course has had a lot of problems with china because of the relative opening to taiwan. so there are divisions within europe as well about what the best approach to take toward china is, haidi. haidi: bloomberg's bruce there. it has been a busy time for geopolitics. let's get you a latest check of the latest business flash headlines. elon musk has allowed donald trump's twitter account to be matured -- restored. elon musk's decision comes at a time of turmoil inside twitter as sources tell bloomberg the billionaire is considering firing more employees. this time, layoffs could target the sales and partnerships part of the business. at least a dozen employees have accused ev maker rivian of safety violations at its illinois plant. the complaints filed via federal regulators say the company ignored hazards and a range of injuries.

in a statement the company disputes the allegations, saying they are creating a safe environment and that is part of its operating procedures. a spokesperson declined to comment on specific events. japan post bank is considering joining forces with japan industrial partners in its bid to acquire toshiba. the newspaper reports that the investment may amount to more than 350 million dollars. bloomberg earlier reported that the consortium was in talks with about 20 potential to investors. coming up next on daybreak, we take a look ahead to this week's bank of korea rate. part of jp morgan joining us. this is bloomberg. ♪

haidi: you are watching daybreak asia. financial prices are hunting

policymakers as they rush to support the local credit -- credit markets. rising rates and inflation and a slowdown in exports. data is coming through this week including consumer confidence. as well as business sentiment surveys. of course, all of this is leading to the bank of korea's decision on thursday. let's get over to annabelle for a little bit of a closer look as to what the dynamics we are dealing with your art. annabelle: yeah, that's right. and also it is quite interesting. we are seeing that really korea is trading in the red this morning, unsurprising as you said. figure forces at play. we did not have the trade data at the top as well. 16.7% drop in exports for the first 20 days of november. certainly a sign of just how much korea is grappling with these external demand forces, particularly the demand for china.

it still not picking up even as we see officials starting to move toward covid zero in some way or another. that is the outlook of play or trading as i said a half-hour into the trading session for korea and japan, australia also 90 minutes into trading today. let's change it though, because you mentioned the korean yuan. it is turning into one of the best-performing currencies in asia so far this quarter. take a look at this function, which also just tracks on the basis. if you change that to quarter to date instead of your to date, you would see the korean yuan is gaining 6% so far this quarter. again, it really has been a currency that is more sensitive to those risk factors, risk appetite in general. you can take a look there. the move that we have seen for the currency. haidi: let's get you to new york. vonnie quinn has the first word headlines. vonnie: thank you.

climate negotiators in egypt have reset the relationship between rich and poor countries. a move without a single opposing voice the agreement rates of fund that helps evolving nations face the devastation of climate change. while it is a historic victory, negotiators failed to secure cuts on greenhouse gas emissions. the u.s. and china have resumed formal talks on climate change. china's climate envoy says the two countries have agreed to discuss losses and damaging developing nations are experiencing because of climate change. any new deal should mirror the paris agreement. turkey has carried out airstrikes against u.s. backed militant groups in iraq and northern syria. the defense ministry says the rates were to eliminate the terrorist threat and come after a deadly bombing that targeted civilians in istanbul. global news, 24 hours a day. on air and on bloomberg quicktake,

powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: all right, let's get more from seoul where kathleen is. a lot of dataflow from korea. a very challenging economic time, but this is building up to the bank of korea red call. kathleen: it certainly is in here to help us look into all of this, here in our studio is the chief korean economist at j.p. morgan. thank you for joining us this morning. it is a beautiful one. want to start on those export numbers. 20 day export numbers down sharply. what do you make of that? seok: indeed, you are right. the korean court number seven going down in the recent weeks and months. including this morning's number. but at the same time, we have to bear in mind that most of the

dragging effect is the price effect instead of the volume. if you compare the price and volume, the volume is relatively better, holding up better. so in terms of the growth profile, what matters is the real volume growth. which means that we think the real gdp growth should be faring better than what the experts are implying. kathleen: as we look ahead to friday, a lot of things for the bank of korea to look at as it makes that decision, probably between 25 and 50 basis points, in terms of the rate hike when you look at the balance between where inflation is, if the pressures look like they are continuing to build or decline, if you look with the economy is going, where do you see them going? seok: actually the rate is now near. we are at three and a terminal rate may be 3.543.75. so we have been expecting that

the bank of korea's policy hike cycle should be more gradual than before. instead of 50, maybe 25. because we are not fully sure how much we have to get to. so as the end of the hike cycle is nearby, we think the bank of korea will adjust its messages that may be the end of the year, and probably him if the inflation number is not steadily stabilizing enough. there are all of these signs of inflation. i think it is the right time for them. kathleen: does the extreme credit market volatility that we have seen over the last month raise concerns about financial stability? does it seal the deal for 25 instead of 50? seok: it may be one of the factors to affect that, because i think the bank of korea is trying to strike a balance

between the inflation stabilizing mandate versus the stabilizing mandate. so to that end, i think the bank of korea is not going to jeopardize its mandate when stabilization -- financial markets. 25 basis points, which may be defying the market expectation, they will be lb destabilize market sentiment. kathleen: do you see any way in which this market episode seems to have stabilized? there is still concern as to whether it has ended completely or not. is it going to hit the economy or could hit the economy or if he continues? seok: it is inevitable to see some of the cost of the policy rate hikes. in terms of growth slowdown and also sporadic financial stress like we have observed in the past couple of months. at the same time, i have to stress that that is the required

slowdown or some stresses, to stabilize inflation expectations. kathleen: so if the federal reserve signals and maybe even does a 50 basis point hike instead of 75, what is that going to mean for korean credit markets? and the bank of korea? seok: korean credit markets, it is more about the domestic credit conditions. and yes, you are right. it depends on how far the bank of korea can go. that is the function of how far that can go. at the same time, it is the fed policy hike to the bank of korea. they are related, but i think it will be how much the core inflation can stabilize going forward from here. i think that that will be the key. kathleen: how about the yuan? what role is that playing?

one of the weakest currencies in the world, it has had a rebound possibly partly because investors are looking for somewhat less aggressive bank of korea. how important is that, how do you see that playing out, where you see it going? seok: let me focus on some macroeconomy backdrop for the fx market. in our sense, there is some weakness of the korean yuan currency. it was reflecting the trade. and i think going forward, it will be key to where in terms of trade we will be recovering or falling further from here. and in terms of the impact from the fx market, to the policies, it should be some indirect impact from the currency to the bank of korea. because the inflation is targeting the central bank, not the currency. in a way that if currency weakness is impacting the inflation outlook, it will be impacted.

at the same time, i have to stress the investment in the direct process. to the end, to some degree, the 50 basis point hike decision in october was affected somewhat by the currency movement, from here on, if the currency market is as stable as now, i do not think that that will be a major factor for the bank of korea to change its behavior. kathleen: i will talk to friday and we will see what happened on thursday. thank you so much. chief korea economist at j.p. morgan. and up next, we will talk with a former political secretary to the asian prime minister. here why ei sun oh expect changes after the weekends in the decisive election. this is bloomberg. ♪

haidi: taking a look at the malaysian, we are seeing the reaction across the currency as a reaction to malaysia seeing its first ever hung parliament. we see the trading just about 6/10 of a percent lower at the moment against the u.s. dollar. we have seen the broad pause in the u.s. dollar strength recently. but of course, we wait for the 2:00 p.m. deadline, which was

given by the king for the possible coalitions to be formed and delivered for a decision to be made. so those plans should be presented later on monday afternoon. let's bring in julia to has been on the ground covering this election, as well as the principal adviser of the pacific research center. previously served as political secretary to the former malaysian prime minister. let me begin by just getting the latest from you as to what we can expect today. juliette: yeah, as you said, malaysia's first high parliament and king does want a decision by 2 p.m., so a lot of dealmaking going on since that it is election. it looks like it is going to come down to the former ruling coalition as to who they give their seats to. they have 30. we have opposition leader's party with 82% of the -- 82 of the 220 seats needed. and you have the former

premier's party with 73. this is the pro-islamic party and it is more likely as we're hearing from james earlier from the university of tasmania, that they will form a coalition. which will probably be not unlike the government we have had, just with a different leader. at the same time, you had malaysia's longest-serving prime minister at age 97, losing his seat and ending his political career. haidi: let's get more from our guest now. joining us in the conversation, how do you see this playing out as we head into the afternoon deadline? do you see as you say alliances of convenience being formed to be able to get it over the line? just wanted to check that you can hear me, in terms -- ei: yes, yes, sorry.

we get two distinct possibilities. number one, you would have indeed the p.m. coalition coming together. and it would be very similar to the previous coalition. on the other hand, i think all eyes are on the president of the party, which leads the coalition. if he were to lead his party in forming a coalition with them, then indeed, they could form a new government. i think a lot of reformist malaysians are looking forward to that. while some malaysians are looking forward to more of the same. the coalitions are coming together once again. haidi: wood one result over the

other deliver more economic stability and positivity? ei: well, i think the worldwide investors are looking forward to perhaps more economic policies from malaysia. but malaysia has been sliding and its economic growth is also taking a backseat to political struggles. so i think a person such as abraham would bring confidence to the investment community, while, for example, and islamist led government by pn and bn would really have to lay out what the plans would be in terms of reviving the economy. juliette: juliette here. how much do you see the youth vote really impacting? we know it 6 million new voters

were eligible, but we were speaking earlier to a gas to said so far, the data does not show so far that they came out as much as we were expecting. they are certainly focused on the economy, rather than racial based politics. ei: indeed, i think malaysia at the moment is recovering from an onslaught of the pandemic. a lot of people are having troubles getting along with their livelihood. there is flyaway inflation. and this political juncture, you want to install a government which perhaps places more importance on it, for example, religious issues, and i think you will be very hard to put for malaysia to regain its democratic ability internationally, in terms of

being the favorite investment destination. haidi: absolutely. and that just comes back to that point about how much foreign influence you could see. they have dropped off to magically since the 2018 election. you've also got trading in this 24 year low. so just tell us about some of the pressures on the economy. ei: well, i think since the onslaught of the pandemic, a lot of people, for example, they have been very hard put, in terms of losing their jobs or sometimes having their wages snatched and so on. and the previous governments, which was dissolved nearly a month ago, when they tried to provide a lot of assistance, handouts, and so on. but this is not a long-term solution. because malaysia would need to

in a sense transform its economy from middle income to hopefully a high value added one. there is a fair share of electronics, the industry in malaysia. in some pockets of industrial clusters, for example, the food supply in malaysia is not sufficient. and that has been made very prominent during the pandemic. people do not have enough to eat. and of course, the prices are really skyhigh nowadays. juliette: yeah, absolutely. my producer and i were out on the weekend and speaking to malaysia is at what markets, food centers, and that was a key point about the cost of food. i wanted to ask you as well, we were talking about the longest prime minister losing his seat.

what is his legacy? ei: well, the doctor transformed this country from an agricultural base one 21 which is much more of an industrialized -- to one which is more industrialized. that was his main contribution, raising the income and global influence. the challenge is how to raise that further, such that malaysia could become a high income nation, a developed nation by definition and also in practice. that is why it is critically important at this juncture that you would have a stable government. and also, a visionary governments with the kind of confidence, expertise, sincerity and integrity to bring this country. if we were to have a government which is led by islamists, i

think you would be very hard put to gain a foothold in the economy. juliette: how strong will the islamist party be given the outperformance in the selection? ei: they are now the single party with the largest number of members in parliament. and even if they do not put up a prime minister, i think that by definition, they would be controlling a lot of policy generation, policy output of the new government. if they were to be in the new government. and if you look at examples from elsewhere around the world, turkey immediately comes to mind. and islamist led government typically number one would try to make the previously

functioning democracy into an illegal one. that i think would be a very challenging proposition. haidi: principal advisor at the pacific research center with us. and juliette who will continue to keep us updated as we get toward the 2 p.m. deadline to come up with those coalition plans. more to come on daybreak asia, this is bloomberg.

♪ haidi: fashion giant sheehan gained global popularity especially among tiktok where influencers would show off videos from the retailer. but laboratory testing found that the garments shipped to the u.s. were made with cotton from china's region where china abuses the minority. let's bring in rachel chan who leads our consumer health and media team. let's be honest, there is a lot of highly problematic bsg issues with this company. what have you found? rachel: very much so. you have to realize this is a brand that has built its success on being cheaper than anyone

else, on turning outcrop tops and addresses at a crazy rate. really satisfying the young people who buy things for one time, for social media and then when they're done, it is disposable fashion, taking that model to the extreme. so it is not surprising to know that esg wise in terms of using what is readily available in china is a chinese manufacturer, all of these are now coming up to the foreground, because it is becoming so powerful and such a big company. haidi: when it comes to economy imports, what are we actually seeing? because the math of it all suggests that plenty of cotton is making its way to u.s. shores in u.s. consumers. rachel: right, that's right. it all goes back to the $800

exemption for individual purposes on e-commerce. a lot of chinese researchers -- chinese retailers. the u.s. locks imports of anything made there. but these actual packages are delivered to individuals directly, as long as each purchases under 800 u.s. dollars. it does not go through customs. it comes in an individual parcel. so through that, we know that substantial amounts of apparel made there are getting to u.s. consumers. haidi: right. rachel chang without great report. you can find it on the terminal. also, daybreak asia is over. our markets coverage of shanghai is next. this is bloomberg. ♪

david: