vonnie: welcome to daybreak asia. haidi: show you has just come online. the top stories this hour. set very positive start after the wall street rallies. bitcoin bounces despite court proceedings revealing a substantial amount of ftx assets are missing or stolen. chinese authorities set to fire jack ma and the possible into the crackdown. that's get you straight to the staggered open in australia. qantas on the upside when it comes to travel expectations on demand going into next year, adding to a positive line in the numbers we got this morning. the stock trading .3 percent higher. we are expecting a little upside after the we saw the u.s. session rising a little bit, particularly watching energy as

well as tech stocks. energy should be a big player in tech stocks as well after we saw that uncertain supply outlook along with potentially concerns about opec-plus increasing production. kiwi stocks on the back foot as we get into rba decision day. consensus is we could get that jumbo size 75 basis point hike from the rbnz, suggesting credibility is on the line in the fight against inflation. nikkei futures, given it is a public holiday in japan, no cash trading there. we are watching dollar-yen at the moment. vonnie: u.s. equity index futures are trying to decide on a direction, pivoting between unchanged and little down. we had anemic volume in the u.s. yesterday but we had all the major indices up more than 1%.

that snapped a seventh session streak of sub one-percent moves. it's not something we have been used to since the cpi data. waiting on the direction for the equity index futures but the s&p 500 finished the session above -- have a look at new york crude, up $.18. we look like we have the european union softening sanctions, so we will keep an eye on fossil fuels. bitcoin counting back from a session low as the judge ruled the identity of major ftx creditors can remain secret. a substantial amount of ftx assets are missing or stolen. a lot of investors have had their confidence encrypt though shaken already. what are they to do now? su: one of the more memorable

quotes was that the former ceo is a case of the emperor has no clothes. that underscores the confidence. you did see a bounce across the board, particularly with bitcoin, up as much as 4% after falling to the lowest in two years. the big picture from bitcoin, it has taken a brutal beating. crypto winter has become a bit more frigid. in terms of the bankruptcy hearing, the key quote from the ftx attorney and those now and charges a substantial amount of ftx assets are stolen or missing, most of it gone. we heard company advisors are in constant contact with the justice and u.s. attorney cyber crimes which opened a probe on ftx. the u.s. house and senate congressional members also asked the new ftx ceo who had supervised the bankruptcy of

enron to testify at some point in december. when you look at the fallout that continues to come from the sbf implosion, genesis global capital is the one front and center and continues to be on the brink of bankruptcy. it's institutional lending unit forced to suspend redemption and it disclosed it had about 175 million dollars locked in funds in its ftx trading account, possibly that money is gone. one of the most stunning details to emerge, one of the colleagues of sam bankman-fried, the former co-ceo at alameda said they used poker and blackjack strategies to engage in high-risk trading. it underscores what lawyers say are the complete lack of controls by sbf and his firm. haidi: stocks tied to anything crypto are attracting a lot of

bearish bets at this point. su: that seems to be the direction for the stocks tied to bitcoin. jump in the bloomberg and you can see the contagion in the crypto stocks has fallen below the price of fallen bitcoin. if we go through the year today for the top 10 u.s. crypto stocks tracked by bloomberg, there is a 1400% gap between these stocks and their price targets. asian crypto stocks have taken a beating on a year-to-date basis. a lot of analysts had been slow to revamp their views. if we look at how stocks traded in the latest session, coinbase, the latest change did bounceback. it will have to rally a staggering 792% to reach the 12 month price target. cathie wood's has been a buyer of coinbase at these very depressed levels.

haidi: let's get some more on the market. we start on the fed and we are talking but the cadence of fed policy and the transmission. it was interesting we saw this push up when it comes to pricing action. nothing meaningful has changed and it comes to the rhetoric. >> it's a bit of a goldilocks day yesterday. the volume was low, you can't read too much into that this week. trading will be pretty light in asia today. but we will see this all the way through to the fed meeting in mid-december, people having differing views on how aggressive the fed is going to be. are they going to drop down to 50 basis points and talk about a plateau in rates? we have this back and forth

going all the way, so we will see erratic trading over the next few weeks. it might not tell us a great deal about how the year is going to end but i suspect if you look at the resilience when there are dips in the s&p 500, it comes back fairly quickly. it suggests there more people leaning toward the idea the fed is getting close to their target for the terminal rates and they will hold their. the -- that gives equity traders a bit of a better footing. at least they can price it in and say it can be held there for a while, we can put it into our calculators and we know major companies in the u.s. have been pretty quick to lay off people, getting themselves ready for a slowdown so they can price that ahead. on balance, it probably gives people a little more optimistic outlook into the year-end. vonnie: we turn our attention to asia and china -- just when we thought the reopening story was getting traction, we see chinese

assets under pressure. will the markets lead the pboc in china or vice versa? mark: we've seen some on the lockdowns, but the biggest story may be of the report is true that alibaba is going to be fined a billion dollars and they company is allowed to move on, that is good news for china stocks, particularly tech stocks in hong kong because if alibaba can get the financial ipo back on the ground, that is a huge incentive for people to get back into the greater china stocks. that to be a turning point for the mood in china tech stocks that we have seen that have been battered so badly this year. people are looking for optimism and alibaba is one of the biggest companies. if they can draw a line under the troubles at alibaba and

companies like tencent have had, that's a major turning point for companies in china. with the stock so far down, you could get serious money coming off the sidelines even before the end of the year. vonnie: thank you. let's get more on that story. reuters reporting the penalty could land in the second quarter of next year. annabelle has been tracking the details. could this be a possible end to the regulatory overhaul? annabelle: that would be the hope from front end investors who have been burned by this year's crack down on the tech sector. just going through the details on this reuters report -- the fine could be more than a billion dollars and it could come in the second quarter of next year. reuters has said the pboc is preparing the penalty. they have been in touch about this and no comment yet to us at

bloomberg, but if it did appear, it would signal we are nearing the end of the crackdown. that kicked off with and being forced to pull back their massive ipo in 2020. about meeting some sense of optimism, they are positive on this so far because a billion dollars isn't such a big fine. it's more like a slap on the wrist. the big benefit is it does remove that regulatory overhang in the sector and we've seen signs of progress in other companies. tencent got its first gains approval since china started reissuing licenses again this year. any indication officials are looking to wrap up their investigations into ant would be a win for the sector in general. haidi: we see indications, and prosperity is a key theme for the government. annabelle: that's right,

especially when you look at the moves from jd. we understand jd is cutting its salaries for its top managers by about 10% to 20%. what is important is the money the company saves from those salary cuts, part of that will go into an employee benefits fund and that's worth around $1.4 billion. the founder of jd.com will be taking money out of his own pocket to put toward this as well. that is what sources told us. a fund will be established to help staff get interest-free home loans. that timing is quite interesting because we just had president she -- president xi reiterate how important this drive is, about redistributing wealth more widely in the population to bring down huge inequality that does exist and mainland china.

we have seen other companies joining this. one has a fund helping farmers. alibaba and tencent also have programs, but it does follow what we have seen in the tech sector. bloomberg intelligence says that means operational uncertainties could exist into 2023. haidi: let's take a look at the first word headlines. the eu has watered down its latest sanction proposals for a price cut on russia's oil exports by delaying its implementation and softening key shipping provisions. according to documents seen by bloomberg, they proposed adding a 45 day transition. the european commission proposed an emergency brake on natural gas prices of 200 75 euros per megawatt hour. shanghai is tightening covid rules on new arrival starting thursday in a bid to avoid

surging infections. new arrivals will be barred from their first five days from places including restaurants, bars and markets. they will need to do an extra nucleic acid test on their fifth day after three tests in the first three days. former south korean foreign minister says the country should turn to reforms as inflation remains elevated. policymakers should push to lower the corporate tax rate, get rid of needless redtape and enact labor reforms. >> now we are facing not just inflation but stagflation. so how can you resolve that is really problematic. that's the dilemma. vonnie: still ahead, the search for malaysia's next government hit a snag. here why they can certainty --

the consultancy firm says uncertainty is set to linger. and state street and why they think safer is better going into a recession. this is bloomberg. ♪

>> given the high level of inflation, restoring they price stability remains the number-one focus of the fomc and we are committed to using our tools to put inflation a sustainable downward trajectory. >> what we need is to get

inflation peaks and stacks to come down durably. it cannot only be one data point. in our forecast, we forecast inflation will start to pivot around mid next year and will continue to come down even though it will remain fairly high in some countries at the end of 23. vonnie: the oem -- on the global inflation flight. joining us now is the senior global macro strategist at state street. i know you think the fed can't avoid a recession at this point. when do you see it started in the unite -- starting in the united states? marvin: i think second-quarter going into third quarter is a reasonable time. we will be at peak rates and we will have seen the 500 plus basis points we put into the system is doing and have the natural slowing we are already starting to see in the economy.

that might not necessarily be a bad thing. it tends what seat you are looking at it from. in terms of holding down inflation, that might be necessary. vonnie: markets coalescing around the 5% mark. is that adequate? marvin: for the moment. i think 5, 5 point 25 is where i'm at. i think it's a function of how long the fed feels it needs to keep it at that level in the market isn't having the conversation deeply about it, just relying on history and expecting cuts are going to come within two or three quarters after that and that might be optimistic. haidi: to what extent are you still sitting on cash for 23? what percentage of the about -- of a balanced portfolio do you think it's wise to do that with? marvin: cash at four plus percent is not a bad thing in

the face of volatility. we do not have asset allocation model around cash personally. we are keeping the dry powder and it seems to make a bit of sense for me at a personal level while i wait to see how this evolves. haidi: it's that time of year when we start getting predictions for 2020 three. that's the question -- do you think the outlook for next year is too bullish or bearish from what you have seen? marvin: i think at this point, it's a bit bullish given the amount of uncertainty that's out there. there's a lot of crosscurrents and what these asset classes are seeing, this inverted yield curve is saying there's going to be a recession and the fact it has gone inverted as it has, it might be a more significant recession and we have seen in the past. at the same time, we've seen stocks and a lot of risk assets rally quite significantly in an environment where those

recessionary forces are starting to make their way out but are not out full force. you've got this crosscurrents that is hard to balance at the moment. i would think being a bond person ultimately, feeling rates are correct come of that there's a little too much optimism built into risk assets. vonnie: where does cpi go? we likely to go below 3% or above 10% first? marvin: i was never in the above 10% camp. having the economy structured in a way that it's set to get there, but the markets going into next year, we need to see whether or not we can get closer to the 2% were 3% number the way a lot of forecasts expect. haidi: always great to chat with you. you can get around up of the

stories you need to know in today's edition of daybreak. terminal subscribers can find them on the mobile, on the bloomberg anywhere app. you can make the settings so you get the news on the industries and asset class are that matter most to you. this is bloomberg. ♪

vonnie: arctic ceo cathie wood has reiterated her taste -- her case for crypto. she said the underlying value of the technology remains. >> the infrastructure, the technology has not up to beat throughout this entire crisis. in fact, the hash rate, bitcoins has rate is at an all-time high. that is a real indication of the security of the network. on ethereum, we see the total value staked at $24 billion. that is an all-time high.

we think the infrastructure is working beautifully. as far as coinbase, this is an onshore, regulated company, wanting to help shape regulations, the ceo and the cfo have been leaning in to what is going on right now and saying regulators, we need more clarity in order to protect investors. those who wanted to get involved with certain types of crypto were forced offshore and look at what has happened. i think coinbase is going to come out here looking very strong. it just lost a very big competitor in ftx. >> what is the market missing? that could be one narrative but

we haven't seen shares of coinbase rally since the collapse of ftx. does that represent broader concern about people's interest in crypto following the collapse of ftx? >> i think it is more fear. many people say we don't know what we don't know and so what we do is we step back, put a little perspective in the situation and what do we have? the entire crypto asset ecosystem is an $800 billion ecosystem. apple is three times larger in terms of market cap. so that is some perspective. many people are saying is this another lehman brothers? could we see the domino effect here? i've given you one reason why. the banking system in 2008, two thousand nine, trillions of dollars and it was the global banking system. right now, we have it seems from

ftx, $5 billion to $10 billion in creditors as ftx has filed bankruptcy. they will be making claims. if you look at lehman brothers, that was one point $2 trillion in claims. just trying to put perspective, this is fraud. haidi: cathie wood speaking to tim tote -- eking to tim stenovec and carol massar. let's get a check of the business flash headlines. a surprise revenue gain after cost cuts helped prop up the bottom-line and online advertising held better. sales -- baidu's performance gives ammunition to investors who say china's internet sector may be emerging from a two-year drought. revenue was three point $2 billion from the three months to

september compared with the endless production of $3.1 billion. they have scaled-down marketing expenses, especially overseas. coming up, control risk tells us why malaysia's clinical drama should not distract foreign companies and investors. this is bloomberg. ♪ well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity?

that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about.

vonnie: you are watching daybreak asia. let's look at where u.s. futures are trading -- industries rose

1% apace -- the s&p 500 up 1.4% in yesterday's session. plenty of earnings to digest. hp is cutting 6000 jobs -- we will sail markets digest that once they open. here are your first word headlines -- a lawyer for ftx groups as a substantial none of the crypto firms assets are either stolen or missing. the company's first court appearance, the judge allowed names of key creditors to stay secret for now. the hearing is set for december 16. 50 unsecured creditors are owed more than $3 billion. chinese authorities are letting to impose a fine of a billion dollars on jack ma's ant group. it could land in the second quarter of next year. the report says it could pave the way for the end of a regulatory overhaul of the fintech firm that included the blocking of its planned 2020 ipo.

the u.s. supreme court has cleared the way for a house committee to get six years of donald trump's tax or terms. -- tax returns. the committee says it needs the returns to consider potential legislation on presidential compliance with tax rules, accountability, and mandatory irs audit policies were president. shares in manchester united football club jumped in late trading as it announced it starting the process to explore what it calls strategic alternatives. the board says that includes the potential sale or new investments. the news comes with the star player set to leave the club after an explosive tv interview where he blasted the manager and said he felt betrayed. those are your first word headlines. let's -- annabelle: 30 minutes out from the open of markets in korea.

japan shut for a public holiday but in terms of what we are expecting out of the opens today, a little mixed in the future space. we had that volatility in the u.s. session, down to investors appreciating the fed may be open to moderating the pace of its rate hike and the earnings that came through from best buy and abercrombie. the big unknown will be how investors react to what is happening in china. a couple of stories we are monitoring -- covid cases around record highs since the start of the pandemic. other factors at play include what is happening with aunt. officials could be preparing to slap a more than $1 billion fine on the company. that could be seen as a net positive by investors if it removes the regulatory overhang the company and tech sector is facing. the other story is jd.com. the company is planning to cut salaries for its top management. bloomberg intelligence saying

that could extend operational uncertainty. the tech sector in focus and we will see how that moves at the open. the other big story in new zealand -- that decision from the rbnz coming later. 15 of 21 economists say they see a 75 basis point hike. that would take the cash target rate to the highest since 2008. in terms of other sectors we are focusing on, australia moving high but one sector we are watching is qantas. the company came out lifting its profit forecast, seeing profits coming in at $1.45 million -- that is aussie dollars, $150 million higher than it signaled back on october 13. it does signal just how strong the demand is in australia. haidi: the search for malaysia's next leader has hit a snag with

the ruling coalition saying it will stay out of any new government. our next guest has some analysis. let me start with the latest -- this protracted uncertainty continues. juliette: it is up to malaysia's king to decide who will become malaysia's fourth prime minister in as many years. he has summoned the mp's, the 30's who would not decide to give the seat to the parties, so he's going to interview them all, all 30, and decide who he thinks should for malaysia's government. incident forming an alliance with either party to remain in opposition, to try and build itself back after losing only its second election over --

after the last 15. the monarch wants to see a strong, from edible, and inclusive government. he said he turned down a proposal by the ph party to form some kind of unlikely alliance. these ongoing uncertainty in malaysian politics continues even after the deadline to inform the king was extended by 24 hours. haidi: i want to bring in the associate director at control risk. give us your take from the level of uncertainty we are seeing in the implications for economic reforms and the broader investment community. harrison: thank you. essentially, what we are seeing is a lot of open outcomes. i think both have a fairly good chance of being able to form the next government. the kings meeting with the

members of parliament tend to be local time in malaysia. i think it's essentially for the king to work out whether the mp's will be willing to support either party in a confidence and supply agreement. what we are likely to see is some kind of minority government . in terms of economic growth, regardless of whichever government comes to power, they are going to be open for business, very pro investment. we have seen a couple of years of instability with various changes of government but orientation to foreign investors and the business environment is conducive hasn't really changed. we've seen several advances in the digital economy in terms of embracing renewables and climate change policies. these priorities won't change

regardless of whether it's even a surprise candidate like we saw in 2020. haidi: they claimed a single number of votes when it comes to any single party and parliament. does that provide a downside risk when it comes to creating more division and uncertainty for investors? harrison: i think where investors might have to be careful is the sort of creeping religious conservatism that might appear in particular sectoral policies. for example, in terms of regulations surrounding alcohol, regulations surrounding smoking or vaping, that is where the influence is felt.

however, a key caveat is previous administrations include a part as well. they work quite careful and a portfolio is given to pass, it did not allow them to exercise that kind of influence because they understood they need some support from either minority. this election is a game changer in that it's not the single largest party in parliament. they are going to have the clout to demand more positions and it depends on how they are able to balance that. he needs the support and they are suspicious. so it is a balancing act which ultimately will result in accommodation and dilution of policy. juliette: you are not concerned

if we see a surgeon conservative politics that that could put malaysian politics at risk? harrison: i don't think so. based on the track record as prime minister, despite it being a short-lived one, you could see he was clear to put his own people in the economic portfolios. the former finance minister and those were his men. that is for clear political reasons. if you control the economic portfolios, you are able to control how political support can be cultivated in that sense. i think he will be careful not to hand any of those portfolios and even if he did, he might identify someone more moderate and willing to listen to the middle ground. juliette: we have seen external

area growth in malaysia recovering from the pandemic and had an incredibly strong covid-19 vaccine policy. where do you see growth coming from and 2023 regardless of what the new government looks like? harrison: in terms of economic growth, the key sectors, the digital economy with malaysia adopting, finally having a 5g master plan after years of delays, that will be critical in driving demand for digital services. we've seen an influx of data center players across malaysia. the other thing i would say is in terms of electric vehicles, malaysia has been a strong supply chain node for many investors. focusing on manufacturing, assembly, we see malaysia taking steps similar to what thailand and vietnam is doing, moving

toward trying to capture manufacturing of ev's and batteries. that is where malaysia's economy is geared toward. they have to move beyond the middle income trap and try to go for high-tech manufacturing in a big way. juliette: a final quick question on the youth vote -- how did you read that when we had not as strong a turnout as expected but more young people heading to the polls because the voting age was lowered? harrison: this straight answer is the youth vote was difficult to read pre-election and post-election, it showed there was no single party or coalition able to capture the youth vote. the major political parties had their own youth wins, so there is the capability to capture the support and divide the votes

among them. we saw even though you might think the youth vote might embrace change and reform, they may be more inclined, but there a lot of distrust or discontent. they don't really trust him, so voters who did not want to vote for him, they switched their votes. it represents a pro melee party and it coalition that does not embrace corruption. haidi: the latest on the malaysia election. vonnie: we have some headlines coming in from the first day in bankruptcy court for ftx. the current ceo saying ftx plans to reorganize or sell assets in

an orderly way and has received interest for these assets. we have begun receiving interest for assets and will re-organize or sell assets around the world for the benefit of stakeholders. this, after we heard a substantial amount of ftx assets had been stolen or missing. it remains to be seen how much is left. coming up, the new zealand central bank is post to fight -- the highest rate since -- in decades. this is bloomberg. ♪

haidi: new zealand central bank poised for an unprecedented jumbo rate hike. our wellington bureau chief joins us now. and extraordinary -- the central bank that started this whole hawkish tone globally, they are talking about 75 basis points at a time when the markets are thinking about a pivot. >> that's right. it would put the rbnz in contrast to other banks like the bank of korea looking to

potentially stick down the pace of tightening. when you think about what they have done, five straight 15 basis points hikes, it seems extort her we are looking at stepping up to 75 basis points. but inflation is running at 7.2%, a lot higher than the reserve bank expected it to be at this stage. inflation expectations have spiked. the labor market is extremely tight and after today, there is a three month gap until the next policy decision next year. for those reasons, most economists think they will deliver a 75 basis point hike today. vonnie: what happened? could they offer 50 basis points? matthew: there's a chance it could. we've seen globally some easing of inflation pressures and domestically, a lot of new zealand households are on

fixed-rate mortgages. typically two or three year terms. a lot of those have yet to rollover to higher interest rates. that could trigger a sharp economic slowdown next year. there is a challenge they stick to their 50 basis points strategy. haidi: what are you going to be looking for in terms of the forecast today? matthew: forecasts will be really big. we will be looking closely at where the bank sees the cash rate peaking. three months ago, it was forecasting 4%, 4.25% next year but we could get there today. it could be 5%, potentially even higher. the growth forecast will be interesting. are they forecasting a recession, are they saying they have to engineer a recession to get inflation back to target? vonnie: we just have one hour and 12 minutes left to wait.

looking at south korea, pressure is building on the economy. inflation at a two decade high. the trade deficit is growing. they are said to return to their regular range of tightening. a former south korean finance minister says countries facing the risk of stagflation. he said that means the government should push for looser regulation despite political resistance. >> the government budget or deficit has a snowball type of trend. it is really hard to reduce -- i'm not saying it is impossible, but it is very hard. currently, what they are doing is right and should they push further, maybe, but i don't know

if it is possible. i don't think it is possible. kathleen: fiscal deficit tightening, central bank continuing to fight inflation, even if it is not the big rate hike. stagflation, we are hearing more of that word being tossed around in korea. what do you see? >> that is a dilemma for them, for the policymakers. the business you are talking about is clearly >> anti-inflationary. so we are facing not just inflation but stagflation. the decision part, how can they resolve that? that is a dilemma. if someone asks me what do you do if you are in that position,

i don't know. it seems to me some kind of indirect measure, it has the competitive power in the market. one way, although we are tightening the fiscal policy, we can think about the lowering tax rates, tax cut. it is not easy. the -- they don't like it at all. it will be nearly impossible. the lowering of the corporate tax rate proposed by the government and it is rejected by the opposition party and some

other tax cut, may be can reach a compromise but they will not be really effective ones if it is a minor tax cut. regulatory reform they are saying and that would be good for the competitive ability of the firms. but that will take time. but i believe it should be done so -- there are so many needless redtape send regulation. we should get rid of them. haidi: south korea's former finance minister with kathleen hays. tune into bloomberg radio so you can hear more from today's big newsmakers and get in-depth analysis from the daybreak team there. we are broadcasting live from

our studio in hong kong. more ahead. this is bloomberg. ♪

vonnie: here's a quick check of the latest bloomberg business flash headlines. plans to dismiss thousands of workers as part of the incoming ceo's strategy to win back investor confidence after the fintech giant fell 44% this year. the company had more than 50

5000 employees at the end of last year. societe generale will merge large parts of its business in a bid to overtake bnp paribas. they will reunite their cash equities trading and research units. socgen will hold 59% and have the option in five years to buy the whole business. prosecutors rated the frankfurt offices of vanke of new york mellon. it's part of the vast investigation into the controversial scandal that has ensnared some of wall street's largest banks. bny mellon confirms that its office was visited -- was visited by german authorities and says it continues to cooperate fully. haidi: these are the stocks we will be watching when trade opens in korea. the korea economic data daily is confirming samsung will make three millimeter chips.

watching samsung, the heavyweight at the open. also hearing from the male business newspaper, saying the saudi arabia investment fund will jointly invest in the entertainment front. we are watching korean drum movie companies -- they could see active trading after. local media has confirmed they are streaming a korean film after six years. coming up in the next hour, the u.s. and chinese economies headed toward very different directions. the asia-pacific strategist explains why. goldman sachs is with us to tell us a china rebound is --

vonnie: this is daybreak asia. we are counting down to the market in seoul. the japanese markets closed for a holiday. we did see an update in the u.s. yesterday -- indices above 1.4% higher for the most part. but it was any make volume. it is thanksgiving week in the u.s. haidi: we are looking at breaking numbers, when it comes to cd -- singapore gdp. we saw the not all export number posting the biggest decline in 34 months. we are watching to see whether that better than expected growth number we saw in the previous reading can be sustained. headwinds would it comes to these economies, like singapore at the risk of feeling that downturn when it comes to diminishing global demand. take a look at these numbers we are getting across the bloomberg.

that headline number for the third quarter, four point 1%, being revised lower and missing expectations a little bit. that quarterly number coming at 1.1 percent, softer than expectations of 1.5%. we did see it on the export front, terms of trade falling the most since november 2019. we have seen trade volumes with china and malaysia as well as the european union contracting. this comes on the back of singapore tightening policy and we did get the gdp beat, but things may be starting to rebalance a little bit. so much of this china story hinges on whether we see the path forward for a reopening. annabelle: let's see because numbers continue to rise. the most recent number beijing

is reporting -- 1470 six new local cases for november 22. that is the number we are concentrating on in terms of trying to figure out what's happening with china's economy and reopening. annabelle: that has been a major headwind as well as a rising cases in china. the focus more on what is happening in china's tech sector given we have reuters reporting a huge levy on ant group, as much as $1 billion. jd.com planning to cut salaries for its top managers. tech is in focus for korea. japan is shut for a public holiday not we did see the nasdaq gaining in the prior session even though nasdaq futures look a little more muted. investor starting to appreciate that the fed is open to

moderating rate hikes moving forward. so we see that outpacing they gains already. in terms of the currency market, the korean won snapping a five-day slide that had been its longest losing streak in more than two months. the korean won a very risk-sensitive currency and it had been dented by signs the local economy weakening because consumer confidence has been deteriorating. exports sliding even though inflation expectations are starting to moderate. it sets us up for a be ok rate decisions were most economists are expecting it to move to a smaller set of rate hikes, around 25 basis points. new zealand is in focus with a rate decision there. the rbnz widely projected to go in the other direction with a move of 75 basis points higher. that would be the biggest hike we see -- we have seen from them

since it introduced the official cash rate in 1989. meanwhile, australia one hour into trading, being led higher by the energy sector. vonnie: our next guest says the extent of the recession to come remains uncertain, though its likelihood is high. joining us is a strategist at citi private bank. it feels like we have avoided the worst so far in terms of corporate earnings but you say and earnings recession is imminent. how imminent? >> i think the effect of the fed's tightening are not fully reflected yet. we see the beginnings of layoffs, particularly tech firms and the financial industry, fairly large numbers. that, in time, will be reflected in consumer demand next year, particularly discretionary demand. these types of things are going

to constrain u.s. earnings growth. we are looking for a 10% decline in 2023. vonnie: how will we know when it's coming? we got everything from retailers, best buy, to the chipmakers coming out with other than forecast earnings. will we suddenly get a downturn in those numbers? is that how we will know? ken: i think the market has been pricing in forward quite a lot of things. so far, but is reflecting is the tightening financial conditions. we are not really looking at construction jobs. they are still at a peak. why is that when home sales have fallen 40% year on year. these type of declines are just beginning to filter in. i think it is a little too early to be optimistic that we can

avoid a recession. haidi: is it too early to be optimistic about china even the reopening it seems is going to be potentially two steps forward, one step back, very uneven, potentially quite protracted. ken: i think so. the rally in november, a lot of it is reversing the excessive pessimism we saw in the month of october. i think the market has taken a breather and that's fairly natural after such a fast move. with regard to covid policy, i think the decision has been made that china wants to eventually live with the virus. but it's happening at an inconvenient time. it's not just china's problem. this is a wave spreading globally and a lot of governments are finding it troublesome to deal with.

i think our expectation is for the next steps to be taken in terms of reopening perhaps by springtime. in the meanwhile, we should be looking at preparations in terms of vaccine distribution, building more health care capacity, and in terms of government publicity about what they plan to do. at this point, it looks bad since it's only a few weeks since these new rules are released. but i think there has been a change. the clinical imperative for lockdowns and covid zero has weakened and the political drivers for economic recovery has strengthened. haidi: we are getting more and more tweaks to these policy settings for covid. now requiring a 48 hour covid test to access public revenues.

new arrivals in shanghai. as an investors, it is timing, so how do you time when china is starting to see the way out? do you start adding selectively to your positions now or is it too early? ken: i think the chinese market cycle has been ahead of the u.s. throughout the pandemic. coming out of this recession, china had a proper recession this year. coming out of it, it is also ahead of the u.s.. i think the timing, now is actually not bad timing because we think the pivot toward recovery is for real in chinese policy. i just think in terms of focus, for longer-term investors, still focused on investors where policy support is strongest. the physical hardware, software,

technology that is going to move tech innovation in china forward. those areas will continue to have investor support for years to come. vonnie: let me ask you to tie it up in a bow for us. are investors too bullish or too bearish going into 2023? ken: i think at this moment, after we've had a decent bounce in a lot of equity markets, investors might be a bit too optimistic. i think the near term outlook likes to be -- would need to be more cautious with the near term outlook because like i said about potential changes in consumer demand, that has not fully reflected the fed's tightening just yet. vonnie: thank you for joining us

today. here are your first word headlines at the european union has water down its latest sanction proposal for price cap on russia's oil exports by delaying its expectations and softening key provisions. according to the document, the block proposed adding a 45 day transition to the injunction of the cap. they propose an emergency brake on natural gas prices of two and 75 euros per megawatt hour. well above current levels. shanghai's tightening covid rules on new arrivals starting thursday in a bid to avoid surging infections across the country. new arrivals will be barred for their first five days from places including restaurants, bars and markets. they will need to do an extra nucleic acid test after three tests in the first three days. malaysia's former ruling coalition says it will stay out of any new government and instead become part of the

opposition. the move deprives both groups this support they require to form a new administration. it's a particular low two and more who said he was looking forward to having a coalition with bn. the u.s. supreme court has cleared the way for a house committee to get six years of donald trump's tax returns. it rejects a left ditch effort by the president to block the internal revenue service from turning over the documents. the committee says it needs that documents to consider public accountability and mandatory audit policy for presidents. those are your first word headlines. let's get a check on movers in asia. annabelle: taking a look at crypto-linked stocks in asia. we did see the usp moving higher in the prior session. this is down to the rally that was seen in bitcoin. holding above that 16,000 level

that it passed earlier this weekend now it is a signal that investors thinking they are in oversold conditions. the bearish sentiment remains in the sector but this is when we are watching. let's take a look at the korean content producers. these are jumping today. local media has a report out saying basically china is going to be resuming online streaming of south korean movies. there has been a six-year ban in place and it was put there because the u.s. deployed a missile-defense system in south korea, so that was a retaliatory move from china and the two leaders did meet earlier this week on the sidelines of the g20 summit, so this is the result we are seeing. haidi: still ahead, goldman sachs has upgraded its china growth forecast.

the chief china economist explains why. first, an attorney representing ftx says a substantial none of the firm's assets are either missing or stolen. we get the latest on the crypto crunch, next. this is bloomberg. ♪

vonnie: bitcoin bounce from a session low as a judge ruled the identity of major ftx creditors can remain secret at least for now. proceedings revealed a substantial none of ftx assets are missing or stolen. su keenan joins us now. a lot of investors have had their competence in crypto shaken. what are they to do? su: every detail that comes out sounds even worse. the people now running it say it was run poorly.

in fact, they say the former ceo, sam bankman-fried, the former lead air this was a case of an emperor with no close. you see a bit of bounceback in bitcoin and some of the other coins after falling to a two-year low. the big ticker from bitcoin, it has taken a brutal beating. the key takeaways from the ftx bankruptcy hearing which took place today, the company advisors in constant contact with u.s. attorney's office which has a special cyber crimes unit. the key quote which we have heard again and again, which is a substantial amount of ftx assets are stolen or missing. congress members have asked the new ftx ceo to testify at some point in december. another important point, the identity of the top 50 creditors who are together owed more than 3.1 billion dollars will remain secret for now.

the collapse of ftx ensnared creditors big and small around the world. sources tell bloomberg that genesis globe is troubled. sources say a third of this is lending made to a related party, including its parent company, dcg. a lot of focus on genesis because it has ties to about 200 of their firms. one of the most stunning details to come out, sam bankman-fried, one of his colleagues, a former co-ceo at the ftx sister firm, alameda, used poker and blackjack strategies to engage in high-risk trading. the new executives are saying this underscores the complete lack of discipline and controls anywhere in the firm. haidi: meanwhile, we see stocks trot -- stocks tied to anything crypto related attracting a lot

of bearish bets. su: the bearish bets have to do with the stocks are predicated on how well bitcoin is doing. come into the bloomberg and so many of these stocks are now trading below where bitcoin is trading and if we go through the year-to-date charts for some of the top 10 crypto stocks tracked by bloomberg, there is almost a 1400% gap between these stocks and their price targets, u.s. stocks down in a very big way, asian stocks also taking a beating on a year-to-date basis and if we look at how these stocks traded in the latest session, coinbase, the biggest u.s. crypto exchange, bounced back come up some 5% but it would have to rally a staggering 792% from current levels to hit its price target. crypto winter has gotten colder

indeed. haidi: su keenan with the latest on that story when it comes to jd.com. reuters reported the penalty could land in the second quarter of the year and we are hearing a number of this as well. the fact we are getting details could be seen as a bull signal for broader china tech in that we could be seeing an end to all of this? >> it is incredible that more than a $1 billion fine is what 1 -- is what reuters is reporting. it could be seen as a net positive, it could be a signal this year's long crackdown we have seen on the sector could be nearing an end. this go through some of the details. more than a $1 billion fine that could come in the second quarter of next year. we understand from the reuters

report the pboc, who is preparing the penalty has been in touch with and. no comment yet from ant group to reuters or to us at bloomberg, but it could be a signal we are winding up the crackdown. it got into gear when aunt was forced to pull the giant ipo in 2020. the reaction so far has been it could be a net positive for the sector because in the scheme of things, we're not talking about a major fine, it is basically a slap on the wrist for a company of this size and the benefit is it does remove these obstacles around regulation. where we are at in terms of this crackdown, we see signs of progress because tencent was given approval for one of its tiles after beijing started reissuing licenses this year. vonnie: it is a one-off penalty,

but with jd.com, we are seeing something more in line with the common prosperity theme xi jinping is pressing at the moment. tell us about these pay cuts. annabelle: these are two signature drives. on the one hand, you have the tech sector crackdown the other one that feeds into this is this common prosperity. so china would distribute wealth more among the population. jd.com has said it's going to slash its management strategy. you can see the company is stalling in its hiring and the sales figure per employee, that is on a falling trend. to give more context as to why jd is pushing through with this, cutting salaries for top managers only. 2000 people, a cut of 10 to 20%. where those funds will be going is into an employee benefits fun worth $1.4 billion.

perhaps more of a symbolic move, the founder of the company is also going to be contribute money into this out of his own pocket. you are talking around $14 million. the company could establish a fund that would allow employees to have access to interest-free home loans. the timing is interesting because xi jinping did reiterate is common prosperity drive. revenue growth for jd.com and others in the sector is on a falling trend, so the salary cuts a sign of the broader issues facing the tech sector. they do follow job cuts as well, so bloomberg intelligence saying this does lead to perhaps more operational uncertainty extending into 2023 and there's the possibility other chinese firms follow suit.

haidi: more to come here on daybreak asia. this is bloomberg. ♪

vonnie: here's a quick check of the latest bloomberg business flash headlines -- baidu posted a surprise revenue gain after cost cuts helped hold of the bottom line and online advertising held up better than anticipated. sales of baidu rose slightly in the september quarter. their performance gives ammunition to investors who say china's internet sector may be emerging from a two-year drought.

revenue was $3.2 billion for the three months to september compared to the average projection of $3.1 billion. they have initiated aggressive cost-cutting measures, scaling down marketing expenses, especially overseas. adani enterprises is considering issuing $1.8 billion in new shares. bloomberg sources say that conglomerate is working with advisors and could sell the shares as soon as next year. the group is looking to raise at least $10 billion in new debt over the next year. bloomberg has learned fidelity national information services fans to dismiss thousands of workers as part of the incoming ceos strategy to win back investor confidence. this after the fintech giant fell 44% this year. the company had more than 65,000 employees at the end of last year.

those are your latest business flash headlines. haidi: let's take at our u.s. futures -- this was a goldilocks session when it comes to equities and bonds. a holiday thinned trading week ahead of thanksgiving and not much has changed when it comes to the fed narrative in terms of determining market sentiment. futures flat at the moment as we get into the last trading day before the thanksgiving holiday. nasdaq futures little softer despite the optimism it could suggest we are seeing the end of this tech route and the regulatory overhaul might be near completion. we're looking at small caps, little upside there as well. the dollar index continued to lose a little ground but we see broader asian stocks looking like they will follow wall

street higher. we have the broader japanese market closed for a trading holiday. the korean won trading a little higher on the back of that flight to dollar weakness. the aussie dollar holding steady and we are watching the kiwi dollar. the central bank in new zealand is poised to fight the highest inflation in decades. we will go live to wellington next for a preview. this is bloomberg. ♪

♪ haidi: you are looking across

rbnz decision day. they are poised for a jumbo size break height of 75 basis point. we heard earlier from the new zealand finance minister, speaking during his testimony to parliaments finance committee. the global recession on their store steps. -- doorsteps. he says it's inevitable that interest rates will rise to curb inflation and the domestic economy faces significant challenges as a result of these rising domestic borrowing costs. the rbnz is the one to watch today. annabelle: a jumbo rate hike. we've been examining through the show, that's coming and a half-hour. james mcintyre joins us now. we've seen stronger-than-expected inflation data since the october decision.

what can we expect them to say today? james: thanks. that's right. we've had data coming in better than expected and much higher, both in terms of employment which the rbnz focuses on, maximum sustainable level of employment. and then the inflation outcome was above what we were expecting and the forecast from the august projections. we think that as a result of that oncoming -- incoming data flow, the rbnz is trying to manage inflation expectations and perceptions in the economy whilst being aware of what they've done today. they will sound very hawkish today, whether they deliver a 50 or 75 basis point hike. there's going to be more to come in the new year, despite the fact that their forecasts are going to show that global growth and the domestic -- domestic economic picture is going to be weaker. vonnie: you see 50 basis points

today? james: that's right. i was surprised that the consensus has swung so drastically toward that 75 basis point. there is a real split within the consensus of economists on this call today. i'm on the 50. the rbnz has diluted tightening so far. the impacts of that are beginning to pass through into the economy. we are not going to feel the full impact of those next year's until the middle of next year. that's when the rbnz themselves are already forecasting pushing the new zealand economy very close to recession. getting a surprise cpi in q3 isn't necessarily going to do anything about the inflation that's been. they are going to drive the risk of a harder landing. haidi: are we going to then pause? james: they do have quite a long

break until we come back. next meeting is in late february. my view is that circumstances are likely to have changed globally and domestically by then. whether it's 50 or 75 today, this could end up being the rbnz's last hike the cycle. haidi: you can get more on your bloomberg for this of course. commentary and analysis from our team of expert editors. the monetary authority singapore and industry saying the current monetary policy start is appropriate. they see easing coming in the second half of 2023. also really talking about the recessionary scenario, not the baseline scenario for 2023. we did have revised gdp numbers which were softer than expected. we did see it moving to address

these broader inflation pressures. vonnie: turning to south korea now. pressure is building on that economy. inflation at to decade high. the currency is weakening. thursday, the bok is poised to return to its usual pace of policy tightening as it aims to rein in inflation without increasing credit risks. a former south korean finance minister says the country is also facing the risk of stagflation. that means the government should push for looser regulation and lower taxes despite political resistance. >> the government budget or deficit has a snowball type of trend. it's really hard to reduce. i'm not saying it's impossible. but it's very hard. contrary to what they are doing. should they push further?

maybe. i don't know if it's possible. i don't think it's possible. >> fiscal deficit tightening. central bank continuing to fight inflation. even if it's not the big rate hike. stagflation. we are hearing more of that word being tossed around in korea. what do you see? james: that's a dilemma for them -- kathleen: -- >> that's a dilemma for them, the policymakers. the business that you are talking about, clearly anti-inflationary. contractionary measures. now we are facing not just inflation but stagflation. that recession part, how can you resolve that? that's really problematic. that's really a dilemma.

so if someone asks me, what do you do if you are in that position? i don't know. it seems to me that it's some kind of measure that has competing power in the market. one way, although we are taking tightening, we can think about the lowering tax rates, tax cuts . it's not easy. the current situation in korea, the opposition party doesn't like it at all. they are the moderators. so it's possible. already the lowering of corporate tax rate in korea is proposed by the government.

rejected by the opposition party. and some other tax cut, minor ones. maybe they can reach a compromise. that would not be real effective ones if it's a minor tax cut. and then what? that will be good for the competitive ability of the firms. that will take time. even if it will take time, i know that should be done. needless red type -- tape and regulations, we should get rid of them. haidi: south korea's former finance minister with kathleen hays there. let's get the first word headlines this afternoon. chinese authorities planning to impose a fine of more than $1

billion. central bank is preparing the penalty which could land in the second quarter of next year. the report says it would pave the way for the end of regulatory overhauls of the firm that included blocking its planned 2020 ipo. a lawyer for ftx groups as a substantial amount of the firm's assets are stolen or missing at the company's first court appearance. the judge allowed names of key creditors to stay secret for now . a hearing on the issue is set for december 16. ftx's top 50 unsecured edit -- creditors are owed $5 billion. manchester united club shares jumped as it announced it starting a process to explore strategic alternatives. the board says it includes a potential sale on new investments. the news comes with the star player set to leave the club after an explosive interview in which he blasted the manager and said he felt betrayed.

those are our first word headlines. vonnie: i'm not sure if one was related to the other. coming up, goldman sachs sees array bound coming in china. expecting the economy to go 4.5% in 2023. we hear from our chief china economist next. this is bloomberg. ♪

vonnie: you're watching daybreak asia. live pictures from shanghai. we saw numbers of covid cases locally in beijing up for another bay -- day. the offshore yuan is trading at 7.1363. we will get the fix in more than an hour. haidi: of course, all of these concerns as china's economy is bracing for more major disruptions. covid infections rising. that surge posing a challenge to the government's attempt to maintain covid zero whilst also reducing the economic and social cost of that. let's take a look at chinese virus restrictions. it's effective lockdown come you can see that on the screen. tightening policies to control fresh outbreaks despite hopes

for a gradual reopening. let's bring hui shan. it's unfortunate timing. we see this willingness and the recognition of the social as well as the economic cost, not to mention the fiscal cost of government of maintaining covid zero. they want a way out of this but it's coming at a time where we see this new outbreak. how do we see the government and public health and economic policy navigating its way out of this? shan: yeah. thanks for having me. it's going to be a challenging process. as you said, the latest signals are pretty clear. the government is thinking about an exit strategy by mentioned -- mentioning vaccination, covid pills, medical facilities. the reality is that, because china in the first couple years did a good job preventing covid

spread, now if you look at the reopening process, it might last for a few months. during that process, there will be a large number of people getting infections. that could be back and forth. it could be a pretty difficult and messy process of reopening. vonnie: amidst that, what do we see as the potential for recovery? particularly when it comes to these key pressure points like the property sector. clearly, sticking to covid zero, people being locked down in their compounds, none of that is going to be good for property. shan: that's right. we do think that, because of the zero covid policy, all the ongoing property easing might not be transmitted into property sector recovery. so it's a big roadblock for

properties, labor market, for a number of aspects of the economy. we talk about the reopening process. it won't be overnight or easy. in our 2023 outlook, we have a very different to have of next year. the first half as likely to be weak. the second half, once you get to the perpetuity through infection, the first hurdle, you can have a sharp rebound in consumption, services, and also in terms of the transmission between property easing to property activity. vonnie: is it your base case that china will tolerate a certain number of deaths? is that going to be unacceptable? is there a point at which china stops with the local shutdowns? shan: so we define reopening as, when you see cases rising in the city, you don't lockdown the city. the baseline, given the economic

pressure of this errico -- zero covid policy, we think that china is going to try to get out of zero covid next year. how is that going to -- are people going to get nervous when they see severe cases and deaths? is the government going to tighten policy temporarily? it's possible. it's a different kind of institutional set up. first-in, last out. that's why we think it's going to be a bumpy road ahead. vonnie: it feels like the government is trying to figure out a way to give a little bit of leeway to tech companies, these penalties that are in line with common prosperity and so on. do you see a path forward there? is this the end of the regulatory crackdown for some of these industries? shan: i think the framework of having anti-monopoly or certain

type of regulatory framework, that's here to stay. in terms of the intensity of regulatory actions, we do see that easing somewhat. we have seen that in some of the policy communications and household meetings. the language is setting up a traffic light, encouraging the california economy and so on. if you look at the different sector of the economy is, zero covid is affecting services, hurting risks, platforming the economy is another set of employment and labor market being impacted. between the three, i think the government is relaxing a bit in the third category so that labor market is still being supported through these platform economies and internet companies. haidi: jd.com buying 20% for

some of their executive managers. it's probably reflecting operational difficulties for digital companies. it also runs with common prosperity. what do you expect from the latter? will we see a wealth tax? is that a way for local governments to refill their coffers after the devastating cost of covid zero? shan: it's one area where a lot of clients are concerned. common prosperity is relatively new. it's difficult to note what exactly that entails. reading the official documents, the government provides a timeline. by 2035, access to public services. accomplish the common prosperity goal. that's a very long process. how exactly is this going to play out in terms of a concrete

policy? does that mean that minimum wage ? providing more services and support from the government to the bottom of the income distribution? we don't have the specific parameters yet. i suspect any kind of a new taxation, wealth tax is going to take a while. when you are designing taxation, you have to think through a lot of the parameters and the whole legislation process is not going to be happening very soon. vonnie: we have to leave it there. thank you so much. here are some talks we are watching ahead of the markets opening in hong kong in china. look at the tech shares. we are seeing a drop for the most part. down more than 8% following that reuters report.

chinese authorities are finding $1 billion on jack ma. we are keeping an eye on crypto shares as well. bitcoin seems to be holding onto its games. on our radar, technology up 1.4%. centron information as well there. both down. coming up, look at china's debt and where it's going. a deep dive into a murky bond market, next. this is bloomberg. ♪ at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

haidi: less than a decade, the biggest green bond markets. the pileup that swells. investors and regulators confronting a troubling reality. it's a most impossible to know how that money is being spent. today's big take. is we take a step back, what with the reasons why we've seen this market boom so quickly? >> this is really an agenda that has been in force at the very top echelons of the party. said to be a real believer in the environmental cause and

placed green goals really at the center of a lot of his policymaking. very ambitious carbon neutral targets. that's helped channel this enthusiasm. 300 billion -- $300 billion raised. the other side of this is that risks have been created around transparency and precisely just where bonds are going. for example, when we look at the universe of more than 1000 bonds that have been issued, about offensive them are tagged with multiple, three or more categories of projects. when we drill down further, when we look at the top 10 largest bonds, eight of them don't provide any details on where this financing, what projects these are going to. vonnie: that's fascinating. what role are investors playing? how much investors --

information do they want? >> that's part of it. china's issues with transparency are quite similar to other est markets about 70% of the green market is denominated and accessible by onshore investors who haven't really shown that same enthusiasm and desire for green bonds that global investors have shown. the pboc has acknowledge these risks, warning against greenwashing, fraud in the issuance of green bonds. at the same time, also urging the market to come in and fill the gaps, to help fund. we look at 300 billion sold so far. china's own authorities have estimated that the transition is going to cost more than $18 trillion. there's a real need for funding here. haidi: have we seen positive

developments in terms of improvement of quality of the market? rebecca: in the last year, we've seen some major efforts by authorities to clean up the market and bring it closer to international standards. for example, very controversial practice of including cold bonds -- coal bonds, labeling them in the transition issuance. there's a frame look -- work that is taken as the gold standard in many ways. you can see that china is trying to bring its market standards closer to best practices here. vonnie: fantastic summary. thank you. coming up, more market strategy as traders expect the fed to soon slow the pace of its monetary tightening. we hear the top takes from dalton investments. haidi: that's it for daybreak

asia. market coverage continues. we look ahead to the start of trading in mainland china and hong kong. the rbnz decision. do they go for the 75 basis point hike to try to get ahead of inflation before maybe a pause? that decision is a few moments away. we bring you the latest analysis as we get that announcement. this is bloomberg. ♪

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