haidi: good morning. annabelle: we're counting down to the major market opens. kathleen: good evening from new york.

the top stories this hour. china accelerates a shift towards the economy, easing some covid restrictions. haidi: opec-plus responds by keeping the oil output steady. eu sanctions kick in monday. kathleen: sam says he will testify before the house financial services committee after he reviews events. all about the jobs report on friday. hotter than expected suggesting the federal reserve may have to raise rates even higher than at thought when it gets to the december meeting. keep rates higher longer. stocks were down about 1%, volatile. the s&p 500 was down about 1/10. the bond rally fizzle.

we will see how that continues. oil down on friday, 1.5% ahead of the meeting. after the meeting, a lot of uncertainty over western sanctions. we will see how that unfolds let me get to the open in just about one hour for the crude oil trading. let's look at payrolls. as for the headline number, up more than forecast. 263,000. october revised. the average hourly earnings was wages. far above the 4.6% forecast. the trend is up, not down. concern that there is a ways to go. >> the labor market is strong

and we are still in unprecedented territory in terms of the gap between vacancies and jobs. with that has to tell you is we have a long way to go to get inflation down where the fed has said where it wanted to be. kathleen: it's almost like the markets did not know what to do. larry summers says 6% not out of the question. this is not the surprise markets are looking for. i thought about 50 basis points versus 75, the one economist at 75 might be back on the table.

the dots are more in focus. the median -- what will it be at the september meeting? haidi: we're watchful of what is going on in china when it comes to the clarifying outlook for oil demand, we saw over the weekend, the city suffered under the stringent lockdowns, dropping requirements. most things like public transit and public areas, parks and the like. this is seen as one step is joining other cities like beijing in easing some of these measures. partly in response to the public protests we saw just last week. the formal dropping of covid zero, march is when we have the national people's congress.

after that is done we will see a formal dropping of covid zero but it will be key to watch. given we know the amount of turmoil a lot of economies are like, australia, singapore had to deal with this after they emerged from restrictions. annabelle: certainly sending a bullish signal through to chinese stocks, the near 6% gain we had for the golden dragon on friday, taking the index back to a bullish level. the 200 day moving average has not crossed it since june. let's change on the broader equities outlook in asia. certainly, chinese reopening will be a major theme, we are seeing gains. let's looking mixed across the picture. we will see if optimism can be

sustained. kathleen: chinese cities in focus. let's bring in stephen engle. with the latest? reporter: relaxing some testing requirements, adding to cities. we were seeing one in opening up looks like. it's not just hung joanne shanghai. we are seeing relaxations over the weekend. the hunan province, iphone city. immediate end of mandatory covid testing. we're seeing the relaxing use of the subway. to bet will resume bus services.

that's on top of other relaxations. we do not want to say protests spooked the authorities, but i will say it. last week, protests and a number of different cities did spooked beijing and they are doing some token and relaxation. economic pressures are mounting and the bureau beats -- meets in the first part of december. this week starts putting together the priorities that they will unveil at the people's congress. prioritizing the economy will be atop the agenda. haidi: the economic toll has been building.

when it comes to political pressure, is this a sense of some acknowledgment that there has to be further opening up? reporter: there is not necessarily public acknowledgment that covid zero has failed, because they point to the numbers, with the omicron variant, we heard from officials who visited beijing and met with xi jinping said she acknowledged the omicron variant is the most prevalent strain of covid in china now. that would be the most public acknowledgment the virus is not as deadly they built it up as being.

chinese authorities are worried about vaccination levels among the elderly, but the economy and frustration is building up in cities all across. that's a number of different cities. i do want to make those comparisons, different situations. something the beijing authorities have taken note and are working out various relaxations to calm the nerves of people. we will have to see what comes out of the meeting, but a number of top economists including a former advisor put out a report that posted saying the top priority must be economic recovery. haidi: playing out for markets, investors are finishing a chaotic year.

it's ringing the chief rates corresponded. does the jobs report pro anything? guest: does not seem to do so. there was an initial downward shift, the yield spike. currencies dropped. yields went up. the thesis remains in place. if they had 50 in december, that means less than one percentage

point to go. as long as investors can feel confident, stay calm and keep buying assets. concern has to be 75 could be back on the table. it goes forward to inflation. we would think 75 basis point to be on the table. if the fed 75, there is a strong impetus to go up. there are some headwinds building. kathleen: all of the emphasis is on the dots. on oil, holding the output

steady, the sanctions coming into play on monday. what does this mean for the oil market, china, reopening and more demand? reporter: crude oil can go both ways. probably a bit more potential for the upside given the sanctions and uncertainty around russia.

with all about taking the heat, you can see a bit of a downside surprise. it europe isn't as needy when it comes to accessing energy as some people might have thought, you can have another step down in crude. haidi: garfield reynolds. >> we start with lloyd austin who says the u.s. is building a more lethal force posture in the indo pacific as part of efforts to make sure china does not dominate the region. they are the only country with

the will and power to reshape the region. he said the u.s. would sharpen more fighting advantages. securities regulators said money markets, foreign exchange bills and gold will be suspended. he died last week, was party secretary from 1989 to 2002 when china's economy more than triple. a south korean court has dismissed a request for an arrest warrant for daniel chen. the court said his behavior makes it difficult to believe he poses a flight risk or would destroy evidence. he is facing allegations of fraud following the collapse of a stablecoin.

the rko center asked a judge to toss out charges against him. he alleges prosecutors ignored deceitful conduct. he says he was duped into assisting investigators who gave him false hope he would not be charged. he is scheduled to go on trial in october, 2023. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. kathleen: still ahead. we discussed how street protests soaked -- stoked a change in policy. kevin from emerging portfolio fund research joins us on whether he sees a rally in equities or if hopes are misplaced. this is bloomberg. ♪

>> this report is disconcerting. >> the labor market has not crowd. >> we have a significant inflation problem. >> inflation is worrisome. >> the market has not listened to the fed. >> they are not going to start hiking rates yet. >> is the level of rates restrictive enough? >> the fed has to get to restrictive levels and stay there longer. >> i suspect around five. >> at least until the mid-five. >> 5.5. >> five is the dot plot. >> the fed cannot stop until the labor markets slowdown. kathleen: some guest reacting to the november jobs report.

taking a look at the week ahead, markets are bracing for jobless claims and ppi data. monday marks the start of an eu start of russian crude. all but one economists surveyed by bloomberg sees hiking by one quarter of a percentage point. rate decisions. in china, -- haidi: this week marks three years of the start of covid zero. the economic and societal stresses that we saw last week, spilling across the country. the latest and shanghai, listing

testing requirements. that is your week ahead. kathleen: moving on to reserve official signaling a half-point hike, the strong job growth in november and hot wages, the fed might consider racing to higher than anticipated. it's ringing our next guest. it's great to have you. let's start with the fed. average hourly our lines, -- earnings, guest saying the fed is going to 5.5%. what difference does that make for the equities markets you are watching? guest: i don't think it will make a huge difference, everyone is anxious.

they are tending towards the optimistic. i'm in the camp that sees the terminal right above 5%. the fed minutes and chairman powell's remarks are focused on moderating the pace of hikes, not on the fact they are concerned they may need to go higher and longer to tame down inflationary pressures. kathleen: how would you position the equities portfolios, knowing the markets could be in the wrong direction, or not? this is a wake-up call that inflation is staying hotter and rates have to go higher. guest: i think you want to step back.

the liquidity vehicles are from the initial, savings rates have dropped below the usual average. american consumers want to keep spending. there is still some deferred consumption. if inflation bothers you, you want to stay back. if an attractive stock tips, jumping now. the fed will pivot. haidi: we've seen frenzied stock bets. as we get more signs of the reopening, from the mutual fund

perspective, investors have taken out the slack. we've seen strong flows into dedicated china equity funds. when he got his third term, the assumption was he would feel comfortable rolling back the covid policy, more forceful pushback from the receiving end seems to be the catalyst. a lot of money has come in expecting that, so i do not think there is an enormous opportunity in the chinese market right now. haidi: what about emerging markets, i know a key theme is supply chain disruptions. do you see the impact of the slowing greenback contributing to the outlook?

guest: we do. that's a good question. one group are the dedicated funds to the candidates cited when supply chains might move out of china. the vietnam, philippines, equity funds. more consistent inflows over the last two months. haidi: always great to chat with you. more to come here on daybreak australia. this is bloomberg. ♪

kathleen: now quote check of the latest business flash headline. elon musk says apple resumed

advertising on twitter. he made the comments during a twitter spaces conversation over the weekend. he added, apple is the largest advertiser on the social media network. the nissan ceo is heading to france for talks. sources tell bloomberg he will attend a board meeting on tuesday with ashwani cooped up. they're trying to reboot a partnership that has become problematic. wakanda forever has topped the north american box office for a fourth straight weekend. it are no must $18 million -- he had earned almost $18 million. ticket sales have reached almost $730 million globally. haidi. haidi: take a look at the asian markets. we continue to digest the implications of the u.s. jobs

report, what it means for the fed. we saw a quick recovery on friday. setting out for a little bit of optimism going into monday morning. sidney stocks are up 3/10 of 1%. the hike is expected this week. the bank is near the end of its tightening cycle. the aussie dollar is holding just under $.68 at the moment. kiwi stock softer, nikkei futures down by 1.5%. we could see more movement when it comes to the yen as well to the upside, given we have jumped 10% for the peak of dollar-yen. we get 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.

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>> we need to signal to the public, to the observers, to the

commentators that in all scenarios, inflation will be our medium-term target. >> we have to keep his focus on medium-term outcomes. >> looking for next year, the inflation forecast -- our focus is not that. this month, it is about 3.1%. the biggest risk is russia here. >> central bank governors here. the reserve bank of australia will return -- will continue that fight in the final meeting

of the year. that could almost be the end of the target cycle here in australia. is there any concern? >> a lot of people have opinions about this. this is the chief investment officer playing with fire in terms of loosening its grip a little bit earlier on. others point out the situation in australia is a little bit different from australia. the rba is also very conscious of falling house prices, the number of floating mortgages here. they have been a lot of clues in terms of inflation data. there was inflation cooling. we will get the official cpr numbers until the end of january

but from the rba point of view, that is perfect timing. the rba comes back in february. 15 basis points. let's watch growth really closely. there has been a considerable amount of tightening and takes a while for that to show up. >> you can't underestimate the leg effect for central banks all over the world. expect it to show a little bit of slowing. still pretty good for the year. as you say, the full effect of the titan not yet reflected. you can look at the floating

mortgage rates around australia. bloomberg economics sees growth in 2023 and australia just want to just 1.6% but really rescued by rising population growth. helping keep the pressure off wages. any number of spanners could get thrown into the work year from the natural disasters. on the upside, perhaps china reopening here for tourism. >> paul allen incident. turning to crypto, sam bankman-fried says he will testify before the u.s. asked after he's done investigating what went wrong at ftx. what can you tell us? >> we know there will be a series of congressional hearings

sent to investigate what went wrong at ftx and the coming up will be the u.s. house. in recent days we have been hearing from the as financial services committee -- basically calling on sam bankman-fried to attend this and testify. one of them was the committee chair. just in the last 90 minutes or so, we actually heard a response to it tweet calling for sam bankman-fried to attend. he is essentially saying he will appear but he did not exactly commit to the timeline that maxine waters sent out. as maxine alluded to, the focus is basically on discovery what happened at ftx, alameda. sam says he wants it to be --

>> where are we at in terms of legislation? >> there is a broad understanding that it will be fairly difficult for this. the pressure is certainly on to put more guardrails in place. it does seem to be some bipartisan support for this to happen. sheriff brown was just there on cnn. he and his colleagues have been looking to get something passed and then there is senator pat toomey who is the top republican on the senate banking committee. he said he bought into the hype, the craze and then he was impressed by ftx and sam bankman-fried but now he is saying that there is a small window of opportunity to get something passed by the end of the year. this would be attached to a spending bill so it is not a broad sweeping change that will take place but it would have measures that would include a regulatory framework, clarity around the definition of a crypto broker but also a tax reporting exemption on crypto

transactions that are under $50. >> what about the cleanup at ftx? >> this is ledger x that is basically the derivatives arm of the u.s.. it really was the cornerstone of sam bankman-fried's efforts. it is considered one of the most valuable assets associated with ftx and it is one of the very few pieces that are left. what we are hearing from our sources is that this unit is now for sale and attracting some sizable interest. there are bigger crypto guys like blockchain.com but we are told at least 10 firms have expressed issue -- have expressed interest. it is unclear but we know that it had assets.

where we are at, that is unclear. we do understand it is serious for some parties to have signed nda's. coming up, the peterson institute for economics talking about these rare protests in china. they may have reshaped beijing's approach to covid zero. this is bloomberg. ♪

>> you are watching daybreak australia. i am su keenan with first word headlines. chinese authorities have accelerated before opening the economy. shanghai and wenzhou are easing some covid restrictions after the protest here. shanghai will scrap pcr testing. meanwhile, the home to the tencent, alibaba testing requirements for entry in most public venues. they will keep their output unchanged. this as they take stock of a market that is roiled by uncertainty over chinese demand in western supply. the group held a roughly 20 minute online meeting on sunday. the decision is expected to hold

for at least a few months until its monitoring committee meets once again in february. to south korea now. the president has asked his cabinet to prepare a return to work order. this as damage has been increasing with $2.3 million worth of products in oil and steel. also other sectors that are able to be transported as of saturday. they seek to advance debt negotiations. evergrande is put into get support for the plan for offshore creditors. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i am su keenan. this is bloomberg. >> easing some covid restrictions. the chinese leadership is looking for off ramps after protests against the nation's stringentr a cut last week. wonderful to have you with us. can we say that the organized protest that we saw last week and of course, individual protests, grass movements are not so unusual in china but the scare was really something to be reckoned with last week. can we say that has meaningfully impacted how the leadership is handling covid zero? >> it is always a dangerous game to try to figure out what happened in other people's minds.

especially the chinese leadership but it appears that is true. we are seeing dramatic changes. this thing about testing requirements and entered a public space being lifted. there was a huge milestone here in the united states. that is happening. we know that is going to lead to some communities spread. the authorities will relieve the -- will alleviate the pressure. people who are just fed up with a lap dance. >> very interesting. we don't want pcr tests. can you extrapolate this more broadly in the sense that i am wondering if this means a controlled form of civic resistance? it might be forming a precedent for impact policymaking in china.

>> even in authoritarian governments there is a large role for the public. they have to go along with the authoritarian regime and what they want. that is never been the case that the chinese leadership did not try to control the public. hence the reason for clampdown's on the internet. i think we can say it has influenced policy. we don't know to what extent. they may be lucky to squeak that out. that has upset a lot of people. many of whom are suffering greatly because of the lockdown. ordinary people, small business owners, the service sector in particular.

>> you have been convincing people they have to be locked down to prevent covid from spreading and to survive. it is time to come out of hiding , how do you convince people of that? local governments may be resistant and give beijing leaders a bit of pushback. >> yes. 2020 hindsight is always there. it looks like china has spent a lot of the last two years making its task more difficult by scaring people. the virus was scary. very scary throughout the world. it has not taken -- it has not been time to take advantage of vaccination rates among the elderly. and secondly, increase the capacity of hospitals to deal with what may be a coming surge.

>> foreign investment. the wall street journal is reporting that apple may be is limiting its plans to move some of his production out of china. what about the concerns on many levels that foreign investors may have now question mark >> i think there are two levels on top of the other concerns they had for covid-19. also, what that has meant for their workers, firms and relationships with workers. the second is the dramatic increase in the control of personal movements. that has to send chills through anyone who is involved in business activities in china. >> mary, i keep going back to this idea of the tacit agreement between the public and the government in china at a

relatively unfettered level of economic freedom. improving standards of living, a lot of that is coming into question after covid zero. even pre-covid, the economy was slowing. we're looking at a normalized rate of slowing growth now. there will be fatalities. how does the leadership navigate this? >> this is going to be very difficult. it is really hard to see very far. there could be controls on information. the other is to really try to get boots on the ground right away to both of the capacity they need to get those shots in the arms. we could see more dramatic verbalization on these health

workers who have spent such a lot of time disrupting activity. we have already seen propaganda machine moving to actually show that. coinfection is not life-threatening in general. there are a lot of things we could see happening right away. there is going to be this pull and tug. economic activity has been hurt. we are going to have to see how much the chinese government and its current form can actually mobilize local authorities to carry out what needs to be done over the next couple of months.

>> there is always that risk of over interpretation. you look at one of the measure points. -- pressure points. >> this is such a special case. it is hard to extrapolate too far. the move to indigenous technology has always had the risk of putting in place inferior technology or being able to keep up with the frontier. we have had lots of examples in the past where companies closed near borders. they wanted to grow domestic industries.

the international front you never became a exporters of those goods. i think there is a lesson here. it is one that we knew already. in this case, it is particularly dire. clearly lives are at stake. >> thank you for that enlightening conversation. you can get a round up of the stories you need to know in today's edition of daybreak. you can customize your settings. this is bloomberg. ♪

>> xo lehman says others will still be -- believe in this. bloomberg tv said outflows have not stopped. >> we have 10 key investors. they are longtime investors. they welcome our plan to transform the company. they have high belief in the credibility of the management team. they are standing by. they want to see the change, they want to see is executing. that is what we are doing.

>> what was the feedback like? why would i put 100 million with all of these here? >> the feedback is quit astonishing. we had very few clients really leaving. i am confident, i have had a lot of personal discussions with clients. >> we have seen two or three weeks in october. since they have been flattening out, they have stopped this gradual takeover of the switzerland. >> a big -- quick check of the latest business flash headlines.

sources tell us at least 10 firms have expressed interest in ledger including blockchain.com and gemini. they are considered one of the most valuable assets associated with fcx after more than 100 other entities filed for bankruptcy. the crypto exchange is planning to slash its workforce by 30% as the bear market and cryptocurrencies deepens. the share sale could raise as much as $1.3 billion. the private equity firm is selling its entire 30% stake. ipo's in the gulf region have raised nearly $20 billion so far this year. >> some of the stocks we are

watching in just about six miss time. hancock energy increasing its bid to apply all of the fully paid automated shares. we are also looking at asian places as well. we are also seeing those actions on russia. this is something else we are watching. this is the largest active volcano erupting for the first time in 38 years. we are really eager to take a look at the many mysteries in the largest active volcanoes in the world holds. the news came to people in the big island of hawaii. we saw public officials really scrambling to alert people that live nearby.

this was no point in scale to monitor the volcano. a lot of other equipment and state-of-the-art tools as well but this was really considered one of the most well and cemented volcanoes but so much of that is unknown. we have seen a lot of scientist researchers really trying to strike that balance between wanting to collect data and also watching for the public safety aspect there. we will watch this incredible spectacle. ♪

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