>> you're watching daybreak asia

coming to you live from new york city and hong kong. >> we are counting down to the market opens in tokyo and seoul. they are easing some covid restrictions. eu sanctions on russian experts taken today and the dollar inches higher as asian risk assets could get a boost as we see that using out of china. west we have the opening of the asx 200. the question coming into the trading day is if this reopening in china is more cities moving to ease their covid zero restrictions. the answer to that is looking a little bit unclear.

earlier, they had been up as much as a quarter percent. this optimism, will it be short-lived? >> new dot plots suggest just how i fed officials think rates will have to go next year. it was almost unchanged for stocks on friday. we are down 1% and then the nasdaq was down 4/10. now we can see just marginal in the red. this is not much. we are probably waiting to see what happens next. in terms of bonds, we can see a little bit of green at the open.

the bond surge on yields also fizzled on friday. the futures are showing a little bit of it we are going to trade, let's sell. but i think those are the measures of our. >> can energy. a pretty cute day day -- she day today. all of that was agreed to by eu members. look at brent crude. new york trading just about .5% higher. opec-plus responding to really surging volatility. the growing level of demand on uncertainty as well. if you look at market pricing, we have seen other investors really piling on when it comes to these various beds despite the jump in pricing that we saw last week. robert is here with us for more. what is the big market move at

this point? opec-plus? >> it will probably be with china actually. this is all the beginning of this time last week. 5% over the week. everyone is just trying to figure out how much demand will come back and china. that is part of the reason opec decided to hold again over the weekend. the sanctions are having an effect. they hinted there would be repercussions. how those will look we just don't know. >> bob, it makes you sound like

the opaque moves, the sanctions, those are potentially priced in. we can't tell what is going on with china yet. we will be stuck in a range for a while. >> i think it might be. this letter bit of news -- let us produce can cause price moves. i think a lot of people will be focusing on what happens with china.

>> the missing puzzle piece is really what happens out of china. the country does seem to be exhilarating in that shift were reopening the economy. the latest over the weekend here. governor reynolds is here as well. we don't want pcr testing. we want freedom. >> you will no longer need a pcr tests. a negative pcr tests. also others it is like that. this is an addition to many other cities that are taking new marching orders from beijing to ease back a little bit. i understand china pretty well.

when the marching orders came down from the most powerful leader, xi jinping has consolidated more power. he basically said you must implement these covid zero policies. the various municipalities took at the heart. perhaps as a result of the frustration mounting, it just reached a boiling point. they were probably watching the success. the communist party chief of shanghai gets promoted. he will become the number two ranking official understanding committee. there has been mixed signals.

>> at the very least getting public acknowledgment from beijing. there has to be for the opening. >> absolutely. we are not getting xi jinping coming out and saying i will listen my cornerstone policy. that being covid zero. they met with xi jinping on thursday and a european official said that xi jinping acknowledged the dominant strain of covid in china is omicron and that has been less lethal. it would be the first public

acknowledgment from xi jinping that there is an argument to be made to loosen the restrictions. we can't allow a loosening up of restrictions because of the lower vaccination rate among the elderly and the like. there is a shift and we have seen six prominent economists in a joint report posted on we chat. essentially saying that the top priority now of the nation must be economic recovery. the beginning part of every december is the meeting where they said the economic and priority agendas for the next year that will be unveiled in march. i am sure economic recovery will be atop that list. that must include further relaxation of covid zero. >> that is the strong messaging

on the economy. does that mean there is a stronger bout to stand on when it comes to china? >> even if others had been a bit skeptical, china will be as rapid as we have seen elsewhere. they will make a major pivot and surprise you because of the concentration of power. with that being the case, those hopes are there. we saw a very strong rally in the golden dragon on friday where other equities were sort -- were slightly mixed. there has to be some optimism that this will allow things to come roaring back. you also have the potential that asian equities can turn around. they have been serial underperformers and china has been a key part of the reason for that. the one thing that is a little bit surprising is the distinct

air of caution going on. it has been a brutal year. we have had some very steep losses. the nice bounce we had in a range of assets, especially in equities might leave you thinking is this a good time to take somebody off the table? putting it into bonds? >> a big question. look for the answers. stephen engle and garfield balance here. now let's get to su keenan with the first word headlines. >> china's financial markets will pause. the central bank and securities regulator said trading and security futures near bank bonds , foreign exchange, bills and gold will be suspended. however, they did not get a start time.

jiang was party secretary when china's economy more than tripled. to south vietnam, the president has asked his cabinet to prepare a return work order. damage has been increasing with 2.3 billion dollars worth of products in oil, steel and petrochemicals and other sectors unable to be transported as of saturday. programs have unsettled wage demands after months of negotiation. and the south korean court has dismissed a request for an arrest warrant against daniel jen. his behavior makes it difficult to believe he poses a flight risk or that he would destroy evidence. he is facing allegations following the collapse of the stablecoin.

and billy long asked a judge to toss out fraud charges against him. he alleges u.s. prosecutors engaged in deceitful conduct in the early days of the investigation. he said he was duped. he is scheduled to go on trial in october of 2023. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. >> the creator of the software for autonomous driving will be joining us. we will see how they see the future of autonomous driving. coming up next, the senior economist tells us what asian central banks will be following the fed in this next leg of the hiking cycle. this is bloomberg.

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>> we need to signal to the public, to the observers, to the commentators that in all scenarios, inflation will return to our medium-term target. >> and a we have to do is keep the focus on meeting outcomes. >> looking at the inflation forecast, china is a wreck. >> 3.3% last month.

>> the biggest risk is another supply shop. >> the central bank governor on the fastest to get to inflation. taking a look at the week ahead now. markets will be bracing for jobless claims, ppi data later this week as well. monday as we talk about the start of eu sanctions on seaborne russian food. it is the rba decision day. all but one economist surveyed by bloomberg seems -- sees the rba hiking by a quarter percentage point. we are also watching out for gdp numbers out of australia and japan. in the focus in china, traded will be a highlight this week. inflation likely slowed in november as well. that is your week ahead. >> our next guest says asian central banks will not follow

the fed. carlos casanova is the senior asian economist here. we saw the jobs report coming in harder than expected on the size of the payroll increases and importantly on the average hourly earnings. wages are of more than 5% year-over-year. >> we have seen other central bankers here. in this part of the world, i believe there are three reasons why central bank would be able to afford to take a break from having to follow the fed rate hikes. those three factors are that inflation has started to inflect. asian inflation was 3.6%. that is a trend you can observe across almost all the countries in the region.

they will need to tackle inflation. in third place, we have the u.s. dollar rally. we expect that is nearing its peak. in november, all asian currencies depreciated against the u.s. dollar. we will continue without some bumps in the months ahead. we do expect that u.s. dollar will be less significant. they may hike at a slower pace than the fed. these are the 25 basis points. i read a story saying maybe 15.

a 15 basis point rate as possible. >> we saw the make of korea delivering a 25 basis point high. inflation has started to go. still above the tolerance band. they will have to take a pause in terms of the hikes. even if they do a smaller 15 basis point hike instead of 25 which is what is currently priced in the market, we think that the rba will pause -- it is a little too soon to argue that. we think that most likely the rba will have to continue hiking into the first quarter of 2023 but it will do so in smaller increments to avoid exacerbating

things on the economic front. >> even if australia avoids a technical recession, do you see a possibility of seeing and easing cycle begin? >> it is possible. we spent economic activity will remain quiet supportive in your of your terms. it could be quiet strong, around 6%. the key for australia will be performance in sequential terms. it is expected the economy will have to slow down in sequential terms as those interest rate hikes start to bite. we could see that with gdp as well. if we have no technical recession but a significant deceleration in economic activity in the first half, it could be sooner policy

inflection by the rba in the second half. we expect something but it could be as soon as q3. >> how much of the china reopening is a simple bulletin? how careful do we need to be given the examples we have seen like singapore? how volatile and difficult is that process? >> i agree that this is the main silver bullet for 2023. it is where -- it is what all markets have been waiting for from oil to asian equities. everyone is hoping they will be able to get on with this economic reopening. beijing also joining the reopening party, definitely encouraging. keep in mind we are at around 40,000 cases per day.

given very low vaccination rates , the vaccination rate is only 60%. for levels around 80%, it takes time. around 3-6 months. we do have a three month interval here. that will take time. we are not sure the government will continue to be so tolerant in the face of rising cases if there is deterioration. or if hospitals do that with covid patients. this is not a reopening that takes place.

this is from 25 to 35 after three 50 basis point hikes. downshifting even though they are downshifting relative to their target. what do you see? question 6.7% after backed by the rba. we think the rb i will opt for 235. that is the interest rate hike. they will worry about headwinds to growth. they do expect inflation to turn back. most of the pressure is seasonal. it is all structural like in australia. very low employment rates. it is mostly do -- due to high quality prices. we should pursue a lower pace of

rate hiking -- there would be slower basis tightening into the first quarter of next year. >> great to have you as always. you can get a roundup of the stories you need to know to get your day going in this edition. that is on the bloomberg anywhere app. you can change up those settings . this is bloomberg. ♪

>> a quick check of the latest business flash headlines. elon musk says apple has fully resumed advertising on twitter for the de-escalating between two of the world's most

influential tech companies. apple is the largest advertiser on the social media network. the nissan ceo is going to france. sources say that they will attend this with the cll. they are trying to reboot a partnership that has become problematic over the years. next they will -- they call the fbi's collapse the worst case of business negligence he has ever seen as investors struggle to deal with it. this is bloomberg. ♪

kathleen: this is "bloomberg daybreak: asia."

we started with the latest on oil, opec+ is keeping it oil output unchanged as it takes stock of the market that is roiled by uncertainty over chinese demand as well as russian supply. the group held a 20 minute meeting online sunday, the decision expected to hold for at least a few months until its monitoring committee meets again in february. chinese authorities meanwhile at accelerated a shift toward opening the economy. shanghai and hangzhou are easing covert restrictions after protests against the nation's stringent policies last week area shanghai will scrap pcr testing requirements to enter outdoor public venues. in hangzhou, home to tech giant alibaba, testing requirements for entry into most public venues will also be dropped. u.s. secretary of defense lloyd austin 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. austin says china is the only country with both the will and power to reshape the region and added the u.s. would sharpen its war fighting advantages and bolster its force presence. evergrande's offshore creditors are said to have signed confidentiality agreements as they seek to advance debt negotiations with the chinese developer. sources tell us the talks were beginning over the weekend. evergrande is aiming to present a restructuring proposal for its dollar debt as soon as this week and is hoping to get support for the plan from offshore creditors in february. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. haidi: let's take a look at how we are fearing a half an hour into the start of trading in sydney, mining stocks trading sharply higher in the first four

minutes of trade, this optimism over the china reopening story. yet more steps, shanghai and hangzhou dropping pcr tests requirements for most public places and public transport as well. that isn't lending itself to the further leg up when it comes to both chinese assets and china expose assets, including miners in austria. kiwi stocks down .1 of 1%. we could see further moves when it comes to dollar-yen and further strength coming for the yen given the move beyond the 200 day moving average. s&p futures looking negative. watching the aussie dollar as well, we see a bit of u.s. dollar strength as we get the readthrough of the usa jobs report. certainly, we are headed toward the rba decision as well on tuesday with the 25 basis point move in view. this will seem to be closing in on the end of the rba's

tightening cycle or the first meeting of the new year. let's bring in bloomberg's economics reporter with more. is it likely we will see calls from tomorrow? this is always a concern from strategists that they are calling it too early. >> yes, the rba has signaled they could consider a pause, it is the only central bank in the major advanced world to signal that. they have not said they will do it, because they also want to send a strong message to the market that they are determined to crush inflation, and there are a lot of uncertainties still , but they want to go cautiously from here. they do not want to be very aggressive, so there is a good chance that this february is the last interest rate hike in the cycle. kathleen: the rba seems to of

taken a different stance than its counterparts. are the discussions about the rba's resolve to fight inflation notably, a couple of hawkish it investment advisors said that they thought that they were may be playing with fire. >> yes, that is right. there is some concern in the market, and that also comes out during press conferences and question and answer sessions with economists and investors where the question is often asked about whether the rba is determined enough was serious enough about inflation or whether they think this could become dangerous. the rba has so far sounded confident that they can engineer a soft landing in the economy, they can crush inflation and it not have a recession. they want to preserve employment gains, economic growth we have

had from fiscal and monetary stimulus during the pandemic, so they do want to get the economy going and bringing inflation down, and they feel they can do it, because a lot of supply chain inflation is already coming off. we have data recently from u.s. and europe all pointing to a slight easing in inflation as well, and with china opening up, that is good news for the global economy as well. that is what the rba is focusing on. they are looking at the positive news and leaving australia and do it. haidi: can they do it amidst a global recession? >> australia is an export heavy economy, and they do rely on trade, so it is a difficult one. goldman sachs, they are amongst the most hawkish it banks, and they are predicting 4.1%, the

peak rate for the rba, which is 100 basis points after tomorrow. and they feel even after that australia will be able to withstand the global recession and interest rate tightening, so there is underlying strength in the economy, which a lot of people leave will help get through a global recession and further aggressive tightening as well. kathleen: that is the bloomberg's academic reporter getting us ready for the rba meeting tomorrow. let's take a quick look at the offer you one, gaining past seven per dollar, there is widespread optimism now. you can see it in stocks and the golden dragon index in the u.s. on friday. there was a big move up, a lot of money coming into chinasoft etf's, but this is another sign that the reopening and the fact that the chinese government does seem to be implicitly acknowledging that they have to

bow to the protest, they have to start moving into the era of dealing with covid, living with covid, and this is something that has created a lot of optimism in investors. this is the first time we have seen this is -- since september 15 of this year. sam bankman-fried will testify before the u.s. house after he is finished investigating what went wrong at ftx. annabelle is tracking the developments. annabelle: i start off with what we know, because of course ftx is basically in the congressional process in the month of december, because there are a number of hearings taking place, so so far we have already had one in the senate and the houses next up, because they are holy one on tuesday. recent days ahead of that, we have heard from a number of financial services committee members calling on sam bankman-fried to explain exactly what went wrong at the exchange, and one of those people is maxine waters, the committee

chair. she took to twitter to call out sam bankman-fried publicly saying it would be a big help if he could come and help ftx customers, investors, so she wants his participation on the 13th. sam bankman-fried in the last couple of hours has given an rsvp sort up to this. he has said he is willing to testify before the committee and explain what happened, but he is not committing to the timeline of december 13. he basically says it would be his duty to appear once he has finished learning in reviewing what is happened. haidi: of course, the collapse of ftx has renewed the push for more legislation particularly when it comes to preventing spillover effects to larger parts of the market. have we seen much progress? annabelle: it is a tough one, because rarely there does seem to be bipartisan support for something to happen, but at the same time you do have a divided congress. that does complicate the matter, but we are certainly hearing from both sides of politics now

about this, including from the senate banking committee chair who was on cnn on sunday basically saying him and his colleagues are working every day to get this done, and we also heard from senator pat toomey, the top ranked republican on the senate banking committee. and he is someone himself who said he bought the story in the past, the hype, the enigma that is sam bankman-fried, but he is saying now there is an opening coming up in congress to make something happen before the end of the year. in terms of the context and scale of this, it will not be quite as big as what would have been helped by some in the sector, because it will be attached if it happens to a larger spending deal, but a regulatory framework for stablecoins is one of the measures that could come into play, clarity around the definition of a crypto broker and a tax reporting exemption for crypto transactions under the value of $50, and that would enable them to be used in smaller good sales. kathleen: it mostly looks like

cleaning up the mess, one of its units possibly for sale? annabelle: that is right, this is ledger x, the derivatives arm of ftx, and it was the sole entity regularly by the ftc. it was a cornerstone for sam bankman-fried's efforts in washington and is considered to be one of the most valuable assets were ftx. it is one of the very few that is solving at this stage. but we are hearing from sources, this is not official, sources reporting this business unit is for sale and is attracting interest from a lot of buyers, something like 10 firms are said to have expressed interest including blockchain.com, gemini. it is not known how much ledger x wood fence. as around mid-november it had $303 million in cash according to a filing. where we are at in the sale, it

is supposed to be advanced enough that at least some of the interest of parties have signed nda's. haidi: annabelle in hong kong with the latest. we will be discussing the future of autonomous driving. shinpei kato joins us for the conversation next on japan ahead. this is bloomberg. ♪

kathleen: it is time for japan ahead on "daybreak asia." someone reports the country's liberal democrat party is considering adding the democratic party for the people to its ruling coalition and tax rates will be extended to owners of fuel-efficient vehicles beyond the current end date of april. haidi: japan is planning to allow autonomous vehicles on public roles -- roads and eight limited capacity and next spring. this could pay the way for services like rubber taxis and driverless buses. our next guest is the ceo of a startup that developed autonomous vehicles and are backed by the likes of sony and yamaha. joining us now is the founder and ceo. tell us about the opportunities you see in these regulatory changes.

>> hi, first of all, thank you for inviting us to bloomberg. good morning, everyone. we are excited to see the regulation allow us to have real targets on the public road. since we started the discussion about the regulation, i think it will be time for us to go. haidi: do you think the legislation goes far enough to open up the market? it is a pretty fiercely competitive space too. what gives you the most opportunity and the most advantage in moving? >> from the market point of view in japan, i think the regulation is getting more and more ready,

well now it is a matter of technology, if it can fit in the regulation and also can satisfy the experience for the customers. kathleen: so, you know, the competition here is fierce, and that is to say the least all over the world. what is worth strength? how are you going to win here? >> yeah, it is quite one of the most competitive markets in the world. we are making a software platform on top of which we work with our partners and customers to fill in the missing pieces of the customers such that they can leverage their assets, not just buying the entire system. by this way, we believe we are going to be able to create an

ecosystem so that we do not have to build the system ourselves. we can build the system with our partners all over the world. that is one strength we believe we have. kathleen: when you see a couple of big auto companies step back from autonomous vehicle development, they say it is way too often the future, how do you answer that? how are you going ahead when some big auto companies say, not a good time? >> it is all the trend of cost, quality, and the pipeline, so we have to find out the best balance and pipeline that you can deliver your system with safety and cost. most of the companies that step back have misalignment with the roadmap in the markets. as far as you find the best

pipeline to deliver your system, other companies like us are quite positive to a step forward. haidi: what does japan need the most right now? >> excuse me? haidi: what change does japan need the most right now? what do you think is most urgent when you think of policy reform, when you think of things the government might be able to do? >> i think they are twofold. one we have to identify a partition. japan is one of the most technical countries in the world , so we have to leverage this partition, as i mentioned. i think japan is good to formulate an alliance. we are using open source, but other ways are acceptable, but we have to work with the

partners not building the system ourselves to be competitive to the market, and the second point is we also have to leverage our market itself. japan is also a big market for automated mobility, so we should leverage this opportunity in a country that allows us to have a real service, so we have to leverage this opportunity as much as possible, then expand the model to the global market. kathleen: you know, on the private sector side you have got backing some -- from some pretty big important companies. how easy has it been? how readily have you gotten the funding need to move ahead as quickly as you want to? and any plans at this point for an ipo? >> right, fortunate or

unfortunate, japan has started accelerating this startup market. the government has announced that they do support the big plan, the flagship project to support startups, so i think the environment of funding is actually quite getting better, and of course, if not right at this moment, my company is waiting to make a plan for an ipo in a few years. haidi: shinpei, we appreciate your time with us today. stay with us on bloomberg tv for more key interviews on japan ahead every monday at 8:40 tokyo and 6:40 p.m. sunday if you were watching in new york. ♪

kathleen: a chairman says scores still believes in the metal bank. lehman told bloomberg to that outflows have now stopped. >> of course, that is never easy. we have quite a lot of some 10 key investors that are long time

it investors it. they are not pleased with the share prices of course, but they welcome our plan to transform the company. they have a high believe in the credibility of the new management team, so they are standing by, but they are somewhat inpatient. they want to see the change, they went to cs executing, and that is what we are doing. >> what was the feedback like? if i am an old client why would i put $100 million with all of the uncertainty surrounding credit suisse? >> the clients still like us. we had very few clients really leaving. in light of the rumors, they might have withdrawn some money from us, that i am confident. from regional management, when we do well we will come back. >> went to think the outflows will stop? >> the outflows have stopped.

two or three weeks in october zoom, and they have started gradually coming back, particularly in switzerland. haidi: axel lehman with francine lockhart. an ipo is covered within hours of the company opening its books. the shares could raise as much as $1.3 billion with a private equity firm selling its entire 30% stake. ipo's in the gulf region have raised almost $20 billion so far this year. a crypto exchange is planning to slash its workforce by 30% as the bear market of cryptocurrencies deepens. the ceo says the move is part of an ongoing reorganization and that the priority is to ensure business operations are unaffected. bybit is the latest in a stream of exchanges to announce job cuts. disney's black panther: what

kind of forever as top the north american box office for a fourth straight weekend. the marvel film earned almost $18 million at u.s. and canadian theaters from friday through sunday. the ticket sales have reached more than $730 million globally. kathleen: these are the stocks we are watching when trade opens in korea and japan it shortly. we will keep an eye on oil and steel shares as the government plans to return to work work order on striking truck drivers. we are also watching shares of nissan and mitsubishi with the nissan ceo heading to france with more talks with a partner. samsung electronics may announce an annual executive reshuffle as early as monday. coming up in the next hour, nico asset management says it investors should be looking outside of the u.s. for value.

we will speak to the chief strategist, plus the ceo of a company is not surprised by opec keeping up with unchanged but expects demand by china to ship policy as the country relaxes its covid zero policy. haidi: we have been watching the spectacular images all morning today, hawaii mauna loa volcano erupting for the first time in 38 years. the lava is remaining near the summit but officials have been issuing safety warnings to nearby residents saying that could be changing quite quickly. this is the largest active volcano on earth erupting for the first time in 38 years. this is bloomberg. ♪

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kathleen: this is "bloomberg

daybreak: asia." we are counting down to asia's major market opens. john's reopening steps great optimism. beijing is reporting 3738 new local covid cases were december 4. i tech company saying it's covid vaccine is been approved for emergency use. perhaps this is another good piece of news for investors to digest. haidi: as you gradually openings elsewhere, hitting vaccination level in vulnerable populations it will be key. we have seen optimism in trading. what are we watching? annabelle: we have the open of south korea and japan at the start of trade, also cast treasuries coming online, so we are going to kick off your, because trading sentiment being donated by two factors. you have the china story we are mentioning but also what is

happening with the fed, given we have prospects changing for the outlook for rate hikes after the strong u.s. jobs report. the two year yield coming online, we are well off the peak that we saw on friday rising above 4.4%. traders recalibrating just how long they expect the fed to be holding rates higher four. in terms of what it wails we have moves coming back in, strength into the u.s. dollar playing out across the g10 space, including the strength we are seeing against the yen, but a broadly this is a picture of caution today. it does seem traders are more focused on the u.s. jobs report, citigroup saying basically the rally we have seen in japanese stocks over the past few months is going to be giving way by the end of the year, and the reason for that is they are saying we need to see a strong economic rebound to sustain the uptrend in prices. exchange -- let's change to the open and korea, we are caught between that were between the

fed and china. in the tech space because deck -- kosdaq outpacing broader games we are seeing for the kospi index. the fed is going to be having rates higher for longer periods to the expectation of 50 basis point movement this month, but we also have those moves arising in currencies this morning supporting the china story. instead, we are seeing offshore chinese yuan strengthening to the seventh level for the first time since september and a little bit of strength coming back into the korean won and below the key 1300 level that is a key psychological level we are seeing at the start of trade. it really does tell us perhaps if you have a change in look at what is happening in australia, this is a market being dominated by these moves in china today toward reopening, robert cities reacting strict covid zero restrictions. asx 200 gaining being led by miners. that is the story of reopening

in china and also what is happening in the brent crude space given that we have that also moving hard today after the opec+ decision, also down to what is happening in china with reopening. finally, a bit of inflation news, we have the readings and we saw gains of 1%, year on year 5.9%, but the australia story around inflation a lot more subdued than what we see elsewhere. kathleen: our next guest says the u.s. equity market is not cheap so a strong rally seems unjustified from december levels . how other countries are quite inexpensive and could perform reasonably well. the chief strategist at nico investment management joins us now. i want to get your view of how strong this wage number is, what it means for the fed and terms of saving that view? not so positive on u.s. stocks more focused on asian. >> you are right, it is just one

number, and the fed says do not watch one number, but it was a very big number. 0.6% is very rare for a monthly hourly gain in wage earnings. it is up 6%, well beyond the fed's tolerance level, so i think you will hear increasing hawkish language from the fed for a while, and that will keep rates high in my view. i think fixed income markets have overreacted, and it will be a bit of a pressure on u.s. equities for the six months ahead at least. kathleen: you also think there was a lot of risk hanging over europe, cold weather, the winter, oil prices, etc. in asia, where are you looking? >> japan is of particular interest, it has been late in opening up, and the streets are

finally getting quite crowded. it is hard to believe the fourth quarter will be very strong after a disappointing third-quarter. you have got auto production increasing, tourists coming in, and that is always a very high margin business, so we expect a good number for the fourth quarter, which will help support equity prices here. as for korea, we are less optimistic. the tech hardware space, especially semi conductors looks challenged for a while longer. you have to invest 6 to 9 months ahead of the tech cycle, but it is hard to read this time, especially because the crypto boom that supported demand is faltering greatly. haidi: it is interesting, you talk about crypto. as we await to see the happens , you see opportunities in that space or has it been dealt a

rather existential hit in terms of mainstream credibility and investors? >> well, yes, i think everyone is going to be quite shy to return to that space with the due diligence that was not done correctly is really pretty surprising. not that i knew any better, but it surprised everyone that a lot of the wisest heads in the institutional investing world were caught unaware on this, so i think everybody is going to be a bit shut in terms of throwing money back into the sector. that will affect many different players in that space, including tech hardware, as i said, but also advertisers. advertisers like google and social media used to rely quite a lot on crypto advertisements, and that has already decreased a lot and could fall further. haidi: is that china rebound on

firmer footing as we get concrete measures from policymakers that show pretty clearly that they are headed for a manager reopening next year? >> well, yes, let's hope it is managed well by mother nature or whatnot. it is very hard to predict what is going to happen. it is probably a good thing that they are opening up once again, they are taking some risks. it was really an untenable situation they had, and it will be volatile going i had to, but it is the right thing to do and that is a bright spot at least in their -- the intermediate term. it might be choppy the first few months during the winter and the chinese new year, but after that it should help the global economy quite a bit. kathleen: i just have to ask you about the yen, if the u.s. is looking to a higher terminal

rate, keeping rates higher for longer, the dollar continues to weaken. is this good news for the yen and how much stronger you've expected to get going into next year? >> it does not sound like any market is paying attention to the fed. the fixed income, rallying yields falling, they end rising again along with that trend, so it is sort of surprising to me, and i am not an expert in foreign exchange. i do not know anyone who is perfect at it for sure, but it is heartening for officials here. inflation was getting to be a real problem politically and economically and for the bank of japan, so the fact that it is back down to 135 is a great relief to japan, and the inflationary worries here. i will say, it probably will not continue appreciating very much further. i think it will be in a range

trade route for the next three to six months, because you do not see a strong reason for the yen to strengthen further because of the interest rate differential will remain. haidi: always great to chat with you, john. let's get you to new york where su keenan as our first world headlines. su: the u.s. secretary of defense lloyd austin says the u.s. is building a more lethal force position in the indo pacific as part of efforts to make sure china does not dominate the region. austin says china is the only country with a will and power to reshape the area and added the u.s. would sharpen its war fighting advantages and bolster its force presence. try's financial markets will pause for three minutes on tuesday as a tribute to the former leader jiang zemin. the central bank and security regulations say trading in sexchange, bills and gold will all be suspended.

they could not give a start time. jiang was party secretary from 1989 until 2002 when trying to's economy more than tripled. a south korean port as dismissed request for an arrest warrant against daniel shin. the court said it is behavior it makes it difficult to believe he poses a flight risk or that he would destroy evidence. is facing allegations of fraud following the collapse of terra luna stablecoin. archegos founder has asked a judge to toss out fraud charges against him. he alleges u.s. prosecutors engaged in what he calls deceitful conduct in the early days of the investigation. hwang says he was duped into assisting investigators they gave them false hope that he would not be charged. he is scheduled to go on trial in october 2023 with the

collapse of archegos. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. haidi: let's get to annabelle in hong kong for a look at early movers. we see the china optimism reopening plan playing out. annabelle: this is the major theme we are watching today, basically as china continues to be some of its most severe covid zero restrictions, we are seeing that reflected in aussie miners today, but this is what we are seeing for some of the biggest names in japan and korea, broad-spectrum gains seeing we are seeing bullish sentiment broadly rising against assets, including of the offer you want this morning with officials taking steps to relax their hard-line stance. oil is seeing the effects of this net reopening and other factors at play, we have brent crude coming online 2% higher in the session this morning, but

also down to what happened at opec+ at their meeting given that they decided to keep output controls in place, taking stock of the current state of the global market. we also add the eu price cap onrushing group. we are seeing some of those names in japan also trading higher at the start. kathleen: still ahead, a company sees no surprise in giving oil prices steady. that is coming up. we look at long-term place in china as beijing begins easing covid restrictions in a bid to boost economic growth. this is bloomberg. ♪

kathleen: chinese cities are accelerating a shift toward reopening the economy. let's bring in our chief asian

correspondent stephen engle. what do we know? >> august 8 the reopening as we have been speculating on is starting to take shape with a number of new cities relaxing covid to curbs. essentially pcr tests in shanghai and hangzhou and other cities are no longer required to take public transport or going to public areas. that is a good step, some would say a necessary step to get the economy going and get people's moods improving. we have this in addition to what we saw in other cities like beijing, shenzhen and wenzhou -- guangzhou. also the city capital where they may all of the iphones at foxconn. calling for immediate a mandatory covid testing to and for public transport -- to end for public transport. wuhan, other cities also

relaxing some of their curbs, so this has been a top-down directive coming from beijing. obviously throughout the covid zero timeframe, we had xi jinping and top leadership in beijing saying you must do everything you can at the municipal level and provincial level to contain covid, and some say these took that too much to heart, and the crackdowns and lockdowns were a bit excessive some would say. now it is going the opposite way , the directive is coming from above saying relax where you can. in fact a shanghai city officials saying the measures will continue to be optimized and adjusted in line with national policy and the national situation, so, again, we are having the politburo meeting in the beginning part of december. they set the economic agenda and priority agenda for next year. that will be unveiled at the national people's congress in

march. i am sure they are taking heat of the advice coming from at least six notable economists, who have posted a joint research or statement on wechat essentially calling on the government to prioritize economic growth and also further relaxing covid to curbs nationwide should be the number one property of policymakers in china. step-by-step, incremental improvement in the covid zero situation. haidi: stephen engle there, and that improvement, the accelerated opening up measures, we are seeing this play out when it comes to the currency, offshore yuan rallying past the seven per dollar level for the first time since september. our chinese fx at a reporter joins us now. the pessimism getting priced out of the market. >> it has been quite a roller coaster ride.

just back in october we saw the offshore at a record low. today, this morning we are seeing early trading, because after he saw a robust jobs report there were twin factors helping the offshore to rally, so today we saw that break that we have been tracking very closely. on the jobs report, the pivot around the fed has this rhetoric around reopening, it is likely to keep the yuan supported, but a lot of analysts say depends on how the macro progress comes next year. kathleen: they will not have to wait that long to find out. do you think traders are going to start testing it both ways? >> i think right now the consensus is ending the air around seven could be fluctuated between 7% and 7.2%.

the idea is that all of the pessimism you mentioned is still getting priced out. one of the most opulent traded fx nearing the end of the year is the offshore yuan. there are a lot of factors like at the end of the year liquidity could be playing into some of these things. kathleen: that was tania chen. as china about reopening start to take shape investor focus is shifting from frenzied stock to longer place. our guest joins us now. catherine, it was travel, leisure, those kinds of things i know people are looking at things that are more steady, like health care. >> absolutely, good morning. as the signs of reopening alpine, you saw a big rally in simple stocks, travel, airlines. those are easy to predict and obvious players.

now we are -- moving into what is next and how you can put money into this game. investors and analysts are saying look at the ones that benefit from longer-term reopening and the ones that are going to be benefiting here, like you said health care but also blue-chip names, also looking at tech. haidi: is it fair to say we are seeing stronger fundamentals when it comes to trading in chinese at assets now versus prior weeks were just a rebalancing, given how one-sided the china trade and become? >> it is definitely a difficult one. what has fundamentally changed in the last four weeks? the reopening plague, the issue seems to be lifted, but under all of this we are seeing companies come out of the woods,

so to speak. tech saw some more solid earnings in the last quarter. is it all great? it is not clear. are we going to reach the heydays that we did a few years ago? probably not, but slowly and surely these companies are finding their footing, and this will help. haidi: we do not want to return to the heyday just remembering how much volatility and the breakneck pace of gains we saw. the volatility is interesting, we are hearing from strategist saying is reopening might be two steps forward and one step back. there might be adjustments on both sides. what does that mean for a foreign investor and what they should be bracing for? >> the market is quite volatile. chinese markets have always been volatile. the recent ones have been for someone with not weak stomach.

it will be a widely expected this will be a bumpy ride. we see clues of reopening, but a very easily the government can save we still believe in covid zero, and that would send things down. most people believe the bottom is behind, that we are moving slowly upwards, so that is causing a lot of wall street banks and big-name strategist to say we are buying, we think this is a good opportunity. anything goes in this market, so it will be bumpy, but it is at least looking more progressive or a little bit more optimistic. haidi: our team asia for asian equities, catherine. you can get a roundup of stories including the chinese reopening in the latest edition of daybreak. go to dayb on your terminals or anywhere on the bloomberg app. you can change of those settings

so you get the news on the industries and assets that matter most to you. this is bloomberg. ♪

haidi: the credit suisse chairman says core shareholders still believe in the battle with bank. lehman told bloomberg outflows have not stopped. >> of course, that is never easy. we have quite a lot of some 10 key investors that are long investors. they are not pleased with the share prices, but they welcome our plan to try and transform the company area they have a high believe in the credibility of the management team, so they are standing by. they are somewhat impatient, they went to see the change, went to suggest executing and that is what we are doing.

>> what was the feedback like? if i'm an old client why would i put 100 million adult -- $100 million with all of the uncertainty? >> the client still like us, we had a very few clients leaving. in light of those rumors they might've withdrawn money from us, but i am confident, i have had personal discussions with clients. i know from regional minute know that when we do well money will come back at least to a significant part. >> when do you think the outflows will stop? >> the outflows have basically stopped. two or three weeks in october, zoom. kathleen: that isaxel lehman. look at stock futures in europe, see how they are opening. you can see some green on your screen for stoxx 50, it closed

ready much fund changed -- unchanged. traders shrugged off concerns that stronger-than-expected u.s. jobs data would mean that the fed was going to go higher on rates and keep them there longer. and also some signs that it may be the bears are throwing in the towel particularly in the dax. same story there back and forth but ending the day pretty much unchanged. a little bit of green on the screen, futures or not so negative that they want to sell, but it may be the confidence generated by what we are seeing in other parts of the world is helping them move ahead. one of ftx's if obit units is said to be a for sale attracting interest for potential buyers. sources tell us 10 firms have expressed interest in ledger x. it is considered one of the most

valuable asset associate with ftx after more than 100 entities filed were bankruptcy. bybit is planning to slash its workforce by 30%, part of an ongoing reorganization, and the priority is to ensure business operations are unaffected. coming up, the eu with a $60 price cap on the russian crude, and opec hold supply. what that means next for the market with vanda insights. this is bloomberg. ♪

kathleen: going to take a look now at a string of purchasing manager indexes across asia. you cans a -- you can see the

number coming in at 50.3 for services. the prior number was 50, so a little improvement and no change at all in the pmi composite for november. the final number at 48.9. when it fell below on the preliminary number, it was the first time that had happened in nearly two years. we know manufacturers around the world are facing tough times right now with the global economy slowing down and some big questions over how quickly some of these industries can move ahead now. haidi: questions when it comes to the recovery of the hong kong economy as well, even with quite a bit of reopening. take a look at the numbers we are seeing when it comes to the pmi readings for hong kong and singapore. hong kong, we've seen weakness when it comes to the property sector as well as pressure on the hong kong dollar.

the whole economy pmi we saw coming in with further weakness, 48.7 versus 49.3 in october, a third consecutive month of contraction. a third straight month of falling there, new orders lower compared to the prior months, so maintaining that solid footing in contraction rate territory. when it comes to singapore, we have seen more of an uplift for that reopened economy. the gdp coming in strong. we know this is an economy open to trade flows and externally exposed, so that reopening news as we get the incremental measures of listening out of china will be very beneficial. singapore's pmi coming in at 56 point two. sticking with asia and south korea's government, planning to order truckers back to work amid

disruptions in the transporting of key materials. that has been disrupting global supply chain. our global is this reporter joins us now. what measures are we seeing? >> the south korean government is ordering truck drivers in other industries to return to work. they are pretty strict in terms of handling this strike but they are getting serious because there will be a pretty large strike tomorrow in the country on the occasion of unions in various industries. it is a pretty large strike. that association has about one million members in the country,

not only the truck drivers but other workers, ordinary workers, most of the industries in that country doesn't see risk but the government is strict in terms of handling all of these strikes. the truckers unions, it is similar to the north korean similar threat. kathleen: how big of a threat as this to the economy? this is what investors usually worry about. sure. at some ports, like bussan port, we covered about 70% or 60% of the lower levels. other reports, most of the

deliveries are not working, so it is still having an impact but the point is no one is expecting how long these kinds of strikes will continue. but one of the worst scenarios is already we have seen gas stations in the country running out of gasoline or diesel. that might have a huge impact on the shipping industry. haidi: we have more to come on daybreak asia. this is bloomberg. ♪

su: this is daybreak asia. shanghai and hung joe are easing some covid restrictions after protests against the nations stringent policy last week. shanghai will scrap pcr testing requirements, meanwhile in hung joe, home to tech giant alibaba, testing requirements for entering most public venues will also be dropped. doyle, opec-plus keeping its output unchanged as it takes stock of a market roiled by uncertainty over chinese demand

and russian supply. the group held a roughly 20 minute online meeting sunday. the decision is expected to hold for at least a few months before its monitoring committee meets once again in february. and evergrande offshore creditors are said to have signed a confidentiality agreement as they seek to advance debt negotiations with the chinese dollar. talks were beginning over the weekend. evergrande is aiming to resent a restructuring proposal for a dollar bet as soon as this weekend is hoping to get plans from offshore creditors in february. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. kathleen: now we are going to take a look at how the markets are opening in korea and japan. we will get back to belle. what are you seeing? annabelle: just under 40 minutes

into the trading session right now and so far the session is looking like we have that tug-of-war going on between what's going on in china, covering some of the headlines there and what is happening with the fed, given we did not have that strong u.s. jobs report. policymakers are going to keep hiking for longer. we are seeing bond yields pulling back and new zealand australian, in line with the moves we had friday. and fx space, this is where it gets interesting. coming into the session, we had the dollar looking stronger but that has given up. given we did see the offshore yuan strengthening past the seven level for the first time since mid-september. we saw the south korean won opening below or above that key psychological level of 1300. in the stock space, looking fairly mixed today. you need to pay attention to what is being foreshadowed for

the open of chinese market about 15 minutes from now. let's zero in on the moves we are seeing in the equity space. you can see this is a picture, most sectors declining. what is leading they gain is what we see in the material space. that is a story of reopening and a lot of expectations cities will continue to pivot away from their covid zero policies and it will be a supportive factor for the regional economy. energy stocks with the second biggest mind materials. brent crude, both of those gaining -- this, you can add to the opec-plus deal and the eu price cap. haidi: let's get more on that

when it comes to the outsized impact of the china demand story. the eu announcing that price cap, russia rejecting it. sanctions kicking in today. the reopening for china all playing into this. joining us now is vandana hari, the founder and ceo of vanda insights. out of that sector of influences, what is most noticeable? what's the most powerful factor? we have the china story is the major one today. vandana: i would probably say keep an eye on how china's covid pivot progresses. i expect it's going to be quite chaotic, confusing for the markets, may be two steps forward, one step back. it is via sleek completely uncharted territory. as you are just mentioning, over the weekend, we had more cities starting to ease testing

requirements in terms of how the public is allowed to access public spaces. look at the second largest oil consumer after the u.s. and the single biggest contributor of demand growth. china is key for the oil market. there's going to be lots of uncertainty and unpredictability around its covid pivot. haidi: when you take a look at the dynamics of crude pricing, the sanctions that take effect today, are they going to make a meaningful impact on pricing? vandana: no. the price cap, in a way, politically it saves face for the eu that they managed to agree on a number, but for all practical purposes, it's immaterial. even as the price cap has been set at $60, five dollars above where russian crude has been trading toward the end of last week.

it is not going to achieve one of its critical aims which is to cream russian oil revenues. if they were trying to ensure european shipping companies, insurance companies remain in the game and continue to have the business of russian crude flowing into the country's, i don't think that's going to happen because china and india have -- i don't expect them to sign up. the third intent was to try and avoid a supply crunch and price rally, but that's not happening, but that's more because of demand concerns in china and an economic downturn rather than a result of the price cap. really it is immaterial. kathleen: you say the second big pipit to watch as the fed. after the pivot is not expected

by fed watchers to be weaker, going back from rate hikes. it's expected to even go higher and less longer. how does that go for oil? vandana: this is an other sort of choppy waters therefrom a broader financial market, they are going to continue speculating and a great deal of volatility. what you have seen in the past few weeks is oil hasn't always moved in lockstep but the return of risk appetite in the financial markets, on some occasions, it has come on some occasions, it has not. by and large, a fed pivot, if it is back in the market, that is a pro for crude because that gives investors a bit of relief in terms of how badly the u.s.

economy might be affected. that's a positive for oil demand and it typically matters the u.s. dollar which ends up being profitable for crude prices. i don't think this fed pivot story is going to be concluded one way or another in terms of market sentiment. we won't always see a positive correlation, so that's another uncertainty. kathleen: you say barring a rude surprises of russian oil flows, you expect downward pressure because of the global economic slowdown and the heavy discounts on those russian products? vandana: exactly. as of now, the eu had -- the cap is looking to put russian crude at about $20, $25 discount to brent. going forward, the freight rates are expected to rise because

there will be fewer ships available to move russian crude if shipping companies remain out of this trade. freight trades are going out and buyers like india are going to ask for deeper discounts for russian crude to offset the higher freight costs. and russia's market is shrinking. it's obviously not going to go into that part of the world. there'll will be more perils and fewer buyers. i expect the russian discounts to keep sinking, basically higher discounts. kathleen: thank you for joining us. founder and ceo of vanda insights. coming up, a look at the outlook as prices are skyrocketing. more on that, next. this is bloomberg. ♪

haidi: -- kathleen: china's property market could consolidate well builders continue struggling to survive. patrick wong joins us now. big story, more than ever for the property market, how might the exit of covid zero strategy impact this market next year?

patrick: the situation is very tricky. we see the downturn this year and with the covid exit strategy, it's a good opportunity for things to improve next year, especially for the long-term horizon. even the office is going to have some recovery. there is some challenge because the sentiment is not there yet. it will take some time for the sentiment to recover because they have some concern about giving their homes to them. still a bit challenging, so that is why i think in terms of sales, the middle of next year

for the recovery. haidi: does that mean major developers should be able to resolve cash flow issues next year? patrick: yes. i think you can see the overall sentiment improving because you can see more m&a coming, especially -- they enjoy a funding. so some of them do some m&a and get opportunities to buy them at reasonable prices, which is good for them. but it is still a bit challenging and they need -- they will definitely get some more opportunity to improve the

situation and also take some time. kathleen: how would rising borrowing costs impact hong kong home prices next year? patrick: recently, a vendor of high volume increases quite surprising, established almost 5%. the challenge overall is in the next couple of months, we may see more being sold at lower prices. definitely even the u.s., they are going to lower the pace for increasing this way but it could be another 50 basis points which will have an impact in hong kong and maybe three and a half or even higher. we see that is the challenge when the mortgage rates are much

higher and they still have pressure to come down another 5% or 10%. haidi: we have seen the market here in sydney drop about 13% since the start of the year. do we see a turnaround or more pain next year? patrick: this situation for us trillion may be a bad turn. prices may be coming down a bit. like may or june, stabilizing. fundamentally, things are solid in sydney. we still see a potential soft turn, but sometime next year in may or june, interest rates stabilizing and we could see the prices recover.

haidi: patrick along with a look at the property sector going into 2023. indonesia wants to build a new $34 billion capital city right smack in the middle of a vast rain forest on the island of ne-yo. more than three years after this was announced, not one foreign party has entered into a contract for funding. let's get more from our asian investment reporter. what's the motivation? why are they creating this new capital? >> inc. you for having me. one of the primary reasons to build a new capital is the existing capital in indonesia, jakarta, is sinking. it's overcrowded and congested. the idea is to elevate some of the pressure from jakarta and create a new administrative capital, very much like what you have in the u.s., which is you have washington, d.c. and you have new york. the key reason is to spread the

wealth. currently wealth and power is very much concentrated to jakarta. jakarta contributed 16% to indonesia's gdp and the other reason is basically to establish higher economic status by 2030 five. this new capital is expected to create more than 4 million jobs, it's expected to bring in more sectors, investment in new sectors like clean energy, renewable energy and that is why they want this new capital very badly. kathleen: it's great that it's going to create jobs and help the country get richer but apparently foreign investors are not sure they are going to get richer if they invest in this. faris: that's the main crux of this whole development. how do you finance this colossal

project? it is not something that's going to happen in the next five or 10 years. the ultimate dateline of this project. the government, the president wants 80% of the capital to come from private and foreign investments. while there has been so much talk about interest from foreign investments ranging from china to the u.s., there hasn't been any binding contracts signed. this is proving to be an uphill battle for the government because as we can all see, the global economy is slowing down. for the foreign investors, they are saying i would rather focus on might mistake projects rather than investing in this long, drawn massive project that is not going to bring returns fast enough. kathleen: great story. you can get more on today's big

take piece on the terminal and bloomberg.com. subscribers can access past stories on and i go. the wall street journal reports saudi arabia's crown prince is preparing to invest in credit suisse group's investment bank. the prince may invest $500 million in the lenders seat. he sounds ceo is heading to france for more talks with renault. that's it from daybreak asia. keep it right here. this is bloomberg. ♪

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>> good morning, it is not :00 a.m. in