shery: you are watching daybreak

asia. annabelle: we are counting down to the market open. haidi: australia has come online, the top stories this hour, inflation calls reinforcing the case where the effect is low the pace of tightening what they half-point height, i will look for asian stocks, investors are considering what this means for future fed policy. segment three denied bail -- bankman-fried denied bail in one of the biggest fraud in american history. shery: south korea jobless rate come in, -- came in, the third month where we see the unemployment rate adjusted in south korea, rising, you have to put in the broader context of things we have, an aggressive tightening from the bok.

626,000 jobs were added in november, the risk ahead for south korea, i weaker won is a threat and import prices are higher and employers are getting hit on costs. what does that mean? the economy faces a difficult environment and the difficulties could worsen in the first half. what are you seeing in australia? annabelle: we have the open here of the asx 200 and we are pointing to some fractional gains, we should move higher as we go into the session given the front, it is the reaction to the inflation print and what it means for the fed. these lower than anticipated rise in inflation in the month of november and that is telling traders that a good moderate the pace of its rate hikes in the decision later on wednesday.

we see these moves, particularly in the more rate sensitive front , the drop in yields, let us see, that could help boost asian stocks because we are seeing the asia benchmark index here up 20% from the allow it reached in october, china does make one third of this index. we see the re-optimism around the opening extending. haidi: despite the fact we are saying the economic or conference perhaps being delayed, we will wait for confirmation on what happens next. we are seeing u.s. futures muted in the asian session after we saw the surge after the u.s. cpi numbers faded throughout the session. we finished slightly higher, we are talking about treasury yields continuing to tumble, the two year yield slipping more than 15 basis points, the

bloomberg dollar index of touching the lowest level in six months, we see downside for crude prices in the asian session after we saw the risk on sentiment take oil prices higher in the new york session. the dollar is weaker, it helped the energy pricing. let us talk about the inflation numbers. shery: it slowed again in november, a big sign, that we are in a right direction as it gets ready to make the policy decision. there will come out with their statement. kathleen hays is here with a look ahead. break it down for us, we have the headline number about at the core cpi number as well? >> on both fronts, that is good for the fed, trying so hard to get inflation down. the second month in a row there was a bigger than expected decline in the headline cpi.

very broad measure of prices of goods and services. that is why the fed puts so much emphasis on it. down 7.3% from the estimate, the actual number before was 7.7, seven .1% is great. the month before the core cpi which takes our food and energy was 6.2. facilitating 6.0, on the month for the cpi, 0.1 is a nice, small number. that is how cpi numbers used to look before we had an inflation problem. look at the components. we new energy prices and gasoline prices would look better. that will be a plus, although as heidi just asked in the previous hour, what about china? a lot of juice in demand, pushing the gasoline price back up, that may be one reason why the fed may be cautious, knowing

this is a volatile kind of commodity. you see prices stabilizing more and new cars are looking better. rent is a problem, 0.8 percent the month before and they got back down to 0.6. you pay a mortgage every month, turn it into a rent payment, those are sticky prices. this is the bloomberg, if there is a problem for the fed, goods prices are coming down, furniture, apparel, those prices have come down. it is core services when you take out the food and energy, look at how they remain a 6.8% a year and leveling out now, not plummeting like those prices, this is a question for them as they go into the meeting to decide just how dovish they want to be or how hawkish they want to remain. haidi: we are looking for

implications as to where expectation will fall going into next year for the fed? >> that is why this meeting is so important because this is, remember the dots? every quarter the federal reserve updates its economic projections and there are opportunities every three months to look at the numbers and see a signal of where they think things are going, where the economy will be and where employment going to be -- is going to be. if we see the consensus, the median., does it go from -- the median dot, does it go from that to 5%? i think it will be interesting to not just look at 2023, look at 2020 four, the market that expect the fed to start cutting rates once they get to the peak and hold it there for a while. will we see some people backing off of the higher dots?

i think that is one of the most important things as you know, the figure will get higher instead of 75, the dots are submitted, what do they tell us when the fed stepped back and looked hard, what were they thinking? the markets are pricing in 5%, something lower, could you imagine the rally? higher? that could be a different story. haidi: let us get some assessment of the market move post cpi, our chief rates correspondent is garfield, interesting session because on one hand the equity rally unwound and we have repricing across rates. >> part of what seemed to be going on was a covering of short end in general. which speaks to the fact that this year has restored the capacity of the fed to make the

markets fear them. yes, the inflation resulting in line where both equities and bonds had been looking for it, the wildcard is what is the fed saying when it comes to dot plots? there is remaining tengion which i think is a difficult one, markets like to see things moving one way or the other. it is a bit of a truism, as soon as a central bank makes it clear they have stopped cutting or stop raising rates the market starts saying when will you be cutting? that is what has been going on here. you can even see or argue that some of those bets and directional changing beds are sort of overstated because they do cut this is what they will do. you have got the potential for

attention because powell is quite likely to emphasize, it has been the mantra since jackson hole that at some stage they will slow down. and does not mean they are going to look to stop all of that rapidly -- it does not mean that they are going to look to stop all of that rapidly. part of the danger is with treasury yields, big moves there. is no market was pretty short coming in to the meeting -- the market was really short moving into the meeting. the extra risk, if the fed stays aggressive or if you get something that comes up in the next while that signals inflation, it will not be transitory, you have come a long way down and there has got to be a consciousness that it seems early for the peak yields because there is difference between the peak and rates. a lot of nervousness out there,

i think if the fed does say the dot plots do not get too extreme, you could see moves to the upside. shery: how much of a chance is there we could see investors focus on what happens after the this week? we have tons of central bank decisions not to mention economic data as well. is there anything out there that could erode what the fed does -- derail what the fed does? >> when that is currency, rallies against the dollar, those also unwound a bit and that is because that is the one area where you have got your multiple risks. if the fed, what does the fed do ? does it attack less hawkish or more hawkish?

what does the u.k. central bank do, the mexican central bank and all of these others on tap this week? has expectation is the fed end -- the expectation is that the fed ends up with the expectation, anything to shift the quantum either up or down is not just dependent on the fed, they could have a very strong influence. in currencies in particular, that feeds through too. you have seen what a strong dollar does to risk sentiment. if you do get the dollar weakening on the expectation of the differential, it will narrow, that could support broad risk sentiment. especially outside of the u.s. where investors have been more cautious than they have been want to come to the s&p 500 and the nasdaq -- when it comes to the s&p 500 and the nasdaq.

shery: eco-data as well, we are watching what is happening in their. a judge has denied bail for the ftx co-founder who plans to fight extradition to the u.s.. federal prosecutors have charged him with what they are calling one of the biggest financial frauds in american history. let us get the details from laura davidson in washington. what did we hear in the bahamas and what is next for him? >> the judge said he would be a flight risk, he has too many assets, his lawyer asked for a bail but he will be pursuing the next steps from his jail sale and he wants to fight extradition on the u.s., this is more of a delay tactic. this is a long process, there is

a lot of charges laid out both criminal and civil as well as some other unnamed individuals, presumably other top executives we could also see more legal proceedings there. the bankruptcy proceedings are continuing. multiple tracks in multiple countries. haidi: customers who have money in the ftx account, how do they regain access? >> john j ray the third, the court ceo who is handling the bankruptcy testified he is doing the act of praising the assets they have back to specific customer accounts and looking at where there may be the most losses, he says that the ftx u.s. accounts are best positioned to be paid back sooner and more fully, the ftx.com, the international accounts that could be looking at more losses and waiting longer to get their assets on frozen. there are a billion or so, there

are a lot more to go and they do not expect to get anywhere all of the assets that were there before bankruptcy because the money has been spent, donated, it is difficult to go after piles of money once they have gone out to multiple vendors were given away in grounds or to -- grants or political campaigns. haidi: let us get some of the other stories we are watching. >> china is delaying an economic policy meeting after sources tell bloomberg it is uncertain when the economic conference will be rescheduled to. the meeting was supposed to begin on thursday and it is usually attended by xi jinping and the other top officials. china's military officials have sent bombers in the taiwan strait, the strategic bombers were among 29 warplanes that the

defense ministry said detected -- said were detected. sources tell bloomberg u.s. is poised to send missile-defense batteries to ukraine, final google comes from president biden. ukraine has one of the system to counter a barrage of russian missiles. the move to send the system may come within days. opec has reduced estimates for the amount of crude the group will need to pump in the following months. under 29 million barrels a day in the first quarter of 2023, that is only slightly more than november. the latest number follows a slump in crude prices on concerns of week consumption. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: we will discuss what is

next for crypto regulation after the collapse of ftx. the former doj prosecutor and senior treasury advisor joins us for that later in the hour. jp morgan australia says it does not expect any fed rate cuts in 2023, laura fitzsimmons shares their investment strategy. this is bloomberg. ♪

>> you look at the headline numbers and core, better than expected, with alliteration in a number of items -- deceleration in a number of items. >> inflation data shows it is going in the right direction. >> it is not just the magnitude of the moves, it is the speed. >> investors did not think that inflation was going to come down as fast as predicted, it is coming down even faster. >> it is not the end. this is not the time to get complacent, there is a lot more to do. haidi: bloomberg tv guests are reacting to the most recent data out of the u.s.. our next guest says that the fed will not be carting in 2023.

laura fitzsimmons, head of australia rate of sales and jp morgan joins us. is that what clients are talking about? laura: people are thinking about the big trades, as we begin january, everybody has the reflection moment and one thing that stands out too many people is listening to powell trying to educate the market. the rate will have to be hired and also stay for some time if they want to control inflation. that is the message we will hear from him tomorrow. at the same time, people are thinking the market has been pricing cuts for some time. i do not think when i speak to investors that we get the sense that is coming around the corner. that his early 2024 when the fed may begin to ease -- is early 2024 when the fed may begin to ease. you see the market pricing moved

back a bit as trades are starting the year. haidi: where the u.s. dollar goes from here, is it a one-way street in terms of weakness? laura: positioning looks like it can extend further for the dollar. it does seem that we have seen a lot come out heading into year end. i expect the trend to continue. next year we are more constructive on the u.s. dollar but it will be a different story, it is looking at more selective currencies. we think potentially that there are risks for the europe region. we see dollar strength continue. is less clear like the dollar yen. the doj will have to move away from the second quarter of next year. shery: i wonder about the implications that the fed will not cut next year but only pause

for a central banks around the world? laura: i think at this stage in terms of the fed, they have been quite clear with their messaging overall. we see that at this stage it does not look warranted. we are hoping that there will be a soft landing and that is part of our future at this point. it does seem like the markets will persist in pricing this trade somewhat. it is something we will continue to talk about and the hope is the recession risks are not as severe as the market is currently predicting. shery: what does it mean for central banks around the world this week? after the fed we have the ecb and central banks in the philippines and emerging markets have had to follow the fed higher. if they do not cut, they only pause, what are the implications for these other central banks around the world and what the markets are going to do next year reacting to what the fed

does? laura: in terms of when we think about the ecb and the 50 basis point hike, i think optionality is pretty important for the bank of england. they are getting some strong data, it is going to be quite difficult to treat at this stage. it will not be cutting anytime soon, that is the case there, ecb is not a huge continuation from here towards terminal around 2:75 -- 2.75, people want to keep their options open. watching the moderation. certainly as we head into the northern hemisphere this weekend and -- hemisphere, in terms of australia, we are expecting the rba to pause in february. the most of which of the central banks taking his own path, downshifting and we think we

will be pausing before that. i think the bank of new zealand started first in the hiking cycle and we expect them to continue. the market is price for another 75% move, a different story there. ucd synchronization occurring through -- you see this december de-synchronization through 2023. haidi: this is bloomberg. ♪

shery: elon musk has been displaced as the world's's greatest person by the chairman of a luxury giant. muska has seen his fortunes tumble by more than one hundred billion dollars since january, the head of tesla is worth under $164 billion what is below the

$171 million -- billion net worth. alternative app stores in the upcoming months as a response to a law taking place in 2024 that levels of the playing field for third-party developers. regulators have accused apple and google as being the gatekeepers of the biggest app stores. closely watched economic policy meeting as covid cases search in beijing. this is bloomberg. ♪

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daybreak asia, 30 minutes into the trading day for australia, the asx 200 tracking what came through the session overnight, this is the u.s. inflation print which came in slower than expected in november telling us that the fed could start to moderate the pace of its rate hikes, 50 basis point moose is baked in for the position on wednesday, some traders saying we could see a move to 25 basis points as soon as february. we see the nikkei futures in singapore coming online and they are moving to the upside. a shift slightly in japan, the survey coming out in 20 minutes from now, take a look at what we are expecting, we are looking for a bit of a mixed result coming through, optimism of the non-manufacturers increasing in these services industry but still, the biggest manufacturers we are expecting a little bit more weakness to come through and a part of that is the

external demand picture and deteriorating economic outlook, the trading partner in china. haidi: sticking with china, postponing the key policy meeting, the conference during a covid spike hitting the capital. stephen joins us from hong kong, we were looking at this three-day event, usually it is, to give us an idea on how the shift may play out? a's the fact it has been delayed is telling because we were looking for the tea leaves to find out what the plans are to navigate through this dismantling of covid zero, we were expecting some stimulus measures, towards the property sector or potentially even a declaration that the regulatory crackdown on the property sector had ended, there are a lot of expectations for the central economic work conference with was due to begin tomorrow,

thursday, we are hearing from sources that because of the covid wave that is sweeping not only through beijing but through the financial district of shanghai and other big cities in china, that the risk of a super-spreader event at the central economic work conference was simply too big a risk. the members attend that as well as of the provincial governors and all of the big financial agencies and also commissions and the like. all of the bigwigs of beijing were due to gather in a closed-door meeting starting tomorrow. have not heard officially it has been delayed but because of the numbers of covid cases spiking in the capital, we are hearing from a number of sources that it has been postponed and we do not know until when. shery: the overall financial sector is doing with the covid spike? >> we may see a drop in volumes,

we have seen that already for the onshore dollar. the lowest number since april. a lot of people are calling in sick, many people have the scratchy voice like i have right now. or worse. they fear that they have a covid -- fear that they have covid and fever clinics, one city fever clinics saw a 16 time increase in the number of patients on sunday and the number of traders will have called in sick in shanghai in the financial companies in beijing is spiking. half of the traders are one of the banks in beijing were off sick as of tuesday. basically, they do not have a lot of recourse, they are being told if they have a high fever, do not come to work but hospitals are saying do not come

to the er or the hospital unless you are severely ill. we have seen a spike in the number of people going to the clinics and calling emergency hotlines. in beijing alone they are saying do not call the hotline on those who are severely ill. shanghai alone has 1700 official financial institutions employing half a million people. i will leave it that that. -- at that. shery: thank you was 20 us despite your voice. that was the latest on china's rising covid cases. we have seen the pressure amount on beijing whether it is because of the health, the covid infections rising on geopolitical tensions as well, washington upping the pressure on the chap sector -- chip sector?

also in africa's traditionally strong partner for china, the biggest trading partner is beijing and we are seeing the president in the u.s. hosting african leaders in washington for the next three days where they are expected to talk about trades, democracy, rising food prices, and much more. haidi: we know and we are seeing the soft diplomacy being aggressively pursued by beijing in this part of the world to build out these she did prayed investment relationships and covid-19, the economic downturn has made that one difficult for china economically and in terms of the debt burn for a lot of these countries as well. it will be interesting to see the longer-term strategy when it

comes to infrastructure development, technical support to promote the continental prayed for africa to come from the united states. we are seeing this big throwing of the president's backing behind the african union and getting permanent membership in g20 during the course of the summer. interesting, shifting dynamics across the space and emerging markets more broadly. the first word headlines. >> u.s. inflation has posted the smallest monthly advance any more than a year. cpi rose 2% in november and is up 6% from a year earlier. cpi increased 7.1% as energy prices offset rising food costs. inflation has peaked and may validate a downshift in fed rate hikes. >> prices are still too high, we have a lot more to do but things are getting better and in the

right direction. >> i hope by the end of next year, i am convinced it 18 up. >> china is ready to build better ties with south korea, the top diplomats from beijing and korea have had a virtual meeting as washington campaigns to curb china's access to semiconductor technology. china has challenged the u.s. chip codes at the u.s. trade organization. australia has assigned a packed, the second defense agreement in two months as many look to china for influence. the agreement helps of the two countries collaborate across a wide range of areas including disaster relief, law enforcement, and defense. argentina's superstar captain won over croatia.

at age 35, it is his last chance. france will play morocco in the semifinal. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: coming up, a former treasury advisor and doj prosecutor joins us to discuss the future of crypto regulation. this is ahead of an extradition battle. this is bloomberg. ♪

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a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. haidi: a judge in the bahamas has denied bail. let us get more from our correspondent, we are all waiting for the extradition hearing. what do we know ahead of what is likely to play out? >> we heard over the course of five hours here at the chief magistrate, they heard from both the defense for the united states and the lawyers who are defending bankman-fried and many of the was around whether he

served as a flight risk. there were a series of points where extradition was discussed but it was not until the judge's ruling was that his request for bail was denied and we understood that extradition is likely in early february. bankman-fried did not waive his right to have extradition hearing earlier in the case and that seemed to be a suggestion he is willing to fight once the case is heard. shery: what is the timeline from here? what can bankman-fried expect if he is extradited to the u.s.? >> there were a number of hearings including on capitol hill as well as the unsealed documents in the u.s. that may suggest that there are a number of steps the lawyers can take. there was not much discussion about what the timeline may mean other than he is being sent to prison. he will be able to help visitors

-- you will be able to have visitors, unless they are preparing a legal defense. that must be mapped after the also what we heard from john jay, the new ftx ceo as well as going beyond investigations that are taking place in the bahamas. haidi: we heard from the former federal prosecutor talking about the avalanche of evidence. what is this? tell us about the case that prosecutors are trying to build? >> it seems to be the case in the bahamas that the chief liquidator who has been chosen by the supreme court and the financial crime unit are really digging into some of the transactions that took place on friday, november 11. there seems to be access to documents in some cases but we also know that not all access that the regulator has a did the

bahamas is something that they have been able to get. we heard from a chief government official that they are hoping to work with the united states to give us access to some of the documents that were held on service of the company. that access is not granted to the securities commission. much of the details around the company whether there were the right compliance measures taken, whether there was communication among executives to allow withdrawals on friday the 11th, the details that are open for investigators in the bahamas. shery: that is from the latest -- the bahamas on the latest. you have been watching all of the latest on this, what stands out to you? annabelle: the scope of the charges because there is the civil side and the criminal side as well and we understand from bankman-fried's legal team he is

considering each of these and looking at the options. when you look at it at the broader context, the likes of the sec and other regulatory agencies those can take a backseat when there are criminal charges involved. i do want to bring in our next guest, they estimate more than a decade as a prosecutor. ari redbord is the leader at trm labs. he has denied knowingly convict -- knowingly committing fraud. if he is convicted, what are the stakes? ari: as a prosecutor we had this much activity in one case on one day, we saw regulatory charges and civil charges from the sec. not only do we see the arrest but a detention hearing first thing today in the bahamas where he was held.

we saw indictment from doj unsealed. we heard an important hearing on capitol hill where the legislative branch is engaged. really unprecedented activity. that goes to the heart of this case. it will be interesting to see what plays out, we know that there is an extradition hearing of some kind and likely in february but things change quickly. it is possible that a few days or weeks in the bahamas of being incarcerated causes a desire to move on how go to the u.s.. we have not ruled out challenging extradition or not challenging extradition. one thing to get to the heart of your question is the sentencing guidelines will be significant in this case. they are not mandatory, most judges follow them. one of the major drivers for federal sentencing guidelines is the amount of money involved in the fraud committed.

as the u.s. attorney said today this is one of the largest fraud in history. the number will be very very large and we will see a significant amount of time that the defendant here will be looking at. there are mitigating factors, does he cooperate? see waive extradition? as you -- does he waive extradition? annabelle: picking up on extradition, he is planning to fight that, does that impact the cases pending against him? >> you said very well that typically civil cases do take a backseat to criminal and that is because when you are talking about criminal cases or charges, you are talking about potential incarceration and in this case you are looking at significant potential incarceration. this fighting extradition will

ultimately end up delaying the criminal process which i could imagine a world where the sec case and civil plaintiffs cases will ultimately be stayed pending the resolution of the criminal case and the monger extradition takes, the longer the preliminary stages take place once he is ultimately extradited. it delays things further and further. shery: we have heard bankman-fried acknowledged it was mcmillan judgment -- make management on his part. his that a -- is that a legal defense? >> you have to have intended to commit fraud, one thing that is outstanding is exceptional is the speed of the indictment. had a team of agents working

around -- you had a team of agents working around the clock looking at transactions to understand what the evidence is and they packaged the evidence up and present it to a grand jury. the grand jury indicted on pretty significant charges. by that says to me is that the strength of the evidence is very strong. that was likely a factor that the judge took into consideration in the bahamas and will be a factor that the court once he arrives in the u.s. will take into consideration. do your question, the strength of the evidence is strong but the case is moving quickly -- to your question, the strength of the evidence is strong but the case is moving quickly. haidi: greater regulation around crypto, this could have been avoided, the core of this case which is limited and vesting of

customer funds, they are already. myriad productions in place whether you are talking about investor laws laws or consumer laws. the infrastructure being able to prevent this from happening? >> we heard the testimony on capitol hill, it was about corporate malfeasance, a lack of corporate governance and fraud. civil and criminal. this case is more akin to the traditional money laundering financial crime or malfeasance at a centralized institution. i am not sure about the regulatory clarity that is needed and it is needed in the cryptocurrency space, if this would have sold for the issue we see here which is akin to what we saw in the enron case. another important fly is that

ftx was not an u.s. -- another important point is that ftx was not a u.s. company. u.s. law did not necessarily apply. i do not think that ftx is a reason we need more regulation in two crypto space. i think the crypto space, crypto businesses agree, it needs more regulatory clarity. we are more likely to see that in stablecoins and anti-money laundering and other sorts of areas. the fraud here did not occur on blockchain. it occurred behind closed doors and feels closer to corporate malfeasance we have seen for generations. annabelle: picking on what you said in terms of regulation, congress come into next year, what exactly do you think we can realistically expect? >> i think the reality is it is unlikely we will see a broad comprehensive framework for crypto assets the way that we

have in the eu around the markets in crypto assets. in the u.s. we are likely to see something that is more akin to piecemeal. we will see -- i think the first thing we will see in stablecoins regulation. they have been working on it for months or longer and i think we are ready to move with that and see some movement. especially in the wake of the collapse of stablecoin. we will see more, it will be spotty i don't as comprehensive because to your point i am not sure that the political environment is right for some brought out a comprehensive framework today -- broad and comprehensive framework today. shery: his views on what is happening around bankman-fried. we are getting the survey out of japan for the fourth quarter for the large manufacturer index

sentiment, it has weakened to seven. it is above expectation but it is a weaker number than the previous quarter. when it comes to the outlook, also weakening from nine, in line with expectations. this is not surprising given that we have seen weaker i external demand manifesting through the region when it comes to manufacturing and export numbers as well. the nonmanufacturing index has improved from 14 in the previous quarter, also the outlook realistically -- relatively the same, the outlook has missed expectations. these companies are seeing a lift from the travel subsidies and relaxed border restrictions we have seen so far in the fourth quarter in japan. the outlook is not as strong as economists had expected.

they are expecting to rise 14.2%, it gives an indication of future spending. haidi: when it comes to future capital spending uc machine orders when it comes to the month on month number four october beating expectations. a survey of expectations was 1.8% and it is a reversal from the 4.5% and a contraction of the previous month, against expectations of 1.5 percent and slowing from the previous month and as an indication of future capital spending, it strips out chips and orders from power companies and such. this is bloomberg. ♪

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haidi: tech stocks in focus after we saw the nasdaq 100 advancing, the peak of u.s. inflation is likely past, the tech sector are set to benefit. this is bloomberg. ♪

shery: this is daybreak asia, we look ahead to the fed policy decision, we have u.s. inflation numbers cooling more than expected for the month of november. wall street rallied. haidi: the treasury curve steepening as the assessment of where the fed goes into 25 basis points in the second half of the year is playing out as well. we watch ftx as we get developments as bankman-fried is being denied bail and fighting extradition. annabelle: this is a news every day but we have the opening of japan and korea upon us, the cash treasuries are watching the 10-year yield at the open, the treasury yields are sliding across the curve, traders are trimming their fed hike outlook after the inflation print that came through. local factors are at play as well, we have the survey

dropping in the last few minutes and we saw sentiment among the larger manufacturers weakening. we saw a reflection of the deteriorating economic outlook and in terms of what we are watching we have two big ipos taking place, two of this year's biggest japan listings making the stock debut in trading on wednesday. that is stocks starting to trade, we will have those numbers in a few minutes. we are watching the yen trading steady. other markets including the open we have in korea today, we saw the unemployment numbers dropping earlier. that rate is edging up slightly in november, telling us the state increases in the bok is weighing in on the hiring market, morris gone in the session, also tracking the korean won, slipping beneath the key level.

the asx 301 hour into the session and it is being led higher by energy stocks and they are the biggest gain or in the moves today. we are watching what is happening, it has been rallying again after the inflation print on wednesday. haidi: we are watching the economic forecast when it comes to new zealand as well, new zealand is forecasting a recession in the second quarter of 2023. grant robertson says the recession shall be shallow. let us get to our guest with death. >> this was not expected to be a fantastic economic update. we were anticipating an end to the fuel excise and this was a cut in the tax that makes up a large proportion of what new zealand has paid for petrol at the petrol pump. that is gone. that is costing the government

half $1 million a year to maintain. the government will be running a contractionary fiscal policy that will bring inflation under control. we are awaiting updates on the inflation numbers but there are countries, the inflation story in new zealand has been confronting, 7.2% in october and we have seen a coming through slump in -- we have seen a slump in house prices. off of 12%. the economic conditions in new zealand are challenging to say the least. on a positive note, migration is surging as well. the wage price pressure, the take away from the update is the recession in the second quarter of next year.

>> we continue to adjust the soft inflation numbers and whether that may cause a downshift in the size of fed hikes. possibly next year, joining us is charu chanana, a market strategist at saxo capital markets. what do you make of the markets? charu: think about what the strategy would be based on communication in the past that it has to be a sustainable, slow down in inflation to really expect a pause. i think of the markets, a lot of emphasis to these prints, it is not make a lot of difference in the trajectory of the fed. shery: given the activity data

has surprised to the upside, given when it comes to the market, what does this tell you about the outlook for a recession here in the u.s.? charu: along with the data, if you dig deeper into the inflation print we had last night, i think it indicated this slow down inflation runs quite hot. this signals that wage pressures will be sustained and the market remains hot. there are enough reasons to believe that the u.s. economy has been taking these early types from the fed pretty positively, there are bound to be slowdowns going into the next year but that is needed. we do not think that there will

be a big recession in the u.s. which seems to be the market consensus at the moment and that is why we think inflation will still remain and they will need to avoid the premature easing and avoid the risk of inflation coming back stronger. that is why i think we are focusing on the rights for longer as well. haidi: you say the reopening has been overpriced, what do you mean about that? charu: we do not doubt the commitment of the authorities to move away from the zero covid policies they had in place for much of the year, but, i think what is important to watch is that there are a lot of workers going in sick. there will be a lot of slowdown in activity because of the amount of cases that we see now. that will beat the positive

effects we get out of the reopening trade. that being said, the other risks to the economy in terms of the supply chain is moving out of china, geopolitical tensions continue to be there. i think it is a bit softer than what we have seen pre-pandemic. over the course of this week, we have the chip escalating again, we have headwinds in the property sector. with all of that, we are cautious of overpricing the reopening trade at the moment. china's credit is turning positive. six to nine months from now, at this moment, given the positioning has changed so much, we would be a little bit more cautious there. haidi: what are your assumptions

when it comes to the u.s. dollar next week? the impacts across asian markets and positioning? charu: this quarter has suggested that we have seen a weakening of the u.s. dollar because we are seeing a downshift in the trajectory from the fed. we have seen most of the interest rates from the markets right now, as we get into the first and second quarter of next year, we will see the recession concerns sounding alarms at least for the markets and that will mean that there is a safe haven. i will not call out the dollar yet, i think that the liquidity pressures we have been seeing in the property will escalate again. it has been a safe haven, support, for the gains in the

u.s. dollar. haidi: it is always great to have you with us. let us get you to vonnie quinn. >> china is delaying an economic policy meeting after covid infections surged in beijing. the meeting was supposed to be on thursday. it is usually attended by xi jinping and other top officials. china's military had its biggest daily set of bombers in the taiwan strait in two years. the defense ministry says it detected planes in the area. it was visited by a senior member of japan's ruling party. the u.s. is poised to send defense batteries to ukraine pending approval from president biden.

it counters a barrage of missiles that have targeted energy infrastructure. sources say the move to send the system may come within days. opec has reduced estimates for the amount of crude that they will pump in the coming months and 13 members seem to provide an average of .9 million barrels a day. that is only slightly more than in november. there are concerns about we consumption. argentina's superstar captain will get his chance to claim football's biggest prize for the semifinal victory over croatia. he hit a penalty to open the game. at age 35, it is likely to be his last chance. france plays morocco in the other semifinal. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries.

shery: early in the asian trading session. annabelle: 10 minutes into the trade for japan and korea, we are tracking the reaction we are getting from the u.s. inflation print. it is slower than expected reading telling us the fed could moderate the pace of its rate hikes as soon as it is meeting on wednesday. 25 basis point hike in february. in terms of the sectors we are focusing on, big tech is one of them, given the nasdaq is adding another day of gains, up 1.1%. some of the biggest tech names in asia, tokyo, electronic, leading the advance. the commodity one given the moves that we also had in gold and the gold has been impacted against the fight against inflation given the treasury yields and a stronger dollar as a result. the aussie gold miners, these

are moving sharply higher. leading the advance. haidi: there watching the early part of the session, we are talking through the challenges when it comes to the global semiconductor supply chain. the rhodium group talks about why the u.s. is a chip maker. the path ahead, this is bloomberg. ♪

>> you look at the headline numbers and core, better-than-expected, deceleration in a number of items. >> the inflation data today shows us that it is going in the right direction. >> it is not just the magnitude of the moves, it is also the speed. >> investors did not think that inflation was going to come down as fast as forecasted and it is

coming down even faster. >> it is not the end. this is not the time to get complacent. there is a lot more to do. shery: guests reacting to the latest inflation data, it cooled more than expected, this could bolster the federal reserve's case for a slowdown in rate hikes but it may not discourage the view towards their policy rate next year. kathleen hays is here with a look ahead. what is the message for the fed? >> things are moving in the right direction, relative to what everyone was forecasting, even at a faster rate. some point when commodity prices started falling, some of the goods prices during the pandemic were clearly coming down, this will start happening, welcome news to everybody, look at the numbers and see what we are talking about. 7.3% was the estimate with 7.7,

it went down, have been up to 9.1% year-over-year earlier in the summer. the court takes out food and energy, it went down to 6.0, beating the estimate again. the monthly number is a 0.1 monthly number you want to see on the cpi, core cpi is 0.2, it is looking pretty good. the terms of what is driving this, energy prices, gasoline prices, gas prices in the u.s. were down 1.6%, food prices were up 0.5 percent, that is the lowest number we have seen. shelter, rent, the owners implied rent, you take your mortgage payment and put it into a rent payment and you get some services part of the number that is looking better but not that much better. 0.6 on the month and it was down from 0.8, a number that is very

sticky and mortgage payments do not adjust all of the time. medical care was down, let us look at this, bottom line, services, headline service, the core services, take out food and energy. new look at the core services cpi you can see it is still pretty high, and has not come down, goods prices tumble. 50 basis points, they singled that shifting from 75 basis points for four meetings in a row, that is all in the cake. as for singling something around 5% rate, get to that in the spring and early summer and hold it there. that has to be confirmed and this number will not dissuade them. the dot plots we watch closely, they have been submitted and they were submitted before the cpi report. they look at how important it is to get the rates and inflation down and how usually it takes a long period of restrictive

rates, it would be unexpected to a certain extent and unusual for the fed to back off on that. we will see what happens tomorrow. haidi: we had the lines from new zealand, the finance minister forecasting a recession to start at the second quarter, saying it will be a shallow recession. given the indicator new zealand is, is this in the minds of not just the fed but also there are a bunch of other key major central decisions this week as well? >> let us governor at the reserve bank of new zealand, they have led the way on the write-down -- way down and it is interesting how so many central banks seem to -- they have been slowed again because inflation forces like commodity prices for ukraine has been so strong that they are all in the same boat, the fed may be in the toughest

boat to row at this point. on thursday, there are more after the fed, the ecb and the bank of england and 50 basis points and you see on your map the philippines are supposed to do 50 basis points as well and then there is another four central banks that are meeting. everybody is fighting inflation and trying to be the bigger rate hikes are faster, we will see what happens but it is definitely a week for -- let us help more of them can say we are doing better and get some victories here because this is something that when these countries slow down, if not a recession. haidi: sticking with new zealand, this is an economy that is key because a lot of economists and analysts look at this as a precursor, very early on the tightening cycle and something of the coal mine if you are hearing after the finance minister said the

assessment is that there will be a shallow recession without hearing from the governor, saying that the able inflation is the best contribution that the bank of new zealand can make, the employment level to stay high there, the labor market has never been tighter and labor has never been more scarce in new zealand. more government spending is a risk, reiterating that the action shows that he is speaking at the hearing at the moment and we had heard from grant saying that they 2023 recession will be a shallow one starting in the second quarter of next year. you can get a round up of those stories you need to get going in today's addition of daybreak, find it on dayb , you can also find it in the mobile anywhere app. customize so that you get the news on the industries that

matter to you. this is bloomberg. ♪

>> the implosion of4. --ftx. >> a group of grossly inexperienced uncertificated individuals. >> and ron and bernie made off blended together -- and ron and bernie blended together. >> justice seems to be in process which i think is welcomed by those in the crypto industry. >> a good chance there will be more people under the microscope for sure.

>> this is just plain old embezzlement. shery: weighing in on the company's collapse. bankman-fried, up to update on his legal status and we go to nassau, bahamas. following the latest developments, what stood out to you? >> over the course of the five hours we heard the lawyers for the united states and lawyers for bankman-fried, the most important -- interesting part of it was that the discussion of whether he would be a flight risk. his arraignment was focused on pieces being played out and that because he is a permanent resident or because he has property here the defense argued that he would be loyal. the fact he has been cooperating with the security investigation

in the bahamas. he would follow his word and stay put but the lawyers for the u.s. said that in many ways the fact that the assets he owns here may in some ways be caught up in the liquidation proceedings and the fact that he has access to potential resources, he could leave the country at any point and that team took the main tension point throughout the day. haidi: what about extradition? we saw in a statement from the statement from the attorney general and the bahamas, they would move quickly if the request came through that he would fight that? how would this be dragged out? >> his hearing today was focused primarily on his request for bail which was denied. he was reprimanded to prison until february 8, 2023, when the hearing will begin at 10:00 a.m.. from what we heard today and as

well as was justified before the house and financial services and the court case in the u.s., it seems to be making a picture of the fact that he can find his extradition hearing but it will depend on the facts and circumstances leading up to february 8 hearing including the ongoing investigation that the bahamas security commission as well as a financial crime unit of the police will undergo. shery: that is the latest on bankman-fried and the proceedings. haidi: they're getting an upgrade when it comes to expectations of chinese economic growth. gp morgan stanley is raising its estimation to 5.4% following a rapid policy easing and a boost in growth. we were expecting to get more color around this progress shift

from beijing, they expect to kick off the central economic work conference this week. it has been delayed indefinitely as a result of the surging covert infections. -- covid infections. the budget target as well, we are not getting that this week but what we have seen is really a whole cohort of wall street banks and institutional investors becoming more bullish on the economic outlook as we get into reopening as well as prospects for china assets. with a delay on the key policy meetings, we are hearing that banks are activating backup trading plans as covid really rips thr as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network.

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>> this is daybreak: asia. 30 minutes into the trading session. speaking of tokyo, we have some major companies making their trading debuts today. two of the line of sure scales we are seeing, the first company here is a company offering waste and recycle treatment facilities and skymark actually a bankrupt japanese carrier, that is returning to the exchange after the eight year hiatus. these companies raise more than half $1 billion. to put that in context, we are actually seeing a lot of companies inside japan deciding to shelve their listing plans knowing the local stock market volatility and ongoing geopolitical tensions. we are not seeing light pricing yet, that -- our spread is not yet matching. we do see skymark popping at the start of trading. to put that in context, we saw both of these companies marketing their shares at the top end of the marketed range.

we will see if it can hold, because if you look back over the course of history, we are seeing companies in japan raising more than $100 million in the ipo. it closed today six to 8% higher on average. haidi: let's get to vonnie quinn. vonnie: a key gauge of u.s. inflation has posted its smallest monthly advance in more than a year cpi excluding food and energy rose 2% in november, then 6% the year earlier. cpi increase to 7.1%. lower energy prices helping offset rising food costs. inflation has likely peaked, may validate a downshift in fed rate hikes. >> inflation is coming down in america. prices are still too high. we have a lot more work to do, but things are getting better in the right direction. i hope by the end of next year -- i am convinced they are not going to go up.

vonnie: ordering sam bankman-fried to be detained in prison. he is too much of a flight risk to be released. an extradition hearing has been set for february, and one of bankman-fried lawyers said his client plans to fight. he is a fighting eight counts in what is called one of the biggest financial frauds in american history. >> not sophisticated at all. sophisticated perhaps in the way they were able to hide it from people. frankly, right in front of their eyes. this isn't sophisticated whatsoever, this is just plain, old embezzlement. vonnie: china says it is ready to build better ties with south korea. top diplomats from beijing and seoul had a meeting next week, to curb china's access to advanced semi technology. the u.s. has been pressuring

south korea to comply with its exports controls. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: new research from bloomberg intelligence suggests china needs to get its vaccination drive into overdrive to meet beijing's coverage targets by the end of january. we have the numbers from david. david: our analyst just crunched the numbers, 93 million is the number of doses that china needs to give out between the end of november. this is what official data came out november 28, until the end of next month. january is when they have set these. 95% coverage rate for this age bracket and everyone above 80 plus kids 90%. in terms of a daily number, the

four weeks we are looking at 45,000 per day. they need to get that -- that needs to go up by about 30 times to get this, about one and a half million doses per day. that is the required rate to meet that target, that includes the upcoming holidays, the january lunar new year. if you strip those out, this number goes up to about 2 million. to put this into context, we will show you a chart in a moment, the u.s. at its peak was about 4 million. it is doable, but is far from where china was two weeks ago. it certainly brings to mind to what extent markets have repriced normalization and reopening. reopening has really been a key focus here for the markets. haidi: always bring us the great

data. we will stick with china and how they had to postpone this week's key policy meeting. that is what we are hearing, do to a covid spike hitting capital. asia correspondent stephen engle were joins us from hong kong. we are starting to see a lot of different ways that these key events have been disrupted. stephen: it is adding to the uncertainty of china's economic recovery, especially with the dramatic u-turn we have seen on the covid zero policy. we are getting empirical and anecdotal evidence that there is a sharp increase in the number of infections across china, not just in the capital, these were conference was scheduled to begin tomorrow. we are hearing from sources it has been postponed indefinitely. the fear is that they simply do not want the 24 bureau members, the heads of government agencies

and financial institutions to essentially be a super-spreader event or a witness or have a super-spreader event there. as i said, it is just empirical evidence as well as anecdotal about a rise in cases. the actual nationwide number of cases has been coming down. that is more attributed to the fact that they are not testing as much. those kiosks have been dismantled and the requirements for pcr testing have dropped nationwide to go into public spaces. we are seeing long lines at hospitals, shortages of medications to treat beavers and fever clinics seeing a 16 time increase in patients on sunday alone. covid is very likely spreading, but as authorities are downplaying how lethal this may be, the top medical advisor earlier this week to the central government essentially saying that it is no more lethal than the seasonal flu.

again, that does not diminish what is happening on the street level. people are feeling and getting sick. we will have to see how that translates to potential furthering the economic recovery. shery: how is the financial sector handling this? stephen: people are calling in sick. we are hearing anecdotally as well as empirically, and with the data as well, we saw it yesterday in the last couple of days, the fx trading on the onshore dollar yuan drive to the lowest level. the volumes dropping to the lowest level since april. essentially one bank in beijing, a financial institution, so half their traders call in sick. this is going to potentially be reflected in lower trading volumes in shanghai. keep in mind, shanghai has at least 1700 official financial

institutions employing about half a million people. 500,000 people. so, potentially, if this covid wave extends through the winter, there could be some disruptions. shery: stressing china, 700 and $50 billion offshore bond market has ease to the lowest level since evergrande's debt hold worsened in 2021. loan reporter and joins us now. the impact of seeing some of those measures coming from policymakers to support the property sector. loretta: in november, we see for the first time in over a year, offshore dollar bond market stress has ease to the lowest since last august, according to our data. that is actually quite rare for this market that has been suffering from all of these

dollar bond defaults, all these payment failures, also dropping dollar bond prices. that is mainly due to authorities really stepping up support measures for the property sector over november. we have seen all sorts of financing help ranging from dollar -- bond financing to equity financing to the easing of resales money. and also, you have the easing of covid policy, which i think people are pricing in a gradual recovery of home sales in the future. haidi: it is very skewed towards the higher end of quality, right? do we continue to expect to see that divergence in this market? loretta: absolutely. i think investors are getting more bullish on the sector overall. if you look into who are gaining in terms of performance, it is mainly the benchmark names, those that are targeted through government help.

for instance, country gardens that we actually wrote about more than quadrupled over the past month, just on those policies. i think that divergence is going to continue, because those that have already defaulted aren't likely to get any sort of funding help because of a mix of lack of confidence and also just because of the range of problems they are facing and the extent of the debt. haidi: china has filed a dispute with the wto trying to overturn the u.s. imposed export controls on-chip technology. we speak about the global fight for tech dominance, next. this is bloomberg. ♪

japan and the netherlands are likely to announced soon that they will join the u.s. in tightening controls of advanced chipmaking equipment grade let's ring in our next guest who says convert to intended matters. we have the director of rhodium group, always great to have you with us. we know if this announcement is actually formalized, it would be a total blockade of these sophisticated machinery that

beijing would need to make these leading edge chips. what is your assessment based on the information that we have as to how this potentially plays out? reva: yeah, the netherlands and japan appeared to be coordinating their response, strength in numbers matters areas there are very few years in the space as well. there have been signals there are aligned in principle, so we will need to see exactly what that means when we get to technical details read in the negotiations are still in play. where exactly will the line be drawn to find a middle ground will be critical. it is easier for foreign partners, the u.s., to adopt controls on high-performance computing, but it is another thing for them to accept a u.s. argument that china's growing market share and more mature technologies is a direct threat to national security worthy of heavy export controls. but, that convergence is happening, the u.s. is asserting its leverage any number of ways.

as you mention, this is a paradigm shift in the way the u.s. is shaping the export controls and what came out october 7, it is not expecting a copy and paste of it partners, the key was being japan and plans to start, but it is expecting some a general alignment, and we appear to be moving in that direction. haidi: the frustration for beijing must be pretty palatable. we know any decision in their favor will not be enforceable for the u.s.. are they out of options? what else can they do in terms of investment and building up. at this point? reva: this week has been a really good demonstration of the lack of good options that china has to counteract the u.s. led controls. for example, there were words that beijing may soon announce a huge one -- $143 billion subsidy package for its chip chip

self-sufficiency guide. they have been spending tens of billions of dollars already and trying to meet a target of producing 80% of the chips china uses by 2030. china has fallen way short of that goal under around 70 -- 7%. that is one issue. on top of that, chan is -- china's national ic fund has been consumed with correction scandals. that doesn't bid well for china to make these big technological breakthroughs to get around controls. there is a wto complaint, which is really a sign of the times and shows china's lack of options here. you can file a complaint, but there is a national security exemption, which, of course, the united states will heavily lean on. the united states still has an effective lock on the appellate body in the wto. it is more of a public protest.

shery: no matter china is trying to appeal to other companies who are known for high tech. we know that beijing is saying it is ready to build better ties with south korea, the diplomats had a virtual meeting this week. where does seoul stand in all of this? reva: you are south korea relative to other u.s. partners, japan, netherlands, taiwan. you see stronger convergence between u.s., japan. taiwan is balancing very effectively, it is putting very significant investments into the u.s.. the netherlands has already been restricting it cutting edge technology in the form of euv machines. it is a question of whether it goes beyond that to more mature technologies. south korea is in a more reactive position to u.s. controls. because of its deeper exposure in china where a significant

amount of its memory chip production is located. south korea is really at the mercy of u.s. commerce, bias licensing. that is an uncomfortable position to be in. and south korea is watching moves from competitors and getting closer to the u.s.. i think that will be a big pulled out the u.s. will use. also, remember that there are negotiations over the u.s. is inflation reduction act. south korea has been very vocal and has come up with some clever proposals to try to get u.s. treasury to get a more creative interpretation of how to implement those rules. can there be a middle ground? i think there is potential. that is certainly an area to watch. the u.s. and south korea bilateral relationship. china may not have as much leverage there. shery: where do all these latest

developments leave companies? the private sector, samsung, sk hynix. domestic companies in pan like tokyo were trying to push back on japan if the u.s. in the netherlands. reva: it creates tension. obviously, between government and industry on where is there going to be alignment within these countries, and then, how far they are willing to go with the united states. i think japan has been signaling already that they broadly agree that where the u.s. drew the line on logic. the harder thing to swallow is still where the u.s. is saying that look, we are very uncomfortable where china's growing market share that includes legacy chips. that will be hard.

but, this is where the u.s. needs japan, and the netherlands on board so that alternate suppliers for semiconductor manufacturing equipment don't undermine the u.s. controls. so, the timing and design of the october 7 controls was very deliberate in that it gives a window to the foreign partners to figure out what they want to do come out to what degree are they going to align, or else face -- face great uncertainty in 2024. there are also a number of territorial measures. the u.s. is implicitly saying that look, we will resort to long measures if necessary. shery: always good to have you on her show -- our show. coming up, a preview of the opening hong kong as beijing postpones a key economic meeting. this is bloomberg. ♪

shery: a -- haidi: experimental personalized cancer vaccine reduce melanoma debts when combined with the bigger selling drugs, came true to. the drugmaker's plan to move the combined treatment into further stage studies next year.

but during a has been searching for new applications for mrna and beyond. >> cancer is not a death sentence. cancer is a busy -- a disease -- you have drugs to be able to help you. that is what excites me. haidi: apple was preparing to allow alternative app stores on its iphones and ipads in the coming months. it is a response to laws taking effect in 2024, the aim to level the playing field for third-party investors. regulators have accused apple and google girl as -- google as having too much power. shery: china is delaying a closely watched economic policy meeting after covid infections surged in beijing read less bring in our chief market respondent for china, sophia for a preview. so, what are we going to see in

the markets? we had wall street rallying, not to mention that does the fact this meeting postponed, we are not necessarily seeing more covid restrictions. sofia: that is the key thing. this was a closely watched meeting, because it is the meeting where policymakers, including xi jinping, discuss economic priorities for the following year. we don't really normally get a very detailed read out, that comes later in march. it is not like we are expecting the gdp target. we have learned that the gdp target under discussion is around 5%. it just landed in my inbox that morgan stanley reports actually upgrading their gdp growth next year to 5.4% from 5%. they are actually expecting this faster than previously expected reopen to actually boost economic growth.

the key thing here is that we are not seeing more covid restrictions, so that, in excel, is emulex and should reduce consumption into next year. haidi: in terms of the bullishness we continue to see come out morgan stanley size 5.4% of gdp growth for china. is there much in the terms of caution as we know that potentially this reopening could be quite disruptive for the economy? sofia: that is an excellent question. it's bullishness coupled with a tinge of caution and also that word we are seeing everywhere right now, bumpy. expect some volatility and lumpiness in the china reopen. we will see these, like beijing, seeing this first wave of infections, people are getting sick, we are not seeing that mobility. also in markets. you are seeing some of that

long-term money that has perhaps stayed away from the rally, doesn't want to chase it quite yet, starting to come in. this is specifically out in the rates market, and also in the offshore yuan. you saw that big move dribbled -- driven by the dollar. we could see some strength as well. hong kong stocks is where the action is. market has rallied very violently since a few weeks ago, so the expectations that will continue will set us up for a better year next year, maybe. haidi: thank you for that with the latest as we get into that session, markets coverage continuing ahead of the start of trading. this is bloomberg. ♪