haidi: a very good morning and

welcome to "bloomberg daybreak: australia." annabelle: we are counting down to asia's major market opens. shery: the top stories this hour. try not reopens its borders taking the final step in dismantling its covid zero policies as it emerges from three years of global isolation. haidi: thousands of supporters for bolsonaro working into congress. shery: asia stocks may get a list -- a lift. this was a close on friday session with gains of more than 2%. the s&p 500 seeing its best day in more than a month. the jobs numbers having a very encouraging effect on the fed. hiring strong and wage growth

cooling. into context because we got the likes of the weber numbers not to mention jobless claims earlier in the week still showing a strong labor market. we have to consider those factors when we are trying to figure out where the fed is going but for now we see rates retreating. the 10 year yield falling towards the 350 level not to mention the two-year rate fell the most last week since the november markets recalibrating. we had marginally higher prices for oil, around the $73 per barrel level. a weekly the biggest weekly loss in more than a month. annabelle: we are also monitoring what is happening in the aussie three year yield. you can see the drop of 16 basis points. down to the reaction to the u.s. jobs market. in the equities picture looking risk on tim learned to the wall street session.

australia looking to gain as much as 1%. new zealand trading. mixed moves in dollar in the g10 space in early aipac hours. the yen is looking stronger. we note japan is shut today for a public holiday. the other major theme we will be watching today in asia is what is happening in china. we had major quarantine changes coming through on sunday. alibaba -- jack ma on saturday says he is ceding control of the fintech arm. that means ant will be unable to apply for listing on the mainland for a couple years. shery: as we start the second week of the new year we are watching what the key concerns in 2023 will be and it seems

there is concerns about inflation that is top of mind. the economic association holding a meeting in new orleans and the height -- and the concerns are higher rates, geopolitical concerns. there was a lot of soul-searching in this meeting because they were not able to forecast this persistent inflation and what that means for policymaking going forward. haidi: one of the wildcards when it comes to the global growth and -- and inflation outlook is the china reopening. so many scenes of jubilation of homecoming, highly emotional. we will start to see outbound travelers as well. will that meaning -- will that meaningfully change the outlook? will people want this lunar new

year to jump on a flight and go overseas? leading to the likes of ubs saying this outbound tourism economy could actually take quite a while to materialize. let's get more on the reopening. let's bring in stephen engle from hong kong. the borders are open. now what? >> i just flew back from the united states and the airplane was packed. this is an total evidence but a lot of mandarin chinese being spoken including the guy sitting next to me who was a student coming back to china for the first time in three years to see has family and that was probably a similar situation across that 100% capacity cathay pacific flight from l.a. people are taking the opportunity to get back into china whether it is through hong kong or do for -- or direct flights. direct flights are still limited. the border between china and

hong kong board -- opening up. there is a quota of 16,000 each day including 15 -- 50,000 -- preliminary figures showing more than 45,000 total travelers across either direction including 33,000 -- 33132 going northbound into china a long story. many people in hong kong that have businesses across the border and extended family on mainland china. this is the first time they would be able to apply for the quoted ago indochina. the chief executive of hong kong saying the next step in hong kong's opening up will be a relaxation of the quota but he gave no timetable. this is welcome news for hong kong and the economy that has contracted three of the last four years. the new survey showing a pickup perhaps of the economy this year of 3.3% which would be very

welcome. again, as you of said, it could be a long slog to get through the concerns about covid. on the flight from l.a., it sounded like a hospital ward. there was a lot of coughing and itchy throats including yours truly. shery: i'm sorry. chinese reopening very important for the global economy at a time when we do have fed officials seeking stronger than forecast u.s. jobs growth and an unexpected cooling of wage gains. they move towards a january rate hike. kathleen hays is here with the latest and the question is 25 or 50? kathleen: more than ever after this jobs report. let's think about what we were talking about last friday before the report that the fed would be watching closely average

earnings. how tight is the labor market still? payrolls, for the ninth month in a row they came in above forecast. not too difficult of a one to forecast. the estimate was 202 down from 256. stronger than the forecast thought. unemployment fell. the labor market is not getting looser and may be getting tighter. labor force participation was up a 10th because women are coming back which shows more optimism about the labor market you would think. on the other hand, the wages, the hourly average earnings slowed down more than expected last month. they went down to 4.6% from 5% year-over-year. the november monthly number was revised lower. the fed wants to see it between 3% and 4%. they have a ways to go but moving in the right direction.

what does the fed do with these conflicting signals? let's listen to rafael bostick and what he said on friday. >> i am very open to both -- one of the things for me, we got a fair amount of feedback from the business community that the holiday season experience was going to be a big trial for how they think the year is going to go. as those numbers come out and we get a clearer sense, that will help decide 25 versus 50. kathleen: the richmond fed says we still have work to do and lisa cook from the board of governors says there are signs it is moderating but inflation is still too high. the cpi number this week which is expected to show some pulling back by a good amount is going to be a key number for the fed

as well and certainly for the markets. shery: whether or not we are seeing the down trend continue. we take you live to brazil. the u.s. and eu have condemned the invasion of zell's congress, the supreme court and presidential palace by thousands of supporters for the former president also narrow. peter miller joins us from rio de janeiro. we are seeing the images of chaos across brasília. what is happening? >> it appears that security forces have been able to get the protesters out of congress and the presidential palace and are moving them away from the main avenue where the government offices and ministries are. it took them a long time, several hours. there was a lot of ransacking as the television images show. destruction of doors and furniture and thousands of

people were milling around these facilities for several hours this afternoon. haidi: this follows months of protons -- protests and chaos. when it comes to lula, there has been a legal investigation. how challenging is it going to be for him to be able to resolve this if not squash it? >> that is a good question. i think that at the end of the day, bolsonaro's political movement will be more damaged by this than lula's. this does not make him look good. unlike in the united states. he had already taken office and his government is in motion. there does not appear to be a lot of violence. this will give lula a chance for

him to call for unity. he will be looking into the financial backers of this. there is going to be investigations and political backlash but i think it is clearly bolsonaro's movement. shery: what does this mean for the markets that have already seen sharp losses after lula's election? >> this has been a volatile time for the markets. it was a close election. the leader does not have a strong mandate. there are a lot of concerns about fiscal stability and whether they will abide by budget limits or if they will start spending too much or the if they will start doing things

ike's upset eyes and gasoline. we will see how it plays out. the markets will not like this. it shows increasing signs of civil unrest and there is a section of society that really rejects lula's mandate. that is going to unsettle markets for sure and in the longer-term they will want to see if this will mean more populist spending on the part of lula to buy social peace. haidi: bloomberg's peter millard in rio de janeiro and you can turn to bloomberg for the latest on this are there is commentary and analysis from our team of expert editors covering these riots breaching congress, the supreme court and presidential palace. you can get the latest there. let's get to vonnie quinn. vonnie: newly elected kevin mccarthy is rallying republicans

with pledges to champion spending cuts and strengthen borders. a new rules package includes a measure -- to vacate the speakership. to secure his win, mccarthy gave into demands from republican hardliners use the federal debt ceiling as a bargaining chip. greg abbott has confronted president biden demanding in a hand-delivered letter that the u.s. act immediately to stop unauthorized immigration. greg abbott says the letter suggests possible solutions including increasing deportations and constructing more walls. the president was visiting texas on his way to mexico city. ukraine has rejected as nonsense a russian defense ministry claim that kremlin troops killed 600 ukrainian soldiers in a major strike overnight. global officials say the -- region was hit with missiles but military targets were not affected. the attack was said to be a

retaliation for a new year's day strike. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead we will be speaking to investments about chinese advancements in biotech. coming out next, up next, or international ceo carol pepper says investors need to be patient, practical and proactive or what is set to be a rough first after we get her market outlook next. this is bloomberg. ♪

>> this is a soft landing report. >> a goldilocks report. >> this is the immaculate disinflation report. >> wage inflation is starting to come down and ease.

>> the fed will continue to raise rates at the end of the month. >> a 25 basis point rate hike in early february still seems reasonable. >> you cannot write off another 50. >> i think they could stop right here. >> we think they will still get to around 5% by march. >> if the fed keeps tightening financial conditions and gets the fund rate into the five -- the chance of the economy rolling over into a harder landing is significantly higher. haidi: some of our guests weighing in on the jobs and wages data and what it means for fed policy. on tuesday, top central bankers including jerome powell and andrew bailey attending an international symposium in stockholm. on thursday we will be watching for the u.s. cpi report from december allowing investors to

assess the implications. we will also get inflation numbers out of china, australia and japan. and more data from china including credit, money supply from december along with key factory consumer prints. and on friday, the bank of korea is widely expected to raise rates in what could be the last hike of the current tightening cycle. shery: we will be keeping a close eye on fourth-quarter earnings reports from u.s. banks later this week. cementing the possibility of a recession. investors will be looking at outlooks. that is the week ahead. our next guest says markets could turn more positive after recent of sized rub -- surprises. joining us is carol pepper. would to have you with us. we are seeing potentially more encouraging inflation numbers not to mention lower energy prices but at the same time, the

fundamentals remain that we are in a higher rate environment and low growth environment as well. how do you hedge for such fundamentals? carol: the street is predicting a recession. the street is thinking the sky is falling and things will get really bad. we have had some good pieces of news. let's look at the facts -- europe is making it through the winter without any major energy problems. and the energy prices are starting to come down and supplies are out. people were not predicting that a few months ago. we have not had any major new brakes of covid strains in europe or the united states and while china is it, they will get through this monthly reopening period which will be good for the world and china. and look at what is happening with ukraine. they are starting to make headway in the war. there are a lot of positive things that could cause the market to turn around so i advise my clients and as you

know i manage money for family offices and people with over $100 million. i advise them to be patient. this is not the time to be afraid or put your head and the sand. there is an equally good chance that the good news will prevail. at the fed will not have to go aggressively higher. that is what i am thinking could possibly happen. do not panic and be patient. shery: do you still like energy related assets? prices are coming down but you also mentioned china's reopening. carol: energy has another year to run i think until the war is more resolved. we might have another year of the war in europe. i don't think we will have a huge run-up in energy from here. i think we will have a leveling off of prices. if you are in a slow growth environment, the dividends from energy stocks are nice to have. any kind of dividend based earnings will be helpful. i think oil and energy has another gear to run and

renewables picking up. europe is making a greater movement. haidi: u.s. solar in particular is a good place to be looking for opportunities. carol: there were tremendous numbers of subsidies in the united states so look at some of the solar etf's. solar will pick up significantly because there will be more tax incentives in the u.s. but the ability to create carbon credits in europe and get the credits for solar projects all over the world. solar is going to be a bright spot if you would pardon the pun going forward in the renewable space. haidi: so much interest in solar. and going into the theme of stocks for the future, how do you feel about big tech at the moment given the valuations and given that has been a space where we have seen some strategic layoffs getting ahead of the macro trends? carol: big tech will always be a

long-term good play and if you are underweight in big tech in your portfolio, this is not a bad time to get in on the entry point. names like microsoft are not going anywhere. the air is coming out of companies that did not have the earnings to support the technology and got ahead of themselves but having said that companies microsoft have massive cash flows. and they are only going to be continued to be strong. if you can get them at a lower price and hold them, as we come into a more positive cycle, you will be well rewarded. those are long-term stocks. that is what i like to focus on. things that will make money for you and your family over the long haul. haidi: china, there are a lot of questions when it comes to the pace of reopening and the pass-through growth and inflation and also questions about whether we are seeing some of the levels when it comes to chinese equities be overbought.

what opportunities are you still finding in the story? carol: this is early days in the reopening so perhaps there is too much initial enthusiasm but try to think six months from now and where we will be. if china has a successful reopening, this is going to be a very positive thing for the entire region and will affect positively supply chains around the globe and this will help the entire planet recover. i think for people that are looking for broad exposure, big china or greater china etf's are a good place to play this. hopefully we will see positive results for china at the end of the year and things will pick up and we can hopefully -- and they can hopefully rejoin the community and engage and it will be a good thing for the entire planet. haidi: you take a look at the momentum gauge. suggesting we could see chinese

stocks in positive territory for the first time. carol, always great to have you with us. carol pepper. you can get a run-up of the stories you need to get your day and started the week started. terminal subscribers can find it at dayb . you can customize the settings so you can get the news on the industries and assets that are pertinent to you. this is bloomberg. ♪

haidi: a quick check of the headlines. ant group has no plans for an ipo. the statement comes after it indicated that jack ma is giving up his controlling rights in and as the billionaire further retreats from his online empire. the company is offering 10 individuals independent voting rights effectively removing jack

ma's control of ants. richard branson's orbit says it is on track for britain's first-ever space launch monday evening after completing a rehearsal. the modified boeing jetliner is set to climb above the clouds before the rocket blasts away. the mission from cornwall will deploy nine satellites for a range of customers. eisai and biogen gets fda's accelerated approval. more to come on "bloomberg daybreak: australia." this is bloomberg. it's official, america. xfinity mobile is the fastest mobile service. and gives you unmatched savings with the best price for two lines of unlimited. only $30 a line per month. that means you could save hundreds a year over t-mobile, at&t and verizon. the fastest mobile service and major savings?

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♪ >> investors are intensified focus on when the u.s. government might run against a

borrowing cap. kevin mccarthy barely got elected speaker. he said now the hard work begins. how difficult will it be to raise the debt ceiling this year? >> he could be very difficult. what you saw last week was valid after ballot at sir valid. there were 20 dissidents that he picked off. they were just starting to warm up for some of the fights they are going to have. there are a lot of ingredients here reminiscent of what happened in 2018. that really rattled the financial markets. we have a democratic senate.

we have a very strong populist movement. the majority of the house is smaller than it was then. this could become a big flashpoint. there was meeting after meeting after meeting in the capital. they were trying to get the votes. knitting these republicans beyond very important committees. this is letting people jump to the head of the line. without having the seniority they have usually had they got the ability with just one member one thing to call a vote to vote against the speaker ship at any

time. one of them was asked what he use that tool? if kevin mccarthy does not attached strings. he would not take that off the table. shery: what might president biden and congressional democrats give up in that fight? >> they are saying it should be a clean debt limit increase. that has been their stance all along. they were asked on whether they would attached strings. i did not hear her say absolutely not. late last year when democrats controlled the house and senate, they tried to do it then. and avoid a filibuster in the

senate. shery: it has been a chaotic week in congress. the u.s. labor secretary says he hopes the tech industry will start rehiring. he said the administration is pleased with employment gains. >> we have room to go in communities of color. to get those numbers down a little bit. we are in a very interesting economic time.

we have not seen the growth we have seen today. >> it is not just the numbers today, it is the numbers we have seen all week. i listen to the tech companies. >> they are looking at how inflation impacts their business. they gobbled up so much talent.

>> a lot of people are arguing that we saw a tight labor market. they are talking about the return of labor power. can you give us an update on the west coast port situation? how close are we to a deal? >> i was out there this week. i went to the port in los angeles and long beach. they are back at the table. they did not give me a date. the quicker we can get this resolved, the better. i think both sides are committed to getting it done. this is a very different situation than the rails.

we were not having conversations in that particular case. haidi: that was labor secretary marty walsh. we have an alert on the bloomberg right now that police in brazil have retaken the congress building. protesters rated the building earlier today. thousands of protesters remained in the area adjacent to congress. now we are hearing that the police have retaken the building. we knew the rioters were near the supreme court. we are now hearing that they have been cleared as well. let's get to the first nerd -- word news. >> the border reopening in china is sparking a homecoming rush for many chinese living indices.

visitors will still need a 48-hour negative pcr tests. a rebound may take longer. the world bank is warning further shocks could push the economy into a recession. the warning comes at the economic prospects report. bloomberg has learned that u.s. authorities are probing a crypto empire. federal prosecutors are investigating money flows to the group and a subsidiary. none of the subsidiaries have been accused of wrongdoing. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

haidi: coming up, the quality of vaccines in china is improving. but still not where they need to be. taking a look at the latest in surging covid cases in china, next. this is bloomberg. ♪

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shery: we are hearing more about the expected economic boost from china exiting its covid zero policies. what does this actually mean for other countries in the region? >> we are taking a look at what we can expect. this is australia. we have been looking at the numbers at this. chinese tourism had been one of the biggest countries that have been visiting australia prior to covid. student arrivals given that international students make one third of the contingency of australian universities. jp morgan saying the biggest potential that will come through in the services sector will be

spread out. you might not see the full effect of it until 2024. we are already seeing action come through again all assets. that is the 200 day moving average. including the impacts of other things like wine and lobster. haidi: does that mean hong kong can finally get a leg up when it comes to the conversation with singapore? >> that is what we can hope for. hong kong has really been lagging. over the past two years. we could see growth in hong kong go up. this is from the latest

projections that came from our bloomberg survey. they are saying the growth outlook for hong kong this year is 3.3%. that is up from the number we had back in november. quite a big jump here. what is driving that is not only as hong kong then dismantling its own covid zero restrictions. we can expect more mainland arrivals in the city. a big boost for some of the businesses here. shery: let's delve into that. many visitors to the city are expected to try to get access to covid vaccines that are not available at home. we report from hong kong. >> waves of visitors from mainland china could be visiting here after border checks reopen for the first time in nearly three years. many of those visitors are expected to want to get their hands on these vaccines.

something they could not do in the mainland. leading up to the opening, lines at vaccine centers around hong kong have formed. it is hard to book an appointment online. some hospital website showing no availability for 14 days. even nonresidents are eligible for these vaccines provided they meet some requirements. they can also go the private route and pay. they have opened online bookings for people to be vaccinated in hong kong. it could be good business. the effects could reach hotels, retail, even property. it is hard to say that booster growth might be muted at first.

singapore opened their borders earlier last year. local hotels are also struggling with staff shortages after employees found work elsewhere during the pandemic. hundreds of thousands of people have left hong kong. it is estimated they lost $27 billion in potential growth because of the strict covid curbs. haidi: china has rejected several offers to provide western vaccines as beijing battles a fast waving -- fast spreading wave of covid-19. joining us is the ceo. great to have you with us. this popularity is very interesting. we are starting to see the reopened into hong kong.

what does that tell you about the vaccination status in china at the moment? is it still useful for china to be developing a vaccine given that every other market we saw full vaccination before an abandonment of covid restrictions. >> absolutely. this technology is going to be the mainstay of vaccines. not just for covid before a lot of things coming forward. china wants to be an important player in biotech for its own people and for the world. it needs to be at the forefront of this for the future. the inactivated vaccines that china developed in the early stages of the pandemic, they are not very strong. they played an important role for china in the world when vaccines were needed. but it is clear from the data

that they are not a great booster. china is making some progress with other technologies. for protein-based vaccines. they had an emergency use authorization approved in china in december. that is a world quality vaccine. there are a couple of other chinese companies that have them. what is really missing from the picture are mrna vaccines. if china is going to hold onto waiting for a chinese company to develop one, based on the data i have seen, i think it will be a wild. i think you may see some emergency use authorization's piled toward the end of the year.

it may not be available until the end of the year. especially if you are talking about a strong global quality vaccine. shery: i know you are more positive when it comes to the development of their a few dates. we have seen a really dynamic time when it comes to biotech in china. >> that is right. i am the biggest health care conference of the world today. it is the 41st year of the conference. we have always called it the super bowl of biotech. now i think we need to call it the world cup. china is playing catch on vaccines. but they are at the forefront of

cancer technologies. big companies like johnson & johnson are licensing in the technology. one company recently licensed these antibodies. that is an amazing cash payment for a partnership. johnson & johnson developed the cell therapy. that is one of the most important medicines in the pipeline.

what many viewers might not know is that these are some of the most important technologies. shery: we see these tensions between china and the west. do any of these developments have an impact on how far chinese deck and -- tech and bio tech can go? >> that is a great question. we are seeing that in the news a lot. it seems like the red line is acquisitions. there have been a couple of acquisitions that chinese companies have tried to do. that the u.s. government has stopped. we have a board in our country and we use that for national security to block that.

there is another one right now that is technically being reviewed. it is a u.k. company. in the u.k. organization approved it. but it looks like the u.s. will block it because of national security issues. other companies will be south korean companies. they really gave themselves a foothold. just like in the tech sector. how apple and other companies are diversifying. the same thing is happening in biotech. there is a lot of work still happening in china but i think biotech companies that use service providers in china will start to diversify more. shery: other companies are going

into innovative science. >> yes. for many years they focused on vaccines and plasma products. they are starting to be a big player. they help them diversified geographically. and move into other areas of medicine like kidney disease. this shows how they are going on the edge of technology. that is pretty much the state of the hard way of doing medicine that we can talk about. the first-ever improvement of its kind. it is there drug. amazingly that drug has a price tag of $3.5 million. it is the most extensive therapy in the world. but it allows hemophilia

patients to not have to take regular injections. those drugs are very expensive. all nations got the message from covid that biotech is important going forward. you are seeing a lot of investments. shery: very interesting developments in the biotech sector. be sure to tune into bloomberg radio to hear more from today's big newsmakers. broadcasting live from our studio in hong kong. plenty more ahead. stay with us. ♪ d that actively cools, warms and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night.

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♪ haidi: taking a look at australian and new zealand bonds at the moment. treasuries are rolling higher. wage growth is solid. we are seeing that catch-up across australia and new zealand. the aussie dollar is up

slightly. shery: take a look at the stocks we will be watching at the open. we will be replaced by another group. this as demand uncertainty continues. that is it for us. this is bloomberg. ♪ at booking.com, finding perfect isn't rocket science. kitchen? sorted. hot tub, why not? and of course, puppy-friendly. we don't like to say perfect, but it's pretty perfect. booking.com, booking.yeah.

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