>> you are watching "daybreak: asia." >> we are counting you down to the market opens in tokyo and seoul. >> australia has just come online. . a stock rally, fizzling out as fed officials signal rates could top 5%. corporate estimates are still too high. chinese officials discussing a record 360 billion local debt closure and why the budget deficit in the latest bid to stimulate growth. and apple set to replace a key broadcom chip, as devices deal a blow to one of the biggest employers. >> breaking news out of south korea -- we are seeing the current account and goods balance turn into deficit. we are talking about the november current account moving into deficit for the first time since august. the deficit coming in at 621.7 million dollars.

the trade deficit, also widening to 1.57 billion dollars for the month of november. we had seen a strong exports growth number out of south korea offset some of that pressure from soaring energy prices. given that exports have also been faltering and south korea with semi conductor exports now under pressure we are seeing numbers fall into deficit. the november current account, moving to deficit of 622 million dollars and the trade deficit also widening to close to 1.6 billion dollars in november. >> in terms of what we are watching now, we have the open of the asx 200 in australia. at the start of trade, we are seeing it snapping a four-day rally. that is not surprising given the wall street session. more details, and a moment. the headline you need to know, to fed officials say the terminal rate -- two fed

officials say the terminal rate could top 5%. that will be crushing optimism because there was the expectation building in markets that it could actually reach 5% which was lower than what had been projected in the dots blood. equities will be moving lower throughout the session and australia. bonds are looking more range bound, a smaller move for yields. let's take a look across the region, we are seeing kiwi stocks today trading slightly more positively, japanese futures also pointing to a flat start today but chinese futures are want to watch because we have actually seen the optimism around china reopening and chinese stocks leading the emerging market index into bull market territory. the question is whether that buying a starting to look a little overdone because we do have the 14 day relative strength index looking overboard levels. the msci china index, all about 70, not necessarily a

selling signal, but a strong momentum we are seeing across markets. >> all about optimism over china is sending em equities into bull market again. that optimism is not enough with u.s. markets because the rally fizzled out on the wall street session. not a lot of movement in u.s. futures. a little bit of pressure given the s&p 500 did manage to rise above that 3900 key level. it finished below that level. we didn't have tech stocks. gaining ground in the nasdaq 100. we did have treasury yields continue to fall with the 10 year yield headed toward the 3.5% level. we do have wti prices coming in slightly higher above $74 a barrel. on optimism about china, given also more generous quotas for imports from beijing. >> such a dovish picture at the moment. the fed peace is still -- piece

is still ever present. kathleen hays joins us now from our chicago bureau along with our chief rates correspondent for asia, stephen engle and garfield reynolds. when you take a look at the fed speakers, what is the key takeaway? >> that the federal reserve is repeating this message over and over again, it is going to raise rates, and that is probably going to keep them there for a while. the president of the san francisco fed, the president of the atlanta fed, both speaking today, not only keeping rates high, but on the other hand opening the door possibly to a 25 basis point hike instead of 50 february 1. let's listen to what mary daly said. >> the starting point is the sdp, putting it between five and

5.5. we need to higher or can we stop a little earlier? i think something above 5 is absolutely in my judgment going to be likely. when i say absolutely going to be likely, i still have uncertainty bands around that. but that's where i'm putting it out right now -- at right now. >> she also saw the possibility of 25 basis points. profile bostick, saying it would hinge on the cpi, if you get a weaker than expected cpi. that would increase the argument for the 25. he says both are on the table and cpi is expected to come down a good bit year-over-year, after we got the numbers a couple of days from now. the month before, they came in lower than expected. it is interesting profile bostick -- profile bostick said, he is not a pivot guy. the fed should pause and hold. how long? he said three words --

a long time. i think that's the message the fed is trying to pound in. it's not just about inflation starting to come down. coming down sustainably, that is the other part of the puzzle. mary daly said she could see a reasonable starting point for how long you might keep the funds rate above 5%. she said maybe 11 months. right now that is what the fed is looking at. it is going to take improvement in cpi to consider bringing things down quicker. markets should be happy if they stop at 5.1%. >> it is important, the inflation expectations. we people see inflation going from here. we see any more clues where we are at? >> one of the newer surveys, very closely watched now, you will see on this chart to .99 over the next year. that is the expectation. it is down from 4.2 back in

october. that is a nice change. but it's the other line -- it's the three year expectation. you can see from the chart, it is so much higher from where it was. this is a concern for the fed. the longer-term expectation. short-term, expectations fluctuate with what's happening to inflation right now. that's the number they want to see. it got as high as nearly 7%. it is backed onto 4.99% -- back down to 4.99%. the chicago economic outlook, the business will puts this on, the former head of the reserve bank of india, the former chief economist at the international monetary fund, randy because not, the federal reserve board governor, and the financial research advisor to the new york fed, 12:00 central time, you can go to their website and

watch it online. [laughter] >> wouldn't miss that at all. we talked about fed speak, of course chair powell also gets his chance to push back against market expectations again. >> yeah, they will hear that message. probably not until it's carried out. it's interesting, mary daly talking about the facility of a 25 basis point hike. bostic as well. the market is moving toward seeing the 25 basis point hike. if you look at three-month expectations, the fed rate is going up 50 basis points. over the coming three months. that's pricing in a 50 basis point hike in february than a 25 in february, then another in march. any of those outcomes would be

further slowing in the fed's pace. than it comes to that, how do you price in a long pause above 5%? the market is almost certainly going to start betting immediately not on how long the pause is but how soon it ends and how rapidly the fed comes down. that is going to really open up potential -- a potential battle royale between the fed and markets. the markets are already declaring victory and doing the inverse of what they did a year ago. a year ago, markets were telling the fed you need to do more because inflation is not going to be transitory the way you think it is. they were pricing and significant rate hikes when the fed was not contemplating significant rate hikes. now the market is convinced again that it's got it right, the question is, has it and in

particular will the fed act on the same dynamics the market is seen? and be willing to risk failing to curb inflation sustainably, in order to rescue the economy? >> there's a lot of optimism given what's happening on china for markets. what are we seeing in terms of that u-turn in terms of policy, especially when it comes to fiscal stimulus? >> what china is focusing on now is growth. obviously with the slowing chinese economy continuously slowing, you have that big stimulus, the u-turns on covid zero and the three red lines on property and on the platform economy, like alibaba and tencent. we have seen it reflected in the stock market in the beginning part of 2023. u-turns have a way of going both directions. that's the big question. how sustainable are these relaxations? will the whims of xi jinping

change course again at some point? essentially what we are learning from sources in china is the authorities are discussing right now a return to the tried and true cocktail of growth, and that is infrastructure, through lifting the quota perhaps of the special bonds at the local government level. about a decade ago, the local government financing vehicles got into trouble over borrowing, over leveraging liabilities and the like. the have these special quotas beijing implements to the local governments. your hearing this could be raised this year to a record level of 3.8 trillion yuan. 560 billion u.s. dollars. that is a quota that is hard and fast except for last year when there was needed stimulus. they exceeded that at the local government level because of

unused past quotas from previous years. this would be significant. gives a little bit more leeway for these local governments to deliver the growth xi jinping probably wants right now at a time when the coffers are heavily strained at the local government level, because of all those expenses died to covid -- tied to covid controls and testing and the land sales are limiting, to whether through the pandemic -- plummeting, to whether through the pandemic and the controls. >> garfield, we are seeing investors already pricing all of that in. with that most, emerging-markets broadly now in will market again -- bull market again. >> yeah, another part of what's driving that is the fact that the u.s. dollar is weakening on those expectations. lots removed the key presser point -- that's removed the key presser

point for markets. a bullish move out of china means a lot more for that -- the world's second-largest economy and the largest emerging-market economy, when it moves, it is going to lift asia-pacific and markets in general. the question is going to be again, will it be sustained? it seems very much that china decided that it needed to fix its economy. therefore it was willing to set aside some of the previous policies, from covid 02, and prosperity. what happens with -- from covid to common prosperity. what happens with common prosperity? that will be the $64 trillion question. >> [laughs] garfield reynolds, stephen engle, and kathleen hays.

let's get you to vonnie quinn with the first word headlines. >> brazil's former president has been admitted to a u.s. hospital with abdominal pain a day after his supporters stormed government buildings, protesting his election loss. he has need of surgery several times since being stabbed in the abdomen while campaigning in 2018. security forces have arrested more than 1500 people after sunday's riots in brasilia as lula reasserts his authority. the french president and japan's prime minister have met in paris, pledging to strengthen cooperation in the end of pacific region amid shared concerns over china and north korea. sources tell bloomberg macron also wanted to discuss the decade-old alliance. bloomberg sources say phd program -- the hp group has struck a deal

to sell coal to a chinese firm. sources say bhp sold to shipments of coal to china for a late january loading. bloomberg has learned the billing are the center of last year's nickel short squeeze is planning a major shift in his production mix. sources say he is targeting refined nickel, and is in talks with struggling chinese plants to process the metal. if successful, the company could help double china's refined nickel production this year, a pending global dynamics. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ >> still ahead -- we get more details on apple's latest plans to drop key chips from broadcom and qualcomm as it moves to using homegrown components. up next, j.p. morgan

tells us why international equities will fare better than the u.s., but china looks problematic in the longer term. ♪ this is bloomberg. ♪

>> our next guest continues to believe international equities

will fare better than the u.s., but china looks problematic in the longer term. with us now is joyce chang. always good to talk to you. let's start with the u.s.. we saw the rally today fizzling out, especially after more hawkish fed speak. should investors be taking profits at this point? >> happy new year. i think the fed is going to continue to keep talking to us. we are looking at 25 basis points in february and march. i don't think it is over yet, the economic resilience and strong labor markets, i don't think the fed -- i think the fed still has more work to do. they signaled this very clearly. i think there is a still more to come. i do think international equities still have more compelling valuations here.

looking at the u.s., we think that earnings will have to come down although i'd say recession risk is really being pushed into later into 2023 and the u.s.. -- in the u.s.. >> we have seen china lifting the emerging market space. what do you find problematic in the longer term? >> there's a mix of data coming out, as much as 40% of the population could have fallen ill. we have taken up 2023 overall. we have growth that 4.4%. but i think the medium term potential for china's growth is still something where we do see it coming down. even though the official growth target is still at 5%, we we don't think that is going to be achieved. over the near term, this rally still could continue in china. it's a second largest economy in

the world. shuttered for the better part of three years. the reopening is material. consumption will pickup and china. he had gone from three percentage points down to 1% in gdp. that's going to come back. we need to point out the longer-term challenges facing china. they rallied very quickly here. but the reopening trade is still in early stages and has further to run. >> could longer-term problematic aspects, the topics we always talk about, free covid, now we are getting reports they are considering the old playbook -- more local government debt, wider budget deficit, leaning back into fiscals, does that mean that's just a short-term band-aid which will drive the shorter-term rally? >> i think these are not the types of fiscal packages they

had done before the pandemic. they are going to be smaller, more targeted packages. you could have more of a focus on household income. i do think importantly, on the property sector, one of the recent managers have outlined are more comprehensive. they look at the problems facing the developers that need to be addressed. coming up with solutions that are still going to take a number of years to play out, given the magnitude of the problem. it seems to be more comprehensive than some of the earlier steps they had announced on the housing market. yuo are going to continue to seek -- you are going to continue to see a mix of news out of china. concerning u.s. china relations, the outlook for tech. but the reopening trade is a major trade that still has further to run and will really make a difference for the consumption numbers. i think the china rally is still

a key one to watch going forward. >> we have a story out on the bloomberg today saying this rally has been spread not just by the practical aspects of a reopening of economy, but the fact that perhaps there is this suggestion we are seeing a friendlier, more compromising beijing, perhaps dropping some of the ban on australian coal imports for example. do you think that is a narrative that investors have built, or a sign that we are seeing after the past three years a china were willing to work with global trade partners -- more willing to work with global trade partners? >> since the summit in bali, there's been a real change in the tone to try to find areas where the tensions come down. i think looking at the u.s., given what we saw with the republicans, the challenges getting mccarthy in place, some

of the fears you are going to see the republicans ramp this up, there are real concerns on, how much are they going to be able to get through, given the challenges we see? there was a change from the biden administration itself in tone at the summit in bali. also with china with respect to the way in which they are looking at -- wanting to bring down the level of tensions and increase the dialogue from what had been there. another important thing is looking at the republicans in the u.s. doesn't seem like that could be necessarily something that materializes as quickly or as easily as some might have thought if you weeks ago. -- a few weeks ago. >> always a pleasure chatting with you, joyce chang. you can get around up of the stories you need to know to get your day going in today's a vision of "daybreak" at the dow jones -- -- at dayb to get in euros

and assets you care about. this is bloomberg. ♪

>> take a look at the asian open. this comes a day after they entered a bull market being lifted by the rally in china. we are seeing a little bit of a tethered start to trading. we are seeing new zealand up about .2%. broader asian markets, the futures, looking pretty flat. u.s. futures, also trading sideways.

>> let's take a look at breaking

me is comes to tokyo cpi, japan household spending as well. cpi year on year, bang on expectations. 4% for december. expectations were for 4%. we are seeing when it comes to the broader inflation picture and japan, it has been creeping up -- in japan, and has been creeping up. tokyo sepia, stripping out fresh food. seeing a gain of 4% and slightly higher than expectations. we are seeing a number of to .7% meeting expert -- 2.7% meeting expectations. household spending meanwhile you're on your for the month of november, that print, deteriorating, seeing a contraction of 1.2%.

expectations were for a milder gain after a stronger reading of 1.2% in the previous month. we are seeing household spending, starting to see weakness, as we expect potentially further speak from the bank of japan. we could see a big move up when it comes to fields -- to yi elds. let's get to vonnie quinn with the first word headlines. >> fed officials say the central bank probably needs to raise benchmark rates above 5% before pausing and holding for some time. that would bring borrowing costs to the highest since 2006. atlanta fed president nor mary daly -- they say the case or reducing the size of rate hikes will be boosted of cpi data due thursday shows consumer prices:. sources have told bloomberg china's considering a record quarter of $560 billion this

year for special local government bonds. special bonds are a key funding source for infrastructure which economist expect will help fuel growth of close to 5% or higher. officials are said to be looking at widening the budget deficit target to 3% of gdp for 2023. more than 7000 nurses at two major new york hospitals have gone on strike. the nurses at mount sinai and montefiore say staffing levels and pay in private sector facilities are too low especially as the city battles a so-called tripledemic of covid, flu, and rsv infections. the mayor says public hospitals have emergency strategies to handle any surge in patients. the buffalo bills nfl star demand hamblin -- damar hamlin has been moved to a buffalo based hospital. it is a promising development after the 24-year-old went into cardiac arrest during a nationally televised game on january 2. the bills tweeted they are

thrilled that he has returned to buffalo and doing well. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ >> watching some apples apply in today's session, apple to set to be planning to drop a key broadcom trip from its products as well as swapping out qualcomm electronics as part of its campaign to use in-house designs. let's speak to our tech reporter, mark gurman. we have been watching these developments when it comes to the ambition for getting more vertically integrated by apple. what's the latest here? >> the next frontier for apple and the in-house chip efforts is the wireless stacks. there are tw maino wireless chips, the cellular modem, allowing the phone to make phone calls, connected cellular -- connect to cellular networks. the second is a combined bluetooth and wi-fi module that allows the phone to basically do

everything the modem can do but in your home network or wireless office network and can also handle bluetooth, paring with earbuds and connecting to your car. apple is working on replacements for both of those. they will be designing out those main companies for their future devices. >> what's the significance for the industry given how big a customer apple is? >> let me give you some numbers. qualcomm and broadcom each get about 20% or a fifth of their overall annual revenue from apple. this is pretty earth shattering for the bottom lines of those companies. qualcomm had been expecting this, so they have been factoring this into their forecasts and earnings. they expect to have their normal income from apple across 2023. starting 2024, you will see a bit of a reduction and minimal revenue from apple starting in 2025, according to them.

what i'm told is the transition will probably take until 2027, 2028, so apple will have to come to a new agreement for the rest of the time before the transition is complete. broadcom has been expecting a hit to the business for some time, they've talked about spinning off the business to save some money there. i don't think this is entirely a shocker to them either. >> bloomberg's tech reporter, mark gurman, with the bloomberg scope. let's turn to a check of where we are headed in the markets. >> chip stocks, certainly want to watch with the open of japan and korea 25 minutes from now. in terms of futures and markets already online, the outlook today is pretty mixed. we have the asx 200 snapping a four-day advance. new zealand, still in the green. tokyo futures, and the red -- in the red, flat. what is driving momentum in the

session is two factors at play, what we heard from fed officials, saying the terminal funds rate in the u.s. may top 5%. it had been a lot of expectation building and markets -- in markets that we could see a quick end to aggressive rate hikes. that seems to be somewhat squashed. we have a lot of optimism around what's happening in china, specifically the chinese stocks rally we are seeing, into bull market territory. we can see chinese stocks have broken through a key resistance level. this is the 200 day moving average in yellow. you can see in 2022, this 200 day moving average provided a level of resistance, given we saw the run-up there. also at the end of last year, when we had a lot of optimism, with china pivoting away from the covid zero policies. given there are signs covid

cases are peaking in major cities, we are seeing it moving beyond that. this is a question of whether is looking a little overdone -- we can see that on a relative strength basis, we are seeing some markets in overboard territory, the msci china, the hscei, the question is whether that can be sustained. a lot of uncertainty around that. >> energy policy tensions, immigration, on the agenda. bloomberg's washington correspondent, what is stopping the agenda? >> right now underway, we have president biden and his counterpart in mexico city sitting down for a bilateral meeting alongside their teams. we should know there is a

number of items on the agenda given the fact you can see the individuals in the room -- you have attorney general merrick garland, the claimant envoy, john kerry, jake sullivan, etc. top of the agenda is going to be migration. especially as this comes off the heels of president biden's trip to the border just yesterday. also drug smuggling. u.s. officials are incredibly concerned with the amount of fentanyl coming through the border from mexico to the u.s. admiral kirby was talking about the fact that the border control sees about 20,000 pounds of fentanyl since august alone. last of course is going to be trade. they are going to discuss the usnca, a big hot button issue with the three amigos meeting together with justin trudeau. and the biggest part of the trade dispute for the u.s. and canada is what they say is the nationalist policies amlo has deployed. >> how big is the contrast when it comes to these meetings

and what we saw with the previous administration? how much improved is that relationship? >> it depends who you ask. it is safe to say, in terms of the canadian side and the mexican side, it's an improvement from the fact that the former president ripped up their trade agreement, when they came into power of course, that was nafta. it's now been replaced with the usnca. they are encouraged by what they say -- usmca. they are encouraged by what they see our warmer relations between the three individuals. that is what you hear from foreign officials from canada and mexico. they want to make the ties even more integrated. on the heels of this meeting, officials came to a new migration policy -- provisions of that policy, we are the u.s. is going to allow a certain number of people in from certain countries but mexico would absorb them if they don't

go through the u.s. protocols and they just show up to the u.s. mexican border. they will likely tout that as a win. we spoke to canada's trade minister. they want trade policy to be more integrated. yes there are disputes, when you look at the numbers, it's about $3 million worth of goods every second these three countries are trading between each other. >> bloomberg's washington correspondent, annmarie hordern. coming up next -- insights from bloomberg enf. the price of solar, coming down this year. we take a look at the critical factors. this is bloomberg. ♪

>> we are looking at the outlook of the solar sector with our bloomberg nef forecasting prices. we are joined by our solar analyst. are we expecting to see more solar installations this year than in the past? >> yes, firstly, it was a big year for solar. over 45% more globally. multiple reasons included energy, high-energy prices, security, and economics. and the momentum to continue

into 2023. we expect over 30% -- an over 30% increase in installations this year. >> what about pricing? >> solar panel prices increased since the second half of 2020. even by today, we are seeing solar prices -- solar panel prices were 26% higher than two years ago. if we look at the reasons, the increased price of polysilicon because of supply. we are seeing increased supplies in the past two years, dramatically driving the increase of the supply.

we are seeing over 50% of extra supplies of polysilicon will drive the prices down from the 30 u.s. dollars to less than 15 u.s. dollars. which will enable about a 50% solar --50% 15% solar panel price decrease. this will give the solar back to the path of reduction. >> in terms of challenges other industries face, say labor constraints, regulatory constraints, what trends can we expect this year? >> there are a lot of things actually happening in the solar sector as well. we see a lot of disruptions in the supply side. one thing we mentioned was

because of the increase in politics and the concerns about local manufacturing, we are seeing this year actually there will be more announcements outside china of manufacturing solar panels, more specifically countries like india and turkey and southeast asian countries will be the major markets for the new factory building. there will be more announcements for probably the u.s. as well. the economics is still a big concern. if you look at the new factories outside china, and the u.s., it is dramatically higher than that of china. >> you can watch us live and catch up on past interviews on out interactiver -- on our

interactive tv function, tv . you can send us instant messages during our show. this is for bloomberg subscribers only. do check it out at tv . this is bloomberg. ♪

>> well, it seems a quilting economy is not stopping the very

wealthy from buying up rolls-royce. they set any record last year, selling more cars than ever before. the ceo told us that demand for luxury vehicles is holding up even in china. >> we are not in a kind of shopping spree in europe by chinese clients. that doesn't work for rolls-royce. rolls-royce need to be bought and china. it is what happens in the chinese market. it opens up again, far more, ken covid turns down, i definitely see a tailwind to happen. that is again difficult to judge currently. what is a great relief is travel is back and people can travel. we saw three years ago lots of chinese clients scoping the product. that will definitely come again. >> that brings me to the car

behind you. can you talk to me about your order book for that and other customers that are buying that different from your usual customers -- different from your usual customers? >> both is true. it is exceeding our highest expectations. it resonates extremely well that we are going electric. it is i would say -- one portion of existing clients will love it. there are also new clients that will be new to the brand due to the fact that we go electric. that is a nice proposition, also underlying our strategy to be fully electric by the end of 2030. the entire portfolio will be electrified over the course of the next years to come. >> that was the ceo of rolls-royce speaking with

bloomberg's alix steel. here's a check of the latest business flash headlines. disney is asking its workers to return to its offices four days a week starting march 1. the ceo bob iger is pushing for staff to work on site monday through thursday. in his first meeting with employees after returning last year, he said he was planning to spend a lot of time in the office, and joked he hoped he wouldn't be lonely. some of the english premier league's top teams are in their crosshairs with the qatar fund. the chairman of the sports investments recently held talks about a possible state purchase. they are set to be considering a full takeover or stake in rival clubs including manchester united and liverpool fc. clients turned cautious on technology spending amid slowing economic growth. tata's net income rose 11%

in the three months through december. analysts estimated $1.34 billion on average. >> the french and japanese leaders are set to be in discussion -- set for discussions on renault. what is the active status of talks on the ground right now between the two carmakers? >> it's important to make clear this is not the leaders of both countries talking on behalf of the carmakers, nissan and renault. they had been in talks for several months now, trying to find a way to reshape their auto making alliance, which was thrown into a disruption and instability with carlos ghosn in

2018. they have reached an impasse. what's happening now is the leaders of both countries are sort of sitting down and reasserting each other -- reassuring each other on the government side, what they are seeking to get out of any reshaping of this alliance. >> how do government state leaders get involved in private companies' conversations? are we expecting any breakthroughs, given the high level talks ongoing and the interest from both countries? >> well, from the french side, you have to remember the french government owns 50% of renault -- it actually does have a stake in the future of renault. from the japanese side, nissan is one of japan's top three carmakers. japan does want to see jobs

protected and the automaker healthy and well. of course there was a lot of talk around the time of carlos ghosn's arrest -- did the japanese government have an agenda there? that is not clear. both countries want these automakers to succeed. in order to do that, they really need to reach some sort of breakthrough really soon. >> yeah. what are likely developments as we go forward? will we see a newly reshipped alliance? what timeframe are you looking at? >> yes, so, renault is looking to split into two companies, one focused on combustion engines and the other in electric vehicles. there are a lot of issues around intellectual property as that happens and how the companies will work together. those need to be sorted out. renault's also seeking investment in the new ev venture that it has. nissan is the obvious investor or partner in that.

their negotiation -- there are negotiations happening around that. the holy grail for nissan is to rebalance a cross stakeholding in a situation where renault owns 43% of nissan. whereas nissan holds a smaller stake in renault. coaster holdings are also being brought into this grand deal. there's a lot of moving parts. is very complicated. we were expecting an announcement or deal in november. we are now in january. within the next few weeks, we should get a sense of one that will happen and probably some sort of announcement and agreement within a month or two. >> reed stevenson there. we will be watching carmakers for the opening of japan and korea. we are watching asian chip suppliers, in focus after apple

aims to drop broadcom chips by 2025 to use an in-house product. also shares of asian mining companies could be trading actively after base metals searched optimism of china's economic recovery. -- surged on optimism of china's economic recovery. >> we have live interviews coming up, speaking with the cohead of aipac m&a, the global cheap economist -- chief economist, later on bloomberg: "bloomberg markets: asia" next. this is bloomberg. ♪

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>> we are counting down to asia's major market open. not a strong lead coming from wall street but we are watching what's happening with that hawkish commentary again coming from fed officials. not to mention the semi conductors and suppliers industry across asia given apple's news they want to use more in-house products. >> we see china lifting all boats, but can this be sustained, as the china rally has been driven by policy trickled down straight from the leadership. let's get to the market open. what are you watching, belle? >> we have the opens of south korea and the reopen of japan after a public holiday. in terms of the start of trade, we have the reopen of cash treasuries. we are watching the 10 year yield closing.

a drop in yields. we are also watching in asia today more signals coming through that there is really no price gain. we had tokyo inflation in the last five hours or so hitting 4% for the first time since 1982. that was more than what was forecast by economists. the tokyo inflation is a leading indicator for the nationwide index and also likely to prompt further speculation here whether the boj can stick with its easy policy settings even though we do see more signals of weakness coming through in the economy as well. japan household spending, contracting in the november reading. in terms of the market outlook today, we have japanese stocks coming back online, moving higher today. japan was shut for a public holiday. so a little bit of catch up at play here as well. also as i said, the moves today, really driven by what came through in the u.s. we had to fed officials -- two

fed officials, mary daly and rafael bostic saying the terminal funds rate could top 5%. there had been a lot of expectation building in markets that we could see it reaching 5%. there were expectations as well that we could see an end to aggressive fed rate hikes. we are seeing the kospi fairly rigid on today. -- fairly range bound today. we will have a check on supplies in a few minutes and the korean won. more strength coming through in the currency. exchange now to the australian session. one hour into the asx 200 and it is still trading in the negative territory, snapping four days of gains here. really being led lower by industrials, energy, materials, even though we are continuing to

see gains for brent crude coming through. that is really around optimism around china's reopening. >> let's get more on the correlation we see between the china rally and the rally in broader em's. our next guest says inflation remains sticky and volatile but has probably picked. we have the head of economics and strategy at [indiscernible] china remains the anchor at this point when it comes to the outperformance of emerging-markets. what about the idiosyncratic fundamentals when you take a look at asian em's. -- asian em's? >> you are absolutely right. the persistence on how long the rally can lift the boats in the region is very questionable. as you rightly point out,

the fundamentals in the region are going to differ from country to country. the two biggest challenges for em asia is the inability to move policy freely, like monetary policy, as well as the fed not dialing back, hence risking micro stability and currency stability if they pull back to quickly -- too quickly. they should be mindful of not going into deep deficits. on the policy front, they are constrained. what they are counting on is places like the philippines, they are hoping they are averting a global downturn, allowing the engine to keep humming along. but those are stretched functions. we ought to expect a bumpy patch despite the optimism at

the start of the year. >> i am curious to hear your views as to the fiscal policy that we see china potentially leaning into again. obviously this will be more targeted than the more broad stroke stimulus we have seen in years past. this is a big budget deficit we are hearing. not as wide as 2020. again they are going in for local government financing to be able to fund part of this economic revival, right? does this change your view, when it comes to chinese assets? >> well, i think in the very near term, it is unavoidable markets really take this is a very upbeat signal. what you are right, to scratch a little deeper and look under the hood. there are two major concerns here -- one has got to do with financial stability concerns. already we know leverage is stretched. the question is stretching

leverage further. if there are any misallocations for china in the long run. the bigger question is, will global spending give fries to sufficient confidence amongst consumers and businesses to get the economy rolling so to speak, reviving spirits? on that count, the jury is still out. there's a bit of hesitation due to the lack of policy clarity and the quick inflections we have seen. >> when talking about broad or emerging markets especially around china, where even the chinese yuan is headed, how confident can we be on counting on a peak u.s. dollar narrative? we have already lost a lot of ground. >> i completely take the point on peak u.s. dollar. we have taken the view that usually about six months

before you hit the peak rate, the dollar ought to peak out. the trend of peak dollar so to speak, the question is, are we going to see a sustained and steady decline in the dollar that gives rise to increasing accommodation for the rest of the world? or, are we going to see a sticky u.s. dollar, which may be closer to their native the first half of the year -- to the narrative the first half of the year. especially with the confidence about ecb and the boe catching up with the fed and the policy convergence, there are fragmentation risks for the euro zone, we could see the euro ironically losing ground rather than gaining ground. in which case the dollar is not going to go down without a fight. it might have peaked, but it is going to be a messy affair. >> this is not great news for a lot of asian countries

and markets that have been counting on a weaker greenback. especially the likes of south korea, taiwan. we have seen those chip exports all starting to weaken. we even have today news of apple may not even be needing a lot of those suppliers anymore. >> surely, there are a lot of concerns of an overly strong dollar, giving people little space to adjust on uncertain economic climate. but the relief -- the silver lining is, i think it is in the interest of the pboc and chinese policymakers in short. one other big policymaker to support peak dollar or rather support the picking of the dollar and make sure the dollar doesn't pushback too hard. that's a silver lining.

but it doesn't give complete installation. -- complete insulation. >> how do you think investors are pricing and risk, as you see less loved and higher risk assets and china? >> we have not fully priced and specific -- christ in specific -- we have not fully priced in specific credit risks. we have seen a bit of a selloff. if you look at credit spreads, from a historic perspective, credit spreads are not exceptionally wide. it appears to me that there could be a second leg to risk repricing, especially of we do -- if we do find china's stimulus story falls short of expectations and it is difficult to avert a global downturn. one of the lessons we have is

sometimes when the fed starts a hiking cycle, the recession can be worse outside of the u.s. than within the u.s. 1998 being a key case in point. in terms of risk pricing, that element of it, the specific premiums, we remain rather watchful of, if we don't get the perfect combination of the soft dollar, soft landing, and a strong chinese release. >> the head of economics and strategy at mizuho bank. we do have drinking new -- we do have breaking news at the moment. bloomberg has learned the former ftx engineering chief met with federal prosecutors to become the third member of some bankman-fried's inner circle to seek a cooperation deal. he has not been accused of wrongdoing, he has attended a procession last week at the u.s. attorney's office according to

people speaking to bloomberg, usually at those meetings, individuals are granted a limited immunity to share what they know with prosecutors. we know other members close sam bankman-fried have already pleaded guilty and are working with authorities while he himself pleaded not guilty to eight criminal counts last week. >> we will now get you to vonnie quinn with the first word headlines. >> president biden has spoken with has brazilian counterpart a day after thousands of protesters stormed and ransacked government buildings in bras ilia. security forces have arrested more than 1500 people after the riots. the bloomberg sources say bhp group has struck a deal to sell australian coal to a

chinese firm in the latest side of -- sign of tracing curbs between the nations. bhp sold to shipments of coal to china for a late january loading. bloomberg has learned the billionaire at the center of last year's nickel short squeeze is planning a major shift in his production mix. sources say he is targeting refined nickel, and is in talks with struggling chinese plants to process the metal. if successful, the company could help double china's refined nickel production this year, upending global dynamics. a union representing u.k. ambulance workers it says strike plans for wednesday will go ahead. calling for pay rises. the government has been talking with union leaders across sectors including health, transport and education trying to stop a tide of industrial

action. discussions will continue through this week. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ >> let's take a look at some of the movers. what are you watching in terms of the fallout from the apple store? >> this is an exclusive report we had out early this morning. apple plans to replace some of its key components, including a key chip from broadcom by 2025. these are some of the biggest suppliers to broadcom in the asian region. we have the opens of japan and korea in the last 12 minutes or so, this is what we are seeing so far. fairly mixed at the start of trade. this is a move from apple that could really further upend the chip industry. it makes billions of dollars from supplying apple components. let's take a look at another sector we are focusing on this morning. what's happening in the mining space. we are seeing the miners

moving higher today. big moves in base metals and the price session trading off that expectation around china's reopening. also the hopes of a less aggressive fed even though we have seen fed officials coming out saying rates will need to stay higher for some time. let's change on now because there's another mover coming online in the last minute or so -- the japanese pharma company eisai. it received approval along with its u.s. partner biogen, accelerated approval for its alzheimer's drug. >> millions of chinese traveling domestically to head home for the nation's biggest holiday season. a discussion on that with eric zheng, a little later. details of the bloomberg school,

next. this is bloomberg. ♪

>> chinese officials are set to be molding a record quarter for local government bond issuance this year as well as raising the budget deficit target and further moves -- in further moves to bolster a sagging economy. stephen engle, is this the old debt playbook? what do we know? >> yes, the old cocktail they often turn to of course, that is getting growth from infrastructure spending from the various provinces, so the local government finance vehicles, there's a quarter every year for them to be able to sell bonds and raids -- and raise funds for the, we are hearing from persons within the chinese government that they are mulling a record increase or a special quota for

these bonds this year to be at a record level of 3.8 trillion yuan. that's 560 billion u.s. dollars, the previous record was $3.75 trillion. just a little bit of an increase. on top of that as well, we are hearing the fiscal budget deficit would be increased to about 3% of gdp, from about 2.8%. these special bonds would be important, because again, the coffers at local government levels have been extremely strained because of the pandemic controls and all the testing that is required. it is quite expensive. also given the three red lines crackdown on property. property sales have absolutely plummeted. land sales have plummeted. they are a big source of revenue for local governments that straight up over the last three years. also the number of tax breaks for businesses that have suffered through the pandemic. all of those three things have

really weighed on the coffers and the fiscal health of local governments. this would give them a big boost obviously. >> our chief north asia correspondent, stephen engle there with the latest. beijing has passed its covid-19 infection peak. let's get more from bloomberg's senior medical reporter, michelle cortez. we have spoken to some people on the ground, including operators of hospitals, saying they do expect to either be over the peak by the time we got to the lunar year or potentially already getting to the point now. i know there is limited data available. what do we know? >> in the big cities of china, beijing, shanghai, others like that, the peak at this point is believed to have been passed. there were numbers of infections, we saw deaths out of crematorium's and health-care facilities were struggling with utterly other and the outbreak

-- struggling with that early in the outbreak. the peak being half of that we are already through it. this year the virus is moving out of the rural areas and it will be some time now, still a few more weeks before the country entirely gets over covid. but it is looking like they are on the downhill slide at this point. >> we recently heard the who's warnings about the predominant strains of omicron variants across china. should we be worried about potential mutations, given how big the population in china is and how rampant these infections are? >> well, it's an interesting question. now at this point everyone of the world is worried about mutations. now that omicron has gotten itself while seated in china, people no longer have to worry about that, everyone is worried about the next mutation. in china, it is an interesting scientific question. there's been so little natural immunity and china that the virus didn't really need to mutate very much and china in order to infect people.

we have seen that in terms of the speed with which the virus had everyone. in other places, where there is more natural immunity, the virus has had to work harder and we have seen different subvariants spreading. the point is now though, everybody is on a level playing field and everyone is going to have to worry about the next thing. it could really come from anywhere. we think that it would happen in somebody who is immunocompromised or they are able to survive but the virus continues to mutate and that could really happen at point. is it possible and china? absolutely. -- in china? absolutely. >> in terms of the preparedness of the country from a health system perspective, with this reopening, it has seemed quite haphazard. if we are potentially over the peak, what does that mean when it comes to the need for antivirals, the need for the mrna vaccine, for

example? we have heard talks between pfizer and the government are at a stalemate at this point. >> there are still millions of infected every day and in fact millions are likely dying every day, so it is important to get paxlovid and other antivirals to those people as soon as possible. but your question is a great one. because by the time they get through these negotiations and start getting more of this medicine on the ground, to what extent is it still going to be necessary? it kind is -- it kind of goes back to the earlier question about variants. we know covid is not going to go away and this is something we will be dealing with into perpetuity now. as infections come back and repeat infections come, there will be the need for vaccinations and antivirals. perhaps not as much as there is right now, but yes, pfizer and china, the talks have broken down in terms of getting lower costs, products on the market in china. and at this point, they do need it, but it is going to continue

into the future, so hopefully they make some progress here the next couple of weeks. >> bloomberg's senior medical reporter, michelle cortez. you can get around above up of all these stories to get your day going in today's edition of daybreak on dayb. you can customize your settings so you only get the news on the industries and the assets that you care about. this is bloomberg. ♪

>> here's a quick check of the latest business flash headlines -- bloomberg has learned apple will ditch achy broadcom chip -- a key broadcom chip from its devices in an effort to use more homegrown components. apple also plans to have its own cellular modem chip in action by late 2024, allowing it to replace a part currently made by qualcomm. apple is broadcom's largest

customer and accounted for 20% of the chipmaker's revenue the last fiscal year. disney's asking its workers to return to offices four days a week starting on march 1. in an internal memo, ceo bob iger is pushing for staff to work on site monday through thursday. in the meeting with employee after returning last year, he said he was planning to spend a lot of time in the office and joked that he hoped he wouldn't be alone. carmaker rolls-royce says a cooling economy is not stopping the very wealthy from buying their vehicles. the company ceo told bloomberg rolls-royce is not immune to a recession but the global distribution of its customers is protecting sales, which had a record last year, at 6000 vehicles. >> all the rolls-royces we have sold or for the first time ever around half a million each single car in average, which is also quite an achievement and also indicates the pricing power

we own and also the strength of the brand. also that luxury is booming. we are not really in the car market, we are in the luxury goods market. and i think that market has seen tremendous growth over the last years. >> some of the english premier league's top teams are in the crosshairs of a qatari fund. the chairman of qatar sports investments recently held talks about a possible stake purchase. they are set to be considering a full takeover or stake in rival clubs including manchester united and liverpool fc. coming up -- we speak to eric zheng about the business sentiment in china as the country continues to open up from its covid zero policy. we have seen millions of chinese traveling home, as the holiday period kicks

off. we are headed to the lunar new year holiday. some 34.7 million trips have been made, as the holiday season begins. take a look at how we are trading across the asian session right now. we had seen some tailwinds coming from the new york session. we have seen a little bit of a mixed picture but tech stocks gaining ground in new york. the nikkei is up more than a percent. it is playing a little bit of catch up after coming back from holiday. the kospi, up a 10th of one percent. we have seen latest data out of both economies, with consumer cpi coming in above estimates. plus south korea's current account fell into deficit. this is bloomberg. ♪ 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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two fed officials say the central bank probably needs to raise benchmark rates above 5% before closing and holding for some time. neither the atlanta fed president nor san francisco's president -- cpi data is due thursday. sources have told bloomberg that china is considering a record water of up to 560 moon dollars this year for speckle -- special local government bonds. the hope it will help fuel growth of 5% or higher. officials are said to be looking at widening the budget deficit target to 3% of gdp for 2023. china has transferred a senior diplomat associated with the more confrontational shift to new role. he has been named deputy director of the department of boundary and ocean affairs.

it comes after china's ambassador to the u.s. left his role to become foreign minister. it's the latest sign beijing is rethinking its so-called wolf warrior approach. any meeting in paris, pledging to strive for cooperation amid concerns over china and north korea. they also want to discuss talks after discussion stalled late -- late last year. the buffalo bills nfl star damar hamlin has been discharged from intensive care and move to a buffalo based hospital. it is a promising development after he went into cardiac arrest during a nationally televised game on january 2. the bills tweeted they are thrilled that he has returned to buffalo and is doing well. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm vonnie quinn. this is bloomberg. shery: we have an alert on the bloomberg that the u.s. house of representatives has adopted a new rules package, this was the first test for speaker kevin mccarthy and his house leadership. the package includes when that will make it easier for dissidents to challenge him. mccarthy suffered a humiliating defeat last week including 15 rounds to be elected speaker of the house. >> just over a half hour into this session for japan and korea and so far it's a mixed outlook, down to how traders aren't targeting -- are interpreting the markets. the first is what we heard from fed officials, two top officials both saying the fed funds rate

may top 5%. certainly a signal that we will see in easy pivot or quick pivot away from those aggressive fed rate hikes. in the fx base as an asian currencies looking a little more range bound in the session today. then you have what were seeing in the commodities complex, extending gains. they did well in the london session overnight. also sending signals of positivity into the session today. in terms of what's coming through the equities picture, japan and korea, overseeing the nikkei playing catch up australia snapping a four day rally in the session today. that is down to what is happening in china.

we are seeing questions on whether the optimism, the reopening rally can be extended. the 200 day moving average has a key technical level, we have seen it touch the midpoint of last year and toward the end of last year, today the question is whether that rally can be sustained. shery: millions traveling across the country as the holiday season kicks in, showing signs of a rebound in economic activity as the country emerges from that covid zero strategy. eric, thank you so much for your time today. what is your business telling about the level of business activity we are seeing now with the exit of covid zero? >> our companies based in china,

the end of zero covid was a great beginning for us. 2023 hopefully will be much better year than 2020 two. last year was difficult because the policy of zero covid, because of lockdowns and so forth, a lot of disruptions to operations. this year we are going through a surge in covid cases, mostly mild cases. nevertheless, a lot of infection cases coming up. but hopefully once we get over with this, we can plan for the rest of the year. so i think our company is cautiously optimistic, dealing with the current surge in positive cases, but hopeful that for the rest of the year we can have a more stable environment to operate in. shery: tell us about those business disruptions, and what is the timeline for your members when it comes to a return to normalcy? >> the current surge began in

the north and moved slowly down to the south. so right now i am based in shanghai and currently we don't have official statistics as far as the positive cases, but i guess it is based on anecdotal evidence, at least 70% of people have already gotten the covid infection, so luckily the experience was pretty short, given omicron is about a week. so companies are dealing with this current wave of positive cases, so it does have some impact on operations in terms of shortages in labor and so forth. this is also the chinese new year holiday season coming up very soon. so this is kind of a slow period

for operations. so we are dealing with both. as far as capacity, it is not at full capacity level at this point, but hopefully after the chinese new year, things will get back to more normal levels. haidi: when your last report came out in october, there were some who were looking to -- do you think at the dropping of covid zero is enough to change that, or the difficulties of operating over the last three years has caused permanent damage among some businesses? >> last year was certainly a difficult year, compared with the two previous years. 2020 and 2021 were relatively manageable, but 2022 was very challenging because of the zero

covid policy and all the lockdowns. we definitely experienced supply chain disruptions. companies were certainly taking another look at this market in terms of its resilience, what companies have to do to prepare for uncertainty like the lockdowns. but this year, given the fact that the zero covid policy has ended, i think companies are taking another look at the market. if you are in china for china, you're not going to move your operations out of china. but if you are in china as part of the global supply chain, you may want to take a look at different scenarios, just to get ready in case something happens. we talk about china plus one or the china plus two strategy,

meaning china continues to be a primary source of products, but you have an alternative, just in case. haidi: there's always concerns, even pre-pandemic about the transparency of the regulatory environment, the way your credit decisions affect businesses operating in china that are foreign run. do you think these concerns have been pushed aside with the jubilance of the reopening? one of the biggest worries even with the reopening, it's very much a top-down decision that happen seemingly overnight. is that a flexibility in the leadership, or just another indication that these decisions can happen overnight? and that in itself is concerning for businesses. >> the decision to lift zero covid policy, the process was not clear to us. it came pretty suddenly. in the past year, based on a

survey done last summer, certainly our companies felt that the regulatory environment was not improving as previously, and it became an issue for our companies. a lot of lockdown decisions were made without consultation with the business community. so this year, hopefully with that zero covid policy out of the way, our companies can start to plan based on their own business requirements. at least the uncertainty part of it as a result of the zero covid policy is out of the way. so now we have a little bit more certainty planning for 2023 and beyond. haidi: how optimistic are your members about the trajectory of the recovery? when it comes to the equity market, there is clearly further

upside in the short-term. are there still longer-term lingering concerns about the chinese economy, the property sector and the broader economic drags that are still in place? >> i think certainly our companies are concerned about the week consumer sentiment. that is certainly a fact here. after having gone through three years of covid, all the lockdowns and so forth, consumers are not quite ready to start shopping. from that standpoint, our companies are concerned about how long it's going to take for the economic activities to rebound. we've seen a lot in the retail sector that up gone out of business. how long this at take for them to come back?

i think the big companies are doing fairly well right now. the private companies are still struggling. from that standpoint, i think it's going to take a while for the business sentiment, the business confidence to rebound and come back. haidi: we appreciate your time, eric zheng. you can see our past interviews on our interactive tv function, tv . you can send us instant messages during our shows. check it out at tv . this is bloomberg. ♪

haidi: bloomberg intelligence has a wider rift between china and the west could lead to deglobalization, and animal -- an analyst joins us now. we already see this playing out in other spaces like tech for example and chips. do you expect this trend of globalization to slow through 2025? when you look at the areas you focus on, what is the key

impact? >> first of all, obviously we are expecting slower global trade growth in the coming three years because of a wider rift between china and western countries. and production facilities may going back to home countries or at least away from china. that is partly led by -- we will see more inflation pressure, it is not new. as a result we find out that iphones could drop to 32%, for those iphones, the indian

production this -- facilities may need to ramp up efficiency. for global brands we expect something like a 250% decline in margins, and for auto companies, because of higher raw material prices, they will suffer a decline in their gross margins. that may induce these and you factors to raise prices. shery: that seems to be a fundamental and structural change were seen in the global economy. we do have redundancies built in, does that mean higher prices and more inflation? does this negatively affect the financial markets? >> obviously, we have been

seeing tightening by the u.s. federal reserve and other central banks, but we want to focus on what may happen to offshore chinese securities. primary and secretary -- secondary equities, we expect a smaller share of the asia-pacific total. in the coming three years, from what we've seen, 50%-60% from 2016-2022, to lower than 40% that was forecast. in terms of global banks, either commercial investment banks, as we -- as reflected by the bank for international sentiments, we have been seeing lower claims

from those banks on chinese entities. finally, the greenfield fbi's, 80% of those will be going to china. it may go to southeast asia. shery: energy policy intentions over migration will be on the agenda when president biden meets with the leaders of mexico and canada for talks ahead of the bilateral summit. >> president biden is meeting his counterparts from canada and mexico in what is colloquially known as the three amigos summit. one of the most contentious issues is migration, coming on the heels of president biden's trip to el paso, the border in

texas, over the weekend. biden struck a plan with mexican officials but it has brought strong condemnation from both republicans and democrats. another hot button issue is going to be trade. when it comes to protectionist policies, the u.s. and canada say that mexico is one of the primary offenders when it comes to energy policy. i also caught up with canada's trade minister, who says all options are on the table when it comes to energy. >> we've done nearly $2 trillion every single day, it's billions of dollars of trade. these are significant numbers of trade between the three countries. so everything is on the table. her preference is always to find a resolution when we can. >> jake sullivan says energy will be on the agenda in his bilateral with the mexican president. he said it is a key part of biden's agenda.

haidi: be sure to tune into bloomberg radio to hear more from bloomberg's newsmakers. there is more ahead. this is bloomberg. ♪

shery: we are headed toward the china open with a sense of market optimism across the country's equity space. of course we saw it last week's surge in the shanghai composite. that perhaps signaling that the resistance level that we saw back in 2022 could be turning into a support level for this year. let's bring in our senior asia stocks reporter. what are we expecting him chinese corporate's? >> at the moment, chinese corporate earnings compare favorably with the rest of the world, according to the data by bloomberg intelligence. about a 14% increase in earnings for chinese companies. that compares with the almost

flat readings for companies in the u.s. or europe. the possibility that the markets have not priced in the impact of changes by the chinese authorities. that is quite understandable, given the changes in covid policy has taken almost everyone by surprise in terms of the speed and the scale of the changes. some analysts expect that the earnings could be much stronger than 14%. some think it could be upwards of almost 20%. haidi: when you look at the most attractive sectors, is it really

the reopening sectors, the most book -- most badly beaten down, like tech as well? >> yes, exactly. people have been talking about how consumer stocks will benefit from the reopening in china. that is of course quite obvious, but some investors are also talking about internet stocks which have been hit by the regulatory crackdowns. but they still trade at fairly reasonable levels. once they are freed from the old threat of regulations, they could return to very strong growth and in that case the chinese stocks look very attractive. in addition, those growth stocks tend to move in line with global

-- if the u.s. federal reserve stops rate hikes, that could mean an additional tailwind for those stocks. haidi: some stocks we are watching ahead of markets opening in hong kong and china, mining companies are in focus. base metals surging again on the optimism over china's economic recovery. also watching apple, aiming to drop broadcom chips by 2025 to use in-house design, that's what we're hearing. our markets coverage continues as we look ahead to the start of trading. this is bloomberg. ♪

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