>> we are counting down to

asia's major market opens. the top stories are china's biggest budget firms to offer as much is $24 billion in property loans. investors are waiting earnings and possible surprise from the bank of japan. best start to a year in a generation. warnings of a global recession that is likely this year we have exclusive conversations with mark. let's get straight to the markets. perhaps the best start of the year since 1988. investors looking at the uncertainty of the inflation outlook. earnings of course as well as risks of china reopening. earnings of course as well as jp morgan and morgan stanley. taking a look at the dollar we had a three-day losing streak

stock markets are closed for the martin luther king long weekend. when it comes to europe did have a bit of a modest rise. taking a look at asia of course as we look to the bank of japan on wednesday the yen has been strengthening to levels last seen back in may and investors are ready for the potential pushing for a second date above the ceiling. early slight decline of about 1/10 of 1%. numbers up today also for production numbers in new zealand we are seeing business sentiment coming in at the lowest since 1970's. we are waiting for key economic indicators. economists are expecting consensus with gdp growth slowed

to 1.6% on the attributing gain to 2.7%. the official target of around 5.5% and also looking at industrial output. probably all slumped in december. we are told these new measures are on the way to support high-quality property developers. what do we know about the latest plan? >> as you say there could be more support on the way it really, as you indicated, it's for high-quality developers. the headline coming from this is that the plan is for china's financial regulators and asset managers to offer up to 24 billion dollars of refinancing support. the plan was announced on friday so far from bloomberg sources essentially half of the loan amount is going to be channeled

to the likes of its peers at the annual rate of 1.75% and also companies are going to be asked to offer the remaining 50% from their own reserves. this isn't really a full-blown bailout, it's really just about trying to help the strongest developers. as you can see they're in the graphic we are still seeing new home prices declining. working with asset managers as well because these are companies that lend it out heavily to developers and also of course heavily exposed to the credit was. >> we had a very strong signal with the nose -- news. >> this is quite a big move really. for a company that really once was at the heart of china's crackdown so the big move is it is going to be allowed to let new users sign up to put it really into perspective how

significant the move is, didi was removed in july. we are still talking about 18 months of absence because didi pushed ahead with the report against beijing's wishes. it's really just a signal that officials are serious about offering support for the tech sector. bloomberg intelligence is saying it means we can expect minimal disruptions to the likes of over the course of 23 and as you can see her the chart showing how much the tech giants are being impacted by the crackdown because actually now are trailing the likes of utility companies. in the u.s. utilities index that you can see. it also means the company can resume work toward a listing in hong kong not clear exactly under which conditions beijing would allow that to happen.

>> also, we are watching really the longevity of the rally when it comes to these markets at the start of the year given the outlook for inflation. recession risks, fed risks, earnings about to kick off as well. does this feel like a breather? profit-taking? perhaps a realization there's a risk on the table? >> there is definitely a sense to the last couple of weeks. it was a bit of a vacuum. a bit of a holiday period. there are a lot of risks or you only have half-staff. very few people who have had forgot where they are at. putting money to work, and the data backdrop was fairly welcoming too.

we had signs that inflation was slowing. that fed the narrative that the federal reserve was going to slow down and interestingly enough, the best bit of news we got on that front that inflation came in line with expectations. that turned into a bit of a watershed because central bankers were very firm that yes they probably were going to slow in the weight of rate hikes but that didn't mean they were going to start cutting by the end of the year. that was the case for a lot of people. that gave them pause about the idea that you can plan on this happening and remind people that bankers are wanting to move to a more data dependent set up. they did heavy lifting now they want to work out how long do we keep them there? and that is actually a much harder environment for trader investor because the uncertainty

of the curve. they are going to hold for this many months, it's just are they going to hold for several months and where do they go from there it depends on financial conditions. that in and of itself is a more unstable environment. probably a good time to take a break. >> what does that mean for the dollar short trade? >> the dollar short trade does look like it is likely to continue especially there are a couple of strong drivers for that right now. one is the bank in japan is going to tweak policy and certainly very strong expectations of the worst days. once the worst days are behind the yen, you've got those flows that are sort of set up. japanese are always going to be bringing their money home. now there is not a lot of this incentive for them. that is a big midas for the

dollar. big plus for the dollar. we also got a little bit of a surprise, a stronger arm on the back of the reopening. reopening plus reform, the tech moves, the property moves, all of this is spurning it higher. europe is looking a little bit better than expected because they had a warm winter so they didn't base the energy crisis. the big currencies are all primed to move higher against the dollar and the dollar had become very elevated. so that dollar short trade, that is looking like something that investors do have a bit more confidence in than others. >> as we continue countdown to make open. corporate executives, economists

are warning that a global recession is likely this year. here are some of the voices we heard on day one. >> it's a new regime. the great moderation is over. this notion that when the economy struggles central-bank sleaze, that was true in the past. >> they are containing inflation. they hope by the end of this year and perhaps next year things will come back to normal. >> we needs to stop thinking and short-term. we need to think more long-term. >> we can keep watching for more exclusive interviews with chief executives and policymakers. here in sydney with headlines. >> u.s. treasury secretary janet yellen will hold her first face-to-face meeting with -- in zürich on wednesday.

the announcement follows the november meeting between president biden and xi jinping on the sidelines of the g20 in bali. u.k. and eu have pledged to work towards deals of northern highland but stop short of announcing the final phase of negotiations. tensions have been building since last week when eu agreed checking goods moving across the irish sea border. an agreement would dissolve the dispute. part of the wider u.k. deal. germany's defense minister is stepping down following a series of missteps. christine lambert come -- came under intense scrutiny. she was also criticized for her lack of military expertise. it is a blow to the chancellor. global news 24 hours a day on air and on bloomberg took --

quicktake. i'm paul allen, this is bloomberg. >> we hear exclusively from the investment authority in davos on why he trusts elon musk to run twitter. coming up next to get a fresh dose of optimism. inflationary pressures are starting to fade. this is bloomberg. ♪ if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify

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>> philipp hildebrand says investors betting the central banks will ease up on rate hikes have got it wrong. speaking to us exclusively at davis he said policymakers site inflation continues on the downward path. >> very much so. i think inflation is going to drop very quickly. in fact, i think many of us will be surprised at how quickly it will fall. the problem is it will fall very quickly. that will be the easy part and then it will get very difficult to get it to price stability but at the moment i think the initial phase will be a very rapid decline. >> what does it mean for central banks? when you lay this out beautifully in your world outlook, if you are a central-bank, even if you are the fed do you have to be more careful in how you manage this from now until the summer? >> i think the central banks are

going to continue under tightening path. they are going to be very careful, very focused on not losing the long-term inflation expectation anchor. i think we will see, i don't see any chance of easing this year i think the market has that wrong. they are going to make sure that we can really, not just get from nine to four but limit the risks that become unanchored but because all of this is driven by the lamer market is going to be difficult to get inflation below 4% let alone below 3%. we are in the easy phase now of the tightening cycle. >> we have it for example fed officials saying don't expect a fed pivot anytime soon. the markets keep on testing it. >> i think this notion that there could be easing this year seems to me to be far too optimistic because if you are the central bank you're going to

want to make sure you can get this done, that you don't risk researching suddenly further down the road. i think we are going to see at best, some sort of pause but not quite yet. the market may need some readjusting relative to these expectations that we could be seeing some easing and this is what we call, it's a new regime. this notion that when the economy struggles, the central bank will ease, that was true in the past. >> the leverage being taken, for companies levers and interest rates going from zero or 1% to where we are now without more bankruptcies. are you expecting companies to crop up? >> i think it depends how much damage will have to be inflicted on the real economy to get this last phase of the inflation being squeezed out from let's say 4 back to 2 percent. this will not come without cost.

i do suspect that at some point the central banks will kind of back off. and not drive inflation all the way back to 2%. that might be lower than the market can recalibrate but for now i see the tightening process continuing to ensure that we don't just go from 9 to 4. >> if we tried to put inflation to 2% does that coincide with the beginning of the summer months or later in the year? >> i think we will see it dropping to 4. if that is in since the easy part. then the question becomes what do the central banks to at that point? do they continue and tighten far beyond what is expected in order to drive inflation back to 2 percent? i think that would entail pretty significant tendencies. or do they say we have done enough let's see what happens if we let inflation persist for a bit above the 2% target?

>> what does this mean for markets overall? >> there will be opportunities, you know, not least in credit and short-term bonds. we have a different outlook again when you look at where interest rates are. for long-term investors, many opportunities anything that equities i suspect until we know with the central banks are going to do with the residual piece of the inflation adjustment from let's say for back to 2%, they are going to be -- there are going to be some challenges around equity markets. some of the enthusiasm right now with the notion that central banks could ease again eminently i suspect that's pretty mature. i still see some volatility here until we know how the central banks are going to handle this difficult trade-off that they face. >> vice chairman philipp hildebrand there. bloomberg keeps you up-to-date

on demos throughout this week. our next guest doesn't think inflation is a problem anymore and she is reducing her cash positions. she is a ceo, having this into what we just heard from philipp hildebrand he says that getting from nine-4 is the easy part. keeping inflation expectations anchored is going to be the more challenging part. do you agree with that and the fact that he think's don't understand this? >> we mostly take -- are going a negative. we see the cpi number came at -.1% to us that suggests it takes into consideration and and playful -- inflated number. rather than true housing data. it shows an increase in housing

when in fact true housing data shows a different story. the index suggests housing is dropping significantly so if you include the true housing data into the cpi, we will have gotten a much lower number, a much bigger decrease in inflation. we don't think inflation is no longer a concern, it is coming down and significantly too. >> what about the point that this is down in demand in the labor market? we have seen so many layoffs across tech. is the tightness going to be an ongoing challenge? >> yes, i do believe that the labor market, in other areas we are seeing prices come down. energy prices are coming down but when it comes to the labor market, we think that the fed is pretty much powerless in moving unemployment higher. we see unemployment right now at 3.5%. this is a 50 year low and the

fed has been tightening for quite a while now. so i think the two main issues, the employment rates first of all most of the layoffs happening in tech the tech workers are either working overseas or based in the u.s. under h-1b temporary visas. and these layoffs do not include the unemployment number. one fourth of the calculation, 80 million baby boomers that will also help keep unemployment levels low. >> like most markets at the moment, seeing attractive opportunities, how do you henan at this point? are you saying that rotation? >> yes, definitely. global markets, it is an example china relax their covid policy, rising tide, we are seeing more optimism over from china to other global markets.

the u.s. is doing great, especially in the tech category. high-growth, it was the category that got hit the hardest when inflation was coming up. now we have the reverse which means these categories are up. >> earnings expectations, do you see upside or downside? >> pretty much consistent with expectations. we saw last week we are seeing tomorrow morning jp morgan also reporting and goldman sachs we think they are going to be consistent with expectations, low numbers and the good news as there was a lot of pessimism ceos so going forward, it will be easier to meet those modest expectations that they set in the past. we also think in the future we will see increased activities from financials.

>> we talked a little bit about the fact that the picture in europe has gotten better and managed to jobs a very severe energy crisis how does that inform your portfolio for 2023? >> europe is a great story because as you said that was, the market that we expected to perform very badly. in fact, first of all because of the war, secondly because of the energy crisis. we were expecting it to be severe. now, we are surprised that inflation is coming down. the energy reserves are actually rising because they bought unseasonably good weather -- they have had unseasonably good weather conditions so far. up 10%, and i think although there are better opportunities in u.s. equities because the

closure. there is more potential. >> always great to chat with you. our chief a not -- investment strategist. when all subscribers can go to daybreak and you can customize your settings. this is bloomberg. ♪

>> we do have breaking developments. a sunrun alto -- nissan rainout agreed at this point. we have been waiting for developments on with the committee of this board is expected to do when meeting to

weigh these proposals to address how technology and ip for example, would be protected while we see the restructuring. that is according to the most recent report. we do know they have secured the support of the french government to restructure as well and that is really the latest that we have. if that they have reached an agreement on that rebound. coming up next we will be digging deeper into expectations of policy to ask -- policy tweaks these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing.

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haidi: you are watching "daybreak: australia." prices being whipsawed by weather patterns, but what are

we hearing from goldman? >> goldman sachs is saying that commodities have the best outlook out of any asset class over the coming 12 months. so we did have that pullback to start the year, but goldman sachs extremely bullish, saying we have the perfect macroeconomic environment, and record low interest rates for commodities. saying you cannot come up with a more bullish concoction, and he's drawing parallels between prices now and the run-up between 2000 seven half in 2008. the only exception he sees his european natural gas and that's because inventories are looking pretty strong. goldman sachs has seen demand coming from china as it continues to reopen and other investors are echoing that.

copper rising above $9,000 a time for the first time in several months. and it sees more upside ahead for prices, particularly after the end of the lunar new year holiday at the end of this month. haidi: in terms of central banks, what sort of expectations are building for the? boj decision this? wednesday it seems they are between a rock and a hard place at this point. >> bank of america saying the meeting that concludes wednesday is alive decision. they do have load conviction around that, saying people are talking about the yield curve control settings. the dysfunctions in the markets we have seen after that decision back in december have only worsened, and visualized in this

chart, we haven't seen the 10-year yield rising above the ceiling, a lot of trades out there betting we could start to see a pivot. bank of america saying even if we do see some sort of incremental widening or shortening of the long-range target it is unlikely to solve the dysfunctions in the market. haidi: let's get going to tokyo where kathleen hays is there setting the scene for us. kathleen: he rocked markets when he led the bank of japan's move to alter a bedrock of its altar easy monetary policy by adjusting the parameters of its yield curve control tool. he had given no signal he was about to raise the ceiling and kept insisting it would not happen until inflation was sustainably above 2%.

after the meeting he insisted move was merely a tweak, not the first step on the path for policy normalization. >> we made some adjustments today. kathleen: central-bank dining is pushed up on yields around the world and economists see it as a force that pushed the boj to widen the band, pushing the seeing of 2.75 or even higher. >> if that is the case, it will be much more straightforward and makes the boj even more stable in terms of the framework. kathleen: other say it's simply the boj putting on it shoes but not yet taking the first step. they expect kuroda and the boj to send a signal by raising the

20 23 inflation forecast to 2%. -- two -- it's good reason for preparing for the first step for normalization. kathleen: whatever he decides to do in the final two meetings of his tenure, it is on the way to policy normalization even if the first big steps are not taken until a new governor takes charge in april. haidi: there has been a big divide between what economists are saying and what the markets are doing. there's a lot of confusion as to how the boj navigates this. kathleen: think about it. people have said to me, this is what boj watchers are observing, this is the most important moment in the boj history since

his whole thing started back in 2013. a lot of things happened going into the accord between the government and the boj, while yield curve -- curve control, it's a moment when governor kuroda has pushed back hard against the idea that the boj would do anything before inflation get sustainably to 2%. that's why there's so much focus on this inflation forecast. to have a sense reinforcing the idea that whether they are taking big steps now are small ones, the steps have begun. it is interesting that bank of america is saying there is a chance that today or tomorrow they could scrap the yield curve control per -- program entirely.

it would involve a lot of bond purchasing, even more because of what that would unleash. according to some people i talked to, a lot of hedging your bets, hedging your thoughts, and waiting for anything to happen. a lot of them say baseline, no move, but entirely open to something happening. haidi: what else are you hearing from market sources at this point? kathleen: first of all, there is no when you talk to who thinks it will be a surprise, or almost no one thinks it would be a surprise if they don't widen it even to 1.0. more talk now that eventually the boj could start shifting their stance just a bit by moving back from changing the target to 5%.

the reason we're showing you this, up to 1% higher in terms of the level, depending on what they do. people are saying they are so convinced that normalization has begun that they're willing to lose money holding position that is pricing in the 1% or higher ceiling or getting rid of it. another conclusion people are coming too, just sit back and by yen. one trader i talked to was saying that he thinks the trend now is for dollar-yen to get to 120. it is around 128 right now. whether the boj is getting into a tighter policy spencer not, that is a reason to be positive on the yen. haidi: in terms of signaling, what would traders be looking

at? kathleen: as we covered in the package, it's there, it's on the table. it's not the strongest signal they could send but it would be reinforced because there is still a big debate, former boj officials about japan's inflation rate getting to 2% in the tokyo cpi getting stronger with also reinforcing for that. further down the road, listening to how corona talked at the press conference, one thing he does or does not do right now, there's a sense that the boj is moving away from the monetary stimulus of the past 10 years. is it moving toward a far less stimulus position that was in place under the previous governor. these are the kind of conversations that are already

being had. clearly the message from the meeting tomorrow, any action they take will be very important, not just for this week or month, but for the march meeting and beyond. haidi: kathleen hays there in tokyo with the latest. paul allen is here with the first word news from sydney. paul: bloomberg has learned that china is planning to offer as much is 160 billion you want of refinancing to help some in the slumping market. sources say the bad debt firms are encouraged to match that from their own coffers. there was little detail on friday. authorities have located both of the black boxes from the flight that crashed on sunday. the flight data recorders may give investigators a better idea of what caused it to crashed,

killing all 72 people on board. forensic examiners are now working to identify the bodies. japan is urging the world's leaders to treat crypto like banks. japan's own crypto rules have helped shield investors who are poised to be able to withdraw their funds from the fdx global subsidiary makes month. the italian mafia's most wanted boss has been caught after 30 years on the run. police arrested him at a private clinic. he has been convicted for dozens of murders including those of two judges. 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 paul allen. this is bloomberg. haidi: authorities backing elon musk's leadership of twitter in

the face of the turmoil that followed his takeover. the ceo told us more about the investment strategy. >> we are not focusing on only trophy assets. we have a very fundamental process and the scenarios we see in the market, we know what is going on and we evaluate opportunities based on the developmental aspects. whether this is a trophy asset or not, we always deploy investment. if we find the right valuation, definitely we will acquire it for teacher generations. >> we talked about twitter, you are one of the big investors and twitter. in the last eight months it is gone up, it has gone down.

talked about elon musk and twitter every day. where are we on that? >> we are a consortium of investors. we are financial investors. we engage with the management, with elon and determine the plan that he has for the company, and we believe in this and trust his leadership in terms of turning around the company. so we are committed to the plan that we have made to the management. >> have he asked him to tweet less in the last eight months? there were so much volatility. do you get involved in those calls? >> we do not get involved to that extent. he has our trust and we are sure that he will manage it very professionally. haidi: that was francine lacqua in davos.

keep watching for more exclusive interviews of chief executives and policymakers. we will keep you up-to-date on davos throughout the course of this week. this is bloomberg. ♪

haidi: take a look at the outlook when it comes to commodities.

the strongest outlook of any asset in 2023, according to goldman sachs. i see a bullish concoction, basically a perfect storm when it comes to this asset class going into the rest of this year. parallels from the run-up in 2007-2 thousand eight. the year is starting out with a pullback in prices, rising rates as well. we are watching for the impact of the china rebalance as well. prices to the downside after last week's gains. iron coming under some pressure, we need to hear from china's top economic planning body asking iron ore traders to provide details as it looks to head all fresh commodity inflation. great to have you with us. what was your reaction when you saw some of their policy makers murmurings out of china and the impact?

>> it feels like some of the previous cycles we've seen when they are reverting back to the old tools of the economic growth engine, infrastructure property and the like. clearly it is an easy one for them initially. they need to be careful about extending that into a full-blown rally. clearly the underlying issues in the property sector are still there. that's why we are little bit cautious on the longer-term outlook for iron ore and steel. in the shorter term that will be quite positive. they will kickstart the rebound, whether it sustains over eight long period is yet to be seen. haidi: the jawboning concern on prices, does that have an impact on going with the cost of pricing? >> i feel like they're worried and concerned about how prices

could go over that period. for me and for the broader market, they would see that as a sign there could be some strong demand coming through and they want to try and keep it in the shorter term. that in a sense creates a bit more of a bullish sentiment within the market and that is an issue that got to try to contain over that period. haidi: looking at the call from jeff curry saying you cannot come up with a more bullish set of circumstances for commodities. would you agree with that? >> every market has its idiosyncrasies. the combination of the low inventories, with china coming back, and i think the market is under appreciating how quickly we are seeing things move there. we got chinese new year coming shortly now are as well. the latter part of q1 will be quite strong, but more broadly,

this energy transition is creating a huge swell of demand for key commodities. the industry really isn't set up to meet those in the shorter term. so i think it's really an explosive sort of scenario now. haidi: is there more downside for crude when you consider the risk of recession globally? >> clearly, china reopening -- crude oil itself tracks that general economic growth pulsed closely as opposed to some of the others, where you can get certain sectors really boosting demand. that developed market outlook can certainly weigh on things. even then, we look at markets like japan, south korea, and even the u.s., the prospects of

a shallow recession there bodes relatively well for that global backdrop. i do feel like the risks now or more skewed to the upside then down, certainly on that economic backdrop. haidi: do you expect exploit dacian from china? >> a lot of the rebound will be domestic driven. we are not going to see inflation really occur until external demand is strong. maybe in the second half of the year, into 2024, we may start to see that permeate. certainly the energy issue is still bubbling away in the background. that's really the crux of this export inflation story, if china continues to suffer from those shortages, and certainly while inventories across the fuel

spectrum is relatively ok, they are still susceptible to that. that could permeate into higher consumer prices for a lot of prices. haidi: what about the outlook, the energy transition story remains an ongoing one. has your outlook for future -- future facing metals changed much? >> in the last six months, i gotten bullish on them. the whole geopolitical landscape has thrown a spanner in the works in that specter. herring -- having issues in the industry as a whole. there will be shifts in trade due to geopolitical tensions. we saw the announcement that sweden had discovered a huge rare earths deposit there. the emergence of good minerals and bad minerals in a sense will

create these dislocations. a lot of countries driven by pushing away from chinese supply, looking for deposits in much more developed markets or friendly countries. the demand for that type of supply will be quite strong in addition to demand from the sector. it's going to create a lot of volatility, but i do feel like the industry is certainly on the back foot and really struggling to meet the flow of demand we are looking to see. haidi: daniel, thank you for your time. tune into bloomberg radio, get in-depth analysis from the daybreak team there. more ahead. this is bloomberg. ♪

haidi: china evergrande says auditor pete rbc has resigned over disagreements, according to a regulatory filing, the two sides cannot agree on a timetable and scope of work.

saying he did not receive key information needed for his audit work. choi oda putting the figure at 10 point 6,000,420 23. the japanese carmaker warns that final shipments could be 10% lower if it is unable to procure enough parts, especially semiconductors. rio tinto's iron ore shipments rose in the fourth quarter two just over 87 million tons. the top producer has kept its 2023 guidance unchanged but increased its copper outlook forecast. it will report its full-year financial results in mid february. looking at some of the stocks we are watching when trade opens in australian about five minutes, we will keep an eye on rio tinto , and renewed bullishness when it comes to iron or demand up in china. and we're watching aluminum rated shares, the highest in

june on the back of goldman's better than expected demand outlook and price revisions as well. coming up, earnings revisions, plus an outlook on the market in southeast asia. don't miss our exclusive interview with the german chancellor as europe's biggest economy navigates a host of challenges. that's at 10:30 a.m. in new york, 11:30 p.m. in hong kong. that's it for "daybreak: australia." this is bloomberg. ♪

>> you are watching "daybreak asia."