haidi: we're counting down to

the opens in tokyo and seul. paul: the market turns ugly as prominent fed hops call for more rate hikes. growth concerns. a pressure mounts on wall street. credit suisse pays upfront. microsoft and amazon cutting 28,000 jobs as the post-pandemic reckoning slices into big tech. let's take a look at australia. the staggered open, difficult to get a bead on things. rather flat at the moment. new zealand is off one quarter of 1%. we so food prices rising.

this follows on the decision of the be oj call on deal control. shery: the implications of the tweak in the loan program. take a look at u.s. futures. pretty flat. the s&p 500 all big in new york. we had retail souls falling. ppi coming in below expectations. the nats that gave up gains, treasury yields of their pressure with the markets we could see fed downshifting.

this is coming on the heels of more hawkish fed rhetoric, calls for more rate hikes. we gd oh data cannot help. the surpluses being bigger than expected in global oil markets. paul: federal reserve hawks staying the course on rate hikes even as more signals show the u.s. economy weakening and inflation is expected to fall. kathleen hayes says the data was not great. is the u.s. down for a recession? reporter: it is looking more and more like that. the empire state manufacturing

number pulled by the new york fed plunged last month, a precursor to things slowing down, they are starting to get hit by all kinds of things including rate hikes. in terms of retail sales, down 1.3% after the previous month was revised lower to a 1% drop. for the longest time, wages were growing, looks like this is starting to hit people. the weakest quarter since the onset of the pandemic. this is the regional anecdotal survey, it is done before every fed meeting, a couple of weeks before to give everyone on the ground and expectations

inflation will fall in 2023. the consensus is prices are still rising but it looks like the pace is slowing. that's the data and outlook. jim bullard, one of the leading fed officials probably back at the end of 2021 is starting to talk about doing something and frontloading hikes. he says slow down, let's get to where we need to get. it's over 5%. he is looking for something higher than that. the red master saying she sees more rate hikes, we have to get where we need to be. both of these, it seems like they are outweighed by people who want to slow down, jim bullard said no, let's do 50. shery: they want to stay the

course. the message? do not fight the doj, no change in the policy status in the tweak in the program, what does that mean? kathleen: it means they are doing everything they can to keep the 10 year jgb, its range. they widened the band and they want to keep it there. they wanted to be sustainable until the next governor takes over in april. this loan program makes it easier and cheaper for banks to borrow from the be oj to buy bonds. get a return, not a huge deal but it's making them some money and at the press conference yesterday, one of the key things the governor said, they cannot rule out imagine if you are a

bank and you get a negative rate tomorrow. when you pay it back, you pay back $95 billion. it's a tweak, it's technical. it sends a signal they could do what they can. markets say inflation is rising, there will be a new yield control, it is not sustainable. there could be a collision course in the markets. shery: capping hayes. --kathleen. bank of america is freezing most hiring until midyear. catherine doherty is here with the scope, wall street is doing its best to curb expenses. >> it has always been closely looked at her all of the banks.

now, their expectations costs will continue to rise. they will have to demonstrate real ways they are pulling back and thinking about hiring, the cost we have seen are from compensation. headcount is going up. we're seeing a reversal, bank of america is putting the freeze on the hiring. they are only selectively hiring for roles, otherwise it's just that expense line they are trying to deepen check and show they have that discipline. at other banks, there are cuts across the street and we are seeing thousands like go because there are thousands to account for when it was unusually high, now that it is reversed, they are having to account for the

expenses they no longer need. paul: we're seeing resistance internally from shareholders. reporter: there is tension at the bank. do you pay your talent to keep them there and reward them for your work? if that expense adds up over time and investors will chide you for it, you might have to rethink that model. david solomon on the earnings call captured this tension quite well. when we strive to maintain a pay for performance culture to operate in a talent-driven business. they're having to show wall street analysts that they are keeping expenses in check, and there are also times they need

to reward bankers and make sure they are not directing peers and competitors to other industries. paul: microsoft and amazon have begun cutting jobs in a post-pandemic reckoning which has left almost no tech names unscathed. let's get to at ludlow. where these job cuts taking place? ed: microsoft cutting its global workforce. they did not say what was impacted specifically. engineering teams would be eliminated which is interesting given the reports around open ai.

18,000 jobs from amazon. started notifying relevant teams throughout wednesday, geographically, costa rica impacted the focus on human resources and retail and some other interesting product teams. in both cases, not really a surprise. the question for investors is does this board off a slowing global economy? >> they disclosed severance payments and efforts to wind down real estate leases would result in a charge which translates to a hit to eps. it's interesting because what you see our expectations are more rough.

if you look at the reaction to microsoft in particular, they see the move as protecting margins which in microsoft's is pretty high. it was a weird equity reaction. i heard you talking about the market turned ugly and soured throughout wednesday. earlier both microsoft and amazon are higher. it's not pleasant to talk about layouts. investors often cheer that action because it can mean some type of protections against the environment and growth. shery: the latest job cuts. let's get to the first word have months. plans are being made between talks between the treasury secretary and her chinese counterpart. after meeting for the first time in zurich, they say they intend

to address several areas of disagreements. the u.s. side called the meeting positive and productive. a senior malaysian minister says trade in use to be a key driver of growth. trade industry ministers said gdp should grow between 4% and 5% this year as projected by the central bank but said work still needs to be done to attract global businesses to malaysia. >> how are we going to compete going forward? the focus has to be on making things easier. ease of doing business. that's one of the key opportunities for malaysia to improve itself. shery: they are planning to focus on asia this year. the ceo says $284 billion wealth fund expects a strong recovery

in china this year and is under invested in asia. the fund is looking at potential investments in technology and venture capital globally. >> i expect for 2023, a strong recovery in china. we are seeing signs already. it's a very interesting economy. any country with the growth rate of 4% to 5% for sure will be very interesting. >> those are the first word headlines. paul: we're going to hear from the boss of the sovereign wealth fund in davo's who says they are focusing on investments in asia. the anp chief economist gives us his outlook on economic growth. this is bloomberg. ♪

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more hope that i had before.

paul: producer prices slid more than expected last month. the drop in retail sales exceeded estimates. let's bring in shane. happy new year, i think we can see that. -- say that. getting to that data, not great we have a debate shaping up about the debt ceiling again. take a look at this chart, the s&p has dropped below the moving average. is the scene set for further declines? >> possibly. it's been a good rally the last couple of weeks. worries about recessions and the

hit to earnings are quite high in those risks will continue. the flipside is we have seen better data on inflation. that will enable central banks to become less hawkish. i don't think the fed has to rise rates is much as they are indicating. i think we will cap probably in march. that will probably be it. i think the markets are right to start speculating on rate cuts later this year. concerns about recession are significant but inflation continues to go down and that will take pressure off and that will be a mild one. any pullback will be against the

backdrop. paul: loretta messer is striking a hawkish tone. we have heard from lori logan as well. they seem to be suggesting that the fed is getting ready to tap the brakes on tightening. do we get 25 basis points? >> i think it will be 25. there has been a change from the fed. you get different messages from different speakers. the tone up until christmas was very going to keep going. long way to go. the dot plot was revised. press conferences were generally hawkish. it's the new year, you send --

are seeing more speakers allude to the decline in laois and, slowing the pace. that change is quite significant. the next move will be .25%. this is not a meeting where they will revise the forecast? but it looks to me they got to hawkish. the decline suggests forecaster to hide. the market is probably right to start anticipating a more dovish fed. we're still going to get some more rate hikes. it is slowing inflation and growth, that is normally consistent.

shery: at a time or we could see how her for longer, where does that leave the be oj and for how long can they hold out from joining? >> the doj is interesting, because they have had problems with inflation being too low. expectations were locked in at low levels and it's understandable they are cautious, they don't want to jump onto the tightening bandwagon we so with other central banks. b theboj sees falling inflation in the u.s..

distill, you can understand why they are cautious. shery: they double down on the tweet to the loan program. >> if the market believes that, they will end up with low rates.

in hoops -- it helps boost lending in the economy for lenders, there is also a degree so you could argue some central banks up until last year went too far. that is the big debate. whether it will dip back down in 2024, that is the debate at present. i can understand the bha. shery: always appreciate you

putting this into context. get a round up of all of the stories you need to know. this is bloomberg. ♪

paul: quick check of the latest business/headlines. a lawyer for security fence investors were cost millions of dollars. they were referring to a post 18. the defense argued mosque made a split-second decision to respond to a story. twitter revenue in the fourth quarter dropped 35%, information

says global sales and marketing chief gave the forecast and a staff meeting. the report says one factor was fake accounts. crypto from genesis is preparing for a bankruptcy firing -- filing. so far no agreement. a reminder, we will have more big interviews coming your way including the morgan stanley and bank of america ceo. stay tuned for those conversations. this is bloomberg. ♪

>> there is no economic reason

for the widening of a trading range as the bank is continuing to manage market adjustments through fund supplying operations. shery: this is leaving markets from a risk of a potentially larger shock. let's bring in our chief rates correspondent. we had the yen and yields dropping sharply after the decision at that price action faded throughout the day. what does this mean in the future if we get the doj moving? -- boj. >> the question is more about timing area you can see from the

bounceback in the yen in particular which was due to u.s. data coming in week, that since treasury yields down further. the yen coming back off the floor and yields moving that underscores the investors expect to be oj to bring moving sooner rather than later. the battle from between the central bank in japan is going to continue, some of them out overnight. that is the theme.

they were saying we are irate to raise as we are not convinced station -- inflation is sustainable. you're going to have to also do something to wipe out efforts to

push yields above 0.5% ceiling. paul: what is the risk for persisting with the policy? >> there a couple of risks. one, they want to improve bond market functions. it's part of the mandate like most central banks. that is one risk. the other risk is that has

caused some political concerns in the doj as we approach the end of his tenure. they see some signs that they are pivoting to normalization. the more difficult they wake -- make it for themselves, if they need to pivot, they think the process to get away from them. paul: bloomberg's chief rates correspondent. garfield reynolds. let's get to the headlines. growth is expected to ease in

the year ahead. the survey suggests employment gross -- fed officials remain unified for calls to fight inflation even as recent data shows. the central bank chair tested positive. the next policy meeting conclusion february 1. founder of a crypto exchange was arrested in miami.

>> we will use every tool to attack the criminal use. paul: credit suisse will pay an upfront cash reward as it tries to retain staff. managing directors will be paid to cash component of compensation straightaway, however if they leave, they will have to withdraw the funds in three years. shery: the abu dhabi well on says it's planning to open investments in asia as china recovers from the pandemic and india economy grows. speaking to us from that post, he spoke about the outlook. >> how her mood is cautious

optimism. the last couple of quarters was very negative and i think that mood spilled over, and you are seeing today, the shift you are describing from my perspective, there is some headwinds. challenges ahead. it is not as that many people thought it would be. in my view, 2023 will be ok. >> you are mentally thinking if we hit those levels, clear the decks? >> the data is clear. you can see how we close out the year.

it gives us -- it does not change our perspective. >> i was thinking as a global asset allocator. we have to begin to think about deploying capital. >> we take teams or a five-year horizon, teams move and deploy

capital. we pivot women need to pivot. >> is it saying, we need to pivot, shift the years? is it more diversification? was the pivot and play? >> not necessarily. the themes be at semiconductors and technology, digital transformation, digital infrastructure. software. these are all themes we have been deploying capital, they are very much, that i five to 10 years, we will continue to invest. in terms of the world, the u.s.

remain stable economy, and innovation will remain an important market for us. if you look at was happening now , china coming out, india and growth rates. you are seeing exciting economies like indonesia, southeast asia. korea is interesting. asia is an area focused for us. paul: coming up. moody's sees growth around 4% but is warning of further risks ahead. this is bloomberg. ♪

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my ameriprise advisor helps me feel confident about my financial future. he knows me and my goals. it's not the first uncertain environment he's helped me navigate. probably won't be the last. but with his advice, i know i'm on track. the plan we created can withstand uncertainty. no wonder clients rate us 4.9 out of 5 in overall satisfaction. because advice worth listening to is advice worth talking about. >> may expect to see growth recover later this year. we will see more engagements between the u.s. and china. the leader summit in november between president biden.

shery: our next guest expects the china gdp to rise to about 4% this year. he sees further strains of the regional and local level. good to have you. how much does this have to do with the local governments that will have to help national growth by investing in infrastructure? >> good to be with you. governments will see a rebound in overall fiscal revenue, but the overall picture is land seller remains under russia. traditionally, it's been an important source of funding so

overall pressure is on the ability to support real growth without taking on additional burdens. shery: what are you seeing in regional disparities and how to some of the weaker governments, who are the most vulnerable? >> the effect of the pandemic over the last three years is to accelerate a lot of regional disparities across china. increasingly you see a bifurcation in fundamental, economic profiles across provinces. on the one hand you have a minority of provinces in coastal china which is vibrant from the

movement from less-developed provinces, and on the other hand, you have a majority of provinces and then china, more highly indebted, reliant on investment-led growth. these are the provinces were last year you saw declines in land sales of 50%. these other ones up that remain under pressure. also, provinces in the northeast and manchuria where they have seen very persistent outflows of the labor force of the past decade.

paul: is there a risk of default? >> the options is so high. governments are turning to restructuring, bottom, that is a likely option many local governments consider going

forward. the other option is for there to be higher transfer payments from the central government so that has been going on, particularly in the last three years. there has not been any sign that there will be a more fundamental shift in revenue-sharing between central and local governments. we would need to see that before there is a more permanent solution. paul: we heard from dabo's, recent measures to divide financing to property developers have led to a noticeable, movement. we can say now that the worst of the property crisis was behind us. >> the measures from authorities

in the past are mostly targeted at alleviating developers refinancing pressures, improving liquidity, showing uncompleted projects are limited to homebuyers. to that end, the supply liquidity problems and real issue is on the demand side. it's a recovery in homebuying demand. in the past, at least a portion of property sales was sustained by speculative demand. in lower tier cities, that expectation was damaged last year. there is a risk we could see a negative feedback loop in which expectations can contribute to speculative selling contributing

to further price declines. to see sustainable rebounds would require homebuyer confidence. paul: the vice president and senior analyst at moody's. plenty more to come. this is bloomberg. ♪

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numbers out of japan. this is higher than the estimate around 10%. we are talking about a smaller trade deficit. the estimate was for a bigger trade deficit. the estimate was for more than for the month of import numbers, it's all playing into these numbers. exports are rising. it is surprisingly to china as a construction of 6%. demand is taking a hit.

>> let's get a quick check of the business/alums. 20,000 jobs being cut by microsoft. microsoft has begun telling 10,000 workers that will lose their jobs. cuts are needed and a possible -- >> during the pandemic there was rapid acceleration. there is some normalization of demand. quite frankly, we will have to do more with less. we will have to show productivity gains. paul: think of america is

pausing hiring as it tries to manage costs. certain roles will be filled. business banking and trading. new devices aimed at changing the smart phone market will introduce new displays and a faster tv box. earlier this week, they rolled out a new speaker, revamped in 2021. shery: these are what we're watching. weaker shipments and demand risks. we are watching resin action shares.

paul: let's take a quick look at markets, specifically currencies. a little bit of weakness for the bloomberg dollars spot index. the yen is in focus. a fairly steep fall for the yen on wednesday. sticking with the yield curve control, we are seeing some pretty steady as we heard 20 -- head further into 2023. we have some more big interviews coming your way including the morgan stanley ceo. those conversations here on bloomberg television. the market updates are coming up next.

teachers are pointing mostly higher. cash futures are pointing mostly higher. market opens in just a moment, here in australia, the market is looking kind of flat with some modest declines in new zealand. the market opens her next. this is bloomberg. -- the market opens our next this is bloomberg. ♪

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shery: this is daybreak: asia. we are counting down to major market opens after we saw pressure on wall street, with stocks falling every sector in the red. we not only have hawkish fed speak, but the eco-data surprising to the downside with dampening market sentiment, when we are concerned about a potential global economic downturn. paul: in the next 30 minutes we will have eco-data in australia. unemployment numbers are due, joblessness at a record low in australia. markets are flat. what are you watching? anabelle: we have a few seconds away from the open. cash treasuries we will be watching the 10 year yield at the opening. since we thought falling to his lowest level since -- assad falling to his lowest level since september. we'll get to the catalyst in a moment. we also have the day two reaction to the boj's decision

to keep its policy settings on hold. the moves from that will give investors a jolt in the price of session. we saw the yen weakening past that 1.30 -- 130 level. it's looking stronger against the green. good news for the jgb, dropping off the .5% threshold. in terms of what that meant for equities, we saw them get a boost yesterday. from the weaker currency this morning, that is coming off. we're singh the nikkei trading down 1% -- a seeing the nikkei trading down 1%. we will continue to watch for any speculation that the boj may be forced to normalize policy. that's starting to ramp up once kuroda's term ends. we have the open for career. the big theme, as you mentioned, carrying into the asia trading session today is that weaker

than expected u.s. economic data. downside surprises in retail sailors -- sales, industrial production, that led to a selloff in tech stocks. we see the nasdaq holding steady. in terms of what we're singh from market reaction, the tech heavy sector in korea, outpacing the losses for the kospi. and then what is happening with the korean won, it is trading around the 1200 level. we heard from the bank of korea. saying that oil prices could spur the fed to hike rates of higher. that's also something playing out in australia. if you change on the concern around energy the outlook for inflation, we have australian consumer inflation expectations coming in at, 5.6% more than what was estimated at 5.6%. the market, trading fairly flatly. it is the material stocks leading. we see crude looking weaker in the session.

paul: our next guest h become more constructive on chinaas, watching korea and taiwan, sean debow is asia ceo at eurizen, which has more than $400 billion of assets under management. we have seen reasonable amount of optimism around china at the moment, growth projections are getting a bit more bullish. is that china reopening, starting to look old? is there still a bit more to run? >> good morning. there still more to run in china. it has a number of legs. we're excited about the opportunities within solar, given what has gone on in europe. the long-term outlook is. strong. we think the internet sector in china has way to go, given the

fact that we are going to see accelerating consumer behavior, thinking about consumer back to the consumption. we will see strength in a food and beverage and domestic travel and domestic tourism. all of these make me constructive on china. paul: i just want to pause for a moment. we are getting breaking news out of new zealand. the prime minister is holding a press conference. she says that she will not be seeking reelection, and election is due this year. she's named the dates as october 14. of course, our new zealand's labor majority government struggling at the polls at the polls the moment. she is also seen her popularity slip. she will not seek reelection and is stepping down on february 7. some very interesting political developments out of new zealand.

paul: not a lot of market movement. shery: from that breaking news. we are getting the kiwi dollar holding steady, the stocks are under pressure. we're going to be watching closely, as the prime minister is now stepping down by february 7. sean, let's talk more about your call on china and the broader northeast asian markets. you do like korean, and taiwan at the moment. are you concerned about the semiconductors downturn we have seen? >> so, we prefer china as a first priority. korea, then taiwan. in that order. we have done that the funding out of aussie and and india to a lesser extent. what we're watching in korea and taiwan really is the bottoming of the semiconductor prices. that in turn has to do with demand bottoming. there is a reasonable amount of inventory we think that towards the third quarter of this year, we will see that inventory where

off. we will see a bottoming in prices for chips for logic as well as the memory. that will soon be priced into the market which is very positive for both the korean market and the taiwanese market. paul: --shery: who will be the biggest beneficiaries of these changes across asia? whether it is china or the improvement in the outlook for semis? >> i think, near term the most exciting opportunity is to see the open up of china and see chinese tourists moving on their first vacation. we have three years of pent-up demand, we think thailand, the hospitality industry, tourism industry will be the immediate beneficiaries of that. we think the market has not digested the size of how big that pent-up demand could be. in the semiconductor space, there still time. we do not have to rush into the area. which is why we are still circumspect on the outlook for taiwan and korea.

paul: we are expecting a couple of right decisions out of malaysia and indonesia, 25 basis points, the pace of those increases are slowing. you are less excited about euri zen. >> we are less excited, because it had a reasonably good year in 2022. therefore people use the opportunity to lock in some profits. also, the outlook looks brighter in north asia in the near term, given the themes i was discussing. what aussie and has to concern itself with is were commodity prices and food and agriculture go. that is more dependent on what happens in geopolitical movements. shery: all right. paul: sean debow. thanks very much for. joining us i want to recap the breaking news out of new zealand. the prime minister of new

zealand announcing she is stepping down from the job, as of february 7. she now no longer has enough in the tank to. do the job justice 2023 is an election year in new zealand. she has nominated october 14th as the election day. she will not be contesting that as prime minister. she will remain as a member of parliament through april. it's possible we may see a by election in her seat of open central. ardern stepping down as prime minister. the party will vote on a new leader on january 22. her government had been trailing significantly in the polls, just, the personal popularity rating has been sliding over the course of the, past couple of years after the exit from covid. so, an incredible development. the election not to be held until october 14. it gives whoever is the new leader plenty of time to do some catching up in the polls.

for the prime minister, she will be stepping down on february 7. not a lot of market reaction at the moment. the kiwi daughter -- dollars holding steady. vonnie: credit suisse will pay the senior bankers upfront cash rewards this year as it tries to retain staff while restructuring. managing directors and directors will pay the cash component of their compensation straightaway. if they leave they will have to repay the funds within three years. interested employees must sign up by the end of this month. china's president is calling for renewed efforts in fighting covid, saying, the don is just ahead. in arrived video speech to mark the upcoming, lunar new year xi jinping calls china's outbreak. . fierce he is urging rural authorities to improve medical care. china reportedly, nearly 60,000 covid related deaths for the first five weeks of his current outbreak. -- its current outbreak. a senior asian -- malaysian

minister says inflation is a key driver to growth. industry minister said that gdp should grow between 4% and 5% as projected by the central bank. he says working to be done to attract global businesses to malaysia. >> how are we going to compete, going forward? the focus will have to be on making it easier doing business. that is one of the key opportunities for malaysia to improve itself. vonnie: global news --global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries around the world. i'm vonnie quinn. this is bloomberg. shery. shery: still ahead, bill winters tells us the global banking sector is strong, helping the economy whether price -- crisis after crisis. our interview in davos. janet yellen planning a trip to beijing after what officials are

saying was a productive first face-to-face meeting with china's vice premier. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh

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>> we are really looking forward to a good renaissance in china. >> there is a feeling of optimism in davos. >> we expect to see china's growth recover, later this year. that has positive spillovers for the rest of the world. >> i am optimistic about china. the biden administration has

done good work with china. >> we're hoping we can work with china, to encourage china in certain things we think would make a difference. shery: our conversations at davos. plans underway for u.s. treasury secretary janet yellen and her chinese counterpart to hold meetings in beijing and washington this year. this, after yellen and the vice premier met. let's bring in our politics correspondent. what was achieved in that meeting? >> well, to some extent this was a key confirmation of a pause in tensions between the u.s. and china. it's worth noting that china put out via state run media platforms that there is continued concerns that the premier expressed about u.s. sanctions at issues over technology that are continuing to endure. it's worth bearing in mind that although beijing has been

relatively muted about some of the very sweeping restrictions the biden administration has put forth. there is still, room for them to move. the other element of this, although while it is positive, that yellen and liu are having their first of first -- face-to-face meeting, we are in china and this transition period between these outgoing cohort of reformers like liu, and a new incoming cohort of younger economic planners who really will be the ones that yellen and the rest of the biden administration will be dealing with when they resume in person meetings in china. paul: does this actually move the needle when it comes to u.s./china tensions? >> i think that is a critical question. yellen's visit along with blinken, who are expected to visit soon, it is an improvement, we are seeing face-to-face meetings. but there are a lot of issues that the u.s. and china are not,

or are not making progress on. things like climate change, where we could see the other issue is, over the last couple of years, the view in washington has really shifted. we have seen a shift in the consensus when it comes to taking a hawkish stance on china. back at home, biden is contending with that real shift in sentiment. shery: yes. especially at a time where we have washington trying to rein in china's ambitions whether it is tech, or trade. what are we looking at next? >> well, we see this host of meetings, blinken, yellen, going to meet with china's new upcoming leaders in this economic universe. the question of tariffs is going to come up again. tariffs that trump introduced, widely agreed to not be effective. could be one issue of concession

or conciliatory moves by the u.s. to lift some of those. it doesn't look that -- like biden is going to move back on any of the curves. you've seen other nations stepping in to support that. a delicate balancing act for many of the officials who have visited, at this top level, visiting china for the first time since the pandemic. paul: all right. bloomberg's asia government and correspondent government -- correspondent. officials may not agree on the rate hikes but they can agree that more on the works. our policy editor, kathleen hays is here. we have prices falling more, another reason for the fed to do another hike next month. kathleen: certainly for the federal reserve. bank president in philadelphia he was one of the earlier people to get on board dashboard to shifting down to -- on board to

shift to 25 basis point hikes. here is what he said earlier today. >> the days of us raising to 75 basis points at a time, have surely passed. in my view, hikes of 25 basis points will be appropriate going forward. now at some point this year, i expect that the policy rate will be restrictive enough that we will hold rates in place, hold them in place to let monetary policy do its work. kathleen: again, a monthly drop of 0.5% on producer prices is nothing to ignore, to sneeze at. at the same time, it is also due to a lot of energy prices dropping. the forces that push them down can push them back up. services, producer prices have eased, according to our

economics team. we want to move, on to lori logan the president of. the federal reserve bank of dallas. she agrees it is time to pause 25 basis points. she makes it very clear, she sees a need to keep raising rates this year. let's listen. >> a slower pace is a way to ensure we make the best possible decisions. we can and if necessary should adjust our overall policy strategy to keep financial conditions restrictive, even as the pace slows. ask -- kathleen: sales were down last month, industrial production, manufacturing down. jim bullard, where the leading hawks, said, let's get to our endpoint so we can pause quickly. that is the idea. he does not seem to be in the 25 basis point hike camp. he is in the 50. shery: the fed is on track for their policy path. it seems the boj sending the

message, do not fight the bank. in the opposite direction. they want to continue easing. what is the latest? kathleen: we had a narrative. it was the bond market, forcing the boj to by billions of dollars of bonds, that is going to push them to another tweak, another widening of their yield control band. a month after they made the first on that surprise the mark -- markets. governor kuroda and his teams saying, no we will continue to provide stimulus. we are not going to widen the yield curve control band. inflation is not going to get to 2% and stay there, 2023 and 2024. of course, this tweak to their funding supply operations, loan program. a way to make it easier and cheaper for big banks to buy japanese government bonds, may getting -- making it even easier, whiting the duration of

bonds that can be bought. governor kuroda said, you cannot rule out a negative rate, giving money. basically paying banks to borrow some money, so they can buy some bonds. it's one of governor kuroda's ways to make yield curve control sustainable as long as he can. he also said at the press conference, given time. it's not working well yet. but, people have to get used to it. paraphrasing what he said. but that is the idea. his team is right behind him. it was a consensus. a unanimous decision. clearly, for now, you can. fight the boj if you want we have seen the yen bounceback. bond yields are tamer. but a lot of investors are waiting for the tests to start again. and test governor kuroda. shery: kathleen hays, are global economics and policy editor putting it into context from tokyo. you can get a roundup of all of the stories you need to know to get your day going. dayb is your function.

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paul: new zealand prime minister ardern has announced her resignation. let's bring in our government reporter, ben. this may come as a shock to an international audience. she has a huge global profile. but, new zealand, perhaps not as popular. >> that is a good point. when i was at aipac, she was received with an absolute glowing welcome by international leaders. at home and has been a different story. she has been trending downwards in the polls for some time. the approval for her government is at the lowest it has been since the last election.

she was facing an uphill battle towards election later this year. although there were some new zealand to thought she could pull it off, she is a charismatic politician, there is no doubt it was going to be a tough ask, nothing like the historic win she one last time. shery: does this mean volatility in this country? what will that mean for the economy when the central bank has projected a recession this year? >> yes. it is not going to create stability in new zealand. there no obvious successor to. after this the opposition could win the election but that would mean a change of government by october. this seems to be the latest in a wave of pandemic related resignations across australia. australia has seen two premieres of resign, because they said they had nothing left, after the pandemic. this seems to be similar to what we have seen with ardern.

she said she had nothing left to give. paul: in terms of succession, we might've thought the finance minister was the obvious choice, but he says he will not there was head into the ring. facing an uphill battle in october. what is the most likely outcome? >> it is going to be a real big ask. even with the charismatic leadership of the prime minister, it will be a struggle for him to retain government. the new opposition leader is reasonably popular. who's going to take the poisoned chalice and step up to the plate to lose the government in october? not many takers. shery: ben wescott with the latest on new zealand. here's a quick check of the latest business flash headlines. a lawyer at elon musk's security fraud trial told the jury he misled shareholders in a tweet. his lies cost regular investors millions of dollars. prosecutors were referring to a post in 2018. the tech billionaire tweeted he

was considering taking tesla private. the defense argued he made a split session -- second decision to tweet in response to financial times. crypto from genesis is set to be preparing for a bankruptcy filing as soon as this week. bloomberg understands the cryptocurrency lending unit of digital currency group has been negotiating with creditor groups. but without agreement. in november, genesis suspended withdrawals after crypto exchange ftx, where genesis held some of its funds, went bust. this billionaire's flexure company is offering investors discounts of 10% to 15% in india's biggest so -- sale to raise $2.5 billion. half the money raised will go towards expanding airport and renewable energy projects. a little less than a quarter of the amount will be used to pair debt. paul: let's take a quick look at

how markets are trading at the moment. new zealand, not a lot of reaction to the very surprising announcement from prime minister ardern, that she will be stepping down. the market is packed. where has been this morning. off by a few points. in japan, the biggest declines, and the nikkei is off by 1%. the yen is trading at 128.59. markets are jesting -- digesting. elsewhere, looking like a risk off day, around the region, modestly so. still to come, to of silicone valleys biggest names announced job -- job cuts. details ahead. this is bloomberg. 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

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paul: breaking news out of australia. it's jobs numbers for the month

of december. coming in pretty much in line with expectations. the unemployment rate ticking up, a little to 3.5%. we were at a record low 3.4%, something like a 50 year low. a full-time employment, only increasing by 17,600 jobs. the expectation was a little over 34 and a half thousand. sharp decline in part-time employment, falling off by 32,000 jobs. a net loss of 14,600 jobs. very slight miss. t participationh rate declining toe 66.6% -- to 66.6%. few people are looking for work a bit of weakness in those jobs numbers. not a great deal of movement in the aussie dollar, weakening a little to 6929 at the moment. the asx in positive territory. the unemployment rate, 3.5%.

a very slight miss. but some interesting numbers for the rba to consider its meeting which happens in three weeks. we will have cpi numbers for australia next week as well. shery: staying with the jobs theme, amazon and microsoft laying off tens of thousands of workers. massive staff reductions that are now officially underway, as part of a wider wave of job cuts hitting the tech industry, as it slashes costs amid an economic slowdown. su keenan joins us with the latest. microsoft already notifying some of these workers. su: it is already underway. both microsoft and amazon sharing the view that the cuts are painful, but necessary in this economic environment. we understand that notifications are going out immediately to many microsoft workers. others will be notified in the coming months. again, about 10,000 workers are going to lose their jobs. it will take a 1.2 billion

charge in the second fiscal quarter, related to this move which will fax -- affect less than 5% of the workforce and cuts 12% -- $.12 off the cost per share. the ceo talked about the changing demand picture from davos. >> during the pandemic, there was rapid acceleration. i think we are going to go a phase today, where there is going to be some amount of normalization of the demand. quite frankly, we in the tuck industry will have to get efficient. it's not about everyone doing more with less. we will have to show our own productivity gains without -- with our own technology. su: the company plans to hire in strategic areas. it says. but check out the stock, it has been under pressure like so many tech stocks. microsoft reports earnings next week. it is expected to report its lowest revenue increase in six

years. paul: let's talk about amazon. the cuts appear to be a bit deeper than expected. su: bloomberg first reported amazon talking of layoffs, back in the end of last year. at that time they were talking about 10,000. this is much more. 18,000 workers in total across amazon's global operations. and this is part of what is going on throughout the tech industry. amazon announced sales force announced earlier this year that it will cut 10% of its workforce. it tripled its workforce in the past four years. meta platforms announced major cuts last month. twitter has slashed half of its workforce. amazon is one of those companies that was in a boom phase, during the pandemic. demand for its products went up. it hired on all kinds of workers. so, the big question for amazon

and so many companies right now, can cutting the workforce and thereby cutting costs in a big way, get you out of the recession or through it if we have one? shery: the same narrative and mentality that we are seeing play out across wall street. su: absolutely. we know goldman and other banks have announced some cutbacks. bloomberg has learned bank of america is going to start telling executives to pause hiring, except for the most vital positions. this, as it tries delete -- keep a lid on costs and prepare for the downturn. it's a critical issue for most companies right now. some close to the matter say the move is an acceleration of the company's decision late last year to slow hiring after employees leave of their own accord. again, bank of america has shown no signs of moving towards job cuts, despite a pullback. thanks in mixed performance in

this latest session. citigroup, bucking the trend, boosting pay for most junior bankers despite the tough year. junior investment bankers, may get a boost in the company as much as 15%. the buck comes after city -- citi warned inflation may be pushing compensation costs higher. paul: standard ceo says they have not held talks with abu dhabi's bank. bill winters gave his first public comments, abu dhabi bank confirmed. >> no, this is not something we have engaged with her been interested in. the thing was standard chartered is we're doing well all by ourselves. it's been a bit of a journey to get our bank to where we wanted to be. covid was a material distraction for the business. it was a huge distraction for the world. everything is on track for us.

we have superstrong income growth. we have manageable credit costs. we have been returning capital to shareholders. >> consolidation is in play? >> it should be. we are running the bank to maximize value,. for a lot of reasonsit is the only -- it is the only reason -- it is the only way to run a business. a lot of regulatory rules are required. the medically, there should be an element of consolidation. -- thematically, there should be an element of consolidation. consolidation is hard. >> if you think now is the right time to do some kind of consolidation, what is holding it back? regulators? >> some valuations are cheap. it's logical that banks in locations that are trading at multiple book value will be interested in consolidating with banks trading at a discount.

banks are broadly trading at or below book value. middle eastern banks are trading at a significant premium to book value. everybody should be looking at this and saying, if you go back to the classroom into the combination, cost energies, whatever, you make money. it is not that straightforward. >> what is your take on china reopening? how smoothly will ago? >> it has been very sudden. the impact has been dramatic in short-term. the country seems to be managing. the system is highly stressed for sure, but not overrun. we've had all of our colleagues, they've all been infected in the last two months. they have all recovered. i am very grateful for that. they're fully back to business. i think we are looking forward to a good renaissance in china, not just in the, second half but in the second quarter. shery: standard chartered ceo bill winters in davos.

we're seeing pressure across china, with the global bond rally. anabelle: that's right. since you mentioned, we are seeing the retreat across the spectrum in the yield space today. that is also really putting equities under a bit of pressure because the focus, we did not just here with the interview with bill winters talking about china's economic growth, there is a lot of expectation to help offset any weakness we are seeing elsewhere. the focus today is certainly those signs of recessionary fears that are coming into the u.s. economy, with those misses in terms of retail sales, in production, retail -- production. new zealand is trading in the red. in the currency space, we are seeing e.m. come fx looking weaker. the aussie dollar, kiwi dollar,

commodity currencies, selling off with the lines. we are seeing crude down .7%. the big mover is the japanese yen. we are back below 130. if you bring up this terminal chart, we did have the huge reaction yesterday to the boj keeping its policy settings in place. there had been expectation that it may make changes to the program of yield curve control. in terms of what that means for the yen moving forward, we could see further downside for the currency. we had seen the support line for the october lows. taking a look at the technical indicators. this chart looks at the demark signal. we had a rare purple 13 that flashed two days before the boj. a lot of details. the headline you need to understand is that it indicates we could see a trend reversal, which means further weakness head of the current currency in japan. paul: all right. thanks very much.

let's get the vonnie quinn. vonnie: plans are being made for talks between the u.s. treasury secretary and her chinese counterpart this year in beijing and washington. after meeting for the first time, janet yellen and the vice premier says they intend to directly address areas of disagreement. the u.s. team expressed concern over u.s. trade and technological policies. the u.s. side called the median -- meeting positive and productive. the latest federal reserve book says growth in the u.s. prices are expected to easily the years ahead. the survey suggests employment growth at a modest to moderate pace -- modest to moderate pace. they remain unified in their calls to rate hikes for inflation even as data shows progress. the u.s. is -- has charged a russian man for london -- money laundering to a crypto exchange that mask of the proceeds of illegal gambling and drug deals, more than $700 million. the justice department says the founder of the crypto exchange

was arrested in miami. it says hong kong registered, was a critical financial resource for the dark web market. >> the department of justice will use every tool, working along with our partners, every tool that we have, to attack the criminal use of the darknet, and cryptocurrency. vonnie: the investment plans to focus on investments in asia. the ceo says the 240 billion-dollar wealth fund expects a strong recovery in china and is under investing in asia. the fund is looking at potential investments in technology and venture capital globally. >> i expect for 2023, a strong recovery in china. we are seeing the signs already. it is an interesting economy with a lot of opportunities. any country with a population over a billion and a growth rate between 5% and 4% will be great.

vonnie: global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries around the world. i'm vonnie quinn. this is bloomberg. shery: coming up. we will hear from malaysians trade minister on the country's plan to attract investment and take advantage of the recovery in global trade. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates

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paul: we've got rate decisions coming out of malaysia and indonesia on thursday. consensus sees both raising by 25 basis points. colleagues at bloomberg see malaysia holding. let's get to our senior asia economy reporter. what are we watching most closely in these decisions today? >> good morning. i always start with the caveat that the economies are different in southeast asia. today, similar circumstance for both indonesia and malaysia. we are expecting a quarter-point hike that is a strong consensus, we are seeing a six straight interest rate hike. it's always about the rupiah in indonesia. we have to look at the modest gains year to date, as the dollar is somewhat weakening. that will take some tightening pressure off. as our own bloomberg economic

reporter points out, there will be a cessation of bond purchases. that will add some tightening pressure back. they are going to have to strike this balance going forward. it will be interesting to hear what governor perry says about the fed and the china reopening factors, they are bright spots, but we do not want to get to get too early on those things, especially if you are a policymaker. one growth worry out of this is the stronger rupiah will put pressure on the exporters who are looking at a bad growth picture externally. in malaysia, a quarter-point hike is the consensus. bloomberg economics is looking differently. in both cases, they seem to be nearing the end of their tightening cycles. looking at inflation that is strong on the core side. the headline has come down. but needing to finish the job, and hopefully focus on growth that is looking to be flagging on the world stage. shery: bloomberg senior asia reporter there.

malaysians trade ministry is saying that attracting investments will be key to ensuring that southeast asia gets back to its pre-pandemic trajectories. raising additional capital for the manufacturing sector will help malaysia, take advantage of the recovery in global trade, zafrul abdul aziz says. >> the focus is the trade minister is to ensure that it continues to be the key drivers of growth for malaysia, investment as well. these are areas we are focusing on. industry as part of the portfolio, that give high-quality investments that malaysia wants to see. >> there is great competition for, fdr especially within the regions in particular vietnam. what is your strategy to get it? >> if you look at it, we have thailand and indonesia. everyone is going after the same

kind of investment. for malaysia, we have been, since the 1970's, focused on certain sectors, the semiconductor sector. today it has contributed meaningfully to gdp. we are the seventh largest supplier of semiconductors for the world. so, how are we going to compete going forward? the focus will have to be on making it easier to do business that is one of the key opportunities for malaysia. to improve. my focus will be to ensure that when it comes to investments, the ease of doing investments in malaysia will be there. >> how much fdi can you attract this year? in the first nine months of last year you attracted 45 billion u.s. dollars that is pale in comparison to before? >> in terms of growth, it was a

positive growth. but you are right, compared to pre-pandemic, it was not as strong as before. trade has improved. how do we focus on fdi? we need to go back to basics. >> realistically how much are you looking to attract for 22 any three? >> we link it to the economy. 2023, the global economy is expected to face headwinds. growth is expected to be 4% to 5%. investment is about global trade and investment. for us we have a target. the target is about 20% increase from last year. we have seen trade increase about 30%, compared to last year. again, it is the measure of fdi. for me, traditionally, measuring fdi is about the absolute dollar value that comes to malaysia. how much of those is realized?

how much of those is translated to jobs? that is key. and the number has to be a number that focuses on -- >> a 20% increase is pretty conservative. >> not to me, given the economy landscape, the global economy landscape. >> we have a china that is reopening. china's the biggest trading partner accounted for 20% of your investments. . ken china provide the boost. why not more than that -- can china provide the boost, why not more than that? >> of course, there is uncertainty there. so, maybe it's a bit conservative. but no one knows the impact of china for 2023. 2024 is clearer. . there will be challenges. in the commodity sector, it is a sector that will consume what china wants for the

manufacturing sector there will be a lag for 2023. paul: that was malaysia's and industry minister zafrul abdul aziz. speaking with haslinda amin at the world economic forum in davos. be sure to tune into bloomberg radio for the big newsmakers and get in-depth analysis from the daybreak team, forecasting live from our studio in hong kong. you can listen to the app, or bloombergradio.com. plenty more ahead. ♪

paul: lots of news out of australia new zealand. let's start in new zealand with the shock announcement from the prime minister, that she is stepping down as prime minister, effective february 7. a new leader is going to be elected on sunday, the 22nd of january. we thought it may have been the finance minister, but he has said he doesn't want the job either. so, very interesting times for new zealand's government. the election date also named for october 14 at new zealand's labor government, trailing in the polls. this development would put the opposition national party in the box seat head of the election. ardern believes the labour party

can win the election in october. shery: it is a tight timeline. the caucus will move to elect a new leader with a vote, scheduled for january 27. but if no one gets to third support they have to move to a broader process no later than february 7. what a legacy, ardern leaves behind, she became the world's youngest head of government, after she was elected in 2017 at age 37, as she led new zealand through the covid-19 pandemic. so, really a very emotional press conference is well where she held back tears and she was talking about how she was talking about how she is a human being. and she has given it all to this position. paul: it might surprise international viewers. at home her legacy, somewhat more mixed, despite the achievements you mentioned. let us talk about what we have seen in australia. a slight miss on the

unemployment data to the downside. the jobless rate rising, to 3.5%. not as many jobs created, as anticipated sparking a mini rally on the asx, losses pushing about .25%. we have a bank of australia meeting coming up on every seventh, the first tuesday of february cpi numbers are due next week as well. that has change the picture for the first rba meeting of the year, when it comes to the future path of tightening in australia. not a lot of action on the announcement from prime minister arder. she is stepping down. the currencies of both countries are bit weaker against the greenback at the moment. shery: here is a quick check of the latest business flash headlines. microsoft and amazon cutting a total of 20,000 jobs in post-pandemic reckoning for the tech industry. microsoft said the 10,000

workers will lose their jobs this quarter. amazon sending out emails to those among the 18,000 losing their positions. both companies say the cuts are needed to offset slowing sales and a possible recession as tech firms adjust to slowing growth. apple is working on a slate of new devices aimed to challenge amazon and google in the smart home market. it will introduce new displays including a tablet and a faster tv set top box. the tech giant rolled out a new home pod speaker, a revamped version of the original product, introduced product, introduced in 2021. that is it from daybreak asia. our markets coverage in china continues. this is bloomberg. ♪