shery: welcome to "daybreak: asia," we are counting down to the opens. haidi: australia has just come online. the end slides on news of a deputy governor who may have been tapped to be the central banks next chief. beijing's retaliation after the u.s. a blas a high-tech chinese balloon out of the sky. china calls it overreaction. and turmoil over adani enters a third week. shery: u.s. futures, seeing downside pressure. we had a week of gains for the s&p 500, we are talking around the highest level since august. the friday session was pretty volatile and we entered the day down. we are watching that very hot labor market numbers, players adding more than 500,000 jobs. unappointed rate falling to the lowest level since may of 1969. investors are thinking where

does the fed go from here? potentially it could be higher rates for longer. we had the treasury yields jumping with the two year yield gaining about 18 basis points. we also had downside pressure for oil prices. the dollar also jumping the most since september. we continue to see the downside pressure in oil. a little more caution with the saudi energy minister saying they are being cautious when adding to that production number right now. haidi: yeah, we are watching so many different things. commodities markets and energy demand and inflation is one of particularly to us earlier. modest upside after futures trimmed what was looking like a fourth straight session of gains. the aussie dollar also falling a little bit from the risk off trade. the big again in the u.s. dollar on the back of the surprisingly strong employment numbers that came through on friday as well as the consumer indications in a separate report that suggest

potentially the fed will have to stay higher for longer. we are also watching when it comes to the japan market, the reaction to this report that there is a top pick for boj leadership. the dollar-yen reaction, part of it was on dollar strength, but the slide did happen in reaction to the nikkei report that he had been approached by the government for the role of governor. when it comes to the sydney session, we are looking at specific stocks as they come online. newcrest mining is one of them after the us trillion gold minor received an indicative takeover from newmont, mentioned in regulatory filing, the board considering the proposal. a lot going on. watching japanese assets as we get incrementally closer to what the new leadership at the bank of japan later this year will look like. shery: the potential appointment for the next governor, kathleen hays is here.

how significant would that be? kathleen: it would certainly put a strong, experienced boj official in the driver's seat, and someone who has worked so closely with governor kuroda. it may be a good thing or bad thing depending on how you think of super stimulative policies and yield curve control. but this is a powerful newspaper in japan and the fact they carry the story and officials have been talking to amamiya. it's no surprise because he's been a top contender the last few months. recent bloomberg survey shows far and away out of 43 economists, he has more than half of the votes as the logical replacement for kuroda. a former governor in kuroda's first term, he is finishing his

second term in april, the longest serving boj governor on record. let's look at mr. amamiya. he's the current deputy governor but he is a boj lifer, that's why people have been talking about him for a long time, i call him mr. boj. he has had a hand in coming has even been the architect in key kuroda polities -- policies. certainly yield curve control. he's expected to keep policy flexible. compare him to second in line, hiroshi naka so, he is widely respected, very international footprint, he values long-term financial stability and has been saying a while he is concerned about maintaining stimulative policies for so long good create financial instability. he wrote a book about how the path of leaving yield curve control could pay -- play out.

in terms of where we put him, he is in the dovish camp, he's been favoring maintaining dovish policies. he is apparently not ready to do away with why sisi. -- ycc. he is seen as following in kuroda's footsteps and maintain things that are stimulative. at the same time, people point out he is potentially his own man, his own boj governor and we will see with the spring wage negotiations, if it looks like wages are higher than expected, if they will stay high, if they continue to keep inflation well above the 2% target this year and next, which the boj did not forecast at the last meeting, they see it just under 2%, i think that will be such a big focus, if it is amamiya, or whoever it is, the next governor will wash that. inflation could finally be

sustainable at or above the target and that will lead the way if not completely out of the yield curve controls, steps to greatly widen the band. some people say getting to 1.5%, with more flex ability, which amamiya is said to be looking for. haidi: kathleen hays with the latest on the bank of japan. the other market story we are watching, the crisis around indian conglomerate adani entering a third week. annabelle is tracking the latest. we see the escalating worries from officials and policymakers on this, given the fears of contagion and spillover. annabelle: that's right, but at the same time, sort of trying to limit possibly the impact of this because we did hear from a few members of the indian government over the weekend and they did not really show that much concern or at least that was the impression they were probably trying to give markets. one of the people we heard from

was the finance minister and she basically called this a company specific issue, not something that is endemic. also the bank insurers, they are not overexposed either. it does indicate tricky balancing act the government has to make because adani is pivotal to india's growth ambitions and the ambitions of the government. they are trying to shore up support, it could help stabilize the selloff in stocks. at the same time, adani could end up a political liability because we have the national elections taking place next year and modi has trump himself as an anticorruption performer. you can see this reflected in the bond selloff. questions over liquidity, whether this is sustainable, we have some bonds around 30% in the secondary market.

you compare that to the average of junk debt, around 8%. other people that came out over the weekend, including the regulator in the country, also said the markets remain stable, they continue to function in a transparent, regular manner. and the reserve bank of india on friday also seeking to reassure investors about what is happening with local banks, and they have enough liquidity. shery: we will get more insight into some of these companies reporting this week? annabelle: there is a pretty full slate of companies reporting over the following days, including those that have seen the biggest selloffs, adani transmission, total gas, among the earnings expected in the coming days. the key question arising now is how adani is going to manage to finance instead obligations because we had the share sale shelled last week and that we have reporting they have asked plans for $122 million bond

sale. in come activity around that has stopped. in terms of how markets are likely to move in the coming days, you did see just now we have the close on friday, some of them starting to stabilize a little bit. the key question is what will we hear from ratings agencies, some of them have already sought to downgrade, including s&p global ratings, they say the outlook for adani electricity is negative. others including fitch have kept current ratings in place. this is one of the things we are watching because it could impact the company's ability to finance. those could have to be moderated in the coming months. also the growth ambitions would have to be dialed back. they are not expecting for the next 16 to 18 months. shery: annabelle with the latest on adani. tensions rising as beijing threatens retaliation after the u.s. shoots down an alleged chinese surveillance balloon off

the south carolina coast on saturday. secretary of state antony blinken postpones his trip to china, calling the balloon incident and airspace violation. >> any country that has its airspace violated in this way i think would respond similarly and i can only imagine what the reaction would be in china if they were on the other end. shery: for more, let's bring in our rater china senior executive editor. what an awkwardly timed incident. if americans had a hard time imagining what a chinese threat politicians talk about had, this provided a clear global image of what that surveillance could look like. what are the implications of this? john: i think this is definitely one of the oddest moments in the recent upheaval between u.s. and china ties good i think it underlines how fragile the relationship is.

there was intense pressure on the biden administration and the united states to show strength by shooting the balloon down. when that happened, we saw a change in the response from beijing, moving away from being relatively contrite to becoming more confrontational. obviously china saying the balloon belongs to a civilian company. beijing over the weekend saying it reserves the right to protect the rights of that company and take additional action. i think it underlines how much pressure is on both sides of both governments to show they are being tough, they are standing up, they are protecting their citizens and the sovereignty, protecting the prestige of their various nations. haidi: it really underscores i think the challenges of being able to establish these so-called guardrails for the rivalry when there is such a strong domestic priorities at play. what happens from here? is there a cooling-off period and then we try to get the dialogue on track again? john: secretary blinken did say

this was a postponement, he's still planning to come to beijing i think that's the next thing we are looking for. i think you are right, probably what we need is a cooling-off period, for some time to pass without another incident. when secretary blinken and the chinese see fit for him to visit. when that happens, the first visit in many years for the united states's most senior diplomat. then there could be an opening for some stabilization and putting in the guardrails as you said earlier. shery: this was supposed to be the first secretary of state visit since 2018. more time needed from here. what a weekend. john, good to have you, our greater china senior executive. let's get to vonnie quinn with the first word headlines. vonnie: lowy institute has revealed china's standing in the asia-pacific has been damaged by its decision to stick with covid zero.

china registered the greatest decline of the 26 nations and territories in the report. this has enabled the u.s. to cement its position as the most influential power in the region. the mass trial of pro-democracy figures in hong kong is underway in the largest national secured a case in the country today. they range from scholars to actavis. the head of the international energy agency says china's economy could be poised for a stronger than anticipated rebound, crating a demand boost for oil and natural gas. the iea executive director says he expects china to deliver around half a forecast increased of global oil demand of almost 2 million barrels per day this year. >> we expect this year about

have the growth in global oil demand come from china only but chinese economic rebound may be stronger-than-expected and this would put higher upward pressure on the demand side. vonnie: new zealand's prime minister has antagonized a maori party representative with a stance on including indigenous people. chris hipkins says the government may slow work on co-governance arrangements. the may or he --maori leader says she is shocked and disappointed by the remarks. 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. haidi: still ahead, we will be hearing from a resorts company as they bet big on a ski resort in al qaeda. -- ski resort. first up, the dalton investments

chairman sees headwinds ahead for chinese markets. this is bloomberg. ♪

haidi: let's look at the week ahead. tuesday, bloomberg economics predicting the rba will deliver

its last rate hike of the cycle. the majority of economists predicting a 25 basis point hike. india also such release its monetary policy decision on wednesday. president biden will deliver the state of the union address before congress tuesday. he is expected to highlight key priorities and legislative goals as a new republican-controlled house begins to settle in. eco-data in china ppi data. ppi data out of japan. and initial jobless claims out of the u.s. shery: let's delve into market moves and what we expect this week. our next guest says she is underweight china as president xi crackdown. belita, great to have you with us. we know the crackdown has subsided a little bit, how much of this is to do with transparency and clarity of what

leadership will do with these businesses? belita: thank you for having me back. as i mentioned before dalton invests one company at a time and we are looking to invest in businesses we can purchase with margin of safety along with entre nous or whose interests are along with ours. we have found it very difficult to invest in china. most recently because of the declines. there were options to invest in some strategic companies such as fashion companies, and because of the huge rise in prices, we are out of china again. the issues we have with china have to do with the fact that there is very little alignment of interests. more and more companies are becoming nationalized. entre nous's are being punished for speaking out and i would say creativity is being dampened. those things make it hard for us to invest in china.

furthermore, at this point we believe there are headwinds. firstly, we will see a huge increase in personal consumption because it is now free from three years of covid, but the problem is you will have limited spending in investments and exporters are facing a slowdown in economic conditions abroad. shery: hold on a second, we have breaking news. we are hearing that carlyle group has chosen the former goldman sachs group copresident harvey schwartz to be its next chief executive also other -- officer. this is an attempt to resolve the on running succession challenge. he will be approved -- appointed next week. he would be taking over for cofounder bill conway who has been serving as interim ceo since august after a power struggle. we are learning that carlyle group has chosen former goldman

sachs group copresident harvey schwartz to be its next ceo. let's continue talking a little bit about your call on china. of course, we continue to see u.s.-china tensions as well with the latest loan incident over the united states. how is that going to affect your investments calls, and not to mention the supply chain issues we face in recent years? belita: the balloon incident is another example of how difficult it will be for the u.s. and china to find a path ahead that prevents -- let's hope each country's politicians is playing to its own domestic audience and that truly when they deal each other -- with each other, they find a way forward to establish munication that prevents true disasters from occurring. that's all we can hope for.

haidi: the difficulties in emerging markets and investing is no front and center when it comes to india. i know you still like india as a broader market. what are you taking away from the ongoing adani crisis that is going into a third week? belita: we still like it very much. the infrastructure in india in terms of its very young population, it's very low per capita gdp, and just the ongoing improvements we have seen since the economy basically opened in the early 1990's is very encouraging. with the adani crisis, if you like, we are reminded that india is a developing country, and regulations are not complete. there never complete even in a developed country but they are particularly wanting in developing countries. with regards to adani specifically, it is clearly

important, very important to the country because the operating businesses are so widespread. our belief is the government will take whatever steps are necessary to stabilize the situation, make sure the visas are working and position the party and the best possible position for the elections next year. that is the goal. as far as investing in adani group, it is not a group we would invest in because it's overleveraged and transparency is not great. and frankly, the domestic five it in india have not invested in adani group. last year's purchase of the cement business was financed entirely by foreign banks from all over the world. no indian private sector banks. the adani group is known to be leveraged and take edgy risks.

haidi: there is this broader view that what's going on with adani, fears of contagion is given -- giving rise to perhaps a reality check when it comes to the frothiness we've seen when it comes to enthusiasm in indian markets. do you see that or how are you navigating that to look for more constructive opportunities you do still see, and what are they? belita: the problem with the indian market that most people complain about his it is not cheap enough. the best companies in india are great companies. they compound profits and returns for decades, it is were markable. some of the most profitable companies in the world. the issue is how to buy and invest in india that are reasonable rate so you can build a margin of safety. we have looked to invest in smaller openings not as well known. for example, given fears of contagion to the private sector,

the private banks, we invest in companies like icici bank, which has almost no exposure to united group and more than 50% tier one capital ratio and more than 130% coverage of its nonperforming loans. earnings at about 20%. offers like that are very attractive. shery: really great to chat with you. more to come on "daybreak: asia ." this is bloomberg. ♪ introducing the new sleep number climate360 smart bed. only smart bed in the world that actively cools, warms, and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night.

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>> the number of key japanese

companies reporting earnings this week including the softbank group, nissan, and honda. let's get more from her bloomberg news editor out of tokyo. we understand masa will not be appearing for the first time to discuss earnings. >> he made a brief appearance last quarter and spoke for 25 minutes. but it seems now he will stick back to focus on the chip designer arm and what will be going forward. analysts have pointed out that softbank really does move on his word, he is very much at the helm so denying investors opportunity to speak directly to him could be seen as a negative and raise a specter of additional surprises going forward for softbank. what else we are looking for at this time? what will happen with arm. indications on how the ipo might happen.

it has damaged softbank so much interest few quarters. they sold off alibaba to cover up some of their losses. . also what you to see if there are anymore asset sales, exits from business deals like grab or doordash. shery: what about auto earnings? >> thursday this week, we have the three big automakers. they announced earnings during market hours, so we will have the immediate feedback from there. they just announced a new ceo to replace the long-term leader of toyota. not much really to read into this, not a real stress point. the other two will report after the bell. they had just made their agreement with renault to

balance the alliance they have had over many years. and honda is coming again after hours. with automakers, semiconductors have been such a problem. we are starting to see some signs that that is starting to ease. any indication of supply of semiconductors will be at the foremost of the auto earnings this season. shery: bloomberg editor gareth allan joining us. thank you. let's bring in annabel. new zealand is on holiday. annabelle: something else that could weigh in on the numbers is where the yen trades as well. the yen had been forecast stronger than where it is today. it could boost the japanese equities session. we are seeing the futures coming online in singapore and pointing higher. but there is weakness in the

urine given the report in japanese media -- in the yen, given the report in japanese media. today that is coming through from the u.s. jobs numbers on friday. it showed a pretty robust market which tells us that inflation could stay elevated and there is a case for the fed to maintain its aggressive stance. because of that u.s. futures are looking weaker. australia also falling flat, 30 minutes into the session for the asx 200. the real question is whether the run-up in january is peter out over the course of february. this chart showing the s&p 500 peeling back slightly over the past few sessions. other factors at play as well, the gautam adani saga that really weighed on asian stocks in the past few sessions given the selloff in the market cap and weighing on the asia benchmark, the biggest laggards

for a number of sessions. and you can add geopolitics. given the moves over the weekend. haidi: which of course, they are giving rise to escalating tensions between beijing and washington, after the u.s. eventually shutdown the alleged chinese surveillance balloon. beijing has shifted from expressing regret, to now threatening retaliation. joining us is a research fellow at a school of public policy. if people were looking for visualization of the perceived china security threat, i think a big balloon orb in the sky for multiple days probably is optically traveling from both sides if anything. when you look at the reaction from washington and beijing, does this tell you that this is a definition of a relationship of fragility, despite the guardrails that were supposed to be built?

>> i think the bennett administration's efforts to build guardrails is a work in process and there is work to be done. there is also a great challenge in our state of messages coming out of teaching. the tone has changed, and having those diplomatic opportunities to engage with them is important so they can reduce the risk of miscalculation and misperception. there have been some mixed messages. the ministry of foreign affairs and said it would take the necessary further actions and safeguard the rights of the relevant companies -- those companies have not named. the china defense ministry also issued a statement yesterday calling on a risk on's and described the u.s. response as an obvious overreaction but they said they will reserve their right to use some sort of unidentified means to address a similar situation. that indicates there may be a risk of some retaliation at this point. haidi: the domestic pressures

are problematic for both sides. xi jinping is trying to reassert his leadership after covid nero. president biden is going into 2024 does that. mean there has to be a cooling period before we get the -- back on? he did call it a postponement. drew: the visit of anthony blinken was the outcome of the biden-xi meeting at the g20 in november of last year, so there is intent on both sides to use diplomacy to stabilize the relationship. . i think xi jinping has is on a potential visit to the u.s. in the fall to participate in the apac meeting and president biden's intention is to receive him. so blinken's meeting would be a bridge to facilitate that, so it is in china's interest and xi jinping's personal interest to have the blinken meeting in

beijing go very well. but there is definitely domestic pressures. this balloon incident was a gross violation of u.s. 70. we should point out it was not really a security threat, but definitely a gross violation of sovereignty, something china would not tolerate. what now needs to be managed is potential cycles of escalation. whether or not china retaliates directly or indirectly, they don't have many good options to retaliate. they could consider economic or political ones. we might keep an ion potential intercepts of u.s. surveillance flights off the coast of china in international air space. it would not be reciprocal and certainly not a portion of but it is a risk we have -- and certainly not proportional, but it is a risk we have to keep an eye on. shery: shery: china says this was a balloon for scientific research. how consequential is it? everybody knows every country spies on each other.

is this just posturing from both sides, knowing that, ok, we are doing the same to you probably, but you just need to do this in order to save face to your own constituents? and when you are trying to move on, what will actually need to that? what could be that circuit breaker in this great relationship? drew: so there is a lot there to on -- to unpack. first to consider is that the u.s. does not fly sovereign aircraft into chinese airspace. it does not conduct surveillance missions inside of china by military aircraft. the new criminal defense and the administration have flatly denied this is a weather balloon permit they don't hover over nuclear sites. this was an intelligence collection effort on china's

part in the administration has called them out on that. even the original foreign ministry statement that was issued said it was mainly meteorological in nature. that is the fundamental difference. the u.s. does not do this china, it does not blatantly violate its sovereignty, that is the core issue here. now both sides do conduct surveillance. intelligence collection against the other, that is the norm, but entering another country's airspace without permission is breaking international law. shery: does that give an upperhand to the biden administration? drew: it gives them potential leverage should they used to use it. the objectives of the better administration for the china relationship are limited. they are trying to set guardrails and looking for the floor of the relationship and trying to stabilize it. not sure they are looking to

leverage opportunities like this to seek concessions or somehow a fundamental shift in the relationship. it is clear that china does not want to act with restraint and the biden administration does not have much incentive to seek china's assurances that they will because there is no trust on the two sides. so it could be used as a teachable moment, but i think the biden administration really wants to prevent the relationship from deteriorating into outright confrontation or even conflict. shery: drew thompson, thank you so much, visiting u.s. research fellow at nus lee kuan yew school of public policy. and you can hear more from these big newsmakers. tune into bloomberg radio to hear more. listen to bloomberg radio and on bloombergreal.com. more ahead, stay with us.

shery: it is time now for "japan head" on daybreak: asia. the yen is good to its decline against the u.s. dollar. we heard that masayoshi amamamiya was approached by the

japanese government for the role of head of the japan federal bank. nikkei futures are rising. the yen continues to be under pressure against the u.s. dollar. let's bring in our senior fx energy and -- senior fx energy rates reporter ruth carson. we have had strength in the u.s. dollar. ruth: absolutely. after weeks of yen-buying, the dollar dealt a blow. coming back to that amamiya, he was instrumental in helping create the huge stimulus program after corona. it means he could continue on with deep ultra easy monetary policy we have seen in the last three years. the currency plunged to a

multi-decade low back in october. so because of that rates are divergent story, it is coming back again as a possibility, so that is another reason why they yen is getting a booster right now. haidi: the currency has rarely 12% versus the dollar since the multi-decade low in october. when you look across markets, what does the positioning look like and how much further upside is there? ruth: we have seen obviously a bounce in the dollar versus the yen, but the last jump was the last few sessions. the general consensus is for a shock. bnp paribas, fidelity and jp morgan, virtually everyone is penciling in yen gains for the year. the major turning point for the yen was in december when the boj

and excitedly tightened monetary policy. is a sign that it is only a matter of time before the boj fully cracks and that is good news for the yen and a for spots. haidi: bloomberg's senior fx energy rates reporter ruth carson there. while others are trying to make skiing cheaper, this company spent $500 million on a new hotel, high-end chairlifts and other amenities. the president of the company says the bet is paying off, telling bloomberg that visitor numbers are exceeding pre-pandemic levels. >> look, the biggest strategy here is the sale of real estate. this place has what i consider to be the best skiing real estate in the world. this is the start of it. you could call that the

mothership, the park hyatt. you will see if village expand around the park hyatt. pcpd are very, very good and adept at luxury real estate, they know how to do it better than anybody else. >> give us a sense, how big is japan's ski industry and how does it compare to other countries? >> the story of the ski industry in japan goes back to the bubble years. we go back to the mid to late 1980's and even the early 90's, and japan was doing about 19 million skier visits at the time. with that in perspective, the united states does about 60 million. canada is about 25. australia does about 2.5 in terms of skier visits. the japan market after the bubble shrunk to about 30 million, so it dropped by

two-thirds. the marketing strategy for so many years was, how can we drop the price, how can we make it cheaper question mark then all of a sudden, everybody's depreciation was gone, all their cash was gone and everybody was just sitting there with old infrastructure, with no resources to replace it. >> that is where we are today, right? on the other side of this martin you have another resort. i spoke to them and they said the focus was on the locals and keeping prices accessible. how confident are you that your strategy in this luxury push will be successful and that customers will come here? >> well, this is the first season where the international border has been opened, to really test that theory. haniszono is the only resort in hokkaido that is exceeding its

pre-pandemic levels. by the end of december we were 11% higher than our previous best year ever and now we are running 30% higher in terms of revenue. so people are voting with their feet. when you ask, would you like to pay more or would you like to pay less, of course everybody says they would like to pay less, but people will pay for quality as well. so you can keep dropping the price and dropping the price or you can also increase the quality. because if you say to customers, would you like to raid on brand-new lifts that cost a little more, but there are heated seats and they are nice and smooth and look great, people go for the latter. >> the vision you had 20 years ago to, what you're seeing here today, is it in-line with what you had in your head? >> it is better. it is better.

i am so proud of what is being done here. is just thrilling. skiing in powder is something people don't get to do. it is highly aspirational. and this little corner of the world in hokkaido generally does get the best snow in the world. for the most part, it is 8% water, it is champagne powder. something nobody else can copy. that is really important because right across the world, man-made snow is king. . but man-made snow, it is ok to ski on, but it is not the same as floating through these endless fields of deep powder. so, i have been skiing here for nearly 20 years and i just don't get sick of it. i just don't get sick of it. >> and you will be on the slopes later today? >> of course.

>> as a business leader, what do you think japan needs now? >> you always have to start with a good idea, then you have to have the courage to actually execute that idea. i think entrepreneurship is something that is lacking a little bit right now, certainly in the ski industry it is. just as i am making my dream come true here. have the courage and conviction to make your dream come true. i figured this out nearly 20 years ago, what this place was going to look like, and it is unfolding in front of my eyes but there is still a long way to go. but i know what it looks like. haidi: colin hackworth, president of nihon harmony resorts, speaking to kurumi mori. you can find that conversation and more at tv , that is your function. you could also dive into the

securities and other bloomberg functions that we talk about. this is for bloomberg's of scrubbers only. check -- bloomberg subscribers only. check it out. tv . this is bloomberg. ♪

haidi: one of the stocks we are watching very keenly here in

sydney is the big goldmine in newcrest mining receiving the takeover proposal from a u.s.-based group, a potential deal that values the mine at almost $17 billion. shares are 10% higher in the first hour or so of trading, the equivalent of $27.16 aussie dollars a share. the board is considering the proposal. shareholders would receive 0.8 new shares for each new crest share. this is another attempt of a bid . the earlier one had been rejected. shery: bloomberg sources are saying that retinal directors have agreed to a landmark deal to rebalance the carmaker's troubled two-decade alliance with nissan. let's bring in our reporter in

tokyo. this has been a very challenged relationship. how will this help in moving the alliance forward? reed: this afternoon there will be a vote by nissan's board to approve the deal. this brings to parity the equity the relationship. retinal's 43% -- renaul t's share will go to the same level that nissan holds in renault. it was held together by the presence of carlos ghosn, who as we know four years ago was arrested and charges of financial misconduct, which he has denied, and he essentially exited from both companies. now four years later they are struggling to a certain extent in the ev era against stiff competition. renault will split into two

companies. so in the midst of this they are taken the opportunity to rebalance the alliance, as they say. haidi: bloomberg's senior editor at reed stevenson there. . the market open skin tokyo and seoul next. -- opens in tokyo and seoul next. this is bloomberg. ♪

shery: we are counting down to asia's major market opens. we see a resurgence in the u.s. dollar on the back of those very, very strong job numbers we got last week. not to mention on the other side of the trade we have pressure on the japanese yen on speculation about leadership changes at the boj. haidi: deals activity in focus as well. we had the bid for a crest, the australian miners. local tensions continue to fray between beijing and washington. lots for investors to moldova. annabelle: that is a lot of reasons that asian stocks could be wobbling at the start of the week. you have the japanese open and south korea upon us. also the start of trading in cash treasuries. but really the focus comes to the nikkei report around the boj leadership. essentially the headline being that masayoshi amamiya could be

set to take the helm from governor kuroda when he stepped down in april. this would be a sign of policy continuity. we see the japanese yen looking weaker against the greenback. the finance minister suzuki speaking to local media saying he has not heard anything yet about the boj nomination. in terms of the sectors mostly to move here, japanese bank stocks have been one of the key beneficiaries the last few months. they have been getting on expectations of tweaks to policy. this morning they are looking weaker. the japanese yen boosting the nikkei. cba is among the analysts commenting. they say this news does not change their view over the longer-term, they still think the bank will abandon its yield curve control policy settings and also its negative interest rates later in the year if you see growth continuing there. in terms of what else were watching, as you said, there is a lot for investors to focus on

today. the surprisingly strong jobs report that tells us the fed may need to stay aggressive longer. than you also have the u.s. shooting down a suspected spy balloon from china over the weekend. these factors are negative broadly for asian stocks in the session. watching the kospi here, low at the start. also the kosdaq, in line with nasdaq futures. the other big move is the mergers & acquisitions space this morning. newcrest popping slightly into positive territory as it has received an indicative takeover bid from new mont. it is australia's biggest goldmine there. so you can see it is gaining. in terms of what else we are watching, we have new data from the melbourne institute inflation gauge. haidi: our next guest is still preferring china over other

asian equity markets despite some muted volatility. joining us is the director of equity research at asia morning star it is volatility, but it also seems like this initial opening rally has run out of steam, right? look at the pretty lackluster numbers we had at the reopening after the chinese new year, even as the macro data pointed to everything being positive with the reopening. what is the next catalyst that traders are looking for right now? guest: good morning. yes, strength on the upside was strong since the lows of november. it is not unusual to have investors recessing where everything is. i think at the end of the day when we look at valuations, it is no longer the 20% discount we had seen, but it is still around 15% discount.

there is still great opportunities out there across asia. i think that catalyst we would look for would be trying to find a better outlook, especially china domestic consumption. if that makes up stronger-than-expected, and we could see that, that would actually need to the upside, but i would say that there are still opportunities to pick up at these levels. haidi: where do you see those opportunities? we are seeing investors be more selective now after the broad momentum risk rally. where are you seeing those opportunities? reed: -- lorraine: consumer cyclicals and the tech sector. and of course the real estate base, which obviously you have to be very choosy with your names. that would be the case across most of the stocks we recommend

right now. because you are still facing uncertainty in terms of u.s. inflation, for example, how fast the fed may normalize in terms of peeking the rates or coming back down in interest rates. because of that, we are still looking at stocks that show value, and on the other end of that, some growth as well. we prefer would recall names with economic notes. very well positioned companies with resilience in their earnings. shery: because of the potential global growth slowing down. so how much of the cyclical slowdown has already been reflected in the valuations of asian stocks at this point? lorraine: because we ourselves have looked through the cycle, we think most of the slowdown has been, as far as a mild recession goes, has been reflected. that remains our base case. looking at pockets of excess

supply, that is still prevalent in the semiconductor space. that is probably an area where we don't expect to see inventories turn around until the second half of this year. having said that, given the reactions we have seen, the signs that the leading chipmakers are not really expanding space, at this point in time, with the preference to reduce their excess inventory, i think that is what we are seeing -- why we are seeing support to share prices right now. shery: usually wouldn't have optimism with the reopening in china, that has also been optimism with southeast asian stocks, northeast asian stock markets as well, because of the dependents of those economies on china. are you seeing that yet, or has most of that minority priced in? reed: we are still seeing that.

we still expect to see the favoritism. we still have a preference for the china names right now, but we see pockets of support coming through. you just have to measure that up against the risk of a mild recession elsewhere and high interest rates staying stubborn. but at this point in time, we would have a preference for china first and then some of the -- and then be selective in terms of the usher asian names. shery: our question of the day today, will the dollar-yen reach 120 or one 41st? -- or 140 first? where will the greenback take these asian currencies, including em currencies, in 2023? lorraine: we don't have a specific currency view of our own, but if you look at the macro factors, we believe the fed funds rate will probably

peak towards the middle of the year and start to reverse by year-end. . we are expecting the u.s. dollar to be seeing the higher levels, or rather, peeking at the current levels. shery: lorraine tan, director of equity research of asia at morningstar, good to have you with us. let's turn to vonnie quinn. vonnie: the head of the international energy agency says china's economy could be poised for a stronger than anticipated rebound, creating a demand for natural oil and gas. he says he expects china to deliver about half of the forecast increase in global oil demand of almost 2 million barrels a day this year. >>. >> if you see a moderate rebound of chinese economy, we expect this year about half of the growth in global oil demand will come from china only. maybe some international

financial institutions say that the chinese economic demand will be much time with an expected. this would put higher upward pressure on the demand side. vonnie: bloomberg has learned gautam adani is shelving a plan to raise money through its first public bond sale after the recent market turmoil. the fund was planning a january issuance, but planning has stopped. adani group is also planning to trim capital spending. an indian government -- indian government officials stepped in to address concerns over the crisis, as the main opposition party ramps up pressure. ministers to save are independent and confident to deal with the fallout. the securities and exchange board says it will assure market integrity. the r.b.i. also gave assurances that banks are within limits to protect their exposure.

the 47 defendants in this case range from a legal scholar to former lawmakers and a former student leader. the group was charged with conspiracy to commit subversion, in their roles during the unofficial primary vote in 2020. it was seen as a challenge to beijing. 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. this is bloomberg. haidi: let's look at some of the big movers. in japan, financials are in focus. annabelle: we had the local meeting reporting that amamiya could be set to take the helm from governor kuroda in april. what does this mean for japanese assets? we have a lot of different views coming in, including from resona holdings who think it will push the yen to 147. that would be a positive for japanese exporters. but japanese banks could talk sare the laggards. you can see at the start of

trading. they are moving to the downside. others, including citigroup, say even though we may have amamiya at the helm, it does mean policy continuity, but it does not mean markets may not continue to debate whether there are any room for policy tweaks in the months ahead, including as soon as march. let's look at another sector this morning, the chip names in japan. likewise they are in the red mostly this morning, given another local media report we had that japan is preparing to restrict chipmaking exports to china. this after the u.s., the netherlands and japan agreed together to limit the development of china's advanced chipmaking technology. this is the state of play. and in, geopolitics the big news this morning is the u.s. downing that alleged chinese surveillance balloon over the weekend over the south carolina coast. let's take a look at some of the

defense-related companies as well. we saw the reaction from china so far is that this was a heavy-handed response. the u.s. says it is still investigating the contents of the balloon, of course, china had sent this was a weather research vehicle. defense stocks mostly move into the upset here. shery: geopolitical tensions heightened again. still ahead, jp morgan's head of asia energy and chemical research shares why her firm is raising estimates for china's demand for the energy markets. this is bloomberg. ♪

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shery: it is looking more and more like the current number two at the number one. the government is reportedly talking to masayoshi amamiya about replacing governor kuroda. kathleen hays is here with the latest. how significant would this be? kathleen: this being mentioned by the nikkei, the government so far is saying that we don't know anything about it, but that is what you would expect if it is true. it is not a surprise, because he has been a leading contender for this job for some time. masayoshi amamiya has been at the boj for many, many years. so the fact that it has been

reported, the ruling coalition are holding talks with him. would you like to take the job. i certainly think he would. in february will get -- by the middle of the month, we will probably get a formal announcement and there will be hearings in parliament. let's look at some of the leading it contenders. , media is at the top of the list, at least in a bloomberg survey of 43 economists. . he gets more than 50% of the votes. in second place is hiroshi nakaso. mr. mme has been at the bank of japan since 1979, held many jobs there. that is why he is called mr. boj. very important. he has been the architect of all of governor kuroda does key policies -- the move to quantitative and qualitative in january of 2014.

he went on to expand and enlarge that. importantly, yield curve control. . that is his baby, by all accounts, and one of kuroda's key policies. he is seen keeping policies flexible, adjusting what needs to be adjusted to keep the stimulus in place. he was a deputy governor himself in kuroda's first term, well-known and an expert in banks and banking. his concern with the extraordinary stimulus of governor kuroda is that it makes markets unstable and it hits banks in an printable ways. it could be a source of financial instability. in terms of where they stand, where mr. mme a stands, he is definitely did dovish -- mr. masayoshi amamiya. he is seen as perhaps being able to adjust more what needs to be done, but definitely in the camp

-- you don't have any hawks at the boj right now. [laughter] haidi: i was just looking at that great visual and having a chuckle. i wonder whether a few of those baby hawks or hawkish dives might move a bit to that side. you talked about holding policy studyhow dovish or hawkish you or investors expect him to be, if he is in fact tapped for the top job? kathleen: certainly the markets have voted quickly, at least the foreign exchange market. we did see the dollar-yen spike up. originally after the friday strong jobs report. that was surprising to see the dollar strengthened like that. it makes it clear that the fed will keep the key rate higher, longer. but after this report came out from the nikkei. you had it spiking up to 132.5

for the dollar-yen, then dropping back down to 131 point five. definitely some volatility. what is expected now, he is seen as maintaining kuroda's stimulus policies, including yield curve control. one analyst, i love what he said, amamiyanomis will be like gordon nymex but with a steeper yield curve, or maybe a higher yield curve cap -- amamiya -nomics will be just like kuroda-nomics everybody seems to say thats. the information is going to come back down as commodity prices pulled back. but that is the thing that will be so closely-watched. what determines that. my guess is that mr. amamiya

is not dogmatic. he will look at the economy, the bond market, everything that needs to be needed and that will help him drive policy, if he gets the job. haidi: bloomberg economics and policy editor kathleen hays. let's get you a check across fx. the reaction to that nikkei report is what we have been watching. we saw a weakness of 1% in the yen. that was driven by dollar strength given that we had the big jump in the dollar following the surprise robustness of the jobs report as well as another consumer reporter that has fed into fears that the fed will have to stay higher longer. also the korean won, slighting the most in two months, again on account of the u.s. jobs trader. bolstering the other side of the trade. the aussie dollar is sitting under $.70. much of this is both dollar

strength, also the fact that we're are seeing a little reluctant to build into that position going into the rba decision this week. expectations are a bit over the place, but the consensus is for 25 basis points in the last rate hike of this cycle. we are seeing that aussie trading against the greenback as the best performing g10 currency the year so far. dollar-china also on watch given the geopolitical tensions given the shooting down of that weather/spy balloon, depending on which side you are listing two. also ongoing concerns, earnings season and where this equity risk rally goes. we will get more about top story. beijing now threatening retaliation after the u.s. shut down a suspected surveillance balloon off the south carolina coast. secretary of state anthony blinken, first point his visit to china, calling the incident a violation. >> any country that has its

sovereignty violated in a similar way i think would respond severely. i can only imagine what reaction would in china if they were on the other end. haidi: let's bring in bloomberg's asia government and politics correspondent rebecca chong wilson. this was not the weekend we were setting up for, it was supposed to be blinken in beijing, building on the goodwill that started with the meeting between the two leaders in november. what are the longer term ramifications of this incident. rebecca: the visit was intended to normalize relations between china and the u.s.. of course it is postponed and the u.s. is now setting out to retrieve some of the debris after that suspected surveillance balloon was shot down. so, the u.s. here is looking for two thanks, our sources

tell us. one is information on what type of service capacity it has, as well as whether there is any technology from the u.s. and its allies being used in that balloon. these are two things likely that could move the u.s. to take further steps. and the chinese themselves. of course, beijing is moving from contrite, measured response, urging for cooler heads to prevail. saying they were in communication. now becoming much firmer, reserving their right to respond, promising to protect the rights of the company the reasonable to. and that is dominating the state narrative around this. and underscoring for xi jinping the pressures to respond to perceived external slights. shery: and perhaps a little bit of hope now remaining, given the

fact that secretary blinken did not necessarily cancel the visit to beijing, he postponed it. what is the next opportunity for the relationship to thaw a little more? rebecca: we are waiting to see what details emerge from this suspected surveillance balloon. if we see the u.s. with some very robust and strong confirmation that indeed surveillance technology has been found, of course, it will exacerbate. the other issue, the postponement of this trip. unless we see it coming relatively soon, essentially, this has shrunk the window that the u.s. can use to try to repair relations before we see things really kicking into gear ahead of the election next year. and the center of gravity, i think, in d.c. over the last year has very much shifted. we see are much more hawkish response, and of course, it republican-led house as well. biden himself is under pressure

to be see to be taking a very firm stance. that shuts some of those opportunities to try to reset ties with china. shery: posturing for the domestic audience. rebecca choong wilkins with the latest on the china-u.s. balloongate. you can get a roundup of the stories you need to go to get your day going on today's edition of daybreak. bloomberg subscribers, go to dayb on your terminals. it is also available in the bloomberg anywhere app. . you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

haidi: a quick check of the latest headlines. carlyle group is said to have

chosen the former goldman sachs co-president harvey schwartz to be its next ceo. the appointment is planned to be announced this week. he is set to take the reins of a firm that has struggled to convince investors about its path to growth. elon musk says twitter is on the right track, after a tough three months. in a tweet, the billionaire says the company is trending to break even after he had to save it from bankruptcy. he says he had to handle responsibilities at tesla and space x. coming up next, the latest on the turmoil surrounding the rainier totem -- billionaire gautam adani's conglomerates. this is bloomberg. ♪

vonnie: this is daybreak: asia. i'm vonnie quinn with the first word headlines.

boj deputy governor has been approached to become the central banks next chief. the government and ruling coalitions have held discussions with him on succeeding. some observers say the church is likely to extend the boj's ultra easy policy. beijing has shifted from expressing regret to threatening retaliation over the u.s. shooting down a high-tech chinese balloon out of the sky. china says the device was a civilian climate research vehicle that unexpectedly drifted over american territory. beijing has denounced the overreaction and using force. secretary of state antony blinken was phoned his visit, calling the balloon and airspace violation. the power index has revealed china standing in the asia-pacific has been damaged by its decision to stick with covid zero. it registered the greatest decline in the report.

this has enabled the u.s. to cement its position as the most powerful influential power in the region. the g7 and eu are setting a $100 a barrel price cap on russian diesel to limit russia's revenues. it applies to petroleum products trading at a premium to crude. it backs a limit of $45 for those that sell at a discount. they will also delay reviewing a $60 cap on russian crude until march. 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. i'm vonnie quinn. this is bloomberg. haidi: let's get you back to the markets with belle. annabelle: we are half an hour into the session with japan and korea. a lot keeping traders busy this morning. let's kick off what we are seeing in bonds -- yields ticking high across the curve and that is after that u.s. jobs

report, surprisingly strong, and that tells us the fed has a reason to say aggressive and strong. we see asian currencies dropping across the board. also fitting into that sentiment this morning, weaker, korea and australia in the red. new zealand is in a public holiday but the benchmark is in negative territory. what is standing out is the nikkei climbing .8%, down to another factor at play, which is what we are seeing in the japanese yen this morning, sliding but for local factors. we have local media in japan saying governor kuroda could be replaced in april and that would be a sense of continuity and that yen weakness is helping japanese exporters across the board. a lot of mixed views on what this report means in terms of the general sentiment. most strategists say it is a good thing for bonds and likely

positive for the dollar-yen which could trade back to its year-to-date high. the question is when we go longer-term, will the boj stand the course and most strategists indicating the boj would stick with that pivot away from yield curve control and dump negative rates. citigroup as well says policy changes still possible. shery: let's turn to india because the central bank has moved to calm nerves over gautam adani's conglomerate. emma o'brien joins us now. this seems like a very coordinated response. emme: they are definitely moving to stem what they see as contagion in the wider market in india. that was the theme as we went into the end of last week after the scratched sale shocked almost everybody on the adani

and brought into question how much of an impact this hindenburg report is handing -- is having and how it raises bigger questions not just about adani but india itself given how tight he is to the prime minister and to nationbuilding and development around infrastructure in india. haidi: when it comes to the reaction we seen from the government, doesn't go far enough in terms of being able to soothe some of these investor concerns or do they also come from fundamental worry about the indian market given the high valuations we have seen before this entire episode? emma: i think that is a really good question and we are skating a thin line here between them

wanting to look as though there is nothing to see. we don't react to a short support, but acknowledging this has gone beyond that and it is shaking confidence in india, they are not doing anything substantial on the regulatory side. as you said, a listening of -- a litany of officials over the weekend saying financial regulators and other bodies have the tools and wherewithal to do what it takes to look into these allegations and maintain market stability. i think it remains to be seen whether this story has fueled this weekend whether more allegations come out, more concerns come outcome we are seeing a lot of concern in the bond market whether it then overtakes and they asked -- they

are forced into doing more. haidi: emma o'brien. gautam adani's white power has a few parallels. when says adani is even worse than evergrande in some ways. we have been talking about the similarities, what we are seeing with hna and evergrande. not the first emerging markets conglomerate to come under shortselling attacks under these themes like high valuations. the liver -- the level of debt for evergrande was far worse. why do you think the impact is much worse for adani? >> it has a lot to do with their investment base. they have attracted blue-chip investors and investment grade credit firms that are more skittish toward market turmoil than evergrande or agent a

investors. evergrande was high-yield from day one. believe it or not, they have about $14 billion bonds outstanding and most of it is investment grade. ultra wealthy people, when they buy these investment grade bonds, they don't offer much yield and they tend to catch them out for that -- as citibank and credit suisse have done, they cut off those loans. adani's 2024 bond is offering just a little over 3% rate. so i think it is the investor base. they are more skittish. shery: what is adani's biggest pressure point and tell us about the investor base. shuli: the issue is they have to

keep its financing windows open. with evergrande, we talked about maturity schedule and how much debt and refinancing they have to do. but adani is at a different stage of development. it is at an earlier stage was so not only do they have to keep refinancing, they have to be able to borrow new debt. in 2022, they spent quite a few billion dollars doing capex capital expenditure investments and going into 2023 and 24, they will have to continue doing that where evergrande is a more mature business. in that sense, i think adani is in worse shape than evergrande. shery: coming up next, we are joined by j.p. morgan's head of energy research you thinks china's oil demand is on track

to expand in the energy market. this is bloomberg. ♪ the first time your sales reached 100k was also the first time you hit this note... ( screams in joy)

save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first. haidi: the international energy agency says china could be poised for a stronger-than-expected economic rebound that would help the

economic rebound. how the latest caps on russian fewer making an impact. >> i think we will be able to see crude prices and we have not seen a major challenge in terms of oil. in terms of the markets, we did not see any destruction. but what it meant is russian oil and gas export revenues just before the war and end of january this year, oil and gas revenue declined by 30%. in terms of gas and oil, they went down and we are seeing in

guess markets worldwide. >> so you believe price caps, those have been successfully achieving what these nation set out to do? >> from the nation's point of view, as far as i know, there will still be enough oil in the markets and second, when i look at the numbers, at least for now, these objectives -- >> in the developed world, we continue to see interest rate hikes. there's the china reopening story which does not seem to have an impact on oil prices.

how are you assessing with the key influences would be over the next few months? >> there are many uncertainties as we have been discussing as oil markets are always seeing a lot of uncertainties. but if you ask me to choose the most important answer, it is for me, china, both for oil and gas markets because last year, chinese oil and gas consumption, domestic consumption declined for the first time since 40 years. we had never seen chinese demand decline since 40 years and if you consider china is the number one oil importer of the world, top lng importer of the world, if it bombs strongly, and these

are important implications for the oil and lng markets. if you see a moderate rebound of the chinese economy, we expect half of the world global oil demand to come from china only. some financial institutions claim chinese economy much -- would be much stronger than expected and this would put higher pressure on the demand side and therefore on prices unless opec countries take steps. the same applies to lng markets. >> i'm going to ask the unfair question in just a bit but why have we not seen the chinese recovery process yet? >> it is just starting. jet fuel demand in china is going very, very strongly.

if it continues at this pace, we may see upward pressure on the demand side. haidi: -- shery: our next guest is raising estimates for china's overall growth. good to have you with us. if us some context of the importance of china for global energy markets and how much you have had to revise upwards your growth expectations for the country. parsley: thank you for having me back. good to be on the show. to give some context, china is about 14% or 15% of global oil demand of 100 million barrels a day. historically, it tends to account for a majority of oil

demand growth globally. for this year, we are expecting chinese oil demand to grow by 800,000 barrels a day year on year, representing around half of our forecast of global oil demand growth. shery: that's oil, what about the potential for a global economic slowdown and what that means for export-oriented petrochemical products, for example? parsley: it is very interesting that since the last time we spoke, the case of china reopening has accelerated a lot and our economies have taken up the china gdp forecast. the gdp and pmi forecast for all the other regions, globally, we have seen an upward revision in the past one month or so. similarly, if pmi in the economy starts to improve, we could potentially see an improvement

in demand. not all chemical products are the same. for products used for plastic bags, we are more cautious. 80 percent of chinese demand is for domestic use. 20%-30% is export-oriented. if china is strong but u.s. and europe are we, the export person may not -- portion may not perform as well. on a relative basis, we would be more optimistic on demand recovery for construction-related chemicals which not only are we seeing a gdp pmi uplift on a seasonal basis, we see a pickup in activity as well. we are seeing modest, tentative signs of margin recovery for those products so far. haidi: what about a recovery for

russia? what's the assumption there? parsley: for russian crude oil production, with the g7 cap on russian oil prices, j.p. morgan's view is there will be enough product vessels over time to transport a majority of the fuels. in the interim between fourth quarter and first quarter, if there is difficulty rerouting diesel, we could see russian refineries drop by 300 thousand barrels per day temporarily before recovering close to prewar levels by 2023. that is our forecast. for a temporary drop in crude oil production, but a

normalization in product flows and a recovery close to prewar levels by the middle of 2023. that was one of the key reasons for our more conservative 2023 forecast of $90 per barrel. so far in the first quarter, we are trending slightly below that . we expect most of the priced upside to happen in the second half of the year. haidi: how quickly do you expect chinese refining to come back? parsley: the utilizations have already gone up. in 2022, the full year average utilization was 79%. for 2000 between three, i'm modeling close to a record high utilization of 88%. we have a one million barrel per day increase on refining

throughput. it sounds like a lot but in the context of demand growth rising 800,000 barrels a day year on year, it is sufficient. for people who have been been very worried about a flood of chinese oil product exports coming to the market, it depends on the extent of growth. one thing we do anticipate is for the chinese government to prioritize domestic supply availability of oil products, gasoline, diesel, jet, as the economy recovers. what we don't want to see is another shortage that happened in 2021. against that backdrop, we are seeing throughput recover and going into the second half, that is when the challenge to meet

domestic demand becomes more challenging. haidi: the head of asia energy and chemical research at j.p. morgan. great to have you. on bloomberg radio, you can get continued analysis from the daybreak team. they are broadcasting there. you can listen on bloomberg radio.com ahead. this is bloomberg. ♪ inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done.

haidi: shares of us trillion gold miter knew chris surging after seeing the takeover offer from newmont. our analyst is air with his take. this is the second go from newmont. is this when more realistic? >> they've just announced this one coming in 0.38 per share. we think it's a lot more realistic. this is a premium of 22% to the closing price. e don't think the sector is that overvalued from the perspective of recent history, so we think it will be a lot more likely new crests board will consider the offer. shery: what are we talking about

broadly in terms of merger activity given the strength of the aussie dollar and global reserves declining? moshen: that's right. it's an interesting situation for us trillion minors. even though gold prices have come down a lot. in aussie dollar terms, its all-time high and their costs are in us trillion dollars. the outlook is pretty strong. when it comes to the global reserves, it is a big story for all the global gold miners. they have been depleting their reserve based on the last 10 years because it has not been that desirable to be exporting for gold. now that the gold price has strengthened over the last couple of years, they will be looking to make purchases over the next couple of years, we think. haidi: some of the stocks we

will be watching ahead of opening in hong kong and china -- defense companies have been higher broadly, the u.s. shooting down the suspected chinese surveillance balloon off the carolina coast. we will be watching that. that's just about it for daybreak asia. our markets coverage continues. we are taking a look ahead at the start of trading in hong kong. bloomberg markets the china open is next. this is bloomberg. ♪

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