yvonne: welcome to daybreak: asia. we are getting done to asia's major market opens. haidi: asian stocks are set for

a muted start as concerned the fed will keep lowering costs higher for longer outweighs optimism over china's economic recovery. bhp slashing its dividend as rising costs and softer commodity prices drive 832 percent decline in half-year profit. president biden pledging more military support for ukraine on a visit to kyiv as russia's invasion nears the one-year mark. >> here at the goldman sachs global macro conference in hong kong. this is the first time this event has been held in person some of the start of the pandemic and what an action-packed lineup we have over the next two days. starting up with the chief economist. he will tell us why the bank has raised its forecast for where the federal funds rate ends up. when it sees another rate hike in june and the outlook for the boj later in the morning. we will speak with the former executive director about the

outlook for maybe og -- for a boj led by you waited. haidi: let's get you into the market open as we get into the staggered start any australia. looking muted given the absence of a lead by trading in the u.s.. futures were soft in the u.s. asian equities looking to build on a robust session in the monday advance we did see in this region. we are seeing the ethics coming on 3/10 of 1% softer and with expectations on futures. kiwi stocks down by 2/10 of 1% as we head into the rbnz decision day. whether the -- whether they slow that trajectory. potentially looking for a little more signaling as to why they do 25 basis points with more to come here to a good nikkei futures are off a 10th of 1%.

hong kong will be in focus with hsb earnings on tap. we have a little bit of eco-data to contend with. israeli manufacturing pmi rising. services showing and improvement. yvonne: the rebound in chinese assets was once watch. certainly one to watch. the selloff we saw in january reversing and maybe the call from goldman is starting to kick in. u.s. futures still in the red. we are down a fifth of 1%. nasdaq in similar measures. upon future slightly lower. watching how crude markets react. this was an upbeat forecast when it comes to chinese demand on the reopening story. doesn't do enough to lift prices when it comes to crude? we are not sure how the readthrough of geopolitics is going to play out once markets

reopen in the u.s. haidi: geopolitics, the overlay we are contending with this week with president biden meeting with president zelenskyy in the highest profile visit to ukraine since the war began almost a year ago. anne-marie told us about the trip from warsaw where biden is back in poland. >> in dramatic fashion in trip shrouded in secrecy resident biden made his way to ukraine ahead of the one-year mark of russia's portal invasion pick president biden met with president zelenskyy and other advisors. he announced 500 million dollars more going to ukraine and said later this week there will be fresh sanctions on russia. i spoke with the ambassador to poland about the trip and he said it is a defining moment for the biden presidency. >> the u.s. president joe biden quite bravely took a trip to

kyiv. a lot of risk and the message is don't doubt our commitment to the people of ukraine. >> president biden will head to poland next where he is scheduled to give a major address. he will continue to talk about what he calls the unwavering support for ukraine. it comes as many are concerned about war fatigue as this war has been lasting 12 months and many are preparing for a prolonged conflict. yvonne: china's top diplomat is set to visit moscow in the coming days after floating a fresh piece proposal for ukraine. let's get the china's chief executive editor. china seems to be trying to vision itself as a global statesman in this ukraine war. is there any indication that there support from moscow is wavering? >> i'm not sure the support is

wavering. we have not seen any substantial signs of that. throughout the war china has tried to play the role of seemingly a neutral player and everything but still backing russia in many substantial ways rhetorically at the united nations and various other ways around the world. we have not got the details of the new peace plan but we do expect it to echo what russia has wanted out of the cease-fire. we expect there to be a call to stop arms deliveries to ukraine. that would be something russia would have wanted. i think it will be difficult for beijing to convince especially the west it is a neutral broker in the situation. haidi: the timing is interesting because the skeptics will say it is difficult to go from zero

constraints friendship with russia to a peace deal. why is beijing doing this? have the costs of being on one side rather than the other changed? >> there was an article published by bloomberg opinion yesterday. it said china is not fighting in ukraine but it is losing. that is the situation beijing finds itself in. around the world the opinion of china has been degraded by its supportive russia and this war. the peace plan is an effort on beijing's part to show it is trying to do its part to end the conflict. as we said before it continues to rhetorically, publicly support russia. that is going to be a hurdle in terms of its relationship with u.s. but also europe. yvonne: it goes to show there are some other issues beyond

this balloon that is weighing on this relationship. >> i think president biden's visit to kyiv this week underlines how much of a priority99 ukraine isa for the united states. secretary blinken spoke about the balloon but he took the opportunity to warn beijing not to cross the redline of providing arms to russia. a lot of the tension between united states and russia and impacts around the world is based on this conflict in ukraine. haidi: what are the prospects of getting back to the level of optimism we had in the bali meeting? it does feel try as they might there are myriad issues that stand and the way of washington and beijing being able to improve this relationship.

>> i think it would be very difficult for the two countries to improve the relationship especially in the short term. i think there is too much on the table the two sides need to go through. we are expecting a call between president biden and president xi jinping to try to temper the tensions that have resulted from the balloon incident. dion the balloon, beyond ukraine we still have potential a visit by speaker kevin mccarthy to taiwan. you will remember when nancy pelosi visited how much tension, how much of an uproar that caused. we can expect war turbulence and a relationship going forward. yvonne: this 4000 word article blasting the u.s. for military cultural hegemony, i'm guessing you have read this whole piece. what was the biggest take away

from that? >> i will admit i have not read it in its entirety. it is a complaint beijing has voiced several times and of the past. china feels it has been constrained by the united states. a containment strategy to stop china's rise economically, politically, militarily and that is at the core of the dispute between the u.s. and china. what sort of china is the united states willing to live with and would china accept that role, would china except the state in the world order the u.s. is willing to give china? haidi: bloomberg's greater china executive editor. get you the first word headlines. at least three people have been killed as another pair of earthquakes shook turkey knew the syrian border.

the government says more than 200 people were injured as buildings collapsed. the area still reeling from quakes that killed 41,000 people in turkey and thousands more in syria. you can prime minister rishi sunak's lobbying conservative rebels to support a post-brexit trade deal in northern ireland. sources say he held one-on-one meetings to explain the outline of a perspective agreement with the european union. northern ireland's abilities remain in the single market has been a thorny issue for britain since it left the e.u. three years ago. bert has learned that -- bloomberg has learned adani has decided against bidding for a stake. to acquire a coal power plant in central india. the group has halved its growth target as part of its come back plan. hong kong is planning to let retail investors trade digital

tokens taking a major step toward its goal of becoming a crypto hub. the regulator did not specify which large-cap tokens will be allowed for individual and esters. it says coin should be included in at least two investable indexes from independent providers. those were your first word headlines. yvonne: bhp shares down 2% in sydney. falling on the back of these earnings after the world's biggest miner slashed its dividend after rising cost and softer commodity prices drove a decline in half-year profit. david stringer joining us. what are we hearing more of from mike henry in this video call? and your call and take away on these earnings. >> as you say the initial numbers don't look great. a trip it will profit down about a third to 6.6 billion. that is on the back of the sharp

selloff in prices in bhp's key commodities. iron ore and copper in the second half of last year. shares down in response to the weaker result and move to cut the dividend. that is down from the same period a year ago paired what we have been hearing is rosier. he has been talking about the potential strength of the china reopening and the feeding into demand for raw materials. bhp saying they are very positive for the rest of this half and into the rest of the year. so, the result probably a weaker one. confident we turn the corner and we are seeing prices of things like iron ore starting to pick up already. haidi: what is happening with the divestment from coal? everyone who loves the future facing commodities and minerals. >> we have heard a little more

this morning about the reshaping of bhp's portfolio. they have been doing a lot of work over the years to realign the kind of things they mine with minerals that will be more important in the energy transition. trying to get things that are less popular, more polluting. things like cooking coal. some of their less high quality assets. they have confirmed they are looking to divest another two metallurgical coal mines in queensland. they are held in a joint venture with mitsubishi. the other end of the equation they are going to push ahead faster with a plan to bring on a crop nutrient the mind in canada. that will enter production in 2026. they are forging ahead with a

potential second stage of the expansion. that is all a potential 100 year project in crop nutrients. yvonne: that is a long-term one. the market seems to be disappointed by the results itself. we are having an interview with him coming up. what do you think is going to be the biggest question we need to be asking him? >> i think a lot hinges around china. what are the actual signs? what is the evidence the covid zero policy, the reopening is going to feed through to stronger demand because that seems to be the linchpin of bhp's argument. they are to about the prospect of a stronger china, stronger growth in china plus better growth in india being a counterbalance against a pretty gloomy outlook in their view for other markets like europe and the u.s..

i guess it is how much investors are buying into that. investors remain skeptical. it would be great to hear from mike henry, what is giving him confidence china is going to come back and come back strongly. haidi: david stringer with the latest on bhp. we are getting more with mike henry joining us just after 10:00 a.m. in hong kong. yvonne: fresh off that call with reporters. still ahead, canada's minister of international trade joins us to discuss the trade agreement with 10 other countries any the aipac region as well as membership bids from the u.k. and taiwan. first, as tmc capital joins us to discuss the impact of rising political tensions. coming up. this is bloomberg. ♪

>> that dark night one year ago the world was early at the time bracing for the fall of kyiv. one year later kyiv stands and ukraine stands. democracy stands. america stands with you and the world stands with you.

haidi: president biden speaking on his unannounced visit to ukraine's capital. our next guest is watching all of these geopolitical risks saying the u.s. suggestion china is considering providing russia with military support could be a big risk off event. joining us is the founder and ceo of stm capital. we have seen china puncturing itself to try to position as potentially a player that could broker a peace deal. there are lots of skeptics but no doubt is geopolitics and the risks top of mind for you at the moment? >> this is something that global investors need to keep looking at especially if there is an escalation. the one thing you did not want is potentially china taking the side of russia with the sense of providing weapons to russia

which are some of the headlines we have seen over the weekend. that clearly would be a risk off environment because that would mean acid evaluations would be coming down because people start getting scared and that would have been on both sides of the world with chinese assets and american assets correcting. haidi: it feels investors are waiting for the next catalyst. what are you waiting for? do we get that next like up when it comes to chinese risk assets? >> we believe there is still a like up to happen because there's still a lot of catch-up potential for chinese assets. barring negative escalations from what i said with respect geopolitical tensions and headlines we think valuations are attractive from an absolute and relative perspective. we expect further fiscal stimulus to come in china in order to make sure growth does

not keep falling off a cliff but remains relatively stable. after the reshuffling of last year we think xi jinping's policies could be implemented in smoother way and if those policies lead to better growth and potentially better outcome from everyone within the population which is what the common prosperity should be about that could lead to asset valuations going higher. we do remain bullish on the prospect of chinese equities. yvonne: how much higher? it seems like given how furious this reopening rally has been was that the low hanging fruit and what does it look like? is it going to be choppy moving forward? could we see another big leg up? >> it will remain choppy. the reopening play we think has more or less already played out. that is more or less in the

prices. what you are playing here is the longer-term potential of anything which is the chinese economy. of the fact valuations are attractive and lots of global investors are extremely under exposed to chinese assets. once you start getting a little bit of stability you're likely to get all the flows back into the asset class and the geographical area. it will be choppy. we expect 2023 to be choppy. that is why you have to take a longer-term view. yvonne:yvonne: what does this mean for -- because it seems you are still slightly optimistic about china. what about when it comes to dm evan the fact the market continues to debate how much higher the fed can go and this whole prospect of a new lending situation? what would that mean for risk assets? >> no lending would be great but

a lot of that is priced in. if you look any terms evaluations we think the risk reward profile is not that attractive. we have been taking profits. we think equity valuation have gotten ahead of themselves. which maybe does materialize but it does leave a lot of room for disappointment. if that disappointment does come, if we continue seeing inflation remaining stubbornly higher than what the fed wants or what the fed expects, if we do see not only two but three or four hikes coming from the fed and rates remaining there, we think short term there could be a little bit of risk off environment so we have had of ourselves in the equity space and we think a correction should materialize. we expect the recent lows of last year to hold.

yvonne: we have to leave it there. joining us from singapore. you can get a roundup of the stories you need to know. go to dayb . it is available on your phone and the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪

yvonne: we are coming down to the start of trade in tokyo and seoul. in japan we are going to read on the preliminary pmi numbers out for february. manufacturing index stayed relatively unchanged for the last two months. seeing any signs of change possible. two orders for january.

preliminary figures showing that number shrinking almost 10% year on year. the nikkei is reporting japan and germany will hold regular cabinet talk. bloomberg south korea consumer confidence fell. exports and imports the first 20 days due in the next hour. exports gained around 12%. year on year in the first 10 days. hive releasing earnings today amid its messy battle for control for k pop rival sm entertainment.

haidi: you're watching daybreak: asia. let's get the first word headlines. president biden has pledged more military aid to help ukraine fight back against russia pair the defense department says a

400 60 mandalay package will include artillery and radar systems. while meeting the president on an announced visit biden also promised further sanctions on people and companies assisting the russian war efforts. >> putin thought ukraine was weekend the west was divided. as you know i said to you at the beginning he is counting on us not sticking together. he was counting on the inability to keep nato united. he was counting on us not to be able to bring in others. haidi: china has laid out a fresh list of problems it has with how the u.s. uses its power. the news agency published a 4000 word article entitled u.s. hegemony and its perils. it underscores how tensions have worsened over the suspected spy balloon incident and the war in

ukraine. top chinese scientists have outlined plans on how to circumvent chip sanctions imposed by the u.s.. an article by two senior academics proposes beijing should build a portfolio that governs the next generation of chipmaking. these are the first word headlines. yvonne: countries are navigating geopolitical tensions as they tried to boost trade relations. let's bring in haslinda amin standing by with a special guest in singapore. >> we are joined by the international trade minister of canada. good to see you in person. >> the last time we were not in person. it is terrific to be here. >> we have been talking about how geopolitics have come to the fore. the balloon incident being shut down in the u.s. as well as canada.

how has that -- how is that impacting trade relations between canada and china at a time when canada wants to amend bilateral ties? >> we were here in the region. i spent about 11 times in the region over the course of the last number of months. we launched canada's indo pacific strategy. we laid out a comprehensive plan for how we will work in the region. diversification is a very important part which is why i am in singapore with our canada trade mission. in our relationship with china it is multifaceted. we will stand up for the values that are important to canadians. rules-based trade. the values of democracy. standing up for human rights. we can collaborate on areas like climate change. you saw that in cup 15. we had that in canada at the end of last year. it was china's presidency. they could not have it so we had

in canada. being able to collaborate in areas like fighting climate is what we are going to do but it is a multifaceted relationship. it is when canada takes seriously. >> will such incidents accelerate we sure in a countries like canada, mexico, the u.s.? what are you seeing right now? what? you hearing from companies? ? >> companies have experienced the shocks of supply chain disruptions throughout the pandemic. some of it has started working its way out. for canadian companies it is looking to grow and diversify into regions like this one in the indo pacific. in singapore i have 100 75 companies and organizations here to launch our trade mission. what they are looking for is markets to be able to grow and collaborations with those we have trade agreements and continue to pursue those opportunities. i'm very excited because here and it singapore we have the

canadian trade gateway. what companies are looking for like the ceo roundtable are the ability for us as government to bring them together and defined those opportunities and convene those opportunities for them. particularly for small and medium-sized businesses. helping our businesses get here and attract the investment from the indo pacific region into canada. >> let areas in particular? are we talking about digital? >> absolutely digital. any of the sectors important to green growth. you are seeing in canada a real building out and investment in are better ecosystem. we have strong critical systems in canada that is going to be a very important part of what the future of our green economy is going to be. we have digital that is here in the region. we have a dynamic number of clean technologies. if you look at sustainable mining you have water solutions

and clean solutions that are part of that particular value chain. canadian companies are contributing to that kind of value chain growth. >> you talk about value chain. we have to talk about supply chain spirit we are marking the first milestone of the ukraine war which a lot of disruptions into display -- disruptions into supply chains. >> on ukraine let me just share with your audience as well as those back home canada has steadfastly stood with ukraine in their fight against the unjustified war perpetrated to them by russia. we are going to continue to do that. we are seeing disruptions around the world caused by this war. whether it is food prices or energy prices. canada has been working with its partners and with the business community to ensure we are doing everything we can. diversification is a good

example of this. looking for those partners to tighten up those partnerships so we can ease up some of those issues. >> there are concerns china's reopening might make the supply chains even more complicated. what is your own assessment? is china's reopening a boon or a bang? >> the good parts of this is the issues of covid and the disruptions related to covid is something we are all tackling and moving in the road of recovery. that is a positive thing. maybe and companies have seen the disruptions that have been caused by that. what you are seeing is the ability to find more resiliency in those partnerships. in the region but also in north america and europe for canadian companies. >> india will be hosting the g20 this week. meeting finance ministers.

the government is expected to push for wto reforms. what are your thoughts? >> canada is the chair of the ottowa group. we have a dynamic group of countries we are working with whether it is singapore, australia, new zealand, the u.k., the european union and we are working on wto reform and in particular an area of focus is bringing certainty to the dispute settlement system. we contributed quite heavily in the lead up and the multilateral successful negotiations. we are looking forward to continuing doing that work. i was in geneva a couple months ago to do a wto ministerial meeting and to work again with colleagues around the world to make sure we have a rules-based international order in trading system that will be beneficial to trading countries like canada. >> before we let you go, one final question on cptpp peer

china's membership is causing quite a stir. and we see china being a member given the likes of australia had said unlikely. >> this see pt pp agreement is a high agreement paired what we are working on is a session with the united kingdom to that continues. cptpp is the maintenance of high standards of labor and environment and to look at the track record of how any aspirant economy is -- does their trade. for us will space trade is important. the high standards in the agreement are important. we are looking forward to working with united kingdom. this is the first a session partners. >> thank you for your insights and welcome to my city. international trade minister for canada speaking to us here in singapore.

back to you. haidi: great conversation from singapore. let's get back to president five biden's visit. mark presents he says a message to other nations in the region are grateful to hear. >> you are in a part of the world right now that historically has felt abandoned by the west and now on the people of the anniversary of russia's invasion of ukraine the u.s. president joe biden quite bravely took a trip to kyiv and the message is don't doubt our commitment to the people of ukraine. that is a glorious such to hear in poland because the poles so much want to support their

neighbor ukraine and they want the west to be with it and president biden has provided the answer. an amazing historical moment and a defining moment for president biden. >> definitely think a defining moment in terms of his foreign-policy. the optics it is on full display. tomorrow he will give the speech. today he talked there will be another half billion dollars going in terms of aid. what else can you tell us he plans to deliver when he is in poland? >> when i think of the words of a polish general he fought for the american side during the revolutionary war. for your freedom and hours is what that translates into. that will be the overarching theme of the president's visit here. collective security works. we are all in this together. brace yourself. this will not be an easy or short-term ride. in the end we will be with the ukrainian. . people until the end that is a

message here in poland the poles will embrace because for poland the russian invasion of ukraine is 1939. a horrific foreign oppressor. . attacking a weaker neighbor this. time in poland they feel they can do something about it. the polls have welcomed into their houses and apartments millions of ukrainian refugees and supported them for almost a year now. an incredible humanitarian gesture but they want to know the west is with them. today they do. yvonne: that was the u.s. ambassador to poland speaking with annmarie hordern. coming up next one of the highlights of the latest transitions outlook on the commodities that will drive the world's shift to net zero. this is bloomberg. ♪

yvonne: time for our focus on the global green energy transition. today we're going to look at the metals needed in technology that will help drive the world toward net zero emissions. bloomberg and a fcc's demand for $10 billion worth of such materials through 2050. let's bring in the bloomberg any of metals analyst. tell us which metals and minerals exactly are leading the

pack in terms of growth potential. >> of course paired technologies that will power the global energy transition. we consume roughly five times in 2050 than they do today. among the metals, steel and aluminum are going to be seen the highest demand in terms of absolute volume in 2050. for those that are thinking in terms of value copper will present the most precious opportunity with an estimated three point $4 trillion of the middle needed to reach that zero. you may find it copper in almost every single clean energy to elegies from export cables to the intern or wiring in your electric veterans. one last bit i would like to mention is lithium which stands out in terms of its growth in the market value. ev's will drive a sixfold

increase in the market value of with the demand by 2050. haidi: the scale of demand growth for metals like copper under scenarios modeled by bloomberg energy finances is enormous. is there a risk we will not be able to expand supply sufficiently not just for couple but for all of the future facing metals and is that potentially derail the transition? >> one of the key risks as the fact a lot of the metals needed are concentrated within only a handful of countries. some of the countries implement a policy reach designed to maximize the value of their domestic supply chains. one example would the zimbabwe which has been the export of lithium. resource nationalism could negatively impact the global supply chain and slow down the investments into new mines.

given the growth expected in our research disruptions to new mine developments could lead to a scarcity of supply for many of the metals as soon 2030. the scarcity means there will be higher commodity prices which would drive up the cost of cleaner technology commodities. we have seen this last year where the price of commodity prices have driven up the prices of lithium batteries. the high prices tend to discourage the deployment of clean energy technology. the failure of the increasing supply of metals will slow down the adoption of clean energy technologies which will then derail the global economy toward a net zero future.

haidi: bloomberg nef metals analyst they are paired coming up next to take a look at why a recent rally in japanese equities may be running out of steam as companies prepare to. release more earnings forecast. this is bloomberg. ♪

haidi: japanese equities are treating your ten-month highs despite disappointing earnings. investors are increasingly concerned the rally could be at

risk. spring in our senior asian stock reporter who joins is out of tokyo. is there a complacency for you here that potentially we are ignoring the risk of guidance going forward? >> i don't know if appropriate to describe it as complacency because there could be many views but one thing i can say is the latest earnings season was the worst in many years to say the least. although sales have risen about 17 percent according to bloomberg's data, profits have dropped about 14%. the number of companies that missed analyst expectations is larger than those who beat estimates. that has -- that is the first time that happened since the pandemic began in early 2020.

by all means, the earnings results were pretty weak care the topics is still trading 1% below the november peak. so there is a rising risk the market may suffer a set. -- a setback. yvonne: you're saying it has been pretty disappointing so far. how have the markets directed to the earnings and is there a risk of earnings downgrades moving forward? >> exactly. that is why some investors are concerned at the moment. one thing companies have to take into consideration when they announce the guidance in the next earnings season is the bank of japan is going to have a new governor.

the most dovish governor you can think of will be no longer there. company is no longer to make cautious projection when it comes to the yen exchange rate. another thing is the yen has already appreciated more than 10% from its low in october. although the path has already affected their earnings result the full impact is not reflected in the current earnings. that suggests there will be another drag on their earnings when they announce next earnings in april or may. yvonne: we will leave it there. senior asia stocks reporter joining us from tokyo on what to expect with some of these earnings in japan. when it comes to earnings we're focused on one in particular. we had bhp earlier this morning. a disappointment for the market. hsbc coming up next.

a lot of questions. i think the last time we spoke with noel quinn he was still optimistic about china. a lot of prospects about what this means for their business. especially when it comes to wealth management. haidi: and also always a focus when it comes to dividend. always a focus when it comes to cost controls. how that shift and the refocus on china. such a hong kong story given their big move to refocus on china. also looking at future share buybacks as well as any kind of forecasting guidance for u.s. and u.k. rates. activity levels when it comes to the core hong kong market is going to be key. we will hopefully be getting answers to a lot of these questions when we speak exclusively with hsbc ceo. he will be joining us to talk through those earnings and the shift in strategy to asia. you can catch that at 1:40 in hong kong only on bloomberg. a quick check of the latest

business flash headlines. billionaire adani's will play wonder $21 billion more. had earlier paid around $118 million of similar debt on time using funds generated from business operations. india's largest private-sector ports operator is seeking to ease investor fees over high debt and the fun fund allegations made by a short seller. the world's biggest miner bhp slashed its dividend after rising costs and commodity prices drove a decline in half-year profit. the underlying profit from continue operations of $4.56 billion missed estimates of $4.81 billion. the ceo mike henry said in a statement the company is positive about the dement outlook for 2020 -- for the second half of 2023 on strengthening activity in china. chinese ride-hailing firm d dow has rented its plan to enlist in hong kong after two previous failed attempts.

considering raising about $200 million in the ipo. we are told the company has obtained assurances from chinese regulators, the share cell to go ahead. yvonne: stocks we are watching when trade opens in korea and japan surely. the nikkei reporting keo sarah plan to start selling power tools in the u.s. and europe. pretty messy battle when it comes to activism investors. asian energy stocks made move after they got the lift on hopes chinese demand rebound is picking up pace. sk innovation seeing a downside of 1%. not seeing the follow-through when it comes to energy stocks this morning. i'm going to be speaking live with bhp ceo mike henry on

the reports. talk more about the outlook here. pretty optimistic on china. growth has been slowing in the u.s. and europe. he joins us just after 10:00 a.m. in hong kong. 1:00 p.m. sydney time. haidi: before that we will be live at the goldman sachs global macro conference in hong kong. will be speaking with the chief economist about the banks recession expectations. plus the 21st century china chair -- center chair gives her assessment when it comes to the latest geopolitical developments. ♪ it's just a bike. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. rent a peloton bike or bike+. terms apply.

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yvonne: this is daybreak asia. we are heading down to the major market opens.

pretty quiet in the region but watching closely what happens given the uplifting with china rebounding, on yesterday. not getting that follow-through in the u.s. but asia looking good this morning. amidst discussions of narratives, the fed, geopolitics, watching china closely as to what is going on in korea and japan. haidi: president biden's surprise visit to ukraine, doubling down on the commitment to the war effort. we are in the thick of earnings season, bhp cutting the dividend, the disappointment on the back of the china story and looking ahead to hsbc. yvonne: we have seen downside when it comes to php. bluescope recovering. here is the open in korea. looks like more movement, kosdaq up but marginal moves to the

upside when it comes to the kospi. we are watching the dollar moves. we have wiped out the losses this year. what does this mean for the asia fx trade? some weakness when it comes to the won. we are dealing with numbers that came out, south korea exports falling 2.3% year on year, imports rising 9.3% so that is something to deal with as well. in terms of japan, slightly lower on the nikkei, 134, futures pretty flat but u.s. treasury markets opening in tokyo after the presidents' day holiday, yields take -- ticking up higher by about three basis points. still some upward movement with yields this morning. haidi: we are seeing downside when it comes to trading in australia. most stocks are falling.

tech leading declines across all sectors, a broad downside. communications stocks one of the laggards. u.s. equities falling. there is concern higher rates are held for longer. we will get insight on the rba's thinking with minutes of the february meeting released later. more communication on why they flagged the need for more. new zealand assets, watching as we head into rbnz decisions. set to hike 50 basis points at the next meeting to 4.7 5%, potentially hawkish. the aussie dollar losing ground as it gained ground this morning, fairly -- firmly on that side but the best performer so far in g10. let's get to annabel, who joins

us in hong kong with the goldman sachs global macro conference. we talk about the dominant narrative when it comes to what is driving investors and sentiment. is the repricing of fed expectations? >> the question is whether the disinflation trend powell spoke about, whether that will be permanent or disinflationary. goldman sachs have upgraded the forecast of where the terminal rate ends up, and they see one more rate hike in june. let's bring in the man who made the forecast upgrade, the chief economist. thanks for joining us. >> great to be on the show. >> welcome back to hong kong. >> it is wonderful to be back. >> talk us through what drove the adjustment you made.

>> our expectation for growth is stronger than for many other forecasters. we see a lower probability of recession than the consensus. we see about 25% probability over the next 12 months, in the 1.5% range for growth. recent numbers have been stronger-than-expected on the growth side. we have seen some higher inflation numbers for january. i don't necessarily think that breaks the trend towards disinflation but if it can reinforce the idea the fed has work to do, we think another 75 basis points from here with no cuts until 2024 seems like a likely outcome. >> when you see things like the fed inflation gauge coming out this week, it is expected to re-accelerate. how much does that concern you? >> month it will be a firm reading.

-- month-to-month it will be a firm reading. we think 55 basis points. that is driven by what we saw in the cpi and producer price index last week. these numbers are somewhat volatile. in particular in january, we had flagged there was a risk of a january effect. a lot of prices get adjusted the first month of the year. i think that is coming through and we will see more details when the numbers come out later in the week. there is one argument for doing more still and the fed is moving in that direction. >> that brings the idea of the so-called no landing scenario into focus, where you have global growth that reaccelerate and haven't generated enough slack into the economy. is that something you are concerned about? >> we laid out a narrow path to soft landing a year ago.

that means there is risk on both sides. the economy slows too much and falls into recession, or the economy stays too strong and inflation doesn't come down. when you look at the entire period, we have continued to be on the narrow path. i still think we are on the narrow path that the risks are looking higher on the too strong side. that is the bigger picture that i'm looking at. the fed needs to take out insurance against the low landing scenario and we -- we think they will do it. >> and the bond market the focus is very much on recession and repricing around that risk. >> i think the risk is lower than what forecasters have been saying. the consensus of u.s. economic forecasters says 65% probability of recession in the next 12 months.

we are 25%. that is a big difference. the market pricing has evolved in a way that implies less recession risk then it did a few months ago. a lot of rate cuts that were priced in for later in the year have been taken out. in that sense, i think the forecasters are quite negative, but market prices started to move on a bit. >> one thing back on the table for hawkish people at the fed is the prospect of a 50 basis point hike. is there any scenario where that would be usable? >> never say never but it is unlikely they would go back to 50 basis points, having just moved down to 25. there was a debate around that. i don't think we have seen enough information to kind of reverse that decision. it would be an important step.

if they do 50 in march, the market would probably build in at least a decent chance of another 50. you need to see a lot of information to push you in that direction and i don't think we have seen that. we have seen a month of stronger inflation data but the general trend i think is favorable. >> if you move to a 25 basis point hike, do you have enough to keep financial conditions tight? >> if you keep going at 25, which is our baseline, one in march, may and june, and those conditions, there might be some relatively stable and if they are relatively -- it is not too far from market pricing. if they are relatively stable i think it means the drag from earlier financial conditions tightening abates gradually through 2023. that is one reason why we haven't above consensus pro -- forecast for growth.

the risk is probably on the side of growth staying a bit too strong and the fed having to do more. that is why we added 25. >> the u.s. consumer is a big part of the growth story. does it concern you when you read headlines that credit card debt is near $1 trillion and you have delinquencies rising? >> consumer credit is a bit of a downside risk. credit quality has deteriorated. i would also note that the personal saving rate is at relatively low levels, and has risen a little in recent months but it is below the long-term average. that is probably going to pick up as we go through 2023. to me, that points to consumer spending growth at a relatively subdued pace. one big thing is different this year from last, which is real

disposable household income is rising at a pretty strong pace. you think 3.5% this year. last year disposable income declined at the fastest pace in postwar history. this year we are getting quite a bit more support from income. but i think there are lots of cross currency in the consumer outlook and we think, when we put it together, this growth is more likely. >> there is focus today on china. how is the reopening story a blessing when you have to manage growth versus risk that it adds to global inflation pressures? >> if china continues to come out of the pandemic restrictions and therefore the weakness in activity we saw last year, that is a good thing from an economic perspective in china. we do think growth will be pretty strong. 5.5% annual average, 6.5%

fourth-quarter to fourth order in china -- quarter in china. the spill over to the rest of the world will be positive on growth, especially in the region , in countries that are interlinked with china. and also, headline inflation, we would expect more upward pressure on oil prices from this than what we have seen so far. on core inflation it is more mixed. on one hand, you have a stronger global economy that probably adds to inflation. on the other, we have less supply chain disruptions and that subtracts. it is more ambiguous. >> a mixed blessing. jan, goldman sachs economist. we have much more later today. haidi: annabelle is in hong kong with us.

we will be talking geopolitical tensions with the 21st century china chair and more great conversations in our exclusive coverage. yvonne: when it comes to the korea open, the last trade, we had to update you. seeing things to the downside by 0.5%, because back -- kosdaq is lower. not starting off on the right foot but it is pretty muted out there. volumes are quite low. paul allen has your first word headlines. paul: at least three people have been killed is another pair of earthquakes shook turkey near the syrian border. more than 200 people were injured. the area is reeling from earthquakes this month that killed about 41,000 people in turkey and thousands more in

syria. the u.k. prime minister is lobbying conservatives to support a post-brexit trade deal on northern ireland. sources say he held meetings to explain the outline of a prospective agreement with the european union. northern ireland's ability to remain in the bloc is a thorny issue. bloomberg learned an indian billionaire decided against bidding for a stake in state backed electricity trader ptc india. they called up a plan to -- off a plan to acquire a coal plant. this is part of the comeback plan following the fallout from fraud allegations. hong kong is planning to allow traders to trade bitcoin, taking steps towards the goal to become a crypto hub.

it says the coins should be included in at least two acceptable investable indices. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. on paul allen. this is bloomberg. yvonne: still ahead, rising u.s. china tensions and beijing's proposal to help broker peace in ukraine. the 21st century china chair joins us later. there is more ahead as two top scientists present a plan to get around u.s. semiconductor sanctions. the latest on the global chip wars. this is bloomberg. ♪

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yvonne: president biden met with president zelenskyy and the highest profile visit to ukraine since the war began one year ago. we heard more about the trip from warsaw, were biden will give a speech later tuesday. >> in dramatic fashion, in a trip shrouded in secrecy, the president made his way to ukraine ahead of the one year mark of russia's brutal invasion. president biden met with president zelenskyy and other advisors and announced $500 million more going to ukraine.

he said there will be fresh sanctions on russia this week. i spoke with the u.s. ambassador to poland about the trip and he said if was a defining moment for the biden presidency. >> the u.s. president bravely took a trip to kyiv. there was a lot of risk and the message is, don't doubt our commitment to the people of ukraine. >> president biden heads to poland next where he is scheduled to give a major address. he will talk about what he calls the unwavering support for ukraine. this comes as many are concerned about war fatigue as the war has been lasting 12 months and many are preparing for a prolonged conflict. haidi: a top diplomat may visit moscow after floating a fresh piece proposal for ukraine. more from our correspondent rebecca.

beijing is trying to play a statesman. can they be this neutral influence and broker some sort of peace deal? >> i think that is right. beijing is pushing the narrative very hard, trying to figure itself as a mediator, a mutual player that can -- a neutral player that can broker peace. whether that is credible is another issue. the u.s. is pushing aggressively that china hasn't stepped up to the plate and antony blinken has said it received intelligence that china may be planning to aid support for russia. it is tough to see this being credible in europe, for example. but it may have more purchase with china's partners and allies in southeast asia and africa, for example. we have learned from sources that china may be considering to put forth a united nations

resolution around the peace plan and we may see in the u.n., them trying to garner that support. haidi: how difficult is it to persuade skeptics that china can go from a zero constraint friend or partner to russia, to potentially a neutral actor that can broker a deal? what do we know about the reaction from people that have seen the draft of what they are proposing? >> ukraine we can see is becoming a pivotal issue for both china and the u.s. to shape its global narratives. what we have learned so far is that part of china's peace proposal will be to cease, a cease-fire and also to cease sending weapons to ukraine. the german foreign minister encapsulated the european feeling best by saying there can be no peace plan if russian

troops remain in you are in. that will be the key issue for many of the european powers. i think the concern is that we are starting to see some of this fatigue spread among some parts of europe, with this protracted conflict in ukraine coming up on the one year mark. haidi: rebecca with the latest. key members of china's most influential scientific body outlined plans on how to get around u.s. chip sanctions. an article argues that beijing should build up or julio of patents that governor next-generation chipmaking. we will discuss this with peter. this gives us kind of an insight into how beijing is looking at ways to counter strike. >> that's right. with rising tensions between the u.s. and china, the u.s. has put

in place very severe restrictions on china's ability to buy chips and chipmaking equipment, in particular a cap on their ability to buy equipment that would allow them to produce chips at 14 nanometers or 16 nanometers, which is not that advanced at this point. what the academics at the cas are talking about is leave rugged the existing generation of technology and going to a new generation of technology where they can invest in advanced materials and chipmaking processes, to get beyond these restrictions the u.s. has imposed and by a massive portfolio of patents to be able to negotiate with the u.s. and the west more broadly from a position of power, rather than a position of weakness. yvonne: china has thrown a lot

of money into developing these next-generation chips. i'm wondering, the national strategy hasn't worked out, or has it become something costly? what is holding it back? can china catch up to the u.s.? >> you make a good point. this has been an effort that beijing has been involved in for many years. they spent tens of billions of dollars trying to get the domestic chip industry to compete with the west. this is an argument from the academic side. area to focus on is not strategic or trade but it is on research, and doing the research to get this kind of competitive advantage. it is less about money and more about brainpower to get these breakthroughs in chip tech knology. -- technology. that is the goal. yvonne: we will leave it there. bloomberg executive tech editor speaking to us from tokyo.

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sources the largest crane owning company in the asia-pacific is considering selling its australian business. it is said to be working with an advisors on the potential the vestment of the australian machinery firm. the company is seeking $500 million for the unit. a billionaire's unit will prepay more than -- short-term debt next month. they repaid 180 million dollars in similar debt on time and funds generated from business operations. india's largest private sector ports operator is seeking to reuse investor euros over high debt -- ease investor fears over high debt. checking european futures, after a muted but we still see decent gains when it comes to europe yesterday. we are seeing them slightly in the red this morning but dax futures are flat, and a pretty

steady dollar after evaporating losses with the dollar this year. one to watch here, a lot to do with geopolitics and where this goes next. haidi: coming up next, are long time china analyst susan responds to what she calls beijing's overreach globally and at home. that conversation is next. this is bloomberg. ♪

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yvonne: we have japan pmi numbers, the composite numbers 50.7, manufacturing 47.4 so that is a slow down and continues to be a contraction for another

month. services pmi a little better, 53.6 so another month of expansion on that front. also waiting for machine tool final numbers coming later on. haidi: we are getting the minutes of the february meeting from the rba, talking about the 25 basis point decision reflected in the inflation peak and falling incomes, addressing that australia's income is expected to benefit more from the china reopening than others and further rate hikes are likely to come in the coming months. the peak is dependent on household spending and jobs. they see job vacancies as high, if less than perhaps the earlier peak. the cash rate is lower than in many economies. mortgage payments are projected to reach the highest on record. medium-term inflation expectations after the policy measures remain well anchored.

let's get more analysis given the focus on keep -- the decision to keep hiking. anything that jumps out at you? >> the audience is expecting household debt payments or debt servicing costs will reach record highs. this is where we are beginning to see signs of that in the economy but also, signs of that in the way the governor was questioned. the intensity of the concern around where the rba is going is showing that households are feeling the pain. consumer confidence is telling us that. the rba inches forward and debt servicing costs will grind them to a stop. could be later this year or early next year, depending on how harshly or how well the savings buffer goes in terms of how thin it stretches over the coming months, how quickly they are forced to reverse course over the coming months.

haidi: how much further will they go? >> it is your from the rba comments that they are looking to do another one to two, especially the comments from the governor's appearances the course of last week. another one to two hikes in the cycle is about fair. markets pricing and a cash rate peak of 4.1 so three more to go. that would be an elevated level but it is going to be a case as well as something the governor has stressed, which is the rba relative to other central banks. the sooner the fed peaks, the clearer the air will be for the rba to end the cycle. haidi: there is still a recession fear. how is your outlook changed now that we are a couple months into the china reopening? >> this is the two parts of the economy, domestic pressure and

the external environment. with china's reopening, the external circumstances have improved and we should begin to see that once we begin to especially get tourism back in. if tourism has recovered from the rest of the world, we haven't seen those numbers from china but that will be a support coming through. on the other hand, i do see the risks, as the rba is going further than we expected, the risks on the domestic side have intensified. we had seen australia avoiding a recession but the rba has put it, there is a narrow path to a soft landing. the further they go, the more hikes they will deliver and the narrower the path be. it will be about how badly household debt servicing costs rank in domestic demand. yvonne: thanks, james. taking a look at markets, a

muted session but you are seeing u.s. futures opening in the red this morning. when it comes to hunter come lower than 1%, not just the rba discussion but dealing with aussie minors -- miners. asia is quiet as well, given that u.s. markets have been closed. the rebound in china stocks yesterday, we will see if that follows for another day. here is paul allen. paul: president biden has pledged more military aid to help ukraine fight back against russia. the defense department says a $460 million package will include artillery and radar systems. while meeting president zelenskyy, biden promised further sanctions on people and companies that are assisting russia. >> putin thought ukraine was weak and the west was divided. as you know, mr. president, i

said in the beginning he is counting on us not sticking together. he was counting on the inability to keep nato united. he was counting on us not to be able to bring in others. paul: china laid out a fresh list of problems it has withheld the u.s. uses its power. the news agency published an article titled "u.s. hegemony and its perils." it underscores how tensions worsened over the suspected spy balloon incident and the were in ukraine. top chinese scientists outlined plans on how to circumvent u.s. chip sanctions. an article by academics argues beijing should build a portfolio of patents that govern next-generation chipmaking and would propel china's ambitions and give it the clout to push back against u.s. sanctions. global news 24 hours per day,

on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. haidi: china is trying to convince the world that it can broker peace in ukraine. annabelle is standing by with the china expert -- with a china expert. >> i have susan with me, the 21st century china chair and author of a book about how china derailed its peaceful plans. let's start with the conflict in ukraine. we have reports out that essentially china could seek to convince the world that it is neutral in this conflict. perhaps chinese diplomats could visit moscow with a fresh peace plan to end the conflict, but this is a situation where china has chosen aside. how credible is the plan? >> i don't think it is very

credible for china top offer its role as a peacemaker. it is -- its quote-unquote neutrality is pro-russia neutrality. xi jinping has yet to speak with zelenskyy. if you remember, china used to be the largest trading partner of the ukraine. china has always supported the sovereignty of nations and opposed interference by other countries, yet putin really snookered xi jinping into taking his side right before he invaded ukraine. now i think xi jinping is stuck in a tough spot. >> what about reports the u.s. has information that beijing could provide moscow with weapons? is that something that could destabilize the balance of power? >> it is interesting that

secretary blinken decided to make this claim, or this morning, public. of course, it is very serious. at the beginning of the conflict, we communicated very clearly at the highest levels that if china provided tangible support to russia in this brutal, unprovoked invasion of ukraine, that we would impose sanctions on china that were possibly just as damaging as what we have done to russia. so they have had this morning for a long time. by and large, they have not provided tangible assistance. but if they are skirting close to that, it is important to provide the warning so they don't do that, because not only would it have severe

consequences for the course of the war, but it would be very damaging to china's on relations with the europeans as well as the united states. >> it is interesting when you say about biden making this public because they u.s. and china managed to meet in germany over the weekend but even those talks were acrimonious. you think there is any serious effort to repair ties? >> i think both sides are motivated to get back to traditional diplomacy, to see whether some of our major disputes can be resolved through talks and to try to stabilize the relationship so this downward spiral becomes less dangerous. i think they are motivated to do that, but of course the balloon affair has interrupted that.

it has provided a whole new set of frustrations to both sides. the united states was unable to communicate effectively with the chinese side, which didn't answer the phone and didn't work together with us to try to get the balloon off the continental united states. when we had to shoot it down, the chinese shifted their line from being originally apologetic, to one where they are now trying to defend themselves by going on the offense against the united states. you see that in the speech, which certainly didn't seem to indicate any moderation of chinese policy. it was very a warrior-ish. >> we came into this year thinking beijing might seek to

repair a lot of its ties, particularly in this part of the world. we have seen that to some extent with australia but at the same time, you have more signals of regional cooperation to counter beijing as well. for instance japan looking to invite perhaps australia and india to the g7 summit. how hard will it be for beijing to reset? >> none of these things are actually threatening to beijing. they are the kind of deterrents leg of our effort to maintain peace and stability in the region. certainly from the standpoint of the japanese, the koreans, southeast asia, they want to have a decent relationship with china. and so does the united states. so this is not -- you know, it

is really up to xi jinping and his leadership. if he wants to react to every announcement of a new form of cooperation in the region to preserve peace and stability there, like with the philippines, for example, then things will continue to be very difficult. but he can basically ignore it and do what is actually more in china's own national security interest, which is to try to stabilize relationship with its neighbors and the united states. >> in terms of china's own interest, where would you see taiwan fitting into that? >> well, taiwan is of course the biggest hot button issue of chinese nationalism, mainland nationalism. it is the most challenging issue

for xi jinping. in the past, chinese leaders have actually been very cautious. in some cases, like under hu jintao in the early to thousand's, with the help of one ye -- with the help of the head of the taiwan affairs office, they pursued peaceful integration with taiwan in a way that was extraordinarily successful. direct links, transport links, trade links and that was an effort to kind of win the hearts and minds of the people of taiwan. of course, that was a different president. the minute it was a dpp president, the chinese leadership just dropped all direct communication with taiwan. so they have kind of boxed themselves into a corner.

the peaceful approach to preventing independence on the part of taiwan has withered away. they have given it up. now, the smart thing for them to do would be to resume dialogue with taiwan. and try to avoid the dilemma of having to just react to what taiwan does or the united states does by taking more of the positive initiative towards taiwan. but we don't see any sign of that right now. >> susan shirk, 21st century china center chair, thank you for joining us. we have more coming up from the goldman sachs global macro conference today. in the next hour we will speak about china's outlook for commodities, the boom, whether we are seeing sustainable signs of recovery. we will speak with the china basic materials analyst, and

later this morning the outlook for the boj. that conversation with the boj former executive director hideo hayakawa. yvonne: perfect timing, we actually have them speaking in parliament right now. when it comes to inflation, he believes inflation will slow midyear 2023. private sector lending has been increasing. labor demand, and elation likely to push up wages. he believes 4% can slow down from here. still seems to be dovish but when it comes to wages, that will be the big swing factor potentially. will we get that wage growth that will lead to this virtuous cycle when it comes to inflation? that remains to be seen. we saw the negotiations in japan. the march meeting is not going

to do anything. it is his last meeting. we have plenty more on daybreak asia. this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a new tool in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside and the other goals along the way

wealth plan can help get you there. j.p. morgan wealth management. haidi: sources tell bloomberg an indian billionaire decided against bidding for estate fact alessa tree -- four a state

backed electricity trader. there is reigning in the group is taking. >> this is part of the plan. we saw them scrapping the purchase of a coal plant the other day. we are told by sources that they are looking to rein in capex on some of the more capital intensive units like adani green and adani power, where they had been ambitious plans. they are continuing with the process of prepaying and repaying a lot of debt. that seems to be a big part of how they are trying to portray themselves as this good corporate citizen, as the opposite of what hindenburg had alleged a month ago, which set off this storm against them. yvonne: walk us through some of these prepaying of debt. adani imports says they did

prepay the short-term debt. how is this part of the broader plan? >> i think you have seen five or six times no where they have either prepaid or very diligently repaid debt that has come since the hindenburg report came out. that was a part of that. their leverage has concerned people who watch adani for some time before the hindenburg report. this seems to be a key part of their fight back, which alongside the fact, we understand more broadly, they are bringing in or at least talking to a bunch of international communications crisis experts. they have brought in the international pr firm. we understand they are working with one of the spin doctors

that worked with wework. they are bringing in the big guns alongside more methodical approach to reining in capex, paying that debt, and being a good corporate citizen. haidi: we are seeing volatility when it comes to share prices but there has been one standout that has borne the brunt of the selloff. >> adani total gas is a utility that they own. it is down 76% and may go down further. in the hindenburg report they said there are about seven adani units that are 80% overvalued. so gaining up there. there are between issues and that it is not very liquid. it was the most highly valued of the adani units per hindenburg and it is suffering from a drop in european gas prices and the lack of dynamism in that market. that is the one to watch.

adani total gas. haidi: we have more to come on daybreak asia. this is bloomberg. ♪ lomita feed is 101 years old this year and counting. i'm bill lockwood, current caretaker and owner.

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haven't seen that for some time. we haven't -- what was driving it? >> we went from negative on china's reopening the positive and it depends on what the mood is. u.s. markets were shot so the key was from china. the story is, is the covid reopening really taking hold? is the consumer strong? we are in a data vacuum before the mpc meeting and in terms of the budget, will there be a gdp target? who will be leading the economics team? there are lots of questions. all you can do is the -- is follow the market. haidi: do we follow the earnings as well? how much waiting is hbc going to have today? >> that is the big one today. hsbc has historically been hong kong's favorite dividend play. it has done incredibly well, at the highest since february last year. that is a yield story.

we are looking at the net interest margins, whether they are more profitable. anything on credit losses, this bank is exposed to china's property sector. earnings will be the only driver in this kind of policy and economic data vacuum we have in the next weeks. hsbc also a biggs earning week -- a big earnings week for tech. yvonne: money market rates remain elevated despite not injections. >> we will see if the pboc does anything to alleviate that. we may be seeing, liquidity is tight end it is unusual laughter the lunar new year for liquidity to be tight. it usually happens before. more likely, local governments are on floating -- frontloading, really getting ahead of the budgets to ramp up fiscal stimulus and get china's economic growth engine going. that is why we are seeing credit

demand. that is not coming from the private sector, it is government spending driven. we will see if the pboc injects short-term money into the financial system today. they might use the open market operations. yvonne: thank you. what to expect in the china market we can see day two of the rally. haidi: certainly hsbc is one to watch. the other stocks we are watching going into the market open, really, financials in focus with hsbc to release fourth-quarter earnings. this is bloomberg. ♪ anything. cheesecake cookies? [together] the chookie! manage all your sales from one place with a partner that always puts you first. godaddy. tools and support for every small business first. 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

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>> 9:00 a.m. in hong kong and shanghai, this is bloomberg markets china open.