shery: you are watching daybreak: asia. >> counting down to the market opens in tokyo and seoul.

haidi: australia has just come online. jay powell open door for bigger rate hikes and a higher peak that may come faster than markets expect. >> if the totality of the data would indicate, we would increase the pace of rate hikes. haidi: asian stocks are poised to fall on the comments. china unveiling its biggest bureaucratic overhaul in decades as xi jinping pushes economic self-sufficiency. shery: u.s. futures coming online muted. we are talking about every sector in the s&p 500 being in the red on chair powell's comments. we have another session of testimony on wednesday that we need to listen to very closely because we had treasury yields rallying across the board but the two year yield surpassing 5%

at the highest since 2007. a full percentage point higher than the 10 year yield and that hasn't happened since 1981. deep into inversion territory. the dollar also soaring in today's session at two month high which sank commodities across the board. the oil price was really down toward $77 per barrel. the biggest loss since early january and below the moving average for wti. >> deleted from the wall street session setting us up for grizzly trading across asia today. asx 200 just online. what could help stem the losses for that is what we got from the rba. yesterday we had the governor leaving the door open to a pause in rates. this morning also commentary coming through from a press conference that he is giving saying that they are getting

closer to a point where going to be appropriate to stay on hold. that will be done to the data. it also their assessment of the economy. you can see across the board more noticeable at the rate sensitive three year level. also a sign that has been forcing more weakness into the aussie dollar. something else weighing on the aussie dollar, here's what happens in china. we had the trade data coming out yesterday that showed a deterioration in imports. broadly, weakness in equity space and that is down to what we heard from the fed chair. let's delve into jay powell text money -- testimony confirming that he is ready to push rates higher at a faster pace if that's what it takes to bring down inflation. kathleen hays is here. how hawkish was he?

>> pretty hawkish. especially after the fact of the 25 basis point downshift at the last meeting. that's one thing that made his clear simple remarks today that much more powerful saying that rates may have to go higher and get there faster. saying that the peak rate may be higher than we saw in the dot plot in december when it looked like 5.1%. now as the hubble terminal rate instead -- probable terminal rate may be something higher. this was something that the fomc meant to say. let's listen what he said that signaled this. >> the latest economic data have come in stronger which suggests the ultimate level of interest

rates is likely to be higher than previously anticipated. if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. >> joining us now is a senior u.s. economist. when you were listening and when you heard him read his prepared economic statement, how did it strike you? was it more hawkish than you might've expected? >> you mentioned that it was a simple short speech. to me, it sounded almost like a re-price his jackson hole speech last year. it was very concise, very to the point. very hawkish. in terms of combating inflation at any cost possible. i think participants took note, pricing and close to 40 basis points of tightening.

that could prove difficult to walk back. obviously, he opened the door to a higher pace of rate increases, but it will be up to the data to decide whether the fed will follow up on the more aggressive policy action and a couple of weeks. i big it's very important to watch payrolls this friday and of course the cpi report on tuesday. again, unless the data surprises to the downside significantly, i think it would be a dovish message from the fed if they continue with a 25 basis point rate hike. >> we can't really tell from what he said, but we know it was the former vice chair push this view of maybe we need to downshift get to 25 basis points that was three or four months ago.

do you get some sense that there has been a shift as she got ready to leave and as she departed? >> as i was listening to chair powell's remarks, it sounded more like buyer's remorse of some sort. he almost went so far as to say that he regrets that they downshifted last time given what the data has been. it's not just the recent data that surprised to the upside, it is the totality of data including upward revisions to inflation. he almost what to say that had we known what we know now, about the data and where we stand, we would probably not have done 25 basis points the last meeting. >> markets a been talking about this sort of scenario for quite

a while. how much of a surprise was it that we are talking about accelerating rate hikes and where is the shift right now? are we seeing more leanings toward a faster tightening pace or is it still the preferred scenario that is higher for longer? >> we are expecting a terminal rate of 5.75%. this is our official view and we think the fed will continue hiking at 25 basis point pace. following today's remark, this is clearly an upside risk to the march move and we will see from the data. it's like chair powell opened the door, but it is up to the data to decide. if we see a significant upward surprise or something stronger in terms of inflation, i think it's going to be a very difficult situation for chair powell to step back.

that's why think it's very important to listen to the second day of testimony. the prepared remarks are almost always identical. but we will see if chair powell wants to refine the message tomorrow. does he want to reinforce? does he want to walk back? we will have to listen for the q&a. >> you say it's up to the data but that gets to the question of why his the data been so strong? to you is it because the fed hasn't done enough or because there are structural elements within the data that is feeding through or is it the transmission lag and affect that we haven't waited for? here in australia, hearing the rba talk about potentially getting to a pause because they are worried we will see the impact once the transmission lag carries a -- catches up. >> it's all of the above.

there is an element of seasonality and warm weather and the latest data no question. we estimate almost like 30% of the payrolls report number that we saw on january was due to warm weather. but you cannot just completely ignore the fact that the data has been really strong broad-based. you look at payrolls, personal spending, retail sales. there has clearly been some real acceleration in the momentum. the lags, the into miss long and variable lags. think about where we were a year ago or nine months ago. not near anywhere that would create this kind of policy stance.

we have to wait and also be very careful. to walk in 25 basis point increments. >> are you saying they should not do 50? does that mean you don't think they have that much further to go? some people say 6% plus is in the cards. >> risk management approach would say you have to be very careful and there are some long and variable lags intact that would prescribe 25 basis point increments. again if the february data surprises to the upside and this is very important because january data was so strong. we just need to see whether this was really due to some temporary factors or not. is it an acceleration? we need to see two much of data and if we are in the acceleration phase, i think the fed will need to do more.

>> great to chat with you. let's get you to vonnie quinn. vonnie: u.s. officials are reportedly set to loosen covid restrictions on travel from china. authorities have been assured by recent decline in deaths and china. the white house has endorsed a bipartisan bill that could give president biden authority to ban or force the sale of tiktok. you could hasten the bill's and break the deadlock. the bill doesn't specifically mention tiktok, but it would allow the president to force a sale of a tech platform on

national security grounds. >> we lack holistic interagency approach. instead of playing whack-a-mole on huawei one day, then tiktok, we need more copperheads of approach to evaluating and mitigating these threats posed by these foreign technologies by adversarial nations. vonnie: bloomberg sources say germany will probably prohibit some components made by huawei. the u.s., u.k., and eu have become increasingly focused on security risks posed by chinese -- chinese firms. global news powered by more than 2700 journalists and analysts in over 120 countries. shery: still ahead, china's new foreign minister advises against

a containment policy. plus, the latest from the national people's congress next. this is bloomberg. ♪

>> the latest economic data have come in stronger-than-expected. inflationary pressures are running higher than expected. it suggests we still have more work to do. we are very far from our price stability mandate.

ongoing increases for the target rate will be increased. the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy but over time, we can achieve 2% inflation and we will. we will stay the course until the job is done. >> fed chair jerome powell delivering hawkish testimony to a senate banking committee. the fed may raise rates by 50 basis points later this month. it's never a dull moment when it comes to the central bank observations. >> the surprise is to some extent the markets were surprised. >> he's being consistent. >> he and the fed have been

consistent. the different governors have all talked about at length the idea that at the last meeting even before the data came in hotter than expected, there was a constituency calling for 50 basis points and some of those people who called for 50 basis points but were overruled regretted that they let themselves be talked out of the 50 basis points. jay powell just sort of confirmed that that's the situation. central bank is looking a going there's nothing in the data that says we have tightened too far. the hint was there unspoken but it was there that the data indicate we might not have hiked enough. certainly we will need to hike further. 50 basis points is back on the table. the inversion is past 100 basis points. the bond market is saying that the fed is indeed willing to

risk a recession which jay powell has been saying since at least jackson hole. that if they need to, they will risk a recession if the data keeps coming in strong, they will keep hiking rates further than people expected and hold them up longer than people expect. with all of that, jay powell pushed the envelope from what had been expected but the direction was very much where markets had feared he would go and they fulfilled one of the worst fears. shery: you guys in australia seem to be going in the opposite direction. the rba could be pausing? >> again, is partly the data picture here is quite different from the u.s. except for inflation itself. inflation in australia, the measuring of it has some issues historically they have relied on

the cpi reports the come out every quarter and the most recent one for the end of last year was suppressed to the upside. since then, they have had a range of data including softer than expected gdp report, two week labor market reports. he mentioned all of that and that there is a potential for a pause, he did also say we are determined to get inflation down. we are on the lookout. he has flipped and flopped. he could do that again if the data pushes them to. the strongest data is notably softer than the u.s. hence you have a noticeably softer outlook for the rba and australian bonds outperforming treasuries because they are saying a back stop from the central bank the treasuries are not getting. shery: garfield reynolds with

the top stories on monetary policy. stern to china because it is overhauling many of its regulatory bodies in the biggest bureaucratic revamp in decades. it is part of a broader push for economic self-sufficiency in the face of u.s. efforts to prevent beijing from obtaining advanced technology. stephen engle joins us now with the latest from the npc. i know you have been trying very hard to summarize everything coming out from the national people's congress. is it fair to say that the main narrative seems to be self-sufficiency but also consolidation of power under xi jinping? stephen: absolutely and consolidation of discipline of the party around xi jinping on the various bodies he is revamping with the backdrop being this pressure coming from the united states. the gloves are off. it has been a fairly combative national people's congress. even xi jinping directly

blasting the united states for what he called the containment efforts. you alluded to the chips, but in ai and other advanced technologies. i think china really realizes with this new team of leaders that he is going to be surrounding himself with, that we need better party discipline, we need to face the reality that there is a bifurcation, i'm paraphrasing, but there is a bifurcation going on and china needs to be less reliant on others and more self-sufficient in core technologies for the future economy. that's why he is kind of revamping these regulatory bodies. the financial regulator will become a new behemoth in essentially the cbrc which was consolidated earlier. the insurance regulator and banking regulator together. now it will no longer exist it will be under a broader umbrella of financial regulators to contain all those risks. they will also create a new ministry for data protection. that place to a lot of the problems that have erupted

between china and the united states over data privacy and security, national security. the csrc, the securities regulator is going to be elevated to just under the state which placed in the narrative of national security with listed shares of chinese stocks in new york and elsewhere abroad. >> stephen engle there were the latest. you can get a roundup of the stories you need to note to get your day going in today's edition of daybreak. terminal subscribers can get it at dayb . the fabulous image of jay powell poised on top of a hawk. it is available in the bloomberg anywhere app. this is bloomberg. ♪

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shery:shery: now to the latest on silvergate. the bank has been in talks with u.s. regulators to find a way to salvage the business. su keenan has more. is there a way of this -- a way out of this financial turmoil? >> it looks like there may be some kind of rescue plan at least available to the bank. sources are telling bloomberg's that regulators from the fdic have been on the scene at the la jolla headquarters of the crypto from the bank since last week. officials have been discussing with management we are told ways to avoid a shutdown and one possible option may involve lining up crypto industry investors to help silvergate shore up its liquidity. the fact we are hearing the fdic is on the scene could be the latest sign of urgency. last week the firm said mounting losses may force it to evaluate

its viability. the key question now, can the bank survive? can discussions with the fdic help it along the avenue? analysts this week have been slashing their ratings on the stock. five of them have sell ratings. analysts no longer have target prices because the stock price has been plummeting down 97% from its peak back in november. sources say the involvement of the fdic doesn't mean the bank won't ultimately be able to navigate its trouble without regulators. but we are told fdic examiners are taking a look at the books and the records. again ftx implosion back in october had a very big impact on the bank and there has been a run on the bank and huge losses since then as the church seems to indicate. -- as the chart seems to indicate.

haidi: take a look at aussie bonds were we are seeing yields fall. looking at the reaction when it comes to the three year yield. this on the back of what we heard on the back of the dovish hike from phil lowe yesterday. the speech in sydney, saying that he has a completely open mind but key to market expectations and repriced, the rba now closer to the point where it would be appropriate to pause rate rises. traders betting on a 50% chance that the next meeting could be that pause.

>> the chance of our having a soft landing here is meaningfully higher than i thought it was six month ago. but we have war in europe, it

still very tough and complex relationship between west and china particularly the u.s. and china which is a headwind into and creates complexity. >> i think there are plenty of stocks that will probably go bankrupt. that is not the bulk of the stock market. this is a pocket of the stock market and i would say overall, the cyclical names have even gone too far. >> that was the goldman sachs ceo and morgan stanley's chief u.s. equity strategist. picking up on what mike wilson was saying, yes there is significantly more downside to come for some parts of the market particularly tech stocks but it brings this chart back into focus because morgan stanley has been very much focused on the equity risk premium. it has been deteriorating. that really does play to this risk reward for being invested

in u.s. stocks versus treasuries and that has only been heightened by the fed comments that have just been out jay powell sank the hats needs to be raised even higher and faster and previously expected especially given the economic strength we are continuing to see. the question is whether to stay invested in stocks or park your money in short-term treasuries. it seems to favor in terms of those notes. let's change now because it does play out across the market landscape. we see australia looking lower as is new zealand. singapore futures for the nikkei just online contracting .4%. also keeping and happening in china.

but we heard the comments from china's new foreign minister warning that tensions going between the u.s. and china -- >> in reality, it so-called competition aims to contain and suppress china in all respects and get the two countries locked in a zero-sum game. joining us, great to have you with us. this communication from the new foreign ministry is really just a far stretch from the relationship that was back in november. we had the meeting, the states like -- statesmanlike approach. then hopes that these adult

grown-up rivalry with guard rails would he place. what is changed and how to these comments dictate the way we go forward? >> if we were going to use one word for what has changed, we might say the word balloon. certainly, the surveillance that china led drift across the united states was very significant and visible challenge to the united states. i think it was really mistimed and unfortunate because it really turned the united states from skeptical but wrong to manage the relationship in a reasonable way to hostile and with their hackles up. that's not good. >> when you take a look at the

priorities from the npc,, it is clearly a lot of those domestic priorities are top of mind at the moment. the broader institutional restructuring and re-management of everything that sits under the party. where does the issue of how to deal with the u.s. fit in with that? there is a fair bit of conflict in those priorities. >> yes, you're right. because he isn't an official who has the ear of xi jinping, he is not close to him, it is also not entirely clear that what he has laid out is going to be the future election of the chinese government and its policies. that adds even more uncertainty. i think the signals are clear that china is going to make

serious efforts to try to increase self-sufficiency in food and technology. it is going to make some efforts to stimulate the economy, trying to rely on domestic industry including its private sector. at the same time, i think economic reformers recognize that foreign investment is still a very powerful vehicle to facilitate an economic boost. i think there are some overtures toward the foreigners are also occurring. it is just a question as to how all of this is going to be reconciled with xi jinping's overriding desire to control everything. >> who will be china's next best friends in the global environment? when you talk about foreign direct investments and trying to appeal to investors overseas and at the same time washington and its allies trying to rein in china. where will this come from?

>> it's a good question. europe has had a much more business oriented relationship with china and it is very common for china to try to split the eu from the united states and get it to take softer lines and therefore get better access inside of china. but that's the promise. i think the skepticism over china's actions including its support or its lack of condemnation of russia in the ukraine conflict is actually making it much more difficult for china to be credible in making the arguments to europe that they should be ignoring the kinds of skepticism that is coming from the united states. it's going to be a challenge.

that said, a lot of the businesses in western countries are active in china obviously and the trade has never been higher in terms of volumes. i think we are going to see an effort by businesses that are not in the crosshairs of this national security policy initiative that are going to try to keep going with what it is they are doing in china albeit carefully. shery: how concerned are you about how overtly hostile china is being right now during the national people's congress? something that we really had not expected that they would signal out the united states as leading western countries when it comes to trying to contain it? >> that's a very good point. up to now, xi jinping has avoided naming names in terms of where he sees challenges coming. the fact that he has explicitly

blamed the u.s. and the west for china's challenges is problematic. it may signal his desire to find -- to divert attention from the policies that he put out there that actually harmed the chinese economy and could continue to hamper china's growth. if that is true, that's want to make u.s. china relations even more difficult and it does increase the risks of further hostile policy moves from beijing if they're using that as cover. shery: also from the u.s. retaliatory moves. good to have you with us. let's get to vonnie quinn. vonnie: jerome powell says the central bank will likely lift interest rates higher and possibly faster than previously anticipated. he said inflation remains well above the target. traders are now betting on a 50 basis point hike later this

month. french unions have pledged to keep up their fight against the pension plan. turnout for the nationwide protest has surged to 1.2 8 million people. the movement has disrupted energy infrastructure. getting the french to work longer and retire later is part of the plan to make the economy more attractive for business. a ceo says returning chinese demand is already exerting a poll on some resources. he told us the second-biggest economy is set to surpass the growth target of 5% set this week. he also says it's a good thing that russian oil continues to flow despite the g7 price cap although shipping costs remain a headwind for some markets. >> barrels are flowing, but because of the high freight rate , i'm concerned about the longer distance markets like latin america and africa.

remember seeing the collapse to some degree. i think we could still see some tightness in europe and other locations. it is the long distances that are going to be problematic because freight prices are pricing them out. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. haidi: coming up next, we speak to guest about the strength and energy and commodity contracts as well as the zero carbon transition. this is bloomberg. ♪

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we've got you. what about shoes? mhhm. styled for me? for me? always. we'll pick the clothes. you enjoy the great fit. stitch fix. >> the world is not going to run out of copper. there will be a much higher copper price than we have today. shery: our next guest says she is seeing record interest in energy futures markets. thank you for your time. give us your take on market

activity right now given the uncertainty of volatility around where the fed goes from here. guest: thank you so much for having me. ice is really an all weather company. we cover different asset classes, different regions, and we do really well and volatility. you can see that with the volumes and open interest we have seen across our commodity come across our energy contracts. even our contracts, our natural gas contracts, are volumes liquidity have been the highest we have seen since march 2014. one of the places where we are seeing a huge amount of interest is in the carbon markets. the carbon markets span everyone. it's not just corporate, not just financial institutions. everything from governments down to consumers. even if i go to my local new york salad shop, now i can get net zero salads.

it's quite an amazing little prospect. [laughter] what we are seeing with ice is that our energy and our environmental markets are the most liquid, the deepest environmental markets globally. we are seeing a lot of that interest coming out into asia. in korea, we are seeing etf providers launching etf's based on our carbon markets. in the u.s., our carbon markets include original greenhouse gas initiative, california carbon contracts. they use these to launch ets because there is a lot of demand for that. shery: why is that, is that the broader global energy picture right now? guest: there is a real move toward the energy transition. firms have commitments to get the net zero. they have commitments to move to renewable energy. it's why you're seeing increase in demand and contracts such as

>>, are renewable energy certificate. it is basically taking a megawatt of electricity and certifying that it comes from renewable sort -- sources. those of increased by 40%. these commitments, these firms need to figure out how to allocate capital toward those commitments. they need to manage their price risks and they are doing that with our contracts. haidi: how much is the reopening of china change the expectations when it comes to commodities and energy demand? guest: we are seeing -- china is quite interesting. we are seeing much more demand come out of there and it is across all of our energy markets but also across our agricultural contracts. they do a lot of looking at the sugar markets, focusing on the comp -- cotton markets. we are seeing increase in demand, the state owned enterprises continuing to do more and more volume out of our

exchanges. haidi: one of the biggest shifts that we have seen last year was in the esg space. there has been a lot of both negative and positive developments when it comes to more regulation that needs to be done as well as concerns over greenwashing and green wishing. do you see that reflected in the demand for contracts in volumes across your business? guest: we have especially on our data side, we have a number of indices. art of our firm on the data side ice data indices, they create a number of these indices and its making sure that these underlying contracts they are using our compliant when they are focusing on this index. it's questions we get from client perspective that. that's why carbon futures are often something the clients turn to because they understand that because they know that when they

are allocating capital, they're allocating it to the right place. shery: given the global nature of trading on global exchanges becoming faster and more automated, we have seen some of those challenges as well and i think you are really well-positioned to talk us through some of the cyber concerns that have risen given a hacking recently. what are the key takeaways? guest: when this happened, it didn't impact us directly, it impacted handful of our clients. that indirectly impacted us. what happens when clients at the end of the day pass is positions and if the positions are accurate, we can put together position reports the glut to clients, analysts, users. that was impacted that was the only place. volume is not impacted, but what we did find interesting was the industry really rallied around during this event. there is an organization called the fia they had people set up

on calls, i think the first one had over 600 people and they were running calls five times per day to make sure people could get on, talk about what they are hearing then get all the right information. we found also that for us, it's important to look at the back office and make sure we're getting the right information and get it up and running from our clients. its making sure we understand different clients like ion which is not a household name, that it impacts the financial stability of the market. try to understand that, tried to make sure we have all of our backups, we have created an environment where we can quickly responded to any problems like this. with internally and externally with the broader group of clients and the broader industry. haidi: great to have you with

us. we have much more to come here on daybreak: asia. this is bloomberg. ♪ lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us.

learn more at getrefunds.com. thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh shery: we're getting the current account deficit number widening to ¥1.997 trillion. this is coming from a narrow surplus in the month of

december. it is also number -- more than double what economists had expected. we continue to see export prices surging on energy and japan and that is outstripping the price gains in exports. external demand around asia has been pretty weak so those trade numbers and export numbers for the tray dependent economies have been hit but now we are seeing the current account deficit for japan widening to ¥1.977 trillion, or than double what economists had expected. >> the country of japan has failed in his latest attempt to capitalize on the growing demand in the global space industry. it issued a self-destruct order for its h3 rocket shortly after takeoff on to state. it is further blow to japan's aspirations of taking on spacex. next up could be south korea which is eyeing a third watch of its rocket this year.

stephen engle got exclusive access to the rocket launch program. stephen: south korea has lofty goals for its space program that needed one giant leap of faith in a search engine to get it off the ground. treaties between established space powers like the u.s., russia, and france prohibit certain tech transfers to aspiring nations like south korea leaving a small team of pioneering rocket scientists scoured the web for ideas. >> looked up on the internet to compare and find a suitable launch vehicle. will caught our eye was spacex falcon merlin engine. we developed hours looking at the picture and using it as a point of reference to design. stephen: this is an actual launch vehicle not a replica. bloomberg news got an exclusive and unprecedented tour of the entire space center were the

first to rockets were launched including a successful test mission last year. what did you feel when it longed for the first time? >> my heart is being faster. stephen: the next launch will deploy actual commercial satellites, powered into orbit by spacex inspired but locally made engines and nearly 300 tons of thrust. >> which i'm to build a company like spacex. >> the model mary's efficiencies with prowess in chips. at present, it costs $80 million u.s. per launch. later this year, south korea's government run will transfer its rocket launching to a private company, a rocket engine maker.

>> we are seeking to see if they can make this but it's a very hard task. elon musk has made a very tight market for other companies. stephen: this is south korea's main launch center and launch plot -- launchpad. over here, they're going to expand it because they have larger ambitions for destinations further afield including the moon and beyond. >> lift off of artemis one. >> mainly participation in artemis program. national security will be a key driver at a time when north korea is improving its rocket capabilities and a sanctioned russia means one less rocket launch provider available to south korea. >> it's important to find cheap launch vehicles from a business perspective. but i think it is very important

for the country to have the ability to put satellites or things like this into space when we want to. stephen: to get into the once fairly exclusive but now increasingly crowded mobile space club, south korea may emulate another american accomplishment, the kennedy space center. to transform these islands into an aerospace industry at the center. shery: we will head to seoul and tokyo for the market opens next. this is bloomberg. ♪

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shery: most inversion since 1981. it was not just about rates being higher for longer, the potential faster pace of rate hikes. haidi: for australia a could be the paws around the corner. the following australian yields. divergence fly. let's get you to the market opens. annabelle: he ought, 60 four cents against the greenback. let's take a look at the start of trading. keeping an eye on the yield curve. it two year yield is exceeding the 10 year yield. in terms of what that tells us, it's down to the outlook for the

fed policy rate. jay powell indicating inflation risks are to the upside. the labor market is tight. policy markets are prepared to change not only the speed but level. swap markets indicating the q8 will top out at 5.66%. this is the state of play. mid-december low against the greenback. in terms with that means for the outlook for policymakers in japan, the last policy meeting on friday indicates the level of dysfunction in the bond market could leave to some sort of policy surprised but most are expecting no change. we have south korea coming online and we are keeping an eye on a few set of stocks including

sm entertainment. it has just risen above the offer. tech stocks, nasdaq dropping more than 1%. the korean won is a huge move. it's a risk sensitive and barometer of risk appetite in the market. let's change on. one hour into the session, it comes down to the rba saying there could be room to pause imminently, otherwise, stocks are lower. we have blown past this.

haidi: can you break it down first? so much volatility with central bank trajectory, so which markets are you seeing relevance given we continue to see rate sensitive sectors taking a beating? >> in terms of tech, as you know, we have hardware leaders starting with tsmc. right now, we are focusing on future structural growth within tech so this can be ai which

benefits the asian tech supply chain. over the past year, valuations have become more attractive so we thought it was a good chance to go with large overweight in that sector. haidi: south korea is a market your constructive on. >> korea has always had a discount given issues with governance across large corporate's. we are now seeing a slight change of direction in a positive way. we are seeing regulators pressuring companies on shareholder returns, we're also seeing positive signs from corporate's themselves. this is may be largely due to a generational change, the way they think about how they want to manage the country in the future.

corporate governance improvement is one factor we are focusing on. shery: how much does it help that you have a weaker korean won? also, i want to ask about the broader meaning of a stronger greenback for all of these other asian economies. >> generally, the strong dollar is not positive for the region, but if we think about korea alone, china reopening is a positive for them in terms of exports and the korean won would help in the near term. again, if we look at the overall region as a whole, we would want to see the dollar peaking or leveling. shery: do you like china?

we have seen state owned enterprises doing pretty well. but same time, economists and investors are disappointed on the growth target. >> i would not say we were disappointed at the growth target, again, as you know, the number is just a number. we always focusing on language. we think is positive for realistic targets, because we know that the property sector can no longer be a growth driver for the economy, and as the guidance came out, we are focusing on consumption recovery as well, chinese consumers have a lot of savings. what needs to happen is for consumer confidence to pick up more. we were not disappointed, we are cautious in that longer-term growth rate need to come down,

but we are focusing on the consumption pickup in the near term. haidi: do you expect a meaningful pickup in margins going forward in china? >> so far, the most recent set of results did show large corporate's do have cost discipline, lower topline because of lockdowns because margins were solid. if we can keep the momentum going, if we see margins keep recovering, that would be very positive for chinese stocks. shery: good to have you with us. let's get to vonnie quinn. >> u.s. officials are set to loosen covid testing requirements on travelers from

china. the washington post sites official saying they have been assured by declining covid deaths and infections in china. the requirements went into effect on january 5 after beijing lifted its covid zero balls is. the white house endorsed a bipartisan bill that could give president biden authority to ban or force a sale of tiktok. it could break a deadlock. the bill does not specifically mention tiktok. >> we lack a holistic interagency whole of government approach. instead of playing whack-a-mole, we need a more comprehensive approach to evaluating and mitigating these threats posed

by these foreign technologies. >> bloomberg sources say germany will likely prohibit some components made by huawei. a paper shows the supplier could be restricted from supplying key parts. the u.s., u.k. ndu have become focused on security risks posed by chinese firms. 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 am vonnie quinn. this is bloomberg. haidi: let's take a look at some early movers. annabelle: keeping an eye on was happening with snm entertainment. -- sm entertainment. we are seeing sm entertainment rise above, to cow entertainment

upping the state to around 40%. conflicts. hybe was looking to buy shares. there are a lot of movers in the session, it's all focused around the fed, jay powell indicating rates are moving higher and faster than previously expected. we are seeing big tech weakening. futures are flat. another sector we are focusing on what is happening in the oil space. we are seeing wti falling below support levels, again, we are seeing names declining at the start of trade. you can see wti off one half a percent. big keeping an eye on japanese automakers in the session. we see the japanese yen slide to

a mid-december low against the dollar. you can see it there. also, we're keeping an eye on the sun. it's been cut to junk. the stock falling, a lot of concern around the outlook for the company. shery: still ahead, a preview of cathay pacific earnings that are due out on wednesday as the airline tries to continue recovering from the pandemic. up next, more on the fallout from the hawkish day on capitol hill. this is bloomberg. ♪

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goal. until the job is done. shery: jay powell delivering his hawkish testimony to the senate banking committee. treasury yield topping 2%, the most inverted since 1981. the picture across asia is a little mixed. real estate is gaining ground. energy is pulling the index lower. the asx is lower. the kospi is down more than a percent. the worst day since february. the market reaction across the board in asia. for more, we are joined by kathleen hays. the first question is, how hawkish was the fed chair? kathleen: pretty darn hawkish.

it's interesting as much as markets at such a big reaction, it seems to me he has cleared up some questions about how hawkish the leader of the fed is, particularly after the downshift to a rate hike at the last meeting. by doing this, he has made it clear that because inflation is too hot, his inclination is rates not only have to go higher but they have to get there faster. that's putting the stamp on the possibility of a 50 basis point rate hike. steve blitz, power versus reality. score another verses -- for reality. the headline is, it tested

admission the downshift was a mistake. another person who thinks the fed will be better advised to keep doing 25 basis point hikes said it was almost like buyer's remorse that he regrets having done the 25 basis point hike, other hawkish things, december dots probably compared to the ones coming up next week, those dots coming into weeks may be higher than december. is he looking at 5.5? the markets are pricing in something like 5.6. bottom line, all about the numbers. how hawkish? it depends. for final demand to slow,

because the labor market is strong and there is not as many paychecks growing and is determining what the fed does or does not do. haidi: is phil on the other end of the spectrum? kathleen: it has been fascinating since yesterday, the 25 point basis hikes were a dovish hike. how dovish was it? certainly enough to open the door to a pause at the next meeting, but after we got mr. low talking today, yesterday, the policy statement said inflation has peaked. these are all things to say has

downshifted. as the q and a continued. the rba he says has a completely open mind on the next policy meeting. another retail spending, they are watching the numbers. how hot is inflation? does it continue to come down? again, i would say more dovish. if you look in the middle, is probably on the more dovish side. it's all about the numbers. watch the numbers. that is your strongest clue. haidi: kathleen hays. china is overhauling many regulatory bodies in the biggest bureaucratic revamp in decades, part of a broader push for economic sufficiency in the face of u.s. efforts.

stephen engle joins us now with the latest from the national people's congress. what do we know? >> it's probably in response to pressure beijing is feeling with export controls led by the biden administration on advanced technology and bifurcation of the relationship. it seems as though leadership is taking the gloves off, this is been a combative national people's congress so far. they're playing to a domestic audience in large part because most people in the united states are not going to be digesting the words word by word. lang with fire on taiwan. fed policies. export controls. these moves to revamp the regulatory bodies is in direct

response to what i believe leadership sees as the new normal, the united states will continue its aggressive approach towards china and china must adapt quickly, forcefully, and in a pragmatic way. that means revamping the regulatory bodies and revamping control of those risks. that is why the financial regulator will become a broader behemoth that will encompass what is now previously broader umbrella to help contain those financial risks which were brought up in a several years longer crackdown, they will have a new data regulator controlling and limiting the risk of sharing

data. shery: caroline: stephen engle with the latest. get a round up of all of the stories to get your day going in today's edition of debris. also available in the bloomberg anywhere app. customize the signing so you only get the news you care about. this is bloomberg. ♪

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biggest payraise in years. more from kathleen hays kathleen: he wants to raise wages as inflation hits workers, even as his cost are being squeezed. what if the economy turns down? >> and japan, once you raise wages you cannot lower them. it's difficult to dismiss employees. once it's up, it has to keep going up. >> this kind of reasoning as blue-chip firms from shifting gears and raising wages.

is this enough to ensure 2% overall inflation? the big question is how much large japanese companies are more willing to give wage increases. out of a 3.6 million companies, 99.7 had -- 76% employs 30 cut mustard i. the soaring price of electricity led his board to agree in part to make and retain workers.

>> this time, staff are worried about the future otherwise they may leave us. when you think about that, i don't think it's a costly investment at all. ask at least for now, many economists say momentum is rising. >> even if inflation does come down, push hard. >> any is out of the small supermarket in tokyo. cells are flat or even falling, but he is hoping a torus influx can help. >> eventually, sales will go up, then i would like to raise wages almost immediately. kathleen: the outgoing governor

says wages must rise 3% in a stable manner. it looks like it's up to small business owners. catherine hayes, bloomberg, tokyo. shery: let's take a look at the fx landscape. reacting to a couple of things. the more hawkish tilt from fed chair powell, we are seeing the resurgence of dollar strength playing out in particular when

>> we have complex relationships

between the west and china. well below zero bedrock. >> that was the goldman sachs ceo, we're focusing in and around morgan stanley. further downside. we could see as much as a 20% correction, but broadly the s&p 500, what is dropping back? is it the risk reward ratio?

the expectation is deepening the yield curve inversion, it has been a reliable with strength coming back in nearly intraday high for the year. that is casting a shadow over the session in asia. we are seeing a retreat coming through in bond yields. in the commodity space, we're seeing wti moving below moving averages. the korean won is passed the 1300 level, for hong kong

futures in about an hour, down mom .3%. it's not just a function of the fed. other factors including trade numbers from china heading to the issues in this city. >> next week we will see the expansion of a program that allows investors to trade shares with primary listings on the exchange, the update will include listed companies to be bought and sold through shenzhen and shanghai. joining us now is the co-ceo. great to have your with us, this is an exciting enhancement, we continue to see u.s. china tensions, very visible. what is the appetite out there

for foreign companies to list in the city? >> thank you for allowing me to be here. on the topic of that, i agree it's an exciting development. we consider this a major game changer. international companies are listed and cannot be included in this market next program. this is a game changer. we are able to tap a massive investor base on the mainland. to your question, the joint announcements, one thing know

more about is the new developments, we will step up on our efforts for these companies. shery: what does the ipo company look like? >> they come in all sizes. we have interest from a diverse set, i cannot give you names at the moment but i can say -- haidi: how you seen the recovery?

>> a strong interest to reconnect. over the last three weeks with travel restrictions have lifted. we see a lot of delegations, both from overseas the mainland cities and provinces and everyone is eager to connect. i'm sure the next chapter will be for us to reciprocate again,

the level of activity i have seen in the past few weeks is an indication for what lies ahead for the remaining 2023, we have a lot of things to look forward to. haidi: one of the things that is complicated and we have heard about exchange through lme has been hit with more lawsuits over nickel trades. what is a strategy at this point? hello you see this as being a continued overhang? >> first of all, we believe the cases are without merit. i'm sure your shape we cannot comment further.

delivered metals. we are considering the recommendation and we aim to publish an implementation plan at the end of the first quarter of 2023. those are the steps we are taking and we are providing support. haidi: at what point do you need to consider provisions be made? >> like i said, we are taking steps to make sure we continue to build on long-term health. given the litigation, i will not peel to comment any further. >> thank you so much for joining us.

shery: the technology company is paying a whopping 50% of interest and a watershed deal with the industry. >> president xi jinping has unveiled the biggest overhaul of bureaucracy in decades. beijing would restructure the ministry of science and technology. the u.s. has ramped up measures. french unions have pledged to keep up the fight against the pension plan. turn for protests have surged to a record people. the move disrupted energy infrastructure.

getting the french to work longer and retire later as part of the plan to make the economy more attractive for business. the ceo of a commodities trader says returning chinese demand is exerting a pawn on resource. he told us the world second-biggest economy is set to surpass growth target. he said is a good thing russian oil continues to flow despite the price cap, although shipping costs remain a headwind. >> barrels are flowing, but i'm worried about longer distance markets. the african-american markets. this is where we have some problems. this is where we are seeing the collapse. we could see some tightness in europe, but as the long distances which are problematic because freight prices are pricing them out. 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: the ceo of one chairmanship joins us for the sports media industry and a streaming partnership with amazon prime. this is bloomberg. ♪ welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. what does it mean to be ever better? its your customers getting what they ordered when they expect it. discover how ryder ecommerce makes your customer's experience

ever better. >> women are saying, i can't do

my job at the same intensity as before or at all. if i don't have safe and affordable childcare. that's a problem. >> when it comes to decision-making, we have a big gender gap. >> we have to raise our voice to be heard. >> get the men in power to see the problem and want to fix it. >> how you create workplace diversity, i want the best talent, if you believe it was not at the table in the room. >> women have been at the center of innovation. they don't hold leadership

roles. >> keep fighting for. -- for it. haidi: some thoughts from female leaders who have broken barriers in the fight from gender equality as we mark women's day. our next guest is leading an industry traditionally dominated by men, combat sports. let's bring in the group ceo at one chip in ship. great to have you with us. tell us about your experience. how difficult or challenging -- >>, sports i would say we are actually quite progressive.

it's pretty evenly split, 50-50 male and female. we have a third of our senior leadership team is female. it has not been easy, i used to work in financial services. a lot of it is having a community around you, seeking out mentors. as i have grown in my career, when i have been more open to asking and accepting help, that has helped me tremendously. haidi: in terms of the business, give us an idea of how that is going. we're interested in terms of amazon prime and how key is it? >> we are super excited.

we had a streaming partner prior to amazon, this is the first time we have live, primetime events. u.s. fans can turn it on a monthly basis to watch us on amazon. we are having our first u.s. event in may, so far we have gotten great feedback from our fans and our partners. one of the things that is differentiated as his we have a wide variety of martial arts, unlike u.s. counterparts that focus exclusively on mma, we also have a distinct brand identity compared to other

combat sports. we took a bit asian values, focusing on sportsmanship and not so much on conflict and violence. going forward, amazon is a huge anchor partner for us in terms of the u.s. growth strategy. shery: the debut fight in denver includes female thighs. tell us about interest. >> the debut fights, this is our first on ground event in the u.s., it will be in denver, colorado. we are bringing in our great female fighters. she is a homegrown talent, we discover her when she was very young and she is going to be one of our biggest female superstars. interest has been really high. we're almost completely sold

out. we hope to build on the events. shery: the growth strategy you talk about in the u.s., what does that mean for public listings? could you consider a listing after the u.s. and hong kong, or singapore? >> ipo is something we consider, so that's definitely on the table and some that we are looking at. a dual listing is possible, maybe in singapore or thailand. all of those things are on the table for us. shery: looking forward to those plans. thank you so much for joining us. we have plenty more to come on daybreak asia.

this is bloomberg. ♪

it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david! connect with an advisor to create your personalized plan. let's find the right investments for your goals. okay, great. j.p. morgan wealth management. haidi: japan has failed in its

attempt to capitalize in space. the space agency issued a self-control -- self-destruct order, a further blow. next up, south korea is i and launch. >> south korea has lofty goals. treaties prohibit certain text transfers. meeting the team of rocket sizes have to scour the web. >> we looked up on the internet to compare a suitable launch vehicle.

what caught our eye was a spacex engine. we looked at a picture and use it as a point of reference. this is an actual launch vehicle. not a replica. bloomberg news got an exclusive an unprecedented tour of the space center where the first two were launched including the first successful test mission last year. >> what did you feel? >> my heart was beating fast. >> the next launch will deploy commercial satellites powered into orbit by locally made engines, nearly 300 tons of thrust. >> we are trying to build a spacex company. >> it's a model that marries and

cost of that $80 million compared to $67 million for a larger falcon 9. that's large you are later this year, the government will transfer commercial rocket launching to a private company. >> if we can make the rocket profitable, elon musk has made a tight market for other companies. >> this was the launchpad for the last two rockets. over here, they're going to expand it because they have larger ambitions for destinations further afield, including the moon and beyond. >> left off. >> namely, participation in the

artemis program. national security will be a key driver. i sanctions russia means one less rocket launcher available to south korea. >> it's important to find cheap launch vehicles from a business perspective, but i think it's important for the country to have the ability to put satellites into space when they want to. >> to get into the once exclusive but now crowded space club, south korea may emulate another accomplishment. the kennedy space center. to transform these islands into an epicenter. shery: u.s. futures trading pretty muted. we see treasury yields higher

with the two year a full percentage point above the 10 year, and the asian session we are talking about the deepest inversion since 1981. it's all to do with the hawkishness coming from the fed chair we have more testimony in congress on wednesday. we will see where markets go from here. >> we're seeing japanese stocks holding their head above water. broadly, risk appetite is pretty dim. asian stocks are declining after the hawkish sentiment, the dollar higher, a lot of selling when it comes to asian currencies. the kospi elites declines down by 1%. australian stocks are trading, the biggest decline since the end of february. we're watching a bit of weakness

in the aussie dollar. this is some stocks we're watching as we get into the start of markets trading and china. tech stocks are making pressure. higher, faster. alibaba, tencent. we are watching gold and copper producers that can decline on the hawkish testimony. senator, we're seeing declines at close to 5% in australia. 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.

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>> 9:00 a.m. in beijing and hong kong. welcome to "bloomberg markets: china open"