shery: you're watching daybreak:

asia coming to you live from new york, sydney and hong kong. annabelle: going down to the market opens in tokyo and seoul. haidi: australia has just come online. u.s. cpi accelerates leaving the fed trying to balance the inflation fight with financial instability. asian stocks poised to rebound as investors that the worst of the fallout has passed. tiktok considering splitting from bytedance to address u.s. national security concerns. cathay pacific's new ceo tells bloomberg profit is in once more for hong kong's carrier. >> do you think you have a staffing crisis? > i think we are making steady progress toward our plane. there's a lot to rebuild. i think we are rebuilding to our plans. i don't think we are in crisis mode of any sort. haidi: we have breaking news it comes to south korea. unemployment holding at 2.6%.

better than expectations of 3%. a little softer than the january reading of 2.9%. those seasonably adjusted rate for february. an unexpected decline in the face of economic stress particularly in the export sector that has been weighing more broadly on economic growth. this is being seen as a sign of resilience adjusting the south korean labor market is holding a better than expected in the face of higher interest rates and slumping exports. dropping from 2.9% in january to 2.6% adding 312,000 positions to the economy from a year earlier. we know this is a key barometer of how the broader economy is performing. we have had a year and a half of the be ok's monetary tightening. last week we heard from the finance minister warning the slowdown in the economy would have an impact on employment he also spoke about more funding

for job creation. this should give just another tailwind lift to sentiment today. annabelle: that is right. this has been a closely tracked metric and would help those in the bok breathed a sigh of relief. let's take a look at what we are seeing for australia given we have the open. seeing a three-day slide, rising 3/10 of the a percent. that is with reaction to the u.s. inflation print that is slightly hotter than expected core cpi reading. also what that means for the fed, whether a 25 basis point hike is a done deal next week. we are still watching the moves we have in bond yields particularly the shorter end of the curve. the aussie three-year tracking the moves we saw in treasuries overnight. keeping a close eye on the tech stocks. they are outpacing the gains of the broader asx 200 at the open. a staggered start. still another few minutes to be fully online but that was the biggest laggard.

the nasdaq posting its best day on tuesday since early february. let's take a look at the broader region. kiwi stocks pointing higher. a couple hours into trading there. japan futures fairly flat. we are still keeping an eye on what is happening in the japanese yen. a little bit under pressure this morning. had been watching a little bit less focus on the rate differential between the boj and the fed. the bit less pressure to pivot. chinese futures, keeping a watch on that one. the alternative play for those traders looking for somewhere outside of the u.s. shery: take a look at what is happening in the u.s. because futures under pressure after we saw the s&p 500 rebounding for the first time in four sessions. every sector in the green. traders a little bit more optimistic than the -- now that the worst of the banking turmoil is over. the fear gauge falling today the s&p 500 gains were cut by half

in the afternoon session after we heard the rushing fighter jet collided with the u.s. surveillance drone over the black sea so we are following the latest on geopolitical developments. watching the 10 year yield, the two year yield climbing and passing the 4.2 percent. oil in the asian session rebounding after sinking to a -- to a three-month low. we are talking about a late day plummet because freighters were concerned about the supply picture. haidi: really retaining the focus on the inflation picture. the hot u.s. inflation report. concerns continue to linger over the financial fallout from the collapse of three banks in five days. our global economics and policy editor kathleen hays is here. it was never an enviable position being at the fed. it is even more complicated now. jeanette garrity was talking about this idea that this dense the fed's confidence a little

bit and pushing the argument perhaps we should wait longer for the transmission lag to catch up. kathleen: maybe it is not so much the fed's confidence peered maybe it is the fed's prudence peered maybe it is the fed's responsibility to maintain financial stability. every bit as fighting inflation. one thing it must do is avoid financial debacles. it is not that bad at all. that is why everyone is stepping back and rethinking. it does get more subtle and complicated for the fed. it's run through the key elements of the cpi. the problem is the core cpi is holding steady. it is not coming down. the fed is not making a lot of progress on what they need to do. the headline fell a little bit last month. 0.5 to 0.4. the core rose 0.4 to 0.5 peered at is the biggest monthly increase in five months. what is driving at? a big drop in energy per prices. that is helping the headline.

on a year-over-year basis deadline improved from 6.4 to 6.0. it continues to go up. you have things like airfares. you have food at home. you have these housing rents. shelter cost. keep going up. those are the things the fed was arguing -- jay powell a couple weeks ago opened the door to a 50 basis point hike. there you see the numbers overall for the month and so on. i want to show you another chart . we break it down and make it really simple. you are going to see goods prices, services prices and you're are going to see the super court peered core services minus housing. this is the chart i think speaks so clearly because you can see the goods prices coming down. you can see the blue lines continuing to go up and steady around -- just over 7% on services. the core services, yellow line

has stalled out at around 6.1 for two months in row. it is not making progress. there you are the fed. you have to deal with inflation and financial turmoil. what you are seeing is this concern that maybe things are steady now but there other banks, medium-sized banks sitting on losses and if the fed keeps hiking, if it boils things again that is something they want to avoid. that is the issue. shery: really all this data pointing to the key question, what will the fed do next? what do economists think? kathleen: economist the last couple of days and even yesterday we had nomura saying there is going to be a cut. it is not to thousand eight. they don't need to pull out all the stops. let's see what the markets are doing and they are pricing back in a rate hike next week. the odds cut down to 50 basis points peered know they're back up to 80 basis points.

this the great chart because you can see people are saying maybe the trammell rate is 6%. it felt so below 5%. now it is over 5.1 where it had been for a long time. ethan harris has been watching the fed for decades at bank of america. he says the fencing around the financial troubled institutions is going to work and the fed is going to have to start hiking rates again. the big question is do they do a pause, a prudent pause order they say in the wind at my back could the tailwind from the stronger cpi report, that is the bet investors have to make. shery: we are really watching what is happening in the banking sector with the wall street journal reporting the fed is considering tougher capital and liquidity requirements for midsized banks as well as steps to beef up annual stress tests. bloomberg's finance editor joins us with more on what is happening in the banking sector. we have been watching the latest

developments. three letters collapsing in the span of a weekend what this means for smaller banks. we have now seen moody's come out belatedly saying there is a problem here. >> what moody's said today or yesterday was cut the outlook for the entire u.s. banking system to negative from stable. they did this as they cut the outlook for six regional banks. so some of these banks have seen big stock drops. more yesterday. today there has been a slight recovery. you are looking at a banking system that is not as healthy as it was a week ago. haidi: when it comes to the future of svb or its component business, we have seen interest from some of the largest pe firms, they have been circling around the loan book. what parts are they interested in and what is compelling about this? >> there is multiple parts to svb. it is not just the bank will

know failed late last week. there is a loan book the private equity firms are interested in peered a $74 billion loan book as of the last -- as of the indy of last year. real borrowers are paying their payments. companies like apollo, ares, blackstone are interested in those phonebooks. blackstone is looking at other parts of svb potentially as well. shery: it is all about regulators trying to figure out what is going on. they are looking at executive stock trades cared what do we know? >> we don't know a lot yet. we know there expanding their vesta geisha and into the collapse to the stock trades. we did report last week svb's ceo sold about $3.6 million of shares not long before the failure. that was a preplanned stock sale so that may not be the issue at

hand but there is a lag between when the sales are happening and when they are reported. they are looking into other stock sales as well. we don't have a lot of information but we know they are concerned about the executive stock sales. often executives have a lot more information before the rest of us and if they are trading on that before the collapse then that could be a problem. haidi: really interesting what we heard from the new ceo of silicon valley bridge bank asking for depositors to come back to the lender to help them rebuild and forging the argument that with the backstop this is the safest place in the united states to put your money. do you think the process of rebuilding confidence is going to work and to what extent does it actually help intentionally reshape what becomes of svb given we know there is a high likelihood it is going to be broken apart into different pieces? anyway >> it is a great question. what happened on sunday is the

regulators took an action that basically makes every deposit across country and all the banks insured or not insured safer. they're basically saying if you have deposits in u.s. bank you are guaranteed. svb's argument could be that this is a great brand. you have done business with us for years. we are incredibly well known especially in the bay area and california. very well known in the tech sector. come back to us. keep doing business with the spirit you have liked us in the past peered we had a brief whip but come back and do business with us. you know because of the fed's actions, the fdic over the weekend you are assured that your money is safe. whether that argument plays out, whether people go without or -- they go with that or they move their funds to a more well-known bank remains to be seen. haidi: bloomberg's u.s. finance

editor. market seeing some semblance of calm. long way to go with regards to how this bigger banking crisis story plays out. it's good to vonnie quinn. -- let's get to vonnie quinn. vonnie: the peg on says a russian fighter jet collided with a u.s. drone. the kremlin denies the claims are the state department says the collision was a brazen violation of international law. meta is planning to cut 10,000 jobs. the facebook parent has been marking 2023 as a year of efficiency. a slowdown in advertising revenue led to its first sales decline in 2022. it already laid off 11,000 workers in november. credit suisse ceo is pleading for patients as he tries to turn

the bank around with a radical overhaul. he is telling bloomberg exclusively -- he says they are also seeing an overall slowdown in outflows but that progress will take years and not months. >> they have significantly moderated. we gave an update on february 9 in terms of where we are. we'll give the next update with the first quarter results. this is also very clear. we talked about what has happened in the fourth quarter. we are fully focused on it. turn it around but that takes longer than two months. vonnie: global news powered by 2700 journalists and analysts in over winter 20 countries. -- over 120 countries. shery: more from the cathay pacific ceo who is hopeful the hong kong airline will turn profitable this year. plus tiktok consider splitting

from its chinese parent company. the latest on how the social media platform plans to address u.s. national security concerns. this is bloomberg. ♪ get help reaching your goals with j.p. morgan

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>> the preponderance of data is pointing toward inflationary pressures. >> inflation still strong enough to have a hike next week. >> maintaining financial stability. >> financial stability trumps financial >> -- financial stability ensures that is not going to be 50 for sure. >> they're going to want to do 25. >> for them to not do 25 right now would be construed as pivoting. >> if they had to pause in march they could do that. >> pausing is ok.

>> i do not think it would be an indictment of the tools they put into place. >> the ring fencing works and the fed goes back to hiking interest rates. >> this is a fed i think it will keep raising rates until you see signs inflation is slowing. haidi: guests on the inflation data coming out of the u.s. our next guest says recent distress across the banking sector gives the fed an excuse to slow the pace of rate hikes. he joins us now. it goes to what kathleen was pointing out earlier. maybe it is not of dentist to the fed's confidence but maybe it is a reminder they need to be mindful of financial stability as well as fighting the good fight against inflation. do you think the priority has shifted going into the next few meetings? >> i think it has certainly given them pause no pun intended. they have to keep the making system stable. it is now surfaced here in the

last few days but it has been brewing for a while. these banks sitting on low yielding bonds and depositors wanting more yield on their money so they are going elsewhere. the fed i think with the facility from the fed and fbi see on sunday have ring fenced this pretty good. that was reflected in the market today and market activity recovering quite a bit, regional bank stocks. we will see what we get over the next week. it looks like stable for now. we said in our notes we sent over the weekend and there is a lot of forecasts on what they will do next week but we still think they will raise a quarter-point. haidi: when you take a look at the dislocations, are you seeing opportunities? >> sure. certainly there is a trade in the banks for traders.

regional banks and the broader money centered banks. the money centered banks are going to enough it from this longer-term because deposits are flowing out of fear. we are underweight financials right now. what we have been doing last year on the show, we talked about how not only were avoiding bonds, we were shorting bonds. now we have come back into bonds and our tipping into duration more and more. we think they will offer opportunity this year. ultimately this may and we have seen forecasts that they end by july and hike two or three times or cut two or three times by the end of the year. that might be aggressive but certainly the event is deflationary with this debacle and the regional banks specifically. silicon valley bank.

that does present opportunities as we move forward. shery: does that mean more upside for the growth stocks that did well at the start of the year? we are seeing the confidence returned in that sector especially when it comes to tech. >> when i talk about tipping back into duration i'm not only talking about debt, income. i'm talking about stocks as well. we think of our rose stocks as the longer duration place. we have in tilting from overweight value last year. tilting from value to growth this year. in our stock exposures. it does matter, yes. shery: do you foresee a weakening dollar? it will depend very much where the fed goes anywhere treasury yields go. if that is the case, what do you like abroad? >> we do see a weaker dollar

than last year with such strength that we had. see a weakening dollar as the fed piques on its hiking cycle and may be cuts by the end of the year. we think that is still possible. that and if we look at valuations abroad in europe and asia that is where we see opportunity. we think some of those markets will outperform significantly u.s. markets this year. we are moving overseas quite a bit. shery: always good catching up with you. mainstay capital management ceo and chief investment strategies. we have plenty more to come. this is bloomberg. ♪ go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson. what does it mean to be ever better? its your customers getting what they ordered when they expect it.

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shery: credit suisse ceo says business momentum improved this quarter including in the markets unit but he has told us

exclusively shareholders need to be patient with the benefits of the bank radical turnaround strategy still years away. >> fully convinced of the spreadsheet. we are executing with the right team. that is where we said in october it needs vertical change. the bank needs to be changed. you cannot come after two months and say why is not everything done. >> but radical change could be spitting off the bank. is it something you're valuing? >> credit suisse is focused on the core strengths of the bank. asset management. market trading and sales business. that makes entire cents. entirely different risk profile. very profitable. shareholders understand that. >> when will you be able to say the worst is behind us? >> we said we are going to make a loss unfortunately this year because this is something you need to understand.

a lot of the restructuring costs baked into the transformation are coming in 2023. four we see a lot of benefits out of that transformation. that is something that happens that is why we said it takes three years. >> three years as a long time. a lot of the shareholders will start asking questions. have you asked them for more money to make it faster? three years, anything could happen. >> as i said, our -- is strong. getting stronger as we speak. capital ratio is very strong at 14.1%. we have everything we need to go through the transformation. haidi: the credits we speaking exclusively with francine lacqua. don't miss our exclusive coverage of the credit suisse asian investment conference next week. we'll be speaking exclusively with the bank's top executives as well as the event's key speakers. new york state says it has lost

faith in signature bank. the lender failed to provide reliable and consistent data. that led to what officials described as a crisis of confidence. the fall is the third largest bank failure in the u.s. following customer withdrawals accounting for 20% of deposits. hsbc is said to be coming through the books of svb's u.k. arm only after it finalized a deal to require -- to acquire the unit for one pound pair the bank is conducting due diligence to determine the specifics of what was bought. much more to come on daybreak asia. this is bloomberg. ♪ i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl!

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annabelle: this is daybreak asia. we are 30 minutes away from the

open in korea and japan. nikkei futures coming online in singapore. already pointing to gains of more than a percent at the open. are a lot of different themes to get through for traders. we have the core cpi reading in the u.s. coming in hotter than expected. that typically would be something to cement a 25 basis point hike but there is still the reverberation being felt from the svb fallout. in the u.s. session we had the impression perhaps the worst of the banking crisis was behind us. we did see the vix retreating and in futures you can see the gauge under pressure. kiwi stocks trading higher peered s&p 500 futures flat as our nasdaq once. we did see the rally into the close. that is helping the australian session as we get 30 minutes underway. what is leading that are the gains we are seeing in i.t. stocks at the start of trading. similar to the nasdaq given it

was at its best day since early february. big gains for the u.s. regional leaders. a lot of the more interesting moves we are seeing are in the debt space. shery: especially in emerging markets because bonds are outperforming stocks in the flight to safety that has engulfed em markets in the wake of the u.s. banking crisis. garfield reynolds joins us now. it has been a lot of turmoil in risk assets and em stocks took a big hit. in the debt space there are contradictory because weather is from j.p. morgan and morgan about whether or not they like em debt. >> the difficulty is em debt offers higher yields. it also offers a more nuanced outlook for particular bonds. you can go and buy australian bonds on the same basic reasoning as lie you would buy

treasuries. safe haven, decent yields, prices are going up and yields are going down based on perceptions of what the fed is going to do. a lot of emerging markets have already cut to the peak in rates. it depends. what do you think about how those countries can cope with the potential for u.s. recession, the high likelihood of a european recession? there is a lot of nuances there. that makes it harder to say let's go for emerging-market debt per se. that being said you also would look at it and say at the moment the emerging-market debt might them more attractive than emerging-market stocks because your stocks are very exposed to the volatility that is going on. there is also a tougher road

when it comes to what the currencies might do and how that might impact stocks over the longer-term. second and third order effect. you can see why em stocks would be underperforming em bonds at least in the initial move. for some investors the question is we like malaysia or indonesia or peru but we are a bit fuzzy about the outlook for equities. rather than pulling all the way out of those countries we might go into their debt as a relative haven compared to the stocks and then assess do we pull out altogether or do we go back into the riskier positions we had been taking which had folk like they were a bit too dangerous amid the svb fallout. haidi: there has been a lot more interest when it comes to chinese assets because of their

lack of correlation with the fallout and broader u.s. assets. we are looking at potentially their own fixed income markets and bond markets taking on a shock. this is apparently due to self-inflicted lack of data and pricing information. >> yeah. china is after all still in emerging-market even if it is a big one. one of the things about emerging markets is precisely that the data is sparser. it is more opaque. and it is subject to interruptions. that is part of why emerging-market assets including chinese fixed income assets should be trading at a discount to developed market assets that do not have those fuzzy characteristics. the other point to mention along with that is when you have volatility breaking out the way

it has in the u.s. treasuries market, just about every other bond market -- let's exclude japan because it has its own special characteristics -- just about every other bond market is going to see a larger vulnerability to volatility than even the u.s. market. everything pretty much globally prices on what is going on with u.s. yields. when you have u.s. yields moving more than they have in any time since 1982, that creates a lot of uncertainty about what is going to gone with various markets. in china, that concern about the data and chinese pawnbrokers possibly -- to financial terminals, that really brings home the vulnerability you have as an investor in those markets.

when things get dicey globally. haidi: garfield reynolds. let's get you to vonnie quinn with the first word headlines. vonnie: underline u.s. consumer prices rose in february but the most in five months. that has left fed officials facing a tough choice as they weigh the inflation fight against financial stability following the svb collapse. core cpi exclude food and energy increased taffy percent from the month prior. 5.5% from the -- from last year. moody's investor services cut its outlook for the u.s. banking system to negative from stable peer the credit ridding company sites a substantial decline and depositor confidence after silver gate capital, silicon valley bank and signature bank collapsed in less than a week. woody's highlights concerns over unrealized losses in the asset portfolios and risks the profit. it comes as u.s. authorities are said to be examining the collapse of svb for misconduct

of officers. a source tells bloomberg the probe is being handled by officers in the justice department fraud section. the u.s. attorney's office for the northern district of california and the sec appeared inflation in argentina accelerated in february due to soaring fluid -- soaring food prices. cpi registered a 102% annually. argentina less salt the inflation rate in the 1990's. skyhigh consumer prices and severe crop drought are expected to tip its economy into recession. supporters of imran khan have clashed with pakistani police outside his home as officials try to arrest him for the second time. a police spokesperson said the arrest warrants are to ensure he will appear in court to face charges for failing to disclose gifts. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

i'm vonnie quinn. this is bloomberg. haidi: tiktok is said to be considering a split from its chinese parent company bytedance to help address u.s. concerns about national security risks. it comes as tiktok continues to face a review. let's discuss this with our tech reporter in los angeles. what is the context in terms of when we could see a divestiture over an ipo and how would that help on the transparency point of things when it comes to data security? >> this is kind of at the discussion stage among leadership at tiktok at that review. they have tried to bring forward a number of measures investing 1.5 billion dollars in something called project texas to protect u.s. user data. that is meant to address some of the data privacy concerns. this idea of a separation is seen as a last resort. people familiar told myself and

my colleagues this is something the chinese government would have to sign off on if it came to fruition. the company has said right now they are in the mood of trying to convince u.s. officials and regulators they are doing enough to address their concerns. the reality is they have not been able to convince them of their loudest critics in d.c. the efforts they are taking are enough and a lot of the lawmakers are not believing what tiktok is my now in terms of the efforts. shery: staying in the tech sector, we are seeing more progress in the year of efficiency for meta. >> that is absolutely right. mark zuckerberg came out and said they are going through another major round of layoffs. the second round the company has had on the heels of laying off 11,000 people in november. the company said over the coming months 10,000 more roles will be cut.

5000 open positions will also be cut. mark zuckerberg got a very good reaction from the markets. stock popped 23% when he laid out the plan in february the company is going to be more efficient. today shares are up again on the news headcount is going to shrink once again. it does seem after years of spending a lot and a year of tough pressure on the top line, ad revenues have contracted, he is trying to run a leaner and what he would say more agile company. shery: our tech reporter with the latest on the sector. coming up, cathay pacific ceo ronald lam tells us the embattled airline has a good chance of posting a net profit. more on the hong kong carriers recovery plans. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns.

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haidi: cathay pacific says it sees a good chance of posting a net profit this year. ceo ronald lam told bloomberg the airline is rebuilding rapidly as it eyes a return to pre-pandemic capacity by next year. >> we see light at the end of the tunnel since late last year as hong kong opened up to international countries and a

brighter light in quarter one this year when hong kong opened up with the chinese mainland. it is going to be a little bit of a tunnel to go through but we are aiming to build back to when is your percent pre-pandemic capacity by 2024. it is still early to tell because we are still rebuilding. the milestone will be reaching 70% passenger capacity and 85% cargo capacity by the end of this year. >> was holding you back? -- what is holding you back? >> supplies dried constraints mainly on manpower fronts. when i see manpower, not just manpower in the air. it is also on the ground. it is not only cafe -- cathay pacific's own manpower. it is across the whole aviation ecosystem both in hong kong and outside. >> what is the problem?

is it hiring staff, staffing levels? give us a sense of that. >> at the end of last year, 2022, we had around 21,000 staff across the whole group. this year we are going to recruit another 3000 people across our whole group. across all types of groups. in general we are making steady and good progress toward our plan. >> have you got enough pilots now and do you have enough cabin crew? those two elements which are quite important. >> we do have enough pilots and cabin crew. the critical path is training our pilots because hong kong faces a unique situation. during the pandemic hong kong was one of the few cities that imposed quarantine on aircrew. because of that we were only able to operate a small percentage of our normal capacity. because of that, her pilots

license, many of them have expired. after the opening up, the cancellation of the crew quarantine, we have been scrambling to train our pilots to regain their license. training the pilots is the main critical path at the moment. >> and you have got to have retention. >> of course. we have been watching our attrition rate across all staff groups carefully. i am glad to say since hong kong has opened up since quarter 42020 two, the attrition across all staff groups has become normal. >> that leads us to the ultimate question. do you think you have a staffing crisis? >> i don't think soap your do i think we are making steady progress toward our plan. there is quite a lot to rebuild in terms of manpower resources but i think we are rebuilding according to our plan. i don't think we are in crisis mode of any sort. >> you also have to get the planes back out of the desert. looking at what size the fleet

would be next year. >> at the end of last year, we had 222 aircraft across our fleet and around 20% were parked outside of hong kong. we have been steadily unpacking the aircrafts. hopefully by early next year all the aircraft would be unpacked. >> with hiring etc., it shows how much your future is lockstep with hong kong's future. tell us about that. >> sure. we spoke about the manpower issue for cathay pacific. hong kong does have a manpower issue. how well hong kong recovers on the manpower front, not just on the aviation industry but also across many other industries, i think will be critical to the success of hong kong in the coming few years. >> cathay pacific is good to go for hong kong's future of hong kong is cathay pacific's future.

if someone blamed you for actually perhaps not opening -- during up as quickly, slowing down the hong kong reopening, how would you respond? >> as i mention hong kong opened up late so there is a lot of catch-up to do. i think we are making good progress. we are moving very fast as a city, as an airline. i i am very confident given more time we will be back in path with other cities and airlines of the world. >> you have a third runway. is it redundant in many ways? because when does the city become an aviation hub if ever again? >> i am very confident about the future of hong kong as an international aviation hub. there are two main reasons why am confident. as you mentioned the three runway system is up-and-coming. it will be fully operational by

late 2024 or early 2025. from a growth potential angle, that unlocks a lot of potential for hong kong. that is on the supply side. on the demand side, i am confident as well because we have got a big market up-and-coming in the greater bay area with 80 million population in nine cities in the greater bay area. hong kong and cathay pacific have been doing a lot even during the pandemic to develop our penetration into the extended market. i think we have got some unique advantages coming up in the next few years. >> where are you seeing the most flow? where people looking at? >> everywhere. i am seeing a lot of long-haul travel resuming. people have not seen their friends and families overseas for a long time. i'm also seeing a lot of travel in the region both for the business and leisure. for hong kong people, there are

few popular destinations like japan, korea, thailand. those are very popular routes. there is a lot of student traffic onto our london route which we are planning to resume very soon back took four to five times daily paired flung between hong kong and daily. by summer season starting end of this month. >> wire tickets so expensive -- why are tickets so expensive? >> currently supply and demand is not matching up. the demand is still higher than supply. we are working hard to rebuild. >> that is a global thing. so did you all sort of not get it right in terms of seeing the bounce back? >> overall global as you rightly pointed out, global aviation we are short of resources. short of manpower, short of supply. supply is falling short compared to demand. worldwide you see air ticket prices being higher than normal.

from our market perspective, we are rebuilding as rapidly as we could. we are already seeing the ticket price coming down gradually. as we built toward 70% by the end of this year i foresee the ticket price will come down further. shery: cathay pacific ceo ronald lim with rishaad salamat richard plenty more to come on daybreak asia. this is bloomberg. ♪

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shery: we are getting the latest lines from the bank of japan meeting minutes this is for the meeting in january. the penultimate meeting under governor kuroda. not surprisingly the mainline is boj members think it is important to continue with monetary easing. this is a meeting with her kept their main policy settings unchanged, left the negative rate at -.1%. the target for the 10 year yield under its curve control program around 0% and in the january meeting they push back against market speculation of any policy change and they ramped up their defense of the stimulus framework. the minutes, the penultimate under governor kuroda saying it is important to continue with monetary easing. haidi: we did also see earlier this week and unexpected i guess

blessing in disguise for the boj intentionally. the pivot pressure a little bit less as we sold the drop in u.s. yields. how long that holds as we see the recovery, the readjustment both in bond markets and equity markets is yet to be seen. let's take a quick look at the latest business flash. apple stepping up tightening efforts amid uncertain times and of the tech industry. sources tell bloomberg the world's most valuable company will make bonus payouts less frequent for some employees. it is limiting hirings for more jobs and watching travel spending. they have avoided mass layoffs but have reduced budgets, cut headcount goals and pause hiring across several divisions. charles schwab climbed tuesday and paired the prior day's decline after the ceo told cnbc he bought 50,000 shares for his own account. the stock rebounding from a 12% swing on monday.

he reassured investors the company has liquidity to weather the fallout from the svb collapse. bloomberg has learned see lsa has plan to double stock in southeast asia. they know have numbers more than 20. the plane is for the figure to rise close to 50 by 2028. the region is expected to benefit from china's reopening. saudi arabia will buy 78 boeing plans as the country revitalizes its carrier and rebuilds a new international airline to the new airline called riyadh air will buy 39 of the 78 dreamliner's while existing state carrier saudi will purchase some shared riyadh air says it aims to connect more than 100 destinations around the world by 2030. shery: these are some of the stocks will be watching when trade opens in korea and japan. energy shares after oil touched

a three-month low p there is growing unease over the u.s. trajectory. keep an eye on mitsubishi electric paired the company putting to double its five-year investment plan for its power business to $1.9 billion. in the broader markets the japanese yen under a little pressure against the u.s. dollar as we continue to watch the boj minutes from their january meeting dropping on the bloomberg. one boj members thing it was inappropriate to rush to an exit. that they need to assess the positive effects as well as the side effects of the monetary policy setting. the market opens in seoul and tokyo are next. this is bloomberg. ♪

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shery: this is daybreak asia, we are counting down to the market opens and watching to see a of the positive momentum is in asian session. u.s. stocks rising, but if, after the inking turmoil. inflation remains elevated. haidi: that creates a set of challenges for the fed, whether they think -- take things slowly or give them pause after what happened with svb. with inflation coming in hot, the inflation fire is hot and center. we take a look at how things are set up, given that we are on the cusp of raising all of this year's gains. anabelle: that is right. we have the open of japan and south korea, also the start of trading for cash treasuries. watching how the two year yield comes online, very closely, given what we saw in the price session. it's recovering its biggest drop in four decades. you can see it is advancing. the two year yield with bets

that the fed may hike rates coming back onto the table. we had the core cpi reading coming in hotter than expected. 25 basis points. that could be what is in order next week. there is a lot of uncertainty around the fed outlook coming through. also the fallout coming from svb. the reversions feeling felt -- reverberations feeling felt. watching the jgb future closely, given the 10 year yield dropped through the boj's previous policy ceiling on tuesday, down to .24%. half of the limit that was put in place in december. we are eyeing that. also, the changes that are not expected anytime soon. we have those meeting minutes coming out, blasting minutes. january gathering of officials at the boj, saying that it is important to continue with monetary easing. they still need to assess all of the side effects of any sort of

policy changes. it would be inappropriate at this stage to ration exits. that is the state of play as we get trading underway. the nikkei gaining .5%. in korea, this morning, we saw signals of economic resilience, showing up in the last hour. we had unemployment data and an unexpected decline in february, suggesting the later market is holding up against the sustained interest rate hikes and slumping exports as well. we saw the jobless rate dropping to 2.6%, it was at 2.9% in the month prior. we're watching big gains for the nasdaq. it really does follow what we saw in the nasdaq -- kosdaq, it 's what we saw in the nasdaq with its best price the february, trading flat. we have tech stocks in australia, leading the advance for the asx 200, up .8%.

you can see the gains of 2.2%. we are tracking the moves in brent crude. we saw it recovering a bit as a comes online. it was around a three month low. a lot of concerns around supply balances growing unease over the u.s. economic trajectory. we'll watch brent crude closely. shery: let's bring in our next guest who says asia is attractive because it is cheaper than the u.s.. with us is mark matthews, head of asia research. always good to have you with us. where are you seeing the best value? >> the best value is in china. it does not mean it is the best market but it is certainly helping that their price-to-book is still in the 1.1 times way below the long-term average of 1.7. the price-earnings is 13 and they are experiencing of the shaped recovery -- of a v shape recovery. probably rates cap account

globally. it's fine. shery: you were in india last week. did you find anything interesting in that market? for a long time last year, it looks pretty expensive. is that the same case after adani's issues? mark: well, if i was to answer that question you would have to force me off the set. i have so much to say about india. maybe i will give you an anecdote. i was giving speeches. i was followed by local fund manager. what most encouraged me, none of the questions that followed our speeches were for me. all they wanted to know was about their own market. i thought that was a very nice nutshell of what is going on. indians like their own market. the sip's, the systemic investment plans, their version of 401(k), the bigger the middle class gets the more indians invest in their own market. that increases transparency and the quality of corporate

governments, very much like the u.s. there aren't many countries in the world where the middle class has invested in its own equity market in a big white. india is becoming one of those. i do like it. haidi: you talk about the idea of not trading -- treating this decision lightly. the markets have moved past the fact that we had this backstop, announced on the spectrum of what regulators could do, it's on the extreme. do you worry about the idea of moral hazard? or what lies in the wake of potentially other reactions to higher interest rates we have not considered yet? mark: indeed. you are talking about silicon valley bank and what is essentially a bailout, although they are not calling that. guaranteeing silicon valley bank deposits, which was a relatively unknown company until last week. implicitly guarantees the whole system. it means banks can take on more

risk if there deposits are protected. that should actually increase the value of the banks. that is my thinking on it long-term once we go through this panic. so, yes, i think the ripple through affect of the era of ultra low interest rates and covid is still very much with us. the secondary effects, which are so hard to forecast, are now popping out. i think there could be more incidents like that. it will not surprise me. i do think longer-term, this implicit guarantee for the banking sector will end up being important. haidi: we had a guest who said it reminded her of 2008, when you go to bed, and to read what you would find when you switch on your phone the next morning -- dread what you find when you switch on your phone the next morning. you're better off turning every thing off, you think the markets will be higher in six months times. what transpires for the market

to higher? will the fed tiptoe because of renewed caution over the past week? mark: very much. the reason why both stocks and bonds went down as much as they did last year was because inflation was so high. of course, the print for february last night was not optimal, beneath the surface, there's still a lot of services sector inflation at work. if you look at the cleveland fed's inflation outcast which aggregates a higher frequency to give you a higher reading on inflation. they are thinking it will be 5.2%, 5.3%, for the month of march. getting below that six handle will be very psychologically important. i think it is on the downtrend. airplane tickets were a big reason why services were hard in february. there is a delayed affect in the way it's sheltered us.

it will help bring the inflation rate down. rates have peaked in the fed will -- and of fed will do one more 25 basis rate hike. the 2% inflation target is not realistic. they will change it in favor to something like 3.5%. we think it is achievable and we will get there in the second half of this year. six months from now, if i could turn off my computer and turn it back on then, i'm sure markets will be higher. i don't think i would have adjourned -- job if i turned my computer off. shery: as is the case for all of us. [laughter] one of the issues in the u.s. is a very strong labor market that there are fears that it will fan inflation. do you see a case that could play out similarly across asian economies where central banks would want to pause, would even want to cut, given the pressure

on the broader economy, but at the same time inflationary pressures, the labor market remaining strong? the korean jobless rate unexpectedly falling to 2.6%, when economists expected it to rise, makes me think that perhaps a more central banks across asia could face similar issues? mark: well, asia such a big region. i struggle to generalize. i would say that in countries which have fairly old populations, which would include korea, and the united states, what we are seeing is the baby boomers retiring. that should have started after the global financial crisis. it was delayed, i think by whole bunch of factors. i suppose covid obviously was a disaster for humankind. you can always take positives out of negatives. one thing is, it did serve as a catalyst to encourage people 65 and above to retire. and freeze up jobs for young

people. as much as you can say that is inflationary, it is a good thing. the millennials and the gen z got a raw deal for the last 10, 15 years. very difficult to find jobs, to get decent wages. i view it as a beneficial thing. the fact that the labor market is tight. haidi: mark matthews, head of asia research at julius baer. let's get to belle, for the early movers. anabelle: that's right. we're under 10 minutes to the session for japan and korea. so far, tech stocks are the big gainers today. given that we had the lead in from the u.s. session. the nasdaq rallying into the close and posting its best day since february. we have softbank turning positive. it has been one of the names in focus in this region given its exposure to svb and the implosion of risks of contagion.

energy stocks likewise, these are want to be watching, given we do see wti and brent crude. they are recovering somewhat, sitting around a three month low. a lot of concerns around oversupply risks in the market and the outlook for economies. still, we are seeing stocks moving mostly higher. it's a bit more risk on in the session. it appears that perhaps some of the concerns around contagion and the banking sector have been alleviated for now. shery: right. let's get the vonnie quinn. vonnie: moody's investor services cut its outlook for the banking system from negative to stable. it cites a substantial decline in depositor confidence after silicone bank -- silicon valley bank and signature bank collapse after week. it highlights concerns after risks to profitability. this comes as u.s. authorities are said to be examining the

collapse of svb for misconduct by officers including weather stock sales by executives violated trading rules. a source tells bloomberg that it is been handled by executors in the justice department's fraud session. -- sector. meta is planning to close 5000 open roles in the layoffs. the facebook parent has been marking 2023 as the year of efficiency. a slowdown in advertising revenue led to its sales decline in 2022. it already laid off 11,000 workers in november or around 13% of its staff. cathay pacific says it sees a good chance of posting a net profit this year. the ceo, ronald, says the airline is -- says they have enough travel and cabin crew with china's mainland reopening. >> we see a bright light at the

end of the tunnel since late last year as hong kong open up to international countries. then, even brighter light in quarter one this year. when hong kong opened up to chinese mainland. it's going to be a bit of a tunnel to still go through. we're aiming to rebuild back to 100% pre-pandemic capacity by 2024. vonnie: global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries around the world. i'm vonnie quinn. this is bloomberg. haidi: still ahead, accor ceo joins us to discuss the hospitality sector as well as the expansion plans. plus a closer look at the fed's tough call on a rate rise or rate pause and whether financial stability trumps inflation reads. analysis is next. this is bloomberg. ♪ go. go brain. no, not that one. go this one. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem

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>> the data still pointing towards inflationary pressures. >> inflation data still strong enough to have a hike on next week. >> it will have to pivot towards a maintaining financial stability. >> financial stability trumps inflation in the short run. >> financial instability, ensures that is not going to be 50 for sure. >> they want to do 25. >> 25 basis points. >> portend to not do 25 now -- portend to not due to any five now. >> if they have to pause in march they can do that. >> if the markets are in distress, pausing is ok. >> it will not be an indictment of the tools they put in place. >> the ring fencing works. the fed goes back to hiking interest rates. >> people keep raising rates until you see signs inflation is slowing. shery: tv guests on the hotter than expected inflation data coming out of the u.s. another hot print, tilting bets

back towards the fed rate hike, even as concerns linger over financial follow from the collapse of three banks in five days. our global economics and policy editor, kathleen hays is here. how much more complicated does this make things for the fed? kathleen: jay powell thought it would be a tough meeting. can you imagine how he feels now? after seeing the consumer price index report, it was not terrible it is just not moving in the right direction. you can see on the year-over-year numbers there was improvement from january to february. cpi down to 6%. on the core down to 5.5. this is what got people going. on the monthly core cpi, it went up .1%. the biggest level since -- in five months. when you look at the numbers inside, you see energy prices fell, but you see other things that are concerning. rent prices continue to rise.

they will decelerate. airfares up. maybe that is the end of something, the reopening and all of that. basically, look at those white bars, that is goods prices. boy, look how low they got. going the right direction, what is that? that is core services. they seem to be up to about 7%. plus year-over-year. not only are they not falling, they are rising. when you take out the shelter, rent, housing cost, then you get a number stuck past two months over 6% year-over-year. this is what the fed has to deal with. this is why they still have the inflation fight on their hands. the problem is you have the inflation fight that would have been easier without the svb meltdown. now you have to look at, how do you balance that. traders are starting to bet that the worst turmoils over. you can see how that has changed with the expectation of a rate hike next week. it was down to 50 on monday, when we saw they made their

record drop. treasury bills, bounced back. now there is up to an 80% chance of a hike next week, even though houses like nomura are saying they will have to cut rakes -- rates because they will have to shore up financial confidence in this part of the economy. haidi: we hear reassurance on the stability of the u.s. banking system from atop fed official? kathleen: michelle bowman? she was the state banking commissioner for kansas. she has had many roles in government before she joined the board of governors in 2018. she brings first-hand banking experience, thanking commissioners have to deal with things that are shut down in their state when many crises happen. she spoke, one of the first, in this blackout period, when nobody is speaking from the federal reserve. this is a different situation. here is what she said. >> the u.s. banking system

remains resilient and on a solid foundation, with strong capital and liquidity, throughout the system. the board continues to carefully monitor developments and financial markets, and across the financial system. kathleen: of course, we have seen the medium-sized bank index bouncing back. we can see a sigh of relief. there may be underwater, rocks still the hit, bond portfolios that are still underwater. if the fed hikes rates more and if that got more aggressive, maybe that could stir up the forces that took down svb. ethan harris from bank of america, our global chief, economist has been watching the federal reserve for years. he told us earlier that the ring fence will work, putting the facility in place to shore up the banks that need the financing right now. then, the fed is going to have to resume its inflation. a lot of people are betting that

they will resume it next wednesday. haidi: our global economics and policy editor, kathleen hays. you can get a roundup of the stories in today's edition of bloomberg -- bloomberg daybreak, you can find that on dayb . you can customize the settings as well so you can just get the news on the industries and assets that you care about. this is bloomberg. ♪ introducing the new sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number.

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shery: the credit suisse ceo says business momentum improved of this quarter, including in the markets unit. he's told us exclusively that shareholders need to be patient with the benefits of the banks radical turnaround strategy, still years away. >> i am fully convinced of the

strategy. we're executing it. we have the right team. that's why we said in october, it's radical change. the bank needs to be changed. after two months, you can't come and say, why is everything not done? >> radical change could be splitting up the bank. >> the new credit suisse is focused on core strengths of the bank, wealth management, asset management, what you put in the market, trading and sales business, that makes sense. we'll be very profitable. shareholders understand it. >> one will you be able to say the worst is really behind us -- when will you be able to say the worst is behind us? >> unfortunately we will have a loss this year. this is something you need to understand. a lot of the restructuring cost, it's baked into the transformation, they're coming in 2023. before we see a lot of benefits

and out of the transformation. that is why we said it takes three years. >> three years is a long time. a lot of the shareholders will start asking questions. have you asked them for more money to make it faster, especially in this banking world anything could happen. >> as i said, our ratio strong. it's getting stronger as we speak. our capital ratio is strong at 41 person -- 41%. we have everything we need to go through the transformation. >> are you expecting the first quarter to be good enough to keep shareholders off your back? >> the first quarter, as you said, we put it clearly, we'll have a loss in the first quarter but you will see progress. >> in terms of outflows in certain regions? where specifically? >> in the market business. as we discussed, for reasons clearly understandable reasons, in q4, it looks better.

wealth management we are making progress. not where we should be. but we are marking -- making progress. >> are you comfortable with the banking system? we live through a pretty incredible couple of days. the markets all over the place -- are all over the place. >> this is isolated. if you look at large banks, we'll manage through it. >> talking about credit suisse. first of all what is the timeline for the ipo? >> it is unchanged, as we discussed last time. we have a clear plan to put into market, liquidity in ipo. we're working against our internal plans. i would an event in 2025 -- expect an event in 2025. >> what happens to the rest of the partners? >> the rest is in the past. as we answered in february.

this is our part of the bank. it remains our part of the bank. we're going into liquidity, most likely ipo. we'll be the majority shareholders and we make a position over the next following weeks. >> you are looking for an anchor investor? are you closer to finding one? >> we are close to it. i am not sure if it is an anchor investor. we have a lot of interest from parties to be invested, which tells us something. >> middle eastern investors? >> different kind of investors. different parts of the world. >> but a large chunk investors. >> i will inform you first. haidi: the credit suisse ceo speaking with francine lacqua. let's take a look at japanese banks. we've been watching the sector, given the fear of contagion over what we have seen across the

u.s. banking sector as well. we're singh the rebound, mitsubishi ufj leading the gains by 3.5%. sumitomo, up just shy 3%. we have seen the rebound among the lull in the global equity route. that has spread to the asian session as well. the speculation is the worst of the global fallout from the american banking sector has perhaps eased. we have seen the topics bank -- topix bank up over 4%. the liquidity concern is quite low for japanese banks, according to jeffries. this is bloomberg. ♪

shery: we are watching the spacex 27th commercial resupply services mission. this is going to the international space station.

we're watching the land -- launch at nationals -- nasa's kennedy space center. this is a dragon spacecraft delivering new signs inf -- science information for the crew there. the supplies are 363 pounds of hardware, food. this is part of the multibillion-dollar commercial resupply contract with nasa. haidi: we continue to watch that as we see the 27th commercial resupply from services mission to the international space station from nasa's kennedy space center in florida. we're watching as we get very close to the launch. some of that experiment, including the japan aerospace exploration agency investigation, sending the origin transportation and survival of life in space.

>> falcon a source off the launch pad, dragging its way to the international space station with science experiments and supplies. haidi: you see the spacex cargo dragon space car packed with 360 pounds of food and hardware for the iss as we get lift off from kennedy space center in florida. this has really seen the resupply flight intended to be the 27th cargo delivery mission to the international space station. it's a series of logistical launches we saw back in 2012, with the multibillion-dollar

commercial resupply your services contract with nasa. we'll leave that there. let's take a look closer to the earth. we're seeing a bit of asian equities, certainly sentiment confidence. anabelle: that's right. something else that is moving higher in this part of the world. we're watching this, treasury yields closely. we saw the recovery somewhat of the treasury to year yield, we are adding a few more basis points as of yet trading underway in terms of what else we are seeking, that's leading the moves higher, keeping an eye on what is happening with the aussie shorter end of the curve. w'ere -- it comes down to a few different factors but we have the prospect for a 25 basis rate hike back on the table given the cpi reading that came through. that is putting the japanese yen in focus. we are seeing it look weaker.

we had meeting minutes indicating that the boj will keep the policy settings in place. we heard from the japanese finance minister a few minutes ago, remarking the moves. he does not see any sort of scenario were a -- where an svb type of follow-up will be for the japanese lenders. the korean won in focus, moving higher. we have the unemployment rate retreating a bit. that was a surprise sign of resilience coming through into the korean economy. it bodes well for risk assets. we see the cosby leading gains in the session up 1.5%. other equities moving to the outside. we see hong kong, pointing to gains in the open, something we are watching closely in the next hour will be the trade on other economic activity numbers. if you bring this up here, this will be the first time we get monthly activity indicators for

the year. it's a very important -- is very important, given the recovery in china's on study footing. estimates are low given the bump of pmi ratings that came through. not only should we surpass that maybe later today, given we have already seen those high-frequency indicators suggesting the recovery is on a steady year footing -- steadier footing. haidi: distressed chinese developers moving forward with restructuring plans. it's failing to restain -- retain a rebound. we discussed china's latest credit tracker. why have we seen the credit market in china stalled? how is that being reflected in the latest tracker data? >> from november last year we have seen three months of a spectacular rally. most of that was driven by the policy support coming from the countries -- countries government regulators for the

property sector which is really an important part for the country's dollar bond or -- dollar bond market. three month later we are starting to see some of the effects were off a bit -- wear off a bit. the policies will need time to take into effect. among a few surviving developers some of them are really struggling to keep up with their offshore payment schedules. the market was reminded of all of that liquidity struggle again. all of that has led to a drop of 1.6 percent in chinese dollar bond market in february. there is the macro backdrop were all of this was happening before the svb saga and the market was pricing in a more hawkish fed. really there was a global pullback as well in other credit markets, as well as some other assets that reflected in our tracker data.

it is suggesting that the stress level is rising for the offshore credit market. the stress level has risen from level to which is the lowest since we started compiling the data, to level four. shery: how much progress are we seeing in developers restructuring? how is this helping or not doing much to boost sentiment? alice: yeah, you're absolutely right. there has been a lot of progress we are seeing. a few big developers are finally showing some of the progress months or even a more than a year after their initial default so that includes fantasia, some remember 2021 really shot to the market and it was a record wave default. the developer signed agreements with some of its major bondholders. other bigger names like sunak is preparing similar agreements to

be signed with major bondholders and names like logan, to some holders and the more recent defaulter has also announced a preliminary framework. all of that has not been sufficient to bring back the market rally we have seen in previous months. i think due to a few reasons. number one, this has been limited to a few developers, only still. the market needs to see others joining in. it is still long time until holders -- investors can get their money back from seeing a proposer to negotiation, to signing it, to getting that approved. for some of the proposals we have seen so far, the maturity profile has been stretched out for as long as seven years. in evergrande's case that is 12 years. it's a long time until people can get their money back read

also, they need to see more details as well from a fuller proposal. they need to see cash flow projections to really be able to determine their recovery value. shery: bloomberg's china credit reporter. now let's get to vonnie quinn. vonnie: underlined u.s. consumer prices rose in february by the most in five months, leaving fed officials facing a tough choice as they weigh the inflation fight against financial stability following the svb collapse. core cpi excluding food and energy increased half a percent from the previous month and 5.5% from the previous year. bond markets are pricing higher than the fed hike next week. inflation in argentina shortened due to soaring fluid prices. its cpi spiked over 6% and registered 102% increase annually. argentina saw triple digit inflation rate back in the early 90's. the consumer prices and drought are expected to tip the economy

into recession. supporters of khan have clashed with pakistani police outside his home after officials try to arrest him for a second time. a spokesperson says the arrest warrant will ensure he will appear in court to face charges of failing to disclose assets of the sale estate gifts. the former prime minister has escaped court appearances citing danger to his life. a russian fighter jet collided with the u.s. surveillance drone above the black sea causing the american aircraft to crash. in a statement, russia's defense ministry denies the claims of saying the jets did not come into contact with the drone. the state department says it was a brazen violation of international law. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries around the world. i'm vonnie quinn. this is bloomberg. shery: coming up next, a court tells us why their bullish on revenue from asia. our conversation with sebastien marie christophe bazin in just a moment. this is bloomberg. ♪

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shery: cathay pacific sees a good chance of posting a net profits. the ceo says they are returning to pre-pandemic capacity by next year. >> we have seen the bright light

at the end of the tunnel since late last year as hong kong opened up to international countries and even brighter light in quarter one this year when it opened up to the chinese mainland. but we are aiming to rebuild capacity by 2024. it is a bit early to tell because we are still rebuilding. but the middle milestone will be reaching 70%, passing capacity. and 85% cargo capacity by the end of this year. rishaad: what is holding you back? >> we are still having supply-side constraints. when i say manpower it is not just manpower in the air, it is also manpower on the ground. it's not only cafe -- cathay's own manpower, but it's across

the whole aviation ecosystem both in hong kong and outside of hong kong. rishaad: what -- is the problem hiring staff, give us a sense of that. >> at the end of last year of 2022, we had around 21,000 staff across the whole group. this year we are going to recruit another 3000 something people across the group, across all kinds of groups. in general, we're making steady progress towards our plan. anabelle: have you got enough pilots? do you have enough cabin crew? those two elements which are quite important? >> we do have enough pilots and enough cabin crew. the critical path -- part is about training of our pilots. hong kong faces a unique situation. during the pandemic, hong kong was one of the few cities that

imposed quarantine on aircrew. because of that, we were only able to operate a small percentage of our normal capacity. because of that, our pilots' license, many of them have expired. after the opening up, the cancellation of the crew quarantine, we have been scrambling to train our pilots to regain their license. training of pilots is our main critical path at the moment. rishaad: where are you seeing the most flow? where people looking at? >> everywhere. i'm seeing a lot of long-haul travel, resuming. people have not seen their friends and families overseas for a long time. i am also seeing a lot of travel in the region of the business and leisure. of course, for hong kong people, there are few popular destinations like japan, korea, thailand. those are very popular roots. there's a lot of student traffic onto our london roots. which we are planning to resume

soon, four to five times daily, flying between hong kong and london. by summer season, starting at the end of this month. rishaad: why are tickets so expensive? >> well, currently, the supply and demand is not matching up. the demand is still higher than supply. we're working very hard to rebuild. rishaad: it's a global thing? >> yes. rishaad: did you all sort of not get it right in terms of seeing the bounceback? >> global aviation, we are short of resources, manpower, supply. supplies falling short compared to the demand. you see ticket prices being higher than normal. from our market perspective, we're rebuilding as rapidly as we could. we're already seeing the ticket price coming down, gradually. as we build towards 70% by the end of this year, i foresee the

ticket price will come down further. haidi: that was the cathay pacific ceo with rishaad salamat. china will resume issuing visas to tourists and other foreigners on wednesday, a significant step to rejoin the world and leave its covid restrictions behind. let's bring in our next guest who were -- who runs at hospitality guest, who has 5000 hotels across the country. here's the ceo, sebastien bazin. always great to catch up with you. i imagine a lot has changed over the last few weeks, since the rapid reopening in china in december. what have you seen as the impact on your business? sebastien: it has been like this for the last 18 months. we've been waiting for this. it's fabulous to watch. we knew europe was lagging behind the u.s. for months. europe is back on its feet. we knew asia was lagging behind europe, three or four months.

i'm hearing shanghai, i can tell you, it is booming in southeast asia, booming in indonesia, singapore. it's starting in china. it's very likely. we were down in the leisure market in china in 2022. we will likely be better than 2019 in 2023. it was interesting to hear the guy from cathay pacific, i need flights. the domestic market, a lot of our clients ghosn have the luxury -- go and have the luxury to go by train and car. it's a very strong rebound when it comes to hospitality. all over the planet. haidi: that is interesting that you mentioned the flight capacity issue. do you see that is a constraint to the ability for your business

to rebound even stronger? sebastien: that is correct. it's even stronger. we already are going to be better than 2019 and 2023. the way to go back to 100% capacity, our number is going to be off the chart. i'll be depending on them. i know, they will be putting a lot of -- a lot back. i need both the travel. we've never seen so many people traveling within their own region and not taking airplanes. that is true for australia. that was a very strong season, by australians themselves. they basically went to hotels. shery: how much of what is happening right now and the boom in business you are expecting, is just the fact that we are coming from a low base? are you concerned that we are

seeing global economic concerns, even china facing challenges with fundamental growth issues that could affect your business? sebastien: the low is behind us. i am comparing it to 2019. i don't want to compared to last year. those numbers were low. we're going to be better than the pre-pandemic level, no question about it. it's a question of, a lot of people have said, through the pandemic, accounts are pretty large. people are eager to travel, eager to discover the world, eager to regain control of their lives. control of their lives mean, meet culture, discover the planet, be respectful of the planet. i have never seen people traveling to weekends a month for four days. it has a lot to do with what we do now, ability to work remotely. that relation to work with the digital tools have enabled people to visit a place a couple

of hours where they live. they work remotely on that friday, that monday and over the weekend there at the station. digital tools have enhanced my industry tremendously. shery: are you seeing that enthusiasm in the u.s. and europe who are struggling with surging prices? sebastien: it is still firmly the u.s., which is a good surprise. it's still firmly canada, southern europe, fragile in germany. it's to be watched in the u.k., also because of the economy and post-brexit. i'm amazed of the number still being very strong in the middle east. the rebound in southeast asia and malaysia is remarkable. haidi: you seem really super bullish when it comes to both inbound and outbound of chinese tourists and visitors. what are you doing in terms of

expansion to take advantage of this new growth? sebastien: i have to be careful. i'm extremely bullish on the inbound chinese tourism. they've been traveling 6 million times in 2019. that will be recovered at the same pace. the 150 million chinese away from china, i don't know how many of them we will have back in 2023. probably 10%, 20%, 50%, it will not be the same. it has a lot to do with visa issuance and flight capacity. i'm more bullish domestically than i am on the market. shery: thank you very much for your insight into the travel industry. group chairman and ceo at accor. we are getting the latest lines when it came to signature bank. we're hearing that they faced a criminal probe, even before the firm's collapse. this is one of the three lenders that have collapse in the past week. u.s. prosecutors were

investigating signatures work with crypto clients, before regulators seized the lender this weekend. this is according to people speaking the bloomberg. the justice department investigators in 1 -- washington and manhattan were examining whether the bank was taking sufficient steps to investigate money laundering. it's taking a look. according to two people asking not to be named. we continue to watch the repercussions in the banking industry, from the collapse of signature bank and two other lenders in the u.s.. this is bloomberg. ♪ the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

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. haidi: a quick check of the latest business flash headlines. asia's -- hsbc is promoting a senior bankers by nearly a quarter. some new managing directors are offered a salary of $274,000, comparing with 365,000 dollars for those in the same position. it comes as the u.k. proposes lifting caps on bonuses when it was part of the eu. tiktok is said to be considering splitting from its chinese parent firm, bytedance as it

faces scrutiny from the u.s. government. divesting maybe the last result -- resort if the talks with the u.s. fails, it will have to be approved by the chinese government. shery: we are seeing financials getting a boost in today's session. it is one of the big leaders in the markets. we have seen financials in the u.s. rebound after the banking turmoil. we continue to watch topix bank index, seeing its best day in two months. that is it from daybreak asia. our markets coverage continues as we look to the start of trade in hong kong, shanghai and shenzhen. standby for bloomberg markets china open. this is bloomberg. ♪ 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.

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