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shery: you are watching daybreak asia live from new york, sydney and hong kong. annabelle: we are counting down to asia's market opens. paul: australia has just come online. the yen trading around the lowest levels of the year after the boj delivers only minor to weeks to its policy settings. japan's finance ministry continues to hold off on intervention. china promises cleanup of local debt risks as it wraps up a policy meeting. toyota, set to report what could be record quarterly profit, fueling hopes of stronger guidance. annabelle: a couple headlines, kicking off with the imf because they issued a statement assessmf what the rba and australian government needs to do next to

rein in inflation. headlines coming through, the rba needs to tighten further. inflation is running hotter than what central bankers would like. they say we need further rate increase next week during the meeting tuesday. there is the expectation we could see a 25 basis point move to the upside, but very much a live decision. yields moving higher, but fairly flat as we get underway. the government and australia, the imf says to support the rba, governments across australia need to be wary of when they spend on things like infrastructure and make sure they are coordinating between themselves. that is the open for stocks. asx 200 fairly flat but modestly higher. the rba, and the big focus for first central banks in asia, the boj and we had the decision

yesterday coming out essentially , what the boj gave themselves is a little more flexibility. that was the hope of allowing the 10 year yield to move higher. this is something that could have led to further strengthen the japanese currency. we have seen further week this coming through in trading, around a fresh year to date low. we had comments coming out from japan's finance minister saying fx moves on various factors and you shouldn't necessarily attribute this to their decision on tuesday. shery: u.s. futures trading at the moment, downside pressure after u.s. stocks managed to climb in the new york session, but it was a difficult month. talking about the longest monthly slide for the s&p 500 since the onset of the pandemic. we had disappointing results from tech giants even in the after hours session, amd under pressure after a week revenue forecast. we are digesting u.s. consumer confidence driving -- dropping

to a five month low. unemployment costs unexpectedly accelerating which shows you the resilience of the labor market, and that gives rise to the question of where the fed goes from here. will we see higher for longer ahead of the f1 see decision? treasury yields rising across the board, the two year yield above 5%. the dollar, also rising for the firstime itreesessions. the yen tumbling so that was e other side of e trade. a little strength on oil but after plunging to the lowest levels in two months, rate concerns, economy concerns, a key issue. our next guest expects volatility to linger until we get clarity on central-bank policy, particularly from the federal reserve. joining us is the chief market strategist at invesco. great to have you with us. you don't expect the fed to hike

again in this cycle. why? >> because clearly, there is a disinflationary process in place. even though we will get some data points that are imperfect, that don't fully support the narrative around disinflation, we truly are seeing that happen. in addition, the fed has to be worried, and should be and probably is, about the lagged effects of monetary policy. they have set as much. that doesn't just mean there is a significant lag in terms of the impact to inflation, but it means there is significant lag in terms of the impact we will see on economic growth. so there is a real risk that the fed commits overkill if it hikes rates anymore than it already has. shery: the rate differentials, where the fed is compared to the boj, already having an impact on the japanese currency.

we are getting the latest lines from the currency chief, speaking in japan saying rate differentials, geopolitical risks all affect currencies. they won't rule out any measures against fx moves. kanda says he is worried about rapid moves, fundamentals should move that much. the yen has moved ¥25 since the start of the year and they need to move -- look at the details of the move. the rate differentials are really affecting japan as the boj keeps this ultra-loose policy. staying with the fed, when are you expecting the first rate cut? until we get there, could we see a bumpy landing? >> clearly, the fed will be data-dependent. they have said as much. i believe that data will drive the fed to cut at least once before the end of the first half of 2024.

that is largely because we are going to have a bumpy landing. we are not going to see a soft landing where theres no damage. i don't think we will see a hard landing either with a broad-based recession, but credit conditions have tightened significantly and that is and will continue to have a substantial impact on the economy. it just hasn't shown up fully in the data yet. shery: we continue to hear from japan's currency chief, saying they see some fx moves that are not in line with fundamentals. perhaps a bit of pressure on traders trying to talk up the japanese yen, which has fallen past 151, now at the lowest level since the 1990's. given the divergent policies between the boj and the fed, will anything stop the japanese yen slide at this point? >> i certainly think the boj can

step in. it is clear that markets are waiting for the bank to tighten. they just aren't ready to do anything significant. i think we will get to the point where we see that, and that will change the dynamic. we have to recognize it is a two way street. it is not just about the yen, it is also about the dollar so when we have clarity on fed policy, when we know the fed is at the end of the rate hike cycle, which is not clear right now although i do believe they are at the end, then i believe we will see weakening in u.s. shery: we have seen the rally and fast gains in treasury yields spooking markets. even fed officials talked about how that might merit less tightening, given financial conditions. when we see the boj move, how much of an impact will this have on yields across the world? >> that is a great question.

this remains to be seen because it will be dependent on a lot of other factors. when we go to the long end of the curve, there is so much that is moving it. in particular in the u.s., we have some country-specific factors that are very important, like the increased issuance of treasuries after the debt ceiling was lifted. like the continuation of quantitative tightening. there are forces at work that are u.s.-specific but in general, what we are likely to see is potentially yields in some places going up, where rates continue to hike, although i think we are at or near the end of the rate hike cycle for most major central banks in western developed countries. this is a temporary spike. shery: currency chief in japan, saying there is a standby to intervene if needed. we are seeing more verbal

pressure on traders as the japanese yen continues to trade at around the 33 year low. we also heard from sources that china's central bank likely will inject ample liquidity given interest rates there have surged. where is the chinese economy? when will we see certainty for investors to dive back into chinese assets? >> i think we are already starting to see a little more certainty with the chinese economy, and that has come in the form of targeted fiscal stimulus. we learned last week there will be more coming, and it should be significant. that has already helped boost consumer sentiment as well as consumer spending, and i think we will see a continuation and amplification of the trend as we go forward. we know during the pandemic but there wasn't -- there wasn't, and we had the fiscal stimulus so now we are seeing targeted stimulus that is appropriate.

i think it is a signaling that it is a time to potentially move back in or at least looking to move back into chinese equities, if one has reduced exposure there. shery: always great to get your insights. we continue to hear from japan's chief currency had, saying there is a sense of urgency now heightened and the current moves can't be explained by fundamentals. coming up, the latest on sam bankman-fried's fraud trial as he fields tough questions during his final hours on the witness stand. first, the u.s. says it is sending 300 more troops to the middle east as fighting escalates in gaza. this is bloomberg. ♪ ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors.

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>> for adversaries, be they states or non-states, this is all one fight. we have this -- to respond in a way that recognizes that. if we peel off pieces of this package, they will see that and understand we are playing whack-a-mole while they cooperate increasingly and pose a greater threat to our cost -- security as well as that of our partners.

when it comes to a cease-fire, in this moment you are right, that would simply consolidate what hamas has been able to do and allow it to remain where it is and potentially repeat what it did another day. that is not tolerable. paul: alright. that was u.s. secretary of state antony blinken, who is heading back to israel friday. he will visit other countries in the region. let's get more from our editor michael. another day, another atrocity, this time a refugee camp bombed. what was the purpose? was there a strategic objective? >> israel didn't refer to the refugee camp as such. it said that is where there was a lot of hamas infrastructure. there is likely an element of truth about that. organizations like hamas, there

are lots of underground tunnels and access to those areas through residential buildings. it is possible that it is both. civilians have been hit in a military strike that actually did have a military target. but this is the eternal problem -- fighting a group that, fighting in a gorilla type manner -- guerrilla type manner. it is hard to judge who is a civilian and who is an opponent. we have had a thousand 500 people killed according to hamas -- 8500 people killed according to hamas. israel has only just started the ground campaign. it is a bit of both, obviously a terrible human tragedy but israel says it killed hamas commanders and degraded its infrastructure. there is probably true than

that, too. it encapsulates the difficulties in resolving the conflict. shery: we are seeing perhaps a bit of progress when it comes to the u.s. congress trying to get additional aid for israel. where are we at? >> obviously the new speaker put forward a program that excluded ukraine. there is an element of the trump faction in the republican party that is having concerns about giving additional funds to ukraine. so only for israel, the program they put together, but it involves cuts to the internal revenue service and it doesn't look like it is going to fly. on one hand, because cutting down agents, cutting down on groups that try to raise revenue for the government in order to fund more spending sort of defiance of -- defies logic but

republican senators seem to be more on the side of the administration's bill that links israel's aid to aid to ukraine and aid to taiwan, as well. there is probably going to be some sort of negotiation. republicans are talking about increased aid, increased strengthening of the u.s. border with mexico as a way to win over some of those waiverers. that seems the more likely path we will go down. seems unlikely a standalone israel bill would pass because too many republicans understand the importance of supporting ukraine. shery: michael with the latest on the israel-hamas war. another story we are following, the white house says president biden and xi jinping will meet in san francisco next month on the sidelines of the apec summit.

the white house confirmed this with reporters who had sought an announcement. washington is aiming for in its words, a constructive conversation. the leaders are expected to discuss the economy, technology, and geopolitical issues like taiwan. china says it will set up a long-term mechanism to resolve debt risks tied to local authorities as it signals a willingness to expand borrowing at the central government level. for more, let's bring in our greater china senior executive editor. we have seen a series of measures coming from beijing to support the economy. how much of a difference will this make? >> this meeting held in beijing on monday and tuesday is more of a long-term perspective that this meeting took up. president xi jinping, chairing the conference that happens once every five years. it was delayed by one year

because of covid. the discussion was about how to solve some of these long-term problems china has come a local debt, the role of the state in terms of the financial markets. the problems china faces now, i think these are situations that the central bank, the additional fiscal sit tumulus -- stimulus announced last week, those are aimed at tackling the problems that ale the economy right now. paul: we have interest rates surging in the pboc moving to guarantee there will be enough liquidity. what are they saying? >> what we understand is, the pboc seems to likely be injecting liquidity going into this month. we obviously have the announcement of one trillion yuan of debt sold to the government, which adds

liquidity. the central bank is obviously trying to signal it will be there to make sure the market is stable, debt is being sold and making sure the recovery we have started to see in china's economy is going to continue and won't be overturned by anything happening in the short-term. paul: our china senior executive editor john. plenty more to come on daybreak asia. this is bloomberg. ♪

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shery: a billionaire investor sounds a note of caution on the economic outlook. let's look at warning calls and bring in annabelle. he is going long on fixed income. annabelle: that is the short and in particular. he hasn't done that since 2020 so giving an interview at a conference, and the video is

surfacing so we can get the details of what he said. he is focusing on the short end of the curve in particular. buying up and taking massive leverage bits on two your treasuries. treasuries at the two year yield breaching the 5% mark so lots of investors are betting the fed will need to stay higher for longer. he has been predicting a hard landing for the u.s. economy and says he is becoming more worried about the outlook. paul: all right. so druckenmiller is worried but other investors are more optimistic? annabelle: that's right. we had an interview with the skybridge founder anthony scaramucci. he said his fund has had the best month of returns ever in october and he says key investments around bitcoin, emerging technologies, digital tokens actually have seen a big

bounce. that is what he is optimistic. skybridge has taken a reputational hit because of its alliance with the former crypto exchange ftx and sam bankman-fried. here is what he said as the trial is underway. >> he has absolutely no defense or plausibility to a defense, other than the fact that he, along with his coworkers, perpetrated fraud. the issue right now is, when does this and? when is his sentencing? annabelle: the jury in the trial of sam bankman-fried, set to hear closing arguments wednesday after the defendant endured off final cross-examination from prosecutors -- a final cross-examination from prosecutors. another grilling and invasive responses. su: sam bankman-fried struggled to handle questions from the prosecutor who went after the

issue, where did the $8 billion that went missing go to? who might have taken it? under direct questioning, what did you do when you learned 8 billion dollars was missing? he responded he didn't know anything about a particular employee. the prosecutor pressed and said, did you fire anyone for spending $8 billion? he answered, no. this was the kind of questioning that went back and forth, specific questions and evasive answers. it was the third day sam bankman-fried appeared before the jury, fourth day on the stand. the first day he answered questions only to the judge. at -- jurors will hear closing arguments as early as wednesday and they will likely begin deliberations this week. testimony was considered critical for sam bankman-fried. the legal community generally

advises against the defendant in a fraud case from taking the stand, yet he felt this was a way to tell his story. paul: do we have any indication of how the jury has been responding to sam bankman-fried's testimony? su: bloomberg reporting has observed certain jury members giving each other glances and astounded looks during evasive answers from sam bankman-fried. here is a picture of him earlier in the summer when he was still very confident about how the defense might go. the main defense. sam bankman-fried has sustained is that he didn't commit fraud. he may have made mistakes and the defense also wanted to make an argument that they acted in good faith on legal advice they received, but the judge disallowed fat. so the key takeaways from the trial so far are that under his

own questioning from his own attorney, he appeared confident and told his story, but under tough questioning from the prosecutor, he struggled. the prosecutor presented devastating evidence using his own prior statements that ftx was safe against him, devastating testimony from friends and former friends and coworkers, and he was unable on the witness stand to dispute those devastating accounts of fraud. he faces seven counts related to stealing, he is charged with stealing billions of dollars from accounts and also political contributions to politicians. paul: su keenan following the sam bankman-fried trial. plenty more to come on daybreak asia. so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience

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>> forex moves get large sick and have a major impact on the economy, so it would closely monitor those movements in close proximity with the government. if there was an impact on our price outlook, that could lead to policy changes. paul: that is bank of japan's governor on this policy outlook. for more on how z/yen is reacting following tuesday's policy tweet, let's bring in bloomberg's effects in great reporter, michael wilson. since the governor spoke, 15127 at the moment, what's the power from here and do you think the door still open for the ministry of finance? michael: i think we have to get

past the fed. the ministry of finance data, which was zero. it is significant because we did spend half the time, like 145, 150. there was talk of a great check, but they never got the check book out, and that's a test of approval for current levels. it does speak to fundamentals in terms of interest rate differentials. i think they mention the word fundamental this morning, he said there's a few fundamentals missing, or something like that, and that is a bit of a signal in that the market might be getting ahead of itself. and maybe just giving them something to think about that they don't run away thinking they have tested approval to get long dollars in silver yen. trying to force to boj's hand

and see if they intervene. we could see a situation where dollar-yen closes above 150. we are looking through the last quarter with the inflation forecast they had. they're trying to send a message that the inflation is possibly transitory photo lifted the outlooks worth a new to cited as a driver when they do pull the pin. even though we backed off this morning, 152 is in play. risk versatile doubts risk reversal is so biased for yen after yesterday's move. until that normalizes, there could be another tilt for the

fed and that could be a big driver on the fundamentals in the u.s. are still there across the indexes quite firm. we can have one more go before the weekend. shery: it's a little bit more about what he usually says about monitoring the market closely. given all the flexibility on jgb yields, do you expect the 10 year yield to test that 1% level soon, and if so, and we see this rise in japanese yields, what would it mean for the rest of the world. michael: what happen when it went from .5 to where we are now, that did lift the whole level globally and it happened

and was not in coordination but in coincidence with treasury most. it is worried about boj operations on the 10 -- tenure jgb as they would be am dollar-yen about 152 in terms of intervention. it becomes like a moving target, as it were. if the situation warrants global rates are lifted, you might see 1.1, 1.2% move. it's all about the spread to the treasuries. there was a comment by a guy who said, if we can get that spread down to 3%, that might have

japanese pension funds keep their money home. which would be interesting, but maybe not until next year. paul: effects and rates reporter mike wilson. let's pivots of corporate earnings and advanced micro devices with an up a forecast for its new ai chip predicting $2 billion in sales next year. that may offset a lackluster revenue outlook that was served by slowdown in the videogame industry. it's m 300 processor is said to begin shipping in the coming weeks to compete with nvidia's products in the market for so-called ai accelerators. qualcomm is getting a bit fiscal fourth-quarter resort -- result wednesday showing the state of smartphone demand amid an industrywide glut of components. some analysts are predicting that the worst may be over, that qualcomm will start to cash in on efforts to diversify out of its core business. let's get the views of that senior analyst at counterpoint research. thank you for joining us.

i want to start you off on the numbers we got from a&e. was in great. the outlook was pretty bleak as well. we saw shares beginning to sink after hours until they begin to talk about ai. what were your takeaways about amd's ai plans? >> first of all, thank you. i guess when you look at the tone of the earnings, it was pretty much expected as most of us in the industry have cautious guidance, enormous micro-headwinds, but i guess these are headwinds that people have already expected. there was a big slump in the pc market, and we seem to be merging out of it. the shares pop after trading with a mild discussion on the ai game. we heard that am i300 path to start shipping in this quarter.

in the revenue guidance of 2 billion u.s. dollars sales for 2024 was given. so that is a boosted sentiment. also for us it means that, as a company that has deep skin in the gaming and graphic stamps of the business, it is probably a new entrance into the ai chip industry. of course it's not going to sit by the sidelines and videotape market shares. we will see more detail about where they can compete off of the platform. more will come, but this revenue, this sales forecast shows that the company seems to be confident about his ai pipeline revenue potential. paul: i'm told inventory has been a big problem for a lot of device makers, particularly in the first half. do you feel this is becoming

result, if not resolved? >> i think the tone across the street is that we probably have seen the end of it due to pretty aggressive restocking efforts for the sentiments, whether it's pcs, smartphones. that's a huge sigh of relief for industry. we have to remember that we are entering probably one of the biggest slumps in the semiconductor cycle in the past probably 10 or 20 years. some pricing month on month for almost two years. so a large amount of damage has been done, but we seem to be seeing the end of the tunnel. but with the backdrop, probably tentative sides of global macroeconomics improving the

picture for touring 22-2024 doesn't want to be writer -- brighter for the past year. shery: they talk about the memory of smartphone market set for recovery. but they also talked a lot about and devise artificial intelligence. how fast with this category grow and what role does qualcomm expect the results of play in undivided ai? >> if you look at what device makers and smartphone device makers like samsung and qualcomm, which is one of the biggest suppliers of smartphone chips, they are taking an alternative strategy. it's different from the likes of nvidia. so the likes of qualcomm will not run the biggest llm's, large language models.

try to democratize ai on the happen and be smartphones and laptops. this past week we did see qualcomm announced it. they claim that 13 billion models can be ram on this time. that should be competent enough for real use cases. to think of use cases such as voice assistants or digital assistants that can help you get through tasks through the day. multitasking and also vr linked to applications like facial recognition or facial expression recognition. i do think there is a healthy pipeline down the line.

but i think we still need to see how the party real lines. but the devices by mid-2024. so we can see how well these scenarios play out. shery: we will be watching qualcomm's commentary of their business in china. how does huawei's research into in that market square with qualcomm's performance in sales? >> i do think the emergence of huawei is 60 pro. it probably made attentive qualcomm's revenue streams on china. they were significant customer in china because they had to rely on custom-made non-5g models after 2020.

they make a dent to at the top off on the premium end of the chinese model market. on the other end, the chinese oems that do take the premium trips have not really had a break for premium strategy. there will be some pressure for qualcomm in the short term as well as general economic issues in china as well as geopolitical impact, given the impact of geopolitics. shery: counterpart reseller -- counterpoint research with his thoughts. we have more coming out, toyota releasing their second-quarter results on wednesday in the world's biggest carmaker expected to report record high operating profit. this at a time as we continue to see a rebound in global vehicle demand. transport reporter nicholas joins us now from tokyo.

what will you be watching out for in these results to see if these gains can be sustainable for toyota? >> we will see the drop earlier in a few hours. we expect the numbers to look good for toyota. sales continue to stagnate in china, which is the largest auto industry and toyota is no exception. analysts expect second-quarter operating income to reach record heights, even enough to push the company to raise its fiscal year outlook the company forecasted treat -- 3 trillion for the fiscal year by analysts expect more than 4 trillion. as you say, recoveries and the supply chains, specifically semiconductors are helping japanese carmakers boost production. we found out last week that over the first half of the last

fiscal year, toyota produced a record 5.6 million cars. japan and japanese carmakers are known for their conservative outlooks during earnings season and toyota is no exception, but we do think there is a chance at they will raise the outlook for the year. paul: toyota is tied up with mass-produced ev batteries. how does this fit in with carbon neutrality plans? >> a partnership is all about moving forward and planning ahead. toyota has pledged to sell 1.5 million battery ev's by 2026 and 3.5 million by 2030. the company has seen a lot of changes here, the ceo change this time for more than a dozen years. they made a lot of pledges to scale ev production in this partnership with a big oil

refiner and petrochemical company in japan speaks of the plan. toyota says it wants to commercialize solid-state batteries for ev's but around 2027 or 2028. while this partnership began informally with r&d a few years back, the announcement a few weeks ago gives us a sign that those stubs are beginning to materialize. paul: transport reporter nicholas takahashi in tokyo. plenty more to come on daybreak asia. this is bloomberg. ♪

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shery: you're watching "daybreak asia". the united nations general assembly president has defended the global body's response to the israel-hamas war. the assembly is calling for humanitarian truths in gaza and an uninterrupted flow of a. dennis francis told us why is the un security council that needs to take concrete action. >> the resolutions of the general assembly are never legally binding. it's the resolutions of the security council that are binding. however, it does not mean that the resolution passed in the general assembly is without value, quite the opposite.

because that resolution is a declaration of the political will of the majority of states comprising the u.n.. so it's a strong political statement of what the general assembly would like to see happen in gaza. with the hope that the authorities will follow the guidance provided in the resolution. shery: do we knew days security council resolution that will not be rejected, and do you expect to see one soon? >> it's an interesting point that you've raised because tomorrow the presidency of the general assembly shifts to a new country, china becomes a new president of the general assembly for the next month. and there is the possibility that during the chinese presidency we might see another attempt at a resolution. we've got to wait to see how that plays out. but, that resolution, if it is

passed, will be binding on all members. shery: what would you like to see there? >> we would like to see a humanitarian truths. we would like to save lives, we would like to see all the humanitarian workers, the hospitals, the u.n. and rwa workers being in a position to provide this assistance and support that's needed in gaza. as you know, the electricity has been turned off, there is no water, there has been declining supplies of food. there have been incursions into humanitarian installations of people looking for food. so is civil authority is in

decline in gaza because people are desperate. when they are desperate, they behave in desperate ways. so, there needs to be a humanitarian pause. there needs to be a core door -- core door to allow a delivery, uninterrupted of humanitarian support to those in need. and, of course, there needs to be, as i have said before, hamas needs to release all of the detained individuals, civilians. shery: u.n. general assembly president. if you miss any part of conversation, tv does your front -- tv is your function. you can watch us live and dive into any securities or bloomberg functions and become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only.

check it out at tv . this is bloomberg. ♪ did you know you can get someone to shop for you? with stitch fix, it couldn't be easier. i share my style, size and budget. and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix.

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are seeing a asia stocks reporter in tokyo. what is driving these dividend increases? >> good morning, paul. if you look at the numbers, according to the japanese brokerage, about almost a quarter of japanese companies have balanced dividend hikes, and that is the highest and last year was around 15% and before that it was basically a single digit number. we seem to be seeing an increase as a graft to showing now. the biggest driver is likely to be the tokyo stock exchange and new campaign to boost companies valuations. in march, they said basically companies trading without their

of valuation should come up with new business plan to do something with their low valuation. last month, they also said that basically they want every company to look up their stock prices and come up with ways to boost their market valuations. from next year, they are going to announce the companies that have complied with tsa's new directive. many companies are now feeling the pressure to do something about their share prices. shery: that's a bit early still, just about a third of the companies on the topics of reported so far, but it's not looking that great. >> exactly. i wouldn't say it's out right disappointing, but this is been a dull earnings season. the aggregate number shows their

earnings that have met market expectations, but the thing is, japanese market as rallied so much, it has been one of the best stockmarkets in the world so far this year. so, just meeting expectation is a little bit uninspiring for many investors. shery: how are seeing a asia stock reporter in tokyo with a look at japanese earnings as we head towards the open in tokyo, as well as insole. you can see currencies trading pretty steady as the japanese yen holds out that one level. we are still talking about the weakest in 33 years. this is bloomberg. ♪

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shery: this is "daybreak asia", we are counting down to asia's major market open after we saw gains on wall street ahead of the fomc rate decision. of course we are watching that that potential higher for a longer narrative that meeting and what that can mean for the japanese yen. paul: very weak yen. we are standing by for a lot of data, a lot of pmi's out of asia. here in australia, building approvals, but have trading underway in japan and south korea. annabelle: as you said, it really is that focus at the open, you have the rate differential. you have that jawboning that has come through from various government officials in japan. but it's the tug-of-war between the boj and traders following that decision on tuesday. we have the market open here at

at the outset we are watching the trading direction of the japanese yen. that's where we really seen the moves across this morning. we've heard from the top currency official and he says that authorities are ready to intervene. we also heard from a finance minister and he struck a similar note of caution. off the back of that we saw that little bit of strength coming -- coming back into the japanese yen, but it moved off that fresh year to date low. a lot of that direction really being driven yesterday by traders who were perhaps expecting a little bit more out of that boj decision. they did allow that yield cap for the one-year yield reference rate for the 10 year now out 1%. just continuing to track that, fairly steady so far. it is still approaching that mark. 10 yield fairly flat. but we are ahead. it is the fomc decision that is in focus for later today. stocks, we are seeing pretty

robust trading up 1.5%. but citigroup among both saying that the latest decision from the boj should be supported for equities in japan. let's change on because you have the open of korea here. very much focusing in on the trade data that has been pushed out. this is the exports. the big focus for us because you can see the gain of more than 5% on the year. a little bit lower than what economists were predicting with gains of 6.1% but still put it in context. this is the first time we have seen exports turning positive in korea on the year in 13 months. korea, you know it is an important trade bellwether. it does also report that trade numbers earlier than a lot of other countries. it's a good leading indicator to us. what has been helping us is that pickup we are starting to see in global demand for semiconductors, which is the backbone of the korean economy. in terms of the direction of stocks, the cossack, tech heavy index is outpacing the border heavy kospi. the korean won is a little bit

weaker against the u.s. dollar. let's change on because in australia, one hour into trading and we are just monitoring a couple of headlines that drop this morning, the first coming through from the imf. they just put out a new report saying the iba needs to tighten further because inflation is still running hotter then what they want. they are also urging for governments to be a little bit more cautious. that's at the state and federal level, to be more cautious in the spending outlook and to make investing projects outlays, coordinate a little bit better on that. what is not showing up in the picture is whole prices. we saw them climbing over the course of october. now just shy of a record, it really just add to the pressure on the rba ahead of that decision next week. shery: we continue to watch those lines coming from south korea. site -- finally, that trade surplus number dropping. it's a surplus of 1.36 billion

dollars in the estimate was actually for deficits. so really interesting that the export numbers have come in that strong. perhaps we are seeing that and to the semiconductor slump. let's bring in our next guest, who's expecting more volatility in is maintaining an overweight cash. with us now is the chief at apac investment strategist northern trust strategist. great to have you with us. who could blame you for being defensive and your allocations, given all of the uncertainty. there's monetary policy, fiscal policy or geopolitical tensions with two ongoing wars. how complacent has the market been so far and has some of that been priced out, given the rally that we've seen in global yields? >> in terms of the complacency that was really the driver behind that conscious positioning or risk off positioning, if you may, we see some of it being priced out.

global equities are off their high roughly 10% and that extension has meant from a valuation perspective, things are looking a little bit better. that being said, real yields are still on that upward trajectory in the economy, in global terms, is still quite fragile, as these interest rates are starting to feed back into the economic cycle. we still think there is a little bit of risk ahead and we do like to stick to our cautious positioning as a result. shery: ready see yields go from here. we have the fomc rate decision and the consensus is for a whole. at the time and we have the two year yield about 5% in the tenure yield at for 93 level, where are we going to end at 2023 and on? >> i think that is an excellent question because yields are such an important input into market sentiment and economic momentum. we do think yields will stay

elevated. we don't think there will be more in terms of rate hikes. the fed is the wildcard here. the u.s. economy is obviously doing better than the rest of the world, so the fed might have one more rate hike in it, but the rest is done as it pertains to europe. but really, on a ten-year point, what we are really focused on is what's happening in that term premium, that higher for longer trade, how far does that still have to run? we do think we are getting close to the end. we see natural buyers come in. pension funds are starting to get interested in long-duration bonds. on that part, we think 4.5% to 4.75% end of year is where we are at. slightly lower than where we are currently sitting. paul: in terms of the higher for longer narrative that comes out of the fed. i wondering what longer means for you because we have a number of people we speak to forecasting rate cut sometime in 2024. i do wonder if the fed were to start cutting, what with that

say about the state of the economy, is it a state of being careful what you wish for? >> i think what markets were very worried about was, for a long time we had rate cuts pricing for 2023. i know that's a distant memory, but that was a big story only a few months ago. for 2024 there were 45 rekha spray stand. now we are in a situation where only to rate cuts are pricing for 2024, which we think roughly aligns for expectations that we have as a firm as well, so the higher for longer rate is still one where there aren't going to be a few rate cuts in the next 12 months, but not as much as we saw price in three months and that shift is a higher for longer trade at least the way we look at it. paul: we have yields elevated, the fed looking to be around about done. what is this mean for the u.s. dollar, in your view, and how is that informing -- and how is that informing the strategy?

>> the dollar strength trade has been very important. the markets, in terms of the way they allocate risks, once the dollar starts rallying, it's a momentum currency. there is a risk off element for the broader market on the other side effect trade. seeing that hopefully take a little bit of -- if the fed stops here in signals that is taking these higher rates seriously on the long end of the curve, and is willing to give the markets -- sorry, the economy a bit more time to bring inflation down. i think the dollar strength trade might start to reverse a little bit as well. and with that, improve sentiment across the broader markets. the problem is, we need confirmation first before we do, we are happy to be a little bit cautious here. shery: so you are not expecting big changes to come from the back of japan any time soon, there have been concerns that if the boj moves, it could pull off

global yields much higher. >> i think that concern has been overstated. japan is in a very unique situation. one of their own making and they still have a lot of control over the situation, at least as far as the yields go. the currency part is where it all comes due. and that's where we see that shop, as i heard you mention earlier, really come through. if that fails in of the bank of japan really sees a currency move that's outside of their comfort zone, then the intervention starts kicking in and it becomes a little more difficult for them. however, from a yield curve control perspective, because the inflation rates are still relatively contained, they still have some room for maneuver, especially of the market doesn't spin out of control. that whole narrative where the japanese selloff would infect other parts of the market, i think it's very early days and we are not there yet.

paul: chief emea and apac investment strategist at northern trust asset management, thank you for joining us. we did have that boj decision yesterday and dovish with the possibility of hawkish outbreaks, what will it mean for japanese stocks? annabelle: we have a few different perspectives coming in on that. adding to what you were discussing that. but citigroup saying they think it will provide relief to japanese equities. this sort of signal of the accommodative stance could continue here. you weren't really seeing that reflected in the trading action. the topix is up more than 2% with broad-based gains really coming through. they do say city stocks are likely to say range bound through the end of the year into 2024. but the gains for the topix, looking at near 20% move to the upside versus around 9% for the

s&p 500. let's change on because there is a key mover that has just come online. this is the japan machinery and robotics maker. you can see that big spike higher for the company. that is the biggest move we have seen. the biggest jump for the stock in about a year or just over. they have raised their four-year profit in sales outlook. we had the numbers out yesterday , also beating estimates. the company saying it will be buying .66% of shares. so ¥25 billion buyback. another supportive factor for the price. in terms of the numbers to china , quarterly net sales in china actually contracted near 30% on the year, and they are expecting the delays in china and inventory adjustments will continue. you can see that stock up more than 5%. let's change on because there are other machinery stocks in focus this morning in japan and in korea.

these are higher, even though we had caterpillar in the price session dropping near 7% on tuesday. the biggest one-day decline since april of 2022. it's order backlog shrank. a sign that the market is perhaps seeing a slowdown for its machinery. still into the session, we are seeing broad-based gains for the msci asia-pacific index of 1.3% and just taking a quick look at the imap function, you can see every sector is in the green at this point in time. shery: china signals more efforts to address's financial risk, valley gate debt cleanup and local governments. we will discuss later this hour. the u.s. secretary of state heading back to israel as washington sends more troops to the middle east. the latest in the israel-hamas war, next. this is bloomberg. ♪

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>> for our adversaries, be they

states or non-states, this is all one fight, and we have to respond in a way that recognizes that. if we start to peel off pieces of this package, they will see that, they will understand that we are playing whack-a-mole wall they cooperate increasingly in impose an ever greater threat to our security as well as that of our partners. paul: u.s. secretary of state antony blinken there. he is headed back to israel on friday. he will also visit other countries in the region. let's get more from bloomberg's bruce einhorn. bruce, we have the news as well that an israeli airstrike hit a refugee camp in gaza, but antony blinken among those suggesting that there won't be a cease-fire anytime soon. bruce: the secretary of state had a call with the israeli president according to the state department, they discussed efforts to state -- safeguard

u.s. citizens in israel, the west bank and gaza and talked about efforts to release hostages. they also talked about efforts to what the state department called urgently increasing the pace of humanitarian efforts in gaza. the white house has called for a pause to allow aid to get into gaza. the secretary of state is going to be traveling to the region. he will be going to israel later this week. the state department says he will also be going to other countries in the region, unclear at the moment what those countries will be. meanwhile there's news from the pentagon. the pentagon says it sending several more hundred u.s. troops to the region. says they are not going to israel, they are going elsewhere in the region. the pentagon said there were six more attacks on u.s. and coalition forces in syria and iraq. the defense department said that those were small-scale attacks,

those are something to keep an eye on because the u.s. has said that it will retaliate against iranian backed proxies if those attacks continue and if they escalate. shery: we are getting the latest from the white house threatening to veto the u.s. republicans israel bill, they are faulting the bill on what they call poison pill offsets. we know that the foreign aid is now linked to legislation to cut funding for the internal revenue service, which is a key detail that will potentially be a nonstarter for democrats. but really we continue to see this discussions in the u.s. congress to try to move this forward, but it seems we are at a deadlock right now, what's next? bruce: we heard secretary blinken talking about efforts to

separate the. the white house, the biden administration, has called for there to be an aid package that includes notches aid to israel, but aid to ukraine, aid to taiwan. the new speaker of the house, mike johnson has proposed a standalone israel aid package that doesn't include aid to ukraine in taiwan and doesn't include humanitarian assistance to gaza and israel that the white house has called for. and as you mentioned, it included offsets that would take the internal revenue service that previous congress controlled by the democrats had passed. that is a nonstarter for democrats, so it is unclear just how serious they will be about moving ahead on negotiations, how long it will take, but there is definitely a difference between the two, how quickly

they will be able to resolve that remains to be seen. shery: bloomberg's bruce einhorn there with the latest on the israel-hamas war and where the biden administration stands when it comes to additional aid to israel. the white house also saying that president biden and xi jingping will meet in san francisco next month. this on the sidelines of the apec summit. the white house confirmed this it down with reporters who had been seeking an official announcement. the press secretary says washington is aiming for a constructive conversation and leaders are expected to discuss the economy, technology as well as geopolitical issues, like taiwan. china says it will set up a long-term mechanism to resolve debt risks tied to local authorities as it says there is a willingness to expand borrowing of the central government level. for more, let's bring in our asian government and economy

reporter rebecca choong wilkins in hong kong. we have seen a series of efforts by china to shore up their economy. this plays into that narrative. what are we expecting? rebecca: we don't have many details on what that long-term mechanism can be, but the focus is very much at this forum on controlling debt risks at the local government. the most interesting government is perhaps the signal that the central bank may expand its willingness to increase its own debt levels to support the rebound and economic growth. in china, the local government will hold the bulk of debt. most of that is concentrated in they have gone through this unprecedented time of stress. managing covid and pandemic control measures, plus the cost of the property crackdown with

key access to funding vlan sales no longer available to many governments. many officials are finding themselves in navigating the incredibly tense times. it will take on some of the risks. paul: what do we know? rebecca: yesterday it appears there was a dramatic fluctuation in money markets. one bank trader said that the borrowing costs had gone up as high as 20%. a local media, the state broadcasted cctv responded to this saying that this has been essentially caused by institutions themselves that weren't managing their risks properly and that created a tense move. it appears as a result of the

fluctuations we saw yesterday, the pboc is willing to inject liquidity to try to stabilize the market. that these are precisely the concerns that i think beijing are focused on now. trying to essentially inject stability across its financial market. shery: our asian government and economy reporter. traders piling into fresh bets against the yen triggering pushback from japanese authorities who are now threatening to intervene in the currency market. for more, let's bring in bloomberg effects and rates strategist. they came out and said that there is still a standby to intervene if needed. these seem stronger words than usual and they are monitoring the effects markets. will they tell us if they actually intervene? >> i think the word standby is the keyword and a warning that

markets are definitely in an intervention territory. that's no surprise that we are -- so anything around there would be a logically intervention time. they go we already know and expect this in the markets are saying, let's find out where that line in the sand is. particularly if u.s. yields push higher. i don't think they are weary of it, but that won't stop them from grinding dollar-yen higher. particularly if the fed is hawkish tonight, which there is a good chance it will be given the strong u.s. data that keeps coming out and consumer confidence data. there is no real reason for the fed to take the option of an interest rate hike off the table. i think they will blatantly leave it on the table. it gives them -- the market traders an opportunity to push dollar-yen higher. at the end of the day can you keep saying you wanted intervention, let's find out where that line of sand is. i think risks are geared toward

that 152 where there are some options, there are more barriers. test all those lines. paul: that was bloomberg's effects and rates strategist. stay with us, plenty more to come on "daybreak asia". this is bloomberg. ♪

paul: let's take a look at how we are trading in some of the counties around the asia-pacific at the moment. still have a very weak yen. 151 33 against the dollar. we got data from the ministry of finance that says it took place in october, but we are still on standby to see if it might be a move this month as that yen weakness persists. also a weaker korean won at the moment. this is after pretty decent export numbers out of south korea earlier on. 5.1 percent increase reverses

the contraction we've seen in prior months, a little less than we were anticipating. a quick look at the aussie dollar. holding steady against the greenback, 6338 as we count down to tuesday's rba decision. shery: not to mention we have the poa rate decision later this week and we continue to watch european markets as the euro was also slightly supportive in the regular session, given the weakness of the u.s. dollar. we also saw european stocks really gaining ground as eurozone inflation saying to a two-year low in those bond yields cooling, some earnings looking a little more positive helped sentiment with futures gaining ground. this is bloomberg. ♪

annabelle: this is "daybreak asia". a check on markets here. half an hour into the session for japan and korea trading 90 minutes into the session. for aussie stocks as well. at the start of the day we broadly see gains. there are a few movers standing out, in japan. kicking off with the most -- with the wrist -- the machinery maker and robotics maker, spiking up around more than 5%. we did have it boosting its full-year operating profit few even though it did see a lot of shipments after china and doesn't see a recovery there as of yet. otherwise, we are taking a look at chip events. that stock has recovered from its earlier drop. but, importantly, its profit forecast missed the average analyst estimate even though it did boosted. advantis also in the chip equipment space. that stock there is sliding, but we saw a cutting its for your

operating profit forecast. these are just some of the movers we are tracking this morning. interestingly those chip names with profit outlooks, what we see in korea is where we have the trade data dropping at the top of the hour. what we saw was exports turning positive for the first time in 13 months. let's take a look at that gain of 5.1%. you haven't seen it in positive territory for more than a year on the year of that reading. jumping 5.1% in the estimate had been for a gain of 6.1%. but, still, better numbers coming through, better signal for the global economy. the trade balance turning positive in the territory as an indicator to other economies in asia. shery: which is why was thinking we could see more positive numbers coming out of south korea when it came to the manufacturing pmi's. we are stealing contraction territory for the month of october. 49.8, it was very close to

turning positive at 49.9 in the previous month of september, but it actually eased a little bit. but not that great. we will see if the recovery that was on those export numbers actually filtered through in the numbers next month. but, in the meantime, tiant -- thailand manufacturing pmi falling to the lowest number since february of 2021, so we see 47 .1 there. indonesia's manufacturing pmi still an expansion territory but easing a little bit. we are seeing japan's final number coming in at 48.7, and we are talking about five consecutive months or being in -- of being in contraction territory below that 50 level. paul: we could've been on the downside surprise when it comes to filling approvals for the month of september. contraction of 4.6% on month in the market was extent -- expecting an expansion of two 5%. this is becoming a serious issue

in australia. housing supplies, particularly with house prices, rents being responsible for a large chunk of increases we see in cpi. really considering the head of -- ahead of next tuesday's meeting. we did have a third quarter cpi print that was more than expected. big miss on the building approvals and contracting 4.6%. shery: let's turn to china. foreign investors have been selling chinese shares for three consecutive months, threatening to turn this year's capital flows into negative territory. let's get more from our asia equities reporter. charlotte, really that confidence is not returning to chinese markets yet. charlotte: yes, so we are looking at foreign investors on a basis of $6 billion for the month of october. if you put in the chart you can see this is the fourth consecutive month and if the trend continues, we could see

the first year of annual outflow from chinese equity outflow since 2016. if we focus on the month of october, despite seeing signs with china u.s. relationship and also we've seen more supportive gestures from authorities. we only had three days of inflows from foreign investors. so i think what this says is that investors are waiting for that sustainable turning point for chinese equities before they are willing to come back in. that means in a significant way. that is in terms of earnings, as well is a more consistent picture with macro data, and also the global macro environment for equities. paul: i've also heard from chinese policymakers in the past 24 hours. pboc promising liquidity. authorities promising to clean up debt in the country. is this likely to give foreign

investors much reassurance? quex investors today were definitely assessing the remarks. the readout yesterday we had from the conference. a few sectors are focused on financials. so if they had in for size the importance of the financials and also talked about providing more to high-tech manufacturing. so we could see some sector moves there. i think this also sends a signal that it is really high on their mind to help with the financial market. that could potentially help with the wider market sentiment. we could also see shares moving because we had news yesterday that it would go down in that area of the country, so these are the things we are watching today. paul: with us now is china macro

financial senior analyst at autonomous research. i just want to pick up on one of the points that charlotte was making there about that foreign capital exodus that we are seeing in china. $6.1 billion worth of assets being unloaded by foreign funds. we have a chart here that illustrates how severe that outflow is. at what point is chinese looking a bit oversold? >> to be honest, if we were in previous years in previous cycles here in china, i think the couple of beats that we had had on the macro data in august and in september would have already brought people off the sidelines. but clearly, this is a much different environment that we are in today. i think this is complicating the decisions that investors make. it is not an easy environment when certain things are turning more positive. we can see that in some of the data that's improving, but we clearly have big structural

issues weighing on the economy as well. we saw the week pmi data yesterday just underscoring that even though on the margins some things are incrementally better on the chinese economy, we still have a lot of big problems. paul: i want to come back to those pmi's in a moment. one of the big problems that gets a lot of publicity that troubles the property sector, but i know you feel the other shoe could be about to drop on the financial sector. what are you thinking? >> there is clearly a lot of issues there with the central financial work conference this week. i think the market was hoping that we would hear some sort of guidance coming out of that about how authorities would deal with local government debt problems, how they would be dealing with all of the bad debt that is in the banking system and people need to keep in mind that we have had three different parts of the loan portfolio in the banking system in forbearance over the last few years. this is micro and small inner

prize loans, it includes property loans and l dfe loans. clearly there is an asset quality problem here. the authorities were not very specific yesterday in their readout on the meeting in terms of what they plan to do about the dip back down to the banking system, as well as what they intend to do about local government debt or properly -- property related debt. i think there is still a lot of questions. this is why people are worried that this could spiral into some sort of financial crisis at some point, that is not our base case, we think the authorities still have a lot of influence over the behavior of lenders and borrowers. we assume that the system is still going to maintain stability. what is very different today than previous episodes of financial stress in china is that we do have a confidence problem and financial sectors run on confidence. in this scenario that we are in, there is a risk that the

confidence problem seeks -- seeps into the financial sector and we could have households in corporate starting to say, we would feel better just having more of our money and think deposits then exotic investment products. that type of thing can start to lead to more problems with problems in august. we could see it throughout the shadow credit sector. paul: to your point on local government debt. the things we heard from the working conference yesterday, china state council restricting the ability of heavily indebted councils to take on new jet will limit what projects they can launch. but as you mentioned, this wasn't enough. what would you really like to hear from the space for your conference? >> i think what came out of the

conference was very focused on the flow of new debt and it is encouraging to hear that we are going to continue to see these very elevated levels of debt accumulation. but what we didn't hear anything about is how they are going to address the existing stock of debt. because this is very difficult for local governments to service. clearly that's why the market has been so worried that we could get in a default cycle with local government financing vehicles. i think there is a question here about how this is going to be made sustainable over time, this large debt stock for local governments to manage and on top of that we need to remember there's a big load of problem debt here associated with developers. so, we continue to have questions on this. i would say that in past financial work conferences, it is not uncommon for the authorities to come out right after that and be quite vague about what was discussed and

what was talked about, but can become very clear months later looking back. that's a very important decision that was made. i think we are really going to know what's coming out of this conference in the months ahead. paul: just want to come back to the disappointing pmi's we had yesterday and in about an hours time we will get the manufacturing pmi for october. there was an expectation that we will see an improvement, 50.8, but is there risk we will get another downside surprise? >> i think there is. this is a different group of companies that tends to be a little more micro oriented. i think there is always a risk at times like this that we are going to have surprises in this segment. we also had an issue, and the authorities did talk about this seasonality with the extra long holiday in october versus

september, and that also impacts things in terms of frontloading activity in september and having weakness in october. we could see a similar pattern here of some of the smaller companies in the pmi. paul: macro financial senior analyst at autonomous research. thanks for joining us. plenty more to come on "daybreak asia". this is bloomberg. ♪ ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. the chase ink business premier card is made for people like sam, who make- everyday products, designed smarter. like a smart coffee grinder, that orders fresh beans for you.

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shery: the u.n. general assembly president has offended -- defended the response to the war. calling for humanitarian truce in gaza and uninterrupted flow of aid. they told us why it's the un security council that needs to take concrete action. collects the resolutions of the general assembly are never legally binding. it's the resolutions of the security council that are binding. however, it does not mean that the resolution passed through the general assembly is without value, quite the opposite, because that resolution is a declaration of the political will of the majority of states comprising the u.n.. so it's a strong political statement of what the general assembly would like to see happen in gaza. with the hope that the

authorities will follow the guidance provided in the resolution. shery: do we need a security council resolution that will not be rejected, and do you expect to see one soon? >> it's an interesting point that you phrase, because, tomorrow, the presidency of the general assembly shifts to a new country. china becomes a new president of the general assembly for the next month. and there is the possibility that during the chinese presidency, we might take -- we might see another attempt at a resolution. we've got to wait to see how that plays out. but that resolution, if it is passed, will be binding on all members. shery: what would you like to see there? >> we would like to see the humanitarian truce. we would like to save lives. we would like to see all the

humanitarian workers of the hospitals, the u.n. and rwa workers being in a position to provide this assistance and support that's needed in gaza. as you know, the electricity has been turned off, there is no water, there has been declining supplies of food. there have been incursions into the u.n. humanitarian installations of people looking for food. so civil authority is in decline in gaza because people are desperate. when they are desperate, they behave in desperate ways. there needs to be a humanitarian pause. there needs to be a core door to allow the delivery,

uninterrupted, of humanitarian aid and support to those in need , and, of course, there needs to be, as i have said before, hamas needs to release all of the detained individuals, civilians. shery: that was the un's general assembly presidency and he was referring to china taking control of the un security council, not the general assembly next month. if you missed any part of that conversation, tv is your function. you can watch us live and watch past interviews and dive into the securities are bloomberg functions we talk about and become part of the conversation by sending us instant messaging during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

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♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia. paul: in watching "daybreak asia". the latest corporate stories we're tracking, wework shares plunged up for the wall street journal reported it may file for bankruptcy as early as next week and a finding on tuesday, wework says it's been talking with creditors about improving its balance sheet and addressing its

real estate footprint. we work entered into a forbearance agreement with creditors on monday. a spokesperson told burke the company wouldn't comment on speculation. oh day asset management is shutting down months after its founder face multiple allegations of sexual misconduct. the entire business will close. the funds will either shadow or move to other firms. the founder was removed in june after the financial times reported numerous sexual assault allegations against him. pfizer has reported sales that missed expectations of the pharmaceutical giant continues to transition out of the covid-19 pandemic. the ceo told us they are making significant progress on an experiment to weight loss pill. >> what we are working on his presentation of the product and it is progressing right now and

is expected to have -- by the end of the year. today we announced we put in our websites where people say we have another molecule that we brought into the clinic. so we are waiting to see the results of data and we are going to move into phase 3. >> if you have an oral version, how many doses a day? >> right now it is twice today, but we are reformulating that and we feel confident. but if it works, we will be able to do it once a day. david: well that the effective as ozempic? >> we need to see the data. david: fair enough. when you talk about this, back in january you thought it could be a source of as much as $10 billion in revenue for pfizer. they be 10% in overall market. are you still on track for that, do you still anticipate $10 billion, in success? >> when we made this, we thought

the market would be 90 billion altogether of one third, 30 would be the owners. the market looks like it would be even bigger. so, yes, it is a sizable opportunity. shery: pfizer ceo speaking with bloomberg's david westin. keep an eye on china shares when trading in hong kong starts in the next hour. the stocks fell sharply after comparable sales missed estimates. but bloomberg intelligence believes chinese restaurant operators could see that her earnings in 2024. senior research analyst angela joins us now in hong kong. until we get to 2024, telus what was behind the reason for the revenue miss. angela: i think the misses mainly coming because of the -- not being that well. one expectation is to contract.

by brands k and pizza hut, comparatively we saw weaker's sales in pizza hut rather than kfc probably because pizza hut is more expensive. in there is a trend of downgrade in china. there is a reason why we are seeing more softness in pizza hut than kfc. they believe it would drive up the revenue and opening profit next year. we see the operating profit margin and the cost got has been pretty ok. but just on the revenue side is that we have so much going on. paul: how does this relate to the overall consumption in china? angela: i think the numbers were too weak. i think there are positions. one is that the consumption behavior has been changing from the pandemic because more people are going out to eat or ordering

deliveries. if you get a delivery, there is left is -- less deliveries where see some decline in this spirit it is more related to macro factors. saying the economy is not good. so people want to spend less money. just less expensive than meals. they try to choose meals and promotions. so that is driving down the average spending. whole chicken roasted in kfc might be selling at only four u.s. dollars there. so i think we are still just seeing more promotions coming out, which is driving down consumption. paul: bloomberg intelligence senior research analyst in hong kong. let's take a quick look at some stocks to watch when market opens in hong kong and mainland china. chipmakers are in focus on amd's ai optimism. this is despite lackluster revenue outlook due to sluggish demand for gaming machines.

energy producers will be on the radar with oil near a two month low on signs at the israel-hamas conflict might remain contained. shery: take a look at how markets are trading across asia. we are seeing some broad upside when it comes to the equity markets, with the kospi gaining 1% and the nikkei gaining almost 2%. you are seeing the sectors being led by industrials and consumer discretionary stocks, as well as tech. this as we saw u.s. stocks managing to climb, but ending a difficult october. we continue to watch and look forward to the fomc meeting. of course, a second hold is expected on rates. that's it from daybreak asia, bloomberg markets china open is next. this is bloomberg. ♪

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