♪ >> you are watching "daybreak: asia." coming to you live from new york, sydney on hong kong.

>> we are counting down to asia's major market opens, and australia has just come online. >> and it is day three of the bloomberg new economy forum here in singapore, the top stories this hour -- asian stocks are set to retreat as the fed chief dowsers dovish bets, slumping sentiment. policymakers will not hesitate to tighten further to get inflation back to target. plus, janet yellen begins two days of talks with china's economic chief, with trade and security tensions and focus. >> we have breaking news out of ocbc at the moment -- we are getting there third quarter net income coming in -- coming in ahead of estimates.

ocbc, seeing their 2023 target revise higher to 2.25% region, not surprising given the rate hikes that we have seen from the fed as well. there third quarter number, 1%. the wealth management fees, at 196 million singh dollars. also seeing their 2023 credit costs around 20 basis points. . the expectation was for credit costs to moderate, given that they have a higher provision in the second quarter already. some downside coming from the loan growth area where they see 2023 growth in lonas in the low -- loans in the low single digit range. not surprising given the sector has remained sluggish with weak domestic demand. >> we've got the open here of aussie markets.

we are looking fairly flat. we know what is going to be guiding it is jay powell, he spoke in washington the last couple of hours, really dowsing cold water over -- dousing cold water over these expectations, jay powell, saying he won't hesitate to hike further if it is required by the u.s. economy. we are seeing here that reaction fading in the bond space. u.s. treasury yields, you are seeing here across the curve, inching higher. moves in the g10 space, we are watching in particular. the dollar, fractionally under pressure so far. trading in the japanese yen, we are eyeing the low against the dollar here. let's take a look at how it is trading at this point. it is very close to that low, 151.72, that is the line to watch. we are also seeing equities

here, expecting them to come under pressure throughout the session broadly. that's the outlook for new zealand. the other notable mover in the session today is icbc, the chinese bank. the world's largest lender by assets. there's concerns that the u.s. unit has been hit by a ransomware attack. certainly a stock to watch at the open in mainland china. >> some saying it was because of that also one of the reasons we saw a poor result in the 30 year treasury option today. take a look at what happened in the markets with treasure futures trading like this. we had that tumbling of the weak results and the two year yield off -- the to uriel tops 5%.

we saw the dollar also jumping after jay powell said he would not hesitate to tighten more if appropriate as u.s. yields continue to rise. we are seeing crude prices coming online after pressure after they rebounded in the new york session as a result of some technical gauges given we were already at a three month low. really, a sharp contrast to what is happening in some emerging and developing economies. just a few minutes ago, peru announced they cut their interest rate for a third straight month. this after consumer prices fell the most in six years. policymakers, trying to jumpstart an economy that has fallen in recession. peru has had one of the highest growth rates in latin america, so it is very rare for the economy to stall, but we are seeing the central bank lowering their policy rate to 7% from seven -- from 7.25% to

stimulate the economy. a different picture from where the fed is going at the moment, haidi. haidi: a very different picture. we are trying to navigate where the fed is going and what the next moves are. let's get more on the morning policymakers won't hesitate -- warning policymakers won't hesitate to tighten further. he spoke at the conference in washington. >> u.s. inflation has come down over the past year but remains well above the 2% target. my colleagues and i are gratified by this progress but expect the process of getting inflation sustainably down to 2% has a long way to go. haidi: let's bring in our lumber correspondent in washington, enda curran. explain the tone we heard from jay powell. >> it sounded like a reminder that the fed rate cycle is not over. he said inflation is not yet back to where it should be.

that sounded like he was trying to correct the narrative that the fed had closed their books on the current inflation cycle, no more rate hikes will be coming along. he didn't cite any new data points or any new developments. but it's more the idea that the fed won't hesitate to rate hikes again. that's what people took away from the message today. a lot of economists are expecting the central bank to remain on hold. but maybe his message was about where we might be going in the first quarter if inflation doesn't come back to weird is. then the fed might take steps that they need to. >> enda curran there, joining us from washington. our next guest says the fed is willing t give up growth to be inflation. gary schlossberg is the global strategist at wells fargo investment institute. great to have you with us.

is that the message we got from chair powell today? >> i think so. the inflation numbers have been encouraging of late, but inflation itself, still above the fed's target rate. if the economy doesn't slow as we anticipate, falling into a moderate recession by early next year, that can keep inflation above the fed's target rate, high enough that they might follow up on chair powell's comments, that rate increases are not off the table just yet. shery: what about rate cuts? he pushed back on the idea those are coming soon. what are your expectations? do you think market assets are justified in moving the way that they are today? >> think the market's getting -- >> we think the market is getting a little bit ahead of itself. whittlesey rate cuts until the lot -- we don't see rate cuts until the latter part of 2024.

that allows the fed to move to the sidelines. if we are right and others are right, with the slowdown of the economy. but that is a story for tomorrow. not today. haidi: what about china? there are lots of -- there is lots of measured optimism that perhaps we are seeing a bottoming out when it comes to the economy and we could see more stimulus come and this will make the super low valuations more compelling on chinese equities? do you feel somewhat similar to that? >> somewhat. we think a bottoming, yes, but struggling to regain momentum, a gradual recovery. we think the degree of stimulus by the people's bank of china and other authorities and china, the chinese government, will be constrained a bit by the overhang of debt in the property sector, among local governments, and so, we are looking for a

recovery but we think it will be drawn out over the next 18 months. haidi: you say downside when it comes to u.s. equities. are there international pockets where you would seek sums -- seek some fove expectation? >> we see the situation improving but not until the latter part of next year. we think as the u.s. goes through its own slow down, europe is on the verge of if not already in a recession. we think that plus a slow recovery in china means the weakness in world trade will persist. we see the u.s. as being among the stronger performers worldwide. even though interest rates may not be rising from here, the fact that we don't look for rate cuts while others are closer to that means a strong dollar. that is deflationary for the global economy. haidi: shery: are all of those reasons why you differ -- shery: are all those reasons why

you prefer emerging-markets? how do you position yourself veering away from risk assets? >> we have looked at developed markets a bit more positively than emerging markets but we are still cautious on overseas assets, equities in general. we think the place to be in a defensive strategy which we advocate given the prospects for a slow down globally and then the u.s. to some extent is defensive. which means we continue to favor the u.s. market, liquidity and large-cap stocks, higher quality stocks, with the balance can whether a slowdown, defensive areas of the market whose earnings are less sensitive to the ups and downs of the economy as well, and that targets over to the fixed income market as well. shery: gary schlossberg, always good to have you with us, global strategist at wells fargo investment institute. let's turn to our top story.

this one-story actually had an impact on treasury sales today and the broader markets. icbc says it experienced a ransomware attack attack that disrupted some systems at its financial services unit. the chinese bank is suspected of being hacked by the same group that also hit boeing and the u.k.'s iron trading and royal mile. let's bring in catherine doherty. some are saying this is why the treasury auction took a hit. because this affected those treasury trading investors. but what do we know at this point about this gang, lockbid, is it? >> this is a ransomware attack using software that decrypts, decodes, and they ask for and threatened to release information that they have got in exchange for funds. right now we've heard finally from icbc, they put out their

own statement saying that the trades that were happening yesterday have been settled. they said repo trades happening today have also been accounted for. so now we are just awaiting further updates that we are assuming are going to come out through the statements on the website. there's also all of the u.s. regulators are either in contact with the company, looking into it, market participants have been getting on calls all day today with trade groups, everyone is trying to make sure that they are aware of how their own firms are potentially impacted. but it depends on really what time of the day. earlier in the morning there was a lot of concerns about liquidity in the treasury market. those concerns seem to have dissipated throughout the day. it seemed as if icbc was a corner of the destruction but otherwise there were trades that were able to settle elsewhere we had banks that were stepping up to cover the disruption. so, overall, this might not be

the biggest impact, but it does raise some red flags about what potentially could come down the line and a time that you have cyberattacks, it raises questions. haidi: red flags, the risk aspect as well, is it usual for banks to have this vulnerability? >> so, these are always -- there is regulation that is currently bein evaluated because these attacks, all of the banks have safety measures in place, but sometimes it is -- the things that you don't see, there is a reason why the attackers will often go through third parties, they will go through any avenue that they can that has not been looked at or attacked before and often those are the cracks and the reasons that you have these sort of instances that do get resolved,

but it will often mean there will be responses from both the industry and regulators that are in contact with industry market participants that are making sure they are updating their systems, constantly reevaluating, and if it means it is more costly to update those systems, that is often still the safety measure that needs to be put in in place to avoid an attack like this, and potentially down the line customers asking for -- asking for further updates that even if they are costly, are worse avoiding a situation -- worth avoiding a situation like we had today. haidi: karen pence already with the latest on icbc. we continue to monitor that story, being hit by ransomware -- by a ransomwaregang,

affecting their u.s. unit. still ahead, analysis of japan's robust earnings season to come with j.p. morgan's securities chief, joining us later for the conversation. and janet yellen meets china's vice premier and san francisco. we will get the details of their meeting, next. this is bloomberg. ♪

shery: the u.s. treasury secretary says her today meeting with china's vice premier will address economic security tensions between the two nations. let's get a preview with our economy correspondent, rebecca choong wilkins. we view this as the laying the

groundwork before the big leaders' meeting. what are we expecting between the two top economic officials? >> it will be laying down the blueprint for success. potentially more concrete outcomes could be in the works. we had this comment from janet yellen, saying there needs to be more discussion on how economic tools are being used to achieve national security ends. that's going to be a big focus for beijing. essentially there, they want to avoid any nasty surprises. they understand competition as the dominant tenor of the relationship. they don't want to be taken by surprise by any measures washington now levels. we had this positive, about the success -- positive comments about the success of the working group. we might see more of these people to people exchanges and lower level official exchanges coming out, too. ultimately, we wish we had this traditional airing of

grievances from beijing's side. there are these big challenges for beijing, namely around trade and economics, and also the perception that they think that u.s. has sort of unfairly portrayed their business environment as well. just some realism from beijing before the two leaders sit down. shery: not to mention president trump's terrace are still in place. what are we seeing in terms of the low hanging fruits that can be achieved from this meeting? >> i think certainly we see this desire on both sides to avoid any kind of further spiral . it is unlikely that we seek anything that means -- see anything that means that washington or beijing have to take a serious concession. that takes a trade agreement

out of the picture. we could see some kind of move on issues like the fentanyl issue and ai, or of course issues like climate, where neither party will have to really make any kind of serious concession in order to find some kind of agreement. of course the lower hanging fruit, also the areas of serious yield, but the other element which might be more significant and more hefty are military-to-military talks, any signs of improving communication on that. the u.s. wants to know that china will pick up the phone. that is the sort of big issue, i think. shery: we continue to watch the geopolitical conflict in the middle east. israel is saying it is implemented limited and temporary pauses in in attacks in gaza to allow more people to escape to the southern part of the territory. let's get more from

jodi schneider. whatever turns -- what are the terms of this pause? there seems to be a distinction between what a pause and a cease-fire could be. >> that's right. both the u.s. and particularly the israeli government are making clear that this is not a cease-fire. that this pause is humanitarian in nature, to allow sevillians -- civilians to go from the north to more saved a safety core door to be able to leave some of the fighting, flee some of the fighting to areas where it is safer. the is really government and prime minister -- israeli government and prime minister netanyahu said there will not be a cease-fire until they have wiped out hamas. this is something that has been negotiated some.

when president biden was asked about it he said he hoped it would happen sooner. to allow people to leave and also to allow some humanitarian goods and medicine and things to come into that area as well, though that has proven to be a difficult process. shery: please tactical -- haidi: these tactical local pauses come with political significance? >> they do, haidi. it is said even israel, which has been clear about not stopping the fighting, is noting that there is worldwide pressure to get people to be able to leave some of the more risky areas and also to try to stem the humanitarian crisis. the prime minister himself said as many as 50,000 people have been able to move in gaza. on the political side, this is

an issue for president biden here in the u.s., who is facing growing pressure to, on the humanitarian side, he has been very steadfast with support for israel and the senate request of more than $100 billion, partly for aid to israel to support its efforts to wipe out hamas, but at the same time he knows that he has to do something to try to deal with the -- the try to stem the civilian deaths. certainly the pictures on the news every night of bombings, there is a political price that the president is paying on this, including with members of his own democratic party, on the left. he is trying to walk that line of steadfast support for israel while being concerned about the humanitarian aspects of this and pushing israel to do more on that front. shery: give us an update on the situation on the ground and how much these pauses could

potentially help the humanitarian crisis there. >> that is hard to know. it depends how many people move. the question is, where to they moved to? -- move to? they are moving often to another part of gaza, to a less heavy military part, a safer part. but the question is, how much food, water, medicine is getting to people? that is a real concern. relief organizations say not nearly enough is being done on that front and it is very hard while a war is going on. so those pauses may help there as well. shery: jodi schneider there, joining us from washington. this is bloomberg. ♪

j.p. morgan wealth management knows it's easy

to get lost in investment research. get help with j.p morgan personal advisors. hey, david! ready to get started? work with advisors who create a plan with you, and help you find the right investments. so great getting to know you, let's take a look at your new investment plan. ok, great! this should have you moving in the right direction. thanks jen. get ongoing advice; and manage your investments in the chase mobile app.

shery: take a look at how futures are trading at the moment. a little bit of pressure when it comes to u.s. futures after stocks fell for the first time in nine sessions. we are seeing that downside on the asx 200 as well, falling for the first time in three sessions. kiwi stocks also reversing the gains we saw in the previous session, as of course we just heard from fed chair powell, pushing back on rate cuts. this is bloomberg. ♪ sleepovers just aren't what they used to be. a house full of screens? basically no hiccups? you guys have no idea how good you've got it. how old are you? like, 80? back in my day, it was scary stories and flashlights. we don't get scared. oh, really? mom can see your search history. that's what i thought.

introducing the next generation 10g network. only from xfinity. hi, i'm jason. i've lost 228 pounds on golo. so when my doctor told me i needed weight loss surgery, i knew i had to make a change. golo's helped me transition to a healthier, sustainable lifestyle. i'm so surprised just how crazy my metabolism has fired up. i have a trust in golo 'cause i know it works. golo isn't like every other program out there, and i'm living proof of it. (announcer) change your life at golo.com. that's golo.com.

>> the fomc is committed to achieving a stance of monetary policy that is restrictive to bring inflation down to 2% over time. we are not confident we have achieved such a stance.

we know ongoing progress toward our 2% goal is not assured. haidi: that was the fed chair, jay powell, at the imf conference in washington, making clear to investors that he will not hesitate to hike rates further, if that is what is required by markets. in the direction today, you are seeing that playing out in terms of the options markets, traders are starting to recalibrate and soften expectations around how much we are likely to see the fed cutting by next year. early this month, that had been around 92 basis points of hikes price 10, now around the 70 mark. it is a bit of a pullback in terms of market expectations. the higher for longer narrative, we are seeing it playing out this morning. if you change on now, in the japanese yen, it is continuing

its weakening trend. you can see here we go over a three day basis. very close to its. year-to-date low that was hit back in october, at the end of the month there, 151.72. it really is that focus on intervention. are we going to be hearing anything from japanese officials over the course of this morning? shery: yeah. the usual monitoring of the fx market. i wonder what they will come up with this time. let's talk about how the japanese yen has been affecting earnings and japan as well. we continue to watch the narrative play out. we now have softbank reporting another loss on the dropping valuations of we work and other portfolio companies and its vision front. >> -- vision fund. >> as a company, we need to accept this reality and learn lessons from this for our future

investment activities. the investment decisions need to be improved going forward. that became a very big hallmark for us. shery: for more, let's bring in bloomberg's executive editor for asian technology, peter e. can we say this is the worst for vision fund? what are the losses? >> the company lost a little bit more than $6 billion driven by a couple of things. first the vision fund itself plus $7 billion and then some money on foreign exchange, too, because the yen has been much weaker and they have some dollar-denominated liabilities they need to pay. the headlines of course were about wework and its bankruptcy filing and arm, the ipo, those are probably the two biggest impacts for the company. the wework bankruptcy filing

puts a cap on a chapter that was troubling for softbank. they came out with the total losses they have had. just over $14 billion with we work so far through september. wework filed for bankruptcy just after that. that number is going to increase a fair bit. softbank poured millions of dollars into the company founded by adam neumann. now that is a black eye for the company. they also talked a little bit about arm, the chip designer that went public the last quarter that gave them a bit of extra cash and now has a publicly traded asset that they think is very promising for the future. haidi: the cfo who has taken over the duties, he tried to lean into the positives. is it hard for investors to be overly positive right now? >> yes.

he has been handling the quarterly earnings call. his son said he wanted to step back to focus on the arm ipo. we don't think that he will return to the earnings stage. a couple of things he called out that he think are promising at the company, he mentioned arm, how it has raised $5 billion in the offering, they still hold about 90% of the company, they also said, if you look at it under certain metrics, the vision fund made money on its investments. it's a little bit like a company saying it is profitable [indiscernible] if you don't count the expenses, that may be a step forward that is slightly better for them. they do want to start making investments again. they made $1.5 billion in investments the last quarter. they've begun to step up after

pulling back to a few hundred million dollars of investments in the past. focusing particularly on atonement -- on autonomous technologies. he thinks they have a lot of promise in the future operations. haidi: bloomberg's executive editor of asian technology joining us with the latest on softbank. let's get some more on softbank's earnings. a disappointing forecast for smartphone sales and uncertainty, when it comes to new licensing deals. the co says he expects ai demand will give the company a boost. >> across all markets, we are going to see ai find its way into the end product. for us, 70% of the world's population uses arm, it is impossible to do and -- do an

ai application without us and it's going to drive great growth for us. >> it is still a highly cyclical, low-margin market. can you tell us when arm will stop being mostly a smartphone story? >> probably 60% of our revenues prior to the acquisition, maybe more, or chart of smartphones. today it's less than half. we are not a smart company anymore. our royalty revenues the last quarter were up 20% in cloud and 20% of an automotive. we have greatly diversified. that's a combination of a focused strategy to do so and the pull and demand for arm technology driven by power efficiency, these medical what data centers cannot afford to add more and more energy, at the same time your automobile running off a battery, it is a computer on wheels, it needs to be very efficient as well. the trends are in our favor.

we've also made the investment in a specific product. as a result, we are seeing very strong growth across businesses, and you can say that today we are not a smartphone company. shery: the arm ceo, with bloomberg's ed ludlow. our next guest sees a strong performance in japan's earnings season. good to have you with us. give us your key takeaway from japan inc. >> we see strong, solid earnings so far. many culprits have made the announcement. there's a delay of the economic reopening. we see strength in autos and the sectors related to the economic reopening, and the

food sector. but they are not optimistic, they are concerned in the future. the percentage of corporate management revising the guidance have concerns over the u.s. and chinese economy and y en appreciation risks in 2024. shery: is that a net positive when it comes to japanese corporations? we just saw that for softbank, they took a 200 billion yen hit, but it seems that they had some u.s. dollar denominated liabilities. >> yen depreciation is usually positive for corporate earnings. a percentage of exporters -- manufacturers are more than domestic culprits. but when it comes to the weaker yen, the culprits will find it

difficult to adjust to the full year guidance. that is why the boj andthe government have tried to slow the development of fx developments. shery: with the recent tweaks coming from the bank of japan, we are seeing yields starting to be allowed to rise a little bit. it's been interesting that the banking stocks in japan have sort of de-correlated from yields now. what is happening there and why are we seeing this huge underperformance? >> yes, -- yes, a couple of days ago, we saw a percentage down for the stocks. this is the best timing to take a profit before year-end. the meta-bounce share price actually doubled in one year.

if this adjustment is large, it would correlate with a chance to buy the dip. considering the boj policy, which is still ongoing, the market expects [indiscernible] and japan short-term and long-term will be higher. this is profit taking seasonally. we continue to be bullish in financial stocks. shery: thanks for putting that into perspective. the topix, up more than 30% so far this year. let's talk about boj policy. you are starting to see the start of normalization. when could we see the end of negative interest rates in japan then? >> the bloomberg survey shows many economists and japan think that april of 2024 is most likely for the bank of japan to

do the normalization of rates. there are also people that say there is a risk for earlier than that. i think the forecasts of boj policy is now no longer on icc operations, but short-term rates and policy rates. we think we need to consider the risks of amended rates [indiscernible] earlier before the october decisions. when it comes to the impact of equity markets, usually, rates rising is a negative on equity markets. but it's not necessarily like that for japan this time around. because japan corporates are cashed-rich, 40%, 50% of their market cap. so the impact will be milder.

the historical relationship between per and jgb yields, it tells us it will likely normalize to be higher. we need to think about this narrative, as well as the potential positive impact, we think it will be net positive. shery: it's been interesting to see the transition as well. especially as we saw more companies passing on the costs from inflation onto the consumer. i wonder, for how long can that continue? we just had the japan economy watchers survey and merchant moves were cents for the third month. everybody that has to deal with consumers are paying more with a weaker yen don't seem to be as

happy. is that going to have an impact? >> yes. the consumers struggle because of the cost ratio. the boj watches the underlying inflation. currently this is a hard transitional time. but we expect and the boj expects inflation will be milder and with wage hike development, it is more apparent the policymakers committed to minimal wages, which is powerful. i think that sometime, real wages will hit zero percent year on year. then the consumer will feel better off after the transition from inflation to normal

inflation. shery: great to get your insights. coming up next, a look at the risks and opportunities for china's online retailers ahead of the singles' day shopping bliss. this is bloomberg. ♪

the chase ink business premier card is made for sam who makes, everyday products, designed smarter. genius! like 2.5% cash back on purchases of $5,000 or more, so sam can make smart ideas, a brilliant reality! chase for business. make more of what's yours.

haidi: alibaba marks its annual singles' day this saturday, which has turned into a month-long shopping bonanza. price cuts may be deeper than ever before. our chief north asia correspondent joins us now from shanghai. this is a real barometer in terms of how confident chinese shoppers are and the incentive aspect for the merchants. >> absolutely. a lot has changed since the heyday of singles' day before the pandemic and the big crackdown on alibaba and the whole platform economy, and of course before the economy has

been an stagnation like we have seen over the last year. cpi, consumer price inflation, has gone back into deflationary territory, falling in october by 0.2%. of course we have a pickup in imports as the chinese government is a stimulant and demand but they have fallen for six consecutive months, so there is drag on the chinese economy. that's why we are looking at singles' day as a bit of a barometer. you are absolutely right. it's no longer just one day, that being tomorrow, november 11. not only alibaba but you have jd.com and these other platforms also offering their simultaneous discounts and that is going to be the key this year, they are trying to really encourage spending. they are going to be seeing lots of price cuts. alibaba wants to make sure it undercuts on its platforms rival promotions from jd.com and

pdd. we are seeing already that according to bloomberg intelligence, margin risks are very relevant going forward if they are going to be cutting the prices quite a bit. jd's offering 2 billion yuan of perks. pdd, with a 10 billion yuan cashback program. but gmv, gross merchandise value, dwarfs that of black friday in the u.s., the day after thanksgiving. so yes the numbers might be down on an average transactional basis but the overall number will likely be huge, even though alibaba no longer is giving out that daily number of gmv transactions. shery: definitely gearing up towards black friday. i can imagine the excitement over singles' day and china. how has that crackdown impact and how the e-commerce giants

compete or even collaborate on singles' day? >> you know, it is an interesting question. i have not been back to shanghai in for five years, and a lot has happened obviously in the platform economy with the big crackdown, the antimonopoly crackdown that was launched, what was it, october, november of 2020? things have changed dramatically. you are now seeing -- which was unthinkable to think that alibaba and tencent for example could collaborate, before they had these walled gardens, if you were a seller, you sold online only, you could not sell on other platforms. now you are seeing the cross-pollination and the walls of the walled gardens coming down. in september you saw alibaba and tencent signed an agreement, an advertising agreement. so if you are in various platforms, you can click on a link and an alibaba platform to

go to a tencent link -- that is unheard of. it is part of the government's push to have interconnectivity between the platforms. also of course, alibaba had this pick one of two campaign, preventing sellers from going to other platforms. and that has also been broken down by the antimonopoly campaign. a lot has changed. . and adds flexibility and convenience for consumers and also makes the merchants not have to choose one or the other. haidi: our chief north asia correspondent stephen engle, there and shanghai. it is day three at the bloomberg new economy forum in singapore. the theme today is striking a balance. there will be many conversations around climate change and transition as well as investment. our exclusive conversations with haidi c., kai fu lee, and

john kerry, coming up. this is bloomberg. ♪

>> the war cannot afford an escalation. and most likely both countries cannot really afford to escalate, in terms of economic consequences. the situation in both countries

is fragile. i guess a geopolitical escalation will not be in the interest of both countries. shery: the -- haidi: the ubs ceo on war tensions. speaking at the same event, he said signs are already showing in europe. >> i don't see how we can bring back inflation at target. everybody focuses very much on the big drop. but the truth of the matter is inflation is well above target rates across the globe and much stickier than we think. i don't see how you can bring back inflation without creating an economic downturn.

we are starting to see now clearly in europe and also in the u.s.. >> if you have interest rates high for longer with an economic downturn, what breaks? is it companies defaulting? other markets -- are there pockets in the market you worry about? >> i would say the vast majority of the companies are well positioned in terms of capital position. i'm not so concerned at this stage about the private sector. if you want to look at major events, things that can really go wrong, they usually come from government or real estate. so -- i think that while we look at the private sector, the reality is that the most fragile part is the real estate and commercial real estate markets

across the world. the positive momentum was very short. now the reality is that. we see covid has changed the way that people work, the way people use offices. it has to be watched carefully. shery: coming up, how geopolitical risks could impact the global fight against inflation. we will be speaking with haidi crab erotica -- with heidi crebo-rediker. the market opens in seoul and tokyo our next -- are next. this is bloomberg. ♪

>> this is "daybreak: asia." we could be seeing a risk off day across asia after we saw

u.s. stocks falling for the first time in nine sessions. chair powell, pushing back on rate cuts. haidi: a sterner tone from jay powell, that we should not be getting ahead of ourselves in terms of where we are with this rate hike cycle. this is the third and final day of the bloomberg new economy forum here in sydney. we will be talking about the claimant transition coming in the investment, what it looks like in a world of higher inflation and higher rates for longer, is the energy transition at risk here? a lot of great conversations, touching on the keystone topics we will be talking about all week, globalization, re-globalization, ai. first let's get to the market open with belle. >> we've got the start of trading for japan and cash treasuries. it is really about jay powell

today and what we heard out of the conference at the imf in washington. the headline coming through is jay powell will not hesitate to tighten further, if needed. that really put a lot of risk aversion back into markets. we saw stocks dropping into the close. the outset for trading today, again dominated by that sentiment. we have seen yields rising, continuing to rise at the start. certainly something putting a lot of pressure on the japanese yen. you can see it very close to that year-to-date low set at the end of october, 151.72, taking us close to 833 year low for the currency -- a 33 year low for the currency and raises the risk for intervention. otherwise in the session today, very much focused on earnings. the market reaction, too. one name to watch will be softbank given we saw its vision fund posting another loss yet

again in their latest quarter, coming in at $1.7 billion, that is the loss for the vision fund, writing down the value of wework, its other portfolio companies. certainly when it starts trading, it will be key. the nikkei, dropping at the start, down .6%. let's take a look at the market moves in korea, thekospi, just coming online. we are seeing the kospi down more than a percent. more losses feeding through into the kosdak. -- the kosdaq. dollar strength was one of the key themes developing out of the powell speech earlier. in has been trading around that 1300 level over the course of the week. we do have the rba statement,

the monetary policy do this hour. we are seeing stocks looking weaker. yields are rising. the aussie dollar under pressure. all of this, pointing to the prospect that rates will stay higher for longer. brent crude is above the $80 a barrel level. energy stocks, coming under pressure so far in the aussie session. haidi: let's delve into what fed chair powell had to say especially when it came to pushing back on rate cuts. this is what he said on u.s. inflation. >> has come down the past year but remains well above the 2% target. my colleagues and i are gratified by this progress but getting inflation down to 2% is a long way to go -- has a long way to go. haidi: let's get more from our mlive contributor, garfield rendered's -- garfield reynolds. what did you think of the market reaction that was

so sharp today? >> well, i think the market reaction was not a surprised, to see yields back up rapidly, the rally looked to be so overextended. yes, we had had the fed signaling they may well not hike rates in december but that was a pretty long way away from them saying, hey, we are definitely done and we are going to start discussing rate cuts. which was sort of what the market was leaning into. so, it was set up for this sort of a reaction. the other thing that went on overnight was not just about powell. again, it was about a market that had become overextended in its rally. that was the way that the 30 year option went so poorly. that revived some concerns

about supply at the long end. what it did with 30 year yields was taken back so that they are unchanged on the week. it is a very wild week, because the bond market really is not sure, are we there yet? when it comes to peak rates and also with the peak rates environment is going to look like. will it be a soft landing? which would be good for equities, not so good for bonds? or will it be hard landing? where you would see the mirror of that? haidi: we are seeing thatextension and the -- in the yen weakness, 151, volatility is low. does that mean we get a shrug from policymakers? >> perhaps. the market got excited about 150 and 151 as the

intervention level. and what do you know? that level came and the japanese did not apparently intervene, or if they did a couple of weeks ago, they didn't tell anybody about it. so you could argue that as far as the yen, and japan, they are anticipating the fed is about done with rate hikes, so, the picture then -- the fed is about done with rate hikes, the bank of japan gradually moving towards policy normalization, if that picture sustains, those two drivers sustain, you would think that the yen doesn't have too much further to fall, and therefore the japanese authorities don't need to do much other than just reiterate that they are monitoring for concerns, and remind people that they could intervene if they wanted to, but it looks like the playbook for

them is not to move, as they feel they absolutely have to. haidi: our chief rates correspondent, garfield reynolds, in sydney. back here in singapore, where watching the u.s.-china relationship very closely. janet yellen says her tuesday meeting with china's vice premier will address economic security tensions between the two nations. let's get more contacts with our asian government and economy correspondent, rebecca wilkins. this is another stepping stone toward the big one. but this is really a part of that relationship that is fraught with a lot of tensions. >> this has been one of if not the biggest sticking points, i think, for beijing and washington this year. beijing very much feeling they had a series of nasty surprises when it came to some of those restrictions. i think the feeling with beijing

probably is that the series of visits we have had from raimondo, yellen and other officials has helped on their own understanding of precisely where the u.s. is coming from. but if we think back to for example the restrictions on investments, that white house executive order that came out just after yellen's trip, that was perhaps more moderate than some in beijing were expecting. perhaps speaking to the fact that the lobbying we know that they did for yellen was effective. i think that is the big thing for beijing. they understand the direction of travel here is relationship of competition but it is for them really understanding where the priorities are and potentially where the pain points are going to be. shery: we had a guest earlier from the wilson center telling us how different the views of stabilization and the relationship is between washington and beijing, that china actually wants what they see as insults an provocation from the u.s. to stop.

in fact we got this list of grievances coming from beijing ahead of this high-profile meeting. >> yes, we did. this is sort of quite the traditional litany of criticisms that we do come to expect from beijing, ahead of controversial meetings. not entirely surprising. some of the accusations, including the u.s. unfairly creating this impression that beijing has a hostile environment, saying the u.s. itself does not create a fair playing field for firms trying to compete. not entirely surprising, i think. it is a reminder -- a healthy dose of reality that is going to be a difficult sit down between beijing and washington. the overall feeling on both sides is there does need to be some kind of stabilization. and we do see these areas where both sides potentially could come to some kind of concrete agreement without

taking significant concessions, areas like ai, fentanyl, climate change, areas of low hanging fruit where they might be able to maneuver. the fact that we have seen such a flurry of meetings leading to the biden-xi sit down doesn't suggest that they are really trying to set both leaders up for success, for both to be able to walk away with some kind of win under their belts. shery: china's stay don't icbc bank says it has experienced a ransomware attack that disrupted some systems at its financial services unit. sources say the group behind it is suspected of being the ones that also hit boeing and the u.k.'s royal mile earlier this year. bloomberg's chief north asia correspondent, stephen engle, joins us now. this is the largest lender by assets. what do we know? >> we are still trying to piece it together, getting most

of our information through sources and also of course brokerages who are faced with these perhaps delays or disruptions in clearing and other intra-bank mechanisms, the clearing of trades in particular. icbc is a key component. this was a u.s. division of china's largest bank, that has been hit. icbc has confirmed they have been the victim of some sort of hack. they did not however -- bloomberg tried to reach representatives, they did not immediately respond to comment. i am here in the financial center of china, in shanghai right now. we will be seeking comment from securities regulars. so far no, yet -- regulators. so far, no comment yet, as they assess this hack, likely done by

the criminal group lockbid, which has ties to russia. they as you rightfully said also in the past year hit boeing and ion trading uk and the royal male and others -- royal mail and others. they are suspected of the disruptions we have seen across the u.s. treasury market with some transactions already failing to clear and also traders being asked to reroute their deals. lumber has learned one u.s. brokerage received an e-mail from a broker who clears trades through icbc, the u.s. unit of that, saying the bank could not connect to the depository trust in clearing corporation amid an issue clearing trades. again we don't know what the hack -- if it is a ransomware attack, we don't necessarily know what they were asking for an exchange. essentially what happens with a ransomware attack as they will get into the networks of a

particular victim and then essentially freeze transactions or freeze activity until the hacked network or company pays or acquiesce to the demands of the hackers. we do not know the extent or the amount that has been asked of and whether that has been shut off and rectified. it is a developing story that we will be watching closely. haidi: our chief north asia correspondent, stephen engle, in shanghai for us as we continue to get these developments on icbc. take a look at some of the movers we are seeing so far and japan. we are watching softbank. looks like they are still being forced into defense. >> absolutely. it is quite a fall from grace from someone considered an investment tie in.

in the latest earnings coming through for softbank, we saw the vision fund reporting another loss in the latest quarter so losing $1.7 billion. wework, filing for bankruptcy this week, has been front and center. you can see softbank down 6% at this point. otherwise the focus on the session today is continuing to be on the earnings. sony, for instance, you can see, the operating profit for the latest quarter, falling short of analyst estimates. warning as well that it could be a difficult period to meet a target for the playstation5 sales. that holiday shopping, the christmas period is really crucial for sales. jeffries, calling this a rare miss for the company. nippon, down 10% at this point. cutting the guidance -- also

missing analyst estimates. certainly a lot of focus on earnings as we get to the session and japan today. shery: coming up next, how geopolitical risks could impact the global fight against inflation. we will be speaking with the council on foreign relations at the bloomberg economic forum in singapore. this is bloomberg. ♪ an ever-changing landscape comes with challenges. from our vantage point, we see opportunities. as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt. our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage.

principal asset management. actively invested.

get help reaching your goals with j.p. morgan wealth plan, a digital money coach in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside - and the other goals along the way. wealth plan can help get you there. ♪ j.p. morgan wealth management. haidi: it is the third and final day of the bloomberg economic forum here in singapore. some of the top names we have been talking about how prevailing concerns about

inflation, geopolitical tensions, climate, ai. our next guest focuses on the political economy. heidi crebo-rediker is the adjunct senior fellow at the council on foreign relations. great to see you at an event like this. you have been in plenty of sessions and dialogues over the past couple of days, what has been really top of mind? >> i think top of mind has been geopolitics and how companies can protect themselves against risk that you can't model. it is not something that many companies have had to deal with, and so, how do you actually do that? how do you get boards that have the right backgrounds

to be able to ask the right questions? how do you mainstream through a dna of a company? the agility, build it in? there are shocks that are geopolitical, have ramifications for food security, the invasion of ukraine was obviously a prime example. but also be able to have scenarios of what the future could look like. because i think on october 6, there was no indication that you would have what happened on october 7 with the hamas terrorist attack. as a result, you need to be able to have flexibility built into companies to be able to adjust if necessary. haidi: it does feel like investors and ceo's have been trying to build that resilience and preparedness. especially since the pandemic. what about the issue of bandwidth? more shocks, some major, some

unexpected, how much bandwidth is there for a policymakers and in the private sector to be able to keep taking these hits? >> there has to be enough been with -- enough bandwidth, because this is the future we are going to be dealing with as well, whether the shocks are climate shocks, natural disasters, geopolitical shocks. we have what's happening in ukraine, the middle east, and all sorts of trip wires, in the taiwan strait, the south china sea -- we need to be thinking about how supply chains can adjust. one of the interesting things we have been talking about is, it is not just multinational companies looking to adjust supply chains and have a china plus one strategy or the near-shoring up supply chains, it is also chinese companies that are doing the same thing.

so a lot of the investment going into places like vietnam or indonesia or mexico or morocco are coming from chinese companies that are doing a china plus one strategy. the supply chain dynamics are very much in flux. and i think they will continue to be. haidi: do you think that trends will continue to play out? there has been a sense perhaps -- this may sound optimistic -- that both the u.s. and china are reassessing how beneficial a zero-sum game is when it comes to industrialization policy. >> i actually really don't think the entire decoupling -- i think that would be disastrous. i don't think anybody in the u.s. is considering anything beyond national security related restrictions, to be in play.

companies are making their own decisions when it comes to what their risk profile looks like versus a huge opportunity versus huge opportunities that remain in china. the mood music is much better. the summit coming up, we have already heard janet yellen talk about the need for cooperation on climate, on debt distress, and being able to get countries past the debt distress threshold so we can start focusing on being able to provide support for them moving forward on climate resilience and mitigation adaptation, education, having electricity in the first place. there are a lot of things where we can cooperate together and i think your previous guest mentions fentanyl and a bunch of

other things that will rise to the top of the agenda. i think is having conversations, having leaders talk, having economic officials have discussions on macro and financial stability is crucial and that is already happening. that is good. the long-term trajectory on the national security side is an open question because i would like to see an improvement but it takes two to tango and we are seeing some real challenges on the national security side. haidi: some of it is obviously low hanging fruit and there are real aspects where it is hard to see a path forward. do you think when it comes to something like debt financing, china has occupied such a big space for that for developing economies, is that going to be harder now given the domestic challenges and the slow down, the less for buffer that china has to work with? >> it is really taking care of

the legacy debt, the majority of the external debt china has lent has been to more fragile countries that are in debt distress right now. the ability to come together in some kind of a constructive, cooperative platform -- and there have been several attempts to do this -- i think there is a lot more work to be done because you still have far too much time to get countries back on a sustainable path. zambia, case in point. there is a tendency for chinese lenders to sort of try to go their own way. and we need to find a table that everybody is willing to sit down around and make compromises and make sure that the outcomes are comparable treatment across creditors. because than the countries themselves can -- because then the countries

themselves can benefit from the support that is available from the imf, from the world bank, from bilateral support mechanisms. so i think we really need to get the prior debt issue solved before we can move on and provide support to countries that need it the most. haidi: so great to chat with you, heidi crebo-rediker, the an adjunct senior fellow at the council on foreign relations. here in singapore at the bloomberg new economic forum. we will have more conversations coming up at the economic forum, including a great conversation about ai and the u.s. climate envoy, john kerry, as we count down to cop 28. this is bloomberg. ♪ ♪

♪ ♪ be ready for any market with a liquid etf. get in and out with dia.

is made for sam who makes, everyday products, designed smarter. genius! like 2.5% cash back on purchases of $5,000 or more, so sam can make smart ideas, a brilliant reality! chase for business. make more of what's yours.

shery: we are seeing downside pressure on broader asian currencies, especially on the korean won, leading the declines past the 1300 level. we have the dollar jumping in the previous session. right now holding steady at 1267 level. this of course after gaining ground for four consecutive sessions, as u.s. yields continue to rally, chair powell, talking about the fed not hesitating to tighten more if appropriate, so the japanese yen, also weak, 151, some of the weakest levels this year. this is bloom the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up

to keep you online. only from xfinity. home of the xfinity 10g network.

annabelle: this is daybreak: asia with a check on markets. we are half an hour into the trading session and so far the market moves are very much in

relation to what jay powell said overnight. the key take away is that jay powell said he will not hesitate to tighten further if it is required. so the moves coming through the treasury space, we saw yields ticking higher. this morning it is in relation to that. kiwi the standout. 10 year yield up 12 basis points. but really those moves across the curve. of course you have moves in treasury yields at least to a stronger dollar. the korean won, one to note, among the biggest laggards so far for asian effects. pushing past the 1300 level attached earlier this week -- it touched earlier this week. you cannot see it here but you can see it is near the near to date low of 151.72 that was set

at the end of october. really raising that risk. will we have any further intervention coming through from japanese government officials? in the stock space you can see we are really under pressure through the session. the nikkei and the kospi both off more than 1%. earnings to note as well because we have softbank dropping 7% in early trading. its vision fund posting another loss so the woes just adding up. haidi: the worries continue. really hard for investors to be optimistic. we have breaking news crossing the bloomberg. the rba policy coming through. the reserve bank of australia still seeing elevated inflation as the resilient economy continues to support the job market. what has been really quite strong in australian as well. the central bank expecting central inflation will return to the 2% to 3% target by the end of 2025.

a stronger economy will persist in supporting the labor market, which makes sense. the rba sees headline inflation of 4% by the middle of 2024. that's 3.5% was a previous forecast three months earlier. really seeing a heating up of inflationary pressures. economic growth is from 1.5% previously forecast. when it comes to the labor market, unemployment predicted to peak at 4.25% by the end of 2024, then expected to hold at that level through to the following year. the rba saying the domestic economy has proven to be more resilient than previously expected. the labor market is expected to ease more gradually as a result and so these forecast are based on that cash rate assumed to peak at around 4.5% before falling to 3.5% by the end of

2025. shery: of course we continue to watch the latest corporate earnings coming out. this hour we are watching softbank's flagship vision fund reporting another drop in portfolio companies on top of foreign-exchange losses that could hurt his pursuit of new startup deals. the vision fund segment lost $1.7 billion through september. the persistent red ink costing bout over softbank's claims the worst is over. sony is raising its full-year outlook after its media divisions outperformed. it's now targeting net sales of over $82 billion for the fiscal year, better than estimated. sony also stuck with its goal of selling 25 million playstation 5 consoles this year, even as its chief offer -- chief operating officer admits the target is challenging.

smic's quarterly revenue dropped 15% to just over $1.6 billion, missing estimates. net income was also down 80%. they had been hopes the popularity of huawei's new smartphones could help offset lost sales. the chipmaker help build huawei 's cutting edge chip, despite both firms being on a u.s. blacklist. drab posted its first ever profit unadjusted basis, a milestone for the southeast asia ride and deliver provider. earnings hit $29 million. revenue rose 61%, slowing from triple digit rates. grab has been cutting costs and focusing on profitability as it confronts intense competition. haidi: ebs group ceo says he does not see how inflation can be brought down to a target

level without an economic downturn. speaking to us at the new economy forum in singapore, -- >> i don't see how we can bring back inflation at target. everybody focuses much on the big drop but the truth of the matter is inflation is well above target rates across the globe. it is a lot stickier than we think. i don't see how you can bring back inflation without creating an economic downturn. we start to see it now, clearly in europe, and most possibly also in the u.s. soon. >> so if you have interest rates high for longer and there an economic downturn, what break? is a commercial real estate, other pockets of the market you worry about? sergio: i would say companies, the vast majority of companies are well-placed in terms of capital position. i'm not so concerned right now

about the private sector. if you want to look at major events or things that can really go wrong, they usually come from government or real estate. i think while we look at the private sector, the reality is that the most fragile parts, the real estate markets across the board. positive momentum was very short. now the reality is that we see covid has changed the way people work. people use offices. and as we speak, that one has to be watched carefully. shery: ubs group ceo sergio ermotti speaking with our colleague francine lacqua at the

bloomberg news economy forum. of course we continue to watch all the conversations happening there. one of them starting right now, how the inflation reduction act changed everything. and we have seen the u.s. of course starting its policy of re-industrialization. what that means with global competition, even yesterday we were speaking to adam posen of the peterson institute, and he was talking about this arms race happening when it comes to subsidies in the u.s., europe, china as well. haidi: yeah. this is about that zero-sum game when it comes to industrial policy. do we see that potentially seeing a shift, given a little bit of change in in tone between the u.s. and china? let's get into this panel that is underway here at the new economy forum. >> -- maybe i should stop here, with the broader set of themes we have been discussing, which is the rewiring, the reorientation of the global economy.

and one of the big questions is which countries can take advantage of the value chains connected to the ira and who just benefits from technology cost curves being driven down over time that ultimately spills over. >> where do you see the ira having made the most material difference? >> i usually agree with mark on everything he said. but my view is for this climate transition to happen, the big thing we need is solutions at an affordable price so people in energy, transportation, can transition. which they cannot do until we have solutions. the biggest challenge is bring those solutions down to affordable cost. and innovation is required there. the european countries played that role in wind, and wind and solar have now become alternate energy alternatives. the japanese played a role in

ev's. the u.s. is playing a big role in money being invested, a lot of it is going to electric vehicles. they are giving $7500 credit per vehicle, and the estimate is passenger vehicles will go up by 13 times by 2030, versus three times. big money is on hydrogen. we really need a form of firming for renewable energy in the estimate is still 5.5 million tons of green hydrogen by 2030. but we need to get that price down to two dollars a kilogram. incentives in the u.s. will probably crack the code for the world. as mark says, those technologies can get rolled out. they are doing a lot in carbon capture. we are doing various projects in the u.s. looking to bring electrification of archer vehicles, corporate fleets, etc. even on wind and solar for the u.s., the apprenticeship

investments would bring the cost down. i think across the spectrum but principally most new technologies. hydrogen, sustainable aviation fuel, agriculture. we are doing a program for nitrogen fertilizer and out of hydrogen rather than fossil fuels using ira incentives. people may not know how to fertilizer there is more -- these new technologies, hydrogen, energy, transportation, long-haul transport, carbon capture mechanisms, the u.s. will help crack the code for the world in a lot of those. >> overall because of the global uncertainty, geopolitics but also economically, is capital still going towards the green transition? >> say that again? >> when you look at capital, is money still going where it needs to be to make this a sustainable

and long-term transition? >> definitely. this is a new wave of global green investment. particularly it is introducing to the countries most needed segment. you can see what is happening in singapore here. you singapore government is introducing the first ever difference for green hydrant -- hydrogen. now seeing green tax credit systems as well to develop the battery segment. overall japan wants to build domestic competitiveness. it is kind of a global movement. it is real good for global green investment. with the ira incentive, if you

bring a green hydrogen from -- you can raise per kilogram. previous estimation in europe, this cost would be around three dollars by 2030. that is clear evidence that this is to stimulate investment in this segment. >> just to pick up on a few of those comments and maybe draw a bit of a contrast between what is happening in the u.s. and what helpings -- happens elsewhere. the imf did work last month saying if the world only drives the transition through subsidies and tax credits and support, it is going to add about an additional 50 percentage point of debt to gdp to already indebted companies.

i alluded to this at the start. as a country, not the u.s., let's say the rest of us, you need to use a combination of supports, of regulations, contracts for differences, and others, to provide the signals, and candidly, piggyback off of what is being driven down in terms of cost. as was rightly said, let's take carbon capture and storage. brookfield is about $1.4 billion investment in the u.s. today in carbon capture and storage. that will help drive down -- in and of itself it benefits from the ira, but it will help drive down costs. the hydrogen investments will help get those costs down. when you look at what singapore is doing, is using a contract for difference. providing a floor price, some certainty further out, less of a subsidy, and working with a partner who is already independently well ahead on the cost group.

countries are going to have to decide where in the value chain they are going to be an wench -- and which instruments to use. you cannot be competitive in everything and you certainly cannot subsidize everything. >> has there been a step back? because of my guess uncertainty, or because of all the crises. has there been a step back? >> i think what we have had is with inflation rising, supply chain constraints, costs have gone up a lot. means some benefits we have got of getting cost down are being immersed. if i can use the u.k. as an example, i think the role of government is to catalyze private investment. take it through that phase where there -- haidi: that is francine lacqua there speaking with --

of course if you are a bloomberg subscriber you can continue watching the panel at live go. many more conversations i had from the bloomberg new economy form. coming up we are speaking with sign ovations-- this is bloomberg. ♪

haidi: we are in singapore for the bloomberg new economy forum which is a showpiece of global cooperation. in recent years fractures on geopolitical lines have prompted readers -- leaders and companies to reevaluate concept of -- >> for the last four decades or so, globalization has powered the world economy. >> after the end of the cold war, what really accelerated was the economic integration of big nations. >> as i sign the north american

free trade agreement into law, we are ready to compete. >> what makes sense for businesses from a cost and efficiency standpoint was also supported generally by government when it came to developing really complicated supply chains around the world. >> the more countries work together the more their economies are linked, the more likely they are to be at peace with each other. and that that therefore is good for the world. >> we are clearly not on that path anymore. there is a lot of uncertainty about what is ahead. >> there is a group of economies navigating the middle of this geopolitical divide. we can call them the connector economies. >> it is a rethinking and changes everything. haidi: subscribers can watch that story full on the terminal or bloomberg.com. it's the third and last day at

the bloomberg new economy forum and geopolitics, globalization were some of the big issues over the past two days. yvonne man is with me here. day three just as jampacked when it comes to the conversations. geopolitics still at the forefront as we get this yellen meeting, the two top economic officials in china and the u.s. meeting. yvonne: she seemed to be the more moderate voice. certainly if they can deepen this conversation leading up to the apec summit, that will be a very telling sign of how the path forward is going to be. is there any breakthrough? everyone here is keeping their expectations low. barring anything about climate change or may some sort of talk about -- we are not going to see anything when it comes to the sensitivity of tech, for

example, which might yield something. we talk to so many guests here about really where the relationship is. can made the conference -- talking about the tensions and why the u.s. cannot afford to decouple with china. >> it is going to be hard to just sever. if we can just snap our fingers and sever our relationship with china, do you think we really come out ahead? >> that is the question. >> i think they have 1.4 billion people who are going to prove to us that we are wrong. yvonne: hillary clinton also said this is a chance for the two sides to reset the table and kick things off once more. but certainly we are going to see those discussions continue today, especially when it comes to ai and this ai race between

the u.s. and china. kai-fu lee started a $1 billion start up in eight months focusing on ai not just in china but globally as well. the investment sentiment around that now that this whole ai frenzy has faded a little bit. haidi: and whether that global business will work for ai. of course one of the other big stories is i cbf at the moment. a lot of questions as to how this happened. yvonne: this is the world's largest lender by assets. that have been ramping up cybersecurity in recent months. how did this happen? that is the key question. it did impact the market. we talk about the 30 year option

in the u.s. maybe it was so poor because a lot of traders could not clear some trades. it shook the market a little bit. obviously we don't know how big of an impact, we are assessing the damage right now. a lot of questions about where do we go from here. haidi: a really good example of what we have been talking about here, these shocks that keep coming. some are smaller, other ones are bigger. it feels like the volatility is not going to stop. yvonne will be with us of course later. much more to come. this is bloomberg. ♪ it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan.

let's find the right investments for your goals okay, great. j.p. morgan wealth management. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

shery: of course we are watching the market opens in hong kong and mainland china and we will be watching asian banks after icbc confirmed a cyberattack on its u.s. unit that prevented some trades from clearing and forced u.s. clients to reroute transactions. take a look at how futures are trading at the moment. we are seeing some pressure on u.s. futures. this, after we saw the s&p 500 fall for the first time in nine

sessions. as we were digesting pear chalice commentary, really pushing back on rate cuts and that inflation is not really a target. really reiterating some commentary we have heard in the past. of course we continue to watch the offshore yuan which is really weekend -- weakened to the 7.30 level. the u.s. dollar also jumped on chair powell's comments. the market opens in hong kong and mainline shanghai next. this is bloomberg. ♪ (adventurous music) ♪ ♪ ♪ be ready for any market with a liquid etf.

get in and out with dia. a streaming service... fubo is like the best of cable. plus the best of streaming. thinking of calling yourselves “the big kick-it” because you're helping people kick cable. sorry, uh, i feel like it's a little close ahh... imagine them chanting “the big kick-it”. as you dominate the paint. are we still talking about tv? live tv and sports. and more! but mostly sports. that's fubo! 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.

oh, genius! for more breakthroughs like that- i need a breakthrough card. like ours! with 2.5% cash back on purchases of $5,000 or more. plus unlimited 2% cash back on all other purchases. and with greater spending potential, sam can keep making smart ideas- a brilliant reality! the ink business premier card from chase for business. make more of what's yours. people are always asking me the ink business premier card from chase for business. two words come to mind for me. one is responsibility, the other is purpose. it's just so inspiring to do research that impacts human lives. stand up to cancer has been a critical partner in advancing research for cancer. cancer research saves lives. so please help us fight in this battle against cancer.

rishaad: