toward 650. juliette: beating expectations last quarter, in lending income. we are joined this hour by our guest. >> straight to the markets and it is all about the markets where we are seeing this on feeding itself into what is going on with equities. we have this story right across the board, 90% of the stocks in this part of the world are lower. we have a bit of stabilization in the bond market. we have steep losses for asian equities, and to japan's benchmark trading to its highest since 2016, and then we have a going to the downside. the benchmark 10 year jgb, and climbing up to the highs since 2016. having a look at the five-year high, also taking a look at what is going on with the story of

the nikkei down. and data coming through as well and a quick check of what is going on elsewhere. the dollar index, it is below a fraction, but that is after it had a huge uptick overnight, seen again sterling, going below 140. taking a look at the yield, it has just, down a bit. you can see what is going on their. and 0.16 percent, and that is a yield high around since the january 2016. juliette: it is all about the bond investors. running for the exit and more signs of the economy re-fleeting. another massive relief package and then the federal reserve starting to consider reducing monetary stimulus.

policy editor kathleen hays joins us from new york area bond yields have been rising as the reflation bit takes hold. what is with the big sell off of things? kathleen: the tinder was there and the match was thrown, but let's start off with the numbers in the morning. new claims for unemployment benefits and jobless claims had a tumble. look at this chart, buffer bond investors, it is like whoops, what happened. you can see that the number is now down to about 730,000. it was supposed to stay up around 840,000 at the level that it was before. the labor market is improving, the economy is improving, what is this going to mean for reflation? there's also that 1.9 trillion dollar stimulus package which looks like it will be passed. we have people saying it will

overheat the economy, so this all happened to go into a $50 billion seven year no auction. the demand was so bad that it created a spike in bond yields. the ratio was at two point 4%, that is the lowest on record. we saw the auction tail, 4.4 basis points, that is really wide. the most that they have had to buy because there was not enough of substantial other sources since 2014, and that will cause a big spike in the 10 over at 1.61%. if the current bond selloff continues and echoes the taper

tantrum, the 10-year will hit about 1.9%. the president of the atlanta fed said he is not worried because it reflects optimism on the economy. the yield are still low by historic standards. it has been a big move up. the market is forgetting when they are wondering if this is going to force the fed to move their hand, stimulus is not going to be drawn and jay powell just said it again a few days ago, it will not be withdrawn until substantial further progress meets their goals. and staying there and getting to full employment, maximum employment, those jobless claims are coming down. the fed has given no signal that bond yields rising are going to make it move, but it was an interesting day to be watching the bond market. >> there are people who are optimistic it there in the fed,

and we also have the fed who are warning on business as well. what are they saying and how bad is it? kathleen: this is a study that was done by the federal reserve, the fdic, and the office of the comptroller of the currency. they are the three main regulators of banks in the united states, and what they are warning about, the red flags being waved on all of these companies who are carrying a lot of debt who are hit hard by the pandemic a, they say that companies it hard by the virus are holding $1 trillion worth of debt, and there is a portion that is at the risk of defaulting. in terms of some of the specifics of this study, it is interesting that nonbanks are holding the disproportionate shares. in includes firms doing leverage lending.

problem areas in particular for these kinds of owns. the industries got hit hard by the pandemic, right? bancshares of the weakest loan, are now up to 45% and that was 45% a year ago. banks are much better capitalized now. to carry any kind of load like this at any of the ramifications that could occur, but it certainly shows that they are watching for signs, even as the fed gets more optimistic on the economy watching for some of the weak spots. syndicated loans back to u.s. acquisitions, the leverage of a five-year high in the fourth quarter. the fed has two big hats. one is monetary policy, and the other is overseeing

regulatory banks and maintaining financial stability. this is another part of the picture to watch. rishaad: kathleen hays, still to come, will be joined by the chief finance officer of southeast asia's third-largest bank. giving his analyst for 2021. juliette: our market coverage continues. asia's hermann lee is up next en later will be joined by omar slim. here is a look on how equities are doing what the final day of february with big losses. and they came off of bigger losses of the day, now down. asia is still on track for a fixed monthly gain. the dow jones index up about 4.7%. plenty more ahead as we do see this bond rout affect equities.

this is bloomberg. ♪

♪ >> this is the bond market essentially telling us that they boom is coming in real growth in the country, and we are not priced properly in the market. >> we are selling off because of optimism from growth. i do not think it is concerned about inflation as much as concerned that the fed may not thread the needle. >> some of what we are seeing is a shortlist play and then a longer-term list on sentiment is still there underlying the markets and still allow markets to trend higher. >> we are very close to the end of this and it is a real opportunity in some of the segments of the market that have been hit the hardest over the last week or so.

juliette: that was some of our earlier guests commenting on rising yields in the market with uproar sending into the markets. but it has been a pretty good month for equities. rishaad: yes, our next guest is here. how much of this is a market structure story, and a macro one when we see these go up -- that has to be a major concern? >> well, i would argue that there are both sides of a. there is the market structure story as well as the macro story, but as far as the market structure story is concerned, we recently had a selloff in the greater china market partly due to this, and this type of stories, especially when the flows are strong on the

retail side, and it could really amplify the calibration that occurs in the market in reaction to other types of macro stories. definitely, there is that element which is the enthusiasm for equities, for about a year now, and it has made it a bit more vulnerable to very swift repricing like this, but at the same time, this is occurring partly because real interest rates have risen in the u.s. due to the global growth optimism. part of it is obviously temporary in nature and i think it is bowl of investors to try to look through this. at the end of the day, that we are going to have strong growth

and central banks are willing to tolerate inflation to make sure that their economies pullback, but that is still a favorable combination. this is the volatility, amplified a bit by the retail activities, but it is a part of the repricing in this part of the cycle, and they should be able to patiently live through this. rishaad: looking at the vix, you talk about the volatility, that is up about 35%, 40%. and then we look at how the commodities complex as a whole are ratcheting higher. the bond markets are having its routes. where is the money going then, is it a dash for cash? homin: it appears that way. we had a hint of this from bull markets two days ago with a significant outflow. i am sure, given the strength of selloffs, there is a bit of a

dash for cash in the u.s. market as well. as you said, the repricing has been swift, and what we are paying attention to is the bond markets expectation of short-term rates in the next three years, and average inflation in the next 10 years. real rates have risen, and now there is significant deviation, and that is compared to what the fed has been taking, and it is now declining. it is now almost down to 2%. obviously, there is a challenge for the fed to realize to bring the inflation higher. so that is a challenge. ultimately, we think -- the

market contact is such that we will get to 2.3%, partly helped by stabilization rates. and then that way, this could be more of a sustainable -- juliette: let's talk more about some of your equity strategy. you touched there on what we saw with some of the southbound flows. in the other thing that kind of upset investors was that the tax hike, do you remain a buyer of the a-shares. homin: it is obviously a bit of a challenge for the a-shares near-term performance, but in the long run, we are a believer in the market position in china. there is an incredible amount of capital that is ready to be

employed in investment opportunities overseas and also outside the mainland markets. we think the a-shares keep their relative performance in the past year or so have some catching up to do. once the market sentiment stabilizes, we think it will eventually recover and the a-shares are petitioned to benefit from that, and of course the competition of this unit -- universe is more cyclical in nature and a bit more resilient, we would argue to the rise in global yields, which is also a stronger prospect. we stick to the remainder of the year which is a-shares outperforming. juliette: that stronger global outlook is what is driving the momentum that we are seeing, and also flows through the rebalancing.

where do you see crude go, as it is going to be a slight ratchet tire -- higher? homin: we think in the near term, it is quite likely that crude oil prices has a chance to maybe keep the barrel level, but ultimately in a year or so, we think the supply picture will get a little bit better. the frontloading of all of the supply expectations and the markets, but eventually, we think given the signal that we have seen with the u.s. administration in the iran, we think the oil price could stabilize a bit in 12 months time. we actually see the oil price slightly lower than the current levels in 12 months time. juliette: thank you for your

insights. homin lee, asia macro strategist. let's head over to vonnie quinn. vonnie: president biden has spoken to saudi king salman for the first time since taking office. expected to be critical in the kingdom's role in the murder of the journalist jamal khashoggi. the cia later reported to say that saudi crown prince mohammed ordered khashoggi's killing. china says that camera has ruined their relationship. the morning harrow says that beijing considers that they have destroyed long-term ties. there are indications of a breakthrough in the brexit

standoff between the city of london and brussels. a person to emmanuel macron says that they could grant an equivalent that will allow the sector to do business in the single market. they said the single idea could happen by middle of the year. myanmar facing increasing opposition with facebook banning posts, pages and ads. they had asked to limit communication and planning by protesters. they say allowing the army to remain on their platforms and the risks are too high. and opposition to president putin has been move. alexi navalny was moved to thursday, but neither his family or legal team have been told where he is. he lost an appeal last weekend

on charges from 2014. global news, 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. rishaad: coming up, emerging market currencies taking a hit as u.s. yield search. this is bloomberg. ♪

♪ >> global bonds around spreading into equity markets in asia. we are off the lows of the day, and at one point, the msci asia was down, it's biggest loss

since march. but still on track for a gain for the month of february. let's get more on today's action, the strategist that joins us in singapore. we saw fx in the space badly beaten overnight. which currencies are you seeing most vulnerable? simon: i would look at two categories, the first is that it is the last couple of months like the south african rand and the turkish lira. and secondly, i would look at those currencies with a high beaker to global markets, so latin america as a whole and the korean won in asia are particularly vulnerable. rishaad: how bad could it all get tour emerging market

exchanges and currencies? you look at how sterling got beaten up as well, but generally speaking, how are you? simon: that is a really good point and i think emerging markets could do better, and there are reasons for that. first of all, they are not overvalued or short-term measure. secondly, you look at the risk reversals there is no speculation and emerging markets. and thirdly, equity and bond positions in emerging markets are very light. actually, i think they will be relatively complacent. juliette: if we compare other major spikes in u.s. yields like when we saw the taper tantrum, does that mean that emax is more insulated this time around?

simon: yeah, i think for the reasons i mentioned. you got much larger reserves, so there are buses in the event of depreciation risk, somewhere like turkey. secondly and finally, the external account and general are much stronger. on average, em is running current account services, where in the temper tantrum, most running deficits. that is not making them less vulnerable. juliette: very easy day for us, simon flint and singapore. in terms of what we are seeing on the 10 year currently at 1.4578. those are the basis points after we saw a breakthrough on those

levels passed a 1.5%. we are also watching yields on the 30, just slightly at 2.24 down on the third -- 30 year. rishaad: just getting off for a lunch break after the morning equity traders have had. the picture that we are heading in one direction. 90% for stocks are lower. let's check in with tokyo, it has really taken a beating. well below that and the psychological 30,000 level. bacon is not helping here as well. yen coming back a little bit after serious weakness. 10-year yield just about where they were on the january 2016 highs. let's check in with a couple of the movers. we have some companies there that are still getting beaten up

despite having good news. down to the oil price, shop selling off to the unit. upping it's for your forecast. all of that helping that company. this is bloomberg. ♪ is is bloomberg. ♪

♪ juliette: it is 10:29 a.m. in hong kong and shanghai. i am vonnie quinn with the first word headlines. the federal reserve is warning that businesses ravaged by covid-19 are sitting on a mountain of debt and many may go bust. almost 30% of quarters were in trouble last year, up by half from 12 months earlier.

real estate, entertainment, transportations, they are all seen as particular problems. many of the riskiest loans are held by so-called nonbanks. tiktok has agreed to pay $98 million to settle privacy lawsuits that say it illegally recorded facial scan images and comes after the former u.s. administration said that tiktok is a threat to national security. the new biden team says that it will decelerate efforts to force the owner to unwind u.s. tiktok operations. travels in china are down as the coronavirus continues to hit everyday life read the government in beijing discouraging travel. but users usually seeing up to 3 billion past china, total numbers may struggle to reach

500 million this new year. an oil tanker that became a symbol of tensions between u.s. and iran was seized off, accused of carrying a rainy and crude to syria and breach of sanctions. it was renamed and impounded by british authorities but freed last year. it then sailed east to turkey but has now left the mediterranean. global news, 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. juliette: thanks. united overseas bank is the last of singapore's three major lenders to record to fourth-quarter results. net profits dropped, but still beat analyst expectations. let's bring in group cfo lee wai fai, so let's talk about where you are seeing potential

upside because you are positive on the outlook for 2021. are you expecting this to be a broad-based rebound? lee: i think if you look in our announcement yesterday, we had a very good numbers. our wealth management is doing well, and for the year, we grew 11% in wealth management. this by despite the pandemic difficulties, so that's quite a good achievement in my view. during the beginning of the year, we are expected to worry about how backward credit cards are supposed to be. our bottom-line reviews that we

went through, we saw even after the government ruled out the program, it continued interest payments, so the program actually helped leaders with their customers, but i think most of them are in good shape. we are quite optimistic that 2021 will be better. juliette: we would hope on many quarters. when do you expect equity to go back above 10%? >> there are two indicators that we will need for that to happen. costs will have to come down significantly lure -- lower. i think we were guiding at the end of the year for 30 basis points. when that happens, that will bring equity closer to 10, and equity margins will improve a little bit. probably maybe in the next two

or three years. rishaad: looking at what has been going on with this bond rout taking place, we have also seen an increase in yields, which is always a good thing for banks and bank lending. what other impacts do these yields have on your business? >> before what happened last night, we were guiding for low interest rates. we saw the 10-year u.s. treasury shoot past 1.5%. most important was the trend of three to five years. that's the first time it has gone up. it indicates a section of the yield curve.

the trading environment in asia is probably entered, so basically the market is indicating an interest rate hike might come sooner and the market is actually maybe positioning to the end of the year instead of next year. what does that mean to us? we hope our credit spread will go up, but we are also watching u.s. policy conditions. the short and today is very liquid. our funding positions are still very strong. those are the indicators that we look at, but if the interest rate moves up in the short end, i think it will be positive for older margins, but -- for our margins, but we also have to make sure it is not too big to put -- too big to affect the

performance of our customers. the trend and the move last night actually made us take a very much closer move today. they are probably watching inflation numbers as well as unemployment numbers in the u.s., so for the time being, like i said, we don't think much will change in the next few quarters. rishaad: of course we are watching. the fed is watching of course. it is frightening the fred -- the fed, something people are concerned about. tell us about your take. >> the market overreacted.

of course, it is still way below the long-term trend. we look at the long-term trend of the u.s., whatever spectating you might wish to, the long-term range, i think for the time being, the real economic data are strong and will indicate a sharp hike in interest rates. traders actually love that volatility. that is why we have not repositioned yet, and we are watching closely for more market statistics to confirm that track. juliette: i wanted to ask more about singapore and the impact on your business, particularly as we start to see the impact of what is happening in hong kong, more people moving to singapore, the affluence driving a lot of your business. how well-positioned are you for

a lot of the inflow investment? >> you could argue that with regional grants coming up, we will see a lot of outflows from the corporate side as well. from the copper side, we are well-positioned. we know the economy, we know our customer. we see it increasing, especially from north asia -- not only from north asia but ossian, and we see flows increasing in acn -- in agn -- not only from north asia, but asean.

we see flows increasing in asean . more important is the increase in wealth in southeast asia. you know the population is young and well educated. i think there's some very positive trends we aspire to. we have to develop additional capability to attract this group of people. we will be putting in more wealth offerings unto our mobile platform. this group, they want something convenient, you know? for the higher end, we will be looking at our own offerings, to make sure we get a trend. a lot of them are also moving u.s. dollars, so how can we help them and other currencies? if you notice, it is not only returns we are looking at.

i think emg is very much on the horizon at the top of everybody's head. rishaad: wealth is your business imperative and what you are concentrating on. you mentioned it in the earnings call. how do you propose to build up that wealth product that you do have, those wealth products? is it a sense of you being nickeled away by some of those digital rivals there in singapore and elsewhere, and at the same time you have to beef up your digital offerings? how do you do this? you make an acquisition? what is the plan? >> we experimented with additional platforms. we chose to start in thailand and indonesia. today, it is -- 5% of my retail

base in indonesia are coming out of this. this group of people is young professionals. they are not as profitable as the rest, and once we get them in and get them comfortable, they are now going to offer more offerings, so in singapore and some of the development -- developed markets, -- and some of the developing markets, we put more into that. there's a lot of worry about health, so insurance was a big seller. we want to provide a product where people can just go in and make a few changes themselves to give them peace of mind.

those are things we are working on. the new group of people want convenience and lower cost. at the same time, they want flexibility and someone to talk to for more complex products. that is where we are, integrating digital with physical. we can make most of our revenue through the other two channels. in that sense, we think. digital will -- we think pure digital will extract a little bit because it will grow with volume. we have to watch it. we worry some of them will compete, and we make sure we are in the game as well. juliette: we thank you so much

for your time here. let's get more on the selloff we are seeing, the bond rout moving into equities, but worth noting there has been a little more stabilization than what we saw in the early session. still, the hang seng index off by 2%. the csi 300 down by 1.4%. a lot of selling coming through in south korea's markets, and australia is down by around 2%. we did see benchmark treasury yields falling back below 1% is the asian session. australian bonds also starting to pair some of their losses, and japan's benchmark trading close to its highest since early 2015. we are looking at a little more steadiness coming through on the dollar and also worth noting we have some interesting calls coming through from goldman sachs as well saying the dollar is still expected to fall in

their view, despite the rising rates. all right, plenty more ahead. rishaad: absolutely. bloomberg has updated its covid resilience rankings. plus, other movers. that's on the way. this is bloomberg. ♪

juliette: fda advisers are meeting later today to consider johnson & johnson's covid vaccine for emergency use approval. it is the third judge or ask for clearance in the united states and the first two offer vaccine in only one dose. -- it is the third drug to ask for clearance in the united states. >> we will make even more rapid progress on overall vaccines in march.

rishaad: meanwhile, despite fresh outbreaks and message gdp, it is india who seems to be winning the vaccine diplomacy race as china struggles to gain public trust. tell us a little bit about this. rachel: that's right. it is actually something very interesting that was observed, especially when the pandemic started. china came out very strong with the promise it's vaccine would be global. in the vaccine race, we are seeing india is the one that is becoming favorite in developing countries. india has shipped nearly 6.8 million free vaccines around the world. china has pledged only around 4 million. some have not reached countries at all, and china is now focused on its own internal vaccination drive. we are seeing india when the hearts and -- win the hearts and

minds of a lot of these countries that would not have had vaccines without india. juliette: tell us where else we are at. we know we started to see things being rolled out across the region in recent weeks. a number of vaccines starting in the likes of hong kong and south korea. his asia playing a little bit of catch-up here? rachel: that's right. some of these wealthier countries were adopting a wait and see approach. they did want to see what was happening. now we are seeing korea, hong kong, japan, south korea as well. the issue is a lot of developing countries do not have access to vaccines. the who says there's no point having the money if you don't have a shot. here is where india is coming in to emerge as a country with the

ability to ship those vaccines to developing countries. rishaad: we have a chart that showed how the u.s. has administered the most shots, but if you look on a per capita basis, who is getting it rolled out right? rachel: on a per capita basis, it is israel, the u.k., those smaller places. the u.s. is doing well saying a turnaround in its outbreak. it is at eight point where cases have halved from a month ago. cases are dropping, hospitals are emptying out, and that's very positive news. juliette: thanks so much, bloomberg's health care coverage team leader there. we have been watching what has been occurring in markets here.

we will continue to keep you updated on all the market action here on bloomberg markets: asia. do stay with us. plenty more ahead. ♪

rishaad: just getting some

breaking news coming from the australian aviation authority. they have suspended -- the boeing 737 max was cleared, and it is now allowed to resume service three months after u.s. regulators allowed it to. this is now the fourth iteration of the narrowbody plane cleared for takeoff in australia. juliette: well, let's have a quick check now of the latest business flash headlines, and crypto exchange coinbase has applied to list on the global selection market. the announcement of a direct listing comes as it announces a doubling of net revenue as transactions surge in bitcoin and ethereum. coinbase reported active unclean users of almost -- active

monthly users of almost 3 billion -- 3 million and verified users of almost 40 million. gamestop is up or than 500% this year. other favorites of retail traders have also soared. twitter surged as it said it aims to double annual revenue by 2023 and expects to grow its user base. it has more than -- it is planning to have more than 300 million active daily users in the next couple of years, up from 193 million in the last quarter. cryptocurrency exchange creighton is said to be in talks for funding that would double its valuation to about $10 billion. the firm is talking to fidelity, thrive capital, and general

atlantic. although the terms are not final. the ultimate valuation may increase. crack and is subject to -- cracking -- kraken is subject to u.s. regulation. rishaad: a day we are seeing u.s. equities sell off, what happened in the u.s., find its way here, but what we have at the moment are these markets coming back a little bit from those of the day. we have the australia asx 200 about 2% down, off the lows of the day. south korea not open yet, but it was of yesterday. looking elsewhere, we are seeing coffee up, but cotton did sell off on a broad base. japan actually just coming off. we can see the 10-year jgb was at levels not seen in around

five years or thereabouts. the 0.16 percent handle, if you will. what else is happening? >> i'm trying to be a bit more positive. our guest was quite up to messick about this, saying it's just a little bit of a pullback, a correction that was needed. you've got to look at the fact that markets are still higher for the month of february. looking at the regional index, up about 3% for the month. the dow up by about 4% for the month of february. the nasdaq still only down by about .75%. perhaps i'm alone in this camp, but it does seem like it is a little bit of a pullback today. rishaad: all right, and

interview not to miss -- jamie dimon will be giving us an exclusive interview, speaking from the bank's global high-yield investment conference on monday in new york, tuesday morning in hong kong. ♪

♪ haslinda: it is almost 11:00 a.m. here in singapore and in shanghai. welcome to "bloomberg markets: asia." rishaad: it's time to look at the top stories. global bond routes pushed yields to record highs. juliette: emerging market

currencies feel the heat as u.s. currencies rise. rishaad: it's awaiting gdp data from india after an unprecedented recession triggered by the coronavirus. india suggests the economy is reviving. juliette: let's get a check now of where we are headed here in regional equity indexes. we have seen the asia pacific index having its biggest one-day drop since march last year, but things are stabilizing somewhat, a little, although we are still down 2% over the course of the day. remember as well, it is the last trading day of the month, so we have to look more broadly. we are starting to see a bit more of a tick upcoming move in u.s. futures now -- a tick up

coming move in u.s. futures now. australian bonds paring most of their losses. the rba intervened for a third time launching an unpatched -- unscheduled purchase operation. we have been watching what is happening in the pan as well, the index trading to its highest levels since 2015. we saw the dollar gain in one of the big moves of the day. rishaad: looking at india, seeing a big fall on that nifty -- and fte -- nfte fall. it is hong kong time and singapore time 8:00. gdp figures for the fourth quarter, looking at .6%

expansion after we saw a contraction in the third quarter . at the height of the coronavirus pandemic in india, we saw a contraction, so expecting that to be over with for the time being. the traditionally close relationship between washington and riyadh seems to be set for a wobble. let's get to that story and more first word news with vonnie quinn. bonnie: president biden has spoken to the saudi king for the first time since taking office. the call coming as we get a report critical of the kingdom's role in the murder of jamal khashoggi. the cia-led report saying the saudi crown prince ordered khashoggi's killing. new data shows the amount of wind barred from the mainland

last month. the sydney harold says the australian government has destroyed long-term ties. there are indications of a breakthrough in the standoff between the cities of london and brussels as the french president emmanuel macron says the eu may grant some sort of symbol to allow the u.k. to do business by the middle of the year. military leaders of myanmar face increasing international opposition. britain is adding to u.s. sanctions. facebook is banning posts, pages, and adds -- and ads. facebook says allowing the risks -- says the risks of allowing the army to remain on its

platform are too high. alexei navalny was moved to informal prison on thursday. navalny is the president's most voluble critic. he was arrested last weekend on charges he breached parole in 2014. global news 24 hours a day and on bloomberg quicktake followed by 2700 journalists and analysts from more than 120 countries. juliette: our next guest assess the treasury selloff is understandable and healthy. great to have you with us. the fed is not worried about rising yields, so i guess why should we be? >> yes. i think there has been a slew of talk over the past week or two

weeks which seems to suggest they are comfortable with where u.s. treasuries are at or are heading. i think where we are at, the movement has legs. i think it is reflective of better economic prospects. the american breakthrough successful so far in some large economies, successful vaccine rollouts. i think it is one of those moves that will have legs. interestingly, i think a lot of market participants were expecting that kind of move. a lot of others were surprised by it, which was an interesting dynamic. juliette: if it has legs, is their need for alarm, or is this more just a washout of what we are seeing? >> i think the treasury is

getting out of the trough we saw last year, from very depressed levels. i think essentially, the market is reflecting better economic prospects and also the fact that there has been signs that the economy is dealing with some of the newest lockdowns better than expected. i think this is really just getting out of very depressed levels. i do not think this move is reflective of safety concerns. i think it's just a reflection of better economic prospects at this point. rishaad: absolutely. it's the classic case of good news being taken as bad news. >> yes, to put it into perspective, yields are still quite low, not to state the obvious, and i think i would

just position this move as yields normalizing to a certain extent because of economic recovery prospects, and even to put things into perspective, most stock markets are still up on a year to date basis. things are still orderly, so, yes, there will be wobbly days like what we saw yesterday, but i would not characterize this as a panic. rishaad: absolutely. how does this news fit with your investment strategy? i think in your research, you are perhaps looking at higher bond yields halting the everything rally. >> i think this will make markets a bit more lucid. i think there will be a change

in terms of industry selection, if we are talking about stockmarkets or even the bond market. i think within the bond markets, we are very cautious in terms of interest rate risks. i think the chapter around inflation, our view is that we will likely not see consistently high inflation this year, but i think it is almost beside the point because i think there will be a lot of chatter around inflation because we will see inflation going up in the second quarter of this year. we are very cautious. we like corporate more than sovereign. it's a perfectly safe haven bond market, and we like certain profits in terms of value, if it is private credit, but also within asia and particularly em

corporates. juliette: we had that big move in the dollar in the u.s. session, but goldman saying you could still see the dollar continued to fall even though we have gotten rising rates. you are saying the dollar is relatively mixed in terms of its performance? >> yes, we think it is relatively mixed. in terms of what is often referred to as u.s. exceptionalism, the u.s. is doing well in terms of vaccine rollout. it is also important to note the u.s. is doing better than some other economies in terms of the impact of the lockdowns. we think the u.s. is in good shape. the move we see in interest rates and the yields -- keep in mind we saw some moves also on

the short and part of the curve, which the effects movers are highly sensitive to. we don't see this prolonged period of dollar weakness. we think it is going to be mixed , depending on the relative economic performance and the interest rate differential, but we do not believe in the story of the weaker dollar. rishaad: are people -- investors -- are they underestimating the federal reserve's patients? >> are they underestimating the federal reserve's patience? i think the fed has been quite clear in terms of communicating their policy. it's also important to keep in mind what the fed mandate is

because i think there has been a lot of talk in terms of what the fed is trying to do and what the fed should do and so on. part of that is i think the market is getting ahead of itself in terms of what the fed mandate is. the fed has been if not the only game in town, the main game in town for, really, the past 20 years. i think it is important to keep in mind what the fed's mandate is. they have been in our view credible in terms of communicating, so i think the fed will be on the sidelines for the foreseeable future. there has been a lot of talk about the explosion in terms of frisbee issuance and if the fed needs to intervene to absorb that. my view is that the fed will only intervene if we see a disorderly move and if bond

positions tighten and tighten significantly, which so far clearly the fed has said this is not the case. this is one of the main reasons this movement has had legs, because the fed has said they are comfortable with it. i think the fed for the time being will remain on the sidelines. no talk about tapering any time soon. no talk about hiking any time soon. rishaad: let's have a look at what president biden and what his democratic leadership in congress are doing because they are making a final push for the president's relief bill. let's look at where things stand now. >> both the stimulant -- but the senate and house are expected to act soon on the stimulus bill. retail sales are surging on one side, with january showing a

rise we have not seen in seven months. plus new home sales rose to a three-month high in january, leading some to question if more stimulus is needed at all. >> i look at the fiscal stimulus under discussion, and with the 1.9 trillion dollars, you're talking about something that is relative to the gdp gap is six times as large. >> on the other hand, some 10 million americans remain out of work with minorities and women bearing the brunt of the losses. some 2.5 million women dropped out of the labor force during the pandemic compared to 1.8 million men. numbers pointing to a clear and present danger to the recovery. >> neither the president-elect nor i could post this relief package without an appreciation

for the inequity. with interest rates at historic lows, the smartest name we can do is act quick. >> inflation goals, the economic recovery remains uneven, far from complete. quits with jobless benefits set to expire in weeks, the pressure is on for president biden and democrats to make the case for the relief package. juliette: still to come, india emerging from recession and reclaiming pre-pandemic growth levels. more on that ahead. a preview of what to expect when we speak to the chairman and ceo of an india-based mobile advertising firm. we hear about how the pandemic boosted business and if he sees the momentum lasting. that's ahead. this is bloomberg. ♪

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rishaad: looking at market action now, everything pretty much read, but we are stabilizing a little bit. we have to look at this in context. the hang seng so far this week alone down nearly 4%. the kospi, 3%. nikkei 225, 1.9 percent move lower as well. let's get more with the bond markets and as we see this bond rout, we have asian equities being affected and emerging markets across the board as well as people are not banking on risk. what's going on?

>> a lot is going on. as you kind of implied, this really started with the bond market. in the u.s. session yesterday, we had this kind of flash crash in the belly of the curve of the u.s. everybody was watching the 10-year yield, but it was really the five and seven-year that got the pain. it looked like that might continue with a bit of essential buy into fight back here essentially. the rba has come in to try to buy some bonds, and there is still expectation the doj might step in. plus, we have seen some dip buyers in treasuries. we have seen equities pair their losses, but earlier this morning, the start of the session looked like it could be the worst day for the him sap since march of last year. as you say, emerging markets are definitely under pressure. indonesian bonds, malaysia bonds suffering today, but there's temporarily a little bit of calm . but asia is not taking the

losses more intensely. we are now waiting for europe and the u.s. again. the problem is that europe, based on kind of the time of when the losses happened, european stocks also might have a touchdown, and that might make people a little bit nervous in the late afternoon asia session. juliette: as you say, though, seen stabilizing a little bit now. what about, though, em stocks? isn't there an indication that a lot of these were already in overbought territory? >> i think that is the case for many stock markets around the world, and i think emerging markets certainly have had a particularly good run. i think after the u.s. election, there is a real surge in november, december, and people kind of thought that they looked particularly stretch because maybe some of the gains have been more recent. i'm not so convinced that emerging markets are more vulnerable. the nasdaq is down 7% or

whatever it is from the highs, and to me, that is still where we are seeing more stretch prices. these are lower liquidity, so when we get risk aversion, they selloff extremely quickly, but i'm not sure the story there is any worse than developing markets. i think actually ironically, one of the big shifts we are seeing is that as someone who has been a long-term bull of chinese stocks, i'm becoming more worried about them. we are seeing a lot of pain there, and they make continue to be continuing that. rishaad: on commodities, the question is -- is that where the money is going? >> we have seen a little bit of a bounce in the dollar in late u.s. sessions. it's a powerful move, but we are still near multi-month lows in

the dollar -- or multiyear lows in the dollar. i'm surprised we have not seen more traction behind a little bit more dollar bounce, and my expectation is we will still see that in the next couple of months. i think the parallel for the markets here is 2011. i think people are completely wrong. there's no sign of the fed tapering any time soon. that is absolutely nothing issue. it's exactly like turkey where we are seeing a massive commodities surge. we are seeing the fed being too dovish that they risk losing control of the situation and therefore, we see a yield curve steepening. that weighed on equity markets in 2011, and the turning point came when the dollar started getting a bit, so i still expect that to be the game plan today, but just don't call this a taper tantrum. juliette: thank you, as always.

you can follow more on his story and all the day's trading on our market life -- markets live blog. up next, it is time for morning calls, a look at some top analyst recommendations across markets. stay with us. this is bloomberg. ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that in just 10 minutes a day

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rishaad: going to take these morning calls on a day when we are seeing bonds getting beaten up, stocks getting beaten up, and even some commodities. sophie kamaruddin has a look at all of this. has the bond rout gone far enough? sophie: we are taking a look at action in bond markets. for now, given the 10-year

pushing back below 150 and the five-year nearing 82 basis points overnight, which was declared too high given the fed's threshold for tightening and jp morgan's j very singing the same tune. the price hike is out of line with fundamentals which did take a backseat to technicals in that recent route. jp morgan recommended going along with the five-year. checking back toward that 2% level, reversing the month's gains, and a goldman, they do not see a rise of more than 20 basis points from current levels, and they note that it would take a renewed widening of these rates pushing the u.s. 10-year back above 150. juliette: indonesian stocks falling along with the rupee.

what will we see when markets open? sophie: india along with brazil and mexico have seen sharp treasury moves and we have indian bonds headed for the biggest monthly loss since august -- since august. the rupee is vulnerable as carry trades get paired back. rishaad: sophie kamaruddin, markets reporter. quick look at equity markets as we had for lunch break. red across the board. consumer stocks having a terrible time of it of late. that particular benchmark has declined something in the region of about 7% this week alone. look at the shanghai composite. down by four point 75%. -- 4.75%. bonds having a pummeling. yields on the way up. in fact high yields for u.s. treasuries.

we are, i have to say, stabilizing at these levels if not coming back a little bit. this is bloomberg. ♪

>> we are tracking the global covid vaccination effort. the greatest medical challenge of our time. let's look back at last week. last week, 195 million doses administered. this is how things look today. a little bit better. 13 million more doses administered. the number of countries has gone

up to about 100. here in the region, the number has been boosted by a lot of inoculation and activity taking place here in the region. you have australia, you have hong kong, you have malaysia joining japan in their first shots. south korea, we understand, also kicking off its vaccination campaign. in terms of globally, the same top five roughly speaking. they have inoculated over half of their population, at least one dose. note at this jump of vaccinations in the maldives, fourth on our screen. about a quarter of their own population there, up from a week back. at least one shot. the u.k., for example, at its current pace, on track to

vaccinate about a third of the population. hopefully this time next week. let's take a look at this, in terms of taking a step back. let's assume 75% of the population needs at least two doses to reach herd immunity. we are just under 2%. hopefully as more countries join the vaccination, we will come closer. track the biggest vaccination campaign in history in the terminal, in bloomberg.com, and right here. same time next week. ♪ >> checking in on markets. asian stocks at a three week low. rightly pointing out at one point the regional bench back -- benchmark index having its

worst loss. 225 stocks in the red. hong kong being sold off. the likes of tencent, wayne into -- weighing in as well. trying to find some winners and the philippines is pretty much the only exception. up 0.3% it has been about this bond rout. the offshore yuan, starting to strengthen. pushing past 6.5 to the dollar. it is seen stabilization come through in the 10-year. seeing a little bit more stabilization into a story and bonds as well. the rbaa once again

intervening. the third time of the week. rishaad: coming from japan, some of these emergency restrictions which have been imposed in areas around the country. and western areas including osaka, they are trying to lift the emergency they have had in place. one other headline coming through, india's vaccinations at 13.5 million. japan seeking to lift its emergency and western areas. no information about tokyo, which is on the eastern side. that is a look at what is going on in japan. as we go over to new york. >> the federal reserve is warning businesses are sitting on a mountain of debt. corporate lending was in trouble

at the end of last year. more than trouble from 12 months earlier. real estate, entertainment, retail, energy seen particular problems. many of the riskiest loans -- tiktok has settled privacy lawsuits saying they illegally recorded -- this comes after the former u.s. administration said tiktok is a threat to national security. the biden team has said they will decelerate efforts. bloomberg research says travel volumes and china are down 17% as the coronavirus hits airlines. the government in beijing discouraging travel. with normal years seen up to 3 billion trips across china. numbers may struggle to reach

500 million this year. an oil tanker that became a symbol of the tensions between the u.s. and iran has quietly slipped away. it was seized off of gibraltar in 2019, accused of carrying iranian crew to syria and breach of sanctions. it was free last year. it has now left the mediterranean. global news, 24 hours a day in bloombergquint take powered by more than 2700 journalists and analysts. i am vonnie quinn. this is bloomberg. rishaad: let's have a look at india. it appears set to exit an unprecedented recession with gdp shown expansion in the final quarter. south asia economy and government reporter joining us. what is the data likely to show

today? >> it is showing india's key market with half a percent growth. expansion, the recovery is coming earlier than expected. this number puts the country on track to become the fastest growing economy again next year. >> where are we seeing the growth coming from? >> it is india's consumers who are out shopping again. the central bank has held liquidity. the government gave a huge expenditure. most high sequence indicators like exports are showing an uptick again. agriculture was already doing well, but now the momentum is

building up in manufacturing as well as the services sector. rishaad: how will the reserve bank look at all this? >> there are positive readings. it is good for the reserve bank. it brings down the pressure on the central bank as well as the government. we know last year both the government and the central bank had taken a lot of measures after -- more than 100 basis points last fiscal year. inflation was going up again, so it had to take a pause. we have not seen any -- over inflation worries. the government expanded its

fiscal space a lot. they can focus on inflation withou about growth and focus on fiscal consolidation. juliette: south asia government and economy reporter with us. moody's says it sees india's week fiscal position remaining a key credit challenge in 2021. they have given india the lowest invested great. we are looking ahead to the opening of markets in india, looking like they're going to join the selloff. a look at how the pandemic has boosted india's digital economy. we are going to speak to the founder of apple met. stay with us. ♪

rishaad: it is that time of the day when we focus in in india. and turn our attention to the advertising market there. a compounded annual growth rate by the middle of the decade. one of the key players in the indian digital market place. the ceo and chairman of apple

which helps leading brands engage with customers. tell us about what the company does and how 2020 was for you. . >> thank you for having me on your show. it is a consumer platform company. we have massive opportunities of growth as we have seen in the past. runway for continued growth for the runway a -- decade ahead. we help marketers reach out to consumers in connected device. [indiscernible] we also help them to reach users online and drive convergence off-line into the physical business space. a 50% come from international

markets. we are focused on emerging markets globally, southeast asia, africa. we started a system in russia. that is broadly what we do. what is absolutely wonderful about 2020's we went through unprecedented challenges across multiple levels. at the same time, we saw some massive adoption focus on consumer connected devices from consumers and advertisers in a much bigger way across certain industry verticals. that resulted in a record-breaking performance in the nine months of the financial year in 2020. and set a foundation for long-term sustainable growth for us for the decade ahead. we can deep dive into some of those conversations as we let the conversations unfold -- questions unfold. rishaad: that brings me to the

future. the portion of mobile and digital advertising. how does that change chris market is bound to get bigger and bigger. how do you tap that growth? >> india is a unique demographic profile. when you see us from the consumer point of view, first. we talked about the advertising size of the market. in india, there are about 600 million connected devices. out of those 600 million devices, only about 20% are powered by shoppers who will go on the internet and do transactions with the advertisers or businesses. the remaining 480 million are yet to fully adopt online shopping or conversion. we are forecasting in the next three to four years, india will have over one billion connected devices. more importantly, the number of shoppers move from 120 million

two maybe 450 million in a matter of time. this is a multiyear trend we are seeing going forward. it is no choice for any business but to embrace digital, a lot more aggressively than they ever have. i would think the total contribution for mobile marketing is less than or equal to 20% of the total advertising spend the industry does. india -- we would expect that to be over 50% over time. whether it is three years or five years, it is buddy's guess. the -- is anybody's guess. the writing on the wall is it has to be the majority of the advertiser's spend going forward if they want to engage with consumers. consumers have shifted their attention, time, even spending powers. the average value spent

digitally and on line is consistently increasing for consumers across segments. users have gone mobile. the rural audiences deeper in india, the consumers are deeply in mobile devices. the businesses have no option but to reach out to them in mobile. juliette: a lot of analysts have said one of your biggest hurdles you have to come over is to scale up. how do you plan to do that looking at other markets outside of india? >> we are a global company. india is 50% of our business. india is expected to grow in digital advertising and needs 30% for the next five years or more. that is a massive growth opportunity by itself. we are a global company. we focus on emerging markets

around the world. almost all them are expected to deliver that kind of growth. we just started a small office in russia. we started a small team in japan, and korea, and china. it is a massive growth opportunity for affle because of the presence we can build. within india, there are key strategies we are focused on. we define it as affle 2.0. part of the strategy is getting vernacularized, getting hyper local experiences. the second is verticals asian. we work integrating with them for their vertical. this includes e-commerce companies. entertainment companies. entertainment tech companies. health care companies.

initial services companies. food tech. gaming, roastery's. these top 10 verticals already constitute 90% of our revenue. they are adopting digital as part of their strategy for the decade ahead. juliette: how are you going to speak about what you just spoke -- pay for what you just spoke about? >> we have been extremely cash efficient as a company. we have capital to support organic growth as well as inorganic growth. we have been consistently cash flow positive for the last seven years or so. if you look at the last three quarters, we have grown our cash flow 118%. this means our organic growth is largely well-funded from internal cash flows. a lot of our inorganic growth is funded the same way.

we are exploring possibilities that could accentuate that growth even further by efficient, serving to -- conservative, and careful limit of capital. we expect there will be great consolidation opportunities globally. we want to be prepared for that and have the necessary capital resources when we need them. we will be keeping an eye out for that. rishaad: very quickly, this is a huge topic. there are a lot of issues surrounding data privacy. where you stand on that? do you see a time in the future when an individual will be paid for their data? foxconn i started the company in 2005, i wanted to know there was no iphone at that time, no android. netflix was still shipping out dvds in a red envelope. facebook was only available to

university students. affle was founded as a consumer accessible advertising platform. when we talk about this, privacy becomes a very important factor. our dna has always factor that as a key factor. you will also know affle was fundamentally founded in singapore. singapore is a place where -- some of the regulations the united states have. we believe our platforms are embracing those regulatory standards that singapore has put in place. we have also demonstrated in the last four years, which is

essentially a strong credential. you are not just complying but making sure we get credit for being compliant and being checked on a regular basis by a credible authority in singapore. i welcome data privacy regulations. as of now, our business is 90% in emerging markets. none of those countries have any regulation. we believe regulation will be coming in. we think affle will find ourselves more ready than other players. it will help our strategy to grow further. rishaad: great to have you on the program. please come in again with us. a quick word on a breaking news story. china oil reserves, they have risen to apparently 100 days worth. that is a level testing the country's maximum storage

capacity. that is coming from a couple of people with knowledge of these levels who do not want to be identified. china's oil reserves rising to around 100 days worth of net imports. juliette: twitter revealing a subscription product that will let people charge their followers for access to special content. here more with our interview next. this is bloomburg. ♪

juliette: we are watching this selloff in equities after the bond rout rattled investor sentiment. looking at asian stocks currently down by 2.3% in the asia-pacific index. the biggest drop since last year. as we head into the afternoon session. the nikkei 225 down two point 6%. we have been seeing every stock in that index in the red. selloff in south korea as well. meanwhile, speaking of tech, twitter revealing eight-week that allows users to charge followers for access to special content.

-- why he thinks twitter can boost its numbers by 2023. >> we want to double our velocity. achieving our other goals. as you mentioned, doubling or more revenue to $7.5 billion in 2023. rishaad: ned segal speaking to emily chang. -- about the cryptocurrency. >> when you aggregate these use cases for bitcoin and assume a conservative allocation, say in terms of cash or insurance policies, you do get into the trillions of dollars of market cap potential out there. juliette: speaking at the crypto summit, she says bitcoin has

emerged as an insurance policy in a world of quantitative easing and could even replace bonds. we have been looking at crypto exchange coinbase, applying to list its stock on the nasdaq. this comes after the doubling of net revenues to more than a billion dollars. coinbase reported monthly active users of more than 3 million. gamestop surging, a similar rise on wednesday, as investors go back in. gamestop is up 500% although the stock has whipsawed. the rise in normally in love stocks has drawn official scrutiny. warren buffett has mostly kept

quiet in 2020, the year that saw pandemic, nationwide protests, and a heated presidential election. now he has a chance to break his silence with the release of his annual letter. that is coming saturday. it is closely watched by everyone in the market. rishaad: absolutely. it is going to be something people pay attention to. is it going to be reflecting what charlie mungo his longtime business partner said about markets? saying, they essentially offer gambling services. they found a dirty way to make money, and essence. this is perhaps something we could see in this letter which is due out saturday. charlie mungo talking about

robinhood and others as gambling services. an interview not to miss, jamie dimon speaking exclusively to us at the j.p. morgan space -- chase conference. ♪

♪ emily: i am emily chang in san francisco and this is "bloomberg technology." tech shares lead a rout in u.s. stocks as investors move away from pandemic winners. gamestop surging more than 100% on retail investor action, volatility and volume the words of the day. we have the latest. plus, arc investments cathie

woods says