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tv   Bloomberg Markets Asia  Bloomberg  November 30, 2021 9:00pm-11:00pm EST

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>> it is almost 11:00 a.m. in singapore and shanghai. i'm juliette saly. rishaad: in hong kong, we have jay powell ditching the transitory tag for inflation. paving the way for rate hikes and faster tapering, as well. >> markets remain volatile as investors weigh the hawkish turn and fears over the omicron variant. rishaad: indian goods on track to top the major economies. the chief government advisor this hour.
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juliette: a little bit more of a pricing towards risk as we assess this pivot from what a more hawkish fed means. the big selloff in the u.s. overnight. s&p futures recovering. in asia, good gains coming through, particularly south korea, hong kong, and singapore helping to support the msci asia index. the first gain in four sessions. you are seeing more support today. up by over 2%. back above the $70 a barrel level. adding to the positive tone. australia's word quarter gdp coming in better. a pickup in yields on the year three. just holding at 93. things are looking a little bit more positive as we try to assess what this pivot, this transitory throwing in the towel. rishaad: let's have a look at
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what is going on in banks. looking at the set. following the regional trend. we have a bit of strength for the year. 33, 67. looking at the nifty on the way above the futures contract. reaction to those better-than-expected gdp numbers. growth being boosted by consumption and largely government spending. low interest rate policy. also for paying -- also paying off. and risk with this particular variant may well affect things and cloud the outlook. let's get to the other big story in the market. a bit towards tighter policy. the federal reserve will consider tapering what it persists, and officials describing it as transitory. >> the test we have articulated
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clearly has been met -- you are right, inflation has run well above 2%. the word transitory has different meanings to different people. it is probably a good time to retire that word and explain more clearly what we mean. juliette: the hawkish pivot comes on top of worries of growth risk from the virus strain over the efficacy of current vaccines. for more on this, we are joined by a global policy and economy editor. rachel chang leads our coverage in asia from hong kong. jay powell suddenly ready to speed up the tapering of bond purchases? kathleen: it is interesting. for the longest time, jay powell would look at inflation and say it is lasting longer, looking persistent, but it will start coming down. not worried about it going into 2022. labor markets, looking better,
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but more substantial further progress had to be made in terms of bringing the unemployment rate down. now he says they could speed up the taper, the december 14, 15 meeting. if they decide to go ahead, and a few months earlier, people think he might be talking about march. the whole thing about dropping the transitory inflation stance, it is very important. if it is not transitory, and he said yes, the fed got it wrong. there were supply chain constraints we did not anticipate having to the inflation pressures that got us to where we are now. it is also important to remember he's not the only one saying this. there's been a group of outliers, leaders in this direction that impressed me. the st. louis fed started talking about speeding up the taper debating on the data. chris waller at the board of governors says inflation looks
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like a problem, would probably have to speed up tapering. rafael bostick telling me he is in favor of the faster taper. mary daly. it is all lining up. there is a meeting coming up. the fomc, we will see what they decide. when the chair is ready to look at it, we know it is a very important signal. >> how can you predict what the economy will do next? we just don't know enough about this particular variant. there is a passage in here, where are we with regards to this? the economy shutting down. >> the information vacuum with regards to omicron. people are reacting without any real scientific evidence of the threat of this variant. we know within the next two weeks, we will get scientific studies coming out of the labs on the level of neutralizing
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antibodies that can be created with the variant. that will be a very important piece of information. we know whether the current vaccines are strong enough to prevent serious illness, or if we have to start with a different vaccine, which is a possibility. i don't think it is a big possibility. rishaad: many of these countries making it difficult to enter. >> what they are doing is very much saying stop for now until we know more. they would rather pause. i think it is way too early to say we will turn the clock back on reopening, or borders will be shut. we are still waiting for that information. >> what can the fed do? why speed up these purchases of bonds and other assets when we just don't know how damaging it is all going to be? kathleen: jay powell in his prepared remarks said the
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omicron variant poses risk to the u.s. economy, but they have not factored it into their outlook. and when he answered a question, he said the omicron threat is not remotely comparable. i'm quoting him. not comparable to the impact of the virus in march and april of 2020. he doesn't expect a big lockdowns. many people said that, you will have to start living with it. i think that is the idea, taper bond purchases, inflation will not prove to be transitory. open the door to a rate hikes. the fed will be watching us closely. everyone will say it is a risk. when the fed chair says he doesn't think it will be the last year, he opens to a faster taper. it seems to be the consensus, but we will find out more heading to more fed officials. juliette: we are still assessing the concerns about the omicron
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virus. bloomberg has also come out with the covid resilience rancor. where the best places are to be. >> i think what the ranking really shows his omicron is coming at a terrible time for the northern hemisphere countries. europe especially accounted for 10 of the biggest drops before omicron was here, because winter is creating these new waves across the continent. austria going into an international lockdown. so that is creating space at the top of the ranking. the uae is number one in november for places that will get summer periods. we really see omicron having a kind of across the board effect. will countries be able to continue reopening and resume the process, or will things -- will :00 turn back? it is different. we have covid pills, high levels of immunity. so it remains to be seen how it
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will play out. juliette: thanks to kathleen hays in new york and rachel chang in hong kong leading our health coverage. let's bring in the cohead of asia-pacific equity strategy at credit suisse and get thoughts on transitory throwing in the towel and how retiring transitory, the word, will move down assets. >> it does form part of a more hawkish message powell was sending to markets. i don't think we should exaggerate the market impact beyond the next day's trading. this is still going to leave us in very loose monetary policy territory. we are talking about starting from a base of zero interest rates with extraordinary qe still continuing. even if we get two rate hikes next year, we are still in
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accommodative territory. we are not even talking about getting into neutral monetary policy territory until sometime in 2023. i think we shouldn't be panicking about either omicron or the effect. juliette: i was going to say how much we should be panicked given what we just heard from rachel and kathleen, and how you try to reassess risk when there are so many unknowns. another variant can be coming next week. >> i would focus on some of the more positive comments rachel made, that we do have antivirals now, the vaccines will probably retain some level of protection, that we are probably not going into economically damaging lockdowns like what we saw in march and april of 2020. also, there is always that put, if things get bad enough, we can count on the fed starting to provide stimulus again. yesterday's trading, markets
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reacted negatively to omicron news and the fed's more hawkish measure. you should be worrying about both, either omicron is a problem slowing down the economy, or the fed becomes more hawkish, but you will not get both at the same time. rishaad: many of the unknown unknowns, we have quite a few walls of worry to climb. is it surprising to you how sanguine market participance seems to be? >> i'm not sure i would say the market participants have been sanguine. they are out in asia. but asia is down a bit since the omicron news came out last week. the response we have had from asia has been fairly appropriate. we've got some new uncertainties. given the unlikelihood of a return to the dark days of march
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2020, i think a mild response is quite appropriate. rishaad: stick around with us. dan feynman will join us. giving us his take on where the smart money is going. let's have a look at what is going on in the first word news with vonnie quin. vonnie: lou hill says his company's economic growth is set to exceed the target of more than 6%. in a speech, he said china's economy has continued to recover , with growth, employment, and prices returned to normal. he promised beijing would create a better -- as well as foreign business. in the u.s., the congressional budget office says the u.s. treasury may run out of cash before the end of december. the treasury is scheduled to transfer $118 billion to the highway trust fund on december 15. the cbo says if the payment goes
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ahead and the federal debt limit remains unchanged, it could empty the coffers. democrats and republicans are still deadlocked on any plans to raise the debt ceiling. citigroup suspended trading in hong kong. earlier, bloomberg reported they are closing a lot of the ip gaming rooms and will no longer pay some staff. the ceo was arrested over the weekend and macau's judiciary police say he confessed to illegal betting activities. cnn suspended chris cuomo indefinitely after documents revealed he had used his position to gather information about sexual harassment accusations against his brother, andrew cuomo, who was new york governor. the information was released by the attorney general. andrew cuomo resigned in august after an investigation found he had sexually harassed multiple women. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.
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i'm vonnie quin, this is bloomberg. juliette: we unpack india's post lockdown expansion and what it can mean for the rba meeting. >>q that is --rishaad: west texas crude sliding into the bear market territory. a focus on these thursday opec-plus talks. we have a preview coming your way. this is bloomberg.
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rishaad: checking into the asian market action. generally speaking, moving to the upside. a couple of anomalies, but perhaps country specific.
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it is jay powell seen as hawkish, causing them to end november on a low note. flattening the treasury yield curve, as well. more dollar volatility. the u.s. tightening its requirements, according to various reports. all people in the u.s. will have to be tested for coronavirus, even if they have indeed been vaccinated. here's a look at what else is going on. oil markets in play. a 4% fall in the last 24 hours. oil on the way up. crude up to .2%. what does it mean for investment strategy? let's get back to dan fineman. where does this all leave you with all of these different moving parts? >> out here in asia, i think the outlook is good for 2022. 2021 was a horrible year.
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but there are some interesting tailwinds appearing for asia. number one, asian markets looking very cheap relative to the u.s. and global equities. you typically see good performance from asia in advance of fed rate hikes. when inflation is rising, it helps asia outperform. asian company earnings do well in an inflationary environment. if oil prices fall, which is something we expect, it would help asia more than other regions, particularly the u.s., since asia is a big importer of oil. i think china will be less of a drag than it was in 2021. i don't see strong positive catalysts, but i think the worst is behind. rishaad: are some of those industry groups that were looking on investable becoming attractive? we look at casinos, a lot more
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can go on with them next year. but is the regulatory overhang receding? >> i think that the endgame for regulation relative to the tech sector is becoming clearer. i can't say we have seen the last of the regulatory push, but we have a good feel for how far things will go. it allows investors to assess the risks. a lot of the risks are in the price for china internet and tech names right now. >> you are overweight banks. >> banks in the region look interesting. asian banks have flagged global banks and american banks this year, but earnings growth next year will be better. banks typically do well in an inflationary environment. they do well when bond yields
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are rising. we think bond yields -- we will see the bond yield curve steepening, which is good for financials. this is a good sector if the global economy continues to recover, which should have been, assuming omicron doesn't derail the process. juliette: omicron is going to be the unknown as we have spoken about. we are seeing asian nations hold a little bit more of a cautious stance toward this. japan is in a market you like. what does a stronger dollar mean for corporate, and what do you expect in 2022? >> certain dollars are always good for japan. it means earnings from overseas operations are translated at a more favorable rate. japanese companies gain competitiveness in a strong dollar environment.
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japan globally looks interesting. the corporate reform is still on track. japanese stocks look quite cheap right now. so japan is one of our favorite developed markets. we would be favoring japan over the u.s. right now. rishaad: what about emerging markets? underperformed and developing ones so far this year. you have done research suggesting we have em or asian markets doing well before the fed starts to move up the cost of borrowing. give us the rationale. >> it is not that there is a cause-and-effect relationship, where higher rates make em stocks go up, or asian stocks go up, both are responding to a common factor, which is strong growth, inflation. both of which are good for asian stocks.
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juliette: thank you for your time, let's hope 2022 is good for all of us. if you are a bloomberg subscriber, catch up with our interviews by using the function tv . join the conversation by sending is to messages to the team and guests during our live shows. i'm sure the producers would love it. this is bloomberg.
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rishaad: we are back. this is "bloomberg markets." easyjet saying this omicron variant has had an impact on short-term demand, but has not yet derailed the recovery. the chief executive telling us city to city are the biggest hit, with beach holiday and domestic markets holding up
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fairly well. >> not to the same level of downside we have seen in previous times, with restrictions being introduced. what will normally have been is they will take a few days, and settle down to a certain level. we wait to see what that will be like. >> very much the effect we are seeing is the very short-term, where people transferring out. particularly where the government has said they will review the situation for their -- further and do the half of next year. most effective is probably the city to city estimations. beach destinations are still holding up. domestics are still holding up. that is very much like the previous trends we have seen. >> very early days, and too early to jump to conclusions, but where omicron does lead to more travel restrictions, more
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lockdowns, how will you get through that in your cash pile? you have already sold most of your fleet, how do you expect to survive another lockdown? >> we are in a relatively much stronger position. we have access to some 4.4 billion pounds around liquidity. the least amount of debt of any major european airline. this is because the funding we have taken. we thought this winter was not going to be straightforward. welfare and underlying recovery, -- while there was underlying recovery, we expected uncertainty. so this year, there will be uncertainty over the winter. it is now an example of what we see. but we also have to have a strong pickup into the summer. juliette: that was the easyjet ceo. there certainly is very strong pent-up demand for travel.
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let's have a look at stocks in the asian region. following the story in macau casinos after we had the sun city ceo arrested and trading suspended. stocks continuing to sink galaxy entertainment, up more than 3%. wynn macau coming under significant pressure. this story seems to not be going away and impacting this risk at a time when you still have border closures and other factors hitting casino players. rishaad: a drag on a day across the borders. let's check in with the markets. a mixed bag. shanghai composite pretty much flat. chinext about .8% low. we do have the chinese vice premier saying the 2021 gdp growth will exceed the target, which was 6%. likely to see a maintenance of what has been going on.
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the stability and sustainability of nalco policies reporting to the vice premier -- macro policies reporting to the
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>> the threat is way higher for inflation has grown. the task has been met now. the word transitory has different meanings to different people. it is probably a good time to retire that word. it is time for the policy to adapt. you will see it adapt. we will use our tools to make sure inflation does not become entranced. -- entrenched.
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perhaps it will happen in a meeting. >> fed chair jerome powell. where in hong kong and singapore. 15 minutes away from the start of the session in mumbai. >> yes. futures are going higher. in asia, some good upside. particularly with japan coming back up, south korea is well. last week it was up with foreign sellers. a lot more of a pickup today. a little weakness in the australian market. let's look at some of the stocks we are watching. we saw some in cities holding in that slow effect is going into be casino players.
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there is an upgrade in stock, the automation company growth prospects are increasing. we're seeing it come through with semi conductors. >> oil prices are rebounding. brent crude is over 2.5% to the upside. that is after the sharp decline we saw with concern surrounding the new variant. it had sunk into their market, there was seven year high in october. the focus is on opec plus in the meeting on thursday.
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what are the different things people are weighing right now? on the one hand, the new coronavirus variant and then we have supply and demand concerns as well. >> looking at a quickly evolving situation [indiscernible] thursday a lot of uncertainty in the oil market for the next two weeks. in the market, you can look for the actual impact. oil this week and energy prices, i am liking some of those. the market is predicting some
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tightness. it has changed completely. right now the market expectations are mixed. >> we heard goldman sachs saying that move last week. the quiddity levels are likely to play in as well. >> we have to. the market is slowing down. we're seeing premium on crude, that is falling.
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the margins are starting to come off bullish in the forecast. these are things it will play in the investors minds. >> thank you for that. sticking with oil. and energy giant, where he thinks the prices are coming next. >> $72 as an average. in the long run, $65 for very long term. >> some lawmakers have raised issues about adjusting, trying to change the pricing policy.
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do you have to cut prices in order to help the inflation? >> the company is independent. the market is more and more open and competitive. 50% of declining capacity in attracting new players. we will have a strong and solid market in brazil. that is how the company has been behaving. we have seen a lot of volatility in prices recently. the market is getting more competitive over time. >> you have done a good job in trying to redo some debt levels. i'm curious where the trade-off is good -- is. you have done a good job reducing debt and not having to further sales. what is the right balance? >> we think it is a continuous
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part of strategy. if we look at the market overall, 15%-20% comes from asset sales. we think that is a very important part in our focusing on friendlier assets. lower levels of carbon. we are focused on the pre-cell in brazil. the largest carbon capture offshore. we do have to have management at the start. it is a part of our strategy. if you look at our business plan, it is very well-balanced. >> are asset sales going to be -- in an election year? >> we think we can have very
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positive, most of them come from upstream assets. we believe we can deliver both sign ins and closings. >> that was petrobras cfo. let's get two more. >> the fda is looking to back covid treatment pills. it helps mild-to-moderate covid in adults. e.u. and u.k. regulators have already given it the green light. it is no telling how well the vaccines will work against the new variant. current vaccines are still likely to shield against the new variant of the disease.
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as the world grapples with the new variant, the cases in the uae have stayed below -- since october. european nations account for 80 of the last disastrous months. it has jumped up 19 spots. fed chair jerome powell says officials should be moving at a faster pace. he also thinks it is time to retire the word transitory. the fed is due to starts next policy meeting on december 14. >> it has been met now.
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inflation has run above 2% long enough. the word transitory has different meanings to different people. i think it is a good time to retire that word and explain more clearly what we mean. global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. >> coming up, india and -- meeting their gdp numbers. we will hear from their chief economic advisor on whether or not that growth can be sustained. this is bloomberg. ♪
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>> a quick check of the latest headlines. deutsche bank co says next year profitability is also one of the issues. there will be a virtual conference holding by the ft, the second most important target is hitting the cost income ratio. the german bank is over two years into a restructuring to
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reduce costs. hp enterprises quarterly profit has mix expectations as chip shortages make it difficult to meet demand for equipment. profit will be 42-$.52 a share compared with the average estimate of $.49. they're trying to persuade customers to pay for add-on services. renault has their plans complicated. the carmaker has been forced in some cases to "send someone to asia to get the chips." he also reiterated the company expects to produce fear cards this -- cards this year due to the shortage. >> looking to navigate the
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latest spike and pandemic era shortages. the first episode of our new series chief future officer, gave us her outlook. >> the digital future is already in place for marriott guests, transfer me everything from the checkout process to the traditional room key. even the technology creates efficiencies, there are areas of rising cost on the horizon. after making deep staff cuts, they need to rebuild their workforce. >> the most painful part was the furloughs and the layoffs we had to do. it was necessary to survive. know the company not only faces competition. >> they are trying to do this when wages in the industry are
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climbing a customer and employee expectations are in the state of flux. >> it is the services they offer to guests. there is tension on how they work through what those guests want and what their placement the market is. with labor cost needs actually are. >> leverage technology to reduce the number of jobs in hotel operation. requires very little high-level skills so they can read allocate -- reallocating. >> we have been able to hire 40,000 people since the beginning of the year. what you see it is in certain hot markets where you can see the shortages.
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overall, it is improving. >> technology may help them meet this as well. they're rolling out a new system that will more precisely match staffing to customer demand. >> this system allows a hotel to assign labor just-in-time. i could work the shifts in a way they gives the associates more availability and the staffing levels more appropriate. i can plan for all of next month, your work shift, you know what it is. there's more flexibility and adaptability. >> "chief future officer" premieres thursday night. let's check in on the markets is
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that resume trade. quite a bit of gains coming through on the open. this is versus an upbeat mood today. taking a look at the travel and hotel stocks. we know that india has been one of the countries in asia that has been tightening their borders. you're seeing some upside coming through in a number of the airlines today. >> we could see some of this benefit coming through because of the 19 -- rankings of the best and worst places to be amid this pandemic.
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the numbers were just staggering of people getting into this awful disease. >> a large part of this as well, we know there has been ramping up of vaccines. because of the spread of the delta variant so rapidly, there is a lot of immunity. in terms of getting to that point, doing a little bit better and to ease some of the research what is easy -- interesting, is that warm up where that country is coming out on top. uae is number one there. as a place that vaccinated their citizens a long time ago. we're looking at booster shots as well. it is an open economy. >> yes. finland, you can even describe as hot this time a year.
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the thing about india, it is also -- a large number of population there has to get there second vaccination job. we are talking about 22% of the total population being vaccinated. out of 1.3 billion people, still a lot more to go. this is a subject we will return to, no doubt. more to come. this is bloomberg. ♪
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>> india's effort to boost consumption to government spending a low interest rates is paying off with the economy gaining just as a new coronavirus variant emerges as the top foot to recovery. >> the july quarter grew from a year ago. we have india's chief economic expires are. -- chief economic advisor. what does this tell us about recovery, sustainability, how much india will grow this year? >> india is likely to grow in double digits this year. we are the fastest growing economy of the major economies. india has had a fourth
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consecutive quarter of positive growth. there has been a positive reception. i expect, not for this year but coming here as well, high-growth. we successfully launched amid the coronavirus pandemic. >> tell us about your reaction from what jay powell from the fed had to say. >> here, india has been an exception because of demand management. if you look at every other economy, they actually have a fringe because the only follow description of increasing demand. india has focused on supplies.
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i do not think that monetary policy would have to be in conflict with the other policy. -- with the fiscal policy. i don't think that is it here in india. >> how much this is new -- does the new variant complicate things? >> that something we have to wait and watch. i have been reading extensively on this. every vaccination that is given should provide immunity. there may be some difference between the delta and this one, but i think the vaccines will provide immunity. we should be covering large sections of the population, giving two doses as well. we have more than 40% of immunity.
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i don't think it should be a lot of concern. >> looking ahead, or we get the budget in february, not the faraway. what do you think is going to become of the key policy measures here? >> one of the key things would be consolidation. this year, and the first half, compared to last year and the pre-pandemic dear, i would look at about 25%. going forward, that will be something that we exercise, that will be continued. it has continued to form over the last fears. >> the scrapping of the firm
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laws, another huge point, what impact do you think this is likely to have? >> good question. i would not let those moves affect the sectors. not only in india, and every democracy, it should be seen to the lens of political economy. one will not apply to another industry. i don't think the reforms there will impacted at all. >> getting back to growth. largely, spending has been responsible. if that spending is removed, where does that leave the economy and where does that leave the fiscal? >> we have not missed the fiscal
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target. we announced it at 9.5% and we got it to 9.2%. this year, we will meet it because the tax revenues are better than we projected. the question must be set aside. india will meet these targets. the fiscal so we have done will continue. >> what about the spending, what happens when the spending starts to proceed -- recede? >> one important distinction here is that, unlike other economies, india's spending has been on board with supply, especially on capital expenditures and assets.
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economists agree clearly that the fiscal market is much higher. it will also last much longer. at least in the next years. >> thank you so much for your time. let's have a quick look at markets. we see the powell pivot, traders reassess what this will mean. it will be a much better day when you look at the gmm today. you can see that rebound coming in likes of south korea, india, singapore as well. it does seem like today is in much of a better situation as we sail rebound in crude as well. >> absolutely. we are looking at the bear market for wti.
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we are also looking at other moving parts. later on, we will have a look at the effect on casino and gaming stocks. we are off for lunch for the next hour here in hong kong. our market coverage does continue. this is bloomberg. ♪
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announcer: from the heart of where innovation, money and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: i am emily chang in san francisco.
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