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tv   Bloomberg Markets Asia  Bloomberg  December 14, 2021 9:00pm-11:00pm EST

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yvonne: there is something also very important happening in the coming hours. we have been talking about china and the last two months, but the fed do to meet with u.s. inflation surging and investors keen to find out just how hawkish jay powell has become. let's bring in kathleen hays with more. kathleen, how much of a jolt you think tuesday's epi prices can give when it comes to the fed policy deliberations? kathleen: it drives home the point that inflation, anyway you look at it, expectations continue to search. and producer prices are wholesale prices. consumer prices are what you pay when you go to the store. the thing is, if the producers
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have to pay more for their input and they have to charge more for their output, that is going to feed into retail prices. that is another thing that which is cash that would suggest that momentum continues to build. that is a nine .9% increase year-over-year in the month of november. it is on top of 8.6% the month before. can you say it is just energy and food prices? maybe not. core ppi is a little less, maybe 8% year-over-year on top of 7% the month before. it seems like it is not just goods prices rising -- we saw a lot of that coming out during the pandemic -- service prices are rising too. if you want to talk inflation in the pipeline, there are crude prices, intermediate prices, and finished good prices. right now, intermediate goods prices were up -- there are probably supply chains with those one time kind of affects, but step back -- does this surge
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have to die down? of course. the question is, surges in cpi and ppi, even if they die down, how high will they stay and in fact -- and affect expectations. this has to give the fed another reason to scratch their heads and wonder what to do. rishaad: kathleen, if they decide and we hear that they are going to be really doubling down on that bond reduction program, the tapir, in other words, the immediate application is that they are going to be hiking rates much sooner. tell me what they say later on. kathleen: first of all, it seems to me that if you had to bet, you would bet it is almost a done deal that they will speed up the taper because jay powell, number one, he said inflation does not look transitory, and he did say yes, seriously, he's ready to seriously consider speeding up the taper. people think that means march
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instead of june by doubling the reduction made it the bond purchases. i think one of the big questions is let's keep an eye on those dots, because every three months they revise their outlook for growth unemployment and inflation, and the dots were divided evenly between at least one rate hike next year and no, let's wait until 2023 -- how much will those dots shift? i bet they are not going to move towards 2023, they are going to move toward 2022. the question is how much do they move, and what does jay powell have to say about that at the press conference? we will see, but that is the potential market mover. yvonne: yeah, is he going to be has hopped up as the markets are right now? thanks. some lines crossing from the natural bureau of statistics in china on the back of this data we have been talking about. they mentioned more about the chip shortage. when it comes to that shortage
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in the supply chain for the auto industry, that has eased a bit, which we have seen and heard from some of the automakers, that we have seen a bit of easing when it comes to the bottlenecks, so that is a good sign whether that adds to the inflation debate is still a key question as well, but when it comes to the data dump, pretty much a miss on all fronts if you exclude industrial production for november. david: it goes back to why inflation has remained sticky or even with supply chain issues. as for the shift in the dots, the markets' mindset has been massage, to an extent that we are already poised to expect doubling in tapering. it is really a shift in the dots early in 2022 and the number of rate hikes to expect. some calls out of goldman, j.p. morgan, bank of america, it is probably going to come in the form of positioning for more rate hikes next year, and in the
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case of j.p. morgan, they say 10 year yields have room to move up. they are about 30 basis points too low versus their fundamental drivers. goldman basically says to expect the pace of taper to double from where the previous guidance was. rishaad: this is quite something. we've got chile, 125 basis points to the upside. we've got a lot more on the way. we've got our special coverage of the federal reserve decision. watch the fed decide at 130 in the afternoon in new york. it is 2:30 a.m. if you are in hong kong and watching like an insomniac. ♪
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yvonne: toyota is planning to invest $35 billion to supercharge its push into ev's. the carmaker is aiming to roll out 30 new ev models by 2030, by which time it hopes to be selling 3.5 million units a year. the new target is a step up from toyota's previous plan which shows it is serious about competing with the lights of -- the likes of tesla and volkswagen. banks are giving bumps to keep their bankers happy. goldman sachs will expand its baking bonus pool by 50%, while jp morgan may hit a 40% increase. happy new year. david: happy new year. rishaad: net protection, a data
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processing company, has tumbled down united moment -- at the moment, falling as much as 20%, and 18% fall at the moment during that day. quickly. david: top and bottom across here, equity markets, evolution money leading the declines. we will tell you why am will tell you more after this break.
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>> we think that china, long-term as a fundamental story, remains intact. >> at the moment, it is clearly in a downturn. >> the conference, kind of a huge deal, suggesting china has pivoted to a more growth
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supported policy mix. >> we have become very volatile in china across the board, across assets. rishaad: giving context on what is going on with china's growth. in light of the numbers we did just get at the top of the hour, really across the board with a couple of exceptions. perhaps we are seeing a slowdown which is a little deeper than expected. yvonne: that is why you are seeing bank of america saying 4% growth next year, but you have jp morgan saying 59.50 when it comes to the csi 300. that target would reach a record. things are turning when it comes to the policy front. jp morgan echoes what we have heard from goldman, talking about how chinese stocks resent the buying opportunity as most of the headwinds are facing the country right now. that is all priced in and
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discounted. this is what they are saying. all the risks around the growth outlook remain due to covid-19 policy and regulatory tightening in china, the markets reflect some of those risks here and continue to be under invested. very similar from what we heard. david: a list of china bulls getting longer by the day. mark, i was supposed to start with the fed, but let's start with china. we had a guest from jp morgan that had a target of 6000 on the csi 500, taking you to levels not seen ever. are you seeing early signs that the market might turn year in that direction? >> i think on a very simplistic basis, if you are a global strategist and you have been watching how developments have gone particularly this year, you have seen u.s. markets in particular were ahead -- roar
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ahead and seeing major chinese indices underperform hugely. if you are making a forecast for 2022, probably one of the easiest forecasts you can make is that chinese stocks will be better than u.s. stocks for next year. the ketchup potential is huge n -- the catch-up potential is huge for china compared to the united states. chinese stocks are cheap compared u.s. stocks. if that is your starting point, building a relative value argument around china is not difficult. if you think of valuations and you look at the state of the economy, the economy, although the bottoming out process still appears to be going on, and that is what the data today tells us, the economy is not in recession. the chinese economy is doing reasonably well by global standards, just not well by its own standards.
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on that basis, you have to think that if china, particularly if they are going to rain back some of the claim downs we saw this year, that is going to be less prevalent this year, and have to think that chinese equities look like relative value compared to the rest of the world. rishaad: fundamentals matter. how quaint. let's have a look at the data itself. what it tells us overall, do we see kind of any light at the end of the tunnel? it seems all doom and gloom. >> in the case of china in particular, i think it is remarkable how well the economy has held up. pretty much they are operating on the domestic economy, which has become pretty large, the second largest in the world. they are still able to export, and the numbers have been excellent this year. their performance, considering
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that they are not having any tourists going in, businesspeople cannot enter china, the performance is actually quite remarkable given all those things, when you compare it to the more open parts of the world like the united states. it shows you there is a lot of resilience within china, even with the headwinds, some of them self-imposed. some of the restrictions they have put in are much more dare county and than other parts of the world. -- much more draconian than other parts of the world. it is a pretty resilient performance given all the factors going on. some of them which they can control themselves. david: -- yvonne: we are counting down to the fed decision. a lot of that is how hawkish a powell is going to be, but you also talked about how covid can impact this divergence we see among central banks. does it sharpen the policy difference?
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where does the boe fit into all of this? >> it probably does sharpen the differences, because it appears that the federal reserve are more concerned about the inflation impact. they seem to be under political pressure as well because it could become a hot topic for the midterm elections in 2022. it sounds as though the fed is ready to get more aggressive and china get ahead of the inflation story, in which case they are going to be relatively hawkish. in contrast, the ecb may well use it as a reason for them to stay super dovish for even longer because it may have a dampening effect on the european economy. it may also be that the bank of england is closer to the ecb. they may be concerned that the u.k. economy is going to be exposed, because viruses are going up quickly there. may a partial lockdown in the u.k. as well, so that may give them a reason to cut back on rate hikes. you might get the fed going one
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direction and the europeans going the opposite direction. yvonne: mark greenfield, mliv analyst on what to expect out of the fed decision later on. you can also follow the story on our markets live blog. get a run down in just one click . there is commentary and analysis from our expert editors, including mark cranfield. rishaad: let's turn to the first word news. looking at british politics, we've got boris johnson suffering his biggest party rebellion since he became the leader. his tories arm opposing the plan for covid passes at certain venues. it is seen as a significant blow to the u.k. leaders authority and comes ahead of a special parliamentary election this week. the ecb projecting inflation will remain below the target in 2023 and 2024.
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sources telling us consumer price hikes will be stronger than productions, 2.2% next year. the new numbers are key for decisions on post-pandemic policy, and they will give christine lagarde ammunition to argue against the swift rising interest rates. india has lost a wto dispute over sugar exports. a panel finding the country offered excessive domestic support and subsidies to the industry. india is the world's largest sugar producer after brazil. india can appeal the ruling within the next 60 days. that is a look at our first word headlines. david: let's have a look at this new story out this morning out of hong kong, suggesting that sinovac does not protect against the omicron variant at all. our managing editor is here with us to tell us more about those results. give us a little more detail on that. that does not seem like good
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news. >> yeah, i mean, this research from the university of hong kong was released late tuesday night. they looked at both the pfizer beyond tech -- pfizer biontech mrna shot and the sinovac shot, both being administered in hong kong. a group of 25 people, a small study, fully vaccinated, so two doses with sinovac's shot. none showed sufficient antibodies in their blood to neutralize the omicron variant. comparably, a separate group of 25 fully vaccinated with pfizer, five did show neutralizing ability against the new variant. yvonne: so it is a small study, but when it comes to what we have been hearing from pfizer on their pill, good news as to how
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it will treat covid. emma: yeah, some interesting news out of two studies from pfizer overnight. it does significant help prevent hospitalization, so severe manifestations of covid, but kind of surprisingly, because a lot of people, particularly in markets, have been betting on these covid pills, sort of saying, you know, the neutralizer of the pandemic, the tamiflu of covid. surprisingly, they were not as effective in neutralizing the milder symptoms that are more common in so-called breakthrough infections, so infections in people who have had two doses at least. yvonne: i was going to ask you about booster shots. there seems to be a lot of data now that suggests booster shots are enough to at least neutralize omicron. why do you think a third shot really does the job? am a --
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emma: the only data we have so far as related to the pfizer biontech shot. other vaccine makers, including sinovac, are still looking into it. for astrazeneca, it suggests yes, it third shot will be beneficial -- a third shot will be beneficial, but yes, just a small amount of information, preliminary information that has come out about this, has been a bit of a rush by countries toward boosters. you have seen australia bring forward its timeline for administering boosters. korea, which is seeing a record wave of cases at the moment despite having an over 80% two-shot vaccination rate, one of the highest in asia, they have steadily reduced the gap between the second dose and the third. the countries are already seeing the writing on the wall when it comes to boosters.
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rishaad: emma, good stuff. coming up, we have private investors saying that the male domination in india is going to change. steps being taken to push forward for more female participation. ♪
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yvonne: one of the most well-known names in indian private equity saying she still struggles to name more than 10 women holding senior positions in her industry. joining us is nupur garg, founder of winpe. she joins us early from new delhi. accu for joining us. first, talk more about how you see the gender gap in india. in particular, how bad is it, and where are the gaps the widest? nupur: thank you for having me. it is a pleasure. i think the gender gap in india is no different from how it is in any other part of the world. it is within 7% to 10%, depending on the researcher, and that is clearly at par with almost every other market except china, which shows slightly
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higher data. i think there are multiple reasons. for example, private equity historically has had an old boys culture. then you carry it forward and take it to the organizational level. the inability to hire females, which creates an effect on younger women who fail to see a lot of role models and females within the industry. they start to get a little bitter. when i look around and i see that there are a number of women
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[indiscernible] and a highly valued unicorn, each of them has raised the bar for the industry. there are only a handful of them to create inspiration for the younger ones. david: david here. we started this out by saying it would be hard for us to find more than 10 women in senior positions. i imagine it is almost the same -- that is a reflation of what has been happening over the last 10 years. are you seeing a lot in the pipeline now that indicate that will not be a problem 10 years from now? nupur: i think so. we have been working with a lot of investing firms, and i see a significant change in the conversation over the last two years. i see heightened awareness of the challenge and an increased willingness to act. it is exciting to see how industry leaders and firms are
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working to devote time and resources to solving the gender imbalance. this commitment is evidenced by the real changes that these firms are making to not only their culture, to their practices and policies, but they are putting in place measurements that are going to be at the foundation of driving these changes. with these concentrated efforts, 10 years down the line, we will be able to hold onto more women and higher more women -- hire more women. rishaad: to that point, we have had so many people on the show talking about india, talking about the fund industry and how it is more and more alive with a buzz word -- more and more was the buzz word. it must also make them realize that you do better if you are essentially esg friendly.
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does it make it easier for women to get the foothold? nupur: esg does not include gender. gender has become almost like a separate conversation. esg consciousness does not necessarily translate into a conversation about diversity and inclusion. but the way i think about it and the way i look about it is, when you are talking to people who are progressive about adopting things that are good on an overall basis, and that progressive set of people are more open to conversations on different topics. you have hedge fund managers and investors who are beginning to understand the value of diversity and how it creates business value. these are people who progressively understand the value when it comes to a better
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performing industry. yvonne: talk to us more about winpe. what are some of the efforts you are embarking on to try to diversify more positions, executive positions as well, and to overall break the status quo? nupur: at the core of winpe, we do work with investing firms. it is quite unlike similar organizations. we work with senior members and leaders and meet on a quarterly basis in a boardroom style conversation. winpe monitors compliance and completion. there is tangible work being done, and these action items go all the way from the measurement of want to track to, how do we
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think about pay gaps, about hiring in a more equitable manner, about assessing balance? i am excited that has become the work we are doing. to complement that, winpe does a lot of work with women in the industry in trying to create networks and build communities, planning a mentorship program. i think what will be exciting for us as we look into the new year is our efforts to work with companies that are -- we have been talking to them about how they can implement it and how to bring more women on the board, etc. rishaad: thank you so much for joining us. winpe investor and founder nupur garg. you can watch all our interviews
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by using the interactive function tv . you can join the chat and sentenced to messages during our live programming as well to our team. check it out.
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rishaad: a british handbag
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designer has won fans around the world with a range of luxury brands and is also becoming known about her stance on sustainability. she spoke with francine lacqua on her drive to be clean. >> i am very scared by this climate situation. when you look at the last summer and look at the flash floods and the fires and the he waves, and imagine that was a monthly situation, i think we all have to change our behavior. i love fashion with purpose. that is interesting. it is hard to imagine anything being luxurious in fashion if it is doing harm. to me, this is my happy place. it is what i am interested in and feel i should do. francine: how is this working with the u.k. supermarkets? you have more of an impact because it reaches so many people. >> what is fascinating to me
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about this project, we are working with supermarkets, talking to every supermarket around the world. i think collaboration is going to be the way to solve a lot of these problems. it is quite hard for all of us, including every supermarket, to think in that way because we are so geared to think of rm businesses and around shareholders. but actually it is the solution, and it is interesting, that site has been almost the most interesting aspect of the project. francine: do you see a big shift in fashion overall? you make profit by selling, so how do you match the two? >> it is really hard to circle to square that. i think it is an important question, because we need to maintain a healthy economy. we know probably the thing that will answer the climate issues the most effectively will be big governments paying off less
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wealthy governments to stop deforestation or whatever it might be. we need to make sure we are buying things in contributing to taxes to pay for those things. and we need to employ people. how do you square that circle? we will need to buy better, buy less, buy better. if you want to buy five t-shirts, by two, but by really good t-shirts. the same thing for bags and any clothing. you can catch the full conversation airing on "leaders with like what -- "leaders with lacqua" in january. outside the chanel stores, people line up because they are preparing for prices to go up when it comes to some of these bags. i guess you can blame inflation for that, but it is a sight to see because people are saying, i should have invested in nation l
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bag more than stocks. rishaad: i have no idea what you are talking about. yvonne: what? rishaad: what are these things you speak of? yvonne: another sign of, maybe inflation, and it is creating that demand. it is interesting what we are seeing. maybe there is an inflation hedge as well. ♪
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>> it is almost 11:00 a.m. in singapore and shanghai. welcome to bloomberg markets: asia. rishaad: welcome back. i am rishaad salamat in hong kong. looking at what is going on market wise.
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a bit of a mixed bag but generally heading down. that dated we had earlier from china one hour ago is not helping matters that much. haslinda: investors pretty much on edge, awaiting the policy decision from the fed. you talk about that data dump out of china, disappointment when it comes to retail sales. also fixed asset investments fell short of excitations and jobless rates rose to %, a --0 t -- rose to 5%. erasing the losses -- the gains we saw before the data came out. pretty much flat. we wanted to take a look at the property index. the hang seng property index currently up .7%. saying no need to sell new shares. it's in a good enough position in terms of its financials. news on smic. we heard from the joe biden administration may be
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considering new restrictions on smic. of course that is the limit access to advanced technology according to people familiar with the matter. rishaad: yeah. let's check in with the open in bangkok. about 45 seconds of trading on the way down at the moment, a move of just .1%. this against the background of the thai baht unchanged. this against the world bank coming out and saying the thai central bank is set to hold key interest rates at a record low through the hold of next year to essentially boost an economic recovery. we talked to the central bank governor the day before yesterday and he intimated monetary policy likely to remain hugely, to -- usually accommodative. down about 10% or thereabouts. looking at the nifty open, a flat start.
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rupee weakening. there we go. a look at what markets are doing. wholesale inflation prices came out of india as well, unct rising to three decade highs. haslinda: speaking of china data dump, the economy slowed further in november, property markets slumped and disruptions from repeated covid outbreaks. retail sales weekend to 3.9%. growth and fixed asset eased to 5.2% the first 11 months of the year. property investment grew 6% in the same period, slower than october's data. home sales plunged. industrial output rose 3.8% from a year earlier. rishaad: just got city bank of india coming out saying they're going to explore sailing -- selling a stake in sbi.
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this just crossing the bloomberg terminal, talking about exploring the stake sale. also possibilities to sell that stake. just an ipo and seeing what they are. the fbi is -- sbi is india's largest bank as well. constraints on in person consumption from covid, and that remains. them saying there is downward pressure in china's property market and that increased. let's find out more. let's get to mark cranfield. you have had a chance to sift through the numbers. what has piqued your interest? mark: i think there's probably slight disappointment, particularly industrial production was not a bit stronger. retail sales obviously is disappointing. even though jobless rates ticked up, overall it is a soft set of data. shows at least from the headline numbers, the chinese economy is
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taking a little bit longer to bottom out. not disastrous by any means. these are not numbers that suggests china is about to go into recession or anything. the economy is still moving along at a reasonable rate. when you consider that the pboc is probably leaning towards a bit more easing of policy, either before the end of the year or early next year, that will probably give a bit more of a boost to the economy as well. they have only just cut the rrr rate, so it will take a while before the effect that filters into the economy. it's also typical in china that the lending is frontloaded in the first quarter of the year. there's probably not going to be that much between now and year end, but we expect in january to see a big increase of credit available to people, so that will make the numbers look better at the beginning of next year. not too bad a situation really, but on the day, a slight disappointment for people who were looking for something
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better. haslinda: mark, as we cast our eyes on the pboc and the fed today, i want to pose the question of the day to you. how will covid-19 and omicron impact federal bank policy? mark: we are going to see quite a divergence there. the federal reserve appears to be much more concerned about inflation. there's political pressure for them to get ahead of the inflation story in the u.s. so we are probably going to see them be more hawkish, pop sibley -- possibly even warning markets interest rates could rise by the middle of next year. that is one dent of the scale. at-- one end of the scale. on the other end, the ebc will probably very concerned rises of cases will damper further and they will be a reason for them to stay very dovish for a lot longer. then you have got china as well, which is probably somewhere in between. this report today that their own
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vaccine, the coronavirus vaccine might not be all that effective against the omicron strain. so, that means that in china itself, they may have to keep these recessions going. so certainly the pboc will be concerned about that as well. rishaad: mark, great stuff, as ever. you can follow more of his musings and others in our markets live blog. you can get a market roundup in one check. there's commentary also from bloomberg's expert editors. haslinda: speaking of experts, let's bring in our next guest for some insight. taimur baig, managing director and chief economist at dbs. good to have you with us. first time in two years. taimur: i feel privileged. haslinda: we heard from mark earlier that china's growth is not too bad, but there is some
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disappointment. retail sales, investment falling short of its rotation. taimur: slowdown in fourth-quarter, that writing has been on the wall for a while. if you look at leading indicators, after looking very strong in the second quarter of this year it has been weakening the last couple months. i feel on the back of china slowdown, because it is not weakening on the back of the u.s., which is very strong. if you look at china's event line, the winter olympics are coming, emission controls are in place. i did not think they had anywhere else to go other than flat or slow down, and that is exactly what is happening. our model shows about 4% growth for this quarter. haslinda: but this is an economy that faces constraints when it comes to its recovery. add to that the pressure from the. -- taimur: they wanted lending to
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be scaled back. they certainly felt comfortable doing all these things in a year when initially growth was very strong. they came out of the pandemic hole with a great deal of strength. the medium-term headwinds they are facing, whether it is domestic from demographics or climate transition, or external from the u.s., those are separate challenges, if you will. i would not conflate those issues with the ongoing slowdown in the economy. that is more of a domestic driven development in my view. but about the various legislative development happening in the u.s., that is a very big headache for china. rishaad: we look at property, we keep on looking at property, it is the big story of 2021. and you can't help but avoid the pressure on credit and stress at the moment being elevated. that's got to hurt, and that can
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of course have a global impact. taimur: that has got to hurt. let's take the domestic part first. the pain is a substantial domestically before we think about the rest of the world, which is considerable. domestically pain is return the point of becoming unsustainable, which is why we are talking about rrr cuts, one more in the offing in the first quarter, and various other easing measures. on the one hand you want to address moral hazard. you don't want poor lending to be rewarded. on the other hand you do not want the entire system to collapse, because china still sits on a substantial amount of growth data coming from the property market. so yes, we're seeing distress in certain parts. yes, credit events are taking place almost on a daily basis. but at the same time he might be at the peak of the storm. but china needs to slow things down and ease substantially. as far as the rest of the world is concerned, the first thing we
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are going to look at is the dollar credit space for the first quarter of 2022. china's borrowers have been the big player in that market. will they get shut out because of the credit risk, or will they get a significant amount of continued access because things are turning easy on china, and as i said earlier, that the peak in the stress has been left behind? that is the big thing to see the first quarter of next year. rishaad: this brings us nicely onto what happens next with china. because is the pboc behind the curve? we had no change in the loan facility and people say perhaps next week we will not see the loan primary change either. if those two don't happen, does it indicate perhaps that they are being a little bit reticent? taimur: it is extraordinary. in the case of the u.s. we talked about behind the curve in terms of not tightening soon enough.
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in the case of china we are talking exactly the opposite, being too late in easing policy. i think they find the external part of the economy fairly strong, notwithstanding the supply chain constraints, and therefore there is some degree of balance in the economy. that they can orchestrate some slowdown, some course correction on the domestic part of the economy, while relying on the external engine to fire and not head towards a sub 4% growth. so from that perspective, where china wants growth to be, where they think investment and lending ought to be, i would not say they are behind the curve but the clock is ticking. haslinda: hang tight. taimur baig is staying with us. for now let's go to the first word news with su keenan in new york. su: we are going to start with the u.s. -- that punishes china for
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alleged oppression of the uighur muslims. he now goes to be senate where it is suspected to pass. the bill would create a list of entities that collaborate with china in the alleged repression of weaker -- of uighur muslims. beijing denies using forced labor in the region. bloomberg has learned meanwhile that the biden administration is considering fresh sanctions on china's biggest chipmaker, smic. sources say the national security council will hold a meeting thursday to discuss the potential changes. the tighter rulesould severely limit the a u firms to supply dear to the company. to the u.k., where prime minister boris johnson has suffered his biggest in party rebellion since becoming a leader. almost 100 tories opposes plan to mandate the use of so-called covid passes at certain venues. johnson was forced to rely on
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opposition votes to get the measure passed. it's a significant blow to the u.k. leader's authority, and it comes ahead of a special parliamentary election this week. 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'm su keenan. this is bloomberg. haslinda: still ahead, fresh off its ipo we spook to -- we speak about the outlook for india's wealth management industry. this is bloomberg. ♪ this is bloomberg. ♪
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>> we expect it will be transitory or temporary.
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these one-time increases in prices are likely to have only transitory effects on inflation. it seems likely these very specific things that are driving up inflation will be temporary. >> inflation has increased notably and will likely remain elevated in the coming months. >> inflation is elevated and will likely remain so in coming months before moderating. >> inflation will decline from today's elevated levels. >> inflation has run well above 2% for long enough. >> we were a transitory has different meanings for different people. it is probably a good time to retire that word and try to explain more clearly what we mean. rishaad: just a look back at what federal reserve chair jerome powell has had to say about inflation through 2021. haslinda: you have to wonder if he is regretting what he said. still with us, chief economist at dbs, taimur baig. we have a saying that transitory inflation was the worst call ever for the fed, but he says
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the fed and jerome powell can make it up by perhaps just stepping on the accelerator, speeding up rate rises and tapering. taimur: for all the talk of the fed being behind the curve, when you look at market base indicators, there is no sign whatsoever that their credibility is at stake. when we look at inflation expectations, they are well behaved. when we look at bond yields, they do not suggest the fed is about to slip up so badly we are going to have years of high inflation. all the bond market is telling us is, yes, in the near term the fed will hike, in the fed is giving that signal. tonight that signal will get stronger, and that is fine. but when you look at the core pc inflation, and let's say 2015 is 100, and from then on they are thinking of 2%. even at the end of 2022, with all of this inflation, the fed will barely be meeting its medium-term target. temporary overshoot should not be seen in the context of the
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fact that we are years of chronic undershooting. of course we do not want the credibility to be challenged and we want the fed to stay on top of the curve, if you will, by tapering, by removing excess accommodation from the market, because we do not want negative real rates to persist for too long because that creates other complications. asset real -- asset reallocation. haslinda: in the end it is about real rates. what assumptions are you making about real rates? when you take a look at how low it is, there is no alternative to equities. taimur: right. i think the fact that we still have long-term interest rates so low, and the equity market yield is still substantially higher than that, that that yield gap, if you will, still favors equity investments. with one caveat, which is the rate of return from the equity market should also be seen in context. it cannot be the extremely strong rate of return begun the past decade. from a valuation perspective,
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the risk reward will be much more modest from equity for the next decade, but that's a given, even there is only so long you can grow so fast. rishaad: just looking at, you mentioned that the short end is looking very closely at where interest rates are likely to be, and betting on high. what is the long and betting on -- long end betting on? perhaps on a deep economic slowdown, possibly? taimur: the long end keeps betting on secular stagnation. if you hike rates too much you are going to create a recession, and all this take -- talk of inflation will be out the door. the long end is not convince we have years of high inflation ahead of us. it is also saying there is a massive demand for long-duration safe assets in the world, and that u.s. government is the only source of very large amounts of liquid safe asset that provides positive yields. and therefore, it is hard to see
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a curve steepening anytime soon. the act of forwarding, or bringing forward the rate hike, the policy tightening, will only create more and more flattening dynamic in the market, and that will be one of our favorite trades. it has been our favorite this year and it will remain so going into 2022. rishaad: again, that ppi number yesterday is only going to feed into the inflationary hawks out there. nearly 10% up. we have not seen these levels for at least a decade. taimur: let's also take that into context. yes, we have high energy prices leading to the ppi, but when you look at a broader range of prices, particularly food grain, when you look at cost of shipping those products, production of chips, all of those things, in my view, the worst is behind us.
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we have seen a lot of supply-side-related disruption beginning last year and persisting through this year, combining with very strong demand. going into 2022 cap cup demand. i do not -- we will see peak demand. china is slowing. at the same time, i see many drivers of supply side crunch being eased. when you look at oil, opec-plus three committing to a higher production quota. when you think about what is happening with shipping rates coming down could a lot of factors have pushed up prices are coming down. so ppi number, worrisome, definitely something to track, but at the same time may be a backward looking indicator instead of a leading indicator. haslinda: policy could still be broadly accommodative despite normalization. taimur: by all means. we are only talking about withdrawing asset purchases, which surely does not make sense
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when the real estate market is doing so well. and when we talk about rate increases, nobody's talking about more than two or three rate hikes next year. we are talking about just about 1%, exceptionally low numbers, very accommodating. haslinda: taimur baig, dbs bank. don't miss our special coverage of the fed's decision on bloomberg surveillance at 1:30 p.m. in new york, 2:30 a.m. on thursday if you are watching in hong kong. keep it here with us. plenty more ahead. this is bloomberg. ♪ this is bloomberg. ♪
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rishaad: i think we can get over to kuala lumpur now. the u.s. secretary of state has arrived in malaysia for a two day visit.
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he's just met with the foreign minister. no doubt just outlined the region and where it fits into u.s. foreign policy. >> -- talk about a new program through which the u.s. operates private sector investments. the world's third-largest producer of solar energy cells, and the cop26 global methane pledge and deforestation pledge. malaysia has shown real leadership on the climate crisis. the u.s. is eager to support these efforts to help grow a clean energy economy in malaysia. and on covid-19, we have donated one million vaccine doses to malaysia, provided another $2 million in covid-related assistance which has gone towards testing supply, ppe, and to communities that are
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suffering. we had a lengthy discussion about not only what we need to do to overcome the current pandemic, but also what we need to do to build back better and have a stronger global health system so that we can better confront future pandemics. malaysia has shown commendable leadership on the covid response. more than 78% of the adult population fully vaccinated. and indeed, malaysia has pledged to to donate excess vaccines, including to bangladesh. sorry. i apologize. thank you. let's see if this works. haslinda: that was u.s. secretary of state antony blinken. he's on the swing through
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southeast asian to mend ties, which were hurt during the trump administration. now let's take a look at where we are in terms of the chinese markets as we head towards the break. the csi 300 index under pressure on the back of that data dump this morning. most of the data disappointing. keep it here with us. this is bloomberg. ♪ is bloomberg. ♪ this is elodia. she's a recording artist. 1 of 10 million people that comcast has connected to affordable internet in the last 10 years. and this is emmanuel, a future recording artist, and one of the millions of students we're connecting throughout the next 10. through projectup, comcast is committing $1 billion so millions more students, past... and present, can continue to get the tools they need to build a future of unlimited possibilities.
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su: 11:29 pm in new york. we start with china's economy. it slowed as property sector crises and covid disruptions took a toll. industrial output was up 3.8% on the year. retail was weaker. economists had in predicting a
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gain of 4.7%. extension in property investment both eased the scale of the challenge facing beijing to stabilize the economy. chinese home prices fall for a third consecutive month in november, adding to an industry slump triggered by debt woes. official data show new home prices and 70 cities declined one third of a percent last month from october when they fell by a similar margin. chinese developers rely on the proceeds for these half of the cash flow. ecb projections show inflation will remain below the 2% target in 2023 and 2024. meanwhile, sources tell us consumer price growth will be stronger than predictions, 2.2% next year.
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the new numbers are key. it will give the ecb president ammunition to argue against a swift increase in interest rates. in a rare move, lng and liquid natural gas prices in europe surged higher than north asia. gas prices are up almost 600% from the start of the year as inventories have remained slow to build. russia has reduced volume over tensions with the nord stream 2 prices -- nord stream 2 pipeline. new data shows the covid pill developed by pfizer is highly effective in keeping patients out of the hospital, but is less able to erase milder symptoms. the results are just the treatment will be used for covid patients at risk for severe disease. meanwhile, a lab just on the j&j shot shows it produces virtually no antibody production against
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the omicron variant. 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 su keenan. this is bloomberg. haslinda: thank you so much. let's do a check on markets. investors are waiting the policy decision from the fed on wednesday, a more hawkish tone could possibly send a deeper selloff in the markets. the nikkei back from lunch, toyota planning to invest to supercharge its ev push. the hang seng is up by two thumbs of 1%, down 1.4% on-demand concerns over omicron. take a look in terms of chipmakers. smic down 1.4%. we are hearing the u.s. is considering new restrictions on
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smic to limit china's access to advanced tech. u.s. agencies are meeting on thursday. speaking of smic, let's bring in debbie wu. what do we know so far? debbie: the u.s. national security council is set to held an agency meeting to discuss whether the u.s. government will impose stricter export control regulations against smic. what's to happen is, the biden administration -- that means u.s. chipmaking suppliers [indiscernible] will face more challenges.
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haslinda: a key question is, what are the potential consequences? some say it makes the chip supply chain even more complicated. debbie: what's going to happen is, it's likely smic chipmaking capabilities will take a hit, and that means china's ambitions to bolster its domestic chipmaking systems will be undermined. at the same time, we are seeing the chip crunch continues to persist, and smic's production takes a hit, that means the chip shortage could persist for a longer time. rishaad: that was debbie wu.
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let's get back to shimao, falling for a fourth straight sessions, bonds are being hit, corporate governance concerns continue to weigh on the company. let's bring in stephen engle. what more do we know? what have we learned about this unwinding of confidence? unwinding would be quite diplomatic. stephen: a company like shimao, regarded as a healthy developer, they were considered widely not necessarily out of the woods, but do not have the same scale of problems we thought of evergrande. lo and behold, we are peeling back the onion. we are starting to see -- you talked about corporate governance. there is the property
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management, separately listed company, is buying a unit for $259 million. jp morgan among others are saying, this is overvalued. it's raising concern about corporate governance, because essentially, other developers appear to be using proceeds from one division to feed into the main property development arm where there is problems, without designating it as such. you have died, and of course questions are raising about the ability to meet its short-term liabilities and paying its bonds. it has a bill due on friday, $4.7 million, but another $314 million bond matures in january. rishaad: you could see the contours, the amount in terms of what they borrowed, then we don't know what is not on that
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balance sheet. who knows where it all lands. stephen: this is the problem when the government uses the term ring sensing. what about the balance sheet liabilities? the opaque liabilities that are commonplace among the developers? it's not just evergrande, it's fantasia and others who have used, we are hearing from sources, even fantasia has acknowledged it is selling private bonds through shell companies. we don't know the liabilities. the one that came to head was jumbo fortune enterprises, which evergrande guaranteed is $250 million bond. all of this -- you are starting to see mountains of debt and liabilities, and the inability, because the cash flow is not coming in. rishaad: the other problem, you
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can't actually borrow more money because the cost of borrowing is so expensive. stephen: it's not allowed. you are seeing the bonds falling to record lows, shares falling for a fourth consecutive day from friday on words, down to a near decade low. rishaad: no doubt. we are certainly watching this. stephen engle. coming up, an exclusive interview. the deputy chief executive plans for expansion in wealth management. this is bloomberg. ♪
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haslinda: looking ahead to stories investors are watching in india, the bank of india tightening regulations. the move will force nonbanks to keep up financial metrics and asset quality starting next october. budget season is fast approaching, the finance minister reportedly begins talks with groups later.
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speaking of ipo. rishaad: let's talk about shares of indian wealth management firm, up 6% on its debut, was up almost 12%, premarket moving to the upside. let's get mon listing, its plans for the future. we are joined by its deputy ceo. thank you for joining us. give us a scoop as to how the ipo went, profile of the people who got it premarket, i think you are quite pleased after this ducted list itself. guest: good morning. we are excited and happy about how things have gone. we have attracted some high-quality, along with investors in the ipo, and across
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markets. especially, the wealth management output in the business model has been well appreciated. we are happy with the listing, 7% on closing date. -- closing day. rishaad: >> next? -- what is next? how do you expand the business, what are you going to use the money for? guest: when it comes to what kind of product, we have gone full circle and realized we are gaining immense momentum, specialized products have not delivered. we are gaining momentum.
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that is what our focus has been, and a significant portion of our revenue comes from mutual funds. that will remain. product innovation in the form of -- that will continue. we keep exploring different product lines to ensure client portfolios have efficiency. haslinda: you are focused on the underserved hideout worth individuals. what is the strategy, what is the growth market like? guest: if you look at the business growth, there are several growth drivers. portfolios grow and that results in the business as a whole. if you look at what lies ahead, you will be disappointed if you
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don't go 20%, 25%. to achieve that, we have been able to put money to be able to achieve high productivity. haslinda: is there a bigger market to tap into given how well the indian stock market has done? are there more millionaires out there, retail investors perhaps? guest: we have to [indiscernible] technology led, largely. those focus on -- there is a subsidiary that focuses on technology platforms, independent financial advisors, to be able to give better advice and execution support their we
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have more than one million customers. rishaad: i know you are committed to educating people about financial markets. you have been trying to get more and more people interested in your product. give us a sense of what the environment is like, what people make of wealth management in india, as a product -- also dovetail into the retail investor craze we have seen in the country, too. guest: two parts of this. the regulator created an initiative of investor education programs from the mutual fund
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fraternity. we are excited about that, because that is what dictates the rational behavior during -- last year, when there was turbulence, behavior was far better than the last crash in 2008. as an industry, indian retail stuck there ground and invested more money. unfortunately last year, the industry lost sizable assets, but our clients are positive due to the fact education was our primary objective, and that is -- for the timeframe it deserves. haslinda: one final question. any plans to offer crypto services? guest: no. we personally feel to has not emerged as an asset us, it is
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significantly more volatile than other asset buses when measured in standard deviation. that is something -- we have a very clear risk matrix which it does not fit into. in the near term, we do not look at crypto. rishaad: if i talk to you in a year, i'm not going to ask you what your share price will be. you are aiming for a 25% increase. tell me where you are going to be. give me your topic sector-wise are other 40 year ahead area -- 40 year ahead. guest: when it comes to one year from now, our numbers have been robust. we are positive. [indiscernible]
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coming to the second part of the question, we believe equity if someone can absorb the volatility will deliver twice more with a high probability. we are very bullish on indian consumption stories. that is what we like to play out in our mutual fund selection, so we get that orson -- portion. haslinda: your stock is down 4/10 of 1%, the ceo. thank you so much. the indian markets are trading for two minutes. pretty flat, in-line line with the rest of the region.
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slight gains for the benchmarks. [indiscernible] currently expanding those losses to a most 12%. rishaad: 30% down since the initial public offering. goldman and jp morgan opening their wallets and efforts to keep bankers happy, but will the bonus boost extend to other lenders or banks? that's just ahead. this is bloomberg. [speaking foreign language] ♪
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haslinda: let's talk about bonuses. bloomberg has learned wall street's top dealmakers are planning bonuses to keep bankers happy after a dealmaking frenzy. let's bring in adam for more details. it's clearly going to be a bumper bonus season, is a reflection of banks trying hard to keep their top talent? adam: let's start with the numbers. we're talking about 50% bonus for goldman, maybe something in the order of 40% at j.p. morgan. this is focused on the investment bank, it's no secret
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investment banking has been through a good period of late, and of course with the pandemic, adding extra volatility. there has been a great backdrop for firms to say, we want to keep you if you are good at your job, we want to keep you. in part, that's what we are seeing. we are seeing a reflection of wall street leaders saying we don't want talent going anywhere, the kind of year, the great resignation. these are the firms saying listen, we will give you significantly more than you had been expecting. clearly, this is not for everyone. these are certain performers in the area. it will be good news for plenty of people at those firms, no doubt. rishaad: give me a sense -- others will look at this.
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will they be perhaps matching these sort of increases? or are they likely to be more constrained? adam: it's tricky, because the competitors are and a similar position. a lot of them are going through a similar period with their investment banking side. they will feel a lot of pressure reading this news that bloomberg reported yesterday. it is a big shift in the industry, getting to the end of the year, you are seeing this in pockets of wall street leaders. if you are not going to get that in other parts of the industry, there will be a lot of pressure on the likes of other competitors to at least get close to matching these. we will have to see how some of the other banks respond. whether the dominoes fall. rishaad: good stuff.
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thank you so much, our finance editor. let's have a quick look at some of these headlines coming out of malaysia. antony blinken is there at the moment, talking about myanmar. suggesting additional steps need to be taken to pressure the military government after the coup earlier this year. we also have this notion of what going on with the imprisonment of anxiety sushi. that is the foreign minister there. antony blinken is next to him. haslinda: quick check of the latest business flash headlines. netflix has slashed prices in india by as much as 60% as it tries to win back market share from amazon and disney. the price has been lowered to
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$2.60 a month, as the streaming giant struggles to gain traction in the country. netflix which has 5 million customers in india trails disney with 46 million subscribers, and amazon crime -- prime with 19 million. the group retail business told bloomberg the sector will be a key focus for the conglomerate. before we go, check on the asian markets. the msci asian index looking pretty flat at this point, we await the policy decision from the fed, of course the sense out there is a more than hawkish tone from the fed could lead to the selloff being deepened. rishaad: indeed, one of the crucial things we are looking at is how we can have more volatility, because volumes are
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about one quarter lighter than they would be normally. perhaps indicating caution ahead. perhaps reducing the scale of asset purchases, increasing the reduction of its combine program, that will lead to questions about what happens next with interest rates. bloomberg daybreak middle east is next. ♪
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>> from the heart of where innovation, money and power collide, and beyond, this is "bloomberg technology," with emily chang. emily: this is "bloomberg technology," coming up in the next hour, the ceo of uber declares it is now an all
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weather company that can handle all of the roadblocks coming its
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