tv Bloomberg Markets Asia Bloomberg February 2, 2022 10:00pm-11:00pm EST
earnings and close concerns field demands. nasdaq seeing future slumping. investors place or policy normalization bets. oil edging is down. after the opec-plus meeting, traders are waiting for signs that producers can meet quotas. >> asian markets under pressure. we have three u.s. tech companies. that took down nasdaq futures by about 2%. that dropped about 20%. the asia index is down. kospi is seeing the biggest increase in 1.5 years, playing catch up after the new year holiday. we are also tracking crude,
currently down. saying they will produce 400,000 barrels. today, watch that space. also getting a watch on the tightening of several banks in focus today, the boe and the ecb. >> absolutely. with take a quick check on what is going on. we have a one-week high, part of a we can dollar story. the dollar advancing at the moment. we are looking at the bart having moved to the upside. we did see a lot of money floating into the bond market. according to the features, there are also a lot of socks to watch out for. jk industries as well.
they're all ahead of q3 earnings. the forget, we also have just of two hours, oil my numbers from india. >> inflation unexpectedly hit a record high. with that and expected rate hike, the bank of england is expected to deliver its rate rise, the first since 2004. let's bring in our contributor. what has been pricing by the markets -- priced in by the markets? >> the markets are certain that the bank of england is going to move. and 99% chance of being priced in. that lines up in a lot of ways with the bond market action that
has been going on. a couple of times over the last few weeks, they have been the ones that have been leading the selloffs. we have some extra interest in central banks moving to tighten the policy. as we know from a little bit of experience over the last few months, we do not want to prejudge the boe. it surprised by a hiking when people thought it would hike and then did not hiker people thought it would. maybe it will fill -- fulfill those expectations. >> closer to this part of the world, where you are, looking at australia's trade numbers, how do they move the dial? garfield: the dial is hard to move at the moment.
money markets are very certain that the rba is behind the inflation curve. yesterday the governor had a speech and then he faced speaker after speaker asking the same question, how much longer can you wait to raise interest rates? it depends on whether you are glass half-full, glass half empty. on one hand, the numbers disappointed a little bit. the overall picture, enormous trade surplus, far greater than we had on an annual basis before. that is one of the things that we had to the zeitgeist. how can you say you need record monetary policy settings? >> good stuff.
it will be all about how the ecb and the bank of england message. let's bring the chief emerging markets asia strategist. how will traders price bank of england, ecb divergence? give us a sense of what directions they may be pulled in. >> first, i think the markets are priced in a lot from the bank of england and the ecb. as you know, there will be a lot of divergence. where in that camp with most people expecting back-to-back hikes. the ecb, we think it will not hike until sometime later next year. the market is already pricing in basis point said it likes. that will be a tough ask for the president that already told us
-- already downplayed inflation and hike expectations. it will be interesting to see how lagarde manages to push back against tightening expectations that others say are ramping up. also, coming off the back of a high inflation reading yesterday, it is going to be a tough job. i think that will be a hard call for ecb to stay on goal with asset purchases that will continue for the next few months. lease now before comes down where is the bank of england, that is an easier story. growth is recovering, omicron is declining, inflation will be sustained higher. the question is how much is priced in? i think we already have over 100 basis point hikes. allies priced in here.
-- a lot is pricing here. >> in this part of the world, you get a big pull and push from the federal reserve, what about the ecb, how does that play out with central bank governors in this part of the world? >> in asia, the reality is that the stance is more in line with a lot of central banks. fairly divergent stances in asia. they're still likely to cut policy rates in the next few month. bank of korea, and singapore, they are more on a tightening stance. who does show you the divergence policy across this region and the markets already pricing in significant rate hikes for the fed.
i do think that asia will not necessarily follow what the fed does this time. >> let's pick up on the fed. more official saying they will go for calibrated moves instead of aggressive, how do you see this playing out going forward? >> that is a good point. there has been a lot of speculation of the 50 basis point hike to kick off the cycle. this week, a of fed officials dampening those expectations. it still exists in the market is still expecting. multiple hikes this year are already priced in. in terms of yield, we do think that treasury yields will continue to push higher by the end of this year. we're not done yet but i think on the front end so much is already priced in.
we are looking for the fed to hike four times this year and four times next year. arguably, all of that is priced in. it is hard to see how much more will be priced in. i do think we are probably not far off of being fully priced and here. >> you take -- you talk about asia banks may not move in tandem with the fed, the question is how long can they stay divergent, the army has to move because it needs to prop up the currency. >> i think the currency has been really stable in recent weeks and months. i think that has been encouraging. normally when you have such an aggressive move, u.s. real yields, and only going negative for asia, quite encouraging that we have not seen the same pressure.
it think the bank of be encouraged. they do not have to rush to hike rates. we did see hike, they are already preempting hikes down the road. i do not think they will be in a big rush. potentially we may see one in the second half, the third quarter. i do not think we will see -- unless the currency comes under more pressure, which i doubt. >> tell me about china. with further lockdowns, dynamic clearing in this covid strategy they have in place, it is about time for slowdown. his china [indiscernible] >> is one of the last in terms
of this zero covid policy. i think really, that has meant lockdowns across a number of cases. it is hurting consumer spending and travel. that is behind some of the data. the at 37 recognized that the growth is weakening perhaps too quickly. we have already seen to loan rate cuts. we expect credit growth to pick up a little bit. i think that will be around 10%. wherever it is aggressive enough to prevent a slowdown is another question. i think the answer to your question, all of these restrictions add to supply chain pressures. it could debt recovery going forward. growth this year is likely to be
much lower than we saw last year. potential he and the 5%-6% region. >> thank you. let's get the first word news. >> opec-plus has agreed to increase next month as planned. the 23 nation cartel will increase production in march despite gary shilling most members are struggling to meet targets. there is a toll taken on middle eastern producers to fulfill supply caps, president biden says his decision to send more troops to europe is consistent with what he discussed with the russian president despite objections. the u.s. is posting extra soldiers to poland and germany and with the pentagon called a temporary move. russia has called it unjustified and destructive and could complicate efforts with ukraine.
the taliban is reopening universities after six months. female students are permitted to return but will be veiled from had to to. classrooms will be segregated by gender in line with strict islamic law. 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. >> a treasurer giving us his take on markets and how they do with india's budget announcement. next, diving into meta-'s disappointing quarters. this is bloomberg. ♪
remember that facebook was reporting no growth. that and the loss due to investment into the metaverse, disappointing sales, it take the sock. -- the stock. -- it tanked the stock. facebook, now being called meda, was down. a managed to pair with the law slightly, but is still in decline. for stock that has risen since 2012 ipo. analyst have been talking about it. this is the first stagnation in the social networks history. a lot of analyst talk about the bigger story for social media here, the deceleration in social media advertising that accompanies the slowing growth.
meda is facing competition for user time, particularly from tiktok. the stalled momentum sends stocks reeling. post-market lows, the 22% drop carries over to the u.s. on thursday morning. trading could raise market value. >> spotify is also forecasting a slowdown in growth, as well as qualcomm. why? is it because tech is being sold off because of what happened with meda -- meta-? >> one of our reporters was also surprised at the selloff. it disappointed efforts on their
efforts to spread out their core business involving phones. that spread was hampered by chip shortages. overall sales and profits easily topped but it fell short on certain categories and that had to do with the chip shortage. in this case, it was sort of a self-inflicted wound. they said qualcomm prioritize sales in china. they did this at the expense of other categories. spotify, another stunning story. they're already in a controversy over their podcast start joe rogan. forecast for total users, they plan to add 12 million users but is still shy of wall street estimates.
they plane down the end to 2021, the biggest quarter yet. business was booming. the real questions about that was pandemic time and the joe rogan question. >> thank you. still to come, opec-plus agrees to boost output next month. there are questions about the ability to fulfill supply pressures. we will look at what that means for the market. this is bloomberg. ♪
>> there is no stock. >> just because they say they will increase 400,000 barrels a day for the next month does not mean that that oil will go on the market. >> we have this issue -- nor stream. >> we are set for a crisis for some time. >> some of our guests on the outlook for crude oil. opec and its allies did what was widely expected. the group is still struggling to deliver its supply pledges. a dip today and prices. what are investors making of it at the moment.
is there a serious dent on the oil rally? >> the short answer is they are getting the markets attention in oil right now. he does not look like it will have a quick solution. [indiscernible] they were coming off a very tight market right now. a lot of that was forecasted last year. it is not coming as expected. not all the producers can meet their targets.
>> as you said, it is a tight market right now. our be expecting the market to balance out soon? >> looking at price levels, the markets are looking out to even balances. the ecb is making an announcement around 10% this year. that will be a key part in rebalancing the markets. there is some competitive that they are estimating that this should help. >> thank you. our asia oil trading reporter. now for a check on the latest business flash headlines.
the latest letter been movie and sales help booster quarter earnings to $4 billion, heating expectations. if chip shortage continues to bite, forcing sony to lower its outlook for playstation sales. the to be she's latest earnings top estimates to be japan's biggest lenders. morgan stanley contributed to the total profit in the past nine months. the profit talk analyst efforts on lift. japan second-biggest earner had a net income of $1.5 billion in the third order profit from stock holdings rose 87%. still to come, the u.s. plans to deploy more soldiers to europe
strengthen its message alongside its diplomatic efforts with russia and the ukraine. the details, ahead. stay with us. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable nationwide network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™
the ceo also acknowledge competition from tiktok for younger audiences. >> people have a lot of choices to spend her time. apps like tiktok are growing very quickly. that is why our focus is important for the long-term. >> senate mitch mcconnell is saying it is time to accept that covid is here to stay. he called for the nation's state of emergency to wind down after nearly two years. he also said he wants unallocated pandemic really funds to be accounted for in question the need for additional relief spending. president trump is revamping his political activity ahead of midterm elections in november. he has announced be a video plans to speak at a conference this year. he appeared at such gatherings last year in orlando and dallas. trump is increasingly making his
attempt for another bid at the white house in 2024. the 57-year-old billionaire gates made the decision last year after her divorce from bill gates. the report says she now spends on spending some of her fortune among various philanthropic endeavors. 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. >> thank you. let's take a look at where markets are. asia is under pressure because of tech. the big u.s. tech companies are disappointing in terms of results. also contributed by sony on the back of chip shortages, a
massive 2%. it is backed from a three-day long holiday on the back of the lunar holiday. gaining the most in about 12 months. not to be outdone. the highest level in 2.5 years. nasdaq futures pointing to up and down by more than 2%. take a look at where we are in terms of meda stocks. it is a mixture. gains for lg, innotek and never never. frankly, in the commodity space, we focus in on the back of that meeting. brent crude is down pretense of 1%. iron ore, no stopping it. it is up by almost 3%. >> what is going on
geopolitically? the u.s. plans to leave -- move more troops to europe. also, an important meeting taking place between vladimir putin and you jinping. no doubt, lots of stuff to talk about. what do you think will be the main focus. -- focus? >> putin just posted a letter saying that they will talk about energy, sanctions. and they will talk about important and relevant issues. he did mention that china and russia are aligned on their foreign policy objectives and essentially they will see i do informally a common position.
china has backed russia publicly. putin is in town for the olympic games were short tomorrow. china would not want an invasion during the games. both countries have signed up for an olympic truth -- truce. it should guarantee peace for the next couple months. >> the key question, is the u.s. having any success curing gas supplies for your -- any success gathering gas supplies for europe? >> they have put in some inquiries. u.s. allies, south korea, japan, the market is very tight right now. there is not a lot of natural gas for them to divert. a lot are tied up in long-term contracts. it is a very complicated endeavor to find enough gas to
substitute for the 40% of supplies that europe relies on russia for. the will still be a challenge if innovation takes place in the u.s. retaliate with sanctions and russia turns off the top. >> thank you. the international fund agreed to resume alone to pakistan on wednesday. this, as a country seeks to [indiscernible] we spoke exclusively with -- about the outlook. >> last year, we had done a lot of consolidation through the program. we also had to face covid. then we thought that it should
be inclusive with growth. we never had to in terms of giving incentives to the industry. also, put a lot of money into agriculture. also housing. all about should amount that we want to have growth of 5%. and then we will move to 6% growth. that is with the canvas was. that is what our objective is. there is a certain headwind. >> do you feel like the target is still intact or do you need to revise it? >> i still think we will be around 5%.
at the beginning, things had increased, tax had gone up by 32%, 35%. the cost of electricity had also gone up. given the fact that last year's growth rate in the economy is around 5%, we could be a bit lower than five. -- 5%, but i am hoping it will be there. it could be 4%. >> 6% is your target? >> definitely.
>> you are back with bloomberg markets as we look at some of the key story's investors are watching out for in india. antitrust regulators. allegedly car activity. -- cartel activity. private pmi readings for january in the next few hours. the earnings season will continue. a lot of high-profile names thursday. nifty features. start to the trading day. >> let's talk about the budget. half a trillion dollars spending
plan for the fiscal year starting april 1 is the nation aims to recover from the third virus wave. let's get some reaction on this budget. joining us now is that access banking executive of the treasury. we saw huge reactions in the bond market. bond investors not liking it given the huge spending plan. how do you see the bond market navigating this plan? couple -- >> the of things. it was a bit high them with the market expectation was. they're expecting something close to 5.8%-6%. that was a surprise. the second thing the market was hoping for is some kind of tax for getting india into the global bond investors. that would help.
that was also missing from the budget. these disappointments, i assume they will go up by 20 more basis. as we move forward, all eyes are on the monetary policy, due to be announced february 9. the issue for how is the government going to finance is going to be for the markets this year. the budget is quite conservative. they could scale as they go to the year. i think that the market needs to have some clarity on how much of this they will be supporting by the bank in the coming fiscal. >> you talk about all eyes on the rba policy, how do you think
it will go through this normalization? >> i think the timing is right for some by. -- four is a bite. [indiscernible] my expectation is in the following policy or the policy after, the central bank [indiscernible] that is the time i think the bank will think about hiking. i expect issues over the next 12 months. there are a hundred basis of tightening. i think the markets will be slightly lower than that. >> how do you prepare for
international bond included in already confident that, these taxes can be solved? >> i am hoping that if that is the main thing coming between us and the larger model lows, the government will find a way of managing the situation and i think it will be found to make sure that does not become the standing block. it would require a domestic market appetite that is limited. the difference between domestic demand and the banks and supply needs to be enhanced. how do we get this inclusion thing going? it has been talked about for some time.
this year, i think the market expects it will come to fruitition. >> of course the repeat becomes more important, was the impact the fed tightening, the other aspect, with oil prices where they are it could put the currency between a rock in a hard -- and a hard place. >> i think the serious risk for india is that the current deficit [indiscernible] the reserves can be used.
it has winding a bit in the last few months. there is a strong influence on equities. i think some are driving recently in the overall balance is still expected as well. [indiscernible] >> india has talked about a possible green bond issuance, what would it take for that to be a success? >> it is expected. domestically, there are a few smaller moderations in the sector but we still do not have a very large pool of capital to bring is chi in that sense.
we still do not know what the size will be but it may kickstart some tired of local bond market. there are some signs that we have. but we still do not have a proper dedicated local currency. >> before we let you go, in terms of foreign demand, what assumptions are you making? >> think it is largely for the global markets. they are fairly strong. we are seeing some reaction to
the fiscal deficit and policy normalization. i do hope that once these are done, we will see a return of interest on the foreign ministers of bond market. that should be another comforting factor. all in all, i do for like once it normalizes, there should be some interest. if we do see bond inclusion, we could foster that space. >> very quickly, by back to the budget itself, was there any surprises in there for you? quickly. >> one negative surprise was the lack of index. the positive surprise and focus on capex. i think that kicks out the cycle lecture as well.
>> inc. you for your time. let's do a check on the markets that have been trading for a few minutes right now under pressure. course we had some bucking the trend down for the first day in four. take a look at some of the movers. there is a potential merger with the cash listed unit. the dent is down. -- vedanta is down. petroleum is also down. gail india is flooded.
olympics. one conceit help major companies are giving it a miss. amid rising cases in china. quite a controversial olympics being held. the winter olympics. >> thousands of athletes, journalists and others at the moment, in the capital already are heading there. we go inside the beijing olympic bubble. >> three suitcases for three weeks in china. i'm headed to beijing for the winter olympics under some very strict covid-19 rules. it does not show up on the
departure board, our special flight. i was warned to bring heavy's -- solid suitcases only because it will spray them down with sanitizer. very few on board. this is the in-flight meal. this is part of covid measures. everything is packaged up. sandwich, crackers, snacks. green smoothie, bottled water. the first thing you see when the plane door opens our workers in full protective suits from had to taupe. we take two tests after we landed. the super deep uncomfortable know san throat swabs. we arrived in these pink -- we
had these pink bags we wrestled with that came on the luggage before away on the bus ride. i had to stay in my room until my test results come back. cases have already been reported among athletes. we have seen impose some of the most harsh border restrictions, millions of people under lockdown for a handful of infections. now i'm heading over to the media center. >> that was our bloom break -- bloomberg correspondent in beijing.
a billionaire may merge his company with vedanta. they are holding talks about the deal. vedanta has been raising after a failed takeover attempt. hdf seesaw profit after the last quarter. the net income was up 11% a year ago. posting its second-highest monthly. fourth quarter profit surge for metlife after losses narrowed. u.s. units adjusted earnings and saw a decrease to $640 million.