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tv   Bloomberg Daybreak Asia  Bloomberg  March 6, 2022 6:00pm-8:00pm EST

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haidi: we are counting down to the major market open. shery: welcome to daybreak asia, asian stocks start with a risk of start to trade. booted assesses the ukraine war will continue -- vladimir putin says the crane or will continue.
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china was the honors on policymakers to counter geopolitical risks -- puts the onus on policymakers to counter to political risks. rent has risen more than 15% this year. with the risk of a russian oil embargo we continue to see the search go higher -- surge go higher. jp morgan pushing to $285 dollars a barrel by the end of the year. they are assessing if an oil man would hurt -- ban would hurt the russian economy. we see the downside pressure on u.s. futures, stocks fell four
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out of five sessions. we have the risk off sentiment setting the dollar higher and bonds higher for the 10 year yield falling. we continue to watch for the treasury volatility, which climbed to the highest in almost 10 years. this is going to just continue to exacerbate the impact on the broader commodities space as we also are watching for those prices that are setting a new highs. haidi: regardless of what you are seeing, metal, oil, there is so much inflationary pressure being compounded by the conflict in ukraine. this is what we see when it comes to the equities trading session. a frenzy, we do see they were in
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ukraine overshadowing the stronger-than-expected jump in the u.s. report on friday. quite a bit of volatility at the start of trading here in sydney. we have seen of the market held up pretty well considering it has only fallen for one of the past seven sessions. a lot of those commodities have done quite well. agl energy is when we are watching and it opened 3% after rejecting the improved second takeover from the brookfield consortium. it is not look like another offer will be forthcoming -- it does not look like another offer will be forthcoming. dominating the trade over the past few days. we had the temple in u.s. stocks and the -- tumble in the u.s. stocks. new zealand up by half a percent. covid cases are over 20,000,
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starting to spread quite seriously across the country. chicago and nikkei futures are looking pretty good as well. shery: our viewers should hit jl cl go. polonium hitting another record high, concerns oversupply given that russia is a top supplier. we are seeing gold prices continue to rally, this is as we have those haven demand moves that are being amplified from last week. gold has seen the biggest weekly gain since 2020 with the war in ukraine boosting haven demand. we also have a strong u.s. job numbers affecting the global monetary picture. you see that is a sea of green when it comes to that function. it is showing you the up side when it comes to copper futures,
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gold futures, palladium as well. not to mention silver prices continue to rally as well. the evacuation efforts in the south really again as fighting resumes in the city of mara pol. u.s. and allies are discussing actions on oil. >> we are talking to our european allies to look in a coordinated way at the prospect of banning russian oil while making sure that there is still an appropriate supply of oil on world markets. haidi: the details from our national security, bill. when it comes on the oil embargo, what are we expecting on this front? >> the biden administration is coming under pressure from both parties to step up and put
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russian oil on the table for sanctions. the administration is reaching out to european allies, there is a lot of work going into how this could possibly affect global prices. whether it would create much more of a spike and the big question is are there suppliers who could come online to help fill some of the gap from russia? to cushion the blow. shery: how is the financial isolation of russia going in terms of debt and what are some of the companies taking action? >> we saw vladimir putin issue a decree saying that holders of russian bonds and foreign currencies can be paid in rubles. that may not be what a lot of the bondholders really want particularly given the decline of the ruble in recent weeks, but it does help russia try to
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find a way around some of the sanctions if they can get the payments out. we have seen every day it feels like several companies adding themselves to the list of firms who are either suspending operations in russia or pulling out. sunday here in the united states we saw a netflix -- saw netflix join the list as will as american express. shery: we continue to see the risk off reaction when it comes to markets at the moment, particularly when it comes u.s. futures. futures falling one .3%, nasdaq falling 1%. when it comes to the commodities story, look at the price of oil, soaring above $135. discussions about potential further sanctions that could hit
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the energy exports of russia. we are seeing new york crude above $125 a barrel. gold is up, we are seeing the futures coming online and there, markedly lower. we continue to just see the inflationary pressure pushing prices in every commodity you can think of higher. a lot of those are at record highs at the moment. nasdaq 100 futures are down by 1%. dow futures are down close to 1%. ending friday lower despite a positive jobs print from the u.s., we are seeing these concerns widening negative impacts of the war in ukraine, dominating sentiment over that
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two data. -- ecodata. about five point 5%, beijing may rely on fiscal and monetary labor to achieve its top priority, economic stability. let us bring in david ingle to talk through all of this. we are talking about economic and social stability and political stability. how are they going to achieve this? >> it is going to be tough. i have covered a lot of these national people's congress and growth targets and the one trend i noticed is that they set the bar fairly low. they like to be or meet expectations -- beat or meet expectations. they were at the top and of what most economists expected and the imf is expecting about 4.8%. the consensus estimate is 4.1%.
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these expectations have been ratcheted down through the downturn we saw in the fourth quarter with housing being exacerbated by the liquidity crutch at those developers. there is not a lot of optimism except if the chinese government really opens up the task and if the old tried and true infrastructure spending and cut interest rates. that is a tough one because look at the price of crude and china is a big importer of crude. also big importer of russian energy as well, there are so many variables out there. to peg about 5.5%, it is the smallest park in three decades. it would be the slowest growth in those three decades except for 2020. they did not have a target that
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year and there was a fallout in growth. they are fairly ambitious about 5.5%, where they are going to get the growth without stoking the debt issues and inflation, this is what the premier said saturday. he said the risks and challenges facing china's development have increased significantly this year. the harder things get, the more confident we must be. china has been preparing for these uncertainties for quite a long time. they want to be immortal sufficient in many areas, food security is a big one. xi jinping told the people over the weekend that china should focus on domestic food markets to ensure food security. haidi: our chief asia
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correspondent there, no way to vonnie. >> a review of the first group of terrorists worth of chinese imports -- on chinese imports. it is likely to bring new goods as inflation runs at a four decade high. the biden administration has given no signal of plans to remove the tariffs. the european union is going for fast action to ensure the safety of ukraine's nuclear power plants. in a letter to the international atomic agency they urged moscow to return full control of the facilities ukraine. it said missile strikes at the largest plant and the takeover are acceptable. -- unacceptable. vladimir putin will allow russian companies to pay for the creditors in rubles. it is a way for the company --
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quarter to stave off defaults. moscow says sanctions are imposed on russia will determine if international investors are able to collect sovereign bonds. the international military fund is warning that they were in ukraine and sanctions on russia will have an severe impact on the global economy. economic consequences are serious given the price shocks on poor households. the imf will discuss ukraine's request for $1.4 billion in aid as they have substantial damage already done to ukraine's economy by the war. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. shery: take a look at how the euro is faring, we see continue to weaken, already fallen against the u.s. dollar. it is falling below parity
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for the first time since 2015. we see the war in ukraine intensify, showing the tensions and hostilities and the division within the european union. the japanese yen continues to follow. -- fall. we will get more insight on where the ecb is going on thursday and it is not surprising that the president will almost guarantee discussions around the euro weakness. the euro also dropping below parity. we will be speaking to japan's first d.c. fund about the policy
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shift the country needs to make. deutsche bank tells us what it thinks china's economic growth target is ambitious and enemies for the country's fiscal policies. this is bloomberg. ♪
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shery: take a look futures, we are saying u.s. futures accelerating losses in the asian session. we have seen a stockmarkets in
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the u.s. under pressure on more risk off sentiments. as russia's invasion of ukraine heads to a two week mark, we continue to see losses. we continue to see treasury volatility as well, last week climbing to the highest in almost two years. we are hearing from the white house that they are assessing an oil ban, to see if it would hurt the economy. look at the commodities space, turned above $128 dollars a barrel. 13%, put together not only energy but also crops and metals, this is as gold continues to move towards the
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$2000 mark, this haven demand continuing to intensify with this uncertainty of geopolitics and palladium at a record high. haidi: let us get some analysis from mark, we are seeing quite a bit of mark of mayhem -- markup mayhem. >> it is already a skittish market as you saw last week. we saw people being very defensive and everything they are seeing over the weekend is adding to the anxiety. the fact that it is being considered that russian oil could be shut out of the market is a curious matter. you can see that in the surge in oil futures. to give an example of how serious they are taking it, oil prices are extremely high, it
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would typically mean the inflationary impact would hurt bonds but people are so concerned about having any kind of safety outlet for their money that they are willing to bite treasuries and gold as well. it is an unusual situation, people are wanting to preserve some of their capital. haidi: we are seeing big moves in the effects space with the euro dropping below parity. >> euro is being used as a broad hedge against a lot of things. people think europe will bear the fallout of the situation in ukraine. the euro has been battered by the dollar, pound, as you mentioned. it has been used as a currency which people can use as a macro hedge against portfolios.
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it becomes extremely difficult because some of the natural things are not working so well and the euro is becoming a cross trade of so many things. the momentum is strong and i would consider the fact that positioning against the euro is not as big as it has been in the past. there is room for it to run, it is a very convenient play. the ecb could be one of the first banks in the world who will tell us that they will be deferring tightening of policy because of the risk they seek to europe. there is no worse in sight for it -- respite in sight for it. shery: let us go to the head of economics at deutsche bank, when it comes to economic fundamentals, how big is the
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inflationary exposure for asia? >> good morning. most asian countries are influenced by oil. they will feel the adverse impact of higher oil bills. the inflationary shock and higher commodity prices are going to be a drag on growth. the key question here is to see how people will respond. are they going to prioritize growth even as they have an elevated uncertainty? will they try to tighten monetary policy? there is no question about the situation being -- haidi: what is the situation in your view? >> if this is going to be temporary, and shock to commodity prices, you should see
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through it and focus on the core inflation and seeing how the economy is going to evolve. there is a high chance of a second round inflationary because they are going to see supply chain issues, higher fertilizer prices and higher food prices, metal, energy. it is quite a price pressure. haidi: will it transfer to china? they have been what insulated when it comes to inflationary pressers. they also have a more ambitious growth target as well. >> inflationary pressures in china are quite contained and i expect them to remain that way for a while. the key reason for this is there are requesting downward pressure on the economy.
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in that respect, i see the five point 5% growth target quite ambitious in china -- 5.5 percent growth target quite ambitious in china. it is supportive of monetary policy and fiscal policy. the troubled sectors needs further support and the target will not be met. haidi: thank you, always good to have your thoughts. we have more to come on china, we look at the ambitious growth market and what it means for fiscal and monetary policy with jp morgan. this is bloomberg. ♪
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>> taking the cut futures trading, nikkei futures down more than a percent after it failed to percent last week. on friday, we are seeing aspect futures unchanged but we see the downside pressure as the commodities rally. more news on the white house, they are assessing the oil ban. haidi: bond traders need to be prepared for more wild swings. the dominance of the fear and caution we are seeing from the russian invasion of ukraine, the
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fighting going into a second week. we are seeing fond of feeders looking like this when it comes to the u.s. 10 years -- bonds looking like this when it comes to
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♪ shery: take a look at the commodities rally continuing in the asian section with wti above $100.5 a barrel. brent also above the hundred 28. at this as we continue to hear from the likes of b12 group sing the oil like it -- will market could tighten.
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jp morgan pointing to 100 $85 a barrel is a possibly by the end of the year as the white house is considering a potential oil ban with its allies on russian imports. gold at the moment continuing to rally towards the $2000 level. this after the biggest weekly gain since 2020. as the war in ukraine continues to boast -- boost havens, concern over russian supply risks. former national secured council director alexander is calling on the u.s. to ban and arts of russian oil. -- van imports of russian oil. he also told bloomberg that sanctions must be strategic. putin is counting on reluctance to levy them. >> the primary thing is to punish the transgressions, these massive transgressions. but also thing about off ramps. the opportunity to de-escalate,
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as russia withdrawals some of these sanctions. so right now, if you were to levy energy at sanctions and block energy trade, that could be one of those things to gets rolled back about when russia withdrawals. but the russians are counting on the fact that there is not an appetite to levy these energy sections, because the economies of western europe and europe are going to be hit by those functions, at least to a certain degree. at least through several months. so, that is where we should be thinking, thinking strategically for ways to end this conflict and ease back on some things, because we do not need massive -- there is already going to be massive instability in russia. but we don't need that kind of instability that precipitates civil war. that is a far-fetched turn out but it could end up being that way we have social economic forecasts and other forecast, people posing war with ukraine. but the ones where russians cannot feed their families or they are not receiving pay for law enforcement forces that have been cracking down protests choose to not do so because they
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are not getting paid anymore. that is when thinking -- things get really hairy, vladimir putin will be cornered and he is increasingly unprintable in that kind of situation. >> you have met volodymyr zelensky a couple of times and as you mentioned, he has put up a fight. we've heard about him in the last week or so. how do you think this ends for him? >> i think he is no longer just the leader of ukraine, he is the leader of the western democratic world or the democratic world. he is rallying democracies around the fundamental values that we all share, which is freedom, independence, self-determination. an early on, i was really quite concerned with the rising authoritarianism and what that means for democracies that are under threat. but within the rally cry of
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volodymyr zelensky and ukrainian people, i am a west concerned about that. i think it door a terrien regimes -- authoritarian regimes are going to be more thoughtful. the fears of china attacking taiwan are significantly diminished, because of how the ukrainians performed and beating back the second most powerful military in the world. that is what the russian army was considered. so that makes it really more challenging for authoritarian regimes to attack democracies. but i think zelensky, he is getting increasingly frustrated. he is under a great deal of pressure. he is not getting the support he needs. his people are dying and you can see that in his tone and his voice. i think as long as some really disastrous event does not occur, he does not get assassinated or killed by a bomb, i think he will go on to lead ukraine into a future that is very, very different than its first 30 plus years. it is a future that is locked
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into our western direction. and with the aid that is coming in, these proposals for $100 billion from the european union, the u.s. has not even come up with a stated amount, but these have significant protections. reestablish ukraine as a hub, a modern country, and something that adds new blood to old europe, that was comfortable where it was and we need that kind of in our western democracies. haidi: director of security alexander speaking with bloombergquint take. the reign of the dollar looks like it's going to continue after we saw this resurgence. it has been a haven asset of choice across the afx, there will be no respite for asian currencies according to our mliv team. building on that recent strength, as we don't see a quick resolution to the war in
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ukraine. the u.s. jump sprinters will really offset the impact of lower trade when it comes to that rise in the dollar. we are seeing a little bit more further upside. we are seeing strength in the aussie dollar, of course, these commodities and currencies are going to get that proxy boost as we continue to see price pressures being fanned to the outside for just about every commodity that you can think of. take a look at the euro. big moves as we saw it dropping below parity with the swiss since the first time since 2018. giant moves when it comes to oil, old as well. dollar handholding study. of course, we have seen -- muted demand out of the yen. the preference has been for the dollar. the bloomberg commodities index adding just over 3% at this point. well, we do have another key political event this week. south korea's presidential election has drawn record numbers, as the nation battles
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the worst wave of covid infections last. this contest shaping up to be the tightest in the countries shaped to democracy at 35 years ago. for more let's bring on our east asian editor john. john, what is the key to winning this election? is it based on the handling of the pandemic question mark john cowan pandemic factor facts into it -- the pendant factors into it but what is going to be the daily cost of living? we have seen parasite the tv series squid games that there is a growing distance and south korea between the haves and have-nots. prices have doubled during the current president, over his five-year term. wages have only gone up slightly. so it is trying to win over the swing voters, who are worried about prices going up, being
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able to afford housing, being able to keep up with wages, and there is this gap between those who are part of a very active economy, those who view that they are not. haidi: this international price pressure coming from the war in ukraine will really not help the situation for the economy, right? so we do have the two main contenders, hong kong, what will they be doing these final days of the race? as we head towards the a russian -- election on wednesday. john: well, they've gone on nationwide campaigns, but right now they are focusing their attention to the seoul, korea area. this is where the droid of south koreans live. this will be key for getting the election -- this is where the majority of south koreans live. there are various areas in the man city, around the city. -- in the main city around the city. trying to get the word out to the places where most of the people live.
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unfortunately, we are seeing a lot of the final days being an exchange of insults, heated rhetoric. it is the kind of thing that has turned off a lot of voters. the early voting hit a record high, but we are not seeing any a lot of places this passionate voting for one of the two candidates. people want to get to the polls, but they are not really enamored with -- many people are not enamored with the two candidates. shery: editor john herskovitz there. coming, japan's cfg venture fund tells us what changes are needed for the start up scene after the nation became the first g-7 country to factor sustainability into its investments. co-founder kathy matsui, known for her research, joins us ahead. this is bloomberg. ♪
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haidi: it is time for japan
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ahead on daybreak asia. japanese markets will open in about 15 minutes time from now. taking a look at traders starting the week -- the week. after a risk of commodities, a jump in oil as well, as well as the repricing that we see across fx as well. we are looking at a future session looking negative at this point. dunbar over 1%. if the yen is holding fairly steady amid heightened demand for the dollar. we will be watching japanese bond yields, because we are expecting, given the moves that we have seen, the big swings in yields over the past few days, and past couple of weeks, there will be further volatility ahead for global bond markets. let's take a look at the top stories we have been following in japan. reporting russia is a challenge to national security strategy revision plan for the end of the year. the current strategy, which was meant to guide japan's purity
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policy for a decade sees russia as a partner. -- security policy for a decade. japan's second largest banking group could face disciplinary steps after four employees were arrested for manipulative stock prices. the company says authorities are investigating other them we use and the firm would open its total probe into trading practices. two japanese giants, sony and honda, teaming up to join the ev race. they plan to start a new company this year with vehicle sales federal to begin in 2025. shery: japan of curis was the first -- japan of course was the first to introduce a requirement for foreign asset holdings late last year. but the war in ukraine has put the movement at a crossroads with certain funds finding themselves providing capital for russia's companies. japan's first csg fund says sustainability is the missing
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piece for many startup looking to grow. our next guest is known for research that shifted government policy on women in work and is credited with coining the term, kathy matsui, general partner. it is good having you with us. thank you for your time. let's just ask you a broad question on where japan is heading when it comes to esg. what changed is the country needed to see the most right now? kathy: thank you for having me. i think to answer your question, the most important missing ingredient perhaps is that esg is not just a compliance exercise, but rather, esg is an important and critical driver for growth. i believe that many companies, many people, still believe that it is an exercise, hence we have seen a greenwashing incidents here and there.
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japan is not an exception to the global -- global trend. the missing ingredient and the reason that we are try to integrate esg in the startups that we are investing in is so that they get these values injected into their dna before they become fully formed adults. and these are basic principles. good governance, employee engagement, worrying about how diverse your management team is, the impact your business is having on the climate, all of these elements, which we think are quite basic, really do need to be at the core of a company's business strategy and that is what we are trying to help integrate here in japan. shery: these are all -- they seem like positive trends when it comes to really and lamenting esg across the country, but we are now facing these questions with whether or not esg is also having some exposure in the invasion of ukraine and some of those russian assets. do you have an understanding at
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this point where japan stands in terms of esg in relation to russia and ukraine? kathy: it is a very timely question and i think that we have already been seeing companies in the automobile sector, in the technology sector, beginning to either halt, and, or pullback some of their presence in russia, for instance. but again, this is a very delicate balance because as you know, for example, russia does account for a certain percentage -- i believe it is around six or 7% of japan's total energy imports. japan is wholly reliant on it for its fuel supplies, its fossil fuel supplies. and so, it always has to walk this delicate balance between geopolitical review the -- considerations and realities. we have seen many, many companies begin to support not only with regard to businesses and operations in russia, but also some very generous going
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drop it charitable support for the country -- philanthropic charitable support for the country and people of ukraine. haidi: we did a story as it lays bare the confusion between sustainability and ethical investing, right? where you sit in terms of esg as just a screening tool to help funds avoid these risks to actual ethical investing? kathy: so, you are absolutely right, it is very confusing. where do you draw the line, these lines becoming more blurred by the day. at the end of the day, to me, there is still a difference in so far as esg is quite a broad framework. it is not just looking at considerations, it is looking at, like i said, what kind of admissions -- emissions. not just in its own company, but what kind of omissions impact is
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this company having in its broader supply chain. a lot of industries, that is where the biggest impact is being felt. so it is not just about is it good or not good to do business with a certain customer or a certain counterparty, but how are you doing business. how is that impacting the environment. on the governance side of things, what kind of decision making structure to you have? how diverse is that decision-making structure? that has significant ramifications of course for risk management practices as well. haidi: your fund launched last year. i'm wondering since then, a pusm the government in terms of green funding? in terms of gender oriented funding? and have you seen the investments, what opportunities are you looking at? kathy: indeed, the government has reiterated the thrust of the previous regime, which was japan
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really has two big pockets of focus when it comes to economic policy. number one is green investments and the administration has committed to doubling the amount of investments in so-called green technologies. they also made a speech earlier this year, basically stating that japan will actually back a carbon pricing system. which i think has been controversial subject of discussion in this country for quite some time, so that was very encouraging to see rid but i think we need more than just pronouncements. we need real money backing innovative startups and innovative companies in this space. like i said earlier, japan is very dependent on imported fossil fuels, but it has this very ambitious target at the same time to reach carbon neutrality by 2050. in my personal view, you will not be able to get there if you do not invest in innovative technologies. some of those technologies may come from outside japan, not
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just inside japan. on your other question on diversity, there has been some talk about women then diversity in the government, but personally speaking, i think they could do more. i think there is more about focus on women in terms of income distribution angle, as opposed to let's get women more fully engaged in society, more fully represented in positions of leadership and decision-making. and that being a positive engine for growth. haidi: what do you make of this new capitalism? is it a framework to look at the economic and social challenges of japan's time now than throughout? kathy: i think that his framework is reflective of the challenges that japan's society is facing, namely that growth has been present, but growth has not been of course evenly distributed. so he is trying to address on the one hand in equities within
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society. but frankly speaking, it is hard to redistribute income if you don't have much income to begin with. so the first thing is how to drive growth and innovation. and living in the venture and startup ecosystem, my partners and i truly believe there are brilliant founders in this country. there's not enough infrastructure to support them. not enough growth, none of risk capital, but we think if the government and private sector can work together and collaborate to drive more innovative growth startups, that that could really drive the income growth that the government needs to redistribute more broadly to overall society. haidi: always such a pleasure and great to have you back with us on bloomberg tv. kathy matsui, and power general partner. you can get more on this interview on tv , that is available to all bloomberg subscribers. tune in every week and you'll be
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hearing from the leading names in japanese business. that is mondays at eight: 40 a.m. tokyo time on bloomberg television. plenty more ahead. this is bloomberg. ♪
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haidi: a quick check of the latest business headlines. netflix is shutting down
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operations in russia, becoming one of the largest companies to exit the marketing following the attack on ukraine. it says no new customers will be able to sign up, but it is unclear what will happen with existing accounts. the streaming service with more than one billion customers in russia has been operating through a joint venture with national media group. tiktok is suspending livestreaming in russia after the country's so-called fake news in a series of tweets, they announced the service will be halted into it reviews safety applications of the new rules. however, inapt messaging will remain unaffected. russia has been slowing down social media services including twitter and youtube to make them harder to use. suspended out -- samsung is suspending operations in russia. apple and microsoft took similar steps after vladimir putin's ukrainian envision. samsung accounts for around 30% of the smartphone market and has a larger share than apple. shery: and these are the stocks
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that will be watching when trade opens in korea and japan. we of course are watching those oil stocks, very in focus as discussions are on the way regarding a possible embargo on russian oil. the white house now saying that they are assessing if an oil band would actually hurt the russian economy. we are also watching sony and honda planning to start a new company together this year to develop electric vehicles. this of course coming at a time when we continue to see that surge in commodities prices. rent reaching its highest level since 2008, surging above 120 nine dollars. in fact, very close to a hundred and ready right now as wti is also at around the $127 a barrel. after it already posted its biggest weekly gain on record. gold also approaching $2000. this as we continue to see haven demand in palladium also. haidi: yeah, we are releasing
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this risk off aversion as we see the stakes of the geopolitical front delete rising. vladimir putin sang the war on ukraine will continue and a lot of concerns that the worst is yet to come for the army and civilians in ukraine. we are taking a look at u.s. futures, of course dropping as crude surges with this talk about a potential embargo on russia's energy supplies. the s&p and nasdaq falling more than 1%. ozzie shares dipping looking ahead to the start of trading and seal in tokyo next. --seoul and tokyo. ♪
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shery: welcome to bloomberg asia. from bloomberg's headquarters in new york, i am shery ahn. haidi: and i am haidi. ages markets have opened for trade. our top stories is our our oil soaring in a dramatic start to a dramatic trading week.
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after white house discussions for russia imports bands with allies. the embargo talks set the stage, demand feeding into the dollar in a -- softened debt rally. ambitious growth target that puts policy makers to target geopolitical risks and property slowdown. shery: korean assets under pressure at the open. nikkei falling more than a percent. the sectors are under pressure, real estate and discretionary while the japanese yen is holding 114 level under a little bit of usher against a surging u.s. dollar which is now the highest since may of 2020. -- under a bit of pressure. we are seeing jgb's rallying following treasuries higher with a 10 year yield on jgb is at .14 3%. take a look at the kospi as well because we are seeing losses for a second consecutive session of more than one half percent, both
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for the kospi and the tech heavy because dad. we are seeing the korean juan also extending declines for a while. that would be the lowest in about two years. against the u.s. dollar, of course, we sought the korean leading those emerging asian currencies, given tensions and intensifying war in ukraine and that risk off sentiment early spreading across the board. we continue to watch those commodities prices, because that is really one of the only sectors across major benchmarks that is gaining ground. haidi: yeah, we are watching the dollar as well, when it comes to trading here against the asian fx. we had one gauge of the dollar index trading at the highest since july 2020 on friday. it does seem like the dollar is going to build on that recent strength, as long as we see a lack of resolution to the war in your name. this is what we are seeing when
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it comes to the equities picture. city up by 1/10 of 1%. this despite big gains in commodities and energy, that 10 year yield is holding steady at the moment, but on to traders regionally and globally really in for yet more volatility, given the big swings we have seen in yields, treasuries and otherwise over the past couple of weeks when it comes to the futures picture, we are seeing s&p futures down, as well as nasdaq futures trading down by over 1%. in fact, s&p futures are extending those losses now. and of course, it is really down to the big names that we see in crude as well. your crude trading up by just over $126 a barrel, we are also seeing gold catching a bit as well. let's get more on what to expect us trading gets underway here in asia. we are joined by strategist mark cranfield now in singapore. a huge amount of volatility. does it seem like investors are really waking up to this idea that the possibilities,
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uncertainties and it comes to the war in ukraine are widening as opposed to narrowing? mark: yes, indeed, and taking it to the point where i think investors are beginning to seriously think about the risk of a global recession coming earlier than they it may have thought just a few weeks ago. so what you are seeing -- things are very unusual. obviously, you got oil prices being extremely high, which is usually bad for bond markets. and you're seeing, as you mentioned, treasuries, jgb's, all of the bond markets doing extremely well. a lot of flattening of the curves as well. we see especially in the treasury market, things of the 10 year spread driving toward parity. that is when people are starting to go farther afield and say even if the fed seems stronger in the near term, they are ready to raise interest rates. the risk of a global refresh and -- recession because of oval price -- oil prices means that
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we have to start preparing for seeing a real flattening of the curve as we are getting out the last few days. it will be hard to reverse that until we see more clarity on the possibility of a resolution in ukraine. and that does not appear to be on the horizon just yet. shery: we are now seeing the dollar yuan rising above 12 for the first time since 2020. you called it a barometer for asian fx. what are its applications? mark: it is one of the currency pairs in the region. it will outperform of the dollar is strong or underperforming if the dollar is weaker. right now, when people are using the dollar is a major haven, and of course, the euro, the flipside of that, you have a week euro which means more people get pushed into the u.s. dollar. so traders will go for the momentum plays, where there is liquidity.
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it shown in the pastor can absorb large amount of money, so it's going to be a place for a couple of weeks. people are looking for the weak spots. anything where they see the least resistance and korean would be one of those no doubt. the korean authorities will try to use some things to try to soften it, but there are very large market moves here. we are seeing some things, the australian dollar is gaining against the grain of the u.s. dollar. because australia's increase in agricultural pricing. mostly, it is about dollar strength. shery: mark cranfield joining us from singapore. for more perspective, let's bring in sean darby, chief global equities strategist. sean, always good having you with us. as we speak we are seeing the 10 year yield on treasuries falling to the lowest since january 5. below that 1.7% level, what are the implications of u.s.
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treasury yields and be volatile moves that we are seeing in the yield curve or equities? sean: you've got a pretty terrible policy makes now and the bond markets are probably discounting the fed is going to make a policy mistake by tightening into a slow down and that the global economy will probably still see some latent in elation. so that is stagflation or he environment, -- stagflation environment is being mapped out by the yield curve as we speak. credit spreads have also been widening over the last couple of and with a strong dollar, this is giving a very bad backdrop for risk assets. so the reality is you got slowing growth, you know, sticky inflation and a policy tightening, which is pretty uncomfortable for equity markets and risk assets over all. shery: especially given that of course, broadly, it could hurt consumer sentiment. and we know that consumption has
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been one of the pillars of their recovery. so where do you go in order to really hedge for all of this? sean: unfortunately the number of asset classes that tend to do well as you got a flattening yield curve and potentially one that is signaling a recession is actually very limited rated in particular, this cycle is still against this inflation backdrop. outside of the conventional assets like gold and to some extent commodities, unfortunately, you're being pushed into boring parts of the equity market, which include utilities, consumer staples and really at some sort of big tech franchises which are semi-oligarchies. it's not a nice backdrop and i think we are going to see a big slew of economic downgrades globally now and that in itself is going to reinforce a big cut in earnings numbers as well. haidi: does that really pull forward not just fears of a --
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earlier than expected next recession, but also really comes gets the picture for what policymakers can do? -- really complicates the picture. sean: what the bond market is saying is that you should be thinking about raising rates of the moment. this paradox is i think highly unusual. i think for equity investors and most people in the market, this scenario is not one that they have ever seen before. coming off a. where you have one of the strongest ever recoveries in global growth after a recession. only to find yourself looking back at the abyss of another recession sometime in 2023. so the reality is that, unfortunately, central bank seven caught in the headlights between and idiosyncratic risk in the ukraine and one in which they recognize that inflation pressures grew far, far more quicker than they had anticipated when they set out to tighten policy. haidi: china, there is a cohort
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of investors that have been treating chinese investors as being able to find value, but also almost as a hedge or i guess as a haven even against everything else that is going on outside of china. is that a fair play? sean: i think parts of the china asset markets have actually performed pretty well, given the backdrop that we have seen. and also in the sort of next 12 months, chinese government bonds have held very well. to the currency has been quite resilient. in fact, it is now regarded as a safe haven currency. the difficulty for equity investors is the absence of growth and is certainly as you alluded to earlier in your program, the ambitious five and a half percent does not sit very comfortably with a lot of the forward-looking indicators in china at the moment. and given the fact that the economy is unlikely to open up this year, given the surrounding
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concerns over covid and of course, the unchanged fiscal deficits, it is very hard to square where china is going to surprise on the upside in growth. so for equity investors, the good news is that the reach four yield theme will continue to run through most of 2022. there is plenty of companies preferring good at dividend cover. but the absence of growth, potential growth surprise, is going to mean that at best, the equity market traits sideways. maybe relatively better than some of its peers, purely because it has already as i said got some degree of resilience. haidi: is that the broader picture for other asian economies as well? is a politically sensitive year for china but also south korea. they have presidential elections at a time when you continue to see rising prices and inflation. much higher than what the be ok would want. so more tightening on the way there too? sean: that's true. i think one thing about the bank of korea is that it is at the
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front of the pack, so to some extent, the criticisms leveled at the central bank last year in tightening perhaps too early have actually played out now in one in which they have sort of got some distance towards the neutral rate. the difficulty for korea is that it is very sensitive to energy prices and particularly food isis as well, which is not necessarily discounted. -- food prices as well which is not necessarily discounted. the balance of payments is strong and the economy has been relatively resilient given the very competitive level of the exchange rate. so by and large because china's strength -- currency strengthen, countries like korea and taiwan have tended to do better because of that competitive edge being restored. so there is some insurance policy for korea, if indeed they continue to tighten as they will need to to stem the asset bubble and change some of the inflation pressures.
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but by no means as bad as some of the other countries that we saw last year and this year which is been notable in places like brazil. haidi: sean darby, always good to have you with us. chief equity strategist there. asian stocks in focus, discussions underway. we are valuing a possible embargo on russian oil. sony and honda planning to start a new company together to develop electric vehicles. and all of this is of course just some of the names that we are watching. we are seeing some big upside when it comes to those petroleum exports given the jump in crude prices. let's get you to vonnie quinn with the first word headlines now. vonnie: thank you. the european union is calling for a fast action to ensure the safety of ukraine's nuclear power plants, two of which have been seized by invading russian forces. in a letter to the international atomic energy agency, the eu energy commission urged moscow to return to full control of the facilities to ukraine. it said missile strikes at europe's largest plant and its takeover are unacceptable.
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the international monetary fund is warning that the war in ukraine by russia and it sanctions on russia will have a severe impact on of the global economy. the fund that says economic consequences are already serious given the impact of price shocks, especially on poor households. the inf will discuss ukraine's request for $1.4 billion in aid as early as this week. substantial damage results ukraine's economy by the word. a decrease on by president vladimir putin will allow russia and companies to pay for and companies to pay foreign creditors in rubles. it is a way for the governor to dust government to stave off default. meanwhile, moscow's finance ministry says sanctions imposed will determine if international investors are able to collect bonds denoted in foreign currencies. south korea is seeing record early voter turnout, even as the country battles its worst outbreak of covid infections yet.
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more than 16 million people, almost 30% in that is -- 37% of the total electorate have cast their ballot. that is 11 percentage points higher than the last election. it is shaping up to be the tightest presidential contest since the country's advent to democracy about 35 years ago. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, j.p. morgan says china's five-and-a-half percent growth target would require more accommodative acro policies. we will get you more on that with the chief china economist. coming up next, the u.s. and allies are mulling and am far go. all these details just ahead. this is bloomberg.
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♪ shery: taking a look at futures in europe opening right now, this after we had european stocks closing their biggest weekly slump since the start of the pandemic. investors asset risk, assets as the invasion of ukraine continues by russia. haidi: yeah. russian president vladimir putin thing that the war on ukraine will continue until kyiv except his demands and halts its resistance. in a phone call with the turkish president on sunday, vladimir putin stressed that his so called special military operation is going to plan. that is according to a statement from the kremlin. all of that in ukraine, the eastern port city fell to the second attempt to evacuate some two hundred thousand civilians. the united nations says more than one half million people have fled the country meanwhile,
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the u.s. and allies could be set to take more action against russia. after secretary of state antony blinken met with ukraine's foreign minister on the border with poland. >> we are now talking to our european partners and allies to look in a coordinated way at the prospect of banning the import of russian oil. while making sure that there is an appropriate supply of oil on world markets. that is an active discussion as we speak. haidi: let's get the latest. national security expert bill. how likely is it that we will see a go ahead? bill: there is a lot of pressure growing domestically on the biden administrations from republicans and democrats to cut the russian oil imports. i think the u.s. wants to do that in a unified way with european allies. at the same time, they are really pressing ever other producer they can to find out if there is additional output that
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they can put on the market. we have seen libya cutting back recently because of some issues there, but you have the potential for some sort of deal with iran that would bring more supply. in the meantime, we are seeing a big spike in prices as it looks like there is momentum toward a ban, but not clear if there is anyway to make up for that oil in the market. david: vladimir putin shery: -- shery: vladimir putin try to avoid default by allowing creditors to be paid in rubles. what we know? bill: that is something that we should find out over the weekend. the russian president says use in foreign currencies can be played -- paid in rubles. it's not clear if that's anything investors would like at this point. and whether those payments can still be processed is still a little bit unclear. so, russia is trying to find a workaround to some of these sanctions and the penalties they are facing, but it is not clear
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if this is the kind of thing that is going to help them out very much. shery: our national security editor bill faries in washington. we will have more on russian bonds in just a few moments, but first china's ambitious growth target this year of five-and-a-half percent signals beijing may have to rely on many the school and monetary levers to achieve its top priority, economic stability. let's bring in our chief north asian correspondent stephen engle with more of this. stephen, what is this growth target tell us? stephen: it tells us that they are fairly optimistic in the face of a lot of different challenges, because usually, they will set the bar fairly low and then exceed or at least it by -- hitting this stated target of about five-and-a-half percent, which is at the upper end of most economists range, expected. the consensus is five point 1%. the imf says even lower, 4.8% for this year. but there are a number of challenges. obviously exacerbated as well by
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the or in ukraine, china is the world's biggest importer of oil, gas and coal, so there is going to be some inflationary pressures in the chinese market at a time when economists are saying to meet that economic goal, in addition to, you know, softening the regulation on tech and on the properties sector, they might have to as well cut interest rates, as well as boost infrastructure spending. that is the old way they do it. it sent marching orders to the provinces to create x amount of growth and how to do that, well, put more shovels in the grounded build roads, bridges and the like. so they have a number of levers they are going to increase fiscal spending. let's see what the number is. it is going to climb it .4% in 2022, including a 7% rise by the way in defense spending. but they are also in the work report saying beijing will continue to curtail overall debt levels. but again, domestically,
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external situation is always a wildcard for china and they are going to have to deal with ukraine and the impact on commodities markets obviously and energy needs. domestically, because of ukraine and because of them being importer of soybeans and other commodities, xi jinping told them at the bcc that china should focus on domestic food markets to ensure food security. housing, there also need to be -- they are going to set up financial stability fund and adapt policies to keep housing prices stable. that is going to be challenging. marge has the biggest monthly bill tesh --march has the biggest bill for developers. 3.7 billion dollars in bills coming due for already stressed with what crunch developers. so we have to watch that space. it is still a very big pillar of the chinese economy. finally, on tech, no specifics and no indication that the
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crackdown on technology is going to abate. but essentially, they say we will promote the development of venture capital in china this year. new financial products to securities will be developed to support research and development. haidi: chief north asian correspondent stephen engle there as we continue to get lines out of the national people's congress, we have lots more to come on daybreak: asia. this is bloomberg. ♪
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haidi: a quick check of the latest business flash headlines. visa and mastercard are suspending operations in russia following the invasion of ukraine. the decision comes out after ukrainian president zelinski called on them to halt all business in russia. each company gets about 4% of
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net revenue from businesses linked to russia. visa and mastercard suspensions of businesses in russia are prompting local banks to look for alternative payment systems. this bank says it is looking at issuing cards using russia does union pay while alphabetic is offering union pay cards. the russian central bank has advised citizens abroad to use cash. samsung is suspending shipments to russia including smartphones and chips. detect giant follows the likes of apple and microsoft to took similar steps after the ukrainian invasion. samsung account for 30% of russia's smart on market and has a larger share there then apple. shery: take a look at the equity space across asia. because we continue to see the downside pressure, the nikkei dropping more than 2%. continuing its downside drop from the last week, given the uncertainty over the invasion of ukraine. this as the energy sector is the
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only sector in most benchmarks gaining ground given that oil continues to round the oasis picture and widening petroleum closer to a deal to merge. this is according to people
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vonnie: this is daybreak: asia. i'm vonnie quinn with the first word headlines. united states discussing of possible ban on russian oil in orts with european allies as the biden administration faces pressure from congress to impose an embargo. antony blinken has discussed the matter with the president and the rise will have to be insured
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if a band were to be imposed. the white house is wary of pushing up energy prices for americans. china has set a growth target of five-and-a-half percent for 2022, signaling that -- primarily, he opened the national people's congress to take bold steps to protect the economy has risks mount. policymakers are trying to ensure growth is fast enough to create jobs and maintain social stability while avoiding over stimulating the economy. president xi jinping addressed the chinese people, saying they cannot rely on markets to ensure food security. china should focus on domestic food markets while ensuring it has progress level of capacity. also address the need for farmland protection and technology lead element of the seed industry. the u.s. is set to begin a review of the first group of terrorists -- chinese imports. it is needed to provide a new
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scrutiny of their effectiveness as inflation runs a foredeck at high. the biden administration is given no signal for man's to remove the tariffs, saying that china's has fallen short of its greatest minutes. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries.i'm vonnie quinn. this is bloomberg. shery? shery: let's take a look at the markets of the moment. of course, we see this risk off session and huge gains across energy and the commodities complex as well as haven demand across havens like gold. take a look at crude, settling down but still holding above $125 a barrel as these discussions and speculation over russian energy assets to be targeted as its next level of sanctions. of course, we know that the stakes in this war are rising. vladimir putin saying that his
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war on ukraine will continue as western allies try to work out what the next steps would be. gold futures also catching a bit today. we are seeing continued demand for the dollar. the bluebird dollar index, adding another quarter of 1%, of course a gauge of dollar strength. -- the bloomberg dollar index adding another quarter of 1%. we continue to see the u.s. dollar as being the favored currency it safe haven of choice there. the u.s. 10 year yield big much today as we continue to expect to see that more bond yield volatility across the global sovereign bonds. shery: as you mentioned, wti continuing to soar. u.s. secretary of state antony blinken has said that the biden administration and allies are discussing an embargo of russian oil, a move that would threaten to make an already heated oil market even more volatile. let's bring in bloomberg's market reporter. we have seen jp morgan calling $185 a barrel oil by the end of
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the year. where are we in crisis? and what is the outlook your? sharon: that's right, the supply concern is getting real. and crude went up as much as 18% and now it is up more. so the u.s. secretary of state and the biden administration and allies are looking at an embargo on russian oil. russia is the second largest commodity producer in the world. they are really big oil producer, so it can take away millions of barrels a day from the global market. note that russian oil actually accounts for about 8% of global supply. so that is a massive chunk we are currently seeing jp morgan saying that russian oil is struggling to find buyers. on russian oil at the moment, investors are really afraid of
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russian crude. massive resistance when it comes to buying russian oil even now. asia's head said that it could tighten even more if the russian oil destruction and futures have a massive difficulty. if they continue, it is various supply issues. we need to note that over the weekend, on friday, we heard that the world's largest oil company, shell, purchased a cargo of russia's crude at a discount. so what people are looking for, they will continue to report alternatives, but i think there's going to be a little bit of people trying to use russian oil. haidi: we've seen opec really
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resisting any urge to move more than what it is planning to. what sort of upside would see that change? sharon: that's right. opec-plus did not take real action at the meeting last week. we do have the thinking that some relief oil coming in the days coming. that's only 60 million barrels, so that is not enough for the global markets. what we see as a market possibility is it might be coming back to the market. it is waiting for u.s. sanctions relief according to nuclear investigation. a new deal may help push iranian oil into the market, which has been out since 2015 or so. so if that does come, investors do think it will be about a
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million barrels a day. in terms of the market, maybe by the third quarter of this year. there's been a lot of progress in international atomic energy. director said three months will be a very reasonable range and they will work with them. haidi: bloomberg's oil market reporter sharon show there with the latest. we are seeing just that floor being taken up from the futures section the come see u.s. equities. future session at the moment, nasdaq 100 futures now following by an extended 2% there. dow futures are down by over 1%, s&p futures pretty much at session lows there done by one and a half percent, as we continue to see risk appetite capitulate a soaring oil --
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continues to wreak havoc when it comes to not just appetite, but concerns over the economic recovery and what policymakers, what central banks could potentially do as well. so we will continue to watch how surging oil prices will affect assets, but certainly, it does look like the cash trading session in asia as well is u.s. futures that it is headed very negative impact on these concerns over faster inflation and potentially these rising costs will act as a tax for the consumer and thus really curb growth. president vladimir putin has signed a decree to allow russia and russian companies to pay for and in rubles. it is a way for the government to stave off default, while capital controls remain in place. we have our marketer executive editor paul thompson. does this plan work? and will it work? paul: this seems like a workaround that is being dreamed up as a way for russia to serve
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its foreign currency debts as well as domestic debts in rubles rather than other currencies. so, if you are a russian domestic investor, you can receive the payment as normal trade and it sounds like if you are an investor from a country that has not imposed actions on russia you would get the payment. unfortunately, for those investors from countries that have been imposing those sanctions on russia, it looks like the payment could be put into an account for you and russia, but there would be no means for you to take that money outside of russia because of the capital controls that are being imposed by the russian government. so, kind of a way of on paper staving off a default. but in practical terms, some investors may not receive the money from those maturing bonds. shery: how much are we talking about maturing bonds question mark and right now, the russian ministry saying that all debt will be serviced on time. the full amount.
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what are the implications here, if they do not? paul: well, so, we cut russia further in to a c rating over the weekend, saying it has strong concerns over russia's ability and more importantly, probably, willingness to service us there. so we have already seen with the overset bonds, which are local currency bonds that get paid into these accounts, that the money has not been released to international investors. there is no mechanism for that payment to be made at the moment. the next thing is people are starting to watch some of the bigger corporate bonds that are coming due. gas for example has one. they've been monitoring those quite closely. and then we get to the russian government which has payments due later this month. and that is the crux. that is why people are starting to pay more attention to it. from russia's point of view, ok, it can become a bit of a bond market pariah if this all happens.
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but then again, russia does not really need to bring in cash from overseas investors in the form of bonded sales right now. so long as it continues to receive this money flowing in from its commodity exports. talk of the oil embargo and stuff might shake things up somewhere. so this story certainly seems to have a lot further to develop in the coming weeks. shery: bloomberg executive editor paul dobson with the latest on russian bonds. coming up next, jp morgan's chief china economist says beijing's five and growth target would require a more accommodative micro policies. analysis from the npc coming up. this is bloomberg. ♪
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haidi: take a look at the markets. we've just seen it so much volatility and mayhem in the early part of the asian session whether you take a look at commodities, prices as well as oil prices just soaring. equities having a tough time at the moment. asia pacific index falling more than 1% on these concerns of that prolonged war in ukraine. the asia stop gauge for -- is now down 20% from the 2021 peak with that bear market now inside. if we close at that level as well, in particular, seeing tech , consumer discretionary, as of the big sectors contributing most to that drop that we see.
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that index trading around its lowest since november 2020. in terms of the individual names, we are seeing the likes of toyota, samsung, of course the heavyweight hitachi, seeing big jobs today. this as the stakes in the war in ukraine continue to rise. we are hearing that vladimir putin is saying that his war will continue until he gets what he wants as the outcome there. we continue to see these big moves to the downside when it comes to equities. huge moves to the upside when it comes to commodities and oil. take a look at china, which set an ambitious growth target of 5.5 percent at the national people's congress over the weekend. our next guest says reaching that goal would require more accommodating macro policies. joining us now is haibin, our chief china economic correspondent. this coming with external headwinds as well, concerns ever-growing as you can see in the macro reaction. that we are headed more toward
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the likelihood of a global recession as a result of the big jump in energy costs. as an energy importer, is this something that would be traveling to beijing's plans to hit that growth target. -- troubling to beijing's plan. haibin: 5.5%, that is the lowest growth target. this ambitious target for this year, given domestic and external uncertainty china is facing right now. china is less vulnerable to this tension, particularly sanctions, because trade can still use a single bar to settle. most important channel is tension related to a high inflation on the pbi side and also higher commodity price that we increased china's import bid roughly by 50 billion u.s. dollars. so overall, the impact on china is small compared to the rest of
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the world. a lot will depend on china's domestic policy. as you pointed out, 5.5%, that will require more accommodative fiscal policy. we do see fiscal policy is more accommodative than previous baseline assumption. but still, we are seeing that is insufficient at this moment because of the uncertainty china is facing. haidi: is easing still on the table? so far, we have heard about the road to hitting this growth target seems to be through these local government financing vehicles, more infrastructure spending. is this basically the same china playbook, to be able to get that growth? haibin: well, if you read the npc report, the sector china's government has been supporting in advance of manufacturing and policy relief for tests, were in develop and strict these are the key focuses.
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if the structure is also the policy -- infrastructure is the policy focus. but we are not talking about the conventional infrastructure. there is also infrastructure concepts related to the general economy, for example. and just also to emphasize fiscal policy and face value actually is quite puzzling. because the headline fiscal deficit number was lower than last year. there is a big swing factor because of the underutilized special bond or -- special bond proceeds. that will be carried over into this year. so this is the biggest swing factor, which completely changed fiscal picture, instead of talking about physical tightening, we are talking about physicals of work for this year. it -- fiscal support. the two areas receiving that support is the broad concept of infrastructure, of investment, related. the second is reduction,
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particularly for the manufacturing center and also f next. shery: what about the monitoring side of things? the pboc has already increased rates this year? haibin: we do anticipate further cuts and rate cuts. but on the interest-rate side and also on the credit policy side, we think the room for further easing is limited. particularly on the right side. 10 basis rate cuts for the rest of the year. and also for the credit policy. we expect a little bit higher gross for this year. even with the singular social financing gross, because normal gdp gross is much lower compared to last year, the policy application would be different. the credit would come from negative to positive, but compared to early easing episodes, we think that the policy can provide modest
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support for economic recourse. haidi: what sectors are you watching --shery: the past year we have seen incredible supports for some of those sectors like clean energy that authorities have been really helping and supporting, but at the same time, those technology companies have taken a hit. haibin: yeah, so it is also very clear it is a structural transformation concept. we are talking about the high quality gross. so we mentioned the policy sectors, but for policy headwind sectors, policy, housing, generic relation, the two most important policy headwind areas. we do see the policy. on the housing policy side, there is no clear policy level change. during the mpc meeting, we do anticipate it will enable more policy realization to take
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place. the central government focus is to boost affordable rate of housing market. for internet regulation, we expect to not repeat the big record policy shop as we saw last year. it is more about the further of limitation of regulatory rules. still, the internet business needs to adjust to this new regulatory framework. they need to adjust because i will have application on -- the federation market and stock markets. haidi: one last word without has been trading against the ruble, it was up 25% of record on tuesday of last week alone, does this operate as almost a to fecteau way of sanctioning -- a defect a way of sanctioning the effect anyway? haibin: it is strong along with the u.s. dollar in recent weeks. and that on the technical side
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level, that also continues and also converting dollar. we do anticipate that it will continue to be on the strong side, right around 635 in the first half. but moving to the second half, how they relate to the global commodity price, current house price will come down. also interest differentiate yield will narrow. china will cut rate. we do anticipate some modest market appreciation. the second half, year end, reaching 655. shery: jpmorgan chase china economist could think you for your insights into the broader market space and into china. but take a look at what asian stocks are doing. because the ms eia asia gauges down a 20% from its 2021 peak. if we close at these levels, we are talking about entering a bear market. this as we continue to see the
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accelerating losses in u.s. futures. this after we saw most of last week the s&p 500 seeing losses, given of course tensions around the invasion of ukraine. it gold near 2000, while crude continues to rally. coming up next, we look ahead to the start of trading in china and hong kong, as the risk of a fresh crackdown by beijing could overshadow the impact of russia's war on emerging markets. this is bloomberg. ♪
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shery: take a look at the markets right now because we continue to see euro futures, stocks sliding 32% at the moment after european stocks had the worst week since march of 2020 at the onset of the pandemic. traders trying to impact with the impact of the war in your credo and the prospect of a new regulatory crackdown. let's get to our reporter, sophia a coastal, who will give us an outlook of what to expect the china open. sophia? sophia: there is a lot that china cannot control obviously. it is the ukraine war, the fed policy tightening. and also, you know, what is happening in the property sector. the downturn being unlocked more severe than policy makers had expected.
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some positive news over the weekend, working report from beijing did suggest that policymakers will kind of do everything to defend at least a growth target. and the target being set at 5.5% is a lot more ambitious than economists have predicted. so really a stimulus cycle coming in in china, ledger -- leveraging where policy is focused on maintaining economic stability and social stability ahead of the key meeting at the end of this year where xi jinping is expected to submit for another term. haidi: china markets correspondent sofia costa there. we have, we spoke to advisor to chinese government and president of the center for globalization. they join us later to talk about economic and political policies after announcing that target of five and have percent gdp growth
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rate at the npc. we get more on that ahead, in the meantime, shery, we continue to see markets capitulating and very interesting to see if the asian-pacific closing in their territory at the end of the day. shery: we are seeing u.s. futures, euro futures, all siding. take a look at stocks. 50 features down 3% of one point already. we have seen the worst week since may, that is it from daybreak asia. this is bloomberg.
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york and 2:00 him in san francisco. >> the markets are preparing to close but the day is not over yet. you need the power of the bloomberg terminal to get you market moving data before anyone else.
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>> it isn't :00 a.m. here in hong kong and in beijing and shanghai, welcome to the china open. i am david ingles. let's get to the top stories this monday morning. oil prices through the ceiling here. the white house saying it is discussing an embargo on russian supplies, investors are now fearing an inflation spike. commodity prices could be putting beijing in a tough


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