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Speaker 1: This is Bloomberg day Break Asia for this Monday, February

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Speaker 1: sixth in Hong Kong, Sunday February five in New York,

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Speaker 1: and coming up today, A strong US jobs reports sparks

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Speaker 1: concerned the Fed may have to keep rates higher for longer.

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Speaker 1: Indian officials trying to calm markets over the turmoil surrounding

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Speaker 1: the Addani Group, and the Japanese government has reportedly approached

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Speaker 1: a potential successor for boj Governor. China threatens retaliation for

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Speaker 1: the shooting down of its balloon, criticism and defense of

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Speaker 1: the timing of the shootdown in the US. Ukraine says

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Speaker 1: it can end the war with more fighter jets. I'm

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Speaker 1: at Baxter with Global News. Harry Kane makes history is

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Speaker 1: Tottenham knocks off Manchester City. Dan Schwartzman, I'll have that story.

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Speaker 1: More coming up in Bloomberg Sports. That's all straight Ahead

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Speaker 1: on Bloomberg Daybreak Asia on Bloomberg eleven and three O

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Speaker 1: New York, Bloomberg on Washington, d C, Bloomberg one O

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Speaker 1: six one, Boston, Bloomberg nine, sixtiesent Friences, Go Sirius XM

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Speaker 1: one nine Team and around the World on Bloomberg Radio

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Speaker 1: dot com and via the Bloomberg Business app. Good morning,

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Speaker 1: I'm Doug Prisoner and I Brian Curtis. Here are the

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Speaker 1: stories we're following today. Well, let's take a close to

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Speaker 1: look here at the top stories. The US labor market

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Speaker 1: burned red hot in January. A Labor Department report showed

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Speaker 1: hiring unexpectedly surged while unemployment fell to a fifty three

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Speaker 1: year low. We got reaction from US Labor Secretary Martin Walsh.

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Speaker 1: You know it was a great report. I mean, when

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Speaker 1: you look at areas of that I think are really important.

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Speaker 1: Business grew, healthcare grew, education grew, and we saw in

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Speaker 1: strong steady growth and construction. I mean, certainly I'll take

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Speaker 1: this job report for any day of the week. The

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Speaker 1: strong labor market report now makes FED share j Pal's

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Speaker 1: job trickier. Last week, Pale didn't push back too strongly

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Speaker 1: against markets, pricing in just one more rate hike and

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Speaker 1: cuts by the end of the year. This gave traders

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Speaker 1: greater hope of a near term pause by the Fed

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Speaker 1: in its rate hiking cycle. However, the job's numbers were

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Speaker 1: not likely strengthened the FEDS determination two high grates up

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Speaker 1: above five and then keep them high throughout the year.

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Speaker 1: That's an outcome that investors are particularly skeptical of. Well,

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Speaker 1: we also heard from the former Treasury Secretary Larry Summers,

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Speaker 1: who was saying a soft landing for the American economy

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Speaker 1: is looking more likely than it did a few months ago.

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Speaker 1: Even so, he told CNN those high prices are still

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Speaker 1: a concern. We had a set of inflation indicators during

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Speaker 1: that were very strong that have now come back to earth,

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Speaker 1: but they're still too high. They're still unimaginably high from

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Speaker 1: the perspective of two or three years ago, and that

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Speaker 1: getting the rest of the way back to target inflation

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Speaker 1: may still prove to be quite difficult. So I'd say

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Speaker 1: I'm encouraged, but it would be a big mistake to

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Speaker 1: think that we were out of the woods. In an

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Speaker 1: earlier interview with Bloomberg, Summers said the key question is

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Speaker 1: whether workers income will be spent and then in turn

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Speaker 1: lift the economy, or whether companies will eventually conclude they

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Speaker 1: simply have too many workers. Brian us Tech Megacabs delivered

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Speaker 1: rather disappointing results last week, with Apple, Alphabet, and Amazon

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Speaker 1: all providing weaker guidance. What does that mean? For companies

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Speaker 1: reporting this week, Bloomberg Susannah Palmer has more softer consumer

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Speaker 1: demand and ad spending flagged by big tech companies may

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Speaker 1: signal tepid results for game developers and Walt Disney reporting

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Speaker 1: this week. Investors remain hopeful that companies could emerge as

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Speaker 1: winners with effective cost cutting measures and pricing adjustments. Watch

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Speaker 1: for take to Activision, Blizzard, and Walt Disney, among others.

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Speaker 1: To look for PayPal and Chipotle reporting this week, Susanna Palmer,

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Speaker 1: Bloomberg Daybreak Asia. Indian official stepped in over the weekend

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Speaker 1: to calm nerve of over the turmoil surrounding Adani Group.

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Speaker 1: We have that story from Bloomberg's Annabel Jewelers. The saga

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Speaker 1: is now in its third week after accusations of stock

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Speaker 1: manipulation and accounting fraud. In that time, A Danni's companies

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Speaker 1: have lost nearly half of their market value. On Saturday,

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Speaker 1: India's finance ministers said regulators will do their job in

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Speaker 1: dealing with the allegations against the Adani Group. There's fear

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Speaker 1: of contagion and India being viewed negatively by global investors.

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Speaker 1: Members of India's parliament want answers, the main opposition party

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Speaker 1: increase pressure on Prime Minister Modi over his silence. Adanni's

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Speaker 1: interests have often intertwined with the India's growth plans, and

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Speaker 1: now a nationwide protest is planned for Monday to highlight

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Speaker 1: the risks of small investors. Concerns over the group's debt

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Speaker 1: obligations increased last week when a Dane Enterprises withdrew a

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Speaker 1: two point five billion dollar follow on share seal, and

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Speaker 1: over the weekend we learned the company also shelved a

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Speaker 1: plan to raise as much as a hundred and twenty

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Speaker 1: two million dollars via its first ever public sale of

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Speaker 1: bonds in Hong Kong. I'm Annabel rulers Bloomberg Daybreak Asia

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Speaker 1: Japan is said to have approached the current Bank of

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Speaker 1: Japan Deputy Governor mas Yoshi Alma Mia about succeeding Harihika

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Speaker 1: Kuroda as governor. More from bloombergs Yvonne Man, The government

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Speaker 1: is said to be in the final stages of completing

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Speaker 1: the nomination plan. The Nicke reports officials from the government

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Speaker 1: and ruling coalition have held discussions with Alma Mia. The

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Speaker 1: end weakened on the assumption that If the deputy governor

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Speaker 1: is selected, the current policy will likely remain. Prime Minister

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Speaker 1: for Miyo Koshida has said the nomination will come in February.

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Speaker 1: Kuroda is scheduled a step down on April eighth, after

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Speaker 1: the longest stint running the Central Bank, and it's a

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Speaker 1: hundred and forty year old history in Hong Kong. I'm

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Speaker 1: Van Man Bloomberg Daybreak Asia and I Bryan Curtis along

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Speaker 1: with Doug Krishner, and we will have Mark Chandler coming

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Speaker 1: up in a few moments, chief market strategist that managing

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Speaker 1: and managing partner at benneck Burn Global. So Doug if

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Speaker 1: if j Powe was somewhat uncomfortable with the market reaction

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Speaker 1: last week, you'd think that strong jobs report and the

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Speaker 1: downing of the Chinese balloon have sort of come to

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Speaker 1: his aid, I'm have joking, but we're seemingly back in

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Speaker 1: as I mentioned before, and something of a risk off

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Speaker 1: environment here. Yeah, we're going to hear from the Fed

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Speaker 1: chairman on Tuesday at five pm Wall Street time. He

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Speaker 1: will be interviewed by the Economic Club in Washington, d C.

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Speaker 1: That was pretty dramatic movement in the bond market Friday

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Speaker 1: with the yields spiking right across the curve, and we're

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Speaker 1: also looking at a much stronger dollars, So you would think, Brian,

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Speaker 1: to your point, that this, combined with the equity market weakness,

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Speaker 1: serves to even maintain those tight financial conditions, which to

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Speaker 1: your point, is exactly what the Fed wants to see

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Speaker 1: under these circumstances. Yeah, definitely a stronger dollar doing so

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Speaker 1: as well bad for for risk assets most likely today,

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Speaker 1: particularly in emerging markets, as will the China US story. Now.

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Speaker 1: I think I think China will probably tone down its

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Speaker 1: rhetoric on this because it just isn't credible to many

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Speaker 1: people that this balloon was blown off course. And if

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Speaker 1: it had been, then you would have thought they would

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Speaker 1: have immediately notified Canada in the US and said, um,

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Speaker 1: this is what happened. But they didn't, so it caused

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Speaker 1: a lot of a lot of concern. Even before the

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Speaker 1: balloon was actually shot out of the sky, the Biden

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Speaker 1: administration postponed Secretary of State Blinkin's trip to Beijing, so

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Speaker 1: already we knew that even before the firing that tensions

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Speaker 1: were at a higher level. Yeah, so it could be

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Speaker 1: a very interesting day good to say, listening here to

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Speaker 1: Bloomberg Daybreak Asia, it's time now for global news, which

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Speaker 1: honest reaction to that shooting down of its alleged spy

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Speaker 1: balloon has shifted to the possibility of retaliation, threatened retaliation

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Speaker 1: at Baxter has that story in the nine sixty News

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Speaker 1: from a San Francisco ed Yeah, exactly right, Brian. Beijing

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Speaker 1: first expressed regret, saying it was a weather balloon that

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Speaker 1: flew off course. Now would it's saying as a US

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Speaker 1: clearly overreacted and using for US. It says that it

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Speaker 1: will resolutely safeguard the legitimate rights and interests of the

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Speaker 1: company concerned and reserves the right to make further responses

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Speaker 1: if necessary. Now in the US some reaction. Former US

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Speaker 1: Joint chiefs of Staff Chair Admiral Mike Mullin says, this

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Speaker 1: was a planned action. This was not an accident, This

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Speaker 1: was deliberate. It was intelligence. And Mullin on ABC has

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Speaker 1: heard here on Bloomberg says, even knowing that the President

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Speaker 1: of Military did the right thing, and says the shame

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Speaker 1: is that there's no way Secretary Blincoln could have gone

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Speaker 1: to Beijing at this point. Strategically, this really damages a

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Speaker 1: relationship between US and China, further damage which was deteriorating.

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Speaker 1: And I think that's really the big part of this.

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Speaker 1: So Senator Marco Rubio, though, is questioning that a lay

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Speaker 1: in shooting down the balloon on ABC has heard here

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Speaker 1: on Bloomberg. He says, what China was trying to do

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Speaker 1: is monitor US response. This is what they wanted the

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Speaker 1: world to see, that they could send a balloon at

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Speaker 1: sixty feet US air space over military facilities and that

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Speaker 1: we will be unable to stop it and then ultimately

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Speaker 1: when we shoot it down. If we did, they would argue,

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Speaker 1: look how they overreact to a weather balloon, which is

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Speaker 1: obviously is not what it is, And he says by

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Speaker 1: letting it go all the way across the US, they

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Speaker 1: got the questions to that answered. Meanwhile, the downing is

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Speaker 1: marking the first time that the F twenty two Raptor

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Speaker 1: fighter jet brought down an air target since it debuted

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Speaker 1: in combat and Syria and Iraq almost a decade ago.

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Speaker 1: Ukraine's Defense Minister Aleski Resinov says that he's happy to

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Speaker 1: be getting precision guided rockets as part of the latest

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Speaker 1: aid package from the United States. But he tells ABC

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Speaker 1: that he hopes that there is no more delaying. We

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Speaker 1: need to heat Russian's objects in temporarily occupied territories of Ukraine.

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Speaker 1: There a fool depot, communition depots and their commander's headquarter.

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Speaker 1: And he repeats that Ukraine can defeat Russia if it

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Speaker 1: gets more aircraft platforms. He said, you brand needs to

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Speaker 1: carry out missions near the border. The hackers behind the

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Speaker 1: recent ransomware attack on Ion Trading UK claim the extoration

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Speaker 1: payment has in fact been paid. Iran is not commented.

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Speaker 1: I should say Ion has not commented, but there's no

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Speaker 1: denying that the action upended derivatives trading around the world,

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Speaker 1: and cybersecurity experts say the payment is not a magic

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Speaker 1: bullet that automatically restores computer systems. They say the recovery

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Speaker 1: can drag on for months as many files will have

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Speaker 1: to be decrypted one by one. Global News powered by

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Speaker 1: more than journalists and analysts and over one d twenty

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Speaker 1: countries in San Francisco. I'm at Baxter and this is Bloomberg.

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Speaker 1: This is Bloomberg day Break Asia. I'm Brian Curtis along

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Speaker 1: with Rashade Salama, and it is Monday morning. For US.

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Speaker 1: So let's say good morning to Mark Chandler, chief market

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Speaker 1: strategist and managing partner at Bannickburn Global. Mark, I know

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Speaker 1: this story about the jobs report. The strong jobs report

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Speaker 1: means the possibility of the FED higher for longer. But actually,

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Speaker 1: if you think about it's it's maybe not such a

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Speaker 1: bad story for risk assets in the sense that the

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Speaker 1: FIT is getting close to the end of its cycle.

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Speaker 1: And and here you have a strong jobs report without

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Speaker 1: wages going up as much as some feared, and maybe

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Speaker 1: that seems to suggest more more chances for a soft landing.

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Speaker 1: Your thoughts on that before we talk about the stronger dollar. Yeah,

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Speaker 1: good morning, biny. I think that's what a lot of

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Speaker 1: people are like mulling over is the implications. And I

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Speaker 1: think it's not just the jobs data, which you know

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Speaker 1: has a lot of distortions to it, especially this January reading,

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Speaker 1: but even at Service I s M report a huge

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Speaker 1: jump in new orders, and so I do think that,

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Speaker 1: I mean, I think that since the beginning of the year, really,

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Speaker 1: I think the pendulum has swung in favor of soft landing,

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Speaker 1: not just in the US, but in Europe as well.

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Speaker 1: And I think that the data pushes people more along

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Speaker 1: that path. But I think that it is concerned coming

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Speaker 1: alout from monetary variables like the yield curve contraction and

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Speaker 1: money supply. Uh, these kinds of things I think are

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Speaker 1: still flash and concern for people. So even now after

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Speaker 1: the jobs data, after the I s M data, the

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Speaker 1: market is still pricing in a rate cut later this year. Mark.

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Speaker 1: The thing is, you know, with the interest rate cycle,

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Speaker 1: the monetary tightening that has taken place, the economy is

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Speaker 1: getting stronger. I mean, it's just are these monetary policy

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Speaker 1: tools actually working at the moment, and you know they

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Speaker 1: seem to be doing quite the reverse. What do you

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Speaker 1: think the thinking is in the Fed? And now looking

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Speaker 1: at all the latest data, we think the FEDS views

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Speaker 1: really changed. I think what they told us in December

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Speaker 1: was that they excuse me, they aimed to lift the

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Speaker 1: FED Funds target rate above five The market has said,

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Speaker 1: we don't think you will. The market has been looking

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Speaker 1: at the FED funds futures has been a little bit

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Speaker 1: below five percent, and now it's a little bit above

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Speaker 1: five percent. I'm not so sure about the strength of

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Speaker 1: the underlying economy. Remember what happened in November and December.

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Speaker 1: Retail stale over the US fell by more than one

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Speaker 1: each month, and manufacturing now put stalled by more than

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Speaker 1: one percent in each month. So I wonder if we're

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Speaker 1: just seeing a bounce back from a very weak finish too.

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Speaker 1: And you know that, I think that there's still despite

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Speaker 1: the labor market. I think that's what's so unique about this.

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Speaker 1: And again the factist in the United States, Europe has

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Speaker 1: a fairly strong labor market, so do Japan, and I'm

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Speaker 1: not I'm just not sure that that really means the

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Speaker 1: kind of strength that we think it might, because that

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Speaker 1: the income you get from wages is supposed to be

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Speaker 1: used for consumption, as you as the clips from a

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Speaker 1: Lawrence Summers. But the problem is is that those dollars

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Speaker 1: there's been a cost of living squeeze because wages have

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Speaker 1: not been keeping up with inflation, and so those wages

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Speaker 1: aren't really going to aren't going to really necessarily stimulate

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Speaker 1: that large part of the economy that's driven by consumption. Well,

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Speaker 1: and for investors that might take this in a foolish way,

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Speaker 1: I mean, if you're buying risk asset now, you're you're

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Speaker 1: not really so much betting on inflation coming down, although

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Speaker 1: it is coming down. You're you're betting on the lag

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Speaker 1: effects of the Fed's rate hikes that they'll be softer

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Speaker 1: than perhaps so what might have been expected. And with

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Speaker 1: a strong jobs like report like this, can we assume

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Speaker 1: that the lag effect maybe a little less. Yeah, I mean,

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Speaker 1: I still would be hesitant about jumping into risk gasts.

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Speaker 1: I think that if anything, we've got this pendulum, the

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Speaker 1: stween back. You know, we begin the year off what

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Speaker 1: a honeymoon, and I think that to jump aboard now

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Speaker 1: a month into the new year, uh after, at these

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Speaker 1: extended levels, I think we need to see a pull

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Speaker 1: back and I just feel more comfortable seeing this to

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Speaker 1: the magnets. With this pullback may be driven by higher

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Speaker 1: interest rates. We're at the low end of sort of

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Speaker 1: where we've been trading and now at the to the

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Speaker 1: middle to upper end, and I think you see a

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Speaker 1: sit back in the in those risk assets, and I

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Speaker 1: think this is what's going to help underpin the dollar. Yet. Well,

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Speaker 1: that's exactly what I wanted to talk about it. It It

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Speaker 1: does this perhaps represents an inflection point for the current

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Speaker 1: dollar weakness that we've been seeing. Yeah, that's that's my view.

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Speaker 1: I mean, I think that you know when the e

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Speaker 1: CV met and the euro couldn't make a new high

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Speaker 1: after some hawkish comments, I said, it seemed to me, uh,

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Speaker 1: I was wrong about how the market was going to react,

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Speaker 1: but it seemingly an important way of being wrong in

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Speaker 1: the cent that there does seem to be a change

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Speaker 1: in sentiment. And I think that just encouraged by their

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Speaker 1: jobs data. So I think that really for the first

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Speaker 1: time since maybe late September early October when the dollar

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Speaker 1: topped out, that we get a bounce in the green back.

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Speaker 1: About my concern really then is that it's got a

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Speaker 1: short life about a week a week or so, because

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Speaker 1: I think as we get ready for that January CPI

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Speaker 1: in February fourteen, people who get nervous again because I

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Speaker 1: think that we should be expecting Uh It's not like

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Speaker 1: being a rocket scientist here, but I think we should

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Speaker 1: be expecting a big drop in inflation in the coming

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Speaker 1: months in the US. And here's why. I really simply

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Speaker 1: that the Q one and Q two last year, both

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Speaker 1: quarters CPI rose in an annualized rate of more than

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Speaker 1: ten percent. That is not being sustained in those numbers.

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Speaker 1: So it's high monthly numbers will drop off of the

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Speaker 1: year over year comparison, and so we're gonna we should

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Speaker 1: be looking at a real drop in inflation in the

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Speaker 1: coming months. This is Bloomberg Daybreak Asia, your morning brief

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Speaker 1: Brian Curtis and I'm Doud Prisoner. Join us again tomorrow

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