yvonne: top stories this morning, china's manufacturing activity surges the highest in a decade. those figures helping boost chinese stocks and the regional benchmark. goldman sachs's attempts to put a positive spin on its consumer business falling flat with investors. rishaad: pmi numbers putting a rocket under the hang seng come up over 2%. we are looking at that. also looking at president gareth nicholson -- xi making sweeping changes. david: let's get a sense of where we are market wise.

a lot of the games after the chinese markets opened. about the same time the pmi numbers came out. we will get to some statistics in just a moment. commodity markets third also getting a bit of a lift. the reversal from the numbers in things like the aussie dollar and dollar china now trading at 696. yields are still lower. yvonne: let's get under the hood when it comes to pmi numbers. manufacturing was the biggest surprise here. beating consensus by three standard deviations, 52.6.

nonmanufacturing also beating expectations. kai seen manufacturing just came out at 51.6. showing signs that the factory floors coming back. this bodes well across the region here. rishaad: thailand came in very strong as well. we also have malaysia in the mix gassy -- too. the big one there is china, the biggest out of the lot there. we have to look at china and the story it is telling us. we had the lunar new year in january, how does this play into that? yvonne: let's get more on these

pmi numbers and bring in our bloomberg economist. how should we interpret this data? >> february is the first month that we have no other components disturbing the number. we would in november, in december we were picking in the pandemic, january was the festival. when it comes to february, we have the full month benefiting from the reopen. the number itself is not a surprise. what is a surprise is that it is so strong. david: let me go through the subcomponents. output was from 49.8 to almost 57. new orders up to 54. inventories almost at 50. we have not been at 50 in a long time.

employment back above 50, very good. supply and delivery times, it looks like the 52 number is also an improvement here. what you think the challenges are? >> reading from the numbers, our conclusion is that it is definitely a recovery. what we can say is that the economy is going to continue to benefit from the reopening in the next couple of months. remember one thing is that less march when we had the lockdown in shanghai, so that if we look at the year-over-year number in march, april, may, we will also see some good numbers particularly for the year year comparison. rishaad: how will the next pboc

governor look at all of this? >> it is still too early to say who is going to be the governor. he or she at least will be happy for the numbers over the next several months. the challenges remain. in the near term, the pboc needs to provide continuous support to the recovery. in the longer term, the governor will have to deal with some challenges, such as housing markets and the slowing trend of the economy and also the tension between the china and the united states, which means some technical issues in the tech sector. these are all the challenges the pboc faces. but they may not have a direct relationship because it is not

covered by about monetary policy. but it is a component of consideration. yvonne: david, thank you. our bloomberg economist. these pmi numbers really smashing expectations. markets are listening to these numbers very closely. h-shares up 2.5%, the most in a long time. david: some a real optimism going into the weekend. let's get a sense of whether or not we have enough information right now to chase this rally further. gareth nicholson from nomura singapore limited joining us right now. we were going to talk to you

about higher yields, but this china story is forcing our hats. what do you make of these numbers? this rally was looking for a catalyst. >> absolutely. we expected it to be stronger, but not the strong. this is a very constructive at least in regards to how well the china reopening is going. it seems to be handled pretty well, supported pretty well, seems to be flowing down into production and manufacturing sectors, which is very constructive for china. this plays out brilliantly for the region, for asia in general, but also creates uncertainty around inflation and how this will play into other markets. the probability of volatility is growing as we see this economy

really starting to gain traction. a very exciting time for investors. yvonne: the macro picture is quite conflicting here. the china reopening story and this mess fed repressing we have seen in the last few weeks. does that make investing a little bit more difficult. a stockpicking a better strategy? how do you see this playing out for the rest of the year? >> i think what we have to do is forget the playbook. realizing that he has move from west to east. now we have policy in china being much more accommodative. we have much more dovish policy out of japan.

in india, the hike is not going to be much of an event. they are focusing much more and growth. on the other side of the break, they are looking to slow things down. it is really about actively managing risk and opportunities. rishaad: it seems as though the data shows good in parts, bad in others. what do you make of that? >> that is a good question. there is still a lot of uncertainty.

we still have the world's manufacturing base trying to sell to other economies that are slowing down. europe, germany, some of the numbers were not as constructive as you would expect. we know they are trying to slow things down because inflation is still very strong in europe and they give. what we are looking for is that differential, the delta between the growth projectile in china looking really constructive relative to what we are seeing two similar sort of numbers out of the other big economies. for that reason, it is about seeing where these waves are. it is about actively looking at the strengths. in china, we are seeing a lot of sectors that are still attractive.

yvonne: take a look at the six-month u.s. treasury bill. has a change the whole investment landscape? >> absolutely. you have now an option to be able to own a decent return largely compensate against inflation. at the same time waiting for prime opportunities. instead of in the past where you were not getting paid much. equities were quite expensive. now we have a lot of options to continue to gain and wait for opportunities and when they come, quickly get in and out of treasuries. a lot of opportunity in fixed income.

even if rates go up, the interest coverage is still high and it will not make a major difference. i think the investment space has definitely shifted and this is making portfolio investment very attractive. rishaad: what is your call with the u.s. economy overall? what is the terminal rate in your view? how does the strong data we have affect your positioning? how will affect your position should we have a soft landing or hard landing in to investing in places like china? >> as of early this week, we

shifted to 50 basis points in march. so we are going to get a terminal rate up near 5.75. this kind of level will stay for the rest of the year. in that environment, you have pressure or yields going higher, yields remaining high. this is quite a difference for a lot of refinancing. this will put pressure on companies that are very sensitive to refinancing costs. inflation remains very robust in the united states. there are still a lot of consumers in a good position. when it comes to a hard or no landing, from our perspective, economists are constantly looking at this and it is probably a soft landing is the most likely.

where are we getting compensated for the moment? most of the equity market is very sensitive to rates, like technology, so we are less constructive on that. we like east over west, more support. you dive in and find opportunities from there. yvonne: east versus west, bonds are back. some lines crossing from beijing. we are hearing from china's finance minister at this briefing, talking about proactive fiscal policy will be more forceful. talking about the foundation of china's economic recovery still not solid.

they think there are still challenges ahead. when it comes to policy signals, we're seeing more forceful language here from the finance minister. a lot of questions. david: the support is probably not going to go away. they will be there to backstop this economy during this recovery. a lot more lines coming through. this ongoing briefing with the finance minister. yvonne: they are still expecting that there is some room to expand, although they say moderately, but it is certainly not going away. david: for our bloomberg clients, you can continue to track this briefing on your

terminals. you can also find other things taking place right now. rishaad: let's have a look at some of the first word news. we have a train collision in greece, killing at least 26 people. a passenger train crashed into a freight train, 300 kilometers north of happens. -- athens. rescue operations are continuing on what officials are calling very difficult conditions. south korea's export slump continues. raising concerns about south korea's ability to bounce back from an economic contraction less quarter.

australia's economy rising slower than expected, half of 1% , below expectations. monthly inflation easing in january, well below estimates. i u.s. house committee has advanced china related sanctions bills. they include plans to borrow chinese officials from using u.s. financial institutions and support for taiwan's membership in the imf. it is a sign of increasing hawkishness in the republican-controlled chamber. that is your first word news. yvonne: still ahead, hs gambling hub is finally making a

comeback. we will analyze the casino recovery. david: coming up, china's annual lawmaker meeting starts on sunday with the president signaling a widespread overhaul of government agencies. we will go through what to watch next on the back of the latest lines coming out currently with the finance minister speaking currently. that is all coming up. this is bloomberg. ♪

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government coming in, most of them worked at the local government, they did not work in the central government, so the

lack of experience, they me the time to figure out how to run this big machine. the room for policy mistakes as possible. -- is it possible. rishaad: just looking at those comments. speaking to us earlier. we are looking at extend this rally right now. a quick look at what they are doing, thanks thing is up 2.5%. -- the hang seng is up 2.5%. the pmi numbers earlier put a rocket under these numbers. let's keep the focus on china and have a look at how president

xi jinping e-cig: an overhaul of agencies. -- is a signaling an overhaul of agencies. stephen engle is with us now. we were looking for growth catalyst they are this congress. >> i think the three main goals of the national people's congress will be to support the economic recovery and to restart confidence and to contain the financial risks. these pmi numbers are indicating that perhaps the economy is growing and external demand is better than we had expected. on the political consolidation, it will be interesting to hear that some of these new officials that will be coming into the central government leads to the risk of policy mistakes.

that is the last thing this recovery needs. someone said that covid zero, the crackdown on property perhaps were policy mistakes. china does not need policy mistakes right now. they need a firm hand and essentially putting in these people that are loyalists could perhaps dictate the president's mandate and to the economy and the financial system. that could cause some policy mistakes, but they say reform of these institutions are going to be paramount. david: stephen engle, our chief north asia correspondent. everything is pointing higher on the back of these numbers. u.s. futures, take a look. asian stocks, session highs. copper prices have now topped

9000. the aussie dollar, a very good gauge of sentiment, also reversing all the losses. 50 minutes in the session. there is plenty more ahead. this is bloomberg. ♪ ra, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh introducing the new sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms avalarahhh

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the pmi reading out of china put in a rocket under the hang seng. extending the gains, we were looking for a catalyst.

yvonne: is it going to be a short-term a rally, given to us how bad february was, especially when it comes to hong kong benchmarks? you are seeing a little bit of a reprieve here. david: maybe some of the traders out there taking some of the loss out of the dollar trade. about an hour into the session, we are doing very well.

>> forget about all these things we were talking about.

push that all aside. we have to focus on pmi numbers out of china. we are talking about the third-biggest bead on record when it comes to the manufacturing side. the biggest and more than a decade really. then move we have been seeing. this recovery in february looking intact. >> risks getting red shifted. >> we will carry on from january. hopping back on the train. u.s. futures off those of the day. we almost reversed everything now. asian stocks right here on the

benchmark. there you go, the next one, let us talk about the copper prices. 9058 bucks. let's bring in sophia, our chief china markets correspondent. this was the catalyst. >> there was so much de-risking yesterday. hedge funds getting out of there and then now they are completely longford. the catalyst was looking for a big bead across the board. it was the first clean set of data. we don't have that reopening lunar new year, showing that china's economy is back. you know i am obsessed with flows and positioning. the fast money is coming back in.

coming back, if you look at the volumes here, i am looking at my screen, about 25% higher than the 30 day moving average. fast money coming back into this trade. >> that is instilling almost a sense of malaise over the last few days. given some fire in the belly if you will. i think people were just bored. they were bored with the reopening trade. now we have david same boom. it is reawakening that trade. markets are driven by people really taking risks off the table. here is a reminder of why this should be back in. >> i think it will be exciting. it is also what happens after.

what happens in the implementation of the regulatory pivots that we have seen in the past few months. what is the plan for china growth in the future. that is still a big? . will begin a gdp target? more stimulus, the property market is healing. sales recovering there. will beget more support from beijing? still a lot of questions to be answered. i think it will be exciting. the market got the catalyst perhaps before it was expecting. quite the finance ministers has something quite interesting 30 minutes back. proactive fiscal policy will be more forceful this year. what are you looking to write about? proactive fiscal policy, will beget some tax breaks? maybe, maybe also the debt burden on local governments, will they be eased by the central governments taking on a little bit of that fiscal burden?

the central government has not been wanting to do that. economists really pushing for that. i am updating everyone was talking about china being on investable. is it still? why is it so hard to shake off that level? i will try to answer that question in the story. just take a look at what it comes to with the reopening trade. the bets have been piling up at the big winner, you been crunching the numbers. casino stocks. macau has been that proxy year. you are about close to 100% price changes since november. >> already down 30%. that is the nearest. >> look at the whole thing. they were just beaten down, it was amazing these guys have

survived some of them what has been going on. look at the given composite we have from bloomberg intelligence. that is possibly the story over five months. >> you have casino revenue numbers coming out but take a look at that with macau up 6%. >> there we go. course the managing director at gaming consultancy firm. leisure to have you on the show. the markets really run with macau as being if not the biggest reopening story, what are you seeing right now as far as data is concerned? how quickly is the sector recovering? >> far faster than anybody could have projected in november. we thought covid zero would go on for quite some time. we were all pleasantly surprised

by the rally. everyone can come to macau and then hong kong opened up this week. hong kong followed the next day. yesterday they announced the casinos no longer have to have the dealers or supervisors where the masks. there was pleasant. i think the markets will have a good recovery. china getting close to the 2019 levels. not quite there yet but relative to how bad nestor was, we did 1/7 of what 2019 did and 2022. we are looking at a much healthier casino revenue picture. >> they are raising gdp forecast for china. they are suggesting the economy could grow 5%. that must also mean this recovery from macau could be even faster than what you are witnessing now. let me see it returning the territory to pre-pandemic

levels. >> first of all, we had all the naysayers saying it will only be the chinese new year. we found out that valley continued. more and more people coming in. the challenge we have is that the one sector that is still a? is the vip and the premium market in that after three years, it is very easy for a premium player to request a visa and come over here. the question is are various promises in china going to be able to allow these people to come back as frequently as they once did? that was quite often in the pandemic years. in terms of the regular grounding, business is booming.

>> returning to 20 levels, to go back from 14% last year to something in the order of 50, 60, maybe even 70%, that is as maximum as it can possibly go. to go back to 2019 levels you have to fill in the gap left by the junkets. one sector that is not going to back -- to go back to its good old days is the junkets. you have to assume for us to go back to the dgr levels that the premium masks have to cover not only what they did 100% but also fill the 30% gap that will probably left by the junket. i think it was a couple of years for us to go back to the good old days in terms of revenue. in terms of revenue it will take a few more years. in terms of revenue. maybe to the end of the decade.

they did cap for 33% of the gaming revenues. that is a $12 billion hole of which they will only be able to fill a little bit of it at selves. revenue was, it may take longer. >> do you think we will beat out las vegas? will macau come back? >> las vegas -- mcallister las vegas for the first time since 2006. no offense to las vegas which keeps breaking records. a billion last year but macau is easily going to go back to either one third of 2019 levels, easily beating the vegas strip. my question is with the market up 100%, traders are trading on nuance here. what is your favorite casino?

which one is poised to outperform the others? >> the biggest of them all, they have 12,000 hotel rooms. they will not be adding anything else. they will benefit naturally because they were the beast -- list for light on bip. they have very high numbers coming from the basement. the actual winner will be galaxy. they are already number one when it comes to the single casino revenue. just imagine their footprint will double over the next few years. they will go from 4000 hotel rooms to 8000 hotel rooms. galaxy and china are poised to benefit more than anybody else. >> we will see how this whole reopening journey is going to

play out. let's move along and have a look at the first word news. persia -- president xi jinping signaled an overhaul of china's agencies. that starts sunday, telling broad reform agencies will focus on key industries and sectors in an intensified manner. an arrest warrant for the former prime minister here. this get a hearing on concealing his essence. he called on his supporters to keep our protests. this is part of the cooperation deal.

he admitted he knew the trading arm was borrowing billions of dollars of funds from ftx without customers. that is a look at the first word news. we have a lot more on the way including what is going on market wise. china has stronger than anticipated pmi numbers. this is bloomberg. ♪

>> let's look at greater china markets. we have this warmer momentum coming back into hong kong. that pmi data is reviving the markets after what has been a pretty bad february. take a look at apple suppliers. watch this very closely. a bloomberg story out there talking about the whole supply chain of apple and maybe some of these suppliers now. even the ones in china are looking beyond just that manufacturing hub in the mainland.

this is far faster than services anticipated. there is one company. why the sudden worry about making things for china? >> this trend has started since the u.s. president donald trump -- a lot of items that have been affected electronics -- we have seen apple suppliers moving outside of china including vietnam and india.

they have actually had them for a long time. they are investing 280 million to shift away from china. because we were talking to edmund saying that the fact that you are living supply chain's out of china, that is a big task overall. how much are we talking about? >> we are not talking about moving the majority -- the majority are still being

made in central china. it is not likely that india will have a supply chain like china. when it comes to building the ecosystem. >> what is it like to play? let's just face it, this is not something that will happen overnight. this is something that could take at least a decade. >> i think it depends. it took them 30 years to build up the current scale in china.

i think at least a decade for as much of what china has is reasonable for countries in southeast asia. it will take time. it seems to be a reversible trend. this is what gorsuch has told us. >> great to have you there. the asian tiger reported with the latest on that story. coming up, goldman sachs sets up to breathe new life into a stock with the fate of its -- this is bloomberg.

>> there were some clear successes but there were also some clear stumbles. on the direct to consumer businesses, we found it more challenging. it became clear we lacked certain competitive advantages and that we did too much too

quickly. >> just in case you did not know. david solomon there in new york. sue keenan is here with a closer look. >> they certainly tried to focus on the strengths of their bank. check out how goldman did. it was down close to 4%.

they asked what they would do with them. they will try to emphasize the positive. this is now called platform solutions. it is expected to become profitable on a pretax basis. huge layoffs in january. they are hitting their asset wealth management targets. >> most of their clients are very concerned. they it -- they see it being more persistent and businesses.

>> goldman has been good at working through volatility in the market. this was a very rough year for the bank. they emphasize the prospect of the wealth management division and again, talk about additional cost-cutting. perhaps an additional one billion in expense reductions. profits plunged by half last year and solomon is also dealing with dissatisfaction inside the ranks. what was emphasized is they are getting all the management in-line inside this new strategy. >> thank you so much, sue. the strategic alternatives that solomon are talking about as well.

let's check on the latest bit is five headlines. the nokia ceo says the company continues to extend market share. we are told india is now the biggest growth market. the 5g cycle has not yet peaked. overall, nokia customers are more optimistic than expected and less afraid of recession. >> the mood is more optimistic than i would have expected. there is a little bit less of this recessionary fear. i taught two or three months ago there would be a real crash landing in terms of economy. it doesn't seem to be happening. the crux of regulator says credit suites seriously breached rules and the greens capital affair. they criticized the bank for their risk management. the bank has been ordered to take several remedial measures

while enforcing -- enforcement proceedings will be performed former managers. >> let's look at markets now as we go into the final stretch of the morning session on the mainland here in hong kong. the hang seng is top of list. give or take two or 3%. it gives us an excuse to predator drone -- to pivot from the hang seng. this is something quite rare. technical targets if you follow this would be 25 k. this is bloomberg. ♪

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>> it is almost 11:00 in singapore and shanghai.

welcome to bloomberg markets asia. i am hostile and almond. crux let's have a look at our top stories. we have china's factory activity surging. we have higher interest rates taking a toll on india's economy. the government sticking with it 70% for your target. >> this is the strongest level in three years. we had manufacturing pi feeding estimates by three standard deviations. let's look at where markets are setting up right now. the csi 300 index up by 1.2%.

they are getting a lift as well is the one is in positive territory. up by 20%. take a look at where we are. bond yields sliding in asia. 10 year yields close to 4%. two year yields at 4.8. those high yields will weigh on stocks but not today. yields trending downwards, giving a lift to stocks across the board. >> let's recap what we did see. you can see what is happening here. there is the rate of the chinese economic recovery.

it means we got manufacturing pmi up to 52.6. last month, 50.1. now we are looking at 50.6 here. the highest reading since april of 2012. that is the deal. let's find out now but we have in terms of market reaction. this is putting a rocket under equities and providing that lives out. then we have legs for this rally. futures have come off their lows , just ticking upward. still, negative terrain right now. we have other asset classes on the floor. there is the msci. up two thirds of 1%. they are about to take on a risk. there we go. 1.7% as well. a quick look at msci china. there we go, that data came out.

you can see exactly where it came at. 3% of the good if you are. let's get a little bit more detail. david hsu joins us now. how do we interpret these strong numbers? the thing is we have been saying this is the most complete picture because january was muddied by the lunar new year. to show you had some of that demand postponed into february, it is not as clean as people suggest. quite the most important component of the pmi is the protection site. that is a large share in the pmi basket. in addition, when i looked at is the pmi for smaller businesses. smaller companies. that conveyed positive information to me, the confidence in the economy was

recovering. it still has a long way to get a full recovery. before the second half of the year, we can keep optimistic. click the finance ministers were saying that the economy was not on solid footing. people were anticipating some progrowth policies. >> i think so.

because the governor over the previously -- based on the other statement, it is a very plausible thing that we will see these policies. and maybe some new statements on that. >> it is about balancing growth and inflation for the next previously governor. what do you think are the challenges and the risks? >> for the next previously governor, the key task is to maintain the gross trend of the chinese economy. they can solve some urgent

problems. these are the risks and the financial sector. i think the new one will also take the task to force a couple of years here. based on that, i think the poc needs to balance maintaining growth rate and avoiding the accumulation of financial risks. >> all right. david hsu, thank you so much for those insights. let's get the market perspective. let's bring in the global equity portfolio specialist. good to have you. just when he thought the be opening trade in china is fading, you get huge data that supports buying china. >> we have to understand that it

is probably unrealistic to expect the opening credits only last for about a month. we do need to see how long the data continues to stay strong. we will get a boost for g to be in the first half of the year. crux what assumptions are you making? >> we are always looking at individual equities. generally, policies will be accommodative and progrowth. this will be a stronger and more sustained bounceback. probably still a little cautious

given what they are seen on the global environment. >> looking ahead to the weekend as well. many people looking for that to provide capital for markets. what kind of policy support measures are you expecting from that congress. i would not be surprised if there was we focus on those areas. also, focusing on stimulant consumption to be part of the tentative story. i suspect those areas will get more focus. we have lots of new faces and china's policy will have

surprising people as we have seen in the past. >> branch of the industry groups benefit the most? he regards them as being essential utilities now. what is your take? >> when you look at large tech, in terms of deregulation, i think there is generally an environment where it seems like policymakers are trying to stimulate competition. if the regulator is trying to promote competition, big media, big internet tech while they probably would do all right given that incremental regulation is probably not going

to be intensely negative, you're probably going to need to look in other areas. >> what are you pricing in? >> how much more upside are we looking at? >> every fund manager will have their own assumptions. the economists in the u.s. you think there is some risk. it could be slightly higher than that. even if they don't go much

higher, they would probably stay higher for longer. as a result, the impact of how that feeds into both company earnings from consumer behavior on topline as well as financing costs in other areas may not be completely in the market. we would be fairly cautious. the applications of higher and lower grades are the equity markets at this point. crux we are seeing how quite a lot of other companies have downloaded -- downgraded their estimates going forward. >> when you look at it -- you can look at the composition of the broader indices. you can look at the underlying return, significantly higher.

>> if you have a look at what is going on with regards to this move toward the zero target, you have supply genes -- chains being rejected. does that represent the structural shift? how does that affect you as a portfolio manager and strategist? >> we should definitely expect inflation. we saw a large amount of deleveraging. add to that exactly what is

being said about the reinvestment and supply chains. whether it is apple, supply chain, there is an incremental cost that will come. we also need to understand that technology is this inflationary. as the real changes, what are the company is doing to combat high costs whether it is implementation of technology or their supply chain and also understanding putting more of a focus on things like pricing power.

>> we have a winner of the nigerian election. he has one 35.2%. the runner-up finished at about 20%. the economy is fraught with a lot of challenges. the shortage there. widespread insecurity again. there is a winner. >> fire service officials say a passenger train crashed into an oncoming freight train.

the royal operator says the passenger train had about 350 people on board. rescue operations are continuing under what officials call very difficult conditions. weakness persists in south korean exports. had none experts 7.5%. more than an 8.8% decline. australia's economy expanded in the fourth quarter of 2022. it is assigned the reserve banks rapid interest rate increases are beginning to weigh on activity. separate data shows inflation eased in january to 7.4%. that was well below estimates for 8.1%.

a u.s. house committee has advanced several china-related sanctions bills. the proposal is approved by the financial services committee include plans to bar -- bar findings -- bar chinese officials. it is all a sign of increasing awkwardness in the republican-controlled chamber. it has strained relations -- relations between washington and beijing. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> india's latest in gdp numbers showing economic growth slower than expected. the executive director joins us to outline the challenges ahead. >> government sex executives hinting at further dismantling of the troubled consumer business. all of that is coming up just ahead. music

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>> i think of the new government coming in because both of them work in the local government. they did not work in the central government side. they may need some time to figure out how to run this. crux we are having a look at that mpc. stephen egle is the chief north asian correspondent. you can argue they made a couple in the past few years.

that is a recovery story opening up from covid zero. those of the crackdowns i talked about, restoring confidence. he has consolidated his mandate. there is no longer consensus among the rival factions in the standing committee. he stacked the deck with his loyalists and some would say that is bad for china. others would say we have the same kind of thinking. we can get things done easier. we have a firm grip on the economy.

he will likely be the new economics are. he could be the party chief at the pbmc. then his right hand meant will be number two on the standing committee. he was the guy who oversaw those two months of bruising lockdown in shanghai. that leads to some of the complaints in the community in shanghai in particular. why would we trust this is the right policy going forward after those two months and subsequent pain the nation has faced? we will get a lot of answers to economic policy and consolidation of party grip. party grip on policy rather than the state institutions and the pbmc. who will be the pbs a governor to take these marching orders from xi jinping? crux we talk about high-stakes

challenges. front and center must be the market. 15 to 25% of gdp. what can we expect realistically? request the property sector is a main pillar of the chinese economy. it has been battered and shipped at the foundation if you excuse the metaphor through these red lines campaign bike xi jinping. if you extrapolate it to a nationwide support of the economy, this has been one of the big drags on the missable government. they have several ways to get revenue and do these to the people in the party. that is land sales and property as well as -- that has dried up, as well as those costs in the tens of billions of dollars to the last three years of covid zero restrictions and enforcement measures. that drag has been relieved.

you will see better growth numbers, better services coming out of the municipal government. that should help calm people's concerns that the party is putting misguided policy ahead of their needs. >> thank you, stephen egle. the chief north asian correspondent. we have the one hitting session highs. this is bloomberg. ♪

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>> those pmi numbers propelling equities up. the tech market over 5% up. bear that all in mind as we have a look at the latest business-class headlines. the company continues to extend market share for this fast-growing part of the business. and it is the ninth biggest growth market. overall he says customers are more optimistic than expected and less afraid of recession. the deputy chairman of the air

by manufacturers as they are investing in a new vietnam plant and considering expansion in india. let's have a reaction on the markets from house linda -- haslinda. >> they are making an exit from the chinese market. preempting the fallout from escalating u.s. china relations. this is about diversified widows u.s. china tensions. keep it here with us. this is bloomberg. these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing.

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rishaad: central station is right here in hong kong. it is 11:29 a.m. in shanghai.

chinese markets going off your lunch break in under a minute and the msci china index at the moment showing strong gains. what we have right now our communications and consumer discretionary leading the charge along with information technology. the hang seng tech index up about 5% plus the last we checked, the biggest gain and the hang seng also a similar timeframe for gains of them out into. -- gains for the magnitude. we see the u.n. -- yuan, session highs against the dollar right now. it looks like we were going to be testing the seven handle and we are drawn away from that. the mainland has gone off for its lunch break, but the nikkei is back in play. haslinda: that is right and take a look at the board, gains

across asia on the back of that strong china pmi lifting. we take a look at the hang seng up more than 3%. china h shares also standing almost 4% at this point in time. china's pmi's in terms of manufacturing beating estimates by three standard deviations. taking a look at the yen right now, 1.36 -- 136.33. rishaad: let's get a flesh out on all of this with david ingalls. this was an incredible beat. this is some good news, a catalyst to put it mildly. david: when markets look for catalysts, it rarely comes in the form of economic data, with the exception of things like what we got today. when you put that into statistical context, it was a three sigma variation from where

markets were expecting, so that is one part of it. what you are looking at is the spread between the manufacturing pmi level and the medium estimate. the swing you see in 2020 was the aberration because when the pandemic first hit, no one knew what was going on, no one could estimate how bad things are getting month-to-month, and you got the massive swing. the last time we had a beat of two points was in 2012, which was also at the same time the number was this good from an absolute level of 52.6. 11 year highs as far as pmi was concerned. the numbers were very good. i will end on this. it is to the fact the fed were coming off a bad month for risk assets when there was repricing in the dollar and rates, the opposite for em's, for the china trade.

we were almost into a bear market on the hsa tech index. we were almost off the gains for the hang seng index because of the long story short, the markets were not positioned for a number this good, and this is what we got. we will see what happens on the week that begins, where we get more information and momentum coming through. it is a recovery now, the china recovery recovery. haslinda: the data has been uneven, so we have to wait and see if those numbers can be sustained. or now, let's get the first word news with vonnie quinn. vonnie: global atomic monitors say he ran's stockpile of enriched uranium have surged in recent months. an iaea report says that finding

was inconsistent with enrichment levels officially declared by iran. india is bracing for sweltering weather after already suffering its hottest february in more than 120 years. it's whether office warns most parts of the country may experience heat waves throughout the end of may. it also poses a threat to wheat crops, which were expected to reach a record this year. president xi jinping it has signaled an overhaul of china's government agencies when the legislature holds its annual gathering. he told officials broader forms -- broad reforms to agencies will focus on key industries and sectors that will move in an intensified manner. the npc is also such to confirm xi's third term as president. an arrest warrant is out for

pakistan's khan. thees include concealing his assets.he called on supportp up protests. former ftx engineering chief they should sing has pleaded guilty to six criminal charges, including being guilty of wire fraud. he is the third of the crypto exchange's inner circle to sell out bankman-fried. global news powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn and this is bloomberg. haslinda: goldman stock tumbled even as the bank tried to rewrite the narrative and its investment day. ceo david solomon admitted mistakes within the troubled consumer business. >> there were clear successes

but there were also clear stumbles. on the direct consumer businesses, we found the more challenging. it became clear we lacked certain competitive advantage and we did too much too quickly, which affected our execution. rishaad: let's get over to new york. su keenan is there, and in step 3.9% fall. investors not buying this positive spin. su: that painful for ray with billions of dollars of losses for goldman that overshadowed everything, and the brass tried to put a positive spin to promise predictable profits in the years ahead. let's take a look at how goldman performed against its peers. it was the only major bank stock in the red, down almost 4%. and goldman executives putting the focus on the report card and some of the positives.

the consumer ambitions, what is left of them, are now called platform solutions, and they project this solution and this business will be profitable by 2025. that is on a pretax basis. they are continuing with cost-cutting and other efforts. the ceo -- the coo emphasized the strong targets in the asset wealth management business. let's listen. >> most of our clients are very concerned about the inflation, particularly corporate clients. they say it is more persistent in their businesses. in terms of how the market trade inflation, that is a disconnect and it has to get adjudicated over the course of the year. su: emphasizing that in an volatile environment, goldman can still be highly profitable. he played with the prospects of the asset and wealth management divisiveness -- division, and

they announced how open management has come together and gotten behind this strategy to take the bank forward. this investor dave assists -- the first since the pandemic to discuss the stocks, which took a huge beating since 2022. what they are trying to focus on is the year forward. their very first day in trying to turn investor confidence around, which did not seem to go the way they wanted, but they are hoping down the road they can get investors behind this. back to you. rishaad: thank you. let's look at what is happening in the premarket with adani related stocks, this group of stocks taking a look at what we have, gains of about 4%. we had eight out of 10 adani stocks gaining in tuesday's session after a week start. adani stocks jumping 14% after a

fall of 5% at the start of the day. the cash market opens in about six minutes and we have details on what is happening with the troubled group as they try to shore confidence and try and get people to change the narrative of what has been happening off that short seller input. haslinda: still to come, the executive director and senior economist at dbs will be joining us to take us through india's fourth-quarter gdp miss. radhika rao is with us next. keep it here with us. this is bloomberg. ♪ we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?

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getting the s&p global pmi numbers, the factor coming off a previous meeting of 55 point four. carmakers are said to be releasing their february sales reports, and we are looking at aluminum which won initial approval from bauxite mining. haslinda: india's economy expanded below expectations in three months through december, a gloomy global outlook and rising borrowing costs turning -- hurting manufacturing and consumption. let's turn through those figures with radhika rao, senior economist at dbs bank. have you been surprised by the numbers? radhika: the numbers were a bit below consensus. consensus was 4.7%, but when you look at the internals, we need

to remember a couple of things. number one, they were substantial base effect divisions. he also had the last two fiscal years numbers chains as well as a comparative number. if you account for that, it is not far from where the consensus expectations were looking at the internals again, you have had two years of pent-up demand as well as precautionary savings on having to field consumption. as that dissipates, it will fall back to the organic drivers. what was the momentum before the pandemic and whether that bodes well for consumption and inflation has been pretty high, so central bank has had to keep rates higher. haslinda: we are seeing a slowdown across the economy. a services slowdown and a private consumption slowdown as well. what does it say about growth

going forward? radhika: part of the slowdown is also normalization. like i mentioned earlier, you have pandemic driven factors that affected two quarters back and the economy grew however. so all of that is waning and you are coming back to the underlying moment of this, but looking forward, we think the trend growth will settle at about 6% in the next fiscal year. a couple of things are helping. in terms of trade, it will get more beneficial because energy prices have come off of last year's high. the government has taken on a huge capex program, but what is not helpful is that the private sector will not be able to move into this capex as enthusiastically as they were a few years back. they are facing financing costs and narrower margins than they had. because of that, the global

demand, which is better than what we had late last year, but still not strong enough rhythm to go ahead and put projects in place. you will see a bit of a mix. there are some pluses but certainly some minuses. rishaad: we have got the meteorological office suggesting we could see a hot record repeat of the record heatwave we had last year. how is that going to play out? how will that affect the economic prospects going ahead? with the last read of the gdp, the services side was a disappointment. could that be another one alongside agriculture that would take a hit from a heatwave? radhika: certainly inclement weather has been one of those things that are beyond human control, but has affected farm output quite a bit. last year, you saw a similar thing play out when in the early

part of the harvesting for the winter crop, which happens around march and may, gets affected by heat waves, and you have unseasonable rains the third quarter of the year, which affects harvesting of the summer crop. i think exactly, the weather agency's warnings, we are holding onto that as well. the winter and summer crops might get affected, and you can see that inflationary effect playing out already, things like wheat where targets have been missed and not been able to produce enough, just enough to maintain the current stocks, but not much more than that. looking forward, unfortunately the irrigated land is still 50% of crop land, but there is a

significant reliance on these rains. if the forecast plays out, the farm sector will certainly get affected the year ahead. rishaad: you pointed out that agriculture inflation is far outpacing urban inflation. that could become an even wider disconnect. doesn't feed through into the headline cpi -- does it feed through into the headline cpi? radhika: it does. the retail inflation breaks down into rural and urban, and you have seen rural inflation remain quite high in the last few months. that is specifically when you have commodity prices and all of that go up. in the past, rural prices seem to go up faster when you look at the basic inputs they move into agriculture, as opposed to electricity tariffs which are been is more exposed to. high inflation is a problem because that eats into real wage

growth. real wage growth has been in the negative form -- for a few months now. if you see incomes will not get much relief because of higher production, this means wage growth is showing signs of bottoming out, and might not be able to pick up by much. in effect, bradley means the government support will have to be stepped up -- broadly means the government support will have to be stepped up on the subsidies and so on. haslinda: it seems likely gdp data supports a pause by the rbi, but with the backdrop of a fed that is pretty hawkish. how will the rbi weigh those two sides? radhika: for the central bank, the fed number was in line with their own forecast, so that is why -- certainly in their

metrics, they have domestic and external factors. the risk factors at this point does not allow them to take a pause as yet. inflation, the january number was high. the february numbers will also look like that, so i think they would consider it premature to go and pause yet. as you mentioned, fed expectations of the terminal rate have risen sharply, which means the rupee has come under pressure. domestic and other factors do make the bank hawkish. we do not think they will change to a neutral stance yet because they want to maintain the accommodation stance to make sure inflation does not pick up again. if growth really disappoints and you see that in the multiples, some committee members are highlighting growth risks, and beyond data -- beyond april, they will get data dependent.

if real data disappoints, they would rather keep rates high then cut prematurely or's change stance. rishaad: thank you for joining us. radhika rao from dbs bank. we had to the cash open four minutes ago. let's look at how things are progressing. we are following the adani story as well. gains across the board in aggregate and looking at adani enterprises building on the 14% gain they had on tuesday. we have got the regulator looking into adani group under the short seller's allegations. and there was no refinancing of capital enterprise right here in hong kong as they were on a roadshow to this part of the world to shore up confidence amid the narrative and moving to their advantage. that is a look at adani stocks in play at the start of the session. plenty more ahead. this is bloomberg. ♪

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rishaad: this is bloomberg markets as we look at santander shares as they rally to a three year high after its investor

dave revealed a plan to return half of its profits to them over the next three years. the bank's group executive pulled us exclusively how the bank will measure success. >> success is delivering on what you commit, and we delivered on the 2019 investor day plans despite covid, the wars in ukraine, inflation, and this is important. that gives us confidence the model works, that our customer focus on a global scale and diversification are providing good returns for shareholders. this is an acceleration of that delivery, and this is what matters in what we said today. francine: how much of this is thanks to rising interest rates because the european central bank and the global economy, and how much of this is delivery on strategy? >> that is a great question. where than half is actually because we are improving every year and we will do much more in the next few years improving our operating model.

some of it is tailwinds. it is not healthy to have an economy with negative interest rates. european banks will not charge you, and we are a retail commercial banks, so we suffered more than most. we are getting more than 10 basis points. that was a year ago, and some of it is -- but it is a normalization of interest rates, a normalization of what it records, and more than half is what we delivered in terms of a better operating model. you were confident about the world economy a few weeks ago. are things looking better than they were back then? >> we have been saying this for months. strength of demand is so high and the key number for us as a commercial bank's employment, and we continue to move on that. that is going to change. how fast, i do not know.

there is not a painless way of curbing inflation. the question is how high a price you pay. we have a lot of experience in managing inflation in countries not just now but for years, so the sooner you curb inflation, the better. but he will have to take some pain. haslinda: the center there rupee chair speaking with bloomberg -- the santander group chair speaking with bloomberg. pmi numbers beating estimates in china i three standard deviations, strong numbers lifting sentiments. the aussie dollar having a lot of pressure on year on year inflation, missing estimates, printed at seven point 4% against estimates of 8.1%. here is how it looks like for the msci asia pacific index, trading at intraday highs.

getting a lift of the pmi numbers out of china. rishaad: this is what we were looking for. looking forward to the weekend, perhaps for a catalyst to lift these stocks after that stellar january rally. and certainly we have asian equity getting a root boost -- getting a boost from the strong pmi numbers we have. at the moment, the hang seng getting a rally, which we have not seen since december 8. a lot more on the way, including what is up next. that is "bloomberg daybreak: middle east." ♪ ( screams in joy) save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first.

yousef: this is "bloomberg daybreak: middle east."