Bloomberg Smash of day: Australia 01/11/2024

A very good morning.Welcome to DAYBREAK Australia. I'm Heidi Strobel in Sydney.We're counting down to Asia's major market open.Good evening from bloomberg world headquarters in New york, i'm VonnieQuinn. The top stories this hour.Treasurys fall ahead of Thursday's U.S. inflation data as investors await freshclues on the Fed's outlook. New York Fed President John Williamssaying rates are now sufficiently restrictive.Also ahead, the FCC giving the green light to spot Bitcoin ETFs over a decadeafter the first proposal, we'll be.

Speaking with the FCC Commissioner,Hester Pierce. And I'm sure we can live a C.Yes. In Las Vegas where we'll be speaking toChinese EV maker Xpeng about global demand, especially in China, not tomention about their new flying cars. Let's get a quick check on wall street.Small moves for most of the session, although John Williams those commentsdid give a tailwind to stocks toward the end of the session.He spoke about 45 minutes before the close.And as you can see, the S&P 500 ended the session up 6/10 of 1%.The Nasdaq up 7/10 of 1%.

He said policy is tight enough to nudgeinflation down, but policymakers need more evidence before they can dial backinterest rates. CPI Thursday in the United States,though, is what investors are watching. That and of course, the Bitcoin ETFapproval process, which is now done. Gary Gensler, the SEC coming out sayingthat this is not an endorsement of Bitcoin, nor is it an endorsement ofcrypto exchanges and bitcoin itself. Holding onto some gains, trading justabout $46,000 a coin. No massive moves though.So let's get straight to that story. Annabel.Julia is joining us with the latest in.

Hong Kong.And Annabel, tell us a little bit more about the approvals and what actuallyhappened in the last hour. Yeah.Really landmark decision. Something that's as well seen is reallya watershed moment for the crypto industry as a whole because it couldreally start to bring a lot more institutional investors into the digitalasset space at a headline level. Essentially, 11 ETFs have now got the goahead here and as you said, a decade in the making because it was actually theWinklevoss twins, Cameron and Tyler, who first applied for a Bitcoin spot BitcoinETF back in 2013.

But it's taken until now for the FCC togive their blessing for this sort of structure.Of course, there some heavyweights and it was really the entrance of BlackRockat the end of last year. Others Fidelity, Vaneck, Valkyrie, butBlackRock in particular. That started to tell us perhaps thiscould be something that would end up being an eventuality.So as I said, more than a dozen. And you can see some of these here hasbeen that real race to the bottom on their face structure.But they'll start trading Thursday. Really big test for the industry, forETF issuers overall, because this is.

Actually something we have never seen,at least from the research of Bloomberg Intelligence.This many ETFs for the same product going to market in the same day, it'smost likely about trying to remove that that first mover advantage, but stillsomething that's going to be a really big test for the crypto industry as awhole and for ETF issuers. And as you said, this is a landmarkdecision on so many ways, not least of which is also the fact that we veryrarely see this kind of capitulation on a decision from the SCC.Right. What were some of the factors thatresulted in where we learned today?.

Yeah, absolutely, Heidi.We know that the SEC under chair, Gary Gensler has been pretty muchrelentlessly anti crypto for a significant period here, but it does thesame. On what Gensler said in a statement whatthat it was the grayscale court decision last year that prompted the approval isnow grayscale investments their crypto asset manager they one of the biggest inthe market and at a headline level they applied to convert their Bitcoin trustinto an ETF. Now the SCC rejected that decision.A federal appeals court last year overturned that decision from the SECbecause they said that the Commission.

Failed to explain its differenttreatment of similar products. A lot of details in that.But what it tells you was that it was a really stinging rebuke for for GaryGensler in particular and the way that he had approached the crypto industry.Now he's saying that was actually behind the reason to appeal these these ETFs.It doesn't mean that he's really shifted his stance in any meaningful way on thecrypto industry at all. In fact, he's still saying thatinvestors should be cautious on crypto. He just says that Bitcoin is whatBitcoin ETF is will bring more oversight to the industry as a whole.He's still saying that a lot of crypto.

Exchanges are shirking theirresponsibilities and that this SEC action on spot Bitcoin ETFs does notimply that they've approved crypto exchanges.So Heidi, yes, some progress, but digital asset as a whole.But but it does seem that there's still that that pushback on the cryptoexchanges in particular still the ETF's very big decision and as we said, morethan a decade in the making. And of course, we don't really know howit's going to affect the price of Bitcoin or in demand for Bitcoin.And lots of other factors will be factored into that this year as wellwith the halving and so on and about.

But one of the things is that now sellside research firms will be able to put out notes and recommendations and buywholesale ratings. Have we seen any of those so far?Not not as yet on that front, but to my knowledge.But it is certainly something that's going to be very interesting from aninstitutional basis, because this is really about something that could prompta lot more inflows and it really legitimizes the asset class to anextent. Of course, the crypto industry, it's inBitcoin in particular, even though it is actually the largest of the digitalasset tokens and making up more than.

Half of the market cap, it's still avery, very, very small piece of the investment landscape.And so I think a lot of investors, at least on Wall Street, will continue tosee this as just one of the many alternative asset investments that canbe added to portfolios. Of course, there's the the argument thathaving spot Bitcoin ETFs could actually detract to an extent because investorswon't go to crypto exchanges anymore. Possibly they could just look to investthrough the spot Bitcoin ETFs instead. But it'd be really interesting to watch,of course, overall what sort of inflows we've seen to the space You mentioned,of course the moves that we're seeing in.

Bitcoin today, not really notable atall, but at the same time a lot of this activity had already been priced in andit really kicked off with that BlackRock application for a spot Bitcoin ETF atthe end of last year, which told us that perhaps the SEC could finally shift itsstance on this product. What a whirlwind it has been, you know,lost it, not least of which was the the false start that we had yesterday rightout of there in Hong Kong with the latest.And we'll be getting more insights. An interview with the US SECCommissioner Hester Pierce is coming up in the next few minutes.We'll be hearing more when it comes to.

The thinking behind that Bitcoin ETFdecision after more than a decade. Let's take a look at how the rest of ourmarkets are shaping up as we head into the start of trading in this Asiansession on Thursday. Sydney futures are looking pretty muted,about 2/10 of 1% higher. We have seen quite a bit of a pullbackwhen it comes to a lot of those China related mining, commodities relatedplays. Right.Iron ore has been underperforming now for about five days after what hasreally been a significant run up. And that's, of course, benefited a lotof the big miners and really driven a.

Big part of that rally in here.When it comes to trading in Australia, we're seeing a little bit more weaknessin that space. Now, the Aussie dollar is pretty flat atthe moment. 6697, we had the CPI numbers.We'll be waiting to get more of those inflation numbers for December as wellas the quarterly numbers. But November's readings showing thatsharper than expected slowdown in inflation, suggesting that potentiallythe RBA is well and truly done. Kiwi stocks are off by about a 10th of1% and again trading at one 4564. At the moment we've seen sort of when itcomes to the treasuries and JGB space,.

US bond markets really trimming thosebets on treasuries ahead of CPI. We'll take a look at how that plays outacross Japanese assets today as well. The Kiwi dollar also seeing a little bitof trading on the back foot. And of course, Vonnie, we're alsogetting the Bank of Korea decision today that the first central bank decisionhere in Asia of 2020 for that job market data potentially a little bit betterthan what the headline unemployment shows.But certainly that will weigh into the bear case thinking in just a couple ofhours time. Exactly.Economist looking for the okay to remain.

At three and a half percent, sounchanged. Meanwhile in US central banking, NewYork Fed president John Williams said monetary policy is now tight enough toguide inflation back to the Fed's target.But he also suggested policymakers need more evidence of cooling inflationbefore cutting interest rates. Have a listen.My base case is that the current restrictive stance on monetary policywill continue to restore balance and bring inflation back to our 2% longerrun goal. I expect that we will need to maintain arestrictive stance on policy for some.

Time to fully achieve our goals, and itwill only be appropriate to dial back the degree of policy restraint whenwe're confident that inflation is moving towards toward 2% on a sustained basis.More perspective now on the markets with Grace Lee, portfolio manager at ColumbiaThreadneedle. Grace, did John Williams forward thedebate at all? He's obviously one of the top two orthree that we listen to at the Fed. Well, thanks for having me.I think he he came in in line with what we were expecting.I think it's pretty clear that the Fed is done raising rates.But he didn't really give a signal as to.

When they might want to bring ratesdown. And I know a lot of people have beenexpecting something as early as March, but that seems very it seems like it'sright around the corner and we haven't seen the data that that would supportthat type of weakening that would call for a reduction in rates so quickly.What would we need to see in the Thursday session, for example, oninflation, because we are looking for inflation to rise a little bit, toquicken once again for the month's data. We're looking for an annual pace of 3.2%in food and energy, 3.8%. So I think that the numbers that comeout tomorrow, it's probably going to be.

In a range that is, again, probably notsuper decisive in terms of we must tighten or we must we must listen.I think, you know, we've been in a range and slowly slowing down the economy, butnothing, nothing dire in either case in terms of we heatingsubstantially or cooling off a lot, if that's the case.Grace Do you have concerns about the US economy this year, or are you quitehappy with a soft landing scenario? Well, I think the soft landing seems tobe where we're heading, although I think, you know, obviously we've hadvery low unemployment rate, so that certainly supports that that softlanding scenario.

On the other hand, you know, and andthat inflation has been coming down for the most part.And on the other hand, there are still geopolitical risks.There's a presidential election ahead. There is so there's certain certainlyother forces at hand. But but in general, I think a softlanding is is probably where we see things going.So if you're trying to get a nice return in 2024, how do you preemptively tradethat then? What are you doing with your portfoliosin order to try and take advantage of what you think seems to be a softlanding scenario playing out?.

Well, I think we have to realize that,you know, we like to look at the underperforming sectors.And as much as 2023 had very strong returns for the S&P 500 overall, thereare there are many sectors that were left behind and entire swaths of themarket did not participate. And so those are the sectors that we'relooking at and especially against a backdrop of non zero rates, which Ithink is something that we forget about being so focused on the next 25 basispoints. But, you know, again, if you look at thelast ten, 12 years pre-pandemic, we were in a zero rate environment and that wasa very different scenario than I think.

What we're going to feel for the nextseveral years. And I think positioning for that, we arewe're really looking for opportunities that haven't participated in the lastyear, you know, opportunities where where rates rate's levelling off andpossibly coming down in the near term but will help relieve the pressure.Those are those are sectors like healthcare, utilities, financials, maybenot some of the most exciting sectors like technology.But, you know, we think that that there's ground to be made up there.GROSS I have to ask you how many questions you're getting about Bitcoinand crypto assets generally, now that we.

Have the news that you have acceleratedapproval and, you know, as many as 11 ETFs could be trading by the end of theweek. Well, soI think Bitcoin and is certainly an interesting topic for a lot of people.I personally have not been getting a lot of questions given that I, I focus onmore value and income sectors, but we do realize that this is, you know, this isa hot topic and it will probably take some attention.I think the SEC's approval of the ETF today probably helps to legitimize it asan asset class. And, you know, I'd expect that therewill be more excitement about that going.

Forward.And it probably has you know, we'll probably see baby steps initiallybecause it's only been a little over a year since we've had certain scandalsinvolving Bitcoin. So.So I think it'll take some time, but it's it's certainly an asset class towatch. Grace, thank you so much for your timetoday. Much appreciated.That is Grace Lee, portfolio manager at Columbia Threadneedle.Still ahead, oil prices slip in a choppy session as traders balance a price buildup in US stockpiles with threats in the.

Red Sea.Plus, the Biden administration backing. Legislation that would let the US seizebillions and frozen Russian assets. Details next.This is Bloomberg. You're watching DAYBREAK, Australia.Some top stories we're tracking around the world.The U.S. and its allies are weighing options forretaliation against escalating attacks in the Red Sea by Houthi militants.The Iran backed group launched their largest missile and drone attack to dateon ships Tuesday. The White House has been consideringmilitary strikes on Houthi targets in.

Yemen despite the risk of a regionalescalation. If these attacks continue as they didyesterday, there will be consequences. Again, this represents a clear threat tothe interests of countries around the world, and it's important that theinternational community come together and respond to that.Ecuadorian President Daniel Noboa says he has received a pledge of aid from theUnited States as the country reels from violence.A state of emergency has been declared after a crackdown on drug traffickingtriggered a war between gangs and the Ecuadorian state earlier this week.Gangsters stormed a TV station during a.

Live broadcast.They were later arrested by police. Senior China diplomat Liu Jianchaodiscussed US relations with former officials and business leaders in NewYork. According to a statement, he met withBridgewater founder Ray Dalio, as well as former US Treasury Secretaries RobertRubin and Timothy Geithner. Talks were focused on how to promotetrust and reduce suspicion between the United States and China.All right. Take a look at our trading so far earlyin the Asian session when it comes to effects and seeing the Aussie dollaractually swinging to positive territory,.

67 just above that 67 level.Of course, we've seen a bit of sort of profit taking or a little bit of apullback when it comes to the Aussie. Given the big run up from late October,we've seen about 10% being put on by the Aussie and a lot of that has been drivenover, some would say surprising enthusiasm over the Chinese economicrecovery and some of the policy signalling that has really driven inparticularly some of these industrial metals and and commodities like iron orehigher. That's obviously a big proxy for tradingin the Aussie dollar. The Kiwi is also largely unchanged atthe moment.

We're watching the dollar again as well.One 4566 is where we're at with the yen risking really a little bit more painwhen it comes to the potential for a US CPI surprise.That is of course the big inflation print that we're looking at for the restof the week. The yen really potentially looking atthat 150 against the dollar level depending on if we start to see signsthat US inflation has started to accelerate again, we've got a confluenceof factors, really shifting financial conditions, a re-emergence of yen carrytrades and some of the recent gains in oil as well, which is of course aJapanese import, has seen the yen.

Trading really on its heels this week.Funny, I wanted to point out, Heidi, that Bitcoin is trading up 9/10 of 1%now, really bouncing around it, held on to gains and then lost those gains andnow it's back up again and some other after hours trading.Coinbase, which is one of the exchanges that'll be a custodian that's up 1.3%after hours in spite of the FCC chair saying that he doesn't approve of theexchanges. Up next, we're going to hear from S.E.C.Commissioner Hester person on the approval of the proposals. We'll now bring you to that interview inprogress with FCC Commissioner Hester.

Parris.That's on balance of power. Have a listen.Saga, I know there's still there's still a lot.There's still pieces of it to go. But I think this is a big milestone.Well, it's a milestone certainly for these these Bitcoin products.But it also raises a question of what sort of precedent this sets.If you look at the statement from the chairman, Gary Gensler, he was veryspecific that this is specific to these Bitcoin products, which are non-securitycommodities. And there is a question of what thiscould mean in the future for essentially.

Everything else.Is that door completely closed? The chair is right to point out thatthis is specific to a particular set of products, but obviously precedentmatters. And so you look at the reasoning andpeople will do this. They'll look at the reasoning in the inthe order and they'll seek to apply it to other facts and circumstances asappropriate. So I think the only thing I will say isthat one of my complaints in this area has been that we haven't always stuckwith precedent when when it comes to these kinds of exchange traded products.We haven't necessarily applied the same.

Standards that we do with respect to twoother kinds of exchange traded products. But it is a precedent people will pointto. That's the question, of course, we'reall asking whether it opens the door for other ETFs backed by othercryptocurrencies. Commissioner, Is that in our nearfuture? Again, you know, every application hasto be considered on its facts and circumstances.But I one of the things that I think that we have to acknowledge is that whenwe when we apply a particular rationale to one particular product, people willask us to apply it to other products as.

Well.Well, then there also is the question, Commissioner, of just the use of theseproducts once they do begin trading, is expected tomorrow.What kind of fiduciary responsibilities are there for investment advisers fortheir clients before allowing them to put money into these products?It's like anything else that a fiduciary is is supposed to look out for theinterests of all of the investors that she's working with.And that means taking into account the specific circumstances of that investor,the risk tolerance, the other elements of that of that investors portfolio.And so it's not a cookie cutter answer.

One way or the other.Fiduciaries are paid to make good decisions that are appropriate for thatparticular investor. There were a few moments yesterday whenwe thought this had been approved a day earlier.Commissioner, as you well know, everything worked out with the Twitteraccount at the SEC. Well, it is.I mean, as as we there was a statement, I think they came out saying that we aregoing to be looking into this and working with law enforcement authoritiesto figure out how how this happened, how yesterday's event happened.And and I hope that we get to the bottom.

Of it.And I hope that we're as transparent when we when we explain what happened,as we expect the companies that we regulate to be when they experience asimilar event. Well, that certainly has gotten theattention of many on Capitol Hill. Commissioner, there have been manycongressional Republicans who have made their opinions known about the SEC underthis chair for some time now, who have called a lot of attention to yesterday'sevents. I'd also point to a statement that wegot out from that financial House Financial Services Committee after this.They maintain that while legislative.

Action to provide clarity and certaintyfor digital assets remain necessary, the steps taken today are a significantimprovement over what they call the SEC's track record of regulation byenforcement. Until that legislation exists, even withthese approvals aside, should we expect that regulation by enforcement tocontinue? Well, I haven't seen much progress on usas a regulator setting out clear rules of the road when it when it comes tocrypto products and services. And I think that that's been a complaintthat I've had. It's been a complaint that others havehad.

We could just as we changed our tunehere, we could change our tune on that. And so I remain hopeful that we will.That said, Congress has expressed an interest in legislating in this area,and I look forward to seeing their work in this area.And they have a clear interest in figuring out which regulatory whichregulators to have authority in this area.And I look forward to seeing what comes of that.As do we, Commissioner. As do we.Obviously. Well, while we're waiting for that, alot will just depend on the actions of.

The Securities and Exchange Commission.And in addition to a lot of these enforcement actions, if you will, thereare also just questions around fraud and manipulation.The argument initially about what Chair Gensler was so concerned with aboutthese products in the first place, spot products specificallycompared to futures, obviously, a court has ruled that that distinction wasarbitrary and capricious. But do you share any concern now thatthese products are approved? The deed is done.These things are going to trading, especially in light of the instance wesaw yesterday in which prices moved on.

False information.Do you think that more investors, institutional or otherwise, now couldfall into something potentially here that could be damaging, given howvolatile this market has proven to be and how potentially easily it can move?People. If people put out false informationabout a traditional security, a traditional company, the stock of thatcompany can also the price can also move.So this is not unique to Bitcoin or Bitcoin exchange traded products.Obviously, we will continue to to look at the markets andthe markets for these Bitcoin exchange.

Traded products specifically.And if there is that activity will and it's in its it's within the ETPmarketplace, we have authority there to investigate and bring enforcementactions as needed. Our thanks to SEC Commissioner HesterPearse. Thank you for the insights.Today on Bloomberg, another important breaking story, another big one that'shitting and that was your math, your balance of power, speaking with FCCCommissioner Hester Paris. And we just want to point out thatBitcoin is trading after hours as it does trades all day 24 seven.It is now trading up about 1% to 46,400.

A coin.Turning to oil trading now, another choppy session for Brent on New Yorktraded crude futures. A surprise build up in U.S.oil inventories offsetting the latest concerns about new who the attacks inthe Red Sea. Bloomberg's Su Keenan joins us now.And so it was a pretty big swing in price.Yeah, in both New York and London trading sessions, we saw swings of about3% lower and then higher as these two forces, the concerns about oversupplyand concerns about attacks by Houthi rebels again played on the market in thelatest trading, bearish sentiment won.

Out after US inventories surged by asurprising one or third million barrels last week.That is the biggest increase since mid-December.Inventories in the Cushing storage hub in the US, that which is more closelywatched by traders actually rose and that was a slightly had a drawdown andthat's a slightly bullish signal. But again it was the bearish factorsthat won out dropping in the Bloomberg intelligence said Brent crude has beenfacing initially bearish technical indicators and that of Asia trading atthe trading giant video group is predicting that markets will berelatively balanced this year versus.

Demand struggles.And that is as it keeps pace with the new surging supply we've seen outsidethe OPEC cartel surging supplies from the U.S., for instance, A furtherindication of why we're seeing big swings has to do again with the latestattacks by those who do rebels in the Red Sea area that boosted oil prices byas much as 2% intraday before the downturn.And it continues to boost the rates of the world's biggest shipping companies,which are detouring, for the most part, on much more costly routes of about$1,000,000 a trip for these companies. As the US Secretary of State, AntonyBlinken, continues to say that the US.

And allies are considering takingserious action against the rebels. So meanwhile, an oil industry tradegroup is warning that the Biden administration's oil policies could,they say, threaten the next energy crisis.This is the American Petroleum Institute or API.It's widely known as the largest industry group for oil, gas pipeline andsupply companies. They held their annual gathering inWashington, D.C., and took aim at the Biden administration's oil policy.The group giving a sobering outlook in terms of their current view that theBiden policies could jeopardize the.

Country's energy market.As oil and gas production is currently booming and the group is concerned thatclimate change and climate change activists, as well as other conflictsaround the globe, have heightened tensions over fossil fuel supplies.They believe Biden is under growing pressure to block oil and gas projects.They're seeking the opposite swifter approval of certain projects.The group again are warning that possible changes could chill developmentand furtherance of the U.S. oil industry.Back to you. Glenn Beck Su Keenan that with thelatest on oil and the US has become the.

World's top exporter of liquefiednatural gas overtaking Australia and Qatar.US shipments froze last year after the restart of a Texas LNG facility that wasclosed in June 2022 by a fire and explosion.Qatar saw its volume shrink 1.9%, dropping it from the top of the list tothird place, and Australia came in at second with exports that were littlechanged from 2022. US exports are set to rise further thisyear, with two new LNG projects due to start production.Funny well I.D forward. South Korean electric car batterypartner ASC on expects EV sales to be.

Sluggish in 2024, but they remainbullish in the longer term. Chief Commercial Officer Sung Min spoketo Shery Ahn at CES in Las Vegas about navigating market fluctuationsfor this year going forward for 24. We think it's going to stay around for awhile, but then long run. As you know, our goal through the end ofthe year and the end of the decade is it remains strong and remains in light ofour plan in order to get to the end of the decade.Would you consider adjusting production levels given the demand levels rightnow? Well, that's given in the automotiveindustry.

I mean, the battery wasn't so muchautomotive yet, but then it's becoming more integral part of automotivebusiness and we just need to be flexible relative to the market situation for thetime being. But long run, it's no doubt that we willreach the goal that we're planning on. Flexibility includes production cuts,cut well, not cuts. I mean, we we we manage our productionschedule relative to the OEM orders. Some geopolitical challenges that we'vealready seen as well. And China restricting some of thosecritical minerals and needs to be put into EV batteries.What are your expectations for how that.

Will affect your business?Well, it's obviously a challenge. But then, you know, also as a business,we always manage different policies and regulations around the world.So it's nothing new. We just need to find better ways to toto qualify our products to each respective regulations.So when it comes to I.R.A., we have obviously started our plans beforeCOVID, and then we wrapped it up right through COVID.And then now we were running at full capacity.And then Ira is definitely helpful for our business.And then obviously new regulation called.

See is a challenge, but we willdefinitely manage it through as well. As girl and President and Z are so men.So let's get back to Vegas now to see where Chinese Ave make her X Fong hasunveiled its modular flying car. It would be available to pre-order laterthis year with delivery to individual uses to start in the fourth quarter of2025 and all day bitcoin cash. Ariana is standing by and sharing.I fully expect that I want to see you in that flying car.Yeah. I mean, the stuff of fiction is comingto Las Vegas and really we are seeing more and more models of flying cars.It's becoming a little bit of a crowded.

Market.But let's discuss all of this with EV maker X Pong CEO Brian Gu, who's joiningme here. It's great to see you here, AC.Thank you so much for joining us. Pleasure to be here.You have a couple of models of flying cars.Right. But what I'm curious about is you're onthe EV maker. So how does that really fit into yourgrowth strategy? For expense, always pride ourselves tobe the explorer of future mobility. And we don't think the mobility is theonly stops at making EVs.

We actually want to see the futuremobility involve not just two dimensional but three dimensionaltravel. And low altitude flying actually isalso, I think, as a next big frontier for human mobility.On top of that, because our strength in EV, we actually have technology inpowertrain, in autonomous driving, smart cabin technologies, as well as otherengineering and manufacturing knowhow that actually can be very synergistic ofmaking also flying car a reality. So that's why we are shooting to thissector. Because you've had a little bit of atough time when it comes to the sales.

Themselves in 2023 and 2022 as well,right as the broader market has weakened a little bit.So are you expecting this to eventually add to your bottom line?And how long would that actually take? Well, the Flying car project will take acouple more years to make to become a real product.That's why we're demoing the design. I see us today.However, for the electric vehicle market, it's actually going quiterobustly, both in China as well as globally.We're actually seeing our sales grow last year, about 17% year on yeargrowth.

But also we're seeing encouraging signof further growth this year. Was additional models going to launch?I know that you don't necessarily give these sales forecasts, but what are wethinking of about right now? Same levels as 2023, a little bit morebetter. How long will this recovery take?Well, for 2024, we actually anticipate much faster growth than we experiencedthe last couple of years. And also because we are launching moreproducts this year than when we launched in the previous years.We actually think the growth rate will be outpacing the industry, leading tomarket share growth as well.

It's been really interesting to see howthe Chinese EV market has developed with even a bid taking over Tesla when itcomes to the top selling EV maker. How do you compete against not onlythese foreign names but your own domestic brands?Well, expert I think is quite unique because we're, first of all, technologyfocused. If you look at the the product that welaunch, we boasts top of the line autonomous driving capabilities.For example, in China, we have launched MGP for city urban driving scenariosacross over 240 cities, which actually is the first in China.When it comes to assisted.

Driving tech, I think you were alsotrying to launch in Europe this year. Is that still happening?Well, we aim to launch some portion of our extensive capability in Europe bythe end of this year or early next year. We do have a few issues when it comes tothe EU, right, especially with the anti-subsidy probes on TV makers aswell. How is that impacting exports?Well, I think we're also following the development closely, just like any otherOEM. But I think it is normal.We know when markets adopt certain policies as at the OEM, we just have toadapt to it.

So I think we will be monitoring closelyand see what the policy ultimately will evolve to and we'll respond accordingly.Do you see geopolitics between China, the US and Europe improving in 2024 andwhen? What's your best case scenario of howthat could affect the business landscape for U.S.makers like yourself? Well, I think we're operating in a verycomplex operating environment, both from a geopolitical perspective as well asfrom industry dynamic perspective. It is a very, I would say, dynamic.And I think as a company, you just have to be very nimble to address anypotential issues or strategy changes you.

Have to do.So I think that's something I would say it's part of the business today for ourglobal environment. What about economic challenges?Because Europe's economy hasn't been doing that great, Do you expect it toimprove and what will that mean for sales there?Well, I think Europe is a key market for us to expand to this year, and we stillsee very significant growth opportunities for EV in the Europeanmarket despite overall, I think, economic potential challenges.And also we see other growth markets outside of Europe, for example, MiddleEast and Southeast Asia.

Those are also markets that we seetremendous growth opportunity too. So in whole, I think for us, globalopportunities outside of China represent a very large and also very new and fastgrowing opportunity for us. North America.Well, I think North America, you know, we also monitoring it's a very bigmarket, but I think we need to be probably more prepared because it's avery difficult market to enter for newcomers.So we need to be making sure that we have the right to bear strength andbrand and others ready to enter in us. Do you have a timeline for when youwould like to do that?.

Well, I think we don't have a timelinetoday, but clearly that's a large opportunity we have to spend our timemonitoring. You seem very optimistic when it comesto the Chinese market, but the headlines haven't really been that great,especially when it comes to economic recovery and consumption actuallyrecovering. Do you think that will change?Well, I think, you know, last year we saw, you know, in after, you know, Covidthere's, you know, certain parts of Chinese economy I think is still and I'mface was lackluster performance. But I think, you know, overall there'sstill huge growth potential and also.

There's a lot of vitality in the Chineseeconomy and also a couple ways that, you know, the transition from thetraditional I see to new energy era is still unstoppable.So I think we're still very hopeful. You know, it'll bring a lot of growthopportunities for us. Frank, good to have you here and reallymeeting you in person at see us in Las Vegas.That was the CEO of Xpeng Bunny. Thank you, Sherry.Thank you so much. We'll be back with you later.Watch us live and see our past interviews on our interactive TVfunction.

TV go there.You can also dive into any of the securities or Bloomberg functions thatwe talk about. Loss become part of the conversation bysending us instant messages during our shows.This is very terminal subscribers only. Check it all out.TV go. This is Bloomberg. There was a statement, I think, thatcame out saying that we are going to be looking into this and working with lawenforcement authorities to figure out how how this happened, how yesterday'sevent happened.

And and I hope that we get to the bottomof it. And I hope that we're as transparentwhen we when we explain what happened. Take a look at how Bitcoin and some ofthe other crypto assets are performing at the moment.We've seen Bitcoin kind of holding on to pretty muted gains of really just about1% after the FCC approval of spot ETFs, after what has been just a long journey.This is the immediate aftermath of that Wednesday's decision by the USSecurities and Exchange Commission to approve ETF ETFs directly investing inthe token. It really is seen as a milestone.It hasn't been the easiest path to get.

Here.It's been over ten years. We are now starting to see the releaseof a bit more details when it comes to that final Bitcoin ETF vote tally on theSEC website as he sees two Democrats besides from Gary Gensler voted againsta Bitcoin ETF as his chair, Gary Gensler voted with GOP commissioners on thatBitcoin ETF there. So we are continuing to kind of watchfor the broader impact across the asset class.Broadly speaking, we're seeing a bit of upside here, but really a flat tradingsession. Some of those earlier gains have beenpaired and potentially.

We could see kind of a bit more furtherpressure despite that SEC approval. Let's stick with crypto for morningcalls. Bring Annabelle in Hong Kong.So though, what are some of the views out there in terms of the price actionin response to, I guess, the final confirmation and what could lie ahead?Yeah, well, it's pretty interesting of course, because you said we're fairlyflat today, but when you take a look at Bitcoin prices over the course of thepast 12 months, you can see that rapid ascent here, more than 160% gains reallycoming through in the fourth quarter with that anticipation of spot BitcoinETFs being approved by the FCC.

So the action today fairly muted.But when you put it in that bigger context, we still have seen some prettysizable gains changing on some of the industry is saying actually, yeah, asyou said, we could see a little bit of a pullback here.Now given that approvals come through, some investors might want to take someprofits off the table. And then also it's about trying toattract new funds into into the digital asset space as well.Hash node is one that we've spoken to and they're saying that the investorsthat currently have Bitcoin and other measures could be the ones thatreallocate into the spot Bitcoin ETF.

It's actually going to take a little bitmore time to attract new entrants into the space.Vonnie Well, we're not exactly seeing a lot of funding flowing into cryptostartups either, are we? Yeah, that's right.Pitchbook is one that puts out sort of quarterly reports on how VC funding istracking and the latest one tells us that we still saw it completely in thedoldrums at the end of last year. So crypto VC funding was a third of thelevels that we'd seen in the year prior 2022.Really interesting as well. The particular weakness in the fourthquarter, even though we did start to see.

That ascent coming through in Bitcoin,if you change on now, we can take a look at that chart in more detail here.Really see that retreat, as I said, into the end of last year.The question is whether we start to see more coming back into the space.And a lot in the industry are optimistic given we do have further regulatoryclarity coming through. We've also got the worst of thosescandals that have sort of seem to be in the rearview mirror the likes of SamBankman-fried, for instance, for now. Vani All right.Anabel Jewellers there. Thank you.We'll be back with you shortly and.

Continue to monitor the price of Bitcoinand more. Many more to come right here onDAYBREAK. Australia.This is Bloomberg. Oh, Taiwan heads to the polls thisSaturday to pick their next president despite the looming leadership change.One of the largest players in the island's $1.1 trillion life insuranceindustry is still optimistic about business.Nanshan life insurance chairman Chong Elion spoke to us exclusively about theprospects he sees in the sector. We can now offer a full range ofproducts, and that is certainly very.

Helpful because our customer certainlyhas two needs for investment products, right?So I think by by offering that range of products, it will certainly help withour market share. It's been a tough couple of years withthe interest rate cycle in the United States and the hikes for particularlyTaiwan insurers. What's your outlook for 2024?I think my outlook is positive. I think I have a very positive outlookfor 2024. We believe that the Fed will have to cutrates and that would help. Certainly the insurance sells because ina higher interest rate environment is a.

Lot more difficult to sell insuranceproduct because the comparative yield they can they can get from otherproducts. So what kind of premium increases canyou expect in addition to the improved interest rate environment?We don't have we don't have exact number, but we are looking at a goodincrease. Do you think the worst is over for thisinterest rate risk? I was seeing a note from Fitch earlierthis month essentially saying this is still going to be the biggest risk tothe Taiwan insurance industry. Well, I wish it is over.It's never you know, it's difficult to.

To really pin down whether the situationis over, whether we can really completely get over the that this highinterest rate environment. There's been talk about in the pastwhether it was back in 2009, but I think you also applied for an IPO in 2018,which financial regulators rejected. I think some of the ratio to equity wasnot you didn't meet that requirement of 5.5%.Are you revisiting the opportunity to potentially have an IPO?Well, capital injection is certainly an issue that we have closely look at.Last year we have, you should submit, which would help capital.But certainly our our goal is to go IPO.

It's our no agenda.But at the moment we don't have an exact time timetable for that.Is the market looking better, though? I mean we've seen since the end of 2022,the TAIEX is up about, what, 24%? And the economy seems to have a littlebit of a tailwind right now. Is that your assessment right now?Yep. I think the our I mean, if you look atlast year of especially the fourth quarter of last year, Taiwan's exporteconomy is doing really well and the Y-o-y growth was really exceedingeveryone's expected instrumentation. So I'm looking at this year also with apositive outlook.

I think the Taiwanese economy will dogood. And I know we're not talking politicstoday, but right now, obviously politics is at the four.But with the presidential election coming up.So I'm not going to ask you about that. But the offshoot to that question iswhat kind of support from any government, whichever is going to takeoffice. What would you like to see to help theinsurance industry here? Well, the elephant in the room is reallyover 17 acres and the new capital regime especially.And I think we as an insurance company,.

The whole industry, actuallyhave some very specific history special to Taiwan.And I think we so I think the real regulator, I mean, the financialregulator really working hard with us, and they want to make sure that a smoothtransition to the new regime. And then the chairman of the FCC hasmade it very clear that it's not the whole play regime is for everyone isgood, and then it's not to disrupt anyone's operation.So I think that was a very good and importantpromise that we have, and we believe that the financial regulator wouldreally help us to transition into a new.

Regime and to make it a more viableoperation. Now I'm on life insurance.Chairman Chung Yellen speaking exclusively with Bloomberg's chief NorthAsia correspondent Stephen Engle in Taipei.We'll have special coverage from Taiwan all week in the lead up to the voteJanuary 13th with the full results and analysis from Monday.Now let's check on Asian markets before they open.It looks like it's shaping up to be a positive day for equities across Asia.We have Australia futures pointing to an open about 4/10 of a percent higherdemand futures to look like the.

Benchmark there might.Open higher after a great day yesterday and then really unchanged on the Aussiedollar and the New Zealand dollar. But we do have some movement on the yen.Once again, a lot of optimism surrounding that.And of course before US inflation data in the Thursday morning US session.So right now we have the been trading at one 4566, it's about a 10th of a percentstronger versus the US dollar. I want to point out Bitcoin too, becauseI don't want to call it a rip, but we are definitely a lot higher than we werebefore those approvals. The coin is now trading just below$47,000.

That's it for DAYBREAK, Australia.DAYBREAK Asia is next.

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