>> good morning, welcome to daybreak australia, i am haidi straz more -- haidi stroud-watts. >> i am shery ahn. the top stories this hour. the u.s. hitting a record high. here's remained that the delta covid variant will cause about a weakness for global markets. >> australia will lean on the

private sector to boost its vaccination drive. nearly half of the population is dealing with loss now. we will start to the new member of the central bank board. find out whether his hawkish or dovish direction will cause inflation. we had what some traders might call a boring session in the new york session. we did see another record high for the s&p 500 but on gains of less than point 1%, still finishing about 40.91 level. this was leading the gains of financials underperforming these big pass from wall street banks. we also have cruise opening higher, extending those gains. it was a little pared back given that people were not anticipating that meeting and we had dollar strength. not only dollar strength, we are

talking about staffing announcements as well. payment demand and this is also because of that delta variant that continues to spread around the world. all of that combined, analysts are saying the risk assets will really underperform. they also have a huge tourism angle that they need to care about. >> that exposure is huge. also considering what happens with the u.s. dollar being sensitive. i think we are all looking ahead at what happens in the u.k. because this is a company that

had a hugely's ss will -- hugely successful vaccination drive. the prime minister is saying we are pushing ahead with that full reopening. it will be on the u.k. to see how the hospital system copes, how the vaccine early performs and also, what other countries do and how other economies really recover. shares of moderna climbing to a record high. this becomes the dominant variant in many parts of the world, we have been talking a lot about that in terms of the reopening. let's get more on this. just how bad is this new variant ? are people paying enough attention to how this could derail the recovery? >> as you are seeing now, you're already seeing the delta variant cause all kinds of havoc in the u.k. which was it very hard by the alpha variant. we know you can get wave after wave of coronavirus infection. driven by these new variants that are more infectious. the good news is that the vaccines do appear to provide protection against these variants and they are particularly effective at preventing infection. the bottom line is that we don't want to have this virus continuing. as long as we have people vaccinated and vulnerable, -- unvaccinated and vulnerable, people can get sick and they will die.

records. the kaibab ridge 32 against the dollar. this happen in the first part of this year. this impacted -- the taiwan dollar on the others at one point 5% year-to-date against the dollar. this one exports support. we have the renin be -- renminbi here.

this could be more resilient in other asian fx when it comes to holding up against the dollar strength and going into this friday, this is looking challenging. quite coming up, we discussed the u.s. recovery -- >> coming up, we discuss the u.s. recovery. this is bloomberg. ♪

>> you are watching daybreak

australia. i am vonnie quinn with the first word headlines. multilateral solutions to local crises such as the pandemic and climate change. the foreign ministers in china joining my video. fully vaccinated people are being urged to keep wearing masks because of concerns of the delta variant. it was first identified in india. it is now responsible for one in every five cases across the united states. this first pandemic i rising even more here. the conference increased to 27.3, up from one to zero in

may. the reports showed the rise in confidence consistent with a shift toward increased spending on services? -- services. policymakers in europe are being urged to act quickly on their own digital efforts. global news, 24 hours a day, on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. i am vonnie quinn, this is bloomberg. >> sources say a consortium led by alibaba are nearing a deal to bail out the retail arm of the conglomerate.

this is the latest him not to fall invasions effort to clean up its corporate sector. tom mackenzie joins us. what do we know about this? >> this is one of the biggest retailers here in china. alibaba teaming up with the local government there as part of this consortium we are hearing to buy a major stake in suing -- in this -- in suniing. we know that details of the deal may come later this week. it may be confirmed this week. we also know the founder of the company will ultimately use

control if this goes through. that is quite a fall from grace for a man who was the head of one of the most accredited conglomerates here and is one of china's musto profile -- most high-profile. they went on a shopping spree just like hna did and just like london did. they were forced to sell assets. what they did is buy into areas like real estate and finance. it is a consequence of that and some of the roosters have come home to roost in terms of that. the chairman passed up 20 billion you want -- yuan from

ever grand. that surprised a lot of investors in the country and cause a lot of concern. last month, what you saw was a court in china freezing assets worth about 3 billion yuan of the chairman over credit disputes. there are a number of issues. tom: as we look into the next 100 years -- >> as we look into the next 100 years, what are the key challenges the party is facing? tom: china's gdp has grown by about 50% since the death of their leader in 1976. the party is more powerful than it ever has been. it has pushed into all areas of society from education to private business and it actually shored up its own support with its handling of covid 19 after the initial cover-up by the

wuhan officials. since the handling in the early days of the pandemic, they have turned it around. the challenge is going forward are those we were talking about earlier. very high real estate prices. the threshold of education, that is the number one concern when you speak to people, are their fears about getting children into good schools? there are the backup challenges as well. china's birth rate has fallen the lowest since 1961. china has cracked down on changing and hong kong -- shenzhen and hong kong.

that is a risk for time if it becomes isolated. the questions with china continue. xi jinping is expected to get a third term as party secretary and then the key question is who follows him? >> that was tom mackenzie on some of the challenges ahead for china. the delta variant continues to spread, we have noticed, this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines. didi global is pricing shares in its u.s. ipo at $14, at the

top of the marketing range. it is likely to increase the size from the initial 288 million. that price would allow the ipo to raise about $44 billion. exploring fundraising options after backing away from a listing in shanghai. the ceo told bloomberg that they got capital on their own. >> we have no options.

>> hong kong based insurance giant aiia has but a steak for $1.9 billion. this is subject to readily tort approval and it also marks the second year of aia boosting its investment in china post life. nissan worldwide sales gained 28% last month, led by demand in north america. meanwhile, chip shortages boost the plans for output. coming up next, kathleen hays is

here with a big guest, today. >> i will be joined by the newest member of the board of openers, christopher walla joins us. he works right alongside him -- alongside jim bullard. he is on the board of governors where he is going to be voting at every single knitting. we'll talk about whether the pandemic is still an issue, inflation. tapering, how much stimulus is needed for the government -- from the government at this point. we are also talking about job support. keep it right here, this is bloomberg. ♪

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>> kathleen haynes in new york. we want to welcome you for a conversation with a special guest. joining us from st. louis is federal reserve board governor chris lawler. it is great to have you with us. i want to get right to the questions that have been spoken about constantly last week since the fed meeting and one of them is the big shift in dots. the consensus was from 2024 to 2023. the number of people say there could be a rate hike in 2022.

over one third of the members of the fomc. were you part of that shift? chris: no, i did not shift at all. i tend to have an optimistic outlook for the economy so things have been proceeding could be much according to the way i thought they would so i did not feel any need to move my dots forward but the other committee members have clearly taken note of the improvement in the u.s. economy and felt they were making much better progress towards achieving our goals. kathleen: -- 2024? chris: i'm not going to tell you what i have. very optimistic outlook. kathleen: we are showing it on the dot chart now. what would you have to see to move it up, to get to -- that first rate hike has to come next year? chris: we would have to see very good improvement in the labor

market. gdp growth is what we wanted. inflation is above our target, which we wanted for a while. inflation expectations seem to be anchored around our inflation target. the remaining thing is the labor market has not quite come back so unemployment is so much higher even though it is in good shape at 5.8% relative to other recessions. we were at 3.5% unemployment in february of 2020. long way off of that. a lot of people were in the neighborhood of 7.5 million. they would have to come back very quick. they would have to drop fairly substantially. it would continue at a very high rate. take seriously a rate hike in 2022 but i'm not ruling it out. kathleen: not ruling it out.

inflation expectations are well anchored around what you want to see about the target. however, if you look at consumer base measures seven nation expectations, they are way over averaging above 2%. what kind of numbers on inflation expectations would you have to see to say maybe i am going to get looking for the rate hike next year? chris: i have long been a fan of market-based expectations because in most cases, when you were looking at that, you put money on the table in terms of what you think inflation is going to do. the michigan survey, consumers, it is highly correlated with the actual inflation rate so if people move out their expectations for inflation five years out, there's too much noise for me personally. they do provide a signal that you have to pay attention to.

at the end of the day, i much prefer to look at the market-based measures for inflation expectations. kathleen: this was also the talk about tapering meeting. time to start drying up the plan for that? -- drawing up the plan for that? do you see that this year? chris: we said we wanted to see substantial progress. none of us in december would have thought the economy would be where it is right now so it has moved faster than we thought. we made better progress than we anticipated so as chair powell said, we are starting to talk about this. there's a lot of things that have to be decided in the process of making a tapering decision. when is the appropriate time to taper? the pace of tapering and whether there's any particular sequence of tapering that we want to pursue, there seems to be a wide range of opinions on how to do that so these are the sorts of things we all figure out. but given the way the economy

has progressed, i think everybody anticipates that tapering could move up earlier than when they originally thought, whether that is this year -- we will see, but it certainly cut. kathleen: what is driving the tapering decision right now, pushing it to this point? is it that the economy is so fast? we may be -- mortgage-backed securities in such a hot housing market. chris: i would say the general view -- i should not speak for the committee -- but the economy has done much better than we thought. they vaccines have been extremely successful in helping us bring what i think the pandemic is over and the crisis is over and now we are dealing with the aftermath of the pandemic. we are dealing with the phase of economic policy where it's

appropriate to start thinking about pulling back on some of the stimulus. i am much more sympathetic towards tapering first for a couple reasons. one, even though we are not intending purchases to support housing markets directly, -- indirect effect on housing markets. right now, they don't need any other unnecessary support. i would be all in favor of that. from a risk management perspective, we should worry that if we are going to have some potential damage, then we should pull back just for the fact that we are doing that. the housing market is on fire. we should think carefully about doing purchases and if we were to taper those first, it would not necessarily be a big issue or big problem. kathleen: specifically, you are in favor of tapering

first? chris: yes. kathleen: i want to ask you about jobs. -- taper first rate hike, how important is it that the unemployment rate is down to its previous lows? the level of jobs is back to where it was before the pandemic? -- tapering versus -- chris: the tapering, we want to see substantial progress to our goals. in terms of rate hikes, we made it clear we want to see our goals achieved before we start -- rate hikes. those have two different sets of efforts and it's important to keep that separate. it's not equivalent to achieving your goals. i myself would like to see that

before we consider raising rates. therefore, if you think you may have to raise rates around 2023, you pretty much want to get tapering down by the end of next year if possible. kathleen: in 2016, when you -- research at the st. louis fed, -- -- new paradigm. the idea that this u.s. economy has a disinflationary, low growth scenario. are we seeing a regime shift now potentially with record fiscal stimulus on top of the stimulus that is still there? could this shift of way you are looking at the framework? chris: clearly, we were thinking along those lines and we saw low inflation, very low productivity growth and very low growth rate of the economy. we thought that would persist

and push down real interest rates, particularly in our policy rule. there was not any reason to be raising rates when the economy was not inflationary so why raise rates just to raise rates? inflation for the next few months is going to be running well over 3%, way above our target. productivity has exploded in the past 12 months. that is a tremendous increase in productivity so more capital, more automation. whether that productivity continues or not is the issue. people are not necessarily taking it well. but if it were to continue, that would have implications for our

rates. kathleen: this could be a regime change. do you think that is a possibility? chris: keeping my eye on it. keeping my options open. there is more evidence of it now again there was years ago. kathleen: -- average inflation target framework. chris: not so much the inflation , average inflation targeting. it is what i think would be the long run neutral policy rate. we have a kind of new decade of productivity growth to the neutral policy rate. kathleen: thank you so much, chris waller, for joining us today. chris: great talking to you again. kathleen: -- haidi: we are

hearing that officers need more info and they need time to complete their audit. this coming nearly three months after results kicked off -- not to mention concerns about the companies future. they are unable to provide that. they are saying there's always been defaults under their securities. the firm has been able to pay on time. there is indication that they may head towards a landmark default. bond trading at around 100 cents a dollar. let's get to the first word news with vonnie quinn. vonnie: thank you. all-time high in new york after

its vaccine -- antibodies against the strain. moderna -- [indiscernible] israel's new foreign minister is -- nine months ago. -- his counterpart in abu dhabi. this comes weeks after nuclear talks with iran. -- travel to dubai on wednesday. ministers have more time. it will reconvene on wednesday but that will take place the same day as the main policy meeting on thursday and they will be considering whether to

-- pandemic. the british government says senior executives who travel to the united kingdom can temporarily leave if their work is likely to bring major benefits to the economy. -- multinational executives, looking to make an investment in a local business or setting up a new company. critics question why -- smaller firms. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: [indiscernible] vaccine rollouts -- restrictions. -- half the population under lockdown. our bureau chief joins us now. does it look like -- ?

>> good morning, haidi. that is certainly the hope in sydney. they came in the high teens and expressed some satisfaction. having said that, -- up to around 160. a lot of people were out in the community before they were identified so still that risk that we could see a spike in numbers. yesterday, we had brisbane which went into lockdown, joining sydney, perth, and darwin. they are in a holding pattern. we are looking at two weeks in sydney. haidi: what does that mean?

james: it will have an impact. it would cost around $2 million to the local economy. the other industry that is hit is the tourism industry. the school winter break. [indiscernible] so that's really having an impact on the tourism sector there. qantas airlines -- the other economic impact is potentially on the resources sector because this could have an impact on -- operations in western australia. we are awaiting further details on what impact that might have on production. haidi: [indiscernible] -- to be able to register for

the vaccine yesterday. -- until september. a lot of these are frustrated over the rollout. have there been complications? james: we have seen it hit scott morrison. he has have a lot of criticism. this might have a further impact. really strong opposition in other parts of the world, and the slow vaccine rollout -- it is haunting him now. the problem the government had is making the big astrazeneca -- facility for that to get a vaccine and laid out over the -- messaging on that has been very weak.

[indiscernible] -- risk of that. there is a lot of confusion. has not boosted the vaccine rollout. scott morrison -- we will see what he comes up with. haidi: james thornhill. coming up, a chinese automaker says -- it looks to raise cash after canceling plans for a shanghai listing. catch our exclusive interview, next. this is bloomberg. ♪

>> you are watching "daybreak australia." we are wrapping up the quarter. tencent has -- market cap from the years peak. -- may 2020. over at the asset management company, -- fundamentals,

lagging estimates. the online data business -- rearview mirror. small caps heading into the -- more than one third has come down, allowing it to receive -- more gains. stock lifting its target of its deal with tesla. a securities company says -- further hikes. it has seen boosts the risk appetite. haidi. haidi: it chinese automaker is -- star board. it is the first -- confidence

about consumer demand in china and that judy is on track. >> on target. >> citigroup have made significant growth. we are facing a lot of -- from the whole supply chain. [indiscernible] so actually, -- >> a lot of economists expressed concern that china's consumer is not back to where it was before the

pandemic. are you seeing that in terms of demand? how heavily -- chinese consumer is? daniel: [indiscernible] chinese economy. the gdp growth, consumers willingness to consume volume in the first 12 months has already returned to the level for 2019. we will perform even better, actually, even 10% higher than the same period. >> what percentage of deliveries are being impacted by the semiconductor shortage?

daniel: we are impacted a little bit. it is roughly around 10% to 15%, but for the whole year, we believe we will be on track. daniel: -- >> we saw that you pulled the plans listing in shanghai. will you revive that ipo at some point? is there a timeframe? daniel: we are still established as one of the options, but we have more options and we will decide what is the best milieu for our approach to the capital market. haidi: daniel li speaking with tom mackenzie. stay with us for another

exclusive interview later. the executive director and general manager of a chinese bubble tea chain discusses expansion plans and business strategy as the company debuts in hong kong. be sure to tune into bloomberg radio t cap index -- to get index analysis, broadcasting from our studio in hong kong plenty more ahead. stay with us. ♪

kathleen: in the news today, j.p. morgan has hiked the pay for bankers to lure them to work for them. it is difficult to find workers and it seems that perhaps more work from home set ups could help. i spoke with the president of dona we said this could help society and women. >> i hope that companies realize that a huge value that it can recruit people from their own country and it makes real the cost savings and it may fit the region and the women in that region will find it very difficult to commute to the big cities. haidi: you know that for everyone, in particular for working families and just more broadly, this idea of workplace flexibility is going to be so key coming out of the pandemic.

we heard such a different array of views including just yesterday from a credit card provider saying that even if you can be back in the office five days a week, maybe we should not. that is it for "daybreak australia." "daybreak asia" his next. this is bloomberg. ♪

haidi: a very good morning. welcome to "daybreak asia." sophie: we are counting down to asia's major market opens. shery: good evening. i'm shery ahn. our top stories this hour. engine stocks look set to follow the u.s. higher after the s&p 500 eked out again. fears remained that the delta

variant could ca