haidi: of very good morning. welcome to "bloomberg daybreak: australia." i am haidi stroud-watts in sydney. >> sophie: i am sophie kamaruddin. the top stories this hour. saudi arabia insists the alliance must extend its output yield despite strong opposition

from the uae. we hear exclusively from the saudi energy minister. haidi: china dealing a major blow to didi. sophie: a global ransomware attack targets a software supply chain. experts say it exploded a flaw in an i.t. management program. haidi: let's check in on markets. we are expecting something of the holiday inn session, of course, the u.s. away from the july 4 weekend. we are seeing kiwi stocks up 0.3%. futures trading up 0.1%, this after u.s. stocks rose again on friday, and for the first time since 1987, the s&p 500 reaching the all-time high for a record seven straight session. the jobless rate climbing, jobs

numbers overall coming in positive. no expectations in the markets that the fed will be in an imminent rush take away the dignity punch bowl -- the liquidity punch bowl. futures looking flash. in australia, we are expecting the rba to rein in some of the stimulus measures, despite half the population here still remaining under lockdown. sophie: with ozzie on the back foot -- aussie dollar on the back foot, trading at 1.11. the nhk news reported japan's elections. haidi: let's get to one of the top stories from the markets. the oil patch saudi arabia insisting that opec+ must extend oil output.

they will try to avoid a stalemate. asia energy correspondent is here with us. what are we expecting now? >> saudi arabia is really insisting that opec stick to this agreement that it has hashed out with russia to boost production, and it is really raising the stakes in the standoff with the united arab emirates. the uae has said it is in favor of adding more oil to the markets but rejects the plan proposed by saudi arabia and russia. it is requesting the baseline for its own production be revised significantly higher. without an extension of the agreement, there is a fallback deal in place in which output from the group increases in august. that would be bullish for prices. we will have to see what happens. the group is scheduled to meet

again today so it is still possible that there is some sort of agreement. sophie: let's get deeper into the ramifications for the oil market. >> the uae is forcing its allies into a difficult position, basically accept its request or risk unraveling the entire opec alliance. failure to reach a deal would squeeze an already tight market, potentially sending crude prices higher. but there is also a traumatic scenario. if communities in the opec+ group -- if unity within the opec+ group makes down entirely, it could crash prices. you could see a repeat of the thing we saw last year where it was free fall" races crashed and the market turned negative. -- crude prices crashed and the

market turned negative. haidi: is u.s. shale waiting for full capacity to resume at opec? you talk about the tightness in the market? will the ultimately a stronger driver? aaron: everyone is really waiting to see what opec does. the ramifications are large depending on whether there is an agreement to lift output or the group breaks apart, the unity that we have seen since last year breaks down and there is a free for all a lot is riding on these negotiations and i think that a lot of people make decisions based on what we see that meeting hopefully later today. sophie: asia energy editor eric mark -- aaron clark, thank you. markets are vulnerable with possible triggers in the inflation scare, u.s. deeper talks, and the delta variant setbacks. we are joined by shane oliver.

on the inflation front. opec+ dispute when it comes to raising output, that may weigh on the inflation picture as we see consumer spending being dented. we are seeing this come through with the correlation between the s&p 500 and brent which is negative for the first time since 2019. one will higher oil prices ring the bell for stocks? shane: that is a good question. you could argue the rise in oil prices has contributed to some of the inflation scare over the last few months. you could argue it is opec to some degree. at the moment it doesn't have any positive effect. the question is how much faster it goes up from here.

the gradual rate higher to some degree has been absorbed by the markets. if it continues to accelerate, perhaps because opec can't reach a deal on increasing output, obviously, that would be a concern. but as we have heard, these concerns in opec go both ways. you could argue that less supply in the short-term therefore higher prices. but it could mean lower prices over time as they individually compacted output. it is unclear which way it will ultimately go. sophie: inflation is a key consideration for central banks. ahead of the fed meeting on wednesday, the latest report showing a pickup in unemployment rate, as more people entered the job market. what is the path for the fed tapering and eventual tightening? shane: the fed will start

formally discussing it. by the end of the year, really next year, i think it is probably more a 2022 story. but i think next year, tapering with have started. as we saw in 2013, the initial talk about tapering, there was volatility in markets. but tapering is still monetary easing. so it is not yet a monetary tightening, but obviously it does eventually headed in that direction. my take on all of this is the jobs figures on friday were not enough to change the fed's perception on things. . they will be happy that the recovery is proceeding, the job market is continuing to recover, but by the same token, you look at the fact that employment in the u.s. is still 4% below its pre-coronavirus level. people in the workforce, the

number still remains low, being held back particularly by the enhanced unemployment benefits. as reopening occurs and those unemployment benefits come to an end, then you will see the labor supply pickup. so there were a bunch of things that suggest it was a modest jobs report. recovery continues but it is not so strong. my take is that, yes, the tapering will start at the end of this year or early next year, and gradual process. and rate hikes probably commence in 2023. but there was nothing in friday's jobs figures to change that. haidi: in the meantime, where we are, half the australian population still remaining under these stay-at-home orders, to what extent is the delta variant and the ability to manage that a key differentiator for market outperformance in this region? shane: it probably is causing a

lot of nervousness. this region does not have the degree of immunity that other countries have, because we haven't had as much coronavirus for one thing, and we are not as vaccinated as north america and europe is. that could cause a short-term setback. the production plans from the major producers are accurate. we do see 10 million produced this year. then i think you will see the supply of vaccine across the region start to pick up, i think you will see vaccination rates pickup. these concerns we are currently seeing, i think will gradually start to abate. the editing about this region, it is different at controlling the coronavirus. . we have seen in austria is that vast -- we have seen in australia that there are lots of lockdowns and they work. the fact that the lockdowns would commence relatively early

in terms of the number of cases, does provide a bit of confidence that they can also end early. the other aspect in austria is that a big chunk of the older population have been vaccinated, therefore, the fear factor associated with it in terms of death and illness, particularly in nursing homes, is not nearly as bad as it was last year, actually, it is not bad at all. that is one factor, vaccination rates of older people, people in nursing homes, is different to the situation a year ago. haidi: is your view than that it sets the rba to start tapering? shane: i think so. when the rba meats, they will make some steps toward exiting from easing monetary policy. i think they will probably

announce something in relation to bond buying, either slowing the pace, or making the reviews more frequent than six months or some combination of the two. i think their commentary will remain fairly doviomorrow. i think they will wait to hike rates until 2023. haidi: gently does it. shane oliver, thank you. still ahead, sydney's lockdown is set to end this week but residents are being urged to comply with rules or risk a possible extension. the ambassador from the university of melbourne will janice with her views.

but more on the surprise of the takedown -- on the surprise takedown of didi's in china first. this is bloomberg. ♪

that's quick check on oil prices after opec+ reduced again. not too far off the october 2018 highs that we saw on friday. spreads for brent elevated, pump spreads about 90, haidi. haidi: and is only you've been talking about, the potential stalemate. the alliance must extend its production agreement to the end of next year. saudi energy minister spoke exclusively to bloomberg's annmarie hordern earlier. >> i want to emphasize that it

is the whole group versus one country. which is sad to me, but this is the reality today. >> how concerned are you if there is no agreement and potentially we could see what we saw last year, which becomes a price war? >> we have an existing agreement. i keep reminding people, unlike what we had in march, we have an existing agreement. we will honor that agreement, we will continue with it. the agreement requires that we bring more production, yes, but to complete honoring the agreement, we should kickstart what is mentioned in that agreement, which is we have to, extend. again, the extension put lots of people in their comfort zone.

it addresses the market, check with all the participants in the market. >> if not extended, no production increase in august. what happens in august? >> it is your chance to have another, maybe interview with me, after tomorrow's meeting. >> are you worried we could see a massive hike in prices, because the market is in need of more supply for the month of august? >> if some people would like to have that, they can do that. this is not our intent. because if it is our intent, where would redo the proposal? why would we work with our --

why would redo our proposal? >> russia and china are in. there is just one holdout, the u.a.e. >> it is an agreement that is done. >> does this dispute have the potential to bring an end to the opec+? >> we are 20 countries on agreement, why should it? can i give you a sequel, in march, we did not have an agreement. the situation dictated that people can step back and talk about seriously how to attend to the situation. it is very simple. >> but opec+ needs a consensus or it cannot work.

so, if the u.a.e. does not sign up, you say there will not in agreement. does this need potentially we could see an exit by the united arab emirates? >> what is peculiar for all of us is why they don't. they never brought --. they never -- on an issue like this ever since. why now? it is an extension of another 8 months. there is a solid logic to explain and as it has been accepted by everybody. haidi: that was the saudi energy

minister speaking exclusively with bloomberg's annmarie hordern. we will be hearing from the u.a.e.'s energy minister as well in the next half-hour. meantime, let's get over to juliette saly who has our first word headlines. juliette: tokyo olympics organizers are reported to be leaning towards borrowing spectators from events held in large pennies such as soccer and baseball. they will consider the plan to contain covid-19. the report says families may also be barred from the opening and closing ceremonies. 49 philippine soldiers survived a crash of a plane. it was carrying 96 people when it exploded after crashing. 42 army soldiers and three civilians on the ground were killed. it was one of two aircraft handed to the philippines where the u.s. as part of military assistance this year. cybersecurity researchers say the hackers find the latest

ransomware attack exploited software made by kaseya. russia-linked riv-ill has been accused of the attack. they were also accused of being behind may's jbs attack. global news, 24 hours a day, on air and on bloomberg quicktake, powered by over 2700 journalists and analysts in more than 120 countries. i am juliette saly. this is bloomberg. sophie: a slump in chinese stocks will be short-lived. all sectors in the red, widening the year-to-date lows for the index, which is already a big laggard globally. the hang seng weighed heavily by tech shares on friday. dealing a major blow to didi.

for more, let's bring in our markets go and,, mackenzie, in gauging -- markets co-anchor, tom mackenzie, invasion. tom: it is by far the biggest ride-hailing service in china. what we heard from regulators was that they were banning the app on any app platform here in china, including apples platform. i had a look on the sunday, you cannot find the app on apple or huawei or xiami. regulators citing serious violations on didi's collection and use of personal information. they have ordered the company to rectify the problems, saying that didi needs to protect the personal data of its users. bear in mind, this action from

china's regulators comes two days after they announced a cybersecurity review of didi's operations and a couple of days after that huge u.s. ipo, the second, by the way, second-largest by a chinese company in the u.s. ever, where they raised about $4.4 billion. curiously, people have pointed to the timing, coming just around the time that the communist party of china celebrated its 100th year anniversary. this is a significant hit didi by regulators in china. haidi: when i first saw this, i was, like, how are people getting around in china? but if you downloaded the app before this weekend, you are ok? tom: i was concerned. many of us are reliant on the service to get around the city. you cannot download the app on the app store, but if you

downloaded it before this, it is still in operation. that is good news for the billion or so people who use the service in china. didi came out with a statement and said, this will impact us, it may impact, have an adverse impact on revenue in china, not a big surprise. they say they halted new user registration as of july 3. they say they are working to rectify the act. this is also part of the antitrust push by regulators here, and this underscores the uncertainty overshadowing china's internet sector. haidi: our markets coanchor tom mackenzie in beijing. still more to come on "daybreak: australia."

haidi: and mixed start to trading, with the absence, of course, of wall street. new zealand up a quarter of 1%. sydney futures looking like

>> you're watching daybreak australia. a few days of negotiations between saudi arabia and uae have left without a deal. abba dobby says it will not accept a plan to curb oil production beyond april 2022. blessed is given a higher baseline. meanwhile, the saudi say they cannot give into the demands.

>> we have a deal. we will continue with it. as we bring more production. to complete an honor that agreement, we have to extend. >> we are only asking for a fair payment. we have lost one third capacity. many other countries have been given production, they continue to produce. juliet: chinese president xi jinping and french president emmanuel macron are expected to have a video call this week. macron is set to be keen on

easing travel restrictions into china for eu citizens. supporters of the former south african president have gathered in his home, vowing to resist any arrest attempt following his conviction on contempt charges. it is not clear, after a court agreed to review the judgment. protesters in brazil have been calling for the removal of their president after the supreme court authorize an investigation into the purchase of coronavirus vaccine from india. it turned into a scandal when a government allies said he had a contract to acquire the 20 million doses plagued with regularity. global news 24 hours a day, on-air and on bloomberg quick take, powered by more than 2,700 journalists and analysts in more than 120 countries.

i'm juliet. this is bloomberg. haidi: the latest covid lockdown in sydney is do to end this friday provided case numbers continue to decline. they are urging people to follow the rules, what are the chances that city will be getting out of this lockdown as planned? >> there is a very fine balance at the moment. 16 cases yesterday, 30 already in isolation. 35 cases the day before. in context, these numbers sound small. australia is not used to this, it had been working so well here until a couple of weeks ago. with 277 cases of this outbreak so far, 300 exposure sites, more than 80 fines were issued over the weekend. a beautiful weekend. a lot of people out, exercise,

essential shopping. and then the premier telling people staying at home means staying at home. if you will do the right thing we will be out of this in a timely manner. plans are being put in place for next week after the holidays. but the vaccine for the school-age children not due out until sometime next year. sophie: at the current rate of vaccination, it may take eight months to cover 75% of the australian population. i things going to improve after we have seen criticism of the rollout? paul: yeah, the stall out is is how -- is how it is being referred to satirically here. there are signs that it is gradually hitting up. as of today, 500 gps will be able to administer the pfizer shot to the 40 to 59 age group.

still no word when the under 40's will get their first shots. business leaders are starting to lose patience. saying we need realistic and achievable vaccine packets to achieve this. when every adult who has been offered a vaccine has been able to take up that offer, right now just 7% of the population is fully vaccinated here. haidi: paul allen in sydney with the latest. more analysis on the situation in australia. nancy, always good to have you with us. there have been mixed reactions to the prime minister and the government's four step plan to get people fully vaccinated. is it enough, particularly the level of detail we have been given on how this is going to be achieved?

for >> first of all we need a plan but what they have presented is a plan to make a plan. i think with covid, you need to be fairly flexible. i don't necessarily have a problem that they don't have every step of the journey mapped out. particularly for the initial two phases of the vaccination plan to open up. haidi: with respect to how this latest lockton has been happening, we see very few people wearing masks. public areas being busy. everybody getting back to lives as normal. is this a way to get out of these cluster outbreaks? i know you are saying a lot of these measures need to be put in place until such point that we reached some level of herd

immunity. >> i think masks should be here to stay in some circumstances. not so much outdoors but mormon people are going to malls. on an indoor basis. that may be fully vented, there might be a lot of close contact. going by individuals, being potentially exposed to the sweeping contact, where you have seen the delta variant be able to transmit even without a lot of time spent between individuals. i think using masks in that circumstance makes sense. we know the chance of transmission is much lower inside -- much slower outside, just like if you were smoking outside, the same thing covid-19, people speaking. that doesn't mean if you are

seated outdoors our wedding or something like that that there is at some risk of transmission. we saw that with the rose garden super-spreader event in the united states. there is potential to spread outdoors. you saw some of the shots from yesterday and the day before in sydney. it is hard to know how close these people are because you can play some games with photography in terms of perspective. but, if you are close to people outdoors, you should be wearing a mask. in other cases, not necessarily. sophie: how realistic are the vaccination goal set up by the administration given that specific vaccination goals have not been identified? >> they have not set vaccination goals and we need to. we need to set goals so people can galvanize around those numbers and be motivated by the numbers. we need an entire reset in terms of how we communicate to people.

communicate the benefits, the risk, and inspire people to get out and get vaccinated. they are holding off because we just don't have adequate supply of pfizer yet. holding off until we get the supplies so they have momentum leading into the spring here. but, it has allowed vaccine hesitancy to increase year. not so much, i don't think it is because people don't plan to get vaccinated at some point but they are really confused by all of the mixed messages. and they really don't know what to do because they have not been guided in the right direction. haidi: on the confusion, without the clear timeline and rates and goals, that confusion for businesses as well as households, also looking to be a drag given the shortages of talent.

so, what weatherby and the plan that is needed to allow for reopening of these borders? >> is naive to believe we can truly reopen before we have a high portion vaccinated because that would just be an unmitigated disaster in terms of death and illness from covid-19. we need to start thinking about a stratified quarantine and stratified risk for international travelers. which i mean by that? right now we are treating everyone as if they have the same risk but they don't. we need to think about where people are coming from in terms of how out of control covid-19 is in that jurisdiction and whether individual traveler has been vaccinated or not. if someone is coming from new zealand and has been vaccinated, that is a low risk scenario. we already have a bubble, those people are being treated the same.

even vaccinated people are being put into the same two week quarantine. and are subject to the same decrease in travel. remember, some of those people are going to be extremely low risk so it doesn't make sense that we have restricted people who have essentially almost zero risk of community spread. if they came back to australia. moving forward, we need to get a lot smaller about how weak -- a lot smarter about how we quarantine people and let people in. haidi: when you take a look at the epidemiology of this disease, turning to a seasonal flu, and we then just manage it as opposed to attempting to eliminate it, is it more like a measles situation? >> we do need to open up and we will need to manage covid.

so we will not be able to maintain this covid zero status that we have. but, this is not the flu. anyone still saying this is the flu, this is clearly not the flu. when we look at the flu outcomes over the past two years in australia, the rate of death and illness from the flu is dramatically down. the things we are doing to control covid have almost eliminated sickness from the flu but they still have not eliminated covid. the flu is easier to deal with in covid's. i think the analogies to the flu are misguided and we should stop them. i'm really surprised that people continue to use these analogies because they are so unhelpful. what i think we need to do is accept the fact that we have to open up. we need to be extremely highly vaccinated. i think just relying on vaccination will not really get us is quickly to be able to be

fully open. and, not protect people the way they could be protected if instead of bringing covid in any ignoring that we are living with covid we actually accept that we are living with covid and we institute measures such as wearing masks and malls and things like that, including the ventilation in our home and offices. and not going to work who we are sick. i think that is so important. not going to work will be are sick, working from home we are ill. we need to do those things if we want to make sure covid does not spread like wildfire amongst the unvaccinated. and we protect people from illness and death. haidi: children under 18 have been seen as the last missing puzzle piece when it comes to the vaccination effort. and we are seeing troubling evidence that the delta variant might affect children more than the previous variant. when you think kids in australia

should be vaccinated? >> we don't know that delta is worse or more infectious in children proportionally. we just think right now it seems delta is more infectious. and therefore more children are becoming infected. they are not targeting kids. what we see in the u.k., kids are not vaccinated and they are going to start getting covid. that is going to be the main source of spread of the community in the same thing will happen australia if children are not vaccinated. a vaccination expert group that gives guidance on vaccine is considering pfizer for the between's and teenagers 12 to 17 and guidance is expected soon. i do not expected to be different than what many other countries have decided, that risks and benefits are so it is recommended in 12 to 17 euros.

that is critical because even 80% vaccination rate amongst adults what really be enough to get us to controllable covid and less we include 12 to 17-year-olds in that group. sophie: nancy, thanks so much for your insights on australia's national strategy. on to our next story, japan's ruling bloc failed to score and majority. the vote is being quickly washed -- closely watched ahead of a possible general election ahead of the games. what is at stake here? >> this is a metropolitan general assembly election so it is not hughes but they are watching that stabilizes a little bit i have the olympics. this is the politics of the pandemic and the politics of the olympics.

as you said, a general election is coming up at some point after the games. his popularity level, his approval of girls -- his approval levels have some to the lowest since november. the ruling party has lost three elections in a single day. there are the politics of the pandemic and the handling of the outbreak. cases keep on rising. another 518 newco's nest new cases in tokyo alone. the politics of that and then the olympics, highly debatable whether they should even be held. we are seeing the election results just coming out the last few minutes. it looks as though it did get a bit of a shot at the arm. 33 seats, they had 25. but his partner held onto the 23 seats. maybe a little bit better of

election results than in the past. haidi: you mentioned the olympics, of course against all odds, three weeks ago before they start. do we know whether there will be fans in the stands? what does this look like? >> they have this set of quasi-emergency level restrictions in tokyo. those expire july 11. they are very likely to be extended. if they are extended, the olympic organizers and the ioc are discussing whether to basically ban spectators in those large venues. that would include the opening and closing ceremony. it would be pretty quiet and less a pipe in fake sound. again, i just talked about those virus numbers, they have been on the increase. we have to watch over the next few weeks how those numbers trend.

trends are not looking good right now. we also have a case aa serbian rowing team member has tested positive on arrival at the airport. he is being isolated along with 14 members who traveled with him for possible covid protection. three weeks ago. still lots of uncertainty. haidi: so many worries about this being a super-spreader event. we have lots more to come on daybreak australia. this is bloomberg. ♪

haidi: security researchers say hackers behind global ransomware attack showed a previously unknown vulnerability. they had been working with the company on fixes when the ransomware was deployed. a russian group is being blamed for these attack. what is the full scope of what we know about the attack and how it was achieved? >> there is no exact science to this right now.

what has been revealed so far is that there should have been attacked at least 20 manage service providers. they provides i.t. service to small and medium-size businesses. the number could mushroom. there are labs that say they could be at least 1000 businesses affected by this. what they seem to have done in theory is used access to a previously unknown floor, and push the ransomware to servers using the software, the whole thing could mushroom quite dramatically in theory. sophie: businesses around the world were affected from sweden to the u.s.. what has a reaction been from the biden administration? >> so far is wait and see.

yesterday, joe biden, president biden said he ordered a deep dive by u.s. intelligence officials on what happened. we are still waiting for the findings of that. he also said we are not sure whether russia is behind any of this. reference to a russia based organization, these the guys who make use of being behind that rather devastating ransomware attack on jps about a month ago. if you remember, it wasn't so long ago that bided met president putin and they discussed this particular problem with russia hacking. so, we are waiting to see what bided will say. we expect he could be speaking later on this evening. sophie: let's get to our morning

calls ahead of the asia trading day. some of the world's biggest money manager say there is more room for stocks, blackrock's, j.p. morgan, all expecting equities to keep rising at the second half of the year. they say look outside the united states, the vaccine progress big a driver -- a big driver, highly. haidi: countries lacking in vaccination rates, they could see their currencies fall and coming weeks. among the best performers so far. columbia another country at risk. the mexican peso expected to show resilience. you can as always watch us live and catch up on past interviews on our interactive tv function and guided it of the securities

or functions we talk about. this is bloomberg terminal access only. you can check it out. this is bloomberg. ♪

sophie: let's get a check of the latest business flash headlines.

a fight is brewing after agreeing to a $9 billion takeover. operators are expected, after the offer to shareholders. the deal could also have firm snapping up recommendations. they can raise about $10 billion in a listing which could become the biggest ipo of the year. a business owned by china, plans to sell a 20% stake in the company. $43 billion in 2017. haidi: coming up, and the next hour discussed were they see the biggest opportunities the market right now. hearing exclusively about the

digital revolution in banking. and how the oldest conglomerate is renewing its focus. that's it for daybreak australia. daybreak asia is next. this is bloomberg. ♪

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haidi: a very good morning, we are counting down to asia's major market opens. sophie: welcome to daybreak asia. our top stories this hour, saudi arabia insisting the alliance must be extended despite opposition from the ua. >>