♪ haidi: good morning and welcome to "daybreak australia." shery: the top stories this hour. the fed signals it is making progress on reaching the tapered threshold. >> the first such reduction in

more than a year. >> beijing may be planning to close a loophole that allows chinese companies to list overseas. what that means for big tech. across wall street, we are seeing u.s. futures muted. this after the s&p 500 ended another session at all-time highs. this is the eighth time in nine sessions in a row. treasuries continue the rally with the 10 year and 30 year yield at february lows. wti crude, we are seeing some upside right now. we had a slightly stronger dollar. we are still waiting for more clarity when it comes to the opec-plus alliance. what is happening in the bond market, it's disconnected with what's happening in the fed. fed members are perhaps a little bit more concerned about inflation because you are going to see a strong economic

recovery, we should see treasury yields going higher but they are going down. the time being, it seems that bulls have the upper hand. >> it is interesting what we are seeing in europe as well. this is a time when a lot of the market is talking about normalization of policy with the pandemic stimulus picture looks like. we are hearing that the ecb has raised their mandates when it comes to inflation. instead targeting below 2% inflation, we are hearing that they are targeting inflation at around that, but allowing for overshoot. this gives them even more flexibility and buffer to be able to continue with their monetary policies for some time to come. shery: this debate about price pressures is ongoing. what happens with the market, with these narratives. investors are saying that the markets are underestimating inflation risk. our guest is cio and founding

partner. this chart of the bloomberg showing that two rate hikes are being priced in by 2023. what is your outlook? when will the fomc start moving and what will they be watching before they make that move? >> there are two issues at play with the federal reserve. one is the tightening of the funds rate and the other is tapering of their 120 monthly bond purchases. one is related to housing and housing plays into both sides of the equation. we have seen housing prices in the united states up 14% year-over-year. we are really reaching a point where a lot of housing stuck in this country has become unaffordable to the average american. i do think that that is a concern that the fed has.

by buying $40 billion of mortgages every month, they believe they are pumping up housing stock. the other side is that inflation. right now, i agree most of the inflation readings we are getting our transitory. the fact is that we are seeing used car prices, hotel rooms, airfares spiking. that will likely retreat. however, there are two elements that are more persistent. wages and housing costs. again, with higher housing stock, that is leading to higher rents and that will feed its way into something more sustainable on the long-term. >> what will be the factors that will be moving the markets? we are talking about equity

investors having really relied on evaluation expansions so far. what will be driving the next move? >> our view is that in the short term, the fed is going to want to sit on their hands. they're going to want to play this thing very easy. they believe if you remember over the last 10 years, the fed's had a difficult time raising -- years prior have had a successful time of reducing inflation over time. i think they want to error on the side of too much inflation and let the real rates continue to decline. that is good for growth stocks in the near term, but longer term, we want to look at value and cyclicals where we can get organic growth out of dig -- dividends and earnings. >> where do you see opportunities and the

diversions? -- in the diversions? >> if the fed continues to tighten and other central banks stay put, which is entirely likely, that is going to put upward pressure on the dollar. it's also going to raise demands for u.s. treasuries. it is going to create a problem for a fed that is going to try at some point to raise interest rates. that will likely continue to per -- perpetuate the real rates in the u.s. and that lend support for commodities, gold, the more cyclical side of the equation. shery: it's interesting when you talk about the inevitability of the dollar to go up. does that direct your preference for ems? >> in the near term, it does. we do like hell em is positioned -- we do like how em is

positioned. if the fed does succeed in keeping interest rates low and letting inflation rise, pushing real rates lower, that would at least in the near term push dollar levels down relative to trade -- trading partners. >> for a while now, chinese listed firms in the u.s. have been seen as a good diversifier, particularly when it comes to valuation. you look at what is going on, is that an area where you think u.s. investors should be avoiding for risk? ask it is certainly a concern. it is an uncertainty risk. depending on how beijing must apply it and freeing the heavy

hand over these companies, i think that is creating some investment risk for u.s. investors that do want that versification. -- diversification. >> the policy by central banks has been gradual. in china, the possibility of bringing back rrr. what is the likelihood of reviving this from the toolbox? >> this analysis would make it seem like it's looking more likely but not guaranteed. it seems that policymakers are concerned about parts of the economy that are faltering. we have to take a signal in the state cabinet, that does not mean that the pboc will follow. congress noting that the

cabinets remarks indicate the economic data for the second quarter might not be as good as expected although it's hard to tell if this marks a dovish shift in policy. pulling up the board after we got remarks from unofficial calling for a cut in the second half, we saw chinese bond futures jump. the offshore yuan holding onto gains. we have futures -- nikkei futures looking little changed after a three day drop. this is a big report that japan is planning to declare a new state of emergency for tokyo. shery: we do have big interviews coming up. we will hear from the indonesian prime minister as well as the president of the philippine stock exchange. also a ceo.

and, the founder of blockchain technology. coming up, coronavirus wreaking havoc around the world. up next, regulators and beijing planning rule changes that would block chinese companies from listing overseas. we will at the latest. this is bloomberg. ♪

♪ >> you are watching daybreak australia. the u.s. ambassador says security forces will need international help to investigate the assassination of the president of haiti. his wife was wounded and

evacuated to miami for treatment of her injuries. authorities in dubai say a fire caused by an explosion on a commercial ship have been brought under control. the blast lit up the city just after midnight local time. a device civil defense team worked to put out the fire. japan is reportedly planning to declare a new state of emergency in tokyo. the emergency would extend throughout the olympics that starts on july 23. that would mean the games could go on possibly without any spectators. this comes after tokyo reported the most new coronavirus cases since may. malaysia's largest political party has withdrawn support for the ruling coalition.

calling on the prime minister to step down. and for a temporary leader to be installed pending fresh elections. he had initially installed -- india's prime minister has overhauled his cabinet in an effort to overhaul his image in light of the covid-19 pandemic. ahead of the reshuffle, india's health minister resigned. the leader wants to restore his popularity ahead of elections. 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. >> china is reportedly considering a move to close a loophole used by firms listing

their shares abroad. let's bring in our deals reporter. it doesn't help that they were also hit by two shareholder suits. >> the loop holder -- loophole china is trying to close, foreigners are not allowed to hold stocks in china's companies. this would really have a lot of impact on the remaining listing in the u.s.. we haven't seen any filings yet, but investors are gearing up with lawsuits with their lawyers and potentially we will see something coming up soon. >> this is going to be a boon for shanghai stock as well as hong kong. >> it is potentially beneficial

for hong kong and shanghai. most importantly, the u.s. is still the most liquid capital market. if you are a sizable company such as didi you would want to tap the most sophisticated investors. the u.s. still has its appeal, but there will be some companies potentially of smaller sizes trying to bypass these laws and just do the easy way listing in hong kong were you still get the international investors. it will be interesting to see volume gust hong kong in the coming years. >> what does this mean for the broad -- broader tech sector? >> there have not been that many listing. it has been tapering off. what is really important here is that china is saying that data is why they wanted to stop the listing. that's the same concern that

had. more importantly with the data concerns, whether the remaining companies that traffic in the same data that alibaba or didi and others would be forced to the u.s. and have a home listing instead. >> that was our deals reporter. we have breaking news, we are hearing that the former south african president has been taken into police custody. he was convicted on contempt of court charges last week and he has been expected to hand himself into authorities to begin serving a jail sentence. the announcement of that coming very shortly before the expiration of a constitutional court deadline that he needs to be incarcerated by midnight on wednesday. we are hearing that the south african former president has been taken into police custody.

coming up, we have an exclusive interview. speaking about the outlook for the recovery and tax reforms. that is coming up next. this is bloomberg. ♪

♪ >> indonesia's finance minister expects the budget deficit to remain next year. in and interview, they also discussed the rising oil prices. >> the movement of the oil price is one area that will affect us. on the one hand, indonesia will receive revenue if the oil price increase.

we also see on the indonesian side, our production of oil and gas is likely to be flat or stable. oil, we suffer from a decline in production. >> has the resurgence changed your calculations on how or when you will implement tax reforms? >> we will discuss these in the next three months. in the next two months, the parliament is going to be in recess, them will -- we will start again in the month of august. some of the reforms will be immediately implemented.

at the same time, we in the government and parliament, we will focus on recovering the economy. >> what might be delayed? could it be attacks on high net worth? what are the potential delays? >> we will look at the strength of the recovery. at the same time, because we are introducing -- it is not going to be like one across the board. we will definitely calculate with parliament which one will -- as well as revenues, we have to be very mindful whether the indonesian economy is strong enough at this very moment to be

involved. >> what are the chances of delaying your budget deficit targets through 2023? can you limit your budget deficit to 3% by 2023? >> we have to look after the second quarter of this year. we have a very strong recovery. the delta variant has forced us to decline mobility. that is going to affect the third quarter of this year. overall, the growth this year is going to be between 3.7% and 4.5%. it will depend on how we will be

able to manage this increasing virus transmission. with that assumption, next year we will probably still have a stronger recovery momentum that will continue. i still think we are very optimistic for next year. lowering down the deficit to below five. between 4.7 and 4.85 with parliament. the president is waiting to submit the budget for next year in august. for next year, we are very optimistic and we will try very hard to resume in 2023.

>> that was indonesia's finance minister. more from southeast asia throughout the day. an exclusive interview with the philippine stock exchange president. here's a quick check of the latest. dozens of u.s. states are poised to serve -- sue google after it allegedly abused its power through go play sort. state attorneys general are preparing to sue an antitrust -- file an antitrust suit. the lawsuit would be the fourth u.s. monopoly complaint against google since last year. apple shares surged to a record high amid optimism about second-half growth. the stock rose for a seventh day, it's longest winning streak e l pushing the market

value to $2.4 trillion. wall street is forecasting a stronger rally with iphone sales expected to climb. the company is selling $1.2 billion of debt through a dollar bond yield. [indiscernible] !.xsources say a firm has been talking to tengion partners about challenging a $17 billion proposal. the purchase of the sydney airport would rank as a stray largest ever acquisition. -- it would be australia's

largest ever acquisition. >> the assistant governor says they will continue to pursue potential digital currency over the middle of next year. the parliamentary committee has started its investigation into the sexual harassment of women in mining sites. there's a question about whether they're doing enough to adequately protect against sexual assault. >> coming up next, the delta variant hitting australia and the rest of the world. this is bloomberg. ♪

the report cites a state council meeting. the finance recovery from the pandemic faltering. it indicated it rose sharply in june. meanwhile, a former chinese central bank official has pledged -- the second half of the year to safeguard the economic recovery.

a former director at the people's bank of china. in rate cut would create policy room. the world health organization is urging caution as regions across the globe have seen increases in covid-19. more than two dozen countries have reported curbs. officials are asking governments to be careful when it comes to reducing virus curbs so as not to lose the progress made so far. taiwan may unveil past to partially -- paths to partially ease curbs. there is a risk posed by community infections and the threat of the very end. an easing of controls would include restaurant dining. there were 39 newly confirmed domestic cases wednesday and fewer than 80 local cases each day last week. 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: the two-week long down in sydney has been extended for at least another seven days as authorities braced to stamp out an outbreak of the delta variant that has more than 350 cases. joining us now for the latest is our guest. today's numbers are going to be a substantial increase in the overnight for the previous day and we are seeing the virus spreading across new areas. >> good morning, haidi. in yesterday's press conference, the premier announced 27 new local patients rising from the previous day. she told them the numbers again today and we are expecting those numbers around 11:00 a.m. this morning. where cases are popping up now has shifted since the beginning of this mid june outbreak where cases were first reported in

sydney and areas around bond ai. now, cases are spiking in southwestern sydney. shery: could we see resurgence being tightened from here? >> the government is considering taking further actions to restrict movements in these areas of sydney where the cases are most concentrated now. these are down in liverpool local government areas. the health authorities are concerned because these new areas of concentrated cases has shifted very quickly. the situation has changed since we spoke a couple of days ago so sydney's lockdown is different to what we have seen in melbourne in the past where they are under extremely strict to stay-at-home orders and the retail sector was largely closed. outdoor exercise was under a time limit and people could not travel further than five kilometers from their home. in sydney, the retail sector is widely open and there is no ring

of steel in areas recording the highest case numbers i would not be surprised if the state government in new south wales adopts some of these measures that we have seen in victoria in the past to curb the spread of delta. haidi: georgina mckay with the latest. beyond the challenges the delta variant is creating in australia, it is driving waves of new infections in countries and communities that have struggled to vaccinate their populations. robert gallo is a religious and directs the institute of human virology at the university of maryland school of medicine and he serves as international scientific advisor. always a pleasure having you here on bloomberg so when you take a look at the spread of delta and the potential development of new variants, how much caution should be assigned to the reopening up? take a look at the u.s. and the u.k., and it feels like, psychologically, people want to forge ahead with getting back to normal even with this new strain. robert: understandable.

when it is early and when you are seeing these observations that the early period of this new variant is very difficult for anyone, including any scientists, any virologist, to give accurate predictions of what to do. of course, the best argument is to err on the side of safety but in the midst of all of this, how are these countries that are seeing these spikes doing with vaccines? because the variant is susceptible to the vaccine. it does not escape. there is enough time to see that the vaccine can contain it. if there is resistance to the vaccine in some parts of the world, we need to hear that and fast but i have not seen that yet so the answer is in front of our face, to get people

have tremendous international cooperation among all countries and not let politics and policies of other kinds of things, whether they be financial or other interfere with that. this must have cooperation and the answer is you better have vaccination put out there fully and fast. america is not seeing the rise of the delta variant but it does not mean we can be confident. it does mean that we see clear evidence that the vaccine works. the right vaccines are working. anyway, remember that infections ,çjzñ you may not be protected against full infection by the vaccine, but so far, even some of these threats like the lambda variant emerging in peru, we expect the vaccine will not protect against infection. it lowers the amount of virus

the person has and therefore, the disease consequently has been less impactful. serious disease not going up. shery: here in the u.s., we have so many people hesitant about getting vaccinated. hownj= people? in other parts of the world, we are seeing people that are waiting for the mrna vaccine instead of getting the other chinese or astrazeneca. what do you tell those two groups of people? robert: you are looking at me and i am looking at you. do you think a virologist knows better how to convince people? i doubt it. in the media, people who talk a lot to people, psychologists, educators, you know,

virologists, medical scientists, maybe we don't do such a good job. maybe you have to use more fear tactics. i don't know. you have people stubbornly resisting, saying that it is excessively exaggerated. this, that, or the other. i do not have an answer to that question. i don't think that the answer is simple and i don't think anybody has a clear answer other than educating people to teach them what a virus infection of this kind means. explain how they can died, how they can kill their family and their elders. if they don't get vaccinated. we have it in our hands to stop this. it makes one want to scream. i cannot answer your question. i don't know. yes. haidi: the problem here in australia, people don't believe

that their families are really at risk. it is more like you don't get a vaccine, you will not be able to travel anytime soon, but i'm wondering, is there a broad shift in the scientific community that this is more of an endemic disease situation, a seasonal flu type affliction? does that mean elimination, which some countries have tried to go for like you are in australia, no longer the wisest? robert: i don't think that there is a substantial scientific shift that this will be a problem seasonally. right now, this virus has not respected the weather very much, has it? i don't know what means -- what one means by seasonal. it is high in all seasons and it peaks and surges in different seasons so i'm not sure what they mean by seasonal. if you mean it will be endemic and always there to come out when we don't expect it, that's very possible. but if the world is well

vaccinated, we can protect ourselves from getting disease. there are a lot of corona viruses and a lot of what we call seasonal coronavirus's. that do come in the east coast in the united states. it's usually in the fall like flu. we don't get sick from them. we don't even notice it the majority of the time. shery: what happens if we don't get as many people as we want vaccinated and it becomes an endemic virus? robert: it will come back. we may be safe in america, but pandemic means all. we are all in it together. we have to get along with each other and we have to work together. we demand that. that is one of the great strengths of the global virus. everyone is in it. it is not government controlled. it does involve australia, china, russia, the united

states, and everybody else that we can get involved. all parts of the world. so we need that desperately because, let's say it survives in a few places in contact with the rest of the world. let's say someplace -- throw out a country, someplace in the middle east. as you know, the phrase has been used a long time ago, this is now a one universe microbial he. for infectious disease agents, except for those that cannot travel more and certain other parasites that can only be in the tropics, we are talking about things that really, it can be global very fast because of travel, tourism, going from nation to nation, personal contacts galore, this kind of thing has changed the whole ability to calculate.

we don't have anything in the past to really go by. it is a new age, so in this new age with all this contact, we have to regard ourselves now as the united states or australia or china. this is the world. we have to be together on this, not so much -- there is a time to be competitive. competitive brings creativity sometimes, but this is going to require cooperation. if egypt survived was the virus and quite a bit of it and everybody else was ok, you know it's going to come back again because protection from the vaccine will go down, some new variant emerges that is not well handled by it, and danger will reappear so we have to get to that. even if we are not humanistic. for selfish reasons, wek should be desiring to help everyone we can help. shery: that is a very good

point. always great having you. director of the institute of human virology at the robert: robert: university of maryland. always a pleasure to be with you. shery: dr. robert gallo. haidi, dr. gallo was telling us how he wanted to really scream and tell people to get vaccinated and i understand the frustration because we continue to see these two america's emerging. we are not that far off from president biden's target of 70% of the population getting at least one shot, 67%, but then you go to certain parts of america, rural, small urban areas, and there are so many questions and conspiracy theories and they are not getting vaccinated, not even half of the population in those small places have got one shot of the vaccine and what is really frustrating is america does have enough supply for all americans, not like the rest of the world that does not. haidi: and the problem is what happens when these people start

traveling. we see air travel taking off across the summer, people going on vacations in the u.s., friends going to disneyland, saying that they think 90% of the people that they see at disneyland are not wearing masks and you wonder where these people are from. is there a way to prove whether you have been vaccinated? i know that introduces the idea of vaccine passports which is not popular but it does call into question -- here in asia, we are seeing thailand looking to reopen to get tourists back in, a couple weeks out from the tokyo olympics, which could prove to be more clusters of the delta variant, if it continues to take place. shery: the delta variant, half of the new cases in the u.s. are coming from that variant. it is spreading fast and global cooperation is really needed right now. haidi: he said he does not have the answers anymore than we do. i suppose that is what anyone

can do. coming up, we will take another look at tech. it exercises power over developers that sell apps on the google play store. we have more on that story, next. this is bloomberg. ♪

vonnie: you are watching "daybreak australia." time for morning calls.

blackrock investment institute looking beyond the economic restart that is broadening and they are seeing a higher inflation regime in the medium-term though they have turned overweight on european equities while cutting u.s. box to neutral and they are also downgrading em and other stops to neutral given the uncertainty over the dollar trajectory. japan has an up -- has been upgraded to neutral on the outlook for earnings growth getting a boost from the cyclical rebound in the second half. when it comes to china, blackrock is overweight on a strategic basis. they see near-term risk as economic growth is slowing in the time that the policy stance is staying tight and the concern is that the response from authorities may not be timely given the focus on quality growth and on that, we did have china's estate cabinet raising the chance of a rrr cut which has not happened since early 2020. they don't guarantee a move.

more weak economic data is needed before the discussion can be had and over at mizuho bank, a new reit cycle would be surprising given the pboc's continued reiteration that it wants to maintain a steady hand, shery. shery: we are watching the tech space. dozens preparing to sue google, alleging the company has abused power over developers that distribute apps over the google play store. that is the latest attack by officials in the u.s. against its practices. it is facing complaints over a surge in advertising businesses. naomi next is on --naomi is on the line. what more do we know about this lawsuit? naomi: what we know is that dozens filed a lawsuit against google, alleging that the company is engaging in monopoly like practices.

this caught the eyes of antitrust regulators for a while now which is 30% see that google extracts from apt make her send developers for inapt purchases. and so, you know that it is one of several antitrust lawsuits that google is facing right now. >> what are these other poems and how does it fit in in terms of context? naomi: google has been under the spotlight in washington for quite some time from antitrust regulators saying it has gotten too big in the marketplace. the justice department has filed a lawsuit. they are primarily focused

around search advertising. alleging that google is being anticompetitive in that space. there is also a lawsuit led by taxes. looking at google practices in the digital advertising space. looking at how it is coordinated its activities with facebook to increase its dominance in that space. this is part of a steady drumbeat of a probe focused on other tech companies, examining whether it has just gotten too powerful. shery: our social media reporter coming to us from washington. coming up a consortium led by mom or group is looking at a bid and we take a look at what that means. this is bloomberg. ♪

haidi: a consortium led by macquarie group is exploring an area for sydney airport to pose a potential challenge to ifm investments, $17 billion bid. let's get the details from australia. what do we know?

harry: the first offer was quite a surprise one and then we came in on friday evening and it was basically amount monday morning. everyone has been scrambling around, trying to see the implications of this. it seems that macquarie infrastructure real assets is seriously considering a rival offer which puts more pressure on the company to kinda react and take this forward. they have a long history in the asset which means it would only be the credible counter offer to what was already on the table. shery: sydney is under extended lockdown and travel is off the table this year. harry: i think they would factor that into account and try and account for some price. it's an interesting way to think about how much of this is already baked into where the

stock price has been and it has come up a lot. the fundamentals have changed a lot. the big equity raise last year. there is a western sydney airport coming online and we got all this speculation about whether the pandemic is just a new normal or something we have to live with. on top of that, the airport earnings are overwhelmingly for international travel and a large part of that is from chinese tourism as well which we had a big reset relations as well. you take that into account and come up with maybe a price where some of these people are thinking it's not a bad time to consider a relatively discounted historical average and then if you layer on top some strategic knowledge for the sector for people who have invested in airports, and ifn, who have

stakes in airports worldwide, they can manage it pretty well. haidi: harry brumpton in sydney. let's get you a quick check of the latest business flash headlines. a cash-strapped chinese developer may undergo restructuring. the creditor has filed a bankruptcy petition against the company in a local court. if successful, it will trigger liquidation. a singapore based company has a 51% stake in the company. citigroup wants most u.s. employees back in the office by september at least part-time. the human resources chief said the health data in both countries had improved. this week, it opened u.s. offices to workers who volunteered to come back. citi already said it will allow staff to work remotely some of the time, more flexible than many of its wall street rivals. shery: we are hearing that the

u.s. securities and exchange commission chair is now actually asking fund managers to disclose staff diversity data. he wants more transparency. he wants the industry to better represent the diversity in the u.s., so really good news on that front. haidi: really good news particularly as we see diversity as being a major issue for5 the more data we have, the closer we can get to the ultimate goal of balancing that equality equation. coming up in the next hour of "daybreak asia," -- shery: really putting a lot of

pressure on those banks. haidi: that is really true as well. we are going to get more markets insight in the next hour. a chairman will get more discussion as indications for investors are coming out of the big story about what happened to didi as well as the other chinese new york listed adrs, but that is it for "daybreak australia." "daybreak asia" is coming up next. this is bloomberg. ♪ s bloomberg. ♪

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haidi: hello, and welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in hong kong. shery: good evening from bloomberg's world headquarters in new york. the fed signals it's making progress on reaching the taper threshold or. exactly when that may happen. chinese regulators could get greater power to block overseas listig