haidi: a very good morning. i am haidi stroud-watts in sydney. york county got to asia's major market opens. -- we are counting down to asia's major market opens. shery: strong earnings taking the focus of virus concerns. bitcoin gets a boost. the elon musk, jack dorsey, and kathy would touting the token at a crypto conference. we will get the case from scott

minerd. four of hong kong's top banks stop mortgage lending for evergrande properties as default fears grow. haidi: let's take a look at how we are setting up for this thursday session with asian equities firmly in the green on the back of the rally and wall street. this is how we are seeing early trading in new zealand. modest gains, .2% when it comes to trading in the key recession. futures looking like the gains will continue after the s&p 500 notched its biggest two day rally in months. the russell 2000 jumping almost 2% as well. a big story when it comes to oil, pulling back when it comes to wti at the moment, jumping. previously, the most since mid april. we see this broader optimism after that u.s. government report. we saw gasoline stockpiles driving last week as well and that added to some of those gains and as shery mentioned, a bit of an interesting session for bitcoin. we saw it briefly passing

32,000. elon musk, jack dorsey, all speaking at a panel on the future of bitcoin and crypto. elon musk saying he owns bitcoin, doge coin and a cerium -- etherium. we saw it rising in the session as well. let's talk about this in a little bit more detail. this is a sentiment, right? not much, to me at least, has changed in the broader outlook for these asset. >> it has not changed much but it really solidified that these people are world-renowned, respectable people in the space and they are really focusing not on trading but accumulating at one key thing i took away out of this is elon musk's mention of etherium. it helped legitimize it.

it is up 170%. that coin is that 10% and to me, it adds to this foundation building icy around 30,000. it looks like the market is much more likely to move higher. but in a more adult and orderly fashion and that is my take away from a lot of things that they said. shery: what about you london mosque's comments on renewables -- elon musk's comments on renewables? mike: it is just a matter of time. he knows it. all the mining for bitcoin is clearly going towards renewables partly because it is cost-effective, cheaper to generate electricity through solar and some wind sources. if you don't have to worry too much about the storage, which is really good for solar, it is just a matter of time. this little flip we had switching from china to the u.s. and away from china is really accelerating that process and he also mentioned he likes nuclear

and a lot of electricity, most notably in france, and the u.s., is from nuclear sources so that helps open up that window. haidi: we know he moves in a copper market but scott minerd -- it brought institutional sentiment. take a look at what he had to say. >> something in the neighborhood of $15,000 is where we are going to end up. the standard bull market -- there market, i'm sorry, has been an 80% retracement and given all the uncertainty and the new competition from new coins and everything else, you know, i think that there is more downside to go. haidi: he also sees a 15% call back when it comes to u.s. stocks by the end of autumn as well. but he has a point. he talks about a lot of this and being drunk. what is the proportion of this market that will be negatively affected with an overall risk-off sentiment? mike: the overall risk-off

sentiment is much worse for etherium in the space. bitcoin is more the macro. yields dropping like they have been in the bonds, risk-off, that might push bitcoin down in the short-term but i'm bullish long-term partly because of the things he mentioned. you look at etherium and 10,000 other coins, that is a big problem for most of the other indices. if we ever get a little bit more of that we are bond yields declined, bitcoin is in the process of replacing gold as a digital reserve asset and that would upset the underpinnings for gold and bitcoin. it is already happening with the long bond drop and below 2%. that is the signal that gold and bitcoin are really to -- ready to accelerate the rallies. shery: mike mcglone, bloomberg intelligence senior analyst with his take on everything crypto. our next guest saying that positioning for reopening and recovery is key. she believes equity markets can

resume the rally led by cyclicals. let's bring in the managing director at ubs global wealth management. great to have you back. given the spread of covid variants as well, your position for reopening but also how do you position and really hedging for downside risk? xi: thank you so much for having me. you said it correctly. we do not expect the delta variants to derail the economic recovery. at this point, earnings were strong, not a lot of negative news from the fed thomas are we are continuing to reposition and position for reopening recovery and we believe that it is going to continue to be led by cyclical parts of the market including energy and financials and the reflation trade has further to run so this is a good time to protect against downside risks as well because there's going to be mourners coming out

in the second half and a lot of that will be related to bonds. the bond market will be in focus. rebalancing any excessive equity market gains is something important to do right now and looking at downside protection, that could be in hedge funds, private equity options for structures, they are going into more defensive stocks and some of the strategies we are taking on right now. shery: are there any specific markets that you like right for protection? xi: i think we are going to, you know, favor the sectors and regions that have the most to gain from the reopening trade so in one of the markets we particularly like, japan, there has been a lot of underperformance and given the country's vaccine program and the market cyclical biden's and high exposure to just a recovering global economy, which

will be on even with this new delta variant, but just any of these sectors and regions that have the most to gain from the reopening trade. haidi: when you talk about high dividend payout companies, we are seeing that trend in australia with the banks and the miners expected to just bounce back to pre-pandemic payouts. where else do you see that? which companies and sectors? xi: high dividend stocks have outperformed, particularly with the low yield environment, and we expect this trend will continue so we also prefer a lot of u.s. senior loans, asian high-yield bonds, private credit, and just borrowing in general, taking advantage of the low rates at this point. haidi: you are not tantalized by some of the evaluations we are seeing across chinese technical? -- tech now? xi: we have been positive on

china all year, and tactically, we are technically -- tactically neutral on china. leading technology firm. certainly, china is going to be a very big part of the future of technology and continue to see longer-term upside for china's new economy, particularly technology, so you know, china is a great -- with current valuation, it is a good time to get into china, particularly some of the technology equities, but investors need to be prepared. there might be further volatility in the near term or the midterm but if you have that kind of time horizon, you can be patient. china will eventually play out. haidi: xi qiao, great to have you with us, managing director at ubs global wealth management. we will be speaking with zip

immediately after they report earnings. peter gray joins us. jay powell's term is expiring. what white house advisers are thinking about his renomination or his replacement. this is bloomberg. ♪

>> this is "daybreak asia." we start with wendi sherman. becomes the highest ranking biden official to travel to china when she meet foreign minister. the meeting this weekend comes as bilateral relations are strained. the two will discuss areas of concern as well as mutual interest. the death toll is still rising

from floods ravaging the hunan province in central china. the state broadcaster says more than two dozen people have been killed while several more people are missing. at least 12 of those died when a subway was hit by a wall of water in the provincial capital. at least 100,000 people have been evacuated. to indonesia now, where the country says it will implement a strategy to try and mitigate the spread of coronavirus before starting to ease restrictions next week. it will vary from city to city based on how badly impacted they are. the government says it will start to remove the limits on july 26 if the number of new virus cases continues to decline. java and bali are currently at the highest level. the australian city of brisbane has won the right to host the 2032 summer olympics and

paralympic games. brisbane was selected by the international olympic committee under a new process that saw it as the only candidate. the previous process was overhauled to prevent bidding wars among the cities and encourage hosts to use a high percentage of existing and temporary venues. 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 su keenan. this is bloomberg. shery: we do have breaking numbers out of zip. the full year 20 one fourth-quarter results are a record. group quarterly revenue coming in at 129.9. up over 100% year on year. when it comes to transaction values, $1.8 billion, a pretty big yawn your growth. merchants on the platform increasing as well. we will be getting more on zip a little bit later when we speak to the company, but of course,

we have seen huge expansion for zip over the past 18 months across five different continents. peter gray, the coo and executive director there, will be joining us. we will ask him the impact of this apple and goldman payments tie up, shery. shery: lots to discuss but let's return to the u.s. because jay powell's chances for a second term could be growing as top white house aides increase their support for his renomination. kathleen hays is here with the latest developments. what are we hearing? kathleen: we are hearing from the white house itself. people familiar with the matter, that is, our bloomberg news team in washington, that the aids, at least qamar seriously looking at another term for jay powell. his term is four years. also up, which makes this whole discussion even more interesting for the fed and for the market is that rich clarida, the vice

chair, his four-year term will be up in january. the vice chair of bank supervision, his term is going to end in october, so those are three very important seats and the idea here is maybe we can help president biden. put our mark on the federal reserve. remember, these three were all appointed by president donald trump, a republican, and presumably, that is one reason why donald trump was a little bit hesitant to give janet yellen her second term, but the fact that this is kind of being leaked now makes me think that obviously, it is an active discussion and that clearly, there is much more -- not a concern, but the idea that jay powell could be the right person. shery: janet yellen is the treasury secretary and she might have some influence here. where does she stand? kathleen: she has said she and jay powell have a very good working relationship. she also is pleased with the way

he has guided the economy through the pandemic and a lot of people -- not just -- people on both sides of the aisle, democrats and republicans, saying jay powell is doing such a good job, but she said -- would you support a second term for jay powell? she says i will have to discuss that with the president. shery: if powell has done such an admirable job, why isn't this more of a no-brainer? kathleen: politics i think, to a certain extent, and just a vision for many people of how they think government officials should look. who should they be? this is a chance, according to the bloomberg sources we spoke to, to kind of put -- not just put biden's stamp on it but to please some camps of democrats, particularly looking at progressive democrats, and that leads us right to lael brainard,

who has been working with danielle in, jay powell now. she is seen as someone was passed over for that treasury secretary job by joe biden. she is a woman. she is tougher on banks. that is another thing that people like elizabeth warren would like so she seems to be potentially -- if jay does not get the nod -- people figure she is next in line. haidi: johnson & johnson raises its annual forecasts after a strong quarterly sales rebound from one year ago. we will have more on the data. this is bloomberg. ♪

shery: a study has found that johnson & johnson's single-dose covid vaccine produces

relatively low levels of antibodies against the delta variant. that is raising questions about how well the shot will hold up against the strain that is spreading rapidly in many countries. we spoke to j&j's cfo, joseph wolk. joseph: johnson & johnson is proud to be part of the solution set despite last night's report. we think that the data shows that this is very effective against many variants inclusive of the more recent delta variant, and hospital systems and health care professionals are much better equipped to address pandemic situations. you know, as they mentioned, last year, elective procedures were kind of put on pause. if you are one of those people suffering, it is not all that elective so hospitals and health care administrators have done a fantastic job in being resilient and we are much better equipped as a society to handle any variants that may come down the pike. >> does that mean that potentially the second half

could actually better than you assume in your guidance? joseph: we feel really good about the guidance right now. there's obviously the mathematical comparable favorables we were looking into. that was truly expected, but if i look at each of the businesses, operationally, we are gaining share, expanding markets, introducing new products, so we feel pretty good about where our guidance is day. we are going to aspire to have better results but right now, if you look your on your growth, taking out even the comparable mass, each of the divisions, pharmaceutical, medical device, and can number, are very strong even relative to where they were in the second quarter of 2019. >> do you expect to start making a profit from your vaccine next year? joseph: yes, when we came out with the pricing for the vaccine, when we identified a lead candidate, we discussed early on about offering that at not-for-profit. we did not want our cost to be an issue for folks when considering getting vaccinated or not, but that will come to an

end probably towards the end of this year and then we will look to responsible prices and what may make sense. >> he said analysts take that away from their models in terms of the covid scene. do they need to start adding that back into their models when it comes to looking at your numbers? joseph: the caution we provided was around the specifics we can give at this point in time. there's a lot of questions with all the vaccines on the marketplace, when and if a booster might be needed, just how long the duration is. we are proud of the eight-month ration at least that we have demonstrated through peer-reviewed clinical data that was published in the journal of medicine but there's a number of variables that beta play out across the entire market space. >> just staying on that, in terms of the delta variant, that you reference that showed the efficacy went down for j&j, has it been peer-reviewed? have you done your own study

specifically? are you developing a booster? you think it will be. with an mrna -- paired with an mrna booster? joseph: yes, that data -- that article you reported on was not peer-reviewed. it was a test tube study that looked at one level of protection. when you consider the data we have, we are looking at all the different antigens -- the antibodies, i should say, neutralizing antibodies, as well as the sale activity, so the complete retentive response. that is much more valuable than what this report -- then what this report indicates. we have to caution everyone just to rely on health officials who have all of this data at their disposal. they have not declared if or when a booster may be needed for any of the vaccines at this point. haidi: that was joseph wolk

speaking with alix steel. let's talk about the delta variant in a bit more detail. our health care reporter joins us. we have seen some pretty encouraging efficacy data from existing vaccines. i'm existing vaccines, i should say, when it comes to the new variant, but will there be the need for new vaccines? >> leading covid-19 vaccine manufacturers including pfizer and moderna say their shots are highly effective against the delta variant. however, bloomberg intelligence as that studies indicate that delta has particularly bad attributes. it is more infectious and could produce worse outcomes. early data also suggests drugmakers could consider a vaccine which focuses on two key mutations in order to prevent initial infection and mild disease and we have to remember that it is still early days. the delta variant has not really been present for that long at least that we have been talking about so we will continue to see

this evolve and we will monitor the signs. haidi: here in the u.s., we have not done great when it comes to contact tracing and really identifying the virus, seeing the clusters in the beginning phase of the pandemic. are we doing any better when it comes to variant? angelica: the cdc estimates that it is sequencing 10% of all covid cases in the u.s., and it has been increasing its capacity so now, it is contracting with companies such as labcorp, quest diagnostics, and that has helped the u.s. rise in terms of a percentage of reported cases sequenced and actually submitted to a global mutation database. however, some experts worry that c is not doing enough to quickly identify new variants and stop them from spreading. the concerns that our colleagues have heard is that they are not publicizing enough data or

granular data to help us stop variants. shery: health care reporter angelica lavito there. here is a check of the latest business flash headlines. novartis expecting health care demand to return to normal across key markets like the u.s. and china even as covid-19 spreads. the pharmaceutical giant reported second quarter profit above expectations. it will be a key growth driver with sales reaching $5 billion over the next five years. it says cancer diagnosis rates are still recovering to pre-pandemic levels. four major hong kong banks are said to have stopped providing mortgages to buyers of china evergrande. two unfinished residential projects in the city. we learned hsbc, bank of china, hong kong, hang seng bank, and bank of east asia suspended new mortgages after reevaluating risks. evergrande says it has seen no impact on operations as it still

has good relationships with many hong kong banks. we will have plenty more to, on "daybreak asia." --

>> i really do believe that bitcoin will be a much more environmentally friendly -- certainly than traditional gold-mining or the traditional financial services sector. in many ways, it already is. >> what about letting twitter advertisers pay in crypto? >> any form of payment that they want to use, we should take, so absolutely. i am more focused on how to create economic incentives in the network itself without

having to rely on advertising. haidi: kathy would, elon musk, and jack dorsey speaking about the prospects of bitcoin at a panel earlier. on the other side, scott minerd is less impressed. he sees bitcoin falling further as a lot of crypto's are just wrong. take a listen. scott: the market had gone parabolic. there was a surge from 10,000 to over 60,000. we pulled back here to the neighborhood of 31,000 a day, give or take. and you know, the support level is really being tested hard, and you know, the breakdown we got to about 29,500, you know, could be a false breakdown, but i don't think so. i think that there is still more air to come out of this, and

ultimately, i think something in the neighborhood of $15,000 is where we are going to end up. the standard bull market -- bear market, i'm sorry, for bitcoin has been an 80% retracement and, you know, given the uncertainty and the new competition from new coins and everything else, you know, i think that there's more downside to go, and when do you buy it? well, i don't and kenny time soon. but i would make that decision based upon price action in the future. >> let's broaden this out and maybe you can talk a little bit about some of the correlations, if any, that you see right now out there in the market that would either give you pause or maybe encouragement here about some of these other assets. scott: it's interesting. everybody talked about crypto being a diversifying asset, and they likened it to gold, which

it does have some of the same characteristics, but the price behavior has really reflected that it is a risk-on asset. i never since the stock market momentum sort of began to fade, we have seen crypto, under pressure and i think that, you know, that could be the canary in the coal mine that is telling us that we have more problems ahead for risk asset, and in particular, stocks. shery: scott minerd and romaine bostick. some of the calls that we are watching for miners as well, what is happening to the stock markets, given some of the risks he mentioned, whether it is fed to bring coming ahead or hit delta variant, he thinks that we could see some more downside of around 15%. take a listen. scott: september and october are likely to be very rough this year. may be a pullback of 15% or slightly more, but once the

doctors are at the opening game in the world series, i think he will be able to buy it. >> i find it really interesting that in particular, he also talks about some segments of the credit market being to expense of at the moment as well. he really likes the top tier of junk bonds as being the best sort of opportunistic buy at the moment. he says there will be further opportunities when it comes to the junk space as well. shery: let's look at some of those opportunities when it comes to the equity markets. as we wait for the open across asia, we are eating he restocks -- seeing kiwi stocks gaining ground. we had it on a weaker u.s. dollar as well so we are following those currency moves. sydney futures pointing to the upside while kospi futures again to the down side after four sessions of losses. s&p futures not really doing much right now, haidi. haidi: continuing to watch the property developer evergrande.

four of hong kong's banks are providing mortgages to the buyers of its properties in the city. the bonds are suffering. let's bring in our mliv strategist, mark cranfield. this has been a drama with multiple acts. still so much attention on one chinese that issuer, and will cannot dampen these talks about potential contagion. mark: this is a very large bond issuer. evergrande has been a frequent issuer both onshore in chinese yuan and offshore in u.s. dollars for several years. so it is in many portfolios. it has a big weighting within credit indices. it is also a property company in the high-yield sector, where there's been concerns for some time that chinese property companies have probably been issuing so much debt, particularly in the offshore dollar market, that they make up such a huge proportion of the

outstanding asian market, so now, you have one of the largest companies in an already very volatile sector, who is starting to look a little bit shaky, although by company filings, they have quite a lot of cash on hand. they also have a lot of bonds maturing, a lot of loans maturing this year and next year and for the years ahead, so there's some thought about whether or not they could meet all of their obligations without having to either do some emergency funding or to pay off the very substantial interest rates which could be damaging to the business. as we have seen already, they have done a couple of commercial payments onshore. they are a big enough issuer in their own right to cause servants across the market. shery: investors focus on evergrande 2022 outstanding debt. what are we seeing? mark: part of the issue is that

they have enough to worry people this year but also, there's a lot of dollar bonds which, due next -- come due next year and by virtue of their size, when the credit indices are you waited for the beginning of next year, their share of the asian indices will increase and there's also another issuer which has been in some difficulties. that seems to be going onto the back burner a bit. together, they make up a large slice of the asian credit markets, and with so many people holding portfolios and the rating is one of the lowest ratings you can have for a single issuer, and it is on negative outlook, so really, the possibility is you could get some forced sellers. when you look at the price of bonds near to $.50 on the dollar, there's already been some forced selling. there could even be more to come if they were to get an additional credit downgrade. the chinese government so far

has been relatively quiet on any specific measures to support the company itself or to support the sector. they are doing areas of support. government companies in china itself and also much for private companies and this is relatively late in the game. this is another issue which is concerning investors. why hasn't the chinese government stepped in already to help them? shery: very much in focus. mark cranfield there. coming up, we are speaking to zip about their latest earnings results, plus the outlook for the buy now, pay later space. peter gray joins us, next. this is bloomberg. ♪

>> this is "daybreak asia," and i am su keenan with the first word headlines. jay powell enjoys broad support for renomination the federal reserve chair, although a decision still is not expected until later this year. we are told the matter has not yet been put in front of president joe biden, and powell's four-year term is set to end in february of next year. richard clarida's term is also coming up.

they slept fines on several tech firms for spreading sexually suggestive content regarding children. alibaba's -- they removed the offending account. the crackdown is also targeting livestreaming of the education platforms and explicit animation. india's actual covid-19 death toll could be between 1.3 million to a staggering 5 million, which would make it the country with the highest death toll in the world. figures from research models are at a range of three times to 10 times a country's official count, adding to evidence that the true loss-of-life has been massively underreported. skepticism has grown over the reported deaths by the government. 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'm su keenan. this is bloomberg. haidi: the sector continues to draw the attention of investors. it was working on its own deferred payment offering. one of australia's biggest players, zip, released its quarterly update to the asx. the co-coo, peter gray, joins us for his first interview of the day. always great to have you on bloomberg television. every impressive set of numbers. what stood out as being the strength in this business right now? peter: good morning, and thank you very much for having me again. another outstanding set of numbers delivered in all parts of the world. what we are most pleased to deliver was the continued momentum accelerating, particularly headlined in the u.s.. we really have delivered significant growth in all of our

drivers. revenue coming in at 130 million dollars. transaction volume, $1.8 billion for the quarter, which was at the ending, up by 100%, and 7.5 million customers using the platform as heavy users so we delivered across all of the pay metrics. haidi: this is becoming a very saturated market. the last time we spoke to you, we spoke about the competitor impact of paypal coming to this market and now, we are talking about apple working with goldman sachs to have its own service as well. are you concerned about the competition and the level of pretty big household names now entering the fray? peter: absolutely not. it is certainly a hot base and the competitors are now dabbling -- it's validation of the opportunity and it demonstrates that we are innovators and pioneers and we will continue to be so. i think what we believe is that competition is a good thing for all participants. it is very early stages of

market maturity in this competition and the constant focus really will accelerate the opportunity. it will increase awareness and adoption for both consumers and retailers, and it will also increase the size of the opportunity in the market and it is very important to callout paypal's entry in the u.s. at the backend of the last calendar year, it has not slowed any of the growth of any participants in the industry. it has led to continued acceleration and likely speaking, some of the volume that is being acquired by our business is coming at the detriment of credit cards. shery: you mentioned the u.s. is that where you are seeing the bulk of new customers coming from? where are your biggest growth markets? peter: the u.s. is a critical market for us to continue to deliver on. what we have seen in the last quarter is that the u.s. now does make up more than 50% of revenue, which is an outstanding outcome and really does demonstrate the importance of

that market. we continue to accelerate very rapidly. over 200% year on year growth, so the zip u.s. business really is continuing to deliver and it is also holding market-leading margins. in the face of this competitive dynamic, touching on that, we continue to deliver market-leading margins. shery: you did very well during the pandemic and the lockdowns in the past year. now that we see more of these variants spreading, how are you assessing what that will do to your business? peter: it is remarkable how resilient the business model is. we were obviously going very strongly pretty covid. we continue to grow very strongly with covid when there were stimulus programs. we continued to grow strongly when those stimulus programs rolled off and the world returned to some level of normalcy and we continued to grow. you look at australia in the last quarter, where there has

been significant uncertainty, huge amounts of lockdown without economic stimulus, and have continued to grow so the business model really is well-suited to any external factors, and it does demonstrate that we are still early days with regards to the opportunities. we are able to continue to deliver strong growth. no matter what the external factors. haidi: there's been reports that you guys are wanting to go into the realm of trading crypto and bitcoin. has there been further discussions or decisions made on that? peter: we are really excited about the additional products and services that we can serve to our consumers. we believe that it is a great access point to the customer but it is very important we really do serve out additional features that will satisfy their financial diet so paying, budgeting, saving, and investing, they are features we will deliver fearlessly, the ability to buy and sell crypto

is on top of their list so we have had some really exciting developments with regard to future products and offerings. haidi: do we have a timeline for that? peter: the next 12 months will be really exciting for our users. haidi: peter, great to have you with us, zip coo and executive director angelica lavito. we will be hearing from the australian minister about brisbane clinching the rights to host the olympic games in 2032. this is bloomberg. ♪

>> a quick check of the latest business flash headlines. elon musk confirms spacex owns bitcoin and has no plans to sell it. speaking at a clock runs, the spacex tesla founder said both companies hold the cryptocurrency. he personally also owns that coin, etherium and dogecoin. tesla could resume accepting it as payment once it makes a shift to becoming more green. texas instruments fell in late trading after it forecast a wide range traits revenues. the chipmaker indicating uncertainty about whether the increased demand it enjoyed

during the pandemic will continue. the run-up in demand has analyst investors concerned about panic buying, which has led to crashes in the past. -- accused a china-based drone maker of using its technology without permission and is demanding a cut of billions of dollars in annual sales. a texas court filing -- they claimed it infringed on technology that controls drone flights and their attached cameras. according to the faa, it accounted for 75% of small drones registered in 2019 in the u.s. shery: we are counting down to the start of trade in seoul. a newspaper reporting that president moon jae-in is considering granting pardons -- a special pardon for samsung electronics vice chairman, jay y. lee, and the ex-president, which would be the country's

liberation day. big earnings. they are set to release results later today. kick will announce its ipo price if they come in at the top end of the range. the company could raise as much as 2.5 trillion won and have a market cap of more than 16 billion u.s. dollars. here is a quick check of the market and how we are setting up for asian trading. japan is away on holiday, but we have kiwi stocks at a one-week high, gaining ground for a second consecutive session. sidney futures pointing higher and we could get a second day of gains for australia but of course we have pressure from those rising covid cases, not to mention a miss when it came to june retail sales numbers and pressure from covid cases in south korea, recording record cases right now. they have been above the 1000 level for months and we could see a fifth consecutive session of losses there. haidi. haidi: australia's minister for

sports telling us earlier that hosting the 2032 olympics in bruce and will bring up to $17 billion to the australian economy and create 120,000 jobs. he spoke with us earlier on "daybreak australia." >> it is all to do with the new norm that has been developed by the ioc to reduce the cost of hosting, with the objective in time i think of encouraging more cities and midscale cities like brisbane and southeast queensland, hosting for the games. it's part of a new bidding process that has been developed by the ioc and something that obviously, brisbane, southeast queensland, and australia engaged comprehensively with, and we are absolutely delighted with the wind that occurred last night. haidi: it is really some good news for australians under law down at the moment to be able to celebrate this win. mr., talk me through also the

infrastructure investment that is involved. i understand, looking through some of the operational documents, a big focus will be reusing existing infrastructure rather than holding up these white elephants. do you know the cost versus the benefit? any of these numbers at this point? >> a lot of that work remains to be done, but there is a fair bit of detail in the bidding documents submitted to the ioc, and you are right. one of the features of the brisbane bid was the reuse of existing infrastructure. 85% of the infrastructure is already in existence and will be temporary for the games. and that again is to reduce the cost of bidding for an hosting the games. the ioc are clearly quite focused i'm concerned that that is the case and again, as i said, it encourages more cities like brisbane to be able to participate and there is a partnership being developed between the australian government and the queensland

government to assess and build the infrastructure that -- the additional infrastructure that will be required. shery: it seems that we lost you for a second there. i was asking about economic impact for brisbane coming from the games. richard: the projected economic impact for queensland is in excess of $8 billion, as projected, and over $17 billion for australia nationally, which is really good news as we come out of covid and recover from the events of the last 18 months or so. and in terms of employment, it's about 120,000 jobs. and 90,000 of those in southeast queensland, so a significant contribution to the growth and development of southeast queensland, and of course, in that context, that economic development is really positive for those local communities.

>> and of course, minister, you are in tokyo. we have seen at last count over 70 cases of people within the olympic athletes village and within that complex testing positive for covid. i am wondering what the experience is like for athletes and for the australian delegation this year. richard: well, it is certainly very different to any other games that i think have been experienced because of that. there is very strong protocols to manage the virus, so anyone -- people have been tested daily, so that is a very, very strong testing regime, and of course, in that circumstance, they do test positive, they are being isolated, so it's a very different games. think the games will be memorable for the fact that they were conducted during this covid environment. tokyo is a very different city from what i have experienced previously because of the restrictions around covid, and

there's a lot of efforts being made by the ioc to ensure that the separation between the athletes and the community here in tokyo protects both the community in tokyo and the athletes so considerable effort being made. quite strong protocols to support the games continuing safely. shery: richard in -- very exciting that you get to host the olympics for the third time. rio de janeiro, 2016 games, it struggling after hosting the olympics. abandoned facilities. we know that fiscal risk has been a big issue. how is the public taking it? >> the fact that the queensland delegation went to tokyo to accept or push this final part of the bidding process through was pretty controversial, because as you know, a lot of australians cannot get back in. they cut down on caps when it comes to hotel quarantines, so

that was pretty unpopular, but look, with half of the population here under lockdown, it is good news and we will take it as something that we can celebrate. the market opens, sydney and seoul, coming up next. this is bloomberg. ♪ let's get a quick check of the -- this is bloomberg. ♪

shery: welcome to "daybreak asia ." from bloomberg world headquarters in new york, i am shery ahn. haidi: and i am haidi stroud-watts. strong earnings. bitcoin gets a boost. four of hong kong's top banks as ever grand -- evergrande loses

its rating. japan is off on holiday, and we are counting down to the opening ceremony of the olympics at the end of this week. this is how we are faring when it comes to some of the bank at the start of the session, 3% higher, some of the opening trading in sydney. the aussie dollar seeing a little bit of weakness. we had weakness across the gold dollar basket in the overnight session. coming off the session highs of about .2%, and just getting a little bit lower, shery. shery: of course japan away on holiday. it is about the cyclicals, energy, financials leading the game. also standing around the 11.49

level. you see a little bit of pressure for brent, wti. this as we saw oil rally. we have some reports that u.s. stockpiles were declining. bitcoin above that level. we are focusing on those earnings. about 200 20 agent companies reporting in the next seven days, focused -- 220 asian companies reporting in the next seven days, focused on japan and korea. haidi: earnings expectations really looking to top record levels that we saw in 2018, as shery mentioned, mostly japan, korea, and india. the question, of course, shery, is how much is the potential patching this of the recovery as a result of delta? shery: exactly.

the delta variant risk for emerging markets has not really been fully priced and yet. joining us is paul from bnp paribas asset management. great to have you with us. what does this mean in terms of where we will see the movement flows, whether it is stocks or bonds, because in the last few months, it seems like emerging market bonds have rallied more than stocks. paul: yeah, but there is no escaping the pull from equity, right? so investors will still want to see the equity returns. and asia, you know, the last six month has been pretty stagnant. i think this will allow an opportunity for investors to find their way back into asia. the u.s. market is actually come on the equity side, it is still a massive pole. we see a lot of returns coming out, and i think that will still

be a primary asset class going into the end of 2021. shery:shery: when you are looking at opportunities in the asian markets, especially in equities, where are you looking at them? are we talking reopening, like we have seen today? because we are seeing them already start to get pretty stretched. paul: yeah, i think that what we are looking at is volatility leading to long-term holds. asia has encountered a couple of volatility pieces of this, right? one is there is a geopolitical risk that is coming up, and that will create some volatility. regulators are getting more stringent, and that will create volatility. china has tech names, and that will create some buying opportunity. those are places we are looking. we are not looking for speculation, but we are looking at names that we need to hold

for a long term, and volatility will hold onto that. haidi: i know you have got some views when it comes to china. are the chinese tech names going to be interesting from a chinese perspective? paul: they are starting to, and i think they will get even more attractive. the fundamentals have not changed at all and, you know, these names have been under scope for quite some time. i think the scope is going to change, the focus is going to change, and these names will be depressed and will lead to a lot of opportunities. so we are definitely allocating more to china, over long-term, and technology names will be one of the primary focuses.

haidi: and it is fintech and the consumer-facing companies that you think are most interesting? paul: definitely. all over the world, they will be interesting, but china has, again, i think that the volatility has been priced in quite substantially, and the more from the newsreel that comes in, it gives that downward bounce that we are going to be looking at. shery: has the regulatory risk been factored in, especially across china and tech? paul: well, it is very dynamic, right? it is very dynamic, and it is hard to predict these things, but one thing is for sure, that china is making the regulatory changes to allow for more liquidity in the market, right? so they are making the market more attractive by changing some of the rules, to allow for foreign investment to come in.

and foreign investment is coming in. so there's going to be additional liquidity. where is that liquidity going to go? some of these names have the fundamentals. haidi: paul sandhu, head of multi-assets at bnp paribas. let's get to su keenan. su: wendy scholl becomes the highest ranking biden official to travel to china when she meets foreign minister wong yi. sanctions on chinese officials. the state department says there is a special age of concern as well. the indonesia now, where they will meet the four tier movement to mitigate the spread of coronavirus before starting to ease restrictions this week.

they will vary from city to city based on how badly impacted they are. they will remove the order by july 26 if the number of new virus cases continue to fall. java and bali are at the highest level. and singapore will close casinos for two weeks after a covid cluster was detected. the casino will be close through august 5 with all staff undergoing covid tests, and the premises being cleaned. the government is offering free testing for anyone who visited july 2. harvey weinstein has pleaded guilty to rape and sever -- seven other assault counts. the charges include five women. this is the day after weinstein was extradited to california from new york where they

69-year-old was facing a sentence after being charged on rape charges in new york. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: still ahead, big gains from elon musk and jack dorsey. we will discuss those next. this is bloomberg. ♪ ♪

haidi: all right, let's take a look at bitcoin, where we have seen some of those gains that we saw in the session. this is where we are trading at the moment. spread positively about a panel on the disease future. the currency holding by about $32,000.

musk reiterating conditions for tesla to start to accept bitcoin as payment again. elon: most likely at or above 50%, and that -- there's a trend toward increasing that number, and if so, then we will resume accepting bitcoin. haidi: and on the other site of the coin, bearish on the biggest bitcoin currency. >> i think something in the neighborhood of $15,000 is where we are going to end up. the standard bull market -- or bear market, i am sorry, for bitcoin has been an 80% retracement, and, you know, given all the uncertainty and

the new competition from new coins and everything else, i think that there is more downside to go. haidi: let's get more from our bloomberg intelligence commodity analyst mike. when it comes to what minerd said, do you think that greater uncertainty brings more interest in bitcoin, do you accept the proposition that it is inflation hedged? mike: i think you nailed it with that one, haidi, and it is actually inflation and deflation hedged. the thing to remember about bitcoin as it is in the price discovery stage. and has only been around about 10 years, only a mature stage in the last few stages. what you saw today, to me, was these three titans of business, in the mainframe of getting, it is a matter of time, it is going to continue to be a part of bond or folios and gold portfolios

and treasury in early days it i see it building its platform here. one of the key takeaways is elon musk pointed out what we have been seeing, do you cannot mentioned bitcoin anymore, and he did, and now it is that that to thousand dollar threshold, and bitcoin has held at that $30,000 threshold. just bullish, and these markets are building good foundations for rising prices. shery: what about the environmental side of things? mike: yes, so that is the key thing that cap he would -- kathy wood is very good about addressing come of a noble over 50% if you include sustainable's, and musk did point out the nuclear power is very clean, very safe. it is just a matter of time that bitcoin will accept it based on his standards, because everything is going renewable, and it is a fact of pure economics.

renewable sources are cheaper than other sources of electricity in many places, and it is ideal for bitcoin mining, and bitcoin helps regulate what has peak close. it is just a matter of time, and now i see the market, yes, it may hang out for a little while, but i'm worried that this beach ball is going to bounce for a little while. haidi: mike, in terms of a price discovery period, how long does it take, you know, to reach a point where we have an idea of what to expect? mike: that is the cool thing about it. [laughs] it is so new, so massive, so different, we have never seen anything like this before. i view price discovery, i am looking out a price around $100,000, because that is what has done before, it stabilized d around $1000 for a couple of years, hung around, average prices around $11,000.

i think the next plateau is around $100,000. that might take a wild, but that if the next plateau, i think, where it will find price discovery, and it will get there, find volatility, and that is what is happening, becoming mature, becoming like gold, and motility will decline. it is actually declining right now, in this range between 30% and 40% and will probably not get above 60% for a while. shery: always great talking with you, mike mcglone, bloomberg senior analyst with the latest on everything crypto. coming up, we will hear from john kerry who says every nation must step up and combat climate change. this is bloomberg. ♪ this is bloomberg. ♪

haidi: u.s. climate envoy john

kerry says countries need to step up their commitment for climate change in this zero goals. he spoke with bloomberg's francine lacqua ahead of the g20 summit on climate action, taking place in italy this week. mr. kerry: well, i am very hopeful, obviously, because the stakes could not be higher for the world. this is annexes's jewel issue. we are already seeing people losing their lives to the impact of the planet, the crisis, and we need to respond. that is what paris contemplated five years ago. we made this determination to come together, and now we have to implement that service. francine: but what hope is there of getting something ambitious, given the challenges we have seen at the g7, g20 so far? mr. kerry: well, i think, g7 put out a very important statement that was very far-reaching. it called for an ending of funding of coal fired power

plants abroad. it set a aggressive goal for a 2030 reduction. it embraced the keeping 1.5 degrees limit on the rising of temperature in place, keeping it alive. those were aggressive goals, and i am hope will -- hopeful. i cannot tell you yet that i am optimistic, because we have not had actions it with the g20, but i look forward to the next blood couple of days. my hope is that countries will step forward. in saudi arabia, the saudis signed onto a joint statement that is forward leaning an aggressive. and russia, president putin has committed that russia will take this seriously, and the steps that they need to take. i think step-by-step, we are growing the support, the aggressive effort that the world is demanding, and i would empathize young people all

around the world understand this is their future. this is adults today not behaving like adults, and they are demanding that we do, and i think we have to live up to that. haidi: u.s. special presidential envoy for climate john kerry speaking to bloomberg's francine lacqua. we are continuing to watch the impact of these terrible floods that we have seen, a city very well known for being a manufacturing hub, including where we see a lot of manufacturers, but you've seen really harrowing videos of the extreme floods we have seen. we have seen more than two dozen people being killed, 100 thousand people being evacuated as the catastrophic floods move through, and shery, we are seeing china and other places increasingly deal with these climate-related natural

disasters. china is being deemed, like, this idea of climate relocation, being able to move them to other areas of the country that are not as affected by these catastrophic disasters. they have been able to do that before, right? 3.1 million people to build the three gorges dam about 25 years ago. shery: yeah, few governments around the world would be able to carry out these mass migrations. more extreme weather events. perhaps i could be a lesson for other governments, changing, intensifying, who knows where we need these measures in the future. haidi: yeah, the problem with australia being an island is there is not much you can do with increasing temperatures. the entire country is just essentially getting hotter and hotter.

let's stick with the climate theme, the green goal that a lot of institutional investors are trying to push, the world's biggest institutional investors. they say their green goal is to become -- after continuing to invest in oil polluters like oil businesses and airlines. some say the struggles do not add up. are they serious when it comes to sustainable investing, or is this another example, some would say, of corporate greenwashing? david: as you said, australia is an island, so climate change will greatly affect the country. you have to say that temasek is reasonably serious when it comes to investing. they have taken steps toward impact investment as well as renewable energy and others. shery: so how many of those

highly polluting assets do they hold, and are they still investing? david: nate is hard to say how much of their billion dollar u.s. portfolio is. even if you do not think an oil rig maker is polluting in and of itself, it is leading to the exploration and mining of fossil fuels. you have seen solutions of that. what they did say at their annual results the other week as they are open to admitting as long as they can take that on a journey to becoming greener, and that is one that a lot of others have taken. haidi: right, so can they be taken seriously on environmental issues? a maybe they will change kind of approach. [laughs]

david: this is a real tough question. i think the jury is still very much out. you know, if you are actively talking up your green credentials while still investing in an oil rig maker, i think the general public will question that, even if you are telling people that you are trying to encourage them to move toward better uses of offshore rigs, such as, you know, sectors out at sea, this is something that would have to be decided, honestly, through the court of public opinion. we have yet to see the report of that. shery: david ramli there. expecting health care demands to return to normal, even as covid-19 spreads. the pharmaceutical giants report a second quarter profit above expectations, with sales reaching $5 billion over the next five years. rates are still recovering to

pre-pandemic levels. >> we are optimistic that, despite the emergence of the delta variant, that health care systems now are seeing the value of maintaining health care visits, getting patients in to get treated, and hopefully that trend will continue in the second half. shery: saudi aramco confirmed a datalink after hackers reportedly demanded a $15 million ransom. the associated press reported that one terabyte of saudi aramco data had been held by a source on the darknet. accusing dji of using a cut without permission and is demanding annual sales. court findings claim dji arrange five patents for technology. aji is the world's biggest drugmaker. according to the faa, it accounted for 75% of small

drones registered in 2019. haidi: how currencies are trading, you see some of that appetite for safe havens of starting to see greater yields come of course on treasury, equity climbing in the overnight session, the risk appetite as well. dollar-yen trading at 1.10 at the moment come of course closed today for public holiday. you see the dollar-lire trading higher as well. the aussie dollar at3 the moment,4 and the kiwi daughter at9 -- kiwi dollar at .6959. top hong kong banks are now halting evergrande mortgages. this is bloomberg. ♪

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shery: top of the world in 2021, we could see further gains. treasury rally right now paused but not before the 10 year yield fell below or around that february lows. every time we have seen treasury yields fall, we have seen those implode into the chinese bond market. when we saw treasury yields a topic that back in march, we saw them from the chinese bond market and now with more easing

coming from the pboc, we could see yields falling, they have already fallen to the 2.9% level , around 15 basis points of a reduction since the end of last month. when it comes to the corporate credit market, we know there's a chart on bloomberg because we are seeing investors going into the highest rates of the chinese corporate bond market. the spread between the top right and the five-year government bond is near its lowest since 2016. not surprising given the risks we are seeing around ever brand as well. haidi: that is a higher risk curve. at the moment we are seeing them trading at pretty concerning levels. this continues to -- according to levels of distress as well as potential contagion. running us is jenny zheng, head of asia pacific -- is specific

-- is at -- asia-pacific asked income. how -- these hong kong banks have received -- refused mortgages? juliette: and is -- jenny: it is also made for them. what is more important than any chinese developer bond is phasor -- figuring out whether this is just -- systemic. we don't think any individual developer can do it all because chinese real estate market remains fragmented. ever grant being the largest developer -- evergrande is only 4% anyway. the biggest challenge for corporate's or any chinese corporate for that matter is that the capital market nowadays tends to react to more and more trivial headlines and noises which cloud the structure and trajectory. for example, the straight

redline is a very comprehensive checklist national health, liquidity, it is very comprehensive. this tells you the government is inpatient to reduce, avoid and manage the systemic risk imposed by the sector, not by any specific developer. haidi: the thought is evergrande would have systemic implications. i worry because they are not assets -- you could see as oe's -- soes come to the rescue. jenny: whether it is systemic or not pens on the spillover effect. we don't think any individual developer is systemic enough. the whole sector adding up together, gdp, owing to its

widespread supply chain spillover and the debt the whole sector has taken. it can be systemic anyway. if any credit event happened to evergrande, which is the largest developer and the largest in the high-yield market, they would need to shut down the channels of other developers we are talking about. then it is systemic. shery: in the meantime for those investors come out where do you go for safety in this environment? jenny: don't forget that chinese property sector is in a credit down cycle. it is perhaps in a cell up cycle, but from a credit cycle it is down. that means there are two trends happening at that cycle, one is the weaker driven out of

business. the second is corporate takeover , to manage their balance sheet. so you have an increase in risk. whether there is any safe place to hide, i am not sure about that because overall, chinese developers are pretty stretched in terms of their balance sheets. they've already seen too much difference from one to another -- we don't see too much different from one to another. haidi: when it comes to the sovereign side of things, we see chinese bond markets very attractive for foreign influences. this chart showing the index has forecast where chinese people tend to go, and with china's five-year wage swaps, it is closely correlated. could we see further gains for the chinese bond market?

jenny: absolutely. it is a long-term opportunity for investors who look to diversify from their g10 rate. we do think the positive feedback loop we talked about last time will continue in the medium to long-term. we are seeing growth which drives up the currency, and the higher the currency the higher the bonds. in the meal term -- near-term, it depends on how the u.s. dollar performs. that could take cuts but over the longer term, we do think on the back of this strong productivity, china produces, the chinese government -- it will come further outside. shery: always good having you with us. cohead of asia pacific fixed income.

we do have word on bluebird south korea reporting another record number of new coronavirus cases, this time 1842. the vaccination rate in south korea is still low at around 13%. we are hearing that or the 200 sailors on an anti-pirating mission of africa haven't confirmed having the virus. virus cases across south korea at another record of 1842. we announcing that much movement when it comes to korean assets. now su keenan with the first word headlines. su: the latest on china's internet regulators, they have slept lines on several tech firms were allegedly splitting -- spreading sexual content involving children. a government agency ordered kuaishou technology, tencent, alibaba and others to remove the offending accounts and pay an

unspecified amount in fines. the crackdown is targeting livestreaming of minors, platforms and expositor animation. bloomberg has learned that jay powell enjoys rod support remember -- renomination as the federal reserve chair. the decision is not expected until later this year. the matter has yet to be brought before president biden. his four year term is set to and next year. two others'terms are also up. an opioid distributor facing thousands of government lawsuits. the companies and state attorneys say they deal comes from cardinal health and the burden is 21 billion dollars to resolve allegations they turned a blind eye to suspiciously large opioid shipments.

j&j will pay $5 million with claims it illegally marketed opioids. -- the summer olympics and the parliament games. brisbane has been selected under a new process. the previous process was overhauled in 20 to prevent bidding wars among cities. 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'm su keenan. this is bloomberg. haidi: next we get more on the olympics. ♪

shery: the unprecedented fan free olympics may lead to disruptions. japanese payouts are looking strong. let's bring in an intelligence analyst to discuss. the total amount of insurance coverage for the 20 -- 2020 liv-ex. -- olympic.s

s. >> the coverage for insurance globally is roughly between two and $3 billion depending where we start the coverage from. the argument is a lot of the insurance payouts started back in 2020 20 instead of now. to give you an idea, with the breakdown of the two to 3 billion dollars, most of the most impactful areas be tv broadcast, which amounts to about a hundred million dollars coverage. -- about 800 million, and another from the local organizers for the tokyo olympics. haidi: given the impact of a fan free olympics, where will the fans becoming from -- claims be coming from? >> there is disruption to the hospitality, many of them pulling out of ads and things like that. that adds up to another five or

$600 million. if you break it down, the way insurance works is that the japanese peers are not the only ones ensuring these coverage. after we crunch numbers, we realize probably their exposure is roughly about a quarter of a billion dollars, maybe half from the insurers in japan. shery: what does that mean for their bottom line? >> actually, they will be fine. those claims, if those happen, roughly translate to about three or 6% of profit forecast for this year. this is actually quite manageable. if you compare that to other, bigger typhoons or severe floods, that could even go higher up to the billions. haidi: you previously said

dividends and buybacks would be robust for these insurance with the olympics. when any claims from that change that? -- would any claims change that? >> not really, it is a good question because we realize cap needs insurers are leading in terms of total cap and it -- capital return. that is dividends and buybacks included. to give you an idea, after factoring in those claims, or projecting about 6.5% in terms of total capital returns across the three big players. they are already sitting at the top of the range within the asian peers and if you compare that to global benchmarks like the ftse 1000 or the s&p 500, they are still way above those. for example, for s&p, if you add dividends and buybacks it gives you roughly 3%. it is still widespread versus some of the global major

indices. haidi: steven lam there. indonesia is the epicenter of asia covert outbreaks as it struggles to bring down numbers. joining us to discuss is asia economics reporter michelle. what are you expecting to hear from bank of indonesia and what more can they do to support the economy? >> the whole reason interest rate changes have not been the answer is they are already low, inflation has not been a threat, we are expecting another cold from bank of indonesia today. but they're focusing on keeping the ruby stable and while they -- ruby stable -- rupee stable. we will expect to hear about other kinds of support bank of indonesia has pursued, it has done a lot to finance government stimulus packages rout the covid era and make sure the fiscal

side has what it needs while keeping investors calm about the debt pile. that is when challenge they will be tackling. they will also consider aid for small and medium-size businesses, the backbone of many economies in south east asia. they have really felt the brunt of the covid mobility restrictions. they might need more support and aid in terms of lending and other relief. shery: what will be the markers that policymakers are watching ahead on whether and how much more support is needed in the economy? >> it's all about the virus. with the latest charge in cases, analysts are questioning the government strategy on lockdown restrictions. we have curves that very in cities and it could be changed by july 26, a few days, if cases ease. but with a low vaccination rate, they only have about 6% believe

vaccinated according to our vaccine tracker, they need to find another way to contain the virus in the near term. we are looking at whether these terms might be extended. as it has been throughout the crisis, the central bank will be looking to see what the government needs. bank of indonesia is expecting gdp to slide around 3.8% this year from an earlier estimate from as much as 5.1 percent. officials have to appreciate that trade has to -- including commodities which have helped indonesia post 14 treatments of trade surplus. that is a good thing that we hope to see continue. one big publication is the federal reserve. the governor has said they are not fearing any sort of taper tantrum like scenario, he has talked about jay powell being very transparent about the path forward but it could, get things for bi around currency was the fed is starting to move in

earnest. number one is getting the virus under control in the near term. alix: -- shery: staying on the virus, thailand reporting a record 13,000 new covid cases, 87 deaths. and authorities in the capital city of hanoi have ordered arrivals from southern areas under covid stay-at-home orders to be placed in quarantine. we continue to see infections spreading in southeast asia. haidi: we do see the delta variant ravaging parts of this region. in queensland, the state will close its border. instructions are returning, queensland will be not allowed -- not having any new cases of covid. but with the ongoing lockdown and it south wales, we have not seen the numbers -- the latest

case numbers and 10 minutes time. shery: the pandemic situation something central banks are watching. in europe, edging the ecb inflation target into a policy to guard interest rates. that is what ecb president christine lagarde and her colleagues said at their current policy meeting, kathleen hays is here. kathleen, what can we expect? kathleen: like the federal reserve, the bank of england went through the policy review, the framework review of couple of weeks ago. christine lagarde announced they are inflation targets. just under 2%. and sustaining it there. now they are mimicking other central banks, saying it is going to be just below -- excuse me, symmetric around 2%. does this mean for policy?

does it mean for guiding interest rates? how do we know what is going to make them make changes question bloomberg economics, look bring -- let's bring this drink -- screen backup, the governing council will commit in its forward guidance to keeping interest rates unchanged until inflation is forecast to reach or slightly surpassed 2% and remain there for some time within the central bank projection period of two to three years. more specific than the federal reserve, everybody is wondering, averaging of 2% above, how long, a moderate time, what is that. but let's look at what inflation is doing, because that helps us understand what the ecb is looking at. and christine lagarde they be talking about tomorrow, you can see the main inflation rate is up to 2%, it is expected to fall up to 1.4% in 2023. presumably, they are looking at

a transitory inflation situation, but with this new target, what will that mean? when will they be at that level long enough? those questions that she will get from reporters. i think one question is, and maybe the ecb will tell us that resources stay lower for even longer than investors thought, the executive board the ecb is talking about inflation changes before adjusting policy. that seems to echo the federal reserve where they don't just want a forecast or an outlook, they want real numbers. it's going to be a fascinating press conference and statement. haidi: what is the new regime about bond purchases? kathleen: the ongoing bond purchases program was overshadowed by the pandemic emergency purchase program which started last march. what we expect to hear from christine lagarde, our economics team thanks that by september

when they get new economic rejection -- projections, they will be getting ready to cut down the purchases. maybe she will talk about tomorrow and lay some groundwork for a broader, more long-term program. the old guidance was to continue the 1.8 5 trillion euro purchase program, over $2 trillion, which she will continue till the pandemic is over. she will also say one more thing, there's going to be more plain english in the policy statements and she says it is going to be a quote important meeting. i think it's going to be fun. shery: you will keep us updated, our bloomberg local economics kathleen hays, more to come. this is bloomberg. bloomberg.

haidi: chinese and hong kong are markets opening up in half an hour. he is here with a preview. we are seeing a rally. abigail: -- david: you saw behind me, yvonne is next to me, the make a people , there's a hand here. it is going to be a big day.

a massive rally yesterday. have a look at this chart, the reason i bring this up, we are coming to the 10%, it allows them to be behind this market which does not bode well for the rest because it is one of the defenses and places people have been getting in. watch this closely, we are not very close but we are approaching those all-time highs. shery: also rally in the bond markets, topping 2021 when it comes to global rallies. david: yeah, everything from the three-year to the 30 year, i will even include rate swaps, another way to think about that to your point, there is a bond rally. it can also be rethinking and recalibrating of growth momentum in china. those bond yields are coming down, it is interesting is when you look at earnings expectations, i think on msci

china is down about 7% on 2021, if you look at 2020 is about 5%. is playing up expectations, the point we wanted to make earlier is when you look at what is happening in the bond market, the margin has not been at a record, it has been climbing but it has not translated to gains in the broader stock market. it has basically been stuck. we will estimate exactly that question, what is happening in the broader index in china? why is that not moving? haidi: the only thing scarier than the other thing we are focusing on of course and the disembodied hand we saw is these contagious -- contagion fears when it comes to evergrande. david: yes. i will make this quick, too. there's a story that bonds are more widely held than expected when you look at bond -- benchmarks. when it comes to the property

sector here in hong kong, some of the exposure and what their stopping as far as mortgages are concerned. back to you guys. shery: we will be watching them when we get to bloomberg markets china open. this is bloomberg. bloomberg.hot

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♪ >> this is my kitchen table and also my filing system. over much of the past three decades, i've been an investor. the highest calling of mankind i often thought was private equity, then i started interviewing. i watched your interview. i learned from during my interviews how leaders make it to the top. >> is that fine, i did not negotiate, i did no due diligence. david: and how they stay there. we