courts welcome to daybreak: asia from bloomberg world headquarters in new york, i am shery ahn. >> i am southern, rude in hong kong. we are cutting down to the major market open. >> i am haidi stroud-watts in sydney. our top stories is our. following wall street lower. the treasury yields also concerning. as the delta variant spreads,

helping the global virus fight. and how alibaba's earnings may lift some of the clouds over chinese stock. >> we have breaking news out of south korea. july cpi member -- numbers accelerate faster than expected, growth of 2%. the expectation was for inflation to stay flat. it is also following contraction prices in the previous month of june. when it comes to the year on your numbers, again, above that 2% inflation target. this is faster than the previous month. we have seen those cpi prices for south korea year on year exceeding the be ok's 2% target every month since april.

let's turn to sophie for what to watch across markets. >> state caps below 150 ahead of that. switching up the board. checking on aussie bonds. we have the yield curve flattening. we are flipping below that 2% level, retreating by the february high. we are going to be watching for any comments from the rva. pulling up the board once again. china's economic growth. this is going to a june 2020 low. they expect that yields will fall -- continue to fall in china.

capital economics seeing and inclined to 250 by the end of next year. even as long-term yields in most other major economies are seen rising. >> let's get to vonnie quinn with the first word headlines. >> china is now battling its broadest covid-19 outbreak since the coronavirus emerged in late 2019. the more transmissible delta variant has been detected in nearly half of the country's 32 provinces including the original epicenter of wuhan. health officials are urging residents and beijing to curb travel in the near future. the u.s. has reached president biden's goal of -- the target was hit nearly a month later than they wanted. a dramatic drop in april.

new zealand's central bank is further restricting access to mortgages as house prices continue to soar. it will also consider introducing a debt income limit or interest rates slowing. new zealand is one of the hottest property markets, prices surging 30%. chuck schumer is -- has a plan hitting a roadblock. lindsey graham tested positive for covid. no quarantine for 10 days. graham was one of the 10 key republican to help negotiate the bill. china is said to be opening an investigation into recent deadly flooding. this after number -- the number

of known deaths surged. state media says the government will look into the disaster response. most deaths were in the capital where torrential rain, collapsed buildings and submerged subway cars were. global news -- >> pricing for disappointment in alibaba's results later. investors will be waiting to hear about what it says on china's crackdown and the outlook that could lift some of the clouds over chinese tech stocks. let's go to john for preview. in so many ways, this is where it all started. have things improved for alibaba since the crackdown? >> they ended with an upbeat note because they forecasted better-than-expected revenues

for this fiscal year. they are expecting about 930 billion yuan of revenue. we will be looking for a forecast for how they are doing, how they are expecting the rest of this fiscal year to go. last year -- last quarter, they had their first loss in almost a decade because of that record find that the -- fine that the chinese government levied against the comedy. they will look at how they are dealing with the new regulatory environment and what that means for revenue and profit growth going forward. >> given everything they said, it is not surprising we are seeing their stocks underperforming. double-digit losses for july. showing our viewers how bad valuations are. what will it take to push up the stock? >> the overhang is mainly uncertainty about the regulatory environment.

are we in the eighth or ninth inning? is this the first inning? how much concern is there over these very consumer facing tax? are they being seen as the ones that are most impacted by any further regulatory action? >> i think one of the running things we have seen in the actions beijing has undertaken is the quality of trying to narrow the wealth gap. anything in that frame is going to be more at target. pay for couriers, dd drivers, that is what seems to be what beijing is going after. i think that sector specifically is more at risk right now. >> that was john with a preview of baba's results.

our sloughs of interview with richard lancaster, earnings are out. ubs asset management expect yields on the chinese 10 year government bond to decline by at least 25 basis points in the coming three months. this is bloomberg. ♪

>> treasuries rallied on growth concerns and the spread of the delta variant. china's 10 year yield fell to the lowest in more than a year. our next guest is watching asian exports were a preview on global growth. we are -- always great having you with us. let's start with china, given

the recent crackdown on different sectors, what sort of message is this sending us, especially after your meeting on where easing is going. >> i think this is compounding the credit impulse. this is pretty typical of most of the last big cycles we have seen in china where they over regulate. although that is positive in the longer term. then we will usually have a response will start to see a lot of the policy start to complain around the slowdown. they probably don't want to cut right now. it is really positive for chinese bonds right now. we think this will continue right through to the end of the year and possibly into the new year. >> are you at all concerned about those names and the ongoing drama in the corporate sector? whether it is ever grand or

where beijing stands? what impact will that have on the larger economy? >> that is one of the key things. that will slow down. there will be more changes to come. there are some pretty key announcements on how they are restructuring. the key is to look for those government bonds, policy pang on spear he -- bank bonds. those are the ones that you have to get some capital appreciation to at the moment. this is still the stand out as set globally today. relative to the market bonds that are steeply negative or close to zero. this is probably one of the few barbells you'll have today. >> thank you so much. the easing is priced into that

model if you are paying on the diverges this -- divergences. >> there is not much priced in. the reason for that is the pboc just flipped its easing stance. they have been very reluctant all year. they did not want to be seen to be fueling the relay verging economy. the government has been going the opposite direction. as usual, i think they will be called into put a base on the economy very late this year. i think the bond market will continue on rally, the economy -- the flash was liquidity. the problem is it is not getting into the real economy right now. we are facing that same problem again. the plumbing is in place but they really don't have this strong lending to small and medium enterprises.

in china, youllal when you do lending at a lot of those funds don't have it right now. they are still stuck in financial markets. repose are below 2%. we are looking at the overnight. a lot of liquidity in there. the pboc thinks they are doing the right job at the moment. >> other than china, what do you like in the asian space? >> as much as we are in the eye of the storm, a lot of these credits are actually very close to recovery levels. if we can see it in china -- the chinese economy out here, while you're in the eye of the storm, it is time to start switching into asian high-yield and particularly into chinese high-yield and the property sector. they may not feel the right move right now but we look at these bonds, let's say close to $.40. that is recovery level.

a lot of risk is already on the table. if those companies can survive with three red lines in three years, there is owing to be a massive re-rating of that sector. over the long term, this is going to be a very positive policy. >> what about the rest of asia and the spread of the delta variant. how much is that being factored in? >> in china, we are seeing that right now but i think that is playing a very big will across the rest of asia. the one we are watching for india in particular is the numbers. then summit was allowed to go back out. this is just the start of the delta variant.

the best of the area is under pressure. you're looking at the big ones and you actually see the slowdown happening. >> how much of a turn are we expecting? >> there is no much -- no way they can do a u-turn now. we are seeing shutdowns across various states and this is a tricky situation. the individual states are shutting down. you have the largest and the second largest states coming under lockdown pressure. that puts a huge amount of

pressure on the rest of the economy. this is not just an overnight thing or a one-week thing, this is several months and it may even go on for longer because the vaccination rollout is so slow. i would say the rba is under more pressure to keep the policy in place even though there is a lot of banks started to flip. >> always great to have you with us. coming up next, covid cases surging in the u.s.. we will be getting you the latest in, this is bloomberg. ♪

>> counting on to the start of trading. over in japan, have been

tracking the belarusian limbic sprinter who says she was pressured to leave tokyo -- olympic sprinter who says she was pressured to leave tokyo. another big story, how toyota has been a chance -- has had a chance to test it battery-powered car. mitsubishi's fourth-quarter profits more than doubled. we have inflation data for the month of july, consumer prices rising .2% month over month. those were faster than estimates. travel advisory for south korea.

one step, from low to moderate. >> let's look at these. henry goldman. we are seeing these mask mandates and strong guidance is being reinstated across the u.s.. the most recent one is in san francisco. >> new york city also. there is a strong recommendation that you wear masks. it is not a mandate. there is considerable concern about this strain of covid. it is extremely contagious. there are a lot of people who are not vaccinated. a lot of people were very hesitant. >> finally, the u.s. hitting that 70% vaccination target.

>> yes, that is good news. i think it is closer to 74%. it came after the goal that was set by president biden. i think many people think this is a significant achievement. it is more than japan has been able to achieve, moving up toward 350 million doses that have been given so far in the united states. i think japan is at about 40% fully vaccinated. about 30% with one dose. 70% or 75%. it is original. there are parts of the united states where that vaccination rate is so low that it is a real source of concern.

there is going to be a lot of stress on hospitals in states where there is very low participation. >> we have heard that lindsey graham has tested positive for covid-19. he is vaccinated. this is one of the breakthrough infections we have been talking about. >> he says his symptoms are relatively mild. he attributes that to having taken two courses of the vaccine. for him, coming from south carolina, this is a state that has low -- a low part is patient rate. this is a significant statement from senator graham and it may have some credibility with people who have really opposed getting that shot.

>> henry there with the latest on the virus infections here in the u.s.. reporting better than. thomas spoke to bloomberg exclusively about how the delta variant changes and why it is getting hotter to ensure large events. >> in the very short-term term, we are all very confident because we have found after the confinement that you are absolutely right. the delta variant is on the rise, infections are increasing. at the same time, vaccinations are also increasing. i remain very prudent when it comes to predicting economic activity going forward. we have to see how the delta variant is impacting us while the vaccination is increasing.

>> we will come back to just how concerned you are. i know you offered 300 million euros to some of the restaurant owners. we will see what proportion have accepted. can you update the markets? >> this was the league of uncertainty under farms. as you can imagine in discussion with all of our customers, 15000 and i can report to you that the discussions are going very well. we have a lot of restaurant owners who have accepted or want to accept it because it is clear.

things are looking to the good where restaurants are open again. i remain very confident that we need to find a good solution with the large majority of our customers. >> large majority but can you put some numbers behind that? what percentage of except in trade are you seeing? >> just over 50% have been spoken to and given us a written or verbal agreement, just to give you a flavor. >> got it. he put out the new numbers when it comes to the flooding. have you seen the largest extent? can you assume more costs associated with those weather events as well? >> this has been a very tough year when it comes to financial catastrophes. there were major flooding is in europe a couple of weeks ago.

this was a very difficult visit. a lot has been destroyed. we are continuously making sure that we are helping our customers. >> that was thomas speaking to danny and thomas. -- speaking to danny. this management change coming amid huge upheaval. the jiggly when it comes to its result -- this comes amid its upheaval.

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>> we do have the july tokyo cpi inflations. we are seeing a deflation, a contraction of .1%. it is worse than the june reading where we saw no change. excluding fresh food that year, a new number coming in at a gain of .1%. just let the better. very volatile. we saw no change.

given that we had a high year-over-year base. there was under state of emergency which has not just been extended past the liv-ex -- olympics. once you strip that down, we saw no change there. this does not really change things for the bank of japan. but limbic economics expecting a pickup in the cpi gauges coming into august where those prices will come in a little bit more in a flattering way. let's get to vonnie quinn with the headlines. >> blaming the withdrawal of u.s. troops for worsening violence. during a hastily called house session, he urged lawmakers to back mobilization against the taliban.

in turkey, wild fires are raising for a sixth day. at least eight people have been killed. some were rescued by boat. there is a #that says health turkey -- help turkey trending. he says it should be rerun. the union challenge the result after that vote. amazon denied any wrongdoing. it is told a new election could happen later this year. three months after announcing their divorce, the gates and

melitta gets are officially divorced. the judge ordered the former couple to divide their property according to the terms of the contract that remains confidential. u.s. gymnast simone biles will return to competition in the tokyo olympics. she pulled out of earlier competitions, citing mental health reasons. global news, 20 or hours a day on air and on bloomberg quicktake. i am vonnie quinn, this is bloomberg. >> we are seeing u.s. futures higher after losses in the new york session. >> we are seeing caution after we saw the regional index on monday. august has been historically a

rough month for japanese equities. we do have the yen holding steady. that is the latest tokyo cpi data. we are seeing bonds push higher after the long weekend. checking on the offshore you on -- yuan, high volatility is staying muted. this is the currency has stabilized. even as we see russians on the main and market. jp morgan is seeing some caution ahead. this is the portfolio flow backdrop that they say is concerning. >> let's get more earnings news. net profit falling over 20%. the energy provider saying that 2021 was one of the most

challenging years. operational challenges in australia. they say that competence remains robust. richard, always great to have you with us on bloomberg tv. are there further hurdles ahead? richard: the energy sector has been a particularly challenging time. energy use has been relatively stable during the covid pandemic. the challenge for us is keeping operations secure and also keeping our decarbonization project on track. we are going through a massive energy transition and keeping those contracts has been vitally important to us. >> what is this plan in the short-term? >> we have plans in every area

of our business. hong kong is our core business. we are working with the hong kong government to work on a carbon reduction target. we will see hong kong be carbon neutral by 2050. it will be a 30 year investment horizon for us. electricity contribute around 65% of hong kong's carbon emissions. and then carbon free electricity can be used in the transport sector that will eventually see most of hong kong's economy being to carbonized. we are working in australia by making more renewable energy available. we will see energy storage being used. we will see more renewables being employed in the system. in china, our business is pretty

much carbon free now. most of our earnings come from the nuclear sector. in india, we are working toward the renewable effigy. >> will this lead to a higher power bill? >> not as much as people think. this is investment which will be spread over a 30 year time. those investments get spread over a long time. one of the big costs of electricity is the fuel. by moving away from fossil fuels, it actually removes that part of our cost. when you put it all together, won't be as much as people might fear. >> your profits were actually pressured in australia and china. what happened there and what is

the outlook? >> in some part of our business, there are challenges and headwinds in others. what we are seeing is a steep rise in coal prices in china. fuel prices have generally been on the rise. i think that is part of the recovery of the covid pandemic. higher coal prices has put pressure on that part of our operation. it is a small part of our portfolio in china. australia, we had some one-off expenses. this affected one of our plans. generally, wholesale prices have been falling in australia over the first part of this year. overall, our underlying business is in reasonably good shape and

it is quite resilient. >> has 2021 been a better year? richard: i think we adapted quickly to the covid pandemic. we did a lot of work last year to keep projects running. our supply chains were all impacted. it is hard to bring in even simple things. i think we have learned lessons from that. 2021 has been a better year. we have had to play a little catch-up this year. >> tell us about your plans in wales. richard: we are seeing this energy trend in australia where more and more renewable energy is coming onto the system. you still need to make the

energy system work. there still needs to be the storage and the ability to control supply and demand. a whole new set of tools are going to be needed. in new south wales, we need to develop a gas plant that will be 5% hydrogen. this will be the first powerplant, aghast powerplant that will be net carbon zero. these new technologies we are developing, all of this will be part of a new set of tools to help with the transition to carbon free electricity. >> what will this liquid -- this look like when it comes to clp and hydrogen and others? richard: it will be a mix. hong kong has a challenge, there

is not a lot of land here. we are looking at offshore wind, nuclear power and the national gas we currently use. that will be a mix of hydrogen, nuclear and offshore wind. in australia, you have a new mix. we will see a lot more renewable energy but with batteries and pump storage systems that will enable renewable energy. >> thank you so much for your time today. coming up next, turning attention to green hydrogen. how that changed the outlook for the sector. this is bloomberg.

>> china is the dominant manufacture of materials for the rest of the world for the largest chinese players are looking to expand into other nobles with their eye toward driving demand for hydrogen. who are the leaders in this

space globally? >> that would depend on how you defined leading. in terms of who has the largest capacity to produce this green hydrogen, it would be companies based out of europe, germany, norway and the u.s.. in terms of who is actually selling the largest volume, that would be chinese companies. this is because these companies served in chinese markets. that is by far the largest source of demand and because they can produce the cheapest i's in the world. >> what is the long-term future for hydrogen?

>> we are also seeing chinese solar manufacturers entering this market. think of huawei. the reason they are entering this market is because we are expecting this to grow at least nine times between 2020 and 2020 to. chinese solar companies can really transfer their experience from solar manufacturing plants. what we saw in 2005, the biggest manufacturers are based out of the u.s. and europe. 80% of all solar modules are produced in china. you can see something very similar.

they can take a larger of the markets themselves. -- large share of the markets themselves. >> we do have an alert on the bloomberg right now. hong kong will be lifting their ban on residents returning from areas including the u.k.. they are having some high-risk areas. now we are hearing that hong kong will be lifting the ban on residents returning from the areas. this is coming at a time when we continue to see the delta variant spreading around the world. >> the other story we have been watching very keenly is the chip

shortage and how it is affecting. this left automakers without any doubt that when supply will rebound. inventory will be improving soon. >> the chip shortage itself on the back of a rebounding economy in the depths of the pandemic, it has been quite a whipsaw for us in the industry. >> how long does it last? are you going to get things back on track? quite the chip information changes every single day. it is a moving feast. i do believe that our inventories as an industry will

start to recover from later this summer. consumers will have more choice going into the fall and winter area >> is that the only thing holding you back from bigger numbers? does demand far outstrips supply? >> r. kelly's likes to say that success is the intersection of opportunity and preparation. also, the rebounding economy has certainly given us lots of opportunity. thankfully mazda has been prepared to some extent to satisfy that demand. >>, they mazda has not been prepared for and hardly any of the incoming carmakers have been is the switch over to electric. it seems like a lot of you could have prepared a lot longer ago for it. you have the first full electric ev coming. why didn't you act soon on this? jeff: if you look at sales

today, only 2% of the u.s. market is electrified or is electric vehicles. the consumer has not moved there yet but mazda, as you mentioned, we are bringing our first electric vehicle to california in the next couple of months and by 2025, we will have 13 electrified models including three battery electric goes. >> the white house has been pushing for industry carmakers to commit to 40% or more of the vehicles. >> i think that we expect we will have 25% as illiterate vehicles by 2030. that will depend by market what level we have, what customers demand and what regulators require. >> we will be building -- will

you build it in alabama? japan? where do they get built primarily to mark >> it will be built in japan. we are currently together with our partner, toyota constructing a factory in alabama. we will employ a couple thousand more people in terms of the supply base there. that product, we will be talking about it later on this year. the factory is certainly capable of producing traditional internal combustion engines but also electric vehicles. >> the sourcing of raw materials or input serials for these vehicles is different and a lot of those prices have been going up. are you able to pass on higher input costs to customers?

jeff: the dramatic increases we have seen in terms of precious metals, steel and other commodities, i don't see that coming through to customers in huge measure. we are going to be cautious on that. >> that was just speaking with matt miller. coming up in the next hour, nissan's ceo joins us to discuss the chip shortage and other challenges facing the auto industry. make sure to turn into bloomberg radio to hear more from the day's big newsmakers. get analysis from the debris team broadcasting live from our studio in hong kong. plenty more ahead, stay with us, this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines. chinese asset manager maran's restructuring another. the company also plans to renegotiate as standing debt. we are looking to sell nearly all its operations outside to

improve finances. singapore said its quarterly loss shrank. grab reported a first-quarter net loss of $62 million in its first ever earnings report ahead of the merger. grab was forced to delay verdure plans to provide a financial audit of its past three years. google is designing the main processor for its new smartphones in-house, joining rivals apple and samsung. they will include the new ship when they go on sale later this year. google has previously used qualcomm processors in all of its phones.

bloomberg understands the deal could be announced. >> let's take a look at the start of trading in japan. >> shares have been suspended from trading. the deal is showing a growing trend of industry consolidating. we are checking on city stocks and keeping our eye on after pay. this may be rejected by shareholders according to some analysts given that the offer price is well below when it comes to share prices.

they said the deal price does make sense. they extended the lifeline for domestic aviation. it reported that domestic capacity. >> coming up, we do have a big interview in just over .5 hours from now. the chip shortage, rising inflation. a lot more to discuss. >> so much to talk about. you don't want to miss out on that exclusive conversation and you don't want to miss out on the market open either. this is bloomberg. ♪

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haidi: welcome to "daybreak: asia." shery: we are looking at the major markets opening across asia. our top stories this hour -- there are concerns pandemic recovery is losing momentum. alibaba's earnings may lift some of the clouds over chinese stocks after beijing's big tech crackdown. we will look ahead to standard

chartered's report, and if it will follow the lead in paying a dividend. plus, nissan expecting a turnaround. we speak at this hour with the ceo. haidi: major markets coming online now, let's get you to the market open with sophie. sophie: we have seen downside moves for tokyo equities. august has proven historically to be a tough month for tokyo stocks, and earnings in focus as well. we are seeing some downside moves for the share prices this morning. japan airlines and mitsubishi among names reporting today as well. plus, the latest data to digest. prices rising unexpectedly for the first time in the year but inflation subdued. and elsewhere, traders waiting for a bond sale among considers -- among concerns about demand.

in the u.k., the pickup above the target range. we are waiting on a july central bank meeting minutes coming. the korean won holding steady. the kospi slightly under pressure, while the cost at could have some upside moves. in sydney, aussie shares gaining a little ground. they are continuing to rally by nearly 14%, as markets assess a by now, pay now -- later player. we are seeing u.s. 10 year yields holding steady after a push lower below the 120 level. u.s. real yields continue to fall to record lows as a growth risks come on the radar. there are bets rising for the

pboc, although we have -- staying steady. a quick stocks check this morning, keep an eye on asian chip names after the latest monthly sales data from the global industry association reported strong demand. haidi: our next guest says she remains positive when it comes to japanese and south korean equities. she joins us now from singapore. let me start with japan. when it comes to potentially u.s. infrastructure push, and treasury yields, does it bode well, particularly for tech in japan? >> i think from a tech perspective, when we look at many of the pushes overseas, they come to be positive for other aspects of the world, i think what we are seeing in the tech sector, and as we just discussed, we are seeing demand

across many of these segments and the outlook has been quite positive from our perspective. sophie: what about -- haidi: what about korea? christina: similar. last week we were talking about demand outlook being resilient. when we are looking at current results, resilient as well. valuations are palatable. we are quite comfortable with our current positions of investments. haidi: when it comes to the rest of the region, what other opportunities do you see and has the market fully priced in potentially the unevenness of the recovery with delta? christina: i think when it comes to the way the delta variant has played out in many markets, it

has been sad to see what has happened. the way it is playing out in india and southeast asia. from our perspective, the investment cases are not broken, it's just more of a delay of these things coming through. i think we are quite comfortable with the way our companies are positioned for this. shery: could you call what is happening in china also a delay given the different sectors, and at the end of the day, many expect the demographic background in china, that markets will be fine in the long term. christina: i think you're absolutely right there. we've seen a lot of news come through from a china perspective, and it worried -- it worried investors across the markets. from our perspective, it is important to remember the private sector is still very critical in driving economic

growth and china, providing jobs. there's been some concern about whether capitalism is at an end in china with all of these crackdowns from a regulatory perspective. we don't think so. innovation is still a key priority for china. i think on that front, we are also positive on the fundamentals, specifically in sectors that are a little more aligned with where we see policies heading. shery: we are seeinghe discount between china and global stocks surging. are you adding then two-year exposure across the country? christina: yes, we are looking quite selectively in certain sectors. we are quite positive on any companies with domestic consumption. supply chains within the renewable energy space. i think we say a bit of a -- see a bit of a disconnect in

valuations with long-term growth put israel -- growth potential. shery: christina joining us from singapore. let's get to vonnie quinn with the first word headlines. vonnie: new zealand central bank further restricting access to mortgages as house prices continue to soar. they plan to reduce the value of lending banks can make starting october 1. it will introduce debt income limits or interest rate floors. new zealand has one of the world's hottest property markets, prices surging 30%. senate majority leader chuck schumer plans to pass an ever structure bill has hit a road block. senator lindsey graham a will quarantine for 10 days and will miss voting on the legislation. graham says he was vaccinated.

the u.s. has reached president biden's goal of having at least 70% of the adult population partially vaccinated against coronavirus. the target is nearly a month later than the administration wanted but the white house calls it a milestone. the pace of u.s. vaccinations has accelerated due to the delta resurgence of the virus. china is battling its broadest coronavirus outbreak and's it first emerged. the delta variant has been detected in nearly half of the 32 provinces, including the original epicenter. officials are urging people to curb travel for the near future. the u.s. has raised its travel advisory for south korea to a level two, a moderate level of risk. the korean -- south korean president says the vaccination

campaign is on track and number partially or fully vaccinated will soon top 20 million. 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: still ahead, we discussed challenges facing the auto industry. first, alibaba will be reporting earnings amid beijing's crackdown. how will the e-commerce empire whether -- weather the tension? blerg. ♪

shery: we want to focus on the broader context of china among emerging market stocks. what we have seen in recent years has been the growth of weighting of chinese equities in the msci emerging market index.

we had it rebounding more than 1% in the new york session, this after the huge crackdown in china in different sectors of the economy led to pressure in the emerging market index. chinese stocks as a ratio of the broader emerging market index has risen for the last 10 years. when it came to 2020, we have seen it exceed the 35% record we saw in the tech weighting when we had the market stock doubles in the 1990's. we saw the decline, the fear given the huge selloff we've seen on chinese stocks. they are important for the water em complex. we have seen more and more investors despite the crackdown and the uncertainty that chinese markets pose add to those china stocks. etf's, for example, in chinese

stocks, inflows of more than $900 just last week. not surprising given we have seen emerging markets really lag the broader returns we have seen in chinese stocks. the importance of china despite the risk cannot be denied. haidi: and the importance of alibaba within that ecosystem. analysts bracing for disappointment when results role in later, investors will be waiting to see what the company says about china's crackdown, and the outlook, and it could lift the clouds off of other stocks. alibaba reported its first loss in nine years on the back of that massive settlement. peter, let's also not forget that jack ma, where it started, has the company shown enough contrition with the massive fine to move beyond?

peter: these are the questions investors will be looking for answers for later today. first with the financials, alibaba expected to report strong revenue growth. revenue is supposed to be up about 6%. they are supposed to return to profitability and make about $5 billion. the numbers are sort of side the point. what investors want is guidance on how alibaba is making its way through this regulatory crackdown we are seeing from beijing. they want to understand whether after alibaba paid the record fine, if they have antitrust concessions if the business is going to move forward and take advantage of the broad breadth they have an e-commerce in particular. they are barred from doing certain things, including forcing merchants into exclusive agreements, and also they have

to back off some of these investments they've made historically and other businesses to expand the scope of products and services. shery: how does this fit into the broader regulatory crackdown in china? peter: to the point you were making before, investors are very nervous about what this means. we have seen after the initial crackdowns on alibaba and ant in particular, we've seen investors go after didi, the education technology -- seen regulators go after didi, the education technology sector. so they want to know alibaba, as a bellwether, how it is faring. it is one of the two most valuable companies in china, along with tencent. tencent and alibaba are a

bellwether for where the market is going. >> and even bytedance starting to feel the hate. is this because investors are taking money off the table because they are worried the ipo will not come to fruition? peter: yeah, bytedance is the parent of tiktok. it has been a phenomenally successful start of so far and investors have been anticipating it would at least some of its business to the public markets. we reported they were looking at both hong kong and the u.s. as an ipo. we are hearing that in the secondary market, the value of those bytedance shares have fallen a that. -- a debt. this comes from the u.s., where it is now down to $450 billion. there is some nervousness that the company will not be able to exit as quickly as anticipated, but it is still full hundred $50 billion for a start so it is a

phenomenally valuable company and investors want a piece of it. even in the secondary market, strong demand for these shares. shery: next, standard chartered will report second-quarter earnings later tuesday and we were preview the resorts -- the results. this is bloomberg. ♪

shery: we are watching japanese investment bank stocks, given we are now hearing from gca that a company has launched an offer for 1380 yen per share. we are watching those investment takes and m&a advisors that could be active given reports that they could buy another company.

they are offering about ¥1380 per share on confirmation they have launched their tender offer. let's turn to standard chartered. they will report second-quarter results later tuesday and market watchers are expecting the lender to announce a buyback alongside a small dividend. let's get more from our asia finance editor. what are you watching? russell: there are two main things we are looking at today. one is provisions and the other is shareholder payouts. we saw hsbc book profits yesterday from excess provisions and resume paying a dividend. this is after u.k. regulators removed restrictions on payouts. the question is whether standard chartered will do the same, whether they will produce provisions for bad loans despite

the ongoing uncertainty about the economic outlook in asia, its main market. standard chartered gets most of its revenue from the region, where the delta variant is still wreaking havoc. hsbc yesterday said it was very confident about the outlook for loans, particularly mortgages in the u.k. and hong kong come and corporate loans. another focus is wealth management for standard chartered. like a lot of rivals, it has been making a big push into asia , and the question is whether they will see growth like hsbc reported yesterday. haidi: what other bright spots? russell: hsbc yesterday, we are quite bullish despite the increasing uncertainty in the

region. there are still many clouds particular with the coronavirus and the low vaccination rates in the region, but hsbc, if they are guide, standard chartered may follow them and showing a bullish outlook. we will be speaking to someone later today and we will get his views on the main market of asia. we will just have to see how it goes. haidi: as russell mentioned, hsbc remaining steadfast in hong kong's prospects despite china's tighter regulations and the possibility of anti-sanctions rules on hong kong. hsbc told bloomberg howie was relatively unscathed and is seeing ipo activity in the city. >> we've had no impact at all.

businesses had another good quarter, and we are seeing good ipo activity with some of the return with ipo's out of the u.s. and the hong kong market. >> that is potentially where i want to get your guidance. u.s.-china tensions are rising, that is evidenced, and the chinese authorities reaching in to regulate capital raising, are you bullish on your pipeline for ipo's and capital raising or should we be a little more measured when you see such heightened regulation? >> i think there is some reason to be cautious but we think activity levels in hong kong will continue to benefit from some of the tensions we are saying -- are seeing at the moment between china and the u.s.. manus: you manage risk, you manage flow, your job is to manage risk. are you preparing to pare back

at lending to any sectors -- to tax, education, housing at all as a result of the moves? >> we always keep risk appetite under constant review. at the moment we are comfortable with credit books in china and i think when you look at our lending books in china, less than 40% are state owned enterprises, about 20% is to international companies investing in china and 40% is private enterprises in china. we think we are reasonably balanced and we are comfortable with our risk. manus: on a daily basis, we covered the political, social and governmental risks. we risk seeing anti-sanctions law, government has the potential to seize assets and deny visas. when you see the risk of this legislation, are you still on hundred percent committed to

hong kong and china, 100% comfortable with the exposure as these sands shift, some would say it puts you in a very difficult position. >> we have been operating in hong kong over 156 years now. it is our home market and we make about 40% of our profits in hong kong. it is absolutely critical to our business. we are in the middle of shifting senior executives. we are investing heavily in the market and heavily in china and the rest of the region. we are very confident about the long-term macro trends in hong kong, china and the rest of asia. manus: that is your comfort level. have you seen any less comfort perhaps with clients in terms of flow of capital out of hong kong? >> not at all. i think you can see in today's results that our business in

hong kong continues to grow. wealth flows in hong kong continue to be active and growing. no impact at all. manus: in terms of the markets, you talk about global markets, that's where we started. where are you perhaps most concerned -- you see relief in the u.k. and you are stoic about china -- is there anywhere you are concerned about? >> generally we continue to be cautious about the impact of the delta variant. i think it will slow growth somewhat from what people's expectations are at the moment, and obviously we are alive of new variants emerging. we are in a recovery and we think it will be bumpy around the world but fundamentally i think a good growth in the second half and a much more substantial growth then 2022 as

more of the world gets face and ended -- gets vaccinated. shery: don't miss big interviews coming up later. we will hear from the standard chartered's ceo and the soft and cfo as well. here is a quick check of the latest business flash headlines. credit suisse has sold 3.7-$5 billion of bonds as a recovers from losses stemming from the collapse of archegos capital. it is in three parts with durations of 2-5 years. it cost it at least a $5.5 billion. huarong will transfer 70% of equity from its consumer finance to external parties. it also intends to reassess data. coming up next, a ceo joins us to discuss the ongoing chip

shortage and the other challenges facing the auto industry. this is bloomberg. ♪ ♪ (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.

sophie: -- vonnie: this is "daybreak: asia." the afghan president has blamed the speedy withdrawal of u.s. troops for worsening violence as fighting with the taliban intensifies. he urged lawmakers to back a national mobilization against the taliban. hours after the remarks, taliban fighters seize control of radio and tv airwaves.

at least eight people have been killed, others needed rescuing by boat in turkey. the president's office called the campaign a foreign plot designed to infiltrate -- to portray turkey is weak. the national labor relations board officer has recommended overturning a union election in alabama. amazon was accused of making antiunion threats. amazon denies any wrongdoing. u.s. gymnast simone biles will return to competition at the tokyo olympics on allen's beam and the women's -- allen's beam and the women's and -- balance beam and the women's individual performance.

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. shery: let's look nissan, shares down for a second consecutive session, as we have broader downside in japanese markets. the automaker forecasting a return to annual profits for the first time in three years, reflecting confidence it can recover them chip shortage related production cuts. nissan's global sales have been boosted by recovering demand for cars in recent months and its newly released models are tracking well. let's bring in the ceo, who joins us now. great to have you with us, thank you for your time. we have seen unprecedented car demand with some economies a starting to reopen post-pandemic. how confident are you you will be able to keep nissan in the

green in the years to come? >> thank you for having me. we are facing the situation of the semiconductor and covid situation, but after we announced the nissan next last year in june, every quarter we are increasing, including the optimization. as a result, we are able to show the 521 outlook to be positive. and we are making our new vehicles something valuable for the customer and making the revenue increase. last year, compared to the first quarter, we have increased revenue 16%. this is a good sign and we are able to ensure nissan will continue what we have committed in our plan and how we can keep this momentum further.

shery: how confident are you that you can stay in the green through 2024, for example? what will it take? >> well, again, we would like to reach 2% level and this is what we have as a proportionate base. i am confident as our companies start to get back. revenues keep increasing quarterly by year. this is something, the momentum we can keep and we can ensure nissan will be back after being two years in a difficult situation. i am quite confident. haidi: is the global chip shortage the biggest challenge? >> not only that, because the situation is very uncertain, and it has been impacting us. probably this quarter will be

difficult because the -- is quite low. we need to anticipate the supply situation. haidi: in fact, we see a lot of chip stocks rallying today after the global association again being strong sales. do you have a timeline as to when you think the shortage and pressures when it comes to chip shortage might ease? >> i know the day by day, we are in recovery, but we have seen profits of microchip as well. it is difficult to predict how soon we could recover fully. again, we need to keep monitoring the situation to see we are at the right level. shery: you're also monitoring rising raw materials prices,

right? how are you expecting the impact of rising cost to affect you in the second half as compared to the first half? >> exactly, the low material impact is quite high. since q1, we've been able to manage come up but starting from q2 onward, there will be impact. we have it in our business. the second half of the year will be affected, and how we can make those balance will be the key. shery: we talk about increasing demand with some of the economy starting to reopen post-pandemic. where are you seeing the most momentum coming from and where are you seeing more opportunities for the rest of the year? >> i would say the u.s. market

is getting to the better situation, as we all know from the last first quarter. china's activity had a good recovery and the rest of the world, step-by-step, is recovering, including japan. but again, we know the covid situation is continuing and some of the areas have a lot of issues. again, we need to make ourselves to be tightly monitoring the situation, how we can equip ourselves toward the recovery pace of each country. this is what we are trying to monitor carefully and we would like to make sure how we can add value to the company. haidi: how important is the electrification goal and how realistic is it to be achieved? >> it is very important in our company. nissan has a strategy basically by ev and e power.

knowing this beat of each market that is evolving, and we can anticipate and prepare when it comes to the introduction of the ev or e power so we can have time-to-market in accordance with market readiness. this is what we are measuring and we would like to move yonder and it is something we would like to follow, to have a strategy to be a pillar of nissan. haidi: how big a concern is the rise of alta across the region, across these major markets for you? -- the rise of delta across the region, across these major markets for you? >> we need to be careful, again, how we can monitor the situation and the impacts that are ongoing.

this is seriously taken in every region. again, we don't know when and how the covid situation will continue, but it is important to anticipate ahead to show our presence in the market. >> the reliance with to be she and renault -- mitsubishi and renault has been strained. what is it like right now? >> we are going with good faith. electrification is a pillar as well. we want to make sure we can -- we are trying to have the same specifications between nissan and mitsubishi. we can enjoy scalability and r&d optimized one to the other. this is what we are working continuously and i think each company is making a plan and

vision moving forward and we would like to make sure the synergy will be there. shery: renault and mitsubishi have both been dizzy during this pandemic, but i'm wondering when you will have back on the table discussions about the ownership structure. >> we keep -- how we can make sure it can contribute to each company for their goals and the alliance goals. this is what we are focusing on today. and definitely this is something that each ceo is looking for and we are collaborating to make sure we can all go under the alliance. haidi: what is the best case scenario or circumstances under the alliance that will benefit nissan the most? >> we do have a sense of nissan,

and the others, this is a synergy, how we have contributed to each other in the past 20 years and we continue. the concept was announced last year and we are adapting all those coming to the electrified vehicle strategy and also in terms of the case that we are moving forward as an industry. haidi: i want to talk about the equality push in nissan as well. your hoping to move the percentage of women in management the company to 13%, up from about 10%. to a lot of our viewers it might signed -- might sound low, but it is quite high, especially in the corporate auto industry. should companies be more ambitious with their targets? >> let me say it this way

because nissan has always been thinking of the importance of diversity and inclusion in the company. we have been achieving 10%, aware that the markets or manufacturing are still at the 4% level. we are keeping this momentum and further diversity inclusion as a company and the alliance, that we are confident of reaching the goal and that is something that is important for the company. this is representing nissan, i will say it that way. shery: a lot of the times when companies talk about diversity and promoting female leaders, the issues are in the pipeline. how strong a line of a female candidates do you have for managerial positions? >> we have a lot of the good

talent in the pipeline. we are having a lot of interviews internally and also coaching, guiding. we are ready and i do see a lot of strong leadership of women in our company, which is making me very proud, and how the company can grow in the future. shery: nissan's targets are ambitious but still low compared to international standards, and we know that the japanese government has tried to promote more female leaders. how do you evaluate the japanese government's efforts in promoting women? >> i'm not in a position to talk about the government, but at nissan -- shery: the government has encouraged companies like yourself to do more, right?

>> yes, i believe so. we should have this diversity and inclusion when the company has to give the value proposition to the world. i think this is something that each country is doing. shery: thank you so much. the ceo of nissan, with his views on the company and the broader auto industry as well. we have an alert on the bloomberg. the secretary of state of the u.s. is saying in a tweet that the belarusian government sought to commit another act of transnational repression by attempting to force an olympian to leave japan after she criticized sporting officials from her country. she has actually received a visa to go to poland for protection. we are now getting a reaction from the united states.

plenty more to come on "daybreak: asia." this is bloomberg. ♪

haidi: steady as she goes when it comes to asian markets at the moment, let's look at what is going on. sophie: we have mixed trading for asian markets with the si 200 retreating from the record

close on monday. switching out the board in tokyo, financials dragging on benchmarks there as well. shares of one company lower despite the bank with a strong first quarter profit report. new zealand shares falling this morning. it is expected the customer segment will remain a drug for the bank. in sydney, and offer reportedly too low for a company. and another proposal to buy a game maker for $2.2 billion. a check on the bond markets, switching out the board. korean bond features taking higher. the inflation data south korea did top of the mid-target range of 2%, as has been the case

since april. 10 year gtv yields under pressure. this ahead of the 10 year option from japan. we are seeing u.s. encz mark yields back above 118 but they are staying steady after the bond rally on monday. morgan stanley recommended a short duration when it comes to treasury. as for aussie bonds, we are seeing them climb ahead of the rpa position -- rba position. haidi: less than a month after the reserve bank of austria decided to reduce bond purchases, researching virus purchases and lockdowns might force it to consider a u-turn on that. kathleen hays is a here with the preview. there is so much speculation about this reversal. we spoke with someone from ubs and he doesn't think it is possible they could do this.

i guess from a communication and credibility point of view, it will be closely watched. kathleen: if you asked any central banker in the world, what is one of the biggest things you want to avoid, it is making a policy step and then having to reverse it. but this is still the age of covid and the pandemic and i think you can all understand why investors are thinking this could possibly happen. what we are going to now is a look -- this is a picture, let me set it up for you, about why people are concerned. the upsurge in infections they are afraid will hit the economy hard. this is the first meeting rba has held since new south wales, where sydney is, was forced back into lockdown. sydney accounts for one fourth of australian output, over one for the for employment. when you see a chart like this, the yellow line at the bottom is virus cases. not big right global terms but for australia.

in july they came of the pick -- at the peak of bet, but that's what the rba is looking at. the turquoise is the services line in australia, it came down sharply. we've also seen the anz consumer confidence come down. it's estimated the lockdowns are costing the australian economy $10 billion. on the other hand, as you know, outside of sydney, outside of the areas locked down, the economy is described as motoring along, the job market tightening, momentum going into this. there are pros and cons, but how much of a bite will this take out of growth? haidi: what does that do to the taper plan? kathleen: here is where the speculation is, maybe they should and maybe they will. they were not going to start the taper until september anyway.

why not just say we will push that out into the future? our economics team say the lockdowns raise the risk but they don't think it is going to happen. they say there are too many uncertainties in the economic outlook to make such an important decision. it is not a good time. they do acknowledge that the risk of reversal is there, but they think the rba will wait and they will see how the economy goes, and at the november meeting they will look at the taper pace again and maybe they will change it then or maybe not. they don't see any shift in the three year bond yield tar, the november 2024 bonds. you guys looked at this chart earlier, let's look again. the turquoise line is the yield on the november 2024 three year bond, and you can see it biked way up when virus cases were going up and lockdowns were in place. it has come way down.

the current 30 year bond still above the 0.1 target it has come down a lot too, another reason why people are sitting tight. i saw a couple of people talking about maybe the rba will want to show it is part of team australia. the government taking steps, more fiscal spending to offset the virus, and could that be a motive? but you don't want to make a big move like this, have to take it back and then decide we are going to cut it again. maybe not a graceful move. but we will find out into hours. haidi: kathleen hays. let's dive into those numbers. southeast asia passing america for the worst covid death rate in the world. in china, they are battling an outbreak of the delta variant, while hong kong is relaxing some border restrictions. our senior medical reporter is

joining us with the latest. as we speak, china reporting the latest case numbers, 90 corona virius cases, 61 local cases on august 2. it was always a surprise for china not being able to rein in infections, and the delta variant spreading so fast. michelle: delta has managed to penetrate china's defenses and it is getting wherever it can go. that is what viruses do, they spread dramatically and the chinese population has not seen a lot of virus until this point. vaccinations are good there, so hospitalizations and deaths are low, but they are seeing a number of cases, and they have tested and traced and contacted traced and worn masks and cap to the rate to almost zero. we are seeing the first outbreak

in wuhan since they launched the city down a year ago. it is even in beijing. it is all across china and it is worrisome and it will be difficult for them to get this back under control. haidi: struggling to get under control also is southeast asia, another 19,000 new cases in thailand and indonesia. it seems likes only people want to get vaccinated but don't have access to vaccines right now. michelle: the only way to get out of the virus in the end is vaccinations and that's what we are seeing in indonesia. they are having tens of thousands of cases every day, over 1000 people dying in indonesia every day and they are seeing how important it is to get this kind of protection. other places in the world have not yet had that experience so they are not as desperate to be vaccinated. in indonesia, they want that, and instead they are leaning back on the same mitigation

strategies we have seen before -- social distancing, asking, increasing restrictions through the beginning of august trying to get the cases under control. but once the horse is out of the barn, it is difficult to get it back in. haidi: i know you are a relative newcomer to hong kong and it was not easy to relocate there, and we are hearing the government is potentially lifting a ban on high-risk areas and people can return? michelle: this is huge breaking news in hong kong and it is beyond i think what a lot of people are realizing at this point. hong kong had one of the most stringent restrictions on getting in, and people into quarantine for 21 days, is now lifting a lot of restrictions. there will still be quarantine, but they will allow residents and non-residents, and theoretically curis --tourists

-- tourists to return to hong kong. this is momentous news for hong kong today. what it means is it will be additional mobility, people who have essentially been stuck here, not wanting to leave for fear of not being able to get back, and people even in the u.k. and india, barred from coming into hong kong for some time month they are now allowed back in. it is very exciting news in hong kong today. haidi: i know i am waiting for the chance to one day go back when borders reopen. michelle cortez there for us. that's get a check of the latest business flash headlines. a company standing down about 200,000 employees because of covid-19. they have dropped to less than 40% of domestic flights.

a ceo says its quarterly loss shrank as the pandemic boosted delivery. they reported a first quarter loss in its first ever earnings report ahead of a planned merger. valuing when at $40 billion. ♪

>> 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." >> counting down to the