♪ haidi: hello and welcome to "daybreak: asia." sophie: i am sophie kamaruddin in hong kong. shery: good evening from world headquarters in new york, i am shery ahn. back after 20 years, the taliban enter couple after the president leaves in the u.s. embassy is

evacuated. we are looking ahead to key data from japan and china, where the delta variant threatens to dampen recovery. bhp's petroleum division makes it the top player in premium oil and gas. and of course, hyvee we have u.s. equal data. we saw the consumer confidence data plunge into a 2011 low. we are hearing from the minneapolis fed president saying he needs to see a strong jobs report before he can start talking about tapering. the gtv chart on the bloomberg showing how the jobless rate has improved. 15% at the start of the pandemic . neel kashkari now speaking to bloomberg outlets podcast saying that employment could be higher than pre-pandemic levels. haidi: yes, wendy to get the labor market pre-covid levels.

and of course we are watching out for the gdp number for the second quarter coming out of japan. this is a preliminary number. japan has gone through so many rounds of states of emergency for that tokyo area. we are expecting a marginal contraction. and no surprise, when it comes to deltek, it is the private consumption piece of the puzzle that will be missing -- when it comes to delta. shery: we are watching data from china today, the first economy wide data since the outbreak began. we are looking at what will happen with retail sales numbers. strengthening consumption in the first two weeks of the month could help offset some of the market impact in the latter half of the month. we also have the japan july cpi on friday, machine orders on thursday, really a ton of decisions to look at, including the rbnz which on wednesday, is expected to keep interest rates unchanged. haidi: yes, we will be speaking to the governor in the second

half of the week to get his thoughts on that. let's take a look at how we are setting up what it comes to markets. korean markets are closed. huge events as well as earnings continuing, no surprise we're seeing quite a bit of caution today. sophie: caution as markets are looking to be sidelined with geopolitics. we kick off this fresh week, futures pointing to a strong start. the asx 200 could be a top notch, another record high on friday. chipmakers flagging, uncertainty over how the market conditions will continue. demand concerns in other parts of the market -- you have oil under pressure this morning ahead of the china data. offshore yuan is below 6.48. the kiwi dollar is holding steady ahead of the rbnz decision. an early in the is your

session this monday, after the big drop in 10-year yields amid concerns of the delta variant, vaccination rates are top of mind. you're seeing the divergence continue on the chart, particularly in emerging markets, where vaccinations are staying below 10%, listen like indonesia, thailand. singapore vaccination rate is about 70%. shery: let's now get to vonnie quinn with the first word headlines. vonnie: thank you. south korea's president has left the door open for talks with japan for a final liberation day speech marking his neighbor's world war ii surrender. moon jae-in says he is ready to work with japan on global threats, including the pandemic and climate change. in tokyo, the prime minister's cabinet visited a shrine that honors convicted were criminals, something that is seen as crossing a redline. . in malaysian cabinet minister says the prime minister has told

his party he plans to resign. he has resisted repeated calls to step down since march of 2020, and his office has not replied to calls seeking comments on the minister's claims. . a resignation could fuel further political and economic challenges in a country that is hard-hit by the pandemic. the canadian prime minister justin trudeau has called snap election after polls indicate his liberal party has enough support to retake the majority. he met with the represented's in canada to request parliament dissolved. the vote is scheduled for september 20. a panel on bloomberg news found 55% support of his handling of the pandemic. global news, 24 hours a day, on air and on bloomberg quicktake, powered by over 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi. haidi: the taliban are preparing

to take full control of the taliban two decades after being removed by the u.s. military. the group has occupied the presidential palace. we are joined by our guest. what happens here, what are the regional locations? >> first of all, of course it is the exit that the u.s. and specifically most recently the biden administration has promised. there is some concern that immediately surfaced in washington about what it means for the u.s. standing globally, and that includes vis-a-vis china, which of course has had a role in afghanistan. so that is sort of the mood and the sense that is reverberating a bit in washington right now, and also through other countries or

regions such as western europe, where, of course, the u.s. has a long reputation as an ally and also as a military --. so that will be playing out in the weeks ahead. shery: so what will be the implications for afghanistan's democracy, not to mention regionally with the president -- the presence of al qaeda? tony: the biden administration has taken the position that the threats, of al qaeda and groups like it, is contained. in that if it were to resurface in afghanistan, the u.s. military, meaning the air force capabilities in the region, could take that on. of course, there is a lot of concern on what it means for, if you like, the social policies in

afghanistan. we all know that under taliban rule, women were prohibited from working or attending high school or appearing in public without that body covering, the burqa. all of those issues are certainly back in play in a very broad sort of human rights context. that is sure to be raised by governments in western countries as we go forward. shery: tony chicha with the latest in afghanistan. you can get more on the story in the bloomberg terminal and also on bloomberg.com. still ahead, china as covid outbreak is putting its economic cover at risk. we discussed the july activity data next.

class, the virus is also weighing on japan's second-quarter gdp. more on that with a former boj monetary policy advisory board member. this is bloomberg. ♪

shery: china is due to release july industrial output, which will give us a sense on how the new covid outbreak is weighing on the economy. and our current joins us with the latest. of course, we saw the infections worsen in the latter half of july. can the first two weeks make up for any of the strength that was lost? enda: that is the big question. we probably will see a split in the data. the first part of the month things were functioning as

normal. the second month is when we started to see covid measures kick in. we expect to see that visibly in retail sales, conception is cap expected to have been hit quite hard and that should show up in today's numbers. it might be more of a mixed picture, because production overall has been spared the lockdown china had earlier in 2020. production growth should be ok. there turning in exports. investments is largely --, we know that construction is slowing, for example. so all eyes will be on the extent of the hit from delta to the economy. haidi: we are expecting more easing from the pboc, right? do we expect that? enda: it is an interesting question. there are some discussion over what they might do.

we get an indication to whether or not the authorities are getting concerned about the economy today. the over all expectation is more support from the pboc. it is a question of how they choose to eat. we have economists talking about interest rates. they will probably try to get money into the economy through the money markets, especially for small and medium-sized businesses in particular. more expectation for support from the pboc through the money markets. the sense seems to be that the pboc is back in play now in terms of supporting the china economy. haidi: enda curran, our bloomberg chief asian correspondent. we have the division director of macquarie health management, martin lockers. a lot of headwinds when it comes to china. how attractive is this market to you? martin: certainly, looking

at the market, on the tech side we have regulatory issues. for investors it will be very much trying to gauge how long these changes are going to take place. that impacts sentiment, in terms of investors jumping in. . but valuations are starting to look more attractive now. don't forget also through july, not only do we have the additional flareups of the delta variant within china, but we have also had the 100th anniversary of the communist party, and the typhoon. that may have some disruptive impact on manufacturing, albeit short-lived. so those numbers will probably be mixed. it is much likely that the pboc will take action more through the money markets, providing additional liquidity, against moving the interest rate at this

point in time. haidi: on the policy front the resulting drop we have seen in iron ore are react taking further -- expecting further downside for these metals players, given the policymakers and the broader government seem to be pointing in one direction? martin: it is likely that we will see further weakness, understandable given the interruptions through july generally speaking. we have seen iron ore at $230 a 10. it has had a very strong rally. you have still got massive disruption in deliverability and production out of brazil. australian iron ore producers are still well-positioned and you still have very strong demand, through both from india and -- on iron ore and industrial metals broadly speaking. probably the downside for this is limited, but we are expecting to see it keep raising further

into 2022. that we will see adjustments when we have brazil production coming back online. shery: set up the picture for big miners and expanding on that question we have seen oil prices rallying but big oil majors not rallying along despite the fact that we have stronger dividends and buy back plans. martin: certainly. the big producers such as bhp, they clearly had an amazing runp . markets focusing on spot prices. these producers tend to have long-term contract prices. they have got their costs down dramatically and they are clearly making significant profits and returning a large proportion of those profits in the dividends, such as the rio result we just

had. . their is an expectation by shareholders that these will continue for the next year or so. again, on the energy space, a lot happening. into the makes, potentially -- the potential for bhp to reduce its exposure. we are watching this space very closely from both an mergers & acquisitions perspective and a demand perspective. shery: here in the u.s. we continue to see economic data, supply singing to the downside. at the same time, the s&p 500, rallying to record highs as you can see on the top panel. at what point does that data become bad news for the markets? martin: there is no doubt that markets are watching some key data points -- inflation will be

one of those. we think the recent inflation numbers in the early part of this year have been more transitory, reflecting supply disruptions. but underlying, we are seeing modest pressures rising. in the markets we will keep an eye on that. the big question for markets around those data points is more about what the federal reserve decides to. at the moment the central bank is very positive on growth, such as equities and property. we don't see a major change. but the market will have to get comfortable with tapering from, say, the u.s. federal reserve, probably in the first half of next year or some stage. that will also be indicative of signs that things are going quite well. so we are not overly concerned in that respect. the big focus has got to be on how corporate earnings continue to announced through the rest of this year. we are currently going through a

reporting season here in australia, we are about halfway through, and there is no doubt we are seeing some good results. overall, we have some positive beats on expectations, but the biggest thing clearly is capital management. we are seeing high dividends and share buybacks that will continue to drive the demand for equity. shery: martin lakos, division director of macquarie wealth management. to have you with us. we continue to watch the covid outbreak that has partially shot one of the world's biggest container ports in china, amid concerns that the spreading variant will lead to a repeat of last year. one shaping coc's port delays continuing -- one shippin ceo sees port delays continuing to worsen. >> i do know that that port,

that terminal is simply being bypassed for other terminals. now, this creates port congestion, which we have all been dealing with during covid. i do see that increasing, which will have the effect of pushing freight rates higher, whether it is in dry bulk or the container side. >> john, good morning. it is guy. i am curious as to what the current situation is. how long are shapes being stuck outside ports, how long are shapes taking to load and unload? how bad is the bottleneck globally? >> it is globally. you can look at whether it is shaping iron ore from brazil to china, you are seeing congestion both in brazil, much heavier congestion in china. in some cases, 30 days just to discharge in iron ore cart.

you are also seeing it in australia, because what has been put in place is not only a slower port situation, but there are also quarantine periods. so when a ship arrives in australia, it has to be away from a port for at least 14 days. so if you are refueling in singapore, you may have to wait a few days just to get into the lineup. what this is doing is it is pushing freight rates up and shipping costs up. >> rates are going higher and higher. how long could that continue and how high could you see the cost of shipping go? >> that is always the big question. i can tell you that in dry bulk, we are entering in general, into a seasonally strong period. covid or not covid, third quarter in particular, you will see more iron ore being

shipped from brazil. brazil usually ship's 20% more iron ore in the second half of the years than the first half. the other aspect unique to, dry bulk we have a very low order book. in fact, it is historically low, in terms of the number of shapes that will be delivering in the next three years. only about 49%. it is very low. so there is definitely growth in demand. there is definitely elevated congestion. but there is also a very favorable supply situation in there are just not a lot of new ships coming online. >> there are indications that chinese authorities would like to slow down the domestic steel industry. are you seeing evidence of that? >> i think we're seeing a little bit of that. again, i will go into the seasonal trend.

you typically see steel production slow down anyway from november through february, that is just normal seasonal. they do it for environmental reasons in the winter months. but people also see slower construction activity. again, there is not a direct correlation necessarily into the steel industry and iron ore. we still continue to see a lot of iron imports. haidi: john webb and smith shipping and trading ceo speaking to bloomberg. next, japan's second-quarter gdp seems to be pushing the economy into a second recession. we will talk about that next. this is bloomberg. ♪

haidi: we are counting down to the start of trading in tokyo. today, 19 companies will reportedly form a consortium to prevent -- cats from cars. they are ramping up security to protect technology on vehicles. mitsubishi and ibm japan plan on developing a carbon dioxide market that will allow companies to reuse raw materials. and we are also hearing japan may expand restrictions on businesses. shops operating from basement floors of malls would be those included. shery: speaking of japan the second-quarter gdp report could be showing the economy fell into recession again. bloomberg economics and policy editor kathleen hays here with the preview. if we see another contraction, this will be the second recession in less than two years. what is? driving it kathleen: above all, it is the virus.

if we look at this. bloomberg terminal chart, you will see that japan's economy, yes, it will be two recessions in less than two years. last year, the big drop of nearly 29% was driven by the virus. then coming out of it at the end of last year, a big rebound. now in the first quarter of 2021, a drop of three point 9%. what is expected today, bloomberg economics is looking for a small 0.1%. the range is wide from 0.03 percent, to up zero point 1%. what is driving it? consumer spending. private consumption seems unchanged from the previous quarter. we flipped the board and you can see it at the top of the list. when you make the restrictions, the lockdowns even tighter, you will get people staying home and not spending as much.

exports, even though we had strong monthly export numbers, imports have been rising at a faster rate than exports. you get the number down 0.2%. what happens next, that will have a lot to do with getting the virus un and there you have it- woah. wireless on the most reliable network nationwide. wow. -big deal! ...we get unlimited for just 30 bucks. sweet, i get that too and mine has 5g included. that's cool, but ours save us serious clam-aroonies. relax people, my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. (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.

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♪ sherry: korea is away on holiday, but the rest of the asian market is a little bit mixed right now. let's start with sophie. sophie: we are awaiting for japan's second-quarter gdp data. ahead of that nikkei futures pointing to the downside. checkout aussie bonds, catching a bid, with the entire state of new south wales entering a weeklong lockdown from this monday. west pac noting that the lockdowns are hitting confidence.

consumer sentiment is down, but not out. the rba is giving the best case for tapering to kickoff from november. they expect both consumer and business sentiment will bounce back once restrictions ease in australia. taking stock of the earnings season down and are, companies are cashed up. it has been a good dividend season. a number of firms focused on expansion or acquisition. haidi: putting that cash pile to work. let's get more. this company is in advanced talks to buy bhp's petroleum division. the deal would be worth just under 50 billion u.s., and it would make it australia's biggest oil player. we are drink farecast. -- we are joined by our guest. why is it looking to do a deal now, particularly well-being profitable? the pressure for bhp to

get rid of its fossil fuel assets has been unbearable and is forecast to grow more in the years ahead. prices having rallied quite sharply in oil after that blowout we saw last year, prices back up to $70 a barrel level, it makes a lot more sense financially. it is understandable that they might be considering now as an up to full-time -- optimal time to get more value out of those assets. we had recently a merger with our two biggest competitors in the lng space in australia.

so there is an onus on woodside to get moving with its growth projects and remain competitive with increasingly confident and large competitors. bhp has just over a quarter steak in an energy product -- offshore in australia energy project offshore in australia. woodside's project has been delayed. bhp has been wavering on whether they want to go ahead with it. so taking this off bhp gives woodside the leading role in living that forward. the rest of the assets, it is left to see who would benefit. bhp has assets which are going to become a rehabilitation liability, but there is strong short-term cash flow from

those assets. the gulf of mexico is an area where woodside is not involved. it will be a new geography for them. but it would first him diversity in the portfolio also. what we're talking about is a transformational deal potentially for woodside, really putting them into the global big leagues, with the bhp petroleum business. haidi: doing or what the next steps would be, what the structure of the deal might look like -- do we know? james: the big question is whether we will get an announcement tomorrow. bhp has its annual results tomorrow. probably a 50-50, i think they will say something, there is too much in the local media for them not to address it in some form. we expect a statement saying that "we are considering a deal." it is unclear at the moment. i think they would love to make a more specific announcement, it is just a question of whether or not they will get over the line in time. if not then, probably within a matter of weeks. in case of structure, lots of speculation in terms of what that may be.

i don't think we're looking at a pure takeover cash deal, because woodside does not have the cash. it would involve massive equity raising on their part. i think we will see some sort of share offer from woodside which would involve bhp shareholders gaining a substantial stake. would they be comfortable with that? it will be pressure on bhp to exit the deal. it remains up in the air about how the deal may be structured. it could be another south 32 scenario, if you remember a couple of years ago. haidi: -- sherry: james thornhill, sydney bureau chief, keep us posted. we are getting the u.s. state department releasing a joint statement on afghanistan, saying that the u.s. will expand afghanistan security to 6000 troops with next 48 hours. they are saying that u.s. troops

will also facilitate the departure of u.s. and allied personnel, this as we continue to see u.s. and nato forces working against that august deadline imposed by president biden to end that longest war. the u.s. will also facilitate the evacuation of afghans eligible for visas. thousands have already arrived in the past two weeks we, are talking about afghans who have worked for the u.s. during the two decades of military presence there. the u.s. is also working to secure the hamid karzai airport in kabul, as taliban enters the city. next, we discussed japan's second-quarter gdp. keio university professor and former boj board member so you ratio, will join us. this is bloomberg. -- former boj board member so you ratio right -- so you're

sherry will join us.

sherry: bitcoin continues to trade above a key technical level, and digital currencies as a whole back above the $2 trillion valuation. bloomberg's su keenan is here with the latest. either gaining 50% in the past week? >> susanne: an enormous surge.

all of these alternative coins rising is bolstering bitcoin. cardano, etherium, ripple's xrp , dogecoin began as a joke and has gotten support from billionaires. the rally in cryptocurrencies has pushed the combined crypto market value over the $2 trillion mark for the first time really since may. some bitcoin bulls are expressing confidence that bitcoin, given the rise in all these coins, will exceed its all-time high above $60,000. you might recall there was a big pullback in april, may, and june. it has slowly come back all through august, getting after about 48,000 over the weekend. crypto chart watchers view this as a critical move, they say

$100,000 by the year and is still possible. they also say that this indicates surprising resilience. you have to remember last week, it was big news that the cryptocurrency industry failed to win a change to the crypto tax reporting rules in that big u.s. infrastructure reporting bill. that opens the door to greater regulation and oversight going forward. but supporters point out that the fact that you had lawmakers trying to put the crypto industry into this bill was ultimately a legitimizing event. and the supporters take from that a sign that lawmakers are viewing cryptocurrencies as not going away. so it really was a surprisingly bullish event, haidi. haidi: meanwhile, we got an update on that $600 million hack.

su: poly network, a platform that allows trading of coins, indicated in an emailed that they got almost the entire amount. observers say it is an indication that you really cannot launder or offload this digital currency as easily as you could if a bank were robbed. haidi: su keenan there. let's get to vonnie quinn in new york with the first word headlines. vonnie: the taliban have marched into afghanistan's capital, claiming control of the presidential palace and saying that they will soon declare a new islamic emirate. that president has fled the country, saying he wanted to avoid bloodshed. the u.s. military is scrambling to evacuate embassy officials. the secretary of state anthony blinken denies comparisons to the 1975 fall of saigon. the pentagon says the u.s.

deployment in kabul will be boosted to a within 48 hours to secure the main airport. in the uk per minister, boris johnson, says that his priority is to evacuate u.k. nationals as well as afghans who helped u.k. forces. its troops have a right income -- arrived in kabul to help with the rescue. the death toll continues to soar after and earthquakes track of haiti's coast over the weekend. 700 people were killed. the state of emergency has been declared. u.s. has sent to search-and-rescue teams to help find survivors among the destruction. it tropical storm is also forecast to hit haiti in the coming hours. thailand reported more than 20,000 new daily covid cases 5th street -- straight day.

lockdown measures failed to ease the outbreak. protesters have been calling for the prime minister's resignation and more access to vaccines, as health officials worn cases may double. the country is expected to resume containment measures on monday. in other news, seeking approval for further testing. the global times reports a drugmaker is looking for a green light before october. the company's general manager has hailed the current vaccine as remarkable in reducing risk from severe illness from the delta variant. global news, 24 hours a day, on air and on bloomberg quicktake, powered by over 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. sherry: let's turn to japan, it seems like the recovery

there is always a quarter away and that dynamic may play out again in the next few minutes when second-quarter gdp data is released. the head of the numbers, we are joined by keio university professor of economics and former boj monetary policy board member, sayuri shirai. are we going to see another technical recession in japan? sayuri: this time i think we are not going to experience a recession. we have positive economic growth because while consumption is very weak, exports are doing ok and capital spending is doing ok. shery: you talked about the sluggish consumption. can the capital spending of said that? sayuri: the consensus is already building from january. we have another weak

consumption, negative consumption growth. but globally, capital spending is turning from negative growth to positive growth. so i think capex spending and exports will manage to offset the sluggish consumption. shery: but still the assumption right now is that even if we see positive growth, it will be marginal. when can we expect a level of growth perhaps that we have seen before. these four states of emergencies or so that we have seen in the country? sayuri: consumption will remain very sluggish for some time because we are still under the state of emergency. the government may have to introduce tighter controls. i think the recovery will really start from the fourth quarter of this year, from october to december. i think the level of real gdp will go back to the pre-pandemic period sometime next year.

building slow economic growth. haidi: do you think there was any economic upside, even indirectly, from the hosting of the olympics and the paralympic games? sayuri: well, the government is insisting no direct connection between holding these events and the growing pandemic, but the number of infected people started to rise toward the end of july. i think japan successfully held the games, because there was no cancellation of games. but it is true that people started to move around, partly because the japanese athletes were doing so successfully and got so many metals. people started enjoying, having a drink and so on. i think the olympics really changed people's mindset towards the positive, so it is possible that that accelerated the mobility of people.

haidi: let me just bring up a chart, just a reminder, we all know about the u nature of the boj policy efforts to get to that inflation target. this is where we are. it is not really going anywhere in terms of the transitory impact of energy and food prices. when you look at implications for the boj, what policy efforts do they have left? sayuri: the -- other central banks, for example, the fed, did massive purchases of government bonds and agency bonds. in the case of the bank of japan, what they did is they provided massive liquidity to the banks with the maturity of less than one year. that is the factor contributing

to the rapid expansion of the bank of japan policy. for a certain period, like last march and april, the bank of japan started easing to an extent but they are no longer buying a lot. you can see the bank of japan did support the banking sector by providing liquidity, but other areas, you can see the bank of japan doesn't have a lot of additional -- to generate aggregate demand. shery: how is a japanese yen at around 109, $110, trading in very narrow ranges impacting not only the policy but also corporates in their outlook for the rest of the year? sayuri: exchange rates like $109, $110, is really good. this level exchange rates helps the manufacturing sectors to generate their profits. at this moment in the japanese

economy, the manufacturing sector is doing much better compared to the nonmanufacturing sectors because of this no visitors coming to japan. the tourism sector is suffering. the manufacturing sectors are doing well because they are increasing exports to europe and china and asia. this is good for manufacturers' profits. so correctly it is good. actually, yen was much higher a couple of months ago. soy think this is a very good thing. this is mainly affected by u.s. dollar index. shery: we are awaiting gdp numbers from japan, we are

expecting preliminary numbers, as you heard from sayuri shirai. she is expecting marginal growth. bloomberg economics is expecting a small contraction that could actually lead the economy of japan into a technical recession, a second recession when it comes to the last two years this, of course, as we continue to, see the virus infections with a fourth state of emergency. finally we have the japan gdp numbers at the moment coming in. second-quarter gdp growth, 1.3 percent. the estimate was for growth of 0.5%. quarter on quarter, 0.3%. the estimate was growth of 0.1%, which means japan has avoided a technical recession. let's turn back to sayuri shirai. it seems stronger than expected, not only for bloomberg economics, but the consensus as well. give us your reaction?

sayuri: i think consumption achieved in negative growth for the second quarter. the main reason why economic growth turned out better than we thought globally, the export sector was doing better than imports. we thought the net trade balance would be a very small positive or negative, because imports started to pick up quickly. there is a positive correlation between capex spending and imports, so i thought imports were going to catch up very strongly. that his contribution to the real gdp in terms of the trade balance, it is not going to be positive, but i think exports were growing faster than imports, contributing to the better-than-expected economic growth performance. haidi: keio university professor of economics and former boj

monetary policy board member, sayuri shirai, always good to have you with us, as we got the second-quarter gdp numbers from japan, 1.3 annualized growth. you can get more analysis from bloomberg news makers, in-depth analysis broadcasting live from our studio in hong kong on bloomberg radio. you can listen live on bloomberg radio or on bloomberg.com. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. apple leisure group will be barred from its privity equity owners. a deal could be announced later on monday. the transaction is the latest sign of optimism that vacation travel is returning despite the pandemic. there are claims of a data breach that is said to involve personal data from more than 100 million people. this company says it is investigative an online forum post selling the data, including social security numbers and driver's license information. the seller obtained the data from t-mobile service, and is selling a portion for bitcoin.

police are investigating an alibaba employee's sexual assault allegation against their boss but say they found no evidence of rape. forcible indecency is a term that can and couple sexual assault. the manager and the client have been held for questioning, in the case is still under investigation. let's look at some of the stocks we are watching, sophie. sophie: in tokyo, we are keeping an eye on japanese retailers with local media reporting on shopping malls. and we are watching airlines as well, nhk reporting that japan may raise the number of people allowed in the country to 3500 a day, from 2000. in australia, the earnings season continues. dividends so far including from bluescope, which announced a

higher annual dividend. shery: and of course, we are headed toward the open in japan and south korea as we continue. to the major market open, this as we continue to watch tensions between the two countries, especially towards the war end anniversary that we are seeing. we are hearing that a japanese minister visited a shrine in tokyo that has class a war criminals along with the war dead. we have seen a chinese actor taking heat for posing in front of that shrine. haidi: the chinese actor one came as a surprise for me, obviously this is a highly sensitive issue that comes up every year, but to have a chinese actor do this. he is facing boycotts within china, his reputation, his brand continuing to take a hit.

we will continue to watch that play out, but huge uproar. coming up next, korean markets are closed today for a public holiday. we have all the reaction with the market open and more to come. this is bloomberg. ♪ (announcer) back pain hurts,

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♪ sherry: hello and welcome to daybreak: asia. haidi: i am haidi and we have markets and -- opening up for trade. asia pacific is awaiting key chinese data on how the delta virus is impacting the recovery. chinese bond boards open eighth week of reckoning after policy

easing. afghanistan's president fully and u.s. and allies scramble to evacuate their citizens. sherry: karin markets are close on holiday we have japan and australia opening right now. let's turn to sophie on what to watch. sophie: after a two week for -- gain for both benchmarks. we have seen it outpace the woodchip 2-5 this week. -- blue-chip. probably speaking, we got jp morgan keeping the faith in reflation trade and noting that the fiscal's and yields may have come early this month. growth concerns mayfair up hurdles for that. we have thailand expecting to report a sequential retraction for the second quarter but we had japan managed to avoid a double-dip recession with these gains and when it comes to

expansion for the second quarter. we have the yen holding steady so far. turning to japan, after it hit another high on friday, piercing downside pressure. the aussie dollar slightly weaker while gains -- bonds are gaining ground as new south wales enters a weeklong lockdown from this monday. missing the treasury move slightly higher, above 128 after the big drop we saw below 127 on friday. we will be closely watching that indeed. ahead of the to -- china july data dump, they are hovering above 648 this morning. this as a covid outbreak puts recovery risk on china. here are some stocks are watching and sydney this morning. bhp on watch after local media reporting they are in talks to sell the oil unit. we are seeing upside -- upside moves for their shares. energy moving down 4% at the

start of cash trade as it posted a drop in profit. missing a push higher for bluescope steel by nearly 2% this evening after reporting a profit jump and announced a high-back as well. the steelmaker flagged uncertainty over how long robust conditions can continue for the demand, haidi. haidi: we will hear from the bluescope ceo later on today. he will join our china open show at 11:45 if you're watching here in sydney. our next guest, what spring and danny lam, head of research at cb international corporation. great to have you with us. a lot of headwinds when it comes to china, potentially the slow down. where are you seeing sort of constructed investment ideas in the space? >> i think there is a certain

idea for investment it is hard to move all of the economy stocks first because i think it is still on the rise. you can see all the stocks fluctuating. i think there are good things. it will move back from rotating your money actually back somewhat traditional stocks. there are other factors such as property investments or like other local banks. that would be much better for you to pursue right now. haidi: outside of china at the moment, where you see interesting investment opportunities? particularly, as we see so much bullishness when it comes to the feeling even though we keep saying we might've hit the peak of earnings season with so much uncertainty ahead? >> i think what you are seeing right now is sectors like shipping.

they are affected by the fees. you see two things right now actually price favorably for shipping. you will see one of the biggest business parts in the world and of course, the delta virus it is still quite favorable for the lack of delta. we have other good stuff to buy in china but remember, we have to move off like some of these other sectors rather than the new economy sectors. they are actually hovering every day so i hope that is rotating your money back. haidi: we do have breaking news when it comes to bhp reacting to the report we had this morning that petroleum is no advanced talks to buy that petroleum

division for about 14.7 billion u.s. respond to the speculation, they say one potential is to have more patrol unit with website. those negotiations are currently progressing. we have heard of that proposal includes a conference -- company offering it to the entire petroleum business that will pass it on to the shareholders to ensure no change of control. that would potentially make it the clear number one player in the oil and gas sector according to that report, sherry. sherry: staying with oil and gas, we have seen downside pressure in that sector, despite the fact there upping dividends and buybacks. why is that sector so pressured despite all the goodies they offer? >> i think it's the fact you see it on the master -- macro side. the demand and supply of the oil

actually, is fluctuating and subject to opec-plus. there are lots of political issues there affecting those numbers. at the same time, like the petroleum business, i think nowadays, we have to watch out because everybody is talking about environmental issues. like petroleum and using more electricity car. or that these are bad for choi am companies. the best thing for them is to merge acquisitions, strengthen actually the balance sheet and also maybe rotate more business on the environmental side. you can see some of the environmental companies moving in this direction right now. shery: let me turn to another schechter. -- sector. shipping costs continue to rise, especially as we see that port in china. you are overweight in the shipping sector.

why? >> i think right now, the oil price, it is actually oil. on it is on the downside -- it is on the downside right now. the delivery course action is going up you see the shutdowns over some of the ports and also the congestion. it moves a little higher. that is quite favorable for shipping companies. i think nowadays, we have lots of shipping sectors for the holiday seasons coming up. although, a blackout it can charge higher is good for the whole. there will be higher profits in the coming months. shery: great to have your insights. let us turn to vonnie quinn what the first world headlines -- first word headlines. vonnie: india will invest 1.4

trillion dollars to boost economic growth and infrastructure as he laid out national priorities on their 75th independence day. investments in the logistic sector will help integrate transports with the goal of cutting travel times and increasing productivity and competitiveness. eight malaysian cabinet minister says the prime minister has told his part he plans to resign on monday. he has resisted repeated calls to step down since taking power in march of last year. his office has been reported to cause of these claims. this could fuel further challenges in a country hard-hit by the pandemic. canada's prime minister justin trudeau has called a snap election as polls indicate his liberal parties have enough support to retake majority in parliament. he met with the queens are presented in canada to resolve.

the vote is scheduled for some timber 20th. a pall for bloomberg news found that 50% support for his handling of the pandemic. a chinese actor is facing backlash after a photo of him posing at this shrine in tokyo went viral. china's association of performing arts is calling for a boycott of him, saying actors should strengthen their knowledge of history. dozens of brands including coca-cola, maybelline, clinic, and others will stop working with him. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: we will get more on the activity data from china with the chief asian economist joins us later at this hour. but first, taliban leaders retake afghanistan's capital two decades after they were removed

by american forces. we will discuss the latest developments. this is bloomberg. ♪

shery: the taliban have marched into kabul, taking full control of afghanistan two decades after they were removed by the u.s. military. too many, images of helicopters run echo to the american departure from saigon in 1975 at the end of the vietnam war. the u.s. secretary of state rejects the analogy. >> this is manifestly not saigon. the fact of the matter is this: we went to afghanistan 20 years ago with one mission in mind that was to deal with the people who attacked us on 9/11. that mission has been successful. shery: we are joined with the latest. dan, how did taliban and its to make such progress in the

country so fast? reporter: that is a question many are asking right now. certainly, when joe biden said -- set a deadline to remove u.s. troops, that gave the green light to taliban fighters to proceed with their offensive they really took over with lightning speed, going around, seizing provincial capitals over the last few weeks, culminating on sunday with a marched into the capital with the president leaving the country. american forces are now just consolidating at the airport to get everybody out of the country as quickly as possible. u.s. announced it will up its troop total thereto 6000. it was all very fast. the afghan army which was trained by the u.s. have put up almost zero resistance and the will to fight, dissipated with the u.s. on the way out.

haidi: they have spoken about the concerns of seating this territory to becoming more of a terrorist breathing -- breeding ground. what are the implications of that? what are the implications were central asia where there are a lot of chinese interest there as well echo -- well? reporter: certainly, there is a fear that islamic extremist groups will have a foothold again there. taliban has been fighting some of them peered countries like pakistan believe that if they consolidate control over the country, it will be more stable than in the past. that remains to be seen there will be a split between the west and the afghanistan neighbors over how to treat the taliban government when they announce its diplomatically. you mentioned china which has hosted a allegation from the

taliban. looking to secure its interest there could they are particularly concerned about terrorism seeping over and they have billion's of dollars in -- invested in pakistan for the belt road initiative. we can expect china and russia to back the taliban government and the west has to make a choice. today engage with whoever takes over and couple or do they treat them like pariahs? haidi: it will be interesting to see at the have that type of offensive now. you can get more on the story, a top story in today's addition of blue -- daybreak. you can get that on the daily terminals and a noble in the mobile app. you can customize those settings as well so just get the news on what medicine you.

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haidi: if we thought the $515 million package in the u.s. was impressive, take a look at what india is planning to do. we heard from the prime minister international address over the weekend -- in and national address -- in a national address. this is a massive think they do need to do if they want to attract some of these investments in china. they're looking to spent 100 trillion rupees to boost economic stuff. we heard all this over the weekend. shery: this following other

promises made in the last few years, already by the prime minister. as you said, they're trying to compete with china and get those businesses to go into india and invest. one of those priorities when it comes to different sectors they're investing, not surprisingly, clean energy as well. we have been watching major addresses from major leaders as well. our reporters join us now, turning to south korea first. what did the president have to say? sophie: reporter: the liberation on august 15, basically the key point was he was open to dialogue. he was open to dialogue with japan and north korea key point here is despite having the talks fall through in the g7, as well as moons initially planned visit to tokyo during the olympics fell through. despite all that, he wants to

move past the 2019 few they had over the military intelligence sharing stuff and reach out to japan again for more talks. haidi: we are continuing to see these tensions flare up, right? and they see -- commemoration of the and of the war? reporter: especially after a lot of the cabinet members have visited the shrine. south korea's foreign industry has issued a statement condemning these visits and what these visits symbolize, especially for a sitting cabinet member, despite not having visited it himself and sending donations, there is, again a lot of symbolism behind the meaning, remembering these so-called war criminals in the shrine, especially when they are setting these ongoing diplomatic tensions on forced labor during world war ii, as well as sexual

slavery that is yet to be resolved between the two countries. shery: we of course have this address in indonesia. we have seen southeast asia struggle with the delta variant spreading. what have you heard in terms of economic issues facing because of the supply chain disruptions? reporter: we are waiting to see the ripple effects across the world. the latest news will support closures due to the positive art tests. that is what we are mainly focused on right now, especially with the third busiest port waiting a come back online after one of those incidents. that is really the focus. the delta variant is ripping across the region and causing those problems. those countries still have very low vaccination rates. vietnam has 1% vaccinated. these countries are dealing with high virus caseloads and in some case, record deaths.

thailand is trying to keep factories online as i have throughout the pandemic. now is an especially sensitive time because this is when businesses would start to one up their orders through the holiday shopping season. we could be in some more snags and a real ripple effect across the economy. it is a very fragile situation for exporters who are dealing also with exorbitant shipping costs as well. haidi: heading into the busiest time of the year. which companies are you looking at right now so that productions can get back on track? reporter: certainly, china as the world's number two economy and having an impact on asia supply chains. vietnam is one i think we will look at closely because we have seen so many times over the past years of them being a trade or winner and one of the few

economies in the world to grow during the pandemic last year. it is starting to see those cracks, especially with continuous lockdowns, low vaccination supply and rollout. that is all changed now and they have gone through extreme measures to ask this and says, including the likes of samsung and that sort of thing to keep workers overnight, so they can keep the lights on, to keep the supply chain's running. that is starting to see cracks as well. countries like vietnam that rely so heavily on exports. they are dealing with just those high caseloads and more threatening death tolls now. haidi: let's get you a quick check of the latest business headlines. bhp has confirmed they are in talks with one option of potential merger for their business. he reported earlier that they were in advanced talks to buy the petroleum division.

we had reported last month that they were considering an exit from fossil fuels. sydney airport has rejected an offer from a group of suitors that includes other investors. the new offer is upping the previous bid of eight dollars and $.25. they said they continue to undervalue the airport and it's not in the best interest of shareholders. nikkei newspapers said that 90 japanese companies will form a consortium to prevent cyberattacks on vehicles. it will include tech firms such as microsoft japanese unit as well as panasonic. the partnership and -- aims to lower cost for smaller suppliers. they are invest getting claims of a data breach but it involves personal data from more than 100 million people. they are investigating an online

form post that is selling the data, including social security numbers and drivers license information. they're son a portion for six bitcoin or $270,000. police investigating a sexual assault allegation against their boss, finding no evidence of rape. the former manager was suspected of committing forcible indecency. it is a team that can encompass sexual assault. they have been held for questioning and the case is still being investigated. shery: this is a picture across the markets right now. we are seeing the japanese holdings at 109 level. it is inflating at a narrow range with the nikkei on a two week load right now. it is really climbing the highest in a month on dollar weakness already. we have second quarter gdp

numbers growing 1.3% on an annualized basis. the aussie dollar under pressure . really extending that weekly loss we saw against the u.s. dollar. the july labor markets coming up waiting -- later in the week. this as vice numbers are surging to records. kiwi dollar unchanged at the moment that is a big store there this week is the rate decision. we expect them to keep the rate steady. current currency getting ground against the u.s. dollar. they are away on holiday but it is holding at that out -- 11 six he for level. this after five sessions of losses. you've seen the worsening outlook on the chip industry weighing on korean assets. coming up next, we will take a look at the week ahead.

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shery: a mixed picture across early trading. let's turn to sophie for what to watch. sophie: we are seeing downside moves across agent with korea off-line. there off to more than 1% this morning. you will see these names way the most while names alike. tokyo electrons are climbing ahead of its report card. would you film is also up. the aussie share market the weight by banks and sing yields declined while bhp is gaining

ground. the are in talks to sell its petroleum business. we have the aussie dollar hanging around by 2/10 of a percent this morning while the offshore u.n. is holding around a 648 level ahead of the july data dump. we have the malaysian currency under pressure as well, trading around the 424 level. this as we wait to see the prime minister will resign this monday. in the commodity space, we're seeing weakness for crude prices. shery: that demand outlook being weighed with the delta variant. china's july activity numbers in 90 minutes. japan consumer numbers and bank indonesia later in the week. for more analysis, let's bring in julian lee, chief economist at the bank we are getting that

activity number out of china for the first time since the most recent outbreak, right? that outbreak happened in the letter half of july. what can we expect in terms of the risks and upside for that later set of numbers? >> as you mentioned in terms of the outbreak towards the end of july, having said that, we are expecting those retail numbers as well as investment numbers and production to slow down. that should actually be a foreshadowing of a much slower growth momentum in the third quarter of this year. we are expecting growth to slow down what can we see in terms of the monetary policy and

diversions from other central banks across asia? >> as far as the pboc is concerned, we are expecting them to cut their policy rate in september. in fact, we don't allow a rate cut as soon as they. in terms of the, the fact is that rrr cuts have provided liquidity into the system. it is not resulted in broad-based fall in lending rates. it would not support what -- critic wrote so we think that policy rate cut will provide a stronger private growth as well. haidi: what kind of implications to receipt when it comes to the pboc? given there has been increasing calls for using its rate tool kit a little more aggressively? >> as i mentioned, i think we are expecting full rollover coming soon.

at the same time, that should vied a broad base fall in lending rates. we are expecting for the cuts that will provide the into the system. that should actually be coupled with a more physical -- fiscal easing. if you look at the total credit growth that been restrained, that is really led by restrained physical as a part. we expect that easing to provide a stronger support for the economy in the second half of this year. we should see that deficit widened. that should actually be positive for recovery and growth in the fourth quarter. haidi: it was a good surprise coming out of japan, right? what he met double-dip recession. does that give you some hope that consumer sentiment for japan and and you extended more

broadly a stronger than expected even with the delta variant? >> what we see time and time again is with these covid cases, the public has learned how to deal with it, right? first time around, there was severe impact but the impact has been less as people have learned how to live for the virus but at the same time, funding ways to consume and ways to work. we should see the impact to be relatively limited compared to some. and some of the growth numbers have seen in other countries. instead, what we are seeing in china is increasing covid cases but slowing down of properties and constraints in micro policies. -- macro policies. that should provide recovery in the fourth quarter. haidi: chief asia economist over

there. you can turn to the app and see commentary and analysis from our expert editors. there is more insight ahead on bloomberg television. the chief aipac economist will join our shout next hour before we also hear from the other spaces. this is bloomberg. ♪

haidi: vonnie: minneapolis has said labor market strengths will set the stage for a tapering of central-bank bond buying. he was speaking on this podcast recorded august 9. the secretary has said bond purchases will continue at the current rate until he sees substantial further progress on inflation jobs. >> if we see more job reports like the one i got, i would feel more current about saint we haven't completely filled the whole we have been in but have made a lot of progress. and then, will be the time to start tapering our asset purchases. vonnie: the taliban have much into afghanistan's capital, claiming control of the president's house and will

declare a new islamic emirate. megan beck president has fled the country said he wanted to avoid bloodshed. the u.s. military is scrabbling to evacuate officials via the airport. the secretary of state -- denies comparisons to the 1975 fall of saigon. the pentagon says the u.s. deployment will be boosted to 6000 within 48 hours to secure the main airport. the u.k. premised are said after -- prime minister said his priority is evacuating british and afghan nationals who helped u.k. forces. the defense ministry says the troops have arrived to help in the rescue. the death toll continues to soar after a 7.2 mentored earthquake struck off the southwestern coast of haiti. 1300 were killed. a state of emergency has been declared. the u.s. deployed such and

rescue teams to help find survivors among the destruction. a tropical storm is also forecasted to hit haiti in the coming hours. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: the u.s. will be absolutely prepared to strip at a third covid shut quickly. the cdc approved a third jab for people with compromised immune system. let's bring in our senior medical reporter. this, coming of course after a country -- many countries can give a first desperate does anybody -- everybody need a third dose? is more better here? reporter: it's not that more is better in this context. what we know from what happened last week is the fda is saying that people who had compromised immune systems would benefit

getting a third shot because it will further boost your immune system. it will give you a better fighting chance against the coronavirus should you become infected. they're worried about the idea that your immunity might decrease over time. there is some indication that it will be as effective as months go by. for people older, perhaps earth -- health care providers, they might need more extra protection. when you layer delta across that, with every thing we are seeing across the world right now, it becomes even more important to get people protected. to your point, we have seen over and over again to get more people vaccinated than a smaller number of people. this is something we think about what this vaccine rollout. shery: the idea was to get as many people vaccine as possible to reach herd immunity. is that still possible? reporter: there are two pieces

that are hurting us. going back to that delta variant , when you're talking herd immunity initially was that it would only be so difficult to get to that point. that would give us protection against herd immunity, it would make it impossible for the virus to jump from one person to the next because the people who are around infected person would no longer be vulnerable because their vaccinated. with the delta variant being more potent and transmissible, it is easier to get from one person to the other. that rate is ramping up and in some cases, they are saying 80-95%. we have large numbers of people who are vaccine hesitant. and those who will refuse vaccinations. any places can't get anywhere near, not even 90% of their population. they going to get 9% vaccinated. that idea of going to herd

immunity is falling by the wayside now. haidi: much of a problem with the pandemic has been a shifting goalpost, right? if we can't get to her immunity, what is the endgame look like? reporter: it is an acknowledgment that it is a virus that will be a -- what us for years. you will vaccinate against this variant and different variants of the virus for years to come. i was talking with greg polin who was head of vaccines of the mayo clinic and he told me that the 1918 spanish flu is still being vaccinated against in the influenza vaccines we have right now. 100 years from now, we can still be vaccinate against some variant of the coronavirus we are seeing right now. it could be with us for decades. shery: malaysia has been one country hit hard by the pandemic. the prime minister told his party he plans on resigning on monday. a cabinet number says potentially fuels further

economic challenges in the pandemic hit nation. and must joins us with the latest. he has rejected repeated calls to present in the past. what is different now? reporter: what's different now is that it is blatantly clear he does not have a majority of mps in the lower house of parliament supporting him. one of the compass it parties and is coalition, a large number of their mps have pulled the rug. in some ways, it is remarkable that he has staggered on to this point. this saga, depending on how you define it has been running for months. in some way, it has been running since march of last year when he took over. haidi: what are the options available here?

how is this best case scenario player? reporter: what malaysia really needs is an election. to clear the air and make it abundantly transparent will have support. an election probably isn't feasible right now. it became a super-spreader event last year. they don't want that. the king is going to have to nominate somebody who he believes has geordie support. ideally, he should go one step further and insist that this person submit to a confidence vote in the house. failing that, whomever succeeds him will be subjected to the same erosion of legitimacy. haidi: it is interesting. the two flaws, are these

weaknesses and vulnerable days that would afflict any successor? reporter: the fundamental problem that plagued malaysian politics since at least march of last year is the politically dominant ethnic malays are split. they used to be one dominant malay party that led national governments from its independence from britain. that party was at the center of a coalition. there are now multiple parties competing for the mainstream ethnic malay vote. that is the root cause of this. the unknown edifice no longer apply. however, has not yet taken shape shery: what will this uncertainty due to the economy echo -- economy?

reporter: it's not good. what they made a last ditch appeal to get opposition support, the government and so downgraded economic forecast. malaysia will still eat out some growth this year but it will be small. the asian economic recovery large to places like korea, china, taiwan, singapore have enjoyed has largely escaped malaysia. you can say sure, part of that is the delta variant. political crisis never helps in these situations. shery: we got the latest on malaysia. thank you he was telling us about the economic growth concerns. we continue to see these peak growth concerns and the rest of the world as well, given the spread of the delta variant.

that is not boding well for emerging-market currencies. we have seen that correlation with rising to -- currency yields. they are now saying if we do get a spike in yields in the highest yielding currencies could suffer the most. haidi: it's interesting because you take a look at that encz mark, is down 2%. it will be erasing those gains for the year. that correlation with the u.s. to year yield is holding near zero but a lot of analysts are saying we shouldn't get complacent and that could change very quickly. particularly, with the delta variant and the worries over not just growth but central-bank divergence as well. shery: some of the worst performers -- performers,

divergent central-bank policies into that. haidi: as well as of course, just the currencies in the economy you mentioned are most afflicted with the search of the delta variant cases as well. this lagging somewhat when it comes to vaccinations. haidi: you can tune into bloomberg radio tear from more -- hear more from the analysis -- analysts. you can listen in via the app. this is bloomberg. ♪

haidi: police investigating a alibaba employee sexual assault allegation. they found no evidence of rape they could've committed forcible indecency which can encompass sexual assault good -- sexual assault. whether the police find out that we know? reporter: over the weekend, they posted their initial investigation results. they found the former alibaba integer was suspected of conducting forcible indecency and as you mentioned, this can

include sexual assault. there are so far no evidence of rape but the police are still carrying on their investigation. some of the police reports backed up the victims accounts. some of the reports also offer more details. it's also worth mentioning that another alibaba client which had been fired after the female worker accused him of sexual assault was also suspected of forcible indecency. shery: what have been the reactions online? reporter: i'm sure we are seeing some online citizens who started to question the female workers because the police report has found out that alibaba never forced her into the business trip, nor was she forcing into -- forced into drinking at the banquet.

it is worth pointing out that there are suspicions of sexual assault case which have been the most important part of the case we don't need a perfect victim. there's still allowing instruction about how to treat women properly. in the current corporate world which is a more important discussion at the moment. shery: our tech reporter there. turn to sophie with what stocks to watch. sophie: we have plenty on the agenda today if you have calendar items like highland gdp hurt when it comes to stocks to watch, will see what comes to hear it for example. keep an eye on that space paired with the government set to reopen, some facilities from august 18. china in particular, this on as the first half numbers, with all

segments matching a modest recovery. switching on the board as thailand as their gdp report, we are watching their shares. this after they reported revenue growth through june despite the closure of restaurants and detainment venues across thailand. we are keeping an eye on aviation stocks as well as tight airport reported profits. later this morning, we will be watching stocks of character -- companies tied to afghanistan and direct revenue. shery: will also watch those chipmakers across asia. korea is closed but we have seen recent pressure on south korean stocks, given the worsening outlook for chipmakers. when it comes to the world semiconductor index has been down for six consecutive sessions. this chart showing the philadelphia index also really stuck in a range despite the fact that stocks have been

getting cheaper relative to the s&p 500 since february. those continuing shortages of chips. haidi: analysts saying they are starting to indicate there are real reasons of inflation across the broad economy. were seeing the demand really shooting up over the pandemic and is that going to be more muted, right? despite us continuing to see a lockdown in some parts of the world, certainly here in australia as well. we are starting to see the mismatch of the process happening there. shery: especially with the latest call from morgan stanley last week the made ripples that they lowered their chipmakers as they see the outlook losing stream. let's see what the markets are doing right now. korea is away on holiday. they have been pressured because of that call from morgan stanley. the nikkei losing ground on a

two week low already, down 1.5%. we have the japanese yen climbed to the highest in about a month against the u.s. dollar, although we are seeing a little bit of weakness at the moment. we are seeing it down 4/10 of 1% we have seen the aussie dollar weaker after losses to the u.s. dollar. that has to do with infection spreading across the country. iron or prices have not been great. we've seen a slump for a while. --ore. we are expecting that rate decision. the expectation of course, is for rates to remain unchanged. it might revise their projections to a hike this year. haidi: coming up here, don't miss big interviews coming up on number markets including the ceo joining us and the partner.

that is it for daybreak asia. markets coverage will continue. we are coming down to the start of trading and hong kong, shanghai and xinjiang. china open is up next. this is been. ♪

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>> welcome to bloomberg markets china open. i am yvonne man. david: i am david in glass. let's get to your top stories -- david ingless. the taliban are sent to retake taliban. the tension after they were removed by the u.s. military. >>