haidi: very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's major market opens. shery: i am shery ahn in new york. welcome to "daybreak asia." a choppy wall street session. the virus and taper talk way on the economic outlook. commodities feel the pain of china's credit tightening. copper heading for its worst week in two months. adrian orr tells us october is a

meeting for interest rates. as it defends this week's decision to hold. governor orr's decision was dependent on the virus cases in new zealand. add to the virus delta concerns, not to mention the fed tightening concerns, and you have a pretty worried market. haidi: expectations are that you will see a bit of a move in the currency when they decide to go. it is interesting to see these implied rates falling a bit as the conversation continues. so much uncertainty as new zealand tries to stick to its covid zero strategy. let's take a look at how markets are setting up for the last trading session of the week. sydney futures up by .5% over in japan, getting cpi numbers, looking flat as far as the futures session euros and dollar strength is really in the backdrop of this session when it comes to asian fx as well.

s&p futures looking pretty muted. let's get back to what shery was mentioning. the decision to delay the rate hike rippling through markets, sparking concern that the delta variant will be forcing the other central banks to shift their own timelines. we did speak earlier to the governor, adrian orr. he said the height may not happen in october. adrian: we have to focus on our purpose, which is the inflation and employment mandate that we have. absolutely this week was not the best timing to be looking to reduce interest rates given -- reduce the monetary stimulus, i should say, given the health situation. time is on our hand. we can observe what is going on and the underlying economics remains the same. we have significant capacity constraints, supply disruptions with the costs.

maximum sustainable employment, so the underlying situation remains the same but we thought we would just observe over the next few days. kathleen: you brought an interesting concept up at the press conference when you talk about a strategy of permanent flexibility, the need for the central bank to manage its way through a virus environment, knowing it's going to come and go. does that mean you could potentially hike the key rate, maybe even october, even if there is still instances here and there of outbreaks and target of locks --targeted lockdowns? adrian: i think it does. the real issue is, what extent is monetary policy being useful? the largest lesson i have had globally as fiscal policy is most impactful to manage this

type of crisis. it is not a cyclical behavior. we have seen governments bolster household balance sheets, business balance sheets incredibly effectively, so that puts monetary policy in a useful but secondary role and we need to just be true to our mandate. shery: adrian orr speaking with us a short time ago. as we continue to see central banks gearing up to taper, we have seen the fomc minutes really rattled the markets and that continues in the wall street session today because the s&p 500 did manage to gain a little bit of ground but really not much. it was a very volatile session. the vix ended above 20. we have seen also really those moves in the commodities space with bloomberg commodity index seeing its worst week in about two months. concerns and central-bank timing dollar strength virus concerns

adding to the pressure and chinese adrs also fell. haidi: it is starting to feel like a vicious cycle. in the u.s. session, the chinese adrs are falling after a brutal session here in asia with the hong kong tech index falling to the lowest since its inception basically. we are seeing what a third day of continued outflows looks like as well so investors pulling their money out of exchange traded funds and focus on china as well. let's wring our markets reporter for more context. -- let's bring in our markets reporter for more context. >> i think what the investor needed is some clarity of the balance going forward. visibility is so low of what the environment looks like. investors -- some of the investors think that chinese

tech companies are unsuccessful. shery: on top of that, you have the chinese credit impulse really showing a little bit of tightening and that is also not helping the stock market or the commodities space either. ye: right. chinese has been tightening the credit supply for quite some time. mick credit impulse and china leads to the commodities and emerging-market. i think the commodities are just catching up and tightening impacts on a chinese economy. we also have the coronavirus. -- country in the world. haidi: ye xie. let's get a quick check of what commodities have been doing recently.

we continue to see the downside pressure when it comes to iron ore. this as china is moving forward with a pledge to curb steel production. we saw iron ore plunging again. copper also at the lowest level since april near the oversold territory in the 14 day rsi. we have not been at that level since june. this as we continue to get growth concerns. palladium under pressure. branch down more than 2.5%. wti is also seeing its longest losing streak in 18 months. dollar strength really not helping on that front either. let's get to vonnie quinn with the first word headlines. you have a little bit more when it comes to grain supply and appetite and demand. vonnie: china's appetite for u.s. foreign products are -- farm products are battered by a resurgence of covid infections. soybean sales were the highest vince january for the week ending august 12. china purchasing more than 1.1 million tons.

total sales were 2.2 million tons. beijing also boosted its u.s. wheat and cotton purchases. covid patients are dying in u.s. hospitals at levels not seen since february as intensive care units overflow in parts of the south. the federal department of health says alabama has run out of intensive care places. florida, mississippi, georgia, and texas are all above 90% of their icu capacity. president biden has defended pushing for booster shots for all americans after criticism that it is unfair to poorer countries. the w.h.o.'s africa director says booster rollout makes a mockery of vaccine equity. the organization says high income countries have already on average administered more than 103 vaccine doses per 100 people. that is in comparison to just six in africa. singapore will pilot quarantine

travel lanes for passengers who are vaccinated next month. and restrictions will be used for residents and visitors coming from hong kong and macau over the coming week. hong kong's government meanwhile say they will no longer pursue a travel bubble with singapore. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi. haidi: still ahead, we will be speaking with an associate professor about the face of women and girls amid the taliban takeover. the market outlook with emily weiss. what happens with their evolving emerging-market strategy. this is bloomberg. ♪

shery: emerging-market stocks in currencies erased year-to-date gains as the delta virus strain and possible reductions of central-bank stimulus weigh on the economic outlook. our next guest is cautious on em equities given the heavy weightings to china. emily weis's macro strategist at state street. great to have you with us. this gtv chart on the bloomberg showing how emerging-market stocks are now around 20 year those versus the s&p 500 but then there are some analysts out there like of america, actually calling this value. wouldn't this be a good time to jump back in? emily: i think there are a lot of cases to be made for emerging-market equities over the long run. the thing that is making us cautious is exactly what you hinted at at the start of the hour which is that there is such a strong waiting in the e.m. indices towards china and emerging asia.

in particular right now, that is a really potentially hot button issue as we wait for these regulations be rolled out as your previous bloomberg best was hinting at. we really are in this wait and see mode to see where regulation policy is moving next and how that will impact the markets. we have not quite seen the debt buyer mentality coming -- dip buyer mentality come in as quickly as we have another equity markets. shery: can you go more country specific? we have seen some economies in latin america who benefit a lot from food inflation with commodities prices surging as well. emily: even though we are seeing some of those steam taken out of the likes of copper and oil, we are seeing all-time highs and things like sugar and wheat. a lot of countries that exported those commodities will be set to benefit from that. in a week where equity markets had a particularly difficult run

, mexico is one of the bright spots of green on the board. latin america does tend to have a little bit of an advantage in the commodities space. into regionally -- into region -- interegionally, we have not vaccine rollout in the emerging asia and that has left some vulnerable to these renewed knockdowns that will put pressure on supply chains and company production. haidi: when it comes to the fed, most officials according to the latest five minutes expecting tapering to begin this year. we are looking ahead to jackson hole for fed powell's comments on that. what would emerging markets be looking out for an are we past the point where we are really bracing to see a taper tantrum like we had in previous cases? emily: the countdown to jackson hole is one week away. as much as the market is waiting for this event, for e.m., it has

been a wait and see mode. investors are hesitant to extend over their skis in light of this potential risk event. there's a few things i think makes this slightly different to other episodes we see -- that we see from the past. notably, this time around, fed communication has been very transparent about this process upcoming. nothing but warnings from the fact that the eventual taper will be taken place. this time around, investors are not overextended in the e.m. space. in 2013, there was a lot more inflows into e.m. assets and that put those assets more at risk. they erased some of the year-to-date gains in emfx and em equities, meaning there is not as much of an overhang that might be vulnerable to those swift withdrawals of money so those two components help alleviate that this time around. one last factor i would not to mention is when the fed announced its plans, he made that infamous comment about

starting the taper. we ended up seeing treasury yields spike higher and the ended up putting a lot of pressure on emerging-market debt and fx has a higher u.s. yields detract capital away. this time around, u.s. yields are pretty low and if anything, they struggled to gain momentum. net has not been an area putting pressure on emerging markets. rather, it has been the growth scare combined with this taper effort. haidi: always great to have you with us. emily weis, macro strategist at state street. almost every major auto maker in the world has been affected by the global chip shortage and here are what guests on bloomberg tv are saying right now about the outlook. >> we believe that the worst is passed. >> it is very fluid. >> it will run into 2022. >> the chip shortage, which is driven by the capacity, already the actions have been taken by our suppliers, and this will

also go away. >> microchips are the center of most of this activity but we are seeing a wide range of supplier disruptions due largely to continued outbreak of covid. >> we think we will be into mid-two until we start to see supplies rebound. >> whether this will go away in short-term, i don't think so. >> we have seen shortages of somewhere between 20% maximum production compared to our initial plans. shery: we are watching toyota when japan opens in the next hour. the are down over 4% after the company announced output suspension at 14 plants across japan for several days next month. the adjustment is in response to a part shortage resulting from the spread of covid in southeast asia. the toyota motor executive vice president of sales spoke exclusively to us earlier. >> we have been managing this

supply chain disruption very well over the last four months to six months. due to the disruptions we are seeing in southeast asia as well as in europe, we had to announce overnight that we will be reducing production in the month of august between that 60,000 to 90,000 units, and again, we are evaluating the impact on september but it appears to be 70,000 to 90,000. i will say that this is far beyond microchips. microchips are the center of most of this activity but we are seeing a wide range of supplier disruptions due largely to continued outbreak of covid. >> robert, you have done a really good job managing your dealership network. you have been really flexible, really kind of coordinated. you had a really good

communication strategy and this has been reported pretty widely. this is not just me saying this. one of the things they are saying right now, how under strain is the inventory program, how flexible is it in terms of getting vehicles in one place to another where they could be solved to manage that kind of inventory that you do have as nimbly as you can? robert: thank you for that. we communicate extremely well with our dealer and retail partners. a little bit of frustration is that metal demand for the industry remains to be very high. if we are projecting demand without supply chain disruption, it is in excess of 17 million units on an annualized basis. as we have been seeing over the last 60 days, the industry sales are coming down to around the

market as inventories are purely depleted. i will give you a good example of that. last month, we started the month with 40,000 units in inventory. yet we are able to sell 225,000 units. that is because our 15 plants in north america were continuing to produce and our dealers do an excellent job of serving the customer. as we previously said, the supply chains in southeast asia and europe are so critical that we are not able to continue that level of production for the months of august and september. >> robert, i wonder what the long-term fix is. obviously, we can make chips at home in the u.s. that makes sense. we are having partial closures from ports in china, for example. it feels like herd immunity for covid getting pushed out. it might not be there at all.

this might not become a full reality of life. how do you fix it to still run your business? robert: that is a complex question right now. what we really need to do as an industry is we need to solve this pandemic and bring a safe work environment to our team members. i'm really proud of our 15 plants in north america. up and producing, social distancing. we have returned to 100% mass wearing. we have a very solid plan in north america yet we are dependent upon second and third tier suppliers that are coming out of asia and europe. that was really the issue of this problem. haidi: robert carter, vice president of sales, speaking with bloomberg's guy johnson. just ahead, tesla is set to

showcase progress in artificial intelligence. it's future faces that federal investigation. we will take a look at what to expect, next. this is bloomberg. ♪

haidi: tesla's ai day begins soon, aimed at showcasing the company's progress. it is happening against the backdrop of that federal investigation into the carmakers autopilot futures after a series of accidents our west coast reporter, ed ludlow, joins us now. what are you watching out for? ed: elon musk has been unequivocal. this is about recruitment. he acknowledged that the final steps towards true autonomy, true self driving, it's all about cracking artificial intelligence paid they want to hire the best talent.

some posted on linkedin saying that the announcements, the specific ones, will be around their anonymous driving technology. it can be applied in other parts of tesla's business. tesla is working on a camera only base system to power its autonomous technology. other players like waymo, backed by google, and another backed by general motors has arrange with lidar and radar. their technology is effective but right now, full self driving, ssd, is in test phase for we will look at when that tests commercially. shery: didn't muska say we would have robo --already? ed: he said that within a year, they would have one million fully autonomous vehicles, a fleet on the road. that deadline passed and did not come true. elon musk has overpromise and

not delivered on many different areas of the business. he started to change his language recently in tweets and during earnings calls about how difficult this is. they are very committed to hiring the best people to crack this puzzle. wall street is very optimistic that they will do so. shery: ed ludlow there. you can turn to bloomberg for more on tesla's event later. go to tliv to get commentary and analysis from bloomberg's expert editors. here's a quick check of the latest business flash headlines. chinese regulators sold china evergrande to resolve its debt problems and stop spreading false information. in a rare public review, the pboc and cbrc issued a joint statement, sending the developers bonds and shares lower. evergrande has been selling assets including stakes and units over the cash crunch. asian private equity firm pag is said to be close to investing

almost $3 billion in the operator. sources tell us their commitment to commercial management brings the fundraising side to $6 billion. the company was initially seeking to raise half of that amount ahead of an ipo later this year. sources tell bloomberg that softbank is offering $2.2 billion of its stake in doordash in a block trade through goldman sachs. the block trade is the latest move in softbank's selling spree that tripled to $14 billion last quarter and comes after doordash recently forecast a seasonal decline in new customers. we will have plenty more to calm on "daybreak asia -- to come on "daybreak asia." this is bloomberg. ♪

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haidi: we do have cpi numbers coming out of japan at the moment. we have the year on year numbers coming in at a follows .3%. that is actually slightly better than expectations of a contraction of .4% but again falling into deflationary territory compared to just modest gains of 12% we saw in the previous month. shery: same for core consumer prices when you exclude the fresh food prices.

it is a deceleration but not as fast as what -- was expected. core cpi is a contraction of .6% which is a slower deceleration than expected. we have seen some gains because of base effects from last year but when it comes to those core consumer price numbers, it is still a deceleration in the negative territory since august of 2020. pretty far away from that 2% inflation target. let's take a look at what markets are doing right now because we are headed towards they japan and to reopen. we futures at the moment -- japan and korea open. we spoke to adrian orr who said the october meeting was a live meeting for rates. sydney futures pointing higher in the context of seeing recently the longest losing streak since october.

outside of .3%. as the nikkei has fallen to a seven month low, u.s. futures really not doing much after barely managing to hold onto gains after a very volatile session. haidi: he said it before, we spoke to adrian orr, the rbnz governor. of course, it is a live meeting. he gave us the clearest indication that a hike is likely in october even if there are still cases of covid-19 in the community. here is more of our conversation with him earlier. adrian: we have to focus on our purpose, which is of course the inflation and employment mandate that we had. absolutely this week was not the best timing, looking to reduce interest rates and reduce the monetary stimulus, i should say, given the health situation. time is on our hand.

we can observe what is going on in the underlying economics remains the same. significant capacity constraints, supply disruption creating the costs. about maximum sustainable employment so the underlying situation remains the same. let's just observe over the next few days, low cost to us. kathleen: you brought up an interesting concept at the press conference a couple of days ago where you talked about a strategy of permanent flexibility, the need for the central bank to manage its way through a virus environment, knowing it's going to come and go. does that mean you could potentially hike the key rate, even october, even if there's still instances here and there of outbreaks and targeted lockdowns? kathleen: -- adrian: i think it does. the real issue is at what extent

is monetary policy being useful? the single largest msn we have globally is that government fiscal policy is most impactful to manage this type of crisis. it is a structural crisis, not a cyclical behavior. which sees governments step in and bolster household balance sheets, business balance sheets incredibly effectively so that puts monetary policy in a useful but very secondary role. we need to be true to our mandate, which is to say our in -- are inflation pressures rising? should we be back more out of mutual interest rate? what will change that view? you will have to see a significant shock to demand. what will lurk is that incomes remain strong. demand bounces back very quickly. and that these rolling lockdowns

will continue for a while. that flexibility remained focused on the medium-term target. kathleen: i hope all those investors and traders who kind of control the market expectations for rate changes are listening closely. market expectations from an october hike have been higher, close to 100, down to 59%. that is first of all because you skip this rate hike in the midst of that sudden lockdown in new zealand because of the surge outbreak or the case outbreaks, but also may be because it's not going to be a monetary policy statement meeting where you typically make a rate change. it is a monetary policy review meeting. you announced the end of your long-term security asset purchases. a meeting just like that. are you been saying that october is a live meeting regardless of any of this? adrian: we retain the right but

not the obligation to move policy when we think it is necessary. we can communicate many different ways our monetary statement released this week. outlines are our views on what the mutual interest rate is. capacity pressures, how we see inflation performing. you know, we have the official cash rate back at mutual over next year, the course of next year, which is 2%. what would push us off that course, we would have to be very convinced that the supply side has suddenly been able to respond, removing inflation pressures or the demand side for the economy has had a significant turnaround. that would mean fiscal policy is not doing its job. shery: adrian orr speaking with us earlier. vonnie quinn with the first word headlines. vonnie: the biden administration

says it is appropriate for extended unemployment benefits to expire as scheduled on september 6. however, the treasury and labor secretaries have risen -- written to lawmakers to say it could be extended in those states hard-hit by the delta variant. many republicans argue that the measure discourages americans from returning to work. the secretary of state, antony blinken, and g7 for ministers have agreed during a virtual meeting that the taliban's actions will determine their relationship with the international community. president biden told abc news the islamist group is facing an existential crisis but he does not believe they fundamentally changed course. biden said chaos was unavailable -- unavoidable as u.s. troops withdrew. kamala harris will look to bolster economic and military cooperation in china's backyard starting this weekend. it is the biden administration's most high-profile trip yet to asia.

it comes as the region becomes more economically dependent on beijing. harris's trip to vietnam will mark the first time a sitting u.s. vice president has visited since the war ended in 1975. hong kong nurse seeking a new light -- hong kongers seeking a new life may be forced to leave their retirement savings. china withdrew recognition of the british national overseas passport. the u.k. expects more than 300,000 residents will use the passports to leave hong kong. that puts billions of dollars at risk of being trapped. 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: china evergrande group says it will work to fully meet regulations requirements after the financial regulatory may demand for the developer to

resolve its debt risks. our chief north asia correspondent, stephen engle, joins us now from hong kong. it sounds simple enough. fix that debt risk. stephen: we are complying. that is the message this company is sending to the government after this rare meeting and then public rebuke from not only the people's bank of china but also the banking and insurance regulator, putting out a joint statement basically saying evergrande, get your debt problems in order, and also, stop posting or spreading untrue information onto the market. it has been an amazing 48 hours really if you look at, you know, the debt issues in china and how the government is tackling it because 48 hours ago, we had this recapitalization of while wrong -- of the company and then

the meeting with evergrande executives with the pboc and the cbirc that resulted in that public rebuke. evergrande saying we will comply with the government's policies for healthy growth in the property market and we will make disclosures of material interests in a timely manner and clarify untrue information so any hopes that evergrande was going to get the same kind of bailout treatment that the other company got faded quickly and obviously, evergrande has been punished. it's bonds have sunk, its stock has sunk by two thirds this year. very different situation. shery: barely any time to breathe a sigh of relief after that news. what do we know in terms of how much progress evergrande has made in handling error liquidity issues? stephen: not enough, -- handling their liquidity issues? stephen: not enough. i have a list of some of the

things evergrande has been trying to do to pare back this $308 billion worth of liabilities. evergrande, they cut their interest-bearing debt by 20% in the first half of the year. that is what they say. they sold assets to fend off a potential cash crunch. it had been in talks with xiaomi and others including urging the shenzhen government to sell its stake in the electric vehicle group. china evergrande new energy vehicle group. however, we are hearing from evergrande that there were initial talks but they never went further so there is a stumbling block right there. investors are concerned that these moves made by evergrande are simply shifting obligations to different parts of its balance sheet and not necessarily tackling those 308 billion dollars in liabilities that the government once cleaned up -- wants cleaned up quickly.

shery: stephen engle at the latest on evergrande. as we were just saying, there's no time to relax when it comes to all of these headlines coming out of china. every other day is not every day. we continue to see that pressure on the stock market on chinese adrs as well. tencent, alibaba adrs really under pressure in the new york session. we have seen them continue with the nasdaq golden dragon index at the lowest level in three months already. we can see evergrande losing double digits when it comes to their stock price and those adrs here in the u.s. also broadly in the red. haidi: it is really the reach of the crackdown across different sectors. it is not just tech. it is consumer stocks, property. for evergrande, what is interesting is the timing of this public rebuke coming one day after we saw the government

organize recapitalization. the fact that we are seeing evergrande, which is bigger and arguably poses a significant systemic risk being told that they need to sort themselves out. it kind of tells us may be that the situation was an exception rather than a two to fail rule that beijing is going to go with, right? shery: evergrande with over three hundred billion dollars of liabilities could pose a systemic risk. let's turn to china telecom because that is a different story. it is debuting on the shanghai stock exchange on friday, one of the three mainland telecom carriers booted off the new york exchange. our equity capital markets reporter joins us now. what can we expect here? julia: as you said, this is one of the -- actually, it is the biggest listing share sale of the world because they raised $7.3 billion. as is likely with most mainland

listings, it is probably going to be well. it is rare to see stocks fall on their debut, but it is interesting because it is part of a wave of -- a trend of the mainland telecom carriers raising funds through listing. we have china telecom now, china mobile going to follow with what is likely to be an even larger listing. this is after all three of them, china telecom, china, and china unicom were booted off the new york stock exchange here that was in response to president donald trump's executive order barring ties to -- companies with ties to the chinese military. haidi: does this homecoming fit into the idea of common prosperity, bringing that wealth home? julia: it does, in a sense. it has been one of china's ambitions to get more of its companies listed at home, on

domestic exchanges. these are not exactly the large tech giants like alibaba but still, it does add to that. it seems to be good, to be doing it homecoming or listing at home on the mainland exchanges boosting the proceeds there and the activity there. going to use the china -- china telecom is planning to use the proceeds to build 5g networks, which is very much in line with china's priorities in terms of winning that race. haidi: julia fioretti, our reporter. the taliban's return in afghanistan is sparking fears on progress made on women's rights will now be erased. we will discuss with a university professor. this is bloomberg. ♪

haidi: with the return of the taliban in afghanistan, many are fearing a reversal to a repressive past for females who participated in society. the taliban says it will honor women's rights within sharia law but questions remain. joining us now is the associate professor at mcgill university.

great to have you with us. the taliban is trying to project a softer image, if you will, a time offensive as it tries to gain international credibility this time around. do you think that actually translates to a better outlook for afghan women and girls? >> i think you're absolutely right. the taliban has been on a charm offensive, trying to rivet below take -- rehabilitate their public persona. afghanistan of 2021 is not the same as the afghanistan of 1996. the taliban has got to make good on their commitment, as you said, and they will respect women's rights, want to include women in the talks for the new transitional government that is currently underway. certainly now, we have to perhaps step back and see how things unfold in the next couple of days. haidi: at the same time, we see

corroborated an uncorroborated videos and accounts including forced marriages. it is simply sexual enslavement going on. women who work for state banks, for example, being told they don't have their jobs anymore. really even more disturbing and awful videos being circulated. from what you hear on the ground, what is the situation like for women and girls at the moment? vrinda: a situation is very chaotic. very complicated and externally dangerous for women. they have not really been able to leave their homes. they have not been going to work. the taliban issued a statement asking women to come back to their government jobs and they assured women that there will be safety and security for women so perhaps what we can think about or be cautiously optimistic is that now that the taliban is a government and not an insurgent

force, they have to grant amnesty to the citizens they have been threatening, killing, car bombing up until now. shery: the taliban pledging to protect the rights of women within the sharia law, what could that look like? vrinda: we do know from past experience that the taliban have a very harsh interpretation of sure i a law -- sharia law, but they have assured women that they will have rights. within the islamic framework. now, it remains to be seen more kinds of interpretation of sharia law they will have. it seems likely that it will still be rather harsh, intolerant interpretation, but we also know that they are in talks with other politicians. hopefully, if international pressure and regional pressure

is brought to bear, there may be greater hope for women's rights within the new islamic emirate of afghanistan. shery: what should nations and international organizations be doing right now? vrinda: there are a couple of things they could be doing. one of the main things is to use this time when we know the taliban is getting legitimacy with the international community, to use it as leverage to make sure they actually honor the statements and put those into action, the statements they made about amnesty and including women but also to ensure that any foreign aid is contingent upon the respect for women's rights and minority rights because the majority, the overwhelming part of the budget runs on donor aid and international aid so that is another point which the international community can possibly use to leverage. shery: vrinda narain, associate professor at mcgill university,

thank you very much for joining us. sure to tune in to bloomberg radio. you can hear more from the day's big newsmakers and get in-depth analysis from the daybreak team. we are broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. plenty more ahead. stay with us. ♪

shery: we are counting down to

the start of trade in tokyo and seoul. over in korea, the government is expected to announce or extend the current highest level of social distancing as daily virus cases continue to hover around 2000. local media saying korea may be easing a gathering ban for fully vaccinated people. they will be releasing their economic assessment report at around 10:00 a.m. local time and we are also watching an e-commerce giant under pressure after a series of controversies with the ceo in the spotlight. over in japan, as we broke earlier, inflation dropping less than expected although prices still extended the longest losing streak in a decade. on the corporate front, watching sources telling us that japan's second-largest mentor will team up with ir japan holdings to start offering shareholder services. toyota in focus after the global

chip shortage forced the automaker to cut its september outlook plan, showing how efforts to stockpile chips failed to protect the company long enough, haidi. haidi: let's get more on toyota. david ingles joins us now as we count down to the start of trading in japan. david: it is not just chips. it is this entire supply chain across southeast asia and parts makers in general. essentially, you are not looking at toyota -- it has taken them longer to turn over all of their inventory. you see the buildup of 41 days. just to flip things around and really have a look at southeast asia, you had plant closures in thailand and that has been extended. they announced that last week. you will get an vacation -- an indication of where those are when you browse over that model involved.

this is a very important part of the entire supply chain of toyota. it's not just chips. it's pretty much across the supply chain as it pertains to this part of the world. shery: tell us a little bit about what is happening in southeast asia and why that is important. david: suppliers. it is not just being able to say here is the factory and these are the models. these are what happens in stock markets. the stock performance full-screen here. some of its own suppliers within that specific market and as you can see, they really underperformed this market. the market knows about this. keep your eye on some of these names and just in case you're curious what these models are, a partial list of some of the vehicles and models that are affected by these closures not just in southeast asia but also what they announced over in japan yesterday. shery: david ingles in hong kong. take a look at the automaker's last trade as we head towards the opening japan and south korea.

we saw the broad downside there. haidi. haidi: coming up of course, we have that exclusive interview with the tourism group chairman and ceo, who will be joining us. we will be discussing markets including the outlook for these automakers, chipmakers with ubs global wealth management. this is bloomberg. ♪

shery: welcome to daybreak asia. i'm shery ahn. haidi: asia's major markets have just opened. our top stories this hour. apex stocks facing choppy wall street session. we are washing the open on reports of the chip shortage.

plus ever granted bonds are under new pressure after regulators issued a rare public rebuke. shery: this is the picture across asia with major markets online. we are seeing the nikkei down .1%. this coming off a seven month low as we continue to see pressure on japanese stocks. the yen is trading in a narrow range. we did get cpi numbers, accelerating less than expected. the cost be at its lowest level since april, rebounding a little bit up .5%. we are awaiting be ok policy meetings next week to see if they'll go ahead with the tightening. they have choreographed that they might start normalizing policy this year. but we continue to see virus cases. there are reports that they may extend the restrictions for another two weeks. the asx 200 unchanged at the moment.

also kiwi stocks at the moment slightly higher by .1%. their rate is kept on hold. we spoke to the governor today and said covid cases alone will not prevent rate hikes. we are watching automakers across asia. toyota abr's fell more than 4%. this as haidi mentioned the closure of 14 plants across japan next month. ihs coming out and saying global shortages of semiconductors will cut worldwide auto burg -- auto production by as many as 7 million vehicles this year. the lack of chips will not stabilize until the second quarter of next year. we continue to see plant closures in southeast asia given the virus infections there. haidi: i will stick with this

big toyota story. toyota has been faring pretty well amid the shortage so far. they are the number one chipmaker. they are known for a resilient supply chain. what has happened? all right, we will try to get more from river a little later. we do not seem to have her at the moment but let's try to get some market reactions because we have seen of course investors taking a look at some of the reaction from supplies, in particular toyota supplies reactions. we know that globally there are 7 million cars meant to be affected in terms of restrained out but -- output is on results of this ongoing chip crisis. we will go back to river davis who is the transport reporter in japan. river, this is the number one

carmaker in the world. they are well-known for their resilience when it comes to the supply chain. what has gone wrong? reporter: the 40% cut for september output was a real shocker yesterday. that was reflected in the hit that toyota shares took yesterday. up until this point they have been really resilient. they had quite a large stockpile of chips and work on their supply chains for the years. toyota make -- toyota, among other automakers like bmw, were being touted as strong with this chip shortage. there been relatively little hints that there have three major production curtails. in recent months they put out record numbers of vehicles. that being said, this was not entirely unexpected. at the most recent earnings briefing last month, toyota did not up cast its forecast for the year. that was a relatively conservative decision for

executives. the market reaction led to that. because toyota did have on its mind is that covid is not going away. the supply chain problems are looking for it going forward. shery: how is this affecting the broader industry? reporter: there is concern for a lot of automakers -- if toyota with all its preparedness is being impacted, what executive said yesterday is that the chip shortage had been wearing its inventories thin but the final blow was this outbreak of covid we are seeing in southeast asia. recently toyota has had to halt production at its thailand manufacturing hug -- hub because a lot of its regional suppliers are being impacted by covid

outbreaks and country lockdowns. specifically suppliers in vietnam and malaysia are being impacted at the moment. going forward, toyota did say september would be the worst impacted month. there are risks going forward. it is trying its best to procure parts and other regions of the world and will also work on not focusing specifically on one region and tried to diversify its supply chain going forward. haidi: river davis there. let's get a little more on the supply chain storage is and how they could impact market sentiment. the regionals ceo at ubs global wealth management is with us. we are seeing adjacent companies stocks falls. is this a wake-up club for investors who thought that appellees had the delta variant under control? guest? -- guest: yes.

global equity markets have been hitting all-time highs quite frequently on a recent basis. it's time -- if you look at the equity markets, whether it is only three or five or seven year basis. it is only attractive if you compare the equity valuation with the bond market, which are also similarly pretty expensive. it is something we need to take stock on. talking about that, we need to take into consideration the fact that the federal reserve is not talking about tapering timing. haidi: this is obviously not just a chip problem or an auto problem, where else do you see where positions should be trimmed given the risks?

>> i think if you look at it on a yearly basis we are entering a seasonally -- if. where it's always been a little weaker about that. . i think in the u.s. the tech sector is probably somewhere you want to diversify away from, given the fact that -- and if you look at the proof of rotation, is outperforming growth in last three months and at this point time you want to put more into the value of stocks given the fact that where the financials are concerned there has been reporting for the last three months and we expect the 10 year yield to extend by the end of this year. that is always been good news. shery: how do you hedge for the

chinese cracked and yucca -- chinese crack down? guest: we think the regulatory tightening is speaking. the economy has started to slow down. so if you tighten the screws a lot more on some of the sectors you run the risk of slowing the economy more. on top of the exports, this shipment spending in the u.s. and europe moved from durables will probably mean less demand for exports going forward. in terms of china, we are happy with the internet sector, the technology sector, given the fact that china wants to be a technologically advanced superpower over the next five years, they cannot tighten the

screws on the technology sector forever. it will end at some point. shery: they've even tied the screws when it comes to the commodities space, trying to get rid of speculation in the futures market there. our question of the day, in fact, is how long before commodities bottom out as we continue to see the plunge after that incredible rally on that front? how is this impact in your portfolio? guest: we tend to look at commodities with a lot more detail. we think there still some room but on a short-term basis, given the fact that you have green negative u.s. inventory report yesterday. on that front we think that the recovery in u.s. in europe, in the u.s. we are looking at 6.8, 7% recovery. in europe you're probably looking at 5.1% 235.3%.

so you're actually little more positive on oil. we think a strengthening dollar, and re-think the dollar will strengthen because of the higher use as a result of tapering concerns, we think that will affect gold and silver on a short-term basis and see trending down. it is probably a good time to accumulate some gold. shery: great to have your insights. let's get to vonnie quinn with the first word headlines. >> thank you. covid-19 patients are dying in u.s. hospitals at levels not seen since february. as intensive care units overflow in parts of the south. the federal department of health says that alabama has run out of staff for intensive care places. and florida, mississippi, georgia, and texas are all above 90% of their icu capacity.

president biden has defended pushing for booster shots for all americans after criticism that it is unfair for for countries. the who says that booster rots in wealthy nations making mockery of vaccine equity. singapore will try a quarantine free traveling for vaccinated passengers next month. starting from arrivals with germany and were nine. restrictions will be eased with residents coming from hong kong and macau for the coming weeks. hong kong's government meanwhile says it will no longer pursue a travel bubble with singapore. china's appetite for u.s. foreign products is a rare bright spot for commodity markets battered by the resurgence in covid infections and the stronger dollar.

china purchased more than 1.1 million tons. beijing has boosted its u.s. copper purchases. 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. haidi: steelhead we speak about the future of leisure and travel around the world. but first, the rbn's next meeting is live in october. we will get more from our conversation. this is bloomberg. ♪

haidi: the rbn says the decision to delay the start of a tightening cycle will force other central banks to shift timelines. they've given the clearest indication yet of a rate hike at the next meeting even if covid-19 remains in the community. >> we retain them right if not the obligation to move policy when we think is necessary. we can communicate in many different ways our monetary policy. our statement real -- outlines our views. how we see inflation performing. whoa it pushes off the course?

we would have to be convinced that the supply side has suddenly been able to expand, and moving inflation increases, or the demand side for the economy has a significant turnaround, and that would mean fiscal policy is not doing its job. >> looking through july of next year, you can see the rates at just over 100 basis points from the rbn. is that something that gives you confidence in terms of how potentially the recovery plays out? dealing given the uncertainty of delta that is a big bet to be making? >> all we can say is to the best of the way we see the economy unfolding, how we see demand, given the role of fiscal policy, given the very strong situation of household and business balance sheets, given how we have seen consumption snap back post lockdown, supply being constrained.

when you're in that situation that's inflationary. that's why we are saying we are accountable that the economy maintain its momentum. with less monetary stimulus. you have to remember that 2% is neutral. it is 1.75 above where we are. we're not putting the brakes on the economy. we are civilly reducing the accelerator. haidi: how much pressure of the need to start normalizing comes from the red-hot property market? this is something the rba is struggling with as well here in australia area i know you had a pointed exchange with lawmakers yesterday. do you feel the heavy lifting has to be on the micro side? >> i think it needs to be on the supply of housing. we can muck around on the edges of aggregate demand,'s financial

stability measures are very stable in new zealand. the banks are well-capitalized. they are very diversified. there is no stability issue. more of a housing supply issue here in new zealand. we need to focus on consumer price inflation, and we need to see a supply response. we are very confident that that is coming and what i been saying yesterday is that house prices in new zealand have not reflected a very strong supply. the strongest simple since the 1960's in new zealand, construction activity. we say that prices are unsustainable at the current level, given demand is constrained. we see a correction. not because of macro credential tools underlying economic fundamentals. >> a lot of people were saying that we were in an inflationary situation. as the economy in new zealand overheating?

is there a risk of waiting or being deterred by lockdown too many times? >> i think there is a risk to both sides. without a doubt. the single worst thing that could happen for central bank is to have inflation expeditions become upended. become well north of our target. we have been very confident that they are well ended. the market expects a central bank to do its job. and so we need to have the confidence to do our job and make sure that the value of our money is retained through time and that is what we will be doing. the challenges the monetary and fiscal policy coordination. we know now that we are in a good situation with the government. >> he was speaking with us earlier. coming with us next, the route of chinese tech giants steepen's as a new round of regulations

appears to be on the way. we will get you the details next. this is bloomberg. ♪

shery: tencent is doubling the amount of money it is setting aside for social responsibility programs. joining us now for the latest's asian tech executive editor peter elstrom. is this an effort to buy some goodwill from beijing? reporter: it is certainly an interesting move by tencent. they have said they will allocate another $7.5 billion for social causes. in this case it was specifically for wealth distribution. this is the second time they are doing this. they are doubling the amount of money to $15 billion. this is not the sort of thing you typically see from companies, but these are not typical days for china.

chinese companies are trying to figure out these new rules of the road as beijing begins to crack down on a whole lot of sectors, tech in particular. but i goes well beyond that into real estate and some other areas. tencent like some many other companies now are trying to do their part for what the beijing authorities are now calling, and prosperity. it is not just about being a profit maximizing capitalists. they need to contribute to this common prosperity, too. haidi: will we see a more philanthropic tilt from other major tech giants, as well? reporter: you're certainly seeing it already. many of the richest people in the country who have made their money from business are giving money to these charitable causes. we saw with the mates one founder, we have seen it with bytedance, you've seen it with jack ma, alibaba, also. these billionaires are trying to show us they are not just in it to make money, but are also

trying to give back to this society in ways the beijing authorities would approve of. so we are seeing that in many cases across the country. it seems to be a very fundamental shift in how you operate a private company that you cannot just maximize the profits, you need to also pay attention to how you are treating your workers, what you are giving back to society, and what kind of taxes you are paying and charitable contributions you're giving. haidi: china evergreen group says it will work fully to make regulation requirements as regulars make demands for the developer to resolve its debt. stephen engle joins us now for more. we are hearing this a lot lately. reporter: it's been an interesting 48 hours. you had that recapitalization, the bailout of huarong, and 24

hours later you had the evergrande regulators and then after that meeting you get the public rebuke, the rare public rebuke, telling essentially of evergrande to fix its debt problems and stop putting out misleading information. a classic example of that bailout, the recapitalization of huarong is probably the exception, not the new rule. evergreen -- evergrande is a bigger company but it is the most heavily indebted developer. the government wants to rein in and control the debt load. it is also a private company. evergrande is private whereas huarong is owned by the central government and in a different part of the economy, bad debt disposal, which is perhaps more critical to the health of the

chinese economy rather than the debt piling up in the property sector. shery: how much progress has -- have they made in dealing with their liquidity problems? reporter: they are selling out assets and cutting debt by about 20%. but you know what? investors are not convinced. the stock is down by two thirds this year, 66%. bring up this bloomberg chart. the bonds of god in a completely different direction. but huarong prices are picking up. investors concerned that the company is simply shifting obligation to other parts of its battles -- of its balance sheet. shery: coming up next, we speak to fulsome tourism group. the chairman and ceo joins us next. this is bloomberg.

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reporter: darby and had governor has given the clearest indication yet of a rate hike after the next meeting in october. even if cases of covid-19 remain in the vicinity. the central bank says the delay to start the tightening cycle as the country went into lockdown over the delta variant outbreak in that prompted investors to pair on a hike on the x over six meeting, pressing just a 50% jump.

>> we need to be true to our mandate which is to say that our inflation pressures are rising, should we be back more at a mutual interest rate. what would change that view? you would have to see a significant shock to demand. >>, harris will look to bolster economic and military cooperation in china's backyard. if the biden administration ties profile tribute to a region becoming more economically dependent on beijing. harris's trip to vietnam will mark the first time a sitting u.s. vice president has visited since the war ended in 1975. secretary of state antony blinken and g7 foreign ministers have agreed during a virtual meeting that the taliban's actions will determine their relationship the international community. earlier president biden told abc

news that the infamous group is facing an existential crisis but he does not believe they fundamentally have changed course. he also said chaos was unavoidable as troops withdrew. the sec has filed to revise antitrust campaigns against facebook. the sioux asks the court to unwind facebooks acquisitions of instagram and whatsapp. engine a federal judge dismissed a landmark antitrust case filed by the ftc and the coalitions of states attorneys generals. 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. journalists and analysts in more than 120 countries. shery: the pandemic is still hitting the tourism industry hard in the delta variant is increasing uncertainty about any recovery. our next guest runs a tourism

company which operates resorts and travel businesses. it's businesses in china outperform. joining us from shanghai, the chairman and ceo. it is great to have you with us. thanks for joining us. how are your business is doing now, now that we have a new covid restriction because of the delta variant spreading in china? guest: high. the first half of 2020 business was still affected by the covid. it was very challenging. however, we see a good recovery both in china and also overseas. actually, in the first half of the pandemic outbreak, it was well-controlled in china. so our results were performing

outstandingly in china. the business volume of the resorts in china, they grew by over 170% year on year. shery: those are really great numbers but i wonder what happens in the second half now that we have new restrictions even in china? guest: yes, actually since october, we have seen cases in some regions. but it is very different region by region and china. for example, the biggest city, maybe they cannot travel since october, but the region business is still running very well, for example in beijing we have near vision resorts. these resorts are running very well. long-distance results -- resorts

suffered, but in china we recorded very good business in july. record revenue achieved since we opened atlantis resorts. we do believe this is a temporary program. the government, the chinese government is actually deeply concerned as control covid-19 and the biggest city in china are gradually opening now. haidi: what has changed in the reopening in terms of people's spending and travel hall -- travel habits? do you anticipate much of a change given that a lot of the governments pac-10 -- crackdown seem to be focused on adjusting

the way families focus their priorities? >> as i said in the first half in china, we recover very good our business in china. since october, because there are some cases for them -- for example, some cities start again to control the travel. but you still can travel. for example, i just came back yesterday from the capital city of hainan. but we needed a passcode and also testing. you still can travel but it is more controlled now. in august. haidi: a lot of your foreign

assets are focused on europe. the thomas cook grant, club med. what you seen in terms of pickup this summer? there seems to be so much revenge travel happening tied to vaccinations. >> reducing -- we do see recovery in our overseas markets. in the first half of this year, most of our resorts overseas in europe was closed. because of the pandemic. with the easing of travel restrictions, our overseas, the results have been open now in stages. you can see once opened, reopened, the responses are overwhelming. in july, we had 41 resorts under

operation globally. we opened 41 resorts and the occupy rates reached 67%. closing in the second half of 2020, we recorded -- recovered 284%. so compared to 2019, we compare the normal your -- normal year, even in july we already achieved the booking compared to 84%. all of these indicates there are demands for vacations after the

reopening and i do believe that china can achieve a good recovery, also in europe, and the u.s.. haidi: when you see is the outlook when it comes to specifically luxury and a travel in china? guest: i think in china, normally when in one place it happens and they control it for quick, so the whole province of hainan announced yesterday that they already announced as a policy that they can travel again. yesterday. haidi: do you have built into

your business model any kind of prediction or outlook as to when borders might open in china? guest: i do not think we can predict now many things, but personally i believe the recovering of cross-border business still takes time, but we have a very good chance for the regional recovery. so we can focus for example on the regional marketing in china, the regional market in europe, or the regional markets. the business, actually when the restrictions are lifted, i do believe the regional market will recover quicker than the

cross-border travel business. haidi: thank you so much for joining us. china telecom debuts on the exchange friday. this is one of the three big mainland telecom carriers booted off the new york exchange. our equity capital markets reporters joins us. what are the expectations? reporter: it is likely to do well given most mainland chinese listings go up on their debuts. we should not seized surprises there. -- see surprises there. it is the biggest sale of the year. it is overtaking a $6.2 billion ipo in hong kong. this wave of state-owned telecom companies coming back to the listing in the home markets after they were kicked off the new york stock exchange, they were delisted because of an

executive order from former president donald trump, which banned u.s. investment in companies deemed to have ties to the military. that happened earlier this year. now china telecom will debut today. it could be even bigger. shery: with the u.s. china tensions, we thought all china would benefit, including hong kong, but it seems all of the listings are happening on the mainland and ipos in hong kong drying up. guest: -- reporter: that is correct. hong kong is going through the summer. so it is usual for listings to be more quiet this time of year. we do expect them to pick up a little bit in september. but certainly listings in mainland china are still doing very strongly. they are an 11 year i -- year high. obviously this homecoming trend

is benefiting the mainland markets and is very much in line with beijing's priorities, and china telecom will use the proceeds to build 5g, one of china's priorities. and with china mobile, as well, shanghai will get a big boost in terms of listing volumes, whereas hong kong is a little more quiet right now. shery: of course, given the regulatory upheaval in china, it's not surprising many investors are looking for alternatives, right? it seems to be the case when it comes to vcs and their investments. investments in chinese venture capital falling and guess where they are headed? they are headed to india, where we are now a frenzy of ipos. haidi: this seems to be the new

emerging-market darling when it comes to the funds that are really going into everything from -- and a lot of this i should point out is pandemic related, everything from online learning to e-commerce platforms is getting all this money. we are talking about some big players, like fidelity and kkr. just some of the global investors pumping money into india. we are talking about a $.8 billion for the amount of money raise an ipos so far this year. it has already exceeded the total and now we are seeing for indian ipo fundraising for the last three years. shery: quite a breakout year for india because it always sort of lags by the u.s. and china but things are turning for the indian markets. be sure to tune in for bloomberg radio to get more in-depth analysis from the daybreak team,. -- broadcasting live from our studio in hong kong. plenty more ahead. stay with us.

>> we believe that the worst is passed. >> it is very fluid. >> the shortage will run well into 2022. >> is driven by the capacity, already the actions have been taken by our suppliers. this will also go away.

>> microchips are the center of most of this activity. but we are seeing a wide range of supplier disruptions largely to a continued outbreak of covid. >> we think we will be probably into at least mid 22 until we start to see supplies rebound. >> whether this will go in the short-term, i do not think so. >> we've seen shortages of somewhere between 5, 10, 20% maximum production compared to our initial plans. >> some auto executives speaking on bloomberg about the global chip crunch. not surprising given the measure we are seeing on automakers across japan. consumer discretionary is a -- is the biggest lura -- biggest loser on the nikkei wishes right now at its lowest level in seven months. other losers also in energy and industrial down at the moment. we're seeing the kospi rebound a little bit, up .6%. this after seeing the lowest level since april.

we are seeing the asx 200 gaining. the energy sector is down on the asx 200 but we have consumer stocks leading the gains. kiwi stock under pressure, down .1%. we heard the governor also talking about the october meeting being a live meeting and that the coronavirus cases were not allowed be a deterrent for rate hikes. take a look at nikkei volatility index. we continue to see price points on the up, on track for its biggest weekly pop in about three months. we of course have volatility here in the u.s. section as well, with the biggest gain on a weekly basis since january. commodities futures looking like this. we saw the downside pressure broadly on base metals with iron ore leading the decline, given that we have's now seen china trying to rein in steel output.

we're seeing copper's slightly higher but this of course after falling to lowe's. copper near oversold levels at around the 30 level, which we have not seen since june. we are seeing brent crude continue to gain .6%. this coming on the back of the longest losing streak in 18 months. as we continue to worry about the delta virus and what is happening in china, growth concerns really hitting the commodity space. haidi: we will stick with that theme. i want to bring out energy -- asia energy and commodities editor. it seems like a confluence of events are causing this dynamic we are seeing at the moment. are investors believing it is transitory, if you will, to borrow a term from the fed, or ongoing pressure? reporter: i think we have to look at the context of where we are coming from as well. where we have commodities coming

at a 10 year high. the bloomberg spot index was at its highest since 2011. with so much chow -- chatter about a super cycle. we had extreme weather events driving food prices high. we had to china's recovery really pairing the economy -- the commodities market. that has been styled back substantially. the momentum over the return to office, the slowing down, as the fed tapering situation and the higher dollar has sparked a huge selloff yesterday, and the jitters are very strong at the moment in the commodities market. i think one of the key things we will be seeing is whether china is going to continue it sort of crackdown on some of the assets it is seeing us to inflated, including commodities being one of them. and whether that will continue

to push commodities down. shery: what is the demand outlook like right now? reporter: it is getting softer. there was a lot of hope that europe and the u.s. would continue what china had started. with this big sort of v-shaped recovery in commodities. but now the signs coming out of china are looking like it has slowed down. essentially there is some concerns around the property sector, which had really powered things like -- there's a lot of concerns about admissions that china's trying to crack down on, so still consumption, or still production is about to get tight there. that is obviously hitting oil quite hard as we saw yesterday with a huge plunge in prices. haidi: take a look at this. for the first time since june,

we're seeing global stocks right around the world all poised for the weekly drop. take a look at this chart on the bloomberg. u.s. stocks, even with the attempts to hang onto the u.s. exceptionalism in that performance, they are up, the asia-pacific, and the msci emerging markets index, all lower on friday. shery: a local analyst said we have to put the commodities space in perspective. the rally has also applied to stocks. we are coming out of record highs, record highs, and multiple record highs, especially in the u.s. but you said it is perhaps a weekly loss for the first time for all over the world, especially at a time when the msci emerging market index, em currencies as well, have erased all year to date gains. we have more to calm on "dayb reak asia." this is bloomberg. ♪

reporter: a quick check of the latest business headlines and sour. the worsening ship shortage is causing a 40% cut in auto plants. they're looking to suspend 14 japanese plants next month due to part shortages revolve it -- resulting from the spread of covid. the global chip shortage will cut auto production by as many

as 7.1 million vehicles this year and only seems to stabilize in the second quarter of next year. sources tell bloomberg that softbank is offering 2.2 billion of its stake in doordash in a block trade through goldman sachs. the block trade is the latest move in softbank's selling spree that is nearly tripled to $14 billion last quarter. and then comes after doordash and new customers. only fans is getting out of the pornography business. in october the company will prohibit exceptionally explicit content on its website, although some nude photos and videos will still be allowed. only fans has attracted more than a hundred 30 million users. it's popularity increasing during the pandemic as sex workers, musicians, and online influencers use it to charge fans for content. shery: as we head to the opening in china, we are not holding our breath for any relief when it comes to the credit markets, when it comes to equity markets, given that we thought perhaps

with huarong receiving recapitalization, we were a little in the clear, but take a look at this. selloff in chinese corporate debt. investors have lost 10% and junk rated corporate dollars. we have more bad news for china evergrande with regulators in beijing telling them to refrain from spreading untrue information. haidi: that divergence between huarong is really elster to in the point that beijing is trying to make that one recapitalization of a company does not make a guarantee that there is that backstop by regulatory authorities in china. it does seem like the huarong thing is rather -- is more of the exception then the rule. shery: we are getting those risk premiums with china. corporate debt is higher than that of nigeria, ukraine, bahrain. triple that of russia.

we will watch the market opens in china, coming up insight from a jp morgan asset measurement chief asian market strategist, plus china is expected to imposing new anti-sanctions law on hong kong. the china open is next. this is bloomberg. ♪

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♪ yvonne: 9:00 a.m. in beijing and shanghai. david: we are counting down to the open your last sessions of the week. let's get to your top stories today. investors cautious as the delta strain raises concerns over supply chains and stimulus.