♪ >> good morning from our middle east headquarters in dubai. i'm manus cranny with john mckenzie. it is daybreak europe. the stories that set your agenda. the f.d.a. gives full approval to the pfizer vaccine raising hopes for sustained economic reopening. asian stocks follow the u.s. higher chinese tech after

beating on sales and kamala harris makes a major foreign policy address. she blasts china but says the u.s. won't force its allies to pick sides. welcome back to the show. welcome aboard tom mckenzie. in theory we do things a bit different. glad to have you with me on daybreak europe. what have you got? there is a structural shift. we moved from this real anst about markets with some kind of ease. perhaps a taper from the fed. i think there is a shift in the gears tom from the kiwis, the fed and of course the chinese. >> yes, of course. interesting to hear from the pboc governor drawing together having a meeting with the banks there saying we need to be sure there is adequate credit supply. as we said in the head in the

headlines credit slowed quite a bit after july. there is a strong pickup for those market weight companies like ten crept and alibaba. -- 10 cent and alibaba. >> fool me once, shame on you. fool me twice, shame on me. seven day moving average of delta is rolling over. so will the fed be brave and look through the delta narrative which is drive now and go ahead with the taper. there you go. those are the ground zero in missouri. a number of other states as over 56% to have u.s. is now

vaccinated. tom, good morning. >> welcome. good morning. thank you very much indeed. so much of that is reflected in the commodity space as well. w. tirvetion higher as well. the sum of that, the assumption after the reopening is starting to kick into gear. maybe as you say, we are reaching peak covid. all eyes will be on jackson hole toward the end of this week. whether or not we hear any details from jerome powell. checking on the marks as we get underway here. it was across the board in asia where you're seeing that strength buyback on evaluation opportunities there. the tech up 4%. u.s. dollar essentially unchanged. of course that is benefiting some of those stocks and equity markets. s&p futures seeing gains there of .02%.

very solid upside there. after a significant selloff earlier this month. it seems that maybe as a result of this support from the pboc you may see more liquidity directed toward real estate. >> we'll talk about that policy shift maybe overall in china in just a moment. to the u.s. regulators. given a big boost to the vaccination drive with a full approval. that has given the markets a bit of a lift, a shot in the arm prejackson hole symposium. it was at that event jer ole powell wrote out the inflation framework. questions are being asked whether the program is backfiring as prices spike. a former new york fed president

said he would support him for a second term at the fed. >> he has done a terrific job. i think he has articulated what the fed policy is very clear, consistent way. i don't see any reason why he won't be. >> our guest from -- delta. this seems to be a building narrative. do you and will the fed look at that chart which suggests that -- the seven-day rolling average is down. are we at peak delta and have we passed peak anst? >> we think we're close there. we monitored the models quite

closely to see what they are predicting on this front and they are lining up with what you're saying. delta should be peaking in the next two weeks and that should be a pretty good sign for the u.s. economy. we know delta hasn't had the impact of previous waves. there have been very few restrictions and lockdowns in place. indoor dining, travel has been vg hit. it is still a little high but maybe a little too early for the fed to rely on this but the direction at least is positive. >> of course the fed will be -- the data we're getting out of the u.s. there has been a mixed picture. how do you think that'll play out? >> you're right. the data has been -- of course we got that retail sales report last week and then a ticktown in the p.m.i.'s as well.

from a fed perspective it is about how do you marry that data with the leading data and how do you look at the outlook for u.s. economic growth. obviously we're in a recovery faze. obviously we're going to -- transition. we're going to see data that is going to be trending down. we went from one state to the next. that tapering is what makes it so hard. do they announce they are going to start tapering in q4 or be a little bit more relaxed and a little bit more cautious and go for that q1? we think it is the latter. with the data coming in a little below expectations and delta still with a bit of uncertainty they are going to hold off and start in q1. of course we're going to find out perhaps on friday. >> as you said, for it doesn't

structurally matter whether they taper at the end of the year or the following year. to what extend do you think you'll see the 10-year yield rally and come out and inlittle bit in any damage on the equity stories. they said the taper will come it won't inflect damage on the equity narrative. do you agree with that? >> parking lotly we do. the tapering decision whether it is qump 4 or qump 1 q4 or q1 doesn't matter that much. probably more important is the state of inflation. we have already touched on this. there is quite a above it uncertainty as to what that more organic level of inflation is. we're used to having core inflation around or slightly below 2%. currently we're running far above that. what happens when all of those transitory covid factors drop

out. we're trending at 2%, 2.5%. that would put slight upward barometric pressure on that 10-year rate. the inflationary backdrop is the one we're watching more closely. the growth outlook. >> inflation still primary in terms of that focus rather than the question about the taper. thank you. you're going to be staying with us. don't miss our coverage later in the week from the jackson hole symposium. let's get the first word news with simone foxman. >> thanks, tom. good morning. the evacuation from afghanistan is set to dominate a summit with boris johnson today. fears grow the cutoff could

create further chaos. the taliban says the date is the red line and will take action if soldiers are not gone by then. >> the question is are we on track to fulfill our objectives of this operation to bring out our people, so many of those afghan who is helped us and so many of those afghans at risk. we believe we are. >> the u.s. vice president says beijing poses a threat to countries in asia and is using coercion and intimidation in its territorial claims in the south china sea. freedom. >> our engagement in southeast asia and the and the pacific is not against any one country. nor is it designed to make anyone choose between countries.

instead, our engagement is about advancing an optimistic vision that we have. for our participation and partnership in this region. >> campaigners have singled out the big accounting firm for failing to highlight green issues as protesters gather in london. hundreds of extinction rebellion supporters assembled monday as they started two weeks of protests over climate change. they said account apts are complicit in green washing. global news 24 hours a day and on bloomberg quick take powered by more than 2700 journalists and analysts in 120 countries. >> coming up, the pboc vows more credit support for the economy. this is bloomberg. .

♪

>> we have seen the regulatory compliance happen every three or four or five years. obviously the markets sell off at the time. quickly afterward the markets have recovered and gone to new heights so i think we have got to look at this process that we chinese regulators are going through in the prisonle of the last 10 -- prisonle of the last 10 years. there has been a lot of -- in china in terms of lack of compliance. lack of regulatory oversight. we criticize them on the other side as well.

manus: henry fernandez, chairman and c.e.o. of msci. you landed in london. you brought the goodwill with you. a lot of this is predicated on the pboc, the vow to keep the credit flowing, to bounce at those credit impulseses. look at the five-year correlation and the credit impulse is 45%. tech is roaring higher. you have some of the names on that. the csi had the bounce back. will it endure? tom? tom: almost all of the analysts are saying there is a lack of transparency along the regulatory framework. two key things coming through this morning from china. the fact that there has been some bit buying around the technology space. some very solid gains for the

and topping the list on the hsi. tencent, alibaba coming out with earnings that beat expectations and suggesting that maybe the impact of this squeeze from china is not going to have as detrimental impact as some have said. you see some solid gains. how long will this be sustained? alibaba down about 30% year-to-date. manus: the pboc is vowing to stabilize the credit and boost the am of money supporting small businesses. that is after growth slowed in july. northern trust asset chief strategist. what is your view on what we'll be hearing? it seems like the pboc have been trying to moderate their stance as the data comes through and they are data dependent in china of course. suggesting there is going to be

more support for s.m.e.'s and the economy. >> this is good news. something we have been waiting for. there is the regular story story and the monitory monetary and fiscal policy story and in china they are closely linninged. as the positive development. we have seen the real activity data come in below expectations and knew the chinese government was getting close to being uncomfortable with what was happening there. they wanted to keep -- the olympics coming up in 20 22. easing is often -- and tapping the gas a little bit is a good sign for the chinese economy and a good sign that policy is

diversifying from being tight on the policy front and tight on the regulatory front and looser on the policy front. manus: are you brave enough? i look at some of your allocations. you want to be high yield europe. are you brave enough to scale in or how do you look at retaking china risk? nothing in china. she accepted in and bought some jd.com. when she swings money around, people notice. are you as brave as kathy wood? would you take on china tech risk at the moment? >> at the moment we think it is a little too early. it feels like a bet, like a gamble opposed to an investment. you don't quite know when it comes to this regulatory tightening. we don't know if the equity

selloff was enough to really sharpen their minds or whether they feel that that is just the price they are willing to pay to reach the goals that they set out. remember, they have been very clear how they want to restructure the society and how they want to lower income and wealth inequality. that doesn't happen overnight. regulatory tightening is not going to disappear either. it is about managing the balance and clearly the balance has gone in one direction. now they seem to be going to the middle. but the uncertainty is still very high there. we're not taking that yet. tom: too early to dip your toe back into china. our guest will remain with us. coming up, oil steady after its biggest surge in months. iron ore jumping as investors look for more stimulus in china. all of the latest commodity

moves next. this is bloomberg.

tom: welcome back to bloomberg daybreak europe. i'm tom mckenzie in london with manus cranny in dubai. oil jumped more than 5% yesterday. it snapped its biggest losing streak since october. jason. why is oil doing so much better this week than last? >> i think primarily the market is taking a lot of comfort from the fact that it look like china has brought the latest downbreak in the delta variant under control and that can only have

positive impacts on things like fuel demand and somewhere down the lined the demand for jet fuel as people start traveling a little bit more. manus: it is a heck of a bounceback but very closely linked with the china story in terms of mobility and the dollar as well. they seem to be two of the biggest drivers that have taken over this week week. >> yeah. i think we're starting to see more congestion in some of the bigger cities in china in beijing and shanghai so people are getting out and about. the delta outbreak about a month ago and some of the travel restrictions were tough that did cause demand restriction in the market. that is receding. there are other localities in the world that are getting hit hard by covid. when the market such as china starts to merge and things look

brighter, that is going to add some dollars to the price. tom: thank you for updating us on where things stand in term turnovers oil complex. northern trust asset management strategist. what is your view on commodities whether the gains that we have seen this week can be sustained and what in that complex is looking most attractive to you? >> sure. so really this week is also a bit of a reaction to the very tough weeks with have had leading up to this. they have recovered and that is good to see. we are overweight asset class and it is still a good place to be. we like to take that exposure through equity exposure and we take positions in commodity companies opposed to the future complex. we find that much more

attractive. you get i had thes opposed to a headwind. if you look at the underlying complex it is about the underlying growth picture and what's happening in the u.s. and china. that's why we think there are still gains to be made including in the energy complex. manus: in terms of the spread that you want to have onboard, is it the metals? the miners miners, big oil or are you a little bit more worry because of the green agenda? the new narrative in terms of energy? >> sure, so from a sturl basis, we are definitely a little bit more cautious on the energy complex that is based into our view already on the strategic and we don't think it will to away. we are already structurally

overweight. more metals types of exposure and things like water which we think will be long-term very important as well. we already have that baked into our views and that is part of where we think our exposure is at the moment. tom: how much of this is dependent on china ensuring there is a flaw under growth that is continuing to slow in that country? how dependent is that view on an increase in infrastructure spending, for example? >> the the infrastructure side of things is an interesting point. we think that is dpoang to be a very modest but still a positive impact on the natural resource complex because there will be a little bit more demand for those natural resources. you're absolutely right. from a global perspective, china is still the major player. we need to acknowledge that they are a demand source of choice for many of these commodities and if china goes one direction so does the commodity complex.

we want to highlight we think from a chinese growth per spiivet we're transitioning from that recovery faze to that organic faze. it is a matter of managing the transitions from volatility and the data that that brings. china is easing off and getting a little bit more supportive on the fiscal and monitory side. that's why we think commodities and natural resources is a good place to be. manus: thank you for being with tom and i this morning. northern trust strategiest. check on the equity market futures. morgan stanley, casinos, theaters. we'll talk about the chart in a moment. morgan stanley not selling at

the moment. tom: a couple of drivers from china. that bit buying pushing stock much higher. stay with us. this is bloomberg. ♪

>> good morning from bloomberg's european headquarters. it is 6:30 p.m. this is bloomberg daybreak europe. here's what you need to know. vaccine boost. the f.d.a. gives full approval to the pfizer vaccine raising hopes for sustained economic reopening. asian stocks follow the u.s. higher. the p.b.o.c. vow toss stabilize

the growth of credit after there was a slow growth in supply. and kamala harris makes a major foreign policy address. the vice president blasts china but says the u.s. will not force allies topic sides. so if you were looking for capitalist ins these market, a few have start toed come through as you rightly "sportscentered" out -- as you rightly pointed out manus. the f.d.a. approved the pfizer shot and private enterprise ins the u.s. have been pressure todman date those vaccines. support from the pb of courser c and some very significant bit buy, the lixivialy ba ba. jurisdiction . com all significantly higher some gaining 10 fors or more. the index with very solid gains

with more than five percent, manus. manus: it shows you what this will pose for his cohorts. whether it's in arizona, missouri, flea and l.a. we'll have a look at that time chart which is we're rolling over the seven-day averages. yes, the unfortunate reality are the number of deaths over 1,000 a day, tom. but this is the challenge, isn't it? it's whether you have a more nuanced paper on the head winds of delta and covid? or do you believe that we are at peak? fool me once, shame on you. fool me shame on me. and fool me three times --

tom: their not taking their eye off the ball the slowdown from china in the back of the pandemic, we know that's been coming through. but this is a reminder from the pb of courser c's governor egno their looking very closely how the growth dynamics are playing out appeared their ready to step in to support that slow down and make sure it doesn't become too pronounced. looking at gil: of 6 fors or more. officials say their well on track for that. that is the line at the pb of courser c. manus: i learn something new every day. i need to know what cyclicality means. the index ripping it up over 5.6 fors. jurisdiction . com is one of the big alpha stories there. cappy wood buying some

jurisdiction . com. that's a big line in the sand. while our guest said it's too early for him. iron of courser re up 5 fors. all of that is predicated that your going to get this support from the p.b. -- pb of courser c it's all about the local. tom: what a switchup there to deals here in the uk particularly among the retail space. we may have noticed this yesterday, rose as much as 12 fors yesterday after a rotter that they could be taking a look at britain's second largest goerges amid wider con is diggs. for more, we are joined by charles allen. thank you for sharing your views on this. why do the uk supermarkets seem to be more attractive than to

stock market investors at this point? >> yeah, good morning. the main reason for that is that after this sort of pandemic which sort of messed up the business model temporarily but did show that there was a lot of loyalty to super markets we're in a position where the supermarkets are looking at fairly low growth. expectations are only for 3 fors or 4 fors over the next two years. but the cash flow is very strong and therefore, you've got stock market investors who want growth. but you've got other investors, private equity investor who are looking at the cash flow and the flow of income that can come i think that's what's attracting those investors to these super markets. tom: charles, a very good day to you. i mean, the whole local, sainsbury. define what the appeal is.

it's a cash flow. what's the ambition there? what do they do? do they bring it back to the public markets? what do you think the objective is? >> well, sainsbury is different than mo yous because the acquisition of arg of courser s. and i think the pandemic made that a different situation for an investor because that's an incomplete consolidation. there's still some way to go on this. but you've got arg of courser s that essentially will be brought within the sainsbury storms that will make them more productive and you've got the outreach to consumers a general merchant knows that it can potentially grow that business or an investor can grow that business in a way that

asbestos beyond the food business. so i think sainsbury has a dynamic that could -- it's not certain it's going to happen because there's a competition in both food and general merchandise that could make it into something different from what sit now. manus: so that digital proposition given a boost as a result of the babb demic what -- result of the pandemic you could be looking at three of the big four supermarkets at some point in the line being in the hands of private equity. yeah, i mean, i think the the assumption that they all have are the conditions are going to be main relatively benign. appeared that you've got this flow of cash that will continue to come to pay off their investment. but i think history tells us that when you see super markets expecting benign conditions, you get someone who chooses not to

make them benign appeared that could be tesc of courser or probably more likely the german dis counters aldi and little. they could see this as an opportunity to move their market share up from where it is at the moment about 14 fors collectively, you know, up to where it is now and well above 20 fors so you could see the, you know, quite an aggressive price fall that would make the cash flow more problematic for a while. manus: charles, allen at from bloomberg intelligence my question is tom mckenzie. how many years did you live in china? charles: five and a half, manus. manus: did you miss wetr of courser s or sainsbury more. charles: that's the reason we go backing. i have you down as a watr of

courser s, manus, through and through. manus: yes, tom: one of the first things we went is go to watr of courser s. the supermarket in china is not top-notch it's getting there. you have some very high priced supermarkets. it was one of our highlights. it's true. manus: let's get the first word ton news, shall we? what do we got? >> thanks, manus. the evacuation from afghanistan is set to dominate a virtual g-7 summit convened by boris johnson today. with a week to go, the u.s. is facing deadline toss extend the deadline for leaving kabul. the cut off will create further chaos. they said that the date is a red line and they will take action if soldiers aren't gone by then. u.s. president joe biden says

full approve of the bi of courser ntech pfizer vaccine job should impose requirements for staff. the f.d.a. granted clearance for the shot for people 16 and older as u.s. averaging daily covid deaths topped 1,000 for the first time since march. it's first vaccine to be fully approved by u.s. regular or thes richard branston -- branson's virgin of courser rbit at $3.2 billion. the merger is expect toed provide the new company with $44 million in cash bolstering the capital until regular launching operations are expected in 2023. boeing will put $100 million into the company. global news 24 hours a day and on bloomberg quicktake powered by more than 2700 journalists and analyst ins more than 120

countries. this is bloomberg, manus manus: simone, thank you very much. well, the vice president clam harris has warned that china pose as threat to country ins asia while reassuring countries that the u.s. won't force them to choose between the biggest economy. she made this announcement in east asia where she rehitted the u.s. to the international order. >> in this region, we have long put forward a vision, of peace and stability. freedom on the seas, unimpede commerce, advancing human rights, a commitment to the international rules base order now as we face threat toss that order. i am here to reaffirm our

commitment that vision. manus: let's get oderick. decker, kamala harris, do you think she did enough to reassure the allies in the region? decker: well, think that's the big question, isn't it manus. mung who is in aaddition to being rhymes to singapore is and as tuitt performer of world politics. who said look, the u.s. relationship with southeast asia has been fairly constant for the last 70 years for good times and not so good times. but the real key is that partners and allies are going to look at what it looks like in the future to make that judgment. it's not going to be necessarily that -- that some official or

multiple officials as the case is now comes to southeast paetsch sha and everyone says, oh, yes, everything's fine. let's move on. their going to have to wait to see what actions ae. for the time, i think that allies and partner ins the region are taking the u.s. at its word but their looking to make sure that it's backed up by actions going forward. from here, clam harris go to vietnam where there will be more questions being asked because street snapple in a much different state than singapore is because of the pandemic manus: there are some action that is reinforce the rhetoric and some that undermine. the action haves urnedmined some of america's rhetoric when it comes to commitment to what extent is afghanistan still hanging over this trip? >> it is the issue hanging over the entire trip. i mean, look, i don't think -- this trip was planned well

before the afghanistan stuff came out. and before that situation deteriorated. this was suppose toed be a pretty straightforward, pretty easy trip. singapore isn't a global geo political trip hazard. vietnam isn't particularly tricky for the u.s. these days but afghanistan is the thing that's looming over. it's first question that's getting asked. it's getting brought up in the introductory and remarks before harris speaks it is just sort of the context in which the whole thing operates now if you go and ask these countries as though, as i said i mentioned vietnam. vietnam's number one concern is the united states. the issue that they have in vietnam among others is that covid is shutting down factories boastless an ongoing outbreak. so if clam harris walk ins there and we don't know what the deliverables are. but let's say she walks in with a meaningful amount of vaccine

commitment to offer and she's goes something to offer there, that would be something that they would want to see let's see what they actually bring forward even though afghanistan is the frame, it's not the outcome for these countries. >> no, but it's certainly dominating the agenda, decker, isn't it? among the g-7 being convened today and the lines -- afghanistan is the biggest foreign disaster since suez. thank you very much for the latest on vice president's clam harris's trip. coming up on the show, hedge funds getting off to a hot start. investors risk missing out. more on today's "bigtake." this is bloomberg.

a strong written about red balloons what tease turn about? welcome to the show. >> thanks so much, manus. hedge funds really having a bit of a renaissance best start going back to 1999. after a real struggle as you mention to keep up with those index trackers that central bank policy snapping volatility that simply

speaking those hedge funds relied on. but a stark reversal in 2020 and the pandemic helping out the hedge funds their able topic their stock winners and stock losers during the babb dem -- pandemic. we had some record low years. that had investors serging where to put their money for better returns and hedge funds as a big beneficiary of that. investors took note of that. we had asset that is were stagnating for several years. but then we got a big surge up in 2020. so that really helping the hedge funds out there. their actually taking the hedge fund industry to about $4 trillion at one point. but while their make ago come back, the question is really whether it's just a bit too late for investor toss get back in on the action because we had over 1 ,000 head funds. that was a record and included the famed breven howard which

closed its doors to new money so that really helping them there as well don't forget we have some other risk on the horizon. the pandemic, that could reverse some gains. china cracked down that could induce a selloff as well and tech stocks which could start to reverse that could be a big risk for the hedge funds as well. tom: on -- well, thank you very much indeed. they suspend their plans to challenge uber in europe. the details are next. this is is bloomberg.

that's where we are. and whether we're attend of that in the middle of a cycle. and whether it's a catchup or more to come. john liu, our executive editor for china joining us there. and tom, let's set out the agenda for the day. we've had one part of the theater. we've had kamala harris, really going hard on china, one could say but not putting their -- their relation ins a hard place. you've got to choose between china and us. this is what else with -- we have. we have the paralympics. >> yeah, indeed. just to rehit ate in what's

going on in china, their rip roaring higher. that's worth paying attention and there's this debate whether china is investable. you've seen alibaba screaming higher. some of that is on the back of the more positive result that is we got jibbed from jurisdiction . com. the pb of courser c support ins terms of credit. we continue to look ahead to jackson hole. and whether or not we get more clarity. there you can see some of the pricing action around chinese tech. manus. manus: big moves, tom. you've got brent and wither t.i. along with iron of courser re. the question that i think for the markets is this, as you saw

local case toss zero in china yes, goldman sachs says that oil markets are oversold that the spreads have overshot too much on the dime side. your going to retouch $80. that asbestos it from tom and i -- that's it from tom and it i'm off on holiday

>> by christmas? >> hopefully even sooner than that. of course, i don't really know. it's really hard to predict, you

know, how their thinking about it. ♪ >> good morning. welcome to bloomberg markets. i'm anna edwards leave from london our managing editor joins me in singapore to take us through all of narcotic action. -- through all of the action. the f.d.a. gives full approval the pfizer vaccine raising hopes for a sustained economic