haidi: welcome to "daybreak asia ." i am haidi stroud-watts in sydney. sophie: i'm sophie kamaruddin in hong kong. shery: good evening from bloomberg's world headquarters in new york. i'm shery ahn. our top stories this hour. asian stocks set to open off the back of new wall street highs. trading was thin head of jackson hole. where u.s. employers say get shots or get out.

goldman sachs, disney, and chevron among the companies imposing vaccine mandates. we speak to bret taylor after quarterly revenue surges on a jump in corporate spending. haidi, u.s. futures trading muted right now and this after seeing another record high, the 50th record high for the s&p 500 this year. the most since 2017. the caveat was that we are ahead of jackson hole so we continue to see these lighter volumes. haidi: lighter volumes when it comes to the recovery in chinese adrs as well and we you this kind of cycle where we get a week lead from here in the asia session and that tapers into the u.s. as well. if you take a look at the amount of influence we are seeing, there is some fatigue and that rebound trade. we saw the china index looking pretty flat by the end of trade. in the last close. it is certainly starting to fade. shery: haidi, i'm super excited

today because it is bok rate decision day and i cannot renumber the last time i was excited about the bok policy decision and this is a coin toss. we are talking about 10 out of 19 economists surveyed by bloomberg seeing the bok holding given what happened with the rbnz potholed last week and we have virus cases, a different situation from the july policy meeting, but household debt is setting new record highs so it's really, really a headache for bok policymakers right now. haidi: and that currency could be a headache. maybe too much of a good thing. worried about capital outflows, worried about the impacts on foreign investors as well so they could be primed for a pretty good job with the won at a one year low going into this decision but we have lots of big interviews ahead including conversations about the bank of korea but before that, this hour, president brett taylor will be joining us after the company saw quarterly sales jump

and we will be talking through qantas's earnings with the ceo, alan joyce, and an indian technology company will be sharing the details of their funding round but let's take a look at the set of when it comes to this thursday session in asia. sophie kamaruddin is in hong kong. sophie: futures looking mixed mostly lower. ping an as well as cosco. qantas and focus in sydney. the carrier flagging the return of overseas flights and optimism after reporting a second annual loss. in wellington, kiwi stocks under pressure with air new zealand shares slightly under pressure after suspended guidance following a back-to-back annual loss. in japan, the airlines cut flights on 12 domestic routes as the country expanded the state of emergency. a be official -- the rj official warning of a contracted recovery but there is optimism over vaccinations in japan which has yen bears noting the currency

around. flipping the board, emerging currencies got a lift wednesday heading into the jackson hole symposium with strategists from hsbc saying they are better able to handle a taper tantrum. high reserves and low external debt seen as buffers are the thai baht -- according to could agricole, sheriff. -- shery. vonnie: president biden urged businesses executives to improve cybersecurity across critical infrastructure and the economy. meeting with ceo's from companies including apple, alphabet, and j.p. morgan, the president said the cybersecurity workforce is not going quickly enough. recent cyberattacks hit infrastructure including colonial pipeline and jbs as well as microsoft and solarwinds. antony blinken says 1500

americans are still in afghanistan. he says the u.s. is relentlessly trying to reach them but does not believe all of them wish to leave. evacuations must end within the next few days to allow enough time for remaining troops to pull out by a president biden's deadline of august 31. lincoln emphasizes -- >> it is hard to overstate the complexity and danger of this effort. we are operating in a hostile environment in a city and country controlled by the taliban with the very real possibility of an attack. vonnie: israel's new prime minister will oppose u.s. led efforts to revive a defunct iran nuclear deal during his meeting with his president at the white house. he communicated this. in a new york times interview, he says he will assert his country's intention to continue attacks on tehran atomic program and he also says his coalition government will not reach a peace agreement with palestinians.

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. shery: u.s. companies are following through on president biden's push for vaccine mandates. some of the biggest institutions have already announced tougher rules within just a day of the biontech approval. let's bring in our san francisco bureau chief, carol. will these be the game changer to getting unvaccinated people these shots? carol: a lot of these employers are thinking so. surveys showing that more people will be willing to be vaccinated because they are hesitant that they have not had full fda approval and now that this is expected to bolster confidence. more companies are falling in line. delta came out today doing its

own form of not quite a mandate but a penalty for workers who will have to pay 200 dollar monthly surcharge if they don't get a vaccine which is something of a punitive measure. more players are being emboldened perhaps, the idea that this could get more vaccines out there. haidi: after the full approval of the pfizer shot, how far away are we when it comes to the booster shot and the moderna vaccine as well? carol: moderna came out today and said it completed its application process for full approval which puts it in line. it will take eight months but the fda has fast-track to these approvals and they are hoping it can be done in half the time. in terms of boosters, johnson & johnson came out with data saying that the single-dose shot significantly increased antibodies to covid-19 and

answer the case that there should be a stir shot for j&j so that is something fda officials will also consider. haidi: it seems like we are no closer to getting any more clarity on the origins of the virus. carol: -- kara: that's right. today, we had a group of scientists to study the origins, pleading for support. they have gotten criticism for allegedly failing to investigate the lab leak theory so they are issuing an urgent plea that may support -- the window of opportunity is closing fast. the more time goes by, the more difficult it is to gather evidence about how the pathogen emerged. haidi: kara watzel with the latest on the virus on the vaccine front. investors are waiting jackson hole and we will discuss expectations for fed chairman jerome powell's messaging.

western digital reportedly in talks to combine with japan. we will take a look at that deal, next. this is bloomberg. ♪

shery: the countdown clock to fed chair jay powell's big jackson hole speech on friday continues. kathleen hays is here with a preview. what is in focus? kathleen: one of the most read stories on the bloomberg terminal today is positing that the big fed taper question now is not when it starts. it is when it ends. take a look at this chart. when the taper first started in 2014 -- 2013 is when ben bernanke gave his signal it might be happening -- but the actual tapering ran for two years in the middle of 2014.

much more than two years. you could see it was pretty quick to wind down. anyway, the question now is, if you have got a stock market that has been rallying with all its liquidity, a bond market that has yields near six-month lows, then maybe it will be very sensitive not just to the start but how long it lasts. does it stretch out for a long time? this is a different economic recovery from the great financial crisis, the great recession, because it was a long time to get gdp picking up and the fed could never get inflation to the 2% target and keep it there. inflation is about target, we have a very strong rebound. it may be a little bit hit the virus but the question is what will jay powell say about this? you don't want to go too slowly and let inflation get stronger but you don't want to derail the recovery. chris waller, jim bullard, president of the st. louis fed, has said in the last couple of months that we are ending the taper rather first quarter and that would be a lot quicker so that is the question now.

what will be here from jay powell? is he ready to give us something as specific as that? haidi: kathleen hays there. we will be hearing from a slate of said presidents during the jackson hole symposium and that includes esther george, rothschild bostick -- raphael bostic, and loretta mester. our next guest says the key risk to this week's rally are any hawkish commentary from power. joining us is the cio at bluestone wealth advisors. lots of concern over inflation overshooting the fed's expectations so what kind of balancing act is jackson hole for the fed chairs? bryan: all eyes are going to be on fed chair powell's comments with regard to taper talk and inflation commentary. i think what you see in the past few days in there's been a strong. on risk assets and growth assets

in particular given a lot of investors are getting ahead of what they believed to be a slightly more dovish tone from said powell, given the delta variant in its resurgence in covid cases. haidi: where are the investment opportunities for you at the moment? we are seeing a return to growth, a return to text. is there a bit more appetite for reopening trades given it does not seem like delta is going to lead to widespread lockdowns again? bryan: here at bluestone, we have taken a barbell approach and invested on both sides of the coin. in the growths, technology driven companies, and also the reopening plays that will benefit from the economy defrosting and continue to grow out of the cobit shutdown. you know, 2021 can be characterized as the bond market dictating the direction of the equity market and thus far, it has gone back and forth so we feel like our strategy is the

best way to approach equity markets and participate in both sides of growth and value. shery: yet when it comes to the bond markets, those estimates for the 10 year yield come year-end are so wide-ranging at the moment. where do you put the credit markets and how that is going to affect stocks? bryan: the credit markets are trying to figure out where they want to settle in here. you know, we were bottomed out around 1.153 or four weeks ago and here we are north of 1.13 today, so we have been relatively range bound and i think the equity markets just want to see some sort of direction and we stabilize in this sort of range that it would be constructive for equities. in terms of investing in the fixed-income side of the book, we are not necessarily calling a direction for rates but we continue to tell our clients that the path of least resistance is rates heading

north at 2%. when that happens, nobody really knows but we feel like the risk-reward is not in your favor for traditional fixed income today. shery: what is your outlook for inflation and how that will affect margins at different s&p 500 companies given that we have seen those margin pressure outlooks really impacting how stocks perform during this earnings season? bryan: that is one of the key topics i will be focusing in on on fed policy statements on friday. if he continues to tell the market he believes inflation is transitory or if he starts to tell investors that they should be prepared for structural inflation here. we have seen pockets of the economy in terms of inflation or to tip over in auto and lumber but other parts of the economy continue to stay at elevated inflation levels. shery: bryan lee, great to have your insights, bluestone wealth advisors cio. coming up next, salesforce

reported its second-quarter earnings which included a strong gain in quarterly sales and boost to its forecasts for annual revenue. we will speak to the companies president and ceo, next. this is bloomberg. ♪

shery: salesforce has posted a strong gain in quarterly sales with revenue in the second quarter rising 23% $6.3 billion and it boosted its annual revenue or cast, a sign that businesses have accelerated spending and they are buying a broader array of products. let's look at the outlook with brett taylor. thank you so much for your time today and congratulations on the results. so what products did well in the quarter and what disappointed? >> really, we saw strength across the board.

the demand environment was so great with so many companies invested in digital technology and it is because, especially with the delta variant we were just talking about, we are in all digital, work anywhere world. the company agenda is to get back to growth and that means investing in digital sales, digital customer service, digital marketing, digital commerce, and digital hq, which is our new acquisition and we saw healthy acceleration across our whole portfolio and every customer in the world looking for their digital customer 360. how can they connect with their customers in this new economy? shery: especially as we continue to see the delta variant spreading an affecting the return to office scenarios for can you give us an update on what is going to happen to your conference? bret: that's a great question. it changes every day. we are responding to new medical advice. i will tell you one thing, dream force is primarily a digital event this year, like it was last year.

i'm really happy we will be able to welcome hundreds of our trailblazers in san francisco to watch the keynote. it is not hundreds of thousands like once was. we are investing in our digital experience for all of our customers. we are training all of our customer teams to get personalized digital dream forces to our customers. i'm looking forward to the days we can have hundreds of thousands of people. we are focused on digital. this is the digital transformation. dream force is included in that. haidi: other than the pandemic, the other great challenge when it comes to your business has been cybersecurity and geopolitical security as well. i'm wondering how the cloud business is prioritizing that aspect. bret: as you know, trust is our number one value at salesforce. we pioneered in the cloud and when we did that, trusting a technology company like salesforce with your most sensitive data has always been about security, about trust,

about compliance, and now, as the whole economy has gone digital, it shows you there is no finish line it comes to cybersecurity. really grateful for president biden putting a focus on this and i think that we are really grateful to really be i think a pioneering company, having the cybersecurity conversation. it has always been our top investment from an engineering standpoint. it is one of the most important conversations we are having right now. society has so much running of digital technology. haidi: what would happen if salesforce was hit by a ransomware attack. are you confident that there are tools in place to circumvent that? bret: we invest and have a sophisticated approach to technology and i cannot comment on hypotheticals but what i will tell you is securing our customers data, ensuring that when one of our customers puts their trust in our platform, that is the highest level of

trust available, our first priority. shery: tell us a little bit about your business in china, that partnership with alibaba, given all of the regulatory reforms yes in that. bret: i will start with talking about a little bit of our international business. we have seen just tremendous growth of the united states. it has been compelling salesforce's growth and that really continued. our chairman and ceo is in switzerland today at the world economic forum, meeting with many of our european customers and as you mentioned, we have a partnership with alibaba so we can serve multinational companies that also do business in china and it is an important part of making sure we can meet the needs of our most complex customers. haidi: talk to me about the latest plans when it comes to return to office because we have had to see a lot of agility, if you will, amongst so many corporate having to change. has that been the case for salesforce? bret: it has.

reopened over half of our offices globally and i have been coming into salesforce in san francisco as often as i can but with these variants, we are not seeing a lot of people show up. we are seeing that across our base. the first thing i almost did was plan my office space. if i was starting another company today, i would not start with my digital -- physical office space but my digital hq. every white-collar company is having this experience right now, really this surge investment in your digital infrastructure and that it's really why, as you mentioned in the opening, why we are seeing such amazing revenue right now, such an acceleration in our performance is an investment in that digital technology across every line of business. sales, customer service, marketing. and with technologies such as slacks, the digital hq can connect employees at home, at an off-site.

i think this new world that we are in right now, the pandemic is not going away. these are as important a part of the employee experience as part of real estate. haidi: what are you doing intensive -- in terms of investing in people? bret: we are hiring like gangbusters all around the world. with so much opportunity for us to grow our employee base around the world, it is remarkable. we hired tens of thousands of people, many of whom never stepped foot into a salesforce office, something i could not have imagined a couple of years ago, and it's all about investing these tools so we can feel connected even when we are not together in person and that means tools like slacks and our employee engagement abilities. every company around the world, when you are onboarding employees, you are enabling them, infusing their culture with new employees. you need to do that digitally. we are figuring out as we go, like so many companies around the world, and now that slack as part of the portfolio, one of

the things i'm so excited about is such an amazing vision for what a digital experience can be. i'm excited to bring that vision to all of our customers over the course of the year. shery: you only allowed vaccinated employees back into the office so far. will salesforce have a full vaccine mandate? bret: right now, we are encouraging all of our employees to get vaccinated. we are really trying to encourage a mandate. when he think about reopening offices safely, your choice impacts your colleagues and you recognize that, which is why we started with that lessee. haidi: great to have you with us, as always. bret taylor. let's get you a quick check of the latest business flash headlines this hour. xiaomi is buying a startup for 77 billion dollars, looking to propel its ambitions in the ev market. the smartphone maker says deal

after revenue beat estimates jumping 54% to $13.6 billion. the venture could help shorten the time to markets for its first car, initial investment of $10 billion over the next decade to break into the ev space. china life insurance junk in the first half as they boosted investment returns. net income climbed 34% to $6.3 billion. china's largest insurer said slow pandemic recovery was putting pressure on growth with sluggish demand from long-term policies. new business values -- that fell to 19%. china evergrande is expecting first-half profits to drop 29% to 39% from one year earlier as it fizze -- fixes its debt problems. the world's most indebted developer since it will do its best to maintain stable operations and resolved at risk.

coming up next, it is a coin toss for the bank of korea. economists split right down the middle on whether the central bank will be the first in asia to hike rates. just a couple hours time until that decision. this is bloomberg. ♪

vonnie: this is "daybreak asia." pfizer and covid-19 vaccine partner biontech are seeking full approval of u.s. regulators for a booster shot for people aged 16 and older. the companies already announced they started an application with the fda for a third dose. reiser and biontech say they plan to complete submission by the end of the week, bringing them one step closer to clearance. yoshihide suga has expanded the state of emergency to cover more

than 70% of the population. the delta variant surge has led to a record number of cases and is straining the medical system. the curbs include the tokyo and osaka metro regions which will run until september 12. the move comes as japan hosts the paralympics and as suga's support drops to record lows. bloomberg has learned the latest soon to be released u.s. intelligence report on the origins of covid-19 is inconclusive as beijing warns a retaliation against those questioning whether the virus leaked from its labs. china's foreign director general made the comments ahead of the report's release. he says while beijing will cooperate with groups like the who, detractors should be prepared to accept the counter attack. the w.h.o.'s backing a proposal to set up a $10 billion and to plug the financial gap that the global system exposed by the pandemic. the global health fund is part

of efforts by finance ministers to double spending on health care and boost financial capacity to respond to future pandemics. singapore officials told the organization that global health security is "dangerously underfunded." global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery. shery: the bank of korea could become the first major central bank in asia to pull back on aggressive pandemic driven policy. kathleen hays is here with a preview. i feel like we need sound effects of vroom. kathleen: if the bank of korea moves today, they will be the first central bank to make this kind of a move and they are so much focused on the federal reserve. are they going to make a move by starting to announce using stimulus through tapering? let's

take a look at some of the factors. household debt is a big part. up 10 point 3% year-over-year in the latest quarter. they are getting bigger and bigger and bigger. in the latest quarter, that was the biggest gain since 2003. people are thinking when you have such cheap money, of course you will fuel the barring. employment down to 3.3 percent, inflation year-over-year at 2.6% . you have gdp just growing 6% in the latest quarter. it is a hot economy but what about virus cases? look what they are doing. they have risen so sharply. the vaccine rollout has been very slow. this is the biggest reason, the only reason about maybe the bank of korea is going to wait and see about how this goes through the economy. does it start coming down? can they put it behind them? governor lee said in july, when they were thinking about all of these factors, they would

discuss seriously a rate hike at the august 26 meeting. that is today. the rbnz just overnight practically had to decide we were going to hike the key rate. we learned may be a 50 basis point hike and they did not because of the lockdowns new zealand and the impact that could have on the economy. that is the big question now. haidi: the weakness that we have seen in the won, does that play into things? bret: you have to wonder. the bank of korea is coming and superhot. you have virus cases. maybe it would not be a bad thing to do a rate hike, especially when you think the fed might start tapering bond purchases. our bloomberg intelligence team has a metric of covid resilience and it has to do with investment portfolios, the amount of global investment, and the idea that if the fed starts tapering, they could start removing capital from korea. here is two very important things about the charts.

there is a margin. that is not going to hike rates right away but moving stimulus would be a form of tightening and look at this. the bank of korea was among the first in asia of central banks start tightening in 2017. they do not mind getting out ahead. what the team concludes is that the bank of korea has lots of foreign exchange reserves. the most effective thing for them to do would not be necessarily to hike tea rates. it's to do currency market intervention and that is a very interesting argument and probably governor lee and his team are looking at the same thing. haidi: kathleen hays ahead of that really big implications from the bok decision. you can turn to your bloomberg to get more on this. tliv for the commentary and analysis from bloomberg's expert editors as we get towards that meeting. we will have more analysis when it comes to the bank of korea as well in the next hour. bank of america securities

economist will be joining us right about the time that we get that decision. let's take a look at kyoto, the japanese technology storage provider. there's been talk that they have been in talks with western digital to combine in a potential $20 billion deal. we are hearing from them now that they are preparing for an ipo at the right time according to the spokesperson. they will not comment. there is speculation according to comments being given by phone. we have been hearing about this deal to unite them with western digital which could be worth more than $20 billion. the person familiar talking about that saying it could be reached by mid-september if these talks were successful. it appears to still be considering that ipo at the right time according to the spokesperson. let's get to the global supply chain crunch. it was meant to be temporary and now it looks to have a lasting impact into the next year as the surging delta variant upends

shipping in asia. enda curran joins us now. i was wondering about the longer-term structural dislocations, but now, it's really the immediate fear of the delta variant that is causing all the problems. enda: indeed, haidi. we spoke to a lot of manufacturers in recent weeks and asked them what is their outlook now as we head towards the end of the year and as dr. spreads like you mentioned? and the answer from all of these manufacturers is that they are preparing for the long-haul. they don't see these problems with shipping containers being resolved anytime soon and they continue to complain about shortages of key input materials for their products and there's ongoing disruption as they try and get their products around the world. we are going into the all important holidays for christmas shopping season so this is bumper time for consumers, manufacturers, and shippers. both of them are saying that there is a long jam and that will continue to have an upward pressure affect on inflation and

it will have a downward effect on the global gross recovery. shery: i was going to say, this inflation surge was supposed to be transitory so what are the implications for global prices? enda: i spoke to several manufacturers and they all made the point that they will be increasing their prices and they are for the wholesale buyers of their products so there's no doubt that pricing pressure does remain there. another theme to come out of these discussions was how fragile this remains. factories are getting closed down overnight due to outbreak of delta and that means production needs to be moved overnight to a different location and a different country. reports are fragile in china because of an aggressive zero covid strategy. things have to be shuffled and moved overnight and that costs a lot of money. it costs a lot of money to move things around as one producer said to me. that is why there is pressure on

their prices. they are concerned that will flow through. shery: chief asia economics correspondent enda curran there. that surge in container rates has japan shipping companies backing the largest -- they have outperform the topix in the past month. let's bring in our asia stocks reported. this is quite a u-turn for companies that for year have lagged the broader market. >> you're right. may have forgotten the stock market for years. share prices have been lackluster for years. for this supply chain bottleneck , there's this big mismatch in supply and demand for chipping services -- shipping services that support and all of these shipping rates. japanese shipping companies are really having a big rally that is expected to kind of last all

throughout the year according to some analysts. and because how enda just set about the supply chain being fragile, prices are likely to be supportive for a while as the variant keeps on spreading through the region and globally. haidi: given that it is a global theme, why are we seeing japanese shippers outperforming even the regional counterparts? min jeong: if we look at the past month, you can see the japanese companies, the three big shippers have been outperforming most of its peers in asia. if you look at a little bit bigger timeframe, like going over the past year, all these shipping companies have been doing very well over the past year so if you look at the hong kong chinese won in taiwan and south korea and japan, all of these shipping companies -- the

share prices have been trending higher for over a year now and we have seen a huge rally basically over a year. in some of them, for the other peers, there have been share price corrections after surging for five times over the past year. from here now, they are likely to see a little bit of a correction in share prices for some of the companies in the region but the overall trend of being supported by continuously high shipping rates is a trend that is likely to be a theme continuing globally and not just in japan. haidi: min jeong lee, our asia stocks reporter. let's take a look at some of the stocks sophie is watching. sophie: lots of stocks to watch given the container market is having an impact on other areas

given the supply chain crisis. futures in singapore for the nikkei pointing to gains. the yen at the 110 handle because with the boj very much in focus, it may continue its stimulus as it could downgrade the growth forecast on the delta impact which has played out in the semiconductor space. we are keeping an eye on chip-related names in japan and elsewhere with more companies seeing investing in shift capacity. fuji electric is to invest an additional ¥40 billion into that space. another company considering joining the tsmc around ships. pulling up the terminal, the supply chain crisis is set to ensnare apple in that space as chip shortages may impact production of the new flagship iphone. the company flagged a lower rate of sales growth on that crunch. using the map function on the terminal, teach it suppliers have halted production in

malaysia. pulling up the board, we are on m&a watch with toshiba adrs jumping on news of a deal for the memory maker out of the conglomerate. shery. shery: up next, more on the talk of a marriage between western digital and japan's holdings. we will discuss potential areas to the merger. this is bloomberg. ♪

shery: western digital reportedly in talks to merge with a japanese holding company and a deal that could be worth more than 20 billion dollars. joining us now for the details is su keenan. what is the driver behind this combination? su: better competitive muscle, particularly when you are going against samsung. they have had a long term joint venture deal between the two. you are looking at the digital stop which was up as much as 15% in the latest session as this deal was announced by the wall street journal. both companies have declined to make any comments but these are two technology storage providers and the joint venture would create a much bigger competition for samsung which is a dominant player in the market for memory

-- portable and computers. western digital moving in a big way on the news and giving the company market value of $20 billion. for those not familiar with the japanese company, back in 2018, it spun out of toshiba. the maker of flash memory. both companies combined sales of $17 billion last year. haidi. haidi: just saying that they are preparing for an ipo at the right time. is that the plan b? what are the potential barriers for this megadeal getting done? su: let's start with the obstacles. the barriers are that given the current market and political situation, any merger between a u.s. and international company, let alone asian company, likely to attract much greater scrutiny and therefore greater challenges. there is a bit of a rocky road between western digital and its

japanese partner in the years they have had the joint venture, we western digital provides capex spending and r&d in exchange for the right to produce out of his japanese partners plants. let's talk about the decent plan b. they did file an ipo last summer with big investors such as toshiba and bain capital planning to sell shares? that is very much in the works as the company confirmed within the hour. when we get news from people close to the matter on talks such as these, they are always with the caveat that they could fall apart but people close to the matter say if negotiations are successful, we could possibly hear about a deal in the weeks to come, possibly as early as mid-september. back to you. haidi: we will continue to watch this. su keenan with the latest. in the meantime, rocket lab

tumbled in its first day of trading. the company prepares to develop its largest rocket yet. the ceo spoke to bloomberg earlier about competing with the likes of spacex and the outlook for the space exploration industry. >> there is a mono for competition. there's only two companies delivering regular reliable access and that is enough. that is the wonderful thing about rocket lab. we are not just a launch company. we have satellites, satellite components, rockets, and ultimately, we will provide applications as well. i would business plan is very well diversified over the whole sector. >> where does the profit come from? can you make money on the launch side of the business or are those projects around data that you alluded to? is that where the money is to be made? >> the launch market is a $10 billion market and we have been

the market leader for three years. the satellite market has around a $20 billion market. the data market is $300 trillion -- three under $20 billion market. -- $320 billion market. if you can build your own satellite in unique position, you can really deploy that. there is really only one other company that has the ability to do that. >> who are your customers, on the long side or data side? >> customers diversified 50% government and 50% commercial. the national reconnaissance office is there. the top of the top customers. nasa as well, and foreign governments, foreign companies for japan and germany, you name it, we have flown anything you can imagine.

60% government, 70% commercial. >> you raised more than $750 million through this spac transaction. what are you going to spend it on? >> a large launch vehicle designed to carry eight tons to orbit and designed to carry crew and that will be a direct competitor to the current standing in the marketplace. we have a strong and organic growth strategy and we made our first acquisition last year that has worked out incredibly well last that was a satellite component. we have many more of those to come. also, it is important in this industry -- there's going to be some consolidation here. we are making sure we are in the prime position to do that consolidation. shery: peter beck speaking to bloomberg earlier.

qantas says international flights may restart at the end of this year after posting a second consecutive full-year loss. we break down the results. this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines. we learned that indian logistics

and supply chain start up plans to file for an ipo as soon as october. it is backed by softbank's vision fund and carlyle group in the listing could raise about $1 billion. versus say the offering could include both new and existing shares targeting a mumbai listing be or march next year. only fans reversed the decision to ban sexually explicit material after uproar from creators and sex workers who rely on the plan for income. last week, it said it would ban exquisite content, a decision forced in part from pressure by banking and payment services. the site tweeted it secured assurances necessary to support its content creators. delta airlines will impose a $200 monthly fine on employees who are not vaccinated against covid-19, becoming the first major u.s. company to announce such a levy.

ed bastian says 75% workers were already vaccinated by increasing virus variant cases were driving the push for all employees to get shots. haidi: we will stay with aviation, watching qantas when trading kicks off in sydney in just minutes time. carrier posting a second consecutive annual loss but seem potential for international lift off. let's bring in our asia transport editor, peter. i mean, he can say when he would like to resume international operations but of course, we know that has been pushed back with borders remaining closed. >> hello, haidi. it does seem quite optimistic to be laying out resuming international flights in december and said that himself that if what they are looking at is after a pretty sluggish start, australia's fractionation rollout is exhilarating quite -- vaccination rollout is

exhilarating quite fast. the target met the government set for a resumption of international flights is on track to be reached in december. in that level, vaccinated australians will be able to travel internationally and the caps on inoculated australians coming home will be removed. there is some possibility that come december, australians will be able to travel overseas and it is quite a measured rollout from qantas. they are saying that at that age, they will only be flying to cobit safe destinations where vaccination rates are high and cases are low and that includes places like singapore, the u.s., japan, the u.k., and canada. more risky destinations are probably going to be later next year. shery: what about domestic travel? how has that affected qantas? peter: joyce was blunt today and

he said that that has been diabolical and by the end of this year, the pandemic probably would have cost $20 billion in lost revenue for qantas. sydney and melbourne are still in lockdown. in sydney's case, that is going at least until the end of september. they really are the two key drivers of qantas's domestic market. sydney and melbourne before the pandemic was one of the disease airline routes in the world. it's not just that. with about 12 million people, that's really -- hurting destinations such as queensland and the northern territory. haidi: peter vercoe in sydney and we are just hearing alan joyce speaking on a conference call, talking about the future of project sunrise. this is his ambitious plan to do

nonstop flights from the east coast of australia to places like london and new york, saying quite clearly that international borders need to reopen. they are keen to revisit the business case for project sunrise. we will be speaking with him in a few hours time. this is bloomberg. ♪

maria: -- shery: hello and welcome to daybreak asia. haidi: taking a look at the major market opening in asia. equities rally into jackson hole. traders are awaiting fresh inside when it comes to the timeline. economists are split on the chances of a hike as

policymakersw -- policymakers weigh debt versus delta. shery: japan, south korea, and us really are coming online after the 50 year record high in the u.s. with the s&p 500 with a new high. how is the action looking? sophie: we are looking at a mixed start for asia. the nikkei 225 adding 0.2%. the yen trading around 110. we have optimism over vaccinations, but the boj did flag concerns about lagging recovery given the delta impact, which sees 70% of japan's population in a state of emergency. turning to south korea, we are waiting on the be ok decision. it is pretty much a 50-50 bet on which way the bank will go. korean won traders certainly

have jackson hole to consider wind mapping out the trajectory of the korean won. we do have the korean won slightly on the front foot, trading 2/10 of a percent higher against the greenback. after a three day game for oil, we are seeing a downside pressure for brent, act below the $72 a barrel mark. iron ore, though, extending the rally, with futures in singapore up 14% since monday, providing stability for the aussie dollar, which is trading at a one year high. qantas is preparing for a recovery in international flights after the carrier posted a second annual loss in the face of what ceo alan joyce called diabolical conditions. we are seeing some downside pressure for the asx 200 after a three day game, and we are watching regional chip names.

we are keeping an ion names with company looking to invest boost chip capacity in the face of a supply crunch which may affect apple's new iphone production. it is considering joining the sony chip business in japan. some a-shares slightly lower this morning. fuji electric shares, ¥40 billion into chip capacity. switching out the board, we are keeping an eye on the m&a front as western digital is set to begin talks with a company spun off of toshiba in 2018. toshiba shares are gaining ground. sk hynix up by nearly 3%. shery: traders are looking ahead to the taxable symposium -- the

jackson hole symposium. our next guest has concern that any tapering could coincide with further disruptions from the delta variant. lorraine tan is the director of equity research at morningstar. there are concerns, and inflation is going to be -- there are concerns that inflation is going to be the issue addressed at jackson hole, and it could be the fed is underpricing for the impact of the inflation. where are we at in terms of market expectations for how cautious policymakers are going to be? lorraine: i think that a lot of that is going to be somewhat internally driven. if you have an economy that is normalizing because of the fact that vaccination rates are high, the tendency is to mobilize on the central bank side. that we still think the inflation rate risks are transitory, they are going to last a little longer, and in our view, the inflation is probably

going to overshoot the fed target at this point in time. there are those pressures. when you talk about what is going on with vaccination rates, a look at the destruction from the delta variant may be focused on specific areas from the country and not as widespread. we would expect that things will start to normalize over the course of the next year. shery: you see that the taper tantrum is not really materializing for asian markets. the anxiety is kind of frontloaded. lorraine: that is normally the case. there is a lot of anxiety in terms of impact from equity prices ahead of expected tightening. once the event starts and the uncertainty is known, i think that is when the share prices

start to recover. we think that a lot of the higher debt costs are already factored into current evaluation, but -- current valuation, but we know a lot of share prices are priced to perfection. haidi: we saw the rb and z holding up rate hikes. we do have the be ok decision, which is close to call, in the next hour or so. what are your expectations there, and if they need to hold because of the virus spreading, will it be a problem if we continue to get these hawkish signals from the fed? if you have high rates, you could temper the effects of the tapering. lorraine: i think it is time for the asian central bank to move. i think for korea, for some of the countries out here in asia

who are still facing delta variant risk, i think there is room to hold off and wait and see what happens. with jackson hole coming up, we do not expect a whole lot of information to that extent, but we would like to see a little bit of plans out there. in reality, we probably will not see much tightening until early 2022. shery: how would that work out with the inflationary dynamics we are already seeing because of the supply chain disruption? we see commodity prices going up, and perhaps price pressures are not as transitory as expected. lorraine: we think these things are transitory. a a lot of it is supply chain related, as you mentioned, so that is a silver lining.

if you look at it over the next few years, we think that once supply chains start to normalize, vaccination rates move up, chip supplies start to come back on stream sometime in 2022, we do expect inflation risks to reduce. we think inflation will overshoot in the short-term, but then over the next two years, they will start to normalize. i think the central bank will take that into consideration. shery: always great to have you. take a look at qantas moving up, rising 3.5% after reporting four-year results. clearly investors are latching onto the optimism when it comes to international travel plans.

alan joyce said they were hoping to restart international operations by the end of the year as the vaccination pace picks up. we have seen qantas in the past recover very quickly after domestic borders have been lifted in terms of the strength of the domestic performance as well. we are seeing outperformance when it comes to qantas stocks at the moment. we will be speaking with the ceo in a few hours' time in sydney, just past noon if you are watching from hong kong. >> pfizer and biontech are seeking through approval -- full approval from u.s. regulators for a booster shot for people aged 16 and older. the company has already announced they have started an application with the fda for a third dose. pfizer and beyond text say they plan to complete submission of the application by the end of the week. bloomberg's learning of the latest soon-to-be released u.s.

intelligence report on the origins of covid-19 -- it is inconclusive. that as beijing words of retaliation against those wondering if the virus leaked from its lab. the chinese inspector general made the comments ahead of the report release. he says detractors should be prepared to, quote, "accept the counterattack." the japanese prime minister has extended a state of emergency to cover more than 70% of the population. the delta variant surge has led to a record number of cases and is straining the medical system. it includes tokyo and osaka metro regions and will not run until september 12. the move comes as japan hosts the paralympics. -- remains closer to being reelected.

the prime minister's public approval rate in recent weeks has fallen below 30%, considered a make or break level for a leader. lorraine: -- global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: still ahead, we are on watch for the bank korea's rate decision. analysts are split on whether this could be the first major central bank to hike. we will discuss with kathleen oh later this hour. plus, china's attempt to clamp down on everything from propertied education is already weighing on the world's second-largest economy. we will take a look. ♪

haidi: china's recent crackdowns are taking a toll on the world's second largest economy. the clamp down on industries has roiled financial markets and is curbing the outlook for growth. joining us is enda curran. when it comes to the aspect on the real economy, are restarting -- are we starting to see that -- >> it is hard to tell what is impacting what. on one hand, we have a slow down due to aggressive measures to contain the delta variant, but then we have this big policy story going on, whereby they want to de-carbonize the economy. that is impacting the steel sector. they want to cool down house

prices, putting a break on land sales. and there is a push to slow down overall borrowing because of the debt story, and that is having an impact too. the end result is that growth is slowing, and economists are saying you will have to be careful as you grow, because the global economy is at a fragile juncture. and how far will they push the regulatory overhauls currently going on in the chinese economy right now? shery: especially as we continue to see the push for common prosperity. to be have a sense of where this new policy shift -- do we have a sense of where this new policy shift could hurt the most? enda: it is getting resurrected in a big way under the current administration in beijing. the broad takeaway seems to be that this is not about policing the rich, so to speak, it is all about growing the pie so there is more to share with everybody else. i think regardless of how it

does play out, we know authorities are serious about where they -- about clamping down on where they see inequality. the education crackdown is about taking pressure off families and allowing those families to grow. regardless, they seem to be deadly serious about pushing it through. shery: let's turn to chinese smartphone maker shall me. -- xiaomi. it surpassed apple for the first time. it posted revenue that beat estimates. for more, let's cross over to stephen engle in hong kong. it seems that regulatory measures have not affected xia omi, at least for now. stephen: at least for now is a good way of putting it. a lot of these companies are trying to find ways to make it a -- to mitigate the potential

risk from regulatory crackdown. the chairman has already pledged about $2.2 million in shares toward more socially conscious areas that are in favor by the government to get ahead of what xi jinping has been calling for, more prosperity among tech companies. xiaomi did well. revenue up 64%, that have -- net income of 80%, beating expectations. it is the world's number two smartphone maker, just behind samsung. it is also diversifying its product mix. it has all those smart gadgets for the home and the like, but it is also going into autonomous and electric vehicles. they just spent about $77 million to buy deep motion, an autonomous driving startup. that is part of late june's initial commitment to go into

the ev space. there you see it, 44 buys for this stock. but while we are talking about ev's, one of the big leaders will be out later today in the united states. hopefully we will get clarity on the state of semi conductors in the auto space. shery: we also got quite shall. what did we get? >> revenue was up 49%, but net losses widening again. they are spending a lot to stave off the competition from a tiktok equivalent and tencent. they are under regulatory threat as a whole. video contact being attacked -- content being attacked by state media due to vulgar content.

it is a ski slope down. they have lost a hundred $80 billion of market cap because of the regulatory threat and because the lockup period from the ipo expired and people got out of it. this stock is below the ipo price. shery: stephen engle with the latest earnings out of china. you can get more analysis on china's crackdown, particularly on tech giants, on red lines, available online at the bloomberg technology channel on youtube. next, evergrand's warning of a 29% profit slide is the company grapples with fixing its debt problems. the details just ahead. ♪

haidi: evergrande is warning of a slide in profits up to 39% in the first half as it faces mounting pressure to reduce debt. as the chickens continue to come home to roost, what are we expecting here? >> i think the profit is within lines of what investors were expecting. most of the profit losses coming from the property unit and from its new energy vehicle unit. this has implications of the ceos personal wealth, which has dropped from $32 billion to less than $10 billion. shery: any chance that beijing could come to the aid? we have seen government-backed

investors really getting into chinese debt. rebecca: they certainly will want to avoid any kind of disorderly default or systemic risk units markets, particularly after the retracted affair. still, property is an area where policymakers have clamped down on. it is also a private firm. the focus will be on whether ever grant and find a way to verse -- evergrande will find a way to resolve debt issues. haidi: -- shery: what about chinese sovereign debt? rebecca: that should be more positive. i think for the most -- for most of the credit market, we have seen remarkable resilience, given the slight upset in the corporate bond market, particularly for the onshore market. offshore, however, in the

corporate space is where we have seen things be a little more volatile and rocky. haidi: shery, we are seeing even with concerns over evergrande, we are seeing the asian credit markets start to heat up. the credit market is at its hottest in about 18 months. yield premiums have been narrowing for eight straight days. we spoke to one of our guests yesterday who said that all the regulatory overkill may not actually create a bad investment environment. even if you are talking about lower markets, you may expect more stable cash flow, which is a favorable environment for credit investors. shery: in fact, we have seen bond sales on track to be highest since 2015, the actual yuan dead sales. it seems that investors could get more opportunities to become more exposed to yuan-denominated

assets, because for the first time ever, we are talking about municipal yuan debt going offshore. the likes of shenzhen are seeking underwriters for offerings. so far, we have seen that appetite, given that we continue to see slightly tighter monetary policy in china as opposed to lose policy in the u.s., so the cost of swapping yuan into dollars is dropping, so we have seen appetite for these dim sum buys. haidi: interesting timing to see the broader access, given the kind of recent surge in local government volumes. let's get you a quick check of the latest business flash headlines. western digital is in talks to merge with japan's co-ceo in a potentially more than $20 million deal that could be reached by mid-december at the earliest if negotiations proved to be successful. the talks between the two technology storage providers could still fall apart.

quante tech's -- qantas says it plans to resume international service by the end of this year, but after the pandemic drove the airline to a second consecutive annual loss of 1.3 billion u.s. dollars, slightly better than estimated. qantas expects international travel in the for half of 2020 -- third half of 2020 to fall to just 15% of pre-covid levels. space launch provider rocket lab tumbled more than 9% in its first day of trade. the company raised funds to build its largest rocket to date. the company describes itself as spacex's only direct competitor. it ceo says the debut does not affect long-term ambitions. >> we are not just a launch company. we build satellites too.

we have multiple missions, and our team is building satellites to go to nasa, one satellite to go to the moon, and we have one satellite in orbit already. haidi: stubhub plans to fall to an ipo as soon as october. sources say the offering could include both new and existing shares, and it is targeting a moon by listing by march of next year. coming up, we take a look at you should he do so because -- yoshihide suga's prospects as a leader and holding onto his job as japan's prime minister. this is bloomberg. ♪

introducing xfinity rewards. our very own way of thanking you just for being with us. enjoy rewards like movie night specials. xfinity mobile benefits. ...and exclusive experiences, like the chance to win tickets to see watch what happens live. hey! it's me. the longer you've been with us... the more rewards you can get. like sharpening your cooking skills with a top chef. join for free on the xfinity app and watch all the rewards float in. our thanks. your rewards.

>> this is "daybreak: asia." president biden is recording business executives to help improve cybersecurity, meeting with ceos from companies including apple and alphabet. the president says the cybersecurity workforce is not growing quickly enough. recent attacks have hit infrastructure as well as microsoft and solar wind. pres. biden: coast of our

infrastructure is owned and operated by the private sector, and the federal government cannot meet this challenge alone. >> the european union may reimpose travel restrictions on visitors from america as u.s. covid cases store well above guidelines. the change was recommended by slovenia, which hold the bloc's rotating presidency and decides which countries are allowed to enter the eu for non-essential travel. the move to bar visitors from the world's largest economy would deal a blow to transatlantic recovery efforts. the who is backing a proposal to set up a fund to plug the financial gap in the globe health care system exposed by the pandemic. the fund is part of efforts by g20 finance ministers to double spending on health care and improve financial capacity to respond to future pandemics. an official said global health security is "dangerously underfunded."

global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: yoshihide suga has won the support of a powerful faction. let's get more from our politics reporter in tokyo. isabel, can he keep his job despite the public support rate being so low for him? >> yes. it is not as straightforward as you might think. just because he is not popular with the public does not mean he will not be reelected under the japanese system. i a lot of this depends on the powerful faction within the liberal democratic ruling party, and one of them has come forward to say if they will be supporting him in the coming leadership election, which we are expecting probably around the end of next month.

that is despite the fact that his party faces a general election in the next three months, so whichever leader they have will be the one to lead them into the election and end up with them losing a lot at their seats if they do not do well -- a lot of their seats if they do not do well. haidi: when it comes to the nomination threshold, we have only seen one woman manage to clear that. are we looking to potentially get more representation? isabel: i really do not think so, unfortunately. we have one woman who has come forward from a bit of a conservative wing of the lbp, a former internal affairs secretary. she posted an article laying out her platform. but these factions have great sway over who even gets to run in these elections, so therefore it is quite unlikely that she

will be able to get the 20 people that she needs to go forward. shery: what are the top issues right now? we know covid's top of mind, but what issues in terms of the economy and geopolitics, perhaps, could affect what is happening in the political scene? isabel: i think you could certainly say that the issues relating to china are one of the things that are on the back of people's minds. but to be honest, i think the coronavirus is going to be the top issue this time around. prime minister suga was asked last night how he ranked his own handling of the issue, and he gave himself pretty good marks. he said the vaccination program is progressing pretty fast, and by the end of september, he expects to be near 60% of the population fully vaccinated. he also pointed out that in japan, the death rate is far lower than we have seen in any other developed countries --

many other developed countries. he said to him, the difference is obvious. that is obviously not have the public sees it. many in japan are concerned there are not on hospital beds, and that will not be one available for them should they need it. haidi: this is also not how the bank of japan sees it either, right? they have been more cautious when it comes to prospects and recovery as a result of delta. isabel: that is right. in terms of the economy, there was a growing feeling that japan should have had a more severe lockdown on the virus and provided more subsidies for businesses that were not able to operate, because they effectively -- bars and restaurants have not made any money during these long periods of states of emergency, which we now see affecting 80% of the economic area of the country.

it is hard to imagine that there will be any kind of mixed recovery in the near future. haidi: isabel reynolds in tokyo. we will get more on the covid situation globally now, and we start with hong kong. just 42% of the city's population has been fully vaccinated. officials resisting calls to implement mandates. we saw one of the earlier rollouts of the vaccine and progress being made in hong kong, but that has been stagnant, and yet no signs of any kind of mandate of action so far. >> it is really difficult to mandate vaccines for anyone, and particularly for hong kong. there was initially concern, even among doctors, about putting the elderly at the front of the line when it comes to getting vaccinations. we are seeing some of that kickback, where we are trying to get the vaccines out broadly.

seniors who have not gotten it already do not feel like it is something they need to do. that is the piece that is getting difficult, finding people willing to get the vaccine. doctors are not stepping up and there are no mandates for anyone, really, and not for the elderly. shery: any talk about booster shots across asia? in the u.s., we have seen plans to get booster shots. johnson & johnson saying there shot really triggers a surgeon anti-bodies. -- their shot really triggers a surge in antibodies. >> in asia, we are seeing infections happening among the political elite. this shows a disparity on what people can get access to, because the vast majority in indonesia have not even gotten their first shot, yet we see political and military elites getting a booster. the challenge is twofold, not

only the one that is obvious, that some marketing three shots and others are getting done, the other piece is that you get a greater benefit from the vaccine when you space it out. these folks are getting the vaccines very close to each other, so not only are you getting -- not getting the best bang for your buck, you are actually maximizing those who are not getting the shots, so it is a lose-lose across the world. what we are seeing as a microcosm in china we are seeing in a greater -- grander scale in places like the u.s. and israel. shery: we are seeing markets across asia look mixed as we await the be ok decision, a tossup at this point, and it could come at any time. let's turn to sophie for all the action. sophie: taking a look at the msc i, we are seeing it hold onto a four-day gain.

credit suisse strategists see the gang hit 820 by the end of next year. in asia, we are seeing north asian equities campground. we are seeing the cost be set for a fourth day of gains -- kospi set for a fourth day of gains. we are seeing toshiba jumping on the possible western digital deal. and we are seeing losses. most sectors falling in sydney. flipping the board, we see qantas shares rise this morning as it prepares for recovering international flights after posting a back to back loss. turning quickly to the em fx space, we have the bok situation, the yuan on a further

footing. there is the countdown to the jackson hole symposium as well. there are hopes that this will reduce pressure for capital flights out of asia. haidi: we are hearing from the head of emerging markets debt at hsbc saying they are buying emerging markets assets that are already battered by a taper tantrum. as we look toward jackson hole, toward potentially a taper tantrum, a lot of investors say what we are seeing over the last few months is already the taper tantrum. it has already been priced in, and the recovery is here to stay. shery: given we saw the selloff starting in june already, and we continue to see cheap valuations , with emerging market shares near a 20 year low. not surprising that we continue to get calls from hsbc global,

but also earlier this week we heard from goldman sachs and bank of america liking em currencies and em stocks. haidi: couldn't the won really rejuvenate the em trade? kathleen oh joins us next. we will assess the path ahead for the central bank. it is the delta variant versus the huge debt load they are facing. the bond had been trading in the last two days at the lowest in about a year. we see a bounce if the bank does hike? economists are split down the middle. ♪

shery: bank of korea is due to announce its rate decision any minute now, when south korea could be deforestation economy to hike rates. our next guest says things have changed since this july meeting. for analysis, let's bring in kathleen oh with merrill lynch. the gtv chart on the bloomberg showing inflationary pressures, but perhaps the understanding is these price increases will be transitory.

however, household debt now seeing a new record high. if we see the forest rate hike in october, is it a little too late to start the cycle they are given the financial risks? -- cycle there given the financial risks? we do not have kathleen oh at the moment, but this is an exciting conversation, because at any moment, we could see this rate decision. it is split right in the middle. we are talking nine economists out of -- sorry, let me get that number right. 10 out of 19 economists predicting a halt depending on the virus situation, but the household debt mention could be a problem. -- the household debt i mentioned could be a problem. we have kathleen back. given the risks with household debt and other issues, could starting the rate hiking cycle

in october be a little too late? kathleen: thanks for having me this morning, and thank you for the question. i actually think it would not be too the lead -- too delayed if we made the rate hike in october. the bok needs to look at covid to make sure the rate hike is not too late. it will be a few weeks until we see the risk going down. i do not think it will be a huge delay in terms of containing the household debt. haidi: talking about the debt burden, this is exactly the kind of dilemma that be ok is contending with, on top of what we see when it comes to park the -- comes to property market prices as well. the inflation will slow further out going into 2022, 2023. there is room to keep the rates supported, but you take a look

at household debt soaring, and that is a key reason. shery: haidi, give me a second, because we are getting that very exciting decision. it is a hike, to 0.75% from 0.5% . economists were split right in the middle, and it was a slight majority who thought it would hold, but they are not holding. they have hiked to 0.75%. haidi: i have to say i did not expect that. i knew it was split down the middle, but i thought they would take the cautious path. kathleen, what do you think about this? lorraine: i am not -- kathleen: i am not too surprised. they clearly showed they are putting the policy wait on the household debt and financial imbalance now, so this may be think that the rate hike going

forward from here will be slightly faster than i previously expected, where the second hike i saw previously was coming next year, now potentially coming within this year or early next year. shery: what will you be watching in the presser today from the governor? what does he need to say to soothe the markets? kathleen: we need to monitor the policy weight governor lee will be emphasizing. will there be cautiousness with the covid risk despite the hike this morning, or is he going to say the growth momentum is less hindered by the covid risk now that they will pursue continued addressing of the risk and financial and stability? i think that will determine the pace of the cycle we will see. haidi: the demographics matter too. can they go beyond 0.2 5%?

how many hikes do you expect to see in this cycle? kathleen: i see the rate being at 1.25% by early 2003. it is going to be very gradual, according to my previous forecasts. but now that they are clearly showing that they are going to address more aggressively the financial imbalance issue, i now think that although the number of hikes will still remain at three, but the pace could be earlier than previously expected by early next year or end of this year. shery:shery: take a look at the jump in the korean won. what will be the trajectory now that we are in a tightening cycle? kathleen: we still believe the strong dollar story will persist. we have the tapering in november, and now that the hike is here, the globally, the sentiment is that the stronger

dollar would be the over story, despite the one move. the rate decision always had a short-lived impact on the markets, so i think one to two days of the move eventually we will probably see weaker won going towards the fourth quarter. shery: we continue to hear rumors about the size of next year's budget. with the fiscal stimulus and fiscal momentum coming through in the economy, will this be able to offset perhaps some of the impact -- offset, perhaps, some of the impact from the tightening cycle? kathleen: we actually see the new stimulus coming in september and fourth quarter offsetting the downsized risk that we would see in the fourth quarter. the budget next year, if it is approved, will push forward with the recovery momentum. we actually think the local

vaccination after reaching herd immunity would continue to push the reopening and the strong growth at 3.5%. the fiscal package is just going to help continue maintaining that solid domestic momentum, in my view. haidi: kueng prices are a big issue that plays a part in that debt question. it has more than doubled in the last 20 years. are we expecting more targeted policies that could alleviate the dilemma they be ok could continue to face going forward -- the dilemma that the bok could continue to face going forward? kathleen: that shows the local authorities' determination of containing housing prices. i am expecting more targeted potential measures to contain the housing prices and household debt going forward. i think that will go in line

with the bok's hiking cycle and contain the household debt growth. shery: kathleen oh, it was great to have you on. korean economist at bank of america securities. you can turn to your bloomberg for more on the bok later. haidi, i've got to say it is it is a really surprising decision from the bok, considering we have the surging amount of virus cases across korea, and also add to the fact that the rv and said held last week -- that the rbnz held last week, it is surprising that the be ok moved. haidi: and of course the rbnz deputy governor making it clear, saying it was about communication. they did not want to announce it on the same day that a snap lockdown was being rolled out.

it does look like october is pretty much -- not just live, but expectations will be soaring for the rbnz to go. they have all these concerns about the fed being hiked behind the curve. what does chair powell do to communicate this at jackson hole? shery: and as we continue to see more economies around the world start to move, and perhaps they have no other choice. his ilk, for example, we got inflation numbers this morning -- brazil, for example, we got inflation numbers this morning, and they are overshooting expectations at 9.3%, way above what they wanted. the mid-august number for cpi is the highest since 2002. political tensions also adding to the dynamic there. haidi: yes, and we will continue to watch the markets. the won with a big recovery. the currency trading at a lowest level in about a year.

there were worries that the currency would be too much of a big thing. we are seeing that recovery. but a lot more analysis as to the policy path forward for the be ok. a divided decision, but going with the decision to hike. ♪

haidi: show me -- jami is buying -- xiaomi is looking to buy deepmotion. revenue beat estimates, jumping to $13.6 billion. xiaomi says the venture could shorten the time to markets for its first path. it has pledged an initial investment of $10 billion over the next decade in the ev space. china life insurance saw profit jump in the first half as the stock market rally boosted investment returns. net income climbed to $6.3 billion, but china's largest insurer size slow pandemic recovery put pressure on growth with sluggish demand for long-term policies. china evergrande's expect

in first-half profits to drop 29% to 39% from a year earlier as it fixes its debt problems. in a profit morning to the hong kong exchange, the company cited a decline in property prices and increasing expenses. the world's most indebted developers says it will do what it can to maintain stable operations and resolved at risk. -- resolve debt risk. let's take a look at the china open. sophie: switching of the elements, turning to casino stocks, there has been a solid stretch of gains so far, putting macau casino stocks in course to the best -- bloomberg intelligence is flagging a warning that revenue in august may fall short of consensus. eva chow at invesco says we could see the pboc trim the rrr in the coming quarter.

the economic credit signal showing deeper outlook. shery: to be ok made the decision to hike rates to 0.75%. the first asian bank to hike rates during the pandemic. ♪

in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.

investor. then i started interviewing. i've learned