haidi: welcome to daybreak asia. sophie: we are counting down to asia's market open. kathleen: i'm kathleen hays. now for a look at our top stories this hour -- asian traders await the august pmi numbers after wall street hit its 12th record close of the month thanks to big tech rally. china's whitening crackdowns

also in focus -- via gaming and a private equity latest focus. and the u.s. officially ends its twenty-year presence in afghanistan, but hundreds of americans who wanted to leave are still there. haidi: we do have breaking news crossing the bloomberg when it comes to korea industrial reduction. the company grew better than expected. the survey was expecting 7.2%. it's moderating from the june figure of 11.9%. coming in with a gain of .4%, much better than the contraction of .5% that was expected. delay slowdown from the 2% pace we saw in the previous month. when it comes to bank of korea, a lot of people were surprised a few days ago, largely on account of the debt written in the country, but some of this is positive data that would be

supporting that decision. kathleen: as we watch the end of the u.s. president -- presence in afghanistan, we are going to listen to secretary antony blinken speaking on the withdrawal. >> we lost cherished members of our foreign service unity. we will never forget them. helping americans come our foreign partners who have been by our side and afghans at risk at this critical moment was more than just a high-stakes assignment for our team. it was a sacred duty. the world saw how our diplomats rose to the challenge with determination and heart. u.s. service members in kabul did heroic work securing the airport, protecting civilians of many nationalities, including tens of thousands of afghans, and airlifting them out. they are providing vital support right now, caring for afghans on

military bases in europe and the middle east and here in the united states. we've seen pictures of u.s. service members at the kabul airport cradling babies, comforting families. that is the kind of compassionate courage are men and women in uniform exemplify. they carried out this mission under the constant threat of terrorist violence. and four days ago, 11 marines, one navy medic, and one soldier were killed by a suicide bomber at the airport gate as well as scores of afghans. nearly all of them were in their early 20's, just babies or toddlers on september 11, 2001. these deaths are a devastating loss for our country. we at the state department feel them deeply. we have a special bond with the marines. the first person that you see when you visit an american embassy is a marine. they guard our diplomatic missions, they keep us safe

around the world. we could not do our jobs without them. we will never forget their sacrifice. nor will we forget what they achieved. the most exceptional among us perform a lifetime's work of service in a short time here on earth. so it was for our brothers and sisters who died last week. finally, i want to thank our allies and partners. this operation was a global endeavor in every way. many countries stepped up with robust contributions to the airlift, including working by our side at the airport. now serving intrinsic companies, allowing evacuees to be processed on their way to the final destination. others have agreed to resettle afghan refugees permanently and we hope others will do so in the days and weeks ahead. we are truly grateful for their support.

now, u.s. military flights have ended and our troops have departed afghanistan. a new chapter of america's engagement with afghanistan has begun. it is one in which we will lead with our diplomacy. the military mission is over. a new diplomatic mission has begun. here is our plan for the days and weeks ahead. first, we have built a new team to help lead this new mission. as of today, we suspended our diplomatic presence in kabul and transferred operations to doha, which will soon be formally notified to congress. given the uncertain security environment and put a cool situation in afghanistan, it was the prudent step to take. let me take this opportunity to thank our outstanding ambassador ross wilson who came out of retirement in january 2020 to lead our embassy in afghanistan and who has done an exceptional, courageous work during a highly challenging time.

for the time being, we will use the post in doha to manage diplomacy with afghanistan, including humanitarian assistance, working with regional and international stakeholders to coordinate our engagement. our team will be led by our debbie chief of mission in afghanistan for this past year. no one is better paired to do the job. we will continue our relentless efforts to help americans, foreign nationals and afghans leave afghanistan. haidi: that is antony blinken, the u.s. secretary of state as the u.s. and 20 years of involvement of afghanistan. bloomberg subscribers can continue watching it live go. some of the events you may have missed earlier.

now we are joined by bloomberg national security reporter larry ebert. what's the important point the u.s. has reached with afghanistan. we are out, but many people are looking at an area that is unstable, where terror attacks may emanate from and more. >> that, plus the mission is not entirely over. you just heard secretary blinken say the diplomatic mission has begun. diplomacy without force is going to be a tough one. he said there are probably just 100 americans in the country. there are thousands of afghans that work for or with the u.s. who still want to leave. the question is what diplomatic pressure can the u.s. place on the taliban. what relationship should the

u.s. have with the taliban, which they forced out of power and years ago at the start of this war. going forward, that is the question and what do they want to do with the taliban, what can they do to put pressure on them? haidi: economically, what could that pressure look like? larry: that's a good question. i noticed today, one of the most direct references, the white house press secretary said we have an enormous amount of leverage, including access to the global marketplace. there are existing sanctions, u.s. and united nations against the taliban. there could be more levees. the question is are the taliban a group that would be receptive to that kind of pressure? there is a theory, a lot of

experts believe they know the dire circumstances they are inheriting running their country and they will want to be in the global marketplace, they will want their imf loans and banking relationships to continue for afghanistan and, to do that, they need to deliver on the assurances they have given, vague assurances, that they will provide some rights for the women of afghanistan and some help in getting americans and others out of the country. that's going to be quite a test in the weeks ahead. haidi: our bloomberg editor there with the latest on afghanistan. india is one nation closely watching these developments in afghanistan. this tuesday, india's gdp is on tap, causing sophie kamaruddin to take a look at the economy.

sophie: you can see the june quarter gdp report for india shows double digit growth on a yearly basis to two -- week will likely see a quarter on quarter contraction even though india is on course for a world beating expansion for this year. pulling up the next board, we have south korea due to release its budget proposal and an expansion proposal is expected as it looks to continue providing fiscal support to the economy. we will see if that provides any outside pressure to yield. korea to sell $9.4 billion worth of government bonds to provide that fiscal spending support. pulling up the next chart, we have ever blends profit in focus. you can see how deep of a slump the property conglomerate

endured as its mounting debt woes have been a challenge. haidi: sticking with china, we've seen escalation of restrictions on the lucrative gaming industry. these are the strictest limits let that hsien on videogames. they continue to signal that they will go on what the campaign to limit tech titans. let's bring in stephen engle. this has a bit of morality being one theme, going tough on tech for the other. >> a commentary making the rounds presently is this hailing of xi jinping's regulatory crackdown of the profound revolution and it is going into gaming for the second time in about a month.

the second round of crackdowns, where regulators are going to be limiting significantly the amount of gaming time they will be allowed to minors down to three hours a week. on fridays, when our, saturdays, when our and sundays when our and one hour on public bodies. that's down considerably from the last round of restrictions we saw in 2019 which restricted them to one and a half hours a day. this is a significant crackdown. however, if you dig deeper, the revenue contributions of minors and game spending for tencent in these companies is rather limited. tencent says it is less than 3% of its gross gaming receipts in china. still, it's a signal and another round of regulatory scrutiny investors are going to take pause, as they did overnight on the adrs. some of the stocks were down as much as 9%.

they paired those losses but there is a threat of ending and potentially arbitrary regulation and clamp downs that have investors spooked. kathleen: you kind of wonder how long they have been working on this or one thing leads to another -- china securities regulatory commission cracking down on private equity funds. explain what they are doing and why. >> the securities regulator was out with the speech published yesterday or early this morning, essentially saying there are false private equity funds and true private equity funds working side-by-side and growing. in the last couple of years, they've decided there have been hundreds and hundreds of new fund managers coming into the market and potentially marketing and selling coming going public with these funds to the general public rather than to targeted investors and they want to root out this which has led to some cases of embezzlement.

it's and other clamp down of financial we know regulators throughout china are looking at ways of containing some of these peer to peer lenders and various areas that are under regulated. haidi: pmi data out of china. what are you expecting? >> we expect to see the brunt of the week on the services side because that is where the aggressive curves to contain the delta outbreak really hit. one hand, they covered about two thirds of the economy sides, so the end result is nonmanufacturing side is expected to come in around 51.7. we know property sales have been slowing in china. car sales, 45% below pre-pandemic levels. the consumer side of the economy

is expected to show the brunt of the slowdown. kathleen: a lot of people back gdp forecast. the final number still looks ready good. are they losing momentum? >> the manufacturing site is holding up ok. you will probably see that in the numbers today. the export story is doing good but the overall story is one of slowing growth and that's why we expect the authorities to come in with more support, both from the central bank and what the bigger story here is less about growth. it's about stabilizing growth, making sure they hit the 6% target. the bigger picture is all about the regulatory crackdown. the president is pushing it through as a theme of common prosperity. it's less about day-to-day activity and more about making sure the bigger goals of

prosperity are achieved. kathleen: thank you so much. our chief asia economics correspondent and our chief north asia correspondent. let's get to vonnie quinn with the first word headlines. vonnie: president biden has vowed to provide federal support to those impacted by hurricane 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. -- hurricane ida which made landfall as a powerful category storm -- category four storm. biden met virtually with fema and the governors of louisiana and mississippi and promise day. >> we will get you what you need. we other people of mississippi and louisiana are resilient, but in moments like these, we can see the power of government to respond to the needs of people if governments prepare and if they respond. that is our job. if we work together, folks get knocked down, we are there to help you get back on your feet.

vonnie: pfizer and beyond text vaccine has received -- they are on the cusp of the final signoff. ac/dc panel voted unanimously in favor of the two dose regimen for people 16 and over. it still needs a final nod from the cdc director. it became the first vaccine to a full approval from the fda. the prime minister of canada's reelection campaign may be struggling with polls suggesting opposition conservatives edging ahead. canada reported its sharpest one week decline in consumer confidence. cbc gives trios liberals 32% support compared to 33% for the conservatives. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, we will take

a look at hurricane ida's impact on commodities. coming up next, we will get you more insight on markets. this is bloomberg. ♪

haidi: a quick check of business flash headlines. bhp is thinking of making covid-19 vaccines mandatory at its australian minds. bhp says it is enforcing the policy in early 22 any two. shares of robinhood and charles schwab split after a full band

of payment for orders is on the table. the business model is an inherent conflict of interest. policymakers are scrutinizing complex wall street practices that have contribute it to the meme stock frenzy. sources say india's ridesharing company -- they are -- they could raise about a billion dollars on evaluation of more than eight the lien dollars. -- $8 billion. they could file as soon as october. the s&p 500 -- kathleen: the s&p 500 and nasdaq rally to fresh records as strong earnings pushed industries even higher. ongoing crackdowns put pressure on the shares. for more analysis, let's bring in the managing editor at medley

global advisors. especially at a time when this is the 12th fresh record the s&p 500 has made this month. you step back and say this is a little crazy. is it? >> it is extraordinary because we are in an unusual situation. if it happened say five years ago, the natural disaster the pandemic is, we probably would not be making these record highs. and -- on friday, i think just like back in 2020, -- it understands and i think that

took place -- kathleen: in terms of the big tech stocks leading the rally right now, is this heard movement? are we going to see narrower and narrower gains that make people doubt the sustainability of a rally? >> that's always the deal with these mega cap stocks because of their weight on the index. they had a bit of a downdraft and now people see it is down, so it makes a narrow draft that you mention. but it's a combination of the delta variant affecting market sentiment. i think going from here, reopening is deferred and you will get some more reopening momentum. i think that's just the dynamic.

haidi: is it possible to gauge how much further downside there is as a result of china's crackdown? >> the rule of law, it's an update from 2015. i find it interesting that they are looking through a timeframe to perfect the law, so that makes it difficult for investors to gauge the downside. it makes for possibilities of becoming less profitable or not profitable at all. [indiscernible] there are better opportunities

for the asian markets where you don't deal with the crackdown and they are getting a bit out of the delta variant that persists. haidi: great to have you with us. more to come on daybreak: asia. this is bloomberg. ♪

kathleen: we are counting down the start of trade in tokyo and seoul. we want to catch you up with some of the big stories. h2o retailers is increasing inches they in a grocery store and its subsidiary. moving higher on news the company is to invest in american off rotor plans. let's take a look at korea because investors are reacting to the industrial output data

which beat estimates with the rise of 7.9% year on year. the vice fannin's units are holding a meeting to review the macroeconomy. plenty more to come on daybreak: asia this is bloomberg. ♪ .

kathleen: some good news on the labor market coming out of japan. we are going to start with the jobless rate. it's down a little bit, but still down. it got as high as 3.1%. prior to the pandemic, it was running pretty consistently. still above that rate but gradually improving. we saw retail sales stronger than expected. we talked about the job

applicant ratio, the number of people looking for jobs compared to the jobs that are opening. it's good when that moves higher. the survey was looking for 1.12. that number has been up well over one point 150. we are getting good news suggesting japan's economy, despite the slow vaccine rollout and extended shutdowns is moving ahead. let's get to vonnie quinn with the first word headlines. vonnie: the u.s. has officially ended its military presence in afghanistan, concluding two decades of involvement marked by the -- sparked by the september 11 terrorist attacks. more than 123,000 people have been evacuated following the taliban's rapid advancement to couple. the group known as isis-k was working until the final hours to launch further attacks. >> we did not get everybody out that we wanted to get out, but i think if we stayed another 10

days, we would not have gotten everyone out we wanted to and there still would have been people who were disappointed. it's a tough situation. vonnie: chinese regulators are escalating their crackdown on the videogame industry. children will be limited to just three hours a week of online gaming, including fridays, weekends and public holidays. the new rules are aimed at curbing excessive indulgence and games and protecting minors physically and mentally. beijing says it will continue efforts to rein in big tech. the european union has voted to impose fresh, nonrestrictive travel restrictions on the u.s. that change is likely to affect unvaccinated americans most. israel's premise or is urging his predecessor, benjamin netanyahu, to return dozens of expensive gifts he allegedly

received while serving in the nation's top job. he reportedly vacationed on a private island owned by larry ellison. he's on trial for allegedly accepting gifts from wealthy associates. netanyahu denies the charges. 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. kathleen: federal reserve chair, jay powell, says the federal bank could begin slowing down as the economy recovers from the pandemic that seemed to signal no hurry to raise interest rates. the job market has for the progress to make. let's discuss the impact on emerging markets. we are bringing in the professor who previously served as that governor at the reserve bank of india. great to have you back.

when you look at jay powell's message, the markets in the u.s. have responded very positively. but when you extended out to the rest of the world, particularly emerging markets, what does this stance mean for them? >> emerging markets are very worried about what happened last time the fed tightens, which began with a taper tantrum, which was an absolute disaster for some of them. they recognize that at some point, policy in industrial countries has to get tightened. the fed leads the way and what they would love to see is when it happens, it happens slowly. that it's well advertised, there's a process by which accommodation gets removed and markets have enough time to react and it doesn't happen abruptly. to some extent, chairman powell did what they wanted on friday

by essentially laying out a path where they would spend some time looking at the strength of the labor market and then decide to slow down asset purchases. when that ends, there will still be some time when they will assess whether markets and the economy was doing fine and, at that point, they would start raising interest rates. but there wasn't an immediate connection between when they ended asset purchases and when they started raising interest rates. that bought a fair amount of time for the fed to see what is happening and for emerging markets to react. kathleen: how do you think this is going to pay -- going to play out? if you look at not only the u.s. but the world more broadly, what does this mean? >> we are coming off a substantial amount of

accommodation. we did not tighten really strongly after the global financial crisis and we started the process of accommodation in 2018. of course, the pandemic brought a huge amount of monetary accommodation. there's a lot of liquidity in markets and what the emerging markets worry about is an abrupt change in stance. they don't mind a steady change in stance but abruptness and a shocked market is what they fear. what this has done certainly for india is giving it some time to remove some liquidity in indian markets and adjust for a world with tighter monetary policy. china is in a different phase of the cycle right now. what's happening in china is in a sense the people's bank of china is trying to goose up the

economy a little bit after it has seen some signs of slowing. a somewhat different pace but china is much are protected because of the surplus and it has tremendous amounts of reserves. haidi: at the same time, you see the bank of korea becoming the first major economy to tighten the process. is this a strong signal to central bankers around the world that the structural issues with each to mastic economy are going to potentially trump the impact of the delta variant? >> emerging markets have much less room to wait and watch because they have less credibility, both on fiscal policy as well as monetary policy. some of them have stretched fiscal quite a bit. that levels are, like industrial countries, and some emergency --

some emerging markets, they are at unprecedented levels. some have corporate set have borrowed in foreign currencies. what they don't want to see is an abrupt change in financial market prices, including the exchange rate. they want to prepare well in advance,, -- match the removal of accommodation which is why you see them moving and you see some of them experiencing inflation earlier. food inflation hurts emerging markets more because of the communal basket. haidi: let me get to india, taking a look at what we expect as a base push what comes to the gdp reading given that 2020 was a horrible year. we see a targeted approach, but how far is there to go before we see the true release of pent-up demand?

>> i think there is some pent-up manned, but there's a fair amount of scarring in the indian economy. upper middle income households that have not spent that much in some of the supply constraints as well as the lack of mobility, which has prevented spending. that would result in some demand as the economy reopens fully, but there are lower middle-class households, people on the verge of poverty, as well as the small and medium enterprises that have not had the kind of support. they have been hurt quite a bit by the pandemic. households have mortgage gold to borrow. these will be stressed entities and their demand will be much more limited as we come out of

the pandemic. kathleen: is china a bigger force in the world than what we worry about? china looks like it's managing its recovery pretty well. they will youth as much as they have to. if they slow down, what does that mean for the rest of the world? what does it mean for emerging markets, especially in the asian region? >> china is trying to move to a new model of growth where it relies less on fist -- fixed asset investment, less on exports and more on catering to consumption demand domestically. it is still halfway house there. it's trying to move in that direction. what you are seeing is after the surgeon exports as china came out of the pandemic and other countries started importing, including -- what we are seeing

a slowdown in china. the question is can they get sustainable growth without relying on yet more fixed asset investment, yet more investment for exports? can they move away from that model and a sustained way? doing all of this even as you have seen some moves against the private sector in the interests of what they call common prosperity. so they are trying to do a lot of things at the same time and the question is, are they trying to do too much? kathleen: one final question -- what is the mistake you see the fed making on inflation or taper, whatever that could throw things off not just for the u.s., but globally? >> i think the fed thinks it has time because chairman powell, as he said on friday, believes that medium-term forces that

prevailed post global financial crisis, they will come back to keep inflation down. but there is one big inference post-pandemic which is the enormous amount of fiscal spending. that wasn't their post global financial crisis and that may make the difference between a regime of low inflation, which we had post financial crisis and a different regime post-pandemic. my worry is if they don't fully account for these new forces, they may be behind the curve and as everyone says, stronger tightening down the line. haidi: always a pleasure to speak with you. coming up, u.s. gold coast -- we are getting the market impact

from wayne gordon, next. this is bloomberg. ♪

haidi: let's get a look at the markets as we set up for the start of trading across asia. sophie: ahead of the open in

japan, shares in singapore move to the downside. bank of america sees three catalysts that could drive the balance of payments into negative territory in japan which could push the yen toward 116 by years end. political risk is one of those factors. as we count down to australia's data, including the countdown for the june quarter, the aussie dollar holding losses with the currency on track for a third straight month of the clients. the equity benchmark headed for the 11th month of gains, albeit the pace has moderated, materials dragging with that sector up by about 8% in light of the downside pressure on metals. iron ore, copper, and nickel down on the month whereas aluminum has been a bright spot. prices trading at a july 2011 high.

the growing gulf between bullish, micro signals and those macro risks. in australia, it is earnings season. the pickup in commodity prices we saw through the second quarter helped boost mining profit. at citi, they expect a new wave of investment flows. haidi: we are watching u.s. trading as gulf producers wait for damage assessments from hurricane ida. our next guest is positive when it comes to commodities, including crude. he expects prices to peak next year. wayne gordon is here. let's talk about the immediate impact of ida, because we have seen assessments of refineries hit by four, perhaps six weeks as a result. does this exacerbate what we are

seeing as low stockpiles and strong demand? wayne: i think that is a really good assessment, actually. about 75% of louisiana refineries seem to be down, some being caused by loss of electricity. clearly, on the production aspect, it has not been as hardheaded. this time around, it has been fairly benign. most production outputs are in ok shape. it's going to be relatively short-lived, but it is a pretty fluid situation at the moment. overall, demand continues to be relatively robust even though the delta variant has had some impact on sentiment. the market is still undersupplied in our view, and consequently, we think prices continue to had higher as we go

into the end of the year. haidi: expectations from opec this week? wayne: it's going to be an interesting discussion. we are seeing some of the higher frequency levels, demand-side indicators have been on the softer side. we still expect them to go through with production increases. as we said, the market is relatively undersupplied, so the consequences -- consequence is opec will add more production over the next couple of months. but of course opec say it will remain flexible. while it can be guaranteed this will sequentially occur each month over the rest of the year, we do think more supply will be added into the market. kathleen: when jay powell made his speech that west taken as dovish, a lot of commodities got a pop.

gold come in particular, rising. inflation, they are worried about it but they are not going to do anything. how important for that -- how important is that for commodities going ahead? wayne: it's going to be difficult on the reflation trade on the board for the next couple of months as people started to assess the risks, particularly around the delta variant and what that could mean for growth overall. the point we would make is, jay powell, to be fair, did an excellent job communicating or separating the difference between rate hikes and the winding back of bond buying. basically the pop in gold came from inflation expectations lifting little bit, but nominal rates, it is lower. consequently, real interest rates in the u.s. are tracking around -1%. that's probably what is holding it all up. we thought the gold rally, in

particular, was fairly lackluster. it sort of popped and it has been under pressure since largely because risk is starting to come back into the market. people think we get past this jump in delta variant and consequently, commodities, particularly copper, on the supply side is still in deficits. we think this supports prices until the end of the year. kathleen: the s&p 500's wealth new record in a month. but i want to talk about the dollar in light of jay powell because this is one of the big drivers for commodities. what do you see the dollar doing? wayne: the dollar we have going weaker over the next couple of months. we've talked at the very least, this pause in cyclical rebounds would get back underway. we thought this would be positive for some of the periphery countries, such as europe for example. we thought we would get that

little bit of downward pressure on a broad dollar basis as we go into the end of the year. next year, we think it's a completely different story. once we start tapering, once we get into the sequence of how much the fed are going to taper, it's not about the timing. jay powell was clear they are going to at least start by the end of the year. it's going to be about the pace of taper, how quickly the taper is finalized, and then people will turn their minds at the start of next year to win the first rate hike going to be. we see that as positive on the dollar going through next year. we see that dollar pulling back to 130, 115 on a euro-dollar basis. for a cyclical commodities like copper and other base metals as well as oil, we have oil prices around the $75 a barrel mark. a stronger dollar next year but

more weakness as we go into the back end of this year. haidi: always great to chat with you. let's take a look at japanese industrial reduction. slightly better than expected for july. these are the preliminary numbers. a contraction month on month, better than expectations. reversing the gain of 6.5% withdrawal in june. when it comes to the year on year number, we see a gain of 11.6 percent, marginally better than expectations. we were expecting a decline. we had the virus containment measures that would way on durable goods and external demand for autos remaining strong. chip shortages was the main one and some of that natural disaster impact limiting production when it comes to meeting manufacturers plans. a dip put it comes to dollar-yen

trading pretty range bound. kathleen: let's move on to china's energy demand. let's bring in bloomberg's new energy finance reporter from beijing. let's start with you -- how has the delta variant impacted oil demand specifically? >> the delta variant has definitely crashed earlier expectation of a summer travel boon. we've seen a decline in all travel indicators. the daily flight departures of the 20 biggest chinese airports hit as low as 30% of the pre-pandemic level in mid-august. back in mid july, pre-delta, we had around 70% of that.

now, with delta currently under control, the indicators are gradually picking up, but we expect it might take a couple of weeks to fully recover to the pre-delta levels. haidi: what about the lng side? >> chinese lng is getting bitten, but not because of the delta variant. it's because of high energy prices. domestic prices, we are actually seeing them trend at levels closer to the winter high, so that's making lng relatively unaffordable for certain industries. having said that, we predict energy deliveries into china are going to go up this month versus last month due to a larger number of contracted deliveries from the arctic russia.

haidi: we have lots more to come on daybreak asia. this is bloomberg. ♪

haidi: let's take a look at the markets where we are seeing trading in new zealand. this is how we are shaping up when it comes to the kiwi session this morning.

ap steady open across the rest of asia as we look to pickup from the u.s. rally. keeley assets up, sydney futures looking up and the nikkei lower despite production numbers. japan coming better than expected. ♪

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♪ >> hello, and welcome to "daybreak: asia." i am kathleen hays in new york. >> i am in hong kong. haidi: and i am in sydney. the stories this hour, asian traders await numbers, with record lows of the month. corporate crackdowns also in

focus. video gaming and private equity the latest targets, and the u.s. officially ends a 20-year military presence in afghanistan. americans who wanted to leave, thousands are still there. kathleen: so let's get right to what is going on in asian trading. sophie? sophie: downside for tokyo stocks, down by 4/10 of 1%, said to snap possibly a two-month drop, and today, we have some data on the jobless rate for july in japan, improving to 2.8%, but factories hit from the delta outbreak, and we have the yen trading below 110, the expectation for it to hit 116 by the year end, including political risk. and checking the open, the kospi a little -- little changed, a

second month of declines. and we have the korea industrial out coming through this morning, and we are seeing the korean won opening little changed, and some bond futures higher ahead of releasing the budget proposal for 2022, more spending anticipated, and as the summer comes to an end, most commodities have retrace the august declines, and goldman is upside for nickel, and aluminum prices trading at january 2011 highs, and oil closing out august, higher for brent, still on course for a monthly loss ahead of the opec meeting, and citi is bearish in 2020 you and beyond. -- in 2020 beyond. the asx 200 is set for another month of gains, but the 50 is

ahead of the asia peers, 5% on the time, while we have seen downward pressure on stocks. haidi: yes, the crackdown in focus again, beijing looking to more. video games, our next guest believes this sector remains intact. joining us from singapore is a manager. always great to have you with us. so how do you navigate this, in the short-term, in the medium-term, and in the long term? >> i think in the short-term, a need to be cautious, so the regulations are having a strong impact on the market. the china market is down about 8% this year, most of that coming in the last two months -- down about 18%. if you look at gaming, in particular, only about 6% of

revenue from gaming bombs from miners or children under the age -- from gaming comes from minors or children under a certain age. there are those playing video games, and this will have an impact on the sector, so at this juncture, at eastspring, we are being cautious. in the short-term, we are being cautious, but longer-term, we think that gaming, the digital economy is extremely important to the chinese overall growth strategy, and chinese developers for games are among the best in the world. they are very, very talented at designing and commercializing games. another fun fact a lot of people meet their partners online gaming, so there is sort of a

social aspect, as well that is not so negative. we are cautious now, but long-term, we think that this sector still has a role. haidi: well, they want to get the birth rate up, right? [laughter] kathleen: -- haidi: sarah, do you have more preferences in east asia? sarah: we actually are bullish on taiwan and also korea and emerging asia. taiwan is largely the semi conductor story. we think there has been a lot of volatility there, as we know. we think long-term, the structural supply and demand dynamic will sort of level out. in korea, we are going for more of a diversified approach, so we still like tech but looking at

financials and also petrochemicals, looking for value plays in korea, as well. kathleen: speaking of stockmarket rallies and tech, high tech, big tech, leading this massive rally in the s&p 500, the 12th record set in months, does this make sense? what is driving it? sarah: i think it is hard to think this is sustainable. the market keeps going up and up, and we know the delta variant is raging. we have some concerns over employment, as well. it looks like the economy is ticking along very strongly, and the economy has been very resilient throughout this whole covid pandemic. we have not seen how this shakes out, how many americans will go back to work once the unemployment benefits are rolled back and how many people will need to stay home and take care of family and things like this,

so i do think we need to be cautious. emerging markets, for example, are in negative territory this year, so the picture globally is not perfect, and the u.s. does not operate in a vacuum, so while things look very, very bullish right now, we should be a little bit cautious, especially because the regulatory concerns in china -- china has an enforcement factor. kathleen: and they do not have to go to congress and pass it. what is the risk? usually, a strong economy can make stocks rally. stocks strong on friday, and inflation stays high, is that one of the things that is going to make this stockmarket stumble, because maybe on the next speech, it will speed things up? sarah: yes, absolutely. i think the rhetoric has largely pointed to a very slow and steady sort of tapering and, you

know, interest rate hikes are well down the road, looking into 2022 if not 2023, so yes, that would certainly cause the market to have a rather severe reaction, i would think. kathleen: ok, everybody is going to be watching this friday. thank you for joining us. eastspring investment manager, sarah lien. yonnie: the uss officially concluded two decades of involvement sparked -- the u.s. has officially concluded two decades of involvement in afghanistan that was sparked after 9/11. dozens of americans who wanted to leave are still there. >> we did not get everybody out who wanted to get out, but i think if we spent another 10 days, we would not have gotten everybody out and there still would have been people disappointed. it is a tough situation. vonnie: secretary of state

anthony blinken says the u.s. has begun a new engagement, saying close to 100 american still remain in the country who wish to leave and that a commitment to helping those people has no deadline. he says the u.s. embassy in kabul will remain vacant, and diplomats posted in afghanistan will now work from cutter -- from qatar. new travel restrictions on the united states amid a surge in covid cases, which had been lifted in june, and the changes likely to affect unvaccinated americans the most. there is a final say on who will have waived restrictions in the e.u. chinese regulators are having a crackdown on video games, children limited to just three hours per week of online gaming including friday, weekends, and public holidays, the new rules aimed at curbing excessive

indulgence and protecting the physical and mental health of minors. they say they will continue to try to reign in big tech. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: still ahead, we are looking ahead to data and expectations, but coming up next, we will be bringing you up-to-date when it comes to the situation in afghanistan as the united states and its 20-year military presence with the last coming out of kabul airport. this is bloomberg. ♪

kathleen: the longest u.s. war is officially over, the u.s.

ending its presence in afghanistan after 20 years. secretary blinken says this ends a chapter. secretary blinken: our troops are departing afghanistan. and you chapter of american engagement with afghanistan has begun. it is one in which we will lead. the military mission is over. the diplomatic mission has begun. kathleen: so now, let's get back to our bloomberg national security editor, joining us from washington. so, larry, in terms of what is next, what does it mean? i just have to ask you, to leave and have everything just so chaotic -- we know that the afghans need support. they need money. we also know that there is a lot of concern, not just within afghanistan, around the region about instability now. what do you see?

larry: well, i think all of that is true, and it is a gamble, paloma see without weapon we -- diplomacy without weaponry to black -- back it up. it cannot be used, and what the are suggesting it could be is economic power. they have not been very specific, but they have referred to the need, the possibility of adding new sanctions or lifting those as the leverage they have over the taliban, and the talent -- the question is, are the taliban well enough aware, sophisticated enough, and in control enough that they respond to those economic incentives, considering the very dire economy they are inheriting, with everything from covid affecting them as the rest of the world, but also economic

difficulties that are long-standing in their country? so will that economic weapon be sufficient? that is what we are going to find out in coming weeks. haidi: president biden, of course, refusing to budge on the end of august timeline. i am wondering how this goes down in terms of the domestic political impact. factors of broad international security and geopolitics playing into the viewpoint? larry: yes. i think there has been a lot of criticism in congress, although it is very mixed. not a lot of members in congress said send in more troops, you know, and the democratic party has a limited constituency on that, usually the ones on the defense committee that tend to be more hawkish, and the

americans, some folks like the minority leader said we have got to keep troops there, we have got to stay longer, but it was not a whole lot of criticism about the decision to leave as much as how it was executed, and there the debate is over did the complete folding of the afghan military within just days -- could the biden administration have handled it better? there will be hearings, hearings left and right in the coming weeks on that question. haidi: larry, great to have you with us. more details on the u.s. exit, the official exit, from afghanistan, and more to get your day going on this edition of "daybreak," on your towable,

-- on your ap. ♪

kathleen: china is imposing its strictest rules yet on online gaming, limiting minors to just three hours a day of play, sinking in new york trading on the news. let's bring in our chief asian correspondent, stephen engle, for more. steve, what do we know? what are the specifics, and how is this going to work? stephen: that is a question of how it is going to work, but they are doing internal controls, because the writing literally has been on the wall and the virtual wall. we have been talking about the spiritual opium that they are imposing on the minors, and they call it an electronic drug, and

that has been scrubbed from state media, but that is out there and is kind of the sentiment in this crackdown over multiple sectors. of course, there was commentary spreading like wildfire across state media, hailing xi jinping's crackdown as a profound revolution. you can see that this is certainly institutionalized, and it leaves investors quite wary of possible and immanent if not arbitrary regulation and crackdowns, so what is basically happening in gaming, this is the second major crackdown in the last month or so on gaming. it comes after another crackdown we saw, a sizable one, in 2019, that limits the number of hours for kids to play games. those under 18 can now only play online video games on fridays, saturdays, sundays, and public holidays for one hour a day, down from the most recent restrictions of 1.5 hours a day,

so they are absolutely cracking down on this. the one silver lining, perhaps, for investors is they have not indicated that gross gaming receipts from minors is only about 3% or 6% or there about, so maybe not so much of a material impact but sentiment, for sure. haidi: that antitrust probe has not hurt much? stephen: yes, and no. they are doing their internal controls, as well, and they are also pledging certain amounts of money for causes, and after the earnings results, improving the benefits of their drivers. a big food delivery giant, and one of the big complaint is they have not necessarily treated their vast army of drivers and motorcycle delivery people well, so they are vowing better benefits, but people have got to eat, and revenue was up, other than expected, the equivalent of

$6.8 billion. yes, they did post a third consecutive loss, but they are investing more to gain favor with the government in areas that the government would want. kathleen: everybody has to eat, not everybody has to invest in private equity, but the government also talking about a crack down there, as well. what is the regulator saying so far? how do you expect it is going to work out, steve? stephen: we could do the whole hour just on the regulations coming out of china, and i will try to be quick. the second crackdown on the private equity space, the securities regulator out with a speech, essentially saying that all private equity funds have grown, mushroomed along with true private equity funds. they want to crack down on the listing of these private equity funds and marketing them to the general public rather than to targeted investors.

they alluded to suspected embezzlement allegations, as well, so, again, this is just another step to crack down on illegal and under regulated private equity funds. the last regulation came, private equity funds, private property development, which kind of choked off a much-needed and really one of the last few stable areas of financing for a troubled sector. haidi: i see a new show coming out about the latest chinese regulations. our correspondent. you can get more context and analysis on china's crackdown, but cheekily when it comes to the tech sector, and available online at the bloomberg technology channel on youtube. heading to property, as steve just mentioned, some investors could get some clues on tuesday about plans with tighter controls. the world's most indebted

developer informing the press. joining us for now is a china credit editor with leadership at evergrande, what are we expecting? >> this is a process. it is the weakest in years. and, of course, the dollars of losses from the property and vehicle unit, so certainly, investors are embracing themselves -- bracing themselves for the news, but they are also the news conference, and this is a way investors typically use to probe companies when they go into difficult periods, and when you look at evergrande, it is going in the $.30 and a dollar

range, and for a company to talk about the pressures, really key. kathleen: what are their broader risks in the china credit markets right now? rebecca: there are their broader risks that are emerging, and evergrande is one of the key areas, but other properties have been under a lot of pressure, partly because of evergrande having the risk off sentiment, in china high yields, and the crackdown, and elsewhere, local government finance vehicles also under pressure, china also looking at those sectors, and of course, we have yet to see a public bond default at the local government financing vehicle, and that remain something that investors are looking out for very, very keenly this year. haidi: let's get you a quick

check of the business flash headlines. losses. make lenders extended their corrupt -- their recovery. $17.4 billion, and another climbing 12%. concern about a banking sector exposure to china developers, banks struggling with surging defaults. china's banking watchdog is investigating a property investment group. they say the irc have ordered them to stop selling to the property market. shares of robinhood split after it was said that a full band for payments is on the table. -- a full ban for payments is on

the table. it has been in the crosshairs of washington as they scrutinize practices that have contributed to the stock frenzy. tumbling in late trade after sales fell short of estimates, concerns a company will struggle to maintain rapid revenue, the california-based company saying revenue over $1 billion in the current period and 4 billion in the fiscal year for zoom. coming up, at the top of the next hour, a guest is with us as the chinese economy faces a potential slowdown. lots more to come. this is bloomberg. ♪

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haidi: all right, the start to asian trading, sophie kamaruddin in hong kong. sophie: here in asia, stocks from asia under pressure, but the regional index is still on course, with energy and utility sectors providing a boost. discretionary stocks have been lagging along with telecom, and the asx 200, gaining ground, web jet rising on the back of

trading, and looking at the forex moves, the kiwi dollar jumping as much as .8%. the aussie kiwi cross, that is at a low, amid chatter there is a barrier option. and the chinese pmi data do on tuesday. kathleen? -- chinese pmi data due on tuesday. kathleen: the outbreak of delta could show up in the numbers, something traders are watching, and then there is the impact on consumption. let's bring in a greater china economist, iris pang. so, iris, i want to start with

setting the stage of your view. you see a lot of things hitting this economy at once, flooding, social distancing measures, chip shortages, on and on and on, but is this really a small drag and notching your outlook down or something that is really potentially bad for the economy? iris: so let's discuss this one by one, because they have various degrees of effects on the economy. for example, delta. the damages comes from two sides, one from domestic, which i believe that the damages our short-term, and it is not controllable, but external, it is long-term. kathleen: ok, so when you look at the pmi coming out, we are

expecting to see more nonmanufacturing services damage. in fact, your own forecast of the pmi and the latest months is pretty much unchanged. what do you see, especially in the manufacturing pmi, and how does it fit into the bigger picture of some potential dangers with the chinese economy? iris: the first thing is that the damages of the pmi mostly comes from operations. it is not coming from the manufacturing side. so it is not coming from production. this is nothing to do with production. production is still normal. but the operation has been suspended. these will affect manufacturing pmi's. and from exports, imports, affecting the manufacturing pmi.

and worried about troubles, it is about worrying that they could be suddenly locked down in a foreign entity, even within china, so they hesitate with trouble and consumption. haidi: iris, this chart, taking a look at liquidity injections when it comes to intra-bank from the pboc, we are looking at potentially another injection today, is this -- what is the strategy hear from the pboc? iris: so with all of the challenges, there is one hope in china, which is very controllable under the central government. that is infrastructure project.

however, the funding comes partially from local government. it is critical to continue to increase. actually, local governments can barely raise any funds for infrastructure projects, and that is why we have seen that infrastructure projects have not taken off a lot in the first half -- in july and august, so i think that the central bank is lowering yields through the open market operation injection. you have local government's -- governments . haidi: iris, i need to ask you about this segment, where we have seen reaction with evergrande, their stock tanking, distress levels, and is this going to be on a selective

basis? within this sector? iris: i think it is just a very clear policy. it is deleveraging. it means that the ratio has to go down, and the cash on books has to go up, so most of the real assets property developers in china, the criteria, they have to continuously lower their debt ratio, and at the same time, they have to sell more homes to get more cash, so it is just a very, i would say, twisted thing as well as their property developers -- development. on one side, the central government wants cash, wants the

development of cash. but on the other hand, home purchasing and other restrictions on the home purchase market limits sales, so it is very distorted. we understand that it is to lower the debt ratio. haidi: so many conflicts. iris pang, always great to have you. up next, health recommendations with the covid shot in the hopes of pushing wider adoption. this is bloomberg. ♪

vonnie: this is "daybreak: asia." i am vonnie quinn. hurricane ida made landfall in new orleans as a powerful category four storm, affecting homes and businesses, without power, as it moves inland while bringing torrential rain. the governors of louisiana and mississippi promising age. >> we will get you what you need -- promising aid.

president biden: the people are resilient, and we can certainly see the power of government to respond to the needs of people, if government is prepared, and if they respond. that is our job, and we work together. when folks get knocked down, we are there to help you get back on your feet. vonnie: the reelection campaign of justin trudeau. and also a one-week decline in consumer confidence. trudeau's liberals. israel's prime minister is urging benjamin netanyahu to return dozens of expensive gifts he apparently received while serving in the top job. there was vacation on a private island in hawaii owned by oracle

founder larry ellison. he denies the charges. bloomberg has learned that alibaba has sacked 10 staff for publicizing the account involving sexual allegations. they announced they were fired for sharing an account on an internal forum by the accuser. we are told another three people have been reprimanded for making inappropriate comments in public forums. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. kathleen: vonnie, thanks. a surge in new american virus cases prompt the eu to impose travel curbs on the u.s., and let's get more from our

bloomberg senior medical reporter, michelle cortez. so, michelle, the pfizer shot recommended by the cdc panel, the idea that it is really good if people want to take it, what do people in the industry say about this? it seems like a great hope, but isn't really going to make a difference? michelle: i think the people who really want to get the vaccine, certainly in the u.s. and in a lot of places around the world, have already gotten the vaccine. what the cdc decision will do, and of course, we are still waiting for a sign off on that, is to normalize the vaccine, so it is going to be more like what we have seen with childhood immunizations, where everyone just gets them. it is the certain thing that every time you go to your doctor's office, it is recommended, and companies, schools, other places require you to get it, and that is the rub. that is the point. the backing by the cdc and, of course, the full approval last

week by the fda is not going to make people want to get the vaccine. what it will do is to get some people who are reluctant to get the vaccine. haidi: michelle, speaking of childhood vaccinations, do we know how far we are from getting a vaccine approved for children under the age of 12? michelle: they are still working on that. the clinical trials are still coming out, and we do expect for that to happen. they are just taking it very slowly. at some point, we will see the balance shift between the risks and the benefits. the number of kids who have been affected by delta has been skyrocketing. we are starting to see serious mortality and morbidity's, children getting very sick and reports of death, so we expect there will be this balance shift for these younger kids under age 12, and hopefully, that will come soon, and we know there is already pent-up demand for that group of people, but the actual

emergency authorization is still pending. haidi: michelle cortez there in hong kong with the latest. and with the covid out break in south wales, that keeps getting worse despite weeks of lockdown conditions. the state has recorded another record of cases on monday, total cases now more than 20,000 in the current outbreak. we are joined now. we will get fresh numbers. it feels like they have lost control of being able to trace all of these people who have had the virus that are in the community. >> yes, these lockdowns appear to be an effect of bringing it down, and the delta variant is spreading. this year, it really only seems to be slowing down the cases and not bring them close to zero. as you say, we have the latest numbers in about 15 minutes, and you would have to be an optimist to ask that anything different. things are better in melbourne,

73 cases reported yesterday, but it is also likely that lockdown conditions in the state of victoria are also going to be extended, so it has been going on for weeks now. as you point out, not too many bright sides. one is that it leads the australian carbon emissions have gone down. year to march, they are the lowest they have been since 1990, but the real silver lining is the vaccination rate, which has picked up sharply with the delta variant, and 34% nationwide, and, of course, the federal government very keen to rein in the lockdowns once the target of 70% and 80% are reached, which should be sometime in october if we stay the course. haidi: yes, michelle was talking that having the importance of the cdc recommendation, and we are waiting in australia to get some of the vaccine hesitancy out of the way. in terms of vaccine mandates,

here is what one person had to say to their company. >> the measures in our workforce, we have a lot of things in place. we do rapid antigen testing. we are seeing the vaccinations and the ability to get vaccinated -- there is the vaccine hesitancy, we went to get it reduced before we look at mandatory vaccinations. haidi: covid spreading, what are some of the other miners doing? paul: bhp -- they have to walk a fine line. bhp says while it respects individual choice, there is also an obligation to keeping its people safe while on the worksite, so bhp is going to trial this program. it is going to start rolling out

vaccinations at one of its mines in new south wales, a copper mine, and the policy in 2022 being enforced if all goes well, and in western australia, very successful in keeping covid numbers very close to zero. the vaccination rate really, really lagging there, so a risk. bhp has had some success with workplace vaccination, helping to get the vaccination in chile up. you can see the appeal of this idea. kathleen: all right, paul, thank you so very much, in sydney. we continue to follow the biggest vaccination campaign in history with more than 5 billion doses given across many countries now. you can check out our vaccine tracker on our terminal and on bloomberg.com. haidi: yes, let's get back to australian minors. -- miners.

with fortescue, i had to talk about iron or out of china. quick supply is still relatively constrained -- >> supply is still relatively constrained. with production, it is still up 8% at the end of july since last year. we do expect to see some rebound in construction activity and, therefore, demand in the fourth quarter of this year, but we are continuing to see strong demand with the strength of supply, so we are still seeing a very strong market and demand for iron ore. haidi: how much are you see the impact of delta being a threat to global production as well as demand? elizabeth: well, global production is actually up since the end of last year, about 21 percent, so outside of china, steel production up around 21 percent, so the market conditions currently indicate very strong recovery from last

years's covid impacted levels. the impact of delta is difficult to see at the moment in terms of what we might. through the end of july, we continued to see very strong conditions, whether that is there rest of the world or with china, so not a significant impact of delta, but the demand or iron or steel production -- that is something we continue to monitor. haidi: have you seen any disruption yet from the impact of delta and the covid outbreaks and lockdowns and parts of australia? elizabeth: well, it has given some challenges. as you know, a majority of our workforce, about 90%, reside in western australia, so we have been a bit quarantined relative to others, but we worry about the 10% of having that mobility, which is important to us. what we say is a number of our

members have either permanently relocated to western australia or have decided to temporarily relocate. we continue to support them with facilities on-site so they have a place to stay, but there is no doubt that the ongoing border restrictions in some of the impact on the mobility of labor is pretty challenging. we are managing it. we have been managing it for a long time now, but it has been a real challenge. haidi: you will be tackling the scope three missions next month. setting a target, has there been a change of heart? elizabeth: the change of heart, we have been measuring, and actually, we have been doing a lot of practical initiatives, so we have been working with our customers on this. we have been looking at the research and development, so we are committed to reducing emissions. we have not set targets in the past, because we do not like to set targets without a critical

pathway. now, with the development of fortescue industries with the work that we are doing, we'll feel confident to set targets, and we have a credible pathway to achieve those targets. kathleen: that was the fortescue ceo, elizabeth gains. be sure to tune into bloomberg radio to get in-depth analysis from the team broadcasting live from our studio in hong kong. there is the app, or bloomberg radio dot com. there is plenty more. stay with us. ♪

haidi: a quick check of the latest business flash headlines. an indian ride-hailing and an ipo. they are backed by softbank. they could raise about $1 billion on a valuation of more than $8 billion. ola could file as soon as possible. valued at about $2.3 billion, a racing carmaker is being transformed into an electric-led brand by chinese owners, and we are also told that the investment arm was part of the investment lineup for lotus.

and a full-year profit target with a chinese push to reduce carbon emissions. japan's largest steel producer is seeing larger margins. steel production accounts for 15% of china's carbon emission, pushed down the price of iron or by around 30%. shares of another company surged the most in almost five years on confirmation that there will be an increased stake and integration with existing supermarket operations, carried out with remaining listers for h20 and kansai. kathleen: let's get back to sophie for a look at what is on her radar screen. what are you watching? sophie: online gaming, bloomberg intelligence noticing the pressure will be less than 2018 crackdown on games.

pulling up the board ahead of the open in manila, we are watching mall operators and retailers, under extended lockdown to manage this, and we are watching reaction to indonesia extending situations until september 26. a view of what is ahead when it comes to the asean session. also, results since the first of trading, and earlier, a report of a wider first-half net loss per your we are also gauging reaction, kathleen, to the covid relief budget, $2.4 billion, with new cases in thailand dropping. kathleen: ok, sophie, thanks. haidi, i have to talk to you about this warren buffett story, sometimes known as the god of investing. making money in japan's trading houses, including names like

mitsubishi and sumitomo. he made $2 million on the bet. 21 percent rise. that does not even count for dividend income. -- a 21% rise. apparently, because of the covid outbreak, everything that has been going on with japan on that front, and even the political uncertainty, people getting on board. haidi: yes, political certainty, something always brewing in japan, not leading investors to follow him, but a lot saying this is exactly the sort of play that you would expect, to go in and hold for a long time, and to do very well at it. it is in his playbook. but it is very interesting, because it is a combination of the pandemic handling as well as the leadership. a lot of bearish sentiment when it comes to japan, including on the yen.

they expect more weakness for the yen as a result. coming up, we do have chinese data up, a couple of minutes away. an immediate reaction, and outlook. a guest joins us to talk about new antitrust laws from china, too. this is bloomberg. ♪

♪ >> 9:00 a.m. in beijing. i am yvonne men. -- yvonne man. david: we are waiting for the latest pmi numbers for august, looking for a number for manufacturing that should be coming out any time now. measures of demand, new export orders, pmi for small