>> very good morning and welcome to "daybreak: australia." i'm haidi stroud-watts in sydney. >> i'm sophie kamaruddin. we are counting down to the major market open. >> i'm kathleen hays. the top stories this hour. >> u.s. stocks hit a record. a cyclicals leading the gain ahead of a crucial jobs report. haidi: foreign investors.

the stock exchange, and further putting up of the economy. >> hsbc's ceo betting on china's middle classes. he tells us it is too big of an opportunity to miss, despite beijing's crackdown. haidi: southeast asia's second-highest vendor is going on a hiring spree. we hear from the ceo in our first in person interview since taking the top job. >> take a look at how the wall street trading day went. the s&p 500 hitting another record. was not a big move. it continues to move higher. energy industrial shares, which had been laggard, were among the biggest gainers. consumer discretionary and communication services were at the bottom of the list. consumer discretionary not doing as well today. to the bond market, flat as a pancake. anchored around 1.30%.

wait to see the jobs report. stronger than expected number. volatility in the bond market. in terms of crude oil, closing under seven dollars a barrel. a little bit lower. looking ahead to the opec-plus additional output. the hike saying we can absorb it. still wondering about sorting out the damage from hurricane ida and what it means for output in the gulf. the dollar is weaker for the third day in a row. take a look at the jobs report. what was expected and what we have seen, and why it was important. let's look at the yellow line. 700 25,000 forecast. that would be below 943,000. the previous months. close to one million. previously, the numbers weaker. the question is, are more people coming back to the labor force? that will be what people want to see. at the last fomc meeting, jay

powell's presser, he talked about -- he was asked what he is looking forward to taper. one thing he mentioned in passing, "i would like to see a couple more strong's job reports." that is why so many traders are on the edge of their seats, even at the end of a long holiday weekend, to see which way it goes. maybe the weaker side or the stronger side. haidi: also have them on their edge of their seats when it comes to watching what happens in china on the regulatory front. we heard from the president. was it something of a charm defense, and olive branch when it comes to foreign investors? he announced a lot of positive, but very broad measures, potentially a new stock exchange, small or medium-sized enterprises, pilot projects, trade agreements? will go to the open to see if it has an impact on sentiment.

they want broad stroke measures that were enough. kathleen: the latest on the hurricane, the death toll in new jersey is even higher. an estimated 29 people. 12 deaths in new york city. a total of 29 looking at the region. people were caught unaware. this is the remnant of hurricane ida. barreling up from the gulf. hurricane ida slammed through in central park. a record of rain. when i left work about 10:30 a.m., central park was already closed off. rain was pouring down. i had no bad how -- no idea how bad it was for others. closures, people having a hard time getting into the city and out of the city. a lot of the commentary we are having of these catastrophic storms in places that don't usually have them. what does it tell us about climate policy? this really sort of livens up the debate. haidi: it really brings it home.

i never would have thought to see these pictures out of new york. take a look at the latest death toll in new york city. bill de blasio saying the death toll has claimed to 13 people in new york city after the state of emergency was declared. stay safe over there. we continue seeing the fallout from the wild weather. in terms of the other story we track, the vaccine mandate and wall street. the u.s. is very split when it comes to mask mandates, vaccine mandates. interesting to see a lot of these wall street banks around states like texas that are very anti-vaccine mandate. all of that has been around vaccine friendly states like new york. kathleen: i want to say one more thing about the storm. we woke up to a beautiful, sunny, mild day. the calm after the storm.

our hearts and sympathies go out to the families of those who lost loved ones. let's get back over to hong kong to get a check on the markets with sophie. what are you watching? sophie: when it comes to how road maps are being mapped out to move away from the pandemic, japan reporting the government is drafting a roadmap to ease covid restrictions. we have a set up looking mixed after the regional index. a five-day gain for asian stocks. pulling up on the terminal, more pmi readings from across the region. manufacturing activity hit a speed bump at this summer on delta outbreaks and supply chain pickups we have seen. softness in export orders. broadcom and its earnings seeing some relief and the chip industry expected to return to normal with the company controlling supply to stop buildup.

we see shares under pressure in after hours trade in new york. pulling out -- a snapshot of base metals. aluminum is advanced continuing to hit multi-highs in london. upward pressure on the output curves in china. expectations for more support on the mainland. otto prices have been under pressure. the chinese clamped down on the steel industry, which citigroup flagged. they signal a peak for australia's iron ore export. haidi: president xi jinping sending a strong message to wary stock investors. he wants to play a developmental role in china's financial system. this is a trade summit he gave. he said the government will establish a new stock market in beijing to support small and medium-sized businesses and innovation. let's bring our chief north asia correspondent, stephen engle. a lot of it seen as an olive branch. positivity injected, given the

downside pressure we have seen from markets. >> yes and no. i have listened to a lot of speeches from chinese leaders. they are usually strong on thematics and short on details. so this is going to be the devil in the details on this new stock market. and also the pledges he is making to put the band-aid on some of the wounds we have seen, losing hundreds of billions of dollars in market value for these companies. global investors, not just chinese investors. president xi jinping giving the speech. a bit of an olive branch. he mentioned the regulatory crackdowns. he talked about more thematic terms about using innovation, also using the equity markets as a way to support the financial system going forward in a more innovative financial system that is less reliant on big state owned banks and debt. he basically said they will

provide the new stock market in beijing, shanghai and will have binging -- beijing provide a platform for small and medium-sized enterprises. beijing already has a market, it was set up in 2013. but it has been short on liquidity, and many companies do not trade very much on a daily basis. it has not necessarily served the purpose it was set up to do in 2013. according to the statement just after his speech, elaborated more that some selected companies will go over to this new board. we don't know the name of the board, when it will be set up, we don't know it's constituency. we don't know what the listing requirements will be. but we know that they did have lower lifting requirements and benchmarks than the main benchmarks in shanghai and in

shenzhen. so it is a step, something xi jinping announced as part of his reform agenda. but few details and no mention of the regulatory drive, other than it will likely continue. it kathleen: kathleen: seems to be obvious it will, and alibaba with the platform. do we expect all big companies to support this? how can they not? >> compliance is their lifeline. that is what tencent's president said. alibaba was the first to be in the crosshairs. they have pledged all incremental profits in the near term to go towards societal projects. this is now in addition to this 100 billion yuan pledge over five years to donate that money, which is $15 billion u.s., the exact same amount tencent has recently upped its pledge to.

so all of these companies are doing it. they are pledging money to societal goods to meet xi's common prosperity vision. so it will be over five years, 10 different projects. not defined right now. but you can guarantee they will be projects that fit with xi's vision for common prosperity. kathleen: thank you so much, stephen engle. you can get more context and analysis on china's crackdown, particularly tech giants, on red lines china and big tech online at the bloomberg technology channel on youtube. hsbc says it is committed to navigating the complexities of operating in china. in its first broadcast interview, the ceo told bloomberg the bank is expanding hiring in the region. he spoke exclusively with bloomberg. >> we have been around for 156 years.

we have faced political tensions in that 156 year history. let's be honest, if you want to be an international bank serving the world, serving 60 markets, at times it can be difficult. i'm not going to deny that. but our clients tell us they still want two locally, whether consumers want them to invest elsewhere in the world their savings, or businesses wanting to trade with the world. the demand we have seen, even in a crisis like the one we have just faced, the demand from our customers to serve them globally still exists. >> asking to choose between -- >> no. we have to comply with the laws, the regulations in the markets which we operate in. that is a complex task. i will not pretend it is easy. no one is asking us to choose. >> what are your expansion plans? are you hiring? >> we are hiring. we announced the committed, we

are listed core pinnacle. the plan is to hire 3000 extra wealth managers over the next three to four years. we already hired 600 of those in the first nine months of the program. we are on track for a target of hiring this year. the initiative is going well. meeting business case expectations. >> talk about hong kong, the sanctions. if it comes through, what does it mean for the financial sector? >> as an international bank, we have been around for 156 years. one of the jobs of an international bank is to comply with complex laws and sanctions laws wherever they are implement it. that complexity has increased. we will navigate it, as we have done so far and we will continue to do so. but you have to stay close with your clients, and with the regulators to understand their requirements. and to navigate those complexities. it is certainly a complex

situation. haidi: noel quinn speaking with francine lacqua. let's get you to vonnie quin with the first word headlines. >> at least 36 people are now concerned -- confirmed dead across the u.s. northeast after the destructive blow delivered by the remanence of hurricane ida. in new york, record rainfall of more than three inches an hour at its peak cause catastrophic flooding. transport services were paralyzed and people stranded as the state of emergency was declared. in new jersey and maryland, it triggered tornadoes. >> we are in a whole new world. let's be blunt about it. we saw a horrifying storm last night. unlike anything we have seen before. and this is a reality we have to face. unfortunately, the price paid by some new yorkers was horrible and tragic. vonnie: president biden has

rebuked the supreme court for what he called an unprecedented assault on women's abortion rights. the justices voted 5-4 to allow a new texas abortion restrictions to take effect. it will effectively ban abortion after six weeks of pregnancy. he ordered the administration to counter the safe law, which is the presidium. european regulators have find whatsapp for failing to be prance -- transparent about how it handled personal information. it is the first find issued under the eu data protection law. whatsapp did not properly explain how -- data, and violations of how data were shared between whatsapp and other facebook companies. the italian government led by prime minister mario draghi is preparing for its fully -- first full budget revenue. the finance ministry is working on a new law aimed at supporting

italian families and businesses during the pandemic. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quin. this is bloomberg. haidi: still ahead, kristin forbes and former boe external member of the monetary policy committee joins us. coming up next, president portfolio funds. he thinks equity and bond markets are pricing -- top of the pricing in longer-term inflation risks. we get more on the view next. this is bloomberg.

>> we know that china has lost so much more length with the

rest of asia. after it becomes china's biggest trade partner, it is -- substantially. we do know there is this opportunity. haidi: helen wong, we will be hearing more from our exclusive interview with her. u.s. stocks closing at a fresh record ahead of the key jobs report. that will shape the fed's stance on tapering. jobs will likely remain subdued. inflation also seen as a elevated. and that markets are not are poorly priced in with price pressures. joining us is michael cuggino. in terms of the underestimation, you don't think it is transitory effects? >> i believe some of the inflation pressures are transitory. short-term supply constraints, commodity pricing, labor issues caused by payments made allowing

people not to work because they are getting income from other sources, they are transitory the longer it goes on and the more inflation gets ingrained into the structure, the more it becomes structural and hard to get out. i saw a report from a company we own reporting 5% raise across the board to employees. that is what you saw in the 70's and early 80's. they are not the first company to announce such things. when you see that, you begin to see inflation become more structural. right now, it is a combination. i don't think the fed is wrong saying it is transitory, but it is not all transitory. that is a risk that is not fully appreciated. haidi: in terms of the thematic investing, i want to look at the chart of the battle between tech and cyclicals. a divergence between the nasdaq

and russell 2000. goldman sachs saying the concerns about global growth, delta are overdone and their opportunities in cyclicals. do you agree? >> i do. the book arbery the recovery was always going to be two steps forward, one step back. while we did not expect a delta variant, it is not surprising. we are dealing with uncharted waters. we did not pull down -- pulled down the economy on a global scale and tried to bring it up voluntary. it is new ground for all of us. i think the growth story slow down over the summer. it was supported by data points showing slowing inactivity. some of those exist. airline travel was slower this week than i had been a few weeks previous. i think there will be a resumption.

i don't think trade has been fully played out. there has been a sugar high aspect where we get a few quarters of unusually high growth as we resume to normal. what i think it's interesting is if the growth is sustainable, if it is broad enough to be all over the world, or if there will be pockets better than others. and the structural components and physical -- fiscal and monetary aid to shepherd it along. those questions are not answered at this time. it remains a work in progress. in the short-term, i see growth. i would agree. kathleen: we have had a number of guests who are bullish over the next year, 1.5 years, don't worry about the high valuations, because there is enough growth to justify them. will rally continue? >> as we sit here, you have an accommodative fed, not talking

about raising rates. they may taper, maybe not. $4.5 trillion of government spending -- i don't know the final number, but it will be a big number. what is not to like in the short-term? corporate profits have been good. they will work better maybe than they are. but they are good at supporting equity prices. the overall market is rich. we have not had a correction at all this year. that is interesting. back to my previous comments about underestimating inflation ahead of the interest rate volatility. inflation is more structural, but it begins to eat input costs, like labor, materials, it eats into profit margins. that drives the price learnings -- price-earnings multiple even higher. companies will have to perform even that much better. throw in a corporate tax

increase, a headwind. investors will have to demand a bigger inflation premium in equities to still be there because of the risks to the business models. will they do that with inflation the more structural? that is a real risk that is not being appreciated. kathleen: learning in coming weeks the fed is realizing it. thank you so much, michael cuggino. plenty more to come. this is bloomberg. ♪

kathleen: the world's largest chipmakers, broadcom, gave a bullish quarterly sales demand after demand of chips. let's go to ian king for the details. i think what everybody wants to hear, what are they saying about the chip's surprise situation that has been holding back so

many industries? >> they are usually outspoken, saying the industry is still constrained, still in this situation where they cannot get enough from contract manufacturers. interestingly, his main point was "we could have put up higher numbers, shoved more chips out there, but we didn't because some of that demand we are getting is coming from these companies that want to build inventory, not reorder, so we are holding back a little bit and making sure customers that really need it for the end devices are getting what they need." haidi: our tech reporter ian king. coming up next, the latest damage assessment after a minutes of hurricane ida bashes the u.s. northeast. catastrophic flooding and people reported dead in new york city. others cross new york city -- new jersey and the rest of the u.s. as we monitor the fallout

of these deadly floods hitting the northeast part of the u.s. the latest next. this is bloomberg. ♪

♪ >> we are in a whole new world now. let's be blunt about it. we saw a horrifying storm last night. unlike anything we've seen before. this is the reality we have to face. unfortunately, the price paid by some new yorkers. horrible and tragic. >> the records that were broken in central park, for example. 3.51 inches in one hour. it broke a record set one week earlier.

that says to me that there are no more cataclysmic, unforeseeable events. we need to for cvs in advance and be prepared. kathleen: official speaking about the impact of hurricane ida's remnants. su keenan joins us. the damage is still rising. i'm sure getting home last night was no easier than many others. so many people in new york didn't make it through. what is the latest on the damage and the toll it took? su: the comments relating to global warming. they believe that wetter -- weather is getting more extreme. that is still controversial in the u.s.. in new york, unprecedented for the remnants of a storm that was flooding the subways. people waiting on the platform as the water rushes in. subways were shut down.

trains were shut down. there was flash flooding throughout new york city, throughout the tri-state area. new york city is home to wall street. there was a massive transit problem throughout the night and into the latest trading session. massive rain that flooded roads, highways, trapping cars. baseball stadiums, basement level apartments were swamped. that's where you saw some of the deaths from people trapped in cars, people trapped in basement apartments. state of emergency declared in new york and new jersey where tornadoes were cited. in terms of the other damage, power outages were massive throughout the city and throughout the state. getting back to the traded issues. we had 190 flights countered at newark. -- canceled at newark. i mention subway service was largely suspended. amtrak train service.

two east coast cities also suspended for the last 24 hours. 20 people reported dead in new york. in new jersey, a state of emergency and a tornado cited. the death toll climbing to 23. president biden has stated the white house is working around-the-clock to respond to the damage from ida. that also includes opening the strategic reserves. he's interested in keeping gas flowing up and down the northeast coast. also, gas prices from skyrocketing. haidi: we saw oil futures in new york trading higher, closing near $70 for the first time in a month. this is the concern on the gulf coast. su: you have to realize there are no factors impacting oil that have put texas intermediate

on a wild ride. you've got the receding dollar. that makes commodities more attractive. that's bullish pressure. opec deciding to boost output. you have ida which is causing an increase in demand and a decline in supply. oil futures in new york near $70 a barrel. that's the first time in a month. investors are betting that the market can absorb the additional supply from opec, particularly as the u.s. grapples with ida's impact. 94% of the gulf of mexico crude production remains shut. we know that the secretary of energy has authorized the use of strategic reserves. that's when the government releases its own supply and to the public. they are exchanging with the exxon refinery in louisiana. we could see more of that in the

days ahead. that regulation keeps it from being a huge deficit. that can also impact price. it's expected that oil will bounce back from the dip we saw in august. it will stabilize around this level to the near term. back to you. haidi: let's get you the first word news with vonnie quinn. vonnie: china will set up a new stock exchange in beijing. they did not provide a timeline. they said it would deepen reform of the national equities exchange. china wants to increase equity financing in its bank dominated financial system to renew debt levels. >> we will continue to support the innovation driven development by deepening the reform and setting up the beijing side as the primary

platform for innovation. vonnie: chinese regulators have set a december deadline for 11 car healing services to fix instances of what it calls misconduct. this could impact an industry employing millions. it cited violations including using unlicensed drivers. india's increase in daily covid-19 case numbers is raising concerns of a possible third wave. more than 40,007 -- 47,000 new cases and 509 deaths recorded on thursday, the highest in two months. israel reported a record 11,000 new daily cases with testing rates high ahead of the school year. about 30% of those infections were in children younger than 11. singapore exchange has become the first asian financial hub to

introduce a framework for tech companies to list. they will be allowed to listen singapore starting friday. half the amount the exchange first proposed. global regulators step up scrutiny. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. kathleen: thank you. ocbc is boosting its regional business flow from the world's second-largest economy. the ceo speaks exclusively about the opportunities she sees. >> we are partnering with chinese banks so we expect a lot of referrals of customers coming to hong kong. throughout this, we have been building up our strategy for quite some years now.

we have our premier profits coming in. indeed, some of these are optional. for the last three years, we have seen that number increased by 50%. those from china increased by 100%. >> talk to us about the impression and strategy to get there. when you take a look at your income, china accounts for 40% of your total income. what are the projections? what are you looking at? >> china accounts for 25%. we still have our home base in singapore. singapore contributes a substantial amount of our profit. we know china is the second-largest largest economy in the world. we know that china is so much more linked with the rest of asia.

we will become china's biggest trade partner. enter asian trade is going substantially. we know we bridged our presence in great china. we have about 19 branches around china, hong kong. in a way, we are there and we are ready. it is indeed the trade roads that we are capturing. investment in so many more chinese companies, customers coming to us. using singapore as a base and going further into indonesia. it's a big market for them. >> different industries all coming. not just counting the chinese investors. you are also looking at some of the multinational companies. some of the chinese companies. koreans, japanese who have been adopting what we call the china

plus one strategy. having a second stop in southeast asia in that sense. >> are you all set up for your growth plans, your strategy? do you see then -- see the need to hire further? >> we will hire further. bank of singapore establishment in hong kong. we doubled our rm numbers from 2018 to now. we are going to double that again in another two years. that's one example. for handling the trade flows, capital investment, we are also expanding. we are still expanding what we call our china business office. china business offices in thailand, vietnam, malaysia. we are increasing the prices in indonesia as well. >> how concerned are you about the infectious delta variant

that is still hampering growth and most of the market in southeast asia? >> yeah. i think this is uncertainty we talked about. this year or last year, anyone in the finance industry is to make sure that we protect and serve the customer. that is pretty much done and done well. again, we want to be prudent as well. looking at what other opportunities and recognizing the challenges. kathleen: coming up next, more on the opportunities for lenders in china. no claim speaking exclusively to bloomberg about the base plan and the complexities. this is bloomberg. ♪

♪ kathleen: haidi: -- haidi: nor client is not deserved. china's continue wealth creation offers more opportunities. in his first interview since becoming ceo, he told us about navigating the changing laws on hong kong. >> you know, we've been around for 156 years. we have faced political tensions in our history. let's be honest.

if you want to be an international bank serving the world, serving 60 markets at times, it can be difficult. i'm not going to die and -- denies that. our clients tell us they still want us to bank for them. whether they are consumers wanting to invest elsewhere in the world or its businesses wanting to trade with the world. the demand we've seen over the past, even in the prices -- crisis, demand from our customers still exists. >> are authorities asking you to choose? >> no. they are not. we have to comply with the laws and regulations in the markets in which we operate. that's a complex task. i'm not going to pretend it's easy. no one is asking us to choose. >> when we hear china say that they want to have a fair society, what does that mean for wealth creation? what does it mean for your focus on china wealth? >> let's talk about wealth creation.

if you think about the number of cities in china that have over one million population, there are different statistics out there, but it's around the 75 mark. many of those cities have gone through organization over the past decade. they are going through gdp growth. and we are starting to see those cities turning to strong consumption markets. as they develop consumption appetite, when they get to gdp in the double-digit per head, that's when they start to think about wealth products. insurance. wealth management. investment products. that's where the huge drop in attorney -- opportunity is. there still more urbanization to come. i think that we have a long transformation program in china.

the creation of wealth is not super wealth. it's wealth for the middle class. it's wealth for the urbanization that has taken place. that's why everyone is interested in china as an opportunity for wealth. don't just about wealth in china as the superrich. it's also wealth for everybody. it can be as simple as policy. >> with the latest crackdowns, you don't feel like it will veer you off course? >> it's an important part per -- market opportunity and need to serve. it's not going to change our investment plans. >> if the sanctions law comes through, what does it mean for the financial sector? >> as an international bank, we've been around for 156 years. one of the jobs of an international bank is to comply with complex laws and sanctions laws whenever there implemented.

that complexity has increased. we will navigate that, as we have so far. we will continue to do so going forward. you have to stay close. you have to stay close with your clients and the regulators to understand their requirements and to navigate those complexities. it is certainly a conflict situation at the moment. haidi: that was the ceo of hsbc speaking to francine lacqua for front row. subscribers can watch the full interview on the terminal. navigating china's regulatory roadmap is top of mind for investors now. sophie kamaruddin is tracking this. what is on your radar? sophie: morgan stanley is tracking this. they say it's transitioning from the mid to late stages of this gradual shift. in the coming months, they are looking to resume the resumption of offshore ipos.

flipping the board. morgan stanley also expecting more easing from policymakers amid the growth slowed down. they are penciling in another 50 basis point rrr cut their. on china's slowdown. goldman sachs thinks exciting over that and other global cyclical risks is looking overdone. the outlook is looking less friendly going into 22. they do see in improving outlook for japanese stocks. one play on goldman, they are looking to recommend shorting forty-year booms. the ecb wilt caper -- will taper in the next corner. kathleen: our next guest is suggesting a new playbook for central banks.

joining us now is kristin forbes. previously an external member of the bank of england monetary policy committee. unofficial attendee at the recent kansas city fed economic symposium. in terms of this new playbook, got to go fast. you don't know when you need to start raising rates. there is so much focus on the jobs report tomorrow. what is the place for the fed of jobs and jobs growth in this new playbook? kristin: the traditional playbook is still very much the one that we are following. they want to see the labor market recovery. that is the big unknown right now. the fed estimates that there's roughly 7 million fewer workers today than there were before covid. are those workers going to come back? that's a missing leg in the recovery. it's key for what happens next

for inflation. it makes sense that that is what the fed is focusing on. they want to give the economy time. they wait to see that play out. they are going to move forward, hopefully sooner rather than later, on tapering. i was focusing more on what comes next. after the tapering is done, as the economy recovers, how should you prioritize interest rates? kathleen: what is the conclusion? what is the main take away from that? if they start tapering sooner, people are going to start saying , maybe they see more growth and inflation and they will move faster. kristin: it's true. they are linked. there will not be a serious discussion of raising interest rates until the tapering is done. it makes sense to get this process out of the way and then the fed can return to looking at

its usual metrics of how the economy is recovering. how much of the inflation is transitory versus permanent? and then it will be ready to act as needed to get inflation back to sustainable levels and ensure full employment. until he gets through the tapering process, it will be ready to adjust another margin if the economy keeps up the strong recovery. haidi: how much wider is the margin for error, given the dislocating effects that this is a pandemic caused economic situation that we are dealing with? kristin: back at set a number of very interesting issues that were the focus of the jackson hole conference last week. it's a very uneven recovery. quite different than your standard business cycle recovery. that means that the fed, central banks need to think carefully as they move forward on how they tighten. some sectors of the economy are doing very well. for example, the housing market. very strong.

needs a lot of stimulus right now. there's other sectors of the economy, somehow salt are struggling to pay credit card debt. they are going to continue to need support for a while. some may have trouble getting back to work because of health concerns. some companies have trouble getting back to businesses. the fed should think carefully and how it starts to cut back on stimulus. it makes sense to cut back on stimulus to the segments of the economy doing well. the housing market, affected by asset purchases. probably keep more support in place for sectors of the economy that are struggling because of the uneven recovery. maybe be slower to raise interest rates which have more effect on sme's and borrow short-term for banks. household struggling to pay credit cards debts. this is where the nature of the recovery changes the standard playbook file the central bank

should be thinking about the next steps. haidi: as the fed continues to mall the set of questions, we are seeing emerging markets. bank of korea loss of 75 basis points. does it tell you that there are idiosyncratic problems that these economies are dealing with? we are not necessarily watching the fed deal with the center of gravity when it comes to setting global policy. kristin: you are right. each country is different. some countries are recovering much faster. some are more of a risk because they don't have as well anchored inflation expectations. there's other factors pushing up inflations. all central banks easing in 2020, 2021. now we will see different central banks moving stimulus at different rates. that makes sense. they have different situations.

the fed still matters. the central bank is the world's largest financial market. it's the central bank for the world's most important currency, the dollar. what the fed does will still have global applications. that's wide is important for the fed to be very careful and communicate very well what it's doing and what it plans to do next. kathleen: thank you so much. plenty more ahead on daybreak. this is bloomberg. ♪

♪ haidi: a quick check of the latest business flash headlines. he'll a placard -- it says corporate and government customers aren't spending as it predicted. hbe says profits will be between 44-53 cents per share. analyst average protections for $.49. apple's next generation smartwatch is expected to push the limits of the user data. it is bigger and has a better processor. do watch faces will be designed to make use of the increased real estate. the device is expected to be unveiled this month. it has face production snacks. that's it for daybreak australia. daybreak: asia is next as we count down to the final trading session of the week.

this is bloomberg. ♪

♪ haidi: very good morning. sophie: we are counting down to asia's major market open. kathleen: good evening. our top stories this hour. asian traders look ahead to the u.s. jobs report after cyclicals led wall street to fresh records. china's president looks to calm investors, announcing ne