haidi: welcome to "daybreak: asia," i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in singapore. shery: and in hong kong, i am shery ahn. markets await u.s. inflation data after wall street snaps of five-day losing streak. japanese leadership front runner

kono gets abused by learning that he earned the potential backing of a rival. and public protests are raising the stakes for beijing. haidi: will get more on that story on evergrande in a moment but it is front and center when it comes to the u.s. inflation. the consumer inflation print is in focus for investors. when you look at u.s. inflation versus the rest of the world, that is the u.s. there and read. japan down below in the darker yellow. could this inflationary pressure be idiosyncratic, a u.s. thing? monetary policy stimulus that has gone into the economy, because of that elevated level of demand, does that mean that transitory come down could be steeper than we have seen other economies? a lot to speak about as we wait for that key data print. shery: the u.s. attorney open for business with faster than the rest of the world but we

continue to see inflationary pressures across the globe because of commodity prices rallying from aluminum to steel. supply concerns. european gas reserves at a decade low. base metals, within 5% of a new all-time high. haidi: from rallies of one kind to another, we are seeing increasing concern over social instability bring into this evergrande story. we had police having to go to the company's shenzhen headquarters because dozens of people have gathered. this revolt from retail investors, even its own employees and homebuyers. it is not just a systemic contagion, this is a company that had sold so many wealth management products to apartment buyers, to their own retailers. . now everyone is coming back. there is concern that we could see a disorderly unwinding of this company. shery: every other day we get

new headlines on evergrande. of course, we will be waiting to see how the stock performs. it has already fallen below that ipo price. when it comes to the chinese market open in about 50 minutes time, we have a new backer. jp morgan leh keen japan, not to mention other -- liking japan, not to mention other emerging markets. telling people to offload attack because the growth so far has gotten a bit too far, haidi. haidi: yes, very interesting to see whether the japanese rally will continue, how that could be beneficial for the cyclical driven rally. over to sophie kamaruddin in hong kong, what are you seeing when it comes to the start of trading in tokyo? sophie: nikkei futures in chicago are printing higher.

. it. assesses the different economic paths by candidates to take over the world by suga. ishiba is not in the race. political risks are seen a beating. jp morgan's strategist is also bullish on the yen. and another analyst has upgraded her price target to 4500, but she is cautioning chasing the gains, saying there is a major pullback, u.s. stocks have gained ground on. day drop ahead of the u.s. inflation numbers on tuesday. the dollar is under pressure. switching out the chart, the reflation trade. we had aluminum hitting $3000 in london for the first time in 15 years. commerzbank says there is no sign a reversal in the trend is coming, even as technicals are looking over about four aluminum. could be in the making for prices, inflation.

sherry: the rally in community continues. let's get to vonnie quinn with the first word headlines. we have this new forecast by opec. vonnie: yes, predicting stronger demand for crude this year and next, a combination of rising fuel consumption and output disruptions. the group's report says the world will continue to face and oil deficit in the coming months even as members revive production. global oil consumption is expected to reach 100 million barrels a day in 2022, which will exceed pre-pandemic levels. a global scientific panel says vaccines for covid-19 work so well that most people don't yet need a booster. it report published in the lancet says governments should focus on immunizing the vaccinated and wait for more data on which boosters will be most effective and doses. the assessment is based on a

wide range of real-world observational studies and clinical trials. china has urged the u.s. to repair damaged relations as the biden administration weighs a new investigation into chinese industrial subsidies. the foreign ministry called on u.s. trade and commerce officials to uphold the spirit of last week's conversation between presidents biden and xi . global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quaint. this is bloomberg. haidi: let's get back to that china evergrande story, the developer facing more pressure not just from bondholders not that it is nearing a possible default but also anger from homebuyers, management, investors even its own

employees. let's bring in chief north asia correspondent stephen engle in hong kong. this is largely centered around these wealth management products that were sold as part of supply contracts and apartment purchase contracts, right? stephen: a small-scale protest for wealth management products like this, whether it was a ponzi scheme tied to peer lending, these are not uncommon in china. but because the government put such a high premium on social stability, and there is this added emphasis and attention to a common prosperity and protecting the rights of retail investors, the government is clearly taking notice of this at a time when, of course, bondholders are sweating it out right now over evergrande, the world's most indebted developer with more than 300 dollars in liabilities. now they are seeing protests -- with more than $300 billion in

liabilities. now they are seeing protests. dozens gathered to demand repayment on overdue wealth management products. a media company is reporting that that number had swelled into the hundreds over the weekend on sunday in particular, but it is not an isolated case. in the northeast part, employees who bought those wealth management products protested over the weekend. they were told to work from home going forward. also in guangzhou, there was a protest on unfinished homes. yet to be completed homebuyers, up to 1.5 million of them. evergrande has put out a revised plan, giving wealth management product holders three different options, but all of them are not very palatable, as you can see by the level of protests starting to emerge. shery: does that mean we could

actually see the government intervening now? stephen: that is the big question, isn't it? with huarong, there was a delayed bailout, but that was a government-owned bad debt manager. this is largely private-owned. a developer in china. the government has withheld from any kind of assistance. but as these protests mount and the financial risks also escalate, at nomura, this analyst, her best-case scenario for all these circumstances playing out, she says the best-case scenario is a government-supervised deal that ensures evergrande delivers homes and pays their suppliers. that keeps the suppliers and some people happy. but at the same time, where the dollar bondholders, they would get a big haircut, about 75% haircut. 25% of their money back. that risk already being priced in with many of the dollar

bounce trading at $.30 to the dollar. shery: our chief north asia correspondent stephen engle with the latest on evergrande. we have a big update in japan leadership race. is reported that the former defense minister will not run in the race to succeed yoshihide suga as prime minister. joining us is our tokyo deputy bureau chief, sophie jackman. what does this mean for the leadership race? sophie: with the defense minister out of the race, we have three main candidates. his endorsement will benefit from his popularity among the liberal democratic party's rank and file nationwide, as well as the voting public. local media reports he is behind the vaccine minister kono. he is leading in public opinion polls, and with ishiba on his side, he should get a boost. but there those who do not get along with ishiba.

he is a polarizing figure. so will have to be sure not to alienate members of his party. haidi: what do you see as the main policy differences? >> the three candidates, ko no, the former defense minister, they are yet to face off in a debate. we know they have different views on what economic and fiscal policy should look like as japan pulls out of the pandemic. a year ago we were at the end of the eight-year premiership of shinzo abe, and his namesake of abenomics, monetary stimulus and easing. one of them is his protege and is key to holding onto that 2% inflation target and making that a priority. kono on the other hand said growth generates inflation, not the other way around, indicating he is not bound to that target.

that is a difference between the candidates. shery: sophie jackman with the latest on japan. in the u.s., house democrats are proposing tax cuts that would impose hefty increases on corporations, although they fall short of what president biden put on the table. global economics editor kathleen hays here with the numbers. is this all basically a negotiating strategy? kathleen: it sure looks that way. democrats in the house got so much attention, they got the ear of everybody. they want to spend big, but there are moderates in the house , too, and this is what they are trying to bring together, this revised corporate tax proposal. they want to raise the corporate tax rate from 21% to 20 six point. . percent not quite as much as joe biden wanted, 28%. capital gains, 20% will go after 25%. joe biden was looking for 39.6%.

it is far less than that, though it is estimated to raise more than $2 trillion. it is a $3.5 trillion plan. you have to pay for it somehow. that is what moderate democrats are talking about. some of them are in swing districts. if you look ahead to the midterms, a swing district, libya have a powerful republican challenger if i am a swing democrat, i have to appeal to them, too. . in the senate, there is joe manchin, pounding the table saying, we already past $5 trillion with the stimulus. let's slow down, let's talk about this. he says he is looking forward to talking to biden himself, about how they can put something together that makes sense. haidi: how do you see clean energy and fossil fuels fitting into this debate? kathleen: it is an interesting part. local stories have interesting parts. joe manchin, democratic senator from west virginia, a coa

l-dependent state who believes there is no need for clean energy provisions because the nation is already moving against fossil fuels. he has also received 400,000 dollars in donations from the oil and gas industry since 2017. some progressive democrats like alexandria ocasio-cortez in the house say he is beholden to oil and gas. he says, that is not true, you can have your opinion. but it is another sticking point. i think that is what is so interesting. a very powerful person. you need all 50 democrats to pass the reconciliation bill that will get this budget bill through. that is why it is important and why it is getting a lot of attention. haidi: our global economics and policy editor, kathleen hays. still ahead, asian bonds, and the increasing pressure on evergrande, with alliancebernstein head of fixed income, fred gibson. and loreen gilbert from wealthwise financial will be with us.

this is bloomberg. ♪

>> the u.s. cpi print. >> a key print for tomorrow. you may start to see the taper. >> the fed will make up stories to fit their story, which is inflation is transitory. >> a lot of uncertainty about inflation. >> any upside surprises. >> surprises to the upside. >> could certainly hurt growth we need to think critically about what higher prices do. >> the persistency of inflation. >> to what extent there is a negative feedback, second-round effect. >> a lot of that coming to play at the next fed meeting. >> a bit of a dangerous game. ♪ haidi: our earlier guests, talking about what they are expecting from the cpi print of the u.s. on tuesday.

let's get more on expectations with loreen gilbert, ceo at wealthwise financial. great to have you with us. what are the implications one of our previous guests said that the fed will try to use it to fit its own transitory inflation narrative. loreen: i think what we're looking for are the areas that are not so obviously transitory. when it comes to inflation, how much inflation is there in food prices, staples, that make no sense apart from supply chain issues that we talked about and semiconductor issues that we know about. i think if we see a persistent price increase in those staples, we will know it is persistent and not transitory. haidi: inflation expectations when it comes to u.s. consumers in the meantime, the highest on record. we heard the new york fed survey saying that american consumers expect inflation to be around at

4% level. what does that do for consumer sentiment and how does it impact your stock choices? loreen: good news for consumers is they have been saving a lot of money so they have money in order to spend more but they don't want to use that money to pay for goods they want to use that money for one-time expenses not ongoing expenses for monthly needs. people have the money to spend. they are not going to want to spend it just on increasing -- consumers will become more cautious in a sense. we want to look at what is happening with apparel, with food, how are consumers going to respond, and will that sentiment dampen as they see prices continue to go up? you talk to the average person on the street, everybody knows there are inflationary pressures. . so there is an expectation that that will be there. but the consumer, because they have that money, that can help equity prices. shery: higher prices also

affecting company's margins given the pricier input prices of raw materials. i wonder how much the corporate tax hike will hurt once it goes through congress. of course, there is still a lot of work to be done, but is this something you price into the markets now, or later? loreen: what we heard today was very good news. that is a more moderate tax increase. that would be very good. it would bring a sigh of relief to the markets and to consumers. even to corporations. so it sounds like we will get a moderate proposal. moderate increases, which can be absorbed. it can be absorbed by corporations, by consumers, and individuals as well. shery: today in the markets, we also have the chinese adr continuing to be under pressure given the news of breaking up ali pay. are you invested in chinese equity markets at all or exposed to them, given their weighting in emerging market indices, and

what do you do with that? loreen: i think individuals need to be cautious around china the continued regulatory intervention, the concerns that are there all the news that we are hearing. from our perspective, we are underweight chinese equities. there is the risk of delisting of equities. i think the investor needs to be very cautious when it comes to chinese equities. to your point, of course, they are lumped in with emerging markets. most people have emerging market. maybe it is small, but there is still exposure. i think being careful, understanding where that exposure is. we know china was ahead of us in recovery. they are also ahead of us as earnings have peaked and now are going down. we will see that impact when it comes to chinese equities. to try to invest in emerging

markets outside of china, including china. shery: coming, commodities surged to a 10-year high. european gas and power hit fresh records. we will tell you what is driving these moves. this is bloomberg. ♪ loomberg. ♪

sherry: the commodities rally ramped up once again. aluminum hit $3000 the first time in 13 years. gold is rising ahead of inflation data. a new storm is headed for the heart of u.s. refining. su keenan joins us for the latest. we just had eric and ida. we have another tropical storm coming. su: yeah, nicholas. it could be at hurricane status by the time it makes landfall in

texas. nearby louisiana could also be affected, and that could cause a disruption for the golf refineries, and infrastructure that are still recovering from hurricane ida, which was just two weeks ago. residents are once again boarding up. the louisiana governor declared a state of emergency. that texas governor is ordering people to get ready. energy stocks have been on fire. as asia trading begins, we are seeing a pullback. nymex crude surged above 70% in the u.s. monday. natural gas was better than 7% intraday. but we are seeing the bigger picture that oil is back at a six week high, and natural gas, look at that, more than doubled for the year. it had a seven and a half year high. there are many analysts who now say the demand for oil and natural gas could further juice the oil rally.

nearly 50% of oil supply is still down in the g. -- in the gulf. if you look at the bloomberg commodities index, it is way and above the faang stocks, which we generally look at at the higher beta, so that juices concern about inflation, heidi. haidi: aluminum and steel at decade highs, china has output curbs adding to their concerns and potentially a threat for first or inflation as well. su: absolutely. let's dive into the bloomberg. you can see the dramatic surge particularly in these metals not only threatening faster inflation, but increasing consumer costs and putting pressure on several banks to curb the massive stimulus measures.

booming demand for economic recovery combined with supply lows -- look at aluminum, nowhere can you see this surge in price, aluminum at a 13 year high. output curbs in china adding to the rally. haidi: bloomberg's su keenan there. let's get a check of the latest headlines. credit suisse has been dropped from the list of lead banks for this apo. it was going to be in the london debut of this company as well as citigroup and jp morgan. insiders say credit suisse declined to join the firm's loan group. southeast asia is battling one of the world's worst covid-19 outbreaks. this company expects sales down two point $3 billion. pandemic restrictions creating an uncertain operating environment. next, we will be talking to the rates and currency outlook with alliancebernstein's brad gibson,

and see what he says there are aspects of evergrande's crisis that are hard to ignore. this is bloomberg. ♪

haidi: for months now, epidemiologists speculated that vaccinated people may need an additional two help stop infections of the delta variant. but we are getting a new review that has some turn -- some scientists questioning whether a booster shot is needed as well. is this situation where they think it will not create more immunity, or do they think that most people will have sufficient antibodies from the first two

shots? >> frankly, the argument was that there is not enough data to show a booster is needed. that the vaccines' efficacy wa nes with time. the idea that government should perhaps because of treating their efforts more on getting the vaccine to people who haven't had any doses yet, rather than focusing on those who have had the shot. this is a panel of worldwide experts, something the world health of organization has also been arguing, we need to get the poor people who haven't had access to vaccines, they should get the shot first before we talk about boosters. sheri: and this comes at a time when most of the world is unvaccinated because of lack of vaccines. president biden is expected to urge global leaders to do more on this front, according to the washington post. what do we know? kara: biden has ramped up efforts trying to get the vaccine out, saying that even as

he is pushing ahead with his plan to get boosters after the u.s., trying to get them in mid-september ending. fda approval, that he will make more boostersp. vaccines available -- that he will make more vaccines available to other countries that don't have the shots. they say there is more than enough to go around. shery: kara wetzel, san francisco bureau chief, with the latest on the global pandemic. turning to asia's vaccination efforts. japan hit a milestone on monday with half of the operation fully vaccinated. sophie kamaruddin is tracking progress across the region. sophie: as bloomberg economics points out, japan managed to keep up that piece of vaccination even as it approaches the 50% threshold. jp morgan is confident that global growth slowdown will be short-lived as vaccinations are picking up in the areas most impacted by these outbreaks, and that would be asia and australia. the threat they see to a rebound

is the persistence of supply constraints, but they do see that fading as inventories rebuild. jp morgan is staying long equities versus bonds. that is a theme that has been favoring japanese equities. going into the tokyo open, nikkei. futures in singapore are higher. the yen trading study, and futures rising. . we are tracking the rally in treasuries ahead of the u.s. inflation data. the aussie dollar is holding steady. iron or futures picking up ever so slightly. downside pressure for iron ore, which bloomberg intelligence suspects will continue, given the ramp-up of steel output curbs in china. shery: all right, let's go with the first word headlines. vonnie: the front runner to be japan's next per minister has been given a boost with a report that the former defense

minister wil. quotes people close to you see the saying he plans to back kono in the election. the members of the party will vote for their new leader on september 29. president joe biden will host the leaders of india, japan, and australia next week for discussions that will include countering china's expanding influence in the asia-pacific. the first in person summit for the group known as the quad. the agenda will also include the pandemic, climate change, and emerging technologies. singapore's parliament is considering a bill that would allow the government to investigate and stop foreign actors from influencing national politics and inflaming social issues. is the latest move to assert control over online content that the government's threatening. a two-year old law in singapore

against "fake news" has been used several times to order social media sites to block posts. walmart and globe newswire to say they are investigating a hoax tying the retailer to a nonexistent cryptocurrency deal. the fake announcement said the retail giant would start letting customers pay with litecoin, relatively obscure instrument that is not amon. walmart denied the statement -- which is not -- -- that is not among the top 10 currencies. walmart denied the statement. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. shery: china has crisis continues to escalate. evergrande is now facing protests by homebuyers, retail investors, even its own employees, a new challenge for beijing. the crisis is not going away either. china's next big bond maturity

doesn't hit until march, but it needs to make $670 million in coupon payments by year and. our next guest is underweight exposure to evergrande and says it is hard to ignore current prices. brad gibson is head of asia-pacific fixed income at alliancebernstein. we understand you follow rates and currencies and you are not going in debt when it comes to the credit space, but we have to ask about evergrande. given it is trading in the 20's. how compelling is this story. brad: $20 for a bond is extremely distressed and prices in default. it is very hard to ignore prices at those levels. more importantly for us, it is dragging almost the entire sector down. there is some dispersion among prices in the property sector, but a number of potentially higher quality bonds are now trading in the 70's and 80's, and there is potential value

there no individual property issuer is systemically important, but the whole property sector itself is. we think the trouble for evergrande is representing opportunities across the sector. we have been overweight china rates, it has been a topic for hours the whole of this year. some of those easiest gains have been made, but relative to other large bond markets around the world, we still see room for china rates to gradually decline into 2022. china's economy is slowing. monetary policy is likely to be slow to aggressively re- stimulate. nevertheless, the bias is for china rates to be heading lower into 2022, may be supported by a rrr cut at the end of this year. haidi: central-bank divergence or policy divergence is a key theme for you. what would you be looking at is the most opportunistic? brad: within asia, if you think

of the reserve bank of australia, it has reduced its bond purchase program. it is still very supportive of the entire yield curve up to. 10 years they have recommitted to keeping policy on hold until 2024. compare that to the bank of korea which has already started raising rates. it raised rates 25 basis points in august. it is likely to raise again potentially in november. that is causing some interesting divergence between their currencies as well as the rates market. thinking about pairing that divergence, whether it is in the bond or the currency market, it is very interesting for us in asia. haidi: the em space you are talking about rupee versus repair potentially -- rupee versus rupiah potentially? brad: the rba had inflation,

that was softer than expected. nevertheless, core inflation between england remains elevated. in the rbi is likely to start tightening in 2022. the bank of indonesia, on the other hand, is continuing the purchase of its bond market. again, you have policy diversions between indonesia and india. that also represents opportunities within the currency space that will affect the bond market. shery: we are seeing large issue pipelines following that global trend this week. brad: yes, and asia is no exception there. between today and thursday, there is maybe nine or 10 deals priced in for asia, over $10 billion worth of supply, so very busy period for the asian market. there is a pecking order as to what comes first. we already had large singaporean banks -- dbs, indonesian suffering.

the very large banks tend to come first. then we start to see more interesting issuers in the rest of the month. shery: brad gibson from alliancebernstein, great to have your insight into asia. thank you. of course, here in the u.s., we are also getting large issues in the stock bond market when it comes to first-time issuers. say, coinbase, the latest of the 70 companies issuing high-yield bond market debuts this year. not surprising, given how well they have performed. we are talking u.s. junk bonds returning. until last week, 4.86%, which is more than any other kind of data out there. haidi: the numbers when it comes to this coinbase issuance are incredible. 1.2 -- a 1.5 billion dollar junk bond offering, seven-year trench. the representative at goldman

sachs not making much about, but we do know they are expected to price it on tuesday, just one step below investment grade. we will continue to see how it is received by the market. but sticking with crypto, cathie wood's of ark investment management is allowing one of its funds to invest in canadian bitcoin etfs, as the money managers six fresh ways to that on the regime -- to be on the regimet. >> i thought, if you are going to start a firm, why don't you become a little more disruptive and use some of the technologies that have disrupted all these other industries, to, at the margin at least, disruptor industry? so, social media. giving away our research. really doing that to educate. that is one of our missions and values. but also, to engage with the

communities we are researching. those who are doing the innovating, and become a part of those communities. i have to tell you, i think it has given us an enormous competitive edge, because most compliance departments in traditional asset management firms will not let their part for the managers or the analysts say anything about their research or their portfolios of social media. >> there's four powerful change leaders. if you could each make one specific recommendation or aspiration, what would it be? cathie wood? >> i am on record as saying i love to be a woman in this business. i have. when i started in 1977, i was in college, very low expectations. . but i had high ambitions. it is easy to surprise if you are willing to put yourself out there, make yourself vulnerable.

so the first is participate. but only if you have really good ideas that actually are questioning the conventional wisdom. and then in terms of, in terms career itself, make sure you move into a position where you can be measured, for better or worse. so, at last year was better for us. this year, worse. you take your performance with you. no one is going to take that away from me and ark. by the way, i am not worried about this year's performance -- we have a five-year horizon. and if you want to start your own business, look for a huge, unmet need. what is missing? i think there is a lot missing in the financial world right now that innovators can come in and change. shery: ark investment's cathie wood there. plenty more ahead. this is bloomberg. ♪

>> prime minister modi has also set very ambitious targets here in india. the target of 400 50 gigawatts by 2030 over noble energy, is one of the most powerful -- of renewable energy, is one of the

most powerful goals set in the world. already you have reached 100 gigawatts of that. background great -- i congratulate you on that. shery: john kerry speaking at a dialog aimed at getting india get resources to decarbonize his economy. let's get more with our guest. how ambitious is india's 2030 emissions reduction target? nupur: at first glance, it actually is not ambitious at all. it's target means emissions can rise 170% by 2030 relative to 2010 and still it would be compliant with its price agreement. that would put it at second after turkey among g20. the other hand, india has the lowest capital emissions in the world and its current market

means that it would still be the third lowest, the third-best among g20 by 2030, after the u.k. and the e.u.. shery: so when it comes to the climate crisis and tackling this challenge, what is the dynamic between the india and u.s. governments? what do they want and need from each other? ali: so as we heard in the clip from secretary kerry, the goal of this current trip is to announce the nitty-gritty details of climate action and finance mobilization dialogue. beyond that, the u.s. is hoping to convince india to set a more ambitious emission reduction target. for india, it is all about the common but differentiated responsibilities. india as a developing country once the u.s. and allies like the u.k. and the rest of the g7 to recognize that, and they need to provide more climate finance support to developing countries such as india.

shery: how would we measure success for john kerry's visit to india? ali: if we measure success in terms of new emission reduction target from asia -- from india, i don't think we will get that this time around. maybe at the new summit announced for september 24 where president biden is hosting the leaders of the quad, maybe we will see movement there. but i am skeptical that the u.s., the u.k. and the rest of the g7 have done enough to support developing countries inserting more ambitious targets. shery: bloomberg nef head of asia research ali , izadi-najafabadi, thank you. to start on that green narrative, really interesting when we talk about the dairy industry, the cattle industry,

how environmentally unfriendly they are especially with methane gas emissions. interestingly, we now have treatment of cow urine. because apparently urine also contains nitrate, which is really bad for the environment. we have scientists designing a tool to manage collection of cow urine. something worth flagging. since we are on the green topic, right? [laughter] heidi: i love the variety of conversations that you are not have. i love the headline for this story. scientists are toilet training bay because to cut down on emissions. shery: leave it to bloomberg to come out with the best headline ever. [laughter] haidi: and another story we were talking about earlier, brazil, the biggest beef exporter in the world, they have approved the use of may thin fasting cow feed. a feed additive that kat smith an emissions from cattle as pressure builds on the broader

livestock industry to curb its role in global warming. so particularly interesting for new zealand and australia farmers, we have cattle producers in this part of the world. [laughter] a quick[laughter] check of the latest headlines you should be watching, this company is -- the department of transportation is rejecting tax credits for automakers in the u.k.. automakers complained about a congressional proposal that would make any individual who earns less than 400,000 dollars eligible for the tax credit. it said america's limited resources shouldn't be used to give tax breaks for the wealthy, adding that electric cars shouldn't just before what the people. sri lanka is -- sources say this company is advanced photonix with gac and raising a stake in the 50-50 jv that oversees its jeep operations. it has promised investors a plan to improve performance in china,

where its market share slipped to less than 1%. hong kong made a bid for an automotive tech company. with its over of $37 a share, beating that of a rival company, magna international, this company is set to be interested in the software unit which helps cars perceive and make driving decisions. coming up next, shares of japanese electronic maker have been surging, regular company's founder the richest person in japan. details next. this is bloomberg. ♪

they knew person has voted to the top of japan's ritualist. takemitsu takizaki, the founder of electronic-sensor maker keyence corp. he is now worth 38 dollars after a surge in company shares helped him surpass other companies. this comes down to market moves. what have we been seeing in terms of what the stocks have been doing? >> you can see two things happening at the same time. share prices of keyence have continued to rise.

others being lackluster after hitting a peak in february. it shows how investors are favoring companies using automation, particularly keyence when it comes to japan. earnings for the company have been really good. in contrast, earnings for other companies haven't been really good because of the covid outbreak. so you are seeing these contrasting moves and therefore the positioning in the two stocks. sherry: so where do they go from here? guest: for the time being, the outlook for the company remains quite positive. as the economy recovers, analysts are expecting the company's solid earnings to continue up, whereas for fast retailing, the covid outbreak is kind of dampening demand for

outdoor clothing. so good times for keyence for a bit more. shery: our asian stocks reporter there. we will be watching the company's trading in japan. other companies to watch, sophie kamaruddin. sophie: regulators are said to evaluate these retailers by march. on a nikkei news report, nintendo has cut the price of its switch console by 9% in europe. plus, this company is on watch on the back of its results. the supermarket store operator maintained its full-year forecast after operating profit missed estimates in the third quarter. a quick check on how we are shaping up this tuesday ahead of the open in tokyo, sydney and seoul. futures are little changed some upside potential for japanese stocks which had gotten the jumps up -- the thumbs up from

j.p. morgan. the opening trade still having some energy. qe stocks are under pressure, of by 0.3% as sydney extends its lockdown. sydney futures are little changed. keeping an eye on miners, as we have some divergence when it comes to performance for iron ore and aluminum. aluminum shares this month up about 24% on the back of the rally we are seeing in aluminum. shery: yeah, we are watching the commodity space very closely as we head to the u.s. cpi numbers out of the u.s. on tuesday and as we see the commodity spot index at a decade high. coming up, the challenges facing the airline industry, with the director general of the association of asia-pacific airlines. plus, more market insight from eastspring investments portfolio manager nupur gupta .

the markets open is next. this is bloomberg. ♪

it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. and there you have it— -woah. wireless on the most reliable network nationwide. wow! -big deal! ...we get unlimited for just $30 bucks. sweet, but mine has 5g included. relax people, my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. switch to xfinity mobile and save hundreds on your wireless bill. plus, save up to $400 when you purchase a new samsung phone or upgrade your existing phone. learn more at your local xfinity store today.

haidi shery: hello and welcome to daybreak asia. haidi: taking a look at the major market opens in asia. our top stories this hour. investors way u.s. inflation data. that debt crisis at chinese developer eve grand is raising

the stakes for beijing, and the news that briefly boosted litecoin. let's get straight to the market open. >> we are seeing japanese stocks , a third day of gains after we saw a bounceback in the afternoon session on monday. 2100 points, extending gains. jp morgan saying they see global growth bouncing back, inventory rebuilds help lift expansion. again is trading below 110, switching up the board. switching to south korea. we are waiting on the be ok meeting minutes -- the copy is gaining for 10%.

crypto related stocks, regulators say -- switching up the board. we have change for the asx 200 at the start of cash trade. we have divergence for market so far this month. one company is up 24%. iron ore has been attracting lower since may. futures are off by about 100 plus. check out gold holdings, gains ahead of inflation data. we have seen inflation expectations continue to rise. costlier energy bills likely feeding into that, we are seeing oil prices extend gains, opec predicting stronger demand this year. shery: we have breaking news. we are getting a statement from ever grand saying they are

taking steps -- they do not have a binding packed. the hong kong building sale has not been completed within the timetable. they will continue to implement and ease liquidity issues, we know the company continues to insist that the rumors of bankruptcy are not true. they have released another statement on the website that they are facing on resident difficulties. ever grand is saying they are engaging capital companies.

we have heard from analysts saying debt restructuring for ever grand is almost unavoidable, we know that when it comes to bond pricing, they are trading around $.30. they continue to decline, they expect continuations to continue. more details on those struggles. let's turn to our next guest who says the rise in inflation is temporary. let's discuss the implications with a portfolio manager at e springs investment. great to have you with us. you are firmly on the transitory camp when it comes to inflation, does that mean stagflation is not an issue?

guest: good morning. from our perspective, we think the inflation pickup we have seen is likely to be temporary. some of that is driven by supply constraints, some is driven by the boost in demand given the reopening. stagflation to us seems a little premature. as for prices, we will probably start pricing in stagflation only if we see a significant tightening in coronary tightening of monetary and fiscal stimulus. shery: we continue to see these challenges for companies in china, ever grand saying they are in talks for investors on repayments. how will this affect sentiment, for the broader markets across china, where we continue to see beijing tightening scrutiny, the property sector, education,

tech? guest: the last couple of months have been paramount in terms of regulation crackdowns, and it has been in overhang. in our multi-asset portfolio, we are being more positive undeveloped markets over emerging markets. we have been for the past few months, and be think that will continue. having said that, it is important to note that generally speaking the tone we think has moderated. it is probably going to help to limit the negative global equity sentiment. the equity sentiment we track has actually shown to be are pretty much at the bearish and of equity sentiment already, which means any small positive news can really take the market higher. haidi: taking a look at japan, the nikkei is on track for its highest close since 1990.

we have seen japanese equities go gangbusters after the prime minister's resignation, expectations of more economic growth inducing policies. how much further momentum do you expect if there are factors that drive upside in a cyclical rally? guest: up -- obviously, japanese stocks have been strong. we think it is driven by domestic factors. at a time where we are starting to see some amount of peak growth across the world, as well as emerging markets vaccination drives improving, we think perhaps staying in the u.s. and european equities probably seems to be the most positive at the moment. if you start to see more positive signs come through, parts of asia constructed look interesting. for the time being, global equities wise, we are positive on u.s. equities. haidi: but you are getting

defensive within those strategies. guest: absolutely. early gains are probably behind us. we have seen the cyclical rally play out, we have seen the federal reserve be confident about growth, starting towards tapering. there are selective stocks and sectors within the developed world we think look very attractive. for instance, utilities and consumer staples in the u.s.. that is something we think and do well in an environment where the market is grappling with two opposing fortis -- forces. the reopening boost, but tapering potential. how is the market going to absorb that, have are the fixed income and bond yields going to react to what the federal reserve says next week. shery: any other regions that interest you, especially when we

have a reopened trade gathering momentum? guest: southeast asia looks interesting to us. malaysia has been under pressure over the last couple of months because of the increase in infections, but they have managed to secure the vaccination supplies substantially and they're aiming to vaccinate 70% to 80% of the population by the end of september. the market has been in outperform or for the last few weeks, can be think that is likely to continue. haidi: great to have you with us. let's get you to vonnie quinn. >> china has urged the united states to prepare damage -- repair damage to the relationship. the foreign ministry called on u.s. trade and commerce officials to uphold the spirit of last week's conversation

between president biden and president xi. sources the u.s. is weighing a tax on chinese subsidies. opec is predicting stronger demand for crude this year and next, a combination of rising consumption and output disruptions. the latest report says the world will face in oil deficit, even as members revive idle production. opec says production is expected to reach 100 million barrels a day in 2022, which will exceed pre-pandemic levels. india's inflation rate easing august as food prices cooled, boosting their case for the central bank to keep interest rates lower. consumer prices rose 3% last month from a year earlier, the slowest rate since april. it is the last inflation print before the rbis october policymaking. house democrats have released a

package of tax increases that fall short of president biden's ambitions. the proposal would raise the corporate tax rate to 26.5%, and capital gains from 20% to 25%. that would raise government revenue by $2.1 trillion over 10 years. democratic lawmakers say they will undo a $10,000 cap on federal deductions for state and local taxes. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, we take a look at the challenges facing the airline industry. the director of asia-pacific airlines. up next, the latest on ever grand after the embattled developer reassesses its capital structure. the details ahead. this is bloomberg. ♪

haidi: china ever-growing group is facing more pressure, hiring financial advisors to reassess its capital structure. for more let's bring in stephen in hong kong. what is the latest? reporter: there are of course these protests, but we have breaking news. the red straps on bloomberg. china ever grand is hiring financial advisors to assess their capital structure to explore all feasible solutions to ease the current liquidity issues. they put out a statement to the hong kong stock exchange within the last few minutes, continuing to decline and contract sales in september. this indebted developer resulting in what they call continuous the group's cash flow

and liquidity. the lack of cash flow and the budgeting is preventing evergrande from paying retail investors and bond investors, retail in particular is the source of these protests. these protesters, thousands more said to have showed up yesterday according to media, hundreds showed up on hundreds. they are purchasers of wealth management products by evergrande. the returns have been delayed. essentially, evergrande has tweaked and offered to pay back the principal over a staggered amount of time, and also, getting them in lieu of cash payments.

they can accept repayment in the form of evergrande developed properties. you have the protests in front of the head orders, protest by employees. then they were told to go work from home. they were angered about the long delays, retainment schedule. then as well, you had protests about homebuyers -- there are about 1.5 million buyers. the delivery of these units. haidi: does the fact that it

does not feature on the balance sheet. what role will the government player? reporter: who is going to get paid first. this is trickling down to smaller retail investors. common prosperity from the government. they do not like the social unrest, that is obvious. they want to ensure retail investors are going to be protected or at least the government has their best interest. does that mean the government will step in? i will read you something. the best case scenario on how this all plays out, it ensures evergrande plays it suppliers.

dollar bond investors get about 25% of their money back. already the price of dollar bonds are being priced at about $.30 on the dollar. 25%, that is a 75% haircut for the bondholders. again, on the wealth management products, they gave three different options. cash over staggered amount of time plus interest per quarter, or properties. that is a questionable one. are they going to be billed? it's a fluid story. shery: the latest update on ever grand. coming up next, we hear exclusively from the creator of litecoin. this is bloomberg. ♪

shery: the creator of litecoin says the foundation will be more careful about what they tweet. >> anyone can start affecting it. [indiscernible] someone thought it was true because it was reuters. two minutes later he said it was fake news. >> are there any efforts to make the person behind this

accountable? can who is behind it or somehow track who was involved? >> i am sure the global newswire will contact the person who submitted the report. in terms of the foundation, there is not much we can do. people can release fake news. not just cryptocurrency. >> they are enhancing authentication, they will work with authorities. they say it was isolated, never happened before. litecoin, as you said, that the release was fake, quotes were fabricated, said someone got to eager when they retweeted us.

but litecoin did pop, big time. to those who might suspect someone on your end is responsible, what would you say? >> it is definitely not anyone on our end. litecoin, pretty much -- i will denied that it has anything to do with us. we will stop it from spreading. >> what internal changes are you making? >> we realize how powerful our twitter handle is. we want to make sure we don't retweet fake news, we will double check and make sure it goes through some checks.

that is something we have to improve on. haidi: the litecoin founder. you can get more on that top story with a roundup on the other stories in today's edition of daybreak. bloomberg subscribers can go on the terminal. apple says it has patched a security flaw after researchers determined nso group used it to exploit devices with spyware. joining us now is mark gurman. this is coming ahead of the latest gadget launch. reporter: there was an exploit in the messages app, the iphone, call devices. this would allow a hacker to send a malicious pdf file. if it was opened on an iphone,

it could technically let the hacker break into your home and siphon data and take control. apple said that the patch was put together over the course of a week when they heard about this. they're also saying the overwhelming majority of uses were not impacted. this is used to hack people on an individual basis. it's a continuation of a long-running cat and mouse. they're also saying with iphone 15, they will have further security protections. shery: not great for your reputation. what are we expecting for the product launch?

reporter: it will look similar to the current iphone. apple watch series, largely displays. this will be a new mid tier air pot. no noise cancellation, no water resistance. it all comes standard. look avril lavigne's on tuesday. shery: always great talking to you. there is a check of the business flash headlines. oracle shares reclined -- declined, but demand slowing. the world's second-largest --

they gave -- say qualcomm has made updated of $4 billion for a tech company. its offer of $37 a share beating out a rival. it is said to be interested which helps cars make driving decisions, and later divest. toyota is objecting to tax credits for other vehicles, saying it includes exorbitant tax breaks for the wealthy. they complained about a proposal which makes any individuals eligible. toyota says america's limited resources should not be used to give tax breaks to the wealthy. plenty more to come.

this is bloomberg. ♪

>> this is daybreak: asia. a global scientific panel says covid-19 vaccines work so well that most people do not need a booster. a report published says governments should focus on immunizing the unvaccinated and wait for more data. the assessment is based on a wide range of real-world observations. the front runner to be japan's next prime minister has been

given a new boost. a newspaper quotes that he plans to back them in the party election. lawmakers will vote for their new leader on september 29. china evergrande is engaging joint financial advisors to try and underway out of the debt isis area in a stock exchange filing, they want to reach a solution for all stakeholders as soon as possible. earlier, police were called to the headquarters where protesters were demanded repayment on overdue products. president biden will host the leaders of india, japan and australia next week for discussions that include countering china. the first in person summit for the group known as the quad will

help bidens goal of making the region a top priority. the agenda will also include the pandemic, climate change and emerging technologies. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: japan on track for its highest close since 1990. let's turn to sophie. sophie: let's visualize the nikkei which is on course for the 1990 bubble economy territory. we have the index gaining, markets are assessing the economic outlook. jp morgan is expecting diminishing political risk, have boosted their stance on japanese stocks. switching out the terminal for a closer look, the early session

in tokyo, tokio marine gaining ground amid anticipation of stimulus. we are seeing japanese gaming names under pressure, resuming declines after last week. haidi: we will stick with china and beijing. urging the u.s. to repair damaged relations, with the biden administration said to weigh a new admin -- investigation into chinese subsidies. mach 2 we know -- what do we know about the latest? reporter: fit is still early. reports within the administration that they are

considering this investigation into chinese trade practices and subsidies. whether they will follow through on that is the big question. china is linked to all of these issues, they have been demanding that the white house lives tariffs, get rid of sanctions, drop the case for the extradition. there is a long list of demand. the u.s. has been frustrated with china, things like climate change, that is what spurred the phone call. any broader investigation needs to take into account these bigger political issues between the two countries. there are signs the white house does want to work with china in some areas. shery: tensions over taiwan will

continue. reporter: that is right. if the u.s. puts a names timeline, that's a bottom line. a situation where china has pulled the ambassador. best night we heard -- last night we heard that if the u.s. does this, the main will fly fighter jets over thailand. -- taiwan. that is an issue that can escalate depending of what happens in the next couple of weeks. shery: let's turn to singapore. the government potentially threatening.

why the need for such a loan? reporter: the government is taking a stance on online content. it said it needs to do that because singapore is vulnerable, it is pretty much plugged the system. any misinformation online could cause a lot of the russians. remember in august, when the prime minister said during the speech one challenges for singapore are rising tensions -- the government said the bill will strengthen and disrupt interference. [indiscernible] i want to put that in context. this is the first time singapore

is taking action. two years ago it implemented a fake law news. it could take the likes of facebook and other platforms to test. it could force facebook to carry corrections to online information which it deems inaccurate. singapore taking action, making sure the population remains intact. haidi: has there been influence of foreign interference? reporter: the government says yes. it takes us back to the 1980's when the first u.s. secretary at the u.s. mvc brought together a group of local lawyers and got them to run in the election. it also cited report suggesting people receive funding groups in singapore. local proxies to advance causes and agenda.

therein lies the caution that it is thinking still, this is not without controversy, we have facebook coming out to say it is a tool that can be used for censorship. critics have also called it politics of paranoia, but as far as the government is concerned, it is taking the necessary steps to ensure a population filled with lots of races remain together. haidi: our chief southeast asia correspondent. coming up next, how the recovery is going for the asian airline industry. the director general for asia-pacific airlines joins us, we are also asking him about the asia-pacific airlines association renewed commitment. ♪

haidi: almost two years into the pandemic, asia-pacific airlines remained largely in limbo. the region's trade body is aiming for a more sustainable recovery. the goal of net zero emissions by 2050, surpassing the existing commission. the director general, great to have you with us. we have seen admissions half

during the pandemic, because so many planes have been grounded. is it possible to hang on to some of that progress once international travel is resumed fully? guest: yes. i think this is the real issue for the airline industry. even before covid. we need to redouble our efforts to ensure that we meet our goals. the industry long-term goal was to half by 2050. this was constructed in the paris agreement.

the popular wisdom as this would not be enough. you need to make sure that the temperature increase remains below 1.5, and we think the best way to achieve that is to go2net zero carbon emission reductions by 2015 -- 2050. haidi: aviation has long been considered a hard industry to decarbonizing. a lot of planning has been based around carbon offset. has there been progress made? [indiscernible] guest: the industry has four pillars. the innovation and technology.

operation improvements. sustainable aviation fuel. market-based measures like offsets. for long-haul operations, the 80% of asia-pacific airlines, operations are long-haul. above 1500 kilometers. the main pillar is going to be a sustainable fuel. efforts are underway to make sure we have the necessary support and incentives for the industry to be able to acquire enough sustainable fuel to make sure they meet supply. shery: not just about the industry, how much ordination do you need?

guest: this is going to be an all industry effort. cannot be achieved by just the airline. we need the stakeholders within the aviation ecosystem to all put in the efforts. we have the governance, the fuel suppliers. aviation service providers. the finance sectors. and of course, the manufacturers have to play their part. governments will have to consider subsidies and incentives as well as invest in r&d and development. in order to make sure there are sufficient supplies of fuel. also, we need a lot of facilities to produce these sustainable aviation feels and distribution and supply chains, and at the moment these are

lacking. shery: how much leeway do airlines have sustainability as a priority? guest: the government and fuel suppliers [indiscernible] to be cost-effective. i think this is an endemic issue because of covid-19. both of these issues, this is what asia-pacific airlines are working on to make sure we meet our goals. this is a commitment.

this is not just a pledge, but it also wires -- it's called waypoint 2050. it's a navigation system used by pilots to get to a destination with markers and milestones. we have offsets already being applied to ensure that the growth that is happening on a carbon neutral basis. we should be able to achieve the milestones of net zero carbon emission reductions by 2050. haidi: we are getting the latest virus numbers out of china, to 92 new cases, 59 local.

it is depressing when you look around the asia-pacific and look at the slow pace of recovery when it comes to opening up. when do you see the catch up and pent up demand? guest: everything depends on the vaccination rate. the world is divided into two halves, one that is able to open up travel on the other half, we are hoping they can, depends on whether they can up vaccination levels. the asia-pacific region, with the exception of a few places, most of them are lagging behind the world average in terms of vaccination rate. most governments are redoubling efforts.

we can the forward to a vaccination based pressure framework for reopening travel. travel will open up before -- if you look at the progression of vaccination levels, 2023, 2024 before you can see the recovery to 2019 levels. shery: what do you say to governments still pursuing elimination strategies and the need for vaccine passport?

guest: that is going to be very difficult to carry out. covid-19, everyone is saying it will be endemic. both of these endemic issues restart as well sustainability. it will have to be tackled with a progressive agenda, progressive strategies. shery: great to have you with us again. here is a quick check of the latest business flash headlines. southeast asia battles one of the world's worst covid-19 outbreaks. the ride-hailing and food delivery giant now expects net sales of up to $2.2 billion, down from $2.3 billion. they say pandemic restrictions are creating an uncertain

operating environment. in the second quarter, they lost $218 million while revenues more than doubled to 180 million. sources say the company is in advanced talks with a state on partner on raising a stake in the 50-50 venture that oversees chief operations. they promised investors a plan to improve performance in china where it's market share has been less than 1%. . a chinese teahouse chain is said to have tapped ubs for a potential hong kong listing as early as next year. we are told the company could raise at least $500 million. severalty houses are eyeing ipo's after a bubble tea chain raise $654 million in june.

haidi: we have breaking news on evergrande, dollar bounds are down one to do sense. we heard the bond interest payment is drawing close scrutiny. they need to repay about $669 million in bond coupons. we also heard they sold a 40% stake. that was also according to a filing we had recently as well. this all coming at the headquarters as retail investors and wealth management product holders and employees are feeling skittish. coming up next, we take a look ahead when it comes to the prospects of chinese tech shares.

regulatory pressure continuing to mount. this is bloomberg. ♪

haidi: let's get a live look at shanghai. is rainy, but we are expecting flights to resume within seven hours after the typhoon

threatened flight paths as well as closures and other activity in the city. we will continue to watch that while we count down to the market open in china, the tech route on monday. let's take a look at what we are expecting. sophia, whenever we talk to analysts, the consensus seems to be there is not enough visibility on the extent of the regulatory impact. we watching for? -- what are we watching for? reporter: the question is where do you call the bottom? you had interest from the mainland going into hong kong tech, especially after technology was added. there is some appetite. as you said, we seem to get news every day on the latest targets from beijing. where is the safe space to invest in china? especially these offshore

companies which are largely tech, very profitable. those are the target of beijing. you are seeing some money, funds flowing back into these companies, but still very difficult environment to trade. no visibility makes it also difficult for strategists to recommend either buying or going overweight on chinese stocks. shery: no visibility as well when it comes to evergrande. there seems to be differences that can play out with this firm. what will be the spillover effect? reporter: this is the biggest story of this morning. evergrande hired two financial advisors, one is very well known globally for advising lehman brothers and other financial

restructuring cases. what we are seeing is a development that seems to be evergrande fix its cash crunch. we saw lots of video circulating on chinese social media of protests, the key breaking point is the wealth management product that ever grand has apparently failed to repay. the contagion effect we can see in money markets, it will be interesting to see what the pboc does tomorrow with its medium-term lending facility. shery: the chief markets corresponded. let's turn to sophie. sophie: we are watching chinese companies place more restrictions on steel aluminum output. there are watching reaction to the philippine government switching to targeted -- from

september 16 that will allow more businesses to reopen. keep an as well as retailers in manila. shery: bloomberg markets china open is next. this is bloomberg. ♪

(announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.

>> 9:00 a.m. in beijing and shanghai. welcome to bloomberg markets china open. we are coming down to trade on the chinese mainland and hong kong. evergreen hires financial advisors to solve the liquidity crunch as it faces protests. spot prices rally to a 10 year high threatening to escalate cost and spur inflation. cryptocurrencies f