haidi: a very good morning. welcome to "daybreak: australia." i'm haidi stroud-watts in sydney. sophie: i'm sophie kamaruddin in hong kong. we are counting down to asia's major market opens. shery: and going from bloomberg world headquarters in new york i'm sheriff. up the top stories this hour. the u.s. stocks suffer the worst fall since may as a debt default causes concern. shery: the world's most indebted

developer faces further as the crisis looms over global market. shery: the world economy faces up -- a buildup in stagflation forces and boosting inflation and slowing the recovery. this is a picture across wall street. we are seeing u.s. futures higher by .2% after the s&p 500 saw the worst day since may. a second day of losses. the focus was very much -- valuation has become a concern. remember, back in march, we had the 10-year yield at 1 1kwr-7 4% level and the naz 14507b was at 13000. so right now we're very much above that still valuation concerns are big right now.

and of course the focus was -- we're also watching those bond prices. take a look at utilities. communication services and real estate. utilities have had the worst time this year as compared to any other sector on the s&p 500. of course, with rising treasury yields we're also seeing the dollar rising to a 10-month high. secretary janet engel saying a failure to raise the u.s. debt ceiling could hurt the status of the greenback coming at a time when we continue to see those debt ceiling concerns in the u.s. and haidi, we have heard treasury secretary janet engel giving this deadline when the treasury will run out of cash and that seems to be october 18 which is sooner than analysts had expected. this of course after republicans blocked that democratic move in the senate to raise the federal debt limit and also keep the government funded. haidi: we've been at this

precipice before, shery. this is like ok, it will work itself out because we know the u.s. always pays its debts but very interesting that janet yellen really flagging the potential harm to the u.s. dollar reserve and haven status if this was to worsen. also of course watching evergrande and that's playing to the fed's story as well. because we've heard the federal reserve officials have been questioning the heads of big wall street banks, big u.s. banks, to really get to the bottom of any exposure, if any, of course, that they have to the chinese property market. and this evergrande story because shery, not just about the debt that we know is coming due. -the-also the -- it's also the unlisted debt. bloomberg scoop really talking about just one of these bonds. the $260 million bond that's due on sunday issued by a joint venture part owned by china evergrande. haidi: more and more payments coming up. investors facing all these risks plus a looming global energy crisis. let's get more on the growing wall of worries with our treasury reporter chris condon.

market reporter sue -- we mentioned the debt ceiling but also senator elizabeth warren blasting jerome powell over his record on financial regulation. take a listen first. >> your record gives me grave concern. over and over, you have acted to make our banking system less safe and that makes you a dangerous man to head up the fed. and it's why i will oppose your renomination. haidi: chris, give us a summary of everything that's happening in washington right now. chris: right. ok. well, let's start off with that clip you that just played. we already knew that elizabeth warren was not enthusiastic about a renomination for jay powell. but she had not really come out firmly saying i oppose his renomination. she did exactly that.

that causes a problem for president joe biden who many of us assume is headed to renominate powell. there really is no alternative that has emerged. people have talked about governor leal brainard but even warren didn't say i favor leal brainard and just said she's against jay powell. now, how difficult will it make it? biden can definitely get the powell renomination through. he's going to get a lot of republican support. but does he really want to pick a big fight with the progressives at the same time? so that -- that raises a big question. now, the other thing i think that came up during the hearing, a couple of other things that came up. of course, both powell and yellen talked about the importance as you said of raising the debt ceiling. and yellen's point was we don't even have to get to a default for this to become a very serious disruptive issue in financial markets. just coming close can cause a

lot of chaos in financial markets. and it would be best for congress just to get its act together and raise or suspend that debt ceiling. the other thing i think that's not getting so much attention but very interesting that pat toomey, the republican senator from pennsylvania, took a real run at the administration's efforts to seal a big international tax agreement. and he is insisting that a big portion of that agreement is going to have to go through the senate for two thirds treaty ratification. that's a big outstanding legal question that's very uncertain. but i think the opening salvo in that debate. haidi: and evergrande was in the spotlight overnight again. but we're watching for this $45 million coupon due today. how concerned, though, are we about these private placement liabilities?

>> it seems like we passed the peek of the concern. evergrande had not made a public statement regarding an interest payment that was due last week. and we know a 30-day grace period before the default could be declared. and the global market seems to have accepted that. yes, the evergrande, restructure its debt but the government will step in at some point to ensure -- to avoid a disorderly collapse of the company. so it seems like the market has accepted this as a reality now. shery: and all of this as we continue to see this energy crisis ongoing. let me turn to you, su. because oil just off the three-year highs. but still commodity prices overall with metals also surging. su: absolutely. and if we dive right into the bloomberg, there's a question of when west texas intermediate mainly traded here in the u.s. will break above its current range which included a break

above $75 in the most recent session and then rising above $76 before pulling back after five straight days of gains. there was an unexpected increase in weekly supply and a private support that was out. we'll find out what the government report says. but let's go right to brent crude which broke boffed 80 a barrel -- above $80 before treating again. that's the highest level in three years. it's spurring some panic buying. we'll get to in a minute in the u.k. it did pull back in the face of the equity selloff. but the real issue is again that we're seeing demand running ahead of supply. look at the three-year chart of west texas intermediate again. and you'll see the recovery from that jaw-dropping decline in the middle where we collapsed below zero. opec saying an upswing of demand recovery is the story right now. haidi: that's a look at some of the top rinks for our investors today. our treasury reporter chris condon and marks reporter ye xie

and su kennan there as well. well, inflation pressures loom ever large over markets still. sophie: and the specter of inflation, fed tapering and more hawkish -- global bond yields have picked up gathering pace since last week. the steepening pressure is on for aussie bonds with a potential of reopening down under and on tuesday, we saw the aussie 10-year yield climb to a july high. the futures indicate that this steepening trend is likely to continue. but offensive at -- expect this preemptive steepening of the 310 curve will peak before the hike delivered by the r.b.a. and pulling up the chart on the determine international right now over in india we saw bond yields jump with the 10-year above of.20 and rish -- r.b.a. signaling tightening with inflationary pressures as we have those rising oil prices. now d.c.b. bank saying this move was likely a precursor to a hike in the reverse rate they see coming out now. the race to normalize policy, ramps up around the world, with

central banks taking note of these inflation risks, the policy divergence with the pboc, that is widening which has further narrowed china's yield appeal against treasuries. we see that falling to 134 basis points tuesday and the pboc will keep pumping liquidity into the system to also contain this potential contagion risk from evergrande, shery. shery: we will be watching those risks cloal as we get to vonnie quinn with the other first word headlines. vonnie: thank you. japan's ruling party votes wednesday for a new leader to replace for candidates are vying for the position with vaccine minister haired kano the public favorite. unlikely that any contender will secure a-round majority. attention will turn to a runoff vote. the winner will almost certainly be the next prime minister as the l.d.b. has a majority in the parliament's powerful lower house. outgoing japanese yoshida suga listing the virus emergency as

one of his last actions in office. the restrictions on tokyo and 18 other areas have dragged on the economy. saying the fight against covid is entering a new phase where people will combine health precautions with everyday life. bars and restaurants will be allowed to resume alcohol service from friday. the c.d.c. says covid booster shots produce mostly mild side effects. data shows 71% of recipients had pain at the injection site while 56% were fatigued. less than half experienced a headache after a third dose of the messenger r.n.a. vaccine. more than two million people have received additional covid shots in the united states which are currently approved for at risk groups. the french ambassador to australia will return to camba after being recalled about two weeks ago. it was a show of outrage from paris after france lost a submarine deal and left out of a defense pact with the u.s. and u.k. the exact date of the ambassador's return has yet to be decided.

french officials say they will also seek new partnerships with asian nations including india and indonesia. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2,700 journalist and analysts in 120 countries. i'm vonnie quinn. this is bloomberg. haidi. haidi: still ahead, japan's ruling party will pick a new leader today with a winner set to become prime minister. we'll get a preview of what to expect coming up later. coming up next, b.m.o. family officer carol m. schleif helping us sort through what she calls a mind-blowing quantity of stuff for traders to ponder this week. this is bloomberg. bloomberg. ♪ ♪

>> it is imperative that congress address the debt limit. >> it is essential to raise the debt ceiling in time to avoid payment defaults of any kind.

disbnchts if not, our current estimate is the treasury will likely exhaust its extraordinary measures by october 18. >> potential effects could be severe. >> america would default for the first time in history. the full faith and credit of the united states would be impaired and our country would likely face a financial crisis and economic recession as a result. haidi: treasury secretary janet yellen and fed chairman jerome powell on the debt ceiling saga. congress keeps hearing the markets won't take kindly to a default. but they don't seem to be listening. b.m.o. c.i.o. carol m. schleif joins us from minneapolis. carol, great to have you with us again. so we have seen the market reaction back in the debt limit saga in 2011 and 2013 as well. what are you -- how are you expecting this time around to play out for the markets? carol: well, hopefully congress will get the message because we

have definitely seen investors came into this week with a whole bunch of worries for considerations of a big week with the dual infrastructure bills, the end of the fiscal year on september 30, the debt ceiling looming, and then the big data day on friday. so there's a lot on their plates to worry about. and they held it together pretty well yesterday given the dithering in congress if you will. but it seems like today it's -- especially with janet engel coming out today and putting a date -- a date pretty certain that default unless we get moving. so we really need to move. haidi: the spike in yields seems to be affecting the broader mentality of where stocks are going. do you still buy the dip or is it really going to affect those valuations, especially for the growth sector and we could see a broader downside that could be more prolonged? >> i think it's really important to remember that that 10-year was 1.75 as the pandemic started

last year. so this rebound is coming up -- off a very abnormally depressed level. and it's -- it's trying to find where that more normalized rate is that's reflective. there's still a lot of strong growth underneath. so investors may decide in a day or two to buy the dip. they may back off until we see some movement on congress, particularly as it relates to that debt ceiling. haidi: is the energy crisis really the big risk going into the end of the year? carol: well, it's an issue like so many other things are. i think -- the thing that's taken everybody by surprise and probably shouldn't have in retrospect is the fact that reopening the global economy after the shutdown that we had. a little more awkward and a little more difficult and there's all kinds of factors in getting it going again. and so energy is one of them. commodities, prices impacted by a lot of different weather patterns that we've seen and unusual weather patterns that

have spawned floods and hurricanes and fires everywhere. so there's a lot of issues to consider. but energy in particular will impact things. and it's not just the energy price itself. we're seeing in london, the getting it to the ultimate concern. and to have enough supply, can't get it to the end markets. haidi: yeah. a transmission. is that a real kink? you got one contrarian happy glass half full scenario going into the end of the year which is that delta starts to wane and reopening continues to open, congress gets its act together and consumers splash all the crash that they've got put aside. does the energy side of things potentially complicate that? carol: it complicates things. but we've had higher -- again, energy prices were higher. we got -- energy as a sector is most likely under pressure. again because some of what we're seeing is that people are trying toryfy missions and make the

switch to green. but in the intermediate and longer term maybe this accelerates that switch to green and forces companies and consumers to make that leap sooner. haidi: b.m.o. c.i.o. carol m. schleif. and a report that predicts 100,000 jobs will be lost as software developers begin to dominate. we get more details just ahead. this is bloomberg. ♪

>> we're excited to be return to the city. we will be bringing back 5,000 people to the office over the course of the next six months. and we're absolutely thrilled to be part of that resurgence. haidi: sober bask on --

haidi: scioscia bank on its plans to return staffers the era of bankers dominating the financial industry is over. software developers rise. predicting 100,000 jobs will be eliminated in five years. due to technology improvements. let's get more from finance reporter. where will these job cuts come from? >> yeah. it's a really interesting number. 100,000 over the next five years. the analysts at wells fargo saying that's a record. so we'll see more culling in the coming years than we ever have before and a lot of that is really from call centers. and bank branches. that's where they say the vast majority of these cuts will come from with all the investments these banks have been making in automation and technology. knows roles aren't as needed in the coming years. haidi: culling bank branches, branch bankers i should say and call center staff, whose star is rising when it comes to these beg institutions? >> yeah. it's just what sherri said, actually. the software developers and the

technologists and computer engineers, these banks are investing heavily in these technologies. and they need the kind of staff that you might see at a google or an amazon to actually come and make these improvements and make these investment for them. so that's who you really see wells fargo seeing as the new king of the jungle in banking. and i think we're probably going to see a lot more hiring in those places. shery: the googles and amazons are having quite hard time adding talent, right? i can't imagine it being easy for them. for banks. >> that's exactly right. some of the banks have said that this is like the craziest market for this talent they've ever seen. so it's definitely expensive. it's hard to find. especially to the deutsche bank c.e.o. point, bringing people back. this is the kind of talent that's really liking work from home and that remote and flexible option. so it will be very interesting to see kind of how the banks stack up against the googles and amazons of the world when they're so adamant about restocking their towers. haidi: where are we at when it comes to the return to quork

plans across wall street? >> earlier this month we really saw a lot of the u.s. banks really put more and more folks back. deutsche bank is one of those. citigroup, banc of america, also bringing a lot of folks back. and i think -- now we're in this wait and see mode where they see how that's going and how are people feeling now that they're back. and something we hear a lot as folks are coming in. but they're still doing a lot of their day on zoom. and so what will that ultimately mean for how people feel now that they're back at these desks? they haven't been to in 18 months. so i think it's still an adjustment period for a lot of these bankers. and we'll see as we move into the fall and also delta variant and all these other new variants, you know, how that kind of derails things. i think wells fargo is just out a little bit ago saying we're actually not going to bring folks back until january at this point. and forced delay for that bank. haidi: it is just moving goal posts when it comes to return to office. jenny surane bloomberg finance reporter with us.

let's get a quick check of the latest business headlines. china evergrande is facing a bond interest payment worth $45 million on wednesday. last week, the developer let the deadline for another bond payment pass without giving any public statement. and several holders of that debt say they're not yet -- have not yet received a coupon. both bonds have a 30-day grace period before evergrande is considered in default. the japanese government may start the sale of an $8.5 billion stake in japan post holdings as early as this week. officials are set to be meeting with bankers on wednesday as the state plans to cut its ownership to one third from about 68% currently. the move would mark japan posts third share fell amid an ongoing privatization push. america's largest chip maker micron has delivered a weak forecast for the first quarter. suggesting that demand may be waning. dipping sales to $7.65 billion with $1 billion short of the average analyst estimate. earnings per share also projected to be lower at $2.10

per share. micron is coming off a record year for chip demand which allowed the company to charge more from its products -- for its products. taking a look at the day ahead for australia. we are still following the tug-of-war to take over the a.a. group is expected to end its $260 aussie cash and offer for wednesday. that's according to reporting from the financial review. on the geo politics front the french story continues. the ambassador to -- returning to camp brvment rasun and this comes after he was recalled by president macron to extend outrage after being left out of a defense pact of britain and the u.s. a new objective of cutting emissions by 50% below 2005 levels by the year 2030. up from 35%. that's under updated projections and object itches released as part of the netzero plan. plenty more ahead. this is bloomberg. bloomberg.

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haidi: japan's ruling l.d.p. party will elect a new leader on wednesday who will next week be replacing the outgoing yoshihide siga. it is considered the most wide open contest in a decade. let's bring in our north asian correspondent stephen engel t culminates k we draw any conclusions on how all of this behind -- behind the scenes horse trading i should say has been going? >> the political rang willing

has been -- wrack willing has been fierce, when took over -- yoshihide suga took over from abe. this year will the japanese consider more continuity under this obviously covid time? this will be the third prime minister in the covid era. shinzo abe, suga and one of these four individuals who will stand for the l.d.p., the leeb real democratic party, the ruling party in japan. the leadership vote today. we're going to get more than a million rank and file l.d.p. members voting. actually, they had to vote as of last night. and lawmakers will vote today. we'll get a result by 2:20 japan standard time. so 1:20 hong kong today. it's very unlikely one of them will get an outright majority. so what will likely happen is we'll have a runoff between the top two candidates. and right now, as you saw those

four individuals, opinion polls don't matter much. because this is not a public vote. this is an internal behind-the-scenes vote. and you have to look at where the factions line up and who is gaining momentum among the big wigs and who -- and all depends on how the party wants to move forward. from abe and suga years. do they want continuity with kono and kishida or something radical? i won't say radical. i'm sorry to say that. but japan has never had a female prime minister. you have two candidates. female candidates. haidi: pretty radical. >> for japan considered practiced cal. it would be interesting to see how this plays out. likely two different internal votes. the first vote and then an hour and a half later, or thereabouts, you get the results of the runoff which will likely -- likely come down to kishida and kono. the feel mail backed by shinzo

abe could be the wild card here. haidi: and still the same liberal democratic party, right? the l.d.p. so how much of a change can we really expect in monetary or fiscal policy under a new prime minister? >> well, most economists we've spoken to don't expect really any -- what, fiscal policy -- monetary policy change. obviously we're battling with the covid pandemic. but monetary policy and fiscal policy, they -- right now, in japan, they're kind of hamstring. so we could see most economists predict more spending on the fiscal side to get through the pandemic. and we all know that suga, his last act as prime minister, by the end of this month in a couple of days he will be lifting the widespread states of emergency, pandemic states of emergency. and that will give another boost to the economy as stores and travel reopen in japan.

that -- in addition to stimulus that will come from whoever is the next leader. october 4 whoever is chosen today, october 4 is the date to circle on your calendar for the election of the next prime minister. but then we have a general election by the end of november. haidi: north asia correspondent stephen engel with a pro view and be sure to catch our conversation next hour with l.d.p. upper house member ahead of wednesday's leadership vote. and we will be watching the market reaction as well. with the topics -- topix and nikkei beating the rest of the world in september in terms of market outperformance. we're staying with politics now. france will return its ambassador to cambro as a scrapped military submarine deal, recalled its representative two weeks ago after australia changed course on its alliance with the u.k. and u.s. so has anything meaningfully changed here? >> well, the ambassador is going

back. john peever tabol will return and we don't know when. it comes from an anonymous source. but that's fairly typical diplomatically when these sorts of things occur. and upset that -- wasn't consulted australia's decision to can that $65 billion sub contract. and in favor of eight nuclear submarines built in partnership with the united states. now, prime minister scott morrison said that the -- at the time he understand there would be some damage to the relationship. but was confident it would recover. and of course australia has a very long history with france. fighting side-by-side with the french helping liberate france in two world wars and lacy been difficulties as well from french nuclear testing in the pacific to the bombing of the greenpeace vessel rainbow warrior in auckland back in 1985. so the relationship recovered from both of those two major setbacks and hard to imagine it won't recover from this as well. haidi: and how these u.s. nuclear submarines would be

built, do we have the shipbuilders that can do this? we're hearing reports that they will have to loan submarines while we kind of, you know, get caught up with the -- how to manufacture them? paul: the australian manufacturers workers union has been expressing a few concerns about this. and other issues as well. and that union has had a long-standing tradition against nuclear energy. so it's having to re-evaluate that and consider how workers are going to feel working around a nuclear reactor in a submarine which will be docked at the port near one of australia's largest cities. adalaide. but attitudes are changing toward that. a pole in australia found that 62% of people in favor of this nuclear submarine deal. but the union also worried about does the workforce have the skills for this? the finance minister simon birmingham issued a few assurances about that saying that every commitment will be given to help these shipbuilders transition into new roles. but yeah. many, many unknowns about this

deal. and not the least of which still remains the cost. shery: bloomberg's paul allen there joining us from sydney. let's now get to the first word news with vonnie quinn. vonnie. vonnie: schaefery, thank you. u.s. senator elizabeth warren said she will not support jerome powell for a second term as federal reserve chair. she's the highest profile democrat with a say on the confirmation to come against him. powell's term expires in february. it's not clear warren warren's approval would derail powell who has bipartisan senate support. and is likely to be confirmed again if president biden picks him up -- picks him. >> it gives me grave concern over and over, you have acted to make our banking system less safe and that makes you a dangerous man to head up the fed. and that's why i will oppose your renomination. vonnie: u.s. democratic progress rivas lining up to defy speaker pelosi and oppose a bipartisan infrastructure bill. it's a blow to the $550 billion

measure's chance and potentially endangers president biden's economic agenda. the infrastructure bill has already passed the senate but liberals in the house insist that democrats pass a larger tax and social spending package before voting on the roads and bridges measures. fed officials are set to have questioned several wall street lenders about their exposure to evergrande. u.s. banking supervisors routinely question such lenders about their ties to struggling companies. fed chair jerome powell said last week he saw no direct u.s. exposure. hong kong has also asked the banks there to report risk side to the chinese poverty developer. china's president is targeting a significant boost to the number of tech professionals and research and president -- research spending. xi jinping said china must embrace self-reliance in high-tech industries. and it comes as he pushes the doctrine of common prosperity and continues a regulatory onslaught on the digital sector.

global news 24 hours a day on air and on bloomberg quicktake powered by more than 2,700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: we are seeing fallout from the high court of australia's decision saying social media and other owners of facebook and social media pages aren't responsible for the comments made on their posts. we're hearing now that cnn has restricted access to facebook pages in australia. cnn reported by dow jones saying it's restricting access to its facebook pages in the country following that ruling from the high court of australia that makes news organizations legally liable for comments on their facebook posts. that means facebook users in this country will no longer have access to major pages run by the network including its primary facebook page. cnn international page and other pages dedicated to its shows. so this is a development and seems to be the first u.s. major

media organization to do this. we've had high-profile individuals, premiers of certain states and politicians swiving off the comments on their posts. and on their pages because of this inability to be able to moderate 24-7 the comments that come through. coming up next, the w.t.o. chief says the looming energy crisis has different causes in different countries. we have that interview just ahead. this is bloomberg. ♪

>> this is just the first inning of a multi-year potentially decade-long commodity supercycle. it's driven by -- we have the war on climate change. >> this should be a wake-up call to speed up the transition toward a fully sustainable economy. >> what we need to do is invest more in renewable. >> and caleb city prices drop -- electricity prices drop you store and rise you take it out of storage. that's what we're missing right now. shery: some of the energy c.e.o.'s we've been speaking to this week. take a look at the commodity space receipt now because we are seeing a little bit of pressure and consolidation for w.t.i. which also lost ground in the new york session. but still very close to that $75 a barrel level. and it's being boosted by the thought that demand will continue to rise given the high

prices in natural gas with continued to soar toward that seven-year high. thermal coal also rising toward levels that we haven't seen in quite a while. it already -- 40% rose this month. we continue to see the power shortage really forcing the processors to shut and sending prices higher as well. under a little bit of pressure in the previous session. but up about 60% year to date. and you have been we have those -- we have those energy intensive aluminum plants giving rise to the price of aluminum for a 13-year high. in the meantime, the w.t.o. saying that the energy crunch in the u.k. and china have different causes with china's crisis potentially impacting the free trade flows. the director speaking exclusively with bloomberg's has linda amin. >> the energy crunch in the u.k. and china may be slightly

different origin. i think the u.k. is more of a labor problem. not the supply of oil but getting it to where it's needed. i think, you know, with respect to the situation in china where factories have been asked to cut down on their energy use, that's definitely factor. and the demand, pent-up demand due to the -- very appropriately by many countries to households and businesses, there's a lot of demand on the side of households. but there's also a lot of demand on the side of businesses who are trying to -- some of them are stocking up for inventory purposes. this is another way they manage risk. so if you put that business demand together with household, and you mix that with a cut in supply coming from china, yes, definitely. i think this trade will be impacted. i hope not for long.

i hope it's temporary. >> the impact of china's growth because it is already slowing and chinese manufacturers are curbing production. and this is the latest shock to global supply chains. already delays, chip shortages, with soaring commodity prices as well. >> well, you know, haslinda, we've seen a lot of supply chain disruptions. at the beginning of this covid pandemic, and then, supply chains became resilient. and really moved goods around, especially medical goods and supplies. but now at this part of the pandemic, we're seeing destruction again. you know, and this continuity. and that's because of what we spoke about, the demand that is pent-up -- pent up. and if you have factories slowing down, and you know, not being able to produce as much, that's going to impact growth and the recovery.

so that's why i say i hope it's not for long. because that's a feedback loop into the rest of the global economy. shery: that was the w.t.i. director general there speaking exclusively with our haslinda amin. crypto man will consume 25% more energy in this year than last. and more miners are moving to countries that allow them to use more renewables. analysts say that the crypto industry must find a way to consume less power or it will continue to be plagued by sustainability criticism and government bands. and managing director jonathon miller, great to have you with us and this comes in the wake of the big move, the most decisive move yet out of china to essentially ban these crypto transactions. is finding an answer to the environmental sustainability part of the piece really crucial here? jonathon: good morning. thanks for having me on the show. great to be here, haidi. and i think this is a really important question for all

industries. and, you know, crypto is no -- is not secluded from that -- with that stand-alone. i think the really interesting thing about crypto is that it's -- it's almost kind of marginal efficiency maximalist. so it is seeking the lowest sources of power and we know that renewables are. latest that i've seen with crypto miners in particular, bit coin mining, which has been most in cost, is -- in the 50% to 60% range of renewables which is well above the industry average. that being said, it's -- it is a lightning way to go there. and i think it is a key part of the story for crypto. because this latest ban from china which you mentioned, one of several that we've seen, it', from -- maybe they're tied up. but i think the china then -- part of a bigger story for china

in general. and it's something that we're obviously not happy to see. but from the energy point of view, what that has meant and the previous ban in china for mining is bit mining has moved offshore. it's now -- accounts for only 45% of mining is in china. and that will likely -- likely reduce over time. and the more that mining moves offshore out of china and the more that it moves into places where there's vaster and vaster uptake of renewables, and that the u.s. is one of those locales, we'll see that energy mix change for crypto. and the last thing i'll say on this is that the -- the different block chains that exist out there, bit coin is one of them. and you might have heard of etheorum i'm sure. -- ethereum i'm sure. they're looking at alternative ways to secure the network and prove of stake, a different method for securing these transactions and securing the distributive ledger. a lot of new, technologies, coins, and existing coins are

transitioning to this type of methodology. and i think that will have an impact. haidi: i was going to ask you about proven stake because even with proof of stake block chains they're not created equally, right? and ethereum ranks as -- poorly out of some of the others. is it really the environmental savior here? jonathon: it's part of the story. i think the main -- the -- generation needs to change to renewables. and crypto will move even faster. because we know that, you know, renewable energy is the cheapest source of energy now. and every new project, in fact, some australian projects that are really quite interesting, modular mining projects, they're part -- that can actually empower the energy transition. i think, you know, crypto being something that can be located, crypto miners can be located onsite. we're seeing projects that are setting up on site dealing with excess supply. we've got excess supply issues in australia when it comes to

peak solar in the middle of the day. and you can leverage some modular consumption here. so bit coin is not just the enemy. it's part of a tran addition. and it's an interesting tool. and the real issue is generation and we're seeing that change and crypto will follow. shery: we have seen this new experiment of cross-border digital currency by the bank of international settlement not to mention the monetary authorities of china and hong kong. what will digital currencies do to other crypto assets? jonathon: it's a really interesting question. because we've seen the announcement recently that platforms like twitter have added crypto to their -- to their network. you can keep people on the platform using bit coin. and some really interesting videos showing people, tipping cross-border to all of a sudden, you know, twitter is now a cross-border payments platform

as well as a social media network. and that's the power of blockchain and crypto. it's native to the internet and can plug into any app. i think that the rise of potential bank digital currencies is also that is sincere interesting and what is being proven over the last 12 to 24 months by the rise of stable coins and the use of crypto and cross-border flows is that it's a superior form of money. it works better in that context. and so you're going to see central banks take -- make use of that technology. and it's the nephew internet. it's the new rail. so these things will co-exist and unfortunately a place like china, china enforces one type of currency and we've seen that attitude to tech in general. and that's unfortunate thing for i think for emergent businesses in the chinese community are so quick to embrace new technology, right? so crypto and central bank, digital currencies, will co-exist in the future. shery: when it comes to embracing new technologies and

developing their digital currencies, and perhaps a development of regulations as well, which countries are leading? jonathon: i mean -- kraken is a u.s.-domiciled business and we have a footprint here in australia. and we have a local footprint here and in many other countries. and different countries have different flavors and the regulatory framework is something that's -- that's -- shifts and changes and that has a big part to play in terms of adoption. right now, if you tell me who the most advanced crypto countries are, you can't not mention countries that have adopted it as legal tender like el salvador. but there's so much innovation coming out of europe, coming out of switzerland where there's a lot of domiciles, foundations for some of the most interesting technologies. the u.s. has a huge amount of vibrant and exciting projects. it's -- it's a global technology. and where the people are. where the people are is what matters and interestingly

there's some fascinating projects coming out of australia as well. shery: jonathon miller of kraken australia. managing director. thank you for joining us. plenty more ahead of the this is bloomberg.

haidi: here's a quick check of the latest headlines. deutsch panic plans to bring

5,000 staff back to new york city over the next six months. and expects offices in major financial hubs to refill quickly. america c.e.o. christiana riley said many returning employees will have the option of flexible arrangements. deutsche bank said earlier this month the workers in many industries are feeling isolated. amazon has launched a new robot called astro which works with its alexa voice software. the autonomous gadget can check on tests while a use senior away or follow the child around on a video call. amazon is trying to position itself at the center of home market gadgets after a failed foray into smart phones. it will be sold on an be consolidational basis for $1,000. rio tinto says it is suspending sales of cop from your a smelter after the plant was shut last week following a release of molten metal. the miner has declared certain

sales of copper cathode and assets from the plant and is assessing the work needed to restart operations. the outage comes as copper prices remain elevated. and the strong u.s. demand and dwindling inventories. haidi: the asia trading day. soph. sophie: taking a look at what's been going on with the dollar. it rose with u.s. yields overnight as higher energy costs fueled the inflation debate. and there are more upside risks for the greenback here. r.b. cbs capital among them, seeing significant gain for the dollar if hear yields put pressure on stocks' downward pressure. and over at society general, struggling to see how the treasury selloff ends without a spike in the u.s. dollar. now that said, switching out the board, saying the big economic story is not the u.s. or europe but the slowdown in china which requires sufficient policy action and lower rates seem to be a matter of time. for now the pboc stance, that is keeping the u.n. in a very tight

range indeed. but by year end hsbc, the forecast the yen will hit 660 by the end of the year. shery. shery: "daybreak: asia" is next. this is bloomberg.

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♪ >> welcome to daybreak: asia. >> we are counting down to asia's major market open. >> good evening. i am shery ahn. a global stock selloff set to spilling to asia after wall street -- worries include the debt ceiling sendoff and inflation.