poll hello and welcome to "daybreak: asia to: sophie: -- shery: i am shery ahn. our top stories this hour. asian stocks that to start october on the back foot after wall street kept its biggest monthly cell up since march 2020 with further losses. china orders top energy

companies to secure supplies at all costs, warning blackouts will not be tolerated. japan's financial regulator setup scrutiny of banks in a desperate hunt for yield. paul: the energy crisis you mentioned is casting a long shadow over things in china as golden week gets underway, that order coming from the deputy premier, secure energy supplies at all costs, blackouts will not be tolerated, but no advice on how to achieve that. also casting a long shadow, ever grant -- evergrande, although there was one sliver of good news, buyers did get their first installment payment on sunday, but it is going to take them to pay a limit. shery: some progress is still progress, right? as we had toured repayments -- head toward repayments.

some progress when it comes to averting a government shutdown and the u.s., congress was finally able to pass the stopgap funding bill that would keep the government operating through december 3. uncertainty continues over that debt ceiling suspension. secretary yellen saying there may be a few days of cash left past the october 18 deadline but a lot of uncertainty about how we get there. we have another infrastructure bill coming up -- vote coming up as soon as later today. paul: it looks like it is going to be a long night in washington. a number of markets in the asia-pacific close today as well. sophie kamaruddin is keeping an eye on things. sophie: keeping an eye on the echo agenda, we were in the final quarter of the year and we get a check on age's manufacturing, just a few my readings do across asia including from tech export heavyweights, taiwan and south korea along with -- where we have seen delta and its a

vaccination raceway on the outlook. at bloomberg economics they have trimmed their gdp growth forecast for some countries next year, malaysia, philippines, slowing growth next year at uber economics. switching of the drug, we are also waiting on creating -- charts, we are also waiting on three and traded it. experts expect slow growth due to outbreaks there. average shipments did grow. other resilient echo didn't like resilient output, that supports the case were a november rate hike from bok, which is also instigated, citibank expecting 1.5% next year. they said they would be the delays if they fall below that level. keeping in mind downside risk on the energy shortage. with that, we are seeing that fueled global competition for

lng supplies. that has pushed gas prices in asia to record highs. shery: more details on that energy crisis, bloomberg has learned government officials have earned top own state -- top state owned energy companies to secure supplies at all costs. su keenan joins us, and it seems the order is coming from i up. >> it comes directly from the vice premier, and head of the nation's energy sector and industrial production. sources say it was delivered during an emergency meeting earlier this week, with officials from a patient regulator there, as paul said, the words from the meeting, blackouts will not be tolerated. if you look at a map of china that you can see the critical situation this emergency heating underscores because several

regions have had to cut power to the industrial sectors. residential areas have faced seven blackouts, and demand is the real issue here. china's demand for thermal power as never grown so much as this year. supply cannot keep up. one of the biggest importers of a lot of energy, the shortage of coal has caused liquefied natural gas prices to soar, and that has bled into other commodities. let's go to a price chart, to quite a expected to intensify volatility in energy but it is not just in asia but globally. the europeans compete with china for supply, and this order indicates that perhaps the european government and consumers are going to suffer through elevated gas and electricity prices as well, the rest of the winter expected to be unusually cold. paul: su keenan there.

for some positive moods, for customers of evergrande wealth management products, a look at how this fits into the wider picture, let's ring in our markets reported. tell us about this installment paid to smaller investors. >> good morning. this is an agreement they had already made with its customers [indiscernible] to its investors. it seems like at the companies prioritize some of the borrowers, special retail investors because that is important to maintain the social stability, but they still have a lot of debt to pay. shery: this story as so many different facets, right?

including trying to's purchase in the stake of a struggling bank, the local government asking for the stake, for the money to be going to debts with the lender. what else do we know about how this saga is getting resolved? >> the good news is it seems like the government is trying to prevent the fallout from ever grant -- evergrande. pboc has been called into ease the housing markets and easing markets for some homebuyers. fine-tuning their policy, they are trying to lead to a soft landing as opposed to a hard landing. shery: our bloomberg markets reported with the latest. in the u.s. the house of representative as passed a nine week spending bill to avert the u.s. government shutdown. the bill passed both chambers after democrats dropped the

attempt to include a debt ceiling suspension. let's get the latest from bloomberg government congressional reported. it is a small victory to avert a government shutdown, but at the same time we have no resolution when it comes to the debt ceiling. >> that is absolutely correct. democrats have said they are going to make sure republicans come along with them on the debt ceiling. republican said absolutely not. this is very much a standoff right now. i debt ceiling deadline on october 18 is several weeks away. democrats cannot do this overnight. if we end up going through the reconciliation process, the process takes a couple of weeks. even if we were further out at this point, it is very really washington. it is overshadowing on the

infrastructure and potential spending and tax plan. it is really not clear democrats are going to have the vote to pass it. progressive wings of the party do not support the package. paul: our bloomberg congressional reporter emily wilkins. let's get to vonnie quinn. vonnie: incoming japanese prime minister: she that will name a new finance minister. they felt about longer than anyone in the country's modern era. the former olympics minister is likely to replace him. koshida wants to appoint younger lawmakers.

bloomberg's vexing tracker shows more than 55 countries are get to hear the 10% coming targets. it illustrates the challenges of covax to send sides to every corner of the planet. covax has cut its 2021 supply forecast with delays, bans, and according about the issues. indy's -- the current account, which is a measure of a retreat -- overseas trade was up $6.5 billion. forecast were for a $2 million excess. $8 million in the january through march period, strong sales of computer business services help boost income. bloomberg's sources say the head of the wto has privately discussed resigning. she is seven months into a 4.5 year term, which began with

plans for quite negotiating victories to boost a dysfunctional organization. we are told she has fully dressed the reality of the wto's inertia and may resign if knowingly can be found on google issues. -- critical issues. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, the former olympic minister says -- is likely to be named the next finance minister. up next, we speak to general gerard -- daniel gerard. this is bloomberg. ♪

paul: asian stocks look set to start october on the back foot after the u.s. be kept the monthly selloff -- biggest a lot

since march of 2020. as investors brace for the fed to win down, that's wind down, the rate environment is supportive of equities. joining us from boston is daniel gerard. you say the rate environment is supportive of equities. we have seen broad selling, looks like we are saving up for a risk off in the asia-pacific as well. >> i think this is a good buying environment. overall, what we have been seeing from our institutional clients, the opening has been turning to risk off. we would support that. this is going to be an environment where we are worried about peak policy, perhaps, pete growth, but i do not think that means peak earnings, and that is why equities continue to advance. we might not get the same liquidity abuse, -- boost, but do have those earnings continue

to be supportive, we have got market pressure, but as long as we continue to think about transitory release nonrecurring for the long term, that can continue to support equities going forward, especially in cyclical areas. paul: one market we will not see selling today is china, because it is closed for the golden week holiday. a lot of pressures building up a run, concerns around evergrande and now the energy crisis. >> china, we continue to be a bit skeptical that they will take it was urgent need in equity markets. there are a number of risks. most important is that the state orchestrated slowdown in credit, they are trying to balance so much at the same time that we are getting worries about funding in high-yield markets. for example, in evergrande as

well as the electricity issue. at the what i were -- worry about most is the electricity issue because that is the biggest potential for knockoff and global gdp. attempts to quantify these risks have been better and seat more supportive policy innate period where china has been attempting to deleverage a bit i would be skeptical of that performance of chinese equities were assets overall. shery: yet we continue to see the pboc being supportive to the financial markets. we see them trying to really support confidence in the markets with those liquidity injections. where in the economy in china does the power crunch and the evergrande issues were you the most? >> and industrial centers, industrial profits. you are right, we are starting

to see supporting policy from the pboc. it is just a little bit and kind of late at this point. it is a reversal of the direction and not enough to support the expansion that we would need to see. the areas that have probably the biggest power crunch worries or have also missed some of their environmental targets as well, these provinces are something like 50% of gdp growth, and if we get a harsh winter on top of what we are seeing already, this has the potential to knock on to industrial production and industrial companies within china, manufacturing companies to produce for the world contributing to the shortage we are already seeing from shipping and margin pressures from energy. i am more worried about the supply chain here that i am

about the domestic china market in that respect. shery: when it comes to the regulatory crackdown we have seen in china, could we start to see valuations become compelling? we heard from janus henderson is the good news the selloff is so big and tech perhaps that is an entry point. >> it is hard to say. we go through that discussion all the time as well. the trouble is in order to value something you need to be able to quantify the risk. we can look at absolute valuations are relative valuations to history and say that looks good, but if we cannot quantify the risk to what is coming next or where is the regulatory crackdown going to start and finish, it is very difficult to make a decision, so if you are a great company and political analyst within onshore intranet, then i absolutely think there are opportunities.

we are not in tune enough to pick those stories out, so we will stay out of that makes for a while until we get better clarity. paul: finally, you mentioned you are concerned about the supply chain issues. it does not mean we are getting factors for christmas, but more seriously does it mean that this rate environment we talked about being supportive, is the supply chain a major risk for the outlook there? >> it is. your christmas question, it seriously i would get the shopping and now -- in now. as far as the two issues, on earnings, it can profits hit? it is an issue we will have to worry about in another quarter or two as inventories start to draw down here, and we do not have much relief in sight for at least six months on the shipping side. energy, there is an upside to energy profits and oil prices

that is going to potentially crimp manufacturing profits down the road. i look for beef in the upside in the next quarter but certainly risk to margin and supply chains under the quarter or two. shery: it was great having your insights, state street multi-asset strategist with his views on broader markets. you can get around the stories you need to know in this edition of daybreak. the mobile in the bloomberg anywhere at. customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

>> he could surprise us, but i think in many ways we are going to see more of the same.

>> he speaks a lot about disruption and how to deal with the disruption and also talking about distribution for the cycle economy, so i think that will be many changes. >> a lot in his term will depend upon what happens to the course of the virus. >> we will continue to maintain accommodative monetary policy. shery: the boj governor along with guests on bloomberg to be under -- on the economic outlook under the newly elected leader. we are in a to in tokyo and seoul area in japan, his next steps will be the main focus today with investors watching up for his chief take their it --

their next pick. -- center take the helm as prime minister the parliament vote on monday, and on the corporate front, we will be watching toshiba after elliott management said it has become an in 6 -- significant investor. how this will impact the board decision to take the company private. in south korea, we will be watching defense stocks after the state media said they fired another missile, marking the fourth test in recent weeks. on the eco-front, we are getting new data. experts saying staying robust next first days of december. a5-week hearing at the national assembly as part of this tech crackdown. lawmakers are to question the heads of companies. we continue to see the

regulatory crackdown why didn't. paul: let's get -- why didn't -- widen. paul: evergrande continuing -- as one of three repayment options. payments on some $6 million of wealth products last month and put pressure on beijing to avoid further unrest. as it management shareholders will tutor a proposal with a debt so of more than 10 years subject to approval on october 21. debt managers secured a rescue package from some of china's biggest financial firms in august. the wall street journal says morgan stanley is being scrutinized by u.s. federal

authorities over links to an alleged venezuelan fraud. they say the firms are among several to a managed this. he is under -- is under investigation. banks will close regional bridges in italy and spain in favor of smaller banks. it is a shift away from richer clients to instead focus on a more affluent group. the company says it plans to serve customers mainly through digital banking. blackrock has told employees it will start its return to office planning program on november the first. more than half the staff will be expected to work in the office at least three days a week. shery: taking a look at the

markets, we are seeing downside pressure for those qe stocks, falling .4 of 1% despite the fact we did get positive data out of new zealand in the past week, including building approvals rising for a third month in august, and we are seeing u.s. futures gaining ground .25 of 1% as we are getting the latest breaking news right now as i speak, president biden at sign that bill to avert a government shutdown. the government had been funded for another nine weeks. it will remain funded through december 3 as congress was able to pass that legislation is democrats dropped an earlier attempt to attach debt ceiling suspension, so president biden having said that bill to avert a shut although there is still no resolution when it comes to raising the debt ceiling and we are headed toward another infrastructure bill as early as today. coming up next, more on the

potential cabinet shuffle in japan live from tokyo 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.

paul: breaking news for you out of japan, the jobless rate for the month for august coming in weaker than expected, 2.8%, same as it was the month prior, job to applicant ratio had a steady. 2.8%, we have seen a state of emergency for the covid outbreak lifted in japan or it is going to be lifted. not much change, 111.8 four

against the greenback. we are expecting the nikkei to open weaker as we get coming at the top of the hour. shery: the new leadership in japan watching very closely, the latest developments on the economy as they carry out the leadership change. global immediate reports a newly elected head koshida is planning to dissolve the parliament. he also wants a brother-in-law as the finance minister. isabel, tell us a little bit about this potential new finance minister. >> suzuki is very much a lower profile politician. we have had the longest serving finance minister, very much a big personality, always focused mind even if that caused scandals.

tsuzuki is more of a conservative. his sister is married to someone so they do have a connection there. she was the olympics minister for a short period. what we will expect for him is what kishida has put on the menu for this new administration. key does not want any kind of neoliberalism in japan. he wants very much to have a middle-class country where there was not a big disparity between rich and poor, and he believes that disparity as gone too far and he wants to fix that. he has the problems in japan to deal with, massive national debt, which has resulted from the aging population and the social security spending from

that nds to try to get the economy back on track from the covid hit, which has been fairly bad is expected to get better as the state of emergency is lifted from today. paul: toshiba -- kishida said he wants to support younger ministers. tsuzuki is 68, rather stretching the definition of younger. >> he has says that he wants to appoint more young people, but there is an informal rule, you have to have five election victories before you can be considered for the cabinet, so it is fairly rare for someone to very young to be appointed. 68 is obviously a bit younger, but certainly not young. we are also looking at the party

, a bit less high-profile but more important in terms of preparing for the coming elections in november, and reports are saying someone who had been in his position for a record period will be out and will be replaced by someone who is 10 years younger. not young, but younger. it will be interesting to see how far she manages to appoint women. a lot of people say he is keen on promoting women, but we do not know how far that is going to go. shery: our politics reporter isabel reynolds there. we are waiting for the japan open in less than half an hour. sophie: afterward's equities in tokyo, nikki futures extending losses, down more than 1%. ubs seeing light, expecting upside for japanese stocks,

which are there most preferred market. the nikkei on course for a second weekly drop. as for the end, it did cap a third quarterly decline as a push above 111. u.s. ten-year below 149. e-mini's gaining some ground led higher by russell futures. the dollar looking steady this morning after wrapping up a choppy month against g10 peers but it is going into the fourth quarter with upside pressures. only not the chart on the terminal will frame investors mindsets -- investors' mindsets. the dollar rose to a november. asian markets with a greater share of export oriented stocks like taiwan and japan may seem to be the effective place. paul: more breaking news on the makeup of japan's new cabinet, a foreign minister is going to

remain -- retain his post so he will remain a minister in the new cabinet. let's get to vonnie quinn. vonnie: the unprecedented spike in european energy prices is amplifying concerns about public support for the world's most ambitious climate reform. the european union and environment ministers want to make crisis early next week following poland's role to consider an impact on a planet green economical. the european parliament will tackle the issue at a summit. trent's leaders have -- bloomberg sources say the order came directly from the vice premier who supervises the nation's energy sector. in the order was issued during an emergency meeting earlier this week and says like us will not be tolerated. a chinese driver has successfully sued tesla for fraud over its purchase of a

secondhand model s. it is the latest setback for elon musk ev pioneer. a beijing court found tessa had misrepresented the car's condition after major repairs following an earlier accident. tesla was ordered to refund the cost of the car and debate damages of three times the purchase price. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: coming up next, australia's focus on makeshift is proving tough -- mateship is proving tough australia. our guest discusses how it affects the gender pay gap. this is bloomberg. ♪

paul: australia's gender equality condition is a paradox that might be causing the economy $1 billion. it tops the world in terms of limit's educational attainment, worst among participation in the economy. our financial reporter christ the data for this report. what were the highlights that you found? >> what i found was that

australia definitely has a woman problem. we are the best at educating women. however, we are number 70 when it comes to women's economic participation, and only in 2006 we were number 12 in that regard. as you can see, australia has been going backwards. the cost of the economy is huge. on goldman sachs estimates, we know australia could add as much as a percent to its gdp, $114 billion a year by enclosing the employment rate gap between men and women. then you have got the issue of sexual harassment at work and that is costing the economy about $3 billion a year. much more to change. shery: stick around because we want to continue this conversation with our guests as well. joining us is diane smith-gander , a past president of chief

executive women. thank you so much for your time. these gaps between women and men in australia are big despite the fact that australia lead in legislation for gender equality around the world. why do we continue to see these persistent divergences between the two? >> lovely to be with you. when you see something like this that goes on for decades and decades, the only place you can look is to culture, and no less a person than our prime minister to back in early september said that we have at culture in australia that excuses, condones, justifies, and ignores gender inequality, and that is on all australians to fix. i think we all know that saying

culture eats strategy for breakfast every day of the week, and that is what is going on in australia. our culture is not right to allow women to take an equal place in leadership across the nation, and we need to really start to think about how we are going to frame leadership in a different way to make a change. shery: has the #metoo movement been seized in australia as much as it has across the world? >> to a degree. there have obviously been a couple of big #metoo movement's. -- movements. the biggest was when brittany higgins stepped out. that woman was included be strong in the way she positioned her personal experience. i think the situation with the pandemic and the way australia has closed its borders, lockdown its economy, and focused so much on what is going on with the pandemic as to a degree water

down the impact of the #metoo movement, and that is a very sad thing. we are seeing women are being disadvantaged more through the lockdowns, because we have this very gendered culture where women are expected to take a major role in looking after the home, doing unpaid work, and in childcare. childcare is seen very much as a woman's problem. shery: how can we that the education of women in australia to fix the problem, because we are number one in education? >> there are more female graduates from yale university that there are no graduates, -- are male graduates. women fall through the pipeline. we have very few role models.

only 18 chief executives are women in our top 200 companies, and when you look across our 300 top companies, the line roles, nine and 10 are held by men. there are 181 companies in our top 300 that do not even have a single woman in a line role, so young women when they come through look upwards, they see the gender pay gap, which runs at about 20% at the moment, and say what is the value proposition for me? then men say receipt women opting out, they were to stay home with their children. women are logical and as economically rational as men. we look and see there is no value proposition we take a

logical choice. i am not saying that career is difficult for women. everyone has struggled along the way in their career, but the single most challenging thing in my career in australia has been the fact that i am a woman. >> i was just about to ask you a little bit more about that, because you have been a leader in corporate australia for several decades now. what were some of the barriers you have had to personally overcome and that you are not trying to mitigate at companies you are on the board of? >> general issues for me were what people austria's expectations were about what i might and might not be privy to do. they were wary of the decisions i was going to make. i have led 17 times in my professional career, and that is a lot by any standards, and i

felt often when i was asked to consider an opportunity, if i said no i might not get another chance because i might be thought of as a woman who did not have a lot of aspiration, because that was often the expectation 40 years ago when i was trying to find the corporate letter. men have the same decisions to make as well. i experienced sexual harassment at times during my career, and is a woman in her 30's, working for men who work for men who worked for men, it was very difficult for me to understand how to deal with that. there was nobody really to talk to, so you ended up not talking about it, but what that does is it makes it a bit more tentative the next time you're in a circumstance where the situation might arise again, and it also

makes you tentative in the way i dealt with colleagues. at 1.i was told i was quite standoffish. shery: have you seen progress since then? how much more would you want to see and what needs to be done? where is the pressure has to come from? >> is to come from all levels of leadership. corporate australia is trying very hard. they do a great job of devising that a lot of changes needed and a lot of that change needs to be led by men, but we do need our political leaders to frame this cultural problem and we need them to change some of the settings to stop thinking this way about childcare so it is not only a woman problem. i cannot understand how childcare is not tax deductible.

it is clear for a family to go to work they need to have their children cared for, and surely that is a tax-deductible expense. shery: it was great having you on, diane. thank you so much for your insights, and thanks to our finance reporter in sydney for that great reporting. bloomberg has been asking top wall street names what the next big risk that keeps them awake at night. our guest is the social -- addresses the social and economic fallout. he explains his concerns in an exclusive interview. >> i think the thing that worries me the most is inequality both in and across countries. it is something the financial markets put aside as a social problem, not economic or financial problem. and we risk seeing the issue of

inequality gathered momentum. covid has already been a great equalizer -- unequalizer, but now that we have go back to where we have come from -- >> what are some of the places you see it most striking? >> we see it in income and wealth, and that has massive economic consequences. a highly unequal society is not an economically healthy society, but the one thing that worries me even more than that is inequality of opportunity. we know what covid did to people who had no wi-fi at home, no computers. we know that school districts lost touch with a lot of their students, and the students risk

not only becoming unemployed but unemployable, which means a lost generation of young people. we also see the aftermath of covid as we slowly emerge from it create different dynamics around the world. if you are sitting in a developing country today you can no longer assume that the companies will come to you. the owner is is increasingly on us coming to our employer. that increases when education is lacking, technology is lagging. i am worried we are going to see this massive process get larger if we are not careful. shery: el erian speaking with our correspondent. we are getting a survey for large manufacturers, the index coming in edit better than expected 18 above the expected 13, and improvement from the

previous quarter -- an improvement from the previous quarter. manufacturing coming in at higher than expected at two instead of a zero. it is also an improvement from the previous month. when it comes to the manufacturing outlook down the line, a little bit muted, as much as expected, 14, a slight improvement from the second quarter. nonmanufacturing outlook, three, a little bit of a miss but still staying steady from the second quarter. industry coming in at -- capex coming in it 10.1%, an increase for the previous quarter. relative stability it might have helped a across these manufacturers and none manufacturers. we are getting the latest lines from the bank of japan releasing their summary of opinions at their september policy meeting, one boj member saying they

should continue easing persistently. japanese companies see a 1.1% year on your inflation in five years time, so we continue to have very supportive monetary policy across japan, that also helping sentiment, which has been hit lady -- lately given the extended luck and uncertainty. it is much more positive than expected. this is bloomberg. ♪

paul: a check of the latest business flash headlines, five9 shareholders have rejected a stock acquisition show the deal from zoom. zoom sought to buy the software provider to bolster its popular videoconferencing app in the face of stiffening competition. 59 says it will continue to operate as a publicly traded committee. -- is that it has become a significant investor in toshiba as the board continues taking a private. elliott says it approached toshiba about a potential takeover. elliott is now said to be one of toshiba's top 10 shareholders. korean airlines is expecting approval to buy a rival character -- carrier year-end. the german said it will take at

least two years with only the most efficient planes retained. a380s are unlikely to remain in the fleet and are only useful in a short search in trouble demand. shery: we are just a few minutes open away from the open in trade in korea. sophie: g7 companies agreed to a common standard to speed up the return of international travel -- travel. we are watching names facing increasing scrutiny, several heads of big companies. starting from this friday, amid allegations of unfair trading practices by big tech and south korea along with souring public sentiment. a set of australia -- ahead of

austria's bond data, a continued rise in housing prices sparking restrictive pressures which have surged in the right -- in light of interest rates being low in austria. paul: a company says china's energy crunch may push base cost higher. our guest will join us in the next hour. ubs expects market sentiment to require. we have the market open in tokyo and seoul, futures in sydney pointing to a week or 10. futures for the nikkei down. the yen, 46 against a strengthening greenback. more to come in a moment. this is bloomberg. ♪

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shery: hello and welcome to "daybreak: asia." paul: we are looking at the major market opens in asia. our top story this hour -- wall street's biggest monthly selloff

since 2020. china warning blackouts will not be tolerated, plus evergrande pays off some investors. let's take you to a live shot into hong kong right now. a flag raising ceremony in hong kong commemorating the founding of the people's republic of china. hong kong putting 8000 police on the streets, more than the 6000 present during 2019 during the height of protests. security a priority as that flag raising ceremony takes place. shery: we are getting those

latest trade numbers with exports rising 16.7%, which is a bigger acceleration than was expected by economists. it is in easing from the previous month, which came in at 35% export growth. trade surplus slightly lower than expected. we continue to see very strong external demand for south korean products, although the calendar reflected the basics not helping in the month of september. paul: corelogic house prices for the month of september rising 1.5%, the same increase we saw back in august. house prices continuing to be very much back in focus. market of wendy percent of the past year. the annual growth rate faster

than any year since june 19 89. this attracting the interest of regulators as well. the regulatory authority saying it might intervene in the market over the next couple of months as it continues to run red hot. let's get a check of the markets as we get going here, and sydney, tokyo, and seoul. sophie is taking a look. sophie: we also have a bond sale on head of that. we are seeing ossie bond yields climb to a july high. the 10-year yield back above 160, and we are seeing the aussie dollar hold steady, but it is set for a weekly decline. in the share market, we are seeing losses with energy among the biggest losses. switching out the board from japan, this morning, we have the

latest with improving sentiment scene where non-manufacturer sentiment came in lower than expected. the nikkei opening to the downside after we saw japanese stocks among the best performers globally for september with the nikkei having in your 5% gain, but we are seeing a soft opening at the start of october. we do have the yen staying above the 111 handle after notching a third quarterly drop as japan lifts its emergency this month, and in south korea, we have the government looking to extend social distancing rules for two weeks, also considering the latest export data we got from south korea, which may bolster the case to hike rates in november. we are seeing downside moves.

the korean yuan is steady here this morning after we saw it move lower this week as we have that dollar gaining ground and going into the fourth quarter, expectations for firmer dollar will weigh on traders' minds. paul: our next guest is positive on global growth, looking for a 42% expansion. joining us from singapore, the head of apac equities and credits at ubs global wealth management. optimism for you around global growth, but we have had our hopes -- before, haven't we, by the delta variant, and now we have had an energy crisis from in the mix -- we have had our hopes dashed before. >> we believe the energy crisis

is already peaking, likely staying high, so the market should not directed too much on growth. we are seeing more reopening's, so what we have done, also given that in terms of peak growth, especially also earnings peak growth in several regions where we have already reached and possibly even surpassed it, so in our strategies, we do favor some of the typical sectors still, such as energy and financials, but we have also more recently taken one cyclical out, in this place industrials, and replaced it by a laggard. so replacing it with not to cyclical laggards like health care -- not so cyclical laggards like health care, we have seen this pay off in the portfolio.

paul: you're are also optimistic on earnings growth, as we mentioned, but to a degree is your optimism being curbed by the ongoing and you could argue worsening issues around supply chains? >> these issues sort of prolonged or holdback economic growth to some extent, and it is not only semiconductors. we have also seen from a base effect point of view, especially from europe because the opening that was relatively late, as a result, europe is one of the few regions where we see economic growth picking up next year but nonetheless, when you are headed towards the peak, it is postponed, in other words, not that it is not happening. shery: the 10-year yield right now in asia trading rebounding about that 150 yield come --, so

the spike we saw in bond yields, what will this do to overall equity markets? >> yeah, certainly a risk for financials in particular. why this happens, we all know the discussion about tapering and eventually also the discussion will intensify around rate hikes. therefore, if you think that, it also reflects more optimism on growth. otherwise, you would not see this long and going up like this. therefore, we think it is a positive signal of support. typically, the markets need 2, 3 months digestion period around tapering hour before tapering that can happen, so the path is a bit more rocky, but once that digestion period is over, it would not be surprising to see markets continue to go up even when we are tapering.

shery: away from equity markets, we continue to see pressure on emerging market bonds. is this a sector that you look at? >> it certainly is a sector we are looking at, and we are also cognizant of the risks, but on the other hand, we have modeled it for the entire asia high-yield sector, basically, and a dominant part of it is, of course, china, but we think the fallout risk toward other operators, other developers is limited. there are maybe a handful, but they are also already priced, including issuers like evergrande -- they are already priced for these issues. in other words, are some of them moving closer to liquidation value? even if they get liquidity,

there is not any more, so although they have tested to some degree the result of deliberate tightening, there can also be a deliberate partial easing on the sector. long story short, we think the yields we currently see on offer are quite attractive, and we actually recommend an overweight in this space. paul: before we let you go, i want to get your thoughts on bloomberg's big question of the day -- which asset class will outperform in the fourth quarter? >> i would still say probably the most cyclical ones, energy continuum and financials ahead of the tapering would be my guess. shery: great to have you on. let's now get to vonnie quinn with the first word headlines. vonnie: thank you. the incoming japanese prime

minister will reportedly name a new finance minister. the broadcaster says his brother-in-law is likely to replace him. and there are also reports the foreign minister will retain his post. president biden has signed a nine-week spending bill to avert a u.s. government shutdown including funds for states recovering from hurricanes and wildfires and to resettle refugees from afghanistan. it does not contain a debt ceiling suspension. meanwhile, the house speaker nancy pelosi may press ahead on a boat with a bipartisan infrastructure bill, despite more progressive democrats saying they have the numbers to stall it. the afr newspaper says the eu has postponed the next round of negotiations for a free-trade agreement with australia for one month. the report citing unnamed officials in brussels says

unresolved issues means the 12 round of talks will not happen until november. bloomberg's vaccine tracker shows more than 55 countries are yet to hit the 10% covert inoculation target. the number is seen as a crucial milestone to narrow the gap in access. it also narrows the challenges for covax. it has cut its forecast due to production delays. global news wendy four 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. paul: still to come, tesla loses a fraud case in china, a setback

in one of its most important markets. details later. up next, avoiding blackouts this winter. this is bloomberg. ♪

shery: more hawkish commentary coming from global central banks. cotton and other commodities, though, continue to rally. cotton seeing decade highs, the best quarter in 10 years, up about 20% in the third order. of course, we have had cool letter around the world, and now the beijing government is using quotas. natural gas still around that seven-year high, a hair below that six level. the japan-korea market really

around those records that we have not seen in years. iron for, we did see a a lot of pressure in the previous quarter, but it did manage to rally in the previous session of investors locking in investments ahead of a weeklong holiday in china. when it comes to futures in singapore, though, we are talking losses of about 40%. the china energy crisis having a huge impact. bloomberg has learned government officials have ordered top state officials to fulfill government supplies. we are told the order came directly from the vice premier. sue: yes, he is the head of the country's energy sector. analysts say it tells you how severe the situation was. one analyst said there's no cooling off on the energy crunch, and it could get a lot

more crazy from here. again, the word coming out of the emergency meeting which was held early this week, was that blackouts will not be tolerated. this was a meeting between officials from beijing--- beijing's state-owned assets regulator in the heads of coal and oil production. part of the emergency is there have already been limits to power in several key regions. we're told some -- several residential areas have faced blackouts, and china's demand has never grown as much as this year. demand is just off the charts in the most recent time period. it comes when supply cannot keep up with the shortage of coal, and this is -- this has caused liquefied natural gas to sword. if we look at year-to-date today price charts, you can see the

outsized gains for coal, for liquefied natural gas, for iron ore, as we just saw in your latest price chart, and all of this again pushing the commodities price chart higher. natural gas has almost quadrupled. if you go into the bloomberg, you can see how in the u.k. as well as asia, this is starting to be a real problem, and again, analysts are saying this latest move by china just shows how severe this crisis is. paul: obviously not quite as dramatic as natural gas, but oil about 10% higher. what is happening there? su: with west texas intermediate largely trading here in the u.s., it has a lot to do with what we saw with hurricanes in the gulf of mexico, but the ongoing energy shortage in china, asia, where it looks like oil will now be used for heating

, because of the outsized prices in natural gas and coal, that is adding to the increase in brent crude. where a three-year highs, just coming off of that 80-dollar price tag earlier in the week. this is getting to the white house where we heard the white house press secretary or the spokesman say that there is concern about the rising price of oil. we look at how energy prices have risen. his important to realize that opec is planning to meet on monday, and part of the discussion will likely be -- this is what the speculation is -- that they will be boosting production even more than originally thought. as one analyst points out, it is likely that there will be pressure from the white house to do that, to boost production in terms of prices. the options activity we saw in the most recent sessions, some

taking bullish bets on $200 oil by december. paul: bloomberg's su keenan. positive news for customers of evergrande wealth management products. it has paid the first 10% on dollar bond product to do in september. how does this wealth payment fit into the overall saga? mark: it is certainly good for people that are exposed to evergrande in china itself. clearly, this is helping to anybody who is invested in you on products. the government has also talked about the banks supporting the whole property sector, subject to certainly help people expect there could be some repayments of money they have invested onshore in china, though wealth

products linked to the actual purchases of specific properties and in some cases, what would happen is that investors would buy a property and at the same time, they would take out a evergrande to help them pay off the installments in the property itself, so there is a direct link there. the government is very keen to get this sorted out because of the risk of social unrest if people are not happy they cannot get their money back from their investment in the wealth products, and there have already been protests in some parts of china about this, but the picture for people invested in u.s. dollar bonds is still very murky. you have seen the bonds trading at very distressed levels, and it looks as though another dollar payment this week may have been missed, so we are getting a bit of a divergence in which investors onshore in china and offshore are being treated differently.

shery: dollar notes climbing above 15%. mark: it is a problem for the whole high-yield sector. when you have one group, the chinese property bonds, you will have to have a real waiting because investors will be using comparisons. when you have a significant borrower such as evergrande, their yields are extremely high. that has also helped to push some other chinese property yields higher, and it will just spread across the whole complex. that is why you are seeing the high-yield index at such significant levels. it will be very difficult to shake this off until we get some kind of resolution on where the

recovery rates are going to be for evergrande. we have not even really discussed yet specific restructuring for evergrande at this stage. we don't know if they get are going to repay fully, repay partially, it is a very uncertain picture for people invested in u.s. dollar bonds, and as long as traders do not really know the outlook, that will certainly push bond prices down to outlook levels. paul: hong kong is marking national day, as we have been discussing, with live pictures of the reception now at the convention and exhibition center in hong kong. 72nd anniversary of the founding of the people's republic of china. the reception they are now under way. very heavy police presence in hong kong at the moment. 8000 officers on the streets, including plainclothes and official tactics officers.

making sure there was no protest activity disrupting the national day celebrations. we do have plenty more to come on "daybreak asia. this is bloomberg. ♪

paul: let's get a quick check of the latest business flash headlines. elian's management says it has become a significant investor in toshiba -- elliott management. it set it up its stake when toshiba was approached about a potential takeover. korean airlines is expected to receive approval to ride a -- to buy a rival airline by years end.

a-380's unlikely to remain in korean airspace much longer. they will only be used for scheduling the short surge on's travel demand after the pandemic wanes. and an almost 30% decline in zoom shares since a deal was announced in july. zoom sought to buy a software provider to support its popular videoconferencing app in the face of stiff competition. 59 says it will continue to operate as a standalone publicly traded company. coming up next, china has ordered top energy firms to secure supplies at all costs. more details on that story in a moment. this is bloomberg. ♪

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♪ >> president joe biden has signed a stopgap funding bill that averts a government shutdown but fails to resolve the threat of a u.s. default linked to the debt limit. let's get the latest from everly will -- emily wilkins. this after the democrats tried linking the bill. what is next. -- next? emily: democrats and republicans

are at a standoff. the senate is taking a vote on this issue, but it is expected to fade because republicans will have to join democrats for it to pass. democrats need to figure this out, even though the debt limit is only several weeks away, democrats need to figure out what they need to do. not all options open to them should be open quickly. if they use the reconciliation process, that takes several weeks, so it is something they have to look at now, but everyone is consumed with what is going to happen with the infrastructure bill. if there is a vote this evening, it is expected to happen late. >> the stopgap bill, there were a number of things that were not in it. can you tell us what those were?

emily: one of the main things was funding to assist israel's iron dome. that became a bone of contention when progressive members said they would not be supporting that funding. it was taken off the bill so the bill could move quickly. lawmakers said they will add in that funding for the iron dome later. it only goes until december 3. in a few weeks, they will need to pass another bill. they will be aiming to fund the government through september 30 of 2022. >> congressional reporter emily wilkins in d.c.. let's get to vonnie quinn with the first word headlines. the mood and manufacturers in japan improved, according to the boj's survey.

sentiment among medium-size enterprises measured six compared to a forecast of negative one. china's central government has ordered top energy state owned companies to secure supplies at all costs. the order was issued during an emergency meeting earlier this week and said blackouts will not be tolerated. india slumped to a surplus on robust services and exports and a narrower trade deficit. the current account was up $6.5 billion. forecasts were for a $2 billion deficit. strong sales of computer and business services helped to boost income.

global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. >> we have the latest manufacturing pmi numbers out of asia, and we are seeing southeast asia's recovery taking place when it comes to indonesia and the philippines. entering expansionary territory at 59.2. we have the philippines above that level, south korea staying steady for the past 12 months. japan, final numbers coming in at a level of above that's -- that expansion level. let's turn to sophie for a check on the markets. >> you are seeing downside moves, the a sx off by nearly 2%.

the pmi data did see new orders rise to the highest reading since july of 2021, taking this into account with the export. we will see that forecasters will revise their views for the rate hike outlook, but that activity could bolster the case for a tightening move in november. let's get a check on stock movers of note in takeo. -- in tokyo. nintendo falling the most in eight weeks. moving to the upside, toshiba gaining ground as elliott investment revealed its stake in the company, and rocco 10 -- rakuten.

oil is set for a rise with energy prices continuing to live -- continuing to rise. we are seeing futures retreat in singapore. at goldman, they say the bull market has ended for iron or. copper gaining some ground in london. a drop seen as the energy crunch impacts supply chains, household incomes and growth. shery ahn: chinese officials are ordering the state owned energy companies who -- to secure supplies for this winter. the emergency meeting, underscoring the critical power situation with the crunch unleashing turmoil in commodities markets. let's bring in our commodities analyst.

always great having you with us. where are we seeing china's power crunch being felt the most? >> i think it is going to be coal and gas. oil will be carried, but to a lesser degree. what we will see is that demand appetite for coal and gas, to make sure you have enough supply this winter. it is a significant development, and it means this energy crisis could extend for a couple of months. it is showing that the policy is being pushed in china to make sure energy shortages are reduced. shery: were you expecting the shortage in china to be so severe. we were so focused on what was happened with energy grand -- ever grand that it was flow up

-- flying below the radar, but all of a sudden, we see headlines that this is a real crisis. how does it get resolved? >> in terms of the main issue with china, it stems with coal production. coal production, it's only lifted about 4.4%. we have seen this snag for a while. we will have to see china's coal output recovering quickly. the main constraint will be environmental and safety checks. there is great about -- greater accountability for the coal sector what we see in terms of the supply response is more muted than what we've seen in the past.

this recovery certainly will be slower, but that is the key issue to solve. china's coal production accounts for about 95% of what it consumes. it is central to china's coal problem right now. >> in terms of coal imports, china has import restrictions on australian coal which is low sulfur. it is a good product. who is their band hurting more at the moment. >> it is hurting china more. certainly it is something that impacted this coal shortage, but

in terms of the numbers we have seen china's imports have dropped 8% year on year, but it is actually 4% coming to 2013. the situation in australia could solve some of what we see in china, but it will be china's coal production. on the margin, if you can get more imports cheaper, and on -- and indonesia will be looked at twos to supply that. china has not helped. >> i want to get your thoughts on oil. opec meeting next week. do you expect any sort of response. >> our expectation is about

400,000 barrels a day. that is something we expect even coming into 2022. the risk is that they will look to add a little bit more, but it will be interesting to see how opec-plus approaches that meeting. when we look at a number of forecasters,, if you look at the administration, they see stockpiles falling to a low by november. the iea, they think we will see hefty withdrawals in september. the situation has been known for a while. opec-plus factored that into account. the big question will be next year.

that is something that could turn this market and prices early next year. >> thanks for joining us. he mentioned a law change in china, which certainly doesn't help the current crunch. the change happened in march, and it was minors being told they would taste for for -- tougher penalties for mining accidents. we were told that caused and under abundance of caution from chinese coal miners, which has brought about the supply issue. shery: the global energy crunch will not help when we head to glasgow. we were looking forward to these talks on the emission curbs and fighting climate change, but with this energy crunch, we may

see developing nations not being too keen on cutting back on those dirtiest of fuels. government officials speaking to bloomberg saying they are concerned that the resurgence of coal will cast a shadow on these efforts to curb emissions. 197 countries are meeting at this climate summit. climate change, energy crunch, big risks around the world. what is the next big risk that keeps wall street awake at night. that is what we asked kathy wood, and she says while many investors are worried about inflation, she is concerned about the opposite problem, deflation. >> just like howard marks and ray dalio. all of them have been very, very

concerned about a deflationary bust. we agree with them in this respect. we think it will be balanced by a do flay sherry boom. it's where we agree is there are companies who thought the world would never change and have been catering to short-term shareholders who wanted that extra penny or two in earnings and got it by having the companies leverage up and take more debt and shrink the number of shares, and they've been focused on dividends. they are probably saddled with products and services that will be obsolete because of the record breaking amount of innovation taking place today, and in order to service their

debt, they are going to have to cut prices and move those goods and services on their way out anyway. i am concerned about that. i think there is going to be a lot of confusion around it, as well. that is why we keep our eye on the innovation ball because that is going to balance these issues out to a great extent, but what it will also mean is the traditional gdp numbers we are going to be seen are going to be very low. growth will seem very scarce. i think it will proliferate over time, and some of the companies that we own, the stocks we own, they are not in any index out

there, we think there are going to be a lot more opportunities like those going forward. >> that is kathy wood. up next, tesla loses a fraud case in china. another setback in one of its most important markets. details in a moment. hong kong marking national day, 72 years since the founding of the people's republic of china. carrie lam speaking to the assembled crowd at the hong kong convention center. you are seeing live pictures from hong kong. this is bloomberg. ♪

>> a chinese driver has successfully sued tesla for fraud over his secondhand purchase of a model s. let's bring in katrina nicholas. this case has turned into a bit of a legal tit for tat. can you walk us through? >> a chinese driver successfully sued tesla for fraud over his purchase of a second model -- secondhand a model s. he said his car was involved in

a prior accident. tesla was ordered to pay damages of almost a quarter of a million dollars. tesla is actually suing him for damaging currency cars. now he is suing tesla for defamation, portraying him as a behind the scenes organizer of some protest. it has turned into a bit of a he said she said situation. >> tesla has seen more regulatory scrutiny in china. can they afford going into this tit for tat? >> that is a good question.

tesla has had a rough go when some of their cars were banned from military complexes. sales have been a little bit patchy, although they are reasonably strong. we spoke to a lawyer about the case who is not involved in this particular one, and this verdict should be regarded as some sort of milestone. we might actually see more of these actions taking place. it remains to be seen. clearly, there is a lot of sentiment that is negative towards the company.

it has a huge number of very loyal fans. there is this wrinkled the base of people who don't like the company. shery: over and south korea, lawmakers are taking on the national tech sector. executives from the biggest companies will rebut accusations of unfair market dominance. sophie kim joins us from seoul. what will be the main focus during the hearing? >> lawmakers are likely to ask questions about unfair charges on online platforms. next tuesday, they are likely to

be grilled by lawmakers about the issues related to their holding company and market dominance. they will face a range of issues related to unfair contracts and labor issues. >> what sort of reaction is there going to be from the tech industry. >> it hopes to have mutual growth with partners. some firms are fighting back.

in general, the industry isn't concerned over regulations that could hurt investment in the field. shery: the latest on those tech hearings. we have plenty more to come. this is bloomberg. ♪

>> we keep on looking at gas. not only the trend, but also the technology is becoming cheaper. we also see that there is a big place for hybrid. i think the renewable power plant is still very influenced by environmental factors. until we find the right balance, we will keep fighting in all directions. >> that was caroline lincoln. you can watch more on generation next airing on monday on "daybreak: asia." china asset management shareholders will consider a proposal to issue almost $11 billion in funds to raise cash. the debt sale with a term of no more than 10 years is set for

approval on october 21 a. they secured a rescue package in august and revealed a record loss for 2020 after delaying its earnings report. evergrande started returning a small portion of money owed to investors. developers were paid of the first 10% of an installment due in september as one of three repayment options. shery: we are headed towards the open in china. let's head to sophie. sophie: korean won, leading the losses by credit suisse. we see global demand for exports rise, but the bank is negative on the covid impact. ahead of the singapore open, futures are pointing lower. the dollar is extending losses after it marked the longest

stretch of quarterly declines in years as the city is battling a record wave of covid infections, which jumped to a daily record. shery: that is it from "daybreak: asia." stand by for "bloomberg markets." this is bloomberg. ♪

yvonne: it's 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china markets are shut for the holiday weekend. ever grand pays back some investors, a sign of priorities in dealing with debt, and u.s. lawmakers