haidi: good morning and welcome to "daybreak australia." sophie: we are counting down to asia's major market open. shery: the top stories this hour -- china's evergrande faces its next big debt test. payment on a $260 million bond the developer is said to have guaranteed is due monday. haidi: president biden insists

his multi trillion dollar spending plan will pass as progressives look for a way to rescue his domestic agenda. shery: and at the epicenter of the delta outbreak is set for a change in leadership after the premier quit after an investigation. we see u.s. futures higher out of the gate by a quarter percent after the s&p 500 rose in the friday session. we saw some dip buying, but not enough to offset the weekly loss of 2%. treasury yields losing ground to that 146 level. we are watching for the next big catalyst that could be the u.s. jobs data coming out on friday. we will be watching to see what happens with big tech, higher yields leading to valuation concerns and big tech losing $300 billion last week. oil gaining .3%. it also rose on friday as we had

opec-plus supply meeting after the already boosted production levels by 360,000 barrels a day in september. but of course it is all about inflation. consumer spending did rebound. consumer sentiment remains strong. it's also leading to a rise in the highest level since 1991 on an annual basis. that would be the second panel there. inflation coinciding with downward revisions to the s&p 500. we will be watching closely what happens during the earnings season as we see firms coming out with their guidance for the rest of the year. really when it comes to treasuries, for investors in that sector, 2021 could turn out to be worse than the 2013 taper

tantrum. bracing for perhaps more volatility in that sector, not surprising we've seen those inflation concerns, coronavirus concerns having and that's leading the bloomberg treasury index to be on track for the first annual loss since 2013. haidi: speaking of bracing, we are bracing for more deadlines when it comes to evergrande. the jumbo enterprises bond, because it lands on a sunday, it's effectively due on monday. this is the next big test. we are starting to see some signs of contagion. some of their peers having shocks and their bond prices. it does seem the sector is seeing the room sensing of

evergrande. shery: and it went -- and when it comes to the potential that crisis, the drama in congress continues. we are getting a new deadline when it comes to the infrastructure bill with nancy pelosi given her democratic party some more time to pass that infrastructure bill. there's a big abide when it comes to progressives and more moderates in the democratic party, especially on where the bigger spending package from president biden goes and we are now seeing his economic agenda facing some uncertainty as recent gallup polls showing the presidents performance rating may be hit given the latest messiness we have seen in congress and d.c. right now. haidi: we are going to be

watching out when it comes to the political and covid fallout. victoria counting down toward last week of lockdowns as we get toward that 70% or 80% double vaccination rate. new zealand having to expand their locked down a second city. we are talking about very few cases with new zealand sticking to its zero policy. we will be watching for reactions of that but also some optimistic news when it comes to covid treatment. we are talking about this merck bill looking like it could reduce death and hospitalization by 60%. this could be a game changer when it comes to developing nations where we haven't seen vaccination rates or availability take much action, so that could be something that

could add to the levels of vaccination we are seeing across the world. let's get back to our top story with evergrande in focus. that in data developer matured on sunday. failure to pay would constitute a default. that spring and stephen engle hong kong. we just kind of sit nervously and wait for something from the company. there is a grace time for this particular bond. stephen: the previous two dollar coupons do in the last couple of weeks that had a 30 day grace time, the 260 million dollar bond issued by a joint venture whose main owner is a real estate company, the main real estate unit in china. it is these opaque cross guarantees that are perhaps starting to bubble up and show some of the biggest systemic risks that perhaps the market was not aware of. we know the bond payment schedule for evergrande's bonds,

but these cross guarantees are quite tricky and this maturity as you rightfully said, which makes the do day today because sunday is a market holiday, they might get about five days grace time if there's a technical or clerical error. but today is the do day and it can be classified as a default. what would creditors be able to do? will they go offshore and file legal action? they can't do that unless it is officially declared a default. but it's also showing over the last couple of days how authorities are urging banks to extend credit and support to healthy developers, not necessarily these heavily indebted ones. they are ring fencing, not necessarily saving evergrande, but it is a slow train wreck to

see how this might play out and today might be that official word -- default -- on this jumbo fortune enterprise note that matured yesterday. shery: we will be watching out for anything more on the evergrande saga. stephen engle will keep us updated on all those developments. speaker nancy are it -- speaker nancy pelosi bus target day to pass the 550 billion dollar bipartisan infrastructure bill is in focus. she wrote to her caucus saying she act off a pledge to bring the measure to a vote this week because it would have been defeated. joining us now is our bloomberg editor -- what does this mean for the timeline and what's next? tony: it gives the democrats another month to overcome their

infighting, which is really what it is, between the more left-leaning and the moderate factions. pelosi was really forced into this pretty much by president biden, who came up to capitol hill and said we have to keep the two bills, which are really the heart of his economic agenda, keep them on the same track. that meant the infrastructure bill which was supposed to be voted on would not be voted on and that is where they stand now. there have been some signs over the weekend from the progressive side of the democrats that they are offering some olive branches to resolve the problems around the substantially bigger bill which includes tax increases that biden has promised to deliver. the upshot is it has created a

window or breather for the democrats to sort themselves out. haidi: as we continue to watch little wrangling in the u.s., here in ostrow year, we are pushing forward with a plan to end the covid zero situation. the prime minister says international travel bans will end in november but uncertainty remains about what that would mean across different states. do we getting more clarity when it comes to the reopening plans and are we going to see a deep divide between states that are going to live with delta and states that don't want to do that? matthew: unfortunately, no clarity at the moment. once states have reached 80% full vaccination threshold, they will welcome immunized overseas visitors. for new south wales and victoria, that is looking at

november for sure. queensland, which is more dependent on the tourism dollar, that is looking into late november or early december if vaccination rates keep at their current speed. what was also announced as the current caps on the number of arrivals into australia will be lifted. this is great news. for the stranded us trillions that have been locked out of it country since about may 2020. this is great news for them. domestically, i doubt we are going to see those scenes of christmas and people in new south wales rushing to see family. that's not going to happen. the western australian government have said they are probably not going to be opening their borders to the west of australia, particularly the

eastern state with widespread delta outbreaks at least until 2022. the domestic border closures are still going to be in place even though we will be able to welcome in others. shery: let's talk about new south wales -- looks like a replacement will be the states treasurer. what would that mean for the battle against covid in sydney? matthew: at the moment, everyone is expecting it's going to be status quo. the broadcasting corporation had an interview with him the other day and he said, he indicated the plan would be up in the and. the current treasurer is from the right wing of the liberal national coalition party but famously he has been one of the ones pushing for new south wales

to essentially be open and not put in locked down restrict businesses. when she is more in the moderate camp, her whole idea is around the second health system are keeping people healthy. it remains to be seen what's going to be happening in new south wales, but the status quo will no longer be the case and next year, we will not have restrictions or lockdowns in new south wales provided they continue on the terms of his previous rhetoric. shery: the latest on the covid situation in australia. the markets are closed in china and south korea, so we might see some thin trading. the australian markets remain open despite the fact it is labor day there. what are you watching? sophie: we are watching energy

stocks in australia. topping $200 amid the rebound in demand and let's check on brent prices ahead of this virtual opec meeting, prices rising for a third straight session amid calls to boost prices. jp morgan raising its brent forecast. opec is not likely to reach production over 400,000 barrels a day. pulling up the chart once more at we have seen a gradual turn of these oil shipments. they have seen petroleum revenues rise to a three-year high as brent is close to $80 a barrel. the move would not be welcome by experts amid demand for fuel.

haidi: the start of the trading week in hong kong. let's get you to new york. vonnie quinn is there with our first word headlines. vonnie: the world's largest independent oil traders as opec stocks will be a main factor influencing prices over the coming months. the cartel is due to meet on day as it eases talks which began last year when the pandemic ravaged energy markets. there is little chance of iranian oil returning to market this year and u.s. shale producers are not able to quickly raise. katherine tai will report on monday that china is not in compliance with the phase one trade deal. they are due to outlined the biden administration approach to the bilateral relationship at an event hosted by a think tank. cnbc sites sources that beijing is not in compliance in washington is evaluating possible further action. the u.s. has called on china to

halt what it calls provocative pressure on taiwan after a record number of incursions by chinese warplanes. the taiwan defense ministry says tie -- said chinese aircraft conducted six teen flights and 38 on friday. the u.s. state permits as the military actions are destabilizing and risk leading to miscalculations. a massive document leak has revealed how world leaders and the superrich hide money in offshore accounts and other assets. the international consortium of investigative journalists have dubbed the almost 12 million files the pandora papers. it includes jordan's king abdullah, former yucaipa prime minister tony blair, and former associates of russian president vladimir polluting. -- vladimir putin. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, a cornell

university professor and china division had joins us to look at china's move when it comes to evergrande. coming up next, the etf i director of research says the -- says investors have little appetite for investors to maintain inflation. this is bloomberg. ♪

haidi: let's take a look at the week ahead -- even with china closed for the golden week holiday. leaders meeting to review the output policy on the backdrop of the global energy crisis, falling inventories and recovering demand, all of which has pushed up prices in recent

weeks. you gets a chance to respond to the power crunch on sunday with russia looming large as europe's single biggest source for natural gas there. in hong kong on wednesday, the chief executive delivering her final annual policy address before her term expires after overseeing what has been a turbulent few years for the financial hub. shery: in the u.s., the main event will be the jobs brent on friday. now another print could derail the fed's taper timeline which could begin as soon as november. the projected addition of 500 new jobs may cement those plans. sophie: staying on central banks, no shortage of action in asia this week. all big decisions do and we will hear from the governors of the pboc and pierre j.

bloomberg intelligence predicts no change until november. the rbis will hoping inflation is more than temporary. that is the week ahead. shery: our next guest says the current levels of high prices should not be a big surprise to most investors. let's discuss more with the director of research at epf far. great to have you with us. how have markets hedged for what we may see as stickier prices and for longer? cameron: our view is shaped by following mutual fund flows. what we have seen his since the second quarter of last year, relentless inflows into inflation protected bond funds, which is where my assertion the

current inflation situation, while highly unwelcome, is not a huge surprise to a large segment of the investment public. the knock on effect or issue at the moment is the investing universe seems no more ready to accept the medicine than they were in 2013, 2014. shery: those inflation pressures being exacerbated by higher energy prices as well. this function on the bloomberg sector in the green on the week. how do you expect positioning to change in asset classes given the rise in inflation and this ongoing energy crunch? cameron: the area we are paying a lot of attention to his consumer demand and the sectors

that might reflect that. one thing we have picked up in our data is especially american consumers are quite happy to spend the money that has come down through various government programs. personal savings rates are still at pre-pandemic levels and the outflows from u.s. money market funds, the big liquidity vehicles, are much less pronounced than they were in the aftermath of the great financial crisis. so we are paying attention to consumer goods, industrials, and commodities which feed into the products that keep consumers happy. haidi: you say investors may not be so surprised that prolonged inflation. do you think portfolios and investment minds are being positioned for stagflation risks?

you see what's happening in europe and can only assume it's a risk elsewhere as well. cameron: it certainly is. while people did not tend to believe the transitory nature of the inflation of allah many of the central bank narratives, they did see it as being driven by accelerated growth. stagflation is a fairly new wrinkle on what has become a long-running debate, so i think people are only just beginning to think how they might position themselves to deal with that. if the narrative takes hold, i would expect to see more interest in real estate sector funds and any asset class which is fairly directly connected to something tangible. haidi: great to have you with us. be sure to tune into bloomberg

radio to hear more from the days newsmakers and get in-depth analysis from the team there. broadcasting live from our studio in hong kong, you can listen on bloombergradio.com. lots more to come. this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines. facebook is bracing itself for allegations from a former employee on the capitol hill riot. the whistleblower is expected to accuse facebook of relaxing its safeguards to soon after the november election and suggests its product contributed to the storming of the capital. tesla delivered a better than expected 241 thousand cars worldwide in the third quarter -- a rick -- a record for elon

musk. wedbush calls in a eye-popping number. -- an eye-popping number. it's seen as a barometer for consumer demand. coming up next,

shery: new zealand in a snap locked down after two covert cases were reported. let's bring in ainsley thompson in wellington. bring us up-to-date with the situation in new zealand, where they continue to try and pursue the covid zero strategy. >> that's right. they have been battling an outbreak of the delta variant for eight weeks now. a few weeks ago, most were lifted out of lockdown but auckland remains in a strict

lockdown. today was a big day because the prime minister's cabinet is meeting to decide whether that lockdown should be lifted. yesterday, there were two cases found outside of auckland so this is not a good sign. it means it is spreading, but we don't really know what will happen. it is looking doubtful that the lockdown will be lifted. shery: the rbnz meets on wednesday. how are lockdown's going to affect monetary policy? ainsley: that is a good question. they will still raise rates but it definitely casts some doubt on that. at the last meeting in august, once again, it had been looking likely that they would raise rates and then the day before, the country moved into the strict lockdown -- definitely a much more interesting decision now on wednesday. shery: we will be watching.

ainsley thomson in wellington. first word news with vonnie quinn. vonnie: the head of the german company that developed the first covid-19 vaccine says the new formula will be needed by mid-2022 to protect against future mutations of the virus. the cofounder and ceo told the financial times that current variance such as delta were not -- undermine current vaccinations but he says move strains will emerge that can invade mr. schatz and the body's immune defenses. u.s. progressives looking for ways to rescue president biden's domestic agenda have opened to door to -- the door to scaling back some social spending. nancy pelosi scuffled last week's planned vote on a $550 billion infrastructure package. progressives first one agreement on $3.5 trillion in social spending and tax increases. >> one of the ideas that is out there is fully fund what we can

fully fund but maybe instead of doing it for 10 years, you fully fund it for five years. vonnie: the philippines president says he is retiring from politics and will not be seeking the vice presidency in 2022. in a speech on saturday, he said he is acting out of obedience to the will of the people who placed him in the presidency. prior to the election, dutere also said he was retiring from politics but ultimately ran for president and won. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi. haidi: let's get back to one of our top stories. china evergrande closer towards a massive restructuring. our next guest says beijing is seeking to withstand discipline work. joining us is the senior

professor and former head of the imf china division. always great to have you with us on bloomberg. let's start off with this jumbo enterprise in bonds. this was a new development and i wonder how much more concern to our, knowing that there is a possibility of more cross defaults and the opacity of how much debt obligation we don't know about. >> first of all, as you alluded to very clearly, beijing intends to make this episode a clear lesson to financial market participants and also to all the leveraged rowers. now, if you think about the broader ramifications about possible defaults by evergrande, there were two questions. what are the direct effects in terms of property for evergrande, and what are the connection effects on the rest of the property market and on developers? certainly, there are some

developers who are highly leveraged. there are some banks, especially some of the medium-sized commercial banks that are quite exposed to these developers, it looks like aging is begging that this problem can be contained to those highly exposed banks and highly leveraged borrowers and there will not be broader financial contagion and it seems like markets are getting a little concerned but certainly not panicking at this stage. haidi: michael wrote an interesting point when it comes to this idea where there is a long-term gap between the perceived value of what is in a portfolio and the actual value over a long time. is this the situation that beijing's state associated enterprises are setting up for? is this the ring fencing of risks that is happening? lisa: the broader -- eswar: the broader context is worth thinking a little bit about because beijing is trying to make the point that the implicit guarantees that undergirded the

financial system, dead undertaken by private enterprises and many local governments, that that implicit guarantee is no longer something that can be counted on. it takes a while for markets to adjust and the problem is that beijing has been sending somewhat mixed signals over time. there have been some trust companies and corporations that have come close to the brink of default. there have been some defaults come about by a large, beijing stepped in when it looks like the players are large enough. it seems like the market has not really been imposing the discipline that beijing would like it to end it seems like evergrande is going to be used as a test case of that. but you know beijing clearly faces amount of things here, trying to get the markets to maintain financial discipline while at the same time, beijing is exerting greater state control over certain parts of the economy and when vision seems to take action and seems

to do it in a heavy-handed fashion, i mean, you will see a lot more stumbles of this sort but i don't think, given the resources beijing has, this is really going to lead to a financial implosion but it will certainly have longer-term negative consequences on growth. shery: it is interesting you mentioned mixed messages coming from beijing because it also seems to case -- seems to be the case for evergrande itself, buying a stake in the troubled bank owned by evergrande. we saw them raising oversight over evergrande's bank accounts and markets thinking that perhaps they will come to the rescue at some point, but they are not. i guess it is also the objects of bailing always billionaire here. if beijing is going to help evergrande in some form, what is it going to look like without, as you say, creating the moral hazard? eswar: beijing seems keen to use evergrande as a shining example of how the rules of the game

have changed. the problem for beijing is there are two elements that have been key to china's growth over the last couple of decades. one is the property sector. it is the local governments that are happy to sell land to developers because it is a very important source of revenue to boost provincial gdp, plus there is a property sector which by many accounts, 15% to 20% of overall gdp in the chinese economy. at a time when the chinese economy does seem to be losing growth momentum, there is a risk of pushing back very hard against these two problems so what beijing seems to be doing which i think makes sense at some level is to let evergrande you with the financial troubles while protecting the households in particular that they have put down deposits that are going to be exposed to financial troubles from evergrande and trying to let evergrande basically sort itself out.

this seems to be working so far but it will take a fair bit of resources from beijing and ultimately could end up with something degree of state intervention -- some degree of state intervention to what degree is not clear and it continues to confuse and embroil markets. shery: when it comes to the future of china's economy, what is also confusing this is the added element of the ongoing power crunch. how is that going to factor in here? eswar: so this is another set of dilemmas the chinese government faces. how do you reduce the energy dependence of the economy, which has not been good for environmental reasons, without scrunching the industrial sector, which continues to be very important for china's growth. it has been a very important part of china's growth but investment heavy growth is clearly not something they favor financially or environmentally sustainable. another question is how do you

try to get the private sector to innovate and increase productivity at a time when beijing it's making it very clear that it wants to cut private enterprise down to size and also increase control over certain parts of the economy? beijing has been living with these sorts of dilemmas for a while and i think trying to resolve this inherent contradiction will lead to a lot of stumbles. but could it pass beijing tim allen age -- beijing to manage this balancing act? haidi: that transition to other types of growth would usually come from the consumer but do the demographics point two a big challenge for beijing? eswar: beijing has a lot of headwinds in terms of long-term growth. there are financial risks that continue to burden the economy, demographics, and other favorable factors, so the

long-term rebalancing china has been talking about, trying to get more growth to come from the services sector, which is better than the industrial sector at generating employment. in addition, trying to move towards more consumption driven economy, these are things where beijing was in fact making progress but then the covid pandemic came along and beijing resorted to the playbook of credit driven investment growth so it will take a wild to get back to that rebalancing effort and on top of this, you have beijing trying to ensure growth that delivers more equality and benefits to a greater part of the population. these are all very logical objectives but i'm not sure they are perfectly consistent with each other. shery: always great having your insights, eswar prasad. senior professor at cornell university. you can get more on evergrande and other stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to dayb

on terminal spirit of course, one of those stories is really being well read across the terminal, what is happening with the pandora papers, because we are now starting to see more and more insights on how world leaders and the superrich sort of hide their money away from the public. we are talking about these papers, the pandora papers, which file details more than 29,000 offshore accounts, double the number identified in the panama papers five years ago. we know some of the beneficiaries of these secret accounts include very high-profile individuals like jordan king abdullah, the former u.k. prime minister, tony blair, and of course, vladimir putin as well. haidi: some really interesting accounts to note. as you say, almost 12 million financial accounts and records being accessed by this report.

really, we are talking about $100 million being spent on property, talking about people who became billionaires after relationships with other high-profile entities. really fascinating reading but i thought it was interesting that there was one former fbi agent who said these offshore accounts really should be the concern of everyone in the way that money is being moved around and in the way that some of these transactions can really be major drains when it comes to even things like a nation's and reserves, talking about the huge amount of wealth being associated with some leaders of developing nations, for example. shery: we will definitely see more insight into these accounts in the coming days as we continue to see these articles about the details of these offshore accounts. plenty more to come on "daybreak australia." this is bloomberg. ♪

>> you are watching "daybreak australia." time for morning calls ahead of the rbnz meeting. it is divided over monetary policy because of the ongoing law down and heightened economic uncertainty. as you can see, markets have pared back their aggressive pricing for rate hikes this year. in westpac, they expect a more positive it sure should emerge by december given the economy has been on solid footing and activities should jump once again when covid curbs are back.

westpac does see the kiwi dollar and 75 by the end of this year. him into commodities, rbc capital has upgraded their base case outlook for u.s. natural gas prices. about six dollars in the coming quarters with the market on edge amid this ongoing obvious tightness in the market, underpinned by clear risk going into this enter. rbc with options to capture upside risks. shery. shery: holding at that 57 three level but near the seven-year high. if you morgan making the call. gas is so expensive in some places that switching to oil-based fuels could add more than 900,000 barrels to daily demand. of course, we have seen brent already very close to the $80 a barrel level. jp morgan saying they are seeing it at 34. helping prices on friday. coffee also seeing its biggest

day since july, climbing given the worsening supply concerns for top suppliers like brazil and columbia. they are seeing bad weather in the region. when it comes to the commodities space, energy traders will be focusing on opec and its allies as they meet monday to discuss whether to increase output. su keenan joins us now with the latest and this coming as opec already increased supplies in september. su: they have been restoring oil to the market which had been on hold and the pandemic and the question is how much they will increase by. citigroup and more saying opec may actually double its output boost from previous discussions of adding 400,000 barrels a day. it boosted output again by 360,000 barrels in september. opec-plus, output increases still lag the demand recovery and all-out buying across all

fuels for the next month could tighten markets even further. and then you have the world's largest independent energy trader predicting that the production policy will actually be the main factors driving oil prices in the coming months. they will basically control price for the near term. analysts and traders show the view that demand could outstrip supply over the coming months. let's look at the last week of oil trading. for west texas intermediate answer brent, it was volatile even though we saw both prices for brent and for west texas intermediate hit three year highs. brent hit 80 for the first time since 2018, only last week. there are fresh signs that the increase in oil is becoming a political issue. if you look at the big picture oil charts, you can really see why. the order from beijing last week

for state owned oil companies to secure energy supplies at all costs and for the white house to discuss the rally really shows why this is a front burner issue. >> we continue to see bullish productions for $100 of oil for gas prices as well. su: let's jump into the bloomberg to see the natural gas spike because that is getting intention not just here in the u.s. -- attention not just here in the u.s. but elsewhere. the crisis in asia and europe is the equivalent of the oil shock of oil being at 100 $90. jp morgan mentioned this morning that the worsening natural gas crisis in europe. your today increases so you get an idea of how energy prices have spiked that this will spur so many power generators to switch to petroleum-based fuels

that crude will reach 84 by the end of the year and we are seeing alternatives like coal spiking and that is just compounding the prices. shery: su keenan with the latest on the power crunch and those prices. gains in energy prices leading to inflationary concerns. mexico's central bank sees no immediate need for an aggressive rate hike but remains data-dependent as it seeks to fight for price pressures. i spoke to the deputy governor about their efforts to combat inflation that is currently double essential banks target. >> we are in a very difficult and complex contents in terms of the monetary policy. we are seeing a very fast recovery but at the same time, it has slowed down lately because of the pandemic and we are observing globally increasing inflation so it is a

moment where we have to be aware about uncertainty in terms of growth. interns terms also of inflation. we have seen a rise that is beyond what we were expecting. so this is something that we need to be analyzing as issues just arise. we adjusted our monetary policy stands in terms of being able to get to the convergence of our targets of 3% within our monetary policy horizon. i wouldn't say that we have a specific path to which we are committed but we are into doing whatever is necessary so that we can converge to the target in the horizon. shery: does that include half a point rate hike instead of the

25 basis points that we continue to see? irene: it is necessary. -- if necessary, we are open to that. we are basically data-dependent and at this point, we don't foresee that is something that is immediate. of course, this is something where we cannot commit. shery: so far, you had already three rate hikes. have you started to see any positive effects on inflation? irene: we have seen inflationary increasing but i'm sure that if we did not do that, then we would be seeing a more increasing inflation on one side . and on the other side, we have seen a very good development in the fx markets. i think that is really relying on the monetary policy we have been making lately.

shery: how are you factoring the global energy crisis into the monetary path? irene: that is something that is affecting global inflation and also locally. we are seeing a lot of stickiness in terms of core inflation and the influence of energy prices in merchandise has been very strong. and also if you add to that the shift of consumer patterns in terms of giving more importance to mention services, i think that this is a factor that will be present for a longer time, especially as we see the shortages in the energy markets. haidi: so give us your take about what is keeping inflation so high for so long because we are talking about double the banks target right now for a few months. irene: right.

that is why we needed to renew our monetary policy stance and of course, there are a lot of factors, external factors that come from global inflation. also base comparison factors but also the shortages and the production chains that have increased so significantly in general production costs and shortages of merchandise. so this is something that has affected us a lot. it has already affected the short-term expectations and we are worried about anchoring and maintaining long-term expectations. >> irene espinosa speaking with

shery. lots more ahead on daybreak. this is bloomberg. ♪

>> let's get you a check of the markets at the start of the trading week. pretty muted moves as asian stocks are set for some gains going into the start of trading. china off for its golden week

holidays. it is a holiday in new south wales. sydney futures are trading up by one point 4% and new zealand higher despite a second seating -- locked down the delta variant. this is bloomberg. ♪

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haidi: hello and welcome to "daybreak asia." i am haidi stroud-watts in sydney. shery: i am sophie kamaruddin in hong kong. shery: i'm shery ahn. our top stories this hour. it is in stocks set to open the week with gains as the pickup in growth always concerns over inflation. evergrande faces its next big test with payment due on the m