dani: good morning from bloomberg's headquarters. 6:00 a.m. in london. i'm dani burger. this is "bloomberg daybreak: europe." evergrande avoids default with a last-minute payment. you a-shares hit another record but the you for yuri it -- u.s. shares hit another record but the euphoria is not long. checking facebook, twitter and

alphabet. the fed curbs trading by top officials after an embarrassing scandal. will powell's damage control be enough to clear the way through nomination. happy friday. you made it to the end of the week, and the inflation bet is on. a monster auction yesterday yesterday in the u.s. session. $19 billion up for sale in a record low yield. there is demand in the market to hedge, and protect yourself against inflation. all of that translates into inflation expectations as measured by rake evens that are at -- breakevens that are at the highest since this was offered again. these are a substantial ramp up. this is a conversation we have been having for months, but it

is notable how the market keeps putting these on. what does that mean for risk assets? so far, not a lot. u.s. stocks yesterday hit an all-time record, but why is it equity markets are so resilient? in the view of jim polson, the risk involved with an upsurge in inflation -- we have seen a lot of pricing power with companies. he says escalating inflation may be appropriately an issue when it comes to considering an individual stock or sector, otherwise you have to avoid companies that have an issue overall. this is not a problem for a stock market where we see earnings beat. let's get your check on where markets are this morning. we have seen the front-end end of the curve in the u.s. at his highest level of yields since the start of the pandemic around february, 2020. we are looking at bond buying in

the asian session, yields lower two basis points. nasdaq index down 0.5%, leading the losses in the u.s. futures session. we are looking at gains and cyclical sectors. euro stocks 50 futures up 0.5 percent, and another three standard deviation moves in shanghai aluminum. that metal continues to be extremely volatile. let's stick with the story in china. evergrande avoids default by paying a bond coupon before the weekends deadline. the della bella per wired -- the developer wired the payment, and on holders receive funds tomorrow. joining us from hong kong is stephen engle. kanner concerns be laid to rest?

-- can our concerns be laid to rest? stephen: no, it is the beginning, really. it buys everybody a little time. keep in mind there are more dollar bond coupon payments due starting next week, $45 million they missed 30 days ago, like this payment, it has a 30 day grace period. that ended tomorrow, and today is the last day of the businessweek in hong kong. they had to get that paid, and my sources told bloomberg they wired the $385 million. there are another four dollar bond coupon payments still overdue and need to be paid by november 11, totaling $200 million more. it is a critical time because the story yesterday was that

evergrande and another developer, that deal to sell a controlling stake in evergrande property collapsed in the final hour. that was a deal worth $2.6 billion that evergrande kaibo shed because they demanded better terms of the deal. it raises a lot more questions, how are they going to get the necessary funds to pay the near-term obligations? long-term, forget about that for now. near-term they have a lot of bond payments to be made. dani: i'm trying to stay optimistic. thank you for keeping us honest. let's see if there's more optimism in the markets. let's get an update on the asian market with juliette saly in singapore. we are looking at asian equities push higher this morning. juliette: absolutely.

it may be kicking the can down the road but his solved a short term problem. china's regulator announced further support for high mortgages. a lot of momentum is coming from the tech sector. you see weakness in materials, and we see coal futures extend their climb by 20% over three days. when it comes to the overall property sector, we are watching evergrande closely, but property stocks getting a boost, lifting them to a two month high. my chart starts to show this is getting into a bull market, up 20% from the lows. a lot of analysts after evergrande did meet this payment expect a short-term rebound in the sector. united first partners save we

have seen this movie before, and it does not solve evergrande's problem, or change the fact that it is the living dead. dani: the bulls are coming back for now at least. from china to the u.s., senior officials were banned from trading stocks and bonds after an epic scandal that led to the departure of two regional presidents. break down what are the new rules being limited by the fed? >> as you mentioned, the fed presidents have greater restrictions on what they cannot cannot buy. it brings them in line with rules that existed for officials. they have to report within 30 days transactions instead of a year. that helped make this time nasty, it all came out at once.

wow, look at what they were doing when the world was going to hell, so to speak. they need to provide 45 days notice before they buy certain assets. and with what happened with the covid situation, they are not supposed to trade in times of extreme financial stress. exactly when you would expect the fed to make extreme decisions, they should stay out of it. the aim is to avoid this reputation of damage they have suffered now, to make it absolutely clear they are clean and going out of their way to make sure they are clean and what they are doing. dani: to that point, we remember senator warren hitting back at powell, questioning his leadership because of the scandal. this comes back to his early 2022, when his term is up.

what do the new rules mean for powell and his renomination? garfield: they are likely to help because he push them through so quickly, so comprehensive. senator warren is unlikely to relax much in her campaign, but it will likely suck some oxygen out of the room when it comes to her attacks on him. powell, like other central bankers around the world, are in this tricky situation where they are trying to manage the transition away from extraordinary monetary stimulus to something a little less, and as they manage their way out of the recession, out of the covid impact on the economy and face these concerns that inflation is going to get out of control. they want inflation to get to the level we have not seen for

years, but you are running the danger of people's expectations getting out of control. this underscores the rapid response to this. it underscores the way the fed will feel extra pressure to respond to other concerns, such as inflation. and on the others, if people think they will raise rates too quickly. he has been nimble responding to the scandal. he will need to go on being nimble to respond to the other challenges coming up at the end of the year and into next year. dani: thank you so much, garfield reynolds. let's take a look at key things markets are watching out for today. it is a busy day when it comes to european data. we get manufacturing services, and pmi out of france, the euro

area, and the u.k. throughout the morning. we have plenty of earnings to look out for. at 4:00 p.m., what not to miss, francine lacqua will host a discussion about central bank policy in the wake of the pandemic at the south africa reserve bank. she will speak to fed chair jerome powell and the south africa bank governor, and the general manager for the bank of international settlements. coming up, earnings season underway. third quarter sales missed. we will discuss this, next. plus, after a mad -- to a new high, bitcoin gets a little breather. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." i'm dani burger in london. the s&p 500 hit a record overnight but the mood soured after the cash session when the owner of the snapchat app tumbled on earnings outlook. this hurt other technology shares in late trading. joining us to discuss is janet mui, director of investment, brewin dolphin. there has been this idea tech was immune to supply chain issues, but snap saying in the report, because of these issues we are seeing companies not want to advertise products they do not have in stock. should there be more concerned about tech and being less immune

to supply chain constraints than originally assumed? janet: good morning, thank you for having me. i think it does raise concern over the sector come about the tech sector is one of the better sectors to be positioned with this high inflation pressure. investors are right to be worried about inflation, but there are increasing signs this could last longer than what transitory means. there is a supply chain issue, if you look at the demand side of things, it remains strong. looking across surveys and data, there is -- the container ships are stuck somewhere. we believe this advertising problem these tech giants are facing is likely to be temporary once the supply chain concerns gradually dissipate.

that could be an overreaction from investors in terms of the share price reaction. dani: i want to bring you lines breaking now across the terminal. renault seeing a 2021 production loss of 500,000 vehicles, citing the losses due to the lack of components for the third quarter around 70,000 units. this idea of reduced visibility. you say this might be a temporary thing, but when you look at sectors like autos which have a clear impact from chip shortages, do you want to be a buyer in this sector? janet: the supply chain problem is obviously, one of the biggest sufferers is the auto sector given the complexity and the supply chain.

it would suffer the most in this current crisis. we do not see the sector getting better anytime soon on the supply side, because everything you heard from the earnings report is this will go longer than expected, and there are no signs it will get better. look at the number of weeks from the order of the chips to getting the delivery, over 21 weeks. we think there is a cautious tone in the sector given there is no sign it will be alleviated. i will still be watching given there is a lot of uncertainty. dani: you will stick around, you are pretty optimistic about the earnings season, so we will get to that. janet mui, director of

investment, brewin dolphin sticking with us. juliette: president biden says the u.s. has a commitment to protect taiwan, and would come to its defense if attacked by china. speaking at a cnn town hall event, president biden said he did not want a cold war but wanted china to understand the u.s. will not step back or change its view. the u.s. and five european governments resulted a feud over a deal that was reached after a broader global agreement to overhaul levees on big operations. the european countries will retain digital service taxes on companies like amazon and facebook, but once the global tax deal comes into effect, they will refund any levees in excess of the agreed rate. actor alec baldwin fired a prop gun on a set thursday that cause the death of the cinematographer and wounded the director. the incident happened on the set

of the film "rust." no one was arrested, and no charges have been filed. a spokesperson said there was an accident involving the misfire of a prop gun with blanks. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: thank you so much, juliette saly in singapore. coming up, supply chain bottlenecks and surging consumer demand surge expectations to the highest level for more than a decade. more on that next. this is bloomberg. ♪

>> it is trickier as values move up to deploy capital. we have competitive advantages.

we operate almost all of our businesses that large-scale, so this year we have done something like 13 public to privates that we have invested in. that is a competitive advantage given the size. the breadth of our platform continues to expand, that helps us a lot. it so many of our large investments were in new areas. what we are trying to do is find interesting areas in these neighborhoods we love, were we can buy in at a more favorable price. we bought in india and

a small tv business, but we saw huge potential. we invested in that considerably. that company has gone public, hugely successful investment. we made something like 15 times our investors' capital because we found a great company that people did not realize. we are doing that this quarter again in the garage door opener business with a company called chamberlain which owns the liftmaster brand. access to homes makes so much sense through the garage. our response to a high price market is try to buy things we like, but do it in a one derivative off were we find value in those areas, and that is the real challenge. dani: do you agree with competitors and in the banking industry at morgan stanley, goldman sachs, do you believe they have it right when it comes to inflation, perhaps many were undercounting how much of an issue it is becoming? jonathan: i would agree inflation is becoming more pervasive, more persistent than people had hoped. i think that is happening because of a couple reasons,

money supply his grown significantly by more than a third since covid, which happened. monetary, fiscal response to the crisis, but it was more money in the system, and we have big structural shortages. in housing, we have been building 40% fewer homes than in the past. we have been investing less and energy because we are trying to balance that out in terms of sustainability, and we have seen fewer people in the workforce. dani: jon gray speaking with sonali basak. key central banks will raise rates sooner than they planned and faster. policymakers sound worried that the pandemic inflation will stick around. still with us is janet mui, director of investment, brewin dolphin. we have seen the five-year

break even. you were mentioning you see inflation more sticky than originally assumed, but has the market gone too far in terms of its inflationary bets? janet: i think the market is right to worry about inflation, because the signs are everywhere. it is in the supply chain, in the energy crunch, and there is no near-term sign this will be resolved anytime soon. there is a risk the inflationary pressure will be more entrenched within the underlying component. the latest consumer price index suggests the non-reopening components are driving inflation. there is a real risk this will be more entrenched than previously thought, and we are

talking about a tight labor arc and high wage growth pressure that will feed through higher oil prices in the future. i believe there is some reason for markets to be worried, but i also believe once things get better, at some time in 2022, the headline inflation will come down. then i think market pricing of inflation will moderate in the early parts of 2022. we are some months before that. dani: if we get moderation in 2022, do we look at someone like governor andrew bailey who has been clear signaling to the market that they are going to tighten policy and react to this inflation? is he acting too soon, dictated

by markets rather than having the transient language we have seen at the fed? janet: i think the bank of england has a tough job at the moment. the u.k. inflation will peak later than the u.s., and will probably be stickier given that credit problems the u.k. has. it will take a while before things get better, but there is reason for andrew bailey to be concerned. in the u.k. we are also facing a number of difficulties like higher taxes. it is a tricky situation, but i believe the market has priced the current rate increase has gone pretty far. dani: so wonderful to have you on. that is janet mui, director of investment, brewin dolphin.

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dani: good morning from bloomberg's european headquarters. 6:30 in the city of london. i'm dani burger. this is "bloomberg daybreak: europe." evergrande avoids defaults at the last moment, easing concerns about possible contagion. u.s. shares hit another record. snap warns about supply chain hold up, sending the stock plunging 20%, and dragging

facebook, twitter and alphabet with it. the fed curbs trading by top officials. will powell's damage control be quick enough for renomination? good morning to you. the big inflationary bet has the attention of markets. we were just talking to janet mui, director of investment, brewin dolphin who sees inflation more sticky but it could subside by 2022. with that in mind, is the market overdoing it? the five-year break even at its highest since 2005. we are seeing that but also risk assets get a bid as well. jim polson says you have to be more choosy with the markets. let's check in on the markets. here is where we stand -- five year yield lower this morning,

down two basis points, after yesterday seeing its highest level since february 2020. tech, a double whammy with the curve hurting it and snap earnings disappointed. euro stoxx 50 index futures moving higher, pointing to a higher open of 0.5%. aluminum down 7% over concerns of growth in china and output. bitcoin, after a mad dash to a new high, it is taking a break. it touched a high on wednesday, galvanized as a successful launch of the first u.s. bitcoin etf. that was becoming too popular for its own good. the rules, they camped the --

capped the contracts owned to 2000, but the etf owns nearly 1900 contracts for october. to avoid hitting the limit, it has amassed 1400 november contracts, but at the rate it is adding assets, a maximum total position of 5000 contracts, that could come into view. let's break that down. joining us is charlie morris, cio of bytetree asset management, crypto composite. so great to have you on. i know you manage crypto assets but you are always on top of this data. when it comes to this etf, and a lot of interest, do investors in this u.s. futures etf need to be concerned about some of the issues when it comes to hitting the limit of contracts, and the effect that will have on the

futures market? charlie: i think they do. you are looking at a market currently around 16% negative trust to management fees, that is a significant underperformance. that might settle down, we may have done too much in the last three days. i'm told it is the fastest etf in history to get to $io within two days. it is a real frenzy going on. the futures market needs to be bigger. if this was the s&p, it would make no difference. we do not have a natural seller on the other side, so the minors are more involved. -- miners are more involved. dani: i think that record of

getting to $1 billion in assets was 14 years ago. there is concern about the etf as well, but could we see a distortion in the futures market independently of the etf's? charlie: it is no problem for the futures market. it will give it money or say, thank you very much. it will distort the outcome. most know what does not reflect the price in the future that changes supply and demand today. that will push the number up in this case. i think what we will have is an effective trading dale wall street, -- trading day on wall street. the oil etf, a couple of billion dollars over the last 15 years, but it has underperformed the

oil price by 12% per year but is it is successive trading vehicle. in the long term, it will be frustrated. dani: do you think these issues, short-term though they may be, you should and might speed up the fec in allowing an etf that tracks bitcoin itself? charlie: that is the hope, because there are not a lot of etf's around the world to buy, but we are talking about access by the u.s. retail investor. you probably cannot buy a swiss or canadian etf. people can buy grayscale, crypto stocks such as coin shares, or galaxy, or coinbase. every auction they have on the

table is not as good as the low cost tracking vehicle which gives greater certainty. dani: i want to get to your views on bitcoin as an investment itself. we keep hearing given the current environment it is an effective inflationary hedge, more so than gold. what would you say to the naysayers who say bitcoin is too volatile as an asset to hold in order to protect yourself from a higher inflationary regime? charlie: i do not think it was right to think of bitcoin as a better inflation hedge, it is just a different inflation hedge. it is a risk on inflation hedge. historically when we have inflation at level, bitcoin comes under pressure. we still have special stimulus measures, which is bizarre given the world is running out of people to do jobs.

we have a highly stimulatory environment. look at september, nasdaq and bitcoin down. look at october, nasdaq and bitcoin up. it keeps happening. appears and down years. -- up years and down years. nouys year at 20% for retirement, no one thinks that. that tends to come about the most in a risk off environment. it is no great shot gold was flying until last summer, and as soon as it stopped, bitcoin took over. dani: given that, and i know this is not an easy task, i would love you to give us your best shot -- how high does

bitcoin go in the near term? charlie: i think we are up in advance. the thing that drives bitcoins are fundamentals and value of the networks. it is the amount of money trading over the bitcoin block. that is fair value around 40 k. bitcoin moves around a lot. the other side is what drives price shorter-term is flows. bitcoin needs over $1 billion a month to fund the mining output. if that keeps going, prices stay high. dani: really great to have you on. that is charlie morris, cio of bytetree asset management, crypto composite. let's get the first word news with juliette saly.

juliette: snap shares tumbled by 27% after hours after it lowered its forecast. according to changes to supply chain issues, they are weighing on advertising spending. the snapchat owner expects revenue of $1.2 billion in the final three months of the year. that is below analyst projections. the u.s. and five european government's resolved a dispute over digital taxes. the deal was reached to overhaul levees on big corporations. european countries will retain digital service taxes on companies like amazon and facebook, but once a global tax deal comes into effect, they will refund any levees in excess of the agreed rate. the federal reserve will ban health officials from buying individual stocks and bonds, and active trading. it follows an embarrassing scandal that led to two fed

departures, and clouded jerome powell's path to renomination. that officials will be limited to what they can purchase. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: thank you so much, juliette saly. coming up, eu leaders agree a common approach to soaring gas prices, but a number of countries say the agreement falls short of what is needed. more on that, next. this is bloomberg. ♪

>> it is really a matter of both ships and chips, we have a

shortage of components, we see the delays of the shipping industry and the congestion in the ports that probably intensified during the quarter. >> it has shifted to energy and labor. energy, we feel it mostly in our trucking and shipping costs. >> transportation logistics for many countries in the world, procuring truck drivers is becoming the most important element of our supply chain. >> when it comes to the supply chain, you will always be looking for supplies where we are operating as well as having multiple supplies. we see the same type of supply disturbances posing some threats to the fourth quarter, but i would not exaggerate. >> are brands available on shelves that were meant to be? in our top 10 markets, we have

96% on shelf availability for our products. dani: some key voices speaking about the supply chain squeeze, and global supply disruptions due to worker shortages could extend into next year, according to one of the world's biggest port operators. this comes amid earnings season. we are joined by bloomberg's joe easton. we are getting through earnings season, and supply chain issues, not a surprise this is coming up, but what are investors expecting? joe: this will be the earnings season of inflation. investors are trying to calculate which parts of the market will absorb that and absorb the supply chain issues. we are looking at different parts of the market. if we look at the industrial sector, we saw yesterday abb, the big swiss company, these industrial companies are so

dependent on supply chains having hundreds of supplies for one company. when they have this squeeze, that hits their margins. we saw a big negative report there yesterday. on the positive side, investors are looking to inflation hedges. the obvious one is the oil and gas sectors with the big gas price rises. those companies are able to benefit from inflation. the same with banks. our clues yesterday, a really strong report because higher interest rates benefit the company. the market is trying to find those winners and losers from the supply crunch. dani: what has been the reaction of markets to these earnings? a lot has beat this porter. how are companies getting rewarded are not? joe: last earnings season the market was trading high.

any negative commentary was met with big share price plunges. we saw that in renewable energy stocks. this time around the stock market is not at the high valuation, so people are expecting negative commentary. renault cutting guidance because of chip shortages. i would not expect that stock or investors to be too surprised. on the other side because there are so many risks, this sudden increase in covid infections in the u.k., the central bank commentary changing all the time -- investors are not willing to buy in either. going back to barclays, it ended up down 1% for the day because people are thinking where we going over the next few weeks?

if anything, reactions have been muted. dani: that is our joe easton from our equities team. that's stick with supply issues. european leaders are in brussels, yesterday they agreed on a common approach to deal with rising energy prices, although it fell short of calling for joint purchases or procurement. some say they need to do more. >> we also will look at the way energy markets are functioning as a whole. and in the mid and long term, it is clear the strategy has to be to invest massively in clean and renewable energy. >> having new regulations which are rocketing prices to the sky. >> we need to distinguish between the challenge we face in the fight for the climate.

this is about answering the question regarding what is needed for the spikes in energy prices. dani: we are joined by maria tadeo. we are seeing big divisions. why is that? maria: yes, big divisions, those who say we need to stick with the green strategy, cutting emissions majorly from now until 2050. then you had victor or bun saying, we are seeing prices rocket to the moon. yesterday, european leaders did agree to text on energy. this was a discussion that took hours to get to the comment text. they want to look into the etf market, they believe speculation is pushing co2 costs up. they say we have measures already on the table to make the better use of it. if you were hoping there would

be any signals or hint that the european union is willing to purchase gas or even store gas, that was not in the text. that is probably a disappointment for countries who have gone into the summit saying , we have cut our domestic tax and the costs and our own countries. this needs to be a joint solution. that did not happen last night. dani: thank you for staying on top of this, maria tadeo and brussels. coming up, we look at european data and rate decisions from the russian central bank. that is next. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe."

i'm dani burger in london. present aragon's -- president erdogan --this was on transitory inflation, adding it has limited room for further reductions this year. the loera slumped to a record low. -- the lira slumped to a record low. big moves in the lira. what is next for it? >> traders are thinking where to draw the lined in the sand for the lira. heading into yesterday's decision, it was at a record low, 9.5 per dollar, according to what we were seeing in terms of auction pricing. after yesterday's cut, we have investors saying, maybe 10 is a possibility over the coming weeks. it speaks to the idea in markets where there is this continued

decline in the currency in reaction to what is going on with monetary policy, and generally the sentiment more broadly regarding turkish assets right now. dani: turkey stands out in regards to em. we have russia on the docket. what contrast is there? >> russia has established itself as a credible inflation fighter. that will not be any different from what people expect from them today. russia has been a favorite for emerging-market investors recently because of the credibility of the central bank in fighting inflation, and the windfall from rising commodity prices. russia is one of the biggest winners of the move higher where it squeezed other emerging-market. russia as an energy exporter and producer, it was a big moon for them -- a big boon for them.

investors are waiting to get cues on what to do with inflation next. they are being hit with inflation pressures like any central bank, but they have a lot of credibility they can lean on. dani: i think about massive moves from chile, and central banks tighten. in terms of the divergence between emerging markets and develop markets, what does that mean in terms of how investors are treating assets? kristine: earlier in the year, we have been seeing emerging-market investors taking heart and the fact emerging markets are ahead of the cycle in terms of tightening compared with the fed and other developed markets. that has been announced to short the currencies. i do not know if that is the case anymore because the broader environment is a lot more challenging. we are seeing developed market central banks catching up to

these rate hikes. investors are wondering what is the proposition beyond this protection from rate hikes? what are the fundamental stories to support the asset class? that is the question investors are asking at the moment. dani: great to have you on, kristine aquino. let's dig into today's key events. we have a second day of the summit in brussels. leaders must navigate tensions over climate change and poland's ruling. as we discussed, at 11:30, the bank of russia appears set to raise interest rates. francine lacqua will have a discussion. we have south africa reserve bank governor, and the chair of the fed, jerome powell.

that is it for us sy "bloomberg daybreak: europe." u.s. stocks start to come down. anna edwards and mark cudmore will walk you through that, next. this is bloomberg. ♪ this halloween,

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anna: good morning. welcome to "bloomberg markets europe." mark cudmore joins me to take us through the market action this hour. here are your top headlines. evergrande back from the brink of default, expected to make a last-minute bond payment. inflation fears away on the market. breakevens had a 16 year high.