haidi: welcome to their break australia. -- daybreak australia had. shery: the relentless rally pushed benchmarks to new high. haidi: investors look ahead to the fed expected to confirm a

scaling back of its massive asset purchase program. shery: deforestation and methane emissions dominate climate process. this is a picture of wall street. this was after another day of record highs. the s&p 500 pushing the limits of trading. we are talking about the possibility of greater swings with the 14 day rsi approaching oversold territory. we have choppy trading for oil which continues to be under pressure toward $83 per barrel herded. it was about treasuries. short-term rates, volatility

rising even as we see volatility in the s&p 500 starting to subside. the two-year yield in the u.s. seeing the biggest decline this year. steepening the spread. not that much of a big change for today. when it comes to the fomc decision, the majority of the 49 economist in the survey are predicting we will begin the taper in november and wrap it up in 2022. after that, what does it mean for rate hikes? haidi: we rarely have the situation where what happens in australia what the rba decides has some implication for fed expectations, but that's exactly the kind of narrative we saw playing out after the rba

announced they would be killing off their target. there are heightened expectations for an earlier rate hike schedule. sparing some of the global flattening trades as well. money markets paring back bets when it comes to the ecb as well as the fed and the boe after that rba announcement. shery: in the u.s., it's election day and many americans headed to the polls today. we are watching virginia, new jersey in the next couple of hours. the only two states holding gubernatorial elections this year. we are watching mayoral races in new york city and boston. what does this mean for the electorate going into the midterm elections as we continue

to see president biden's decline in popularity not to mention his failure to pass his economic agenda. haidi: much of that controversy is how much he wants to invest in clean energy. he certainly criticized the beijing leadership saying they made a mistake by skipping the g20 and cop26 summits. he also said things when it comes to the leadership out of russia and saudi arabia. he said this was an ability to influence people around the world that they have lost. it has gotten the attention of the world and that is climate. we know that xi jinping addressed the g20 virtually. he is not left the country since the start of the pandemic. this is much -- very much at domestically focused agenda. joe biden assange saying it's a missed opportunity. central banks across the world are setting to reduce stimulus. the fed is said to be the next

in line. why is it the fed won't wait any longer and has the rba change things globally? >> what i think the rba has done is to show that keeping bond yields low, short-term long-term it's getting harder and harder to make work. it doesn't make sense. you don't need to keep buying bonds when the economy is recovering. having said that, the governor dug in his heels. the bank of england making its decision on thursday. inflation is surging. it doesn't look so transitory anymore. october 22 after saying it's not time to think about tapering, now we can think about it, jay

powell is now saying i think it's time to taper. november seems like the right time most people. how fast will be the big debate from today going into tomorrow. 51% of the economists in a bloomberg survey said eight months. 35% say the taper could be ending in seven months or less. because the quicker you and the taper, the quicker you can open the door to rate hikes. one said it could be a faster lift off than others are thinking. the other thing we are looking for is language on if full employment. jay powell said there is substantial further progress made. if you get to the lift off on rates when it comes to starting to taper the bond purchase, the question is what does it -- what constitutes full employment.

shery: -- we are just getting a new report. >> it is overall optimistic saying the economy is in a good shape. the transition from living with covid to the next phase could be difficult. there could be permanent changes in spending behind her. they might find they can no longer make it. the underpinnings just aren't strong enough. they also expect more stimulus removal in the medium-term depending on what inflation does and the job market. éç■the rbnz says there's a highr risk of a host -- housing market correction. the governor are the -- of the rbnz says we have a bit part in this. the government is taking steps

to deal with the hot housing market. m optimistic report definitely a lot of caution. a lot of governments realize if -- inflation isásurging. what h}h$}h$appens when we get r away from the pandemic? å&shery: kathleen hays with everything to watch across asian central banks. imim promises must be matched with real auction. we will have more from the cop26 climate summit in moscow. -- glascow. >> to cut down methane gas emissions. this is the second largest contributor to climate change. countries that agree and sign onto the pledge will promise to cut down methane gas emissions

from 2020 levels come 2030. as usual, the devil is in the details. we see countries like russia, india, china, they have not signed onto this proposal. this is where the heads of state and political figures go home and it's time for the negotiators to do all the work behind the scenes. to see whether or not this will yield real results by the end of next week. this is now about the technicalities and the details behind the scenes. haidi: let's look at how the midweek is shaping up in asia. the earning story still dominating. we await policy changes from the fed, boe, and ecb. we are seeing a bit of a move

when it comes to the kiwi dollar. a drop in unemployment numbers and the higher per dissipation rate, that should give the rbnz ammunition for further rate increase. sydney futures a little bit up at the open. we have relative stability when it comes to the 10 year yield but analysts are saying the spread between the three year and 10 year still sing a jump of 10 basis points. we could see a reignition of that steepening going into year end. looking at cryptocurrency, this is what we are seeing with bitcoin trading. let's get you to vonnie quinn.

>> good morning. the chinese premier says his country's economy faces new downward pressures and -- taxes and fees. the state tb comments -- television comments, he said the economy needs adjustments. president biden says he will soon be announcing his pick for key fed positions. he told the conference in glasgow he is meeting with advisors to decide on the best choices. it remains unclear whether he is leaning toward reappointing jay powell or replacing him. the meta-platform says it will no longer use facial recognition

over privacy concerns. it says it needs to weigh the benefits over worries about the technology. facebook has used facial recognition since 2010 to encourage users to tie family, friends, and content. ahead of soccer has been indicted. officials found a payment was made without a legal basis. both men have denied wrongdoing. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: still ahead we discussed shifts with global central

banks. up next, we assess the eb landscape and supply chain stalls. this is bloomberg. ♪

it's going to collide with the system that is unable to absorb unless these companies give them

the tools they need to succeed. >> alignment to global standards is going to be key. for banks and stand willing and able to finance the transition, but also for clients. >> as we underwrite them, one of the risks is do they have a plan that meets the standards and if they don't, that will have a problem down the road. shery: top executives on the challenges ahead for climate financing. let's get more on the market implications of the push toward clean energy. you say the tesla is not the only player when it comes to the ev landscape. where are the opportunities? >> tesla was early on ev's and has paved the path, but now you have almost all of the major oems dedicating tens of millions

of dollars to new factories. you work your way up the chain, you see the battery makers are dramatically increasing output to make enough batteries. further up, you have lithium minors -- miners that are struggling to keep up. the entire ecosystem is benefiting from this revolution in electric vehicles. shery: at the same time, you have president biden at cop26 pression for more -- pressing for more emissions cuts. how do you balance out the two forces when it comes to getting exposure to clean energy and to use fossil fuels given that it looks right now that they're here to stay for a while? >> it is some conflicting messaging. you have to separate short-term from the long-term. oil prices are high and that's

going to hurt consumption. in the long term, the goal is to transition people off of oil. electricity is cheaper. it costs $10 to fully charge tesla. if we can make the transition to electric vehicles, it will make the transition in the long run. $80 per barrel is it helping right now. haidi: when it comes to ev and tesla, it still feels like a meme stock. they said they were going to play a key role in the transition to ev's. no detail with1 tesla. is this retail driven volatility? is it hard to work out what the bone -- fundamentals for this trade? >> there are clustering around

headline names. whether it's the oems that are trading cheaply compared to benchmarks or looking at the battery makers or the lithium miners, they are still unknown. they fly under the radar. they tend to not be well represented in broader indexes. this is a corner of the market that is experiencing strong growth, but many people have no idea who the exxon mobils and dutch shell companies are of the lithium space right now. haidi: when it comes to consumer confidence, we have seen a big gap what the u.s. consumer is feeling and what markets are saying. do you expect gap to close as we hit this critical holiday season where at the same time we have

inflation worries and supply chain disruptions? >> overall, we are seeing a lot of strength out of consumers. consumer confidence has risen in october. retail sales in september improved as well. the consumer is looking strong. think it will still be an unusual q4. rather than the last-minute shopping that tends to be done between thanksgiving and christmas, i think this will be protracted as early as right now. multiple months of buying as people try to front run these purchases given the supply chain issues. it will be a different q4, but different. e-commerce is still in the best position. haidi: great to have you with us. be sure to tune in to bloomberg radio to hear from the latest newsmakers.

we have plenty more ahead. this is bloomberg. ♪

haidi: hedge fund traders watched a nightmare scenario play out last week and now some of them have seen enough. they have each grounded traders after hitting maximum loss levels. tell us what happened at these high-profile hedge funds. >> given the upheaval we saw in bond markets last week, many hedge funds were positioned the wrong way.

they lost so much money so quickly that they hit risk limits and the trading had to be halted. at exodus point, they lost about $400 million last month. you see this as hitting risk limits and having to be stopped, it's a bit of a extraordinary risk management move. you don't want that to happen to you if you are trading at a hedge fund. shery: who are the biggest losers? >> one lost 11% last month. alpha dine is another big one that lost 6.5% last month. they are down 17% for the year.

for them, it could be the first down year since they started trading in 2006. we have seen significant numbers largely on the surprising moves of the bond market. haidi: we are expecting more volatility going into year end. are they well-positioned to try to deal with that? >> it's hard to say. we don't get clarity into how their position in the current moment. we do get a sense if funds had reacted and adjusted their positioning from last week when most of the funds were positioned for a steepening of the yield curve and what we saw was the yield curve flattening amid hawkish comments from central banks. they have adjusted and now they are expecting more central bank action like hiking rates sooner,

if they have made those adjustments then they may think they are better positioned to last through the year. it's a wait-and-see. we will watch closely. shery: here's a quick check of the latest business flash headlines. zillow is quitting its home flipping business. it plans to reduce its workforce 25% as it winds down the division in the coming months. zillow says it's pricing algorithms work accurate enough sometimes causing them to overpay for houses. avis sword -- soared after an executive said it will pay a big

role in electric vehicle adoption in the u.s.. while they didn't this close plans to add ev's to the fleet, executives say that doesn't mean they are pursuing potential deals. lyft saw airport rides rise compared to last year. rakitin --rakuten is one of their biggest shareholders. coming up, shifting policy with global central banks. this is bloomberg. ♪

haidi: time for morning calls. our economics team is changing the call. this is six months earlier than previously forecast. shery: looking at the dollar and where it will move immediately after the meeting. we see it -- bank of america

sees it strengthening. haidi: this began in australia this week. we are seeing stability in the 10 year bond yield. let's bring it chief economist. is he this reverberation of what the reserve bank of australia does with regard to the rest of the world bond markets, but that's what we are seeing so far this week. what is the lesson learned on the rba having to bow to market moves? >> the lesson learned is that all of the central banks are

finding themselves needing to respond to what i think for them is a very rapidly changing environment. in particular, what one sees with the rba announcement is something that has not been acknowledged by our fed in the united states. the markets getting ahead of them. in this case, the market is saying we understand how you want us to think about this, but we are going to think about it differently. the central bank is finding they have to respond. haidi: we are also starting to see a theme of stagflation. data shows the extent of how the supply shortages globally are starting to weigh into the dynamic of parse pleasures.

-- price pressures. >> i have said to many people this might be an analogy that doesn't play too well in australia, stagflation is like the abominable snowman. much discussed but never seen. i don't think were going to see it here. most central bank authorities i think would agree you don't have stagflation when you have a sub 5% unemployment rate. the two concepts are rather inconclusive. there seems to be not a lot of problems with consumer demand. it is on the supply side and a lot would reason that once it is resolved, economic growth will pick up again. shery: when do you expect

tapering and eventual rate to happen in the u.s.? >> i should refer to your bloomberg forecast. i think the tapering will start this month. that they will stick with that plan irrespective of the weaker economic growth numbers in the united states for the third quarter. the most current projections for the fourth quarter are perceived to be a pickup in measured economic activity. i think they will stick with the pate -- taper starting soon. the question will be other they will signal anything about when the rate hikes will start. avoid that. the the-tthñ9e■.÷ toward things hapg midyear. shery: are we factoring in the

fact that president biden's economic agenda is running into headwinds? >> right now, i think the oavforecast that i see for fourh quarter growth really is not looking to the stimulus from the fiscal side because it takes a while for that to get into the system. the proposed actions are not quite the same as what we saw earlier in the pandemic which were the quick actions to get money pumped into the system. they will take longer to filter in and against that backdrop, something is going to happen it's just the timing is running later. the outlook for economic growth in 2022 is by and large quite positive. and i think for the-h@ world, it will come with higher inflation. shery: the fomc seems to be

emphasizing a more inclusive version of a full employment. how do you view the economist calls that that includes black unemployment at 6%? >> there are all sorts of measures that one can use for employment. and unemployment. i would see the real issue is measuring on a plumber right now , measuring the labor force even more critically. in the united states, what is the size of the labor force? who is in fact, are the people who are not looking for work now going to come back in or have they relatively permanently stepped away from the labor force? that has all sorts of consequences for economic growth and wages which we are going to

see inflation forecast. shery: always great having your insights. thank you. you can get around up of the stories you need to know to get your day going in this edition of daybreak. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

>> janet yellen was due to meet leaders at the cop26 summit. the bank of america ceo was among the leaders expected to attend. >> this is a transition we all have to make as a consumer company. there's pressure on banks because our clients and investors are demanding this. if you think about it in the context of 2015, the u.n. said we want this to happen and -- >> if you look at what banks can

do, can you stop lending? >> all of our clients have to make a transition. some of them extract minerals or fossil fuels and they have to make a commitment. could we assess them on a risk basis. it's hard for them. we have to stay with them to help make the transition. they need capital to deploy. their declarations that you are seeing by many of them now, we can be part of the measurement system because as we underwrite them, one of the risk is do they have a plan that meets the standards the world wants them to have? if not, they will have a problem down the road. >> where is the biggest opportunity for banks? >> we did $80 billion of financing last year. it's a business. we have tax credits, we disclose

. there's lots of opportunity to make money doing this. we do charitable work and everything in between. the thing that's hard for people to understand is this transition happens when we all work together to make it happen. >>ép# are you disappointed thate don't have more commitment? >> know, the governments can work together in multiple ways. i think they are seeing as the private sector is pushing them private sector is pushing them ebslglño2mq jlpñm■#l$ñ)tc■cvh■9;ie taaq urrencyo3k■;zt■m#/ñ$plsgb lm

americaçjb ceo speaking ath s te cop26 summit. we have more now with vonnie quinn. >> the second and final day for world leaders at the summit. two deals that could become key. a plan to reduce methane emissions. 100 companies backed up plan to end deforestation. joe biden view is that beijing announced an opt -- missed an opportunity to participate. xi jinping addressed the group remotely but he has not left his country since the beginning of the pandemic. joe biden also said that russian and saudi labor -- saudi arabia leaders should have attended.

the fda and cdc have backed pfizer shots for children age five to 11. they can be sent in packs of 10 vials compared to the 195 vials of standard vaccines. the cdc director must still sign off on the recommendations before the vaccinations can begin. goldmansu?-z sachs has named its biggest class of new managing directors ever. it's a near 40% increase from two years ago. it's as part of the reason for the jump is the recent headcount at the firm. women are less than one and three of the promotions. black and hispanic employees at goldman sachs each make up 5% of that incoming class. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: it's election day here in

parts of the u.s.. the polls close in virginia in a few minutes. one of only two governors races this year. let's get more from our political news director in washington. we also have new jersey closing an hour after virginia. what are you watching? >> virginia is the one everyone's watching. it's the closest so far. we could have an upset in virginia. governors can only have one term. terry mcauliffe is trying to come back. glenn youngkin doesn't want to give him the chance. the governor who is the same member of the party of the president has only one once the last 10 times and that was terry mcauliffe when he did that several terms ago.z9á"t) rá has.

terry mcauliffe has tried to paint glenn youngkin as connected to trump. glenn youngkin has run away from that. he is conservative, but he will not necessarily be another trump. it's a tight race. it will depend a lot on turnout. the republicans will need to turn out, but the democrats and independents who voted for biden last time and he one for 10 -- he won by 10 points a year ago, it will have to show up at the polls. there doesn't seem to be as much enthusiasm for the democratic candidate as there was for joe biden in virginia year ago. haidi: what are the issues most at stake? >> one of the things we're looking at is whether these are clues to what could happen next year in the midterms. the party in power often loses

seats in the midterms and that's what they are fearing. if they lose in virginia, it will try to tie it to biden. there are local issues at work as well. education has become a big issue and the parents say in the education of their children has become big. glenn youngkin says the terry mcauliffe doesn't want parents involved in their children's education. other issues spending, taxation have been important. it really has been, this was terry mcauliffe's race. he was way ahead starting last spring and now it is a dead heat. ê]ud■r

just yesterday. the polls close in just a little bit. the count votes quickly in virginia. we may know quickly. watching now new jersey where the incumbent governor is expected to be -- his republican challenger. shery:y: democrats seem to have suffered along with president biden's declining approval rating. how is his economic agenda coming[ >> they didn't get a win with the infrastructure and -- there has been a lot of infighting among democrats. et help from the administration. covid came back with delta this

summer and that has not helped the democrats. they had some things that were going for them early on and that is not helping now. the issue of taxes has always been an issue for democrats particularly in new jersey. haidi: still to come, facebook's phaseout of racial recognition. -- facial recognition. this is bloomberg. ♪

shery: meta is blocking the use% of facialñvñv recognition. it is deleting over one billion face templates it is collected over the years. this is in an effort to clean up its image as well as rebranding. >> i think it has to be part of that process when you think about how long facebook has had the technology. they have been using it since 2010. 2010. -u1;ukb@jzcvcv3e■z wouldq

week after rebranding the company to me is a sign that they're are trying to turn over a new page. they want to be known as meta. that comes with all kinds of privacy issues. this is an opportunity for them to take one of the biggest ones which is facial recognition software and put that aside and try to say we are thinking about this in a responsible way. haidi: what else to they need to do to get that critical buy-in from regulators but also from users that have been doubtful about the platform? >> i don't know what they can do at this point because tatian is -- the reputation is so negative. no one necessarily thinks of facebook and thanks that's a company that i trust with my data. when you build something like the metaverse, you are offering them all kinds of stuff. your name, identity, movements.

you're going to be in physical spaces in a virtual way. i think that this is a tough hill for users to climb. the best thing to happen would be for them to get other companies on board. when they're building this alongside apple, amazon,, google of the world. if this is supposed to be facebook specific, that's going to be a tough sell. shery: this facial recognition technology has not been used just by facebook. what happens to the technology itself? >> this is something that is common in a number of big tech companies. apple has facial recognition technology. i unlock my iphone using my face all the time. facebook is the first of many companies that might have to pull back.

we have seen them talk about regulation. this might be them trying to proactively avoid those issues. the technology itself is not going away. while facebook will not use it for the social network, they are still going to be building the technology presumably for the metaverse. they are not abandoning the idea that -- they are just saying we won't use it for the facebook social media anymore. haidi: that's an important point to distinguish. it is not just facebook migrating to the realm of the metaverse. microsoft will also take a stab at the idea. emily chang spoke exclusively with the ceo. >> it comes down to bringing the

real world people places and things to the digital world. for us, this is by the way happening both in the consumer space and in the commercial space. seven years ago is when we launched hollow lens. we talked about the gaming applications and the enterprise applications. this pandemic if anything has made the commercial use cases much more mainstream even though sometimes the consumer stuff feels like science fiction. i was able to go with it to the nhs hospital in the u.k. and do a virtual visit of the covid wards. i was able to go to the toyota manufacturing plant and to a remote site and even the space station. the ability to be able to have the malleability of digital really helps ring links together. >> you are working with a number

of partners including facebook that just unveiled the metaverse. what do you think of their approach? >> we love that there is so much innovation going in. whether it's from facebook and others. i hope this is the next thing that happens after the mobile internet. we will make sure for example all space vr today runs applications on oculus. we will continue to make sure some of our best applications, platform work, mesh applications, anyone who builds using mesh can run using those applications on oculus and hollow lens. that is going to be our goal.

originally planned. nintendo has struggled to get enough semi conductors to make the new machines. the company had hoped to make 30 million consoles as demand has been strong. nintendo shares have dropped 20% this year over concerns of the new switch. netflix has begun its jump into video games. titles are included in the netflix subscription and the company says there will be no advertising or additional purchases required. the streaming giant sees videogames as the next big things. elon musk cast doubts on hertz plans to buy tesla ev's. he tweeted that tesla has not signed a contract yet and it has zero effect on the company's economics. haidi: stay tuned for a big interview.

the u.k. chancellor will be joining us at cop26. daybreak: asia is coming up next. this is bloomberg. ♪ moving is a handful.

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haidi: i am haidi stroud-watts in sydney in the markets of just open for trade. shery: i'm shery ahn new york, asian traders relentless u.s. stock rally as corporate profit margins rise despite inflation. the fed expected to confirm is going back of its asset purchase program.