>> welcome to daybreak australia. >> we are counting down to asia's major market open. shery: the top stories this hour. u.s. stocks snap a today slide. >> the central bank has a lot more work to do to meet its inflation goals. shery: we are seeing u.s. futures up 1/10 of 1% after the

s&p gained ground for the first time in three sessions. the nasdaq outperformed. the inflation concerns i laid a little bit. we are headed toward the nonfarm payrolls numbers on friday. we are expecting a slight cooling of labor demand. oil in the asian session extending gains. in the newark session, reversing losses of more than 3%. this has a lot to do with u.s. inventories dropping. a goldman sachs representative talking about a tighter market during summer. opec-plus increased supplies during summer but not enough. if you look at this chart and you see opec capacity, we are still far away from the pre-pandemic levels.

there is a lot of skepticism about how much supply opec-plus is bringing to the u.s. markets right now. >> more oil in the markets could help to ease the investor concerns around inflation. ahead of the open, we are looking at a bullish start to trade. the bloomberg dollar index was seeing a bit of weakness. that is helping to boost the aussie dollar. that is typical proxy for risk in the asian session.

we hear from the vice fed chair dousing cold water she saying there's a lot more work to do when it comes to getting the inflation target and it very hard to see a case for pausing the actions when it comes to hiking at least in the next few months. shery: the reason we focus on much on the fed pausing is all of the recession fears we keep hearing about. even today, the goldman president warning of tougher times ahead saying this is among the most if not the most complex dynamic the environment has ever seen in his career. jamie dimon, we heard a pessimistic tone from him -- preparing for hurricane.

let's talk about this recession fears. the fed battle with inflation as well. this is the top focus across markets. for more analysis, let's bring in our global economics and policy editor kathleen hays. what is your take on the message that brainerd is trying to send? >> the message brainerd is trying to send and all fed officials is this is about inflation. this is not about the labor market. it is tight and a strong. this is not about the fed having a preordained plan. this is about the fed watching the numbers and knowing that until it sees inflation starting to come down not on the forecast, but the actual numbers, they will have to keep hiking rates. let's listen to what she said earlier on cnbc.

it's hard to see the case for a pause. we still got a lot of work to do to get inflation down to our 2% target. >> later in the day, the president of the cleveland fed was giving prepared remarks answering questions as well. she spelled out clearly something that lael brainard had touched on in her remarks. >> it by the september fomc meeting, it provides compelling evidence that inflation is moving down, the pace of rate increases would slow. >> could she be any clearer? she said it could pause in september if inflation is coming

down. >> what kind of signals are we looking for out of the jobs report? >> i want to give a quick note on the adp report. it is an unreliable projector -- dichter on jobs. cooling-off in the labor market may not be enough. payrolls are supposed to rise three or 20,000 plus. -- 320,000 plus. unemployment is supposed to be unchanged at 3.6% in our latest survey of economists. that is the lowest unemployment rate since 1969.

wages will only rise by 5.2% year-over-year which is still very strong. they are still watching inflation, rate hikes will still be on the table. shery: especially will may continue to see prices rising. will the supply hike make any material difference? >> market is saying no. oil was of on the date which tells you everything you need to know about the scale of this increased. on top of that, only saudi arabia and the uae have the ability to raise production in any real way. most other countries are top out at this point. people are quite skeptical as to the amount of barrels hitting the market. it's not really going to move the needle. the good news is that saudi

arabia is finally on board with increasing production after months of pleading from the u.s.. there is a sign of falling and that relationship. -- thawing in that relationship. >> the significance of the planned visit to saudi arabia. in 2018, he put the blame for the killing of jamal khashoggi on the crown prince. does this tell us what the policy priorities are in the geopolitical relationship? >> it certainly does. they are struggling with equipment, labor shortages.

the message in texas is we can't ramp up production quickly. it will take 18 months at the soonest. with what's going on with ukraine and russia, the extra barrels coming on the market, they provide -- >> one big-name, losses at tiger global prompted the firm to cut management themes and create separate tension accounts. what other big changes for client? >> they lost a lot of their money. what that means for them now is if they want to redeem their money from the fund of public

and private investments, they will be facing a side pocket meaning those private investments are going to be stuck in a separately managed account of some fort -- some sort that will be sold off at a later date and investors will be able to get the cash back. there will be a discount on fees to account for this inconvenience and there will be more liquidity meaning they can put more of the money than they would typically be able to in the situation. shery: this is great exclusive reporting. tell us more about the broader context. is there a fear that is indicative of the liquid investments? >> this speaks to a broader issue which is this group really pushed into investing in public and private together. that worked for a very long time as valuations sort. now as you are seeing the public stocks do poorly, a lot of markdowns in the private side, it's a double whammy. we have seen tiger global do

this, expectations are -- the bar wondering what is going to happen in the coming months ahead. shery: that is our bloomberg hedge funds reporter with the latest on tiger global. >> the eu has approved a sixth package of sanctions including a partial ban on russian oil. this after hungary wrapped its objections. the eu's toughest measures yet will ban the import of russian crude in six months. pipeline crude will be spared for now. president biden is set to urge congress to pass gun-control legislation in a primetime address from the white house. the address will come one day after a gunman killed four people in oklahoma and over a week after a gunman killed 19

children and two teachers in a school in texas. a bipartisan group of lawmakers on capitol hill is negotiating a possible agreement on gun-control. president biden reportedly traveling to saudi arabia to strengthen ties. the new york times says he will meet this month with crown prince mohammad bin salman. it marks a shift provide. the u.s. has condemned china's policies toward religious minorities. particularly in hong kong and shin jong. the state department accused china of committing genocide against ethnic legal muslims. it also highlighted crackdown on churches in hong kong associated with the 2019 pro-democracy

protests. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. shery: still ahead, why the opec outlook -- output hike is a victory. coming up next, our next guest says the u.s. has no control over china and russia and investors should only revisit the data after the summer. that's just ahead. this is bloomberg. ♪

>> this is among if not the most complex dynamic environment i have ever seen in my career. we have been through lots of cycles. the confluence of the number of shocks to the system to me is unprecedented. now there's is greater recognition that inflation is not transitory. it is probably with us for a number of years. it is a type of inflation that

we don't believe the federal reserve has the policy or tools to do much with it right now and i am not blaming the federal reserve for where we are right now. i believe most of the problems we are living with today are policy generated and supply generated. haidi: some influential voices speaking to us about the u.s. economy. this is the picture when it comes to the u.s. futures trading. the upside looking to extend those gains. u.s. stocks holding after a two-day losing streak. traders and market sentiment bouncing between those who see a recession and others who see a fed pause. we have asian stocks set to poison ahead of the key u.s. jobs report. our next guest says the markets need wartime, more data to

anchor for the new normal. she also says the fed has zero influence when it comes to the bottlenecks between china and russia. you say investors should go away , enjoy their summer and come back when we have more data. where i'm matt, we had a long cold winter. -- where i am at, it will be nice to enjoy that and come back after labor day. we need a lot more data for the fed to decide in december two

raised by 0.25 or 0.5. what you saw today was related to the fed was out there talking about looking at a leveling into the fall if you will. not necessarily pulling back but not drawing 75 basis point increase either. >> when you look at inflation hedges in spaces that are oversold, it was interesting to meet that we saw the riskiest fringe interest -- fringe assets rallying. where are you looking? >> we think the potential range of outcomes is wider than it has been. we think that you will see a lot of volatility through the summer. a lot of filling. we had a sharp bottom off of the march lows of 2020.

it's going to be data-dependent, it anchors us to a new normal which is a reversion to what long-term is a much more normalized set of economic -- >> as you said i would love to go away for the summer. it's going to be volatile especially when we don't have enough data out there and this chart on the bloomberg shows us we continue to see price pressures for businesses. that's the line in white. even as we talk about supply chains getting slightly better, it seems margins have paced out covid. >> exactly, margins. in mind, we are talking about margin compression of historic highs. you have companies that basically prepared for depression going into the early spring of 2020 when covid first

hit than a lot of them ended up with a postwar boom five or six weeks later. the corporate infrastructure was cost savings to the max. when the demand flowed through that, we saw record profits, record margins. bring in the margins back down is pretty natural. yes it would be nice to go away for the summer, but don't necessarily think you're going to see huge volatility as much as arrange bond market where it's went to bounce around for the summer as people interpret every piece of data. that will be the hard part as prognosticators. you might think the number is going to come in here and it comes in there because people don't like the commentary. it goes down when it should go up and it's want to be one of those kind of summers. >> especially at a time when consumer sentiment -- what's your take? >> watching what consumers tell the pollsters and watching what

they are doing are two very different things. they are telling the pollsters they are angry and understandably, everyone is pinched by food and energy costs because it's hitting everybody and it's so noticeable. on the other hand, there's the pent-up demand. you are seeing record lines at the airlines. all kinds of extravagant weddings and bachelor and bachelorette parties, lots of stuff going on. in a delightful white. delightful way. >> you can get a roundup of all of the studies in today's edition of daybreak. this is bloomberg. ♪

>> my guess is that there's too much uncertainty in the marketplace. there are too many things happening. the fed reversing qe2. the war in ukraine. interest rates going up and how much they will go up. there's too many unknowns, too many items out there. >> that was marc cooper speaking to bloomberg earlier. bloomberg has learned citigroup may post losses of at least $50 million after trading may trigger a flash crash in european stocks. the final number could be even higher. a london trader was working from

home and added an extra zero to an early trade. microsoft has cut its sales forecasts. the surge in u.s. dollar will eat into revenue more than expected adding to broader inflation and monetary policy risk. earnings-per-share are expected to be two cents lower. revenue could be as low as $51 billion. coinbase says it is expecting a hiring freeze for the foreseeable future. the crypto exchange blamed market conditions and shifting priorities for the decision. bitcoin has tumbled more than 55% from its record high in november. other coins of fallen even more shaking confidence in the asset class. >> let's take a look at asian markets. u.s. stocks snapped the two-day losing streak with every sector except energy.

city futures looking for at this point as do futures for japan. in sydney, a potential gain may get into the start of cash trading. the aussie dollar is largely unchanged. chicago nikkei futures at the moment unchanged. we are counting down to the key jobs report as traders and sentiment continue to balance between will there be a global recession or a u.s. recession or will we see the fed back off and put in place a september pause. the vice chair for the fed doesn't think so at this point. coming up, we will be talking through the importance of indigenous representation in government. don't miss our conversation with australia's first indigenous affairs minister. that's ahead. this is bloomberg.

>> china is coming out of lockdowns and they are stimulating. people haven't gone on holiday for two and a half years. finally, you have russian production getting tighter over the coming months. this market is going to get significantly tighter as we come out toward the summer months. >> on top of all of this issues that he mentioned, we also saw today u.s. inventories dropping and not to mention opec-plus came out with a supply hike. we are talking about 50% in the summer months.

wti catching up to rent prices at the moment extending the gains that we saw in the new york session. we are seeing gasoline futures at a fresh record high and demand dropping given the prices are high at the pump. i mentioned that the opec-plus decision, while they agreed to increase supply, at the same time when you put in perspective the global demand outlook, a lot of people are saying that's pretty modest. we are seeing all of these prices surging higher. let's discuss all of this with our next guest. great to have you with us. given the reaction and prices, i'm going to said this was a political victory for the u.s., but perhaps not much more. what is your take? asked we agreed this was a big political victory. there has been a lot of

discussion back and forth between saudi and the u.s. for some time so this allows the biden administration going into the midterm elections to say we are taking action and doing things to help alleviate prices at the pump. ultimately, i don't think this will do much if anything to alleviate prices at the pump, but it gives a political victory for the u.s. administration and for saudi as well which is looking for more security arrangements and agreements with the u.s. vis-a-vis the ongoing war with rebels in yemen. >> the geopolitical implications of this, could this signal more to come in the months ahead? >> there is speculation to that effect. it's now the consensus that joe biden will make a trip to saudi arabia and that could portend additional barrels coming to market. i don't think that will do too

much. saudi arabia -- to eat into their production capacity. another issue to remember is that a big part of what is driving oil prices and product prices higher is a lack of refining capacity. saudi arabia and opec could pump all the oil in the world, but if there isn't enough capacity to refine that into products that everyday consumers need in terms of jet fuel and diesel, it's not going to do much. >> are we likely to see more investment when it comes to refining capabilities? or is that something that it's not going to be terribly helpful? >> i don't think it will be terribly helpful. over the past couple of years, we have seen tremendous shutdown in refining capacity in the u.s. and globally. china, russia, and the u.s. are the three largest refining

capacity countries in the world. russia is obviously largely off-line in terms of their capacity right now and china which does have extra capacity has been exporting a lot less. that has been an interesting wildcard that we want to see as china moves out of their lockdown. we know that they've increased their demand for crude oil, but the question is whether they will start to increase their refined products exports into global markets. we have seen it they will cut down on that as they have more esg roles to cut their carbon emissions. as prices are very attractive globally, the question is will they start to increase because they do have the refining capacity to do so. >> when it comes to increased demand out of china and india, we know that the sanctions package has been approved from the eu and that covers a partial ban on russian crude. is that crude likely to find a

home in asia? >> so far, it has been finding a home in china and india and other countries such as sri lanka and turkey. the real interesting question now is that part of the european sanctions include a joint u.k. eu ban on providing insurance for shipping of russian oil. that might make it difficult for the crude oil from russia going to europe to be averted into other markets if it's difficult to get insurance to ship those barrels. that is what we're going to start to look out for if there is decreased ability for india and china to absorb russian barrels. >> we have seen a release of strategic reserves by several countries already. what more can importers do to increase supply at this point? >> it's a tough situation. we are really basically looking at two options which is either

production can increase and we aren't seeing enough producers commit capital, it's too difficult, supply chains are also making that difficult. the other lever is that demand can get curtailed because of these high prices. that could put downward pressure on oil prices. i expect as the u.s. administration gets closer and closer to midterm elections and prices stay stubbornly high at the pump, they will take more effort to try to reduce prices such as curtailing exports or maybe having a windfall tax on u.s. producers. ultimately, i don't think it will do very much. in the u.s., we have plenty of product. the difficulty is getting it to market on the east and west coast and that's an infrastructure problem which is something that will take many years to rectify. i don't think there are any solutions to this problem.

>> do you see russian crude sales being targeted for cap because we have heard they have a line in the sand in terms of pricing. >> that's the question is does russia and up weaponizing oil? we have seen them taking steps to weaponize natural gas in terms of cutting back gas exports to certain countries in europe that are going along with their plan to pay in rubles. that is the next flag in terms of where this ends up going. does russia curtail experts -- exports to other parts of the world via pipeline which is not included in the current eu ban. we expect that russia will take the necessary steps to up the ante because the president -- precedent they have sent in the gas market. >> always great to have you with us. we appreciate your time.

time now for morning calls. let's get to annabelle in hong kong. >> this came from an interview with the blackrock ceo. he said that inflation could be with us for quite a while. it's not the type of inflation he thinks the fed has the tools to handle. the reason for this is that he thinks it's being driven more by policy shifts particularly in the u.s.. we have seen the shifts and globalization where companies are grappling with supply chain problems. also, the war in ukraine. this is elevating things like energy and food prices. he also thinks more market volatility is ahead and we could see more fear and turmoil succumb.

>> very important for these businesses doing business abroad is the strength of the dollar which we are now seeing restricted at least in today's session. what is goldman sachs saying in terms of which assets can benefit from the weakness of the dollar? >> goldman sachs is looking more at the performance of the dollar since the last high in mid-may. there saying that that could be good news for developing markets because if history is a guide, that's when it tended to outperform. looking at this chart, you can look at the value of the dollar versus em emerging markets and you can see the dollar performances there. goldman sachs says em x china, that tends to be the outperformer but this time around, they are taking a look at others in particular, they are the top picks for strategists. it's not exactly an exact science because em growth data

tends to bottom out when we see the end of the cyclical dollar rally and equity valuations often trading at this point at a discount versus the s&p 500. >> we're are going to get more on that chart specifically and that correlation. the cohead of level fx and em strategy will be joining us in the next hour. su: we start with fed vice chair lael brainard. she is back to nx -- expectations for 0.50 rate hike for the next two sessions. she was sworn in last week and she says the banks to has a lot of work to do to get inflation down to 2%. she echoed and need for flexibility depending on economic conditions. in ukraine, the central bank has more than doubled its benchmark rate in its first policy move in

four months. the central bank raised costs to the highest level since september 2015. that move is about paying more time inflation. policymakers say it will move toward cuts when pricing starts to ease. china is set to carry out a set of policies to encourage growth. authorities from the ministry of finance say they will accelerate refunds of value-added taxes and make it easier for small companies to bid on government projects. the pboc has also promised to use monetary policy to help maintain growth. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. >> coming up, the first ever

aboriginal woman to serve and we will discuss the importance of indigenous representation in government. this is bloomberg. ♪

>> i begin by acknowledging the traditional owners of the land on which we make our respect to

the elders past present and emerging. on behalf of the australian labor party, i commit to the -- >> the australian prime minister beginning his election night victory speak -- speech a promise to enshrine the voices of first nation people and parliament. it was that pledge for a national referendum. i spoke with the first aboriginal woman to hold office as minister for indigenous australians. >> it is about trying to reach consensus across the parliament which includes the opposition. it includes the green and the number of independence. the most important thing is to

build a consensus in the broader australian community. in austria, it takes -- it's extremely hard to get a successful referendum passed. the bar is incredibly high. of the referendum's we have had in australia since federation, only seven or eight have passed. i see my role as about building the consensus in faith communities, business communities, and the nongovernment sector and the broader community so at the end of the day, we have compulsory voting here in australia so every australian will have their say in the referendum. >> the new government has placed or intends to place indigenous issues within the center of their policies. is this a shift from previous governments what we have seen the focus more on writing the

wrong of history? >> it is certainly a shift from the government we have had in australia for the last nine years. it is about rights and about things like developing, getting a referendum passed to enshrine first nation voices in the constitution. it's also about addressing the really hard social justice issues that still plague communities. lack of clean water. a huge disparity in expectancy. educational outcomes. overcrowding and homes. domestic violence. an enormous list of issues that really need addressing at the

same time that we think about things like a referendum change like creating a commission to oversee a national process of truth telling and a national process of treating and agreement making. it is both of those things that need to take place. >> we know there has been significant investment when it comes to housing, health, education, all of the areas you mentioned before. yet the gap whether you talk about the education gap, the gap in life expectancy, it continues to be so troubling. does better representation help that? what is the biggest shortfall? >> that is a very complex question. it would take more time than we have to answer it fully. you cannot divorce those present day social justice issues from

history and from the past. think about the history in the last 100 years in australia. particularly, the stolen generation. where generation after generation of aboriginal children were forcibly removed from their parents and brought up outside of culture, outside of language and in many ways, provided almost a slave workforce. you cannot divorce the past from the present. i get very annoyed when people say get over it, get on with things. it doesn't work like that. imagine what it would be like to have everything taken from you. everything including who you are, what your culture is, who your family is. and how that doesn't reverberate down through the generations.

those seem important to understand. which is why part of the -- it's a national process of truth telling. that will lead to a national process of healing as well. >> the intersectionality of equality because obviously your experience as an indigenous woman is going to be different to that of an indigenous man. i wonder if you draw from your personal experience as well as professional experience. when you look at that breath of experience, how does that intersectionality former policy priorities and the way you want to lead in your portfolio? >> it informs my policy priorities is obviously working with the prime minister and with my cabinet colleagues. working with the caucus.

and in the labor party of austria, we have a first nations caucus. those entities inform my direction very much. like you say, i am a first nations woman. obviously, my life experience is something that informed me and my employment history as well. the life experiences of first nations people in this country are very different to the life experiences of mainstream australia. what is really exciting and extremely important is the party that i am part of, the government of australia recognizes this and does see first nations issues as an issue of fairness, decency, equity.

>> finally, as we make our way through voice treaty truth, what does your vision of australia look like once we get to the end of that truth telling process? >> the first thing to say that treaty making will take a very long time. we are hoping to have a referendum for an aboriginal voice in the constitution in this term of government which is about three years in australia. a national process of truth telling, i don't have a timeframe on that. i think the journey is as important as the destination and i want to see truth telling to be able to be localized. i want it to involve schools and universities and local

government and aboriginal organizations. most importantly, it has to be about the truth story of this country. not the layers of guilt, but just the truth. i see that as transformative thing for australia down the future. >> that was the us trillion minister for indigenous australians. if you missed any part of that conversation, tv is your function on the bloomberg. you can watch past interviews, watch us live, also dive into the securities or functions that we talk about and become a part of the conversation. this is bloomberg. ♪

>> we are minutes away from south korea's inflation numbers. cpi is seen as topping 5% for the first time in 17 years. the hottest components were transports, restaurants and hotels. we continue to see a strong rebound from the corona pandemic. >> projecting 4.5% when it comes to expectations for this year pulling back from previous

expectations that were hotter. potentially there is more to go when it comes to these inflationary pressures. we have seen them prioritize that ahead of growth. we heard from the finance minister that he sees inflation sitting around 5% for this year but it's a huge challenge for the bank of korea governor. there is much more difficulty in forecasting these numbers. >> recently, we heard from south korea saying they expect inflation to stay above 4%. >> coming up, we will take a look at the yuan as well. our guest will talk about fx trade.

also the elevated risk of recession. this is bloomberg. ♪

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