shery: you are watching daybreak

asia. >> we are counting down to the major market open. haidi: recession warning that of the inflation report, asian investors are waiting for central-bank calls in korea and new zealand. the outlook for oil dams despite -- the outlook for oil dims. cleaner formally sues elon musk demanding he follow through on his $24 billion buyout. shery: we are getting the jobless rate out of south korea as 2.9% for the month of june. log 2.8%. it is pretty low, levels we have not seen in years. this is when inflation is rising and the cost of living is rising

and rates are rising. it will be something that the be ok has continued to watch. -- bok has continued to watch. let us get to bell for the set up of the asian market. >> reflecting recession fears, focusing on the movement into safe haven in the bonds as well. the japanese bought futures and the aussie 10 years -- bok futures and the aussie 10 year. it is rising on the month of june, 1.2%. the focus on the basis point hike, since october, as expectation is the fed could be a bit more hawkish than what had been expected.

generally, a 50 basis point move is what is said by most economists. click on the board, see how that is being played out in the fx space. we are seeing the qe dollar trading -- kiwi dollar trading fractionally higher. australia looking flat, we are a risk off as we head to the recession. shery: this is after we had stocks fluctuating throughout the new york session. we actually have major cap tax selling off -- technology selling off. we see oil at a three month low. not to mention the covid cases in china continue to rise. the demand outlook is not looking great at the moment. the haven flows continue into the haven space -- treasury

space. the 10 year yield dropping as much as 12 basis points below the two year rate. the imf has cut the u.s. gdp growth forecast for this year to 2.3% against last year's 2.9% estimate. let us bring in garfield reynolds and kathleen hays. we continue to see the haven flows whether it is towards treasuries or the dollar. >> there is no rate at the moment. the dollar has been the ultimate king. you get a reversal in some of the drivers either through the european recession fears or a parity drop, inflation is the flow, the fed may have a rapid turnaround in the dollar.

the same thing goes for treasuries. they have had an extremely volatile time. the highest since 2020. they could even get quite close to the highs as it got in march of 2020. both of those are uncertain havens. there is a bit too much certainty when it comes to risk assets. the cause is the downside. haidi: a big day for central banks are in asia. the rbn said that they will come through with more big rooms -- moves. >> it has been a trendsetter, the bay of new zealand, since the pandemic. the first to start cutting rates. turned in october of 2021, 320 point basis point hikes and

another in april. another in may and today they are expected to do another 50 basis point hike. taking the rate up to 2.5%. that is an aggressive move. what is driving them and investors are looking for the right to be up, it is inflation, above the 100%-3% target -- 1%-3% target. one and two year inflation is at a tenure high. they have shown how aggressive they can be in both direction. the bank of korea was the first to start hiking rates as the recovery started to insert and from the pandemic. look at their indicators. see that what they have got is a series of rate hikes, 15-19 people surveyed, say that 50

basis point move is 2.25%. the biggest single move they have made since 1999 when they first adopted interest rates as a primary policy tool. i am surprised to learn that because i thought everybody had been doing that. their cpi is six point 5% -- 6.5 year-over-year. the bank of korea says it is open to doing a 50 basis point move. it would be the first time they have done it in a long time. maybe even obviously doing a 30 basis point rate hike. -- 50 basis point rate hike. haidi: parity to any owner name, there are concerns -- parity by any other name, there are concerns we could see the

downside. >> the euro has not gone under parity is slightly the concern. there are a lot of options mind up, a lot of reasons for investors and traders, the parity level make it difficult for people to go below it. russia played a bit more hardball when it comes to cash supplies with the war in ukraine. no parity until the u.s. session. even if we just get turmoil in general, you can expect real fireworks unit because it goes a long way to the downside or because there is a reason for the spac's to go a long way too. shery: our global economics and policy editor kathleen hays with our top market stories today.

let us turn to twitter, it has formally sued elon musk over his abandon $44 million takeover out for -- offer. he changed his mind, trashed the company, and walked away. let us get information from jeff. what does twitter want at this point? i cannot imagine that they actually want elon musk to become the new owner? >> they want him to pay out his greenbacks that he promised to pay out. what they're asking the judge for is specific performance. you enter a contract, you are the smartest guy in the room, you sign your name to a contract, you are obligating yourself. he cannot show that there has been any hanky-panky that blew a hole in this deal on the part of twitter. . he has to pay the whole thing. eat the whole banana of 54.24

share. >> this court is very well-versed when it comes to corporate battles. >> it is the premier corporate case. there is no punitive damages awarded. they can hear the case very quickly. we are a quite -- quick sidebar tonight. they think they can get this ready for trial by september 19 and put it on and be done in four days. that would be lightning fast. shery: we are watching for any twists and turns on that case. what can we expect? >> we can expect to see elon musk on the stand. he is no stranger to delaware, he was here last summer

testifying in the solarcity acquisition challenge which he won. he is always quite the performer when he gets into the public eye. you know, we are all looking for it. we have to lay on the popcorn because it is always fun. [laughter] haidi: there is never a dull moment when it comes to elon musk. we are expecting that on the eagle front. let us get to the first word headlines. >> opec's oil outlook shows no relief for consumers. to fill the gap, opec would have to hike production. members are falling far behind due to underinvestment and political instability. president biden is urging middle east producers to open the tatts and will visit saudi arabia this week -- taps and will visit saudi arabia this week.

supporting the yen after meeting with japanese finance ministers in tokyo, yellen said at the two did not discuss intervention and t7 nations should have market determined exchange rates. the world health organization is urging governments to take steps to curb covid-19 transmission amid a new wave of infections. the director general warned some variants of the omicron strain are lifting case numbers and deaths. a new wave of cases in england and an estimated 2.1 million people have been affected in the final week of june. the house committee investigating the january 6 capitol riots have seen trump's tweets from the campaign manager. another text from that to a colleague says this week i feel guilty for helping him win. the committee has been told that

company tended to contact a witness. -- trump attempted to contact a witness. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. shery: our exclusive interview with the banyan tree group as it regains its footing from the worst of the pandemic. we talked global bond market as the u.s. treasury curve goes to a level not seen since 2007. this is bloomberg. ♪

>> we are engaged in a challenging exercise. it is to hold the economy down to normal levels. in an effort to bring inflation under control. without the intent of trying to hold it so down about the decline is bad. get inflation under control. period. haidi: one of the u.s. bond markets watch indicators of precision risks reached levels last seen in 2011. the yield dropping by 12.4 basis points below the two year rate. our next guest says he is not as heavily positioned when it comes to curve flattening in a lot of markets. great to have you with us. how much of the direction of what happens with the treasury

curve engines on what sort of print we get from the cpi? does it not matter as much in terms of how people are pricing in recession risks? >> good morning. i think the market in terms of changing the trend in the curve flattening will need more than one cpi trend to show that it is rolling over. we expect that to concern -- show in the last stages of this year. we are expecting slightly above last month. the court may come down a bit. that is not enough for the bond market to react strongly in a way and change its yield curve flattening for now. maybe 35 basis points. haidi: there is an enduring narrative that inflation will be a much more sticky and backdoor

issue for markets going into next year -- sticky issue going into the next year. we see that in the dollar? >> this is different from what we have experienced in the last two decades. the yield curve is steep and it may not be room for the curve to invert even further. we are not fighting it for now. the u.s. dollar, it is trading at. high levels. look at the level of real yields, there is room for the dollar to appreciate. janet yellen says they are not wanting to intervene in the currency. the fed is trying to get inflation down.

the fed is not hurting that direction. shery: how confident are you in inflation protection at this point? >> we like being in a long inflation protection. we saw the inflation rates falling back to the low end of the range is. we are engaging with the markets. we like layering in inflation protection. shery: what are we going to see in terms of the opera performance in the asian markets include australia? not to mention korea, new zealand, we are getting a rate decision today. >> we are likely to see korea and australia will be next. both of those markets have been ahead of many other central banks and we see reason for their bond market to actually

outperform such advance in their cycle and inflation elevates higher than i would expect. it is not quite where it is in the u.k. and europe. there is room for outperformance in those bond markets relevant to other bond markets. looking to get the liquidity followed by the font and benchmarks. -- on and benchmarks. although yielding develop -- that is through low yielding developed markets. haidi: if we see a meaningful breach beyond purity, or does that take us next? what is hinging on the trajectory? >> the ecb is making the next stop to see what happens to the currency. unlike the u.s. dollar, they may know what a significantly

unhinged euro because of what that means for price pressures. they have their work cut out for them. i think it is a volatile fashion, we could see more of a response from the ecb than we have seen when the fed goes to the currencies. it could be quite important for the euro. shery: it was good to have you with us. remember, if you like any of the charts we showed you throughout the show, gtv is your function. browse recent charts to catch up on key analysis and to tourists for future reference as well sheo

the start of trading, tokyo and seoul.

in korea, it has a central bank is set to deliver its rate decision with most economists expecting a 50 basis point rate hike. bds will appear in two disney plus shows -- bts will appear in two disney plus shows. charlie b is bidding for a korean burger brand -- jolly bee is bidding for a korean burger brand. janet yellen says that they are not intervening to slow the yen fall. the nikkei news says nikon will withdraw from slr cameras. bloomberg has learned that a company and tends to buy for kryst, softbank. a good value fortis are more

than $1 billion -- it could value fortress for more than $1 billion. haidi: a 4.3% increase in salary. hyundai says it would total salaries rising around 9%. company management refused to extend the retirement age. union members vote on the offer next week. sewing the parents of investment, a more market declines ahead. a mild u.s. recession arriving for next year due to tight financial conditions and geopolitical worries. it also sees china facing challenges leading its growth targets. if i put a percent return for the fiscal year. >> i would expect a reversal from the peak sometime in the next few months. when it comes down to a level which is acceptable, including for example russia, ukraine

situation. haidi: peloton will stop building exercise bikes and treadmills at his own factories are rely on production partners instead. this is part of a ship to cut costs and streamline its strategy. peloton booed during the pandemic and then struggled as jim's reopened. -- gyms reopened. coming up next, opec gives the oil market outlook for 2023 with no relief expected from the price squeeze. we have the details just ahead. let us have a check in the market open in 35 minutes. a muted and mixed picture across asia and risk aversion with the yield curve story. flagging more risk of a recession. we are seeing more risk from the bok. expecting another 50 basis

points of rate hikes despite economic indicators suggesting risks of a recession. downside when it comes to the asia futures. nikkei is down. taking a look at the story when it comes to treasury, we have the he gauge of recession risks, 10 year yield dropping as much as 10.4 basis points below the two year rate. we have not seen a move of the of attitude since 2007. it is one of the most widely watched signals of recession risk. has robert tightening by the fed continuing to feed into the regrowth concerns -- the growth concerns. we will know more when we get the cpi but for the u.s.. also taking a look at fx because we had the touch of parity with the dollar euro. we watch for more meaningful

reach of the key level and the further direction as to where the pair goes from here given the willingness strength we have see in the king dollar and downside pressure from energy price risk for the common currency. the bloomberg dollar index is sitting higher at the moment. the aussie dollar also reflecting people back in risk as well. despite the better picture when it comes to trade and commodities, we have seen the aussie falling victim to risk aversion. we are watching for the covid case numbers as the economy suffers the risk of covid zero. suffers the risk of covid zero. this is cancer research requires bold and innovative thinking.

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the fed president of richmond is keeping options open on how the fed should go when it raises interest rates later this month. he says the right policies to keep interest rates under control. >> we are engaged in a challenging exercise which is to try to cool the economy down to normal levels. without the intent of trying to cool it down that the decline is calamitous. >> china has criticized taiwan's decision to send its vice president to mourn shinzo abe. a spokesman accused it of political manipulation. the response was more muted than usual. the vice president is the most senior taiwanese official to

visit in decades. hong kong has suspended nonemergency services as the city grapples with covid cases. elective surgeries are among the procedures affected. the latest outbreak push the number of cases to about 1000. officials warned infections could climb to as much as 6000 in two weeks. the liquidators of a failed crypto hedge fund have won permission to subpoena founders. it was tweeted on tuesday they will ride information about firm assets on what he calls a rolling basis. the liquidator is seeking information about bank accounts and digital wallets. 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. haidi: president biden will seek to salvage relations with saudi

arabia as he travels to the middle east, but his strip risks political embarrassment unless he is able to bring gasoline prices down. anne-marie has this preview from tel aviv. reporter: president biden is making his inaugural trip to the middle east. his first stop is right here in the city of jerusalem. the government recently collapsed and are looking ahead to november. the opposition is meeting with the former prime minister engine in netanyahu. one key focus has been to normalize more countries with israel. there won't be any massive breakthroughs when it comes to dialogue or peace talks with the kingdom but potentially more saudi airspace being opens.

the first president of the united states to fly from israel later in the week. at home, he needs the saudi help to bring gasoline prices down. shery: perhaps some relief. we are seeing the rally around oil prices under a little bit of pressure. brent and wti back below the $100 mark. it suggests there is no relief from the supply squeeze. su keenan joins us with the latest. it seems those demand concerns are winning out. su: fears are spooking the market despite the tightness in the supply situation. we have a stronger dollar having

an impact and the fact china now, we are seeing it below $95 in the asia trading, brent crude falling. because fewer people are trading and it's more costly to trade, there is less liquidity, that adds to the volatility and money managers have been the most bearish in the main oil benchmarks, west texas and brent, the most bearish since 2020. haidi: the outlook for next year seeing no relief from tight supply conditions. su: by all accounts, the supply

situation will not get better from here. the opec look suggests there is no relief ahead from market tightness. they also expect demand to outstrip supply by one million barrels a day in the coming year. meanwhile, we have the iea executive director saying nations around the world might have not seen the worst. producers are behind on output targets for 2022. that is why we believe biden is scheduled to visit saudi arabia as he tries to tame energy prices. meanwhile, gasoline prices have dropped. that is the benefit. the demands may be lower.

forecast cut by some 30% as the u.s. sees net gas supplies improving. haidi: su keenan. let's get for a look of how we are previewing markets, a lot of risk aversion right now. >> picking up on the expectation that china may not be the answer to oil markets and they could not see or keep up that level of demand, and that is being reflected in what we are seeing, the micro frequency indicator from our markets life team, passenger volumes and shanghai, the csi 300 really tracking those moves you see.

does not seem what we are seeing in fundamentals. it's a further headwind for the metal space, we have seen declines across iron ore, steel, copper. all of this down to the nature of infrastructure spending, china is focused on areas of water conservation, that differs from what we saw in the 2008 financial crisis the focus more on areas like building expressways, certainly as you said, allowed for investors to change some flashpoints. that is being reflecting in

bonds, that is spiking, that move index has been rising. we see the vix, this measure of the explanations, but the bottom line is it's adding pressure on investors to figure out where we go from here including the plan and what we can expect from the earnings season. haidi: adding challenges for the hotel operators. talking about the costs and strategy in response to those choices in a difficult requirement. that is just ahead. this is bloomberg. ♪

shery: a singapore based hotels operator says attracting the right talent at a time of uncertainty is proving a challenge as the company regains its footing through the worst of the pandemic. the senior vice president is

building a collaborative workspace. they spoke exclusively about making responsibly -- responsible choices on the road to recovery. >> we see light at the end of the tunnel. from a performance view, revenue is up 46% against last year. openings have been delayed for a long time, we have expanded brand portfolio. recovery in terms of occupancy and people than value. the next stretch is differentiation and driving rates to where they were in 2019. that of them last year, every year it's improving, it's about

60%. >> as we talk about recovery, there is increasing noises about a possible recession. how are you assessing the risk of that and how are you positioning for that? >> a huge risk is talent attraction. less in the recession, it's more around wage inflation. it's a big source of cost for us and keeping people in our industry. people are wary about being the ability to shock. i think a talent model that keeps people as well as the labor model that enables us to provide the same experience and level of service that is our brand promise is quite key. from a demand point of view, we used to be quite reliant on

international long-haul. from that point of view, i think we are better insulated. >> you want sustainability. what is the thinking behind that? >> a platform for development. that's always been brand origins. now it's a different landscape. he spoke to us in the beginning of this year so we go wide strategy. how do we continue that growth without doubling emissions and impact? we are baking it into every single brand.

part of the green transition. it will take a collective effort. >> it will -- what will it take with your customers? >> is part of our values. definitely resonating. it's never been seen as driving preference, but the amazing thing covid has done is people are picking this up as a reason for choice. 82% of customers will want to travel more responsibly in the near future, and are evaluating things like the type of food you provide, linens. i think it's driving consumer choice preference which is something we are glad to see. >> in the end, it's a business. how is that translating? >> we are looking at driving

loyalty. we don't see it as driving any price differentiation. it is more costly to make responsible choices. we look at what we consider an acceptable premium. compare that to cost of operating right now. the area we think it will drive premium is food and well-being. customers are willing to pay up to 20% more. we do think customers will come back to us. and drive loyalty in that sense. they visit us once, our brand promise, they will come back. for us, competing to win and keep loyal customers is our strategy, not so much gaining huge market share. haslinda: how does success look

like in the end? what would define success for you? >> i think we look at our company with two lenses. one, ownership. one is management. stewardship is the fundamental aspect of this. we don't see it as ours, we see it as contributing to a better world. success for us would be from an ownership point of view to see those values deeply embedded in practice today as it was 28 years ago. at the end of our transition, the people running the business. haslinda: are there negatives and being in a family business? >> when i first started, i felt the need for space.

as i have been getting older, with my own family, being able to work with my parents and brothers is a privilege. i am very happy for that level of closeness, intimacy and trust. i grew up with people who have -- i work with people who have seen me as a child. without a strong center or sense of what i want to do and bring to the table, it can be difficult. haidi: watch us live, catch up on past interviews using the interactive tv function. dive into any securities we talk

about. join instant messaging. this is for bloomberg subscribers only. this is bloomberg. ♪

shery: widespread declines in

china. one cio told us the fund is adopting a cautious outlook and is seeing more market declines ahead. guest: generally speaking, probably the worst behind us. once more important is earnings. partly a function of economic growth. includes companies like ev's or battery companies, it's part of a global trend. those areas become much clearer. other areas like consumption look attractive when you see the recovery in growth, but will depend on the pace of recovery.

>> some are saying 5.5% growth for the year is not achievable. it's closer to 3%. guest: when the numbers come out, it may surprise the markets negatively. you will see some volatility. from here, you see strong fiscal initiatives. the $1.5 trillion bond in the local government. monetary policy for mortgages etc.. a lot of risks on the horizon. doesn't matter with 5.5. sequentially, i think that will be seen positively. haslinda: what is your take on india? foreign funds are pulling money out, as much as 1% of market cap. do you see opportunities there? guest: we are quite constructive

on india in the medium term. rising oil prices, inflation. we do see a turn in the cycle. the ecosystem is vibrant. haslinda: at some point, the strong dollar will impact all asset classes, won't it? the pain will continue. guest: it is impacting oil markets. it's one of the headwinds to u.s. earnings we expect to see this year. once you get to a point, if we talk about a u.s. recession, the point where you see a turn in monetary policy, that's probably when you see the direction of the dollar change. it cannot be a one-way thing forever. haslinda: the biggest worry for you as an investor?

guest: two big areas. one is inflation. we need to see that come under control. we need to see where we make the transition. haslinda: when? guest: tough to say. i think you will see a reversal from the peak sometime in the next few months. then, when it comes down to a level of doctors. russia, ukraine situation. that is something which does not see a clear entry, it will lead to energy prices a little. those are issues we need to worry about. more importantly,, governments

not being able to feed it each other, that helps mitigate major issues such as climate change. shery: speaking with bloomberg's chief international correspondent. we are getting breaking cases when it comes to shanghai. new covid cases paul found in quarantine areas. that's according to state news. we continue to monitor the situation. hugely impactful. the risk of parts of major cities returning to lockdown. as we heard from earlier reports, these mass testing drives are disruptive and have huge implications for the economy. we have china trade data.

big day when it comes to the central bank, these asian central banks have been at the forefront of the tightening cycle. shery: i am very excited about bok. if we see the 50 basis point rate hike, interest rates not seen since the 1990's. we will be discussing that decision, but before that we have black box saying the old investment strategy of buying cheap assets is no longer in vogue. the market opens our next. -- are next. this is bloomberg. ♪

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shery: we are counting down to

the major market opens as we await policy decisions from korea and new zealand. on this day we also have trade data out of china. suffice it to say, we have a pack show. haidi: on a day when recession risks flash across u.s. treasury, magnitude which we have not seen since 2007. a lot for investors to contend with. let's get you straight to hong kong. >> just a few seconds away from the open in japan, south korea and australia. we have seen the continued rebound. some analysts expecting traders betting in the options market that we could see 3.2% by year end.

in terms of what we are seeing in the yen, stronger against the greenback but trading in a tight range ahead of that important cpi release later today in the u.s.. in terms of the equities, still, we got the 1.8% drop in the previous session. let's turn to korea. the bank of korea decision could calm as soon -- come as soon as today. inflation at a 23 year high. there are signs of the economy holding up. there are signs the labor market is resilient. keeping and ion what we have seen with the korean won, the biggest flag yesterday, very sensitive in the tech space, the

selloff in tech stocks. the nasdaq declining, reflected in but we are seeing in the tech heavy index. turning now to the energy markets, let's take a look at how brent crude opens. still lower, building into the 7% drop. that is a big weight on the energy and materials sector. opening weaker, still a little bit flat. we are tracking moves in the treasury, the rbn, 50 basis point move pretty much baked in. shery: we will be watching how the markets react. asset managers believe -- achieve strategist joins us now. this is not necessarily a market where you buy the dip.

guest: good morning. we are going through something from a paradigm shift. it's been called the great moderation. kind of a pleasing era of no inflation which allowed policy to support growth and markets. we think that is over. we are moving to a more volatile world where supply is much tighter, driven by a variety of factors that is much more difficult whether you are doing the weekly grocery shopping, whether you are a central banker trying to set policy.

it will be a more challenging macro backdrop. shery: accelerating inflation. is there something we can do about that? guest: the first thing central banks need to recognize is they can't fully solve for inflation. central banks, the fed is a big one. central banks can crush demand and bring inflation down

accordingly, but central banks need to recognize we are in a different macroenvironment and therefore the trade-offs, if they choose to solve for inflation, it could be potentially a meaningful slowdown with implications for growth, employment, so forth. >> critical is a recognition -- what is critical is a recognition for a challenging paradigm, then central bankers can make it all over the world and will have to pick their spots on how much it's been in the last 40 years. haidi: how do you invest in this tight rope, navigate these distortions?

ben: couple of things. the uncertainty presents opportunity, so there is something of a silver lining. we do not think it's going to be normal to buy any dip we see, which has not been the worst strategy. we think that's over. investors of all strides will have to be more nimble and more focused around selectivity rather than just a broad, by any did we see mentality. fundamentally, central banks are not there for us. i think a more cynical approach, less comfort, sadly that seems

to be behind. more selectivity, morning bill, we think that is true. haidi: are you factoring more on the ethics side as well? -- fx side as well? as we continue to watch a more meaningful reach of euro-dollar parity? ben: financial conditions continue to strengthen. the fed wants that. interesting question if there is kind of a fed call. they are kind of relaxed about the dollar going stronger, that kind of helps. conveniently, they are quite relaxed about equity markets

continued to be challenged. we do not think this is a moment to buy the dip. they are totally dedicated to their mandate, keeping inflation low. obviously, we have a likely high inflation print baked in. i think the fed will continue to lead into that, to reserve credibility. whether it's dollar strength, i think -- haidi: great to have you with us. let's get you a look at the movers and the energy space. >> just taking a look at the asian energy companies. we are seeing brent crude trading below the $100 level, not reflecting the fundamentals

of the market because supply is tight, but certainly a sign of demand concerns. the risk of recession in the u.s., covid in china. energy companies are slumping. let's turn to airlines stocks, because they are the major beneficiaries when we do see lower oil prices. we are seeing them jump across the board. this is a reflection, keeping that forecast for the second quarter, highlighting the strength of travel demand the summer, even as we see higher import costs. let's take a look at the bitcoin space. it going declining below the 20,000 level. in terms of the market reaction, little bit mixed. these are companies that operate exchanges or own stakes in exchanges.

let's check in on what we are seeing with softbank. this is the saudi arabian, abu dhabi sovereign wealth fund the could be buying fortress, and asset manager from softbank, and that deal would value it at about $1 billion. haidi: we continue to see consolidation. let's turn to vonnie quinn. vonnie: the richmond fed president keeping options open and how big the fomc should go when it raises interest rates. he says the right policy is to keep inflation under control. >> we are engaged in a challenging exercise. trying to bring inflation under control but without trying to cool it so much, the right

policy is to get inflation under control. >> janet yellen is showing no willingness to support a currency intervention to support the yen. after meeting with the japanese finance minister, she said they did not discuss intervention and g7 nations should have market determined exchange rates. opec oil market outlook suggests no relief for squeeze consumers. to fill the gap, opec would need to hike production, but members are falling far behind due to underinvestment. president biden is urging middle east producers to open the taps. china has criticized taiwan's decision to send their vice president to mourn shinzo abe. a spokesman abused taipei of political manipulation. beijing's response was more

muted than usual. he says it was a personal decision. 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. nine vonnie quinn. this is bloomberg. haidi: still ahead, the bank of korea looks set for a rate hike to curb rising inflation. analysis later this hour. number crunchers think chinese export growth probably slowed in june. we will get a deep dive into that research, next. ♪

haidi: potential price action and risk.

we are expected on the economic slowdown, risks of capping inflation. ozzie stocks are off by one quarter of 1%. kiwi stocks are holding pretty steady of about half a percent going into the rbn decision. shery: let's discuss the rate decision. the 50 basis point move.

>> jumbo moving inflation. the bank of korea has opened the door to the 50 basis point rate hike. cpi up to a 23 year high. the bank of korea was one of the very first central banks to start hiking rates. this will be the first 50 basis point rate hike in 23 years. since 1999, when they first started seeing interest rates for monetary policy. they are on the move and ready to get more aggressive. they hike the key rate back in october of 2021. they did three hikes. there one of the were central

banks to do 50 basis point hikes, long before the fed. they are ready to do another one. investors are saying by the end of the year they will have the key rate up to 4%, as inflation gets very hot. they are continuing to push on inflation. haidi: when it comes to the big inflation report expected from the u.s., doesn't move the dial at all? >> that is the question. so many fed officials have come out and said i am in favor of a 75 point hike, the second one in

a row. when you expect year-over-year continuing to rise, the monthly level is expected to be up 1.1%. it will have risen 1.1% in three of the last four months. gas prices are a big culprit. 15 year high. they top five dollars a gallon by may adjourn metrics across the country, a company tracking grocery prices, they are at a 15 year high, show no signs of coming down, goods prices are coming down but people figure service prices will rise and rent, home prices, the amount of money people pay the mortgage, continuing the core cpi will get lower. so much focus on the headline and so much realization that

even if commodity prices come down, they are still very high and the recession risk is pulled back, people start buying commodities, that could push oil up again. that is the concern the fed has. they have to break expectations and be aggressive. haidi: the prolonged inflation. a lot of concern. kathleen hays there. let's take a look at futures and europe. we saw a pretty muted session. europe is looking more positive, futures and germany, widespread inflationary fears for the region, but it was a start and stop session. not a great deal of conviction

in that. talking about the euro, what comes next in terms of a meaningful breach. the euro could sink to 90. bloomberg saying china's export growth slowed in june following multiple outbreaks. the chief asian correspondent joins us now. what will you be honing in when it comes to that data? reporter: confirmation that export growth is slowing. despite the conversation about the peak, it's expected to show a growth in exports probably slowed to 13% year on year,

lends itself to the idea that the great merchandise boon since the pandemic began, we are getting more into the reason with south korean export numbers. the industry production side of things is not back to normal levels just yet. overall, people are looking for numbers to confirm the trade boom has peaked and is fading. shery: especially with recession fears mounting here in the u.s. and europe. what is the outlook in the coming months? reporter: a lot of people are

looking at what happening in europe and the u.s., all of the commentary coming out of there is consumers are tightening their belts. this is something we have picked up and factories are saying the order book months out from now is quite weak. there will be seasonable pickups, the other point to keep an eye on is what to do the u.s. with trade terms? most people say that's not going to be a game changer, might have -- what we are looking at is a slower china exports story. the question is how slow that can become.

shery: came on for twitter and elon musk. we will take a look at what the lawyers are saying, next. this is bloomberg. ♪

shery: twitter has sued elon musk over his $44 billion takeover offer and told a delaware judge the world's richest person mountain a public spectacle, then changed his

mind. let's get more details. reporter: what is twitter asking the court to do? are you still with us? we know the company has formally sued elon musk. haidi: we just continue to watch developments in the drama. i wonder whether twitter even once elon musk to buy the business, how much destruction there has been for the share price. we will get some more details on that top story a little bit later. google is planning to slow hiring for the rest of the year due to a potential recession. the ceo has emailed staff saying the company will focus on

engineering and technical roles through 2023. they are calling that -- i would dobby's sovereign wealth fund is said to be in talks to acquire fortress. sources say they are discussing a deal that would value fortress at more than $1 billion. they have long been a softbank rival. peloton will be stopping to build bikes at its factories. a strategic shift to cut costs. peloton boomed during the pandemic but has struggled when economies reopened. they have shaken up the executive team. shery: we continue to see the strength in the u.s. dollar

having repercussions with the rest of the asian currency space. the japanese yen is trading at the 136 level after falling to a fresh low. take a look at the korean won. little bit of strength at the moment. the be ok decision can come out at any time. we are expecting a rate hike, it comes after declines around the 2009 low against the u.s. dollar. we will talk oil, next. this is bloomberg. ♪ psst. girl. you can do better. ok. wow. i'm right here. and you can do better, too. at least with your big name wireless carrier. with xfinity mobile, you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill, over t-mobile, at&t and verizon.

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>> 30 minutes into the trading

session for japan, we are counting down to the rate decisions expected from the rbnz and bank of korea it could come in the next 30 minutes. taking a look at markets ahead of those decisions, in terms of what we are seeing in new zealand, the kiwi dollar is holding against the greenback. fairly range bound, unlikely to see any major moves, rate hikes largely prized in. -- priced in. the 10 year is moving higher overnight with the rebound, but still perhaps an indication that some are expecting the rbnz statement may be more hawkish than what had been anticipated down to the continuing pressures we are seeing around inflation.

inflation rising, 175 basis point moves since october. bok expecting to hike rates and certainly we are seeing the economy looking more resilience, we did just get the jobless figures out this morning, holding below the 3% reading. it's a sign the labor market is looking tight. we are seeing that reflected in wage pressures as well, which is another factor that would force the bok to hike rates. we could see the feedback in the loop of prices and pay emerging. haidi: a vietnamese vehicle maker has signed on to raise $4

billion for a u.s. production plant. credit suisse and citigroup will be raising funds with cars set to roll off the line by 2024. credit suisse is arranging offshore securities to the tune of $2 billion. citigroup will act as an advisor with the minimum value of around the same amount and that will be going towards the development of the u.s. factory. on track to start the production of cars by 2024, and there have been ambitions, one million cars globally within five to six years. pretty ambitious. they said last month the target is still achievable. shery: let's turn to president biden. he will seek to salvage relations with saudi arabia as he travels to the middle east.

he risks political embarrassment unless he is able to bring record gasoline prices down. anne-marie has this preview from jerusalem. reporter: president biden will be making his inaugural trip to the middle east as president of the united states, when it comes to breakthroughs, the israeli government collapsed. the caretaker prime minister will be meeting with the opposition leader, benjamin netanyahu. one key focus has been to normalize more our countries with israel, and a key focus is saudi arabia. there won't be any massive breakthroughs when it comes to dialogue with the kingdom. potentially, more saudi airspace being open to more israeli flights. the president is one of them.

the first president of the united states to fly from israel to saudi arabia. he will be meeting the king, crown prince and other leaders. it's an interesting moment. the president is backtracking on a campaign promise to make the kingdom a pariah, but at home he needs help to put more oil on the market. in jerusalem, annmarie hordern. shery: president biden getting relief from oil prices, falling again. back below the $100 mark. despite the facts the 2023 outlook suggests there is no relief from the squeeze of supply. >> you have the stronger dollar, adding on for china is battling surge of covid cases.

check out west texas intermediate. extending that the climb in asian trading. money managers have become more bearish? haidi: opec showing no relief from tight supply >>. couple of signs it can get worse.

in fact, they believed demand growth is likely to exceed supply, energy agencies might not have seen the worst global energy crunch. buckle your seatbelts, it could be worse. producers are behind on output targets, the biden administration believes there is more room to pump. there is relief however, finally seeing take a look at natural gas as it sees improving supply ahead.

haidi: bloomberg subscribers can get that on the terminal. let's get you to vonnie quinn in new york. >> the world health organization is urging steps to her covid-19 transitions admit a new wave of infections. the director general warned new variants of the strain are listing case numbers and death. europe is at the center of the new wave. an estimated 2.1 million people have tested positive. hong kong has suspended nonemergency services as the city grappled with a surgeon covid cases.

the latest outbreak has pushed the number of cases in hospitals to about 1000. officials warned daily infections could climb. the committee has been told attempts to conduct witnesses have been sent to the justice department. new owners are grappling with luxury cars. the u.s. consortium discovered it doing due diligence and were later told authorities are investigating. they have chosen a former billionaire. 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. shery: back to the twitter lawsuit against elon musk. let's get the latest. what is the suit asking the court to do? reporter: twitter is asking the court to tell the world's richest man that you signed a contract, better honor it. the deal specified all legal disputes have to be heard in delaware. the premier court in the world that making disputes.

business experts that can parse through these complicated merger and acquisition problems. twitter is hoping to have this case tried starting the 19th and claim it will be wrapped up in four days. i have my doubts. haidi: can this help us gauge what happens here? reporter: the law in delaware is pretty clear. elon musk is a big boy. the world's richest man, some said he is the world's smartest man. he signed a contract with the battalion of sharp lawyers, who had due diligence on the contract and he agreed back in april, the valuation is off,

coming twitter -- telling twitter we did not do anything to blow a hole in this thing and you agree to pay. we want our money. haidi: the latest as we continue to be intrigued by the twists and turns in this legal battle. next, the twist and turns when it comes to the bank of korea. the jobless rate is staying low, a sign of economic resilience, more leeway for the bok. they are expected to hide 50 basis points today. this is bloomberg. ♪

shery: evenly split we are not seeing clear direction. talking about consumer discretionary staples leading the gains, perhaps not surprising given we are seeing wti and brent fall below $100

per barrel. this as we continue to see inflation fears. including the bok, the expectation is 50 basis points. we will continue to watch for that anytime now. haidi: any minute now. it's always a very exciting time of the month. a senior south korea economist joins us, great to have you with us. does this tell you there is a buffer the bank of korea is operating with, more resilience to rising rates? reporter: today's labor market, 2.59%, it's a bit higher than

the market consensus. it means the korean labor market is resilient, and could -- that shows the relatively healthy domestic demand condition. haidi: what are the biggest concerns when it comes to the weak points in the economy for the bank of korea? in terms of how potentially well entrenched the expectations might be? reporter: last month, consumer sentiment showed some softening of confidence. and also inflation expectations. also, last month the cpi is

probably the most concern at this moment. however, other data shows the priority of policy to contain inflation at this point. shery: we have such a week korean won. if the korean won helps exports but at the same time pushes inflation concerns, is it a net positive or negative? reporter: at this point,

probably a bit of a negative because it is pushing more on the inflation and putting higher upward pressures on domestic price pressures. however, like you mentioned, korean exporters, but at this point the trade balance is unusual. it is not because of exports, it's because imports grew more rapidly than exports. it's mainly due to the higher commodity prices and we think this trend will continue for a while. until the global commodity price comes down meaningfully.

korean exporters will have benefits from high currency, however, the concern is more on the inflation side. shery: tell us more about that, especially the new governor's policy leanings. guest: the governor is very clear that the main mandate is inflation targeting. we are seeing 6% of inflation, and korean growth is staying relatively healthy based on reopening and fiscal policy. the bok will take a policy priority on price stabilization. shery: when it comes to the domestic economy, how bad is

household debt? that was a key concern when it comes to south korea, the hot property prices. the concerns are these perennial issues for the economy. guest: that is true. household growth was way faster than gdp growth. it's a concern for policymakers. now that we are seeing some stabilization in the housing market, it's partially due to the high credit conditions imposed by the previous government. also, the mortgage rate has been rising from 3% to 6%. that will probably have impact on pulling down the real estate market. [indiscernible]

the thing is more than 90%, 80% of household debt is [indiscernible] which means the higher rate environment will increase the debt service burden for the coming months. haidi: does that mean there is a heightened risk of a messy, accelerated deleveraging? guest: at the same time, the government -- shery: sorry to interrupt, we are getting the bank of korea rate decision. 2.25%. as expected, talking about a 50 basis point rate hike, 15 of 19 economists had expected it. we are talking about the largest increase since the bank of korea started using the interest rates

as a tool in 1999. the bank of korea raising the rates to 2.5%. give us a reaction of this rate hike and what can we expect in the subsequent policy now that we have this 50 basis points outsized hike? guest: just announced, the first time ever. it shows the strong policy commitment to price stabilization. at the same time, a strong signal to the market to do their best to meet the inflation target mandate. however, the market will be closely watching what the governor has to say at the press conference and wondering whether

today's decision was unanimous or if there were a couple against growth. it is the so-called neutral rate, and probably from now on the bok will be more cautious. that is why they will return to the normal rate hike of 25 basis points in october. we believe the terminal rate will reach 2.75%, however, this rapid rate hike

they will probably be entering into and easing cycle. shery: really good to have your reaction to the historic rate hike. the ing south korean economist. turn to the bloomberg for more. also, we have the upcoming new zealand decision ahead. haidi: more on the direction of global monetary policy tomorrow. loretta mester joins us to talk about rebalancing inflation and recession risks. don't miss the exclusive interview on daybreak australia. this is bloomberg. ♪

shery: watching a debut that falls as much as 15%. haidi: we will speak later with the overall outlook on lithium prices and china. that is just about it. the market coverage continues. this is bloomberg. ♪

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>> i was very successful at listening to my own -- i'm perfectly happy to go in every different direction.