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haidi: a very good morning and welcome to "daybreak: australia." i am haidi stroud-watts in sydney. annabelle: i am annabelle droulers in hong kong. we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. the top stories this hour. stockmarket optimism of evaporates, as apple moves to tap the brakes on spending and hiring, to brace for a possible recession. haidi:. haidi: wall street is also looking to reining expenses, goldman sachs planning to slow hiring and potentially bring back job cuts. shery: and china considers a grace period for mortgage payments as it races to restore confidence in the housing market. u.s. futures are unchanged at the moment. the s&p is slightly up, after a lost ground. we saw the s&p giveth gains of 1%. we had apple's plans to slow hiring impacting the markets.

apple is a company that did pretty well during the pandemic. they have done well, weathering many different economic crisis, so having them react to the fears of recession is not doing well. the twos and tens are inverted. crude prices today about $100 a barrel, though we are seeing a downside today. goldman sachs did pretty well, a bit of a mixed picture for bank of america. take a look at the earnings picture. we have 33 earnings results so far. a little bit mixed. when it comes to the earnings beat overestimates, it has been around 60% which is low, compared to the two-year average of more than 70%. we have more than 70 companies reporting earnings this week. we will continue to watch where we're headed, especially when it comes to guidance about the broader economy. annabelle: and of course, will we see investors overlooking that? because j.p. morgan is saying that investors could interpret

bad news as good news because it means we are at or around the peak of the earnings trough. we are seeing asian futures looking mixed across the board. australia illustrated like this. new zealand just online. we are keeping our eye on the dollar, seeing a slight fullback. and we are seeing the yen lifting off its weakness against the greenback. beyond the u.s., we are also looking at china, specifically with their property sector, we have the homebuying protests, people refusing to pay their mortgages. the latest on that is that authorities could offer a grace period to new homeowners. certainly that does offer some level of support, but still, it points to a deeper problem in the property sector. those issues, very difficult to fix. . a big rally in metals, and were also watching gas. haidi: yes, watching gas prices.

it seems to suggest some analysts that prices will continue to be capped, as we see supplied dwindling to markets in europe. we have seen some of these contracts coming under pressure, given several gas buyers have received their letter dated july 14. it applies to supplies that will be delivered over the past month. the declaration of force majeure on several european gas buyers, suggesting it plans to keep the supplies capped. that reinforces russia's group on the region's gas suppliers -- grip on the region's gas suppliers. it creates a little bit more volatility in what is already a hugely risky week for energy supply. shery: so much depends on china. chinese demand when it comes to pricing, and we are getting the property crisis in china.

bloomberg has learned that beijing may allow homeowners to temporarily halt mortgage payments on property projects, without incurring penalties. we will see if that will inject confidence into the markets, or if it makes it worse for owners of completed properties to also protest for relief. and we have been following what is happening with apple. it is planning to slow hiring and spending next year in some divisions as the company copes with a potential economic downturn. and u.s. banks are beefing up workforces as speculation knocks the dollar off its peak. for more let's bring in our finance reporter, and mliv contributor, garfield reynolds. mark, the news from apple had such a repercussion on the markets, already angst he about a potential recession. mark: people see apple as a bellwether not only for the technology industry, but as the economy as a whole.

apple was one of the companies to start to shut down stores and offices in relation to covid-19 in 2019. february and march, they were already starting to make precautions and make changes. so society and investors sort of trust apple's view of what will be happening economically. these are not significant changes, but they will be aggressive fullback skin some divisions related to hiring and spending growth. typically apple likes to raise headcount may be 5-15% year. you will not see that in all teams in physical 2023 and into calendar 2023 as the cfo's really tries to understand what is happening in the economy and how can apple avoid layoffs, major changes, and how can they keep the cash balance intact. haidi: mark, talk to us about the pressure points. there is risk in the chinese market and also there being hit about these antitrust issues on

apple pay. mark: this lawsuit about apple pay is an ongoing issue that has existed almost three years, the idea that the top to pay chip inside the iphone can be used with apple pay and the wallet up. for instance, paypal, which art, they cannot develop their own pavement app so they -- wechat, they cannot develop their own pavement app to use in the apple store. if spending will decrease on products, if they will not bring in as much revenue as oedipus abated, they want to make sure -- revenue as anticipated, they want to make sure they are allocating resources to the areas that will be most important in a recession. services versus software. maybe that is in hardware products as well. shery: one sector that rally today was the banking sector. jennifer, what did you see in terms of the performance of

goldman sachs and bank of america today? jennifer: we saw some pretty big increases. one of the big stories is the federal reserve continue to aggressively hike interest rates . it will boost interest income for these banks. not just bank of america and goldman sachs, but jp morgan and citigroup last week up nice numbers. they have the federal reserve to thank a really big boost to their income. haidi: we are seeing some interesting hiring trends, even as we see a super tight labor market, as well as concerns about recession. we are still seeing the labor force being added, too? jennifer: it is interesting, the banks have been behind some of the big tech investments and so they are playing a bit of catch-up and having to hire more software engineers and coders and developers. that is where you are seeing the bulk of this happened. they are also interested in

advisors and adding to their wealth management ranks. but goldman sachs today came out and said, similar to what mark was laying out with apple, they will pull back on hiring and make sure that the headcount numbers stay a little bit more under control, just as they deal with the huge slump in investment banking that we have seen this year. shery: and garfield, we still have hundreds of companies on the s&p 500 to report. what are we expected terms of the market impact? garfield: clearly, we have to be nervous about further developments along the lines of what has happened with apple. that was the fear for a lot of investors into this earnings season, that this is the earnings season when the stock market will be forced to price in more of the recessionary concerns that the bond market in many ways has already done. so that would be the concern. it is also part of what is helping to keep a bit of worry about treasury yields because of

the expectations that equities remain vulnerable to further declines. there have been less upside surprises than before, and the potential for sustained downside surprises in the earnings guidance will keep investors concerned. haidi: and when it comes to the dollar, a bit of a reprieve for emerging markets and asian currencies, who saw the worst two day decline for the greenback in a month. is this just a temporary pause, though? garfield: probably a temporary pause. even though we have a bunch of mostly potential dollar-positive central-bank meetings coming up, the you see the and boj this week. we also have the gas situation in europe. all those dynamics are likely to be dollar-positive. next week we have the fed. by now, things have gone relatively dovish, so to speak,

to where the market had been looking that it might actually be that the fed manages to surprise to the upside. not that they will do a 75 basis points or more, but they might signal a willingness to keep going further than the market might be thinking. so it is possible the dollar is just pausing the rally now and mid-go further. it is getting close to a couple of levels where you might expect it would top out. but for now and that the next month or so. haidi: garfield reynolds, mark gurman, and jennifer surane, with our top stories. let's get to vonnie quinn to get you caught up with the rest of our first word headlines. vonnie: thank you and good morning. bloomberg has been told china may allow homeowners to hold mortgage payments on a stalled projects without incurring penalties. the proposal still requires approval from chinese leaders.

it is part of a broader push to stabilize and inject confidence into the housing market, when allowing time for developers to complete projects. russia's gazprom has declared force majeure on at least three european gas buyers. that means it will not fulfill its supply obligations due to unforeseen circumstances. gazprom had already been curbing supplies to europe. u.s. treasury secretary janet yellen has called on the so-called trusted u.s. allies to help fix supply chain issues. speaking in south korea, she called for u.s. partners to deepen relationships and diversify supply chains, to lower risks to their economies. she singled out to china, warning that beijing could use its market position to exercise geopolitical leverage. the field of potential candidates to replace boris johnson is narrowing. rishi sunak and penny mordaunt

retained the top two places in the latest conservative party voting. more ballots are scheduled for tuesday and wednesday, after which just two contenders will remain. johnson returned to parliament monday for a larger symbolic -- largely symbolic confidence vote. 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: still ahead, we look at the cost of china's covid zero policy, and the risks stemming from homebuyers mortgage boycotts, with our next guest. ♪ haidi: and we will navigate market relatively amid fears of a deep and prolonged recession. optimal capital director of strategist frances stacy will be with us. this is bloomberg. ♪

>> u.s. consumers remain quite resilient. >> consumers and businesses have been resilient so far. >> spending remains well above pre-covid levels. >> i expect there is going to be more blood to the team and more uncertainty. >> the environment is very complicated, lots of uncertainty. >> we see inflation deeply entrenched. >> we might head into some form

of recession. >> the data privacy tells me that the u.s. is on the cusp of a recession. >> it is unlikely to be a deep and dramatic recession. >> we have managed a recession before, we will manage it again and do quite well. haidi: u.s. banking ceos there on the health of the consumer and the risk of recession. our next guest says she's looking for any indicator that makes the hard landing more probable. with us now is frances stacy, director of capital strategy at optimal capital. you are looking for signs or indicators of a large credit event here. frances: certainly. because if a look at the previous iterations of tightening, they stopped reducing the balance sheet in october of 2014 and did not start adding it until september of 2015. and then they did their tightening cycle over several years and then had to pivot in 2018 despite having to pay but

despite the 20% selloff in the s&p 500, we still had liquidy shortage in 2019, which reignited quantitative easing before covid. so when i compare this tightening cycle for the last tightening cycle, we are doing a similar move, extensively, but within a one year period, and the balance sheet lift-off is overlapping. what happens is, the system isn't able to recalibrate all those moves. for instance, when we have these 75 bps upticks, the ceos are talking about the strength of the consumer. but many consumers are putting their stuff on credit cards. every time that you hike interest rates, the cost of servicing that that goes. two times, 75 bps june and july, sometimes if you don't -- sometimes you don't know if somebody is defaulting on something for up to 90 days. so we will have lagging

indicators. that is the risk, that we will overshoot before we realize there are problems with credit. haidi: so you think the fed will before it's to prevent. i find it intriguing that your top three calls are china gold and duration. frances: that's the u.s. dollar has been reflecting the tightening cycle, the strength in the u.s. dollar. it is in the short-term, overbought. i am looking to see a meaningful reversal in the dollar. if it is a meaningful reversal in the dollar, you have a negative correlation with gold. . gold is in the short-term oversold. i am expecting for it to go down. i am watching that. so a reversal in the dollar could be an early indicator. i am also comparing that to the fact that even though we had this surprise to the upside on the cpi, we had a fourth floor high on the 10 year. so it is very interesting to see that. and we have waiting volatility

both in equities and particularly in the index ahead of the fed. shery: what about your call on china? many analysts are not satisfied with the policy stimulus that we were supposed to get by no. frances: it is true. china has a number of hike risks. i am not opposed to being tactical and to be fully transparent with viewers, if we had a 20% drop in china, it would affect 2% of our portfolio. we are still calculating that there could be a myriad of geopolitical risks there. but they are the only central bank that stands at easing. . we don't fight the fed, in the u.s.. let's of other things go on. we saw that despite the lockdowns during covid, the fed's fiscal stimulus overcame the shutdowns. so it depends how aggressive

china gets. i am just watching the chart right now and it is holding support. if it falls through support, i have no problem selling it. shery: what about the idea that what the fed is doing, frontloading both retakes, could give it more room to cut when needed, something that perhaps beijing does not have in hand, and the fact that we are seeing a systemic crisis evolving around the property sector again. frances: that is very true. however, what i am starting to see in the bond markets is that, the bond traders thus far, if you look at duration being off of its lows, it is already starting to potentially call the fed bluff, right. we are expecting 75 bps rate hike next week, yet we are seeing other indicators in the bond market. the fed is not going to pivot because it wants to pivot, it will have to pivot because it has to pivot.

we have a record amount of debt in the system and it needs to keep a particular amount of liquidity in the system in order to service that debt. we are draining liquidity at a record rate. china has less room for movement , just watching the technicals on china. but with the fed, frontloading these hikes could give them more room, but i think they will still have to pivot when they want. haidi: we have got a while to go in terms of this earnings season. do you feel like the records are adequately pricing in the macro backdrop? frances: i feel like earnings expectations, even though valuations have dropped dramatically, earnings expectations, they are still on an upward trend well growth is starting to look on the downward trajectory. so there is a gap being created there. i think misses are going to

be repriced. the whole narrative of the bank ceos is that the consumer remains strong, but the fed is trying to destroy demand. i don't have any anticipation. i am watching the relativity and then i will be very practical. shery: all this good to have your insights, director of strategy at optimal capital, frances stacy with her view on the markets. you can get a roundup of all the stories in today's edition of "daybreak." terminal subscribers go to dayb . you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

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omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world. shery: are quick check of the latest headlines. twitter has dismissed elon

musk's complains that he doesn't have information about spam and report accounts, as an irrelevant sideshow. in the latest court filings twitter urges a judge to hold a trial as soon as possible over musk's actions. softbank has put plans for a london initial public offering chip designer arm on hold, due to political turmoil in the u.k. government. according to the financial times, former prime minister johnson had been lobbying softbank to partially list arm in the u.k.. however, two u.k. officials playing a good rule in the talks resigned after china's government collapsed. ibm fell in lake street after lowering its free cash flow forecast due to the strong dollar and less of business in russia. it overstated results that topped analyst estimates, including a second-quarter sales jump of 9%. still -- that signaled

strong demand. netflix will ask customers in five latin american countries to pay a fee if they want to use their account in an additional home. customers will be asked to pay an extra fee of two hundred 19 pesos, or $1.70 in argentina, and two dollars 99 cents in el salvador, guatemala, honduras, and the dominican republic. the streaming giant blamed password sharing is another primary reasons for its lagging subscriber growth. haidi: we are just getting the hp production figures. a very difficult time when it comes to iron ore. bhp fourth-quarter output at 64.1 6 million tons. output coming that out at 460 18 hundred tons for the fourth quarter. australia iron ore shipments are just shy of 73 million tons. we will get more context around

those numbers, but we have certainly seen a downgrade when it comes to bhp. goldman sachs had anticipated downward production guidance not just from the company, but from mining stocks in the second quarter. still anticipating good earnings for the sector, but of course, there has been a decline due to the decline in iron ore prices. last week they tumbled almost 15% to around $100. that seems to have stopped. we see prices topping $100. a little bit more encouragement out of china in terms of grace periods for mortgage payments. we are watching the story very closely. shery: coming up, bloomberg has learned china may

vonnie: you are watching "daybreak australia." i am vonnie quinn with the first word headlines. the white house says it supports

limiting chip investments in china. the better administration says it continues to support what it calls strong guardrails. the senate began debating a bill tuesday that would deliver money for u.s. chip -- u.s. semiconductor manufacturing. sri lankan legislators are set to submit nominations for the presidential post, with voting due on wednesday in parliament. acting president ranil wickremesinghe is among the top contenders for the job, along with the leader of the main opposition. the presidency has been vacant since water bear rajapaksa fled to singapore and resigned last week. in italy, lawmakers in mario draghi's coalition are working on a last-ditch plan to convince the prime minister not to resign. bloomberg learned that some members of the five star movement are ready to turn their backs on party leader giuseppe conte they are trying to

determine whether that will be enough to allow draghi to stay on. draghi offered to resign next week. dr. anthony fauci is said to be planning to retire before the end of president biden's current term. bloomberg learned he will step down before january 2025, wrapping up a storied career as the u.s. government's top infectious disease expert and are seven presidents. he has served since 1984. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: traders are peering their bets on a 100-basis point hike from the fed on signs of moderating inflation expectations. let's bring in annabelle for some morning calls. is it too early to call a peak when it comes to price pressures? annabelle: that is what we are hearing. it was the big move in markets. we had seen traders pricing a 100-basis point hike, the odds of that at one in three.

then we got the university of michigan survey and we saw expectations moderating. goldman sachs is telling us it is too early to call a peak on this. here's what we heard from the chief global equity strategist, peter oppenheim are. >> the data last week suggests core inflation is still rising, well ahead of people's expectations and it is pretty broad-based. it is premature to believe inflation is going to come down quickly. annabelle: in that interview, peter also told us we have not seen the bottom for risk assets and to get to that, we will need to see a further tightening of financial conditions. the reminder that the rally in stocks could be built on flimsy foundations. but when we see some sustained recovery, peter oppenheim or said it will be tech and cyclical stocks leading the way.

shery: there has been a lot of optimism that perhaps china could provide support, but we are hearing more about the property crisis. any reaction to the mortgage payment boycotts? annabelle: the latest is that we could see it moratorium extended on payments to homebuyers and also that china could end up pushing its banks to lend more to developers to finish their projects. citibank's team has been looking at the consequences of that and they say we are not going to see too much distress in the npl's sector for banks, but we could see some unintended consequences . just touching on the size and scope of these protests, we are looking at zero .01% or mortgage payments during affected out of the total outstanding. but citibank says we could see some second-order effect. weaker property sales, access to funding for developers, and the financial health of local governments in affected. they see that these three banks here are the most vulnerable in

this situation. but their credit risk is looking a little bit manageable. shery: let's delve deeper into that. china could be allowing homeowners to temporarily halt mortgage payments and stalled property projects without incurring penalties, according to bloomberg sources. shehzad qazi is managing director at china beige book international. good to have you with us. how much confidence could this inject into the markets? >> this solution might provide some relief to homeowners who are clearly upset they may not get the apartments they have been paying for. but you have to take a step back and look at the property market as a whole. it is in pretty serious trouble. earlier this year we saw several months of improvement after a terrible late last year, but all of that has gone away. housing specifically took a real gut punch. prices are down, sales are down. shery: which is why there are

more concerned that perhaps property owners with finished projects could revolt and want some relief as well. how much help has come from beijing so far? shehzad: regulators are only now trying to step in and correct this problem. we don't know how big the problem can get as yet. clearly, it could become a real crisis. so that is why you are seeing regulatory action. my concern is, what happens in the property sector for the rest of this year and next year. this may stanch the bleeding for now, but it is not a long-term solution. shery: so what happens? we are seeing credit stress, banks also involved. could it be a systemic crisis? shehzad: i don't know that it could become a systemic crisis. china's government has the ability to socialize the losses at the end of the day, unlike the u.s. and europe. that actually has negative

implications, the biggest one being, how long do you keep throwing good money after bad, and what does that do to your long-term growth prospects. so there are concerning macroeconomic scenarios at play here even though it doesn't turn into a big moment. haidi: that this is not just to do with the property market it is the broader issue of debt and infrastructure financing, and we are starting to see beijing returning to the old playbook. you said in your report that local governments are finding it hard to raise cash from institutional investors, and now turning to retail investors. what does it tell you about resorting to this kind of stimulus again, for increasingly fewer returns? shehzad: i think there is certainly evidence that there is some amount of infrastructure development that has gotten started already. would assume we will see a little bit more of it in the second half of this year than the first half.

that said, a couple of things, i am not entirely sold that beijing would be going back to the old school way of blockbuster growth that we are used to seeing as far as infrastructure development and so forth, but the second day we have talked about, zero covid -- you cannot do fiscal stimulus if you will repeatedly shutdown parts of the economy, especially the most important parts. haidi: this is fundamentally an issue for the closed market, right? is the risk remaining that regardless of what happens with the property sector issue, whether it blows up or not, you still have household wealth intrinsically tied to property in this country. shehzad: yes, that is at the heart of the crisis in many ways. because of the property sector will see a lot of turmoil not only for months to come, but for years. we need a very serious restructuring over there. parts of it perhaps have kicked

off, and this turmoil reflects that. but as far as household wealth, as far as people wanted to invest more of their money in that closed economic system, their options are pretty risky as far as the property sector goes. shery: hyvee mentioned the idea of a closed economy here, how closed is it to the pressures globally when we see borrowing costs rising? we have seen hints of regulators now telling businesses, don't send your money abroad much right now because of capital outflows potentially. shehzad: certainly the concerns are there, in the equity markets and in capital markets. at the same time, i am not sure that you are looking at a very big problem. if you look at the scale, of course investors are getting more spooked. you are seeing higher interest rates in the u.s., moving many in this direction, but it is way too early to conclude that

somehow we are looking at some major capital outflow crisis, or so forth. haidi: so, incrementally, do you continue to see the debt burden for china continue to grow, data structures become ever more risky? and if there is one thing they could practically change about the growth model, what should that be? shehzad: one of the things, over the last couple of years we have seen which is quite startling for many is the fact that big stimulus got taken off the table that has really confused a lot of folks. you have seen endless amount of investment, terry saying, we are going to get big stimulus in china because that is how the government always dealt with crises. it hasn't done so this time around, which tells you that there is enormous amounts of de-leveraging that has taken place in the last couple of years, something to be lauded in many ways. the real question is, how do we see this take place in the next couple of years? can you have a disciplined and

sustained de-leveraging take place in that country, because if so, you are looking at a pretty serious slowdown in the growth rate serious, meaning that employment market. that can be politically risky for the party. shery: it was really great having you here in our new york studio, shehzad qazi. coming russia as gazprom declares force majeure on several of european gas buyers. what this means for supply. that is ahead. this is bloomberg. ♪

sherry: here is a quick check of the latest business flash headlines. goldman sachs planned to slow hiring and reinstate annual performance reviews that were suspended during the pandemic, as the wall street bank looks to rein in expenses. >> given the challenging operating environment, we are closely re-examining our forward spending and investment plans to ensure the best use of our

resources. as a result, we are taking a number of actions to improve operating efficiency. we have made the decision to slow hiring velocity going forward. shery: apple is set to plan on slowing hiring and spending growth next year in some divisions, as the company hopes for the potential economic downturn. sources told bloomberg that the division stems from economic uncertainty. apple is still planning an aggressive product launch scheduled in 2023, that includes a mixed reality headset. apple has been hit with an antitrust lawsuit over apple pay, accused of using its market power to fend off competition, and charging card issuers fees to boost their. . bottom line. . the proposed class action complaint marks the latest antitrust battle for the iphone maker. apple has been facing increasing scrutiny over its euros from government -- over the years from government

regulators. haidi: the world's biggest miner changed its earnings guidance. it has been a volatile time. what is the outlook? paul: it sure has been. bhp is not immune from the pressures inflation. it sees the effect of inflation lasting into 2023. but the guidance for next year, 278-290,000,000 tons of iron ore output and copper output raising 4% as well. the numbers were a slight mi ss. all of those key products, metallurgical coal, copper and nickel, were up on the quarter. and it coincided with a period of very strong prices for commodities, iron ore averaging 120 four dollars a ton in the past year.

despite the slump we have seen, iron ore prices were back about $100 a day, and copper prices recovered overnight. shery: china complained about excessive racing power from australia's miners. could that be about to change? paul: could be. beijing has been planning a new state owned company that would do things such as purchase raw materials and also oversee new projects, such as the project planned in africa in guinea, which is expected to help china diversify away from its reliance on australian iron ore imports. this idea has been around for some time, but now it seems to be taking form, according to people familiar with the matter. a number of materials executives in china have been shoulder tapped to be a new part of this state owned company, so watch that space. shery: paul allen in sydney.

gazprom is declaring force majeure on several european guest buyers. this may signal it intends to reinforce russia's grip on the region's energy. . let's get more from simon casey. we have already seen gazprom delivering less gas in the past few months. how much of a difference would this make? simon: it could make quite a big difference. we confirmed today that this letter that was sent out to several european utility is true. it is unclear exactly how much gazprom's total gas supply this affects. but undoubtedly, gazprom supply was already lower. maintenance was being carried out on the system. so this just adds to the entirety. and of course, it was just in the summer when a natural gas demand is relatively low in europe. it is increasing anxiety right now on whether this disruption will stick in the approach to winter when gas demand is at its

peak in europe. haidi: what do we expect when it comes to the risk of nord stream 1 not reopening this week? simon: the crunch will come on thursday morning, when we see if that has been completed, or whether it was a smokescreen just to turn off one of the spigots. and if that supply doesn't come back on -- i mean, there was a great deal in recent weeks that nord stream 1 would not come back on because this key piece of machinery was being sent to canada for maintenance. and then it got caught up in the sections. justin trudeau stepped in and sanctions were circumvented so they could come back to europe.

we are waiting to see if that machinery gets replaced and whether it comes back fully online. ultimately, whether or not gazprom supplies gas into this winter and beyond is really up to one man, at the kremlin. haidi: simon casey there with the latest. meantime, demand for cooling is soaring with the heat wave in europe, risking the supply of vital commodities as well. annabelle is looking into this. annabelle: we are definitely seeing pressure on supplies of commodities into europe. this major heat wave the continent. in germany, the riverine saw a key bottleneck, shipments of key commodities like call and gas that. pastor the continent. . water levels have significantly dropped, well below the -- in germany, we saw that river

rhine with a key bottleneck, shipments of key commodities like paul and gas that passed through the continent. water levels have significantly dropped. we can also take a look at what is happening in the seasonal factors. we are seeing temperatures much harder. this line looks at the 30 year average. we are five degrees longer and it is continuing to spike, before eventually dipping back down around late july. people are starting to look for air-conditioners as well. you can see the spike in searches for stores with air conditioner amidst the heatwave. shery: i understand, it is really hot here in new york as well. annabelle there with a look at commodities. be sure to tune in into bloomberg radio to hear more, and get in-depth analysis from

the databricks team, now broadcasting live from our studio in hong kong. plenty more ahead. stay with us. ♪

haidi: the qatar airways ceo says he is disappointed by heathrow's airport flight reductions.

he said the director of the border heathrow -- the director of the board of heathrow spoke of the disruptions. >> as a board member on the board of heathrow, i am very disappointed. but i will keep my mouth shut. >> are you going to abide by the rules and restrictions they put in place? >> heathrow has the right to restrict your flight, because they cannot overload their facilities. but my question to the management would be, they should have seen this coming, they should have made mitigating actions. i don't mind to reduce the number of passengers. but i need to be told three months in advance. because people, if you want to go on holiday, you booked your flight in march to travel in

july. and then i tell you just one week ahead that on so date, i will not be able to carry you. we have cost implications. all airlines have cost implications. this is the problem. i sympathized that it is not in their hands. companies who were given licenses, there was not a proper diligence to make sure their financials are strong to weather these kinds of issues. it is all about money. for me as a ceo, i will abide by any rule by heathrow or anybody else, but we need to get enough time to tell my passengers that there is no booking on three months ahead. >> you are in a protracted legal battle with airbus right now. are you still an airbus customer? >> i am customer. i have 350, 23 of them to be

delivered by them. i have 50 +30 options, three 21's for them to deliver to me which they have walked away, saying that we cross defaulted. we did not cross-default. it is a separate contract. the problem is they have taken so much orders. they have supply chain problems, so it was nice to walk away from a contract they have, and we have full confidence in the english courts and in english law and the judge in london will decide if they were right or we are wrong. and we will abide by whatever decision the judge takes. we are open to settlement. >> what would it look like? >> we have up to now, 18 months that we are having this issue. we are open for a settlement. but there is no incentive for

airbus to settle, because although in public they say they want to settle, we don't see a proper, amicable proposal to fix the problem first. that is acceptable to a regulator and to me as the manager of the airline. and they need to admit, which they have at the end, which in the beginning they were just saying that it was a issue. to us it is the surface degradation of the airplane, something that is happening below the paint they have now agreed in court that there is a problem. they also admitted in court and in london that they don't have a eminent fixed for it -- permanent fix for it. ♪

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