heidi: you are watching daybreak

asia. shery: we are counting down to the major market open. the stock rally said to continue in asia after big gains on wall street. the worst of this year's equity may be over. earnings optimism is a cute driver, netflix seeing a return to growth as a reportedly smaller than expected subscriber loss. crypto's rally with big breaking out of a month long training ranch will get the full case at the bloomberg crypto summit. annabelle: the big question is have we seen the worst of the equity rout? we see big gains, new zealand trading a percent higher. we are looking pretty flat. a lot of optimism around

earnings, we had the serious rally on wall street. we are also keeping an eye on the aussie three year yield. i want to point out unnecessarily market moving, we have the australian government announcing the first review into the rba since 1990's. let us also pull up the terminal tart and look at the other factors driving the equity -- chart and look at the other factors driving the equity. giving up a percent, that is also the other question here. we are seeing the peak of the dollar. shery: we have seen the weakness in the dollar except against the japanese yen. the s&p 500 saw the best day in three weeks. all 11 industry groups gaining ground. we have a volatile earnings season.

the recession fears, any outside supervisors are leading to the outside gains. netflix, not to mention we are also watching twitter and tesla reporting tomorrow as well. we have the 10 year yield topic 3%. we see how long that continues because we saw a gain until 3.5% mid june. appearing back those gains in yields as soon as we talked the level given recession fears as i mentioned. heidi: garfield reynolds, whether this is setting up, given the tailwinds from overnight? >> i would say in a lot of ways this is a rally that equity investors have been waiting for. are we there yet rally? it is not a lot of fun, that has

been the stock market. at some stage, you get past the worst of it and it is all uphill from the thick. -- from there. the basic idea is when is the capitulation happening? when is all of the bad news priced in? there is hope ruling that all of the bad news has been priced in. we will see how sustainable that is because there is a lot of bad news to price in. we will have plenty of risk out there for those who are coming back in. equities got pretty cheap for a reason. whether they got cheap enough. shery: that risk leads to more haven flow towards the dollar. we are seeing people talk about peak dollar. >> yes. the dollar on a couple of measures look like i may be

getting close to a peak. it actually touched briefly the bloomberg dollar index, the highest since i gauge was brought in. started in 2004, that even exceeded the pandemic peak. you have a similar metrics for other dollar indicators. we also have a lot of positioning. very heavy positioning for the dollar to gain. that made it vulnerable to a snapback, especially with the combination of butter sentiment. the fed talk down the idea of a 100 basis point hike and it has stopped talking in the quiet period. all of that makes for understandable conditions for the dollar to come up a fair bit. are those dynamics which have been driving dollar strength, how they faded enough or are they no longer strong enough to sustain it at these high levels?

that is a big question going forward. one concern is what is going on in the treasuries market. yields went back over 3% for the 10 year, but not by a lot. the yield curve actually ended lower on the day. further inverted on the day. that underscores the recession concern. it is not some faultless forecast that there will be a recession. a recession is on people's mind. that also has to act as a caution on -- especially on volatile equity gains. what you would like to see from here would be the equities settle down and start to grind higher instead of jump up and then be volatile to dropping back. shery: he is a contributor with his take on the market moves.

we watch a netflix, gaining. a return to growth after losing 970,000 subscribers in the second quarter. less than what wall street feared. that is thanks to stranger things, let us work with our senior editor. they are calling it a success. it is less bad than what was expected. >> we are seeing it in the stock. it is a relief rally. it is also taking some of the warner bros., disney, paramount, all of these other companies with it. there has been a lot of anxiety in hollywood about the streaming business speaking and it is not robust growth of the are protecting but it is a return to some growth.

heidi: i think it is clearing a very low bar that was set. even netflix acknowledging it is hard to contact allies that as a win. what do we see in changes to revenue strategy if we see a continued slow down when it comes to growth outside of basically everywhere except asia? >> they are doing quite a few things and they updated that on us today, advertising, they did subtly delay it, it was going to be an ad supported here rolling out later this year, they are saying early next year. they have a big deal with microsoft to sell the ads for them. they continue to say that this is a strong business for them going forward. they're cracking down on password sharing, other people sharing accounts and they are charging people extra. they are experimenting with this in latin america.

another three dollars a month. they say that is going wild. their target sees a broader role out of that next year. shery: any other surprises that call your attention? >> there is a lot of anxiety in hollywood, there has been layoffs, fighters have been canceled. spending would be around $17 billion on content. it is a big number but it will stay in that range with a moderate growth going forward. if you expect a lot of wild spending that is not great. it is reassuring that there is a $17 billion going out to actors and directors and writers who keep the content machine turning. shery: let us get you to vonnie

in new york. >> the european union institute proposed a voluntary 15% cut in gas use. this concern -- and this is in concerns that russia will withhold supply. there will expect a full cut off by a mascot. it also continue with a mandatory trigger if the situation worsens. gazprom is continuing gas exports to europe at reduced capacity. shipments resume when maintenance ends. it will remain below normal after they cast giant uses a measure against some european clients. the recent turbulence in the crypto currency sector is a full-fledged credit crisis. he acknowledged he was wrong about the magnitude of leverage in the system and called out regulators for not doing enough

to protect investors. he says the worst is over and he expects bitcoin to surge. >> what i do not think people expected was the magnitude of losses that would show up in professional institutions' balance sheet. that caused a daisychain of effects. it turned into a full fledged credit crisis. huge damage to confidence in the space, the infrastructure of the space. >> president biden is announcing new plans to protect -- fight climate change. he says he will not let an impasse in congress stop tackling global warming. australia's treasurer has announced a wide-ranging review of the bank. they will look at policy tools

and look at interest rate decisions. the rba was criticized for taking a dovish tone while others were hiking rates. 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: one of the philippine's power giants has big plans to expand global generation capacity's we hear from the president and ceo. heidi: based on expectations, we don't to the cio about how he is positioning for that. -- we talk to the ceo about how he is positioning for that. this is bloomberg. ♪

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reserve bank of australia. he is calling the path ahead narrow and clouded and uncertainty -- in uncertainty. as pandemic policies contributed to inflation pressure and demand

in the australian economy is pushing against capacity. the need to get equitable path to 2%-3% inflation. this is following a wide-ranging review of the rba. this is after the central bank came under criticism for its dovish tone and moving quickly to hike rates after saying that they would not be moving rates upwards until 2024. oh and a has moved up his expectations for a u.s. recession -- our next guest has moved up his expectations for a u.s. recession from 2023. when you take a look at what is going on with many of these major central banks, it is clear what these blunt instruments of ability to chart the next leg of global growth or lack of growth is becoming more limited. what is your baseline expectation on how you are positioning for that? >> the economic durability of

the global economy is under challenge right now. the fed is moving aggressively, reestablishing price control and demand. you see the global economy really begin to slow. the rate of growth, it persistence of inflation, the degree to which credit has yet to react to some of the outlook ahead. it does push a precision area scenario into 2023. the combination of slowing growth and rising inflation and earnings expectations that we are watching carefully could drive the u.s. into a recession. heidi: what are the opportunities you continue to see or how much firepower would you be keeping given these risks? >> in terms of positioning for

the road ahead, an investor says it is a complicated calculus. find pockets of opportunity that from a technical perspective makes sense in the stagflation risk scenario. i would highlight that our asset allocation preferences include mid-cap u.s. equities which have different rigid -- which have differentiated themselves from the mega cap space. but them together with evaluations, -- put them together with evaluations, you have to look at your macro asset allocation positioning. own your strategic amount of equities. it is not advisable to move to underweight of equities. we have fixed income, look towards real assets in other alternatives that are well-positioned for the next 12-18 months. shery: do you buy into the peak

dollar narrative? how much more to the dollar rally? >> i think it is a bit too early to look at the level of the dollar and call it a peak. the expectations call for a leveling off of the dollar relative to other global currencies. that dollar expectation has moved quickly. most pundits were looking for 75-100 rates of tightening. we moved to 350 in 2022. we have been behind of the eight ball, we are behind the curve, i expected to stay relatively stable. shery: we are seeing so much strength given the weakness of the euro and how the ecb has lagged. what do you make of how they invest? >> we look for signs of life around europe, the valuation

front where investors are typically encouraged, as you find opportunities to pick up european equities at a discounted price, most notably it is about confidence in the continent. look at european continents, you see an erosion a the confidence -- in confidence. we think it is relevant to the expectation ahead. should that come to pass you to higher energy prices we would expect the ecb to react accordingly. heidi: when it comes to global opportunities, are you looking towards asia? >> asia is interesting. i would take a look at emerging markets, due to the potential. the world's second-largest economy is one of the few spots that has been in china where you the targeted and specific easing

measures. this is related to the housing market, we see potential for specific measures later this year. china offers a potential investor's diversification and a different global equity path forward than dm. that is something that asian investors need to look carefully relative to the prospect for dm in europe and japan. shery: it was good talking to you. heidi: you can get a roundup of all of these the stories to get your take on in today's addition of daybreak. go to dayb . customize your settings so that you get the information about the assets you care about. this is bloomberg. ♪

heidi: up investor says he is wrong about the cryptocurrency investment. he admitted he had no idea how much leverage was in the system and that the industry experienced a full fledged credit crisis. >> the industry, plenty of retail investors had little concept of risk management. what was interesting about luna was transparent. it was all public, all on the blockchain people knew what they were making. that turned out not to work and it unraveled very quickly. what i do not think people expect it was the magnitude of the losses that would show up in professional institutions. that caused a daisychain of effects. companies like associates and three arrows and genesis and blockchain, this was all public

information. they had exposure and the three arrow situation which we will see. we will see if it was a legitimate or if there was fraud involved. it started that flywheel of credit losses. it turned into a full-fledged medic crisis. -- credit crisis. huge damage to confidence in the space and the infrastructure of the space. big institutions either declaring chapter 11 or putting up gates and stopping rental deposits from leaving. i would say that within industry groups we need to self regulate or the regulators are coming. when you look back, there was little self-regulation. there was inane risk management

where companies took massive leverage, took asset liability mismatches. short-term deposits on what they lent out long. those are the ways that people go bankrupt. the tale is as old as time. it happened and it happened a lot of ways. that is greed, ignorance. it is frustrating because of the whole industry looks like a bunch of idiots. what is interesting is the defy and beyond chain stuff worked as it was supposed to work. it was transparent, people got stopped out when they were supposed to be. there was no you lied to me. i did not know the rules. a lot of ways, this crises is an advertisement for more

transparency and more defy. >> when you talk about the credit crisis that was called, are we still going to see much more? as the flywheel -- >> what you saw was a cascading of stocks. the large end losses got hit in that move from 29,000-17,000 all at once. i hope this year 20,000-38,000 would be the low. i do not realize at magnitude of the leverage of the system -- i did not realize the magnitude of the leverage of the system. heidi: the founder is expanding his crypto empire in the midst of the market's rout. shery: this is as we continue to see gains on bitcoin about as of 23,000 level, up .2% for the

third consecutive session. this is broken out bitcoin's trading range and it is higher than the 23,000 level for the first time since mid june. ether is a bit different, we see the reversion. this is as we continue to see challenges brought in for crypto. front cryptocurrency regulations to cover more activity. we have plenty more to come on daybreak asia. 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. wow. i can do better.

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annabelle: 30 minutes out from the trading session for japan,

korea and australia. these are the nikkei 225 forecasts. we can see, there is still some upside on the medium basis. an 8% jump. we have seen weakness in the japanese yen. over the longer term, little bit of a drop until the end of next year. we have the u.s. recession risks . the boj governor changing hands, kuroda stepping down. the boj decision coming up tomorrow. let's take a look at the results we're getting from the individual firms. much greater upside, 31,000 for the nikkei. broadly, taking a look where we

stand. we are staying risk on. nikkei futures coming online, 1.7% upside. we are continuing to see gains for the asx 200, new zealand online, 1% to the upside. shery: let's take a look at energy. rest on is helping lift brent and wti. europe is facing for a full cut off in russian gas supply. su keenan joins us latest. su: west texas up 1.5%. that is on top of rising in the u.s. session. we are on a pattern of rebound. analysts are pointing out the acquitted a is thin, -- liquidity is thin. you have more machines than humans trading, referencing

computer-driven trades. west texas trading in a technical band. bigger picture has been choppy. traders are weighing concerns that a recession will help -- our demand. with friends, -- brent, futures in excess of four dollars higher. that is a huge premium and it indicates refiners are willing to pay up for barrels. we have an interesting short-term rally. not a compromising situation. haidi: the situation with russian gas flows to europe. what is the latest? su: a lot of focus on the nord stream. bloomberg has learned it will begin again thursday. if gas exports restart through the nord stream pipeline to europe on thursday, it would be at a reduced capacity.

capacity has already dropped off. bloomberg learned shipments will resume when the maintenance ends. however, it will remain below normal after the russian gas giant declared force majeure on some clients. that has europe on tenterhooks. they are waiting for that thursday day to pass, but at the same time, they are bracing for the worst and that has the eu scheduled to proposed a 15% cut in that gas usage by member states starting next month. that proposal would be presented on wednesday. there are concerns russia may halt all supply. that would be catastrophic for europe. that will deal with what to do with in terms of avoiding a full cut off. it will include a mandatory

trigger. back to you. shery: su keenan there with the latest. president biden is expected to announce executive action to confront climate change amid an impasse in congress, he will outline the move in a speech on wednesday. biden is holding off on issuing an emergency degree that would allow him to use sweeping powers and billions of federal dollars against global warming. haidi: as the new australian government places more emphasis on the climate transition, so much damage has been done. i'm talking about the environment, ecological or showing just about every aspect of australia's environment has seen a severe deterioration. these are things like the threatened species of animals, floral and pharma. australia has lost more mammal

species than any other confident, one of the highest rates in the developed world. the other interesting part was it came out a while ago, but the previous government had it suppressed and did not release it until after the federal election. we have seen these elements, habitat loss, invasive species. it's a pretty dire report. shery: experts talking about land and floral quality. for the pandemic would really make a difference. for now, let's get to vonnie quinn. >> china is ramping up testing and clamping down.

22 million people in shanghai are going through another round of testing. authorities are focused on outbreaks in provinces where some are under lockdown. macau is able to resume some activities. the european central bank may go big when it raises interest rates on thursday. bloomberg learned it may double. eurozone inflation surged to an all-time high of 8.6%. 50% chance of a half one hike this week. a three-way contest is emerging for sri lanka's next president. two of the candidates have links to the former leader, suggesting the plan may have some influence. the next president needs 113 votes to secure a majority.

the chill life finance minister has moved to reassure investors. in an exclusive interview, he stressed the copper industry would remain competitive despite plans to raise taxes. he said the new government would safeguard the reputation for fiscal discipline. >> we are approaching this with an open view. the most important thing is to secure revenue targets we are trying to set, but also to secure new investments in mining that are necessary and where we have. 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: up next, the president

and ceo of one of the philippines largest power producers tell us about plans to boost generation. that interview just ahead. this is bloomberg. ♪

shery: one of the philippines

because power producers is planning to more than double local capacity. the president and ceo says he is looking at a mix of gas and renewables. the 102-year-old conglomerate started as a hemp trading venture. the business bands banking, food and infrastructure and more changes ahead. he is part of the fourth generation and spoke exclusively to bloomberg. >> there is plenty of room for growth. we provide power to about 20% of the country. we have the growth. it keeps getting bigger and bigger. there is lots of opportunity.

yes, lots of opportunity. yvonne: what is the outlook for power demand in the country, and how well-positioned is the conglomerate in meeting those requirements? guest: the power demand is 800 to 900 megawatts a year. we have -- we are very focused, we have a new partner. the largest operator is going to help us. that is kind of our focus.

we have renewables. yvonne: by 2030 you want 9200 megawatts of generation capacity. how far away from you are -- are you from that goal? guest: we have 1000 something in the pipeline already. we want to be 50-50 gas and ree. yvonne: you mentioned the clean energy part of it. the department is no longer approving coal projects. 50% has to be from clean energy?

and is there a reduction to 32%? can you walk us which clean energies you prefer to meet these goals? guest: we have two geothermal areas we are seeking to expand. wind is a big portion. solar. for the baseload, we are looking at gas. that is where we are the biggest in renewable. we are expanding in the philippines. outside, we are looking at other projects.

yvonne: i want to ask you about the revenue in the conglomerate. the rest is food manufacturing. is there a plan to cut the reliance on power and never survive revenue? guest: we want to be 25% power, 25% infrastructure. we have a new company, a data center company. we have a water company. if the structure is 25% of our business. thanking where we -- banking will be about 25% of the business.

yvonne: what do you see the future of the conglomerate? you are fourth generation. you were overseeing a fifth generation. where do you see yourselves evolving? guest: the competitive advantage. all of our programs are about people. we are a family corporation. one good thing is that we provide community and long-term thinking. we looked down the line for the next 10 to 20 years. how we can be more competitive and invest our money can give us something that is more long-term. that will be the focus. talent, that is going to give you the best continuity moving forward.

family stability in the best talent we can get. yvonne: what are some of the lessons from the third-generation? what guidance did they give you? guest: adapt. we have been doing it for 100 years. we have gone through a world war. we have been taught lots of lessons, when the pandemic hit. this is an important lesson that was passed down to us.

for me, that is probably the most important. haidi: speaking exclusively to yvonne man. you can catch up on past interviews at tv , you can also dive into securities and functions we talk about. you can join in on the conversation and send us instant messages. let's look at how we are shaping up. asian equities futures are looking energized given the big boost from tailwinds, the sigh of relief coming through. netflix earnings. feeding through to nice gains, cindy futures are up. new zealand trading higher by 1%.

watching those gains mostly being held by the aussie dollar, we see the extension of greenback strength. we are watching these lines coming out. the rba governor says at some point they will get to the 2.5% initial rate, steadily raising rates now. he does praise the labor market as being a positive story. talking a little bit about productivity trends and the need to closely monitor the household response to the inflationary environment. the government announced the first review into the central bank.

they will consider the inflation target, primary tools, criticisms and rate decisions. james, there was a lot of criticism over the fact he said rates are not going out until 2024. guest: one thing we should be surprised about is it has taken a long time to have a review. the policy frameworks need to be reviewed, so there are lots of things for critics who were looking to have ago. not just in terms of the forecasts and disorderly exit from yield curve control, but

also some of the rba longer duration, historical policy moves such as raising rates as the global economy was entering, but also following the mining boom, keeping rates too high for too long with the rba undershooting the target. we have not really done this in a while. there is a lot to discuss. shery: where the be any meaningful implications for the policy stance? reporter: one thing that is not going to change is the fundamentals are not going to be affected, that is what the

central bank is going to have to respond to. what could change? among many things, the review is looking at the composition of the board, who is on there, what the experiences, how they are appointed, we could see a shift from what we currently have. potentially restructuring the board to bring more monetary policy expertise like we would see at the bank of england. that could be something that sees the focus of policy shift over time, but the review outcome will not be known until march, 2023. short-term, we have the rate hike path the governor has been discussing this morning. shery: we have plenty more to come on daybreak asia.

this is bloomberg. ♪

haidi: china will find didi global more than $1 billion.

investors have been awaiting the penalties since china launched the investigation last year into potential violations of data security. the european playmaker is growing more confident by an indian flag carrier. boeing is working on as many as 150. netflix shares rising as much as 12% after subscriber losses were not as bad as expected. the service expects to return to growth. shery: these are some stocks we're watching in the next hour.

netflix related stocks, and south korea, some production companies linked, netflix edit 1.1 million subscribers despite the fact 1.3 million customers in the u.s. and canada. coming up in the next hour, a discussion will talk about china forecasts. this is bloomberg. ♪

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shery: this is daybreak asia.

continue to watch the deepening property crisis in china, a day when australia is carrying out its own policy review of the rba. haidi: it's a precarious time for the economy. huge sigh of relief. better-than-expected slow down out of netflix. annabelle: we saw the big jump in the nasdaq. we are a few seconds away from the opens in japan, south korea and australia. cash markets for treasuries coming online. the three year is above the 3%, the 10 year is above the 3% level. we're watching the dollar, the

retreat. the yen is holding pretty steady. the boj say we should continue to see the 138 level. japanese stocks with a strong start, up 1.3%. concern to korea. the broader risk on move we are seeing. the korean won sitting around that key 1300 level. now to australia, the asx coming online fractionally higher. we are continuing to watch wh at we are seeing in yields. we saw lines from the rba governor saying we do need a credible path to two to 3% inflation but need to keep the

economy on track. the australian government announcing a review into the rba. we'll see the outcome of that as well. shery: our next guest is in favor of chinese equities. good to have you with us. when are you expecting policy support to start helping the broader market? guest: right now, policymakers are more focused on ensuring the property market woes don't spread into the wider industry. that could come in the form of greater credit support in terms of making it easier for households to get mortgages and

even mortgage restrictions as well as developers getting financing for existing projects. that's in the near term. for the second half of this year, policy rate cuts perhaps once more on the rrr rate. shery: we have seen the rally in the u.s. markets after a lot of negativity. any upside surprise this helping markets. guest: earnings estimates have to come down a little bit more. next year's earnings are looking

to be quite solid. from a china tech perspective, i think we will continue to see piecemeal regulatory measures come out of beijing, but the bulk of the measures have already been undertaken. it's possible you could see a bit of relief for investors looking to get involved in chinese internet and tech companies. haidi: when it comes to dollar strength, that's one of the headwinds for broader asian equities. are you expecting that to be alleviated? guest: that's right. i think that narrative will start to wane once investors get a better sense. i -- if that is the case,

perhaps even starting as early as next month. haidi: what are the other big risks for the asia-pacific? this is probably a region where we are hopeful there might be patches of growth. guest: the biggest risk is from global macro weakness and potential recessionary risks. that stems from europe. that is certainly not a done deal. still a relatively softer landing. for the export oriented economy

that could potentially be a significant hurdle as there could be decreased demand for their products. shery: i am surprised you are calling for overweight on em government bonds. it continues to show risks rise. we have seen the warnings from the imf, a third stock of tightening and potential more defaults. guest: it is an environment where we have to be selective even within asset classes and bonds, certainly countries that are not energy exporters will do better in this environment and also certain em countries that have balance sheets, so certainly that asset class is on bail.

we are seeing yields at a more interest in level than a year ago. investors should stay probably diversified in bonds that i think it should be looked at. shery: talking about commodities exporters, we have seen a little bit of pressure on the outside as well. it will get worse if we see recession for the u.s., chinese demand, where we see them in the next year. guest: commodities broadly speaking are continuing to be an asset class investors should continue to look at. when it comes to energy, the supply side and capex investment space for energy and oil, there

has been significant underinvestment. when it comes to agriculture, i don't think we have seen the bottom of current scarcities, so i think i culture continues to be an interesting investment opportunity. haidi: always great to have you with us. looking at the movers when it comes to netflix, admittedly clearing a low hurdle. annabelle: you can call it that. we saw the return to growth. one million subscribers loss, but asian-pacific helped boosted. taking a look here at the korean studios linked to netflix.

studio dragon, the producer of crash landing. let's move to another sector, because bitcoin is jumping above the key $23,000 level. these other companies that have stakes in exchanges or are operators themselves. let's see what we are seeing in the mining space. the world's number two iron ore supplier. they are now seeing output of 320 million tons in 2022. we are seeing those gains today. shery: let's turn to vonnie quinn. >> china's treasurer announced a

wide ranging review of the reserve bank. amid questions over its forecast and interest rates this business. the governor admitted some forecasts were embarrassing. the european central bank may go big when it raises interest rates on thursday. bloomberg learned they may boost rates by double the quarter -- money markets have a half-point hike. the eu is said to impose a 15% cut starting next month on concerns russia may hold supplies. we are told the european commission will unveil a plan on wednesday to cope with a potential fall caught off.

it would include a mandatory trigger. gazprom is poised to restart exports at reduced capacity. they will remain below normal after the russian gas giant declares force majeure on some plants. 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'm vonnie quinn. this is bloomberg. shery: netflix loses almost one million subscribers but says things could be worse. the latest results end up be, later in the show. but next, gary gensler about the looming risks of 200 chinese companies being delisted from u.s. exchanges. this is bloomberg. ♪

haidi: this is what we are seeing when it comes to the early part of the session. netflix clearing expectations,

the upside of 1.6%. the kospi extending games to 1.5%. we see australia stocks up. there is growing speculation perhaps the worst of the selloff with equities may be over. qe stocks are up by just about 1%. china remains the other unknown when it comes to the economic slowdown. let's get some more on what is potentially in-store. let's bring in and out. what are we expecting? reporter: because the central bank did not move its money market rates, the expectation is the bank will move there. thanks typically follow pboc for

guidance. the five-year rate is for mortgages. neither are expected to be lower. we are seeing pickup in activity . when you look at what going on with the economy, accordingly the banks will have to address their own lending rates. haidi: some china developer suppliers are unable to pay bills. what is the political

significance of not only the mortgage protest, and if this becomes a systemic problem? reporter: the critical question is the authorities respond, suffocate. the question becomes how widespread will the protests become? how will local authorities react? can they deliver? we are seeing early indications local authorities are acting, we're seeing regulations of free sales, calls for more support for indebted property developers, and broadly speaking, the government -- it's much higher than the u.s.. when the authorities see

protests going on, that's very sensitive. that will go to the very top. shery: the chair of the u.s. securities and exchange commission says it is unclear if authorities can reach a deal to avoid delisting companies from stock exchanges. gary gensler told us is important steps are taken to protect investors. >> it has been very constructive , there is a recognition that for 18 or 19 years, issuers have not yet complied with the fundamental bargain. we have a fundamental bargain that if you want to issue stock

in the u.s., you have to be audited by an accounting firm and that the auditor is subject to investigation and inspection. this was set in place 20 years ago after the largest bankruptcy at the time, enron. 20 years later, china and hong kong has not yet complied with that, and congress said it's going to happen. this is about access to our capital markets. access to the deepest capital markets. you have to play by the standards. the talks a been constructive.

it's going to get choices made by the authorities, inspection and investigation, that means meeting with people, taking testimony, actually seeing the audit papers to determine and protect the american public. haidi: gary gensler there. most take a look at how futures and europe are opening up as we see the broad-based rally taking hold. equities gaining for a third day following the report russia will

restart the nord stream on thursday. seeing a little bit of gain when it comes to german dax futures. equities extending gains. we're looking ahead to the ecb where policymakers are reportedly considering a 50 basis point hike at the meeting on thursday. lots more to come, this is bloomberg. ♪

>> if it was a single thing, you

could talk about stranger things. really we are set up very well next year. shery: the company is forecasting a return to growth, less than half of what wall street feared thanks to the new season of stranger things. let's get more. >> this is a relief rally. all of the big entertainment companies as well, this whole idea of streaming has peaked,

the model wasn't working. this is a sigh of relief. the numbers are not great. they lost one million subscribers but they are forecasting things to turn around. they have new growth initiatives. shery: that's going to be key. take a look at this chart. we are seeing netflix make more money per user. that's of 50%. >> one is an update on advertising. they signed a big deal with microsoft which is going to

distribute and sell the ads, and that is a huge source. it's a new ad supported tier that people can option at a lower price. they are going after people who share passwords. netflix said there are 100 million accounts they could potentially turn into paying accounts. they are experimenting with this in latin america. they have not threatened to cancel. they hinted at a broader rollout next year. shery: you can get around up of the stories you need to know in today's edition of daybreak. subscribers go to the terminal, mobile, you can customize your

settings so you can only get the news you care about. let's get a clue check of the latest is in/headlines. china will find didi global more than $1 billion. the wall street journal says it will allow the apps to be restored and add new users. investors have been waiting for these penalties since china launched an investigation last year, a potential violation of data security. twitter has scored an early win against elon musk. a delaware judge has agreed to fast-track the case despite the legal team arguing twitter was unfairly pushing for an early trial. airbus and boeing are working on the deal.

the european play marker is working on a landmark deal of about 50 jets. shery: coming up next, a cut and gas supplies. this is bloomberg. ♪

haidi: we are looking at numbers

coming through. we are seeing pressure when it comes to the rba, we have had reviews when it comes to the first pressures. the june number is coming out a contraction. we are starting to see the impacts of iron nation as well as higher rates. let's get you to over with bell. annabelle: we are fairly risk on. a lot of the moves you're seeing are in tech stocks. i.t. is up 1%. we had moves in apple, alphabet. strong results from that x, jumping more than 10% in after hours. we are fairly quiet.

no change. growth should improve in the second half. energy and material stocks, we had guidance from the world's second-biggest producer of iron or and they are cutting production targets. we are seeing iron ore higher. chili being the biggest producer of copper in the government vowing the industry will remain competitive. the outlook shery for the dollar. haidi: i will take it from here.

let's get a closer look at energy. su keenan joins us now. su: let's take a look. supply levels have dropped off. we told shipments will resume, thursday is the day. it's very much a question. we have europeans on tenterhooks.

that is why the eu is moving quickly to propose a 15% cut by member states which would start next month. how to cope with this. voluntary or mandatory use reduction would be triggered if this is not sufficient or if the situation worsens. meanwhile, take a look at natural gas prices. they continue to rise. lots of supply reduction. shery: what is the latest on

oil? we see fluctuations in the energy space. the expiration of the july contract. su: what we saw were two strong days. west texas intermediate was above $104 and continue trading in asia. liquidity is thin, people away on holiday. we're continuing to see west texas trade in a technical ban, and notably the tender -- timber contracts is down slightly in asia trading. we are beginning to see the recent rally that perhaps is also related to the dollar. oil trading continues to be choppy, this as traders wait

concerns will help demand from's ♪ fallout from a stronger dollar. that is a huge premium that indicates refiners will pay out. we're starting to see differences in month-to-month how contracts are trading. stay tuned. haidi: su keenan the latest. let's take a look at another volatile asset class. bitcoin breaking out of the trading range amid a broad rally in digital tokens. let's get more. guessing and guidance is a bit of a fault. reporter: they might object. it's been very stable for couple of months.

the idea that it's breaking away from that in either direction would be welcome, there has been a lot of concern, the next move would be on the leg down. that is adding to an improvement in sentiment, one of the factors as the narrative that inflation has peaked or is peaking. it's unlikely to go 75 basis

points at this meeting and maybe it would like to slow down after that. those factors are feeding into a general improvement in risk appetite. bitcoin and the moves and other cryptocurrencies are what you call poster children for optimism. shery: the latest on the bitcoin rebound. another believes the recent crypto crash says capital will be better allocated in the future. he said many company valuations were not tied to profitability and that contributed to the sector route. guest: one thing, when you look at the companies across the space, profitability was a dirty word for a number of years and it has returned to parlance.

last year, if you saw a funding round, was that valuation related to the profit of the company? probably not. everyone suddenly slipped to purely revenue as the driver of value, and no thought towards how profit would eventually catch up. i think there has been a substantial re-rating towards looking towards pathways to profitability in a company which feels strange to say, but something that was missing. i think this question of if everyone woke up one day and this thing was gone, would anyone miss it?

i think that has been a strong predictor of which things have survived and which have not. obviously, stablecoins have survived, exchanges have survived. blockchain's that have some property that are plausibly superior to other blockchain's have survived, including a more consensus from players. things that if they went away you would forget they existed, generally they have gone away. haidi: how -- we take a look at how he is expanding. you can get more on the terminal.

>> continuing with crypto, michael mcgrath says there is a full-fledged credit crisis. he acknowledged he was wrong about the magnitude of leverage in the system while calling out regulators for not doing enough. he says the worst is over, and he expects bitcoin to surge. >> what i don't think people expected was the magnitude of losses that would show up in professional institutional balance sheets. it turned into a full-fledged credit crises with complete liquidation and huge damage to the space. >> [indiscernible] in an exclusive interview, mariam are so stressed the copper industry.

>> we are approaching this with openview. for us, the most important thing is to secure revenue targets. at the same time [indiscernible] >> sources tell us president biden is expected to announce new plans to tackle, change after legislation was blocked in the senate. he will make a speech on wednesday vowing not to let and in passing progress block action. a declaration would unlock sweeping powers and billions of dollars to tackle global warming. a three-way contest is emerging

for the sri lanka president. two of the candidates have links to the former [indiscernible] the next president needs 113 votes in parliament to secure the majority. 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: coming up next, we will weigh the risks and opportunities in china markets. this is bloomberg. ♪

haidi: chinese banks are expected to hold a study for july. economists see a cut to help out the property sector. mortgage payment boycotts are souring sentiment. daily covid cases are remaining high. for more, let's bring in that chief china economist at --

great to have you with us. lots of pressure points for beijing at the moment. let's start off with the property sector. how much systemic risk do you see? guest: in terms of the mortgage payment boycotts, analysts showed near-term implications on stability is likely manageable. that said, it remains fluid. the government will have to act swiftly with policy coordination to push property construction. in order to manage the medium term impact on growth as well as the financial stability. haidi: at the same time, we are

seeing an increasing covid cases across china. covid zero is being adhered to. does that mean it puts a cap on any meaningful rebound? guest: i think the chinese economy is in the face [indiscernible] this could make the upcoming growth recovery in the second half more difficult. we expect a bountiful recovery in the second half. the zero covid kyle sees will likely continue to bring uncertainties to the supply chain stability. we are seeing rising

unemployment from youth, and the property market is stressed as well as the likelihood of a recession in developing economies. shery: every analyst we speak to is bullish about the market despite we are seeing more recession fears. china is the beacon of hope right now. are you expected to see stimulated measures coming from fiscal or monetary policy? we know that leverages superhigh already in the economy. guest: i think given the growth recovery pressures we have seen, policymakers will likely

continue in the coming months. there is room for policy as well as the government to ramp-up easing. for instance on the monetary policy front, i think the pboc will likely continue to focus on expansion to support the real economy, they will continue to provide support to sectors, loan facilitation, to support infrastructure construction activities, as well as to normalize conditions for the property sector. in terms of fiscal policy, i think they need to play a bigger role in the second half. we expect the government to continue to accelerate infrastructure construction spending.

to provide covid related relief to targeted sectors as well as support demand. shery: we continue to talk about potential social instability and that is why they are moving so fast in these boycotts. what are you following in order to be able to tell if we could potentially see some risks? guest: because the property sector is so important for the chinese economy, accounting for more than 20% of gdp, and the second quarter we are seeing -- the largest threat to chinese growth. the head of a very important political event, they have

greater incentive to make sure they can deliver stability on growth in the financial system as well as the social front. definitely more accommodations could be seen. lately, we have seen banks asked to provide better funding to qualified developers and support for consolidations, to support these projects. shery: good to have you with us. we are looking ahead to the loan prime rate later today. we talk about china, we have to talk about regulations. authorities set to slap a fine on dd. we will ask if it means the end of the tech crackdown. this is bloomberg.

♪

haidi: chinese tech stocks on watch following a report china is wrapping up an investigation to dd global, the find of $1 billion. investors would be glad to get

this out of the way given how long awaited this is. does this mean they can get back to business? reporter: the initial reaction from investors were pretty positive,. we saw the big jump of shares. investors are seeing this is consistent with what we have seen with other tech giants, tencent, alibaba. from a share price perspective, investors are saying the rally might be short-lived because the overhang surrounding chinese tech companies, regulatory tightening has not been removed, and alibaba share price has resumed after they were fined by regulators.

i think it is safe to say they are not out of the woods yet. shery: markets -- where markets ahead of themselves last month when there was a lot of optimism? john: we have seen a strong rebound until last month. as we enter into july, there has been some blowback for chinese markets. investors have been adding positions, but hedge funds are very cautious on china. outbreaks, the risk of lockdowns and china. that's all adding to the risk in

china. the mortgage boycott crisis outbreak in china, investors will be closely monitoring those sectors. shery: we will have to leave it there. our asian stocks reported. those are some of the stocks we are watching at the open. not to mention, iron ore and steel. a mining giant trimmed its annual production forecast. we have the market opens in china and hong kong coming up. do stay for bloomberg markets: china open. this is bloomberg. ♪

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david: good morning.