>> here watching "daybreak asia" coming to you live from new york, sydney and hong kong. counting down to asia's major market open. the top stories is our, a cautious start to head for asia after disappointing earnings takes a shine off the u.s. equity rally. markets also digesting the first ecb hike in over a decade raising by 50 basis points while unveiling its new crisis management tool. plus, president biden test positive for covid as cases continued to surge globally, driven by the spread of more infectious variant. annabelle: we are awaiting pmi data from australia. in the meantime, as we await that, you continue to watch the moves we are seeing in the bond spaces morning, particularly what we see in the 10 year yield, we are seeing a job, signs of concerns around the economic indicators we had from the u.s. and the leading index now indicating a recession at the end of the year, lots of

reflection on what the size and scope is of the contraction will be. meanwhile, the aussie dollar just weakening a little bit this morning, it has been touching those july highs over the previous session rallying for three straight sessions. aussie futures are close to the upside by its overall change and more broadly speaking. we are looking to a bit of a down day in asia, japanese stocks looking for some losses at the open, but heidi, i will toss it back to you. haidi: we are seeing a miss on every front when it comes to the pmi numbers coming out of s&p global australia for the month of july. composite services and manufacturing all declining from the previous reading. we are seeing those /manufacturing pmi coming in at 55.7, falling from 56.2. we are seeing output unchanged. new orders rising. seeing the highest reading since april 2022. when it comes to that services pmi, we are seeing a pretty

significant fall to 50.4 to 52 point six. that's the lowest reading since january. we are seeing employment falling as well to the lowest since january as well. prices charge, clearly with the inflationary backdrop rising to the highest reading since that series began. so we are seeing a pullback with all of those reading still above that 50 level that has expansion. shery: it's really felt across the board. at&t plunging in the u.s. session because they are now saying that customers are putting off paying their phone bills. we did see the best three-day game here in the u.s. and about two months. we saw that recoup of those losses, given some optimism of earnings. a tech rally in the new york session. not being sustained here in the after our session in the u.s. futures in asia trading. take a look at the nasdaq 100. because of their disappointing results, it pointed to a major

slowdown in advertising. what does that mean for tech giants like meta, alphabet, twitter coming up later? the tenure low before it that rufus -- recession fears. u.s. jobs. eight-month high we will have the philadelphia fed factoring out in plunging to the lowest since 1979. that was felt in the oil space, which really lost ground in the new york session. why are they rebuilding -- rebounding and the asian session. still below the $100 a barrel level. haidi: we are talking about the ecb, doubling the first great hike in 11 years, saying that the ego data will determine future moves. let's get more from bloomberg global economics and policy editor kathleen hays. it's a tradition for the ecb to begin a cycle with some sort of crisis going on in the background. this time it's the italian political crisis. previous time they've had to report -- reverse course. this might've been a risk. kathleen: no situation is

exactly like the previous one, but i must say, i would look at that factoid, i would feel just a little more nervous. a 50 basis point rate hike had been signaled by christine lagarde. i don't think a -- i don't think people played -- paid close enough attention to the speech where she said inflation would accelerate and gradualism was no longer appropriate. i saw that several times yesterday. people did so as well. even though it wasn't a surprise to many people of the markets. and why did they do it? because inflation is very important. it's unanimous. the hawks let the federal reserve towards more aggressive rate hikes. in 2022 it's the hawks at the ecb leading the more aggressive hikes at a time when inflation is out of control. maybe it's the hawks we have to pay more attention to. prices are spreading, price

spreading across more sectors. inflation will remain undesirably high for a wild. very important and she made a very clear and answered questions, drop the september guidance. if you remember back in june, they were saying three rate hikes, 25 basis points, -- 25 basis points each. now she said, specifically, we are going to go meeting by meeting. they are going to watch the data . forward guidance is receding as they have to have a more flexible, a more nimble message as jay powell would say. the transmission protection. the tool is out on the table and we don't have a lot of details. anybody could use it. it's not clear what the indicators are. they are saying we'd rather not use it, but won't hesitate to do so if we need to. global crisis, given the italian blitzes remaining very wide. reuters reporting today that it

was not discussed, the italian political crisis at this meeting. we will see. rex sour global economics and policy editor with the latest on that ecb meeting. for more on how markets are digesting the decision, let's bring in our mliv strategist mark cranfield. mark, really the markets don't know what to make of this zero rally that was completely fading. >> as you were mentioning -- mentioning earlier, because on a day when the italian government was falling apart. so that's obviously a major challenge for everybody in europe. there is such a core part of the whole eurozone. nuc volatility in italian bond spread with german yields has widened the game, which is very significant. it's a huge payday for the ecb. although they are introducing this new crisis tool, traders have got some question marks about how effective it will be when you have such significant risks taking place in a country

like italy. so, whether or not they can get their act together and really calm down the italian bond market, if you look at the way it performed yesterday, traders are not so sure. and that's obviously their impact on the euro currency as well. and as christine lagarde says, she is leaving guidance open as to with the ecb goes next. or if they can't keep control of the italian market, then it will be very hard to do another big interest rate hike. shery: we saw -- haidi: we saw u.s. stocks with their best three-day rally since may. snap numbers really casting doubt to the resilience when it comes to the bear market doubt, particularly when it comes to the tech sector. mark: i think the snap has been overdone. if you remember last time, the nasdaq index was down a couple of percent. a mild setback we are seeing. and it does rally pretty well yesterday. i think far more significant --

far more significant in the u.s. data, people are in the job market and continuing claims rising. if you look at the fed numbers dropping to the lowest since may 2020, that's pretty alarming. it's much more a pace of how quickly is the u.s. economy slowing, what to look for in terms of all that peak yields, and you have the fed meeting next week. investors are much more concerned about has the job market really peak, will he get worse, and what can the fed do about it? these other questions rather than one small company. for now, stocks are hoping to believe that the peak in yield is not far away, and that's what's helping to drive the s&p index. shery: mark cranfield on what's happening across markets. of course, we saw that dip in the u.s. session today in the morning when we got president biden's covert diagnosis. he tested positive after returning from a five day trip to the middle east. this coming at a time as a house committee prepares for its final

hearing into the january 6 attack on the u.s. capitol. let's get more on this with bloomberg government jack fitzpatrick. let me get started with president biden, how is he doing? >> he seems to be doing alright. he put out a video wearing a blazer and dressed business casual out on the balcony of the white house saying he is doing well, being productive. a very different set of circumstances and when the last president got covid. this is a vaccinated resident, boosted president. they are giving him a prescription so that the virus can work its way and change in terms of how you are doing from blind date to the next. he put out a video to show everyone he is doing fine for now and is in good medical situation in terms of being vaccinated and given a good therapeutic. haidi: we are also hearing the house panels eighth meeting into the january 6 attack on the u.s. capitol. what are we expecting from this

round of businesses? what do we expect a here and is this likely to be the last one or do we expect further ones? jack: tough to answer that last part. this was supposed to be the big finale, one reason why it's on primetime in the eastern time zone in the u.s. what they have come across so much information that they are continuing their work and will continue to do interviews. it's possible there will be more hearings after this. today's hearing will focus on 1:10 to four-17 p.m. eastern time january 6 and what that then president donald trump did do and did not do during that time. they are focused on the inaction to help as the committee knew about violence at the capital. we may hear about communication between trump and lawmakers, including kevin mccarthy. and how this all culminated in a video that came out after more

than three hours of violence at the u.s. capitol in which trump did eventually tell people to go home. the details of how that came together will be a significant focus and the chairman of the committee actually said it took trump six takes to do that video . so the details of his own negotiation with his staff and reluctance is the focus today. haidi: we will be watching for that as the hearing is scheduled to get underway. bloomberg government jack fitzpatrick with a preview. let's get the vonnie quinn with the first word headlines. vonnie: italy will hold an early election on september 25 after mario draghi resigned. the president officially called the vote after dissolving parliament. polls suggest that the coalition of the brothers of italy may have the majority. the economy faces months of political uncertainty. russia has resumed sending out to europe its biggest pipeline, but uncertainty remains.

it returns to 40% after a ten-day maintenance time period for now, the restart eases europe's fears that russia's president will keep the pipeline shut. but it remains held up in transit and germany. tokyo has recorded its highest number of covid cases since the pandemic began. the city recorded nearly 32,000 new infections on thursday, topping the previous record set in february. covid's resurgence has been driven by the spread of a more infectious variant as japan begins opening to tourists and residents as they prepare for summer holiday travels. china's banking regulator vowed to ensure that developers finish building presold homes as people try to avoid mortgage payments. the insurance reglet tory commission said, if it weren't for the pboc -- it's for the pboc to find stability. it risks spreading the real estate crisis for the banking system. bloomberg learned russia is

holding referendums and ukrainian territories occupied by troops. sources say that would give vladimir putin grounds to observe those territories into russia as early x -- early as september. they are not willing to give up any seized land. they are planning to vote. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. shery: still ahead, why women and people of color in the tech industry are often doing jobs they aren't paid for. we will have the challenges highlighted by john williams research. haidi: ecb taking the gloves off now. its first rate hike in more than a decade while the boj -- we will take a look at what this means for dollar strength in emerging markets. this is bloomberg. ♪

>> we decided to raise the three key ecb interest rates by 50 basis points and approved the transmission perfection instrument. >> all members of the governing council rallied to the consensus of 50 basis point. economic activity is slowing. russia's unjustified aggression towards ukraine is an ongoing drug on growth. -- drag on growth. we expect inflation to remain undesirably high for some time.

we will have continued pressure from energy and food prices and pipeline pressures in the pipeline chain. shery: ecb president christine lagarde. let's bring in the chief emerging-market asia and europe strategist. good to have you with us. of course we saw that greater than expected rate hike from the ecb, something that you said would go against recent communication. is forward died in's dead now, and what would that mean for the market? mitul: clearly central banks are not doing one thing and doing another. we heard from the ecb that it was most likely in markets expected that. suddenly we have leaks of 50 basis points. forward guidance has become a little bit more unpredictable and is not giving us that guidance as we would've expected. central banks are clearly hiking more aggressively across the board, not just the ecb, we've

added a space of upward supply on rates in central banks globally and in developing markets. it's really playing catch up to rising inflation and what's happening here is that growth has been put on the backseat, economic activity is clearly weakening globally, but inflation is the clear focus of central banks, so i think that will continue to mean rates moving significantly higher. that said, ecb and other central banks have been frontloaded, that means less needs for aggressive hikes after. haidi: what does this -- shery: what does this mean for europe when you have so much turmoil, and italy with mario draghi stepping down in the anti-fragmentation tool at the same time? mitul: it's a difficult one. unlike the u.s. where there is still consumer balance sheets that are pretty healthy, europe is struggling with weak demand. so you have the energy crisis that's unfolding. clearly the ukraine war is still on current -- is still ongoing

on the border. you have other pressures on growth that continue across the board, so the ecb is in a difficult situation here, but they have said they want to focus on inflation. when you've got inflation four times a target, there is no other choice. they have to act, even if it means weaker growth. unfortunately it means a what -- a mild recession or more in europe and the next several months. it also means the ecb could have to keep hiking rates. you could see another 50 basis points, followed by 25 basis points thereafter until we get to a neutral rate around 1.5% for the ecb. haidi: when it comes to the dollar, which is a big driver for what happens with a lot of other currencies, we have seen a bit of softening over the past few days from the greenback. we heard from the boj saying this is largely a dollar problem, not necessarily a yen weakness problem. so does this make us question if

we have peaked when it comes to the heights of the dollar? mitul: certainly we have the question. it's still unlikely we reached the peak, what i think any dollar gains from here are going to be more of a grind than the sharp rally we've seen in recent months. a lot is in the price and terms of interest rate markets and fed rate hikes. a 75 basis point hike is more than the july meeting for the fed. and hikes are more significantly thereafter as well. when we look at the price, the dollar will find it more difficult to move higher. with that said, it's still a buy on dips. when you look at what's happening with the euro, currency is still very much a magnet. euro will struggle to make much ground. the ecb hike in a time when italy's government was falling apart, peripheral brought -- peripheral bond spreads are coming under pressure. it's difficult to see how the euro can rally from there. we talked about weaker growth,

so it looks like the dollar is the more favored currency. haidi: is the short yen trade -- obviously one of the hottest macro trades of the year, is a looking overdone or is it in the way given that governor kuroda said they won't be tightening the end? mitul: i think there is little to stand in the way here. it's hard to see dollar-yen come off to significantly from any sort of level, even though we have been approaching 140, that could be a line in the sand. again, we are not expecting an intervention from the bank of japan, nor are we expecting to see a shift in the yield curve tightening, which they said they won't do despite the move of the dollar-yen. if any move, the weakness of the yen will probably help reach the inflation target, and that is more important. clearly there is a bit of backlash domestically. it's really hard to see dollar-yen fall back to significantly from these levels. given the fact that the dollar continues to be a buy on dips.

shery: we have seen significant resilience in the chinese yuan, where are we headed when you hear from the premier that he might be a little bit more flexible with that 5.5% growth? mitul: that's right. when you look at the yuan, it has rebounded. dollar yuan has moved higher, but to less of an extent than other asian currencies. the yuan is somewhat resilient and i think it will continue to be the case. we do expect to see gradual depreciation on the dollar in the months ahead as china's current account worsens and still given the fact that we are seeing capital inflows from china from foreign investors. we still see weakness. i think growth outlook is certainly under pressure. 5.5% is difficult to achieve. our forecast is 3.8%. we had a bit of a rebound in june data, but with the housing market coming under more and more pressure and china, a lack of significant stimulus in the pipeline, it's really hard to

see growth hit that 5.5% target. haidi: mitul kotecha there from td securities. you can get a roundup of the securities you need to know to get your day going era terminal subscribers can find it at dayb . it's also available on the mobile and the bloomberg anywhere app. and you can customize it. just get the news on the indices on the assets that matter the most to you. this is bloomberg. ♪

shery: counting down to the start of trade in tokyo and seoul. some of the stories we are watching, tokyo reported its highest number of covid cases since the start of the pandemic. we have seen the spread of more infectious variants just as japan started reopening to torres. japan also reportedly mulling plans to provide a fifth coronavirus shot to limited groups of people on the

corporate side. we are watching shares after cathie wood sark funds. ahead of the machinery makers earnings next week. over in south korea, the government planning to exempt taxes on interest income and capital gains but not residents. foreign companies investment also and bonds and monetary stabilization. bonser also included in the proposal. also on the tax fund, top corporate tax reduction 22% from 25% could be underway. plus, major company earnings to keep an eye on industrial bank of korea said to report their second quarter financials today. haidi: let's get a quick check of the latest headlines. one of elon musk's top lieutenants is said to be under internal investigations or his role in a plan to get construction materials. he is the executive running texas tesla's factory. they said tesla plans to part

ways with him in terms of the exit. some inquiries have already moved over the investigation. sam some electronics is spending on most $200 billion to add 11 more chip manufacturing plants in texas. the company revealed the plans to compete for a financial incentives program in the state before it fires this year. samsung was already investing $17 billion in texas on an advanced chipmaking facility. blackstone cashed out of big deals in the second quarter, helping ease the pain of write-downs. contributive learning site 80's -- fell 86% from a year earlier to $2 billion. driven by 29 billion from deal sales. at the same time, the world's largest asset manager led to a this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going?

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shery: getting cpi numbers out of japan.

coming in gains of 2.2%. in line with economist estimates for the month of june. a slight acceleration from the previous month. food and energy core core cpi, 1% gain, which is slightly ahead of estimates. the headline inflation number year on year growth of 2.4% in line with estimates for the month of june. this is pretty much expected that core cpi would come in again at a 2% target for the month of june. but still of course, the boj does not like this inflation cost push factor like food, commodities, weaker yen, instead of that demand growth of stocks by the central bank. interesting, from deutsche bank i want to mention, they are saying that the boj's confidence that inflation will stay under control sounds like the transitory argument we have seen in the past and bank of japan is having shades of rba and that they may be too late to hike.

>> that certainly was the concern that the boj would be looking to frontload the hike. as we continue to monitor the inflation productions, the boj's upsetting it's inflation projections yesterday. that does lead to the conjecture around where rates go from here. with recession fears rising, fewer bets are really being placed on bonds in the end. now the yen is still sitting around that same level we had a bit of strength coming back in a post the boj decision. governor kuroda saying that no change is expected to try to prop up the currency in the short-term and really it would take massive hikes to get us to that point. meanwhile, nikkei futures coming online, looking slight here. haidi: we are joined now for a bit more context and tokyo. we heard from governor kuroda, no interest in tweaking policies

or changing or targeting the end. >> that's right. kuroda is clearly sticking to his position. i think if you look at the headline inflation figures, you can understand how he comes to that conclusion as we have seen over the past few months, inflation in japan is mainly led by those energy and food and commodity costs. i what the government has decided to do is to focus on making handouts and so on and a fiscal policy that can help people who were hurt by that and helps more people that were hurt by that rather than change monetary policy, which risks a much bigger hit for what the government is saying to small businesses and to homeowners who might not be able to cope with the higher interest payment. haidi: what are they thinking is -- shery: what are they thinking is the plan forward? not to mention global growth almost slowing down. >> those are the two sort of

clashing risks that everyone is seeing coming down the road. but i think -- i mean, we are looking at the news on the food front. we are seeing that there is good news about wheat exports from ukraine. the market stabilizes there and it will help at the moment and there is another pressure on prices that can make it go up further. i don't think, in itself or the public at large, it's really a concern. people are really not traveling abroad very much at the moment, say -- so they are not concerned directly about where the yen is, although the government is concerned. haidi: are they reporting the highest number of covid cases, since we have seen the arrival of the subvariant playing out there, has there been much government response to expect policy to change at all?

>> we are seeing a peak of cases so far, which is almost doubled the previous in the year. the number of serious cases and death still does remain pretty low. i think at this point, the prime minister is preferring to air on the side of trying to keep the economy going. japan's population is the most elderly in the world and they do tend to be rather conservative about what they want to be in terms of the virus. i think he is very concerned about the economy at this point. so what he's doing is he is doing a bit more vaccination, although it is still quite limited for elderly people and people working in the medical field. but i think what we could see is that he will perhaps delay the loosening up of the border restrictions, and we still have restrictions or numbers who are able to come in, and i think he

will kick that down the road for the full opening that he promised earlier in the year. >> isabel reynolds joining us, the latest on covid-19 in the boj's path, and really not giving into global peer pressure when it comes to tightening. blackstone group said earlier this week that the fed will need to go on a line -- on a longer tightening cycle and rates could go as high as 5% to control inflation. we speak about inflation and web blackstone is doing to prepare its portfolio company for the recession. >> what we have always been doing is talking to our companies and our people hear about the changing environment. we have been highlighting inflation for some time. we are obviously talking to our companies about the slowing economic environment. although many of our companies are seeing real strength on the ground. technologies traded off a bunch, and yet our enterprise software companies are doing quite well.

i was talking to one of our big ceos and he was talking about the strengthen his business. so, we are telling companies to be mindful of the environment, but it's still decent on the ground today and there is an awareness that they are slowing. i think companies will show restraint, but as i say overall, a picture is still mixed and there is still a fair amount of economic momentum. >> what about inflation? there is a debate on how much it piqued versus how much it could be a problem for companies facing margin pressure. where do you stand? jonathan: i think it's a mixed perch -- a mixed picture on inflation. we have is fixed prices coming down, commodity prices coming down. in europe labor is challenging. in the u.s. labor markets are very tight. and i would say rental housing, an area where we have substantial holdings, we are seeing much bigger increases than the sheltered numbers and that government statistic.

what i'd say is i think the inflation will ahead lower, the fed is obvious lee focused on that, but it will probably be sticky at a level and some of these areas for longer than people expect. and i think we have to get used to that. >> your economist made a huge call this week that funds going to 5%. that is significantly higher than where the banks see it going. if the fed funds go to 5%, does really need to go that high in order to control inflation? jonathan: i think it's very hard to make predictions. for me, what i would say directionally is, i think this will be longer. i don't know ultimately how high fed fund rates go, but as i said, i think the fed will have to hold here probably longer. the markets pricing and cuts in early 2023, and that feels a little premature to us given the strengthen the economy and some

of that residual inflation i was talking about. haidi: blackstone president and ceo jonathan gray. college of the law tells us the ways in which we can empower more women intact. this is bloomberg. ♪

vonnie: this is "daybreak asia".

the ecb raises key rates 50 basis points for the first increase in 11 years. that's ahead of most expectations. the head -- the hike ends and experiment of borrowing cost. the central bank said more rate rises may be coming. the president announced a tool to prevent borrowing costs from jumping aggressively and weaker economies. christine: expect inflation to remain undesirably high for some time, continued pressure from energy and food prices and pipeline pressures in the pricing chain. vonnie: president biden has tweeted that he's doing great after testing positive for covid-19. the white house as he's experiencing mild symptoms and has begun taking treatment. he will isolate while continuing his things on zoom until he's testing negative. president biden: i am doing well, in the meantime, thanks for your concern. vonnie: the u.s. congressional

committee investigating the january 6 u.s. capitol riot will televise in prime time for what could be its final hearing. a democratic member said they will make the case that former president donald trump was a derelict of duty. evidence will be presented that donald trump waited more than three hours before asking them to leave the building. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is bloomberg. haidi: the tech industry has been widely criticized for its white male dominance in racial and gender disparities. research from our next guests says cultures prevent many women and people of color from progressing in the sector. she has some simple ways to make tech less toxins. joining us now or john williams, professor at uc hastings college. great to have you with us. are you able to talk us through the main findings of your report? joan: the main findings were, we

focused on women of colors experience and we found -- experience intact, and we found that they experienced more of every single kind of bias than white women do. of course, white women encountered more biased than white men do. but women of color reported, for example, threading -- 23 percentage points more of the kind of bias where proof begins. where you have to prove yourself over and over again. one of the other dramatic findings we have found is that women of color often have to literally work harder then anyone else in the workplace. they have to work harder to prove themselves, but not only that, in smaller companies, they have to do more things on top of their regular jobs. even to do all of hr or to be the office manager. when these things are not part

of their job descriptions, and of course when performance evaluation comes around, they are assessed typically just on what their job description is. so, women of color have to literally do unpaid work in order to get ahead, which of course has really important implications for their performance. haidi: we know the challenges and the struggles and the cultural biases in the institutional biases and structural biases. are there ways that you could see it as being impactful in making more gains? >> absolutely -- joan: absolutely, in the report we have very detailed best practices that many of them we have piloted with companies, some of them we have shown with experiments of actually concrete effect in a short amount of time to level the playing field for

women of color. for example, there is a very simple two-page sheet that -- just reading people through it, can increase the performance evaluation and bonuses of women of color. that can take less than five minutes. so what we have found is that sometimes just an evidence-based tweak to one of your business systems can level the playing field in a short amount of time. so companies find interesting about, what can we do, read the report, implement the bias interrupters. shery: when it comes to gender disparity, how important is factoring in childcare and parental leave? joan: childcare and parental leave are an issue, but that's not really what the report focuses on. quite apart from the issues that women see and some men do as

well, certainly company should have equal parental leave and shouldn't expect them to take it. quite apart from those issues, even mothers who performed exactly the same before they had children faced what's called maternal bias. other people assumed that they are less committed, even when they are doing exactly the same thing. so, company sometime say, we just can't keep women because of work family issues. very often companies -- i hate to say this, if women are leaving and telling you it's because of work-family issues, but in fact is because of bias in the workplace, it's because of your climate. it is very easy to fix, you just need to go step-by-step and business system by business system and fix it. shery: is that a reason why we see the huge compensation gap as well? joan: again, women who are

having exactly the same performance as men very often are being saved last very systematically. it's everything to do with bias. another form of bias that we haven't talked about is that women often are judged much more harshly for not having quite the right emotional tone for coming on too strong or being intimidating, for example. intimidating is the word that black women in tech meet over and over. and latinas in tech we found over and over again are called things like icy or sassy, which are really interesting terms. it sort of like saying you are acting above your station, you are not acting the way we expect. you're acting more

authoritatively than we expect a woman like you to ask. shery: joan williams, really good having you on. professor at uc hastings college of the law. we are really talking about the divergence we have in disparities between genders and races at the moment. one of the faces where we see that gender gap is in japan. despite the fact that we saw the former prime minister really trying to push more women into the workforce. there was some success in his eight years in government. we actually had millions of women joining the workforce in japan, with of course the banner of women. but we haven't seen so much success when it comes to female executives. haidi: a lot of these new female workers and companies had to come up with business plans to bring more women back to the workforce.

a lot of them were in the regular positions. part-time, temporary contract positions. more vulnerable than the slums that we saw when it comes to retention rates across the pandemic. that meant that women made up the bulk of the jobs that were lost in the early months of the covid pandemic. at the senior level, it's a lot of disappointment. as you say, the goal that shinzo abe had a women feeling 30% of leadership positions, we actually see a really slow move. those numbers, 258 of almost 2.5 thousand on the nikkei 225 index company boards were filled by women since shinzo abe stepped down in september of 2020. still a lot of work to do and a long ways to go. speaking of the pandemic, a long way to go when it comes to covid zero from china. getting the update in terms of how the areas of shanghai are being targeted. the financial hub is targeting six medium risk areas subject to lockdown. this coming as we continue to see the stocks start the

situation when it comes to the lockdown restriction fears, the fears of returning to more severe lockdown restrictions. the cases continue to hover at around that two month high this week. residents have previously hiked in areas that are growing fearful. and they are warning of the big challenges ahead as we get both of those numbers out of shanghai. 18 new local covid-19 cases. much more to come here on "daybreak asia". this is bloomberg. ♪

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haidi: we are tracking the fallout of the global supply chain crunch and these other top stories. a late trade after reporting that second-quarter margin squeeze due in part to inflation on higher supply chain costs. the toymaker's net sales were a beat and expect sales to grow eight percent to 10% for the full year. they have secured enough battery supplies to build more than half a million electronic vehicles annually by late next year, but it's a huge leap from the 27,000 ev's sold last year. ford has had yields with material companies like bhp and rio tinto to fast-track shortages. has a ceo elon musk has called for more investment in lithium refining which shortages and battery materials. it's limited to global capacity to limit the hive metals needed for battery supply chains.

musk says lithium mining is easy but refining is much harder. shery: take a look at lithium prices, because it is --. take a look at that, nearly 400% higher than a year ago. bloomberg terminal users can read more about it in our newsletter. that's on and i trade nl. shares rose in the u.s. session after chinese regulators slapped it with a $1.2 billion fine after wrapping a year-long probe. there is uncertainty hanging over the line and may be assigned that the worst is over for china's tech sector. as get to asia equities editor. >> good morning, this is definitely closure. you have to remember this has been an 18 month, two years sort of time now. this investigation or the broader crackdown of the sector

started with when authorities suddenly grew the groups and later of 2020. and there was a tech crackdown. it might be in the u.s. and the shares for this company and shares for all the other techs have had fallen. i think investors are quick to say that even though this has happened, we aren't so sure because we remember. it has not been forgotten so quickly and i think investors say this is great -- great for the closure of this company, but they are concerned for the broader market. haidi: is it too early to say that this signals the broader end to the tech crackdown? >> this is something we have been asking investors and analysts. everyone says, not so sure. there are things that are unresolved. what about the gaming site, is

that going to be settled, some of the crackdowns and the other sectors. every time someone has tried to call the bottom, they have been proven wrong. so in this atmosphere, with so much volatility, i think that will need a little bit more time to see the dust settle before they can get back in. shery: asian equity editor catherine there with the latest on tech regulations and china. we are very much focused on capitol hill. the second primetime hearing by the capital hearing investigating the january 6, 2020 one insurrection -- january 6, 21 insurrection. a lot of focus on president trump's 187 minutes of inaction. this as the armed mall was attacking the u.s. capitol.

one or if we could see more witnesses coming forward. haidi: that is really key. this is supposed to be the finale, the eighth hearing, but we could get more. we are getting that started in a few minutes or so. but looking in the hearing, the first person view from inside the west wing of the white house in terms of what the president was doing in terms of the attack. the efforts to act sooner or more decisively. we will hear from the former national deputy security advisor in the trump administration who resigned after the assault. trump deputy second sect -- secretary will be hearing from. there will be video testimony and key when it comes to some of those players. the former white house chief counsel who called trump's actions a dereliction of duty and potentially also some insights again. that is all coming up next in the market open. this is bloomberg. ♪

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shery: this is "daybreak asia", counting down to asia's major market open as china continues to battle its covid outbreak. tokyo hitting a pandemic record in cases. even president biden testing positive for covid. haidi: of course, we continue to keep our focus on capitol hill as we get this potentially final televised primetime hearing into the events of january 6 getting underway just at the top of this hour. the focus will be 180 seven minutes. 187 minutes of inaction by the former president donald trump. as we saw the armed mob attacked the u.s. capitol. that will be the focus and testimony in the hearing. let's get you the latest when it comes to the market open in hong kong. annabelle: we've got the open of japan, korea, we continue to monitor the moves we saw on the previous session, posting their

biggest drop in week period a lot of concerns about the economic signals you're getting from the u.s.. recession risks, president biden testing positive for covid. those moves should provide some support for japanese bonds this morning, but also there is speculation around the path of the boj because we did have those inflation numbers coming out and what was really important whether core cpi numbers. still rising beyond that 2% target coming in at 2.2% on the year. when you strip out the fresh food, energy will see gains of 1% on the year. the boj is seeking price pressures unlikely to be sustained. they are speaking with the policy settings. coming online a little bit weaker, reflecting these reset -- recession fears in the u.s. turning to korea, because we did have some producer price data coming out this morning as well, quickening in the month of june. singling how hard it is to bring

down inflation in the battle against consumer prices, commodity prices and supply chain disruption. we saw rising manufacturing prices, also key driver, consumer prices in korea. level increases and more than two decades. pressure on the be ok that we already signaled they are beginning to move forward and 25 basis point increments. stocks keeping an eye on the chipmakers this morning. we are seeing the cost at gaining against the board of kospi index. a couple of reasons for that, a primary one, the moves we are seeing for chipmakers specifically for the u.s. clearing this deadline or this path towards providing more subsidies for domestic chipmakers that could benefit the bigger names in korea and japan, possibly taiwan. although, gina speaking at a conference a the dependence on taiwanese chips is unsustainable. that's quickly moved to australia as well as the asx 200 could be dented by the recession fears. the covid out.

-- outlook here is really expanding more district under lockdown. brent crude is higher at the start, but still, we are looking at the longest drop this year. shery: of course, those demand concerns are really weighing on the markets and oil prices. our next guest says the u.s. equity market is showing higher quality characteristics than other markets, but growth is likely to come from e.m. asia. joining us is the global market strategist at j.p. morgan. good to have you. what does this mean in terms of what you like and asia at the time when we continue to see more covid around the region and start and stop reopening surround several different companies -- countries? >> that's right, recession risks has risen in the developed market, but one of the bright spots we are seeing is really in asia and japan where a lot of

the other economies are continuing to reopen strongly. china, even though it still grappling with the covid situation, more recently there is also some concerns over the recovery of the property market, but we do believe china is on track for more strongly in the second half of 2022, and that should really help to bolster chinese equity market. shery: when it comes to earnings, how dependent are asian companies in the region and more globally? >> that's a good question. one of the bright spots that we are seeing is that if you want to break down -- sorry about that, if you want to break down the msci asia index, if you look at where their graphical revenue of these companies are coming from, it's actually 80% from asia. and with age -- 80%, 20% is coming from china. to the extent that china is

resounding in asia and japan as a whole is starting to grow again, than that should be a pretty positive offset for your global outlook. haidi: interesting that you are constructive when it comes to china. there are some pretty measured risk. one of them is the fact that covid zero in these strategies going back into lockdown, the impact on supply chain, all of that is going to put a cap on the productivity of stimulus and the ability for the economy to rebound. >> there is a fair price for everything, if you look at how significant evaluations are across many different sectors than the chinese equity market, and you look at how low earnings expectations have actually gone. actually there is moves that we are out of a place that there is a factor that is positive on china. so we do believe that it will

continue to grapple with the covid situation. but the more important thing is we are adopting a much more accessible approach and locking down cities as a whole and rather focusing on more problematic spots. haidi: a lot of this hinges on whether we see continued strength in the dollar. do you assume that, and if so, what do you avoid across the region that will be badly hit by the strength of the greenback? >> i think throughout the euro, there are questions as to how the dollar has continued to remain strong by the evaluations. so the first thing is the hawk is federal reserve. in the second is the dollar status currency. so given that the global outlook has been significant, it is not surprising that people has flock towards a safe haven asset as

they seek shelter. historically, it has not really been a big positive for asia equities or emerging markets as a whole when the dollar is strengthening because -- for global growth situation. we want to avoid this as a whole because there are opportunities. there are more companies that benefit from this company. it will focus more under local economic growth in those are the opportunities. haidi: global market strategist

at j.p. morgan, we appreciate your time. let's get a look at the early movers, what are you watching? annabelle: taking a look at the biggest chipmakers in asia this morning because we have seen the u.s. progressing even further to this promised a for the biggest chipmakers domestically there around $50 billion worth. so how that is impacting asia. we are seeing tech stocks looking weaker, but broadly. we have seen them rallying up around 20% nearly this month from the low. so please subsidies, they could also help some of the biggest names in this region, particularly in korea and japan. gina has been highlighting taiwan and the dependence on chips there as a major risk to the sector. let's turn also to look at some of the social media companies. because snap is really following this very disappointing earnings for the social media giant around ad revenue and receding spending there. that has been a major drag on the stock and after hours. we are also seeing subsequent losses for its peers here in asia. shery: let's now get to vonnie

quinn with the first word headlines. vonnie: italy will hold an early election on september 25 after mario draghi resigned as prime minister. the president officially called the vote after dissolving parliament. polls suggest the central right coalition led by the brothers of italy could have a clear majority. they now face months of political uncertainty. russia has resumed sending gas to its biggest pipeline, but insurgency remains about future flows. delivery returns to 40% capacity after a ten-day maintenance. for now, it eases european fears that russian president vladimir putin would keep the pipeline shut and the pipeline has been under repair in canada remains held up in transit in germany. tokyo has reported a number of covid cases since the pandemic began. the city recorded 32,000 on thursday, topping the previous record set in february. covid resurgence has been driven by the spread of more infectious

variant. that comes as japan opens to tourists. this is bloomberg. ♪ -- global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. shery: in washington, the january 6 house committee has started its latest televised hearing. the main focus will be president trump's 187 minutes of inaction as an armed mob of his supporters attacked the u.s. capitol. let's get more from our government reporter, emily wilkins. this is just the second primetime hearing. what are we expecting? emily: this is really expecting to hone into a moment that i think was more shocking for a lot of people within trump's party. the fact that he had his vice president in the u.s. capitol, that he had his allies in congress and the u.s. capitol, and he did nothing to call off the mob that was potentially very dangerous, they got so close to vice president pence,

and that's where a lot of the concern was. if you talk to republicans in the days following january 6, a lot of them were shocked and a lot of this hearing will focus on what trump did and did not do during that time. why didn't he call the national guard, why didn't he try to talk to the national department of defense or attorney general? we will hear testimony from the deputy national security advisor , as well as the deputy communications director sarah matthews. both of them were in the white house that day. both of them were within trump's orbit, and it's going to be very interested, again, what the committee tries to do saf they offer all the hearing. it's for those inside the white house who were around former president trump and let them tell the story of what happened that day. haidi: this is supposed to be the last of a number of primetime televised hearings. are we likely to hear more and have more of these hearings after tonight? emily: the committee has announced they will have more

hearings from september. that's around the time we are expecting the committee to release some type of a report showing what their findings are. initially, this was supposed to be the last hearing, but since the committee started doing these, more people have come forward to speak with the committee and the committee says and the committee says it now has more information that it needs to share, as well as process. haidi: bloomberg's u.s. government reporter emily wilkins as the hearing gets underway. still ahead as we watch the story, we will talk more about energy. explaining how resumed a russian gas flows to the nurturing pipeline does not mark the end of europe's energy crisis. the ecb going big for its first rate hike in 11 years. we will hear from christine lagarde next on her outlook for inflation. this is bloomberg. ♪

>> we decided to raise the three key ecb interest rates by 50 basis points and approved the transmission protection instrument. >> all members of the governing councils running to the consensus of 50 basis points. economic activity is slowing. russia's unjustified aggression towards ukraine is an ongoing drag on growth. we expect inflation to remain undesirably high for some time

owing continued pressure from energy and food prices in the pricing chain. >> christine lagarde, the ecb doubling the signs of the first rate hike in more than a decade saying that the economic data will determine the signs of future moves. let's get more from bloomberg's global economics and policy editor kathleen hays. i understand that inflation accelerated more than they expected, but why not to what they said that they would be doing and guided the markets for 25 basis points? kathleen: i think what's going on here is that there may be is a bit of a shift. that's one fundamental shift then just they did 50 basis points and where they are going next. it's realizing at a time like this they got so far behind on their inflation side, and it seems like the ecb took a long time to start hiking rates. and now, what forward guidance, we will realize it's more part

of the great financial crisis here. this is a very, very different time. the 50 basis point rate hike only got them to zero. it's not all that aggressive when you stop to think about it. at a time when the ecb president christine lagarde says she's worried about inflation because she sees price pressures that are spreading out and it's going to remain undesirably high for some time and they acknowledge the recession. you heard that in the statements we just read with christine lagarde in today's press conference. and yes, christine lagarde made it very clear they are dropping the forward guidance they gave earlier in the year when they said, yes we will hike rates, we will do 325 basis point rate hikes, june, july and september, and we are going to take it step-by-step. one more look at the thing that they did it is the transmission protection instrument, the anti-fragmentation tool, the tools that they can buy bonds

with an individual countries inside the euro area if these rate hike start hitting the indebted nations like italy hard. if those spreads and yields keep widening out. in fact they said they would rather not use her, but they won't hesitate to do so if they have to. i think it's interesting the more we think about, we may be seeing more of a fundamental shift in central banks as well. haidi: ecb is the latest in the series of generally bigger than expected rate hikes. does this mean we toss our forward guidance in this environment? kathleen: does this but the nail in the coffin of forward guidance question mark i know just what you mean. it's not the first one, but it's all been happening quickly. we had the federal reserve, two days before the meeting of the first hike of 75 basis points.

suddenly there's an article in wall street journal not attributed to anybody, signaling they are looking at 75 now. it signals 25. christine lagarde open the door to a more aggressive hike if things were happening like inflation accelerating. we are going to be watching the numbers, and we could change what we are suggesting if the numbers change a lot. central banks got behind on inflation and now they realize they've gotta catch up quickly. it does seem that it's something that is always going to be out there, but markets and investors have to realize it's about the numbers. >> kathleen hays with a look at the central-bank action. first hike in 11 years on the biggest since the year 2000. look at our european stock futures as we get into the end of a hectic week. i'm change when it comes euro

stoxx 50. it is looking pretty flat the moment. we saw euro shares rising in the previous session. an italian shares are unsurprisingly underperforming given the political turmoil. we did see financial services in tech stocks leading the advanced energy travel leisure dropping. we saw banks doing quite well in that session. let's bring in our bloomberg intelligence european equity tim there. let's start off with your view on the ecb. history will tell us this is the decision that has a lot of risk, given the last two times, they have different crises brewing, they had to unwind pretty quickly. how are markets and investors feeling? tim: the relative calm that we saw yesterday on what was a very big day in terms of actions

speaks volumes. you've got relative calm, stocks relative calm, bonds, even relative calm in the euro. the ecb is talking about being behind the curve. it's not just more a data-dependent approach. in that signals credibility. shery: tim, unfortunately we can't hear you very well. that's tim with the reaction on the ecb move. we have play more to come. stay with us. this is bloomberg. ♪

haidi: let's bring back tim who joins us now from singapore. or market sanguine when it comes to the ecb move.

there was negative news factors for your brain now. -- for europe right now. tim: i think there is good and bad from yesterday's move. i think if you look at the calm across stoxx, mainstream european bonds, like the euro, that's a good thing and it shows that there's increase credibility from ecb policy with them moving to a more of a data-dependent strategy. the decline in bond yields over the course of the past several days, a couple of weeks, i it's also a signal that the market is starting to think that the ecb can have an impact on growth, slowing growth, which is going to be a positive for inflation going forward. i think the negative out of yesterday's move is the italian bond yield, which we did see rise, which signals the market isn't quite clear yet on whether the ppi is going to be effective . i think the ecb is in for a

test. the market is going to push this to see if the ecb will act and use the tool as they vindicated. shery: especially since the italian politics seems to be a bigger factor at this point, then dealing with their own government issues with mario draghi resigning. what other possible outcomes here? tim: it's an interesting thing. italian politics are just constantly a state of flux, unfortunately. i suppose the good news at this point is there's a lot already discounted in the marketplace, even if this goes on for a while within decision. the market is trading at seven and a half times forward earnings, which is where it was back in the last crisis. what's going on in the broader market context, but i think a

lot of bad news is priced. we will see what happens if they can cobble together the coalition and some form, which would be the upside case, which we could see a nice release rally. we will continue to keep italy on the sideline in terms of how we think broadly about european markets. haidi: how much work does the energy crisis get in europe? obviously, a bit of release with nord stream coming back online, but that's only part of resolving the issue. tim: i would agree with you. there -- you said it, there was a big sigh of release -- relief yesterday. that said, we are still -- with nord stream coming back on running at only 40% of capacity, there's a risk of further outages ahead with more maintenance that is set in scheduled to be done. in both natural gas, as well as

oil, are possible weapons that can be used within the conflict that's going on between russia and europe more broadly. germany bears the brunt of the blow. our analysis from this would suggest that if gas were to be cut off, the german industry would suffer significantly. basically, germany would need to cut back 25% of their natural gas demand and all of that is going to go to things like big chemicals and other companies. it's a big risk, even though yesterday was a good reprieve. shery: tim there with a look at what's happening across europe and a look at the energy, supply disruption, adding to new inflation concern, which is why we see borrowing costs around the word -- around the world rising and uncertainty of risk about the default rising. we are hearing from the intelligence unit that asian

frontier markets could suffer the most, the highest chance of default in the next four years followed by mongolia and myanmar. haidi: it's very interesting because we keep hearing from economist that asian emerging markets are in a lot better situations compared to the taper tantrum compared to the asian financial crisis. you are right, frontier and things like mongolia are in the tight spot of the surging input costs. mongolia is expected to be reliant on new debt inflows this year. the king at debt restructuring and ownership transfers as a possibility as they come under that that pressure. we have more to come here on daybreak asia. this is bloo 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,

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vo: call 211 or visit 211.org 2-1-1 get connected. get help. ♪ >> breaking news out of japan, this bank numbers softening.

the composite, 50.6. softening from 53. the services number, 50 .2. manufacturing, to point to from 52.7. still in expansionary territory, but a pretty soft number coming in especially for services, down to 51 and close to that threshold. took it has now hit a pandemic record of 30,000-plus days cases. let's get a check of the markets. not clear direction when it comes to the japanese equity space. annabelle: just picking up and what you are saying about the pmi numbers for japan, yes, we have the tokyo covid cases rising. high import costs. energy really spiking as well as fresh food.

in terms of what were seeing in the market reaction, the yen is being driven by that continuing differential between the u.s. and japan, still sitting at a one-week high against the dollar this morning with the boj governor signaling that he will not be doing anything, at least in the short-term, to stem that. in the stocks, a mixed picture across the board, the msci pacific index, eking out some small gains. we can look at the four-week basis. globally, shares are set for the past few weeks. the reason for that has been driven by what we are seeing in the dollar. he continued see weakness coming in we have the recession risks returning with the leading indicators saying that a downturn in the u.s. could imminent near the end of the year. haidi: that are volunteering

into the attacks on the capitol on january 6 is underway. let's get to jodi schneider. tell us what the key focus is. jodi: the hearing began a little more than one half hour ago and is being presided over by liz cheney. bennie thompson, the committee chair, has covid and is remote. liz cheney made the statement right from the top, that the president abdicated his oath of office and did not live up to his oath of office as president, president trump on january 6 of 2021, because he didn't try to stop a mob that was attacking the capitol for 100 87 minutes. when we will hear that number a lot tonight during this hearing that he did nothing from the time that the mob attacked the capitol, to when he finally made a statement. they showed that statement, and

we are starting to hear from witnesses who were there, who were at the white house that day , who heard things from that end of things. we are not hearing so much what happened at the capitol in this hearing, more what happened with the president and why he did not act. shery: i am curious what happened with the deleted secret service texts, if we can get any insight into that. what should we be watching out for? jodi: there is a number of texts. most of the texts from january 6 that seem to be missing from the secret service. some perhaps were deleted. there is an investigation, the department of homeland security investigating this. there is a real question, where the texts went, if they were deleted, why they were, which could be a criminal offense. that is being investigated and will more about that.

and apparently there is more to come. liz cheney at the start of the hearing, said we are continuing to get more information. the investigation is ongoing. as these hearings have gone on, they are getting more information in, so the investigation will continue throughout the august recess of congress, and they will likely have more hearings this fall. haidi: we will be looking out for those after this break hearing today. bloomberg political news director jodi schneider, turning us from capitol hill. let's get to vonnie quinn with the first word headlines. vonnie: the ecb raised its key rate 50 basis points, its first increase in 11 years, i had number of most expectations. it ends the experiment with subzero borrowing costs. more rate rises me becoming. president christine lagarde also announced it will prevent borrowing costs and jumping aggressively in weaker

economies. >> we expect inflation to remain undesirably high for some time, owing to continued pressure from energy and food prices, and biplane pressures in the pricing chain. vonnie: china's banking regular about to ensure that regulators finish building pre-sold homes. an official with china's ranking and insurance regulatory commission said it would work with the pboc, and the government to ensure stability. president biden has tweeted that he is doing great, after testing positive for covid. the white house says he is experiencing mild symptoms, and has began taking paxlovid. he will isolate will continuing his duties via phone and resume until he tests negative. >> i am doing well, got a lot of work done. i will continue to get done. meantime, thanks for your concern and keep the faith. vonnie: 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. haidi: russia has begun sending natural gas to europe again through the nordstream. shipments have returned to 40% of capacity. it's bring in our next guest. let's start off with the big picture chart on the bloomberg, which shows what we have seen in the past few months when it comes to the curb by of russian gas to europe. there is still talk and concerns that we could see that 40% drop lower, depending on sanctions and how they are act the maintenance of these pipelines. do you see the restart as positive, but not fundamentally changing the trajectory of this energy crisis? >> that is right, i think advised germany and europe at large sometime, that it doesn't change the calculus that they have to work very aggressively

right now to curtail and ration their demand, especially going into winter. russia has been not shy about using natural gas as a geopolitical weapon. we think russia wants to enact maximum pain on the west and sow disunity. we expect supply, going forward, will be up or down. russia will try to do whatever it can to put maximum pain on europe, and especially with europe announcing plans to reduce by two-thirds their reliance on russia for the end of the year for natural gas supplies, i think russia is saying, don't worry, we will do that for you, we will just do it on a timetable that is best for us. that is the concern, that europe will not be able to fill their inventories ahead of the winter season. haidi: what options are there other than rationing supplies?

how quickly could u.s. supply and exports come in? and does not seem to be a short-term solution there. >> the problem is that europe, since the invasion of ukraine and the prospect of russia weaponizing natural gas first came to people's attention, the problem is europe has been focusing mainly on supply and an alternative sources to russia. as you mentioned, that will take a couple of years to get the supply up and running and the associated infrastructure for it. so really, the most important thing they can do in the short-term, is think about how to use their demand constructively. that is really where russia has the upper hand. there are difficult questions in europe as to how to ration. it's not just a question between residential versus industry, particularly in germany, making difficult questions as to which

industries can continue at what levels and which industries have to have more curtailment, really you are talking key differences between germany and other countries in europe that are not quite as reliant on russia and use as much natural gas. that is where the question of disunity within the continent comes into play. shery: will receive a reversal away from renewables, given that they want to start to coal power generation this winter? tamar: the unfortunate situation for europe right now, they were thinking that the big seasonal problem would be the winter. they have to fill up inventories ahead of the season in winter when there is higher demand for cooling. but unfortunately, europe is in a massive drought and heat wave

right now. which means there has been more unanticipated pressure on other sources of energy. as you mentioned, wind and solar is not working very well in the extreme heat. there is difficulty in getting coal because river levels are lower. wind power is not working as well. i think there will continue to investment in renewables in the long-term, but seasonable patterns and weather patterns are making that difficult in the short-term. an unfortunate casualty is the environment, because coal has really been germany's main alternative source to german national gas -- natural gas. shery: what are you seeing in terms of demand coming from china? we have seen oil prices impression recently as well? tamar: china has been ambiguous. the intermittent lockdowns have been a factor in why crude oil prices have come down recently.

europe actually caught a break because china has been in lockdown, because that is actually enabling more lng supplies to be diverted to europe, instead of going to asia and particularly into china. so, it is a big question if china continues with this zero covid policy. we are uncertain if that will continue, especially as the communist party has its congress in october. but until now, it has been helpful for european consumers of natural gas and it has a bit of pressure on the crude oil market. shery:. shery: to mark exner, principal from vectors energy partners -- tamar essner, principal from vectis energy partners. thank you. coming up, an update on the omicron surge, next. this is bloomberg.

♪ shery: look at how asian stocks are trading at the moment. energy is the biggest loser right now, not apprising, given oil nurses are still below the $100 a barrel level for wti. demand fears. the ongoing chinese outbreak. it is summer driving season.

libya is restoring production as well. tech at the moment is gaining ground, but not a lot of positive sentiment today across the markets, haidi. haidi: and when it comes to the backdrop, we are seeing the subvariant really taking hold good tokyo for example, reporting its highest number of covid cases into the start of the pandemic, driven by this more infectious range of variants. our manager for asia global business emma o'brien is here. we are seeing a very fast pace of how cases are raising. emma: that's right, almost across-the-board. even china which is deploying a very different strategy to the rest of the world, we are seeing an uptick, mainly because of the subvariants, ba.4 and ba.5. they are strains of omicron, which itself was more contagious than the variance before it.

these are more infectious and appear to be more impervious to the vaccines when it comes to transmissibility. shery: what is happening in macau? they are now targeting filipino residents? emma: yes, very interesting developments in macau. they are about to reopen the casino sector there, which is the bulk of the economy, obviously being welcomed as cases are coming down, but still an interesting tweak in the way that they are deploying mass testing there. they said that anyone with a filipino passport, philippine nationals, even those that are macau nationals but have a filipino passport, they have to be tested every single day. they say it is because of the

social patterns of this ethnic group that makes them more vulnerable to spread, and the virus. but it is obviously being criticized heavily, and it harkens back to some of the more questionable moves that we saw earlier this year out of hong kong, which also unfairly, some said, targeted helpers and domestic workers there when it came to testing. sort of implying that those groups were responsible for morse red than other groups in the community -- were responsible for more spread than other groups in the community. haidi: what does this mean for the potential of returning to lockdown? emma: i think they are very much trying to avoid declaring a citywide lockdown, but it doesn't mean they are locking down, as you said. a number of areas every day, we are seeing 12-15 "areas," as

they call them, could be an apartment block or a neighborhood lockdown. it close contact having visited the building can see it lockdown for a few days. you are seeing vast swathes of the building lockdown, without them calling a very contentious and heavily-criticized citywide lockdown again. but the effect is similar. shery: emma o'brien, managing editor for asia global business, with the latest on the pandemic in asia. coming up, china's $1.2 billion fine for didi global is raising hopes that beijing is done putting pressure on its tech industry. we will take a closer look. this is bloomberg. ♪

sherry: here is a quick check of the latest business flash headlines. bank of america ceo brian moynihan the u.s. consumer remains healthy in the face of an ration and geopolitical turmoil. the bank is seeing borrowing and spending increase, and loans including credit cards and mortgages are back to pre-pandemic levels.

>> we don't have any plans to make any adjustments, because frankly, we had plans to adjust our headcount at all times. it is a constant learning for us in our company, is how do we use the human capital and the great team we have even more effectively and efficiently? shery: samsung electronics is floating the idea of spending $200 billion to add 11 more chip manufacturing plants in texas. the company revealed the plan in part to compete for financial incentive programs in the state before they expire this year. samsung is already investing $17 billion in texas on an advanced. chipmaking facility. hsbc is selling its russian unit to another bank. it is the latest international bank to exit the country after moscow's invasion of ukraine. the bank did not disclose terms of the deal. hsbc stopped providing retail banking in russia seven years

ago, while still offering services to international corporate clients in the market. shares of at&t fell the most in 20 years, after it cut its forecast for free cash flow this year by $2 billion. the wireless carrier says. customers are putting off paying their phone bills, and it expects the trend to continue. at&t was already facing pressure from deep discounts on new phones, and higher spending on network equipment. haidi: we are watching didi share. they rose in the u.s. session after chinese regulators slapped it with a 1.2 billion fine at the end of the year-long investigation. while some say it is a sign of china's easing on the broad tech shakedown, others say it may continue. . does this mean better times ahead for didi?

>> it is 5% of their revenue, a tad higher than what was said in terms of percentage to revenue for alibaba as well as mietuan. but what stood out is that this is the first time that management was also fined together with the company. going forward, did you mentioned yesterday that they are doing what they can and they will comply with regulations. you have definitely seen companies stepping up and articulating their commitment to regulations. so if that actually fuels compliance, i think naturally, we can expect that the number of

penalties and fines will come down. but the scrutiny will still hit. most definitely. shery: investors have been optimistic that perhaps this was the end of the crackdown, so what does this mean for market moves? catherine: a couple of things to take note of, in the technology sector, it is an evolving and ongoing marketplace, whereby there will still be new developments and new areas that may catch the attention of the regulators. [indiscernible] -- was linked to alibaba. it highlighted that there are still potential new rules. they may require new rules and further regulations and scrutiny. that is what marketwatchers, we all have to pay attention to.

further scrutiny will continue, and we should still be prepared for penalties, depending on how the market goes and how the regulators' view changes. shery: catherine lim from bloomberg intelligence. stocks we will be watching when markets open in the mainland, tech is in focus. the hopes that the didi fines will offset fears of further regulatory crackdowns. china's top chipmaker has reportedly achieved a breakthrough despite u.s. sanctions. other chipmakers were also watching, tsmc, hon hai, and pi

otech. haidi: china's gasoline demand rose above levels last month. so we are watching trading for china oil and gas, and others. coming up in the coming hours, we will be speaking with our guest, jeffrey cleveland, as markets digest the you see the hike in a decade. and the biggest it since 2000. fitch ratings is also joining us, they see china's mortgage crisis is a test of the broader banking system eggs resilience. that is it for ""daybreak asia"." our market coverage continues as we get to the start of trading in hong kong, shanghai and shenzhen. . the "bloomberg markets: china open" is next. this is bloomberg. ♪

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