>> good morning, welcome to

daybreak australia. we are counting on to asia's major market open. >> i am sherry on. better than expected earnings data. >> nancy pelosi goes to korea after her controversial visit to taiwan. china is conducting military drills around the island. >> opec plus squeezed out a token supply increase of 100,000 barrels per day, saying the capacity is severely limited. look at oil trading and agent section -- session. this reports afterward so that pressure in the regular session in new york given that we also have u.s. inventory pointing to slower demand and slower economic issues being flagged in

that data. look at u.s. futures at the moment. there is a little bit of pressure after the s&p 500 gained ground. we also had stronger economic numbers. that really mix things up. the 10 year yield headed toward 2.7%. higher given that traders are now pricing in higher rates. take a look at this chart. if you look at this and we are pricing more than 50 basis points a rate hikes for that september meeting, the meeting on september 24. that is a little bit of a gap between then and the last meeting. that better-than-expected data was the services gauge that rose just three months higher. given some investors some optimism about the economy.

>> that is a soft landing here. across asia we are looking a little bit more calm here. most futures pointing higher here. the exception is china. we did see that movie and the golden dragon index. a bullish signal for mainland and hong kong stocks. the dollar has been trimming some of those recent gains. the yen has been fluctuating between gains and losses. you mentioned that uplift we are seeing from the earnings result. we do not see that armageddon earnings season. the earnings season really getting underway over the next few weeks. we did see that big drop in the dividend payout. we saw a stark decline in profits as well. woodside among them. we have seen the minors really underperforming.

>> we had gotten that for to becoming an much more hawkish than we expected. this coming from the likes of jean talking about fronting big rate increases. it is really interesting that we are seeing the fed on this hiking path. we are expecting a rate decision as well. this after brazil just minutes ago signaled that they will assess the need for a smaller rate hike when they meet next after hiking the rate of 50 basis points. all of this faded through the -- fading through. i saw a pack trying to balance those responses to the diplomatic overtures from president biden to increase supply. it was a minuscule supply

increase. just 100,000 barrels per day in september. there was a much less than what they added in july and august. it gives that market extra supply at a much slower pace. this is what we're looking at when it comes to the actual production. opec plus production is actually lagging behind. they are not even hitting those plan levels. we are only expecting a fraction of what is being alleged to actually be delivered. >> let's get more on the markets with mike regan, stephen engel and sue keenan with our top stories. let me start with you. a bit of a mixed session when it comes to treasuries. maybe the soft rally continues. what were markets paying attention to? >> this comes from a few

different reasons. nancy pelosi traveling to and from taiwan without any major incident, i think that is the most acute risk that people were worried about this week. i say there are still some plans for china to hold some military exercises and there is some risk there that tensions could return but for today, that was a big one. as you put it up, this economic data today, the ism services index, factory orders, durable goods orders, not all better-than-expected but in that positive sort of growth area. investors are worried that economic data is not stream -- screaming in recession at the moment but the earnings are beating estimates by about 5%, showing right now that the companies have a growth of about 8%.

not really a blower quarter by any means. i really started to get worried about the economic data being on the downside. i think there was a lot of relief going around on all fronts and that is what we saw this really strong rally in the u.s. markets and of course, oil coming down back toward $90 a barrel. the lowest since february. because of a destruction and demand but also, still something i think the equity market will take pretty positively on a day like this. >> does that kind of renewed confidence, is that why we are seeing more of that rotation back into tech? we are hearing from analysts that they think this might be looking a little bit more overstretched right now. >> today, we had treasury yields back down, oil back down. some of those traditionally considered value stocks, they will not perform as well. the earnings season not showing

a disaster on a broad level for big tech. there were some idiosyncratic stories and execution problems but as a whole, tech is bearing this earnings season pretty well. for the moment, you are right, it looks like the growth of trade is back up at the expense of value for sure. >> as we go toward the edge of them, we continue to watch what china is doing in response to speaker pelosi's trip. >> geographically, taiwan is used to typhoons. this was kind of like a political typhoon that swept in for a 24 hour time. pelosi obviously moved on to south korea but then the cleanup happened and the aftermath happened and that is what we are going to be dealing with for the days, weeks, maybe months to go because of china's response and also, behind-the-scenes, we are hearing that the white house was none too pleased that nancy pelosi went ahead with the trip

despite the urging of the pentagon and maybe even some within the white house for her to not necessarily make this political grandstanding toward taiwan at this time of intense standoffs if you will between china and the united states diplomatically. yes, pelosi has moved on but we are seeing the military exercises. those are those six exclusion zones. try to state media called them danger zones where military exercises have been underway. the people's liberation army conducted joint navy air force and rocket force drills to the north, the southwest, the southeast of taiwan. they also quite alarmingly for the global supply chain, they simulated strikes on major ship targets in the taiwan strait and around taiwan by land and sea bass forces. taiwan also saying 21 mainland chinese military aircraft were detected in taiwan airspace.

22 of them actually crossed over the midline of the taiwan strait. they issued radio warnings and deployed air defense missile systems but saying so far, commercial aircraft have -- the effect has been fairly limited within some airlines are diverting to japan or philippine airspace and we are here in cathay pacific has instructed their pals to take 30 minutes of extra fuel on their flights. that will be around the taiwan area. >> what is up next on nancy pelosi's agenda? i would imagine this is quite challenging for u.s. allies in the region. >> she is in south korea. north korea is that big elephant in the room there. i think a lot of this discussion in south korea since the south korean president's office says pelosi will not necessarily or it is unlikely she will meet with president yoon.

maybe the discussions in south korea will be more unhappy -- on economic issues and chips. we talked with the tmc domicile there about the chip and science act and luring some of these chipmakers to come to the united states but one caveat of that bill is that anyone who takes funding including tsmc or samsung, they also have to promise not to expand their advanced chip manufacturing in mainland china. i think they will be some courting of samsung and just explain what this new chip still over five years means. >> is geopolitics also playing a part when it comes to opec's increase of supplies that was not as much as expected? >> let's talk about that limited increase. it is the lowest in the six

decade history of opec and clearly, that combined with the drop in demand we are seeing in the u.s. to build up the stockpiles put pressure on prices in the u.s.. we had a drop to near the $90 level. it has come up a little. clearly, prices have come lower. the fact that opec plus is only raising up to $100,000 per day speaks to the fact that they have amended ability to do so. drop it in the bloomberg and you see what we are talking about. it is that cushion that the oil producers like to have in case they need to produce more. that is why they are saying they really can't produce more right now. 100,000 barrels a day again. this most output hike and a bit of a shock. as heidi said at the top of the show, we are already in a situation where all but three of the opec producers are pumping below their output targets as of

june. there is a lot of output problems and production problems that limit what opec can do even if they wanted to put more oil on the market. >> have we had a reaction from the biden administration on this and how daisy domestic prices at the moment? -- and how they see domestic prices at the moment? >> you had a president that went halfway around the world to greet a world leader that is now -- it was a fist bump that received a lot of criticism. the biden administration said there would be for the steps by the saudi's to put more oil on the market. it just didn't happen. some say the biden administration may take some victory from the fact that prices are now lower and we have that new information from the energy agency that gasoline demand is the lowest it has been since the pandemic.

back to you. >> there was the latest on taiwan there. let's get you over to vonnie quinn. >> thank you and good morning. the u.s. and iran are set to return to vienna for another attempt to bring up their nuclear deal. they will try to rescue the landmark 2016 agreement. washington withdrew four years ago and reimposed sanctions on iran. president joe biden will find a second executive order intended to improve access to abortion services. it comes a day after they rejected an amendment to their constitution that would have erased abortion rights. the president lauded the kansas boat and reiterated the call for congress to enshrine -- enshrine abortion rights into federal law.

elon musk's lawyers are using twitter of exploding and distorting court rules. they said twitter was demanding more time as a part two -- as part of an effort to which media campaigns. twitter says that musk's legal team is trying to flaunt court ruling. global news, 24 hours a day, powered by 2700 journalists in more than 120 countries. i am vonnie quinn. >> still ahead, we speak to the ceo and cofounder of australia's leading space company to find out how satellites can help the mining industry reduce its impact on the environment. next, the rock creek managing director tells us how she has been investing some of the firm's $17 billion in assets. this is bloomberg. ♪

>> the pivot that everyone is talking about. >>. it is too early for headlines. it is also his number. >> the fed is actively trying to be hawkish. >> powell really endorsed this message of data dependence. >> i don't think it was that dovish. >> we are having fed speakers

come out and be quite hawkish. others are saying no. we are still really focused on inflation. >> this is a fast and furious data rush. >> two exquisitely signal something new. quite the market is looking for a pivot. >> this was not a pivot from the fed. >> let's bring in our next guest . the managing director of rock creek, to have you back. it seems that most people agree with the latest rhetoric coming from fed officials, there is no such thing as a fed pivot. is this the environment you are cautious about? where'd you go when you're trying to hedge such a challenging fed dynamic? >> there is just not enough data or evidence to really increase conviction on entering the markets at these levels. we are at an interesting point

in time when equity and bond markets are at a high. we have an inverted yield curve. this has been one of the most reliable indicators of a recession historically and then you had equity investors that in the most recent weeks have been very optimistic. that is increasing our caution because we just don't have the conviction and the data to really think that the second half of the year will be any better than the first. >> we are seeing a very mixed picture in the treasury space. a lot of volatility as well. what about that for long-term investors? this was about to be an asset class for people who retire for pension funds. will this cause new chaos on the investment portfolios? >> we think there will be a lot of opportunities in the bond market but we are not there yet. i think in the coming year we will have to see how we can work these income portfolios. it all depends on the trajectory of the fed and what they decide to do in terms of the rate of increases and the equity markets

are already kind of pricing and when the federal actually cultivates. i think there will be a lot of opportunity and bond market so abandoning a bond portfolio in a diversified portfolio seems shortsighted because i think you need to have that diversification between equity and bonds even though there seems to be a very high correlation. >> are we see more of a balanced view when it comes to value versus growth when it comes to revocation back into tech? quite the rotation into tech, i think that might be an interim time when investors are getting really excited that what seems to be more attractive valuation and the growth space is coming off such a low base for some of those tech companies. even then, the majority of big tech is still up over 20% from where it was pre-peak pandemic. there could be another severe

downturn, another like to go in the s&p and a lot of that is some of the big tech companies that could continue to get hurt as well because of the strong dollar and what will happen to earnings in the coming quarter if that strong dollar remains. >> talk to me about the strong dollar. what is the term -- what is the outlook on the longevity of that trade? >> i think it is surprising that it has not actually been discussed or the markets have not been as worried as they might be in the coming quarters with a strong dollar because it is a major headwind for global companies. i think a strong dollar is here to stay. especially when you look at the state of the global economy. currency markets are a good opportunity today but they are extremely volatile and that strong dollar is impacting quite a bit in terms of earnings and companies in the future.

>> there was her take on the market. we have breaking news at the moment. the u.s. and has given approval for sweden and finland to join nato. all 30 members of the organization need to ratify the 222 countries that have already done so. the u.s. senate was expected to give this final approval. it has happened. it was expected to pass overwhelmingly given the threat coming from russia's invasion of ukraine. russia has threatened retaliation should sweden and finland joined nato but now we are seeing that the two countries have one u.s. senate approval. other members need to vote on ratifying this. >> subscribers can get that day going. they can customize those settings. this is bloomberg.

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>> this is daybreak asia. a quick check of the latest business plus headlines. around 6000 cars. it is the second time the company has cut its output goal. they only made about a thousand cars in the first half. then we production led to a big sale. revenue came in at $97 million, well below the $147 million estimate. >> metta is considering its first ever bonds field. limburg has learned that facebook parent is arranging a series of fixed income investor calls on wednesday. that may lead to metta offering debt.

walmart is said to be cutting about 200 corporate jobs as the retail giant content with rising cost, bloated inventories and weakening demand for general merchandise. the company will also land more jobs in commerce. around 1.6 million people. mgm resorts had a net revenue that topped estimates at the casino operator came in at $3.6 billion against an average estimate of 3 billion. the gain was given by -- driven by revenue in las vegas there was a big mess in macau amid those covid lockdowns. >> let's get another look at the u.s. futures after what was another volatile session. really investors trying to price and further rate hikes where is that pivot?

s&p futures looking for a flat as the stocks managed to snap that today the client. futures looking flat as well. nasdaq 100 futures off by a quarter of 1%. about 70% through earnings season here. these things have come and not fantastically but better than what parts of the markets had been expecting. look at what we have been training when it comes to the fx front. a little bit of risk aversion coming into play there. the key we seeing a little bit of a modern gain in the early part of the session and dollar yen holding pretty steady at 133. we will watch more as millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network, with the carrier rated #1 in customer satisfaction.

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>> you are watching daybreak australia.

i am vonnie quinn with the first would headlines. fed officials are pledging to continue an aggressive fight against inflation even at the risk of recession. jim bullard says he favors big rate hikes. they are committed to lowering prices and a recession could happen. mary daly thinks rates will remain high for up to a year. nancy pelosi will meet her counter part insole after wrapping up her controversial taiwan visit. it is on the agenda include into pacific security and climate dependence. -- climate change. opec plus will raise production in september and one of the smallest hikes in history. it is a blow for president joe biden after visiting saudi arabia in july, trying to help cool fuel prices in the united states.

their production capacity is limited. india plans to work with cleaner fuels. the roads third bennett -- their biggest emitter of greenhouse gases is pushing to hit net zero by 2030. the government is seeking a mandate for the use of some fossil fuels. a group of professional golfers including phil mickelson are suing the pga tour, calling it and -- an illegal monopoly. the players say the suspensions are part of the pga's plan to course rebel tours. global news, 24 hours a day, powered by 2700 journalists in more than 120 countries. i am

vonnie quinn, this is bloomberg. >> we are in the thick of earnings season and alibaba could be posting its first ever quarterly sales decline. let's bring in annabelle. some analysts say this could end up being the worst three months of the year. >> that is what we are hearing. you really don't want to estimate how significant this is. we rarely see this from a chinese tech giant. they are seeing a decline of around 8%. .8% on the year. that is not as much as other analysts who are seeing around a 2% drop. a lot of headwind space in this company. you have those ongoing covid zero policies. the impact that has on consumption and we already discussed this government crackdown on the sector but a focus on this will be what we are here for, whether we will see any recovery in consumption there. if you just change it now, you

can see that analysts have been quite slow to react to the headwinds that are facing this company. we are seeing the price target from analysts and the actual price in trading. >> we are seeing any kind of -- are we seeing any kind of reaction in oil markets? >> we are seeing brent crude, online. we did see that 3% drop in the previous session. we will have brent crude and about two hours from now. we have that opec plus meeting. but as well, the u.s. gasoline report showing the stockpiles there are growing. that is something that led to the decline. joseph stiglitz has been speaking to us about what that decline in energy prices means for disinflation. >> we will go through disinflation in the future. i can't tell you when it is going to happen if the russian war comes to an end, the energy prices will come down and that

will be a strong disinflation every part. >> the fed is laser focused on bringing inflation down. brazil just lifted a key rate by two basis points and we have a bank of england decision looming as well. let's get more from our policy editor kathleen hayes. let me start with you on the fed and getting inflation down. that seems to be the focus and no talk about any of this. >> i think we got another now in the coffin of that pivot argument. the last 24 hours, we have seen a total of about six fed bank presidents pledging to stick with the tough inflation hikes. even if there is a recession, i am still laser focused on inflation and people talking about rate hikes, next year, listen to what the president of

the minneapolis branch said. >> we will cut interest rates next year. i don't want to say it is impossible but it seems like that is a very unlikely scenario given what i know about inflation dynamics. a more likely scenario is we would continue raising and then we would sit there. question president of st. louis repeated exactly what he said at the dinner i attended last night, reporting on the show, they have to get more restrictive policies. they have to get up to 4% on the funds read by the end of the year. market participants are betting on these market hikes. tom barkan, the richmond fed president said that the fed could cause a recession but in the interest of getting down

inflation, mary daly from the san francisco said a 50 basis point rate hike is -- could be reasonable. to, forget it, -- pivot, forget it. quite the central-bank signaling the need for a smaller rate hike in the future. what does this mean? is this the end of a tightening cycle? >> they have tried to end the cycle for a while now. they said they will evaluate the 25 basis point hike. this is the key rate here in brazil by the end of the year. we have to remember that raphael was one of the first latin american central banks to hike

rates. he was one of the first in the world to do so in the midst of the pandemic. right now, with this latest hike today, they have an impressive 11.75% basis point. this was nonstop. most of that tightening has yet to take a hold on the economics. even though they see an advanced stage, they are still battling stronger-than-expected labor markets. that could boost domestic demand and keep inflation higher. >> what would make that move again? >> the main concern right now is on the physical side. continued inflation such as tax cuts and we are also seeing

payments to help them battle inflation and they do have a risk to higher inflation and time horizon they have. we have to remember there is an election cycle heating up in brazil. his opponent has said they could boost government spending and that could fuel inflation expectations which right now, this is blow this up 4% rate they import. >> let's turn to you because we are also expecting the bank of england opposite to brazil seems to be slowing down. the boe seems to be getting more aggressive.

>> the inflation rate in the u.k. has continued to surprise even some of the more hawkish members and that is what is pushing them to act. they have forecasted about 10% for the year. now they are expected to raise their forecast over the year to 12% over the year. this continues to rise. they are expected to hike their key rate. 50 basis points to a 1.75% so this will be quite an escalation. they started slow and now they are started to pick up that rate. it is the inflation rate forcing them to do this. the balance sheet is another important part of this meeting. because of this august monetary policy meeting, they are expected to unveil their plant for not just letting them run off and mature but actively

selling guilt. they own half of the outstanding field. andrew bailey has said the total for the first year should equal about 50-100,000,000,000 pounds. just to see how aggressive they will be on getting inflation down, the tightening of policy. >> one singaporean lender that is very exposed to what the fed does, just how quickly we see those rates continuing to go out there, the group is reporting a beef. they are seeing expectations of 1.6 9 billion. taking a look at our total income coming in at just over 1% year on year. the banks are benefiting from rising rates and the uncertain outlook. the asset quality continues to be robust. the issuance of the dividend per

share is a little bit lower than expectations. this is the earnings upside from the accelerated rate increases. that likely bottoms and the second quarter. this will be in the mid single digits as expectations are like this. when it comes to total income, pre-much meeting expectations at 3.7 5 billion. the net interest margin at 1.58%. this has been seen as more exposed to the fed. they could get up to a 30% pretax profit boost according to bloomberg intelligence. >> coming up, have australia's technologies are putting a global network of low orbit satellites with the aim of democratizing medications and data. we will speak with the cofounder and ceo.

this is bloomberg. ♪

>> bloomberg york county has announced the 2020 to catalyst

of a group of innovators and entrepreneurs who are accelerating breakthroughs of some of the world's biggest challenges. they are creating the world's most advanced loan power satellite network using it in-house technology. great to have you with us, flavia. tell us how your technology can speak to some of the biggest problems including climate change. >> thank you for having me. we started building this technology. our dream was can we make something much easier to deploy than his big satellites. this satellite is really like a pizza box. they are flat and no more than

40 kilograms. i really new technology. it is incredible what you can do it. -- do with it. we are trying to make an impact on the world. lithium, copper, cobalt, all of these things that are really useful for us, it is humankind. satellites can help us. >> can you quantify the difference that your technology can make in these applications in terms of being able to accelerate the green energy transition in order to make the exploration project or

sustainable? >> absolutely. usually, these objects are in the -- projects are in the middle of nowhere. in the past 10 years, we have worked with more lithium than any other department. we cannot move ahead like this. in the next year, to reach 90, we need four times were production. we actually have a lot of data. we don't have to dream anymore. we can put the axis on the ground and we can exactly no where this is going to be.

>> you are doing all of this from south australia. talk to us about how vibrant the space industry is there. >> we are leading the australian space resolution. they are even going to the moon. we really have the ambition to do that. >> tells about your ambition. what does growth look like for a company like yours? >> it has been five years and we are reaching hundreds more employees. the reality is this is the dream

that goes way beyond what we have achieved now. we really want to help the earth with the energy transition and we are now opening up to the u.s. and canada. they are special things. we are leading the charge in the world from beautiful australia. qwest good luck to you on your endeavors. thank you. be sure to tune into bloomberg radio to hear more from the day's big newsmakers. now broadcasting live from our studio in hong kong. you can listen on the app or bloomberg plus. plenty more ahead. stay with us. . ♪

>> airbnb's miss on booking estimates may have disappointed wall street but the company is poised for its best quarter yet. he told bloomberg technology's emily chang that he is not concerned with the current macroenvironment. >> i think the best thing we can

do is continue to tell our story. our revenue was up 50%. i think one of the things we share with investors is that our bookings actually celebrated from june to july. i think one of the things we saw is there is a lot of demand for q3 and q4 summer travel. we are focusing on what we can control. >> there is some disappointment about your forecast. it will still grow by throwing at the same rate as last quarter. they were saying look i might be the perfect example. i took a big trip and now i am back home. >> we are not too concerned about the macro environment. one of the things that we learned was two years ago.

our business dropped 80% in eight weeks. the thing that was remarkable is what happened next. our models are adaptable. we have nearly every type of space and every type of community. people are still going to want to live on airbnb and travel. we are also grateful for nonverbal destination. i think we are a very adaptable model. we were actually born in a recession. people turned to airbnb to become hosts. people wanted to save money. we are actually feeling really positive about it. >> i spoke to the ceo of over it. he said he thinks uber is

recession resistant. is that how you would describe airbnb, are you recession proof? >> we were born in a recession, we dealt with the pandemic. we just established that we have a record q2. we are feeling really good about q3. i think we are as well-positioned as any one of four of the session if that were to happen. >> we have been talking a lot about the company's doing layoffs. big tech companies like netflix, chapter five, coin base. i spoke to tim cook just ahead of their earnings call. apple planning to slow down spending on hiring and growth. they also said that apple plans to be deliberate about it spending. are you changing your spending or investing or hiring strategy at all given the downturn? what is your approach? >> absolutely not. if anything, i would be interested in stepping on the gas because we have been through this movie before. two years ago, we made a lot of

difficult choices. we got really focused. that is why we went for a company that had -- we are not changing our harvesting plans. we are not changing any of this. we were disciplined over the last two years. we are staying disciplined, stay focused. we are focused on how we can step on the gas to be prepared for the next travel season. >> we will stay on big tech. this could be a milestone path for all the wrong reasons. that quarter ended in june. the market is focusing on signs of recovery. the domestic challenge has been choked -- so challenging.

also, the international headwinds as well. the big expectation is how their business and strategy shifts. >> it really did not last because we heard that jack mar would be seizing control. how nancy pelosi has -- nancy pelosi's closely watched asian tour will ripple through the diplomatic ties in asia. this is bloomberg. ♪