shery: you are watching daybreak asia coming to you live from sydney and hong kong. heidi: we are counting down to the major market open. stocks in asia sit for a firm open up a robust u.s. retail earnings, signs of a darkening economic outlook adding to pressure on oil. for the site to raise rates for a fourth straight meeting, investors are awaiting further moves. tencent mate report is first ever negative revenue growth as a gaming and ad revenue is under pressure. annabelle: we are looking ahead to more positive starts under the board -- across the board. u.s. retailers is down, that is a tailwind for asian stocks. we are seeing futures in japan

and australia closing, it is well into the earnings season. including csl, we watch how they start trading as well. fx why, we are seeing the tight right. technical indicators saying we could we could have a more downside for the yen. i had -- saying we could have more downside for the young ahead. all 18 economists expect a fourth straight 50 basis point hike. aggressive period of tightening here. we do get that it could be a supportive factor for the kiwi dollar. we are on inversion watch, that is creeping back into the 2.10 curve. i don't hunt ahead, new zealand,

a reflection of fears about the property market. we did not see a lot of movement into the property market with higher interest rates. we got a downturn there. shery: the 10-year yield jumping up all the 2.80 level. we are nothing of a movement in the future of space, this is after a lot of volatility in the new york session. finishing slightly higher, this is after a sharp downturn. the 200 day moving average, technology under a little bit of pressure today. crude prices are rebounding in the asian session. given where we closed in new york, we are seeing perhaps a more crude in the market, we see progress on the nuclear deal. that is with concerns about demand as well, a seesawing market right now. heidi: let us get more from our

cross asset editor, su keenan joininus awell. andrea, the rally continues, a lot of concerns about the growth although, still. >> that is right, the rally continues on the back of the consumer stock earnings we saw in the u.s. last night. basically shows that the u.s. consumer remains relatively resilient despite inflation and rates going higher. company profits have largely powered these rebounds in stocks from the lows in june. monetary savings are tightening, inflation remains high, that is one of the reasons why the fomc minutes coming out on wednesday will be key for investors. looking perhaps not too subtle

but do see where the debate on whether inflation speaking, whether we have reached the peak hawkishness. while we make it some tailwinds from the earnings, there is a lot of uncertainty, especially with tightening financial conditions. shery: not to mention the fed rate decision and plenty of eco-data to watch out for. what are you expecting in today's trading? >> it'll like we are going to have a more positive open following what we saw in the u.s.. the reserve bank of brazil it is expected to tighten 50 basis point -- of new zealand is expected to tighten 50 basis points. the yields have gone up, i dampening effect on the market here -- a dampening effect on the market here. china remains a focus for

investors give the slow -- given the slowdown. we get a bit of a boost at the open. there are some headwinds that investors have to look out for in trading today. shery: we look forward to see how energy stocks do, given we see the rebound in oil prices. >> we are seeing a slight rebound, we will prices, west texas intermediate after 87 -- at the $87 level. it was the decline in the new york trading method off alarm bells. closing on a six-month allow for the first time in a long time and that was on a very volatile trading day on the volume. we should put out the low volume which is a typical late in the summer in new york, does exacerbate price swings.

talks between the eu and iran, a potential nuclear record note from oil on the market. economic data is something, it is bring a the price of oil down, you can see we have broken below key support, there she data has really been the driver in addition to this iran element. but as a result of the threat of recession as well as chinese lockdowns. i could keep the price of oil below 90 dollars going forward. heidi: we know that there has been progress between eu negotiators and arranging negotiators. what difference would arranging oil make to the global market -- iranian will make to the global market? >> it could put an additional 1.3 million barrels on

the market. there is an easing of the tightness that has driven the huge runoff above 100. look at the spread, the spread between brent crude, the forward curve, it shrank to the lowest since february again. that is a technical signal that tells us a lot about trading sentiment and trading sentiment is that the supply tightness is easing. shery: the top market stories, investors watching the big policy decision coming from the reserve bank of new zealand today. it could be boosting its key rate for the fourth straight meeting, the most aggressive tightening campaign in more than 40 years. kathleen hays has more on this. we are expecting heights and

what happens next? >> this was the very first when the pandemic was getting started, the moved back up to 50 basis point hikes long before the fed, in terms of what is expected today, 50 basis points will take that to 3%, hundred 35 basis point of hike -- 235 basis points of hikes. the most aggressive path since more than 30 years ago when disorder targeting inflation. one of the first central banks in the world to do so. to have hiked a lot, you need to keep going like this, that may signal a pull back to 25 basis points. the housing market is in decline and it gets worse as mortgage rates keep going up.

unemployment has started to rise from a nice low, business confidence is slumping to a two year low. we spoke to mary jo vergara, she is from kiwi bank, this is how she sums up the post facing the economy after the aggressive rate hiking. >> we have seen consumer and business confidence hit recessionary level. our yield curve conversion is indicative of how much tightening the reserve bank has delivered so far and are still to deliver and obviously tom puts more pressure on our growth and inflation expectations -- obviously that puts pressure on our growth and inflation expectations. >> that is something people have taken note of, investors are getting worried about where the economy is heading. heidi: what about the output?

there were 14 year highs we saw in the first quarter, is the outlook starting to ease? >> probably not enough. the reserve bank is in the same boat as other central banks, it is great if it starts to ease up, look at inflation, 7.3%. low compared with july of last year, that is way too high. you have the one your inflation expectation barely starting to level out. you have the two year still rising. weight is going the fastest white in 14 years -- the right is going the fastest in 14 years. you do not want to have regrets about not doing enough to keep the economy out of a recession depression. turn it around, you do not want

to have regrets. stop inflation and hike rates and that is their monetary mantra. shery: especially when consumers are suffering where prices are surging. for the latest, let us get to the first word headlines. >> president biden signed a sweeping health care -- a measure into law. it changes the way that medicines are priced and a minimum 15% tax work corporations. the act is the biggest commitment to mitigating climate change in u.s. history. it invests $374 billion dollars. >> we are delivering results for the american people. we did not tear down, we built up. today, offers a proof that the soul of america is vibrant, the

future is bright, and the promise israel and just beginning. -- is real and just beginning. >> an ambassador says nancy pelosi's visit to taiwan has created fallout and the chinese ambassador it arguments that lawmakers act independently. the eu sees iran's consultation his productive. arabian oil could return to global markets. the u.s. has been tightlipped, big issues had been largely settled. ukraine a says it is beginning attacks against russia in occupied crimea. it came after an explosion

happened on the epoxy peninsula and after a similar class at a russian airbase. russian television reported around 2000 people were evacuated from the area. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. shery: still ahead, we discussed the outlook for oil markets with energy services, they are seeing storm clouds on the horizon for commodities. we discussed markets -- we will discuss markets, is the u.s. avoiding a recession in the next 12 months? ♪

heidi: we are getting earnings crossing the bloomberg, 1.1 billion dollars, underlying profit come in at 2.7 billion.

we have expecting record numbers out of those earnings for santos as we had elevated prices and strong demand from asian markets. this is coming through now. these higher energy prices at the core of the strength we also expect to see in the balance sheet position that gives management a bit more room to raise and the dividend payout. capex and the dividend payout. we have pretty positive guidance as well. some of the pricing moves with the will merger plays into this latest set of results. the long-term output is looking to surge after the merger with oil, we see rising production as well as the gas

price outlook is elevated throughout the course of this year. let us bring in our next guest to assess they are moving towards an end game with the fed destroying its credibility over the past year with policy embers. with us is a global cio at oriana financial services. we see the risk of global central banks over tightening as you say, bringing back the credibility in bringing down inflation. his recession -- is recession the cure for inflation? >> recession is a potential cure for inflation if we do see a recession hit in the u.s. and it moves up to global economies. you will see inflation come down and significant destruction. you will see a broad based and

very rapid fall in inflation. i do not think that is the only solution here. there are parts of the inflation to start spectrum that are. rolling off. we can see that there is some strength in the labor market. wage pressures are not outpacing inflation in any stretch in most economies. there is no need for central banks to ram a recession down the throat of economies who do not need rates to be moving higher. yes, recession would be a solution, it is not the only solution and it is not inevitable. >> you see more of a fed pause rather than a fed pivot? what does that mean given we already see i not -- not a great deal of resilience in the market? is this a bear market because versus a sustained rally -- a bear market pause versus a

sustained rally? >> when you look at what the market is pricing out, a rate hikes are frontloaded in a sharp set of rate cuts in 2023. that reflects massive consensus that we need a recession somehow , this will be a recession that is widely anticipated and we need to have it to bring inflation under control. we think the fed can hike in september, hike again, get to 3.5%, that is quite restrictive compared to historical levels. then pause. maybe hike once, twice in 2023. i will be critical in determining the -- it will be critical in determining if this is durable. we think the economy does not need a recession, earnings cancer present the upside and this will be the beginning of a

more durable and gradual rally over 2022 and 2023. shery: you have moved to neutral bonds, how are you counting on this micro challenge and this macroenvironment into your bonds called right now? >> i think that duration call, the government bond is an opportunity to have a bet each way. if we do see a recession and the fight is going to cut rates next year, it could cut quite aggressively because inflation will befall the sharply -- be falling sharply. a good rally right down to 2%, maybe sub 2% and when we moved in june, we had about 3% 10-year yield. on the other hand, no recession is because the fed pauses.

it holds it for a while, in this scenario, it will be pausing because inflation is trending lower, both the stabilizing out below current levels, the tenure is probably going to trip lower in that case and have a longer period and will win both sides. shery: surprised -- a surprise move from the pboc, how do you see that market? >> it is not the end for the pboc, it is the beginning of something that could persist for a little while. i think we will see more cuts and fiscal support, changes in the covid policies we get to october and november and december, opening up internal borders. china is probably in recession when it comes to china, it is not always clear. they will grow out of that over

the next 12 months we think. shery: good to have you with us. you can get around up of all of the stories you need to know to get your day going in today's addition of daybreak, terminal subscribers go to dayb , also available on mobile. you can customize your settings so that you only get the news on the street and asset you care about. this is bloomberg. ♪

>> there is a lot of uncertainty in the 6-12 month horizon. well folks on the global threats we face including consol energy -- we focus on the global threats including the energy market and the war in ukraine.

if you look at the policy actions we are taking, the inflation reduction act, the chips and science will be passed, those will help meaningfully in this transition. shery: speaking about the uncertainty in the u.s. economy and it is getting very challenging for people to retire at this point. we are talking about the pandemic, dictate high inflation, soaring prices, borrowing costs rising. we have been talking about the yield volatility, tenure yield higher by more than 100 basis points. $3.4 billion from 401(k)s, just in the first half of 2022. it is getting hard for people to retire. force for young americans because borrowing costs are rising, they cannot buy a house and build wealth. heidi: you are looking at the

demographic reality of an aging population. the number of people in the u.s. aged 65 and above is set to increase and exacerbate the problem. . i wonder if there is appetite politically to tackle the situation given it is a national ira that investors can take from employers. we can only see limited action at state level. we have looked to congress to see if it could be any reform, it looks like the numbers in the meantime are getting pretty dire. let us get a quick check when it comes to u.s. futures as we get into one hour closer and do the start of trading in asia. futures looking pretty tepid. this is bloomberg. when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution.

i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working. i've done the diets, all the diets. before golo, i was barely eating but the weight wasn't going anywhere. the secret to losing weight and keeping it off is managing insulin and glucose. golo takes a systematic approach to eating that focuses on optimizing insulin levels. we tackle the cause of weight gain, not just the symptom. when you have good metabolic health, weight loss is easy. i always thought it would be so difficult to lose weight, but with golo, it wasn't. the weight just fell off. i have people come up to me all the time and ask me, "does it really work?" and all i have to say is, "here i am. it works." my advice for everyone is to go with golo. it will release your fat and it will release you.

♪

haidi: -- >> 30 minutes from the open in japan. taking a look at key trade data we have coming out in the next 20 minutes from japan. these are some of the data sets to be watching. machine orders we are expecting a small bounce in the month of june. that would be nearly 6% contraction in the month. machine orders are leading indicators of -- and we are watching sentiment indicators for the third quarter in particular. trade balance due as well. we are expecting the deficit to have narrowed in july. they were -- the decline in oil prices could have weighed on imports because japan relies on external sources for 90% of its energy needs. any depreciation in the end of that period, not seeing enough

to offset the decline we saw for imports. turning to the outlook for the yen. technical indicators suggest we could see a further drop ahead. we do have on a short-term moving average, that suggests there could be further losses ahead. that has been a key indicator we have been watching since the start of the pandemic. shery: we are also watching tech companies here is a tencent backed company. it intends to sell much of its stake in chinese food delivery. a preview of tencent quarterly results later wednesday. let's bring in stephen engle in hong kong. it's not just about -- we are talking about the billions of dollars of investments in listed companies. not only tencent, but alibaba.

this could have big repercussions. >> absolutely. this is what we are seeing is a culmination of what has been years of incubation of other tech companies. i use that term loosely because essentially there were so many other startup companies in china that either alibaba and tencent mutually invested in and propped this industry. it created a lot of monopolistic behavior according to regulators and antitrust concerns. what you are potentially seeing because last year we did hear tencent disclose it was going to start to the -- stakes in jd.com as well as sea limited, the southeast asian e-commerce player that tencent is the largest shareholder. it had terrible results. i will get to that if i have time later. essentially what reuters is reporting is that the big food

delivery giant in china is potentially the next company that tencent is going to sell all or part of its stake in. it is baked, 19%. tencent does 19%. that is $24 billion. tencent has invested in chinese listed companies to the tune of $89 billion. 606 billion yuan. that is a large chunk of their investment in other companies that potentially because of regulatory scrutiny, we do not know if they are being ordered to sell some or all of their stake. it does look like a trend. that is why we have to look at billy billy and all of these stocks either yesterday in the hong kong market or overnight in the adrs. shery: a number of drags on the

chinese economy and the chinese consumer. we expected to see that reflected in earnings? >> the economy, dampened of course by the slowing chinese economy and the covid zero issues. all of that weighing on consumer sentiment. again, when you have pressure on e-commerce said you have pressure on the gaming site of the business, the biggest money turner for tencent, that is going to spell a pretty bad set of results. keep in mind, there was a moratorium put on new game titles in july of last year. regulators have started to lift that moratorium, but not a single tencent backed game has gotten approval since then. that has withered their gaming pipeline down, making tencent reliant on the old tried and true cash cow of honor of king.

that is a big dampener on earnings. what we are expecting is defeated -- the first drop in quarterly profits for tencent ever come since it was a lens -- a listed company. ad revenue is going to be down. the new games pipeline is dried up. all of these regulatory issues i am sure will be dominating the conference call with the executives of tencent. haidi: chief north asia correspondent stephen engle. let's get the vonnie quinn with headlines. vonnie: chinese premier has asked officials from six key provinces to bolster growth measures. li held a meeting with provincial officials asking them to help boost consumption and offer more fiscal support. reportedly acknowledged pressure from covid lockdowns and told officials to strike a balance between virus control and economic growth. kenya's former prime minister

rejecting the outcome of last week's election. he says he will take constitutional steps to challenge the results. ruto was declared president-elect with 55% of the vote. -- secured 48.9%. a delay in swearing in a new leader posts risks to stability. crypto hacks have soared as d5 protocols have become an easy target. that is according to chain analysis which reports $1.9 billion worth of digital tokens stolen this year. a 50% from the same period. north korea in groups have stolen nearly $1 billion in crypto this year. 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: singapore's next prime minister says the city state is

seeking a compromise in its review of a law banning sex between men. while views on the law have evolved, there must -- they must be balanced with perceptions of traditional family and berridge. >> we know that these issues are issues where different segments of society hold deep fuse. sometimes opposing views. our way of addressing these issues is really to engage the different groups and see if we can work up some common understanding, some way of having mutual accommodation and compromise without causing need for the divisions in our society or deeper polarizations. that is a process we are undertaking right now. >> you are a modern man, you have studied abroad, you have studied at harvard, a cosmopolitan. it must be embarrassing having a law like that when you are trying to bring people to

singapore. >> sure. we all understand the history and the reason why this law was in place. it is not something the government in singapore introduced, it was a legacy. >> british. [laughter] >> as a british colony. over the years, many asian countries which had this legacy as a former british colony, has repealed the law. we understand that, but we also know that in singapore there are many segments who feel it is not just about the law, but the law is a marker for other things. things that we care about. societal values about family and merhige. it is not about the law, per se. haidi: speaking exclusively with bloomberg's john micklethwait. up next, oil traders way prospects of an increase in iranian crude. we get the insights.

we are seeing problems in the markets amid inflation and recession concerns. this is bloomberg. ♪

haidi: these are our top stories. walmart's -- less dire forecast

or the retailers seeing progress in supply chain costs. arizona, nevada and mexico are set to see another round of drastic water cuts from the colorado river amid a climate change driven drought. the cutbacks could have a big impact on -- in the u.s. as arizona grows most of the lettuce. zinc surging after one of europe's biggest smelters would hold production next month. it comes amid an energy crisis to hobble industries. the netherlands will be placed on maintenance from september 1 until further notice. shery: bloomberg terminal users can read more about those stories online. oil prices bouncing back a little beckett -- a little bit of the asian session after falling to the six month low in new york. we continue to see investors really pricing and the potential of more crude coming from iran

and a potential nuclear deal. let's bring in our next guest who says there are storm clouds on the horizon for prices. john driscoll, director of gtv energy services, good to have you with us. we are seeing the challenges, whether it is recession fears, demand fears, especially with the latest data out of china, and also a very tight supply market. which side wins when it comes to prices? >> thank you for having me on. i think we are coping with the impact and the fallout from the russia-ukraine invasion. we have seen incredible volatility and generally at the beginning towards the upside, we got as high as 139 dollars on march 8. there was a strong conviction that we were going to go into a super cycle on commodities.

i think we are having a reality check right now. you can explain part of that with concern over the broader macroeconomic forces. inflation. are we going to bust through double digits? are the central bankers going to be able to contain this with interest rate increases? where is demand going to go? i tend to focus more on demand. having just taken a transpacific flight, i can attest the airlines are full. that sector looks very strong. if we fall into a deep recession, and i think we have already had two consecutive quarters of downward growth, then this can really take some steam out of this rally. we have already seen that this week, falling to a six month low. it wasn't that long ago we were flirting with 100, now here we are at 92. i think we have a bit lower to go.

potentially looking short-term. longer-term, we are looking at the winter into the geopolitical factors. haidi: this chart showing rick -- showing recession probability projections. -- soaring for some economies including the euro zone, the u.s. and the u.k.. tell us about what we can see from opec-plus. we have seen president biden try to lobby for more output giving surging oil prices. >> opec is pretty much set to going its own way. to me it is not so clear whether they want to be less than optimal in increasing their production. part of it could be simply that -- remember, president biden began his administration denouncing oil, championing green and all of that. canceling the keystone pipeline. low and behold, he suddenly finds he needs to attract this

sector. he needs more oil. recent -- about the saudi kingdom being a pariah state, his words about mohammad bin salman. all of a sudden he created a situation where he was at a disadvantage coming out of that meeting. the general consensus is that the meeting missed the mark. -- vladimir putin afterwards and they are more closely aligned because they are part of the opec-plus group. that additional oucome is not forthcoming and i do not expect to see it. one must ask, how much idle capacity, surplus capacity do they have right now? i think the answer is we have probably already seen that in 2021 when we had the so-called russian oil war. minister novak walked out of a meeting and the crown prince

opened the floodgates. bottom line, i do not think there is spare capacity and we could be bumping up against that soon. the biden administration has embarked on a programmed that uses strategic petroleum reserves to tap into that, to bring more oil into the market through exchanges and outright sales. that oil is going to have to be restored at some point. that program is nearing an end. there are analysts who say inventory continues to draw and spr is going to run out of bullets. we could see flattening then. jack ross is just around the corner. if we see a colder winter, we have seen a few of those in recent years, we could see prices off to the races. particularly liquefied natural gas. haidi: if there is a deal, and we know there is progress between eu negotiators and

iranian negotiators, what impact does that make on supply? >> i would tend to cast that in a political context. we are coming up on midterm elections. the biden administration needs wins. they need positive optics. so you've got a build back better bill, joe manchin has finally come around, as has christensen them appeared the democratic coalition was able to put forth a modified build back better and climate change bill. those will be cited as biden achievements at the 11th hour before the election. i think the bite and white house misplayed their hand from the beginning. the easiest thing to do would have been to say, donald had canceled this deal, this plan of action, we are going to restore it. i think they felt they could negotiate more favorable

conditions, that wasn't palpable to will -- that was not palatable to the iranians. right now they are trying to salvage something. what that might do on the supply side is the iranians may not have potential protection of 2.7 million barrels a day, but they've got probably 100 million barrels of oil on a flotilla. floating storage. most of that is crude oil. but, that is hanging over the market and that could be released in short order if they work out a deal. haidi: great to have you with us. john driscoll. we are getting breaking news. the citroen government in china has ordered a factory stoppage between august 15 and august 20, this coming on the back of an energy shortage and a heat wave across the province curbing hydropower generation in what

has become a looming threat to electricity supply and economic growth. automakers have been affected. -- confirming that a stoppage is due to electricity supply, an adjustment, if you will. we had earlier reporting about that. we have seen high temperatures and drought heating the worst levels on record. this is bloomberg. ♪

♪ haidi: we are getting trade numbers for japan for the month of july. experts year on year coming in better than expectations. expectations of 17.6%. pretty similar to what we saw in the previous month. imports also beating expectations. 47.2%. consensus was for a reading of about 45%. that leads the trade balance of -- in deficit. we are seeing some of those adjusted trade balance numbers still up from the previous month of june. all, it suggests we are still seeing a resilient trade picture for japan, despite headwinds from the slow down we continue to see in china. shery: when it comes to the core

machine orders, they have price to the downside a growth of only .9 percent. still an improvement from the month of may where we saw the sharp contraction. numbers seem to have supported a little by shanghai's reopening. still, the year on year number growth of 6.5%. that is really missing expectations of growth of more than 7%. it is slightly easing from the previous month as well when it comes to the year on year numbers. month to month has improved from that contraction territory. this is important, given it is a key, leading indicator of manufacturing production as well. let's turn to crypto assets. bankrupt crypto lender -- has received offers of cash to fund its restructuring. let's get more from our team editor john dawson jury. what does this say about the state of the industry?

>> it says that while things are not necessarily great, these lenders have frozen withdrawals, they are in bankruptcy, etc. there really is some interest in them. if you are seeing multiple offers, it is showing there is at least a little bit of life in the industry. things are not necessarily great, there could be more shoes to drop as you get lenders who are hanging on but might get into more trouble. but, there is still -- haidi: the u.s.'s three largest bitcoin mining companies lost more than a combined $1 billion in the second quarter. the adjustments we see across the industry, right? >> exactly. that is to be expect it when you have been going down about 45%

or so year to date. these miners have struggled as they have had to retool things as they deal with the operations. they were used to bitcoin being at $50,000, adjusting at $25,000 is a big deal. you have marathon digital, minors like that really struggling in the second quarter. shery: when it comes to the fed, they are saying banks are wanting to jump into crypto but they need to do their legal homework. for a long time, we have seen the regulatory side trails attack, right? the innovation. what are the concerns? >> the fed is basically telling financial institutions if they want to get in, they need to make sure what they are doing complies with law. they need to do their homework first. that makes sense. it is in line with what most of

the big institutions would be thinking anyway. one of their big wildcards in terms of getting into crypto has been any sort of regulatory uncertainty. most of them probably would not be surprised by this, but the fed is saying, you need to make sure everything is going to work and there is a lot of volatility in the space. any big institution would need to think about that before they get into creek though. haidi: let's take a look at stocks we are watching ahead of markets opening in just about five minutes. asian zinc equities could be on the rise. one of the largest smelters in europe saying they will halt production due to high energy costs. korea in focus also. a big day for ozzie earnings. watch for reaction from santos. this is bloomberg. ♪

at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect. this is xfinity rewards. so you can enjoy more of...this. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these

and so many more in the xfinity app.

haidi: this is "bloomberg daybreak: asia." we are counting down to the major market open. with the upcoming singapore trade numbers and japan trade numbers just broke with exports singles double-digit gains. a big one today, the rba rate decision. shery: expected to go for that 50 basis point hike. also watching the energy crisis. we're hearing companies in china being ordered to stop their production as a result of high temperatures a record drought. >> a lot for investors here to contend with as we look ahead to the open for japan, south korea and australia. also keeping an eye on

treasuries. we do see that move from the previous session deepening the yield curve inversion. the 10-year yield now looking up. japan trade numbers we had out. also, smaller than predicted bounce in the previous month, the first month on month gain in two months. the end still looking weaker this morning. suggesting we could have more losses ahead. the nikkei just coming online to the upside. let's turn to the open for pre-op. we are watching chipmakers there at the start of trade. these are what is seen as the global bellwether. the big korean chipmakers already cutting back on their investment plans. we will have that performance, that weakness in tech stocks in the u.s. session. which is now .2%.

the korean won continuing to weaken. looking at the asx 200 and australia, it is a major earnings day for australia. we'll be watching house of the biggest names, online including magellan. some of the other movies -- movers we are watching's of the kiwi dollar looking weaker against the greenback. we do see that high -- economists here expecting a fourth 50 basis point hike. we could see the kiwi dollar reaching $.66 against the dollar. it had a six month low. -- oil hit a six month low. shery: despite the bear sentiment, we are selling seeing and parts of the market, america's latest survey suggesting investors coming back from that publisher --

apocalyptic center. good to have you back. we are seeing investors pulling back from that record pessimism. how justified is it improving sentiment right now? manpreet: i think there is positioning going on in -- when you look at positioning a month ago, we tend to see markets move the other way. i think when you look at risk assets, there are other challenges here. we seem pessimism, positioning still on the bearish side. but there are some of the longer-term questions about growth. in the u.s. for example. on the one hand we see positioning and some of the data not turning up as expected.

but running up against some of the longer-term questions about economic growth in the u.s. and to what extent it might slow. we think that will keep equities , that's a conversation between equity and the achieving a balance between the maybe the key to investing. haidi: we are not getting positive news out of china just recently. heidi mentioned the factories being shot because of that record heat wave. we have talked about the economic data being pretty weak. we had news overnight about what is happening with those tencent act companies. in tencent divesting there is a given some regulatory concerns. you still have a preference for chinese equities, why? manpreet: this is where a little perspective from an economic cycles might help with the deeper context. undoubtedly the numbers a week,

but policy, of trying to support growth. we think from an economic cycles of the puts china's economy at a polar opposite of the west. in the u.s. trying to the brakes, ensure that you tend to see this kind of data and policy action. policy trying to sue provide some support from that perspective. markets -- when you think about fairly inexpensive valuation, if we are likely to see a rebound, equity markets will discount that had of the fact. that is why we think chinese equities and about an interesting point, we think it is in the price, and to what extent policy efforts underpin that. haidi: what is your outlook when

it comes to pull -- commodities. oil clearly coming under pressure today. also supply concerns. is there a upside for the broader commodities complex, in particular, metal, if we do continue to see that slowdown in china? manpreet: i think we would have to go through commodity by commodity. the way we look at commodity, is really looking at the supply balance. in several markets, it is still quite tight. if we take away some of the short-term growth concerns, you're fairly limited. i don't believe that. he comes back to the point we discussed with chinese equities. purely from the demand side, we are seeing weakness at the moment. the key is to what extent do

policy supported. supportive target of measures. we start to see more confidence come through. we may begin to seek some support start to come through. it is really about both sides. seeing weaker demand across the board, but to what extent is offset by tight supply and commodities? shery: what do you think the opportunities are when it comes to asian fx then? manpreet: i would be looking more toward countries -- at the moment a dominant force is still what the u.s. dollar does. while there is quite a bit happening on the others, at the end of the date, is still defined by trade in the u.s. dollar.

we see a really big switch up away from dollar strength towards something that is marked sideways, or weakening dollar, we think that will be a dominant trend. dollar-yen, that is the other one where we expect more of a range. we do to see u.s. dollar to the downside, that is the currency we might see more disproportionate. comes back to point to position. a reaction to a weaker dollar could be more significant. shery: always great to shut -- to chat with you. let's get you to vonnie quinn in new york with the first word headlines. >> president biden has signed a sweeping health care and tax credit law bill into law.

it will change the way it medicines or priced, and a minimum 15% tax for corporations. biden says the inflation reduction act is the biggest commitment to climate change in american history. >> we have not wavered, we have not flinched that we have not given in. we are delivering results for the american people. we did not tear down, we built up. we didn't look back, we look forward. today offers further proof that the soul of america is vibrant, the future of america is bright and the promise of america is real and just beginning. >> china's envoy to the u.s. is warning washington not to underestimate china's resolve on taiwan. pelosi's visit created serious pop and the trip by u.s.

lawmakers violated agreements. they say congress should abide by u.s. foreign policy. bloomberg has been told the eu sees iran's response as constructive. in the they are now consulting with the u.s. on the next steps. salvaging the land mark deal could see iranian exports -- oil exports returned to the market. indonesia's president says his administration will make good on plans to get next year's budget deficits below three percent of gdp. -- 3% of gdp. southeast asia's largest economy will produce its economy by 8%. then three years of spending triggered by the covered pandemic. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is

bloomberg. shery: let's return to annabelle for the latest on the markets. here in the u.s., we have some retail earnings giving a boost to stocks. annabelle: were seeing some of the big retailers here in the region also moving forward. walmart said that was the key throughout the morning. after slashing its profit outlook three weeks ago. we are still seeing a high income consumers the amid back-to-school sales. leading to some the big asian retails reacting to that result. it is a big earnings day in australia. we are seeing some of the biggest companies reporting this morning. csl, you can see it dropping at the start of trade. it did report a 6% drop in net profit on the year. a lot of production challenges from the ongoing pandemic. that limited supply for its

product. santos is another one we saw, coming in at $1.17 billion. magellan is another company that has seen significant outflows. it ceo says the company is confident in its business moving forward. brambles also looking higher at the start of trade, as a transport and logistics giants and the country, showing a combination here of market clout and the ability to work on surging content can help businesses tackle the pressures. shery: lots of movers in the day session. still had on daybreak: asia. metaverse -- ball metaverse research partners joins us. before that, we take a look at the interest rate call of what it might do. this is bloomberg. ♪

>> obviously there's a lot of uncertainty in the six to 12 month forward horizon. were so focused on the global threats we face including the energy markets and the second part of the war in ukraine. if you look at the steps we're taking and the policy actions, i

think it is the case that the inflation reduction act, the chips and signs bill we passed, those are going to help meaningfully in this transition. shery: the director of the nec. yields higher in the asian session. the 10-year yield now 280 level. this as we have seen that the 210 inversion -- the two-10 inversion deep in. the bullishness of the markets really counterproductive to what the fed is trying to accomplish, especially with financial conditions easing. the availability exempt the cost of credit, the goldman sachs financial conditions index back to early june levels. moving away from what the fed would like to see. not helping with restoring price

stability. you could see inflation easing, or perhaps not to the levels of the 2% inflation target. we are also watching the rba. it could be boosting its key rate 50 basis points on wednesday for the fourth straight meeting. our global economics editor is here with the latest. it is not just about today's rate hike, but what happens next? >> your battle to get the key inflation rate. rbnz was expected to see them do their fourth 50 basis point rate and row. it will get it up to 3%. it will be a total of 275 basis points of rate hike in this tightening cycled. they beat the fed to the punch when it comes to starting the rate hikes last year. what is going to happen next?

the rate hikes are having an impact on the economy. could they signal -- open the door to possibly slower at the next meeting. the housing markets have been hit hard by higher mortgage rates. unemployment got to a record low. it is popped up. will that continue? to your inflation expectations outlook is still rising. earlier we spoke with mary jo out, she is the economist at kiwi bank. she focus on some of the areas she sees where the economy is being hit most. >> risk and recession are rising both locally and globally. we see in consumer confidence hit recession level, which is increasingly expensive. the yield conversion is indicative of how much tightening the bank has delivered so far. and are still to deliver. that puts downward pressure on

our growth and inflation expectations. >> even if the rbnz does not open the door to the small rate hike, they need to -- everyone is going to be listening to the outlook. what did they say about inflation? hesitate? are they getting more optimistic? to get some sense of what is happening next. shery: even if we see inflation starting to ease, it is probably not using enough for the rbnz to fall back. shery: i guess i don't want to >> is up on the rate hikes. did you want to get inflation expectations coming down, not just failing to rise. inflation, 7.3 percent over the last year as new zealand. that is way above their target. clearly wages are rising at their fastest in 14 years. the one your inflation expectations have leveled off. far from being enough from what they need. at the june meeting, the talk

about their new policy. when the economy was facing severe recession, that is when they said least regrets. we want to make sure we have the least regrets about our policy. we want to make sure we get the question under the economy, with great cuts. now, your least regret is making sure you do enough to stop inflation, get expectations under control. it will be interesting to see what they say about that and how that informs the policy going forward. haidi: our editor kathleen hayes. you can get more on that decision as well as a run-up of the stories you need to know in today's edition of daybreak. you can customize your settings in the op. let's take a look at how european futures are opening at the moment. when you look at that, you see

uncertainty across the global markets. yet this rally so continuing, at least in u.s. and here nation as well. futures up by .4%. we are seeing msi europe -- and csi -- msci europe up as well. energy prices continuing to worsen. germany has enough gas for less than three months on the back of the russian cut off in supplies. shery: let's turn to china. the premier has asked officials to boost progrowth measures after the countries latest data showed consumption and upward -- asia economics correspondent joins us with more on this. what was the significance of this message, especially at a time when you are also seeing authorities double down on covid

zero policy. what can officials do at this point? >> we didn't get many new details. officials spoke about the need to get spending on infrastructure. that is one of the areas that is expected to drive the economy the second half of the year. he also said they have to do more for the interest rate. he gave a nod to the challenges of covid zero. he said we need to see a balance between covid zero and protecting the economy. this of the governor will take steps to address that. and acknowledge has been weaker than expected. the economy is in space -- there

wasn't any specific details in these remarks. the fact that he made the middle against the backdrop of slowing, does lead to a growing sense of urgency among the top ranks of the government. shery: does that mean we're expecting more support coming with the signals what could be in the pipeline? >> everyone is asking this question, what kind of policy? if he is saying on the one hand covid zero is a political target at this stage, what else comes? the folks in real estate, can the drum up support there? the press coverage to give nod to where micah comes aboard spending on infrastructure should be a priority. they said they will consider new policies. they are going to make sure they get on with reviewing existing

policies. when you take it altogether, it feels like a junction, where the authorities are saying the economy is not a good place, but they are short on specifics. shery: our chief asian correspondent with the latest on china. more to come. this is bloomberg. ♪

haidi: we see a little bit of pressure in the crypto space, with coin moving down for the fourth session. it's a long way from that record high of 59,000 earlier in the year. we are getting more signs, of more regulatory action in space. even as coin is down nearly --

bitcoin is down nearly 50% since the start of the year, there saying bullish on crypto. he spoke to bloomberg about his outlook on the market. >> i think the retail investors have may be pulled back a bit from where they worked six months ago. i think of a lot of great reasons why it's of the macro environment is tough right now. inflation seems to be out of control. we are in a recession in the united states. that is to be expected. you have more discretionary income you're making more investments. people are worried about the price of gas and living expenses. >> at the end of 20 21, it was trading around 46 thousand dollars. today, south of $24,000, which may be could buy you a honda civic, what is your outlook now? >> i wasn't expecting this

craziness in the macro environment. i am so hopeful about it by the end of this year. i would not hold my hopes up. would you want to pay for the gas for such a car at this point? i am still very bullish. i bought into it bitcoin again at 18,000. i am happy to write it all the way back up. i'm still very bullish in the long run. i've never bet against bitcoin. shery: jesse speaking -- jesse powell speaking exclusively with bitcoin. heatwave threatening china's electricity supply. this is bloomberg. ♪

haidi: breaking news out of singapore, we are getting the nonoil domestic output numbers, growth of 7% for the month of july, beating expectations. a little bit softer than the previous month, but still higher than what was expected, especially when it comes to month-to-month numbers. the economist expectation was for contraction of more than 3%. we beat that by growth of 1.4%. still a second month where growth is in the single digits and not the double digits. just a few months back, electronic export seeing a big growth -- growth of over 10% in singapore. a big jump from the 4% we saw in the previous month. the revised numbers for the month of june coming in a little softer for both the year on year and month on month numbers. haidi: we are getting the

leading indexes of the month-to-month number for july here in australia, contraction of 0.15%. that is in line with what we see in. the leading index levels sitting at 97.77. we have seen a recent trend of decline, falling to the lowest since january of this year. on the back of weaker economic outlook of this is the six-month growth rate, which really tells us the projected pace of economic activity in the near future. as the leading indicator slowing again in the month. that gives us an early impact of central bank tightening cycles. we have seen rising rates as well as rising costs and inflation. let's get a look at how markets are doing, half an hour into the trade. >> just picking up what you're saying about the softer readings coming through from australia

and singapore. it certainly does point to the broader concerns around recession. we did see that in that latest bank of america fund manager survey. nearly 60% saying risk of recession in the next 12 months is up from 47%. you can also see the median projections from private economists of recession risks. u.k. topping out at 60% chance of recession over the euro zone at 5%. the u.s. at 50%. asian economies of the biggest ones china and japan, inflation more under control in those areas. central banks are sticking with the tightening. we can look at how markets are reacting. the rbnz is the big one for us today. prediction for a 50 basis point move, the fourth straight hike of such magnitude. the most aggressive tightening from new zealand since more than

three decades ago. in terms of the reaction from stocks, we are seeing equities shrugging off these concerns, they are more focused on what we had out of the u.s.. those rated -- speaking to the strength of the consumer we are still sitting there. we are seeing indexes moving a little higher this morning. haidi: let's turn to citroen -- 61 -- see schwan's a bright a threat to their electricity supply. let's bring in bloomberg energy supporter -- reporter. we just heard the government has ordered a shutdown for toyota and others. how long can we expect this last? >> the stoppages through this

weekend. it is not the longest stoppage, there is some hope that maybe bring comes. that could refill this and help the situation ease a bit. to be certain, there is nothing set in stone. there are local reports from the meteorologists in china saying the seat could last through the end of the month. we are looking at between one to two weeks of this. if it continues past the end of august, be longer. supply chains are already strained because of the war in ukraine. china's covid zero policy. this is just one more issue for that companies and factories to deal with that will complicate how companies create things and adds potential inflation fears. haidi: when it comes to the broader or markets, what is going to be the result?

goldman does not expect a short-term deal to be announced? >> there has been progress. there's been a response by iran to the eu, they submitted that on bloomberg because said that the eu thought it was constructive. they are still looking at it. it was the first positive statement out of the eu that showed the arabian response was not a dealbreaker. there is no deal yet. it will take time to bring something together. it will probably -- you will see ran suddenly flooding the market with oil. but the sentiment will definitely change. while it might not physically change the amount of oil on the markets, traders could read this as a positive step. if you could see oil prices ease a lot. with the u.s. benchmark for oil trading on a six month low. you could see that fall further

if there is more of a concrete step toward getting uranium one deal out there and he ran adding oil to the market in the future. -- and he ran -- bonnie: japan reported its 12 straight month of deficits. $10.7 billion in july. higher import bills, especially in energy and food make cool. exports continue to recover, they compare it to the u.s. and china. ukraine says it is beginning a series of attacks against russia in occupied crimea. the statement came after explosion in that russian munition depot. a week after similar blast at eight russian airbase. the russians report around 2000

people were evacuated from the area. can you's former prime minister rejecting maps come -- kenya's former prime minister rejecting the election results. william ruto won with 55.9% of the vote. it poses risks to stability in east africa's biggest economy. the chinese premier has asked officials in six provinces to help boost consumption and reward physical support. he reportedly acknowledged pressure from covid zero, and as for balance between virus control and global growth. -- economic growth. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. shery: coming up, tencent may

report its perseverant negative revenue growth with only getting an advertising under pressure. my divorce -- metaverse research reporting. this is bloomberg. ♪

haidi: asian stocks right now, we are seeing consumer discretionary industrials and materials leading the gains,

although health care is under pressure and energy between gains and losses. we've seen oil posing as a six low in the new york session, though it is rebound slight -- rebounding slightly around $87 and asian session. we are heading for the china open. we will be watching those tech names. tencent intends to sell much of its stake in meituan. stephen, this is not only about that but the broader textbased. >> -- tax space. >> tencent is the third most heavily weighted stop in the hang seng index. if this report is true, that tencent intends to sell either all or a good portion of its 24%

of -- 19% stake, $24 million of meituan, how are they going to do that? the impetus coming from authorities in china that want to see the influence of these large tech platforms like tencent and alibaba have on the broader tech industry. whether this is part of that regulatory push, we have to see. last year, tencent indicated it would start selling off some of its shares in jd.com. as well as an e-commerce provider, which had terrible results on poor e-commerce as well as band in india. -i will go into that right now. as part of the broader spell --

broderick selloff. -- broderick selloff. simply because if the dominoes start falling, if there is jd.com, then made one, what about bilibili? this is why all eyes were on the chinese tech. haidi: also watching tencent earnings, are we expecting? >> we are expecting a fairly poor set of results. the first quarterly drop in revenue ever is a listed company. we had a similar report earlier this month from alibaba, though its overall results were somewhat deader than expected. tencent has been jumping off, and hong kong, once most cap -- heavily capitalized stock care. really the bellwether for the hang seng index. it is near -- mere shadow of its

former self because of the regulatory pressures. and the chinese economy and impact on ad sales. social media and gaming have been under incredible pressure because of the moratorium placed on new game titles. it is slowly being lifted by regulators in beijing. since it was put in place in july last year, since it started to relax as of tencent's the biggest game producer, has not received a single new game approval. that has been waving -- weighing on them. all kinds of different pressures on revenue and profitability in those results after the market closes today. haidi: our chief asia correspondent there. and matthew kanterman, the head of research at mall -- paul

metaverse. his this a divestment of influence, does not create a better regulatory outcome for tencent? what could we see the company use that money for? we've got goldman sachs singh -- morgan stanley saying this could mean more aggressive share buybacks. matthew: share buybacks are definitely on the table. we've seen tencent since the middle of last year buying back stocks. if you recall, the jd.com, was by a dividend to shareholders. they don't raise a lot of cash from that. as a tax efficient way to percent stake to shareholders. that is on the table as well, which entangles the regulatory webs that have been tencent, though they don't operate directly in things like e-commerce, they have preferred partners that they invest my

hand to help them grow. as the regulators look to break down the barriers, unwinding its tentacles and investing network is a good way to do that. it is interwoven. buybacks on the table. there is a lot this company has to do to keep growing. that's on the table as well. shery: you seen the shot reverberate across the other tencent indices. is this going to be a period of adjustment for these companies? does it have a meaningful impact in their individual systems? matthew: in the near term it's a little better. a lot of them have contracts in place for certain amount of time. i think meituan has a preferred contract with tencent 2023. does it become more of a competitive playing field for

the 1.3 million active users on we chat. as we looking beyond this year and next, that is when it gets uncertain for these investee's if tencent is no longer a preferred partner. i don't think they're going to build completely, but there is definitely a huge cloud of risk both in terms of song stop and what pressure that most of the market. in the fundamental risk on the next few years. shery: let's have a look at earnings. we saw virtually no growth when it came to first-quarter sales. now we are expecting a decline. given how big gaming is, and not a single title has been approved this year, what are the expectations for this company going forward? matthew: the gaming business, tencent is in a unique position, where they don't rely on new games to sustain profitability. they rely on new games for growth. smaller companies need new games

to generate cash flow to keep people employed. a company like tencent is a much more stable operator, but the growth won't be there without new title releases. that is the boat therein. that is why they are looking abroad for more growth. they are in riot games, sue purcell, their talk about investing more in ubisoft. the growth in the gaming business is mostly going to come from overseas going forward with the domestic market, even before the regulatory crackdown, getting happily saturated with competition. so many people spend a lot of time and money playing games already. shery: tell it to the people actually giving up there. let's talk about the investment abroad. you've seen a potential focus on their overseas markets. how feasible is that when we are

seeing regular crackdowns when it comes to investments in the chinese unchecked environment in beijing perhaps not wanting all that capital outflow? does beijing see that differently? matthew: potentially that's a good shout. about what the chinese regulatory environment and the western environment. there tentacles are woven throughout the gaming industry globally. now you have pushback on both sides of the world. give the western world pushing back on chinese influence and investment. give chinese regulators focusing, let's invest more domestically, and export domestic content abroad as opposed to investing in foreign content. you have a perfect storm pushing down on them where it is going to be difficult to keep doing that. when you see news that they are looking to increase their sake -- mistaken ubisoft, i think we

are talking about an increased shery: full acquisition will be difficult regulatory wise on both sides. but to have your thoughts. the director of research at paul metaverse research partners with his views on tencent. investors can't seem to look past covid zero policy. pushing the chinese levels to their lowest level since 2005. this is bloomberg. ♪

haidi: here's a quick check of the latest business flash headlines. walmart shares search the most in almost two years after meeting income expectations. the retail giant is falling its footing after slashing othello three weeks ago. the ceo says walmart will be well-positioned for the coming holiday season after making good progress on the inventory growth in supply chain costs. china mass -- asset management says it expects a nest loss of almost $28 billion, even after revamping its business. the loan manager says results

did not meet expectations because of the real estate downturn. >> investors in china having a hard time looking past the country's covid zero strategy even as officials wrap support for the economy. let's get more with our chief china markets correspondent, sophia, you had this boosting measures and expectations more stimulus. the pboc pivots, what is going to take? >> that is the big question right now. it doesn't seem to matter what the pboc does. we had a rate cut yesterday. it was only 10 basis points. a lot of people saying it is not enough. why ask people what will it take for monetary policy, from the physical side, from the central government, people just don't know. there's a huge level of anxiety in chinese markets.

nothing the central banks or policymakers want to do appears to be working. it's been five months since those sweeping promises to do everything to support markets and the economy. so far, nothing has worked. the level of anxiety, confusion and markets is running so high that people don't believe in these promises. haidi: we have seen stock swings and hong kong, that has become normal for the asian markets. we could see those swings coming to new york as well. what is happening? >> ever since i first came here in 2017, this is a regular occurrence. this is why hong kong is a popular market for short-sellers. the level of stock swings and these pump and dump schemes, that is something the hong kong exchange has tackled in the last few years, is now coming to the

u.s.. these are the kind of smaller exchanges that have a lower level of regulation, their the ones that these companies are trying to list, because the standards to get listed in hong kong have come a lot higher. buyers beware, level speculation and hong kong was extremely high. shery: we'll see what u.s. regulators do. we continue to have those tensions between the u.s. and china already. our chief china markets correspondent with the preview of what to expect on the market open in hong kong and china. these are the stocks were watching. zinc related equities may rise after the metal soars. we will be watching the vision mining group and vision mining as well.

>> we are keeping an eye on china tourism group, duty-free. haidi: coming up in the next hour, we will be speaking to anyone global, sing the global economy will stay in status much longer. kevin should mota, -- kevin shimota as well. we look ahead to the start of trading in hong kong, shanghai and shenzhen. china open is next. this is bloomberg. ♪ ♪

what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create