>> you are watching "bloomberg daybreak: china."

coming to live from new york, sydney, hong kong we are counting down to asia's major market open. the stock may extend gains from a seesawing u.s. sessions as fed officials offered divergent signals over the next read height -- rate hike. president z has 4 -- xi has four and a present did third term. >> there might be a nickel tax as they try to cash in on a shift to electric vehicles. >> you have talked about putting attacks on nickel products, will that happen next year? an export tax on nickel products? >> it is possible to oppose it this year. >> we have the indonesian president commenting in the interview that they want for has like car plans, there willing to -- 4 tesla car plans, -- plants

saying that haslett must make cars locally not just batteries. >> is trying to relieve the were elon musk by meeting with him early there -- earlier this year to drum up investment. not surprising given that indonesia is the biggest producer of nickel as we heard a little while ago. it is an important part of ev's, take a listen to what you had to say. >> what we want is the electric cars, not the battery. fort haslett we want to build electric cars in india, ford electric cars, honda electric cars, we want a huge ecosystems of electric cars. >> indonesia president, in the interview and more coming up this hour take a look at what

u.s. futures doing at this moment. no clear direction in the early asian section -- session given the volatility we saw the new york session. mixed eco-data and mixed earnings, we are all -- paring back from the losses that we saw earlier today. oil now gaining for the third session, past the $90 a barrel after falling to the seven month low earlier this week and we have a lot of that commentary -- a lot of fed commentary. >> calling for a three-quarter basis point move, and another one saying you might need to be more constrained than that. in asia today you mentioned the volumes, we are looking at a pretty big start with japan futures, a straley a -- australia thing high, new zealand in the red this morning. the five-week high, the dollar

index on the yen here at the 50 day moving average. what has been a big moves -- boost for markets from the june lows is the feeling that inflation, from signals is the yuan. the japan cpi data, getting inflation above 2%, we are hearing it could come in at 2.4%, the quark number watched by the boj -- the quark number watched by the boj. they say easing will be necessary, there is a lot of pressure as he approaches the end of his term. >> what a contrast with what other central banks around the world are doing. especially with what is happening in the fed. let's bring in kathleen hays and bloomberg stretch just mark. we have some conflicting signals coming from fed officials. the broader narrative is that we

need rate hikes. >> absolutely. the question is not if they will hike, the question is in september how big the rate hike will become a 50 or 75 basis point. a year ago he said he was looking for transitory inflation. he is back on board with the hawks for sure, he was speaking today with a business group. he said the that has an inflation problem now and they have to get it down urgently even if they have to risk recession. >> i do not think we are in a recession right now. but, as we continue to raise rates, cost so to speak on borrowing across the economy it should be tapping on the brakes of the u.s. economy. that makes it more likely that we will end up in a recession. >> jim, present of st. louis fed, did not say he was just leaning toward 75 he was urging a 75 basis point hike when he

spoke to the wall street journal. why wait when we can get it done now? he has been saying it for a while, he wants the front low the hike, have an impact, prove your credibility and that is the way he wants to go. contract -- contrast that to the president of the kansas city fed, saying that it remains strong. they will continue to races the size of the -- base the size of the hikes with her colleagues. moving so fast you might on -- up and businesses and make it tougher on consumers, she thinks you have to look it over carefully. larry davis poked her last week and she said the same thing today. baseline, 50 basis point, 75 possible. looking at the labor market, still strong the latest jobless claims, is a nice reassuring number. home sales in housing market

that has them more worried, we see home sales down for the sixth month in a row, the lowest since 2020, down nearly 6% last month, mortgage rates when you raise the fund rate aggressively and you push up 10 year notes on the yield size -- side you will get a big jump in mortgage rates. this is hitting homebuyers very quickly. this is other they have to have on their radar screen. they do want to have an impact and they do want to slow things down. >> mark, what we make of it from a market perspective? what are you looking for out of the fed speak earlier today? you still have the likes, the says there is enough for the rally to continue. >> it is a headache for traders. you've been saying it the being of the program with fed speak is inconsistent, a month ago until a very important fed meeting in september, by now traders would

usually have a pretty good sense if it is 50 or 75 basis points. at this stage they do not have any idea. some people are ford and some people are against it. we still have jackson hole to come, that is a place jerome powell can -- you can use the symposium as a platform for him to ramp up the next phase of fighting inflation. traders are wary of what he may say at the end of next week. so i've a couple of weeks to go before the fed meeting after that. another chance for fed speakers to muddy the waters once again. there is little chance we will see smooth trading of the equity markets are bond markets we have so much up in the air and the fed openly discussing among themselves differences of opinion, whether rates are going up and by how much and whether 3% is enough of the end of the year or 3.5%. that is just confusion, traders feel like a confused situation. >> confusion when it comes to

the chinese economy as well. we know it is a very politically sensitive year for president xi xpeng. the tensions over taiwan, the covid zero policy, growth strategies, forecast for growth is being cut. >> if they could pick one thing they just want to see free movement. they want to the end of covid zero. mobility returning, freedom of businesses to export, import as they wish. people to move around, travel within the country and for foreigners to come back to china. they want and and to covid zero -- an end to covid zero. until they take away the policy -- is getting worse and the property market, not better, and demand has fallen off a cliff.

very unusual in china, plenty of money going around, but people do not want to borrow to go into business ventures. that is a pretty depressing outlook for china. they may need to cut the growth outlook even further if there is not a sudden change in policy. a lot of it is self-inflicted pain. until china realizes they can address at themselves and they can fix it, investors will shy away. it will be very difficult. about dylan place people feel relatively comfortable is good -- about the only place people feel relatively comfortable is the bond market. growth is so slow that the pboc will need to ease policy again. they may do as early as next week and that is what traders are looking for. >> mark crumpton with the market take, bloomberg's kathleen hays as well on the head speakers --fed speakers. later on will be talking to the philippine central bank governor. that conversation 9:30 a.m. hong

kong time, let's get to vonnie quinn with the first word headlines. >> chinese president xi jinping is urging regional authorities to help relieve the regional drought, adding a further risk to economic growth, some factories have been forced to curb production as the heatwave has struggled with power generation. waters at the lowest recorded levels of this time of year. the turkish central bank delivered a sharp interest rate cut despite inflation at the 24 your hike and deliver on your a record low, the monetary policy many lowered the benchmark to 30% after keeping it at 14 -- 13% after keeping it that 14%. the sudden resumption of monetary stimulus comes less than a year before elections. longtime trump's asian -- trump organization cfo allen weisselberg has led guilty. he is they've been played with

unreported perks. >> labors in saudi arabia are among the top -- >> he told bloomberg the government way -- may impose a tax on nickel exports. with ev has a surge in demand and they are the biggest exporter of nickel. he says he wants to stop all exports of raw materials to help the nation move up on the ev supply chain. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by

more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn this is bloomberg. >> still ahead, the look at diversity and aviation, we will discuss what needs to be done to empower more women in the industry. up next, td security joins us to talk about china's slow down impact on emerging markets. this is bloomberg. ♪

>> it was taken as almost automatic. six months or a year ago that at some point the chinese economy would surpass the american economy in terms of total gdp and market exchange rates. that is now much less clear. >> treasury secretary lawrence summers, saying local governments could sell more than two a 29 billion dollars in bonds to fund budget gaps, to shore up an economy that has been hit by worsening covid outbreaks. head of emergency --

emerging-market strategy at td security, hearing all of these concerns, the energy crunch and many -- major cities are affecting a lot of the automakers in particular. going forward, how deep of a structural slowdown does is factor for china? in this year even if stabilization is the name of the game, ongoing will be longer-term issues. >> clearly there are longer-term issues. the population is an aging one in china. it will have an impact on growth and productivity, and the next several months on the biggest weights on the economy is clearly the property sector and the liquidity crisis in china. there is a real crisis of confidence in the housing market and that is having a big impact across the board on the construction and many fracturing. auto activity in general.

the current energy issue taking place, the heatwave that is also leading to pressure on the economy and retail activity. last but not least is the dynamic clearing, the zero covid policy that china has in place. when you add all these factors together it really does mean significant downside risks to growth. we downgraded our forecast at being of this week to 9% gdp growth this year, -- 2.9 percent growth gdp this year. we see a lot of downside factors. >> you do not sound bullish, investors are hoping on -- hinging on a hope and a prayer, that policy will turn more accommodative. is that a baseline expectation? how does that feed into the -- given that we have seen the

likes of the yuan as an anchor policy? >> and the terms of stimulus we will likely see a rate cut next week in a low crime rates, and the one year and five year rates -- prime rates in the one year and five-year rates. lower policy rates are lower mortgage rates have not had an impact on the housing markets, is weakening confidence there come a at other stimulus we obviously see a ramp-up or infrastructure spending. i will help growth, will not be enough on its own, exports have been resilient, the negative factors on the economy, he really do need to see much more stimulus to get growth back to anywhere near the official target. for the rest of the year it will have a negative impact on the commodity exports. clearly that is going to pressure the same time we have chinese imports in terms of technology, semiconductors etc., in some of asia's big tech

exports. they will have found impacts on other emerging markets. >> at a time maria heading towards jackson hole where we could get lots of -- where we are heading towards jackson hole and we can get lots of subject, will it be towards a volatility and slightly conflicted messaging coming from jim fuller and esther george today. >> i think all eyes are on jackson hole, clearly the fed as you have seen in recent weeks has pushback on the mower -- more aggressive raise expectations. we see capital flow back into some emerging markets. the uncertainty about september, it will be 50 or 75, we think 50, what happens afterwards would clearly add to the constrained on the confidence in emerging-market assets. we see some pressure, we do think we are past peak hawkish is for u.s. rates. ultimately the dollar is not so

far from peaking. there may be some more upside in the near term, all that should ultimately play for a better environment for emerging markets. probably not very soon, towards middle late fourth-quarter before things turn around. >> deftly not a great environment for the turkish lira, although they have their own issues. chart on the bloomberg showing the real rates are the most deeply active across the world. they just cut rates again. what is the thinking here? we understand president erdogan has his unorthodox views that inflation can be tamed with rate cuts. this does not seem stable, what is the endgame? >> we think the endgame is that rates will have be wrapped up. it is very typical, as you mentioned, real interest rates are massively negative.

-624%, -- -64%. is very -- in terms of the i has been through intervention. we think the i will weaken. in the long-held forecast against the dollar that we've had. we will have to see rate hikes. you can focus on growth, that is understandable. when inflation is rampant ultimately that will be a price to pay we think it will be sharply higher rates. >> you have mentioned how the lira is heavily managed, is not just about turkey, they are burning through or than $2 billion of foreign reserves -- more than $2 billion in foreign reserves to prop up their environment. >> asia has become less vulnerable, we look at the value adjusted reserve declines as well. we look at reserves across emerging markets and has dropped every sharply in recent months.

particularly in asia, china has seen a sharp drop in the lot-based revaluations. i do not think we will see a rising vulnerability. external conditions across emerging markets is better. we may see selective vulnerability. the bigger concern is frontier economies, sri lanka, bangladesh, pakistan, etc.. not necessarily the mainstream emerging markets where external positions have improved. especially in asia in the last few years. we are not worried too much on the front. >> good to have you back, head of emerging markets strategy and td securities, you can get a roundup of all the stories we just discussed. you can go to daybreak, that is dbgo on your terminal. you can customize your settings the only get the news on the assets you care about. this is bloomberg. ♪

>> counting down to the start of trading, tokyo tells a story we are watching today. over in japan july cpi numbers finally inflation even in japan. bloomberg economics estimates that inflation crime to 2.5% that is unlikely to prompt -- climbed to 2.5% unlikely to prompt a change in policy. consumer home lender credit assets in indonesia and the philippines could be valued at about $500 million. the ceo says that the -- they plan to raise prices as needed to maintain profits. amid the inflationary environment come here more from our conversation later this hour. >> let's get a check of the latest headlines. insider report says amazon will

stop offering covid pacific leave operations, they will return to a standard sickleave aussie on august -- on august -- sickly policy on august 19. they will stop contact tracing. bloomberg has learned that qualcomm is taking another run at the markets processors. they purchased a chip start up new via. the company abandoned an earlier push into the $28 billion industry for years ago. they are considering a spinoff, sources say that china's national petroleum -- feasibility proposals. the beijing-based firm to

consider monetizing the business. sources say they raised more than $2 billion after posting their hong kong listing. we are told the resale -- retail giant sold shares, injecting liquidity into the slugging markets, that raise $5 billion this year, a 6% slump. >> coming up the world's biggest producer of nickel may importers -- impose a tax on nickel this year. we go one-on-one with bloomberg next. this is bloomberg. ♪

>> we have breaking news have japan we are getting the core cpi numbers excluding fresh

food, year on year growing to .4%, back in line with the estimates -- 2.4%, this could be -- and comes above the bank estimation inflation target. take on energy as well and you get court seat -- core cpi that slightly faster than and less estimated. suffice it to say this will not do anything for the bank of japan's policy, given that they believe it is cost push inflation not demand driven. we do have core cpi 2.4% in the month of july. fourth insect -- consecutive month of that inflation being above the target. we may not see any changes. >> that very muted reaction, it

is underscoring that we do not tend to see much moves either way when we do get that inflation data. when you take a look at the data , highlighting some of the work being done by our markets team. you can see over the past six of the 12 readings that have been in line with what economists expect. the first hour of the release very muted moves and the yen, we see that again with the yen holding very steady. the 60 day movie -- moving average against the greenback. let's take a look at how the japanese futures opened in singapore, the contracts yet, eking flat for the start of trade -- looking flat for these thought -- start of trade. the inflation signal is mixed messages we are getting from fed officials. a pretty steady start here today. >> indonesian president joko

widodo, says they may start taxing nickel exports is your. he wants indonesia to move up the ev supply chain as well as increasing state revenue. he spoke to our editor in chief. >> we want to added value to exist in indonesia so that there is income for the state, taxes, open job opportunities in indonesia and most importantly we can really enjoy the added value. that is what we want. also with copper, tin, cbo and others. we are not being closed, we are being open indeed. u.s., china, europe can come and cooperate we are open. >> you have talked about putting attacks on nickel products, the next stage up, will that happen this year? an export tax on nickel products?

>> it is possible to impose it this year. >> a consistent thing you have been talking about, green industries and the environment, you have a goal to reach, to make indonesia carbon neutral by 2060. as you know most of energy now comes from coal. coal prices have gone up. i have wondered, we stick to your pledge that you would build no new coal fired plants or is that gone forever? >> our target is very ambitious. 51% in 2030 and 2060 we should be at zero. this requires technology and funding. money. the potential is clear.

the shift from coal to renewables, it is not an easy thing, the coal prices are still cheaper than geothermal. >> you tried also to introduce a -- you talked of a tiny carbon tax. two dollars per ton. the government has twice differed that. i wondered and you would do a carbon tax on coal, the price is a bit high. >> we are currently preparing the regulation. the law, when it is finished we will immediately intimate the carbon tax. carbon trading in carbon tax at a cruel do it this year. >> speaking to bloomberg news editor and chief john, will have more from that position later on "bloomberg daybreak: china." >> let's get you to vonnie quinn

with headlines. >> the fed officials offering mitt -- mixed signals the size of the rate hike. he said another 75 basis point move, but kansas city strikes a more cautious tone on hikes saying the fed is already done a lot. another says the inflation challenge is not over. >> the question right now is, can we get inflation down without triggering a recession? my answer that question is i do not know. we know we have more work to do, raising rates to bring inflation down. >> philippine central bank delivered a half-point hike, take the rate to 3.75%. governor phillipe signaled the central bank is not done with rate hikes yet. they have the ability to -- they raise their inflation outlook for the year from --

a u.s. federal judge says portions of the affidavit justifying the search warrant for president trump's our largo home should be unsealed, the just a parent has one week to propose which be kept secret -- the affidavit should be unsealed and admiral justice department has week to decide what will be kept secret. the vaccine, made by a mexican -- michigan made company should be ready to start in three months. they have ordered 2.5 million doors is from the varick nordic -- bavarian nordic. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn this is bloomberg. >> economies being pummeled by severe weather from record

drought in the south to heavy rain and the north. with power shortages at a critical time. let's bring out our chief asia correspondent stephen engle. what are the latest of what is happening now? >> absolutely, the severe weather, let's start in the south, obviously the temperature at the providence -- the province above 40 degrees for a number of day have caused a record drought shrinking the water and the biggest waterway, the dam created a lot of hydroelectricity as well as other dams in and around the area. also down another providence as well, that will also have up and downstream ramification. this is not only one of the most populous poverty -- provinces in

china come it is filled with factories and suppliers to many companies that are either headquartered in shanghai were factories on the coast. they get their suppliers from sichuan province like a tesla. tesla and sha has appealed to the shanghai government to use their strong arm to urge authorities to prioritize power to the ev space. at least 16 suppliers, that has caused a lot of concern on social media. why should that industry get priority when other households and industries are sweltering under the hot sun? it is causing not only economic damage, because 15% of china's poly silicon comes from there, prices will go up, have the

economic impact at a time when the economy is definitely slowing down. but also, people are getting that up if they cannot turn on their ac in this sweltering heat, what will happen on the social side of things? >> how hide are the stakes were president xi jinping? -- high are the stakes for president xi jinping? >> this is the year when he should ideally be trumpeting his successes. what he has done over the last 10 years. no one will doubt that he is getting a third term, that will happen. again he will not necessarily going to the party congress, he will go into it on the back foot claiming stability and trying to reach stability. he is up and a northeast providence where they are being pummeled by heavy rain. that is not causing power outages, it is causing crop damage at a time when there are food shortages.

i lived there 32 years ago, it is highly industrial as well as highly agricultural. grading, crops -- grain, crops, fruit, he is a plot -- dealing with heavy rains and flooding to alleviate it. a difficult quarter for the provinces to do. where can he find some relief? we already have the reverse repo by the pboc cut on monday paving the way most likely for low prime rate cuts coming on monday. the one-year bench cut -- benchmark rate. and more on the five-year lending rate. that will help with mortgages, but who will be lining up or -- for mortgages when you're pouring money into a hole in the ground and one that is not going to be completed. covid zero, platform companies increasing problems with china

and taiwan and youth and employment up at a record high of 20% in july. i could go on. >> a very difficult year, and for the rest of the economy as well. coming up a global travel demand picks up we will take a look at gender equality in the skies. more on that with the international society of women airline pilots next. this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines, chinese carmaker wrapping up their electric sales in exports after disappointing first-half earnings. is says a shipment of new energy vehicles will account for 30% sales this year, their net profits fell 35% from a year earlier. hit by covid lockdowns and supply chain issues. we have learned that tesla and saic motor, they have difficulty maintaining production if the power crunch continues to impact suppliers. something city officials have asked the southwest province if they can prioritize them so --

the worst drought on record. estee lauder is expecting an eight to 10% drop in sales this quarter amid continued lockdowns in china and pressure from the strengthening u.s. dollar, the beauty company usually creates one third of its revenue from china. they are warning weakness in the country with revenue falling 30% in the previous quarter. gender imbalance has been a challenge for the aviation industry going back decades. with boeing estimating that 600,000 new pilots will be needed over the next 20 years the reason for optimism that perhaps more women will be attracted to the flight deck. joining us as a vice president of the international society of women airline pilots. thank you so much for joining us. tell us about the current situation when it comes to female pilots and what has been

the hindrance in getting more women into the industry. >> thank you so much for having me on the show. i think right now what we are doing to try to get women more interested in becoming pilots is getting out there and giving a lot more role models and mentors available to younger women. so they can see it is not just a male dominated career. it does not need to be, you can do this career as a female. there are just as many opportunities for females as males and a lot of is getting the mentors out there. i know the international society of women airline pilots we have donated over $1.4 million worth of scholarships to females. we was have more candidates we can give senate -- financial support to that we do have funds. >> what is the ratio of men to women in the industry? what are the issues right now in

increasing that number? is a cultural thing? is it the job itself? is it just getting those women into the pipeline and it comes to educating and training them? 6 >> all those things that you hit on, obviously right now worldwide with the exception of maybe india it is less than 10% of the women at airlines are in the cockpit. it is an unbelievably low percentage. i think getting the word out to them and speaking to them and mentoring them is one way to get them into the cockpit. offering those opportunities and i think they will come. >> once you get women into the industry, how difficult is the rise throughout the ranks in terms of gaining seniority. is there a bigger challenge or different challenge for female pilots? >> i think a lot of things might

hold be mel's back, and love questions we get, -- females back and a lot of questions we get is can i still have a family? you are always on the road, you are never home, there is a never stable life. in reality that is not true. every part of your career can offer stability and it is where you want to make and how you do your schedule. there is so much flexibly with being a pilot. depending on where you are in your career if you choose airline or corporate you can have wartime at home than the average parent -- more time at home then the average parent. maybe you fly during the day and your home at night. you do that two or three days a week and then your home and offers that family life. most people that work a 40 hour week, so that we need to get out to the females, you will be a

mother and still have a great life with your family and it will not say you are gone forever. because you will be there. it is important and we need to get that aspect out there too. >> what has been the impact of the pandemic? there has been a lot of concerns with the router cuts with all of the airline -- broader cuts with all the airline bankruptcies, that we will go back to levels we saw in 2019. there has been across the industry allow the labor force taken out that is not coming back. >> i think, in the pilot position it has been different than some of the other positions you might see in aviation. that is because to train a pilot to work for an airline you are talking six to eight weeks of training. it is not an easy path. most airlines cannot get more

than 2000 pilots through their training system. during covid a lot of airlines did not and up furloughing a lot of pilots because they knew travel demand would bounce back and they would never have enough staff to cover flights. it worked out kind of well for us in the fact that it is not been detrimental to pilots. it is worked out very well for us. >> kara great happy with us, vice president of the international society of an airline pirates -- pilots. coming up, plans to counter cost pressures as well as opportunities in north america, more from the ceo next. this is bloomberg. ♪

>> he says that they land to remain profitability for the next -- they plan to remain profitability for the next fiscal year by raising prices. there also looking at new opportunities in north america. >> our overseas revenues accounted for 45%, and city for

percent of profit -- 64% of profits last year. we believe the current price hike could lead to global recession. a consumer good company that does business around the world i think there will be a certain impact. a price hike on our raw materials -- compared to last year we will have ¥80 billion worth of impacts. we believe we can maintain the same level of profit as planned if we -- we have implemented cost-reduction measures. we like to remain the with the trend by further streamlining costs. we did not experience any significant impact during the global financial crisis. our strategy to make a brand premium has been successful. >> he has announced their new recommendation to further regulate alcohol consumption. i wonder how your company is dealing with the situation.

more alcohol consumption has been facing culturally. >> as a company whose main business is alcohol we are also in a position to work in line with the who strategy, specifically we are promoting a strategy to increase the sales of low alcohol or nonalcohol products. in japan we are aiming for 20% between 25 under the smart drinking strategy. >> 2016 after -- i wonder, looking towards the future, what is the next peak for you? is there any area globally you

think will be strengthened? >> we have told our stakeholders we will focus on improving our policies and not make any large investments towards twin 24, we consider north america the missing piece for us, the largest market for beverage and beers all by south asia and africa. it might be possible in south america as well. for north america is difficult to provide opportunities, we want to focus on putting forward our global blank -- brent. -- on the other hand would like to expand our presence and low alcohol or nonalcohol beer and other premium products to adults in north america. we see huge opportunity there. in any case we will continue to seek external opportunities going forward. >> katsuki speaking, coming up

the next hour we will talk strategy with why they are seeing great opportunities in the recent equity rallies. we may be a low bit wary of some of the risks out there. we also make sense of the trade talk between the u.s. and taiwan and how it impacts east asian economies. we will have more with the asian trade center. markets opens in sydney, seoul, tokyo next. this is bloomberg. ♪

>> this is "bloomberg daybreak: china," we are counting down to

asia's major arc it opens, the fed official -- major market opens. the inflation even in japan, the cpi, the core cpi is growing above that 2% inflation target for the fourth consecutive month. >> the supply and energy continues and we're watching that focus shifting to china with a number of the major cities and providences -- provinces halting. really seeing the stoppages in production as a result of the energy shortage. >> very difficult for president xi jinping as we head toward the third term. unprecedented for a chinese president. haidi: we are just getting breaking news crossing the bloomberg. we are hearing they will attend

the g20 summit in indonesia. this is interesting because there has been a lot of criticism other efforts to isolate russia have had limited impacts. the indonesian president speaking in that bloomberg interview saying the rivalry of big countries, he says the chinese president and the russian leader are both planning to attend. take a listen. >> i know you have invited president xi jinping to come to the g20. has he said he will come here in november? >> yes. xi jinping will come. reporter: and president putin? >> president putin has also told me he will come. shery: this is really a broad ranging conversation. we also heard a backing of the proposal to add jobs growth to the bank of indonesia mandate. this will be the third year the government is trying to get this

done. of course they have the inflation mandate, but jokowi wants to see job as well. there has been criticism this could compromise central-bank autonomy, but it seems the government is going to push through this one more time, as of course bank indonesia is doubling down. you can get more from that conversation, as we get more views on politics in the upcoming g20 summit as well. of course we have the japan, korean and australian market opens. let's go to bell for a check of how it's going. >> we will also check in on nickel. that contract goes in an hour. we did have that interview with the indonesian president saying it could impose a tax on nickel exports. we will watch nickel related

stocks. in terms of the open, we are keeping and i on any real action -- reaction on the yen. inflation did come in line with estimates but it does complicate the push from governor kuroda on the altar easing policies and core cpi reaching 2.4% on the year. stocks moving to the upside, indicated in futures trading. let's turn to korea as well. we did have that earnings from applied materials overnight. we do understand they are putting a bullish outlook on the sector. essentially they say they can weather the economic slowdown affecting the industry that is the biggest maker of machinery used to manufacture chips there that is a supportive factor for the chip stocks. we can see it is looking a little more muted. the korean won as well, it was

the biggest laggard in asian fx in the last session. a lot of concerns around the chip outlook. turning to australia, still aussie earnings season. very much in the thick of that right now. highlights include new crest, one of the stocks we can check. stocks pretty flat. a reflection of the concerns around the economic fragility and mixed messages in the fed. shery: our next guest says the recent really gives a great opportunity to lock in equity gains and reduce risk. joining us from singapore is sgmc ceo and founder, massimiliano bondurri. good to have you. you were bullish back in june. what happened? >> well in june, valuations were lower than they were now. before we were coming from definitely oversold conditions. valuations had come down way too much. before we were using capital liquidity to get that into the market.

july and august happened where an impressive rally occurred in the nasdaq, for some of the names that were beaten down. now we are back to fair valuations. there are still quite a bit of risks out there, geopolitical, macroeconomic, therefore it is better to lighten up and take advantage of the recent rally to face what is coming. shery: where do chinese assets sit on the risk spectrum given they have been behaving differently, especially since the economy is supported by fiscal and monetary stimulus? >> chinese assets have behaved differently with respect to american and european counterparts. for the chinese exposure we are retaining and holding up, chinese valuations continue being attractive from an

relative and absolute point of view, but what we continue highlighting is investors need to take a longer-term approach for chinese assets, because in the short-term term of course there could be quite a lot of turbulence and headline risk. at the end of the day, if you can take a longer-term approach, three or four years, you should keep holding onto the chinese assets. haidi: when it comes to broader equity appetite for risk, you are seeing a lot of confusion and ambiguity as to how we interpret what the fed is really communicating. our markets preparing for a pause or a pipit? >> we think yes. there's been a lot of talk about this peak inflation happening and that is likely true, but then again you're still looking at inflation numbers which are way higher than what the fed can summon. you are getting a bit of pricing because the market is thinking the fed could pivot quickly,

looking at hiking rates lower and cutting rates next year. we think it will take longer for the fed to pivot. they cannot run the risk of once again falling behind the curve and potentially risking their image once again as what happened last year. it will take longer for the fed pipit and that is something the market is pricing and hands, we start taking profits with higher liquidity because that in turn could impact risk assets negatively. haidi: when you talk about the energy crisis, particularly in to the northern hemisphere winter, is that something you try to trade around? are there opportunities there? >> the energy crisis is happening especially in europe with respect to the russian and ukrainian tensions. there will be some structural developments happening. there will be a lot of opportunity for renewable energy

and it will be an attractive market. of course, investors need to be patient. if you need energy now, renewables will be something further into the future. definitely start getting exposure there. what really needs to be seen is in terms of the energy requirement in europe, especially, you can get shortages and issues over there and that in turn could put pressure on everything which is growth and production. that's why we are a little more bearish than european assets going forward especially getting into winter. in terms of trading the energy play, renewables, especially anything linked to the u.s. as well, we are liking that market and all the fiscal stimulus which is happening, especially in the u.s., those names will remain supported. shery: how do you price in the latest headlines? do you at all, given that we have been potentially gearing up

for tariffs being listed -- lifted on chinese goods, but you have the u.s. and taiwan with trade talks potentially making things more difficult? >> geopolitical tensions are rising and will continue being there. therefore, there is something that needs to be placed into the current valuations and investors need to grapple with that. at the same time, the lifting of tariffs is something we've talked about. that is something we -- that could benefit both sides. from an inflation point of view, getting rid of tariffs will likely bring inflation down, and from the chinese side, that will be positive for them. that could be something which given the mutual benefit could happen. but that does not mean inflation will be going the way of taiwan. for something a little more economically driven and inflation driven, hopefully it will happen and it could be a

bit of a boost risk asset. once again on the longer-term perspective, these tensions will likely remain and it will not be the end of the story. haidi: great to chat with you, massimiliano bondurri sgmc founder and ceo. let's go to annabelle with early movers. >> we are checking in on the big nickel producers. we had that interview with the indonesian president saying the country could impose a tax on nickel exports, a push to move up the value chain for that key import for ev batteries. we are in the thick of aussie earnings season. some companies reporting, one of them, you can see the client at the start of trading. it did report an underlying profit for the full year that missed analyst estimates, but still profits our board and ceo renewal is aboard. newcrest mining on the other hand is moving to the upside. it is australia's largest gold producer and it did see an

annual profit drop on 25% on the year with the key mind producing less gold. it is due for upgrades and maintenance. shery: now let's get to vonnie quinn with first word headlines. vonnie: fed officials offering mixed signals on the september rate hikes. in an interview with the wall street journal, they urged another 75 basis point move. kansas city has a more cautious tone saying the fed has already done a lot. neel kashkari says the inflation challenge is not over. >> the question right now is can we bring inflation down without triggering a recession? my answer to that question is i don't know. we know we have more work to do in raising rates to bring inflation down. vonnie: the philippines central bank delivered a half-point hike, taking its key rate to 3.2%.

governor signals the central bank is not done with rate hikes yet, saying it helps against price pressures. but turkey's central bank -- the monetary policy committee lowered its benchmark to 13% after keeping it at 14% since december. all 21 economists surveyed by bloomberg expected no change. the resumption of monetary stimulus comes less than a year before elections. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, asian trading. we discussed trade talks between the u.s. and taiwan. what this means for tensions with beijing. president xi jinping is calling

for local authorities, as a heat wave and severe through drought threatens energy supply in china. . we get the account just ahead. this is bloomberg. ♪ at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

haidi: as indonesia prepares for the g20 summit this november,

the president of indonesia has confirmed both xi jinping and vladimir putin are planning to attend. that is despite calls to cancel russell's -- russia's invitation over the war with ukraine. we have editor-in-chief john micklethwait in west java. >> the rivalry of the big countries is indeed worrying. what we want is for this region to be stable, peaceful, so we can build economic growth and i think not only indonesia, asian countries also want the same thing. reporter: but this visit did not help stability. >> what we really want is stability. what we want is peace in the region. reporter: there is a concern that if there is a conflict in taiwan, it would spill into the south china sea where you have

territory that china contests and there are territorial planes there. is indonesia ready to defend itself or the land and waters in that case? are you ready for that conflict military? >> we do want the region to be peaceful. it should not come to the point that tensions rise until it affects economic growth and then later on affects the well-being of our people. in my opinion, it is very important that there is a space for dialogue between leaders, especially leaders of big countries. . the global situation is extremely difficult and there shouldn't be further unnecessary issues. we are going through a food crisis and an energy crisis that has not been resolved, but the

pandemic -- and the pandemic still exists in some countries. reporter: i know you have invited president xi jinping to come to the g20. has he said he will come here in november? >> yes. xi jinping will come. reporter: and president putin? >> president putin has also told me he will come. reporter: american investments in indonesia over the past five years is $9 billion. china has invested $40 billion -- $40 million. we have a chinese car factory around the corner. china is buying up allow it -- a lot of the refineries to make metal for refineries. america at the moment is losing the battle for half the mines in indonesia, but also in southeast asia. do you think that is fair? >> indonesia wants to be friends

with everyone, with any country. we don't have problems with any country. each country will have their own approach. each leader has their own style and approach to bring in investment, so there should not be a problem. but now, what is needed by indonesia's investment technology. that will change our society. shery: the indonesian president speaking to bloomberg news editor-in-chief john micklethwait. chinese president xi jinping is urging local authorities to work to relieve the severe drought in some provinces that is threatening electricity supplies and adding further risk to economic growth. let's bring in asia energy reporter dan murtaugh on the ground in wuhan. how serious is the situation in china right now? reporter: especially in southwest china, it is really serious. we are along the banks of the

yangtze river. and the water levels are several meters below where they normally are this time of year. looking at my hotel room at the banks, jutting out hundreds of feet into the middle of the river right now. the heat yesterday was above 40 degrees in temperature. that is zapping hydropower along the river here because reservoirs are being depleted. at the same time, it is boosting air-conditioning demand so you have the double impact making provinces have to ask factories to shut down and the people to start turning off their lights and keeping temperatures a little warmer to conserve power to make sure there's enough for everybody to use. haidi: -- to be able to alleviate the pressure? reporter: exactly. shery: are there any options in terms of the short-term

solution? and what are the longer term concerns given that in so many places, we are seeing climate related, whether related events recap it -- wreaking havoc? reporter: the short-term, the thing that can happen is for the weather to cool down or to start raining, but unfortunately neither of those things look like they will happen. it is in the high 30's here for another week or so so the only other options, keep factories shut, try to figure out a way to minimize the impact or spread the impact so no single sector is completely shuttered by this, but so far it has affected car manufacturers, solar panels, battery manufacturing. there's a wide swath in the province. longer term, the hydropower is a major source of cooling and electricity in china and around the world. as climate change creates more

volatile weather and more persistent droughts, these things will happen. it is happening in europe. it is happening in california. scientists are studying how effective and stable hydropower will be with climate change being the new norm. shery: air asia energy reporter dan murtaugh on the ground in wuhan. haidi:haidi: let's bring our chief north asia correspondent david engel for all of the pressures coming down on president xi jinping. it is a key year. it is not the ballot year he wanted heading into the party congress. reporter: instead of trumpeting his successes in the last 10 years, xi jinping will head into the party congress, likely to be held in november, possibly october, and will be on the defensive a little bit as well as trying to stabilize an economy that is being hit on multiple fronts as well as our external factors with struggles

with the united states and the conflicts over taiwan. again domestically, he has covid zero he has to maintain and the damages that is having on the domestic economy. hainan island still having their problems. in addition, having problems with massive traffic jams in the far west, in addition to these droughts and the power problems in such one -- shut one. and he right now is in the north , which is also heavy industry, but highly agricultural. it is having heavy, heavy rain destroying crops up there. this is a grain essential area as well as fruits like apples. in the time of food shortages globally, this has put another strain on the chinese economy. in addition to the ongoing regulation against the platform

company, record youth unemployment right now, and of course the ongoing property woes. he's not heading to this party congress -- nobody is saying he will not get a return. -- third term. we are saying he's not going into the party congress with wind in his sales. excuse the pun, he's kind of paddling upstream. shery: our chief north asia correspondent, stephen engle. we have more to come. this is bloomberg. ♪

haidi: let's get a look at the futures and europe opening up no. we do have european stocks gaining with a thin previous session. , cr europe seeing up one half

of a present and a little weakness for german futures. we do see the europe six hundred index snapping the longest winning streak since march. we've seen the energy names in tech still outperforming. given we have had the dollar at a one month high. shery: here's a check of the latest business flash headlines. insider reports amazon will stop offering covid specifically for operation employees and returning to standard sick leave. they will also have sitewide notifications about positive cases. amazon is the largest importer in the tech world with more than 1.5 million and part-time workers. bloomberg has learned qualcomm is taking another run at the markets for server processors. the company is seeking customers for last year's purchase of the

startup. amazon has agreed to take a look at qualcomm's offerings. chinese carmaker wrapping up efforts, after disappointing earnings the ceo says shipments of new energy vehicles will account for 30% of vehicles this year. profits fell 35% from a year earlier with deliveries hit by covid lockdowns and supply chain snarls. coming up, fed officials are sending diverging signals this is xfinity rewards. 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.

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>> i think they will continue to raise rates. >> if they get lucky they can

get it right, but it is very difficult to know exactly where you are because the data others, and with a lag and there can be a lot of shocks. so i am sure they are not going to get it exactly right. that is what they are trying to do. i think if they make a mistake, it will be on tightening a little bit too much because, they really want to make sure they bring inflation down. shery: former federal reserve governor randy chrysler on the fence hike path. still up in the air is how big the next rate hike will be. of a global economics and policy editor kathleen hays is here with more. what clues did you get from all of the fed speak? kathleen: one message is very clear, it's not whether they will hike, they are still trying to figure out how big the rate hike will be on september 21. neel kashkari from indianapolis saying, the fed must get it

down urgently, even at the cost of taping the economy potentially into recession. >> i don't think we are in recession right now, but as we continue to raise rates and raise costs of borrowing across the economy, it should be tapping the brakes in the u.s. economy and that makes it likely that we end up in a recession. kathleen: jim bullard from st. louis talking to the wall street journal, saying that we should just go ahead, do the bigger rate hike. 75 basis points. frontload, go fast and do bigger rate hikes, make an impact, then sit back and look at what is going on. he said, let's get it done now. esther george, reserve bank of kansas city, says, the case for rate hikes remains strong, for sure, but i will still be debating with my colleagues on the speed of the headaches. in other words, how quickly do you get to the neutral rate, the

restrictive level that the fed wants? mary daly repeated what she said last week, her baseline is 50 basis points, she will be watching the data for 75. she would like to raise it and then redundancy what is happening, that strategy. to that extent, it is clear what their intentions are. it is still the case, though, that they are feeling their way along and he will do what they have to do. but nothing is set in stone yet, because they are watching the numbers. haidi: our colleague mark cranfield was saying higher just how confused the market traders are. so much division and ambiguity. why isn't the fed being clearer? is it because that they need to wait and see more data? that is exactly what it is. they are fighting inflation. kathleen: neel kashkari is admitting, the fed has a problem

and they have to solve it. that is one thing that is very clear. i don't see how they can keep doubting that they will keep going for now, for sure. then of course, watching the data, they have said this so many times, where there are four reports we have to which clearly in august and september. two job reports. we had one, it was very strong. and the cpi report, which pulled back from the highs, but that is good. what will the next reports hold? i think what they forget is that traders got used to having everything spoonfed to them. in the old days there were fed watchers, they got paid to get it right and to make the analysis. that is what people need to learn to do, think, read, listen and make up your mind. that is what traders, investors and strategists are paid to do. haidi: our global economics and policy editor kathleen hays there.

coming up, we will speak to the philippines central bank governors at 9:30 a.m. if you are watching in hong kong, 10:30 a.m. in sydney. let's look at the markets now. annabelle: looking at the reaction, we had a big interview this morning with indonesia, the president said the country could be imposing a tax on nickel imports. in terms of the market reaction to that, still waiting to get the price on the nickel contract at the start of trade, but we are seeing big nickel-producing companies moving higher on that. . turning to the broader market outlook, the dollar is popping up a bit this morning as well, also even the interview we had with joko widodo, saying that russia as well as china will be attending the g summit later this year. essentially that indicates a more marginal shift to further geopolitical instability.

across the markets it is a fairly mixed picture today. we continue to monitor reaction from the mixed messages coming through from the fed. we have got esther george with reluctance around a supersized hike. others like jim bullard are calling for a three-quarter-basis-point move. also keeping an eye on the chip stocks in korea, as well as earnings coming through from australia. another headwind is certainly what is going on in china's property markets. we are continuing to see the biggest property companies trading at a steep discount. surprising because of the macro issues there, including the continued reliance on covid zero policy's. it makes it very difficult to get new developments on the market. shery: and a very difficult year for xi jinping. vonnie quinn has a first word headlines and, more challenges on the climate and drought front as well. vonnie: exactly, more warnings from chinese president xi jinping urgent regional authorities to help believe

the severe drought. some factories have been forced to curb production as the heat wave in southern china hit hydropower generation. water levels in the rivers have fallen to the lowest recorded level for this time of year. long time trump organization chief financial officer allen weisselberg, has pleaded guilty to 15 tracks fraud charges. he admitted scheming for years to avoid paying taxes, by paying certain workers with unreported perks such as housing and cars. trump has not been charged in the case, but he will have to testify against the trump company, allen weisselberg will. see first says football fans have snapped up almost 2.5 million of the 3 million tickets available for november's world cup. close to 521,000 tickets were sold in the most recent phase, with group stage games featuring brazil program popular. buyers from qatar and neighbor saudi arabia are among the top buyers.

u.s. with securing -- the u.s. has secured a deal to acquire more monkeypox vaccines. they will be packaged by a michigan company which should be ready to start work in three months. the breaded administration made an initial order of 2.5 million doses, from the company which produces the only vaccine cleared for monkeypox. 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: coming up, we delve into the latest on trade talks, the outlook for global trade. this is bloomberg. ♪

haidi: we just had cross the bloomberg from our one-on-one interview with the indonesian president john micklethwait confirming that the leaders of china and russia will be attending the g20 summit in body later this year. -- in bali later this year. deborah elms joins us. this makes for an interesting meeting given a lot of the narrative around the attempts of the western allies trying to isolate russia, and some of the russian allies, they have had support from china and india --

what is the dynamic here forgetting something meaningfully done at a platform like the g20 if these leaders will be in attendance? deborah: i think it is a great platform forgetting important conversation started. the presence of so many challenging individuals means many leaders will be nervous about being in the same room with each other, so how do you get something done in a meaningful way, when 20 individuals can't even really meet in a room together? i think we should be, on the one hand, pleased that there is an opportunity to solve some issues, but on the other hand, concerned that the optics of even being seen next to someone is going to be so fraught, that ultimately there will not even be a photo, because no one will want to be the person who has to stand next to that guy. haidi: the pandemic, followed by the war in ukraine, the

fracturing of supply chains, the trade protectionism in the last couple of years, that is the background we are dealing with now. you think geopolitics will continue to play that negative force, now that we have less expectations of a detente between washington and beijing and the announcement of trade talks between washington and taipei? deborah: i think it will reinforce the challenges we have in getting local leadership. about the context of the g20. you have 20 of the largest countries that can't meet together and have even a benign statement issued at the end of it, can't release a photo that shows them all smiling together, that suggests, at least to me, that we continue to have problems with global leadership. it doesn't mean that we can't meet, it just means that our expectations of any major breakthrough at an event like this needs to be moderate.

what we should be looking for in the meantime i think, should be more regional and bilateral conversations which is why i think the trade talks between the u.s. and china are likely to unfold as part of that how do we shore up support in different places given the global turbulence. shery: but how much can you do, especially when it doesn't seem there is that much support within congress, even when it comes to new fta's? deborah: it is a real challenge for the u.s. first of all, their maneuverability is limited. they also constrained their own behavior by saying, we can't do this, we won't do that. that leaves the pathway to a solution extraordinarily narrow. again, it is a bit narrower than it needs to be, but i understand you are dealing with a whole complicated issue, and i think

the u.s., as with many of the countries that will show up at the g20, the audience is not the globe, the audience is your domestic constituents. and so your actions at these global meetings is not about how do we solve a global issue, it is about, how do i solve a domestic-level challenge? everyone is looking at their domestic-level challenges and, if we don't agree on what those are, we cannot get a collective response. shery: what about the asian trade initiative when it comes to the indo-pacific economic framework how will negotiations with taiwan. into that? deborah: well, i think taiwan is not going to be admitted to the indo-pacific economic framework with the u.s. and 14 other countries at this point, because of too many geopolitical tensions, which is fine. the idea here is to make a parallel version of that that is very similar to what the ipac countries are doing. on a bilateral basis, you might

be able to go faster and further, so you could use that as a template for what other talks would look like. then at the end of the day, you figure out how to bring these two together. for now, let's just start the conversation, i think that is what is happening in washington, start the conversation with type a and see where it goes, and if it goes well, we can pull some of those issues over into ipa c. remember, ipac is a trade agreement. haidi: let me bring up this chart that shows the existing level of trade between the u.s. and taiwan as we get into these talks that are supposed to happen potentially this fall. $3.8 billion is the trade value that we are talking of, as of june. your last point about the legal enforceability and the lucrative details in this framework, how useful is that for everyday

businesses who are trying to gain an advantage from this sort of trade relationship? deborah: it is a little hard to say because it is early days. i could make an argument that this is will be disappointed because they will not see the things they care about like tariff discussions, market access discussions, reductions of the border barriers for goods and services, for example. on the other hand, maybe you have an opportunity to have a conversation about things that really matter to businesses, the harder things to tackle like potentially climate issues. some of the challenges around supply chains in general. i think it will be tough to sell it in business because what they will not get is a clear click bank this is what happens to you on january 1 next year. instead you will get a document, i suspect, that says, we agree to hold further talks on,

filling the blank. but mostly it is about agreeing to communicate on these new issues. it matters to business. business should pay attention. but they will not be able to say to their board order c-suite, this is what we get on january 1 and this is what we had before that. for business, that makes it challenging. what is the benefit to me of an agreement to have a conversation? it could be huge. it could be zero. trying to figure that out will be difficult. business prefers to be able to say, this is what we get on this day. it is a very short timeframe. not some hypothetical five years from now. shery: it is hard for business to get the deadlines right and adjust their performance and business. deborah elms, that good to have you back, executive director of the asia trade center. ctg duty-free has raised $2 billion after pricing its hong

kong listing just above the midpoint of the range. the retail giant sold shares at 158 hong kong dollars each. shares will start trading august 25, injecting activity into the city took, a sluggish ipo market which has seen an 86% slump this year. this japanese company plans to retain profitability in the next fiscal year by cutting costs and raising prices in line with inflationary trends. the company already announced its first price increase in 14 years on its superdrive beer and other beverages. asahi's ceo told us he is confident the business will hold up despite the economic downturn. >> we believe we can maintain the same level of profit plans since we have implemented cost-reduction measures. we would like to maintain our profit growth trend by incrementing other measures. shery: be sure to tune into bloomberg radio to hear more from the days newsmakers, get

in-depth analysis from the team broadcasting live from our studio in hong kong. listen through radio+, or bloombergradio.com. plenty more ahead. stay with us. ♪ 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 haidi: chinese banks are expected to cut their benchmark loan rates on monday in hopes of

spurring china's slowing economy. let's get more with our chief markets correspondent sofia horta e costa. we know there is plenty liquidy floating around, and not that much take up. >> the problem is on the demand side, not the supply-side. this is just a natural follow-through from the pboc's rate cut monday, what -- but we do know, and the credit data shows that it is not the takeout, the take-up is not slowing because borrowing costs are high, it is because people don't want to borrow because there is some much uncertainty in the economy, that corporate and households don't have that demand for new credit. when we get the rate cut on monday, it is almost a certainty, though most economists are saying that will not be effective to stir up credit demand. shery: especially given the

pessimism over the property sector in china. we have seen bond repayment dates and deadlines coming up, what is happening on that front? sofia: it is quite relentless. so many maturities coming up. . i just saw on my screen that one of them just lost their final investment grade rating, a company that was a fallen angel not too long ago. so it is make-or-break time for the property market. it has been for very long time. it is difficult to see what will get these companies out of this situation, because borrowing costs are very high and there is no alternative for these companies to get funding. it's not like they can come to the equity market. there was a good report yesterday from our equities team, showing that one fund in china is saying, you know, they are writing down the evergrande stock in their portfolio.

and annabelle pointed out a few moments ago, most of these stocks actually trade below liquidation value so, companies can come to the equity market, they need to rely on debt, but that is closed off. shery: sofia horta e costa there. we are very much focused on the historic rebound of hong kong's benchmark stock index. bloomberg intelligence says that he economy sectors of consumer, health care and tech would be the focus. let's bring in marvin chen, an equities strategist for more. any potential exclusions in the index? marvin: we think based on the index provider's projections, health care could be more of a focus going forward due to the gap in coverage. we think jd health could be additions for health care. we think for tech, baidu

and others. for consumer base, smart homes could be added. but for the rest of the sectors, we are not expecting much change in the stocks. there could be some potential exclusions coming from the financial sector. haidi: what are the considerations at play here in terms of these changes? marvin: the broad target for the index provider is to have a minimum coverage of 50% of the market cap for all sectors. health care is the only sector remaining to be below the threshold, so that is why we think health care could be a focus going forward. size and turnover are also representative of the stock for the index, but we have seen some stocks begin the consumer space that we think are large have not been added due to the lack of turnover, or their listings are tonew. hang seng index site the index changes are not strictly

rule-based, and there is a certain element of discretion in the changes. we know the broader direction the index is headed in, but there is a restrictive element to the process. shery: how attractive will this be to investors? marvin: the implications from the hang seng revamp is that it will be more reflective of sentiment and development in china and less so of hong kong, with china's weight increasing to 75% of the index. second is that it will be more reflective of the new economy sectors of tech and consumer services, less so of bank and property. consumer services have seen a surge of momentum at the end of june, given the reopening exuberance. so in the near term, we may see more volatility for the index, but the focus on the new economy sectors does aligned with the long-term policies for china's development. haidi: bloomberg's marvin chen there with a preview. coming up, in the next hour, we

will take a look at the bond market with our next guest, who is seeing value in some indian high-yield issuers steel and telecom. shery: than the philippine central bank governor will also be joining us next. doing camesa that conversation. that state from "daybreak: asia." our markets coverage continues as we look ahead to the start of trade in hong kong, shanghai and shenzhen. standby for the "bloomberg markets: china open." this is bloomberg. ♪

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david: good morning from hong kong it is 9:00 a.m. in