shery: you are washing daybreak asia. -- watching daybreak asia. heidi: the top stories this hour, anxiety builds ahead of the key speech on friday where we are live at jackson hole. new measures to stabilize the

economy, pledging to use all tools available as growth slows. aia group's business falls as they lockdown bites as we speak to the ceo. shery: we are watching the development in hong kong as we have a storm, hong kong exchange was canceled. storm signal eight is in force. they may reconsider the decision and are lowering the call but we continue to watch as a development as we are getting the latest from hong kong. we are seeing u.s. futures pointing slightly higher. stock struggled for the direction in the new york session. we have a mixed eco-data, home sales fell to the lowest level when it came to factory orders, with a core capital goods, that beat estimates.

about weight on the market, and we are waiting for jerome powell's speech and that was in key focus we have the anticipation of a more hawkish fed. we are seeing more outside -- outside in oil prices. we have the eia numbers in the u.s. session. the export of crude is rising. annabelle: in his wait and see ahead of the fed. the asian trading today, we have nikkei trading higher, we are still in the midst of earnings season. qantas numbers are out, and loss but still does airline is pledging a share buyback because it is seeing a strong return in travel. we are also watching the yen

this morning. essentially the government expected to speak with the policy settings even if inflation hits a percent. recapping the morning session 80 hong kong, we continue to monitor the reaction to the tropical storm that is in place of a city. the preopening session has been canceled. we are watching for what happens in the morning session because the storm warning is expected to be lower between nine and -- 9:00 a.m.-10:00 a.m. right now we understand free-market market trading has been canceled. shery: we are hearing a minute ago hong kong delaying the morning trading session as a swarm of signal eight is in force -- as a storm signal eight is in force. let us bring in our global economics editor kathleen hays.

also with us is our chief reporter for asia and susan angle. all eyes on jackson hole. what are we expecting? >> we are expecting jerome powell to do what he always does, kick off the kansas city fat annual symposium. it is a 40th year they have done it in jackson hole. four years ago bob vanquished the inflation with a couple of recessions and this fed faces another formidable challenge. we are not sure how hawkish they are going to get yet. that leads us to jerome powell's speech. it is an opportunity other features of taken in the past. he signaled the second round of quantitative easing. jerome powell can make a statement. you are going to be that hawkish?

we do not believe you yet. they are quick to pivot and they are quick to want to see that happening. i think jerome powell will signal that he is ready to keep going. he is going to focus on how tough they have to get and determined he is to get there even at the risk of a severe slowdown. i think that has to be in the mix. heidi: it has been a couple of weeks of volatility and uncertainty. what are markets doing at the moment? >> markets are bracing for crash positions essentially. the stock market has gone quiet, nobody wants to dive in there. the bond markets, eels continue to grow and higher. there is not a lot of interest in coming in. what interest has been quite fascinating in way that eels

have gone up and taken a step back down -- yields have taken a step up and down. i think that 82-3 years yields will be lower -- in 2-3 years yields will be lower. making of money over the longer term. anybody on a short-term horizon, they are staying away. i think the potential that powell will fail to spook the market enough and yields hit the highs already, it is a good chance that if he does double down, you could see 10 year yield to go to the 3.5% level they tested earlier this year. the court said another brought back down once markets decide -- that could set another brought back down once markets decide.

that is in back and forth we are stuck with -- and that is at the back and forth we are stuck with as markets battle with what the longer term is going to be. shery: perhaps a more thursday coming from the point of korea. the consensus is not for such a jumbled rate hike we saw last time? >> let us give the bank of korea credit, one of banks and was hiking rates long before the federal reserve. their inflation rate is still rising. if it peaks out here it will be well above the top of their target range. the concern here is just a little bit more caution. they are worried about the

strength of their economy, worried about the china slowdown and the latest export numbers look like they were on the robust side. all economists except for one in our survey said 25 basis points, they looking for the 50. that would be the big surprise. i think indonesia surprised by hiking rates when they were not expected to do it at all. shery: we have yet more measures, 19 of them from china to stabilize growth. is a going to be enough? -- is it going to be enough? >> beijing is consistently crashed position, they are adding airbags to cushion the blow, headwinds, and the chinese economy. in a highly politically charged here with congress coming up.

the power crunched th -- the power crunched in the south, lot of things the beijing authorities, and message through the tv that is trying to stabilize the economy. we are getting 19 point economic stimulus package if you will. if you on specifics, they include additional policy and financial tools, and are very specific. the goal is to stabilize the recovery that does not get worse. they caution at this statement as well, the economy will not be flooded with excessive stimulus. the state council will not overdraft future policy room. they want the provinces to. the debt ceiling limits to their maximum benefit and support and stabilize growth in these

headwinds. shery: we will be live at jackson hole all throughout the week and will be watching the crucial powell speech as well as interviews with the fed president's from kansas city, philadelphia, cleveland, and atlanta as well. heidi: this is the australian fund manager saying that it reached a deal with petrol on this takeover transaction. the talks have been ongoing since april where they rejected a 1.8 billion dollar takeover on the back of petrol. we are hearing that there has been agreements that pendle is impressed with the new proposal.

as a shareholder no action at this stage, they expect has don't be complete by late 2022. they will fund the cash component with a new net facility. pendal is recommending shareholders vote in favor of the bid. that means that shareholders get one perpetual share, cash for each 7.5 shares. it is a combination of what has been many months of talk for the fund manager and they manage about $185 billion in funds and have reached an agreement that deals with petrol -- perpetual. >> deputy prime minister is stepping up as a caretaker later after the constitutional court made a surprise move to move to

remove the prime minister on whether a breached an eight year term limit. he received power in 2014. the u.s. announced $3 billion in weapons and equipment for ukraine six months after russia's invasion. it is the biggest package from the u.s. to date. the announcement came as ukraine celebrated its independence. the u.s. is said to respond to the latest proposal to the iranian nuclear program. it is undertaking a new sentiment. the state department says president biden is committed to achieving a diplomatic outcome. 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: qantas struggling to ramp up capacity as it reports a full-year loss of $1.3 billion. we discussed how australia's carrier can navigate his own turbulence. an exclusive debrief with garth jones and china's lockdown since sales in the mainland. take a look at a life picture of hong kong skyline, that you live nature of the hong kong skyline. with the storm signal 884's the third-highest on the scale. this is bloomberg. ♪

shery: 15% decline in first half business value on covid lockdown , insurance sales in may china, the measure of new policies sold dropped from $1.8 billion a year, aia ceo is here to discuss. you operate in a dozen economies. how much of this week has come from the chinese market? where specifically and what is the outlook? >> great to talk to you both again. clearly it has been a challenging operation -- operating environment. we have seen resilient performance for the business. we delivered a growth in june which is notable and with a reflects growing momentum that

is from the first quarter into the second quarter. we have seen a diversity coming into play in the first half. it was a diversified business across 18 markets. the group overall, we have seen the momentum built and move into growth into june i think is important. heidi: given the uncertainty about covid zero policies across china, what are your expansion plans in the mainland? are you targeting 1-2 regions at this point? >> in china we had a good performance, we outperform the market in the first half. we have differentiated in china that is focused on protection and long-term savings. we reflect on productivity and increased in the first half. we saw a business comeback after the movement restrictions were eased.

we thought we moved into growth in july and we have been where the market has been. in terms of the new branch, in co-pay, and we have approval -- kobe and we have preparations for our next branch in another hundred million people, it is a huge market. those markets have been performing really well for us. we have been extremely encouraged by that. the progress is reflected in the results. those markets grew by 47%. that is indicative of the potential of those new markets as we go forward. shery: has that impacted the slowdown and the situation in china impacted your expectations of expansion in the mainland? are you still aiming for that

same level of growth? >> we are a long-term business. we continue our operations, already planning for the next hot 1-2 branches. we expand at the base of 1, 2, 3 a year. we will continue with that. we are long-term business, we invest in our people. we invest in our growth. understanding geographical reach we have in china already. that seen the performance in that. the business coming back into growth in july and those new markets offer potential for us. with the excellent growth of 47%, we are off to a great start. heidi: what is going on with bond yields? volatility across asset classes as well as currencies? how does inform the overall

impact on your business and strategy? >> we have been focused on protection and long-term savings products for our customers. that talk to their needs. what we have seen through the covid crisis and so on, people have become more aware of the need for protection, for products and services. that protection base is clearly that does not depend on market movements and interest rates. what we do see is that people are saving more. long-term savings products speaks to that need. those products we invest in for the long term. we do not worry about short-term fluctuations. we invest through the cycle. volatility comes and goes and interest rates goes. we invest in the long-term. shery: what about competition? how is that affecting your plans

for m&a and distribution channels in the region? >> we have a diversified business. 100% ownership in all of our market. we have a tremendous business. we are focused on our own business. we see that in the performance and resilience of the business. we continue to hire and retain the best people in the industry and that resilient performance in the business as a credit to the resilience of our people. i would like to think them for all of their hard work for what has been at times a challenging operating environment in the first half. shery:. to have you with us. -- great to have you with us. terminal subscribers can go to dayb in the bloomberg

anywhere app, customized settings so you get the news on the industries and assets that matter to you. this is bloomberg. ♪

heidi: we are counting down to the start of trading, some of the stories we are watching in japan, the government may shorten the warranty period for covid patients to seven days from the current 10. shery: two eased its outbound travel advisory for multiple countries. toyota saying that motors have been expelled from their -- saying that hino has been expelled. cpi data is due for today, it

has steadily risen in the past four months. in south korea, the bank of korea raised its rights. that follows last month's first ever .5 point hike to tackle the fastest inflation in two decades. we will see their revised gdp and cpi forecast. we will see if that is being supported so far. we have a rate ahead of august, the ppi score is 9.2% year on year. you can turn to your bloomberg for more on the back of korea's decision. get commentary and analysis from bloomberg's expert editors. heidi: let us take i -- let us get a quick check on headlines. the slump in pc sales is going to last, nvidia's revenues are below the average estimate of

six point new -- 6.9 billion dollars a share. pressing twitter on how it identifies spam accounts, a query requested more information about how it calculates report figures. twitter says is a was already disclosed. peloton announced it will sell its exercise bikes on amazon. it was only available by website and retail showrooms. the pandemic darling has been struggling with the slowing demand and strategy changes. take a look at how u.s. futures are trading at the moment we are seeing a bit of upside in the asian session after they were struggling for direction in new york. this is ahead of jackson hole, we are waiting for chair powell's speech on friday. we have the mixed economic data in new york.

falling to the lowest since the pandemic. contraction of 19%. is expected to be worse for july although home prices keep rising anyway. we had u.s. factory orders for core capital goods beating estimates. mistakes are high when it comes to really what is happening in the stock markets and how crucial jackson hole will be given the stocks and bonds and commodities, everything is moving in lockstep and everybody watching the fed right now. heidi: when you are not watching the fed, you are watching earnings. the $2.25 trillion of the first 3% in the 3% stake in airtel. that is in error tell -- airtel.

it has not been the first time we have seen a divestment from singtel. an evaluation

vonnie: this is "daybreak asia". president biden has announced his student debt relief with forgiveness of $20,000 worth of loans for some recipients. he announced a four-month extension on the moratorium for student loan payments. president biden: an entire generation is now settled about that. the burden is so heavy that even

if you get great you may not have access to the middle-class life that the college degree once provided. >> russia's industrial sector recorded the smallest contraction in four months. the latest sign the economy has sanctions of the war in ukraine. industrial production has dropped. increase mining and oil output has boost performance. semiconductors also saw a rebound thanks to an exit of foreign competitors. texas was named blackrock and ubs as eight others have hostiles for the industry that could cause business. the state comptroller -- as firm seemed to boycott the fossil fuel sector. the announcement is for bond issuers to avoid being sued status is unclear. internet researchers say a covert online campaign cast the u.s. in a positive way has been

disrupted by meta-platforms and twitter. their reports as inauthentic accounts could promote pro-u.s. stories and negative narratives about russia and other countries. the campaign resembles previous online campaign by adversaries. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is. >> the morning is flying by and we've had so many earnings out already. gearing up for the rate decision. what are you watching in the markets? click certainly a lot going on today, but i'm looking at the latest effort that we had this morning. essentially is looking at what would force the governor to change policy headings within his term here, at what they have found is that core inflation is going to need to be hitting 3% in order for some sort of move towards normalization. not only that, we will need to see core cpi at that level for

six months or longer for any change in growth will need to be sustainable. certainly, a lot of things with headwinds for him changing his settings. also changing on taking a look at another central bank. watching the bank of korea in their decision is due in the next couple of hours. the overall consensus here today is we will see a quarter-point move higher, that is that 50 basis point move we had for the first time ever previously. we will check this 2.5% that's now a 2.25%. certainly there has been a lot of focus here in korea on inflation that is running quite hot, but in the last survey did come in below the consensus forecast. that does give a little bit of breathing space, especially when you see oil prices coming down, food prices, that does give them a bit more room to go back to this basis point.

>> really choppy trading in the energy sector. wti is above. but after a lot of pressure earlier in the week we see natural gas futures store once again. bloomberg su keenan joins us with the latest on the energy market, and of course, this procession that the iran supplies could come back to the market anytime soon. su: that's a big part. we also know now that iran is aiming to fill the void left by russia and all the sanctions after they invaded ukraine. we are moving on a combination of factors, a government report also showed the u.s. exporting a record number of petroleum products overseas in order to help with the energy crisis there. and as mentioned, there appears to be progress on those nuclear talks with iran with more iranian oil on the market. take a look at the five day and you will see it is extending higher and did close above 95.

it has a lot to do with the fact that we've got reduced volume, not only because of the market taking a break towards the end of the summer here in the u.s., but because it's much more expensive for the energy players to trade and be involved. you are looking at brent crude, also rebounding this week. the u.s. has sent its response to the eu's latest proposal to rescue the 2015 nuclear report. one trading veteran puts it this way, the iranian nuclear deal continues to be an on-again/off-again type move event that continues to put volatility into futures. look at the big picture the first five months of the year, a big build to a peak and we have been coming down since then. started the week on the rebound as saudi arabia's energy minister signaled opec-plus and it may now be forced to cut output because of the volatility in the disconnect they are seeing between price and fundamentals. >> you are showing gas prices

again surging. su: european gas prices in u.s. natural gas prices, which had a steep selloff just the other day, they are back on the rebound. let's drop into the bloomberg. part of the reason is the unusually hot weather we are seeing, also a restart delay at a key export terminal in texas. then you add other concern about the winter supply coming ahead. look at that chart, it's just a straight upward climb. european natural gas prices surged again to fresh eyes with benchmark futures topping 300 euros for the first time since early march. this is economists worse in decades because european power prices are now the equivalent of if oil were at $1000 a barrel. and everything from aluminum to foot allies are in surging energy costs, and john, a

partner at the u.s., says he does not think we are done yet and there's so much in the market. he sees this rally continuing. >> su keenan there with the latest on the energy crisis. really upping the uncertainty and challenges for the global economy. nobel laureate in economics christopher says he does not think recession is inevitable and told us the current stress and markets is simply due to the central banks tightening cycle. >> it's something that's a normal pattern as monetary policy tightens, liquidity, rates on interbank loans, these things begin to show signs of stress when monetary policy tightens. it's part of how monetary policy works. so, it is concerning, but it's not unexpected. >> as we talk about tightening

policy, there is a question of when it will be. not just meaning inflation is down, but where you put the odds of a global recession? >> that's a hard question. i don't think it certain, by any means. some people would say that with the yield curve inverting, that recession is almost inevitable, i don't think it is inevitable, but it certainly could happen. it could also happen if fiscal policy worldwide is, on average, much to expansionary, we could have no recession because they succeed in bringing inflation down. i don't tickets very likely, but it's something people should keep in mind is another possibility. >> the trajectory of global growth is not just dependent on

the u.s. economy, the world's largest, but also the second-largest, china, which has a multitude of problems of its own and there's tension between those two economies, this idea of further decoupling. i'm wondering what you see as the future of globalization, if we will be a more de-globalize to world and what the economic implications of that are. >> we have already become less globalized, and the u.s. has moved into a regime where tariffs are being used as a policy instrument and tariffs -- even though this was started with trump, biden has done little to move back from it. once tariff goes up, it tends to be politically difficult to get them back down again. so, i think we are in a less

globalized world already. >> noble laureate in economics speaking with bloomberg's kailey leinz. fed chair has been suspended as the prime minister determines whether he violated the new charger produced by his allies. that's get the details from our bloomberg editor. what is the latest we know? this is quite an extraordinary situation. >> it's actually not an entirely unexpected situation. he has served eight years since the military coup. but under the constitution that he wrote, it would be the prime minister's norm. so the surprising thing is the court actually took the petition because the constitution and thailand typically cited --

sided with the monetary elite. so, it's not a huge switch because the prime minister -- and one-for-one. he was also the supreme leader and right alongside him when they seized power and is the former chief. it's sort of, if you like, it's leading away from his popularity. >> exactly, let's talk a little bit about that. this is a cohort, the members have been appointed by the military appointed senate. what does it tell us about the type power brokers and whether

-- the tie powerbrokers and what it means for them in 2023? what we see more uncertainty? a glass -- i guess the question is, what does it mean for markets and investors? wax we do not see a lot of reaction from markets yesterday, stockmarkets tipped a little bit and came back up and ended up pretty much unchanged. the bar has been underperforming but that is for other reasons. that's the economy, which is performing worse than any other southeast asian. in terms of the outlook for the thailand political future, at this point it doesn't make a lot of difference if we are just moving the same players around the chessboard.

perhaps it's off the board on another one is similar players. or further up in the board, if you like. >> that doesn't necessarily mean we will get the pro-democracy players back in power. the latest from thailand. coming up, travel is roaring back, allowing good to cut that in buyback. we are joined next with the airlines full-year results. this is bloomberg. ♪

haidi: qantas has launched a for your loss and is struggling to wrap up capacity with pandemic restrictions around the world, let's get some analysis on the latest results with our chief market strategist. what do you make of the numbers and does share buybacks are intriguing, isn't it? do you think it's a good use of how to deploy that capital right now? -that's in -- >> that's an interesting question because i think you have to get around what has been a very hard time. i will come back to the buyback in a minute, but as much as the

money they can to get debt down to a certain level and this is another way of doing it. yes, capital management would say that this is probably an ok thing. however, you look at the detail, as qantas has pointed out today, the last three years, 2021 and 2022 have now completely wiped out all the work that they took in the previous 5.5 years to get qantas back on to some sort of level footing. you look also at the cost of business, it's only going one way, and that is up in terms of where they sit. it has been a massive problem and will only get worse. there is a massive hiring driver to offset the results, which is that they are seeing an explosion of usage and that's what's being caught. this is almost an apology letter. if you read what's going on at the level of surface, the customer quality has been at a level that qantas cannot demand a premium and that is what we will push and pull will receive the release today. the numbers will come on market

in about 15 minutes time. the headline figures show you very clearly a messy, messy result in probably a mismanagement of how they deal with post-covid worlds and then a cost problem at qantas that all aviation will have to deal with into the post-covid world. haidi: seven, i do want to get your thoughts on that buyback. >> again, the moment you can see from alan joyce, the ceo is around what he saw with the manager. the buyback 40 million bucks make sense in the current market with raising rates. they got down to the level of debt that is now below the optimal number. put that out there, they normally want debt between four point through in 5.6 -- 4.2 and 5.6. they bring get to 3.7 so they are trying to bring the funding cost down. they know the pressure that they can contain is around capital managing. the buyback is an interesting

one. if you get the share price with $5.80 in april, the close of market yesterday there were $4.25. and we were about to see them come online from these results. they are getting it done at a much cheaper price, so the capital management point is probably what they will highlight today. >> nu just highlighted how difficult it has been to staff people in the cost involved, did they cut too much whether it's labor costs during the pandemic? >> yes, the advantage that australia had with the furlong employment market was offset by the government and that helped qantas, qantas is one of the biggest hands in that space to really have their own stock up there. what they have also been doing is outsourcing a lot of the requirements around baggage, all-around engineering, and that is now coming home to roost. they are having problems and they can provide the service they should, so that is maybe

the other argument that management decision to try to reduce costs pre-pandemic has come back to bite them really hard in the service they are offering has been poor, even on monday they try to offset the issue they had around service with a $50 one that crashed their website, but it shows the service people are getting for a premium product is and at the level it should be. >> will customers be happy that at least they are trying. the ceo has been attacked with eggs at his house, so how much will really restore the reputation? >> it's the biggest court take i had ever. they had a confession table in there. their kpis have listed and it shows things like service around call pines, around baggage requirements and around flights that were lost, these are levels you don't express from -- expect from qantas and they are getting back to a level of pre-covert january of next year. we will look at that chart,

probably not. they're still long way to go in and september their school holidays in september and there will be a ramp up of days like it. covert restrictions for the staff. all those things are about to go through again. expectation is that service will still not be at a level that it needs to be. >> i will enjoy the turnaround for a long time, pursuing that not so much by customers and bike want to stop -- staff and the union, should he stay on? >> i agree with you that it has been an amazing turnaround. if you go back what he took over in fy 14, the requirements that he did to turn the financial of the business around were unprecedented. you would expect that he still has that ability, and he has it now. he is an incredible operator, but even as he has emitted today by their own standards, qantas has dropped the ball in the last six months. so they are going to work very

hard, and the expectation is that he will stay on, he's one of the longest-serving listed company ceos around. he has been there for almost 12 years, but this is a challenge that he loves them i suspect that he will stay on. >> chief market strategist with investment, evan lucas. it's a happy with us with the latest on qantas. we get breaking news out of japan. the ppi services you're on your number coming in at 2.1, which is slightly lower in easing, or actually accelerating from the month of june, but lower than economist had expected at 2.2 percent for the month of july. so we are seeing ppi numbers accelerating to 2.1%. of course this is coming at a time when japan is also seeing inflation and we are getting those tokyo core cpi numbers this friday expected to run about the boj's 2% target again. in we are continuing to watch the debate over abortion rights

in the u.s., we heard that president biden has won an abortion access ruling in the state of idaho, we did see that idaho's abortion ban is being scrutinized by judge because of the protections that allow doctors who are providing emergency care. a federal judge suggested earlier on monday that the abortion ban may run afoul to the federal law that it potentially opens up for medical practitioners to prosecution for abortions that are provided when a woman faces serious health risks, but not necessarily the threat of death. so, we have been watching this case very closely, we are now hearing that president biden has emergency abortion access and that ruling of the state of idaho. mortar, "daybreak asia". this is bloomberg. ♪

shery: his a quick check of the business/headlines. private equity firms are said to be among those shortlisted to buy data listed company switch. pag and stone peak have also been selected for the next round of bidding. suitors could start conducting due diligence in the coming week ahead of a deadline from binding offers. chinese nickel producer and trader login resources and

technology is said to be planning for a hong kong ipo as soon as september. they could raise as much as $1 billion although the timing could change. it would become the latest producer of battery raw materials for listing in hong kong's following the listings in july. goldman sachs is reconsidering how to launch its online checking account as senior executives wrestle with runs. goleman leaders have been weighing whether to shelve the new accounts retails list until next year. that was fair from spending big on marketing. the online platform known as markets has seen losses accelerate. haidi: coming up in the next hour we will discuss investment strategy with dashers as the u.s. dollar strength we are seeing is overdone. we are also watching the rate decision and pfa decision joins us ahead of that -- and we will

try to get that reaction as well. market opens from sydney, seoul and tokyo are next. you are looking at live pictures from a stormy hong kong. we have seen hong kong delay the opening of trading this thursday because of the tropical storm. this is bloomberg. ♪

shery: this is "daybreak asia", we are counting down to the major market open and we care up to the bank of korea's rate decision in a has been a big morning. qantas and we are watching hong kong given the morning trading has been delayed because of that storm. >> the tropical storm clouds provide the backdrop to what we are contending with in terms of

volatility. as you said, watching the bank of korea, watching jackson hole, what will chair powell say. will he be is hawkish as they are expecting. let's get it over to annabel to look at how all of this is informing the market open. >> a lot going on this morning and markets, a few sessions away from the open of japan, south korea and australia in the open of catch treasuries. we saw the strong move in the 10 year yield in the previous session reaching or nearing its 2022 peak coming online like this. in terms of the direction for asia, that has been putting the yen under a little bit of pressure, now sitting flat this morning. the bank saying expected to trade in a very tight rank ahead of that all-important jackson hole address from jay powell. stocks live we come online stronger. turning to korea because we do have a key central-bank decision do in the next couple of hours from the central bank. very much the expectation is for

a quarter basis point move to the upside after that outside hike we did have in the previous month. but certainly what has allowed the bankers to focus on the small move is that calling we are seeing inflation and oil prices coming up a little bit. also keeping an eye on what we see with the one trading around that 13 year low. stoxx wise, focusing on what we see in the tech sector. we had that warning out from nvidia. turning to australia because earnings are still in focus. you mentioned qantas at the start and watching the travel sector this morning with a very strong signal qantas is showing about the travel. south32 was another one, the minor returning to four-year profit on that commodity strength we are seeing. oil is still moving above that key 100 level. the market really access -- really assessing the decline. and also the return of iranian crude. >> we are watching the currency

space in our next guest says the dollar strength can be overdone. asia specific -- pacific investment strategist, good to have you back. does this mean we could see some relief for asia currency? the 13 year low in the korean won is not helping with price pressures, how will markets react to the be ok? >> in the near term i think there is reasons to believe the u.s. dollar could retain his strength because u.s. data is most of the best in the world. because the gas situation europe and the economic sentiment in europe is very weak, and china stimulus is not really having the effect that it desired. but you can fast-forward to the end of the year or early next year and i think the odds of recession in the u.s. are still rising. the amount of tightening that has already been done and is still coming are likely to have an effect on the u.s. economy.

that's not showing up just yet, perhaps aside from housing. once we see employment buckle and inflation come down further, you are likely to see the dollar lose its momentum. at the moment, the dollar positioning is so overwhelmingly positive that any disappointment from jackson hole, any show of dovishness in any sign that is not as hawkish as the market expects could set the dollar back a little bit. at the moment. >> so how should markets in asia position, especially when you have policy decisions within the region especially like to be ok today? >> korea is a tough situation. they hiked earlier after and the fed has caught up.

so another 25 basis point is probably not going to change that story that much. so the korean currency has been the weakest because the economy is slowing down fairly significantly. so we think -- again, a lot is driven by the yield gaps. asia has completely lost to the dollar, and that's the change. this could be eight dollars story when it will turn around when the economy shows more weakness. >> we are seeing china release 19 points measures to try to stabilize the economy. stabilization is what they are hoping for at least until we get past the party congress? >> yes.

perhaps in spring we have seen round up of these announcements of packages. the market is taking this with the grain of salt. china is saying show me the money first. at the moment, what the policy intention is is very clear. i think there is a move towards more relaxed covid restrictions. there is a plan forming to help resolve the property situations. and these are the two key issues that are likely to be done after. at the moment, the ability for local governments to implement these policies is relatively -- because there are a lot of changing places.

so our expectation is for the recovery to gain more momentum after and into 2023. haidi: at the same time their earnings revisions by large for china and chinese companies have pretty much bottom -- bottomed. you see opportunities notwithstanding the structural slowdown risk that is still in play? >> absolutely. i think this cyclical recovery story is very clear for china. this year, looking at the consensus we are looking at 6.5% decline each year. looking at china. but for next year there might be below double digit increase. so that's a fairly large upward trajectory. for example, for the u.s. we are looking for a 67% growth this year and a decline for s&p 500 next year.

that compares and more favorable for china and i think that makes china a more attractive market. >> asia pacific investment strategist at city private bank. let's get you to vonnie quinn with the first word headlines. let's get you some of those first word headlines. u.s. has its response to the national court the eu says the u.s. responses been harkin which confirmed its now undertaking a detailed assessment of the state department. it says president biden is committed to achieving a diplomatic outcome.

president biden has announced a sweeping package of student death -- student debt relief that forgives. he will announce the extension for the moratorium on repaying student loan debts. borrowers can cap repayments of their monthly incomes. president biden: the entire generation has sustainable debt the burden is so heavy that even if you graduate you may not have access to the life that the college degree ones provided. vonnie: thailand's deputy prime minister is stepping up as caretaker leader after the constitutional court made a surprise move to suspend it as prime minister until are ruled their breach of term limit. he said it turns again after seizing power. he has 16 days to respond to the petition.

hong kong has delayed the opening of the $5.1 trillion stock market as a severe tropical storm bears down on southern china. the start of stocks and trading has been pushed back because of his store morning. the third-highest signal on the hong kong observatory scale. the morning session will be canceled if it remains. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. let's get a look at some of those early movers in this session. annabelle: taking a look at some of the biggest chipmakers here in asia because we did get their revenue warning out from nvidia. we only heard that it sales were slipping and now we have a forecasts for the current time. essentially it says it sales are going to come in a revenue have 5.9 billion dollars. the average forecast for that is around 6.9 million dollars.

really suggesting demand could be even worse. biggest names are little bit lower. there is a very big company we are watching. this is qantas coming online here, stronger rise at the side of trade up around 6%. keeping an eye travel stocks. also reporting some three strong earnings, essentially, qantas is very confident about the outlook for travel in australia even though it did report another annual loss with still a share buyback. take a look at the other earnings we are watching in asia. one of them is this, the by now, pay later company. it was amid south32 and it's a good, annual profit return to that strong commodity earning within increased payout to shareholders as well. shery: we will have more with the ceo later on bloomberg markets: asia.

that that 1:20 p.m. in sydney and 11:20 in hong kong. >> traders are awaiting the key seeds on the fed policy outlook. we will be live at jackson hole just ahead. this is bloomberg. ♪

>> we are in a time of extreme

uncertainty. we have learned there can always be a new anticipated shock that pushes it up or down. of course, the way the ukrainian war goes could have a huge impact and that's very difficult to predict. >> that is why i think that we need more of it. so it's not to shock expectations too much. >> i think there is a real risk that the central banks ask that to aggressively raising interest rates too fast, too far. >> it could also happen with fiscal policy that is, on average, much to expansion area, we could have no recession because we pay the inflation value. haidi: nobel laureates speaking

about their outlets for the global economy. central bankers around the u.s. in the world gathered for the symposium. the spotlight is on chair jay powell and how hawkish his message will be. kathleen hays is there covering it for us. the market expectations from jay powell are running so high, you have to wonder whether his usual level of hawkishness will be enough. kathleen: that's what some people are arguing, that he needs to go in next or mile. he has to go past what he has said previously. he has certainly said that more needs to be done. the distance of a soft landing has led them to wonder how the recipe is going to be. it's every year at the kansas city fed symposium. he will have that opportunity as

he opens the proceeding. that's how we starts to decide if he wants to send a stronger message. do i want to make it clear there's policy framework. i want to make sure everyone is seeing. he could be theoretical or academic. it's probably not the speech you will talk about how the economy looks. but there will be a bigger framework. but there is no doubt that he and everybody at the fed must realize this is the fed when the markets would like more guidance and they are hoping they will get it right here in jackson hole. >> what guidance will we get from the boj today? kathleen: we are pretty sure we will get guidance that they are raising their key rate again because inflation is surging. we are probably not likely to get another 50 basis point hike because the economy is on shakier ground than it was.

that's a fine mount to the bank of korea. continue to cite and praise should -- inflation, but slow down the pace again. slowing down hikes from 75 to 50 and 50 to 25 form be reversing course, but central banks, since they open the door, has made it one of the rate hike and they are giving the different sizes. we just had a guest talking about the weakness in the korean won. something about yield differentials between the u.s. and korea and how that is fresh too. it will be interesting to see in the statement, the policy statement at the press conference, how that question is addressed. it's good to have your one weekend and exports are more competitive, you don't want them to fall too far, too fast.

the latest exports numbers for korea were not overwhelming. china slowdown has not gone away. some people get worse and the property crisis got put on top of it. there's a lot of different questions. they are looking for the 50 basis point hike. again. we will find that how in the next hour. >> global economic and policy editor. in that yield differential, we are seeing it between the pboc in between the federal reserve, which is why we see the downside when it comes to the offshore yuan. we are seeing a bit of a rebound, we are near the two-year low. if the jackson hole symposium

has a hawkish message, and we have more daughters strength. this really helps and if they said in the way of the weaker yen. they publish the from page commentary in favor of monitor yuan depreciation. it is now pledging more stimulus in conceiving liza slowing economy. it's additional 40 $3 billion in unspecified policy. let's bring in stephen engle in hong kong. what do we know about this 19 point package? >> is coming from the state council in the report, and its variants specified as far as what's in that $43 billion of extra stimulus. they said we will use every

available tool in the toolbox. that's what tools are for, to be used. but will be a flathead or philip said scrooge just screwdriver. we already have specific tools used in the week before with the mls rate cut that we had the low prime rates of the one year and the five-year to help mortgages in the 29 billion u.s. dollars in loans to deliver their project. now this is the state council, which is the cabinet of xi jinping, essentially telling the provinces to stabilize growth, alleviate the drought and drag on the economy that it's having an use all the available tools that they have. there's bond landing that they can maximize in a bunch of different tools they could use to stabilize growth at a highly sensitive political year at the party congress coming up.

it's not throwing lots of stimulus at the economy, it's aimed at stabilizing the growth amid all of these other headwinds that you just talked about. they cautioned in the statement that they are not going to necessarily be doing an all-out stimulus or flood the economy with liquidity. they won't mortgage their future as far as using too much lsd up. $43 billion in unspecified policy and financial tools. we see how the different provinces take their marching orders. quick stephen engle there with the latest and one that we are following. they follows much is 1.9% and we have breaking news on the bloomberg following more than 2%. breaking news on the bloomberg. the president and ceo is planning to leave the company

ahead of the management overhaul by the founder. he took back the ceo job imodium to coo and we are now hearing is being stripped of further responsibilities that was excluded among managers to support into sources speaking to bloomberg. now we are seeing the coo resigning soon. >> take a look at what's going on in hong kong. you'd have to contend with this storm warnings. we are seeing hong kong delay the opening of the stock market suspending markets on thursday as a result of the tropical storm. push back because of the issuance of the warning. we are also seeing that debut, which is the biggest listing

that may be impacted today. and facing a legal challenge next. this is -- this is bloomberg. ♪

haidi: eye to eye court has suspended the prime minister as it seeks to examine whether he violated something. that's get the details from our bloomberg editor who joins us now. was this entirely surprising that the constitutional court chose to do this? >> it is a little surprising that it cited with the call to examine whether he'd breach the

constitution by exceeding his eight year term. the constitution was written in by him and his allies to support the military. he sees power in their crude and he's still there is an appointed prime minister. so the court has given itself time to examine whether or not he has breached the constitution but it has not changed things. he's also a former chief -- army chief and is now the acting prime minister. >> is that mean investors can be confident that not much will change in terms of the economic policies? >> there will be little change. and that's more likely re-macy's seven change. although, given the way the constitution stacks things in favor of the military and the elite -- and the elite, it's not

likely it will make much change. the senate is controlled by the military. so you cannot pass legislation if you don't control the senate. >> the latest on all the political changes we see in thailand. we continue to watch the weather in thailand because the morning trading session has been delayed. you are facing that signal. we heard that hong kong would be considering the warming signal between 9:00 a.m. and 11:00. that so far they have delayed morning trading. this storm warning signal number eight is the third highest on the scale and is not necessarily considered a t8. we have both faced it and it's

not fun. haidi: it's not fun and there are lots of disruptions. that could also be impacted as well, the china tourism that we are talking about. we will continue to monitor the 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. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app.

shery: joseph says central banks aggressive rate hikes has higher prices. he told us that raising borrowing costs is not solve supply-side problems. >> raising interest rates does not solve the supply-side problem. it could even make it worse. what we want to do right now is invest more in the supply-side bottlenecks. the raising interest rates makes

it more difficult to make those investments. and if you look at the economy today in the united states and other places, it is very clear that there are strong elements of market power being executive. raising interest rates can leave -- lead to more raising prices, more inflation. and if we look out one of those sources of inflation and housing, there is evidence that when you raise interest rates, they pass the higher costs on to rent, again increasing inflation. i asked the question how will raising interest rates lead to more food, more energy in the chip supply problem?

so they won't go at the basic source of the problem in the real risk is it will make things worse. haidi: noble laureate economist. let's get you to was going on with the markets. annabelle: just over 30 minutes into the trading session for japan. still a very big morning for us. we could get a great decision within the next 30 minutes. we are expecting it to continue it's already five basis point hikes after that point move in the prior month. still monitoring these reactions for earnings this morning as well. qantas is really jumping strongly this morning after announcing a share buyback and other travel stocks moving higher. in terms of what else could be a boost for markets, that is what

we hear from china. their pledge for further economic stimulus. what is interesting is that we are also keeping an eye on a tropical storm over hong kong in southern china and we do have a store morning and placed at that number eight. the third highest. what we are watching for now is if we see that before 9:00 a.m.. we understand them morning session will be canceled, but that does have a big berean with a change. this is a shared trading debut that supposed to happen with china stores in group. it is the biggest shift in hong kong at $2.1 billion. we will have to see whether that can go ahead. >> of course, we are also watching oil because we could

see you see that tropic trading in the asian session. we see natural gas, global su keenan joins us with the latest. there is this dynamic when it comes to u.s. demand, global demand improving but then you have to run supply. su: you have also have a lot of signs of supply being offset by tightening in the market even though there's concern about economic slowdown. as sherry mentioned, we are seeing oil prices get a lift to change a third day higher. government showing the u.s. is exporting a record number of petroleum products, also failed to help with the energy crisis abroad. playing into this is the situation improving? we see an appearance of an

improving situation in terms of iran nuclear talks. lifting sanctions with much more oil on the market. they are perhaps replacing russia. the void left by russia in terms of european energy. we are also getting low volume which exacerbates this. you're looking at west texas intermediate above 95 once again. brent crude is coming off with the energy ministers signaling that opec-plus might actually cut production in the upcoming meeting because they are concerned about all the volatility and they are concerned that that creates a disconnect between the actual fundamentals in the markets. haidi: european gas prices continuing to search. su: that impacting u.s. natural gas. we go into the bloomberg.

u.s. natural gas is taking off in a very big way. john is a partner with capital and a veteran and the energy markets, i don't think we are done yet, there's so much nervousness in the export terminal that starts often that it is going into the wide. receive the natural gas. european natural gas has surged her fresh eyes once again. a lot of it having to do with the nord stream pipeline shutting down and russia for another couple of days of maintenance at the end of the month. there's always concerned that that may lead to a greater disruption in supply. but really, a crisis situation for europe is continuing, especially as the winter months are now looming ahead of us. we drop into the bloomberg one more time, and the european power prices are equal to wet a $1000 oil would be, so a very significant problem. back to you.

>> another problem when it comes to fuel costs for qantas. the flight carrier says travel demand is growing fast and allow them to cut debt and buy back shares as a pose the third consecutive loss. you see the positive reaction in the stocks today. we spoke to evan lucas earlier today and the share buyback was interesting. perhaps it's a bit of a band-aid given all of the other things troubling qantas. >> no dividend about that share buyback. there's a vote of confidence in his own airline that he's leaving. he's optimistic about the future but a real disconnect about what the market feels about him. big bumps today and what counts as stuff -- staff feeling about the airline. it wasn't a great deal of mention about flight cancellations, but that has been a problem in alan joyce's except in the press conference and

customer satisfaction is becoming an issue. but a lot is beyond their control like covert restrictions, long isolation. preseason on the show you. it's up 50% year on year. that contributed to cascading problems to lost bags and canceled flights. facing calls to resign as it was one point, so the hope we would be that it's a start of her turnaround. >> was cl alec so far? >> qantas is doing something to addressed all the problems and is recruited 1500 employees and all the departments. they got rid of 8000 people before the pandemic started to bite. contacts were improved and big improvements when it comes to lost bags the disconnect,

engineers are having a strike today. clearly qantas engineers are not happy of what's going on. shery: paul allen with the police on qantas peerless gets a vonnie quinn. vonnie: internet researchers say a campaign to cast the u.s. in a positive light has been adjusted by meta-platforms on twitter. the reports that it used tactics to promote pro-u.s. stories and negative narratives about russia and other countries. the campaign is said to resemble other campaigns by adversaries. china is planning to stabilize growth as they close from a covid lockdown from the property

sector. it is reportedly ready at a 19 package. keeps them within a reasonable range. has a quota of $43 billion for developmental fuels. russia's industrial sector had the smallest contraction of four months. as the latest that the economy is doubting sanctions for the war in ukraine. it's much smaller than forecast. increase mining and oil output has boosted. clothing, semiconductors and pharma rebound thanks to competitors. texas is named blackrock been a other finance firms hostile to the energy industry. a mutharika cause the state comptroller to boycott the fossil fuel sector. the announcement has bond issuers avoiding paying su status is unclear.

global news 24 hours a day -- global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is. >> we are waiting for the decision within the hour and it could come with the securities expecting that tony five basis point hike with high inflation persisting. this is bloomberg.

shery: emma ca asia gaining. we are seeing gains of 2/10 of 1% being held by health care and energy. energy is perhaps surprising given that we see wti holding about that $95 a barrel level in the asian session. we have seen day eii government report showing that it is reporting a record number of consumer staples and utilities and consumer staples are losing ground. haidi: that key interest rate is a quarter percentage rate. our next guest is expecting at the hike until that great that's three and a quarter. let's get into that decision that we are expecting. korean that the resumption of

normal sized hikes can't rollout everything given that central banks continue to surprise us. is it too soon to take the foot off the pedal and could it be more aggressive? i'm just wondering if this decision will resume regular programming. it's a little bit too early given that i contrast more hawkishness. cathing: the be ok continues to be a hawkish central bank. the recent drop in inflation expectation set is coming in the be ok could back to 25 basis points but continue one hiking and still control inflation.

we do think it is an issue of the korean won pass-through for the cpi inflation potentially igniting some worries on inflation again that it is 25 basis points on a regular basis for now. >> we are balancing the major risk of an economic slowdown when you look at parts of the labor market for korea. >> the labor market looks pretty strong for now, but it was an opening for the covid social distancing measures so we do think it could be a short-lived rebound. we also think around 3% to 40% increases at this is posted by the fiscal funded drop, which

means it has been in a place to create jobs for the elderly and the younger generation. once the budget is cut next year we expected to be for around 40% to 50% in the labor market looks like a grimmer picture compared to this. >> in korea it seems like unemployment has been a perennially talked about issue not to mention high household debt. how are those numbers sitting right now? >> it continues to be much higher than the headline hovering around 90 to even 9.5%. but we also looked into the detailed of the unemployment rate that includes those who potentially could enter into the job market. so we could compare those numbers that hover above 10%

compared to the number of 2.9%. we do think there there needs to be the younger generation entering the job market. younger generation is initiating this new program to train those and pay them for completing those programs so that they are preparing them to enter the job market without getting trained at a real job. so we do think the government is doing something, but it's something that the private sector needs to solve at the end by creating competitive jobs. shery: how much are we talking about when it comes to fiscal spending and could that exacerbate the price pressures we are already seeing across the economy? >> for government is trying to come back and return to the fiscal -- we are waiting for the

subject proposal for 2023 as early as next week and into next week, and we actually expect the budget to increase lower than the previous administration did with 4% to 5% year-over-year. that means that government spending will be smaller and the chance of supplementary budgets going forward will be lower given that the government is trying to lower the gdp debt in china to implement the fiscal rule that caps the fiscal balance to -3% in the government to gdp ratio around 50% and perhaps it hasn't been confirmed. but the chance that the government induced spending inflationary pressure is much lower with this new government compared to the last one. >> is the second

worst-performing asian effects after the japanese yen but could there be ok decision impact that or are we looking ahead to jackson hole and what fed chair powell says? >> i actually think jackson hole is the more important event. we do think the weaker one is caused by the franklin dollar and we do have domestic features that are causing the outflows. we have the smaller trade surpluses. in the accounts balances shrinking on the outflow for equities selling out and also retells increasing their investment. it's also an issue that -- eventually we think the strength and dollar matters and as long as the fed keeps its hawkish tilt and chair powell comes with hawkish comments, then we will

have to expect even more outflows from korea and even weaker ones. my forecast it's at 1360 by end of this year. shery: how much is the exchange rate in terms of inflation in korea? >> it's hard to estimate, but we do think in the first quarter, according to the be ok studies, then 9% of the rights inflation, headline inflation was due to the weaker one. and if we apply that formula to the second quarter, it could be around a 20% to 25% increase in inflation caused by the weakening of the korean won. shery: let me interrupt because we are getting the bank of korea's rate decision. it's a 25 basis point hike to 2.5%. 17 out of 18 economists were made by bloomberg were expecting to be ok to hike the rate to 2.5%, this coming at a time when inflation is at a high that we have not seen in more than two

years, three times the central banks 2% inflation target, and also following that 50 basis point hike that goes on last month, first ever for the be ok. let's return to kathleen, give us your reaction to what you see at the be ok and how far the central bank will eventually have to go to rein in prices. kathleen: this morning's decision is as expected, 25 basis point hike. our view is that there be ok is likely to go on further than what the market currently expects. we think that the be ok would stay hawkish for longer until first quarter next year. that comes with the rate of 3.25%. the reason being behind that is that we think not just the inflationary pressure, but also the concern on week one and the effects cap through after the inflation will persist, and that's one of the concerns that be ok members are quite keen on,

and we think that would keep them to continue on the hawkish side until the currency actually stabilizes, which we think the timing will be just around second quarter next year. so we think the be ok still has room to stay hawkish until first quarter 2023. haidi: we are just getting that revision when it comes to the cpi forecast being raised to 5.2% in today's meeting from 4.5% in may, revising that 2023 cpi to 3.7% versus that may forecast of 2.9%. when it comes to economic growth, 2023 gdp sitting at 2.1%, down from 2.4% projection we had in may. also cutting the growth forecast for this year to 2.6% from 2.7%. that is the cpi forecast this year being raised to 5.6%, really elevated from 4.5% in may. and it comes to the external

outlook, we have seen these concerns over slowing exports and demand, which is a huge driver for an economy like korea. we had nvidia giving the week forecast concerns about the slow down. we have a situation about that and that converts to weakness in the domestic consumption and demand as well? >> we are definitely worried about the external deceleration. we have errors few on china and mild recession forecast in the u.s., and we are lowering forecast for euro. that means combined together, more than 40% of korea's total exports is going to be hit by the slower consumption from those three countries. and we do expect the export slow down to hit domestic production and the labor market going forward. but for now, we do think that domestic consumption will hold up, especially in the services sector. but perhaps we do see the slowdown in the later year of

2023. shery: we are running out of time, but thank you so much. this is bloomberg. ♪

shery: it's been a while since we were watching hong kong's weather so closely. they will be lowering the storm warning signal very shortly. that's after we heard from hkex that they have delayed the morning trading session given

the storm signal. this would be the last time that they actually closed a training back in october, so we are back to that time and we are watching the weather very closely as hong kong will be lowering the storm warning signal eight very shortly. this is bloomberg. ♪

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