>> watching "bloomberg daybreak: asia dear: coming to you live from new york, sydney, and hong kong. haidi: our top stories this

hour, asian and u.s. stock futures apply as investors he havens after jay powell's hawkish speech at jackson hole. >> restoring price stability will likely require maintaining a quality stands for some time. it caution strongly against prematurely losing policy. kathleen: the bank of korea tipping the door open for outsized hikes, the governor telling bloomberg higher u.s. rates may further weaken the won. mr. verizon china downgrading growth work as adjusting profit drag lower by covered curves -- curves -- curbs are the property some. paul: let's take a look at u.s. equity futures, and exciting session on friday. we saw a fair amount of selling post the jackson hole speech, looking calmer, still to the downside by .80 of 1%.

the bond market apparently more abundant, the yield on the 10 year not moving a huge amount. crude prices edging off some of the highs we have seen recently, opec was seems open to the idea to curb supply. we will be keeping an eye on crude prices later today. as we look ahead to the asia open, annabelle, it should be a pretty interesting session. annabelle: you called the bond market there more abundant, i am starting this morning as well because i want to point out what is interesting is that we are seeing much of a reaction in the debt stays -- space compared to what we are seeing in equities. bigger moves in shorter duration treasuries or yields rather reflecting that we are not going to see the fed stopping hiking anytime soon. longer duration once, the 10 year and japanese bonds

unchanged, but this reflecting cited fears that are front and center, because jay powell unlikely to stop even if that means barking a recession. we are looking ahead for the equity space because we see bigger moves ahead particularly for australia asx 300 futures, we are broadly lower, new zealand already trading and keeping an eye on the currencies base as well, the dollar looking like this against the yen but a bank saying that trade is the best way to go with an increasingly hawkish fed. paul: let's get some more on the day ahead, ring in our chief asian correspondent and our contributor. what were your biggest takeaways from what chairman powell had to say and other fed officials as well? >> i think it was a pretty essential, caucus -- hawkish

message that the feds are laser focused on getting inflation down to where they wanted to be. what they're doing there in terms of raising rates, they had at a turning point, and i think that was reflected in other central bank comments coming out of jackson hole that i read. we had several comments on ecb officials, how laser focused they are and getting inflation data. someone from the bank of korea said he could see emerging inflation going back to where it was before the crisis, and explaining why it supports their economy. on the fed and ecb a very hawkish message, they have more work to do and they do not think they are close to finishing that. kathleen: i spoke with the governor from the bank of england -- finland.

ecb officials seem to be talking tough. i wonder how tough they are willing to be. >> we have excessively high inflation globally, and our mandate is price stability. kathleen: listen to what elizabeth, one of the most influential people at the ecb, governor hillary from france, talking tough, but i wonder given governor rehn's concern about the energy crisis in europe right now, our heart it could hit the economy, even though he is saying they would do something significant to the be more significant than 50 basis points? >> the big question is what can rate hikes do about the energy crisis in europe? the ecb are at a point where they're debating

go by 50 or 75. they are on the whole in hawkish territory, some officials making it clear they have to hike even if the economy starts to slow deeply. what happens not just in europe but globally if in the back end of this year we are seeing a pronounced slowdown in global growth, ongoing energy crisis? will the central banks continue to raise rates at the base that they are or will we start to see a turning point in inflation anyway given continued consumer demand? these are open questions. i think the overall takeaway, the biggest tone at the moment is central banks remain hawkish against this question of how long they will hold onto that stance. paul: garfield, we sought reflexive selling in reaction to the jackson hole speech on equities, but the bond market, not so much? why the disconnect? >> there are couple of things

going on. the bond market is down this month quite considerably, as is the stock market. the bond market had not hoped in the way that the equity market had that there would be something in the pivot -- the way of a pivot or powell would disappoint expectations for extreme hawkishness. the other part of that was part of the particulars he met those hawkish expectations, it is very clear he is willing to risk a recession. he did not spell it out, is that we are going to focus on the inflation down, we have one tool, and we will use it until aggregate demand comes down. we expect low trend growth going forward, so it is hard to get below trend growth and a sustained period unless you get a recession as part of it.

recession is is directly good news for bonds and not good news for stocks. adding to the pain for stocks was the higher rate is the longer mantra, so he really pushback against the idea that rate cuts are going to come anytime soon. he says we do not want to have to cut rates and raise rates and cut rates. we want to be sure we killed the inflation piece before we do anything to raise -- bring rates lower. some of it was appealing to bonds, and in that scenario at 3% yield on 10 year debt looks good to many investors. kathleen: we can expect some kind of knee-jerk reaction is the asian trading day and we kick off, negative. beyond that, asian economies are diverse, we have the bank of korea and other countries that are stronger. how do you think this won't

reverberate through asia particularly in a lasting way? >> the one thing at a very obvious he is going to reverberate through asia is a u.s. dollar. there was some thought we were getting peak inflation, therefore peak that aggressiveness. instead we saw the reactions in the yen and aussie, i expect we will get some of the reactions today and the asian currencies that do not trade 24 hours open, and going forward we have several markets ahead of us. that is the think that will reverberate across a lot of economies, central banks will see their reserves come down, lots of assets will feel the pinch. because the fed is more reluctant to prevent, that will make it harder especially for the rba but also the bank of korea and other central banks to prevent away -- pivot away from

high rates. kathleen: that was enda curran and garfield reynolds. you guys leave us features. thanks to our colleagues. garfield just mentioned the bank of korea governor is keeping the door open. i spoke to him at jackson hole. he told me he would join fed chairman jerome powell if prices remain out of control. >> we are not exactly targeting the interest rate cap as our prime political objective. the high interest rate in the united states will have depreciation pressure to korea, and that will impede our inflation rate.

two big large differences, one thing i deal. we have to without the exchange rate to move and we have to focus on our own inflation rate. kathleen: the bank of korea will reach two quarters of 3%, you said that is reasonable. how does that look to canal? >> as i mentioned, i think it meets our expectations. i do not think we need to revise our projection at this moment. kathleen: if the inflation rate were to state steadily above 5% this year would you continue to opt for more gradual hikes, or would you consider doing another 50 basis point hike? >> at this moment i do not want to comment. as you mentioned if the

inflation rate continues to be well above 5% like chairman powell than the bank of korea it also prioritize price stability. paul: that is the bank of korea and -- bank of korea governor. let's get over to vonnie quinn. annabelle: a major wynne lee survey shows economies turning more bearish on china. medium growth forecast is 3.5% down from 3.9% as turmoil in the property market in covid outbreak's persist. protections -- projections for the first three quarters of next year where lowered slightly although the goal for the year remains unchanged at 5.2%. beijing has imposed a partial lockdown as covid-19 infections going. residents in major downtown districts were told to stay home for three days beginning sunday as they go through mass testing. a northern city will conduct citywide test monday.

state media defendant the costly zero-tolerance approach. u.s. warships have entered the taiwan strait for the first time since how speaker pelosi's visit to taipei. in a statement the u.s. navy says two ships were conducting routine transit. in a separate statement china says its military followed the u.s. cruisers added that it was on high alert. germany's finance minister says soaring power prices must be addressed with the utmost urgency. he told the sunday newspaper that an overhaul of the market is needed. a leading economist warns germany it shoulder an extra burden of more than 200 billion euros next year, 5% of gdp. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. paul: still to come, a deputy

governor tells us about the city's ambitious plan to build a city in the middle of tokyo bay. a preview in asia with pmi readings. more with moody's analytics. this is bloomberg. ♪

>> open market committee's over focus is to bring inflation back down to art to percent goal. >> i think we will left to move enough above 4% and probably need to hold them to their next year. >> inflation is extremely high, sort of unimaginable 18 months ago. >> we have to get interest rates higher to slow down demand and bring inflation back to our target. >> we get to above 3.4% by year end, and we see. we have to let this play out. >> it could be over 4%. >> i have said 3.75% to 4% by

the end of this year. i would like to get to that level and the sooner the better. kathleen: fed officials speaking about the outlook for rate hikes and inflation. let's take a look at the week ahead. we will be getting the latest u.s. jobs report ahead of the september policy meeting for the fed. economists project healthy payrolls with unemployment holding at a very low 3.5%. in china, bmi is expected to be released wednesday, expectations are for the figures tuesday weak as the property some of the covid flareups and power surges and recovery. we are watching euro inflation expected to hit another record and get key gdp data out of south korea and india. paul: let's talk about the implications from jay powell's hawkish talk at jackson hole. we have katrina ell with us. do you have a sense that the

gods of recession in the u.s. and more broadly have grown after hearing that speech? >> i mean, certainly. the speech really home the fact that the fed is taking no prisoners when it comes to wanting to fight inflation and sustainably bring it back down. as a consequence, if a recession results so be it, because it was pretty clear that the long-term consequences of leaving inflation extremely elevated and the anchoring -- deanchoring inflation expectations are not worth the risk. in europe we have a recession bank to for the ok this year. it makes sense to say u.s. recession odds have increased as well just because that laser sharp focus on trying to bring down inflation is really the

priority with the fed at this point. as a consequence of that, domestic demand has to come down. the labor market is incredibly tight, the fed is uncomfortable with the tightness of the labor market. the july jobs report showed the impact of those tightening stats have not flowed through, so they will continue to move quite aggressively. paul: there is one teacher economy not talking about tightening, and that would be china. let's look ahead first to the pmi, a modest improvement, but still in contractionary territory. do you think is a matter of time before we see bigger stimulus coming from china? >> that is good question. with manufacturing and pmi data coming out this week we are expecting a modest improvement, so we are looking at the headline number coming in it 49.8.

we have seen the people's bank of china release ongoing but fairly targeted and limited stimulus. we have seen infrastructure spending become a bigger rarity. pboc and the chinese government as well will continue to move to release ongoing stimulus to try to stabilize domestic demand, because there are a lot of domestic headwinds in china at this point. the covid zero policy and the property market remaining quite subdued as well. kathleen: let's move on to australia, retail sales, consumer spending coming up. there is yet another country where it should be going down, and they are not. the labor market is still tight. what is that going to tell us about where the consumer is and where the rba may be in the path of its rate hikes? >> that is a good question. it is important to take a step back and remember that it does

take time for the full impact of monetary tightening measures to fully materialize in and economy. the situation we are in in australia, we are seeing consumer confidence is incredibly weak. the spending numbers, consumption is still quite strong in australia. that is a reflection of the fact that broader economy is doing really well and that the labor market is an important firewall between consumers pulling back and the broader deterioration that we are not seeing materialize at this point. kathleen: move on to south korea, gdp is coming out, in the july meeting they did a 50 basis point hike. they signaled back toward 25, he is not committing at all to 50. what will the gdp tell him? >> that gdp data is not going to be

a critical data point, because in the june quarter south korea benefited from movement control easing back in household consumption. i think moving forward the more important indicators for monetary policy tightening will be the cpi point which we think will stay elevated up on the 6% mark and that will put pressure on korea continue to move. the important point dimension is because the fed is moving so aggressively moving forward that will keep down pressure on the currency adding to inflation as well. keeping pressure on the bank of korea to continue to tighten. kathleen: you have gotten us ready for the week ahead, thank you so much, katrina ell, senior economist at moody's. you can get a roundup of the stories you need to know to get your day going. subscribers go to tv and it

is also available on the mobile app and bloomberg anywhere. customize your settings so you only get news on the industries and assets you care about. check it out. this is bloomberg. ♪

paul: let's have a look at how foreign exchange markets reacted to jay powell's hawkish pivot, strength. you see the bloom blog dollar spot index climbing just a little bit, but the dollar stronger against all of its g10 peers, look at the again, 13 eight against the japanese yen and the offshore yuan breaking through 3.69 for first time in two years. aussie dollar continuing to weakened against the greenback,

68 .63. we will keep an eye on the aussie dollar in the coming days. the next major bank we hear from is the royal bank of australia. kathleen: it is a count on to the start of trade in seoul. in korea it investors will be watching the won for any moves after bloomberg's interview with the korean governor. the finance ministry is holding a meeting after u.s. stocks tumbled on friday. we are keeping an eye out reactions after south korea's main opposition was picked to lead the charge against the conservative president. a south korea delegation is visiting washington to discuss the u.s.'s ev subsidy policy. we will have more from a conversation with the bank of korea governor including on supply chain issues and competing with china. lots more to come on "bloomberg daybreak: asia."

s&p 500 futures are trending lower after a big drop on friday. nasdaq futures down 1.3%, and all three indexes sought after declines. negative sentiment, alvar is it going to go, is continuing -- how far is it going to go, and it is interesting to see how far this will go after giving them a chance to react to jay powell's hawkish speech.

paul: we have been sifting through the fallout from jay powell's speech at jackson hole, the fed governor managing to stomp on the major equity indexes had the u.s., but how about meme stocks?

annabel, you have been looking at the survey. is the craze over? annabelle: this is been a bit of a trade that is come back and devote, but with -- back into vogue, but with the volatility the question is can it stick around? the question this week is will the meme many up as well, the vast majority of people saying no, it will stick around in some version but probably will not get back to that same history it was on january 2021. which stocks are most likely to go bankrupt over the next 12 months? bed, bath & beyond is facing a dwindling cash path and having issues facing its creditors. trading at less than half of the face value. let's look at meme stock volatility is a broader risk to markets?

the vast majority of respondents saying no, it is not. we have seen the vix utmost in 10 weeks following what we got out of jackson hole. kathleen: traders like that volatility. let's move on to things that have caused the volatility, in particular all of the goings-on at jackson hole. we will get a little more of my conversation with the bank of korea governor. he said higher interest rates could weaken the won further, and that means decisions on future hikes must be data driven. >> we are not exactly targeting the exchange rate itself or the interest rate gap. in itself it is not our prime policy objective. the high interest rate in the united states will have

depreciation pressure on korea, and that depreciation will increase our inflation rate. so i think two large differences , one, the ideal, we have to without the exchange rate to move, and we have to focus on our own inflation rate. kathleen: you earlier said the bank of korea will reach 2.3% this year, how does that look right now? >> i mentioned the expectations. i do not think we need to provide our projection at this moment. kathleen: if the inflation rate would remain stubbornly about 5% would you continue to opt for the gradual hike? >> at the moment i do not want to comment.

as you mentioned if the inflation rate continues to be well above 5% like chairman powell, the bank of korea should prioritize price stability. kathleen: it seems like markets around the world want to get ahead of central banks. market rates in korea have been reflecting this expectation that rates could be coming down in 2023. is there any possibility of that? >> that depends on how persistent inflation would be. if you see inflation to remain around 5%, our normalization period will extend. if inflation goes down as we expect at this moment, we expect inflation will go down to below 3% at the end of next year, who knows. kathleen: it looks like the doors open.

chip exports falling, is that any kind of red flag on the economy at this point? >> there are a lot of cyclical elements. in the medium-term we are very much concerned on restructuring of the global chain, and especially china, they are advancing technologies and is becoming our competitor too. we really and if it -- benefit from this. kathleen: on top of that this is been a broader trend. but right now china's forecast has been downgraded a couple of times, the covid outbreak, this insistence on covid zero. what does that mean for korea. 25% of your trade. >> the slowdown in china is

definitely one of the important factors are us. you have seen what happens with zero covid policy. we went to see how that will alleviate slowdowns. paul: the royal bank of korea governor speaking with kathleen hays. let's bring in our guest more. we did get some lines from the south korean vice finance ministers saying the bank is going to have to closely monitor fx bonds and financial markets. the comments from powell change the equation for policy normalization. >> it certainly seems the comments from these policymakers

are hawkish and very much in line with what powell was saying at jackson hole. the biggest risk for korea right now is if you have a higher interest rate in the u.s., it is going to affect the one, and that will have the depreciation pressure on the one as the bank of career -- maria governor said. which means prices will go up higher and that will put pressure on exporters and the trade bottom line and also economic growth for korea. i think we are going to be seeing more rate hikes becoming clearer. there are greater chances of policy mobilization being cemented as we go along for the rest of the year at least. paul: when you were listening to the interview, what were the standouts for you? >> it is interesting, he said

that too large trait and interest rate gap between united states and korea is not going to be ideal. as far as i can see he has been more dismissive than not that the bok has to raise rates just to comply with the fact that the rate gap is going to get larger, but here he says it is not going to be ideal. there might be some action being taken. what was interesting is that we did not ask him about china, he sort of volunteered to speak about the global supply chain being changed at the moment and made it clear that china is slowly becoming korea's competitor, which is quite interesting. it is kind of taboo in korea had to say something like that out loud in korea. kathleen: you have such a

detective's ear when you listen to them speaking. i am wondering, translate this now. what can investors expect in terms of monetary policy and inflation, two more meetings this year? >> i think it means that they need to be a bit more patient, they need to understand that the time where they have to manage the expectation is getting a little longer. the inflation rate is going to matter and they will have to keep the radar on pretty tightly on how inflation goes, consumer prices go, and also the fact that once the rate goes up and reaches the terminal rate at the end of the hike cycle, i think it might be a majority of expect those rates will come down once and economic slowdown happens. they will keep rates high for an extended period of time, and i

think that is a reasonable expectation. kathleen: china's going restrictions and ongoing property prices -- probably crisis are eating into earnings for the year. let's bring in stephen engle. we are seeing the chinese let out reflected in the bottom line now it seems. >> the latest bloomberg quarterly survey of economists, they expect the chinese economy, they are ratcheting down expectations, it will be slowing the rest of this year and into 2023. the average consensus from those economists surveyed down to 3.5% for this year, and that there is going to be we miss into the first three quarters of next year, 3.9% this year was the original forecast. that is being transmitted into industrial companies in china. as we saw a pickup of nearly 1% of industrial profits in june, but in july as we all know, things fell off, all of the main

numbers, economic indicators intranet fall considerably and below estimates. industrial profits falling 1.1% after the june uplift. july, demand fell off. we have to look through this week as well as we get the banks. we have had all three big main oil companies come out, china opec was the latest, it is a bit of an anomaly because global oil prices averaged a 6% gain the first half of this year as opposed to yuriko levels, sinopec posting record profits. paul: still a few big names to report in china. what are we expecting to hear from today? >> look at the docket, dwd, citic securities, a shanghai

company in the pharma space and poly developers representing the troubled property sector. we get ag bank leading off with a big earnings. bloomberg intelligence saying it is going to be the exposure to bad debts in the mortgage space. bloomberg intelligence as increased lung risk into the second half will be prominent due to mortgage boycotts and financial weakness we have seen at the local level. paul: stephen engle there. let's get to vonnie quinn. vonnie: senator elizabeth warren has taken aim at the fed, saying she is worried it will hit -- put the u.s. economy into a recession. saying she does not believe raising rates alone can contain inflation. where and spoke following fed chair' a jay powell speech in jackson all where he said he

would continue an aggressive series of rate hikes. a city near beijing is imposed a partial like dennis covid-19 affections climb residents in the four main districts were told to stay home for three days beginning sunday as they go through testing. the northern port city will conduct citywide test monday. last week state media defendant the country's zero-tolerance approach to the pandemic. nasa is about to take the first step on a journey to return people to the moon by the end of the decade. an uncrewed rocket is set to lift off on monday. the artemis one mission will take an orbit that since it deep into space before it returns 42 days later. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. paul: still to come and look at the ambitious project to build a futuristic city on reclaimed

land in the middle of tokyo bay. join us for an interview with the tokyo governor next on bloomberg. ♪

kathleen: japan ahead on "bloomberg daybreak: asia." japanese markets open shortly,

so let's take a look at how prices are looking for various items everyone is interested in. dollar-yen at 138.17. people are saying after jay powell's hawkish speech that level could had 2140 -- head to 140. futures 2.716 down, 3% plus on friday, quite a move being suggested there. you see futures suggesting lower price autobahns, higher yield, but the thing that was so striking on friday, it was equities that moved like crazy. bonds were pretty boring, as some would say. paul: not a lot of movement. let's talk about the bank of japan we are not moving as become a watchword. almost all of the country's inflation is being caused by

higher commodity prices and the central bank must continue with easy monetary policy. japan and korea economist joins us for more. is there any sign they might join the hawkish times like we saw coming out of jackson hole? >> in a word, no. the bank of japan had no choice but to continue with its monetary stimulus. the case in japan is very different from the rest of the world, and if you look at the inflation numbers, you have got a point. japan is at 2.4%, that does not sound too bad compared to europe and the u.s. tom watts miraculously, however 2.4% is still the strongest in

japan since 2008 excluding sales tax factors. it is not that japan is immune to what is going on in the world. to the extent, it is different. to get stable inflation in japan , which is the admission of the last decade is coming up to the end of its term, he does not want to mess this up. he says wages must go up, but the kind of 3% wage increases he is looking for, we are just not going to see that before he finishes his term next year. kathleen: paul jackson, thank you so much let's move on to the tokyo's deputy governor leading an ambitious project on

reclaimed land in the middle of tokyo bay. we asked him about the project for japan ahead as well is how his past career as an internet service employee helped. >> it came from the work of one of japan's most famous entrepreneurs, said to be the father of capitalism japan and created so many companies. another person to be noted is the former mayor of tokyo. he created the city plan and infrastructure. it lasted more than 100 years and have been of great use to our generation. we must pray something the next generation can appreciate hundred years now. we must consider how we can overcome climate change and we must create cities resistant to infectious diseases. these themes are important.

let's make a zero emissions town , a town resistant to infectious diseases. we are exposed to nature facing the ocean, but people's lives are distant from nature. i think we can make a city where people can enjoy nature more. >> you mentioned climate change, energy shortage and also the pandemic. i am wondering whether there is any difference of tokyo doing this compared to other international cities in the world? >> i think that cities should cooperate with one another rather than competing. 50% of the world's population live around cities and it will be 70% in the next two decades. they will face the same issues, climate change and infectious diseases. cities should share their ideas on how to tackle these issues.

tokyo is one of the biggest cities in the world and it is not easy to make changes they can benefit other parts of the world. >> you started a company. how is the situation, how many companies have been a price of far and are there any companies you were partner with to collaborate? >> we are gathering businesses and ideas to participate in this project. we are about to test technologies of the future in the tokyo bay area where we will focus on the renewable energy in solar and wind power. we will test the technology in the bay area where it is distant from tokyo. we should repeat the test over 10 to 20 years. tokyo will become a new city. >> you worked in the i.t. industry. i wonder how you can bring your

past experience to this role. >> i am not an expert in city administration or community development, but i have many experts on my team what me in those areas. where i can help is the digital field. in the internet server area creators and users work together. it is not a specific skill but the work style. the tokyo bay project is typical of this style. we gather wisdom and utilize that in city administration. i want everyone to participate in creating new projects. >> if there is one you could change with the been, what would you like to change? >> i have been working for a long time, and i think it is quite important that you are more beautiful than when you were started. i left my previous job, and there was today i believe mike current position. in the end there will be a day i

leave the world. every day i start new things i want to make tiny progress. i want to be remembered as a person who is partially involved in making japan a better place than before. paul: the tokyo deputy governor speaking with bloomberg. you can watch us live and see past interviews on our interactive tv function tv . you can dive into any securities or bloomberg functions that we talk about and become part of the conversation by sending us instant messages during our shows. this is more bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

kathleen: let's check the futures market, equities showing us, s&p 500 futures down 1.2%, nasdaq futures down 1.6%. not quite where there were a few minutes ago, not that is to cleanse on friday, but a deficit. look at kospi futures, a small gain, trying to but the tide against the u.s.. nikkei futures down 0.2%.

maybe this is leveling off, easing off. australian futures down as well. paul: let's look at some of the stocks that we are watching ahead of the market open in sydney, seoul, and tokyo. major technology stocks may follow lower after a palatable down on his hawkish back. sony and softbank keeping an eye on fortescue as well after it announced its full-year earnings that slightly missed estimates. market openings. ♪

kathleen: we are counting down to asia's major market opens. it is pretty clear the big u.s. selloff in stocks is being echoed in asia after jay powell

sent a very hawkish message. paul: that's right. we saw a fair bit of selling for u.s. equities on friday. looks like we are setting up to do the same in the asia-pacific. annabelle is keeping an eye on the open. annabelle: yeah, we're about 20 seconds away from the opens in japan, korea and austria. we will also have the open of cash treasuries. what has been interesting in these more muted moves we have seen and treasuries is a reflection perhaps that bond traders are more on the money in terms of what we are expecting from the fed. outlook for sustained rate hikes and the very hawkish message we saw on friday. the 10 year yield coming online like this. we had the boj governor kuroda speaking at the same event and pledging to stick with easing monetary policy settings until wage gains in price pressures are sustained in japan. that is feeding into what we are seeing in the end, moving back

to the 140 level. in terms of stocks we are down to what we are expecting throughout the asian trading day pretty turning to what we have for korea as well, also look into reaction from our interview with the b.o.k. governor. he is leaving the door open to another outsized rate hike. we had 50 basis points for the first time earlier a couple months ago. he also said the weakness or rate hikes further weaken the yuan. we still see it around that 13 year low. this morning down .8% per it in terms of the broader stock market reaction we are keeping an eye on what is widening losses for the nasdaq ahead of the trading session. you can see futures at the bottom of your screen. because dac also really outpacing the losses we have seen for the kospi. we are still wrapping up earnings season.

they are still a couple minutes from trading but the headline is we saw a 40% drop in profit. still the second highest profit ever on record. in terms of what else we are watching, keeping an eye on commodity sensitive currencies. the aussie dollar is one of the weakest performers against the dollar. stocks are slumping as we change on u.s. futures also down more than 1%. paul: all right. let's bring in john vale, chief global strategist at nico management. as you might expect we are seeing some selling to get the day going in the asia-pacific and tokyo, sydney and seoul. how do you expect the reit -- how severe do you expect the repricing to be today? john: it is a little surprise the markets would be down at least as horribly as the u.s. the u.s. is the leading economy in the world and interest rates matter a great deal what happens in asia as well as the u.s. paul: you often get situations

on days like this where a lot of quality names get thrown out. do you view this as a buying opportunity? are you looking to go shopping anywhere? john: we are still pretty cautious. we thought the markets would rise from our last quarterly meeting but they went way above what we expected. and i think they are going to be calming down for quite a while and our view. so we would not be chasing the market at this stage but we are not pessimistic on the long-term at all. kathleen: so where does that leave you? are you sitting in cash or are you in more defensive positions, just waiting to get that signal? the signal from the fed is it may not come until late next year or the following year. john: well, until the market really does absorb what powell said, it is the old adage, i am sure you know, about the market

really only listening to the fed chair. it is when the fed chair says it that the market fully reacts. that was very true with yellen. so the market is going to have to digest this for a while. we are not very positive on bonds either, so yes, a high cash allocation really is proper at this point. kathleen: do you see anything there that argues for, ok, everything is beaten up, so we need to selectively, gradually build up positions? or is it, you know what? it is not that beaten up, but it will be. john: well, you're right. there are some value stocks that look extremely cheap. but i would say that the overall market pe in the states is still on the high side. and if bond yields keep going as we expect, then that will be a lot of pressure. at the same time earnings pressure is coming down.

so the market does not look cheap in the states overall. but in japan, the pe ratio is still very low. the economy here is actually still pulling out of its covid lockdown, and tourism is going to start bouncing back, which is a huge boon to japan. so things look relatively good for japan. then again, japan is not immune to what is happening in the rest of the world, especially in europe and in china. paul: yeah, so far the bank of japan resisting any temptation to jump on the tightening bandwagon. are you confident that inflation is going to stay in that sweet spot and the boj will keep conditions relatively easy? john: well, it looks like it. if you look at the true core, which is food and energy, it is still below 1%, and corona has been consistent all the way through this. until you see wages really rise,

and we are not seeing that yet. there is some improvement. but we are not going to see much improvement from kuroda or the next governor when corona leaves in april. kathleen: speaking of other leaders, the relatively new head of the bank of korea. any opportunities there, or is there too much in the crosshairs of inflation and having to keep hiking rates? john: korea is certainly known as a global option on the global economy. so if you think the global economy is going to rebound than it creates obviously -- then korea is one of the primary places to bp at the -- places to be. the won has been very weak. last i looked it had a surplus. so it's quite surprising to me that the won is as weak as it i s.

paul: john, over the coming few weeks and months, do you expect to see some bankruptcies, a bit of creative disruption going on? john: i do, actually. i think this is the time of the cycle where the companies that really over did it, borrowed too much, maybe bought back to many shares, that some of the problems come home to roost, and we could see some major increases in some credit moves. the credit agencies are always rather slow. but the market could get much more concerned about certain companies and maybe even credit overall, in the states in particular but also in europe. not so much in japan, as far as i can tell. kathleen: john vail, thank you so much. you gave us a lot to think about. now let's get to vonnie quinn with the first word headlines. vonnie: senator elizabeth warren has taken aim at the fed, saying

she is where it able to the u.s. economy into recession. she renewed her criticism of the central bank's tightening policies, saying she does not believe raising rates alone can contain inflation. lauren spoke following jay powell's speech in jackson hole, where he signaled the fomc would continue its aggressive series of rate hikes. ecb governing council member says the bank must act forcefully to contain record inflation and keep future price growth anchored. a significant interest rate hike is needed in september. consumer prices in the euro zone have been rising at an annual rate of 10%, with a weak euro amplifying a surge in energy costs. rehn says policymakers must intervene. >> the reality is we have excessively high inflation globally. our mandate is price stability. vonnie: bloomberg's lotus

quarterly -- the median growth forecast is now 3.5%, down from 3.9%. as turmoil in the property market and covid outbreak's persist. projections next year were also lowered slightly although the median for the whole of 2022 remains unchanged. a city near beijing and posed a partial lockdown as covid-19 infections climb. residents were told to stay home for three days beginning sunday as they go through mass testing. the northernmost city will conduct citywide tests monday. last week state media defended their costly a zero-tolerance approach of the pandemic. 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'm vonnie quinn. this is bloomberg. paul: well, let's get over to annabelle for a check of the markets. of course we talked a lot about

the selling we have seen in equities but not everything has gone down. the u.s. dollar looking stronger than ever. annabelle: that's right. we are still back on the king dollar watch in asia and we are seeing more strength building into the dollar index. how that is playing out around the rest of the region, starting in haven bids. we saw governor kuroda from the boj pledging to stick with easing policy settings. also keeping an eye on the offshore yuan this morning breaking through the key 6.9 level for the first time in two years pretty. the korean won still sitting around the 13 year low, the biggest laggard in the asia emfx space. the aussie dollar one of the biggest laggard for the commodity linked currencies. turning to the stock space, because we are seeing secret losses -- seeing steeper losses than what we have seen and the rest of the market space. we are seeing losses in terms of the nikkei and in korea as well. both of those markets down more

than 2.5%. broadly this is very much a risk off play this morning. let's also check in on some set as we are watching in particular this morning. tech stocks is one, because take a look at where the nasdaq is this morning. a loss of more than 1.5% at the start of trade, but also a lot of losses across the board. turning to another sector, bitcoin this morning fell below $20,000. that's a key psychological level for investors. you're also seeing those stocks declining. these are bitcoin-linked companies. and finally we are still in the midst of earnings is asian -- earnings season in australia. we saw that 40% drop in profit. that is quite a big headline number but it is still the second-biggest profit ever on record. paul: that's right. $1.21 dividend as well, so not all bad news from the pure play

iron ore. we will be hearing from their ceo later on. can catch that interview at 3:15 p.m. sydney time, 1:15 p.m. in hong kong. kathleen: still ahead, an exclusive interview with joe dische, following an upbeat. next, the bank of korea keeping the door open for another outsized interest rate hike. we will have an are from the governor ahead. this is bloomberg. ♪

>> the federal open market committee's overarching focus right now is to bring inflation back down to our 2% goal. >> i think we are going to have to move them up based on my current read of the data, above 4%. and probably need to hold them they are next year. >> inflation is extremely high. sort of unimaginable. the levels we are at were unimaginable 18 months ago. >> we have to get interest rates higher to slow down demand and bring inflation back to our target. >> we get to above 3.4% by year-end, then we see. we have to let some of this play out. >> it could be over 4%. i do not think that is out of

the question. >> i have said 3.75% to 4% by the end of this year. i would like to get to that level, and sooner is better. kathleen: after jay powell's speech friday, we did see some big moves down in stocks. of course that was a number of fed officials talking about rate hikes, inflation, in jackson hole. about 15 minutes into the trading day in asia, we are going to look at how these markets are doing. looks like the nikkei is down 2.4%. that is no small move. kospi also about the same amount, 2.3%. we have the s&p asx 200, almost 1.2%. then we see the new zealand stocks, not quite the same. this jay powell speech, this sense that the federal reserve, one of the world's biggest and most powerful economies, is moving into higher rates. this is definitely feeding over into asia. it will be interesting to see how far goes. now, let's look more on the back

of korea governor, he's keeping the door open for another outsized interest rate hike. he told me at jackson hole he would join fed chair jerome powell if prices remain out of control. >> we're not exactly targeting the exchange rate itself or the interest rate gap itself is not our prime objective. but the higher interest rate in the united states will have a depreciation pressure to korea, and that depreciation will increase our inflation rate. so, i think too large an interest-rate differential not be ideal, but we have to allow the exchange rate to move and we have to focus on her own inflation rate through the direct impact of erect rate appreciation. kathleen: you said the bank of korea would reach 3% by the end of the year. you said that is reasonable.

how does that look to you now, equally reasonable, or maybe even higher? >> i think it is in line with expectations. i do not think we need to revise our projection at this moment. kathleen: if the inflation rate were to stay stubbornly above 5% next year, would you continue to opt for the more gradual hikes, or would you consider doing another 50's basis point hike? >> at this point i do not want to pre-commit, because even this uncertainty, our decision has to be databased. but if the inflation rate continues to be well above 5%, like chairman powell, then bank of korea should also prioritize price stability. paul: that is bank of korea governor speaking with kathleen at jackson hole. the world's top central bankers have delivered a unifying message on the need to curb inflation, declaring that price

pressures are here to stay and will require forceful action. let's bring in our chief asia economics correspondent enda curran for more. the message is pretty clear out of jackson hole but do we put an asterisk next to that? what about the situation in japan? enda: japan is always an asterisk when it comes to this conversation, but in general it seems the conversation that came out of jackson hole was pretty much all around the central banks have to keep raising borrowing costs even if that means further economic pain. there was an acknowledgment that economies are going to slow down. you have had top ecb officials making the point that look, pain is inevitable. none of these officials were using the recession word, but they were making clear that -- on japan, there was a standout. governor kuroda made the point that the inflation the are seeing in japan, even though it is above target, is above

inflation. he sees the steam coming out of that eventually, which is why the boj is continuing to support their economy going in the opposite direction of western peers. but the overall message was one of ongoing hawkishness. i don't think anyone can get call this a complete turning point for the central banks. kathleen: to that point, traders are always waiting for inflation to peak. some economists think it is. is it peaking, and does it matter to central banks right now if it just peaks? enda: there is a view that commodity prices may have come off the boil. oil prices have retreated, food prices have retreated. when you look at that collectively, it does suggest that goods production and goods on the shelf will at least start to cool off a little bit. but to your point that is where the agreement ends. inflation is probably still going to remain quite high for

some time. obviously there are idiosyncratic factors around the world. you only have to look at energy prices in europe to get a handle of how severe the inflation story is there. even if you agree with, say, that headline inflation is peaking or slowing down a little, that does not mean the central bank will stop raising interest rates. you heard chairman powell himself a point that he's made the mistake of pulling up too soon, and it has been a big policy error in the past. you can argue the point that some of the key indicators suggest the big prices are cooling staying but that does not mean inflation will come down quickly and it does not mean central banks will not continue to raise borrowing costs. kathleen: enda, thank you so much. i am sure you're going to be interested in what is happening in the treasury market. we are seeing the two-year note yield actually going up 3.45%, the highest yield since 2007. a very powerful signal when the

short end moves like that. that indicates they are taking it very seriously what jay powell said, and yes, they will be more rate hikes and maybe even bigger ones and they have to reprice again. now let's look at how futures are going in europe, because same thing. when we heard from hawkish jay powell on friday, we were waiting to see what would happen with the ecb, because they have been not quite as aggressive as a group and we have heard some very aggressive talk so we are showing you now the fed rate hike forecast for a six months, up to 3.6%. we wonder if it will go higher. in terms of the stock futures, down across the board. is this a surprise? of course not. 50 futures, msci europe, dax futures, all the bond markets are saying, hey, central banks are sending a strong message, we are listening, selling bonds, yields are rising. so we're going to keep following of this rest of the hour and

plenty more. plenty more to come. this is bloomberg. ♪

kathleen: falling on the heels of the big selloff in the u.s., equities on friday after jay powell delivered a very hawkish speech in jackson hole, we're seeing that asian stocks are falling on their heels. the nikkei and the kospi both down nearly 2.5%. the s&p asx 200 about 2%. then of course look at the new zealand stocks, down not as much, but they are definitely in the same column. something that is not surprising given that there is now a global central bank stance on, yes, we're going to have to raise rates. you may be leading this, the

u.s. and ecb, or you may be an asian market and washed over with us. due to year yield is up to 3.45% , a big move, very strong signal that investors are saying we get it. the fed will keep raising rates higher than we thought and we are going to reprice our positions on the short end, and that is what we are seeing on that two-year. paul: let's get a quick check of the latest business flash headlines. credit suisse is reviewing long-term plans for his business in mainland china as part of a broader strategy revamp. sources tell bloomberg top executives are meeting in singapore this week to discuss plans. some are said to have raised doubts about whether it is worth expanding the china operation. the bank is due to present a new strategy along with third quarter earnings. bloomberg has learned another morgan stanley executive has been placed on leave amid a u.s. investigation into how wall street handles big stock trades.

he's part of the desk that handles block trades. his superior was also put on leave nine months ago. authorities are overseeing the case have stepped up inquiries in recent weeks. an indian billionaire is due to deliver his highly anticipated annual address to shareholders later on monday. he has used the speech in the past to make ticket announcements. investors will be looking to insight around reliance industry's 5g rollout. listing of his telecom units and key secession plans. kathleen: let's take a look at the currency picture here as we continue to monitor asia. the yen has not moved much yet. the dollar is rising so a little weaker on the yen, a little closer to 140. of course the korean won looks like it is actually weakening as well.

it has been there 13 year low. they are suggesting they have kept the door open to higher rates, so we will see how that plays out. you can see also australia and new zealand dollar are getting weaker as well. coming up, we continue to watch the markets and look at themin depth. a whole lot more. keep it right here. this is bloomberg. ♪ millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network and most recommended wireless carrier. that's a whole lot of happy campers out there. and it's never too late to join them. get $450 off any new purchase of an eligible samsung device with xfinity mobile. or add a line to your plan today at xfinitymobile.com

to finally lose 80 pounds and keep it off with golo is amazing. i've been maintaining. the weight is gone and it's never coming back. with golo, i've not only kept off the weight but i'm happier, i'm healthier, and i have a new lease on life. golo is the only thing that will let you lose weight and keep it off. who loses 138 pounds in nine months? i did! golo's a lifestyle change and you make the change and it stays off. (soft music)

paul: we have been trading for 30 minutes now. unsurprisingly we are seeing a fair bit of selling. what is going on? annabelle: that's right. we are risk off of this morning

in asia at the start. taking a look at the equity space this morning. we are in the road for all major markets 30 minutes into the session. being led by industrials, materials, health care. i.t. is another big decliner. nasdaq futures pointing to a drop in the u.s. at the start of trade. other futures signaling declines. s&p 500 contract down around 1%. euro stocks also looking for a job of about 1.5%. it is all about this hawkish message jay powell gave us friday. the strength to give to the dollar also playing into the fx space. the korean won down around .9%. if i -- it is the biggest decliner in the asia fx space. also keeping an eye the offshore yuan breaking through the key 6.9 level for the first time in two years. that sets us up for a move to the seven level, which our markets live team points out would be extremely important for local markets given their

sensitivity to trading flows. what else we are watching, we had that red head crossing the two year yield on the treasury reaching the highest level since 2007. that is also being reflected in the debt space with sovereigns moving as well and the shorter durations. paul: all right, thanks. let's get more on markets and bring an chief risk correspondent for asia and mliv contributor, garfield reynolds. seeing a lot of selling at the moment, some repricing going on. how long do we anticipate this will go on for until markets have correctly priced in the narrative we heard from jay powell on friday? garfield: well, it could be sometime. markets cannot help themselves. they cannot help but look at what they think is going to happen with the data. they are so keen to try and pick where peak fed and other hawkishness is going to be.

there is a lot of money to be missed out on if you missed that moment. so that helps explain what went on last week, even though powell was very much expected to be hawkish. we get some payrolls data later on this week, which does not ring any alarm bells about confirming that inflation is here to stay for longer. you can see the same sort of thing, that back-and-forth occur again. as i said, markets are desperate to pick the moment when peak hawkishness has come, despite the fact that what central bankers, not just jerome powell made clear over the weekend. there is no chance of a pivot for quite some time. we need to see inflation come down a long way from where it is and be sure it is sustainable. and in particular, they need to see that demand-driven part of

the equation. powell said we understand that supply shocks are part of the equation. we cannot do anything about those. what we can touch is demand so we will keep hitting the brakes on that until we are absolutely sure there is no need to hit those breaks any harder for longer. kathleen: what a juxtaposition. because as the fed and all these central banks want to fight inflation there is an energy crisis. it's oil, natural gas, now it's electricity, electro hydropower, because there are big droughts in europe and china. you are fighting inflation when you might just be looking over your shoulder at some kind of nasty hit to your economy. garfield: well, yeah. that's part of what adds to the risks. and in particular, it's something that has been on a lot of investors' minds and will go on being in their minds.

the idea that perhaps central banks are going to do more damage than they have realized if they stay higher for longer, the way they are talking about doing. jerome powell was saying we have studied the lessons of what went on in the 1970's, when we see the mistakes that were made then. of course, in the 1970's there was not a war on europe's doorstep, there was not climate change drying up rivers and causing all the difficulties that i going on with energy prices. so, yeah, part of the difficulty for markets is that there is a disconnect in a lot of ways between what central banks are focusing on and markets perhaps looking a little more holistically. kathleen: garfield, thank you so very much. garfield reynolds there. now we want to move on to

china's covid restrictions, eating into industrial profits which fell more than 1% in the first seven months of the year. for more, let's bring in stephen engle from hong kong. we're seeing the chinese slowdown reflected in the bottom line. stephen: i think so. the industrial profits number we got over the weekend is the evidence of the waning confidence in the growth prospects in china. the latest quarterly survey of economists from bloomberg -- surveyed by bloomberg indicates the rest of this year for the full year 2022, the consensus estimate for growth is 3.5%, down from the previous survey of 3.9%. that is indicative of all the headwinds the chinese economy faces. you mentioned a couple of them. nobody zero is the big one but also the property crisis and also at least temporarily those power shortages down in the

south, which by the way, the government has indicated it has been alleviated a bit to business and industrial clients. we will talk about that more later. but essentially industrial earnings, it is cumulative year to date january to july, it fell 1.1%. that is after it rose zero point -- 0.8% following the shanghai lockdowns. but that has petered out as represented in the monthly data we have gotten whether it is industrial production, retail sales and the like. they were all down in july and industrial profits year to date fell 1.1%. but we are getting some good news in the energy space. brent crude has been up about 60% in the first half of the year compared to year ago levels. that is reflecting in the bottom line of the chinese oil giants. sinovac the latest to report very good earnings.

record first-half profit. that is despite the fact that china's oil consumption is down to about a two-year low in the first half of the year because of the lot downs and the slowdown. paul: those earnings continuing to roll in. what is on tap for the earnings front today? stephen: it is a big week obviously. representative of the chinese economy. you have citic securities, the biggest brokerage. you have the pharma sector. you have a big tech platform and apollo development among other property developers. the big one is ag bank, probably one of the biggest -- well, it is, it's one of the big four state owned banks in china. risks will persist due to mortgage boycotts we have seen as well as financial weakness at local governments, financing vehicles.

mortgage loans from stalled property projects exceeded 660 million yuan, about $96 million u.s. what we are going to try to glean from the results is just how bad of the nonperforming loans in the mortgage space and how it is performing in the bottom line. paul: all right. stephen engle there. chinese state television says the southwestern province has restored most of its power supplies. dan murtaugh joins us now from beijing. how did they pull it off? i suspect it was divine intervention? dan: the weather had a lot to do with it. you saw temperatures cool off markedly over the weekend, rainfall increased. the air conditioning demand dropped by 50% sunday from where it was a week ago. at the same time hydropower increased. that created enough left over

balance in the energy market to return supply for these factories that had been cut off for nearly two weeks. now the province is saying they will return 100% of supplies once hydropower can be increased enough to recover at all. kathleen: so is this episode, this bout of, not exactly a drought, well, it is a drought. can will be sure it is over? dan: it is not quite over, but it certainly seems like we have by far seen the worst of it. there is still a little of what they would call orderly power use going on in some of the eastern provinces. that is where they asked factories to shift their power use to nonpeak times. that will probably come to an end toys the end of the week as cooler temperatures come to china and reduce air conditioning demand further. that said, china is a major hydropower generator. it has the biggest power plant in the world.

all these reservoirs are going to take months at best to refill. so hydropower generation might be affected for the rest of the year. that will put more stress on the coal and gas markets in china and the country might have to burn through more of its fossil fuels and possibly even import more to make sure it can stay warm through the winter. kathleen: warm through the winter, that is becoming a big theme throughout the world. coming up on the show, property guru reports a 44% year on year rise in revenue. we speak exclusively to their cfo about what is next for the southeast asian property technology company. this is bloomberg. ♪

kathleen: on one real estate firm property guru last week posted a 44% year on year rise in revenue for the second quarter. the company also reiterated its full-year outlook for about 44% revenue growth driven by the strong start to the year and gross across its core markets in southeast asia. so let's discuss the company's business plans and their views on the property markets. with us now is the cfo joe dische. it is great to have you back. congratulations on the great

results. i wonder what is driving it. how much is it is demand, and how much of it can you see as a big factor in the technology itself? demand or a technology or what? joe: good morning, thank you very much for having me on again. we are really pleased with the results. 44% yearly avenue growth. we definitely saw growth across all of our segments, which is really pleasing. we also saw good results on the bottom line. so we saw positive adjusted ebita second quarter in a row. to answer your question, i think it is definitely a strong market at the moment in singapore but also the business is executing very well. we have delivered a lot of new products and services to our customers and we are delivering a lot of value. kathleen: i want to ask you because in the u.s., this big move up in fed rates, mortgage rates have just sort.

it has been a crazy, rapid move. when you look across the asian markets, rising inflation, possible interest rate hikes, how is that affecting you? how might it affect you? what might you be hunkering down for a bit? joe: at the moment there is relatively will impact, certainly in our second quarter results. it is certainly a potential headwind. as interest rates go up, inflation purchasing power is reduced. for us we have other dynamics at play. in singapore which is a very attractive place for investments and for people to work, we are definitely seeing just generally greater demand than supply. that is a major driver. across our other markets that are really strong tailwinds we have around urbanization and growth of the middle class. that often leads to more people looking for property so we are writing those longer-term tailwinds and we think that will

keep the markets relatively strong for the foreseeable future. paul: are you noticing any change in demand for people and businesses relocating from hong kong to singapore? joe: that certainly is a factor. it is a factor in a relatively small subset of properties. what you are really seeing is underlined demand, particularly on the rental side. a lot of people have their renovations or have new builds they are waiting for and with covid a lot of that construction is delayed and as a result a lot of people moved. so we saw a lot of local demand take up on the rental side as increased prices on that side. that also feeds into the local rental market. paul: where is your business heading from here? you have been vocal in the past about expanding into fintech and data analytics. how are you progressing along

those lines and and -- and can make specter here of any acquisitions down the line? joe: we are focused a lot on our day to day business. delivery of core organic growth in our markets. we also have a strong eye on businesses to move into. you mentioned fintech, we have existing businesses and some of our markets. we are rolling those out across the region which is really siding. a mortgage broker in singapore. that may well spread across the region. we are living in interesting times and it has been adjustments to valuations and that stimulated quite a lot of inbound interest in terms of m&a opportunities for us. so we're eying a number of those at the moment and we have been doing so for a while. and we hope to affect m&a in the near future. paul: is your focus on expanding

your market share in southeast asia or are you looking to break new ground in new markets as well? joe: our focus is on our existing five markets breed we are really lucky to operate in one of the most exciting markets in southeast asia, the ones with potential for real scale. our strategy really is to go deeper. deeper into the transactions. deeper into fintech, also things like data. there are other areas like home services and velcro software that we are relatively early in speaking with developers on moving from off-line to online. there are plenty of good avenues for growth and many of these things have been done already and more established western markets. paul: all right. joe dische, property guru cfo, thank you so much for joining us. let's get a check at how markets are tracking at the moment. let's go to annabelle.

annabelle: let's take a look at the tech stock space this morning because it is one of the biggest laggards. particularly korea. we can see the kosdaq slumping, outpacing the losses we have seen for the broader kospi index. really an indication of concerns about what we heard from jay powell at jackson hole that high rates. taiwan is closely correlated to what we see in korea. both of those have a very high correlation from the u.s. and a very heavy tech waiting. a drop of nearly 3% of them are -- at the open. we saw the two year yield reaching its highest since 2007. also watching the 10 year. not as big a move for the shorter duration. more rate sensitive yields but still some wall street worry warts are bracing for it to hit 3.5%. paul: all right.

earnings from chinese firms have shown resilience under harsh lockdowns. traders zeroing in on pockets of disappointment. we are going to have a little more on that as we count down to the china open. this is bloomberg. ♪

kathleen: traders are zeroing in

on pockets of disappointment and dumping some chinese stocks even after decent earnings reports. for more let's bring in our chief markets china correspondent sofia horta e costa. what is the dynamic here? sofia: it is very much a travel and arrive kind of situation where if you have a company that reports better-than-expected results people try and focus on what is actually negative here, what is the picture going forward. are margins narrowing? that has been the trend this earnings season. the bar to leap over for companies has been set so, so, so high. because markets are nervous. see the moves today in markets across asia. it is difficult operating environment but also a difficult environment for traders. so the news needs to be extremely good for shareholders to start buying these shares again. kathleen: how does this move forward? what do you expect and what do investors expect? sofia: any kind of clarity on

what the picture is looking forward. i think that is really the problem here. companies and corporate in china, even households and the consumer, the uncertainty is so prevalent that you really do not know. if your company did well this quarter, will it continue to do well? that is the key, the outlook. because there is so much uncertainty in the economy and you do not know when the consumer will start spending again, for investors and for companies, that really is the key. what is the outlook and how can i invest, how can i plan for my capex? ceo's are having a very difficult time there. paul: is there a sense that more stimulus is inevitable from policymakers? sofia: more stimulus is inevitable. it is not necessarily more as in more money but it is more targeted, more specific. there were some state media reports this morning saying that

we need more clarity on what exactly the support will be. i ran an experiment. i just looked at what the market reaction was after 26 pledges of support from cases, that big mart coordinated push. any market -- and the market has only reacted really positively on four occasions. what we are looking for on the market side is clarity, precision and more targeted measures. more stimulus is necessary but when you have an economy that is still locked down, dynamic zero covid is still the predominant narrative going forward. that really did not make the transmission mechanism. so when stimulus actually works, that makes it is difficult sure for investors into companies. paul: sofia horta e costa, thank you so much for that. let's take a look at how we are tracking after a couple hours

trade in the asia-pacific. it is all about that reaction to jay powell's speech at jackson hole. we saw a lot of selling for u.s. markets at the end of the week. so this is the first chance for the asia-pacific markets to react, and react they are. the nikkei weaker by 2.7%. the kospi following with a two point -- 2.75 decline. declines all fairly broad-based as well here's a look at action in the bond market. the reaction to jay powell's speech has been somewhat more -- not all who -- not a huge amount of change to the u.s. ten-year. just yields creeping up by a few basis points, 3.0 874 on the 10-year. kathleen: it is as if the equities were just not ready for this powell speech but the bonds were like yeah, we already got it. let's look at the currency market you can see the dollar

has been stronger and the yen is a bit weaker. it is getting a little weaker but not a big move yet. and of course the won, you can see that. 13 year low. looks like it is continue to weaken. accelerating a little bit. and the aussie dollar in new zealand also bragging as well. the central bank messages having a big impact. up next, previewing country garden earnings. and that is it for daybreak asia. markets coverage continues so keep it here. this is bloomberg. ♪

pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited. just $30 a line.

yvonne: welcome to bloomberg markets china open. i'm yvonne man. our top stories, global equity markets fall. the u.s.