the world of politics and the world of business. balance of power with david westin. weekdays. this is bloomberg. you are watching daybreak: asia.

from new york, sydney, and hong kong we are counting down to asia's major market opens. expectations for another hike. snapping a four day losing streak. china's covid zero policy plunges another major city into lockdown. hong kong is targeting another quarantine. >> south korea cpi crossing the bloomberg softer than expected seeing a contraction of .1%. expectations were a .3% gain and a pullback from the .5% move in the previous months. august year on year cpi 5.7%, shy of expectations of 6.1% and

a fall back from the 6.3% in july. in july for .1%, more or less in line with expectations a little bit of fun softening from the previous month. we did hear from the governor at jackson hole saying they could raise rates again to tame inflation and are not likely to stop raising rates before the fed. more pressure on the won to depreciate. the impact on the wind has been dire. we have seen a ballooning of the trade deficit. inflationary pressures are really playing out when it comes to cost pressures, imports in particular. we see south korean inflation easing more than expected in august potentially signaling that fed tightening could be starting to go during price pressures. >> the head of the bank of korea

could be very happy to see numbers like that. definitely good news. in the u.s., the four day losing streak in the u.s. stock market of the jobs report friday. these are numbers that could help determine the mover for a 75 basis point rate hike from the fed or 50. right now you can see the s&p up. the nasdaq down. there is no reason to make a big move apparently until we get the number tomorrow. treasury markets were a more dramatic mover. the two-year now three point 55%. the 10 europe 10 basis points to 3.29%. bond yields continue to rise. selloffs in bonds continue to push the dollar to another record. now oil, more movement there. a little weaker than the close.

now aggressive fed rate hikes and the central bank generally hiking rates has been in the background for a while. the lockdown in china's fourth biggest city is making people worry about noble demand. will it weaken more with these things in the background? >> the weakening economic backdrop continues to lend strength to the dollar. we are starting to look a little stretched here. many are at or above. the dollar index at a record high. the pound reaching the key 115 level. the kiwi, the aussie, the japanese yen region 140. the korean won at a 14 year low. the chinese yuan on track for a four-week side. the dollar is looking a little extended here. over the medium term looking

strong. the jobs report is the key want to watch later today. and in the u.s. friday. this could lead to a short pullback. there is expectation for the dollar to move higher. let's look at trading in asia. dollars strength ways on the equity picture in asia. futures, japan unchanged, japan slightly higher, new zealand online to the downside. we are on track for the biggest slide in stocks since june. you also get sometimes a little bit of dip buying. >> for the latest in markets let's bring in bloomberg's chief rate correspondence for asia garfield reynolds. garfield, when you look at how this is stacking up, the currency moves seeing very big, i think, in all asset classes now. i am always watching this. what you think about this set up for tomorrow, actually, friday,

in terms of the jobs report? >> well, i think the jobs report will definitely have a very strong impact and potentially a volatile impact. we have strong expectations percolating through the market. that jobs numbers will come in strong. if they come in week, this may lead to some bad news for markets. the said is -- the fed is perhaps less likely to hike 75 basis points. it will be very key what happens with wages here. if we have fewer jobs than expected added but wages jumped more than expected, that would probably be in many ways the worst possible situation because the fed would be looking at that and seeing it is less likely that jobs -- the funds rate is still low.

we have wages picking up. here comes another wage price spiral. we have to be harsh. there is also the way that neel kashkari in particular but the fed in general welcomed the selloff following jackson hole. that might well trap any relief rallies you get in the face of a week jobs report because the fed might still feel it has to slap that down. it does not want financial markets getting too heavy until it is sure inflation is under control. on the other, if there is strong jobs data that is expected, we could see markets move to fully price in a 75 basis point hike. just under 70% odds now. there is a fair bit of scope for that. we might see a 3.5% level for the two year yield.

the fed, the last two sessions, right around 3.5%. that would be an immediate obvious metric to watch. if we get a strong jobs report, i would be very interesting to see what goes on with the yield curve and rather that goes back to inverting further, or continues to pare back conversion. >> does that mean we are likely to see federal upside for treasury yields regardless of the nuances of the report? >> i think that is what is percolating through the market. there is perhaps a belated appreciation that the federal reserve might well be interested not just in seeing its rate go up, but in seeing yields in the economy go up. you know, it is hard to restrain economic activity, to repress it.

that's what they want to do. they see that as the only way they can curb inflation. it's hard to do that if the fed rate is going up, but, the 10 year yield is not going up and 30 year yields aren't going up too much. 30 year yields are key to activity in the real economy. it's very hard to see this -- if the sort of slowdown in the economy they want, unless you get that. we had raphael bostic earlier today talking about how we need to get the economy slowing down. the economy is too strong. given what is going on with inflation. so, that has to mean higher yields. that is why the fed has been so hawkish. that is why they are talking about a higher terminal rate. that is why they are talking about, we don't expect to cut rates next year. all of those are not-so-subtle measures to the bond market that yields are too low cost the curve.

>> so, garfield, when we get beyond the yield curve, there is a broader question i think of equity markets, how asia is trading right now. the fed is really big. jobs report is really big. but the lockdown in china's biggest city is pretty big too. the japanese yen is very big. how does that look now? >> well, that is one of the difficulties. it's hard to understate how important the fed is. it is also getting some help, as it were, in spreading pain across assets. the situation with china. there is another lockdown. they are already struggling to turn the economy around. they are facing demographic challenges and also difficulties of how their prescriptions for

how they think their economy should look, how that gels with businesses trying to get on with doing business. so, china is a weight on the global economy. it is also a potential source of inflation by a supply shortage of china is producing less. that's not great for the global economy. then you have japan, another pressure point. we had earlier this year the japanese bond market go through a very wild ride where the was tumbling. governor kuroda had to tamp that down but that could break out again. that would add fresh volatility to what is already a very fragile economy. >> bloomberg's chief rates correspondent for asian market contributor garfield reynolds there. vonnie quinn has the first word headlines. >> president joe biden is do to make a primetime address on what

the white house has billed as a battle for the some of the nation. the president has ramped up attacks on republicans and trump supporters, accusing them of seeking to undermine democratic institutions and elections. you can catch of the speech live in the next hour on bloomberg tv at 8:00 p.m. new york time, it :00 a.m. hong kong time -- 8:00 a.m. hong kong time. hong kong is targeting an end to hotel quarantine in november ahead of a summit of bankers and international loading compositions. they want to signal hong kong is back in business despite the objections of some in the administration. russia is considering plans to buy as many as $70 billion in chinese he and friendly currencies this year -- chinese

yuan another friendly currencies this year. the panel will later shift to a longer term strategy of selling the yuan's to fund investment. guest point capital cofounder neil phillips is threatened to ripple across the hedge fund industry. another firm suspended those who previously worked with him. on wall street and in london phillips was associated with some of the biggest names in hedge funds. global news 24 hours a day on air and bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. >> ahead, the former usw dairy -- u.s. deputy assistant secretary joel rubin joined us. and, a sensitive investment position and overweight strategy

when it comes to india, indonesia, and thailand. this is bloomberg.

you will you you you

>> let's look at u.s. futures. a bullish reversal late in the session. we had positive sentiment going into the friday jobs report pushing through. asian stocks look set for a cautious open with the big dollar jump and u.s. futures looking a little bit habit as well.

we are reversing some positivity we saw earlier. s&p futures looking flat at the moment. the tech space excluding semiconductors. down just about. creating downside pressure on the semiconductor sector. our next guest is expecting volatility to continue. they are offensively positioned. they are offensively positioned. it's always great to have you with us. it does not like there seem like we have had after all. we will try to get him back for

is for interesting views on how he is positioning in this market. views on how he is positioning in this market. coming up, we lookcoming up, wee chipmaker boycott>> let's get bt

the head of aipac equity

research. great to have you with us talking about defensive positioning given the volatility on certain asian equities. i know you have interesting over weights including india. what does your strategy look like at the moment? lax -- >> we are mostly concentrated in india and southeast asia, indonesia and thailand. these are our best performing markets. shares have been very troubled by recessionary concerns in the market. and, domestic issues in china in terms of regulatory pressures with the covid zero strategy. with those concerns they will

continue longer maybe until the end of this year. we are hopeful that domestic issues will be sorted out. but for now, we still remain focused on india and southeast asia. we are definitely growing in terms of economic revival and corporate there. i think that is the way to play asia for now, it seems. >> one of the issues will be how much further strength we see of the dollar because of the impact on risk sentiment and risk assets particularly in asia. look at this chart. the dollar index at record highs. the overall dollar index at a 20 year high. does that impact the way you are

looking at positioning? >> the dollar strength necessarily leads to funds moving away from emerging markets, particularly asian emerging markets. having said that, i think that emerging asian currencies have not done so badly against the dollar. anywhere between 3% to 7% this year. we think in the near term, pressure on the dollar is likely to continue. not only has the fed risen rate hikes, they are getting more aggressive in terms of cutie. --qt. so, i think the best way for now would be to focus on strong cash and avoid companies with u.s. dollar debt and focus on companies with revenues that

could be a paradoxical gainer in the present. there are many such countries in the asian region. -- companies in the asian region. those companies are predominantly from tech. >> you downgraded from what, a buy to neutral in china in may. you were ahead of the curve looking at the property crisis and covid zero hangs over everything in china. where are you now? were you see china becoming investment resilient? >> -- becoming un-investable? >> i would not use the word on investable. there are pockets in chest of -- in china that are investable now. for example, policy beneficiaries like the ev supply chain.

some select consumer discretionary's and staples have strong pricing power and strong dominance market position and some financials have very high dividend yields. dividend yield is a running theme that we are focusing on in our entire occasion. that said, chinese equity performance has been hampered by both regulatory pressures on various sectors and covid zero policies that have decimated domestic consumption. you know, those two are the milestones we are looking at. we are looking at easing of regulatory pressures. i look at u.s. negotiations, or delisting of the company, that's one example. covid zero restrictions, i think we have to wait for that, at least late october until mid-november.

those are important milestones we are looking out for getting more constructive. >> it is interesting that dividend payers around the world are attracted to many investors. thank you manishi raychaudhuri at bnp paribas. suggesting the company is sidestepping demand function of other suppliers such as nvidia. su keenan is back. >> the u.s. government is cracking down impacting nvidia and amv but not broadcom. it gave not only as strong forecast for global sales but beat third quarter profit estimates handily raising the stock after hours. a big listing on the screen now. the company is reducing fears that spending on internet is slowing. the company saw solid demand in the fourth quarter.

continued investment from customers and data centers. it's a very different story from the demand slump from pcs and phones as consumers price in inflation. the semiconductor index has declined. broadcom among the world's biggest tech companies. that makes it a bellwether. that is what makes this particular news welcome. earlier in the u.s. session nvidia took a lot of tears down in the trading session. it warned about exports of artificial intelligence in china could hurt in the range of hundreds of millions of dollars. >> let's look on the fx front. huge dollar strength will drive the fx future across asia today.

manishi raychaudhuri was just talking about how that will impact flows away from emerging markets. we are seeing flattening when it comes to the dollar index at a record high. at about a 20 year high. the aussie dollar unchanged. eight since there. a little bit of risk going into the key jobs report friday in the u.s.. we are watching dollars/you want as well as -- dollars/you on -- dollars/yuan

♪ funny: -- vonnie: the atlanta

fed president says the company to cool inflation is far from complete and regulators of work to do before the 2% target. he said curbing demand naturally runs the risk of slowing the economy and that a soft landing will be hard. two u.s. senators are using legislation aimed at shell companies listed in the u.s. by china. it would crack down on variable interest on offshore companies that maintain chinese business. under the plan, chinese companies would have to use new stock symbols with ropers providing warning labels to investors. pakistan's former prime minister imran bail -- imran khan has been granted bail in his terrorism case. the charges relate to a speech gave last month in which he allegedly threatened a judge. khan's rallying support for

elections that are not due until next year. the renault's founder elizabeth holmes has had her appeal thrown out by a california court in a preliminary ruling. lawyers were trying to get her fraud conviction overturned by highlighting her accomplishments, but the judge upheld the guilty verdict reached by a verdict -- reached by a jury in january. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ kathleen: let's -- haidi: let's look at stocks we are watching. >> the nikkei futures contract just came online in singapore. asx 200 futures as well. it indicates before the open that we could be taking advantage of the late wall street rally.

the u.s. jobs number is very front and center and what we are seeing in the dollar as well because that indexes no moving to a record high. we are also keeping an ion how that moves the yen passed the key, psychological 140 level. it does spark talk of intervention from government officials. we have not seen that since 1998, the financial crisis. it is a high-stakes move. but the other factor that is going to be driving sentiment for trading in asia today is what we are hearing from china, more lockdowns. stephen engle will have details, but they are moves in the metals space with abdomen and slumping, copper down for the fifth consecutive monthly loss, some big mining companies we are going to be watching at the open in sydney and tokyo. kathleen: the 21 million residents of chengdu in china are now in lockdown. they only got a few hours warning by local authorities,

sparking panic buying amid fears of a lengthy shutdown. let's ring in chief north asia correspondent stephen engle in hong kong, watching this very closely. what are you hearing from chengdu? is anything like shanghai? stephen: that is the fear, that it could turn into a shanghai-like lockdown. when shanghai went into lockdown this year, the authorities said it would be eight days long that there would be mass testing. the virus spread. there were flareups throughout the city ended less than the equivalent of two months, with pockets of lockdowns and scaled relaxation. but it was misery for the 25 million residents plus of shanghai. now, chengdu is the biggest mega city after shanghai to face lockdown this year. four megacities in china have been in lockdown this year. there are 17 megacities with 10

million plus populations. we already had a lockdown in shenzhen, another city, shanghai and now chengdu and its 21 million residents. it is the home of the pandas, for one, but lots of manufacturing. in the automobile space, volkswagen, toyota, volvo all have factories there. it is also a big parts supplier to the automobile industry, as well as technology, part of foxconn and an apple supplier has facilities there. so, the city doesn't contribute a lot to national gdp, about 1.7%. but it is the sentiment factor here, another mega city going into lockdown. that really indicates that xi jinping's covid zero strategy is showing no sign of abating. even though the city has only 900 cases in a city of 21 million over the last 10 days. kathleen: some signs --

haidi: some signs of abatement when it comes to covid restrictions, we are hearing they could wrap -- could scrap quarantines. stephen: i will believe it when i see it. john lee did reduce some quarantines from 17 days to three days and four days of monitoring at home. but this is more critical for the city. singapore has completely opened up. japan yesterday announced they are going to be opening further. so competitors tours -- competitors to the regional hub status of hong kong aren't a threat and john lee understands that. he has invited global bankers to a big financial summit november 1 as well as the rugby seven, back on for november 3 and november 4. sources tell us the government is leaning towards removing hotel foreign genes for all arrivals in november, i would

assume before that, so those people can come. but there are said to be debates within the government, especially health officials who are warning and they want more restrictions because the case is have risen. the numbers yesterday were more than 10,000 a day. but the government is is all gas is also saying that is within expectations. it is not a crisis now, but any relaxation of the hotel quarantines will be contingent on deaths and numbers. let's hear from john lee directly when he was asked about scrapping of the quarantine. >> it was always my intention in the government's intention to allow maximum connectivity with the world. as the number of cases come down, there will be more room to do extra things. stephen: yeah, i will believe it when i see it. and one last sign of the pending easing of the quarantine -- hong

kong airport has conducted stress tests, increasing the number of passengers on a simulated basis to prepare for any surge in passengers. that is a good sign because cathay pacific was down to 2% capacity, now 12% capacity and planning to go up to 25% capacity by the end of the year. the airport is a wasteland right now, so those stress tests will be useful if there is a surge in incoming passengers. haidi: chief north asia correspondent stephen engle. they yen has weakened -- the yen has weakened to the key psychological level of 140. let's bring in bloomberg's mliv strategist sally quinn. there is a lot of dollar strength we are seeing at the moment. is it temporary are likely to continue? >> strength is likely to

continue. further and continued fed response to u.s. inflation pressure, this will enhance diversions with japan. and in this light, any threat of intervention are unlikely to be credible. in addition, there is no strong reason for boj to change its monetary policy other than the cost-of-living shock. kathleen: what response do you expect? a few months ago, when the dollar-yen was rising rapidly, breaking through all cons of levels, bank of japan was intervening every day with bond purchases. will they do that again and will it be effective? simon: most definitely they will continue to intervene in the market. we saw signs of that yesterday,

and that is likely to continue. and they are likely to be successful in controlling the bond market. unfortunately, that leaves it to the ministry of finance to do something about fx. but it is not credible for them to say anything significant at this point because this is really driven by relative yields. yesterday, we did see a slight harshening of the language of the should be further intervention rhetoric today. but i don't think it is likely going to presage imminent intervention. it wouldn't be credible at this point. kathleen: bloomberg's mliv strategist simon flint. coming up president biden's expected speech to say this is

bloomberg. ♪ this is bloomberg. ♪ donald trump supporters pose a threat to democracy.

♪ haidi: president joe biden is set to use a primetime address to argue donald trump supporters pose a threat to u.s. democracy. the speech will calm after a federal judge declined to rule on trump's request for a third party to review classified documents seized from his home.

white house reporter jolene fabian joins us, interesting timing to make this a primetime speech. it comes with risks if history is any guide. jarden: -- jordan: the white house sees this as an opportunity to set the stage for the midterm elections and change the narrative of the contest from a referendum on joe biden and the economy into a choice between powerful political and cultural issues like democracy, abortion rights and voting rights. democrats believe that is their best chance to hold the house and senate. so, the senate is -- the president is going to deliver speech tonight we expect will go hard at republicans. the risk is that, you know, joe biden campaigned as a uniter and if he goes too far, maybe that message could turn off independent voters and people he needs to keep the majority in

november. kathleen: with this approach, who is the white house trying to attract? we can assume there are democrats will support trump and always will and republicans on the other side who think he is great, and mostly independents voters in the middle who have to be persuaded? jordan: it seems like the president is going to be talking to the democratic base. midterm elections of lower turnout than presidential elections. and the way parties have traditionally turned out there voters is by stoking their anger. by going hard after donald trump and the maga republicans and invoking january 6 and perhaps even the fbi search that just happened at donald trump's resort, that could yet democrats fired up to vote in november, and using the turnout on his

side without necessarily trying to persuade people on the fence or people in the middle. kathleen: white house reporter jordan fabian, thank you for something the stage for our next guest, the former assistant deputy secretary and cash deputy secretary -- the former deputy secretary of state who served in the obama and bush administrations. is this the kicking off of the midterm election? and what does it tell us democrats are going to push hard on to get a midterm success in terms of control of the house and senate? >> you are right on in your assessment. this issue of american democracy speaks to a wide swath of the

public, to the middle. president biden is going to appeal to patriotism, our sense of morality as americans who stand for democracy and the will of the people is what determines the future of the country. and he is going to try to kick out of that circle the maga republicans who are a threat to democracy. it is a movement that has been building and it peaked during the january 6 insurrection. interestingly, many if not all of the witnesses practically at the january 6 hearings were republicans. that is the kind of people and kind of voices he is going to try to attract. -- votes he's going to try to attac -- going to try to attract. kathleen: is it wise for the president to call republicans set fascist's? is it going to offend some americans? joel -- call republicans

fascists? is it going to offend some americans? joel: calling for violence against public speak -- public figures, calling for violence against dr. fauci, raleigh for violence against political opponents, that is coming from a specific order of the american body politic. that is something large swaths of americans are opposed to. the number one issue in voters' minds is democracy, it is ahead of bread and butter issues. president biden chose to run a 2019 against this kind of threat and he understands the american people are focused on it right now. haidi: is there a chance of confirmation bias? huge amounts of the population are outraged by these threats toward democracy and by roe v. wade, but households are struggling when it comes to inflation and interest rates, is

this the right time? it feels like the president feels like this is the right time. joel: this is the theme for today without a doubt. he is in philadelphia, the home of the american constitution but it is not going to be a singular campaign. democrats are arguing that the economy is strong and rooms of employment levels, that there have been major a compliments -- have been major accomplishments helping a broad swath of the american people and you look on the other side and they want to relitigate 2020. president trump today said he would pardon all the people who were in the insurrection attacking the capitol. that is his vision for america. that is a risk president biden appears willing to take. haidi: since the claiming his

candidacy, some say the president has laid it safe. is this a time where he needs to take risk? joe: yeah, he has been sticking to script and it is interesting to see this metamorphosis of joe biden. it is biden as a powerhouse figure now as opposed to the attempt to portray him as some sort of week leader. he is aggressive now on the trail, but with a twinkle in his eye. the american people like that. they want to see a fighter, but don't want to see someone who is me. he is really hitting his stride with that. and he is speaking to a broad swath of people who want someone to really fight for them. we are coming off of three years of the pandemic, hopefully, and people are frustrated and joe biden is baking to that end also laying out a vision of rogue rams and policies as opposed to resentment for field elections.

kathleen: kevin mccarthy, house minority leader, is going to give the republican side and they are going to hit inflation, rising crime. will president biden address that or avoid it tonight? joel: the president is going to point to changes in the economy on his watch -- record low unemployment, significant amounts of investments room appropriations bills that in many instances were bipartisan. and kevin mccarthy is right to try to point out the weak spots. the problem for mccarthy's that inflation is going down and gas prices are going down at the exact time he wants them to stay up. the president is going to speak to that trend, adding on the programs we discussed and then framing it as a choice for the future. do americans want to be told by our supreme court what we can do? do women want to be told what to do with their body by the supreme court?

that is on the ballot right now at the centrist voters, independents, i signing up and record levels. in pennsylvania itself, young women under age 25 in record numbers are registering to vote and they are up facing democrats and republicans, 4-1 of the new registrants for women. this is a moment when the american people exercise their vote. if we use our democracy, you are going to see a significant impact that is what president aydin is talking about. kathleen: where do you find pockets of weakness in the democratic party? a significant number of latin voters in the last election were moving toward republicans, so some people might say this is the party of entrepreneurs, small businesses, a chance to work your way up the ladder. do you see any vulnerabilities

for democrats going into the mentors? joel: significant vulnerabilities. first, according to history, a first-term president traditionally loses seats in congress to the opposition already. redistricting strengthened the chances for republicans in certain districts. even recent student loan forgiveness was extraordinarily popular among latino voters. so, there are weaknesses and are going to be issues president biden is going to have to continue to push against, and the inflation argument seems that one republic sends seems the one that republicans are going to rely on the most. but democrats that the winds are in their sales and the base has been mobilized and they are trying to get people to recognize that if you vote for republicans in this election, you are going to be helping

president trump. haidi: we are minutes away from the speech. is it more effective for the president to mount a positive defense of democracy rather than a critique of his opponents? joel: joe biden is a patriot. he has been a public servant for five decades, serving in the senate. i was a staffer in the senate when he was there, i served in the obama administration when he was vice president. he is an american first. and he is going to speak to the american people and he is going to have a tone of optimism. that is his nature. but by dissecting the problems facing democracy right now, he's going to be speaking from constitution hall, where ben franklin famously said after the constitution was rectified that it is a republic for as long as we can keep it. that is where president biden is

going to go tonight. haidi: joel rubin, former assistant deputy secretary of state. catch president biden's speech here on bloomberg tv at 8:00 p.m. in new york. this is bloomberg. ♪

♪ haidi: let's look at stocks we

will be watching when trade opens in australia, japan and korea. asian ships are in focus, samsung tokyo on watch after worldcom, which supplies tech companies, gave a strong, fourth-quarter sales forecast. in the next hour of debris, president hyden's live tv address from philadelphia, plus instant reaction and analysis. what it could mean going into the november midterm elections. the market opens are almost upon us, this is bloomberg. ♪

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♪ haidi: this is "daybreak asia."

we are waiting for president biden's speech in philadelphia and sessions here in asia, waiting for the opens. his speech expected to champion u.s. democracy in the protection of the u.s. constitution and is expected to mount a positive defense of the constitution and u.s. democracy. there is concern as to how this is going to be perceived among supporters and opponents alike, but it is telling that he is delivering the speech from philadelphia, home to the liberty bell as well as the sight of the signing of the u.s. constitution. you can see come on your screens, independence national historical park. kathleen: it is going to be a defense of democracy and a harsh attack on republicans, no doubt. lumping all republicans into the

trump supporters they see as supporting the january 6 interim -- january 6 insurrection and more. is there risk? what about a positive message? this is affected to be a message that doesn't pull out and is a kickoff, people think, to the midterm elections, with the idea that this is going to be a central park of the democratic strategy and message, to keep control of the house and senate. they are going to go at it hard on abortion rights, and issue they will take against many republicans running for office, prescription drugs, many things on the agenda. inflation, we just heard a former deputy secretary of state, joel rubin, talking about inflation coming down. but not entirely. we can see the doors opening, so it looks like joe biden is about to enter and start the speech.

haidi: we have seen gasoline prices coming down, giving the president a window of opportunity before the battleground is set going into those november midterm elections. pennsylvania is a battleground state, as well as more midterm battlegrounds to come going into labor day holiday. he's returning to pennsylvania, ohio as well. in terms of his approval ratings, we have seen more energy and positive support. and recent wins. a gallup poll has found 40% of americans approve of his leadership. that is up from 38%. kathleen: there is first lady jill biden. dr. biden, a very popular first lady. joe biden, walked into the stage

with the honor guard saluting him and the music playing. here comes the speech we are all waiting to hear. ["hail to the chief" playing] ♪ kathleen: it is being billed as about 25 minutes, enough time to get out the message encz enough to keep it tight. this is where we are officially getting ready for the midterm elections. haidi: we have really seen his recent speeches give a hint, presenting himself as the centrist alternative. president biden: have a seat, thank you. i speak to you tonight from sacred ground in america -- independence hall in philadelphia, pennsylvania. this is where america made its declaration of independence to the world more than two

centuries ago with an idea unique among nations -- that in america, we are all created equal. this is where the united states constitution was written and debated. this is where we set in motion the most extraordinary experiment of self-government the world has ever known, with three simple words -- we the people. we the people. these documents and the ideas they embody, of equality and democracy, are the rock upon which this nation is bill -- is built. they are how we became the greatest nation on earth. they are why, for more than two centuries, america has been a beacon to the world. about as i stand here tonight,

equality and democracy are under assault. we would do ourselves no favor to pretend otherwise because tonight, i have come to this place where it all began to speak as plainly as i can to the nation about the threats we face, about the power we have in our own hands, and about the incredible future -- have in our own hands to meet these threats, and about the incredible usurer we face if we choose it. we the people are the true heirs of the american experiment that began more than two centuries ago. we the people have burning inside each of us the flame of liberty that was lit here at independence hall, the flame that lit our way through civil

war, suffrage, great depression, world wars, civil rights. that sacred flame still burns now, in our time, as we build an american that is -- in america that is more prosperous, free and just. that is the work of my presidency, a nation i believe in with my whole soul. but first, we must be honest with each other and with ourselves. too much of what is happening in our country today is not normal. donald trump and the maga republicans represent and extremism that threatens the very foundations of our republic. [applause] and i want to be very clear, very clear up front -- not every

republican, not even the majority of republicans are maga republicans. not every republican embraces their extreme ideology. i know, because i have been able to work with these same, saying republicans. but there is no question the republican party today is dominated, driven and the maga republicans. and that is a threat to this country. these are hard things, but i am an american president, not a president of rent america, blue america, but of all america. -- red america, blue america, but all of america. end it is my duty to tell you the truth, no matter how painful. and here is what is true --maga do not respect the constitution. they do not believe in the rule

of law. they do not recognize the will of the people. they refused to accept the results of a free election. and they are working right now, as i speak, in state after state to give power to decide elections in america took partisans and cronies, empowering election deniers to undermine democracy itself. maga forces are determined to take this country backwards, backwards to an america where there is no right to choose, no right to privacy, no right to contraception, no right to marry who you love. they promote authoritarian leaders and fan the flames of political violence that are a threat to our personal rights and the pursuit of justice, to the rule of law and to the very soul of this country. they look at the mob that stormed the united states capitol january 6, brutally

attacking law enforcement, not as insurrectionists to waste a dagger at the throat of our democracy, but they look at them as patriots. and they see their maga failure to stop a peaceful transfer of power after the 2020 election for preparation for the 2022 and 2020 for elections. they tried everything last time to nullify the votes of 81 million people. this time, they are determined to succeed in thwarting the will of the people. that is why, with respect to conservatives like federal circuit court judge michael lou tague, who has called trump and maga republicans a clear and present danger to our democracy. while the threat to american

democracy israel, i want to say it as clearly as we can -- we are not powerless in the face of these threats. we are not bystanders in this ongoing attack on democracy. there are far more americans, far more americans from every background and belief, who reject the extreme maga ideology than those who accept it. [applause] folks, it was it -- it is within our power, within our hands, yours and mine, to stop the assault on american democracy. america is at an inflection point, one of those moments that determine the shape of everything that is to come after. and now, america must choose to move forward or to move backwards, to build a future or obsess about the past, to be a

nation of hope and unity and optimism or a nation of fear, division and of darkness. maga have made their choice. they embrace anger. they thrive on chaos. they live not in the light of truth, but in the shadow of lies. but together, we can choose a different path. we can choose a better path forward to the future, a future of possibility, a future to build and dream and hope. we are on that path, moving ahead. i know this nation. i know you, the american people. i know your courage, i know your hearts, and i know our history. this is a nation that honors our constitution. we do not reject it. [applause] this is a nation that believes

in the rule of law. we do not repudiate it. this is a nation that respects free and fair elections. we honor the will of the people. [applause] we do not deny it. [applause] and this is a nation that rejects violence as a political tool. we do not encourage violence. we are still in america believes in honesty and decency and respect for others. patriotism, liberty, justice, hope, we are still at our core a democracy. [applause] and yet history tells us that blind loyalty to a single leader and the willingness to engage in political violence is fatal to democracy. foray long time -- four a long time, we told ourselves american democracy is guaranteed. but it is not.

we have to defend it, protect it, stand up for it, each and every one of us. that is why tonight, i am asking our nation to come together and unite behind the single purpose of defending our democracy, regardless of your ideology. [applause] we are all called by duty and conscience to confront extremists who put their own pursuit of power above all else. democrats, independents, mainstream republicans must be stronger and more committed to saving american democracy than maga are at destroying american democracy. we do people will not let anyone or anything terrace apart -- anything care us apart. the dangers around us, we cannot

allow them to prevail. more and more we are here you that violence is an acceptable political to lou in our country. it is not. it can never be an acceptable to lou. so, i want to say this plain and simple -- there is no place for political violence in america. period. none. ever. [applause] we saw law enforcement virtually attacked on january 6. we have seen election officials, bold workers from both parties, volunteers subject to intimidation and death threats. can you believe it? fbi agent just doing their job as directed, facing threats to their own lives from their own fellow citizens. on top of that, there are public figures today, yesterday and the day before predicting and all

but calling for mass violence and rioting in the streets. this is inflammatory, dangerous, against the rule of law and we the people must say, this is not who we are. [applause] ladies and gentlemen, we can't be pro-insurrectionists and pro-american. they are incompatible. we can't allow violence to be normalized in this country. it is wrong. we have to reject political violence with all the moral clarity and conviction this nation can muster. now. we cannot let the integrity of our elections be undermined, because that is the path to chaos. i know that politics can be fierce and nasty in america. i get it read i believe in the

give-and-take of politics, disagreement, debate and disse nt. we aren't big, complicated country, but democracy endures only if we the people respect the guardrails of the republic. only if we the people respect the results of free and fair elections. only if we the people see politics not as total war, but mediation of our differences. [applause] democracy cannot survive when one side believes there are only two outcomes to an election, either they wean or they were cheated. and that is where the maga republicans are today. [applause] they don't understand what every patriotic american knows -- you can't love your country only when you win. it is fundamental. [applause]

american democracy only works if we choose to respect the rule of law and the institutions that were set up in this chamber behind me, only if we respect our legitimate political differences. i will not stand by and watch the will of the american people be overturned by wild conspiracy theories and evidence-free claims of rod. i will not watch elections in this country be stolen by people who simply refused to accept that they lost -- refuse to accept that they lost. [applause] i will not stand by and watch the most fundamental reading, the freedom to vote and have your vote counted, be taken from you and the american people. [applause] as your president, i will defend

your democracy with every fiber in my being. and i am asking every american to join me. [applause] throughout upward history, america has often made the greatest progress coming out of some of our darkest moments, like you are hearing on that bullhorn. we can and must do that again, and we are. maga republicans look at america and see carnage and darkness and despair. they spread fear and lies, lies told for profit and power. i see a different america, and america with an unlimited future, and america that is about to take off. i hope you see it as well. just look around. i believe we can lift america from did apps of covid to passing the largest economic package since franklin d roosevelt and today, america's

economy is faster and stronger than any other advanced nation of the world. we have more to go. [applause] we can build a better america. we passed the biggest infrastructure investment is president dwight d. eisenhower and are now embarked on a decade of rebuilding roads, bridges, highways, ports, water systems, high-speed internet, railroad. -- railroads. [applause] i believe we can make americans safer -- america safer. we passed the most significant gun-safety law since president clinton. [applause] i believe we can go from having the highest costs for prescription drugs in the world to make prescription drugs more affordable, so we passed the most significant health care reforms since president obama signed the affordable care act. [applause] and i believe we could create a

clean energy future and to save the planet. so, we passed the most important climate initiative ever, ever, ever. [applause] this and extend the critics tell us nothing can get done, but they are wrong. there is not a single thing america cannot do. not a single thing beyond our capacity if we do it together. it is never easy. we are proving, in america, no matter how long the road, progress does come. [applause] i know the last few years have been tough. but today, covid no longer controls our lives. more americans are working than ever. businesses are growing. schools are open. millions of americans have been lifted out of poverty.

millions of veterans once exposed to toxic burn pits will now get what they deserve for their families. [applause] american manufacturing is coming alive across the heartland and the future will be made in america. [applause] no matter what the white supremacist's and the extremists say -- white supremacists and extremists say. i made a bet on the american people and that bet is paying off and from the darkness of covid and insurrection and charlottesville, we can now see the light. a light that is visible and will guide us forward, not just in words, biting actions for you, your children, your grandchildren and for america. even in this moment, with all the challenges we face, i give you my word that i have never been more optimistic about america's future. because of who you are.

we are going to create millions of new jobs in a clean-energy economy. we are going to beg. we are going to make the 21st century another american century, because the world needs us to. that is where we need to focus our energy, not in the past, not on divisive culture wars, not on the politics of grievance, but on a future we can build together. maga republicans believe that, for them to succeed, everyone else has to bail. they believe about america not like i believe about america. i believe america is big enough for all of us to succeed and that is the nation we are building, a nation where no one is left behind. i ran for president because i believe we are in a battle for the soul of this nation. i still believe that. i believe the soul is the breath

, life and essence of who we are. the soul is what makes us us. the soul of america is defined by the sacred proposition that all are created equal in the image of god, that all our entitled to be treated with dignity and respect, that all deserve justice and a shot at lives of prosperity and consequence and that democracy must be defended, for democracy makes all these things possible. [applause] folks, it is up to us. democracy will be preserved and we the people have it in our hearts and in our character optimism that is tested and yet in doers, courage to dig deep

when we need it, empathy that feels democracy, the willingness to see each other's not -- to see each other not as enemies come about as fellow americans. our democracy is imperfect. it has always been, notwithstanding those folks you hear on the other side. they are titled to be -- they are entitled to be outrageous because this is a democracy. [applause] but good manners is nothing they have ever suffered from. plus, history and common sense tell us opportunity, liberty and justice for all are likely to come to pass most in a democracy. we have never fully realized the aspirations of our founding, but every generation opened those doors are little wider to include more people that were excluded before. my fellow americans, america is

an idea of the most powerful idea in the history of the world and it beats in the hearts of the people of this country. it beats in all our hearts. it unites america. it is the american creed, the idea that america guarantees that everyone be treated with dignity. it gives hate no safe harbor. it installs in everyone belief that no matter where you start in life, there is nothing you can't achieve. that is who we are, that is what we stand for, that is what we believe and that is precisely what we are doing that opening doors, creating possibilities, focusing on the future. and we are only just beginning. [applause] our task is to make our nation free and fair, just and strong, noble and whole, and this work

is the work of democracy, the work of this generation is the work of our time, for all time. we can't afford to leave anyone on the sidelines. we need everyone to do their part. so, speak up, speak out, get engaged, vote, vote, vote. [applause] and if we do our duty in 2022 and beyond, ages still to come will say all of us here kept the faith. we preserved democracy. we he did not ever worst instincts, but our better angels. we proved that, for all its imperfections, america is still the beacon to the world, and ideal to be recognized, -- to be realized, a promise to be kept. nothing more important, nothing

more sacred, nothing more american. that is our soul. that is who we truly are. and that is who we always must be. i have no doubt, none, that this is who we will be and that we will come together as a nation and will secure our democracy and for the next 200 years, we will have what we had in the past 200 years, the greatest nation on the face of the earth. we just need to remember who we are. we are the united states of america -- the united states of america. and make out protect our nation and all those who stand watch over our democracy. god bless you, all. democracy -- thank you. [applause] ♪ haidi: president joe biden wrapping up his primetime address in philadelphia, the site of the signing of the u.s.

constitution. it was a speech that began with a searing critique of what he characterized as an opposition republican party dominated and intimidated by donald trump and the maga factions of the party seemingly trying to create disunity. then he said democracy needs people to respect the guardrails of the republic. and then he almost had a key change. i want to get analysis from our white house reporter jordan fabian. half of the speech felt like a campaign speech, half of it felt like a state of the union. he went through the accomplishments of the administration. what do you make of it all? jordan: he made a clear and intense case that donald trump and his faction are a threat to

the country. that is going to be a rallying cry heading into the midterm elections for democrats. the president has illustrated the stakes for the u.s. of donald trump's republican party takes control in the fall, saying that not only could they eat away at the democratic fabric of the country, but he got into his agenda, passing the inflation reduction act and things like that and how those accomplishments could be rolled back. so, lumping in this sweeping address about the state of democracy with a campaign stump speech about his agenda that democrats passed through congress. kathleen: on every front, it seems absolutely as expected and this is joe biden confirming what everybody thought, that they have to run against trump. that is what democrats are doing. they can't run against other republicans and are trying to

cast it in this vein, this is what a republican would say, so they don't have to face the shortcomings of the biting administration. they don't to have -- they don't have to look at inflation and rising crime in big cities. what do republicans do next? jordan: the house republican leader gave a blistering speech criticizing joe biden right before this biden message. it was pretty serious, attacking joe biden for everything from his rhetoric against republicans , to passing the inflation reduction act, and the list goes on, even going on to criticize transgender athletes and hitting cultural issues. that indicates republicans are just want to respond by ramping up attacks on joe biden to deflect accusations biden leveled against the republican party & a beer or bite and then

talk about inflation, gas prices. that is their ticket to november. haidi: jordan, where does the approval picture fit? his criticism of his opposition likely to play out well? or are the majority of voters going to be looking at the economy? jordan: there is conflicting data. the economy and cost-of-living are usually drivers for voters in the fall. but 21% said threat to democracy was a top voting issue. other polls have showed the rollback of abortion rights is driving them to vote in november. those are good signs for democrats. that is exactly what they need to thread the needle and keep control of the house and senate. sell, they are going to continue with this message president

biden set up for them this evening. kathleen: white house reporter jordan fabian, thank you. let's get caught up on the markets, speaking about the yen and china lockdown in chengdu. what is the top of the pile for you? >> quite a few things this morning, but you mentioned the dollar and the yen. the dollar, giving up ground here this morning, the dollar index declining .2%. we are seeing the yen retreat fractionally from the key 140 level, but this is all that policy diversions between the boj and the fed. that is what traders focused on today with the key jobs report coming today. there is less and the latest reading them what economists see. stock picture, nikkei trading flat at the start of trade. in korea, the big highlight has

been the inflation data that came through and the be ok saying 5%, 6% inflation could continue. but it does alleviate a major headache for central bankers there, and is also something that leads to what we are seeing in discretionary stocks in the consumer sector. they are also leading gains this morning, fractionally higher, but you can see the difference at the bottom of your screen. in australia, stocks are coming online fairly flat as well. a bit of a wait and see mood i had of jobs data. trading volumes are fairly thin today, off the 20-day moving average. korea is a standout being about that. in the oil space, brent crude coming online higher but we are looking for a big weekly decline. kathleen: as annabel mentioned, the bloomberg gauge of dollar strength has rallied to another record high. the yen, extending its slump.

let's bring in bloomberg mliv market strategist simon flint. the yen is dramatic and who knows how much weaker it gets? in terms of what is driving the dollar, bond yields rising, is it the fed being aggressive with rate hikes or do you see it going higher from here? simon: we believe the fed's resolve has to continue, and inflation is uncomfortably high-end the fed is going to have to do more. you are likely to see higher interest rates at the shortened. that is particularly potent for the dollar against g10 currencies. there is also increased risk that the fed gets more aggressive about a recession. and we know that the dollar is strongly correlated with risk aversion, so it does look like this mood will continue. haidi: what is the outlook for

gold? dollar strength is impacting many things come up with -- many things, but we see the short-term reaction in gold prices? simon: the mliv price for gold is $1600 at the end of the year, because of a few factors. first, we don't think it is fairly reflective of all the bad news so far this year. we are after -- we are estimating it is 5% overvalued, 7% overvalued based on various factors that include high interest rates which we expect to go higher. and also, the decline in demand. we are expecting that decline in em -- -- decline in em demand. most factors point two gold

prices going lower. the wildcards what happens to the u.s. dollar. there was almost a one-to-one relationship with gold and that is one simple problem if you believe that the u.s. dollar is overvalued at this point. kathleen: we talked earlier about the japanese yen you think the boj will intervene aggressively again to keep it from getting weaker. i keep thinking about china and the yuan, because people have been watching that end we have this lockdown now in the fourth biggest city, how do you see the currency going? simon: i don't think boj will intervene in currency, i think they will intervene in bond markets. i apologize. with respect to negative needs to deal with in china, what we have seen over the last few days, pboc resolve has been

speedy and we expect that to last until the party congress is concluded in october. i think we are range bound for the time being. but because of negative yields to the dollar at the moment, that is not this incentivizing speculators from taking those positions short with renminbi because most people like us think this resistance is time bound. and once the congress is over, they will allow the renminbi to weaken in line with core fundamentals. haidi: bloomberg's mliv market strategist simon flint. we are looking at the city of chengdu with 21 million residents in china in lockdown now. they had only a few hours warning from local authorities, which sparked panic buying and fears of a lengthy lockdown.

let's ring in chief north asia correspondent stephen engle in hong kong. it -- what is the latest in chengdu? stephen: people are concerned. they all know what happened in shanghai. they told shanghai was going to be an eight-day lockdown and it turned into two months and misery for 25 million people there. now, chengdu is not as economically powerful as shanghai in china, but it has a population nearly as much as shanghai, 21 million -- 25 million. it has drought and power problems and now come on top of that, another blow with a citywide lockdown. simon was talking about the impact of the renminbi and pboc with the party congress, i think these lockdowns are tied to the upcoming political congress and

political environment. local government officials do not want to make a mistake, so they will go the extra mile. they do not want this outbreak of just 900 cases in chengdu over the last 10 days to go much worse. so, they are going full on and this is a full on lockdown. none of the party officials want to be blamed ahead of the party congress where party officials are jockeying for position. that is where we stand. the economic impact is going to have to play out over the coming months as this is home to automakers like toyota, vw and volvo and also, parts suppliers including in the tech industry. precision has a factory there. we will have to see whether there is going to be factory or manufacturing exemptions to allow closed-loop bubbles. but that is what you take time. the key take away here is, how

long is this going to last? will it be shanghai-like or shenzhen-like? that lasted a week. kathleen: for the hong kong -- for hong kong, there is a quarantine scheme for arrivals. we know businesses are dying to get things up and running again. what is the biggest risk to this not happening? do you get a sense there is nothing that stops it now, or is there some chance this could be blocked again? stephen: it is not just businesses who want the quarantine, it is individuals as well. just about everybody. we have had friends and family leave because it has been going on too long while regional competitors to hong kong like singapore and japan, which is fairly conservative on the covid front, is relaxing rules. john lee, the chief executive, understands that hong kong is losing its competitive advantage

in the region, if it has not already. and there is a debate according to sources in the government between health officials want further restrictions and john lee and his elk, who are saying we need to open up. he is the one who produced the hotel quarantine from seven days to three days and now, we are hearing he is leaning toward abolishing it before november, when they have a big financial forum here and also the rugby seventh, a big sporting event when lots of people come from out of town come on november 3 and fourth. i will believe it when i see it. here is what john lee had to say when asked about. >> it is always my intention and government intention to allow maximum conductivity with the world is the number of cases come down. there will be more room for me to do extra things. stephen: finally, another good

sign of a potential opening up as far as reducing the orangey. the hong kong airport has conducted stress tests where they added simulation of more than double the current capacity for incoming flights to see how their capacity capabilities are. according to the government, the stress tests went smoothly. that is a good sign because cathay pacific at one point was down to 2% pre-pandemic passenger capacity. they aim to go for 25% by the end of the year, a fraction of what hong kong has been as an aviation hub. but it is a good sign they are preparing for a potential onslaught of passengers coming in. haidi: our chief north asia correspondent stephen engle with the latest on hong kong. more to come on "daybreak asia (♪ ♪) (racing sounds)

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♪ kathleen: let's look at jobs. this is something everyone is watching in markets around the world. definitely the u.s., as everyone who was to for got what the fed is trying to do is watching it closely. the last jobs report shows a gain of 528,000. it was double the forecast. this report made fed officials

say about this is strong. we were caught between 50 and 75 and this is something that tilted toward 75. yes, inflation is the main number. but with a strong labor market, you have lots of demand, lots of paychecks, that is why this number is important. the forecast and our bloomberg consensus is for 398,000 last month. cooling off, but still a warm number. 300,000 does not speak to weakness. and we are going to be watching wages because wages are still high, up nearly 5% year over year. the wage-price spiral, you make more money, inflation moves up, you have to have more wages. and that is the kind of thing you want to avoid. haidi: this chart shows unemployment at three point 5%. the rate overall was at its lowest the 1960's. there is patchiness when you

look under the hood, but our guest was pointing out earlier that when it comes to the fed inflation mandate, that is what they are going to move on. it is wage growth and the wage-price spiral that they will be looking at out of labor market data. lots for investors and economists to contend with and ahead of that report. we did speak to the adp chief economist about why she thinks the u.s. is heading to a conservative pace when it comes to hiring. >> for the fed, it is about inflation. regardless of what they see in the jobs report writer, that is a change to get inflation down. they have to keep hiking rates. it is good to know, but it is not a need to know because what needs to be done is the inflation target rather than upping up the jobs market. secondly come i think we are going to see a slowdown in the

labor market numbers. it is probably not going to be the same as the slowdown with the adp client base. this is no longer forecast. we revised this report. it is an estimate of private-sector payroll based on adp numbers. what we saw in our last report was close to consensus, may be lower. i am looking at 290,000 jobs. but the key numbers to watch within that report is the wage data. if it is bad, it is important to the fed and whether the labor market shown in this report is actually leading to a weight-price spiral that the fed has to take control of. haidi: when it comes to lifting the hood on jobs numbers, you have spoken about pressure on small companies in the u.s.. how much further downside do you think there is when it comes to rate-says that if -- when it

comes to rate-sensitive businesses and companies and where we might see job losses? >> at think that is where we are seeing job losses. you are right, they sensitive sectors tied to the housing market and mortgage rates. there is a slowdown in housing, you might see it there. mortgage market sectors. you might see it in leisure and hospitality. small firms are still struggling to add heads and our end competition with larger firms. my take is that this is a very unusual market. we have a high rate of job vacancies and some of the weakness we are seeing is not because of flagging demand on the part of firms, but lack of supply of workers. it is why the labor

participation rate is so critical now. and what it comes down to for the fed is wages. there are insights contained in our reports that wages matter a lot when you are trying to bring down inflation. haidi: economist nila richardson -- nela richardson. lululemon is jumping in trade after raising its forecast and beating analyst estimates. it is a side that demand among high-income shoppers remains strong despite inflation. the company aims to double sales by 2026 by selling more goods to men and opening or stores. according to a staff memo, a company is asking workers to work and the office on a more consistent basis. jeffrey's executives are stressing the need to be in the

office. starbucks has named its next ceo. he will join the coffee giant on october 1 and take over fully april 1 of next year. the consumer industry veteran inherits a growing union push and struggling sales in china. evolution mining has appointed lori conway as ceo and managing director. jake line to continue his executive chair until 2020 four. conway has been evolution's chief natural officer since 2014. the company says the search for a new cfo is underway. kathleen: coming up, chinese property developers post their worst earnings in more than a decade. this is bloomberg. ♪

♪ kathleen: the hang seng index has fallen in 11 of the past fifth -- 11 of the past 15 months, but the drop may be running out of steam. annabelle has details. anabelle: this is called the d

mark combo indicator. it is technical but essentially, it is a tool that can help predict trend reversals before they happen. the demark indicator key number is the number 13. it just appeared in a technical analysis, this box. it last appeared in 2018, see you can see it is extremely rare. what it means it means in 2018 is that the bullish trend we had at the time did start to revert after this. we have the trade war as well, it wasn't all just technical indicators, the trade war taking into high gear. now, it has appeared again. what does it mean? we could see stocks moving higher from here. but there are more details on this chart about the specific growth, the bloomberg client ff

b,go. david: haidi: we are closing it -- haidi: we are closing in on the open of the chinese market after the lockdown of 25 million people in chengdu. let's bring in sofia horta e costa. so much is going to be impacted in terms of the economy and 21 million people being locked down. what are you watching in terms of market impact? sofia: this is part of says one province which has already been hit -- sezshwuan province, which has already been hit. chengdu is the biggest lockdown since shanghai. the concern is not just that it will be painful for the

residents there in bed for consumption, but also, we don't know how long it would last and that uncertainty impacts anything to do with catering, retail sales. that is another headwind for china's economy, just when we were looking forward to recovery. anything in terms of travel, retail spending and tourism is going to take a hit here. kathleen: chinese property developers posted their worst first-half earnings in more than a decade. a bleak picture already. what stands out in the latest earnings? sofia: 80% -- 87% drop in earnings really stands out. what really stands out to me is the gap between state owned developers and private firms. that is really starting to widen. state-backed developers have cash holdings of only 2%, but private firms, it is 11%.

state-backed bella percent of been able to issue debt and that is a good thing, they can fund themselves in the market at a cheap level. that is not the same for private firms. kathleen: our chief china markets correspondent sofia horta e costa with every important information. we are watching for the market openings in hong kong and china. chang high lithium, dongfeng motor, cte, these stocks might be affected. we have the china markets open coming right up. keep it here, this is bloomberg. ♪

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>> happy friday morning from

hong kong.