kathleen: welcome to "bloomberg daybreak: asia."

we are getting down to asian market opens. haidi: a discussion after a weekend of gloomy headlines and likely rate hikes from the rba and ecb. special measures to reign in power costs as germany tries to help billions struggling with household wills. try not looking to contain a covid outbreak in the nation's six largest city. kathleen: let's look at how future markets are signaling sentiment for u.s. stocks, treasuries, and elitist for the oil market. that seems to be an active market as asian trading gets underway. when you look at stocks, futures suggesting a bit of a rebound, not surprising because another selloff down 3% last week for the s&p 500, 8% over the past three weeks. stocks are finding of footing here. in the bond market we are seeing a rally, not a big rally.

up 0.9%, that is after a week when the treasury long and - - long end and short end -- and the 10 year down to 3.19. a little positivity there. improved positivity for the wrong reasons. the gas prices in europe -- crisis in europe is worsening. we have the opec meeting and we are unsure what will happen with outputs. g7 decided to put a price cap on russia group. a lot of reasons for oil traders saying may be oil prices will go up for a while. haidi: very interesting when you look at what is going on in europe, because a lot of analysts are saying it has the capacity to be just as much impactful as the fed and any

other market catalyst we have been seeing. take a look at how we are setting up, pretty dour session in terms of the asian set up, futures limping into the start of the new we, down .25 of 1%. the start of cash trading and just about one hour. australian 10 year, we are seeing yields falling in the australian session. we have seen the aussie dollar and kiwi dollar being at the forefront of that risk off trade and we see downward pressure. watching dollar-yen as well, because obviously that rally has been garnering headlines, just a reminder that the boj unlike the euro zone, unlike the u.k., very low likelihood of a changing policy, so at this point our fx and rate strategists saying they yen remains a price taker.

a pretty bad outlook for risk this monday morning. kathleen: no outlook for aggressive currency market intervention from the boj. let's bring in someone to help us more with this, our cross asset asia editor. and david greg. we saw the stock market, the reaction negative, no question there. a little bit of positivity. the fed is going to be aggressive, it may 75 basis point rate hike, let's move on. >> it could be bad. we are staring at a slow down and up potential recession in europe and a slowdown in the u.s. despite really strong numbers. the bond market has been incredibly volatile, and after those numbers on friday, in

fact, the stock market started pricing a 75 basis point rate hike, from the fed, bb 50, so there is uncertainty and the debate there. even with a strong jobs market, the likelihood of a slowdown in growth is still there, and concerns of a recession are there. we know that bonds, the treasury market have been incredibly volatile, and they have priced in a lot, so that is perhaps why you saw those wheels come down. haidi: energy, the crisis in the eu, the dominant theme over the weekend going through risk aversion to start the week. what are we hearing in terms of intervention possibilities? >> the list is getting longer of the tools they will be

discussing, eu ministers our meeting on friday. have a look at this, a partial list if you will. number three and four is what earlier the european commission in a policy note quoted. three and four were already discussed. what is new and what we learned over the weekend based upon this draft, price caps on russian gas and that goes into trying to limit freely the follow-through effect from gas prices, so overall power prices, and that pertains to the market. if you are one of those participants with very i margins, a possible suspension of derivatives trading, so they are pulling out a lot of things they would normally not even need to consider. given where prices are, prices have fallen by have from the

peak, but we are still above 500 euros per megawatt hour if you look at the year ahead in germany and france. these are prices you do not want to see and keep. kathleen: absolutely, because then they potentially only go up from here. jackson hole, any discussion around the ecb and whether or not they could possibly do 75 basis point of a rate hike also brought in the question of how cold will the winter be? how depressed or negative will this be for the european economy? how do they do 75 when they might be on the face of an extreme slow depending upon the weather? >> hiking into a slow down just to summarize that very simply, right? you look at what economists are saying, 75 is what we are expecting based on estimates whether the economists all right or not. it is probably what we will see.

it is not the ecb, the bank of candida at 75 -- canada at 75. peru, 50. july -- chile, 25. poland, 25. even if you do not get the fed raising by 75 you will get three central banks this week or four giving you that same magnitude. haidi: when it comes to the day i had, it is looking like a dour mood. what are us -- what else are we watching up for? >> like david said, when you move away from the energy crisis in europe, we are looking at central banks this week raising rates. so you do have that cloud over the market, and then throw into the mix what you were seeing in

europe, but look, we have also got china. we have heard they have extended a lockdown. that is not good news for markets at all. you have the biden administration keeping those trump u.s. tariffs were now. they are looking at adding investment in eight u.s.-chinese company. so you have that u.s.-china tension still there. and of course the slowdown in china with lockdowns. look, a lot of negative ahead, and negative backdrop for the markets as they start this week. a lot of things for investors to pick through. haidi: david, it is the start of the week. is there any good news or should

we all just go back to bed? >> we are not yet at two year lows. that is it for now. haidi: [laughter] disappointing, not exactly. let's get you to vonnie quinn. vonnie: china extending its lockdown, ordering more mess testing as it tries to attain a covid outbreak. the mega city's central district will further intensify lockdowns and extend control measures for at least three days. the lockdown starting on thursday, two other parts of china are under lockdown. nationwide 1700 cases were reported for saturday. authorities in china and japan are making preparations for a typhoon, the strongest global storm so far this year. shanghai has closed a major container port while schools and several coastal cities will be suspended monday. japan is ordered evacuations and

canceled flights in okinawa. it is forecast to move northward into the east china sea with maximum winds of 185 km per hour. pakistan as added another eight districts to its list of calamity areas. it cause flash flooding which submerged villages and crushed agricultural lands. 2300 people have been killed and 33 million displaced. the woman said to be named u.k.'s next prime minister is prompting action in her first week in office to tackle energy supply problems. this trust is forecast to -- liz stress -- truss is forecast to replace boris johnson. 10 government bonds rising faster than in any other major market. 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. haidi: getting an update on a

referendum, 6.4% of votes have been counted, improved -- approved votes are at 37%. the new constitution will prioritize the environment. they are unlikely to approve a constitution as protesters demanded. polls showed that a majority of chileans when a new constitution but they are not happy with the government produced. the sunday vote may still likely yield a no vote. 63% rejecting the referendum. in terms of investor impact if we see a decision that would reduce selling pressure when it comes to local assets. it is unlikely to settle the issue. kathleen: if you do not try at

first, try again. so ahead, china's biggest tv producer is making -- ev producer is making inroads in japan. our guest speaks exclusively about opportunity to grow. up we talk with paul gambles. find out what he thinks about gold, bonds, and the yen. this is bloomberg. ♪

haidi: let's take a look at the week ahead, opec+ meets on monday broadly expected to keep production steady. cuts could be on the table to

smooth out what they are calling a yo-yo market. economists expect a rate hike for australia and with the energy crunch ruffling your the ecb is expected to raise rates by 50 basis points. in china traded a good spotlight slower growth, inflation likely edged down with food caused stabilizing, other prices remaining sluggish. kathleen: the new uk prime minister will be announced on monday officially taking over from boris johnson. the currency is near the lowest in decades, and in president did -- an unprecedented surge in borrowing costs. the cost of living cause will be the dominant challenge for the winter. it is expected to include a briefing on windfall profits at gas and electricity companies. haidi: let's get views from our next guest who sees opportunities to buy into gold, treasury, the yen.

paul gambles is a founding partner at mgm be group. we are seeing three different assets that have yet to bottom. why do you think now is a good time to get in? we cannot see a floor yet for these assets? >> good morning. we may well not be at the floor. one leg of this is very much a strategic flu -- view. we are seeing disinflation around 2023 and 2024, and these are the assets that will benefit most from that. they are the assets that are on sale at the moment. look at the pricing, look at valuations. gold miners are incredibly cheap at the moment. absolutely, that they can get cheaper from here. if they do we will keep buying more and more. that volatility gives us another

opportunity and that we have seen so much volume that there are been trading opportunities as well. we have been buying and selling. on the strategic point of view they look great two years i had -- ahead. buy now and if they get better by more -- buy more. haidi: what are the assumptions that you are making about dollar strength as well as fed policy that goes into your calls on all of these? >> a great question. the key thing is we are expecting there to be policy divergence. we think the expectations for u.s. interest rates in 2023, 2024 our way over done. the assumptions about u.s. economic strength are overdone, and therefore the rectification we will see in interest rate

wallace he is underestimated. a lot of people are saying rates will top out and they will start to ease back in 2023, 2024. we think it could come sooner and it will be far more severe because the downturn will be far more severe. that downward pressure on the dollar is good for yen, therefore gold. we think it will be outweighed by the interest rate gains you get on long treasuries, particularly long treasury slips with the gains are potentially 80%. kathleen: kind of a supercharged view. in terms of the european gas crisis, how do you factor that into the picture? the europeans are seeing in front of their face, and the rest of the world is realizing how serious this could be. does it affect any of your

calls? >> i think you have to watch it carefully. in the last few months, we expect there to be waves of continuing supply stock -- shock inflation. all of the policy moves being done are to curb demand. there is nothing being done that is a solution. a greater than expected slowdown specifically on energy. we just do not have any good intelligence as to how well your is prepared. we see the data, the cost on megawatt hours storage data but nobody knows how bad the winter is going to be, how tight things are going to get. a lot of the risk is to the downside on that. it is worse than people are currently pricing in. however bad it is europe is not

in any position to deal with it. it does not have physical space because of the structure of the euro. any damage that happens to the european economy is very difficult to deal with because of the overall structure of the economy, and there are serious weak points. everyone is talking about german problems. italy is the place that terrifies us right now, massive dependence on imported energy and incredible susceptibility to many vulnerabilities right now. it is almost impossible to price how much risk there is in the euro zone. kathleen: one view is chinese policymakers are acting sooner and much more effectively than u.s. policymakers. it is interesting to me the number of people who are not near term on chinese stocks but in the longer-term they are. >> that view is probably right, we went to buy them now when they are cheap rather than

before -- rather than after the policy is enacted. we are saying the stocks and particularly the ones that we favor. we favor smaller companies because they are domestic focused. that is the sector that is going to benefit the most. it is becoming incredibly cheap right now. if it becomes cheaper, keep buying more of it. the impact of stimulus on those stocks looking out two years, we expect that to be significant. kathleen: click follow-up audubon's because you are positive on u.s. treasury strips. what about other bonds around the world? some of those are crazy low. >> they are. if there is one place that is quite interesting, it could be japan. we do not expect the same interest rate pickup on jgb's,

it is a way of capturing any rebound in the yen. absolute interest rates cuts even if those cuts are smaller than the cuts we see in other markets. kathleen: another nice, clean way to go, thank you so much, paul gambles. you can get around about of this race you need to know in today's edition of daybreak. go to tv , is also available on the bloomberg app. customize your settings so you only get news on the stocks that you care about. this is bloomberg. ♪

haidi: a trick of the latest business flash headlines, and's anti-money laundering agency has searched the premises of payment companies as part of an investigation into a chinese loan app. the search was prompted by allegations of extortion and harassment involving the apps. the company says they are cooperating with the agency. australia will investigate the use of personal data by social media apps. it is said the apps pose on modern security challenge to authorities. last month the government announced a review of competition. citigroup has joined rivals as

rising interest rates continue to weigh on demand in the housing sector. more than 100 positions have been limited. the u.s. retail bank is down 15% compared to a year ago. by june is planning a funding round -- byju is planning a funding round. the online education provider is in talks with companies from abu dhabi and qatar which could invest a combined $800 million. kathleen: let's take a look at help currency markets are doing, we can see the bloomberg dollar index rising, 0.2 of 1%, continuing a trend it has been on some time now. aussie dollar weaker.

china, looking at that key seven point level looking stronger. the dollar-yen, the most interesting of all. we went to see if it continues to go past the 140 and change level that it broke last week. in terms of bonds, we have got some green on the screen, perhaps the worst fears of aggressive fed rate hikes are abating just a bit. let's keep it right here and get as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year. and it's only available to comcast business internet customers.

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>> china obviously is grappling with a slowdown of generational importance. >> it has been quite volatile.

>> the story is contingent on policy support. >> there is still a market opportunity when it comes to investing in the infrastructure of companies. >> the pboc is content with the weaker yen to the extent that it will encourage exports. >> we went to get used to slower growth of the economy. >> we are coming up to the communist party meeting in october. lessening of the global restriction policy would be great. >> they cannot keep rates so low. >> the greatest value will come through when you think about the environmental side of things, the fact that there is a big commitment to achieving these goals around emissions. haidi: some of our guests are to where they see the most value in china. so much uncertainty when it comes to the outlook of the currency as well as other chinese assets. let's start out with the yen. when it comes to survey results

globally speaking china's currency is expected to slide. expecting extended losses against the dollar, 7.2 against the dollar, 61% say that is the first level to be had. 6.5, just under 40%. that was conducted around the end of august and september 2. also talking through other key pressure points. went and will try and it will be able to stop the rout in the property sector? it is evenly split, 45% say yes, 56% say no. kathleen: they opened a floodgate when they decided to crackdown on property developers they thought were carrying too much debt. by targeting them directly, i think they frightened away a lot

of other investors who were holding these assets. it has snowballed over time. where do you see the most value across china? so far it is stocks. just in the past few days when we see analysts' notes, near term i will stay away from china stocks but going down the road that will have to stimulate so much as paul gambles just told us that he is ready to buy them now while they are still cheap, and of course the other problem hanging over china is covid zero, but after the october party congress convenes and xi jinping get his unprecedented third term people believe some of these things will lighten up as well. another reason to be bullish on chinese stocks. haidi: let's get to world headlines. vonnie: eu ministers expected to discuss measures to reign in energy cause. gas price caps and power

derivative trading's. a meeting of ministers on friday. the decision to give the north stream pipeline shut is getting to germany unveiling a package to protect consumers. indonesia as race fuel cost to ease the burden of energy subsidy of the budget. the cost of gasoline is increasing by more than 30%. the president said state funds must be used widely adding most of the subsidies are going to wealthier people who own cars. voters in chile expect to reject a new constitution on the environment. 2/3 of the ballots go against the document. detractors fear reduce growth. investors are watching the outcome after years of political tensions in one of latin america's richest nations. the heir to one of india' is

oldest fortunes as been killed in a road accident. he and another passenger died when the car crashed in mumbai. he had an active role in his father's company. he was chairman of a firm from 2012 2016 -- to 2016. this is bloomberg. haidi: the u.s. jobs report is showing hints of a long-awaited increase in labor supply. the big question for the central bank is whether they continue amid an economic slowdown. let's bring in enda curran. what stood out you the most during this latest release? >> the participation increase has caught the guy of plenty of fed watchers. that does mean the unemployment

rate ticked higher to 3.7%. as you say it seemed to hint that perhaps the labor market supply story might be starting to turn, there was a hint on wage growth, that seemed to be cooling a bit in the month. perhaps the fed may not need to go by 75 when they meet later this month. as always, we get back to the view that one data point does not make a trend. bloomberg economics is making the point there were plenty of other challenges facing the west labor force in order to not get too excited. perhaps under pressure in the fed, perhaps maybe just going by 50 basis points, so i think that will have a lot to say. kathleen: 3.7%, that unemployment rate still closed

to a 50 year low. i think we are getting wishful thinking from stock market bulls . much tougher for the ecb. when i was in jackson hole, this was a topic of conversation, that the ecb is in a much more difficult position than the fed. do you see it that way, and lay out the reasons why? >> it is a different scenario. considering what is going on in western europe, have this extraordinary energy supply prices, which by extension is creating the risk of a deep recession. when you consider the ecb is having to raise interest rates into that environment at a hefty pace you have to say none of that as well for the regional economy. the more aggressive the fed hike, the more pain in some of those countries that will be acutely hit, india and financial

stability there in the cost it will have on the government. a very important election coming up. all of these complications are part of the reason people save the ecb cannot match the fed's pace. that is why they are going by 75 versus going by 50, but they are facing a different scenario. the fed is facing broad-based inflation outbreaks. a big sledgehammer just to bring down demand. ecb is a very different story across the regional economy. there is not a lot to do about the flow or supply of gas from russia. kathleen: we cannot let you go without talking about the rba. we had our guest on, a senior economist. she thinks that the rba should slow down, this is lagging to it at that they are looking at,

wages in particular. what do you see? >> there is no doubt this is the big debate going on. of course there was a lack of fact. it takes many months to flow through into the real economy. the vast mortgages there are under a variable rate. when the central bank rate moves it will hit households but it will take banks a lot of time to adjust. there will be a delayed effect on australia. from the rba's perspective, they are seeing an economy in good shape. like other central banks they have little option other than to risk not moving and allowing inflation to become entrenched. haidi: enda curran there. we have a result in the chilean referendum on the constitutional amendment. we are seeing a rejection of the constitution. 48% of votes are now in, 37.4%

were to approve. this was a constitution that would elevate gender issues, environment, stability. the majority of chileans what a new constitution but this was not it. the president suggested there would be a new draft up for vote, but this draft has been rejected by the chilean public. there is great uncertainty associated with the outcome, but we could see less selling pressure on local assets, but this does not settle the issue with potentially another vote to come. up next, china's biggest ev producer making inroads into the japanese market. the president of the company is next. this is bloomberg. ♪

haidi: the city of okinawa as ordered residents to evacuate due to the possible threat posed by a typhoon, the strongest one this year. cabinet ratings have fallen by

one percentage point to 50%. we will watch again as a key focus of the finance minister, atsuki tofukuji indicating they're watching markets. japanese markets open at the top of the next hour. forward to, not a great deal. just a dour mood and asia generally given the dominance of those negative energy prices -- energy crisis headlines. lots of risk aversion going into the market. kathleen: china's biggest ev maker is setting its sights on the japanese markets with plan to sell their model next january. the president atsuki tofukuji discusses plans to attract customers with reed stevenson in this exclusive interview.

>> the biggest reason for us to decide to enter the japanese market is that the government has pledged internationally to achieve carbon neutrality by 2050 and decrease the ratio of electric vehicles to 100% to 2035. we have studied the japanese market through sales of electric buses in the past 7 to 8 years. japanese customers will include these different models in their choice of electric vehicles will we start selling these cars next year. >> what is were state -- what is review of the state of the japanese ev market? >> the ratio is still less than 1% as of 2021, but that is gradually increasing to 1.3% in the first half of the year with the sale of models. consumer interest grows toward electric vehicles. >> what are the strengths of byd

in japan? >> our cars are not only very stylish but high quality. we develop key card such as batteries, motors, and chips for ourselves. we can quickly accommodate market needs. >> what are your targets for sales and performance in japan? >> we do not have very focused customer targets in japan. we have different types of vehicles from light to heavy the can serve a wide customer base. >> why do you think customers would prefer byd over other vehicles? >> we are confident in our products, but most japanese customers are not yet aware of our cars. we would like to share our variety of products one by one. >> what is your thinking in terms of undue support products in the japanese market? >> we cannot tell you the price for our vehicles get but we are

preparing to announce the preparer of this model in november. we value the concept of affordability, but i want customers to feel more value than what they pay for. >> one of the biggest changes you would like to see in the japanese ev passenger market? >> i went japanese customers to find out the benefit of electrical vehicles. that is our mission. haidi: byd president speaking with reed stevenson. g20 officials were unable to agree to a joint communique at last week's climate talks as fresh tensions between the u.s. and china over taiwan threaten cooperation. let's bring in the head of aipac research. which of the parties have been more successful at this effort? >> it depends on how we look at

it. if you look at emission reduction over the last decade, certainly european countries, u.s., canada have all seen declines in their emissions. on the other hand chinese emissions are up 20% over the last decade. on the other hand, if you look at the technology needed for climate change mitigation, china is done a lot more in deployment domestically but also interesting in supply chains for manufacturing these technologies which will benefit the whole world. investment in energy transition, china dominates. china's investments are more than double the u.s. kathleen: how critical is cooperation between the u.s. and china for climate change mitigation? >> back in paris the u.s.-china collaboration it was critical in getting that agreement done.

even last year, it really helped push forward the glascow agreement. at the same time smaller countries do not want to be dictated to. last year when the u.s. and china and a few other major companies came together to came up with a compromise, many smaller island nations that are at the risk of climate change were actually angered by atoning down of the language that was used to get the argument done. to summarize, china's u.s. partnership is necessary but it is not going to sufficiently get us through climate change mitigation. kathleen: many more steps down that road. ali, thank you. up next, saudi arabia's banking

regulator is appointed chief to lead its cryptocurrency program. details i had -- ahead. this is bloomberg. ♪

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gains, up .3 of 1% after trending down throughout the course of the weekend. the market report giving mixed implications when it comes to the fed and interest rates. really under that $20,000 level for a tent consecutive day for monday where it failed to crack above that level. when it comes to the broader crypto context it looks like september might be really difficult month for crypto. historically september has been the worst for bitcoin. bitcoin has fallen every september since 2017. ether also tends to perform pretty poorly in the month although it has only risen about 25 and averages 82% decline. let's-- a 2% decline.

let's get to our guest, jonah. what are hearing about the new crypto chief and the applications were cryptocurrency development policy in that region? >> it is a good thing for crypto that there is interest from saudi arabia, and this is showing the interest of regulators in abu dhabi and other places in the region is also making places like saudi arabia thinking we need to be in there to, we need to be competitive on this. it looks like they're putting in rules and a lot of crypto players want some framework before they going so they have some certainty going on. if you are into crypto, it is always a good development to see that governments want to foster the industry and bring people

in. kathleen: heidi mentioned every september has been about a month for bitcoin and other cryptocurrencies. it has been several months of a vicious selloff. is it possible they are closer to a bottom now? >> that is completely possible. this is crypto, you always have to -- there is always a lot of uncertainty, and it will be a volatile space, but with the fed especially crypto is so dependent on what they're doing right now, the pace of rate hikes. as you start to see inflation cooling off, you start to see the fed saying maybe we do not need to hike as quickly as we thought. you might get a bottom or raise up, but there also are a lot of people who were saying we could see 15,000, 10,000 from here. it is speaking around 20,000

right now. there are people who think you could go even lower before you get anything approaching a bottom. kathleen: i would take that as stay on the sidelines, you might as well wait and not try to catch a falling knife. inc. you so much, joanna -- tha nk you so much, joanna. these are the stocks we are watching. mining added to the asx 200 index. softbank is trying to cut 20% of staff and its vision firm operation. mino motors as scrapped a plan to set up a country -- factory in russia. a pipeline shut down worsening the energy crisis in europe. japan's airlines and another carrier have canceled dozens of

lights. moving on to a market check, the dollar has so strong, where are we going on the first day of this asia trading week? the dollar index strengthens just a little bit. the aussie dollar off its best level ahead of the rba decision, another 50 basis point rate hike expected. there are questions hanging over the central banks right now. we take a look at the japanese again at 140.49, dollar-yen holding onto gains. we continue to see it strengthening, so this is a big question for the asia trading day and of course japanese equities about to open, korean equities about to open, and we will be closely following the china open just one hour or so from now. in terms of the bond market, we

have got green on the screen across the board, a sense there might be respite from the most aggressive rate hikes possible. there are 2.5 weeks before we get that decision. we will get a sense in the last 6 to 8 weeks how they are looking at the economy anymore. haidi: coming up, investors brace for another week of volatility, markets continue to grapple with aggressive central banks at the risk of recession. plus energy rationing in europe this winter starting to look all but inevitable following the north stream pipeline announcement. ♪

>> this is daybreak: asia.

we are counting down to the measure market opens. what a way to start the week. we had an energy crisis bubbling over in europe. we have china lockdowns. it seems that is getting more severe. we have aggressive rate hikes pending around the world. of course, you have the japanese yen. that is the lowest since 1998. we will see what happens. >> you are right. we are seeing a plethora of central bank decisions. we are watching the rba as well. let's get to the market open. >> all right. we can see the nikkei opening a bit lower. that is not too surprising.

the s&p 500 futures have been pointing a little bit stronger. now we see the dollar yen continuing to rise. the question is what kind of response you may see this week. and then we can see it looking at the kospi. it is a little bit more positive. the stock market had its worst day on friday. and then we have the u.s. 10-year yield. the week has begun. the question is where does it go next. >> let's look at what we have here in australia. take a look at just the early tepidness of trade. we are seeing an upside to a 10th of 1%. msci australia up .2%.

there really is no expectation for them to break that half-point hike. the i was just past. they said they are looking at the hard data which is lacking.

that will be considered at a meeting of energy ministers on friday. the decision to keep the nordstream 1 pipe that is bringing renewed urgency to europe with germany unveiling a package to protect consumers. china has extended lockdown in chengdu as it tries to contain a covert upgrade.

it will extend control measures for at least three days. the lockdown started on thursday. at least us, the parts of china are on lockdown. nationwide 1700 cases were reported for saturday. authorities in china and japan are making preparations for a typhoon, the strongest global storm so far this year. shanghai is closed a major trading port while school will be suspended on monday. japan is ordered evacuations and canceled flights and aqua now up. it is work is to move northward into the east china sea with maximum winds of 185 kilometers per hour. pakistan has added eight districts to its list of calamity hit areas. torrential rains hit areas of the north causing flash flooding that swamped agricultural land. 1200 people have been killed and 21 million of been displaced.

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. haidi: let's get a check of shares in asian companies, related to gas and energy, each energy trading in asia. pretty robust against given the sluggishness in the broader market. japan petroleum up and inpex trading modestly higher as traders are set to discuss -- as well as the probability of energy rationing going into this winter in europe looking more and more like a possibility. the czech republic said to include a lot of tools in an emergency measures. oil prices rising to start the week ahead of the opec plus meeting as well on supply. investors wing that against what is going on in europe.

saudi arabia and opec plus have flagged the possibility of a cut to sort out what they call is a yo-yo market. that is the trading theme as we start this week. kathleen: one of the sidebars is russia is opposing any kind of got, because they do not want it investors, buyers of their crude oil and getting there will be a bit of a glut. it is quite an interesting story. still ahead, angie explains out the dangerous situation in germany means the country could run out of gas as soon as early next year. a worsening energy shock in europe not only weighing on the euro but also a tough winter ahead for businesses and households. all of the details are next. this is bloomberg. ♪

kathleen: central banks around the world are said to continue the hold on high inflation even as a part abilities become everclear. endocrine joints is now -- enda curran joins us to. a big decision from the european bank, the bank of canada. they are all facing the same battle. >> it looks like another aggressive week for monetary

policy especially in developed economies. australia expected to go by 50 basis points despite some kind of sewing in the economy. the housing market coming off at a reasonable clip, and canada is in the same boat. both economies similar in the sense that a good portion of their mortgages are flooding rates. that does flow through to households with mortgages. that is one vulnerability. ecb is a standout. the debate is over 50% 75. 75 would speak to the extraordinary energy crisis. that is what the debate is. they are saying we need to consider financial instability especially in italy and all-important action coming up in italy. quite an aggressive rate -- week

four central banks of the cost of money around the world. each economy does have their own vulnerability. haidi: let's talk about europe. on the surface it looks like a binary decision in terms of the size of the rate moves, but the ecb and the continent are dealing with so many different challenges. >> this is very complicated. we had a nordic authority saying there is a risk of lien on loans in europe. you could see companies fall over. that gives you a sense of the scale of the problem. these are measures of european authorities are talking about, price caps and liquidity intervention and may be putting a temporary halt on derivatives trading. it will probably take time before we see the impact that would have on energy prices, and probably it will not be enough

in the near term to stop the ecb from having to do what they have to do. they are having to raise interest rates in this environment of skyhigh prices, which is stoking inflation, which is a very deep recession and eurozone and the growth and inflation story across europe was very different, especially the likes of italy. there seems to be a balance coming down with a rate hike however. it is a question whether they go by 50 or 75. haidi: enter current -- enda cu rran, that is a great shot, aggregate policy rates have risen by 150 basis points, the cumulative impact we have seen from g 20 central banks hiking in 2022. we have no less than eight central bank decisions this week including the ecb, rba, the ones that we are watching morse --

most closely. this is how we are setting up for european trading session, pretty negative in futures. we saw european stocks jumping the most ending the five date losing streak but that was very short-lived. he saw the return after u.s. data market coming in robust, unexpected increase in unemployment risk. msci europe, a little higher. dax futures off by nearly 2.9%. we are feeling the energy crisis. china as extended lockdown in chengdu as it tries to contain a covert outbreak there -- covid outbreak there. more uncertainty for residents, many scarred by what they saw happening in shanghai.

>> and also the economic ramifications still being felt in the chinese economy following 2 months of the shanghai lockdown. chengdu is not quite as large but it is the largest urban area since lockdown was alleviated in shanghai back on june 1. 21 million people obviously going through the trials and tribulations as drones are going through the streets urging people to stay indoors, do not go out. it is a bit dystopian, but this is in line with jie zheng being's -- xi jingping's covid zero policy. chengdu is condemning its lockdown for a couple more days soon, and they will revisit. we do not know how long this lockdown will last. shanghai at last it 2 months. it is not just chengdu facing

operates and lockdown spirit 566 new cases in tibet, no word on lockdowns. shenzhen, people there are getting antsy, seven of 10 districts are seeing a bit of restriction curves, they have been told to avoid gatherings and stay home as much as possible. the engine -- tianjian has new cases there. we have to watch this. kathleen: hong kong, it looks like the government is upset with reports that officials might be divided on quarantine policies. there are many businesses with trade associations, etc. that are looking forward to saying we are open again, we are open for business. >> visited a response to a bloomberg story most likely that came out on thursday. the health secretary in a blog

post yesterday essentially blamed for in media -- foreign media for stirring things up. the story was there should be debaternment about policy, and the chief executive is in more favor of lifting a hotel quarantines completely for arrivals ahead of this big financial forum sponsored by the government on november 1 and second -- 2 followed by the sporting event both of these events attracting foreigners from outside to come to hong kong, and the hotel quarantines of three days is inhibiting that. this is the report, it mistakenly led leaders to think the hong kong government is divided and contradictory in the fight against the pandemic. hong kong government, i hope they are divided.

i hope they are having debates about policy. that is how government gets things done. kathleen: presque isle bloomberg -- pesky old bloomberg. you can get your stories. go to tv go on the terminal and available on the bloomberg map -- app. customize were sitting so you only get news on the assets that you care about. this is bloomberg. ♪

haidi: the new prime minister will be announced on monday officially taking over from prime minister boris johnson. growth the lowest in decades, an

unprecedented search in foreign costs. spring in our editor for more. boris johnson should not be looking at the market performance, because it is dire. >> not a great scenario for anyone whether it is truss or s unak to take over. u.k. yields are rising, the economy is under pressure. not a good scenario at all. the bank of england warning about the set up for this year. not a good scenario for anyone. what -- with liz truss expected to win, if she wants to win policy and how markets will react, she is expected to put in an emergency budget and she is indicating she may rollback national insurance tax and scrap

a corporate tax increase. that would raise the budget deficit, which is not good news for yields. twin deficits are not a positive. she said she would pay with the boe mandate. that is not positive. dare i say breakfast make come back in -- brexit may come back in. kathleen: i have a theory that says she says it is the bank of england's truck to fight inflation. what do you think the messages here? how will the markets take this, i was the pounds going to react, etc.? >> i do not think anyone would debate that they are slow to react to surging inflation. it is supposed to be get 13% this year.

however, what the market is worried about, if they change the mandate, she may say let's go to a money supply is her wort memoji to be, markets do not like that. certainly it come under pressure. kathleen: we will see what happens next. plenty more to come on "bloomberg daybreak: asia." we will keep checking markets for you as europe's energy crisis seems to be getting worse by the minute.

haidi: pmi just crossing bloomberg, we are seeing

singapore global pmi coming it slightly lower than the 58 we saw previously. we also saw coal pmi when it comes to hong kong markets. take a look at bmi for august, 51.2 slowing from the prior 52 .3. we did see that previous number, the managing index seeing the lowest reading since april 2022. we are seeing more expansion overall when it comes to pmi readings out of hong kong. so much is hinging on what we are seeing when it comes to the reopening of borders. kathleen: let's break down japan pmi for services. actually edging up a bit to what he 1.5 and delay latest month, august, the final reading that helped push the composite up a bit. it is actually going down a bit now, and that is unfortunate.

49.4 from 48 point nine. manufacturing is holding up and doing better. services starting to pick up. this is important for the japanese economy. extended virus lockdowns has been one of the things hanging on services generally, and of course spending. this is something that is a good sign for the japanese economy. the business investment, another positive sign. something to be a j -- b o j would like to see is getting wages rising. haidi: production is today, the saudis said to cuts could be on the table. economists expect the rate hike when it comes to rba on tuesday at that meeting, and we returned to the energy crisis, the inflation picture rattling your.

ecb be expected to raise rates on thursday by 50 basis points. 75 basis points hides the challenges were ecb. try not slower export growth and well inflation inched down, food prices stabilized. other prices remain sluggish given the impact of covid zero and the downside in the property market. the currency has been weakening, that spells bad news for emerging markets. traditionally, the yuan has been a major currency. >> at least we have seen the correlation snap back into place in fact currently when you look at the offshore yuan and the rest of the em complex, that positive correlation is back

above the five-year average, they are already at .5, which is strong. we are at .55. with dollar strength and weakness we are seeing in the currency, we are trading at 692. we are coming off the days the previously has set the midpoint at the stronger side of estimates. just trying to anchor that from falling even further with dollar strength coming through. another landmark as we get underway this week, yes, you have the currency correlation. there is also the agent dollar index, which is basically a measure of asian currencies. you have the yuan heavily weighted. let's flip the board if we can. 7.5% down year to date, and i know there are a couple of months left, but we are on track

for the first -- worst year since 1997. that was the asian financial crisis. kathleen: there was a typhoon, a big one coming. some concern, one of the stories we read said maybe it will push inflation higher. it could hit markets in this region. >> it is a very big typhoon, a strong one, and it has been hovering. we put that on the map function to give you a sense of where it is now. it is not sure whether he will make landfall in shanghai but already we are starting to see description and logistics. descriptions of flights that have been halted. taiwan has actually warned of

extreme rainfall. shanghai, right here, one of the world's largest if not the world's largest container port has been halted because of the weather description. it is moving very slowly around this area and that is your weather report for today. kathleen: sometimes it feels like economies are getting one glimpse after another but we always appreciated when you give us any news. that was our bloomberg coanchor and weather man david english. european stocks futures down more than 3%. it has been interesting to watch this the less 2 trading days. i looked at the european stocks -- stoxx market on friday. there were up making a positive

message from the jobs report may be defied -- may be the fed would not have to hike as much. they started coming down sharply justice as soon as they started trading, partly the realization that stock sold out. now, the energy crisis, what is going on, not reopening the north korean pipeline, the question of what happens to gas prices, at energy crisis in europe, the european central bank anymore. just something to hand over to you as you take a look at korean stocks. haidi: [laughter] yeah. it is more of a mixed picture, firms are grappling with the typhoon. watching big insurers when it comes to these potential natural disasters and climate events. we are seeing downside there, also watching electric power corporation of korea seeing a little bit of upside, sideways trading. korean airlines feeling the

upside of 2 percent. watching japanese carriers as well and the potential impact we see right across that entire region. we are seeing most of the airlines trending lower, japan airlines shied by just 1%. kathleen: let's move right along with this big story, the g7 saying it plans to implement a price cap for russian oil and hopefully that will/moscow's overall revenue. accompany all data flows indefinitely, a move decried by european politicians as an attempt to use energy as a weapon. >> nobody should be decide -- surprised by the decision of the russian government. we need to cut gas supplies from russia. kathleen: let's discuss with

daniel hines, a senior commodity strategist. just dive right in. it will not be reopened, this is a time when the europeans have been talking about the damage for the cold winter, which is why we expect it will cause them. where does it leave germany and italy? >> it leaves them in a pretty difficult position. certainly they will be able to refill the storage facilities over the past couple of months, and that did ease some concern at least in the shorter-term. it does raise serious question marks about whether they can get through the winter. even if you get a relatively normal winter, we do expect

those storage facilities will be quickly empty. countries like germany could completely run out of gas in 2023 if all of that remains unchanged. the specter of even lower gas flows obviously from russia leaves them quite vulnerable. ultimately it will have to rely on a broad set of measures, obviously gaining a lot more energy sources from other areas, and coal and nuclear has been raised just to help with that, but certainly reducing energy consumption will be a very big part of that set of measures to get through that winter. we could see ultimately, 15%,

20% of gas consumption would effectively be cut in countries like germany to get through this winter. kathleen: natural gas and petroleum not exactly the same thing, but we got a look. they were supposed to consider an output cut because there was lots of supply. russia apparently is supposed because they do not want the world to think they have to be close because there is a supply glut because it tend to become concerned about their prices. >> certainly russia is banking on, obviously a higher prognosis for oil and impart for gas to keep revenues coming through the door. that price cap, certainly being

able to sell a lot of additional oil has been pushed out of europe into asia in particular, and india and china has been a lot of that extra russian oil and gas on the market. it probably could put a dent in that. clearly i think it is behind. the pressures they are putting on the opec plus alliance, which i think will continue to bow to some of those pressures and keep production unchanged. saudi arabia and other members have concerns about the selloff in oil prices lately. i think they will try to play that middle ground by keeping positive rhetoric around the oil market, it ultimately keeping

down supply levels unchanged. haidi: dan, let me take you to iron ore, another lucked out in china. -- lockdown internet. what do you see and is there hope the stimulus package will help? >> i think hopes of the stimulus package happening in the shorter-term are dying quite quickly. we are coming into the peak construction season in china. that is going to be impacted by renewed lockdown's. we have heard of various steel companies reducing personnel and curbing output as a consequence of that, so it does not look great in the shorter-term. ultimately i think we will see a rebound. it is when that occurs.

revenue is the $50,000 question. we do not know when the covid zero strategy will be eased in china. until then i do not think we will see an effective or strong rebound in the construction sector that could help support the margin and raise prices again. jimmy it looks bleak -- to me it looks bleak in the shorter-term. haidi: let me ask you a question taking a look over the next 12 months. we are talking about the energy crisis. what do you see as a bigger supply shortage over that period? >> i think ultimately, this energy crisis will be quite broad across the commodity complex. at the impact it is having now, the 12, 24 months period on

supply, particularly energy intensive will worsen and worsen as we go on. metals like aluminum, energy and processes are going to suffer as a consequence. they will keep to this energy transition. it will be a fairly difficult period for the energy market and the broader commodity complex with these high prices really causing heartache across the industry. haidi: always great to chat with you, daniel hines. let's get you to vonnie quinn. vonnie: voters in chile have rejected a new constitution that privatize social rights and the environment. after the ballots are counted and 63% rejecting the vote. supporter said change would mean greater equality while defectors argued it would hurt growth and

development. investors have been watching the outcome. the woman expected to be named u.k.'s new prime minister is promising action. liz truss is expected to be named as their leader. her plan to/texas aligning investors -- indonesia as raise cost to meet the burden of the energy cost of the budget. the price of the most commonly used gasoline is increasing by more than 30%. the president says estate funds must be used wisely adding that most of the funds are going to wealthier paper -- people who own cars. 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. kathleen: up next, freshest tensions between the u.s. and china over taiwan threaten

cooperation between the 2 on climate change. this is bloomberg. ♪

haidi: take a look at european futures, we are seeing the depth

of the energy crisis, the fear receiving across the region. this is ecb decision a week playing out front and center. when it comes to stoxx 50 futures, down by over 3%. decks futures extending early losses, 3.25%. stagflation looking like a real risk for europe trying to avoid energy woes. smp futures, a long weekend for the u.s., up about .10 of 1%. things are dour in asia but not quite as bad as what the european open is betting up to be. the worsening energy crisis adding global economic growth concerns. kathleen: but are receiving this european crisis, which is not quite a crisis yet but looks like it would quickly become one, adjuster daniel hines telling us there is no weight

germany and italy so dependent on russian gas, and now with the closure of the north stream pipeline, this is something that hit them very hard. this was hiding in plain sight, it does not come as a surprise, and we are seeing it in your very strong -- europe very strong. just interesting to see how this does play out, even though it is a closed trading day of the u.s., it will be opening up this week and we have the ecb meeting ahead on thursday. haidi: we have been dealing with energy risk on the continent for quite some time, but it seems to have come to a head with the dominant story over the weekend, potentially the risk of energy ratcheting in closer and closer. that is playing out with european risk assets having a

rough time of it at the start of the week. let's get you caught up with business flashlights. indy's anti-money laundering agency is investigating online payment companies about part of an ongoing investigation into a chinese loan app. the search was pumped by allegations of extortion and harassment of customers involving the app. the payment companies say they are cooperating with the agency. byju is planning a funding rally next week valued at $23 billion. the online education provider is and talk with funds

combined $800 million. the funds could be used to make an acquisition in the u.s.. australia will investigate the use of personal data by tiktok and we chat. the apps pose a modern security challenge to authorities. a report is due by next year. last month the government announced a review of facebook and twitter. coming up next, the covid lockdown gets extended in parts of chengdu. we will take a look at risk assets in china. this is bloomberg. ♪

haidi: china as extended its lot done in chengdu and ordered mess testing to try to contain the latest covid outbreak. our guest has more to expect from the market open. sophia, we have not had a lot of good news from these markets. >> is looking like a difficult day for trading today. the lockdown in chengdu showed the uncertainty behind lockdowns. goldman sachs sang 35% of china's gdp is locked down, and that will impact growth numbers. that will bring gdp for the whole year to about 2%. that will be something markets after pricing. the europe energy crisis is not something china is immune from.

let's see how that you want -- y uan will move on that. they need to draw a line in the currency defending the weakness. looking like a difficult open for china today. kathleen: what else is big on the china horizon right now? certainly the lockdowns was at the right, the property crisis is not over. we can go on and on and on the list of negatives where it >> -- negatives. >> we have a survey saying that when she thank -- xi jingping secures his next term there will be some kind of policy shift. in our survey saying stocks will follow. the yuan will continue to

weaken. the yuan is still quite strong let's hope for some good news after october. kathleen: that was bloomberg's chief china correspondent. we are watching the markets open internet, the extended lockdown in chengdu may impact automakers and as europe's energy crisis deepens keep an eye on china oilfields and china oil and gas. haidi: coming up we speak exclusively to the u.s. special envoy of climate, john kerry. this is bloomberg. ♪

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