haidi: oil is also gaining as

germany keeps more nuclear plants open as the gas cut off these european leaders grabbing for emergency energy fixes. we are warns of a possible casualty and bank closures as super typhoons barrel through. that is something we are watching out for, the factories have to hold production in the face of the biggest storms we have seen this year. we are getting ready for the presumption of trade after the labor day holiday. we are seeing some green here up about .5%. some gains here are nasdaq 100 futures as well. things have stabilized at least for now, bond futures in the u.s. are still in the red.

crude, two point 5% higher on the back of the opec surprise of cutting production by 100,000 barrels a day. some are hoping for a hold. the cartel is preparing for some sort of price cap on russian oil, $89 for wti. paul: we see the aussie 10 year above three. we have sydney futures pointing higher by .1%. we saw a reasonable gains for the asx on monday. they are setting up some modest gains again today. the girl has been trading for an hour now. -- euro has been trading for an hour now. it remains a against the

japanese -- strong against the yen. yvonne: we want to bring in our cross asset asia editor. i will start with the winner it comes to the energy crisis. what to look out here -- what to look out for here today. contain this energy crisis? >> i think we are watching what happens in europe closely including for the oil market. this is a big gas story great if russia continues to curtail supply, if the crisis in europe continues to worsen, we will see an impact on oil prices. that will make the situation even worse. paul: we did have the modest production cut a signal from opec-plus, 100,000 barrels a day. or that move the needle in terms

of price stability? -- will that move the needle in terms of price stability? >> if is forecasting that -- it is forecasting cutting supply by the end of the year. we know that the saudi energy minister has been interested in restoring the equilibrium of the futures market because we have seen these massive daily swings in the price of oil. will it work? there are several factors at play here. we are heading into a tight supply situation going into the winter. >> natural gas continues to be almost parabolic in europe. what is your team looking out for today? >> it is volatile, it is unlikely to go away. one of the things we are looking

for here in asia is what china said they are in the end of the year, they're going to come out with more measures to shore up the economy. also that cut in the reserve ratio. how will that impact markets? we know chthey were pummeled agn yesterday. the yuan is tumbling. we know investors will create this news that more contractions are underway. it does have the impact on the market, they would have liked to see. we do have these ongoing lockdowns every day to read we are hearing about more lockdowns . the property market sector continues to be under pressure. the survey that my colleagues did, investors expect the

property market to continue forward for another 12 months. they will continue to be under pressure. it will be interesting to see how the market takes the news of even more measures. paul: we want to get a bit more from you about the picture in china. we are seeing the pboc cut those reserve requirements. is this taking a move from the opec bus playbook? >> what they do with the fx reserve, chinese commercial banks do not need to keep estima hd as they used to. that reduces demand and provides will it do much good? perhaps not. the bigger picture is the u.s.

is tightening policy. this is at the same time that china is going in the opposite direction. i think more broadly speaking, looking to the future, i would expect the best to continue weakening. this is the pboc trying to make sure that current is not getting out of control. yvonne: when it comes to covid zero continues in china, going andre locke down as well. -- under a lockdown as well. that may start to ease up on covid zero. is that scenario looking less likely? >> i think that it is obvious as a government is trying to make the policy less of a burden in terms of the economy, in terms of people's lives. it is unlikely that china is going to move off of having zero infections when the goal is

zero, you will only achieve that unfortunately through extreme measures like lockdown like cortina and mass testing. in the longer term we will continue to see some of the steps throughout china. paul: what sort of market reaction to anticipate? as we see the yuan weakening, what are the implications for emerging asian markets? >> asian markets happen under pressure and that is likely to continue as the yuan weekends. you are going to see expectations for competitive evaluations follow on the currency in asia. as weakening yuan. that has continued to be a picture for asia today and

probably for the foreseeable future. paul: all right. let us get a check on the first word headlines. ukraine's prime minister says allies should help end russia's invasion fast because time is on moscow's side. ukraine can supply europe despite the war, saying russia is using will to blackmail europe. >> we are in war. we have understanding that russia is using european locations and we have absolutely assurances from european politics that they will stay with ukraine. >> the u.k.'s new prime minister

takes over from boris johnson on tuesday and will deliver a speech later outside of downing street. she promised to outline how she will tackle the cost of living crisis with a report suggesting a freeze on energy bills. around 57% of conservative party members voted for her over her rival and are expected -- in an unexpected margin of victory. the most powerful storm in south korea's history. they are warning of casualties and companies from lg electronics are holding operations. in japan, nissan is suspending operations in kyushu and they have warned of severe service disruptions. as a government has slashed growth productions -- the government has slashed growth

predictions. the entire crop at 55% of rights output in pakistan has been wiped out. millions are left homeless by disasters that many experts blame on climate change. those are your first word headlines. paul: investment trends in the aipac reason -- region. we see writer supply shocks in the g7 plan to cap russian oil prices. this is bloomberg.

paul: opec-plus agreed to make a token will supply cuts for october. it was a surprise move from the cartel actually does alliance is seeking to stabilize global markets. it triggered the longest price route 82 years. we have the head of economics and strategy at a bank. that is intended to stabilize the markets. do you think it will have much of an impact? >> that is a good question and one thing we have realized is that will is fantastic. it tends to be quite sticky into a certain global headwinds. if we do end up in a hot landing recession, oil will depress pretty hard. the 100,000 cuts, perhaps

symbolic. it is unsettling nonetheless given it will make prices clear on the way down. even if as we see economic headwinds, especially given that saudis can intervene and make for those adjustments. paul: the oil prices are the least of europe's worries. the price increases that europeans are dealing with when it comes to natural gas. look at the french price, up 574%. these are extraordinary numbers. how does this energy crisis and tightening ecb in fact the investing environment in europe right now? plant fiscal support enough to -- is planned fiscal support enough to prop things up? >> as you saw in the markets

yesterday, the fact that gas prices subsided a little. it was enough to support the euro. i think you hit the nail on the head. the bigger picture looks pretty bleak. it is almost assuring that it will be much deeper and more painful. the other thing it raises is the question of reintroducing this fragmentation given the physical assets could defer across the euro zone countries. yvonne: where does that leave inflation? >> in an inconvenient place. this ramp-up in inflation in the case of europe is ultimately deflationary. it is not really going to feed on itself in terms of boosting

demand or anything like that. rather it will depress demand. the ecb is in an understandable find where the price stability conditions are being challenged severely. it looks like they are between a rock and a hard place and the geopolitics does not balance out and it almost suggests that the on the only way out of this is a landing of the economy. yvonne: a jarring landing. is that why you think a 50 basis point rate hike is a better approach than the 75? >> i am rearranging. i am not sure. splitting hairs over this, i am pretending to make a point. the issue here is that the ecb's messaging around it and i completely identify with needing

to convey the message that they are not going to be 20 inflation and meeting expectations. -- going to be in inflation and meeting expectations. we need to force liquidity prices to become a solvency price. paul: before the meeting, we have another cash rate decision today. markets are predicting a 15 basis -- 50 basis point hike rise. >> i have been living too many hairs here. again, it is quite embarrassing. i am making a big deal out of it and basis point differential. really, the message is we do not want to get used to 50 is the

new 25. the flexibility around it and the evolving recognition of risk that are more fluid in the housing market. that may be a message that is worth conveying. i am not convinced that it will be an mandate, it is a contrarian call. there is a message there. paul: let me give you an opportunity to throw down. the big one coming up later this month from the federal reserve. what are you anticipating in terms of typing? >> i will call it a 50 basis point. so for the question remains of 50 or 75. i think that there is no big change there. it looks like a 75 rather than a 50. my bigger interest is two fold. when it comes to peak rate and

increasing the rhetoric, it will be -- when can they unwind to a norm or they can do 25 basis points? in november or december? those are picker questions around the fed's approach -- the bigger questions around the fed's approach. >> you have the fed that continues to be in the hawkish path for now. we had our previous guest saying that a shortage of reserves is what he thinks could lead to a pivot among central banks. i wonder what your take is on that. how much longer can these banks support their currencies? >> i think that is a valid point. we were looking at it earlier this year. an unsettling rate of cash burn

for a lack of a better word as the central banks worked in the last seven months. i think that will come back to haunt. this rate of cash burn has been the worst since the gse. we cannot dismiss the further capital outflow risks down the road. i think when you hit the needle on the head, the king dollar, adding to that is the usual cycle. the dollar tends to peak earlier than the rates do. because of the euro and the yen not looking that great, the king dollar may have a longer rain. yvonne: you say seven may not be a tragedy, why not? >> there are two lines around

it. it is not a line in the sand. any moves made by the pboc would be quite silly in an environment of a strong dollar. seven is not a one way out either. i think on the trade basis, it continues to be above. it peaked from the selloff in china and that means that it is not only stronger in the longer-term basis but more stable in so far that has a downside is elsewhere. despite this psychological level coming up, i think it is the interest of the pboc not to show a large cash burn either. be less volatile on the balance side and be stable on a traded

basis and not complete fx reserves too fast. yvonne: the head of economics and strategy. we can get a roundup of the stories you need to know to get your day going in this edition of daybreak. it is also available on your mobile and bloomberg anywhere app. customize your settings. check it out. this is bloomberg. ♪

>> we are counting down to the start of trade in tokyo. in south korea, a typhoon is causing a shutdown in some countries -- companies. fires have broken out at two

plants. they will check to see if they are related to those storms. south korea is discussing global cooperation for peace. the bank of korea is releasing a study note on the trade deficit. take a look at when it comes to japan. given the typhoon, nissan, toyota, announced that closures in cash plant closures in kyushu. -- announced plant closures in kyushu. better known as high-tech companies and study data, we have lumber economics and forecast for increases year-over-year due to the base effects. relatively robust travel this summer. paul: let us get a quick check on the latest business flash headlines. asia's richest man is looking

for a new global acquisitions achieve. they have reached out to potential candidates as it looks to accelerate dealmaking. he has been aggressively justifying his empire beyond coal, including data and health care. volkswagen is pushing ahead with its plan to list a minority stake in porsche this year. this could be one of the biggest ipos. as a listing could be as early as the end of this month. it is set to regain direct influence over what used to be its family enterprise. for the morris is said to be considering lowering the acceptance threshold on a $60 billion takeover bid for smokeless tobacco companies. sources say the marble mako is -- the maker is looking to move on. yvonne: we are heading to japan

and korea. take a look at japan, we have the household spending numbers. new zealand is in the back foot. we have australia also seeing some gains here. s&p 500 futures seeing some green as we returned from the labor day holiday as well. very much watching what goes on in natural gas. the euro is near lows. this is bloomberg. ♪ pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited.

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>> alright, household spending numbers coming out this morning. 3.4% is what economists were expecting. we are seeing a bit of a

slowdown in terms of household spending from the previous month. we were expecting some big effects that could have helped these numbers. domestic airline ticket reservations, an increase of 70% from the year before. but right now, numbers are looking pretty subdued. >> let's get a check of the first word headlines now. opec has agreed to reduce barrel production by 100,000 barrels a day in october. it is aimed at stabilizing global markets and take the cartels oil out that august levels. opec-plus said it would be willing to call another meeting at any time to address further market developments. germany is reversing policy on nuclear power and unlikely to meet natural gas storage goals.

they will keep nuclear plants available to ensure energy security. they also signed an energy pact with paris with france supplying gas to germany as needed and germany exporting electricity to france when demand peaks. the banks need to set aside reserves for the second time this year. the aim to boost after a two-year low against the dollar. financial institutions will need to hold 6% of deposits in reserve. at least 46 people were reported killed after a powerful earth make hit china. a magnitude of 6.8 quake triggered landslides from the provincial capital where 21 million residents are under a covid-19 lockdown. global news 24 hours a day on

air and on bloomberg take powered by 2700 journalists and analysts in more than 120 countries. >> south korea has been hunkering down is the super typhoon hit early tuesday morning. give us an update on where the typhoon is right now. what has been the damage that has been caused? >> it looks like the typhoon is starting to exit south korea. and about an hour ago, stirring to move through these to the east. a fire has happened at a steel plant and there is also a report of a fire happening breaking out.

we don't know exactly why, what caused this fire. do with the flooding happening in those areas. we're still trying to have some really hard assessment of the damage that is acting in that area where there is a flood of oil refineries. and even nuclear power plants. >> how are things looking at the capital? >> it seems like it has grazed past the capital. we were expecting to identify lots of gusts overnight. but that can happen. it's looking like it missed and it has basically been hitting the southern and eastern coast

in the capital is in the west and up north. but what's important here is the damage is better along the southern and eastern coast. >> that is sam king in south korea for bloomberg news. some stories we are watching ahead of the markets, keeping an eye on airlines and shipping companies including korean air. as the timeframe moves past japan's southern coastal areas. in the budget gauge. it includes factory automation and office maker. >> singapore is looking to attract global rainmakers across

a range of sectors. we were told exclusively of the effort to get global talent. >> i think it is overhauling. part and parcel with the exercise. it is a very highly differentiated sector in terms of top global talent. and hopefully getting them interested. to beef up the talent base we have today. it can give us strength. and all of the middle segment so that we can also provide a very good platform for the top talent to give their creativity and innovation.

>> at 30,000 singapore dollars a month, it really is the top talent at about 5% of the employment. what are you trying to attract in terms of how many people you want to attract in singapore? >> i think obviously, the headline that most people think of, it passed 30,000 a month. the top 5% and what we're really hoping to bring. there at the cutting edge, science, tech, engineering, math. and we also want to really build top talent in the culture.

so i think in terms of looking at numbers and groups of talent, they are very mobile. i made a statement that it is in offensive strategy for us. for top companies to identify who they are, where they are. >> at that level, there's a lot in terms of finance. are you trying to lure people from hong kong to singapore? >> we're looking at talent from all over the world. not just in one place. a lot of exciting opportunities.

it is really sustainability, finance, the green economy. in the space of where we want to be leaders in the use of hydrogen as a fuel, carbon capture and storage, these are new areas where we can have the kind of talent we are hoping to attract as well. >> singapore wants to repeal a colonial law banning sex between men, but at the same time, they cannot get married. >> i think singapore is very profamily. the deputy prime minister has also shared previously that at the moment, today, when you talk

about that targeting, i don't think there is a specific quota or number. people can manage those kinds of applications. >> the prime minister speaking with bloomberg. the new uk prime minister has an emergency support package to tackle the energy crisis. this will be a 130 billion pound plan to keep them below 2000 pounds per annum this year. there was expectation it could push higher by 3.5 thousand pounds by october. for lower income households, it

will help them. energy suppliers will be obliged to charge households a reduced rate for their energy and the government is going to guarantee finance and the difference with what they would be charged under the previous system. this is $130 billion emergency support. u.s. climate envoy john kerry speaks to bloomberg about why now is the key sign -- he time to accelerate away from fossil fuels. this is bloomberg. ♪

>> u.s. special presidential envoy for climate says now is the time to embrace renewables and combat climate change. >> fuel, gas, has been weaponized by president putin. now, in war, obviously, people go to extremes because of the stakes. >> what is the best stopgap measure? the u.s. has suggested exporting

possible -- fossil fuels. is that not a contradiction to what you are pursuing which is clean energy? >> it is not as long as it is temporary and accompanied by a huge uptick at the rate and amount of renewable energy being deployed. what is a shorthand quick out of this? be as independent as you can in your own energy grid. get your renewables out there. begin to wean yourselves from the weapon used against you which is the dependency on fossil fuel and gas. >> germany is investing and gas facilities right now? >> they are. but here's the way we look at it. there will be gas and oil pump for some time no matter what. that is cooked into the rate at

which people are saying we will reduce our admissions. net zero by 2050. you can do that using gas to some degree if it replaces coal or replaces oil. because gas is 50% less polluting. so if we are using gas in place of coal, that's again. that's a reduction in emissions. but after you reach 2030, in order to get to net zero by 2050, you must be reducing emissions from the gas. remember, it's only 50% less. so it is still emissions problems. i think president biden understands and the policy embraces the notion that we can use gas to transition but it must be transitional or capturing all of the emissions. and so replenishing what we needed to keep europe and its economy humming, to heat homes

and very cold places. that will be necessary in the short term. but nobody should be fooled into thinking that because of ukraine, we can forget about dealing with climate. no, no, and no. i am convinced the world is going to get to a net zero carbon economy. we will get there. the challenge is will we get there in time to avoid the worst consequences of the crisis. and as we sit here, that is not happening. that is our challenge. as we come together in new york, we must agree to accelerate the provision of funding, the sharing of technology, the targets we are setting. we've got to treat this like a war.

literally mobilizing every facet of our economy to do it. >> let's bring in aberdeen. great to talk to you. it give us your take on the energy crisis. it germany keeping nuclear power plant online as they try to contain this energy crisis. you have coal companies in australia, one of the top performers in that market. how do you view these developments? is the pathway to net zero getting derailed? >> i have to agree with john kerry that it's really the speed at which we are moving. the temperature trajectory is well overshooting 1.5 degrees. we think about the crisis in europe at the moment and we

think it is possibly a temporary blip in terms of moving to energy security. and in some cases, that means moving from renewables. and one of the positives for this conversation is a renewed vocus on energy efficiency. i think that is one of the positives coming out of this. >> some of these oil and gas companies are getting a huge windfall from these higher oil prices and what gas prices are doing these days. could that be a better opportunity for big oil to start investing into renewables? >> i hope so. i mean, we are in transition at the moment in terms of what we see.

the signs of why we need to shift. and why we need to has not changed. we have taken on long-term term goals and try to mitigate ambitions and reduce the negative impacts of climate change is much as we can. going in and actively engaging, really working with them and an ambitious and critical transition plan. >> in terms of the long-term transition, what are the key trends you're watching and sustainable investing right now? >> it's climate, climate, climate. what they are interested in,

it's from that angle where climate change is from a regulatory point of view. one of the drivers we are seeing is in terms of the beneficiary interest. clients are wanting to avoid risky investments or opportunities. at the end of the day, we are seeing what climate changes like and a huge investment opportunity. the climate conversations are dominating. but a lot of our clients and other investors are very concerned and very making sure that what weary say we are doing is exactly what we are doing. and we are seeing a lot of focus on key regulations.

>> we have the top 27 meeting coming up towards the end of the year. what are your expectations on that? are your expectations managed in terms of the current energy crisis we are seeing? >> that is a really tough question. i think anyone working in the space has to have hope. it can be very depressing. and i think what we will see is more than what we have seen before. negating carbon emissions now, being -- having recognition that climate change is something that is happening to us now.

[indiscernible] >> to increase that, and how to increase that. and the bigger impacts of climate change. i think that will be one of the key focus of the top 27. >> danielle rhodes, thank you for joining us. it be sure to tune into bloomberg radio to hear more from the days big newsmakers and get in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. listen by the outcome a radio plus, or bloombergradio.com. 20 more to come. stay with us. -- plenty more to come. stay with us. ♪

>> let's have a quick look at markets as we count down to the open here in australia. we have futures for the s&p, currently a market holiday in the united states. the s&p futures currently pushing higher by about 14 basis points. the crude price continuing to push higher by about 2.3%.

still below $90 a barrel but we did hear from opec plus mounting a 100,000 barrel a day production cut for october, the intention to encourage price stability in the market. let's see how effective that is. natural gas prices, an intense focus right now. much of europe could face huge increases to gas bills but the united kingdom appears to be moving to do something about it. >> this latest from bloomberg, this is an coming from prime minister liz truss. 130 billion pounds to try to keep energy bills and the u.k. below 2000. that sounds like a huge number, but certainly there were forecast that energy prices or bills would be up 3500 or more. so this is some effort to try to help households that are

choosing between keeping the heat on or aircon or do you go basics? the key priority is incoming prime minister and we hear a bit more about her cabinet picks. she will meet with the queen later on today. the pound is weak at about 115.64. and so let of tokyo open up next. this is bloomberg. -- soul and tokyo open up next. this is bloomberg. ♪

>> this is daybreak asia and we are counting down to the major markets open.

gas prices continue to spike. we are waiting for the u.s. session to resume after the labor day holiday. opec-plus output cut. >> an important day in australia. the reserve bank of australia to increase rates and hike by another 50 basis point. we'll probably impact the housing market but equities seem to be holding really well despite the turmoil. yvonne: and we have a deal with rem and be. -- remember the -- renminbi. here is how the tokyo open a set up. slightly higher. some stabilization. but things slowing down. dollar-yen still at 140 .42.

some dollar strength this morning. one futures are putting much flat. brent crude was opening in the lower end of things. wti did touch $90 on the back of the opec-plus deal. we are watching korea and the supertype that hit south korea has exited but the damage is done. there are disruptions they are today. posco down 1%. the kospi a little higher. the one some strength. paul: markets in australia have just opened for trade and we have a staggered open across stocks that open in alphabetical order so it is difficult to get a read this early but we

appeared to be in positive territory. building on the reasonably positive day. right now material sectors are performing well on the asx. the aussie dollar is fairly stable, pushing a little high against the greenback. not a lot of move in the 10 year. the big event we are watching today, reserve bank of australia is expected to add another very -- add another 50 basis points that would take it to 2.35% and there is no end in sight to the tightening cycle as yet. yvonne: we will see how it plays out for australia. inflation, housing market, joining us is an investment advisor. how is your conversation with clients these days? what are some questions were getting in terms of volatility? >> a lot of clients have asked if we see the bottom yet and if

we will enter a global recession. we think the risk of that next year is quite high and we think especially for u.s. and european equity markets we might not see the bottom yet. yvonne: when it comes to europe given the energy crisis, we have not even hit winter yet and we already see natural gas prices go parabolic. have we truly felt the effects of where the energy crisis will go? has it been priced into markets fairly? grace: i do not think it is fairly priced, especially with the shutdown of the nord stream 1. it is not in the pricing. but the good news is when you look at the european -- it is almost 19%, which is good news

but the key is how cold the winter will be in europe. if it is much colder we will need more energy. if it's not that cold, it's ok. overall, especially for the consumer confidence, for now it is getting weaker and weaker and also you may see the government, the u.k. has a new prime minister, the key for now is for fiscal relief and how to cap energy prices, things like that. paul: grace, you paint a bleak picture in terms of weakening consumer confidence and rising energy crisis, the central bank and markets tightening. in this sort of environment, how do you find profits for your client?

grace: bifurcation is still the key, to diversify -- we like the price of infrastructure because it is defensive in nature, it pays dividends is a long-term investment and all the governments in the world can focus on that fiscal stimulus and focus on infrastructure. for a lot of the infrastructure sectors, they have utilities, social infrastructure, etc. and those sectors have good cash flow and that will be able for the funds to regularly pay dividends so i think this is actually nice diversification tool in addition to traditional bonds and equities. those traditional portfolios, we

are focused more on those dividends. paul: monetary policy in china is substantially easier than elsewhere in the world but a different set of problems. are you looking at opportunities in china? grace: i think we actually prefer domestic to offshore equities. offshore like hong kong and chinese equities, there are volatile markets but domestically and easing measures , having said that we still expect some volatility near term because of covered restrictions. we still see weakness in the property markets. hopefully the congress that's

going to meet october 16, hopefully after that when we see more political and policy clarity, that could bode well for the mass markets. yvonne: how important is it to have a cash position? should you be cash positive in these environments? grace: i think a lot of times they want to hold cash. it with high interest rate but we still think investors should diversify. you can also focus on investment grade corporate bonds. quality bonds that pay a better yield than just holding cash. paul: grace tam, thank you so much for joining us. let's get a check of the first word headlines. the incoming u.k. prime minister

has drafted plans to fix annual electricity and gas bills at or below the current level. she eventually takes over on tuesday and will speak later on outside 10 downing street. according to officials, the mechanism to exert a massive increase in energy bills could cost 100 $50 billion in the next 18 months. the people achieved if matt has played down the prospect of a nuclear deal with -- the eu prime minister has played down the prospect of a nuclear deal. borel says positions of iran and u.s. are diverging. pakistan's government has

slashed immigration plans after flooding. it consumes the entire cotton crop and more than 1300 people have been killed and millions left homeless by the disaster many experts blame on climate change. at least 46 killed after a powerful earthquake in china. it triggered landslides and shook buildings where it 20 million residents are under a covid lockdown. rocks blocked roads, damaged homes, and interact did power supplies. supertype -- the super typhoon hagibis moved past south korea. -- the supertype has moved past

south korea. it has disrupted ports on air traffic across china and japan. yvonne: we are looking at typhoon related stocks in se oul. posco talked about a fire that broke out and they are trying to figure out if it is related to the typhoon. santos is up. we are watching oil up 2.5% and in tokyo we are watching additions to the nikkei 225. more familiar names are being added. we are watching those today.

paul: still to come, we will talk strategy in the japanese markets with ted fisher, joining us ahead of the hong kong conference. this is bloomberg. ♪

yvonne: this morning, sterling has a bit of a reversal against the dollar. still near the 2020 lows. we just got the news of liz trust and some draft plans about

how to pay some energy bills. let's bring in david for more. walk us through what we know about the plan so far and how it leads from the front. >> good morning. details have just been reported in westminster. the initial idea for liz truss, she made statements that if she became p.m., this would be her first priority to help consumers who are really suffering from energy prices. so we know this package could cost $150 billion in the next 18 months and it would force energy suppliers to reduce the rate they charge consumers.

an average household in the u.k. faces an annual bill around $4000 from october when a new price is going to kick in. this will not happen under that mechanism and pricing should stay at the current level, which is about $2000 a year in terms of an average household energy bill. so immediate relief for consumers. but we do not know if this will be long-term. ultimately will consumers pay for this over a longer term? paul: a very expensive proposal but u.k. is not the only when dealing with an energy problem. what more do we know about the eu plan to intervene in the energy sector? >> we discussed some measures we expect you leaders to talk about

on friday. just stepping into curb some price caps. we have seen direct intervention from some countries. one thing we understand now that the eu commission is looking at is whether they can curb speculation in the lng sector. they are looking at european energy futures. so that is on the table and being looked at. it would be quite a change. certainly price caps, restrictions on speculation are things we expect them to discuss later this week. yvonne: i have to wonder, what has been going on in the eu, does it affect opec-plus decision to make that cut yesterday? >> you have to think it did and

certainly what we heard from opec-plus and the saudi energy minister, he said this surprise cut is aimed at showing they will manage global oil markets. it's not just a supply issue. what we see now is more emphasis on the demands outlook, including the crisis in europe but quite seriously the situation in china, whether a slow down continuation of covid curbs will reduce demand. so those factors are what led to opec-plus make the decision to make the small cut. paul: david stringer they are. let's -- there.

the british pound is one of the best-performing currencies at the moment. the euro also showing gains as we hear more about the plans to deal with the energy crisis in the u.k. and eu. the greenback is still king dollar and nowhere near from abdicating the throne. looking at the offshore yuan, concerns about currency depreciation and china are still alive. pboc reduced effects reserve requirements for banks, not really making a dent in the situation at the moment. trying to cut those reserve ratios for the second time this year after the currency hit a two-year low. let's bring in john. a valiant effort from the pboc but will it make a difference

when it comes to changing the to tear -- the depreciation narrative? >> what they did yesterday, the amount of fx that commercial banks in china have to hold was reduced to 6% and that should reduce the amount of demand there is in china, but will it change things much? potentially not. the bigger picture is that the u.s. is tightening monetary policy and raising rates as china is going the opposite direction, loosening monetary policy and cutting rates. as long as that happens, the yuan will probably continue to fall versus the dollar. this is more likely the pboc making sure that does not happen too quickly. yvonne: talk with us more about the third quarter, give us a time state -- timestamp. what more could be in store? >> the government in beijing has

been doing all it can to shorten growth in this economy. things such as 300 billion of financing being pumped through the policy banks and special bonds the local governments have sold to finance infrastructure projects. how quickly that will come through in terms of economic data, they say third quarter, the final month of which we are in now, we will start to see that trickle through in terms of the data we get. with covid still prominent in parts of the country, whether or not the infrastructure spending will offset the downside, we will have to wait and see. paul: all right, john. you can get a run-up of the stories you need to know to get your day going in today's edition of daybreak.

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

yvonne: equity futures in europe just opened and here is how things look. pretty much flat. more stabilization today. we are looking for news from the uk prime minister liz truss when it comes to energy bills and them trying to put a cap on that. we are seeing more strength coming through for sterling. the dollar is taking a back foot

as a countdown to the rba decision later. the prime minister in ukraine says the country is getting commitment from european politicians to support ukraine in the war against russia despite the energy market turmoil. they also call ukraine allies and need to work to end the invasion. >> we have a war in ukraine but your opinion union also has a hybrid war. food crisis which russia creates. migrant crisis which russia creates by killing civilians in ukraine and sending families. all of this is elements.

on your opinion continent -- on the european continent, is not so simple. it is because of action in russia. so now we have a principal war between civilized war, democracy, and freedom. versus autocracy, soviet style principles. we would like to be part of the free and democratic europe. it is important to understand that the only way we could win the war and save our democratic principles and this winter we should find the possibility to go through the war and when the

war. we in ukraine protect brothers of europe from military invasion. europe should protect democracy principles in ukraine and should protect the democratic and freedom principles. because of this we should be acting together like one. >> do you have a clear commitment from european officials that these actions will stay? it does not matter if nord stream 1 comes back were not, will european union union pay but -- play by the rules of putin? >> we have absolute understanding that european is in hybrid war and russia -- and we have assured from european

politics that they will stay with ukraine until we win. paul: volkswagen is pushing ahead with the plan to lift a minority stake in porsche this year and plans a listing as early as the end of this month. they are said to regain direct influence over what used to be a family enterprise. tomorrow is establishing engineering and plans to contribute to accelerating development in culture. the ppo -- in qatar. and we will have more on the pboc moves coming up. this is bloomberg. ♪

yvonne: taking a look at sectors in the asia-pacific, there is quite a bit of green on the screen.

despite the energy crisis in europe. but the material and energy space were out performers. health care also up. utilities and consumer discretionary are in the red. we are watching effects when it comes to dollar china. will that pboc set another strong day of fixings, that would make the 10th straight day where they have surprised the market with a stronger effects. if it is number 10 it would be the strongest -- longest string we have seen since october 2019. you can see a message coming through from the central bank. daniel moss he joins us now. it can that pboc turnaround the renminbi decline? >> it's important that when we

talk a bout a pboc message, they are not trying to engineer some rally. yes the role is extensive but this is about nudging and guiding and breaking any appreciation and in this instant cushioning decline. the economic fundamentals of china relative to the other large economies are working against a you want raleigh. this is about -- against a yuan rally. this is about saying, we do not want things to get out of hand. paul: there are factors beyond the control of the pboc. what we need to happen for the yuan to rally in a meaningful

way? >> two things, and they are related. the chinese economy needs to find a footing instead of this colliding lul -- this gliding lull that we have had. the economy barely grew last quarter and the growth target is considered ludicrous by most private sector economists. there needs to be assigned there is a bottom. the other thing that happened is the widening interest rate gap between the u.s. and china, listen to jay powell at jackson hole. that must have created some concern that pboc. not only is the fed continuing

to hike, they feel they need to see pain and it is being seen in the yuan. yvonne: is there risk of calling it normal currency and how big of a role does beijing play? >> the yuan moves around in response to economic fundamentals but the pboc can and does show hands currently. there is a daily fix. no other reserve currency has anything remotely close to that. decisions will be rushed out similar to the one on fx reserves the pboc announced after the close yesterday. these things will still happen. the yen is down almost 20% this year. i doubt we will see that. so we are in this halfway house

between the currency that responds to broad economic conditions and the desire of policymakers but the extent to which it responds is always going to be constrained by the hand of the pboc. if china has one saving grace economically right now, it is that inflation is pretty contained relative to the other major economies. ironically, this gives them the ability to trim interest rates, which does not help the yuan. so we are in a bit of a vicious cycle right now. yvonne: thank you, dan moss. here are your first word headlines. opec cuts, opec-plus has agreed to reduce oil barrel production. the cut is aimed at stabilizing global markets and takes the output back to august levels. they say they are willing to call another meeting to address

further market development. germany is reversing their policy on nuclear power as they are unlikely to meet their target for natural gas storage following russia's latest supply cut. they will keep to nuclear plants available for the winter. france is applying gas to germany as needed and germany supplying electricity to france as needed. trump has requested -- blocked the justice department from using material in the criminal investigation. the judge suggested the supreme court might have to decide the issue of executive privilege related to a former president. those are your headlines. paul: liz truss is taking immediate action on the cost of living crisis, drafting plans to

fix annual energy bills for the typical u.k. households at or below the current level of $2300. let's get more from rebecca. my reaction from this is, that sounds expensive. how will this be paid for? >> liz trust has a bold new plan for the u.k.. curbing the energy prices are front and center of her plans. under the proposal to fix electricity and gas bills, they have earmarked money and she is promising to cut taxes, including corporation taxes. there is speculation about how this will be funded.

there was pressure for her to take some kind of action because the average u.k. household energy bill was expected to hike about 80% in october, which is unmanageable not just for consumers, but also having a strong ripple effect on businesses, and a small business is the other area where we see her putting forward more concrete measures with a proposal to fix prices for small businesses that had not yet priced in the full cost of the electricity crisis because they predominantly price in their bills a year in advance so they in october were expected to see a significant hike in energy bills. so we see a two-pronged policy, looking at u.k. average households and small businesses. yvonne: how do you see this being received from the public?

energy bills are really hitting households. the markets do not seem to like her. some say she might have a shorter term than theresa may. does this change her perception of people? >> we are seeing a significant shift in tone from campaigning during leadership where ultimately she is trying to win over conservative party membership in the country and now trying to build a mandate among the public and that is in part why we see a shift toward a discussion about a broad-based form of support to the average consumer. and the energy crisis that has hurt poor families in particular , i think on one hand that will

be received well by the public and you see that she and her team are shifting tactics but the question of whether she is able to win over the public remains to be seen. as a became clear that she would win, people were lukewarm. sterling is rising the highest in the decade and the markets are not being receptive to what she has planned so far paul:. thank you, rebecca. still to come, we talk with seth fisher on the conversation with japan. that in a moment. this is bloomberg. ♪

paul: seth fisher has broad diversity reform insight. he joins us now ahead of the investment leaders conference. seth, you are still in tokyo but

give us a sense of what the current state of broad diversity is like in japan and some challenges that need to change. >> broad diversity is getting better but we still have a long way to go. rates are improving. . accountants and new auditors of the company, we have experts from other companies on the boards but there is still not the fully diverse board of having different types of representation. paul: is the device -- is the issue diversity for the shareholders or is it just a number -- just one of a number

of reforms? >> many need to improve. we would like to see whistleblower provisions improve. improving net income, additional accountability in terms of nepotism. we would like to see a more diverse workforce as well. yvonne: you accuse the president of the time of poor governance and then you see him appointed as the chairman of the company. what is your take on what the

next moves will be? >> is absolutely shocking. he would have lost. an hour before the vote they called off voting for him and he was not appointed director of the company, he was appointed chairman of the company. shareholders most fundamental rights is to appoint representation and here they took away that fundamental right by appointing him the chairman of the company. we have invested -- we have investigated with whistleblowers

coming to us initially [indiscernible] i would like to see accountability there. yvonne: the markets are so volatile and people say there are distortions on the bond market is broken and equities are pricing in optimistic scenarios. are more opportunities to go along? >> i think massively. it has been a macro market and people are not focused on which businesses should be inflation protected. [indiscernible]

same goes for china. there has been a lot of stress and there's an ability to be a value pickers market and see massive decline in a lot of stock and [inaudible] paul: in terms of yen depreciation, what are the chances of policymakers in japan following the path of their counterparts in china? are you keeping an eye on the finance minister in japan? >> for the sake of the conversation i think it is very important for japan and i think they are going the direction of the u.s. and talking about yen

relative to the u.s. dollar, they've been explicit about raising rates in the u.s. and japan is going the other way. i do not see them taking a big move here. i think there is secret happiness about what they could do in parts of japan. yvonne: we look forward to hearing your topic for the year. let's check in with the headlines. looking for a new mergers and acquisitions chief. the study group has already reached out to potential candidates. they have been diversifying the empire beyond coal to data and health care. signify health is going to be bought.

signify potential suitors requote -- include amazon.com and option care health. the deal is expected to close in the first half of 2023. an indian coal business has been sold. they operate two coal-fired plants in india but are looking to d carbonized their portfolio. be sure to tune into bloomberg ready to hear more and get in-depth analysis from our daybreak team from our studio in hong kong. plenty more ahead. this is bloomberg. ♪

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yvonne: setting up for the china open, they have reduced the fx for the second time this year to boost the renminbi. let's get more from sophia.

it did not work in april when they did it. will it work this time? >> it is flowing you want against the dollar. it is still relatively strong. that is what matters when it comes to supporting export growth. the euro is incredibly weak and the yen is incredibly weak and that is factoring into all of it. it's about managing the pace rather than defending the line in the sand. i think seven per dollar is pretty much baked. it should be interesting because if we get a fixed income that is weaker than x .9, what analysts are saying is there are so many positions around that number that we could see [indiscernible] it could be a very interesting discussion this morning. paul: you say seven inevitable

but what does it really mean? is it a psychological level and where does depreciation bottom out? >> it is psychological level. when this first happened a few years ago i was covering it and it was such a huge psychological level back then that we saw the weakness accelerate after what this time around, it has been broken before on the world did not collapse in china will be fine. the yuan is an indicator of economic confidence in china so it is an important symbol for their policymakers and a symbol of financial market stability but china will be fine. they are managing the pace of decline toward the number. it could get some more weakness after that but the weakness against the dollar is only that currency. everything else, the yuan is

relatively strong and that will support their export growth. the euro is slightly more important than the dollar this point. yvonne: what are you looking at in the markets today? >> we are seeing u.s. dollar decline. this is a wait-and-see. it will be the name of the game until the -- things will be kept stable from china's perspective, what officials and authorities will want to do but i think we are 4% away from a new low for the hang seng so a couple of bad days like yesterday and we could really take out the 2016 low again. yvonne: thank you. paul, in terms of stocks to walk

at the open -- stocks to watch at the open, what are you watching? paul: let's look at what we can expect when hong kong and singapore and china get going. the tumbling currency, we will watch that later today. we are watching developers as bunker reports contract audits that sunk compared to before. the covid shop candidate is showing -- the covid shot candidate is staff yvonne: breaking news when it comes to california, they are ratcheting up their grid emergency. this is a warning, which is one step away from rolling blackouts. we have seen millions cranking

air conditioners to cope with the heat, above 110 degrees fahrenheit. electricity use has hit the highest level since 2017. the climate and energy crisis are not just in europe. coming up, a mild zone in the euro zone could become a severe slowdown. and we will have more from the pboc as well. this is blue. ♪ -- this is bloomberg. ♪

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david: this is good morning from hong kong. welcome to bloomberg markets a, china open i am david ingles.

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