♪ shery: we are live outside buckingham palace where people are gathered to mourn the death of queen elizabeth the second.

u.k.'s longest reigning monarch has died at the age of 96. she had just marked 70 years of service, having just celebrated her platinum jubilee. international reaction has been swift. president biden calling the queen -- that she defined an era. >> australia woke up to the news this morning. you can see the flags on the bridge behind me at half-mast. a suitably great day today in australia. the queen very well respected here. she met 16 of australia part 29 prime minister's. parliament has been suspended for 15 days in honor. later on, there will be a 96 gun salute. paul: for more reaction to the queen's passing, let's bring in guy johnson who is in london.

what is the reaction on the ground? guy: a huge outpouring of grief, sadness. this is a queen that most of us have grown up with. she has been the reigning monarch for most of our lives. there are very few people who are not able to say that. as you say, as it australia as we will see here, there are going to be a series of events to take place over the next few days. she defined a series of generations. she took the united kingdom, great britain, from the age of empire into the modern era. she was the bread -- the bedrock upon which british society was built during that phase. we went through a series of prime ministers from winston churchill to liz truss.

shery: tell us about her legacy. you were calling her the bedrock, we have heard a description of her role during those times, during the 70 years of service to her country. >> she played a number of different roles. she was certainly a constitutional anchor. she avoided playing an active role in politics. she stepped back from that process, but was able, through her huge influence, her huge center of gravity, to be able to guide politicians and prime ministers. she met with them weekly. she was able to exert significant influence through soft power. she transformed the monarchy in this country from something that was stiff and upright into something more flexible and understanding. she transformed the country as well along the way.

she was very good, able to read the nuances of what was happening in british society. she went through huge phases during the u.k. pass last 70 years. the death of princess diana. she was able to navigate those and keep the royal family and the country largely on track. guy: written standingguy: on the cusp of change. not the least of with -- which, the national anthem will change. can king -- king charles iii bring the same his mother did? guy: you think about what she brought to the job. the legacy, the understanding, the history. she has been -- largely to be able to deal with different situations. she has huge gravitas.

he is going to struggle to -- that. he has waited a very long time. whether or not he is able to deliver that same deft touch, that same understanding of a situation, we will wait and see. it is a very difficult time for him to step into this role. we not only have a new king, we have a new prime minister within days. this is a country which is certainly in flux. shery: guy johnson joining us from london. for more on the international reaction let's bring in ben wescott. australia part of the commonwealth. tell us about the reaction on the ground. ben: there is a real sense of grief and loss. i think whether you are republican or monarchist, there is a great deal of respect for the queen.

even former prime minister malcolm turnbull, who led the republican movement in the 1999 referendum, he said he wouldn't even discuss a second referendum until after she had passed a great amount of respect for her. paul: what happens next, i understand the prime minister -- will be traveling to london. what is the series of events? ben: the parliament has been suspended in australia. the prime minister and governor general will head to the u.k. to meet with king charles. there is also going to be a national mourning event in australia to be held in a few days time. a commemoration -- has been put out in the main hall of parliament. i expect that will be very heavily attended. shery: we have just heard from -- as well. take a listen. >> queen elizabeth ii has been a

wise and encouraging guide. always wanting the best for our nation. greeting each change with understanding, good grace and an abiding faith in the australian people's judgment. from her first trip, it was clear her majesty had a special place in our hearts. and we in hers. shery: what can we expect from king charles iii's relationship with australia? ben: if you heard that speech there from alvin ease -- albanese, that is a tribute from a man who is a republican. that is a challenge that king charles iii has going forward. how does he create the same close connections, the same deep respect his mother held with australians? there is no doubt that in the years ahead there will be a -- australia. probably for a republic.

it will be on charles' shoulders, the weight to head that often get australians to re-embrace the british monarchy. paul: ben wescott in the australian capital. let's get to su keenan. >> fed chair jay powell says the fomc will not flinch in the battle to curb inflation. marketing's -- third jumbo rate hike this month. monetary policy conference in washington, the fed expects responsibility for price stability and cautioned against prematurely loosening policy. janet yellen wants to see tax hikes on the rich to help pay for social spending. less than two months out from midterm elections, yellen used her speech to highlight what she sees as the biden administration's economic success stories. she says the most immediate challenges stabilizing prices

without losing economic gains. the u.s. government loosening restrictions put in place to curb technology sharing with black firms such as huawei. the commerce department says new rules will help the u.s. maintain its lead in setting international standards. officials confirmed that -- was allowing china to take a bigger role in groups that determine the way technology is designed and applies globally. australia has passed its first major climate legislation and more than a decade. setting legally binding, -- targets. the prime minister's climate change bill -- [indiscernible] global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

shery: we continue to watch global monetary policy. peru becoming the lead central -- latest central bank to raise rates by 25 basis points to 6.75%. this is a smaller hike than economists had expected. only two had predicted this move. central bank of peru saying inflation is slowing, some economic indicators have improved in august. still, this would be the 14th straight hike in a cycle that has added 650 basis points at the key rate. it has taken the level to 6.7 5%, the highest in 20 years. we had chile this week also rate hike a full percentage point. just today, we saw chile's inflation rate come in at double digits, much higher than economists expected. the same story for mexico where inflation continues to come in above expectations.

inflation is the big story as we are seeing on this chart. lately, central banks have started to hike rates. across -- and that tightening continuing across the world. take a look at how u.s. futures are trading at the moment. we are seeing gains after a volatile session in new york. this was after fed chair powell reprised his hawkish views from the jackson hole conference. charles evans saying the vet can fit -- fed could very well do hike in september. it's really about inflation. perhaps a little relief coming from crude prices as we continue to see oil easing. wti below the $83 level. paul: you mentioned the central-bank action out of peru and elsewhere. we did hear from the -- yesterday, signaling a slower pace of rate increases going forward.

there wasn't a lot of reaction on the aussie dollar. $67 50 eight cents, trading similar to yesterday. ozzie futures completely unchanged. new zealand trading for a little over an hour. the yen holding steady. as we have been discussing, keep a close eye on that to see if there is going to be anymore depreciation. shery: still ahead, we are following china's inflationary numbers. consumer price index likely edging down as food prices stabilize and nonfood prices are sluggish. first, find out why news and investment management expects a recession in the u.k. in europe, but not the u.s. this is bloomberg. ♪

♪ >> we need to act now, strongly, as we have been doing. we are strongly committed to this project. we will keep at it. it is very important that inflation expectations remain

anchored. the clock is ticking. the longer inflation remains above target, the greater the concern that the public will start to naturally incorporate higher inflation into its economic decision-making. shery: fed chair powell on fighting inflation. rate hikes gaining momentum. other top federal officials also -- the 75 basis point door even wider. editor kathleen hates is here. what was the message from chair powell and christine lagarde? >> they are 110% committed to that inflation fight. they are not going to back down. forget about pivots. forget about a central bank that is going to worry about it recession. definitely keeping the 75 basis point rate hike firmly on the table, saying they are going to keep this fight until they win. >> we need to act now,

forthrightly, strongly. we need to keep at it until the job is done. we think we can avoid the very high social cost that paul volcker and the fed had to bring into play in order to get inflation down. -- long period of price stability. >> he's alluding to what people consider the misstep paul volcker made. they thought they were getting inflation under control, so they started slowing down rate hikes. guess what? they had to go back in the fray and raise even more, causing a deeper recession. jay powell also said they are going to put their decision on the back of the totality of the data. that puts a lot more emphasis on the cpi's, if there was not enough already. the august cpi is out next tuesday. charlie elephant -- charlie

evans also on board with this aggressive hike, the doors open to 75 basis points. paul: the ecb moving 75 basis points as well. there was a sense maybe they wouldn't go that far. was this a surprise? >> it is hard to say it was a surprise because a number of people were saying it was expected. if you looked deeper, a lot of people thought it definitely could happen, but it might not. partly because the energy crisis is now full-blown in europe. it is a big threat to the economy. ecb even reduced its growth forecast as it raised inflation forecasts for next year. they too are aware of the risks. at the same time, they are knowing they have to go ahead. christine lagarde not just continuing to hike rates, but keeping up the pace with 75 basis point rate hikes, saying they will do more hi hikes as needed. bloomberg news reported it wasn't just ecb hocks pushing 75

basis points over the finish line, it was the doves as well. everybody realized they have to frontload the hikes. now, investors see about a 40% chance of a 75 basis hike happening in october. watch the data, see what happens. see how all of these things unfold over the next few weeks. the 75 basis point rate hike could materialize again but i think we will have to wait and see for now. >> our next guest says the earnings recession hasn't started yet since we haven't seen a cyclical low in equities. aaron pan takei, portfolio manager. thanks for joining us. in terms of earnings recession, we do still have tightening set -- tightening central banks. the last quarter wasn't too bad,

what to future quarters look like to you? >> the first half of this year, we have seen a d rating of equities but have not really seen any earnings recession. the last reporting cycle showed -- is quite resilient. i suspect that won't last for very long. significant headwinds, tightening financial conditions coming from a broad range of factors. quantitative tightening. [indiscernible] not the best combination for risk assets. i suspect europe, and potentially the u.k., but later the u.s. is likely to experience a recession. not a technical one, but a proper recession with an earnings sandwich. paul:paul: despite what we have had out of jay powell doubling down in jackson hole, we did see modest gains for u.s. equities. how long had we continue to see

that? how sustainable are they? can you see that maybe we could have a pullback? which markets are looking most vulnerable? >> the rally we have seen over the last couple of days is a relief rally. some uncertainty has been removed and typically that is positive for risk assets. i would say the u.s. market is still trading above long-term valuations. i suspect a rise in the discount rate should turn technology stocks, the terminal value tends to be very much driven by the discount rate. i do expect a d rating coupled with earnings downgrades. the s&p back into much lower territory. i would not be surprised if cvs down to 3400 -- [indiscernible]

that wouldn't be an exceptional scenario if earnings dropped 3% to 5% next year. -- could pull equities to that lower level. shery: a huge part of the recent rally we have seen was also driven by energy stocks. not surprising, given this chart showing how oil inventory has fallen despite the fact that demand has remained constant. where are energy stocks going? not just in the u.s., but globally? >> energy stocks are facing cyclical headwinds and there's no restaurant about that. if our scenarios right, that we are going to see economic weakness, potentially there's going to be less demand for oil and product. i suspect these will come out strongly on the others of the cycle. there has been an

underinvestment in -- businesses. i think that led to a significant supply-demand imbalance, which should be positive for commodity prices and should benefit oil and gas and resource companies in general. i expect cyclical weakness, but a strong rebound. shery: we are continuing to see the energy crisis in europe. what sort of direction can we expect in european markets? depending on where the crisis goes. >> the outlook in europe is -- compared to the u.s.. the energy crisis is having a much greater impact. that makes central bankers jobs much more difficult. some of these inflationary forces are external. much harder to manage through

monetary policy. i suspect the base rate, the deposit rate to rise despite the fact it could have a negative impact on employment and the economy. i suspect the european economy is going to recession rates this year, by the fact it has been relatively resilient. there are no easy fixes. this could last for much longer than people anticipated. paul: i want to get your thoughts on the u.s. dollar. the strength of baiting as long as the fed continues tightening. bill gross, is it time to get long on the british. what's your thoughts? >> -- investors take positions in more classes and form views. our view is that the u.s. dollar is going to remain supported. the fact is -- contribute to tightening monetary policy in the u.s. interest rate differentials at extreme levels.

we think the relative performance of the u.s. economy compared to europe, the u.k., china and japan, all supports the dollar. on top of that, you have safe haven flows which will accelerate in the second half of this year. and you also have foreign inflows. all of these factors will support the dollar well into 2023. i do not think it is time to take a view -- european currencies. paul: erin pataki, thanks for joining us. this is bloomberg. ♪

♪ shery: live outside buckingham palace where people are gathered to mourn the death of queen elizabeth ii. also celebrating her life.

u.k. pass longest reigning monarch. buckingham palace saying she passed peacefully thursday afternoon at her castle in scotland. she served the u.k. for 70 years. paul: truly is the end of an era. this prime minister was -- winston churchill. she swore enlist trust -- liz truss and appeared to be in good health. in australia, we woke up to that news.

>> as we come back, we have live pictures of president biden. he is anticipating a reception at the democratic national committee in montgomery county,

maryland. we will bring you his comments as we get them. [no audio] paul: in the meantime, we are going to talk more about queen elizabeth ii's death. shery: live from london in a moment. but first, a look back at her life. >> queen elizabeth ii range during a. shape period of political change. reggie took the throne, there had been debate about whether her coronation should even be televised. by the time of her death, she had recorded a comedy sketch for twitter. >> [indiscernible] caroline: as head of state, she presided over the end of britain's mighty global empire and watched the united kingdom -- the european union. >> my government intends on working on a new partnership with the european union based on

free trade and friendly cooperation. caroline: elizabeth alexandra mary windsor was born in london on april 20 1, 1926. at the age of 10, her father and actively became king after her uncle abdicated, making her the heir apparent. in 1947, she married prince philip. the following year, their son charles was born. in 1950 to come upon the death of her father, elizabeth became queen at the age of 25. amid cultural and political upheaval in the second half of the 20th century, the monarchy passed image in british society shifted dramatically. moments of pageantry and spectacle like the fairytale wedding of princes diana were quickly soured by the unraveling of the marriage. elizabeth's perceived lack of empathy. queen elizabeth maintained the nation's affection. a new generation come across as more into with the times.

controversy arose again over the family's relationship with prince harry and meghan markle, and her son andrew's association with jeffrey epstein. the final years of her reign saw significant turbulence as scotland debated independence and brexit reopened tensions in northern ireland. while she had no official say in government matters, the queen met every week britain's prime minister for a confidential discussion. she worked with 15 prime ministers over 70 years of dedicated service. caroline hyde, bloomberg. ♪ paul: for more on the passing of queen elizabeth ii, let's bring in reporter leigh-ann gerrans. give us a sense of the mood in the u.k. right now. >> when i came into work a little bit earlier today, i couldn't believe how sad it felt

to be driving through london. all advertising boards and posters on the bus stops have been changed to very poignant pictures of the queen. with just the dates of her life she did live. she obviously ruled over the country for 70 years. we have no nobody else, as caroline hyde mentioned. the legacy she has left. we have seen hundreds of thousands of mourners flock to buckingham palace to pay their respects to her majesty, who we do know died peacefully at balmoral earlier. shery: tell us about the days to come and what we can expect from king charles iii. >> we do know he will be called king charles iii. charles took over from his

mother as soon she died. now we will get details of what is to come. later this friday, king charles will travel to london and he will also -- you know, the pendulum starts to swing now. we have seen the country mourning the death of a monarch, and welcoming a new monarch. -- will make an announcement later this evening and details of the queen's funeral are likely to be announced. saturday, the queen's coffin will be returned to london by royal train. her body will lie in state in westminster hall. day 10, the funeral will take place at westminster abbey. it will also be a national holiday. markets will close and we will market two minutes silence. charles, automatically taking

over the throne. we will see in the coming days the pageantry and what plays out. nobody has seen that for 70 years. paul: for the lives of many people in the u.k. who have known no other monarch. she had a reputation around the world for being an expert at exercising soft power. is king charles going to be able to exercise that same soft power? >> i heard you talking earlier l -- about what she meant to people in australia. you will be entering a similar mourning process. king charles has learned from the best. he has been at his mother's feet for 70 years. however, he has waited a long time to become king. we have seen him slowly take over the role from the queen over the last year especially. he was really prominent in the

platinum jubilee celebrations we saw as she began to scale back, as she did become unwell. the queen has ruled with soft power, as you mentioned. she has been the gravitas that has kept this country together. she appealed to everyone around the world. keeping a good handle on things. also, keeping a good handle on politics. and also supporting the people. we saw that during coronavirus. she made a speech and everybody praised her because she touched the hearts of all all of us. king charles, we will have to wait to see how he will perform as a new monarch. but, he has learned from the best. we have a slimmed down royal family. they seem to have taken over a lot of different roles. as we move forward, we will see

how the new royal family does come into the limelight here and around the world. shery: leigh-ann gerrans with the latest on the death and life of queen elizabeth ii. as we continue to see the impact around the world, we heard from the australian prime minister. we are also hearing from the asa -- they will keep their hours under normal conditions but will be observing a one minutes silence at 11:00 a.m. local time. coming up, we turn to china and ahead of the cpi numbers due today. this is bloomberg. ♪

shery: china's consumer price inflation likely edged down in august. let's get more from our chief asia correspondent. it really seems china is one of the very few countries around the world where pricing aces have not taken such a big toll. tell us about what we are expecting and how much leeway this gives to the pboc. >> these numbers today look firm. a big divergence with china and the global inflation story. consumer prices expected to come and softer, mostly reflecting an

easing on food prices. pork prices up a little bit, but vegetables taking pressure off the headline reading. core inflation will be softer. that's after being soggy consumer mood. because of all the ongoing restrictions. on the producer side, we expect slower inflation there, reflecting weaker demand, falling commodity prices and a -- compared to a year ago. we take it altogether, it is expected to show fairly subdued inflation story. very different from what is going on in other major economies around the world. to your point, when you have that kind of environment, it does allow pboc to carry on supporting the economy. it means there's plenty of room, they don't have to yet were he about inflation headache. paul: hearing about the latest

policy push to help smaller companies? >> some details on state tv about basically giving finance aid to small firms to try to hire younger workers. remember, china has a record 11 million graduates coming on the job seen this year. the youth unemployment level is almost 20%, the highest since they started publishing data on that in 2018. there's a big push to get these people into work. -- financial aid for companies, tax breaks and that kind of thing to try to hire younger workers and get them up and running. it does speak to the idea that the government is trying to stabilize the economy. but it does not feel yet like growth is stabilizing. -- downgrading their forecast. all of it remains negative. -- china's economy at a turning point even though we are so

close to the all-important congress in october. >> chief asia economics correspondent andy cohen. let's check the business flash headlines. citigroup persuaded a u.s. federal appeals court to force a group of creditors to return more than half $1 billion of -- the decision is a major victory. citibank's effort to redeem the embarrassing blunder. the transfer forced the bank to explain to regulators how to made the mistake. hong kong's largest developer has reported a 3.8% drop in full your profit, fears the cities tour of weekend. underlying earnings fell to about $3.7, below estimates. the company -- hong kong border controls short-term challenges. elon musk says spacex had talks with apple to use -- for ipod -- iphone satellite features.

the comments given day after apple announced emergency satellites which allows iphone users to paying emergency services using satellite networks. it is unclear if the talks are ongoing shery: coming up, japan keeping guard on the yen, making its strongest intervention yet. this is bloomberg. ♪

paul: let's take a look at the japanese yen. pulling back some of the lows we saw earlier in the week. it almost touched 145. we heard from the vice finance minister at the finance ministry saying fundamentals alone can't justify these rules. with that in mind, let's get more from paul jackson. the ministry of finance and japan appears to be moving closer to taking an adventure where are we? >> we are definitely a step closer. no doubt about it. much more alert. however, whether intervention

will take place is far from clear. let's look at the language used yesterday. we had a three way meeting between the finance minister, the boj and the fsa. that news flagged concern. they mention fundamentals being out of whack. moves were clearly excessive. one-sided, speculative moves in the background. all of this is rampant up language. all options open. that is a clear hint. they have really ramped up the language. however, one of the key expressions used yesterday we need to look at was the moves on september 6 and seven. particularly flagged by -- in that meeting. if you look at the moves on tuesday and wednesday, the dollar-yen moved about ¥4.5. if we see another slide of that kind of speed, we need to be

alert to possible moves by the authorities. but if we see a grind lower that is in line with rate differentials, they are going to stand firm and not do anything. there is risk involved. if it goes wrong, they don't turn the tide, speculators could then have all bets on. it could be very messy. also, limited reserves to fight it. when it is helping against a strong yen, it is easy to -- limits on what they can do. when you are propping up the yen, you've only got here -- also, no u.s. backing. the u.s. treasury -- exceptional circumstances. no way. no green light from the u.s. one final point, it is the last

time japan intervened proper the yen is back in 1998. it tried numerous times and it wasn't working. in the end, it took the u.s. to join them to stem the tide. shery: what does this mean then? if intervention does not look likely, doesn't mean we could see change from the boj? a lot of people talk about a tweak to the yield curve policy they have in place. >> in some respects, the easiest way that would be for the boj to change policy. that is a point made in our interview with a chief economist that you can read on the terminal. however, boj standing firm. saying, this has nothing to do with me, the finance ministry. he is determined to get stable

inflation after decades long pursuit of the goal. he is leaving his post next year. at the moment, everyone thinks he is going to stand firm on that. it would really take government pressure against that stance to really nudge the boj to move. shery: paul jackson. tokyo's governor says the depreciation of the yen offers a chance to boost tourism. but, -- told us exclusively that will depend on when japan's borders are fully opened. >> the virus does not see national borders. as well as climate change has no borders. i think my participation -- the jakarta meeting was very meaningful. i know that we can share the

countermeasures against covid-19. it was very interesting. anyway -- tomorrow [laughter] all doors will be open. >> obviously we are spending. of course now we are dealing with the weak yen. so weak, it hit 144 yesterday. tell us about tokyo's financial health. however he doing? what does our report card look like? >> i think this is the time to import our exports. i mean, i told you that tomorrow the door will be open. big industry in tokyo as well as all of japan.

this is the time to greet more foreign tourist's by using this advantage. the depreciation of the yen. >> if you can take your best guess of when the borders will fully reopen -- >> soon. [laughter] >> months? november? >> the national border is under the management of the central government. [indiscernible] paul: that's tokyo governor speaking with bloomberg. a weak yen also giving japan's exporters a boost. let's bring in senior asia stock reporter. how is this playing out for japanese equities? >> weak yen has been visiting

japanese exporters. the yen has weakened 20% so far this year. if this loss will be sustained, it is going to be -- japanese currency -- 1933. all the other hand, many japanese companies have assumed much higher yen rate of the start of their financial year. this means that they are going to be able to rake in huge currency profits in coming quarters when they announce earnings. of course, they have been suffering from headwinds globally such as high inflation, a slowdown in many parts of the world. but, huge gains in currency likely more than to offset headwinds. shery: this is a great story.

earlier this week, we talked about how a cheap you want is not necessarily helping chinese stocks. that was perhaps because of the composition of the stock market with japan having large cap shares. tell us a little about those that are particularly benefiting in japan. >> compared to china, japan's biggest companies are more export-oriented. even companies that have been considered domestic like retail, they are also increasingly relying on revenue from outside japan. in terms of sectors, carmakers clearly reacting to the yen fold in recent months.

if you look at media companies in particular, we -- risen more than 90% this year. subaru also gained quite sharply. toyota is in a slump, but if you compare that with companies outside japan, european carmakers have fallen somewhere between 60% to 25%. clearly, the yen helping japanese carmakers. there are other exporter shares such as -- they also quite doing well. shery: bloomberg cedar reporter with that fascinating correlation between the yen and japanese equities. we will be watching plenty of stocks at the opening trade in japan. metal minors in focus. -- around finished property projects. boosting metal prices.

aluminum and copper rising and they continue supply risks. minerals could be moving. we are talking minerals later, so watch out for that. in japan from a keeping an eye on honda, which will continue to reduce production doing ongoing disruptions. korean defense stocks could also move north korea declaring a law that allows the exploitation of nuclear weapons as an attack on the leadership is deemed eminent. the market opens in sydney and tokyo. this is bloomberg. ♪

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>> this is "daybreak asia", we are counting down to asia's major market open as investors -- including chair powell,

really doubling down on these hawkish views. we have the ecb hiking by a historic 75 basis points. but of course tall, even the markets feeling the impact of the big news today, which was the passing of queen elizabeth the second -- queen elizabeth ii , really observing that moment of silence. >> there will be a moment of silence from the asx. trading will continue as normal. the death of britain's longest-serving monarch at a monarchy that stretches for 1000 years, casting a long shadow over the news today. but trading does continue as usual. what are we expecting? shery: japan is coming online right now. we have been watching the japanese yen very closely. strengthening for the first time in a few sessions already. we are seeing the first gains against the u.s. dollar and five days.

this is as we are close to that 140 four level. but the nikkei right now is gaining ground for a second session. this as we continue to watch some of those exporters taking a little bit more benefit coming from a weaker yen as their exports are becoming much cheaper around the world. the 10 year yield, we are watching it very closely because it did ease to that point to 4% level after touching the highest since july. that would be the upper limit of tolerance for the bank of japan. we are watching oil prices because this has a lot of implication for the broader inflationary picture around the world. we continue to see the downside right there when it comes to brent below $90 a barrel at the moment. paul: we are seeing a few modest gains in the very early going in australia. right now the materials are performing ok, up by two thirds of 1%. broader indexes up by a 10th of 1%. in terms of materials we will be

speaking to the mineral ceo about the outlook for capital. aussie dollar holding firm at 60 76 four. we did hear from the rba government yesterday, giving a speech in which she really dialed back some of the hawkish rhetoric, really suggesting that the larger rate hikes that we have seen in australia might be coming to an end soon. shery: let's bring our next guest who says he has become more cautious after the recent equity rally. with us now as head of equity research for asia at uvp. always great to have you with us. what are we expecting in terms of the asian market, especially when we see a stronger u.s. dollar a play? >> good morning obviously the situation doesn't change frazier, a strong, higher and stronger dollar. is generally not good for asian markets and also for asia earnings. so we think that that's one part

of the asia earnings story. the other part is what's continuing to happen in china, which is the impact of lockdowns on economic growth, so we sort of wrap all that up. the recovery to the mid-2018 level of earnings for msci asia and japan, which looks like it would've happened this year, is now we think at least pushed to a mid next year story. shery: you are still calling china pretty treat giving the underperformance in the ongoing covid zero policy that was implemented in the country. do you expect that to change after the party congress, and what would be the implications for the market? kieran: it's a hard one. the science is pretty solid. the rest of the world has reopened, so the zero covid policy, there is no end to it, so there has to be some sort of reversal and that's quite hard to forecast, obviously.

overall, we think the other part of the china story is that china has been a little bit slow to come out with what everyone would expect to be a big stimulus program heading into the party congress. so much so that nobody talks anymore about the 5.5 percent gdp target for this year and surely that is not going to be reached. so we think that catalyst for china, which is as you mentioned, clearly cheap on headline valuation, has really pushed and into next year. with that also means that, relative to the rest of the world, which is heading into a pretty difficult time, we think. six month after the kickoff of the 2022 rate hike cycle is quite critical. against that, china has been very weekend, it's probably cheap and we think it's a good place to add for longer-term investors. paul: it's not just equities, but the yuan gets cheaper by the day.

that seven level against the greenback insight. we have a chart on the bloomberg terminal that indicates how low effects reserves were. but a five-year low as the currency continues to weaken. do you think concerns are really start an amount now after their capital outflows and china? kieran: it's a closed capital account, and i think this all goes into the strong dollar story, which is affecting all currencies. obviously the yen, the dramatic lows recently as well. frankly, there's not much that the central banks can do, or really should do. at the moment it's more about a fiscal story and let's see, i think we are going to have to live with weaker currencies from asian economies for a while. paul: a number of biggest we talked to like indonesia as a prospect and its buy a lot of the strong selling we have seen

in the other markets. is this a market that you are looking at? kieran: certainly, indonesia is the best performing market in asia so far this year. it's partly because it's hard to find great stories outside of as he and, but indonesia stands out. the fact is if you are getting out of larger markets, a little bit of buying indonesia's going to pursue market quite genetically pure global flows are not going to head into indonesia instead of japan or china. there certainly some interesting bottom-up stories, but is not something that we will particularly focus a lot of. paul: thank you so much for joining us today. it's get over to su keenan now for a check of the first word headlines. su: we start with fed chair jay powell, he says the fomc will not flinch in the battle to curb

inflation. hardening market expectations with the third straight jumbo rate hike later this month. we could get the monetary policy in washington, the fed expects responsibility for price stability and cautioned against prematurely loosening policy. >> we need to act now, forthrightly strongly and we need to keep on it until the job is done to avoid that. we think we can avoid the kind of very high social costs that the fed had to bring into play in order to get inflation back down and set us up for a long time of price stability. su: janet yellen a warns tax height it's on company to help pay for social spending. less than two months out from midterm elections, she highlights what she sees as the biden administration's economic success story. she says the media challenge with stabilizing prices without losing economic gains for the past two years. the u.s. government is loosening

restrictions that would put him price the technology sharing with black listed companies such as huawei. the commerce department said the new will help the u.s. help put in international standards. officials were concerned that it would allow china to take a bigger role in groups that determine the way technology is designed and applied globally. and australia has passed its first major climate -- and more than a decade. this sets legally binding targets to deepen emissions curbs. the prime minister's climate change bill legislates a 43% cut the carbon dioxide emissions from 2005 levels by 2030. this target brings australia closer in line with allies that includes canada, south korea, and japan. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is

bloomberg. paul: still to come, the minerals managing director and ceo andrew cole discusses their plan to double copper production and capitalize on the mobile push. up next, the world leaders remember queen elizabeth, whose long grain offered -- for the world's conflicts. this is bloomberg. ♪

>> queen elizabeth ii has been a wise and encouraging guide. always wanting the best for our nation and greeting exchange and understanding with grace and the abiding faith in the australian people's judgment. from her first trip here, it was clear her majesty had a special place in our hearts, and we concur. paul: the australian prime minister giving his condolences, just one of a number of world leaders to do so. as we continue our coverage of the death of queen elizabeth ii. we will be live in london in a moment, but first let's take a look back at elizabeth's life and legacy. >> queen elizabeth the second rained during a time of

unprecedented technological, social and political change. when she took the throne, there had been debate over whether her coronation should even be televised. by the time of for her death she recorded a comedy sketch for broadcast on twitter. as head of state, she presided over the end of britain's mighty global empire. and watch the united kingdom -- and the european union. >> my government intends to work towards a new government in the european union and based on free-trade and friendly cooperation. >> elizabeth alexandra mary winds are was born in london on april 21, 1926. at the age of 10, her father unexpectedly became king after her father abdicated, making his eldest daughter the heir apparent. in 1937 she married prince philip of greece, and the following year their son charles was born. in 1952, upon the death of her

father, elizabeth became queen at the age of 25. admit cultural and political upheaval in the second half of the monarchies -- shifted. pageantry like the fairytale wedding of prince charles and lady diana spencer was quickly soured by the unraveling of the marriage. in elizabeth perceived lack of empathy for her daughter-in-law. but queen elizabeth retained the nation's affection. a new generation came across as more in tuned with the times. although in the raining years of her life, controversy arose again over the family's relationship with prince harry and meghan markle, and her son prince andrew's association with a convicted sex offender, jeffrey epstein. the final years of her reince optimistic political turbulence as scotland debated independence in brexit reopened tension. while she had no official say in government matters, the queen met every week with britain's

prime minister for a confidential discussion. she worked with 15 prime ministers for over 70 years of dedicated service. caroline hyde, bloomberg. paul: for more, let's bring in our bloomberg reporter. and our chief asia correspondent stephen engle. it's very early in the morning in london. what is the mood in the capital? >> what we know, the senior royals are still there after we heard that the queen -- that queen elizabeth ii did die yesterday in scotland in the much beloved castle where she does spend her summer holidays. the mood here in london is definitely somber this evening. we have seen the crowds flocking to buckingham palace to the queen who has reigned over this country for 70 years.

all of the flags are flying at half mast, and all the advertising boards across the capital now feature pictures of the queen. and we also have seen the front pages of the newspapers coming out today and once again, they have very, very regal images of her majesty, and we are all paying tribute to her reigned over the country. her eldest son, charles, succeeds queen elizabeth on the throne. he will be king charles iii. he is expected to make a speech later this evening and travel back to london this afternoon. we know the queen's coffin will be returned here to london on saturday and it will also lie in state in westminster hall. and we do expect her funeral to be in 10 days time. however, we will be waiting for clarification on those details. shery: queen elizabeth had a

huge impact across the world. some people calling her the personification of soft power, especially when it comes to former members of the british empire. steve, what are you seeing in hong kong -- hong kong? stephen: queen elizabeth the second made it during her reign that oversaw the colonies in this part of the world, whether it was in singapore or malaysia, also of course here in hong kong and the decolonization. but in hong kong she has a special place in many people's hearts. i wanted to get a pulse check of how the hong kong people feel. it comes amid, now, modern-day, more of an acrimony between london and beijing. and she has persevered throughout that period she stayed out of politics, mostly. i asked my wife, that's always a good source to get the pulse check of the hong kong people. she is born and raised in hong kong. like many hong kong people, were given a british education. she texted me this morning and

said, mostly the people of hong kong feel respect and admiration for queen elizabeth the second, and she ended by saying, she was our queen. so there's going to be mixed feelings, but mostly love and admiration for queen elizabeth the second period in hong kong has we wake up to this news. it will be very interesting to hear whether the hong kong government and government officials here will put out a statement and what their sentiment will be. the hong kong government did not really put out a statement to congratulate her on her jubilee celebration. beijing did. keep in mind, she was the queen for 40 five years of hong kong -- british rule of hong kong. her name and her legacy are still seen on the streets. this area is creams road. it's named after queen victoria, but still, it is the legacy that

remains here 25 years after the handover to chinese rule. shery: hong kong is really a reflection of the change that we have seen in u.k., and u.k. standing on the global stage. and we have been hearing from people talking about the queen as that bedrock of the cornerstone of the u.k., despite the changing nation -- nature of the world. what happened next, what can we expect from king charles the -- king charles iii question mark leigh ann liz truss, who only became prime minister 48 hours ago, we could see the pictures of her meeting queen elizabeth the second on tuesday. it was a very, very poignant photograph. now probably one of the last we will see of the queen. and there is a new error here in -- era here in the u.k. that is undoubted. we have seen huge flux within the last few days as we welcome a new monarch, that is king

charles iii. and also as we welcome a new prime minister. the legacy of the queen is for 70 years. she didn't really get involved in politics, and we have heard, however, she spoke to the prime minister every single week. she was a trusted source, she was the person who those could confide in. now king charles iii takes over that role from his mother. he has essentially learned from the best. however, these are big shoes to follow. she was a lady who really served this nation, day in and day out. she never really had time off. she always said that part of her life was the job. but going forward, we do know that king charles iii wants to slim down monarchy. we have seen that come to light in the last couple of years. we especially saw that at the platinum jubilee with only senior royals on the balcony.

so moving forward, we will see how king charles begins his start of the rain over the u.k.. but i just want to echo what stephen engle said earlier. with the public feel on how we all feel in the u.k., i text my mother and asked her how she felt my mother said, i have not stopped shedding a tear, and i feel how much of the country is feeling today. paul: you talked about the pulse of the feeling in hong kong as well. obviously britain and hong kong have a relationship that goes back a long time, but has been eroding over the years. what does the future of that relationship look like under king --king charles iii? stephen: the monarchy china since data politics. there was one bit of the slap, if you will, i believe it was back in 2015 when the queen was

caught saying some comments and private on camera, but it was a private conversation where she alluded to the chinese delegation of xi jinping is being very rude. but those were taken out of context. essentially there queen usually stayed out of politics, but there is a growing acrimony over the issues of hong kong, of course between u.k. and beijing. london seemed a bit sympathetic in 2019 and 2020 protest movement in hong kong also has denounced the national security law. so, it will be interesting to hear whether the hong kong government does put out a statement today because it's undeniable, hong kong, over more than 150 years, is a product of the british colony in the british rule despite the fact that beijing is making efforts

to distance hong kong from its colonial past. over those 45 years she was queen, she came that hong kong was part of the british colony. she came to hong kong only twice, in 1975 in 1986 after her and prince philip's visit to beijing where they walked on the great wall of china. it's surprising that she only came twice, but still, she made an indelible mark on the people of this former british colony. shery: you can get more on these top stories on today's edition of daybreak. bloomberg subscribers go to dayb on your terminal. it's available in mobile on the bloomberg anywhere app. you could custom more -- customize it so you get the news and indices and assets that you care about. this is bloomberg. ♪

shery: take a look at how european futures are trading in the asian session. we are seeing a little bit of mixed pictures after stocks climb, even when we saw the ecb's historic rate hike 75 basis points. in fact, financial let those gains outperforming all other sectors, insurance, financial services. rising higher rates, boosting their profits. but the fact remains that there are inflation risks, there are recession risks. christine lagarde is talking about the upside risks that we are seeing in the region. the european bonds fell given that the ecb also remove that cap of how much insurance government deposits can earn and left the rates above 0% for the first time in a decade. paul: let's get a quick check of the latest business flash headlines. citigroup has persuaded the u.s. federal appeals court to force a group of creditors to return more than half $1 billion it accidentally sent them.

the decision is a major victory for citigroup's main banking -- to redeem the embarrassing blunder. the accidental transfer force the bank to explain to regulators how it made the mistake. hong kong's largest developer has reported 3.8% drop in the four-year profit as the market weekend. underlying earnings fell to $3.7 billion at the year end of june 30, which was below estimates. the company pointed to hong kong's border controls in the global slowdown for short-term challenges. elon musk said that facebook held talks with apple about using starting connectivity for the iphone's new data light features. the comments came after apple announced emergency sos via satellite, which allows iphone 14 users to ping using satellite networks. it's unclear as the talks are ongoing. shery: how asian equities are trading at the moment. we have the korean stock arc it

out on the holiday. but you can see that we are seeing gains on the new k up at 10th of 1%, being led higher by health care, utilities, the japanese yen strengthening a little bit as well as the asx 200 is gaining for a second session. we are seeing the aussie dollar rebounding from that low after the rba governor signaled the potential and to outside interest rate increases. coming up, we will talk a little bit more about the ecb. it went big. we will discuss. this is bloomberg. ♪ 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. so boost your bottom line by switching today. comcast business. powering possibilities. ™

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>> need to act now, forthrightly strongly as we have been doing and my colleagues and i are strongly committed to this project and to we will keep at it. it is very important that

inflation expectations remain anchored. the clock is ticking, as i mentioned. the longer that inflation remains above target, the greater the concern that the public will start to naturally incorporate higher inflations into its economic decision making. shery: jerome powell on fighting inflation. central bank rate hikes gaining momentum as top fed officials just heard from chair powell. they are opening the 75 basis point door even wider in the ecb is walking right through it. our global economic and polity -- policy editor kathleen hays is here. there was a message from jerome powell and christine lagarde. kathleen: inflation is high, it's way too high. they know it will be aggressive and be willing to do whatever it takes. but definitely that's the mantra for central banks, do whatever it takes to bring inflation down. chair powell says they will do this until they win. let's listen to what he said.

>> we need to act now and we need to keep at it until the job is done to avoid that. we think we can avoid the kind of very high social costs that the fed had to bring into play in order to get inflation back down, and set us up for a long time of price stability. kathleen: jay powell is alluding to former fed chair paul volcker, the man who displayed the roaring inflation of the late 1970's and early 1980's, and started backing off too quickly. he had to go back into the fray and raise rates more, creating an even deeper recession. that's what jay powell says they want to avoid by moving now and moving hard. they will move on the totality of data, talking about whether or not they might do the 75 basis point hike on september 21. that would be the third one in a row if they do. but they are more focused on the u.s. cpi report on tuesday, expected to still be over 8% year-over-year, something that could be way too high for the fed. this isn't just chair powell who

has gotten more hawkish. a member of the federal reserve for some time now, and he also said that a 75 basis point rate hike is possible, there is no doubt they will raise rates in september. again, everybody on board with this one. paul: the ecb moving 75 basis points as we mention here, but i had meeting, a lot of sense maybe that wouldn't go so high. what was the thinking in the end? kathleen: i think people were very much divided even though he said we could expect 75 after with the ecb official said at jackson hole a couple of weeks ago, very hawkish remarks. that thought 50 would be possible largely because the economy is suffering under the weight of many forces. the war in ukraine, the energy crisis that is unfolding every day. those are the kinds of things that they admitted will slow the economy down. next year there raise the inflation forecast for 2023. they brought it down, the growth

forecast for the year as well. so, they are moving ahead, that determination that the board member from the ecb also said. the determination to get this job one. importantly, christine lagarde heated specifically at the possibility of not just more rate hikes, but 75 basis point rate hikes. she said they are not forecasting our promising it, but she did say she sees more high hikes as needed. it wasn't just the hawks pulling the doves forward. ecb, hawks and those on board according to our bloomberg reporting and now markets are pricing in a 40% chance of the 75 basis point hike and they meet again in october. so, watch the numbers, watch for future comments, and we will see what people are assuming by the time we get there. paul: global economics and policy editor kathleen hays. that's get to su keenan for a check of the first word headlines. su: health officials in china

are telling people to minimize traveling to other cities during the national day holiday to prevent the spread of covid. the government may relax restrictions after party congress in october. in a reversal and guidance in june, the national health commission now requires all regions to conduct regular pcr testing. japan's top foreign exchange officials are keeping all options open. it's the recent move with the yen continues. they said it's the strongest warning yet on the currencies recent drive. the fundamentalists cannot justify the move that he says has been expected in recent days. and, 14 u.s. companies, including amazon, apple and visa have pledged at least half a million digital and training opportunities for goals in the indo pacific reason -- region. the announcement came into the

grouping of the u.s. and 13 asian nations meet in los angeles. it's the most significant u.s. economic engagement in the region since donald trump pulled out of the transpacific partnership in 2017. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg. shery: more on the global response for the death of queen elizabeth and ascension to the british throne from king charles iii. the american professor is in melbourne. good to have you with us, just give us your reaction to what was a pretty much expected, but it seems the world is still in shock at the loss of such a momentous person around the world. somebody would have served her country for the past 70 years. >> yes, good morning. it is a shock. it is not at all unexpected,

given the age. but such a remarkable and very long-range. nevertheless, it is a great marker of the point of change. many people have said that it's the end of an era and of course that talent will receive. the queen has been the queen of australia for 70 years. she has only recently celebrated her platinum jubilee. and for many people, most people in australia, myself included, she's the only monarch we've ever known. so the really interesting questions going forward are going to be how this point of change is going to play out in australia and in other commonwealth nations. but particularly those who remain in constitutionally monarchies as australia does. and when we use the opportunity of the advent of king charles the third to reflect on whether that system of government for

us, even the great rise of democratic sentiment would be placed on parliamentary democracy. shery: take a listen to what the prime minister had to say about the passing of the queen. >> queen elizabeth --queen elizabeth ii has been a wise and encouraging guide, always wanting the best for our nation and greeting it's change with understanding, good grace, and an abiding faith in the australian people's judgment. from her first trip here, it was clear her majesty had a special place in our hearts. and we in hers. shery: to your point earlier about australia being still a constitutional monarchy, what could be the implications of now having king charles instead of queen elizabeth, that perhaps separation or division that we could see between the u.k. and australia? >> we just saw the prime minister there had a very

respectfully indicated that in the second term of office, should he win the next election, we will be considering that very question and the prospect of moving to referendum on whether australia should become a republic. of course we had a referendum in 1999 that did not succeed, so we do remain, together with 14 other nations in the commonwealth, as constitutional monarchy. but as the prime minister said, is a great place in australian hearts for the queen. she visited here more than 16 times, which is quite extraordinary. beginning in 1964 when she was still a very young monarch. in the numbers that came out during that first visit were absolutely phenomenal. she stated for more than a month and a half. and it's estimated that 75% of australians actually saw the queen. which, when you think about that, it's a remarkable amount. but time is different in society

is far more multicultural. we have moved away from that difference that we showed at that time. but nevertheless, there is a great effect for the queen. and i think that the rupture that the imminent rain will bring, and the questions it will quite rightly bring is a very fitting time under king charles the third --king charles iii to now ask those questions. paul: it's an interesting situation. the former prime minister, malcolm turnbull, which was very involved in that republican referendum back in 1999, has said he would not be pushing for another referendum as long as the queen was alive, such was the respect that she was held in here. but now the queen is gone, what is the path forward for the republican debate? >> i think malcolm turnbull was right in making that comment. many people felt uncomfortable, even though these are institutional questions, it's not impossible to separate that

from the person who has held the reins for so long. and now that the queen has died today, we have a new king, that's the nature of a monarchy, it's the domestic monarchy we have we know who are head estate is and that is now king charles iii. but the government said it won't be moving towards this sugar when the next election, so we are looking at a process that will take out minimum four years. i think that's appropriate. this is a big step, there are big changes to be made which is the powers of the new head of state and australia's elected head of state and set up a monarch. and i imagine that will be very strong move towards that time of morning. once the public has moved on and within looking towards republic. paul: the queen visited australia shortly after that failed referendum in 1999 and she was held in very strong affection and australia.

is there a possibility that king charles iii could get some of that similar affection? >> that remains to be seen. one of the big differences is, charles has already indicated through his actions that he they far more active, and if you like interventionists, royal. many people have described him as like lead to ba middling king. he himself has said that he has acknowledged that he has made ready strong political statements in the past, he has been critical of some government policies. this is an area where the queen was very careful not to get involved, very rarely did she get involved in anything that might be seen as controversy. not without the controversy. the intervention in the referendum was another. but these are small numbers in the lifetime.

charles, on the other hand has been very, proudly activist in approaching governments that he has disagreed with. there's a real problem with that because the issue with the constitutional monarchy is that it must remain neutral at all time. it is the place of elected government. so if charles does not change that lifetime of expectation and anticipation involvement in the political sphere, i think the monarchy could be in some difficulty. paul: the professor at monarch university. thank you so much for joining us today. plans to more than double copper production to capitalize on the global push to electrify away from fossil fuels, joining us from the sidelines of the forum is the managing director and ceo. that conversation in a moment. this is bloomberg. ♪

paul: the company plans to more than double copper production to capitalize on the global push to move away from fossil fuels. joining us on the sidelines at the jeffries asia forum is a managing director and ceo at oz

minerals. take you so much for joining us today. we did here after your earnings announcements, the intention to double copper output. could you give us some idea on how that's going to be achieved in the timeframe you are looking at? >> absolutely, i can. we are excited about the portfolio and opportunities we have built over the last seven or eight years. we have great very low cost already in south australia and growing in brazil. we have expansions that are approaching fid and west musgrave to the latter half of this year. so there is a lot of growth in the business. and as you said, we can potentially take this company from 140 down of copper equivalent production to well over 330,000 tons of copper production in the next half government years. we've also got more than half of our space yet to be classified in reserves. so it's the potential to be

above that that we are actually working on. paul: how about the demand side of the picture, because we do see commodities trading in china suffering some pretty sharp falls at the moment. copper off about 3.7%. what is your outlook for commodities prices? andrew: i am very bullish on the medium to long-term fundamentals for copper and nickel. both of these commodities demand a growing strongly. i think we are joining electrification all around the world and on the supply side, global copper had grades declining, operating because going up. new copper nickel discoveries are at an all-time historic low. i think it will serve exceptionally well. that's not to say we won't have short-term volatility in commodity markets. shery: what about other battery

metals? you talk about progress when it comes to mining in the northern territory, what metals are we talking about here and what could we expect when it comes to the broader portfolio of minerals? andrew: great question, over the last eight or 10 years we have been very focused on building a copper platform approach at the moment. recently, the west musgrove project has taken it through to the last stages of study. we have taken the opportunity to pivot to modern minerals, and perhaps that means copper and nickel, so we look to expand out our opportunities into both copper and nickel. we may look for other commodities, but for now there are two primary commodities we see with our biggest opportunities over the biggest to long-term. shery: you recently just knocked back a takeover bid. do you expect a higher offer and how will that impact your conversations? andrew: the court -- the board made a very clear decision that

it was not adequately compensating our shareholders with the fundamentals, or if the unique nature of oz minerals core, which has low cost, long life operating assets and a tier one jurisdiction. we felt there was an opportunity that was an undervalued business. from our perspective, we are getting on the cycles. we have a lot of milestones coming up through the rest of this year. so we are very focused on reaching those milestones, creating value in doing what we do very well. paul: china is one of the key consumers of the commodities that you produce. we are looking ahead to the china congress at the moment. xi jinping expected to get that third term. what's your biggest hope or wish for china's economics over the coming five years? andrew: i think one thing about all countries, i think we can say when it comes to copper and nickel is, copper is a key ingredient for the

industrialization of every nation. it's a core commodity for the consumption of white goods, and now with the unified approach to decarbonization, it's also on the country's agenda to de-carbonized and clean up the atmosphere. so when you look at copper and nickel, i think china included, these things are in every country's future strategy. i could see the increase with the individual choices that any country makes. shery: what are you expecting in terms of infrastructure in china and how that could actually help demand? because globally we are already now talking about a potential recession. how was out factoring into your base case for prices going forward? andrew: i understand. it's really interesting. if you look at the independent research, i use probably the broader recognized dataset. i think we anticipate a more

than 6 million ton deficit of copper within the next 10 years. and that is exceptional if you are a producer. so there aren't enough -- will bleed to fill that 6 million ton of gap in the sector. that's about 20% or 30% of the size of the copper market. and those are not coming through. irrespective short-term deviations and fluctuations, that supply deficit in the glowing demand because of electrification and decarbonization, we will see supply demand built up, continue to rise in prices continue to go up as a result. shery: it was really good talking to you. oz minerals ceo there. thank you. coming up, we continue to talk about china because we do get cpi numbers. here why analysts say consumer prices are edging down in august. this is bloomberg. ♪

shery: china's consumer price inflation and gains and factory prices both likely inched down in august. let's get more from our chief economic correspondent. china is one of the few countries not feeling the global inflationary pressure as of yet,

what's different in this economy? enda: is a very different story. we know consumer spirits are quite subdued because of the ongoing covert restrictions. food prices are expected to stabilize. more broadly, it's a wheel basket under control. core inflation subdued due to the decline in energy prices, especially oil. consumer inflation is expected to come in and around 2.6 percent. factory prices, like you mentioned, also coming off the board and that's reflecting slowing demand with your chinese export slowing. ozzie prices have come off their highs, that's helping then. if you have slower producing prices for chinese companies, that's pressure taken off the global and fresh -- inflation story due to prices of goods. when you take it altogether, the chinese inflation story is very different compared to others around the world and it means the government has plenty of room to put more money into the economy without worrying about

price pressures. paul: how about some of the smaller companies in china, what's the latest policy push to help them? enda: the story there came out last night, the government will push through financial aid for smaller companies in the form of loans and other measures to especially a higher younger people. we know that china has a record number of graduates entering the job market this year. we know that unemployment is at a record, almost 20%, that's the highest since 2018 when they started publishing the particular dataset. so, there is definitely pressure on the government jobs for young people. this will be one of those measures where they will try to create jobs markets from the university. obviously, there's a long way to go in terms of the broader economy. i don't think anybody has said the economy has stabilized. there's a feeling that china's economy has yet to bottom.

shery: of course, our coverage of the passing of queen elizabeth ii continues, britain's longest-reigning monarch has died at the age of 96. she served for 70 years, longer than it 85% of the u.k. population that has been alive. this will start a tumultuous 10 days for the u.k., a time of national mourning. that's it from daybreak asia. bloomberg markets china open is next. this is bloomberg. ♪

>> good morning from hong kong. 9:00 a.m. in beijing. welcome to "bloomberg markets: china open."