1990's. paul: i like to watch out for the yen. cachet lot to watch -- a lot to watch out for in the yen. >> top-tier media school in beijing has been sealed off due to a covid case among students. 14 new cases from quarantine. this is a shut down ahead of the party congress in october. a new running mate, this could lead to several important ministries including finance or agriculture.

a new opinion poll suggests the majority of thais are dissatisfied with the acting leader. they became the acting prime minister when the former was suspended. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. paul: ukraine's forces have continued the rapid advance in the kharkiv region. raising the question of how far they can go. tony joins us now. ukrainian forces are that have captured a town. >> the element of surprise on

both sides. the next question for the ukrainians after this stunning change. we heard, the video address -- there is a risk of military a over stretching that will play out.

it has been a gateway for russian supply lines. there was a rush of reports that the russians have given it up. zelenskyy claimed that they have retaken it. shery: when we expect next from them? >> there has been news from the self-proclaimed republics that have been set up in eastern ukraine when russia first moved.

what event happened is according to the ukraine side that sunday night that there is a series of -- [indiscernible] this is russia hitting back in retaliation for our advances. it is a real thing and it shows that russia is still hold significant cards including missile capabilities that can strike with what the ukrainians described as civilian targets. shery: the latest on the russian

invasion on ukraine and given ukraine's advances in the military conflict, we see more strength in the european currency. this is gaining ground, and we see the rate hike, at least since the invasion of ukraine, they seem to be gaining ground again. still ahead, we discuss the energy crisis with energy international. the rising cost of power is pushing more people into poverty. we talk strategy with the dfr's kevin who thinks investors are working up to the fed running down the balance sheet. this is bloomberg. ♪

august, if it is not -- inflation is in august, it is not enough to slow inflation. we see a slowing in the cpi print of 8% which is still pretty high. core inflation is rising as well. on the balance of probability, are we looking at another 75 basis point next week? what do you think? >> i think the balance of probability, i am expecting 75

basis points. among the rhetorical nuggets we have heard, several of the fed board have expressed their opinion that we have another 35 basis point hike. it makes sense for them to frontload it. yes, i am expecting the headline number two come in. it has been enough of an improvement to deter the fed. paul: we have yields, predicted that falling as well.

-- protected debt falling as well. >> you want the fed have interest rates which is the most significant element. there is a pledge to run down the balance sheet. this month at least according to the plans they released earlier, a month where the monthly runoff of the balance sheet comes from around 45-47,000,000,000 up to $95 billion. we saw in the mutual fund data that we track, a noticeable reaction to that. the mortgage-backed bonds had their biggest outflows in nearly four months. there was an uptick in redemptions from big equity bonds. especially the ones dedicated to

the u.s.. shery: let me take you to our question of the week. we are ahead of our fomc decision which is the key. what is the best trade ahead of this policy decision? >> i think it is where we are seeing people take mutual funds. if you need income in the months and years ahead, there is a chance to get it. we are seeing strong inflows into short-term u.s. treasury funds. we are also seeing a lot of interest in dividend fund which is surviving the strengths and arrows we have seen this year. given how the lien yield has

been over the past decade, given the number of retirees coming out. i think the trait is to it is below the rate of headline. shery: as we watch the oil market in the of the commodity space, we see ukraine making some military advances against russia. what are we saying in terms of russian exposure in the allocation that has happened locally? -- globally? >> have largely finished reallocating the russian exposure. among the dedicated bond space, rotated a lot of that exposure to oil producers, the saudi arabian goal state, -- goal state. they have focused on most of their oil exposure on saudi

arabia and beefed up their allocations in india and brazil as well as south africa. shery: good to have you with us. director of research at cps are. the bank has delayed despite a week. -- the british bank has been delayed for a week due to the death of queen elizabeth. good news on the assets that you care about. this is bloomberg. ♪

paul: taking a look at the day ahead, australia and new zealand, australians have a new public holiday to mourn queen elizabeth the second. the public holiday will be on the 22nd of september. we are watching shares on the market open as the sector sits down with mining authorities over safety concerns in a copper mine and the trade and tourism administered says the cost of travel is fueling a labor shortage. there may be a subsidy on airfares. 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.

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>> you are watching daybreak australia. ukraine's forces have continued their advance, unconfirmed

reports announce that their troops have taken a town not far from the russia-ukraine border. they have published a map, showing the most of the forces out of the kharkiv region without commenting further. president biden says that u.s. will not hesitate to use it military power against terrorist threats. he cited the airstrike he ordered that killed al qaeda leader, the successor to osama bin laden. he says he owes an incredible debt to the troops who served in afghanistan for over 20 years. britain's right wing has taken over the early vote count. it is likely to gain 175 mandates in the parliament on sunday's election. the result is big as the party

was originally shunned as extremists by establishments. the announcement comes a day after beijing says it is discovering a new cereal that contains helium-3, a future energy source. both china and the u.s. are eyeing resources with space mining shaping up as a possible source. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. paul: australia will get a one-off national public holiday to mourn queen elizabeth ii. this revise a decade-long debate over whether the country should become a republic. emme, what is the reaction in australia? >> there has been sadness, and

coverage across the media here. there are pretty strong ties to the u.k., mostly cultural ones. . and one at a time for the debate on whether i really should become a republic to creep into the discourse. we saw the leader of the green party use his suite of condolence to bring that to the itas stoked that debate once again in australia. shery: we know that the prime minister supports the idea of becoming a republic. while he want to use his political capital for this push? >> it appears not. there were questions if you would bring forward a timeline for a referendum that would be required if australia was to move to being a republic. he did reiterate that what he had said in the past, his

priority is getting an indigenous aboriginal voice into the constitution first and that a referendum on the republic would not happen in his third term as prime minister. it does not appear that the queen's death will change that. he is trying to capitalize on her death. at least in this point of time. it remains to be seen whether voices really start to build around this, particularly around people react to the reign of charles the third. shery: that is emma o'brien. many other priorities for the australian government including china, australia relations. the chinese counterpart escaping the t-28 meeting in indonesia next week and he may have to wait a little longer for the first 11 -- 1-1.

where are we at when it comes to the relief between australia and china and what we can expect if we do not have this meeting at g20? >> this lack of a meeting is significant. we already had a meeting between china's defense minister and discussions around chinese xi jinping -- the chinese president and the joint president. trade is the major sticking point between australia and china. a major hurdle to any warming of relations are these tariffs on australian exports including things like wine, lobsters, barley. any warming of relations, these tariffs need to be lifted. about a meeting of the trade

ministers, it is unlikely. paul: the election of a new government, it is seen as a chance to reset relations. as you say, no movement on the trade front yet. why do trade relations remain so strained? >> it remains one of the areas in which there is a leverage on the australian government and i think it remains a sign that tensions are still high between australia and china. there have been efforts on both sides to move the relationship to a warmer footing. australia's ambassador has been saying that china wants a a reset. they went to restart diplomatic ties. there is a tension between the two of them which has been there since australia created china back calling for an investigation into the origins of covid-19 in april of 2020. shery: g20 will not be a

catalyst for a meeting, when is the next opportunity for a break in the trade relationship? >> it is unclear. the meeting will be a sign that china -- kaiser warming between australia and beijing. we are stuck in a stalemate where the initial warming and the meetings that have not happened for years have kind of petered out a bit. the ambassador to the national press club in which he laid out very clearly what china wanted in terms of a relaxation of tensions. things that china and australia would not agree to. we may be waiting on the sign for the icebreaking. paul: bloomberg's australia

government reporter there. the ice may be breaking, may be it is re-freezing a little bit as well. the entire integration assistant in australia is due for review and part of the review will see a change to a thing called the significant investor visa which means anyone with $5 million and 3.5 million dollars to invest in australia can come and live here. the affairs minister says there is no reason to keep that because it is affecting people in the late stage of life and retiring very wealthy chinese. shery: a pathway to australian assistantship according to local media and people are not happy given what we have heard about where china and australia relations ally. policymakers are not liking the fact that there is little tax income for the government coming from this program given how the type of people that come in her

aged over 45 and have limited english language skills and costing $120,000 more in public services. coming up next, we discussed how the rising cost of power are pushing -- is pushing more people into poverty. this is bloomberg. ♪

shery: a down week for the u.s. dollar. we had a hawkish ecb and a jump in the japanese yen whether verbal intervention coming from officials. larry summers says the dollar surge is not over yet. he told us what he expects further strength in the currency. >> we mounted a stronger response, michael economically to the pandemic -- economically to the pandemic. necessary tightening in respect to monetary policy, given inflation and all of the various factors making us a safe haven. a mecca for capital and that is causing resources to flow into the dollar.

if it is remarkable people were saying that the dollar's day was past. given its current strength, my guess is that there is room for this to continue. the euro was in the low 80's against the dollar 20 something years ago. in some ways, it has a the states compared to europe are even stronger now than they were then. paul: that is larry summers speaking exclusively with bloomberg's david westin. time for morning calls ahead of the asian trading day. in america, traders are rushing out of u.s. equity as the chance of a economic downturn increases. the increasing cost of money is one of the factors driving investors away from stocks.

u.s. stock outflows are near $11 billion in the week of september 7. global equity funds have outflows of $14.5 billion. shery: money managers have european stock funds in the same period. total outflows from dow zero zone $83 billion. finland says they face a lehman brothers moment. analysts are warning that a complete shut off of russian gas will plunge europe into recession. blackrock says this risk has not been fully priced by equities. let us bring in the president of energy international. we continue to hear from your -- european countries trying to intervene in the energy markets and lessen the impact of this. what sort of measures can we expect? >> we expect a similar package.

a package we have seen from the u.k. government. the issue with all of the subsidies and aid packages. on one side, it helps with the energy and for people with their bills and the economy. on the other side, the question is the supply. are these subsidies encouraging consumers to maintain their consumption? where would that supply come from? shery: we have seen those restrictions on russian supplies. we continue to see a need for russian energy. i do wonder, what are the long-term implications, this invasion by russia have on the oil industry and the competitiveness of russian oil? >> this is a good question.

i thank you for asking you about long-term. -- for asking about the long-term. there are anticipation -- there is anticipation. russia may lose its relevance. something that is important is on the oil side, on the gas side, it is hard to substitute as a russian gas in the long-term. now they are looking into energy transition only in gas but nuclear power generation. that will have a stronger role. by today's measure, russia has a very important and significant role in nuclear fuel and nuclear power generation. if you are looking at nuclear, russia is a strong player.

paul: this energy prices is continuing, -- crisis is continuing, is it a transition to cleaner energy sources? >> due to the shortage of natural gas, many power plants have switched to coal and other liquids which increases the demand for oil. for the energy transition, there are different ideas that would be slow it down -- be able to slow it down. governments have been much more mindful of having resources of energy and suppliers. i am anticipating only natural gas but nuclear power generation is going to have an important role in energy transition.

this is for decades to come. again for that, the other country including the u.s. would have to bring our technologies and processing from our generation. in terms of regulations, mining and extraction regulations, it is much easier for the chinese government to extract. and they have a huge many countries. they have a reserve that are needed for energy transitions in countries like africa and latin america. there is a need for technologies and a big leap needed for technologies and other countries on russian and chinese to kick off the energy transition. paul: when do you expect to see some stability returning to energy markets? or will that is how it is going to be until the war in ukraine is resolved?

>> the war in ukraine while end. what is obvious is when we have a high energy crisis and high inflation, the global economy at regional economies started slowing down -- and the regional economies started slowing down. the global economy slowed down, potentially recession in larger countries like the u.s. and europe. this contributes to lower energy demand and a energy demand has an impact on the prices. the market is going to balance the self because of the prices and inflation. shery: we talk about supply and potential additions. there has been speculation about the iran nuclear deal and the removal of sanctions against venezuelan oil.

if we get additional supply, or do you expect them to come from first -- where do you expect them to come from first? >> immediately for this winter, we are expecting high energy prices due to the supply demand of energy and that is extremely political. if the u.s. government issues limited, temporary waivers for european countries to import iranian or venezuelan oil, we do not know. this is all iran and venezuelan oil. it is not 2.2 million barrels of oil. that is not a substitute for russian oil. there are less arguments as white russia -- china and india are important russian oil. the answer is it is the oil in terms of exports are going to

europe. i have this mix of oil and energy. it is not a complete substitution for russian or venezuelan or iranian. that is not going to be a complete substitution for russian oil. paul: the president at svb energy international. check in, broadcasting live from our studio in hong kong. listen via the apple bloombergradio.com. stay with us. ♪

>> the third $1000 to be affirmed because -- the fed wants the dollar to be firm because it controls import into the united states. this is one asset of how do you bite potential conditions -- financial conditions. >> perpetuating and balances to inflation and likely requiring a

sustained policy response. i will also argue the constraints continue. >> i support continued increasing in the policy rates and based on what i know as of today, i support a significant increase in our next meeting. to get the policy rate to a a setting that is restricting demand. shery: rising price pressures, we heard about the strength of the u.s. dollar. we have the dollar 84, we see the dollar index and moving around the fourth session. we have a bit more euro strength on the ecb hawkishness. a lower japanese yen is holding lower. we had a boost in a previous session. we have the finance -- japanese

finance minister warning against a rapid weakening of the japanese yen. we are seeing a bit more upside for the kiwi and the aussie. we are following what the rba might do, there are a lot of data points this week including australian jobs data and pain data coming from japan. the south korean market is closed and the hong kong market and the chinese mainland market. paul: let us get a quick check on the latest business flash headlines. the adl says -- catl says the fiber in china is operating. officials describe it as a severe covid situation. it is the main tesla supplier in china. dan lowe has backed away from

walt disney to spin off espn. he said he looks forward to seeing espn generate synergies as part of disney. disney ceo says espn is critical to the overall mission of the company which includes sports betting. a plan to shake up the board of directors at two indian -- after the $10 billion takeover of the company. they will join the board of adc and ambusia. they will step down after the transition. shery: kiwi stocks unchanged at the moment. we have the kiwi dollar gaining. appointing higher for both the futures and nikkei futures. the 10-year yield continues to fall on the aussie and bonds for

a third session. we had a mixed picture as well. nikkei futures are higher, we are watching the 10 year yield tick up, too -- there, too. a higher risk of further fall in the months ahead as the central banks or high inflation. do not miss our exclusive conversation with tokyo governor and boosting tourism in japan. daybreak: asia is next. this is bloomberg. ♪

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shery: welcome to daybreak asia.