>> good morning and welcome to

daybreak australia. i am paul allen incident. we are counting down to asia's major market open. cracked the top stories this hour. equity markets pushed by, the dollar is on the retreat with risk sentiment boosted by speculation that inflation is close to peaking. investors now looking ahead to u.s. cpi data. >> sources tell bloomberg goldman sachs is about to make its biggest round of job cuts since the start of the pandemic. >> ukraine appealing for more weapons to build on his military successes after rapid losses on russia. we are seeing upside of about 2/10 of 1%. the s&p 500 gaining for a fourth consecutive session. cpi numbers coming out tuesday morning, we were watching energy and tech leading the gains in today's session. apple was a beginner. we have some strong preorder numbers out of the massive

futures. we have a 10-year yield rising today. we are also watching what is happening on food prices. they had a bit of a is around $88 a barrel. it had a weak start when it came to oil pricing. it got better as we had some declines in the u.s. dollar. we are seeing the first weekly decline in the dollar here. let's look at the chart on the bloomberg. we are not only leaving for the commodities rally but some gains on the stock on the s&p 500 that are not very much exposed to overseas markets. also, selling to the overseas markets, paul. >> let's look at our tracking in this part of the road. we are looking pretty much flat.

we are expected to see some decent gains for australia when we get trading underway -- futures are higher to the point -- to the tune of 2/10 of 1%. materials are performing the best. energy stocks definitely worth watching in australia today. the yen continuing to consolidate just above 142 versus the greenback at the moment. we will be keeping a closer eye on the currencies base with a little bit of weakening in the u.s. dollar. >> of course. in today's session, we had some big news coming from goldman sachs. we could be saying several hundred jobs being eliminated starting this month. this could be the biggest round of job cuts -- job cuts since the start of the pandemic. more people going back to the office as well.

we are now hearing that the bank is calling this a challenge in operating environment. we have had that revenue slot. >> we could materially increase pay. we have heard from the cfo. we have seen pretty broad cost inflation. that is a bit of a double-edged sword here. there have been brutal cuts. for more on the situation with the banks, let's bring in more here.

do we know where the x is going to fall? question number we are reporting is expected to be global. we always have this process of what is called weeding out the bottom 5%, extended into the year most recently. now, we will exceed the earnings year. >> a very competitive environment for the banking sector. they are expanding their wealth management. how is that going to help? >> with bank of america, the comments are still interesting.

is there a recession going to come through? we have not seen enough signs of that just yet. there are massive ones in europe. we are worried about how it will spill over into the u.s.. that has not happened yet. their core businesses are still holding up just fine but i am sure they are causing them to work months ahead. >> we heard from the hsbc cfo talking about the need to increase pay. how do they walk the tightrope here -- tightrope here? >> goldman sachs and other

banks, 40 7000 employees. each of these see 22,000 employees. that goes back to what you said a little earlier. you need to boost their pay. where else can you take out the cost? then you put others messaging for the need for editorial cuts. quick stay grounded and today's session. let's find out what is boosting investor rick's sentiment.

emily, perhaps this is big inflation. >> u.s. investors are showing signs of optimism that inflation has peaked. we have had four straight days of gains in the s&p 500 so we are going into this cpi reading with optimism in the equity market. when you look at the swaps market, we are still headed into this meeting with a rate hike from the fed. we will have to see what happens and how that changes after the inflation. it is certainly risk on into the reading. >> a question of confession. this is a very good day for the euro today. >> there are people saying we have reached peak dollar. they expect a new high in the dollar.

there has been just a little bit from the euro when it comes to a more aggressive ecb. there were some speculations that there were long positions that were perhaps a little too stretched. as we go into this inflation reading, that will show colder than expected inflation. that dollar bit is coming off. >> there was emily garcia with the latest on the market. over to vonnie quinn with the first word news. >> sources say prosecutors have sent subpoenas asking about transactions and blue-chip stocks. the same short-sellers previously responded about lesser-known terms as a 30 for evidence of march inflation.

employees must show a negative covid test. officials say they will start online from tuesday and the situation is -- president biden will try to boost local manufacturing. -- domestic manufacturing. the aim is to create jobs, strength supply chains and lower prices. some high-tech has migrated abroad according to analysts. you will cut perry's, the move is russian energy to help calm the businesses across the conference. other measures including public energy prices.

global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> ukraine is seeking more weapons along with continued u.s. support to build on successes. joni schneider joins us now with the latest. what has changed? >> ukraine's counteroffensive in the north has changed that game significant a. no one thought we would see russia retrading. this is a key place with the staging area for troops and weaponry. they acknowledged they have left that area.

ukraine is keeping those. we are at a different place it seems. we had the former defense secretary and cia director on bloomberg saying that it is a pivotal but dangerous time given this retreat by russia may push vladimir putin and that may be dangerous in a geopolitical sense. >> in terms of president putin being boxed in, what might we be able to imagine? >> this is the dangerous part. there is not a lot they can do in terms of having enough troops at this point. no one kind of sees that. at the same time, it could be a

very cold winter in the ukraine. that could really -- this could be a weapon in the sense. the other kind of concern at this point is that ukraine is having -- ukraine having enough of what it needs. the right kinds of equipment for its troops to maintain that counteroffensive. this is all about getting the weaponry to ukraine.

>> this change to the battlefield dynamics in europe throughout history. as the seasons change, we have already seen russia strike a couple of power plants in ukraine. >> that is the real concern. trying to make it very difficult for the population there to survive that without the heating they need. it gets extremely cold. the question will be how long they can support your. it has been a united front with the western countries. as they are not getting supplies for heating, they need what will be a cold winter there.

will their support continue? that is another geopolitical part of this equation. >> bloomberg's jodi schneider giving an eye on the goings on there. up next, we will discuss investment strategy. this is bloomberg. ♪

>>

in the near term, i think we are in some kind of trading range. we will see short-term volatility until tomorrow but then the next fed hike. i think from there, we could see some stability and rebounds until the end of the year.

>> investors seem to be back with some of those very hard stocks that retail investors seem to like. with the volatility, which should these investors be on the lookout for? >> i think the meme stocks are a strategic type of investment. i think when the market started to rally, you get some of that risk off sentiment reversing and people getting back into the markets and back into some of the more aggressive meme stocks. i think if i were an investor and i still continue to focus on the quality, look at the corporations that could have a strong balance sheet, strong operating margins that will participate in future growth, even given an economic slowdown. i would rather look at things

like apple and amazon, google, even microsoft, ibm. a lot of others really. >> is the risk of earnings recessions something to worry about? is that a reason you rotate -- gravitate toward some of those larger names at the moment? >> it is. there are factors that will impact the trajectory of the markets. the first is inflation and we are getting to the point where we feel a little bit settled. if tomorrow's rate is favorable, we are two thirds of the way done. what i would like to say is corporations continue to have pricing power.

then i think we can go to slower growth and then positive returns . then perhaps getting up to single digits in the s&p 500. i think a lot is going away. >> yes. we get a favorable inflation rate. that will have implications for the fed in terms of these rate hikes. what is the best way to trade ahead of this fed decision? >> i think it does not matter a whole lot. the best way to trade is to have a longer-term outlook. i think they can find a spot and work with volatility and if we are talking about the average trader investment manager, change your outlook. think about three or five years out.

that always tends to work. it is time in the market and that time in the market, every time you try to time this, you lose. hang on for a longer time. that dollar cost average will pay off in years to come. >> thank you so much for joining us. we just want to get you across alerts on the bloomberg terminal. this was going to be the biggest deal of the year. according to the australian financial review, they offered $88 per share. they were granted due diligence but the business has materially deteriorated.

that deal appears to be dead in the water. plenty more to come in daybreak australia. this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines. twitter rejected a third attempt by elon musk to cancel his agreement to buy the social network. a day before shareholders vote on the $44 billion deal. but it says the latest move is wrongful. the billionaire says this give them another reason to walk away from the deal. average estimate of $11.4 billion well cloud revenue rose 44%. they generated over $1 billion

in sales during that time. they completed the acquisition of the company in june. intel is said to be scaling back its mobile ipo in the face of a broader soft launch. we are told intel expects the ipo's to value the self driving technology business at up to $30 billion which is less than originally hoped. the new owners prepared to rebuild a state run airline. >> let's take a look ahead at the day in australia. this with all the concerns about

rising interest rates. that was the biggest increase in four months. in australia, consumer confidence also do today. this left it at the lowest level in a year. plenty more to come on daybreak australia. stay with us, this is bloomberg. ♪

>> you are watching daybreak australia. here are the first word headlines. lawyers are fighting the u.s. justice department -- department

. they are trying to stop the using of documents seized at trumps mar-a-lago estate. the judge temporally barred federal investigators from using these materials. king charles the third has vowed to uphold democracy, making it appear indication that he would stay out of politics during his reign. charles praised what he called vital parliamentary conditions, healing the institution as a living and breathing instrument of u.k. democracy. >> my lord and members of the house of commons, we gather today in remembrance of the remarkable and dedicated service from the queen to her people. she sets an example of selfless

duty which with god's help and your counsel's i am resolved to follow. quick the first major carrier here. and some of the regular news to take paying customers there and back. japan has approved moderna's covid vaccines. an expert panelist advised that -- moderna has been limited to 18 and older. there are plans to expedite a booster bill at to prepare for winter. japan joins the u.k. and australia in endorsing omicron specific boosters. global news, 24 hours a day on

air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> let's turn to china. beijing is tightening its cover testing rules. the chinese capital wants to contain several universities ahead of the party congress. how cheap north asian correspondent, stephen engle is in hong kong. what are authorities in beijing doing? >> many people, many workers in beijing will be returning from the long three-day midautumn festival holiday as well as all the students have been returning from their summer breaks into the campuses like at china communications university in eastern beijing where it had an outbreak of at least two new cases. that university campus is in lockdown. a couple of others have also seen a surge. surge is the wrong word. an uptick in cases. 15 cases at one university wanted a lockdown. that is all part of the zero

covid approach. we are a month away from the beginning of that. these workers coming back from the long weekend, perhaps they were exposed. authorities do not want to see a rise the workplace is so they are going to be requiring covid tests within 48 hours of their return to work today instead of the usual 72 hours. it is just a further tightening ahead of that party congress as we have seen. the actual city of beijing which is sprawling, it is a massive city, they have not had a blanket lockdown but just targeted neighborhood and targeted campuses right now. >> what about the situation with hong kong? will that even happen if hotel quarantine is not lifted? >> i think it will happen but there have already been some misgivings about some top bank

ceos, what they are hearing, if they would want to come if they are still quarantine, even if they were given exemptions, would they come? they would face a potential backlash. the latest person to say that he is coming is the ceo standard chartered bank. that is bill winters. that is after hsbc would also attend. it makes sense. banks like hsbc and standard chartered have disproportionate exposure to the upside, so the hong kong market. their key constituents of their global footprint is here in hong kong. it makes sense for them. the bigger question is if hong kong does not relax or eliminate that hotel quarantine. would outsiders come for this financial forum scheduled for november 1 and second ahead of the weekend rugby seven big sports tournament which is going to make a return after several

years of pandemic suspension? we are still waiting and we still have sources say the government of john the is considering -- still no confirmation yet. a good shot in the arm to have bill winters say regardless of whether there will be hotel quarantine or not, it is coming. >> that was stephen engle there. micron has broken ground on a new membership grant in idaho. the first of its kind in the united states in 20 years. they will pump about $15 into the plant. >> $15 billion through the end of the decade.

we have been the research technology and develop related for decades. now, being able to combine it with manufacturing technology, there will be new solutions for the benefit of partners as well as driving u.s. leadership. this is a big day, this is the big announcement. this is very exciting. they will be starting production sometime in 2025. production will start sometime in 2023. we will be bringing on production in line with demand. >> micron already has plenty of

plans across asia. how does this impact operations globally? do you always consider building in the u.s. first? >> of course. we have a very diversified footprint across asia. they are now leveling the playing field. they have become cost-effective with support of grants. we will continue to invest in our plans and asia as well but then we look at the demand, by 2030, semiconductor demand is a must to be better. that is why we started this plant here. they actually had the ceremony that launched the construction for this plant. this will basically enable us to

meet the growing demand. we will keep investing in technology transitions. >> you want about slowing demand about a month ago. that triggered a broader concern about a slump across the chip industry overall. what can you tell us about demand? is it indeed slowing down? >> this is a challenging environment. that is really impacting the industry.

what is important here is the long-term future. the demand drivers for long-term ai, 5g, autonomous and the data center -- both demented drivers in terms of consumption, investments need to be made now because production will only start in the second half of this decade. it will be managed in line with the demand projections for the future. >> ukraine is seeking more weapons after taking back lost territory in kharkiv.

more on the global fallout next, this is bloomberg. ♪

>> we need ammunition, necessary ammunition.

we need armored vehicles and tanks. definitely we need more and more weapons. >> russia has vowed to regain the initiative and its troubled ukraine offensive causing blackouts across the country. some stunning advances made by the ukraine since we have been reporting. what sort of pushback is likely from russia? >> that is right. what we have seen over the past two weeks is really a combination over the past weekend. it is draining ukrainian ability to recapture about 2000

kilometers of territory in the northeast that was under russian occupation, indicating all the calls for armed supplies but also, greater military intelligence sharing. obviously, as expected, we see these images of russian armed forces leaving the area. these are the strikes against some of ukraine's critical infrastructure. most of it under blackout due to the strikes. quick this has not been going as well as russia might have

planned. what are the risks from the russian side? >> certainly, we are seeing the poking of holes in the narrative that russian forces are undefeatable. russia has said that this war of attrition would be one that would be -- russia would be determined to stay. the narrative is changing drastically now. what this means is that we could see some sort of diffusion of the warfare onto the other field. they have already signaled that he may not be too happy about some of the deals around grain exports.

there has been increasing chatter over technical -- tactical nuclear weapons. certainly, the confusion that we could control from the battlefield balances is changing. there will be an attempt from russia to try to potentially get the fighting in the conflict to where it could have a greater bargaining chip. >> what sort of help does ukraine need at this point? >> that is a great question. it comes from europe. we are seeing the start of autumn.

already, there has been some public protests over the increase in prices. it comes in the environment that is already hyper inflationary. there are a lot of political pressures on european governments to try to see the end of this war to limit the supply. because of the change on the battlefield, i think it will be much easier for european leaders to convince some of their constituents that this is a fight worth fighting for and that ukraine should be supported with both military aid. we have seen some announcements already over the weekend.

these are cumulative now. >> russia has pretty much been insulated from the sanctions here. what will this be when you have western majors exiting the country? you have sanctions and financial difficulties as well.

quick six plans have been opposed here. the eu probably has surprised many analysts. this does not mean these long-term defects won't be there and what we have to understand is that because of the war in ukraine, because of european divestment, this is where the majority of hydrocarbons will be. russia is being decoupled from what has been one of its prime markets. this is a diplomatic kind of charm offensive.

if you take a look at the structural foundation, the fact that we have seen so many western companies that have been the largest source of fdi into russia, this is leaving for russia's economy moving forward. -- leading russia's economy moving forward. >> of course, we are closely watching the commodities space. we are seeing a bit more of a boost given the decline in the u.s. dollar. in the asian section, we are seeing wti at the $88 a barrel level. we saw those declined but then the u.s. dollar really offset concerns of global demand. the wti is higher. gas prices also higher at the moment.

this is after feeling the downside pressures even though we are starting to see the european union outlining the details of their intervention into the energy crisis. perhaps curbing power consumption and providing liquidity to energy markets. plenty more ahead on daybreak. this is bloomberg. ♪

>> let's get some alert on the

bloomberg. inflation has peaked in new zealand. that is a deceleration from the 2.1% we saw in the month prior. fruit and vegetable prices in particular coming off here. an increase of 4.1%. down from a 10% increase in july. the food price index on the decline. perhaps some evidence there. the country once down here. let's bring in the wellington bureau chief. >> new zealand was once a fortress when it came to covid. no more.

what is the state of it now? >> most of the major restrictions had already been lifted. what remained was a requirement for people to wear masks and certain indoor settings like supermarket. in reality, i think most people stopped wearing masks. but it is an important moment. in march 2 .5 years of pretty tough restrictions. >> we continue to see more from the u.k., the death of queen elizabeth, what is it like you new zealand at this point? >> the prime minister adjusted

this yesterday. it is not unusual for these questions to be asked in the wake of the queen passing. the queen's face is still on a lot of our notes and coins. new zealanders still have some affinity for britain. but increasingly, new zealand is becoming its own. ties to the mother country are weakening. she can imagine new zealand becoming a republic in her lifetime and doing away with the monarchy, head of state, she does not see that happening anytime soon. chrysler is a quick check of the latest business flash headlines. wall street banks have kick off the second part of a $15 billion package here.

a group of vendors will buy for a $4 billion secured bond offering. they seek to gain a stronger foothold in one of the roles fastest growing entertainment and streaming markets. and of course, we do have plenty of conversations coming up. especially with the asian open. china, hong kong and korea coming back online. daybreak asia is next. this is bloomberg. ♪

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