haidi: good morning.

annabelle: we're counting down to the major market opens. shery: good evening. the top stories this hour. the bank of england ignites a global bounce. haidi: yields on 30 years make the biggest ever drop. the british governor says it does not plan to change course covered. shery: hurricane ian leaves more than one million homes without electricity. it's wreaking havoc in the commodities space. take a look at u.s. futures. little bit of upside, the s&p 500 rising for the first time in seven sessions. the boe helping calm the markets. even despite the fact we have

hawkish rhetoric. the 10 year yield is falling below the 4% level, falling from the 2010 high. the two-year yield is easing. the bloomberg dollar index is easing a little bit. this as we had more support earlier in the session coming from a white house official talking about countries not going to an agreement in order to counter the greenback strength. that led to a little bit of strength and the bloomberg dollar index is falling for the first time in days. haidi: let's get back to the bank of england staging a dramatic intervention to stave off an imminent crash by pledging unlimited purchases. for more, let's bring in a columnist. you have a crisis in the bond markets.

a much bigger worry to you than a crisis in the currency market. does this fix the issue? what does it say about credibility? reporter: it fixes a specific and vital issue which could have brought the entire world markets into prices, large numbers of u.k. pension funds were required by legislation to do liability matching, buying lots and lots to guarantee what they were promising to pensioners. that means they held lots and started using those as collateral to invest in more interesting derivatives. that meant they got desperate margin calls when the price started to plummet, and that means you have this extraordinary phenomenon that

the current 30 year guilds managed to fall 24%, the price fell 24% between the bank of england's normal meeting on thursday and the announcement this morning, since then it has rebounded. given its those long bonds that are what pension funds tend to have in great abundance, the idea of 24% losses in a matter of days could have given us a complete systemic met down -- meltdown. they would have been making forced sales and the risk of social crises as people lost out on pensions. they have averted that critical risk. everything else we have been worried about is much less technical, more exciting than bond yields and pension math remains on the table. shery: i mentioned earlier, the

question is for how long? you recently wrote that at the core of this currency crisis is a crisis of confidence in the bond market. for how long has that return? reporter: if you are talking specifically about the gilt market, i don't think -- people are talking freely to journalists, i've talked to a lot of people about this today. all of them said offhand he has to go. i would be very surprised if he can weather the storm. the interesting issue is whether you can regain confidence while mistrust is the premier. it's unfortunate for her that

her competitor is on record saying in as many words there would be a run on sterling and a spike in gilt yields if she went ahead with what she did do. shery: the breakdown of thoughts happening in the u.k.. we some more central-bank action around the world including china stepping up its defense of the yuan. we had some strong words, a rare public statement from the pboc. annabelle: it came through late wednesday. the major headline was the pboc is saying to banks and corporate's, do not that on one-way appreciation or depreciation, there will be losses. they are saying it's yet another attempt from officials to be

stemming losses in the currency, we are seeing the onshore and offshore trading at multi-day lows against the dollar. in terms of other factors, there are signs they could be moderating some support for the currency because we saw how much stronger than yuan fix is than the average estimate, that was the smallest in two weeks. the reason is when you look at the losses against the dollar, we're at the midpoint ratio when you compare that to other losses we have seen in the currencies. shery: here in the u.s., we are watching out for the destruction and fallout from hurricane ian hitting southwest florida with a massive surge of water and wind poised to make it one of the costliest storms in u.s. history. let's get to morgan norwood. what are you seeing?

reporter: we are taking a beating in tampa with heavy wind and rain. hurricane ian made landfall southwest of us near santa buck, florida. as far as what we are seeing here, torrential rainfall is coming in sheets. at some point, 72 mile-per-hour winds but that is nothing to what folks in naples are getting. 152 mile-per-hour wind. this is a devastating storm and folks here will be dealing for this -- with this for days on end. haidi: could we see inland areas get hit tomorrow reporter: that

has the ability to creep up and down the coast and tear through the state. it could linger for up to two days. it will dump torrential rainfall on places like orlando. two feet of rain. that is what forecasters are projecting. here is why that is critical and important. we're talking about disaster recovery. longer the storm hangs over our heads, the longer we may not see power. one million people are without power. those bucket truck's get any air if the storm is raging out of control. this has the potential to impact us for a while. shery: we are seeing the fallout in the commodity space. we have seen the impact could cost $57 billion, one of the most expensive storms.

orange juice prices are soaring. levels we have not seen in a while, up 15% in the past two weeks. 90% of florida crops face exposure. we have we prices higher. geopolitical tensions have led food prices higher and wheat is being supported by the war in ukraine encountering the strong dollar which has had an impact on the broader commodity space. crude is down 4/10 of 1% after jumping the most since july. we have declined. copper i -- let's get over to vonnie quinn. >> central banks raise borrowing costs. further behind policy tightening.

the monetary committee says it will be flexible while reiterating a gradual approach to shield an economic recovery. the turkish president has called for an interest rate increase by the end of the year. rates have already been lower but he told cnn to expect further cuts. that is despite warnings that rate hikes are needed. he has insisted higher rates down inflation. a state department official told lawmakers the u.s. and allies are planning more sanctions against russia. they told the setting committee the measures will target sectors. the eu is proposing a new set of sanctions including a price cap. >> this will reduce russian

revenues and keep the global markets stable. today, we are laying the legal basis for the oil price cap. >> north korea fired two ballistic missiles. , harris is set to visit the dmz later thursday. the first white house official to do so. it adds to the record number of ballistic missiles fired this year. 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. i'm vonnie quinn. this is bloomberg. haidi: still ahead, the suspected sabotage of pipelines. fortune favors the liquid in the fourth quarter but investors

should not going on all caps. we get more, next. ♪

>> what the bank of england has done seems to be the standard playbook.

>> this was a market maker of last resort. >> pressure could cause the market to freeze up. >> i think it was the right thing to do. it is brought some important stability. amit: >> the bank of england finds itself in the ecb situation where it has to figure out monetary policy. >> clear in the situation every central banker does not want to be in. haidi: some of the reaction to the pledge for unlimited bond buying to stave off the crash.

the u.k. government tax cuts happen -- let's bring in a portfolio manager. i guess you do not have a horse in the game. are you calmed? guest: it was surprising to see the action. i understand what we are trying to accomplish is to help populations with inflation and protect long-term health of overall economies, i think the experiment we have been undergoing in the u.s. with a gigantic balance sheet is not super encouraging as to the long

term prospect. i am nervous long-term, i continue to be happy. haidi: take a look at the chart. we have the 30 year yield set for a record drop. we're seeing chaos when it comes to inversion. does this turn the central bank back into the equation? guest: i think so. everyone has been backed into a corner. it makes sense.

you see this much movement in the currency. at the same time, it has long-term consequences that could be meaningful. >> what does it mean? we continue to be on the others of the equation, hawkish rhetoric coming from several fed officials already. guest: it felt like fed officials held hands and decided they would get very serious, it's pretty scary if you think about the impact on hyperinflation and how it can cripple an economy. it made sense. the market reaction was unfounded enthusiasm we were going to pivot. action happening in the u.k. is more complex, it remains to be

seen how it's going to play out. shery: money market funds are taking huge inflows. how do you fabricate -- allocate your portfolio? guest: it makes sense to have some liquidity going into the fourth quarter. we recommend -- what do you do with the cash, when did you invested, when do you buy. it is less stressful. if you have the opportunity to

purchase some quality names, that's pretty reasonable and makes sense, so if you have dry powder, there will be opportunity to upgrade the quality of your portfolio. shery: you can get a round up of stories you need to know to get your day going in today's edition of daybreak. you can customize settings so you only get the news you care about. this is bloomberg. ♪

haidi: deutsche bank says it's drawing up plans to deal with risks.

comments are a rare public acknowledgment of the situation. he spoke exclusively to bloomberg. >> i always said in my view for the bank, diversification is key. china will always be a key. we are happy to be there. there are markets. we all need to make sure we broaden markets. that's our goal. that goes beyond asia. if you look at german corporate's, reorganizing and

looking into supply chains, they are targeting other markets. that is our advantage. for me, it's all about diversity , it's not about exiting a market, china will always be an important market. >> u.s. and china tensions. how worried are you? what kind of contingency plans you have? >> everyone needs scenario planning. we have planning. there is no increasing conflict on taiwan. in particular, obviously with the u.s. is a strong ally for

years and decades, you see our business with asia and china. it's important for your to find its own balance and germany. i think the german government is working on that. we're doing scenario planning. amit: >> do you see international banks dialing back pulling back elsewhere? >> i can't speak for other banks. a bank is very well advised,

questions to reorganize your own supply chains. we see how they are diversifying. we see singapore, we are helping our clients and supporting. putting it into the center of everything you are doing. it also means there is a certain geographical diversification. shery: speaking exclusively with haslinda amin. here is a quick check of the latest business flash headlines. hong kong airlines is aiming to restructure 6.2 billion u.s.

dollars to stave off insolvency. they are seeking approval to put forward a restructuring proposal. the plan will include -- after pricing it's hong kong public offering at the bottom of the market. 266 million shares. nico securities is facing regulatory penalties for stock market manipulation. regulators say the brokerage has shortcomings.

>> more than one million homes and businesses are without

electricity. the category four storm -- the state is facing black and floods. latest estimates are over $67 billion. the bank of england staged an intervention to stave off a crash. it is pledging unlimited purchases. the doe has purchased more than $1 billion of securities. sources tell bloomberg the u.k. government has no plans to not have tax cuts. china stepped up its attempts to weaken the yuan. the pboc told investors not to move away from the currency saying losses will be incurred.

[indiscernible] weakest levels versus the dollar since 2008. [indiscernible] a science teacher who she married in 2019. join pledge to give the fortune away. 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: the overall sector is being disrupted with events such as sabotage, hurricane ian

making landfall. good to have you with us. we get started with hurricane ian. how big of an impact will it have in the oil and gas industry? guest: i would say so far, the impact has been gulf of mexico production. given the pathway of hurricane ian, it's unlikely to do the same damage if they make texas landfall or louisiana. it's looking to be limited impact on oil and gas. shery: the broader issue with

the european energy crisis, we have seen russia weaponize gas. what about the impact on supply and pricing? guest: in terms of the gas side, we're probably going to see gas flows go close to zero. that is the risk. given what we are seeing in europe, it is likely europe will end the winter given they will

manage to find supplies. europe will be ok, the high price environment will be around for the next six months and probably for the next year given russian supply will be a monumental task. haidi: speaking of demand destruction, how do we gauge the dynamics for china given we do not know what's going to happen after the party congress, do you see sustained commodities demand when it comes to iron ore and the implications for australia? guest: that's one side of the sector as we get caught up in the strong u.s. dollar. when we talk about iron ore,

it's china-centric. 60% of demand. so much is dependent on policy decisions of where china goes after the national numbers. if we see a relaxation of the zero covid policy, we could see a positive demand, infrastructure to grow prices. looking at iron ore, we're talking about 30% of china steel demand [indiscernible] if we see relaxation happen off the covid zero policy, it's a policy when it comes to iron ore. haidi: does that account for a broader restructuring of the property sector?

guest: if you look at what is happening policy-wise, if you look at property developers, local governments, these policy measures are not going to have the impact previously because household income is being threatened with covid related lockdowns and restrictions. once we see -- that is a recipe. a soft landing as possible. it's going to be challenging. that is something we need to see more to improve out of china. shery: what does that mean as a

competitor for energy of supply? guest: imports are probably one part of the market that is probably going to see a contraction. even though that's a big factor, the need for imports and we combine that for weaker demand. we're going to see weaker chinese demand. if you look at what is going to happen. it's going to be a global story when it comes to how china plays into it. for gas, it's about 9% or 10% of

global demand. it's not as notable, but we need to watch is in case there is a policy shift is more mining and energy commodities. haidi: always great to chat with you. be sure to tune in on bloomberg radio to hear more and get in-depth analysis from our daybreak team, we are broadcasting live from hong kong. you can listen. lots more ahead. this is bloomberg. ♪

>> it was the right thing to do given the technical factors that as -- have arisen in the market and has brought stability. it does not resolve any of the fundamental contradictions in british policy. shery: larry summers speaking with bloomberg. sticking with the boe, market watchers say the bank is in a

bind. what is the reading? annabelle: we spoke to us and said the boe has found itself in what he calls the ecb situation. another measure to contain financial risk. he says these things are in conflict. it was going to be hard to do so. mohammed's view on the program of major tax cuts, he says that is a big gamble and he thinks the boe is going to need to raise rates by 100 basis points that is not off the table.

in terms of policy makers, we understand pay has been very critical of policymakers being slow to act and he spoke to us about how that is feeding in to what we're seeing in market action. >> we have to buckle our seat belt tighter and recognize policymakers contribute to volatility. this is going to be incredibly bumpy. annabelle: recession risks are building. stanley says the risk of recession in 2023 is all but certain and could be deeper than many people expected. the reason is he is pinning this down to fed policy over the past decade, essentially qe he says

went on for too long and that created the current environment, because if you have a massive program of bond buying, it creates bad behavior. jp morgan sending similar signals on the outlook area the moves in recession probability according to trading probability, 92% risk of recession up from 51% in august. it's broad-based against the other asset classes including base metals, 96% chance priced in. this is a growing awareness that the fed is willing to risk a contraction in order to tame inflation. haidi: central banks are intensifying efforts as china issues a statement on the yuan. let's bring in garfield reynolds.

such as china. we're seeing the rise of dollar vigilantes. reporter: given there does not seem to be any reason for the fed to be concerned about the stronger dollar, it mostly works in their favor. that means the onus is on other central banks to adjust. that's why you have the pboc for something like three weeks pushing back to try and restrain the yuan slide against the dollar, you have japan, concerns

about what that might mean. you have the pound on what went on. that is three major currencies and a large portion of turnover and major concern. that puts the risk of asia and a lot of currencies that have to deal with these very sudden moves of the open. shery: it's a tricky situation to adjust. you are interfering with freedom of the market. how do central banks adjust to the reality and will we see more action? reporter: we will see some words

and actions. a lot of governments have done work, less 25 years or so to improve current accounts to maintain credible policies. now, those defenses are being tested. some of them are doing a pretty good job, they have maintained a commitment to open markets and prudent policy. we look at where the breach is happening, china is struggling more than most and japan where the currency got out of hand.

for now, walk softly. haidi: let's take a look at what we are seeing across the australian and new england bond markets. the global reverberation, unlimited bond buying to prevent a bond crisis, that has spread to equities and bond markets more globally. we are seeing the australian curve flattening, down 17 basis points, we are a broad move across the curve in new zealand. we have lots more ahead here on daybreak. this is bloomberg. ♪

shery: deutsche bank ceo says the firm is drawing up plans to deal with risks from any u.s. and china tensions over taiwan. in an exclusive conversation, he said some lines had approached the bank about reorganizing supply chains.

he says china is a key market. >> we have scenario planning, we hope there is no increasing conflict on taiwan because in particular europe and germany need to work with both. shery: worth about $10 billion at the end of august. the ceo says the balance sheet is safe. an australian billionaire has nominated newcomers. the annual meeting could set the stage for a board fight. the office is pushing for change

which is one of australia's biggest polluters. haidi: taking a look at the day ahead. we will get the read on job vacancies where retail workers search 39%. the guardian has reported they will shut down power stations a decade earlier than planned. medicare id numbers of almost 15,000 people were exposed to hackers. the government is planning to reform data storage laws and foot the bill when it comes to replacing millions of passports for customers that have been affected. i'm watching this story out of australia. this is a tv series about a family of -- this has been a big

hit for disney plus. they're expecting a huge hit. i hear from my american friends their children watch so much that they have started speaking in australian accents. shery: i do not know the show. i love that it is about dogs. one episode was banned because of jokes about flatulence? they were joking about forwarding. is that which happening? haidi: i know you are a big fan of south park. there are lots of hidden jokes

for the less mature grown-ups as well. let's get back to the story. the saga keeps unwinding. guest: looks to be getting out of control. passport and details and driving license details and medical id numbers were in the data that was stolen. 10 million customers. amongst those [indiscernible] pay for the indicators.

without fines. the cost of pricing. shery: tell us about what measure of the government is taking at this point. guest: the government is discussing legislation to provide protection and considering increasing penalties for companies that allow data to be stored because they are years behind where they need to be. they have compared penalties in other countries in western europe, operating will have

hundreds of millions of dollars of fines. haidi: our reporter with the latest. we are live today from the milken institute asia summit in singapore. we have a huge host of guests, people we are speaking to on your screen. don't miss out on those. that is just about it for daybreak australia. daybreak asia is next. this is bloomberg. ♪