♪ shery: you are watching daybreak asia live from new york, sydney, and hong kong. haidi: we are counting down to market opens in tokyo and seoul. shery: australia is online. asian equities following losses on wall street as we count down to the crucial u.s. jobs report. more hawkish comments from fed officials stress a commitment to crush inflation with rate hikes. >> until i see evidence that underlying inflation has solidly peaked and is headed down, i am not ready. shery: elon musk scored a win as a judge holds his case against him, giving the party three weeks to close the $34 billion deal. haidi: breaking news through the central bank in the country

hiking rates by 25 basis points to 7%, as expected. economists surveyed by bloomberg . this would force another rate hike by another central bank as inflationary pressures rise in peru, two above and 8% level in september. activity is losing momentum. supply shocks are increasing cost adding to concerns in peru. you can see peru is just one of the latest that continues to hike rates across the region, now by 25 basis points to 7%. we move into breaking out of south korea. we are getting current account numbers, a move to a deficit of $3 billion for august. it had seen a surplus in previous months. given rising energy costs,

falling exports or at least easing export growth, we are seeing south korea moving to a current account deficit of more than $3 billion. goods trades are falling to a deficit of $4.4 billion. we have already seen the trade deficit seeing the longest string of negative numbers since 1997. we are now seeing another picture of the current account of surplus, now moving into deficit as we continue to see energy import prices continuing to rise. this does not bode well for the korean won. we are expecting more pressure in an hour. haidi: we have the open for australia already, a good guide. the asx 200 snapping a three day streak of gains for the open. in the markets, in the red. two factors. hawkish fed speak, more fed

officials reinforcing the need to keep hiking rates. the other factor is general anxiety around jobs data due later. in the currency space, we see the yen trading above 145. that is an intervention level we are watching for. in terms of where we go from here, the yen's top forecaster is saying the yen route is over on the debt that the fed will be forced to start cutting rates next year. markets expect 150 basis points of moves priced in over the next six months, compared to 100 basis points for australia, also playing into the bond space. check out the 10 year yield for the aussie. it is very close to the 10 year treasury. compare that to june when the aussie 10 year was about 90 basis points above that. perhaps we are entering a new era. shery: we continue to watch treasury moves closely. we are seeing liquidity

worsening and price swings being very pronounced. talking about the 10 year yield, back above 380 and rising for a second session as we continue to see more hawkish rhetoric from the fed. even now, loretta mester is speaking at an event saying job one is getting inflation down and the fed has more work to do to reduce inflation. we had seen the s&p 500 lose ground for a second session. most of the sectors are in the red and we continue to see downside in u.s. futures. the only sector that rose today was energy. not surprising. we are seeing wti continue to gain above the $89 per barrel level after the announcement that opec-plus would be carrying out the biggest production cuts since 2020. let's bring in our global economics and policy editor kathleen hays and contributor garfield reynolds.

kathleen, i want to start with you. we had plenty of fed speak during new york trade and we continue to hear from cleveland's loretta mester. what are we hearing? kathleen: what we have been hearing for sometime time, there are no doves left on the fed. they have all flown the nest and walks have taken over. doug's -- doves have book, talks. -- have become hawks. neel kashkari spoke. this time last year he was hesitant to look at reducing any stimulus. he was worried about the effect of covid lingering on the economy. by midsummer when the inflation rate remained high, he started changing his mind. >> we now need to stay the course. we need to follow through and validate expectations we have sat in the markets. until i see evidence that

underlying inflation has solidly peaked and is hopefully headed back down, i'm not ready to declare a pause. shery: lisa cook joined the fed board in late spring and gave one of her first official's piece is where she talked about policy. you can see her on the left side of the spring -- screen. when she was asked about rate hikes in her prepared remarks, she said there is no time to pause and you have to keep going. lisa -- i just wanted to show you the pictures to get a better sense of who she is. people thought she might be a dove because she has written about how it can hurt minority groups if you tighten too fast. she is another one. look at charlie evans of the chicago fed, loretta mester, chris waller speaking earlier today. you can see, inflation expectations are high.

headed up to 4.5% to 4.75. that is the message from the fed. kathleen: what about --haidi: what about what the fed is saying for the jobs market? historically we have seen under treating in recessionary conditions and downgrading activity. could this be a different set of circumstances we are seeing for the jobs market in the u.s.? kathleen: so far the fed has said they see a still strong labor market. people were talking about jobless claims rising. at 219,000, that is still below the pre-pandemic level, 224,000. the question is, how week will it get? the concern is growing that if you have a recession it will get weaker. payrolls at 255, less than the month before.

that is considered a healthy jobs gain. unemployment is steady at 3.7%. still at a 50 year low. average dollar lee earnings, 5.0% year-over-year from 5.2 percent, slowing down a little bit but still double the pre-pandemic rate of wage gain. this is a solid report, at least for now. the fed, this will not make them white. inflation next week, cpi expected to stay high even if it eases a bed. the numbers so far support what the fed is saying. we eventually see a rate pause at a higher level. we are not even considering slowing down yet. shery: garfield, we are talking about perhaps hawkish nest. what does this -- hawkishness. what does this mean for the markets? garfield: i think markets are starting to get a little closer to where they need to be interpreting what the fed will do.

there is still a lot of expectation out there. the fed, we are not at peak hawkishness, but it is just around the corner. it is are we there yet for markers again and again. the difficulty is we are a long way from there. talk about unemployment. look back in 2001, 2007, 2008. we had a gradual pickup in unemployment rates from multi-decade lows. then we had the takeoff that came around the time when the fed switched to cutting rates. by that time, recession was obvious. right now we have had a very small increase from what may be the trough. it's still not impossible to go back down to a lower unemployment rates. we are certainly a long way away from the one percentage points, 1.5 percentage point increase in the jobless rate from the trough

that would actually disturb the fed and get them to move. this is why i think there is a lot of volatility and a lot of ways the worst outcome for the market might be if the unemployment rate picks up to 3.9. ok, that is it, the fed will beef up. they won't. officials will say, it is still below 4%. look at wages pressure. look at inflation and the overall economy. jay powell laid it out clearly at jackson hole. we do not want to repeat the mistakes of the 1980's. in his opinion, the mistakes there were once you had a little bit of a turn towards recession, the fed turned around and cut rates and inflation revived. they don't want to take that risk. the absolute most they might pause, there is a danger that

the earlier they pause, the longer they disappoint markets by holding rates high. that has also been a concern. haidi: are there mistakes being made potentially when it comes to the need for structural reform for the treasury market? you have been partnering over there. if we have a liquidity situation, u.s. treasuries have been a global benchmark. what does that mean for other assets, for contagion for global bond markets? garfield: in many ways, this is the question of the year. because, there have been lots of illiquid caches in treasuries trading and as the year has gone on that has become more widespread and done more damage. there is a narrative there is no such thing as a risk-free rate anymore. how do you trade everything else ? if you are not sure, for example, that treasury liquidity

is adequate to buy realistic pricing when it comes to the gap between inflation and security nominal's, breakevens, showing, laughably, that inflation will drop to 2% within one year's time. then, can you trust all your other calls out there, like the idea that the fed will keep pricing to cut rates? how trustworthy are things like that suppose it risk-free rate when it comes to valuing other securities? how do you cope with the extreme volatility in the treasuries market that seems to be driven not just by the fed? the fed has been constant saying. but, the market is shifting all over the place. it is how it is trying to cope with its own internal difficulties. we also have concerns that that

adds to what is needed to sell treasuries to support the yen. interesting times, to say the least. kathleen: always. garfield reynolds there along with kathleen hays with the latest. follow this story on our markets live blog on bloomberg. get a market rundown in one click. all the commentary and analysis from our team of expert editors. find out exactly what is affecting your business at a given time. let's get to vonnie quinn with first word headlines. vonnie: a delaware judge is halting a court case against elon musk over a $44 billion twitter buyout until october 28. it is a win for elon musk who accused twitter of not taking yes for an answer after he revised his bed. --bid. twitter said musk can and should

close the deal next week. the thai prime minister will visit the scene of the countries worst mass killing friday. a30 four-year-old man killed at least 38 people, mostly children in a rampage that began at a decade -- day care center in the countries north. the man is a former police sergeant due in court friday charged with methamphetamine possession. the latest cpd minutes show some officials want a 50 basis point hike. officials agreed to a .75 hike. the central bank is fighting inflation nearing 10%, risking looming downturns. the bank of england pushed back against u.k. government claims that the recent market rout was part of a government selloff. the bank said it had no choice but to intervene with managers dumping gild triggering --gilt

triggering a market crash. global news 24 hours a day on air and on bloomberg quick take powered by more than 2700 journalists and anaylsts in over 120 countries. . i am vonnie quinn. this is bloomberg. shery: ahead, a focus on lgbtq plus rights in china. next, we talk markets strategy with bearings asset management. why they think investors should still hold more cash. this is bloomberg.

♪ shery: let's look at this chart. really, this is exactly why we continue to hear speakers from the fed pushing back against the idea of an eminent pivot. overnight, we saw the disparity that the fed has not finished bringing inflation down. it is quite a ways away from pausing rate hikes according to neel kashkari. we heard similar sentiments by lisa cook and chris water saying the bank needs to continue raising rates early into 2023 and keep the battle over inflation a top priority despite financial markets. this chart is signaling the fed

will raise to around 4.5% by march of next year. the green line suggests we see a lower rate by may. one could interpret march as being potentially the peak. but, in the meantime, let's get straight to some large pictures. rocket launching the galaxy 33 and galaxy 34 commercial communications satellite for intel at the moment. this is being built by northrop grumman. it will be positioned in orbit to provide video and television broadcast services across the u.s.. we are about 25 seconds until lunchtime. the falcon 9 group will land, as always, on the drone ship in the atlantic ocean. we have seen three launches from a spacex from three pads in 31 hours. one had to be delayed as a result of the initial launch.

we saw a similar attempted feet -- we are hearing they have aborted the launch. we will find out more details as to why. of course, this is not an unsurprising development given weather conditions and other conditions that affect the ability to launch successfully. we will get you more on that. in the meantime back on earth joining us now is james leung, head of bearings asset management. this chart shows market expectations are either on a pivot or a forced pivot by the fed. is this something you think equity investors are thinking about? james: this comment coming out over the last couple of days, which you know, you guys have

talk about -- talked about, has forced the market group to expect the fed to continue the hike aggressively, and may be a policy mistake that could shock the economy. therefore, the market might be expecting some sort of cuts somewhere down the road. i do not agree with that. i think the fed will continue to be very aggressive. but, they might start to find soon, along the way, that as most officials have said, we need the next few data points on cpi and related data. that is extremely important in formalizing strategies over the next hike. then, we react afterwards. it's extremely if the court to interpolate the next 10 to 12

months in terms of rate policy. that is why we are holding a little cash for now as we wait for better opportunities. kathleen: --haidi: holding more cash, avoiding long-duration at this point. what will be the catalyst for you to get a little more bold? james: indeed. markets do not wait for the signal to pivot before rising. so, they precurse expectations. if there is any sign of supply constraints being further mitigated, and the related issues coming up from the pandemic, then, certain core inflation dynamics may start to soften. but, still, again, given the commitment of the fed, we are unlikely to see them pivot anytime soon.

but, if it happened, i would think that the potential would be pretty significant. because, of the peak bearishness the market holds on almost every asset class in the world. shery: james, this chart shows how global stocks are pricing in that drop in earnings forecast ahead of a result. what are you expecting? how will markets react? james: the look of it now is that earnings expectation for the u.s. corporation is mixed. by definition, high born cost, slowing demands, coupled together with continued high cost, whether production cost or labor cost, that should squeeze margins. as we see in a long-term record, u.s. companies are quick and

flexible in adjusting production or capital structure to adapt to different phases of the business cycle. so, my expectation is, yes, earnings may weekend. but i am not see yet the risk of a full-blown earnings recession. to the other part of the world, china. i spoke to our chinese equities specialist just yesterday. they are looking at earnings revisions very closely. having had really negative revisions over the last couple quarters, they are seeing revisions at least starting to stabilize and turning slightly ever positive. so, there might be a different picture in china. shery: james leung, good to have you back, multi asset apac head at baring asset management asia.

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shery: u.s. futures continue to extend declines in the new york session after every sector in the s&p 500 was in the red mostly, except for energy. we are hearing from cleveland's retta mester saying she does not see the fed cutting rates next year and the fed will not cut until they get inflation down to 2%. hawkish

♪ haidi: we have labor cash

earnings as well as household numbers out of japan just crossing the bloomberg. missing household spending for the month of august, the print 5.1%. expectations were 6.7 percent, but it is an increase from the 3.4% the previous month. we saw in july, the cutback when it comes to japanese households on spending. we have surging virus cases. some consumers making the effort to rein in spending to offset the cost of living as well even as inflation in japan has been moving higher. but we are seeing the gain of 5.1%, not what the markets were spending. labor cash earnings seeing a stronger-than-expected gain of 1.7 percent. we are really seeing gains against expectations of 1.4%. a little softer than the previous month in july as well. we have seen a stronger job market in japan and there had been hopes that that would

dampen serious wage growth that the boj is seeking in order to move ahead with inflation policy but household spending, meeting expectations on the year on your number despite the recovery, and the relatively robust summer travel and spending season. global markets and fed officials continue to jostle. there is another labor story affecting the u.s. treasury market. we have seen worsening liquidity conditions. it is a situation where it is harder to see large trades being done without moving the markets. the question is, how bad are things and do we start to see repercussions across other parts of the market? annabelle: that is right, when you look at market dips, the worst level since covid last week. that was a point at which the

fed was forced to intervene in the market. we are nowhere close to the levels that we signed the worst of the financial crisis but we are back around a level we saw at the worst of the covid intervention. and as you say, it is something that is a front and center concern for investors, because some analysts say a sizable depreciation or deterioration in liquidity is in the market and we have yet to see substantial reforms on this. it means as well that investors may not be able to rely on treasuries and ways they once could. we look at this terminal chart and we are starting to see more treasury repo sales. this is normal. this is essentially when one investor hans overcash in return for some sort of collateral. there are a certain amount of failures in the market but we are seeing a jump and that is a telltale sign that is tight and that shorting in treasuries is rampant.

the biggest nightmare for the fed is that they have to step in and buy debt in the market and this comes up against the qt program that is going into the next year now. shery: something that they did during the onset of the pandemic, but you don't want to be doing that when you are reducing or balance sheet. another story we are following is the saga around twitter and elon musk. a judge has halted the court case against elon musk over his $44 billion twitter buyout, ordering the parties to close the deal. elon musk's lawyers asked for time to seal the deal. let's bring in bloomberg's su keenan. the ruling itself looks like a win for elon musk, that twitter didn't want to give him more time. su: is a partial win for elon musk, he gets more time, what he wanted, but now there is a hard deadline. he asked for the 28th and is getting the 28th and twitter is

essentially saying, show me the money. a lot has happened in the last few hours. earlier thursday, elon musk's lawyers asked the judge to pause the twitter lawsuit saying it wouldn't harm twitter and that he needed time to do the deal. twitter objected, saying any delay was an invitation of further mischief and delight. it said, until musk comes -- commits to a close, twitter is entitled to its day in court. the ruling from the delaware chancellery judge was surprisingly quick. she gave musk until october 28 at 5:00 p.m. to complete the deal or she will set a new trial date in november. shares were initially up as much as 3.5% after hours. this, as the headline hit the tape. at that is an indication wall street believes that this order from the judghe -- they catch gives twitter the kind of

certainty they were looking for other we did see the gains. back after hours. but twitter has been trending higher since elon musk indicated earlier in the week that he intended to revive the deal. shery: su keenan with the latest on that twitter saga. breaking news out of samsung -- third-quarter operating profit coming in at 10.8 trillion yuan, lower than the estimate of more than 1212 -- 12 trillion yuan. perhaps not surprising. it was widely expected that samsung would report its first quarterly profit drop in more than two years. we are expecting the flagship semiconductor business to post a smaller profit. we have waning demand and looming recession risks for south korea, which saw the first production fall in chips in about four years. samsung now reporting third-quarter operating profit at 10.8 trillion yuan, below

estimates of 12.1 2 trillion yuan. let's bring in our asia stocks reporter, what is this telling us about the state of samsung's business and the broader macroenvironment? >> good morning. so, this is a big miss for samsung and also very rare for samsung. analyst estimates had been lower this year, but they still did not meet that low consensus level analysts had. we can see it as sort of a bellwether for global trade and global corporate spending, and consumer demand. but the biggest reason behind this miss is probably that the demand for smartphone chips and corporate spending globally is going worse than expected.

and the chips that go into smartphones, those would see a big jump in the pandemic as people would stay home and order food online ago online shopping. we are seeing that demand coming down now. and that is probably getting samsung's flagship semiconductor business that relied heavily on corporate spending, data servers and smartphone consumption by consumers. those things are probably behind this big miss. haidi: the chip industry isn't expecting a recovery even going into next year. youkyung: morgan stanley was first to issue a bullish view on the semiconductor sector, after the extreme, heavy losses in

samsung and other major chipmaker share prices. samsung's down and nearly 40% from the 2021 peak. however, even though we may see a true bottom in smartphone sales or the semiconductor sector sometime soon, we are seeing not much of a buy call or turnaround call from investors. because they are still saying risk that could hurt global demand and there is a cycle with other macro economic conditions that make investors want to buy samsung or sk hynix or other chipmakers. shery: any bright spots that we have seen? for example, displays doing better than other sectors perhaps? youkyung: one bright spot may

come from china, it may or may not come from china because smartphone sales in china are crucial for their recovery in the semiconductor business. and if there is any news about china easing it zero covid policy or covid lockdowns, that could be a huge breakthrough for samsung and other chipmakers. because in china, it plays such a big role in determining chip prices globally. but we have to see. i hear a lot of people saying they that saying that may not really happen. another bright spot is that the samsung share price has reached such a historically low level, there may be some buyers even though the buying may not be as strong, because there is still a looming recession risk. haidi: our asia stocks reporter youkyung lee. vonnie quinn has first word headlines.

vonni: the west sanctioned seven iranian officials ande. it includes the interior and communications ministers. this follows the death in police custody of a 22-year-old woman who was arrested for allegedly violating the islamic dress code. a new push by the biden administration to move forcefully. swedish investigators are investigating a damage to the nord stream priceline. the investigating is reportedly increased suspicions of sabotage but didn't indicate how detonations happened or who might be responsible. german investigators are also investigating is nord stream as it is cooperating president biden is pardoning thousands of americans convicted for possession of marijuana and is ordering a review of its legal status. animated step toward decriminalizing the plant, he issued a blanket pardon for all prior federal charges of simple session at willard's governors to do the same for state

offenses. the biggest cannabis country stock boosted 34% in one hour on the news. the department of justice is investigating a london-based oil trading company for potential manipulation of fuel prices per the company has been under scrutiny since last year. reports include activity during a key trading window. we are told the commodities futures trading commission is also looking into potential manipulation. u.s. treasury secretary janet yellen has proposed changes for the world bank and regional development bank to move beyond country-specific loans. the changes look to address a slow of private capital to emerging economies. janet yellen endorsed the notion that multilateral government bags can substantially increase lending without substantially increasing risk. 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. ♪ shery: coming up, as we look

ahead to china's 20th communist party congress, we talked to human rights watch about how the landscape for lgbtq plus life is changed during xi jinping's decade in power. this is bloomberg. ♪

shery: in the lead up to the

chinese party congress, bloomberg equality focuses on lgbtq rights in china, were read him has come under increasing pressure. what does president xi's likely return meet for these groups in chinese society. joining us is now yaqiu wang, a researcher at human rights watch. give us the state of lgbtq plus rights right now in china as we had toward the party congress. yaqiu: first of all, thank god it is not illegal to be gay or transsexual in china. that said, same-sex marriage is not legal in china, and people suffer prejudices from being gay or transgender. shery: how have things changed in the past decade under xi? yaqiu: it has gotten worse. lgbtq groups used to be able to organize themselves to advocate

for their rights. that has been taken away because the government has racked down on any civil society groups in the government as since ordered the lgbtq online community groups harassment surveillance. shery: does this mean that as we see consolidation of power by presidencies in pain, things could get worse? yaqiu: i think so. he is going to get the third term as ccp leader and there will be fewer people to challenge and within the party. and given what he has done to society, there will be fewer people able to put pressure on him from outside of the party. haidi: we have a list of some of the other ways these policies have impacting in a cultural way. because we have seen this

promotion of masculinity, if you want to call it that, the pushback against so-called femininity in men and culture. is that having an impact? yaqiu: certainly. last year, the education ministry had an announcement saying our boys in schools are too feminine, so we need to have them attend more pe classes. media regulators have regulations out there saying there are too many sissy men on chinese tv and we need less of that. that is a sign the government isn't welcoming lgbtq people to be in the public eye. they want more macho men, more men who are close to the values promoted by president xi. haidi: hong kong has previously been home to a more robust civil society discourse, and

organization. do we see the future of that in hong kong? yaqiu: i am afraid the hong kong government has canceled the gay games under the excuse they gave, covid. there have been attacks from government officials on lgbt groups, and also in the bigger political context, the crackdown on civil society roots and freedoms in hong kong is traumatic. it seems to be part of the national security love 2020. shery: what about other minorities in society? gender, equality and also the crackdowns we hear about. yaqiu: i don't think it is a good sign for any minority groups, or women's rights. the chinese government is now actually encouraging women to

have more children. i am worried the government is going to have a policy trying to push women out into the -- out of the workforce and back home and saying the country is a -- country is aging and we need more people, so you need to stay home and have children. it is obvious the government is committing crimes against humanity. i don't feel good about any rights for minority groups in china. shery: are there any rights organizations that can operate more freely within the country to push for human rights? or how isolated is the country now? yaqiu: right now, it is covid. there are restrictions on people going to the country. human rights watch has been sanctioned by the chinese government.

traditionally, if you criticize the central government, you are safer if you work on women's rights and dell g b to rights. even that is getting harder and harder. china doesn't like any kind of independent organizing in china. haidi: in this environment, what does effective advocacy look like? and does international condemnation or economic sanctions help? yaqiu: one positive thing that receive more and more is international pressure on china, the u.s. government just enacted a possession act which in effect pans imports from chin shower -- xinjao for human rights violations.

there have been sanctions against chinese companies. see more and more pushback by the international community, especially western governments, to address china's human rights abuses. an china's government does care about the economy. like the ban on imports from xinjao will have a huge impact and we will see how the government reacts. shery: yaqiu wang, thanks for coming into our studio in new york, from human rights watch. you can listen to the app or on bloombergradio.com. stay with us. ♪

♪ haidi: a quick check of business flash headlines -- peloton laying off a significant number of employees for the fourth time this year along with other cuts in operating expenses. they are cutting the workforce by 500 globally. ella todd has already cut more than 4000 jobs since february as it tries to turn itself around -- peloton has already cut more than 4000 jobs since february as it tries to turn itself around.

an online retailer expects steady demand even with shoppers back in stores and facing the highest inflation in decades. ali pay has been removed from a high-tech company in the latest blow to the ownership group. the payment giant failed to make [indiscernible] the removal likely means the loss of some tax benefits. this company is said to be seeking an outside investor for a spinoff of method advisory and investment banking businesses sources say the advisory and dealmaking teams along with leveraged finance units are being targeted. the credit suisse investment bank racked up huge losses and played a role in some of its big scandals. netflix will debut one of its major film releases in u.s. theaters one month before the movie begins streaming. the upcoming grass and yen will run -- grass onion will run in

cinemas for one week. netflix is looking for ways to boost revenue. we are watching for trey to open in korea and japan for the friday session in a few minutes. operating profit missing estimates. we are -- sam son operating profit missing estimates and we are also watching other semiconductor makers, adding concerns to the sputtering market more broadly for personal computer chips. let's look at markets that are open. asian stocks seeing the downside in the early part of the session ahead of the u.s. jobs data. investors are waiting for the pivotal monthly payroll and also are hearing more and more fed speakers reenter written commitment to bringing inflation down is a priority despite the

risk of lowering global markets. we are seeing a downside of .5% here in australia and kiwi stocks looking flat at the moment. and futures pointing to a soft open japan as well. we are seeing an extension of declines when it comes to the u.s. futures session, s&p 500 futures off .3%. we saw the nasdaq 100 as well as the s&p 500 ending the session near lows. the chip story continues to weigh going into the asian session, samsung, amd also dragging sentiment lower among tech names. we have market opens in seoul and tokyo almost upon us. this is bloomberg. ♪

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♪

shery: this is "daybreak: asia," we are counting down to asian major market opens as investors assess more hawkish fed speak is by pressures on the global economy. we saw the downturn in the chip industry reflected in samsung results. haidi: the drumbeat of talks continues and this at a time when we are getting increasing concerns about this function in the u.s. treasury markets. what does that mean? we are seeing big come a-moves with every become for and block trade having repercussions across global bond markets and other asset classes. a lot for investors to contend with. annabelle: some of the liquidity stress could put the fed in a bind. we are headed to opens now for japan and korea and also the open of cash treasury at the start of trade. the 10 year yield did come under pressure in the previous session. more hawkish commentary from fed officials.

minneapolis fed president neel kashkari saying the fed has more room for its inflation cycle, we have for that from other speakers. here in asia, the nikkei is coming online down 1.2 sent. traders are in a wait and see mode ahead of the key jobs report later. there is a forecast for hundred 2000 payrolls to be added in september, the fewest jobs added since a decline in late want to 20 but still fairly robust. in terms of the direction of currencies this morning, we are watching the yen trading around the 1.45 level even though cva, the top yen forecaster, says the selling of the japanese yen could be behind this. let's change to the open in korea, one-stop we are watching at the start of trade is samsung, declining 1.4%. we got earnings in the last 20 minutes or so in preliminary figures report a profit drop for the first time since late 2019

in the previous quarter. that goes down to the contraction we are seeing in the chip sector. operating profit down $7.7 billion for the three months ending september. sales also missing estimates. this is a preliminary reading, so we will get the net income and details of divisional performance later this month. the cause daca is really reflecting those concerns, the tech-heavy index but overall, the market is low this morning and we are seeing the korean yuan snapping its longest rising streak since january perhaps on broader concerns of fears of the fed staying hawkish, and recession fears that come off that. but at the open in australia, also weaker on concerns in the market this morning, snapping a three-day week of gains. crude rising this morning and on track for the biggest weekly rally since march. it is all down to the opec-plus move we had earlier this week, putting us on course for further

tightening as we getting to the northern hemisphere winter. shery: analysts are now calling for $100 oil again. let's get more market analysis from charu channa, market analyst for saxo capital markets . good to have you back. right now, everything seems to lie with the jobs report tomorrow i'm how the fed will interpret that. but at the same time, how much of is it to do market pricing of the fed's message? not that they will tip it, but just that the market is expecting that. charu: that is a key point for the market right now and that is why we got the jobs were. in terms of manufacturing, and the jobs data is now much more important. expectations are premature at this stage because the global

economy is holding up quite well. but even if we do see some kind of slow down in that jobs report, i think it will be assigned again that the labor market is cooling. it is extremely tight end it might be moderating a little bit. that always happens. there is going to be a piquant then, there is going to be movement around this as well. at this stage i think the markets are pricing in that forecast that the fed is shouting out, and i think cutting expectations for next year. now, they want time to bring inflation of the control. shery:, much of a conundrum is this for asian economies and central banks? because we are now seeing signs that we will continue to see pressure. we saw the samsung results reflect how the semiconductor industry is in a downturn. we have the current account surplus in south korea turning

into a deficit according to data this morning, which will probably way more on the yuan, while you have the fed continuing to tighten. what are the implications for broader economies in asia? yaqiu: with the opec tightening going on for some more time, it is important to look at asian markets. there are big buckets in taiwan and korea that are close to the deck downturn -- tech downturn we are seeing right now. on the other side, [indiscernible] the economy which is holding up quite well. they have adjusted much better to the fed tightening cycle. and that has been reflected in

the stock market. [indiscernible] in commodity prices as well, with oil prices going up higher as well this week. so, there will be global pressure. haidi: how do you position when it comes to energy and commodities stocks? yaqiu: if you are looking at asia, certainly you get the benefit of the higher oil prices. but most asian economies have oil imported. they will likely see further pressures because of the current problems, but at the same time, malaysia is a commodity exporter. over all, if you look at the

equity market, there might be pressures as well as we get into earnings season because overall for the third order, we have seen more tightening. but emerging markets are still quite tight. there is a structural deficit in emerging markets and that will me we will continue to see [indiscernible] as far as global oil stocks [indiscernible] price and performance. haidi: as the party congress going to be a meaningful catalyst for what happens in chinese markets? yaqiu: when we see china moving after the policy congress is a big question we do not have

clear answers on that yet. but i think the opening in asia going into q4, hong kong is taking many steps to go through this. in q4, we are likely to see a lot of things come to these economies and china [indiscernible] i think there is an incentive there. the key to the markets is whether we see more easing. shery: what are you expecting to see during the golden week holidays when it comes to data perhaps signaling spending and consumption in china? yaqiu: given concerns, easing has been pretty measured.

i would be cautious. i am not expecting a lot of optimism in the retail sales data. i don't think we will see those trends continue in a big way and that is why i think the focus is more so on when [indiscernible] following the communist party meeting. haidi: great to have you, charu channa, market strategist for saxo capital markets. vonnie: the latest ccp minutes show [indiscernible] the minutes come three weeks toward the next ecb september hike. the fed is fighting inflation nearing 10% while risking a looming downturn. swedish investigators are blending explosions or damage to

the nord stream pipeline delivering natural gas from russia. the swedish security service says the investigation has increased suspicions of sabotage but doesn't indicate who might be responsible. danish and german officials are also investigating. a -- a delaware judge has altered a court case against elon musk over his twitter by outcome the giving parties until october 20 two can feet -- complete the deal -- october 28 to complete the deal. twitter had objected to the request saying that elon musk can and should be in court next week. the thailand prime minister will be at the scene of the country's worst mass killing on friday after ordering an investigation into the tragedy. a man killed at least 30 people, most of them children, in a rampage that began at a daycare center. the man is identified as a former police sergeant who is due in court friday.

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 am vonnie quinn. this is bloomberg. ♪ shery: samsung continues its decline after its first profit drop since 2019. other chipmakers across asia, how are they doing? annabelle: recapping the numbers, the first profit drop we have seen since late 2019. operating profit drop $7.7 billion in the. ending september. -- in the period ending september. a reading comes throughout the end of the month and we get other factors like the net income and also details of divisional performance. we can see that samsung is weaker this morning but still a little higher than the past five days, due to an upgrade from morgan stanley. look at what is driving this downturn in the broader chip industry. south korea is home to two of

the world's largest chipmakers and we saw the recent drop in chip output in august. you can see, first time in more than four years, putting to the government there. we have heard warnings coming through on this, sk hynix, the samsung. in korea, saying significant adjustments for are inevitable. other peers are also saying they are cutting output to balance supply and avert a price crash in the market. let's look at other chipmakers we are watching across asia today. basically lower across the board. another company coming out is advanced micro devices. it also failed. third quarter sales missing projections by more than $1 billion. a lot of broad concerns around the market. but it does come up against what could be a rosy picture coming,

because we did have the upgrade from morgan stanley this week that contributed to the gains we saw in samsung over a five-day basis and they are saying we could the a recovery in the chip sector by the second half of next year. haidi: still ahead, lower expectations about activity in china. the economic outlook, just ahead. first, counting down to the u.s. jobs report. it looks like the size of the labor market is cooling. this is bloomberg. ♪

♪ shery: more than five top fed officials have spoken in the past 24 hours, all sending the same message -- inflation is too high and a rate hike pause is a long way off. global economics and policy editor kathleen hays is here. are there any does that -- any doves left? kathleen: does look like it.

they have fled the nest. neel kashkari is president of the federal reserve bank of minneapolis. a year ago, we saw him on this show and he talked about the need to go slowly, and was worried about covid-19 eerie by midsummer, hopping on the hawkish bandwagon and now committee seems to be leading the charge about the fed possibly slowing down and made easing the pace of rate hikes. >> we now need to stay the course. we said we are doing this, we need to follow through and validate the expectations we set in the markets. until i see evidence that underlying inflation has solidly peaked and is headed back down, i am not ready to declare a pause. we are a ways away from the pause. kathleen: fed governor lisa cook spoke today, her first policy-oriented speech since she became a fed governor this spring. people thought you might be a dove because she had done academic research, had written about needing to look at the broad impact of your economic policy and how raising rates,

tightening, fighting inflation could affect lower-income, even minority groups. in her speech today, she said to get inflation back to 2%, you need ongoing rate hikes. sounds like he is a hawk now to me. other speaker today, charlie evans, president of the chicago fed, also used to be an ardent dove and now says the fed is headed to 4.5% to 4.75% possibly by spring. he's leading the hawks now. the cleveland fed says inflation is unexpectedly high. chris wallace, leading hawk along with jim bullard, his former colleague at the st. louis fed, no meaningful progress on inflation yet, have to keep raising rates. it is clearly a fed that seems to be speaking with one voice. maybe it is like a flock of birds flying south for the winter. jay powell is at the front that

they are all playing in unison, because it is one message after the other come at the same thing. chris wallace was us about the economy. he said the soft landing is still possible, but the landing strip is shrinking. haidi: also depends on what happens with the labor market. a lot of the support to -- a lot of the supportive data we have had point two softening conditions, but still historically pretty strong. what would we need to see from payroll numbers to suggest that this might be the peak for the labor market? kathleen: in terms of payroll date, it is very possible we have seen that because the size of the hikes is still looking pretty good. we get that report less than 24 hours from now. payrolls are expected to be 250 5000. there were 355 -- there were 315,000 that they were 315,000

-- they were 315,000 the month before. average hourly earnings of five point sent -- at 5% year-over-year, twice what they were averaging going into the pandemic. wages are still looking pretty good. the labor market, as it loosens up, the fed may say, good, we are slowing things, maybe that will slow inflation. they want to see it cool off so it will not be a problem them. november 2 is when they meet again and we have to put all this together. i don't think they're going to pause, it is 50% 75. shery: kathleen hays with the latest from the fed and hawkish comments from the fed moving the treasury space today. the new york session, we had yields rising for a second session. in asian trading, the 10-year yield is added down, but

volatility has been immense in the treasury markets, especially with the liquidity problem movie -- liquidity problem we continue to see where buying and selling large quantities are moving markets every time. a session peak today was driven in part by a large block trade we saw in the futures space. haidi: and very much concern over whether we are seeing signs of dysfunction in the treasury market. that has huge ramifications when it comes to emerging markets especially in asia. look at what we are watching when it comes to currency, outsized when it comes to the aussie dollar, still under $.55 u.s. wanting the dollar-yen, a pullback from the 1.45 level, suggesting that the yen is ready to test fresh lows, and potentially the appetite for defensive measures as well.

this is bloomberg. ♪

♪ shery: a delaware judge halted the court case against elon musk over his twitter buyout, and ordered the parties to close the deal by after over 28. elon musk's lawyers had asked for time to seal the deal, but twitter questioned musk's motives prayed let's bring in bloomberg's su keenan. su: it is a partial win. he got the timing he asked for but has a deadline to get the deal done of the case will go forward. a flurry of court pleadings went before the judge in delaware, elon musk lawyers earlier asking the judge to pause the lawsuit before the october 17 trial date, saying it won't really

harm twitter and they could get the deal done. twitter objected, saying any delay was an invitation to further delay and they said he should have gotten the deal done in a week. that is all it really takes. twitter's position was, until elon musk commits to a close, twitter is entitled to its day in court. the ruling from the delaware judge was surprisingly swift, she grants elon musk until october 20 to complete the deal as he asked, but if the transaction is not done, she will set a new trial date in november. shares were up 3.5% after hours, indicating optimism on the part of wall street that they see this new path giving twitter certainty. but as time went on in trading, gains gave way to negativity. the bigger picture, shares shot up october 3 when elon musk revived the deal, but the twitter position now is, show me

the money. october 28 is the deadline. haidi: and that is the big point the deal hinges on, debt financing in the original agreement. there is a lot that could hold this up. su: yeah and the question is, why are at both sides coming to agree? let's look at the timeline on the case. it has to do with the fact that both sides do not trust each other. elon musk flicked it with the idea of buying twitter earlier this year, he met a deal to buy twitter, then suggested there were issues, try to back out of the deal and now they are in this court case. twitter views him as playing games and the acrimony between the parties spiked in their thursday filings. elon musk's lawyers say twitter won't take yes for an answer and he also revealed twitter had

officially dropped the price a couple billion dollars, but wanted certain agreements he wasn't comfortable with. so now, the issue is snagged on financing, musk saying his offer is now contingent on receiving $13 billion in financing. the original deal did not have such a contingency. and there are issues about debt, it is a lot more difficult to sell the debt, so a lot could happen in the next three weeks. the deadline for the deal to close. haidi: bloomberg's su keenan with the latest twitter drama. quick check of other business flash headlines. netsuite is said to be taking an outside investor for a spin off of its advisory and investment banking businesses. sources say the advisory and dealmaking teams and leveraged financing department are targeted. the credit suisse investment bank racked up huge losses and played a role in some of its big scandals.

cathay pacific is he talks with boeing and airbus about expanding its fleet as it tries to bounce back from covid. cafe dass cathay pacific is looking to add passenger and cargo jets and is seeking delivery by 2025 with a third runway at hong kong international airport coming into service. shery: markets at the moment, downside inequities across equities, nikkei losing ground. every sector in the red. we are watching the kospi fall for the first time in four sessions. and samsung is one name to watch. they disappointed with their latest results. plenty more to come. this is bloomberg.

>> this "daybreak: asia," is i'm

-- this is "daybreak: asia,". the bank says it had no choice does intervene up to dump -- after managers dumped 50 million pounds and triggered a market crash. the remark conflict with the government story about why markets unpunished the u.k. and the pound to historic lows. u.s. treasury secretary janet yellen proposed changes to the world bank and regional development bank to movie beyond country-specific loans. the changes seek to address global threats and speak at the flow of private capital to emerging economies per janet yellen endorsed the notion that multilateral development banks can increase lending without increasing the potential risk. the u.s. has sanctioned seven iranian officials indicate uses of leading a crackdown on protest. the group includes the interior and communications ministers. the protests began last month

over a death in police custody of a 22-year-old woman arrested for allegedly flocking islamic dress codes. the moves reflect a push by the biden administration to more forcefully support the protesters. president biden's bargaining thousands of americans convicted of possession of marijuana and ordering a review of its legal status. in a major step towards decriminalization of the plant, he issued a blanket pardon for all prior federal charges of simple possession and will urge governors to do the same on state offenses. the biggest financial -- the biggest cannabis company's stock surged 34% in the half hour after the news. 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. this is bloomberg. ♪ haidi: the rba financial stability review crossing the bloomberg and we are seeing rising financial stability risk on account of the high rate environment and higher inflation as well, saying some businesses

face more challenging conditions. household income growth has not kept pace with inflation, and the semiannual financial stability review, leading desk leaving households with less financial stability to meet rising costs and also consumption and the rate of savings. pressure on the construction industry but household balance sheets continuing to be in good shape. there is a concern that we will revert back to what happened to house prizes and loan stability in april. since then, the cash rate has risen 250 basis points above the level they were looking out to find stress at. let's look at markets now with annabelle. annabelle: they are picking up off the rba. when you think about the context of the week' is trading action, a lot was driven by the more dovish move from the same really

-- from the australian central bank earlier this week. a 50 basis point estimate started a rally we saw across global equities, including the msci asia-pacific index, coming into this trait today with gains of 4.4%. you can see that we are taking breathing room in the session this morning. a broad-based a lot today. most sectors are lower this morning, really driven by the flipside of what we are hearing from fed officials. they are not near the peak rate narrative and nowhere near ending the tightening cycle and more fed officials were reinforcing this overnight including minneapolis fed president neel kashkari, saying there is a ways to go in this campaign. others really backing him up on that. that is the picture across the msci asia-pacific index right now, you can see on your screen, it is off 6%. and the other thing we are waiting for in the session

today, trading volumes are very thin in the session today. this is the projection of where we are headed throughout the session. you can see that this lining blue is off the 20-day moving average. this is really wait and see mode. what will the jobs market tell us about how aggressive the fed to be? shery: and a lot to do without commodities prices will affect the inflation picture. and while european leaders are discussing whether to implement a cap on natural gas prices, some are admitting it is not clear what kind of masochism -- what kind of mechanism they will consider. our reporter joins us now. what measures are they going to implement? steve: there are many measures they can look at. it is complicated. energy giants we talked to including shall warned a price cap could reduce faith in the market, it could cut flows of

gas to other markets like asia whether it isn't a cap. and it might not do much to reduce demand. there are different mechanisms being looked at. one is a price corridor, which would cap large gains and reductions. the dutch natural gas benchmark in europe would be able to rise as much as it can. there is no circuit breaker. that is one way to look at it. another is to d-link natural gas prices to electricity prices and cap that as well. also something the government is looking at. details are fuzzy and likely, there won't be a decision made in the next few weeks or until the next meeting later this month. haidi: we are seeing a big reaction from energy companies wary of a decision being made here.

stephen: any cap would reduce faith in the market because they have built business plans and their trading desks are set up on an idea that the government wouldn't essentially put a ceiling on where the prices are, and show true fundamentals of where supply and demand should have prices at. any kind of market intervention could reduce that faith. and you have seen companies like shell saying that they weren't off to when these were being discussed. the same with total, the french energy giant. any idea needs to have the support of the industry for it to be successful. shery: what about any u.s. action, what are we expecting? stephen: the u.s. is looking to do as much as it can to provide energy in the market, providing

natural gas to europe. they are a big exporter of liquefied natural gas and agreed that they want to provide as much as possible to europe this winter to allow their energy situation to be stable. they don't want shortages there. but the u.s. only has so much export capacity. they can't really bring anything large online in the near term, it takes years to bring energy export facilities online. so, all the u.s. can do is encourage their industries to sell as much as they can to europe and other customers that need the gas this winter. haidi: bloomberg's stephen stapczynski. hong kong has a russian megayacht mystery on its hands. a 500 foot cruiser was sanctioned to a russian billionaire and is anchored in city waters. let's bring in cheap north asia correspondent stephen engle in hong kong. so much entry, what do we know? stephen: unfolding this mystery

on the waters just off where we are now, in hong kong harbor off stonecutter's island is the 465 foot nord, which is tied to russia's third-richest man. he is the largest shareholder in a steelmaker and is said to be a very close ally of vladimir putin is one of the most influential oligarchs in russia. you can see the ship here, shot by bloomberg news photographers in hong kong waters but the big question -- what is it doing here? this vessel is valued at more than $500 million u.s. and was built in 2020 and spent the winter essentially outside russia. but when the war in ukraine started, it is said to have come back to eastern russia, and

spent since march in vladivostok. some speculate that it went back to russia to avoid being seized, as more than a dozen megayacht owned by oligarchs have been seized either by u.s. authorities or european authorities or others. even some aggie yachts have been immobilized so they could not be returned to russia, or ck haven port so they are not ceased. the big question is, what is it doing here? it left vladivostok stop -- it left vladivostok about a week ago according to buy ship tracking hardware and was supposedly heading for vietnam, but ended up here in hong kong. the mystery continues. shery: do we have any idea of how it got there were the purpose of it being around hong kong? stephen: we don't know. i did and exhaustive search this

morning on the maritime department's website logs every shipped departure and entry in hong kong waters. there is protocol here and they have to go through immigration procedures, they have to give over a ship's manifest as well as a cruelest, etc. i could not find this ship's name or the call sign for the ship on the records. however, the hong kong standard newspaper says it is in the maritime department's records, having arrived wednesday afternoon. there is no indication on how long it will stay here or what its purpose is here. but again, the mystery deepens. haidi: keep your they's or correspondent stephen engle on the latest on the yacht. up next -- shery: up next, why the pboc should pay more attention to the hawkish fed. this is bloomberg. ♪

♪ shery: take a look at how samsung is trading. we have seen their disappointing results, with profit falling for the first time since late 2019. we have a broader, memory-ship industry downtrend at the moment, so samsung our working operating profit fell to 10.8

trillion yuan, below analyst estimates of more than 12 trillion yuan. samsung isn't the only one, we have heard other chipmakers warning in recent weeks that they face a tougher market. our fx reporter david finnerty joins us with a look at the korean yuan, which is a big part of the corporate story at samsung. he joins us from singapore. david, we continue to see weakness in the korean yuan after a string of gains against the u.s. dollar. the fact remains, we are down double digits against the dollar already. david: yes, and the samsung news will not help the yuan's cause. samsung is a big part of the chip sector and the korean economy, a lot of exports come from that part. so labor performance is a good gauge for the whole sector. this sector is coming under

pressure from global demand and that is not good news for the korean economy and it is not good news for the yuan, and it could be even worse if that spills over into u.s. equities in the u.s. tech sector. with earnings season looming, starting next week, other u.s. equity stocks push lower and also risk sentiment will be good for the dollar and bad for the yuan. ed could be a double whammy for the yuan at the moment, with the risk heading at 14.42 against the dollar, particularly if the fed remains hawkish and u.s. epi comes out next week indicating prices remain sticky. haidi: south korean authorities had to dip into their foreign reserves to defend their currency. are we starting to worry about levels of reserves more broadly? david: certainly reserves have dropped globally about 7%

recently, quite a big drop. it limits how much moving forward central banks can keep going. korea as a big reserve surplus. but the market is only showing short-term gains and in the long-term term, it is the fundamentals that dictate and if u.s. yields shift tire and the interest rate differential widens, there will be incentives for the dollar to move fire. this headwind, to some degree, the markets dictate where it goes. shery: bloomberg's david finnerty as we hear from the finance minister in japan talking about forced intervention as a factor in the drop in reserves we saw in september when japan lost $20 billion. learning to china, the covid tally has climbed to the highest in about a month as people enjoy

the golden week holiday. it is dashing hopes the virus can be brought under control before the communist party congress next weekend widening cases means curbs more broadly. nationwide, over 1100 new infections were reported wednesday with flareups continuing to support lockdowns including a popular tourist destination. haidi: let's talk about the outlook with one of bloomberg's top-rated forecasters on the chinese economy. ding shuang is the chief economist at standard chartered bank. the outlook remains so murky. when you look at rolling lockdowns that have happened, does that give you any confidence that we will see a path out of covid zero after the party congress? ding: if we look at the broader week, the market does not have

high expectations in the first place. the minister of transportation protected before the holiday that traffic could go up as much as 30% compared to the same period last year. at local travel seems to have replaced long-distance travel as provincial restrictions remain quite high. i and -- and i think the recent rebounded covid cases to about 1000 nationwide and also the further tightening of the covid measures by local governments, that may have frustrated tourists. i think low expectation is hard to beat. after the party congress, there could be some marginal easing of the covid measures, those

excessive measures are likely to be eased. the local government in month ago leah, they want to contain the covid spread and they will not hesitate to kill the chicken, and use the slaughter machine for the cow. that is what i think is happening now. after the party congress, preparations may start for eventual exit from covid, but the meaningful changes in our view will only take place perhaps next spring. haidi: next spring. from now until then, do you expect further pain when it comes to growth, and therefore the pboc authorities will have to do more, both monetary and fiscal? ding: both monetary and fiscal, they are already doing a lot in terms of support.

but i think the stringent covid measures will stay in place as the property market continues to be corrected. that is going to continue to make the recovery quite moderate. we forecast third-quarter gdp growth has 3.2% year on year in fourth quarter growth, 4.8% year on year. they are better than the second quarter, which suffered from the shanghai lockdown. but on an annual basis, china's gdp growth, we forecast 3.34% this year, still much lower than the target of 5.5%. interestingly, the market, even though they may be as appointed by the retail survey coming out in golden week, they may be interested in the home sales

data, given the support introduced right before the holidays. shery: how is that filtering through in the currency? we have seen support for the offshore yuan while offshore markets have enclosed -- while onshore markets have been closed during golden week. how does this factor into the broader global economic picture in chinese economic picture? ding: recent movement of the renminbi is more a function of the u.s. dollar value. over the past week, market sentiment improved at the u.s. dollar softened. so, renminbi recovered a little bit against the u.s. dollar with the u.s. dollar edge falling low 7.1. but on the trade away spaces, we want them stable against a pocket of currencies. so going forward, i would say

renminbi, the fundamentals will continue to drive the renminbi, including momentum and also the trade surplus. i mentioned the trade surplus even though it may shrink from the record high of the first half. shery: inflation or disinflation in china, the cpi outlook? ding: inflation may have risen to 2.8% year on year from 2.5% in august, but we don't think inflation poses a restraint for the pboc. instead, the pboc may pay more attention to u.s. inflation, the u.s. jobless claims, payroll and the spillover from the hawkish fed bounce. shery: good to have you with us, standard chartered bank. annabelle: ♪♪

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♪ shery: china markets still shut down for the golden week holiday, but will reopen monday. what are we expecting? annabelle: it could be pretty good as the headwind or tailwind is going to be helping us monday

morning, coming from the broader nsc i index. even though it is lower today, you can see on the bottom of the screen that we are still in track for a week of gains after a seven-week slide rid that is one positive factor. the other factor is, when you look at chinese assets w my -- we monitor in the offshore markets, the hang seng index up this week nearly 5%. the golden dragon index also climbing in the u.s.. these are more positive factors. another one at play is moves we have seen in the chinese yuan over the week because it is on track for its biggest weekly gain since may. that does relieve a lot of pressure on the pboc to try to stem the losses in the currency. on the flipside, other issues are still at play, for instance, the property sector crisis, tensions with the west, the covid-zero controls, that is one to watch as well. how long can this bounce last?

we still have covid zero controls in place and citigroup is saying the golden week of travel has not been as strong. around 50% lower of the year in terms of passenger volumes on roads and trains etc. turnover is very low in this market as well. haidi: annabelle droulers in hong kong. coming up in the next hour, we hear from the asia-pacific head of markets. our markets coverage continues as we look ahead to the start of trading in hong kong, shanghai and shenzhen. "

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