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>> good morning. >> we are counting down to asia's major market opens. >> the top stories this hour. u.s. stocks were back from a selloff triggered by a hot inflation print. the yen touching 30 year lows after the release of cpi numbers. >> the fed may be leaning toward back to back 75 basis point hikes. >> rising inflation and a strong

dollar are hot topics at the imf meeting. >> take a look at how the u.s. futures are trading. this after the s&p 500 surged in the new york session. incredible price swings today. we had a losses of almost 2% for the s&p 500. all 11 sectors were down just to reverse course and end up higher today. the inflation numbers came into play perhaps speculation of a bottom in the markets. really it was about cpi numbers today.

the headline number coming in slightly below expectations but it was the core cpi number coming in at the fastest rate and about 40 years. to be led and driven by sticky factors and inflation like shelter. that did not bode well with in fact -- investors. these numbers did a major number on the japanese currency as well. parks we saw whiplash trading earlier touching the lowest level in 30 years. now it looks like it has recovered to a 1998 level against the dollar. but earlier it touched 147. just starting with the spot, that is even at the current levels weaker than what we saw last month when the authorities stepped into the market.

are we going to be seeing intervention again from the officials? some saying what you need to be watching is yen volatility. given that that is still looking pretty subdued, the likes of td securities saying there is not any need for the boj stepan on behalf of the government. the other metric is in the yen futures contract. such trading volume on this spiking. perhaps as our team is pointing out, we could have seen intervention given the ministry of finance is already told markets it doesn't need to inform them when it steps in. let's look at the broader set up for the asian trading session. kiwi stocks already online trading in the green.

what's happening in the currency space this morning, we really did see commodity linked currencies whacked by the cpi print. the aussie dollar recovering somewhat after dropping. >> we are getting some news when it comes to the u.s. retail space. we are hearing that kroger albertsons, that deal could be announced as soon as thursday. we heard that kroger was in talks with their rival that would create a major u.s. grocery giant. it would be one of the largest u.s. retail transactions we have seen in a suit -- recent years. the last time albertsons changed hands was in 2006. bloomberg intelligence flagging that while there are synergies in cost savings and a lot of good things going forward, that

the significant overlap could make regulatory approval difficult. given their size, the combination would mean a 13% share of the u.s. market. still trailing walmart at 25% but we are hearing this deal is set to be announced as soon as thursday. stock is up 6% on that report. retail and the consumer, it was that horrible cpi read reverberating through markets. if there were any hopes by investors that potentially we could see if not a pivot but a pause from the fed, that was all but decisively dashed by the prices surging to a 40 year high in september. we're hearing that they're looking for a 5% terminal rate.

we did see the big market reaction to the downside. the question is, will they go to 100 basis points now? >> it wasn't ever that the markets or the fed were looking for, but that's what we got. we're trading on that right now. we were also watching the market terminal ongoing because of u.k. assets, what the government over there is doing. we're talking about almost two weeks since the tax cuts were announced and how we are hearing reports that government officials are working on a u-turn those tax cuts. we have the pound surges back boosted by those reports. all of this is adding to the uncertainty of what central banks can do at this point.

let's talk more about the inflation numbers and how they affected the u.s. stock rockets. this was on speculation that the year-long selloff had potentially reached a bottom. are equities reporter joins us with a breakdown of what happened today. another session of price swings, but it comes on the back of not only the strong labor market report but headed toward earnings season as well. >> most of the banks report tomorrow morning. we'll have it, dp morgan, morgan stangl -- stanley, wells fargo. the s&p swing more than 5%. it was ahead scratcher for a lot of investors but when it came down to it when i spoke with traders today, they were talking about three areas. technicals, put options, and

short covering. talking about technicals, at one time it a given up 50% of the post-pandemic rally. that triggered some program buying. there was a wave of put options that was bought to protect against a potential route because a lot got burned ahead of that woman got the august report in september when the s&p 500 fell on september 13. also have to mention this, citigroup flagged how there was a large trader at 11 a.m. the suggested there were portfolio level short coverings. >> does this really open the gates wide for the direction of the u.s. dollar? most analysts are now saying there is no way the fed could go less than 75 basis points and we could be in for another cycle of

higher price pressures going into the end of the year. >> the dollar strength that is tied into the federal reserve and how they are aggressively hiking during this time, especially when you're trying to figure out where you put your money when you're looking the other currencies, investors are putting it toward the dollar but we did see the dollar easing today. that's important especially will missile yields spiking, we sought the market turn higher. when we talk about put options and technicals and short covering, yields easing and the dollar easing that had a big part in the market taking a breather. looking at what's happening with the bank earnings tomorrow, that's going to be a big sign. what does that mean for corporate earnings even beyond the banks? we saw microsoft and other big tech companies warned about this. maybe around 40% of s&p 500

companies derive the revenues from overseas. whenever you see dollar shrink like that is going to take hit on their earnings. that's going to be a key focus to see how much is the dollar still impacting these corporate companies? >> turning to politics, the house committee investigating the attack on the capital has voted to subpoena former president trump bringing him into a new legal conflict ahead of the midterms. it was a unanimous vote in this hearing for this committee. >> it was a unanimous vote. you so the democrats and republicans on the committee moved to go ahead. the committee said they have been considering it for some time with they wanted to do it now because they feel like they have reached a place where the investigation has largely completed -- concluded.

they are still opening the door to having another hearing, but they have to finish up their work by the end of the year. part of what they have done today is to have a hearing focused on donald trump's role throughout the election. trying to plant idea of election fraud, saying it was unfair and now the committee is saying they want to subpoena donald trump himself. just because they have put out the subpoena does not mean the committee is going to get to sit down with the former president. he could go through the courts, refused to follow the subpoena as we have seen with other republican figures who the committee has asked to speak with. a lot of questions about what is coming next. one big takeaway is this signals that the committee is about to fully wrap up their work as well as escalating whether charges are against former president trump. >> a fight over records that the fbi seized from mar-a-lago's

long going -- ongoing. trump's request was rejected in a one sentence order? >> yes this is the back-and-forth that has been going on with the thousands of documents that were taken from mar-a-lago by the f vi. -- fbi. trump was successful in asking for a third party to review the documents to certify which ones are relevant to the investigation. the courts also did allow about 100 of those documents with top classified markings to not be a part of that review. it was security risk the more people who saw those documents. today the supreme court agreed with the justice department telling trump they would not allow special master to review those 100 other documents. thousands of documents are currently under review and the concern from the federal government side is they are holding up their investigation into trump although questions

remain about what charges they are pursuing. >> let's get over to vonnie quinn. vonnie: liz truss is said to be preparing to abandon part of her financial agenda. a source says officials are drafting options. no final decision has been taken. reports of the u-turn spark talks that -- is set to quit. >> opposition hasn't changed. i will come up with the fiscal plan on the 31st of october as i said earlier in the week. there will be more detail than. what i am totally focused on is delivering on the budget making sure we get growth i could to the economy, i'm not going anywhere. >> two dozen police patrolled a beijing intersection.

social media posts showed two banners calling for the ouster of xi jinping. authorities are on high alert ahead of the party congress on sunday. hong kong is said to be considering easing property taxes and restrictions as it seeks to carbon outflow residents leaving the city. four years of clinical turmoil and covid restrictions have led to an increased number of those leaving the area. south korea's military said it detected short range missile. the latest and a barrage of provocations by pinch -- kim

jong-un. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. >> coming up we speak to the philippine central bank governor. but before that the european commissioner for the economy and financial affairs. this is bloomberg. ♪

>> global finance chiefs meeting in washington. kathleen hays is there as well with one of those leaders. >> a formidable challenge on his hands. so many issues affecting the world and europe. everything from high inflation to the problem with energy prices. the war in ukraine, so many big questions. the perfect person to address that is here with us now. the european commissioner for the economy and thank you for taking time out of a very busy

day. i want to start on inflation because in the u.s., we had this unfortunately hot inflation report yet again. it is affecting the world but certainly the u.s. reaction has a big effect on your. what does it mean for you as you look over your economic landscape? >> we are not yet in a decline path for inflation in the u.s.. i think we will reach a declining path clearly and we are in an unprecedented situation with a labor market that is still in very good shape. but high inflation. of course in europe, we also have high inflation. it was 10% in the last figures.

i have to say with different rules. in europe, inflation is mostly fueled by energy prices and the consequences of the war. this is a little bit different from the u.s. where inflation is more connected to the heating of the economy, the strength of the economy. in our case, it is much more connected to energy prices. if we are able to address the issue of energy prices, i think we will be able to curb down inflation. >> as top officials are saying, there's probably a case for aggressive rate hikes. do you support that, is that what europe needs?

>> i think it's tightening of monetary policy ongoing. it is inevitable. we have to avoid the fiscal policies of the government's going on the opposite direction. you tighten on one side with increasing interest rates and on the other side, you loosen. it is not easy because we all know that in these weeks and months especially vulnerable households, companies more affected by energy prices in europe need to be supported. this contradiction has to be managed to avoid the fiscal policy is competing with monetary policy. but in a certain sense, the support is necessary. what we ask is the support from the government to be temporary

and targeted. not universal support as one would have against the pandemic. but something more targeted and if possible, only with short time. >> is that where you feel you're going? >> i don't think that all of the measures that are taken are going exactly in this direction. we have to make further effort to have this. otherwise, if we give the impression to our citizens that we can support each and every activity as was the case during the lockdowns, i think we made the wrong choice. >> you have called for the elimination of joint debt to shield the economy from the effects of the energy crisis. what kind of structure do you envision? >> in the european union, we had

this extraordinary experience in facing the pandemic which was establishing a fund that we call next-generation eu 800 billion euros in support of our economies. it was the first time in 60 years and it is a success. we can't repeat the same thing. but having differences along with different member states just seems to be inflation. we have countries with 6% of inflation and others with 22%. differences are there. to manage these differences, we need common tools. >> i want to ask you about the agreement for a global 15% minimum tax. what is the way forward and at what point will the eu proposed enhanced cooperation? >> we are still working to reach

unanimity. we are 27, we have 26 member states on board. we are working to have also the last which is hungary on board. unanimity on this matter of taxation is the best solution for the eu. if we are not able, we will in any case with other ways reach the same goal. we will implement pillar to possibly with unanimity or other waste. >> so you would go forward without unanimity? >> if we cannot reach unanimity, we will not give up, we will go ahead with other tools. >> for pillar one, it allows companies -- countries to tax companies that are physically in their country but they are

making money from selling things to their citizens. are you going to start preparing a backup plan and if so when? >> the principle is simple. you have to pay taxes where you're making or profits. where you are selling your goods and products. this is not the case in the web economy. i think we have a good proposal. we call it pillar one. it is overcoming the fact that each and every jurisdiction as its own digital taxation. this is crazy. crazy for the system and crazy for companies. to have a common solution is the solution. we are working there. i think we will have an international agreement to be ratified by member states by the first half of next year. it is not tomorrow, but it

deserves a month of further work to avoid this proliferation of different taxation which is not good for the economy and not good for industries. >> thank you so much for joining us. it's a busy time at the imf. were glad you could take time for bloomberg television. >> bloomberg's kathleen hays will be back with more interviews from the imf. we are now hearing from twitter saying that elon musk is being investigated by federal authorities over the deal to purchase twitter. this coming from twitter attorneys discussing the elon musk investigation in a court filing. twitter shares are sinking almost 2% at one point after this news broke. we know that elon musk has agreed again to pay $54.20 per

share to purchase twitter. the original deal agreed to last april for he pulled out. we are now hearing from twitter that elon musk is being investigated by federal authorities over this purchase that would be worth about $44 billion with the original $54.20 per share agreed back in april. a transaction is expected for october 17 and we are hearing from twitter that elon musk is being investigated. coming up next, we get the outlook for the philippines. we will ask our guesstimate the future path of policy and action to stem the slide of the peso. this is bloomberg. ♪ millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year

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breaking news when it comes to credit suisse. we hear it's products group is seeking interest from a financial group. it has emerged as a suitor for part of the spg group as the bank moves closer to a final deal. that is according to people with knowledge of the matter. it is up against competition. the credit suisse representatives saying they will update strategy review as they announced third quarter earnings. we know that the spg platform is highly profitable. it employs about $200 billion in risk-weighted assets and $75 billion of regulatory exposure. we know this comes as credit

suisse faces a shortfall of as much as 8 billion swiss francs according to goldman sachs. big spinoffs as well as the spg group. we heard that from the ceo a few days ago. to try to put an end to years of scandals and losses and developments of the bank. >> we will be watching mizuho at the open. the shares have rallied for the bank. look at how the other asian markets are trading at the moment. kiwi stocks gaining ground for a second session more than 1%. this after we had u.s. stocks surging today. reversing the losses of almost 2%, all 11 sectors were higher. sidney futures also pointing to a higher open. the aussie dollar holding steady right now.

-- expected inflation moderated. inflation concerns are global and extending over in australia. nikkei futures pointing higher as well. the japanese yen fell toward a 30 year low against the u.s. dollar. global finance chiefs are gathering right now in washington for the imf and bank annual meetings. kathleen hays is standing by with our next guest. >> we are here at the imf and world bank annual meetings where strong dollar, strong inflation are big topics for many people

including our next guest. he is the governor of the central bank of the philippines. thank you for joining bloomberg again. let's start with the cpi report today in the u.s.. it reverberates around the world to the fact that it was too hot. it suggests the federal reserve will do more aggressive rate hikes. right off the top of your head, how does this affect you as you look at your next policy meeting and think which way ariba to have to go? -- which way will we have to go? >> we are going to do 25 basis points. we cannot do 25 basis points. it's a question of whether it's 50 or 75. i cannot say what we're are doing because i don't know how the rest of the board will go. >> 75 would be quite step for

the central bank of the philippines. >> the advantage of 75 it would probably reduce the pressure on the peso. also reduce inflation in 18 months or so. the disadvantage is that the economy has not fully recovered, it is recovering from covid and we want that recovery to continue, to remain robust. >> the peso is down 13% this year. clearly it is a concern. how big of a driver is that part of it? your inflation rate is still high. you have this worry about the economy that is not fully recovered. how much of a factor pushing you toward even doing 75 basis

points is weakness in the peso? >> let me put it this way. i have been told the fed is no longer raising the rates. i would say we have done enough already because our forecast of inflation is that it is already target consistent. that by 2024, we will we back to 3% in the middle of our target. this changes everything because this pushes the peso to become too weak, then it could add to the inflation. clearly, what the fed does has a very significant effect on what we will do. >> my colleague in sydney is going to join with the question. >> there has been some talk

amongst the g7 about the effectiveness of intentional coordinated currency action. is this something you would support if the fx markets get more volatile? if currency reserves are becoming a problem particular for emerging markets? >> i think the best possible option is the global economy action. i'm not sure it would happen. every country doing its own will be less effective than all the countries together addressing the overly strong dollar. >> good to see you again. would we see those rrr cuts that you talked about before year-end and how would that complement your military part -- monetary

policy stance? of course the way it looks, the fed is going to probably do at least two more 75 hikes and one more 50. in which case, it's all a question of how much we will respond. the argument for not responding point by point is that are inflation rate is lower. but the argument for moving something higher is that the pressure of the currency also has to be addressed. >> foreign exchange reserves are declining and you have been remaining in the currency

market. that's why you want to do a 75 basis point hike because you want to save those reserves. the imf has warned against saving reserves for when you need them. is that what you are inclined to do? are there other steps you could take to support the peso as needed? >> what's on the table is using reserves, raising rates. and of course if possible international cooperation. as i said, i do not consider that to be very likely. >> you just said your economy isn't fully recovered. her inflation is still high, but you need to move and move aggressively. some global leaders have criticized the fed for going on a path that is causing this kind of turmoil for other economies around the world. do you think the fed is moving

too quickly? should they recalibrate and maybe slowdown the pace and a of rate hikes? >> the fed is totally entitled to address the problems of the united states. i completely understand why the fed is doing what it's doing because clearly its actions must be to achieve what is good for the u.s. economy. >> are there any other supports, pandemic measures to support the economy, anything think the government needs to do that is needed to support the economy while you have to move aggressively raising rates? >> the government can do import restrictions of key products. to alleviate the inflation. >> i guess it all comes back to reducing inflation for everyone. >> yes. >> thank you so much for joining us.

we are here at the imf. it's so interesting, he thinks that 75 is going to be on the table. i guess it's called keep up with the federal reserve. back to you. >> we will have more conversations coming from the ground. the biden administration also latest restrictions on chip exports seen as the toughest actions taken against china so far. for a preview, we are joined by erik schatzker. this china u.s. rival permeating everywhere. we have more growing worries about potential conflict in taiwan as well. >> at a time when everyone's

interest is focused on inflation, monetary policy, and the strong dollar, i think it's really important to draw attention to this technological cold war that is taking place between the united states and china. i don't think we can describe it in any terms other than that after the steps of the biden administration took last friday to further curtail exports of vance technology to china. -- advanced technology to china. what hangs in the violence is the future of taiwan and how bad would it be if china were to impose an economic located around taiwan such that taiwanese exports of technology wouldn't find their way to the rest of the world? i spoke a couple of days ago to a portfolio manager at the macro hedge fund founded and run by paul tudor jones and she put

into per -- perspective. >> if something were to happen to taiwan so they would be fully compromised, the economic impact would probably be pale in comparison to what we have seen with covid. >> i just want to repeat what she said. relative to covid and remember what covid was, a terrible shock to the world economy and not to mention world health such that it required central-bank and fiscal stimulus the likes of which we had never ever seen before. this would be nine times worse in her mind. think about that for a moment. >> bringing this good news, eric. [laughter] ever since the first new economy forum, we have been talking about this theme of bifurcated

economies, the decoupling of the two biggest economies in the world, the pulling apart of the realms of tech between china and the u.s.. the other peripheral risks are so much higher now. >> they certainly are and we have to think as well about how china might retaliate if the united states continues to pursue policies of this nature, china may withhold exports and supplies of critical minerals that are necessary to the ev supply chain for example. that paradoxically are of paramount importance to the manufacturer of semiconductors. we talk all the time about deglobalization, re-globalization. the truth of the matter is this is still an intensely globalized world and it is not clear just what the consequences of this tit-for-tat type of approach

might be but at a certain point, and that point might not be in the distant future, it is in good. >> erik schatzker with a preview of the new economy forum that will launch in singapore november 15 through 17th. bloomberg will have full coverage with exclusive conversations on tv and radio. right now, we have live pictures of a press conference by the japanese finance minister as well as the boj governor -- minister suzuki talking about the russian invasion how many and japan have criticized it and also most importantly about how we are watching the currency space the g20 shared understandings over volatility. nations have agreed that many currencies moved greatly. he also is reiterating

commitments to currency stability be reaffirmed. the minister also explaining that the fx market and the japan economy to the g20 especially on it comes to the actions of the japanese government explaining japan's economy and the fx market to other g20 nations. we are also hearing from the bank of japan governor speaking as well explaining japan's price situation, boj policy, how these policies were explained to the g20. we have seen a lot of volatility in the japanese yen that has plunged to a 30 year low against the u.s. dollar. there you have the press conference happening in d.c.. plenty more to come. this is bloomberg. ♪

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twitter says elon musk is being investigated by federal authorities over his deal for the social media company. let's get the details from ed ludlow. >> it's a court filing, a letter from twitter's attorneys to the judge. it's dated october 6. that's important because october 6 was the date that the judge suspended the trial that was due to take place in delaware and

said that both sides have until october 20 at 5:00 p.m. to close the deal. what twitter says in this letter to the judge is elon musk is currently being investigated by federal authorities. they don't list which federal authority but part of their complaint is that they want the team to hand over correspondence between elon musk, his team and the federal authorities. what they are saying is the elon musk team is using a series of mechanisms to say that these documents or correspondence between those parties are outside of the scope. of what is permissible for them to hand over. it's an interesting development because as it stands, we think we are working toward tober 28 for a deadline for the deal to close. >> there are historic as well as ongoing investigations for elon musk. whether you talk about the sec or the ftc.

another has been some concern over his stock buys. do we know if these matters, what's relevant to the latest development at the moment? are we look at to get more details about these issues? >> we don't know. in the letter from twitter's team to the delaware judge, they do say and give examples of correspondence between elon musk team and the sec and the ftc with specific dates. we don't know what that corresponds to, but they have asked for them as examples to be handed over. in may, bloomberg reported according to sources that they had made an inquiry to elon musk's team surrounding the nature of how he first disclosed the stake that he built in twitter. that became public on april 4. that was prior to him announcing his intent by the company. we discovered a lot about that

process since. >> that was ed ludlow the latest on twitter and the twitter -- the elon musk deal. we continue to hear from the boj governor talking about the fx situation, the economy in japan. he is saying that japan's inflation is driven by cost push factors emphasizing the point that the boj will continue its loose monetary policy until they get sustainable inflation. we are seeing the japanese yen around 1998 low against the u.s. dollar. china's 20th communist party national congress beginning on sunday and it will be the most important one in decades. xi jinping is expected to secure a third term and power. there is much more at stake for the next generation of chinese leaders below him. stephen engle explains. >> china's communist party has

pre-much held fast to a mandatory retirement age of 68. allowing past party leaders to oust rivals and promote proteges. hundreds have been forced to leave the 200 plus member central committee over the last couple of decades. thing is the man at the top xi jinping is now 69. he will not be stepping down. due to a constitutional change he pushed through in 2018. it begs the question, will his next power-play the age limits for everyone but himself? nearly half of the bureaus 25 government officials and potentially three of the all-powerful seven-member standing committee are set to retire. one already says he will not seek another term while the vice premier and china's top legislator are both past retirement age. many of xi jinping's

high-profile yet aging nappies could be forced out. such as the economics are spearheaded talks with donald trump. the top diplomat, foreign minister, and the only female on the bureau the one overseeing covid zero lockdowns. elevating the younger may not be a bad idea as xi jinping could potentially rule indefinitely that this would not be without risk as china faces multiple challenges from covid and property drags on the economy to rising tensions over taiwan and xi jinping's support on moscow. the infighting for positions will take place behind closed doors. we will know after the party congress close just how strong of a mandate he has with his new team into offering possible

clues to an eventual successor he is yet to name. >> you don't want to miss our exclusive special coverage of the event that kicks off this sunday at 8:30 a.m. hong kong time. new york 8:30 in the evening on saturday. this is bloomberg. ♪

>> live pictures of the japanese finance minister speaking in washington, d.c. saying that japan will take appropriate action of successive moves that they have been able to gain the u.s. understanding on interventions that they are reaffirming international fx agreements. this is very important because there's a lot of speculation on arc intervention by japanese authorities given the weakness of their currency. >> that weakness sinking to a fresh 20 year low. the impact of the previous intervention faded well beyond the point where we saw actions. it is lots of expectation that we are setting up for another round of policy intervention. we continue to watch those lines for you. that's it for daybreak australia. daybreak asia is next.

this is bloomberg. ♪

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