haidi: a very good morning, welcome to "bloomberg daybreak: australia."

>> we are getting down to asia budget is major market opens. shery: good evening from bloomberg's world headquarters. chinese president xi jinping's immense power as he secures a third term in office, stacking china's most powerful bodies with close allies. >> the pound extended gains after boris johnson quits the race to be the u.k. conservative party. rishi sunak closer to becoming the next prime minister. shery: officials lay the groundwork for a shifter smaller rate hikes even as they prepare for another jumbo increase next week. u.s. futures extended gains that we saw on the s&p 500 in the new york session. it was a stunning reversal on friday, again when we had also the best weekly rally for the s&p 500 since june. we heard from jim bullard, mary daly is how there needs to be debate about how much higher rates have to go and even considering is slowing down of

the pace of rate hikes at some point although committing to the next rate hike. we are looking at treasury yields falling, needing to a surge in stock prices in the friday session. 10 year yield falling toward up 4.20 level. oil eking out a weekly gain. we still have concerns about global demand for oil prices in the asian session, still above $85 per barrel level. we are paying close attention to u.k. assets, the pound celebrating gains against the u.s. dollar after boris johnson pulled out of the race. really leaving exchange of a rishi sunak on the brink of becoming prime minister this as we have the ftse 250 slumping given the uncertainty about the race, a little more certainty and relieve when it comes to the u.k. bond space. 30 year guilt -- gilt surging weekly by a record this after

the resignation of prime minister liz truss. watch the latest developments in the u.k. haidi: we are seeing perhaps signs of uncertainty when it comes to the australian economy. take a look at the australian pmi on the composite and services as well as manufacturing numbers coming in at weaker than prior readings. when it comes to composite and services pmi they are fallen under the 150 level meaning it is in contractionary territory. 49.6 for the composite reading. pulling down from almost 51, the previous reading for services, and that manufacturing component, preliminary number coming in at 52.8, still above the level that suggest expansion about slowing from the previous reading. we continue to hear overtures from the rba about the path of hiking and steepness of that path the rba has taken.

they are increasingly more concerns including from the giants were that inflation will be sticking it for longer particularly in the wake of not just higher energy prices but in the wake of severe flooding in parts of the country. let's get you straight to monday morning for the markets. shery: -- annabelle: a little bit of negativity coming in through pmi readings by the outlook for the asx 200 is really bright. take a look at the last rating, down to what sherry was just saying about these bets that the fed tone down the pace of its rate hikes in meetings ahead even if the move of .75 basis points is baked for november. let's take a look at the direction of fx, we are seeing fairly mixed moves, aussie and kiwi higher in the g10 space but began treating like this. we had the 2.7% jump on friday on one stage it down to more aggressive intervention from

japanese authorities to stem weakness. take a look at the move on friday at one stage, 151.95 four the young. official stepping in, but the question is how long can this last? basically it is not very long really given what we see with the boj sticking with its policy of easy settings and it's policy of yield curve control. that has not stopped international funds betting on a pivot at some stage. 10 year swap rates, that is a popular expression for the outlook for yields, 6.5%, an eight year high and well above the 2.6% line. we are looking at attorney markets. shery: we are already seeing signs of perhaps the turn in markets happening at least here in the u.s. after a $13 trillion stock crash. perhaps bearish bets and positioning are looking more

muted right now and even bullish bets are increasing at this point with inflation hikes being priced in, perhaps the selloff has fleshed out both retail and institutional investors. suffice it to say traders are not exactly bullish, but there is a sense of exhaustion, isn't there? there was a low bar for high news -- for good news. that is what we are seeing in the equity space. haidi: there is the sense of exhaustion we come to just how much the chinese economy has endured under covid zero actually, but there was no sign of a pathway out of that. president xi jinping same throughout the course of the party congress that the chinese economy is quite resilience -- resilient, looking to deepen global links. what the next five years, 10 years old. will they come more in were looking and isolated or will they continue to be these

international, global links? we know the competitive strategic relationship with washington is likely to continue, it will be interesting to see how these economic ties continue to be built and the economic recovery takes place given that we have seen such a shakeup in so many replacements when it comes to the core economic team in particular. the new this trip -- new leadership is staffed with allies of president xi. in terms of gender representation for the first time in 25 years there are no women in the politburo. shery: that is something to watch out for in the next generation of chinese leaders. we are watching the next generation of u.k. leaders, boris johnson pulling out of the race to lead the u.k.'s really conservative party, leaving rishi sunak on the brink of becoming the next prime minister. for more let's bring in bloomberg executive editor james. how much of a surprise is it that johnson moved out?

>> it is a surprise to the extent that the longer the circus was going on for, i remember johnson came back from holiday and said he was up for it, we can do this. the longer he was waiting to actually declare his hand, the more likely it was there were problems in getting a candidacy forward. we now here it is sunday, monday, it does not look great really for johnson. he tried, he failed, not a huge surprise of that respect, because he does not have the support of the tory lawmakers he thought that he would have, getting support from the tory members would have also been a problem. haidi: does this mean a smooth run for rishi sunak then? >> i think it is his to lose,

you could say. maybe have one foot in downing street, but you have to recall there was another person in this race, penny mordant, and she has an element of the popular vote behind her. there is a thought that if the tories have to go to the nation and it is time for a general election it may be mordaunt that is the person to carry the national vote. we will see. it depends if you can get more than 100 votes of tory mps between now and monday in the u.k.. if she does then the next stage is taking a street runoff between mordaunt and sunak to the conservative party, 170,000 people, the average age of more than 60 should we say who are going to vote on the next prime

minister of the u.k. haidi: thanks, james ludden. the chinese president xi jinping as phil china's most powerful bodies with his close allies while securing a precedent breaking third consecutive term at the close of the congress party. let's bring in stephen engle who joins us in hong kong. any surprises for you? there was not a lot of compromise when it comes to the up. >> -- line up. >> those are my words exactly. in the lead up to this party, the reshuffle of party positions, we speculated whether xi would continue on whether -- with the tried-and-true practice of stacking the standing committee with people from different factions. some of the -- proteges.

they were all that is over six members on the standing committee, there was nobody from the other factions, they were all loyalists to xi jinping, he stacked the deck. that was one of the main scenarios that would lay out, and sure enough xi jinping got his third consecutive term and all of his positions on that powerful standing committee. going out, li, we knew he would not be the premier but he could have stayed on the standing committee. he is out, 67 years old, not even hitting the retirement age of 68 yet. won yung, said to be a loyalist more so to hu jintao was forced to retire. the first time in 25 years that any member younger than 68 had been left off the standing committee. a fall from grace from little hu, left off the politburo

completely, the 24 member body and is still on the central committee. you can see the pattern, he put is people in place and sidelined those who were not 100% loyal. number two on the standing committee will most likely become the premier when he is affirmed a position at the national people's congress in march. fung was elevated to the politburo, the top planning body had at the mrc, staunch president xi jinping supporter. replacing another retired person , also pboc governor left on the sidelines. even if he keeps his position as pboc governor. you mentioned the economy, he did make a speech yesterday saying china's economy is resilient, he vowed to deepen economic ties internationally. china cannot develop in isolation, the world's

development also needs china. we can ring up the video of hu jintao who sat next to xi jinping. he had to be ushered out of the great hall of people, aids come up behind him, tried to pull them out of the chair. she was reluctant to go. there was so much chatter in around the world why this happened. we do not know the real reason. state media says it was because of health issues, highly symbolic move a weekend when hu jintao's allies were swept to the side, hu jintao physically swept to the side. i will leave it at that. haidi: just extraordinary video for such a highly choreographed event. stephen engle joining us from hong kong. hedging for doom and gloom is fast for out of fashion in wall

street after a historic route that is wiped out more than $1 trillion this year. let's bring in our life contributor garfield reynolds. it is the tide turning? >> may be the tide is reaching the peak. that is one of the big concerns is a lot of what seems to of change is traders and investors have gotten bored of doom and gloom, even though there are plenty of reason still. s&p has rebounded from below the 3600 level a couple of times, and that was a level attested back in june. there is obviously a fair bit of significance here. the question is is the cost of hedge going down because people are using an alternative hedge and parking company in cash in saint we are not going to go into this market? we are going to put our money in cash, which is starting to pay interest, rather than worrying about the exact dynamics of how the s&p 500 finds a bottom.

the interesting thing is of course the daily comments, wall street journal article on friday signal that allegedly some constituency within the fed are starting to think the frontloading of the rate hikes can slow down. that still leaves a very difficult outlook both for bonds, which by the way to remain in a very angst ridden state when you look at the move index of treasuries volatility, and therefore also difficult position for equities and even currencies. shery: when it comes to difficult position how challenging has it become for the british pound? we saw a rally given boris johnson stepping out of the race but still calls from bank of america calling for parity? >> the word volatility, a very volatile situation going forward. you could argue that there is the potential sunak's criticism of truss'planned policies during

the previous leadership race did end up sounding prescient, the sort of things that might occur if he was caring about the way she blended to. the idea of him coming in, that could bring some stability, but also pinning mordaunt is a wealth card. why is she potentially a good candidate? the tories are going to have to face a general election to the or later. political volatility will remain in the u.k., and therefore volatility will remain in the pound. shery: garfield reynolds with our top market stories. let's give it a paul allen with the first word headlines. paul: the financial times says japanese authorities spend more than $30 billion last week to prop up again while finance ministry officials did not

comment on intervention measures. the ft says to people close to the government from the action. on friday the answers the most against the dollar since march 2020 after earlier hitting a fresh 32 year low. australian treasurer jim challenge -- chalens is predicting an update. it will show an underlying cash deficit of $22 billion u.s. he has promised a sensible budget mindful of the chaos caused by the u.k.'s shock tax changes. china as enshrined the rejection of taiwanese independence into the really communist party's constitution. the document vows to firmly oppose and contain taiwan independence and advance the model beijing as proposed for taipei. the charter previously only called for the advancement of reunification with taiwan. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in

over 120 countries. i am paul allen. this is bloomberg. shery: our guest from georgetown university joins us to discuss how china will handle economic trade-offs given economic growth is slowing. chris weston tells us how he sees the pound reacting if rishi sunak becomes the next u.k. prime minister. this is bloomberg. ♪

haidi: take a look at the week ahead on the ecb take center stage this week for jayland with the fastest tightening circle -- cycle in its history. economists expecting a 75 basis point hike on thursday. we get u.s. third-quarter gdp. we are thinking clues about the economy's path as the fed continues jumbo rate hikes to tape down inflation. rate decisions out of the bank

of canada happening on tuesday and the bank of japan on friday. i made economic turmoil triggered by the war in ukraine, we get inflation data on friday from france, germany, italy, and spain. watching the elon musk twitter to cover case, a judge is that a friday deadline for the deal to close or for a new trial date to be set for november. australia up was because of budget is delivered tuesday night, the first fiscal update from the prime minister's labor government. shery: a massive week of european banks earnings as well, credit suisse on thursday expected to give details of a restructuring plan amid reports of more executive departures. we are getting earnings from major u.s. tech companies, investors paying close attention to apple amid worries about the flagship iphone range. that is your week ahead. haidi: let's get back to the

markets, our next guest is struggling to find conviction for any sustainable positions. let's bring in chris weston, head of research at pepper stone group. we are getting to the end of the year where you see exhausted being a really prevalent narrative. are the markets exhausted with the great selloff? that seems to be a bit of a turning point we are seeing. >> i am not sure if exhausted is the right word, they are searching out reasons to buy. everyone feels we have some coordinated intervention on friday, and we see follow-through dying this morning. this idea that a combination of what we have seen from the bank of japan, the wall street journal article, a combination of mary daly and another fed president as well is giving us a believe that we are getting to the point where the rate is clear to us, anything above 5%

in this current inflation regime , opportunities in the bond market, the rate market. and that is the ceiling. as long as the terminal rate stays below 5%, that gives us believe the dollar rally from here is going to be sustained. maybe that gives us a chance to pull back into equities, and maybe we see a bit of a trend. we will have to see. that depends on what happens in real rates, terminal rates, edit bonds. they are the key. we are seeing life back into the markets, and we will have to see if that propels higher. 38.20 on the s&p, if we get above that we can make a sustainable run throughout the week. much depends on terminals and what happens in real rates. haidi: the fed is obviously considering what the eventual downshift will look like, but for now we are looking like a more jumbo sized moves.

what is the next inflection point given that they went to see a series of sustained data points showing prices or slowing? >> we are in a blackout period now and that is what we got the wall street journal article on friday. marketed a good job of moving their prices to 75 for the november meeting and we get up to a place where the terminal rate is achieved. bullard said he was to get the fed funds effective into that kind of range and see what happens. we will see a prolonged pause when we get to that point. the next huge drop, just after the next meeting we have payroll numbers, cpi print and that will be a big one. we are going to see headline and core inflation trickle down. it will take a while to get near target of course, the fact that we are moving into a sustainable period means they could hold off from rate hikes at the end of q3.

what remains, how to the markets affect by consultative tightening, and the idea that we will see the balance sheet reduced by 95 billion. that is a headwind for equity appreciation. shery: the differential between what is happening in the fed and what is happening at boj really pushing the japanese yen lower, and we broke the 32 year low against the u.s. dollar. the volatility continuing to rise, but can intervention by authorities do anything at this point when we have the boj policy decision later this week? nothing much expected to change on that front. >> we will see some inflations to their inflation forecast for this year and next year, probably up to 2.7%. okc pi -- tokyo cpi coming out on friday and i could see inflation above 3%. intervention is a tough gig when you were fighting what is really a dollar move.

the bank of japan could be happy about the terminal rate. intervention is a tough gig at the moment. shery: chris weston, good to have you with us. we have more to come. this is bloomberg. ♪

haidi: we are watching the reserve bank of australia better risk and speaking in a q&a session at the moment. he has talked about how the central bank is not worried about the risk of an orchard -- imported inflation with the inflation being 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 with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan, or see for yourself how easy it is to save

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>> we will work with all of their people to champion humanities, common values of peace, developing, equity, justice, democracy and freedom

to promote global peace and prosperity to keep pursuing a shared future for the human community. china cannot develop in isolation from the world. the world's development also needs china. shery: let's bring in our next guest who says china's facing decision points and trade-offs including integration versing -- versus isolation. he's the chair for asian studies at georgetown university and served as president obama was top advisor of the asia-pacific. good too happy with us. when we talk about this integration and hear from president xi jinping about opening china, how much is it about increasing the world's dependence on china as much as it is about increasing china's dependence on the world? >> fundamentally what this is about is reengineering china's relationship with global

markets. it's about turning interdependence into asymmetric dependence. given the events over the weekend, what we see is we've reached a point politically in china of maximum xi jinping. nobody should have any expectations of balance in the political leadership in china. this is that xi jinping show. this is about control and control in order to achieve stability, development, and ultimately strength. as much as the chinese government talks about integration, what we are going to see out of this new leadership is a stress on self sufficiency, what they call dual circulation, military modernization, a fundamentally new era of china's relationship with the international community. haidi: i love -- shery: i love how you express it -- maximum xi jinping. is this how we saw the former

president being escorted out of the party congress? that was a shocking live drama playing out for people. this is a highly choreographed event. what is this telling you about where the party stands right now? evan: i don't think anybody should have any illusions about what kind of china we are dealing with. we are dealing with a china in which political leadership is determined by loyalty over merit, in which there are no rules or norms that guide political succession. xi jinping may be with us for at least another 10 years if not longer. when you look at the amendments to the communist party's constitution, they all stress concepts central to xi jinping -- the spirit of struggle. chinese style modernization. opposing and deterring separatism of taiwan. i think we are in this very

different era of dealing with china as an international actor in which they are going to emphasize struggle, economic struggle, foreign-policy struggle, national security struggle, as a defining element of xi jinping's approach to the international community. haidi: his approach to international policy, his approach to to mystic policy, the way he has laid out this leadership reshuffle is characterized by assertiveness and aggression. is this the new leadership model going forward or do you think there will be after this term a potential backlash? evan: that's a great question but it is impossible to tell. what's striking about this leadership transition is how it effectively defied all expectations. there's no balance in this leadership. all of those people that

potentially could have been counterpoints to xi jinping's view of national rejuvenation, they are all gone. all the people around xi jinping are his confidantes, people who either have created the ideological foundation for xi jinping's leninist-marxist nationalist view of the world or implementers of it. i think we have entered a very new era in terms of china's relationship with the international community. haidi: i quote from your joint paper on third term -- you talk about china is going to become more insular, more paranoid, more indignant, more self referential and more dangerous and a more coercive state. how does that work when we know the to mystic gross challenges are getting bigger and less easily surmountable due to the

governance model? evan: that's exactly right and one of the central challenges to xi jinping and his new coterie of confidantes faces is how to balance the fact they face a series of serious economic challenges and the solutions to many of those challenges will require continued interaction and engagement with the international community and international markets. but there's very little evidence in the political choices he made for people and advisors surrounding him that he is going to be interested in choosing those routes. those pathways at rejuvenation. my concern is he will lean in those instincts for self-sufficiency, toward state

directed investment, toward privileging investment, remaining very skeptical about market forces in private sector firms and channeling some of those resources into military modernization. so in that paper, we sought to lay out a variety of dilemmas and both of us looked at the alleadership that was chosen this weekend, i think it is clear what choices they are going to make in terms of the future direction in china. haidi: the other thing you wrote about is his risk tolerance over the past two terms and the forcefulness in making those decisions knowing that balance of interest was in his favor. does that go forward given the way he has stacked the decks and what about the fact the trade-off with the broader population has always been continued economic growth and prosperity? evan: you are exactly right.

on the one hand, xi jinping risk tolerance has always been high. the fact he put together this cabinet, this seven-member committee that he did is further evidence of his risk tolerance. anybody that voiced possible skepticism of xi jinping's policies were purged. they are totally gone. that tells us his risk tolerance in terms of chinese elite domestic politics remains and perhaps has even grown. the question going forward is if those policies are not affected, if he's not able to generate the kind of growth his predecessors generated, what does that mean for the political leadership going forward? part of their legitimacy, not all of their legitimacy, part of it is performance-based, improving the living standards

of the chinese people and if xi jinping's internally oriented economic strategies don't produce the kind of growth they talked about, that chinese people have come to expect, then the question becomes what do they do at that point? shery: what was really striking as we saw no women for the first time since the 1990's in a -- in all male politburo bucking tradition. we've seen how civil society has collapsed. what does the next five or 10 years look like under xi jinping? what does society look like? evan: it's very hard to say. i think we are in a new era in which the party-state relationship and the state-society relationship are going to go through a very

significant transition in which xi jinping is going to try and further infuse the communist party into the daily life of chinese people and i think that's going to be very challenging for the party. especially if the party is not delivering more growth and higher living standards for the chinese people. the fact there are no women in the 24 -- and the 24 men that run the country -- that is a political statement in and of itself. as one of my colleagues put it, there are xi jinping's surrounded by all yes-men but not even one yes woman in this establishment. i think xi jinping is setting a new standard for politics and political succession in china. the whole issue of the role of civil society and public opinion and how the people of china are

going to react to this new era of maximum xi jinping and how the people of china are going to react, especially in an era of declining growth and continued austerity, especially since zero covid appears as if it is going to continue through much of 2023, i think that's going to present the chinese leadership and xi jinping with a series of new challenges that frankly they have not had to deal with since 1989. haidi: really great to have you with us. debriefing the party congress. we will be talking more about the party leadership changes when it comes to morning calls. let's bring annabelle into talk about what analysts are saying about central midi members.

annabelle: this change we are seeing in the terms of the leadership, xi filling those top bodies with people close to him. we did see four of the seven members replaced and this new focus we have or lack of knowledge around a central government experience but still there is the understanding of what happens at the provincial or local government level. a lot of strategists and analysts are focusing on what this shift in career background means. amc says given the knowledge base is changing, that would address the key issues facing the chinese government and where policies are going to need to be addressing issues in the years ahead including issues around the property sector and local government debt levels. analysts coming in on this -- jl l saying new members of the

standing committee should have more flexibility around the growth target. that should be pivotal this coming week given we are waiting on that delayed gdp data as well as the activity numbers. they should be bleak when they do come out. we are likely to see the effect of covid zero policies the property. shery: we are also watching the use -- the u.k. leadership contest. our markets reacting so far? annabelle: we are seeing the pound rising this morning but when you take a look on the longer term, it was well off the levels we had a few months ago. the day liz truss became premise are, it was ron the 115 level. a rishi sunak government given that boris johnson is out of the race is seen as more market positive. he could be better to deal with austerity measures that could need to come in but it is hard

to see as some researchers and analysts say it is hard to see u.k. stocks and the pound bouncing higher over the longer term and that points to issues in the economy given we have inflation around a 40 year high and depressed consumer sentiment and the potential return to austerity. shery: we also see a new in ita. let's get to the first word news aul: giorgia meloni has been sworn in as italy's new premise her, becoming the country's first female leader and leading its most right-wing government since world war ii. she must steer the country and its mammoth debt through an energy crisis compounded by a rising interest rate since slowing economic growth. she will address both houses of parliament makes week for a confidence vote. that officials are preparing to

roll out another 75 basis point rate hike next week. an eventual downshift to more incremental increases. buried daily says policymakers should stop planning for hikes of 50 points after next week. the fed will have to guard against overshooting on restrictive policy. north and south korea have exchange warning shots along the disputed western sea boundary. south korea's joint chiefs of staff said the navy fired warning shots to repel a merchant ship that violated its border. north korea's military said it responded by firing 10 artillery shells and accusing a south korea navy ship of intruding into its waters. 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 paul allen. this is bloomberg. haidi: coming up, an exclusive

conversation with the treasurer of australia, next. this is bloomberg. ♪

shery: this trillion treasurer, jim chalmers, says the government will see an unexpected windfall on commodity prices rather than risk spending it and adding it to inflation.

this as economics -- economic concerns growth for its largest training part of, china. he spoke exclusively with bloomberg. >> we are concerned about development in china. the slowing of the chinese economy in their approach to zero covid does have consequences for our economy and you will see that in our budget forecast. more probably, this is potentially the third deep global downturn in the course of the last decade and half. the first was a financial crisis that became a demand shock. this one is different because it is an inflation stock ringing about blunt and brutal response from central banks around the world. our approach to this one is very different from the other two. when you have all this uncertainty around the world and need a responsible budget, that is what tuesday night will be. >> will you find inflation will

continue longer and higher than expected? does that mean australians should be bracing for a longer run of a harder rate rises as the chinese climbed down inflation? >> i don't want to second-guess the decisions taken by the reserve bank. they've made it clear they expect there to be more rate rises to come. our job and the lesson from overseas as we have to line up what we are doing in the process and what central banks are doing . you don't want them to be at odds and when you are, you get a difficult situation the market reacts strongly to that. inflation is the primary influence we are putting the finishing touches on right now. it guides how we approach responsible cost of living relief and how we target a more sustainable economy. it also guides our approach to cleaning up the budget after a

decade of wasteful spending. so what people can expect to see tuesday night is a budget which is solid, sensible, and suited to the times. it does more than just batten down the hatches against global uncertainty. it begins to build a better future and hopefully bring us trillions together around some of these big pressing economic challenges. >> there's been a big debate about tax cons -- tax cuts for high income earners. what we've seen in the u.k. shows the risk of getting those figures wrong and putting in tax cuts where there should not be. doesn't the current experience show the importance of fiscal caution at this time? >> first of all, what we will be doing tuesday night will be calibrated to these challenges we have inherited and face around the world and here at home. those tax cuts are sometime into

the future and we have more pressing priorities. the lesson i draw from the united kingdom and i'm not going to bag other governments from friendly countries about there to mystic policies but there are two obvious lessons. you have to nicely line up your fiscal policy and monetary policy and when that gets out of rat -- out of whack, the markets will react. secondly, if you are going to make a big change in the budget, you need to explain it and you need to bring people along with that. what i have tried to do as treasurer and what i will continue to try to do is talk up to people and not talk down to them, level with them about our challenges. we have some difficult things to deal with, so i want to level with people about that. another lesson i draw from the uk's if you are going to make a big change, make sure you prepare the ground for it. haidi: the s trillion treasurer speaking to us earlier. internal documents show warnings

to the central bank on home prices may have led to breaking rates with international counterparts to slow the rate of increases. what does the data show us and how it may potentially have directed a change in tone? >> the reserve bank officials say we do not forecast housing prices. so it was interesting their staff did give them forecasts about more than 20% for in housing prices when market economists expectations are between 10% and 15%. there are some forecast for 30% but the expectation is 10% and 15% and the base case for the reserve bank is 11%, hich is in line with expectations. they did have those forecasts and housing is such an important

part of the australian economy that this may have played in their decision-making this month and in the months before. haidi: a huge part of the strength and consumers. the latest there from the rba forecast. or ahead on daybreak. -- more ahead on daybreak. this is bloomberg. ♪

shery: take a look at how the japanese yen is trading --

japanese currency extending losses against the u.s. dollar, this sending the yen passed 149 again. we saw in the previous session how the price soared the most against the dollar and the nikkei reported authorities intervened again to prop up that currency. it was reversing an earlier drop that sent it to a fresh ready to year low of 151.95. authorities repeatedly warned they could step into counter those one-sided moves. we are seeing those intervention measures may not be holding up as we continue to have these wide rate differentials against the u.s.. haidi: let's get a quick check of the business flash headlines -- saudi arabia's public investment fund is in talks with boeing and airbus to biplanes for a new national airline. we are told the sword -- the sovereign wealth fund would buy planes and take out purchase

options. saudi arabia wants a second national airline to fly alongside saudi air as part of plans to make the economy less dependent on oil. bloomberg has learned the credit suisse chief compliance officer was set to leave in the coming weeks. sources say the departures are related to the strategic review the swiss bank is planning to announce this week. but he spent little more than a year in that post. that's about it for daybreak australia. daybreak asia is next as we count down to the start of trading this monday morning. this is bloomberg. ♪

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