♪ >> coming to you live from new york, city and hong kong.

>> counting down to the market opens in tokyo and seoul. australia has come online. top stories, share markets outside china set follow wall street higher. chinese assets facing for their losses after u.s. -- faces their single drop. the yuan under pressure, testing the week end of their trading bell on signs beijing is toning down support. rishi sunak warns of profound economic challenge as he prepares to become the u.k.'s third prime minister this year. shery: trading is underway. we are unchanged at the start, but futures had been appointed take day two of gains, driven by what is coming through the u.s.. optimism we are hearing on the outlook for company earnings. add to that more relatively calm descending on the u.k. and also have the slight retreat there in yields, another some vector for the equity session as

we get underway we are still focusing very closely on what is happening and currency. particularly the japanese yen, now trading fairly flat. we have seen signals of intervention in the markets. two times in two sessions. the offshore yuan about 7.3 for the first time ever. concerns about the outlook for the chinese economy, some think and focus given we've got two sorts of orchids going in asia. one in wall street, and another in mainland chana -- mainland china. xi jinping stacking key leadership positions with allies. what that means for covid zero and companies at the expense of the private sector. we are watching dip buying, or if it extends. otherwise, new zealand online and japan futures also coming online in chicago to the upside. shery: concerns about china, no wonder we had the golden china

-- golden dragon index seeing the worst day on record. we are talking a $90 billion wipeout in the u.s. u.s. futures at the moment are muted. the early asian session after two days of rallies in new york. we had more optimism for earnings season. we have tech earnings coming up. we have seen about 20% of the s&p 500 reporting earnings and almost 60% of those positively. the 10 year rose to about 4.25%. u.s. pmi's showing manufacturing and services contract. there is concern about the economy in the u.s., not to mention china, which is why wti was pressured on the new york session. we are seeing a rebound to the $85 a barrel level. haidi: you mentioned the downside when it comes to china assets. let's bring in -- it is unusual

to see it trade so close to that 2% trading band to the downside. what does that tell us? >> it tells us that perhaps it is somewhat surprising because in many ways there was not a huge surprise about what came out of the party congress. very much, investors are taking this as just about their worst fears being confirmed. this is another gradual degree turn away from the west and the continuing realization that this is xi's china and however he is going to run it, investors are the last things on his mind. haidi: if he could delay gdp on a whim, then obviously -- no -- >> on a whim. the incident, no it is clear, but that is the point.

how do you have that happen if there's no point? what the point is that nobody outside china and hardly anyone inside china knows what it is. among all the uncertainties, that is kind of a known unknown that people are not willing to try and put into things. instead they are saying, let's stay away until we get clarity. >> what common prosperity means, not to mention we have the widening differential with the fed as well as the pboc continuing to support the economy with loose monetary policy. are we going to see further pressure on the yuan? >> further pressure is inevitable. there have been signs that pboc authorities are less willing to support the yuan. that is also a little bit of a surprise and concern because, while there have -- why all they

have been willing to see it weaken consistently, they have tended to step in often to at least slowdown that move. if they are not going to do that, then -- especially in a situation where japan has shown a strong willingness to step income, to slowdown what's going on with the yen, the you want takes over as atp point for currencies. especially when it comes to asia. haidi: you still see that through the yen weakness overnight, right? if there was intervention, it didn't last long. janet yellen didn't comment when asked about if there was intervention. >> the key point for japan is that a district trying to hold the line somewhat. they do not want to see disorderly moves. speculation is bad. ordinary trading is good.

there has to be -- you would think behind it all -- a sense for the japanese that the fed is getting close to the peak of its interest rate aggression. if that is the case, the yen should settle down -- or, up. this should be about where the trough is. there concern is not to let it break too far too fast. they see a chance to perhaps cap things around about 150 and prevent it going too much further, which could do psychological terkel -- which could do psychological damage. if the fed would hold off on rate hikes incoming years, the yen would be somewhere between 170 as far as it gets. you would rather have it not suddenly drop to 160 because it impact that has on society and is this is an politics.

shery: we continue to watch u.k. assets getting a boost with more certainty over the leadership. still, rishi sunak says the u.k. faces profound economic challenges as they perfect -- as he prepares to take power. >> there is no doubt we face a profound economic challenge. we now need stability and unity. i pledge that i will serve you with integrity and humility and i will workday in, day out, to deliver for the british people. shery: for more, let's bring in john authers. it seems sunak has been the clear choice, but what does he need to do to maintain confidence? >> he needs to balance the books. if he can avoid austerity, he

can avoid major public discontent all the better. at this point, it is not politically great for the conservative party if he raises taxes and cuts services, but i think that is what the market wants of him. we have established this is not a time to try anything older -- boulder or morris -- and -- some people would say sanity, but at the very least, stability. we want some sign you can trust what can happen next. haidi: what is going to happen next is the statement due at the end of the month. the deputy governor described the situation as for breath -- which i thought was quite lovely. doesn't help? we talked about the -- taking the reins. >> you can never beat british understatements. so, yes.

it is a feeble situation, which is one way to express it. having a technocrat who might actually talk to the treasury secretary, remember he is the last chancellor started by removing, firing the head of the treasury, that is helpful. somebody who is actually prepared to talk to the central bank, is very helpful. the fact that he is a former goldman sachs banker and hedge fund manager is very good indeed. all of that suggests he does actually understand the concerns in the market and has an idea how to maintain peace with the markets. not political assets, i hasten to add. among many superlatives about rishi sunak taking the job, it looks certain he is the richest

prime minister britain has ever had, at a time people are worried about inequality. politically, it that is not great. in terms of keeping bond markets happy, he probably is the best option out there. haidi: let's get you to vonnie quinn with first world headlines. vonnie: president biden's advisors working on a meeting with xi jinping after the chinese leader emerged from the party congress with a tighter grip on the country. national security council says the u.s. will not comment on china's leadership process bill will keep you medication open. biden is hoping to meet xi next month in bali. the u.s. has unsealed charges alleging two chinese intelligence officers trying to obstruct a criminal of -- the complaints as other suspects are working on behalf of the foreign power to procure technology and include spies.

fbi director christopher wray says 10 of the 13 individuals charged for chinese intelligence officers. the yuan weakened against the dollar despite -- the yen weakened despite signs of a second intervention. earlier, there finance ministers had japan within a firm confrontation speculators and could not tolerate excessive currency moves. the boj is meeting later this week come a set to be another key catalyst for the currency. a court in iran has issued indictments for 315 people arrested for taking part in antigovernment crawler -- antigovernment rallies triggered by the death of a young woman, now in their sixth week. media says four have been charged with belligerence, which can carry the death sentence in iran. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. shery: still ahead, a look at an fx market as monetary policy

between the fed and the boj. also, -- joins us for that. coming up, xi jinping's reshuffle sends investors fleeing. cameron brandt joins us in a moment to look at where the money is flowing. this is bloomberg. ♪

♪

haidi: we are seeing foreign investors fleeing chinese equity assets at a record pace. take a look, northbound selling in china hitting a record. foreigners selling the most share since the commencement of the stock connect program. 17.9 billion you want, about $2.5 billion in shares between hong kong and the mainland being sold off monday. most since it was launched in 2014. this after the leadership reshuffle tightening xi jinping's grip over the ruling party and what if there future policymaking. we already saw going into the party congress, sentiment remaining fragile with concerns over covid zero and policies and regulatory overhang and weakness in the property sector. etc. our next guest says xi jinping's

robust defense has dampen flows to china equity funds. cameron brandt, director of research at epf are. it shows what we know, and we talk about this every day, it felt like risk was priced into the party congress. certainly the statement and the result was largely unsurprising. why did we see investors reacting the way they have? >> i think in part because there was an undercurrent of optimism going into the congress. i certainly heard a fair bit about the possibility or probability that once he had secured his third term, he would be in a position of strength and able to relax some covid restrictions without risks to his authority. that he so determinedly shut off that option. i think it was a surprise for investors.

haidi: the further gdp was delayed. that are wrongfooted a lot of people. is there a broader sense that this is an administration, or leadership where if you take a look at the ranking of priorities, investor interests are not very high? >> that cannot be clearer. that also could be the certain interest of foreign investors who have ranked very low for some time. in some ways, the biggest surprised has been how surprised people are that china is pursuing a direction that has been clearly spelled out for some time. i will say that while the focus has been on these draconian zero covid policies, there is a fair bit of his agenda which makes sense.

a working population shrinking, china trying to rebalance its economy toward higher value, manufacturing and to sort of get its overreliance of property under control. although these are painful at the moment, -- converged with the covid issues, these are not actually irrational policies. shery: we have seen a lot of volatility with japanese assets. we talked about the you want getting past well the japanese yen, we continue to see a suspected intervention from authorities. how much is this heightening uncertainty for investors in this market? >> we have definitely seen increasingly big swings both in and out of japanese equity and bond fines. there is certainly a worry that, for want of a better term, the metaphorical japanese housewife

will be on the march again, moving assets to higher yields. sovereign debt in other countries. this tends to crop up every time the japanese yen comes under pressure. but there is definitely a feeling it is going to be very hard for the bank of japan to maintain its policies -- policy stance without considerable volatility. we are seeing some people bet that they make a crack event. shery: all of this leading to authorities in korea pledging 39 billion dollars? $39 billion to prop up credit markets? we saw a yuan gain ground. what is invents -- what is investor sentiment around this market? are there is definitely pocked -- >> there are pockets of optimism. investors, in the universe i tracked, finally have some --

offers, which has not in a future of the past decade. there are themes and areas that are quite optimistic about recent flows have different lately favored countries with strong semiconductor stories which includes korea, taiwan, japan and the u.s.. tech has shown considerable resilience. technology sector funds have pulled in over $1 billion. shery: gaddafi with us, it director of research at a pfr with his insights into the broader asian markets. coming up, hsbc set to face new scrutiny on his cost outlook when it reports later tuesday. a look at the headwinds in asia and the u.k. next. this is bloomberg. ♪

♪ haidi: hsbc reports the bank is likely to face group a when it comes to the cost outlook and expected credit loss challenges as the global economic outlook darkens. high rates mean a surge in interest income for a preview, let's bring in stephen engle in hong kong. what are you watching? >> we are going to be watching for the net interest income number and how it is faring with rising interest rates. it is going to be a surge, the margins have been doing well with rising rates. but as you said, the backdrop of a gloomy global economic outlook and what that will mean for credit charges and costs as well , as there guidance going forward. we will be looking for that. essentially, there is a threat of taxes coming from the u.k.

if hsbc reports a stellar blowout number on the back of that interest, it is not going to necessarily be a great look at a time when the chancellor of the exchequer jeremy hunt has said nothing is off the table ahead of the treasury's fiscal announcement scheduled for october 31 to plug a funding gap in the u.k. that is a worry for noel quinn and the executive board at hsbc. morgan stanley's alvaro sees headwinds in the u.k. economy, particularly the mortgage market. interns if u.k. retail business come hsbc according to morgan stanley, tilts towards the most affluent. the u.k. arm of hsbc could outperform its domestic peers due to the bank being a more rate sensitive, having last credit risk. that having less credit risk. cap -- cost outlook is going to

be key with credit loss charges and the slowing economic outlook. in the asia-pacific, similar story. hong kong mortgages and china's real estate remain the most notable threats. hong kong's rising rates will boost net interest income, obviously. but what if the worst-case scenarios do pan out and there is a crash? goldman sachs analysts have said over the next two years through 2024 the hong kong residential copy market could slump 30%. any guidance on the outlook for hong kong will be key. at the backdrop, and i do not expect necessary news, but there persistent calls from the largest shareholder of hsbc in china, calling for the spinoff off of the asian business to create a better market value for the asian business. the most profitable part of the global business, of course. again noel quinn in september said they discounted that an it

does not look good in their analysis of any potential spinoff. haidi: stephen engle with a preview of hsbc results. some stories we are watching, traders remain on the watch for further yen intervention. janet yellen saying the u.s. did not receive any notice about a suspected intervention monday. the liberal democratic party general saying an economic package to cushion red hot inflation will be roughly ¥26 trillion, according to kyoto news. department store salesforce september tuesday preliminary orders rose 4%. korea, there president delivering their budget proposal at the national assembly despite reported threats of an opposition boycott. we will also get third quarter earnings. key assures have fallen 5%, down 23% from a year ago. also looking at movements in

honda. janet yellen throwing cold water on expectations of tax relief for ford honor makers. plenty more to come. this is bloomberg. ♪

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the selloff we had in chinese stocks monday, given it was investors first chance to react to president xi's up which is light on central government experience, but high on loyalty. investors really not liking that. major indexes here at multiyear lows. also reflect didn't sure trading which is above the 7.3 level for the first time. a lot of concerns around the risks to china's economic growth and more destabilization around geopolitics. also looking at the clients we have seen in the most follow chinese benchmark index. it is off around 60% from its peak and we had the biggest draw down since the debts of the financial crisis. that is one major area we will be watching today, how do chinese markets perform? future still looking weaker but we will see if any dip buying

comes in, given the likes of alibaba and jd.com that declined the most on record in a session yesterday. let's look about how else we are faring this tuesday. half an hour into the trading session, new zealand back online post public holiday and japan also looking to open higher. so watching what is happening in the end, we have seen that currency stabilizing through the session. we will very much on intervention watching the via session. haidi: japan's government set to stress the boj needs to watch the yen. let's get more from editor paul jackson. what is the take away from the language when it comes to watching markets? does it really seem like it will all an impact, given it does feel perhaps policymakers are treading water? >> indeed i think the take away

is that team japan is still on the same page. the boj still has the support of the government to continue. but it is essentially saying, be careful what say. if you look at the wording, and we have seen a draft of the stimulus plan we are expecting to come out on friday, the wording says that the bank of japan should continue towards its stable price goal, making sure it is a sustainable. that suggests support continues for the boj. meanwhile, it is saying the boj must pay sufficient attention to market moves and their impact. that is not one million miles away from what the boj is already saying in its meetings. it says it must pay attention to developments in financial

markets and their impact on the economy, but it does show that there is more of an emphasis on, you are not independent of the markets. be careful what you say and be careful with your signaling. haidi: when it comes to market moves, really sharp moves on the japanese yen. not just friday, but monday. this has led to speculation of intervention. what is the new playbook hereby japanese authorities? will they acknowledge it? we have seen a few moves happen offshore hours when japan wasn't really trading. what does this mean in the calculations of authorities doing all of this? >> there's two things. one, showing foreign best -- foreign investors and speculators that we are watching.

we are on your case. notice a lot of movement has happened during foreign trading hours, rather than japan trading hours. point number two, leading -- leaving fear in the market that hey, we do not know exact the -- they are not explaining. there's an element of doubt that maybe it slows down the moves and keeps speculators on guard a bit more. what is clear is the gloves have come off. japan is taking its defense of the yen very seriously. haidi: the latest on japanese assets. it is the strength of the dollar and the whitening differentials which is pressuring the offshore you one, topping the key 7.3 level for the first time. let's discuss. christopher wong, fx strategists

and ocbc bank. it is good to have you with us. is the only direction here, weathered is the one or yen, just down against the u.s. dollar given the factors we have mentioned? >> pretty much. basically the combination of tighter financial conditions globally, persisting dollar strength, growth -- growth deceleration. yesterday when market opens for china, the pboc basically relaxed its grip on the -- so that seemed to give markets the expectations that the pboc might be just about willing to let the yuan to appreciate a little more. but perhaps in an orderly manner. this morning, and perhaps the

next mornings, pboc will be critical to watch but to monitor how that goes. as far as that is concerned, there is a little bit of that invisible ceiling that we were looking at. but, it seems like the -- is ignoring that ceiling, which is 2% above where typically fixes. shery: typically that was loosening their grip. what is the take away from what authorities and japan have been doing? i was talking to paul about not only suspected interventions but the fact that they are happening during off regular trading hours, but overseas. >> we have all these interventions. they are pretty much speed bombs to slow the pace of depreciation. the underlying trend, policy

divergence, dollar strength, that is pretty much still intact. you need this to be reversed in order for the perspective currencies to strengthen. like i mentioned earlier, the japanese market policymakers targeting the offshore hours in new york. it is interesting that the last time they intervened last friday , it was exactly one month ago in september where they also intervened. interestingly, the move is about 3.8%, if you measured it from the tip to the bottom. the impact of the yuan is tepid -- the yen is typically felt between two to five days and two to five weeks that gains either in the reverse and they went on to make fresh laws against the dollar. he go back to history, two decades ago, it is the same thing. it is pretty much a case where intervention can help only slow

the pace of depreciation. haidi: is realistically the playbook that they do this to try and stop are the big moves? say from 160 to 170 and how detrimental that would be? if they can slow the big moves and get to a point where the fed is thinking of slowing down, is that any time in the future? do you think that strategy is going to work? >> this really is not quite -- it is quite uncertain in the sense that when the fed is going to pivot where when the dollar is going to shift. what are essentially the policymakers are doing is to buy time. fomc meeting in two weeks, that will be interesting. now that the -- is whether there is a case of fed pivot, or if there is a policy calibration.

the tug-of-war between calibration and pivot is going to keep markets moving back and forth. the case of calibration is such that they are just going to slow the pace of rate hikes, but the rate is still going higher. having said that, it means the latitude of the dollar strength, the banks should moderate. that potentially is a point i am watching going forward. haidi: we heard from the deputy governor of the bank of england saying how weedy it is to lose credibility. when it comes to trading in the pound, the historic gain when it comes to u.k. guilt as well. is the worst over? how lead to bcf path back to credibility echo -- >> we get a little bit of momentum now with chancellor hunt. and with new p.m.. the question is how sustainable

it is going to be? the medium-term budget on monday is going to be critical. following that on thursday we've got the boe meeting. what they need to do is they need to prove that they are on track for fiscal discipline. basically they need to demonstrate they are going to be back on a credible fiscal trajectory. it is going to be challenging for sunak because he is going to unite the government, his government. that in itself as well as tough economic policy, basically how to patch the $40 billion fiscal gap. i think there are strong economic challenges and he recognizes it and even his track record, i tend to lean a little bit more on the optimistic side. we are going to see more. haidi: right. great to have you with us. i would say, even with the political challenges out-of-the-way kumutha economic challenges are bleak.

christopher wong, great to have you with us. let's get you to vonnie quinn with headlines. vonnie: rishi sunak has warned the u.k. faces a profound economic challenge. he called for unity in both the nation and his party, in the face of headwinds including double-digit inflation, rising interest rates and a surging mortgage costs. sooner --. sunak will take office after visiting king charles. >> we face a profound economic challenge. we now need stability and unity. i pledged that i will serve you with integrity and humility, and i will workday in, day out to deliver for the british people. vonnie: australia's deficit is forecast to be less than half seen by the previous government. bolstered by revenue from surging commodity prices. treasure is expected to deliver his speech tuesday.

figures released show an underlying cash deficit in the 12 months through june 20 20 -- 23.4 billion u.s. dollars. u.s. treasury secretary janet yellen has cautioned stressors in the global economy could disrupt the u.s. financial system. yellen says the role faces a dangerous and volatile environment and risks to financial stability could materialize. she says now banks are well-capitalized with corporate balance sheets in good shape. vietnam's central bank has surprised the second rate hike. the decision comes a week after the state bank of vietnam widened as its untoward record low. officials pledged to intervene to me -- to me too dollar demands. 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: coming up, at a brazil's

runoff presidential election, we look at where the candidates stand on climate policy and what the outcome could mean for the fight against global warming. this is bloomberg. ♪

shery: two candidates representing opposite ends of the political spectrum. let's look at how those possible outcomes will impact climate policy, especially concerning the amazon forest. joining us is james ellis. we know bolsonaro has really been blamed for the worst deforestation of the amazon and 15 years of. how have these topics related to energy and climate played out during this campaign? >> the view on what key issues are is very different from within brazil and abroad. the international community has been focused on climate. brazil's worsening record on deforestation under bolsonaro, but the voter is facing high inflation they have seen property rise and looking to see the economy strengthen. pressure to do more to conserve the amazon is stronger outside brazil simply because there are more near-term polarizing issues. safe to say, voters are focused

on the economy but energy rises are a part of that issue and rising prices are negatively affecting brazilians, particularly those further down the economic ladder, which is where lula does better. that shows up from the first round who showed his support in the poor northeast of the country. when he was in office, lula created antipoverty programs, strongly in favor of subsidizing fuel prices and it is -- and is just a big part of who we appeal stupid that has big implications about the country's energy sector. for voter sunday, concerns lie elsewhere. haidi: you have mentioned the pressing domestic challenges. certainly more pop -- more popular policy priorities. do expect more impact in terms of outcome on actual climate policy echo -- policy? >> depending on who wins, climate policy is huge. their positions cannot be more different.

during -- two terms, brazil reduced deforestation by under 70%. under bolsonaro, brazil has an alarming record, which is brazil's biggest source of emissions. bolsonaro has weakened national regulatory bodies and reduced enforcement, and bolding legal logging and brought deforestation to a 15 year high. a post in our win would presumably set the stage for weakening of environmental protections. lula has incorporated environmental issues into his platform in a big way. he has publicly committed to policies that include carbon pricing, support for sustainable farming and ensuring -- under lula, we see brazil taking meaningful steps to sustainability, but the results of the first round saw strong conservative candidates. he is going to have a tough time implementing his agenda.

haidi: what sort of environment are we seeing for renewable energy? are we going to get a boost in this sector if we do see a lula government? >> that is the silver lining. we see continued rapid growth under renewable energy, regardless of the results election. that is because of fundamentals. brazil offers clean power and has excellent solar resources and has experience. renewable sources in brazil already provide around 80% of electricity generation. we expect results have a strong year. our forecasts are showing the country will add up to 14 gigawatts of solar and wind capacity. smaller solar plants are the main driver of that expansion. the small consumer installed consumer is the key driver of noxious brazil, but the whole region's overall renewable energy growth this year. we are closely monitoring import

data because we are seeing imports of chinese equipment brazil increase. in the first half of this year, brazil important nearly as many chinese solar modules as for all of 2021, which was a banner year for brazil solar. new figures who just the potential for higher yields. haidi: james ellis, daybreak will be live covering the brazil elections out of sao paulo. this is arguably one of the most-watched events, politically, of the year for emerging markets right now. shery: such an interesting race as we get closer to the vote. haidi: investors and markets seem stumped as to the outcome. huge implications for australia too -- the budget deficit expected to have. we get a preview of where the money is trying to go next. this is bloomberg.

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♪ >> australia's fiscal deficit is forecast to be less than half level anticipated by the previous government, bolstered by surging commodity prices. the treasurer will hand down the government's first budget

tuesday. paul allen is here with a preview. we spoke to -- earlier. what are we expecting from this bread and butter budget? >> those words he has used, bread and butter. simple, solid. reassuring tones have been struck. we have been hearing from the treasurer and the prime minister. this is going to be a family-friendly budget, dealing with cost-of-living pressures well not putting pressure on inflation. it will be interesting to see how the budget walks that hydra. -- but we are expecting to see spending on childcare, infrastructure and possibly one million new homes. this is what is being said -- being reported in local media. there is a long tradition of details leak about the budget. tilting one million new home sounds like it has the potential to be inflationary as well. we'll have to wait and see what is in this document. jim -- spoke to the media briefly before going into the lockup. we won't hear from him again

until he delivers his speech to the house later. to mention the deficit, 23 point $4 billion, huge improvement. less than half what was forecast in march. for some, it seems a little uncomfortable. australia has been the beneficiary of the war and you train, surging: gas prices have helped deliver a revenue windfall. there is an admission that inflationary pressures are going to put pressure on costs like debt or proceeding and health care. shery: what will be the key stock to watch after the budget is released? >> in terms of infrastructure spending, we will be keeping an eye on the cement manufacturer. there's likely to be some revisions in there for rare earth as well. this is happening against the ongoing intention -- ongoing tension between the u.s. and china there might -- u.s. and china. there might be improvement of

rare minerals. -- will be stocks to watch and on the childcare front, we are expecting to see an extension of paid parental leave from $18 to 26 -- from 18 weeks to 6 -- shery: paul allen with a preview of the budget to come today. here's a quick check of the latest business flash headlines. sources say the chinese metal tycoon behind this year's massive is seeking tat short positions. we are told -- struggling to convince brokers to handle the trade. in march, there huge short position prompted the lme to hold nickel trading for a week after prices spiked 250% in a day. a consortium led by japan industrial partners is set to be considering a $16 billion valuation for toshiba in what could be asia's biggest by out of this year. sources say the jit group is structuring the deal as a mixer cash and debt, but has not

finalized equity commitments from its partners. >> [indiscernible] haidi: the battery fire at the korean data center wiped out digital services for days, reading writing safety concerns. a nation that is a complete -- a key supplier of the 80's. we are watching panasonic and lg. the market opens almost upon us first hole in tokyo. sharethewealthomaha.com

♪ >> this is "daybreak asia." we watch for potential

yentervention or dare i say yuantervention? we saw that 730 level breaking. chinese adrs plummeting in new york. >> it is extraordinary. we don't usually see the chinese currency pushed to the limit of the 2% trading. you have to wonder what policymakers are thinking at the moment, whether that remains a policy priority. whether we were -- whether we will see the state team resuming interventions. >> a lot of questions around chinese markets. futures pointing lower but there's always the risk of lower chances. the start of trading for cash treasuries here, we are seeing the 10 year yield coming online like this. it did have muted moves in the previous session, though yields are pulling off multiyear highs. speaking of muted, that is the state of play for the japanese yen even though it had really been whipsawed. more signs of officials stepping

in. . to stem that weakness. it does seem at least intervention, although not confirmed, has worked to inject a degree of nervousness into trading sentiment for now given that there's a lot of anticipation ahead of the boj meeting later this week. and policymakers not expected to tweak any sort of easy policy settings or the program of yield curve control. stocks wise taking a look at the nikkei 225, we are moving higher. let's look at the open for korea. both tokyo and seoul being led higher by moves we had in the wall street session overnight. a couple factors playing into that. firstly, the expectation that the fed may move to a smaller pace of rate hikes the months ahead. . you have optimism around the outlook for corporate earnings given a fifth of companies on the s&p 500 have already reported results. 60% have been better than expected. coming up this week amazon, meta platforms, and microsoft. the korean won trading like

this. investors are still waiting this pledge from the government to provide support for the credit sector, also something boosting the kospi yesterday in the previous session. investors still continuing to assess a solution. it is not being seen as something that could fundamentally change the situation for the credit market but couldn't give at least investors a little more breathing room? australia, one year into trading for the asx 200, still pushing higher. the other factor we are going to be watching as we are discussing is how chinese stocks come online, given we saw that huge selloff in the previous session. only on mainland and hong kong exchanges, but follow-through into the u.s. session. that is what is driving prices of brent. a lot of concerns about china sticking to covid zero. >> let's bring in our next

guest. he says chinese policy support is still underwhelming relative to the economic challenges. good to have you back. is this why we are seeing such disappointment from the markets and so much pressure on chinese assets? everything else they came out of the party congress seemed pretty much expected. >> great to be back with you. markets are reacting rather negatively to some of the key takeaways from the party congress. there was a lot of hope going into this event there would be support announced for the beleaguered property sector. there would be indication of an imminent pivot from covid zero. as it turns out there was barely a mention of either. if anything it was a doubling down on the stance on covid zero. for the record, we do not expect meaningful loosening in covid

zero until march of 2023 when we have official leadership transition, and as such we were not overly surprised, but as i said, hopes were very high and hopes were disappointed. >> how much of it is to do with global central bank tightening and the fact pboc is going beyond their way? same thing for the boj. if we continue to see tightening financial conditions, what will this mean for authorities in some of these economies that are suffering? >> a global financial conditions really feeds into broader emerging markets in a couple ways. the first is of course that it really forces those central banks or economies that have significant amount of debt for instance, those with higher domestic debt as well, to really catch up to the federal reserve. they need capital inflows unfortunately, this is going the opposite direction to what potentially the domestic economy

requires in china's case. china needs more stimulus, not less. that being said, pboc has lagged the global tightening cycle. that is of some comfort, but marginal at best. don't forget the credit intensity of gdp in china is off the charts. it suggests china has a lot of work to do, far more stimulus than the token policy injections we have seen today. >> as you have listed the litany of woes for china's economy, policymakers, it is pretty long at this point. none of them were really a surprise going into the party congress. does it feel like with the magnitude of selling that something has changed? that investors have given up or at least for now they are saying we are not willing to ride this out until something indicates things will change? what would that need to be? >> it is difficult to see a positive catalyst at this point.

the one silver lining is that valuations are much improved in chinese asset markets but you need the positive catalyst to turn sentiment around. they're -- as such they are few and far between. we think march 2023 offers a potential inflection point, but of course that is some ways from now and in the meantime, global markets have a lot of uncertainty to navigate, not least of which is ongoing stagflationary dynamics and very high realized volatility, which typically suggests a more defensive stance in terms of overall asset allocation. >> you also expect a bifurcated environment when it comes to the components of inflation pressure. how do you play that bifurcation? >> again, we find relative value globally is really regional in nature. if you look at asia specifically for instance and really strip

out on an economy by economy basis, which economy is facing the highest pressure to tighten aggressively? that would be those facing higher volatility in core and headline inflation. we see singapore is really standing out on that basis. that has come to fruition. other parts of asean have enjoyed low inflation volatility. we are rather positive and constructive on se on versus north east asia -- constructive on asean versus north east asia. >> the korean stock market right now of course under a little bit of pressure at the moment. we are seeing the korean won weakening to the lowest level since 2009 past that 1444 level already. we had seen a big boost to when it comes to korean assets in the previous session. support from the credit markets coming from the government. one of those authorities across

asia that have tried to support the markets given the volatility, can we expect more measures coming up only from south korea, perhaps taiwan, other economies when it comes to shortselling bonds and other measures? >> there is only one tool policymakers have in their toolkit. the problem with korea specifically is that the fundamentals suggest the market pressure is going the opposite direction and that is any kind of intervention, whether it is in fx, broader asset markets, can only really help insofar as slowing the momentum rather than turning the tide. in korea's case, some of the fundamental problems it faces would be of course the fact that the yen is weakened. korea and china are exposed in terms of export similarity and need to maintain competitiveness with japan.

the semiconductor cycle is in a rather severe down cycle in light of weaker foreign demand. and of course domestically, the korean market has to contend with a rather aggressive bank of korea despite what are clear signs of slowing in the demised cut economy -- the domestic economy. >> sue trinh at manulife, great to have you with us. >> president biden's advisors are working on setting up a meeting with xi jinping after the chinese leader emerged from the communist party congress with a tighter grip on the country. the national security council says the u.s. will not comment on china's leadership process but will keep the lines of communication open. biden is hoping to meet xi on the sidelines of next month's g20 summit in bali. the u.s. charges two chinese intelligence officers tried to obstruct a criminal investigation of huawei. the complaint says other

suspects on behalf of a foreign power were working to recruit spies. christopher wray says 10 of the 13 individuals charged were chinese intelligence officers. a court in iran has issued guilty verdicts and indictments for 315 people arrested for taking part in antigovernment rallies. protests triggered by the death of a young woman in police custody are now into their sixth week. state media say four people have been charged with belligerence, a crime that can carry the death sentence. treasury secretary janet yellen has cautioned stresses on the global economy and markets could disrupt the u.s. financial markets. yellen says the world faces a volatile environment and risks to financial stability could materialize. for now she says banks are well-capitalized with corporate balance sheets in good shape. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is bloomberg. haidi: let's get you over to

bell for a look at some of the movers. what are you watching? >> taking a look at how toshiba is coming online given we have more details of a buyout offer for the company that would take a private business from japan industrial partners. what we are hearing is it would be a group led by gip, -- jip, it would make toshiba asia's biggest buyout this year, so roughly 40% of the funding will come in cash, the other part from financing from banks. toshiba is trading 0.8% to the downside today but still the stock is up 17% this year. we understand jip is yet to confirm any equity commitments from its partners but here are names it is reportedly in talks to form a partnership with. let's change in to talk about tesla supplies in asia given we did have tesla reducing the prices for its lineup in china.

so it has cut the price tag on its cheapest locally built model three-car by 5%, now price just under $37,000. it has reduced the price for its suv as well, the model y car. options signaling further downside for the price so we could see tesla dropping 5% further into the week. still we are seeing its biggest supplies here moving to the upside. shery: hsbc set to record third quarter earnings. bloomberg intelligence expecting more scrutiny. a preview later with for element research. next rishi sunak set to become the uk's third prime minister this year. more on his immediate and longer-term challenges as well. this is bloomberg. ♪

>> i am humbled and honored to have the support of my parliamentary colleagues and to be elected as leader as the conservative and unionist party. >> incoming u.k. prime minister rishi sunak as he prepares to take power while he is warning of a profound economic challenge. he also faces the challenge of

reuniting a splintered conservative party. lizzy burden has more from 10 downing street. >> rishi sunak has been anointed conservative party leader and is set to become britain's next prime minister. he is expected to visit king charles tuesday before making a speech at 10 downing street. and in an 86 second speech earlier he said britain faces a profound economic challenge. indeed it is a forbidding intrigue. it is going to involve plugging a 40 billion pound hole in the public finances by making eye watering difficult decisions, choices between tax rises and spending cuts. but in order to cut those measures he's going to need to cultivate party unity, the same hurdle liz truss faced. after 12 years in power even

some of the conservative party's own members say it is ungovernable. if he fails on either count, as he said to mp's behind closed doors, the tories face an existential threat and potential wipeout at the next election. lizzy burden, bloomberg news, 10 downing street. >> futures in europe opening up, brought upside across the region. we did see in the previous session about a 1.5% higher when it comes to the stoxx europe 600. amid reports rishi sunak is set to be the next u.k. prime minister. euro stoxx 50 futures looking flat. msci europe seeing gains of 1.4% and german dax futures looking negative as well. ftse 100 futures in particular we are watching because even with the political chaos out of the way, the broader economic backdrop is still dire, although we are hearing from most analysts -- a lot of analysts saying uk's stocks are looking

cheap with rishi sunak taking over as the new prime minister. political upheaval has weighed so heavily on these markets. the ftse 100 is now trading at a comparable level to 2008 based on price to earnings. we are hearing a lot of analysts, including from craig heard that we are looking at two standard deviations below 10 year averages in terms of the discount compared to euro area stocks. let's also take a look at what we are watching when it comes to the fx space. the yuan has been in focus, the yen has been in focus, watching for sustained recovery in trading in the pound. look at the u.s. dollar index, softer at the moment. dollar yen holding at 148. more reports of stealth intervention so far this week and potentially just kind of treading water as we get to the boj decision towards the end of the week. we did see a sustained fall for the yen again overnight with janet yellen not commenting on

whether she had seen any intervention, not to the best of her knowledge, and watching the yuan as we see that trading very closely within the 2% trading band. let's get more from our bloomberg intelligence chief asia fx and rate strategist. stephen, great to have you with us. it is really quite unusual to see these levels of trading on the yuan. do we see intervention on the horizon? are policymakers signaling a greater appetite for yuan weakness? >> it is quite clear after the party congress on sunday. the market is voting for a no-confidence vote in china's leadership. i'm not saying that's going to be the case but that is what the market is telling you. you see the offshore yuan dropping yesterday. now we are talking about 732, a record low against the dollar. the key is today, we are going to see whether it's going to

stay at 7-eleven or 712, the anchor for the onshore rate. still, the offshore above seven point three means the market is very bearish and any signs the fixing is going to drift higher will create more headroom. it is the same market, we continue to stay bearish in the near term. >> is that the case for the japanese yen as well? what is this new currency intervention playbook by authorities in japan when we are seeing them perhaps potentially a -- act outside regular trading hours? >> it has been the same story this year. the widening dollar yield against japanese. as long as the bank of japan stays with its control, we don't see a reverse on the dollar-yen. we talk about 150, a level the

market has been watching last week. if we talk about pace, let's look at the last intervention at the 22nd of september. the yen dropped about 7% before -- during august and september when he first. -- september 21. last friday again another 7% drop. the boj came in just below 152. going forward, what the boj could do or will do is just to slow the pace of the drop in the yen but try to still do the same . there is not much they can do either explicit intervention, whether they use reserves or the foreign reverse ripple balance of the fed. it is just about slowing the end drop and it is very hard to reverse this trend unless fundamental change in japan. >> coming up, australia's budget deficit for 2023 is expected to be less than half the level

anticipated for the previous administration. preview next. this is bloomberg. ♪

>> australia's fiscal deficit but's next year at half the level anticipated by the previous government boasted by surging commodity prices. the labor government's first budget will be handed down later today. ben wescott joins us now in sydney. we keep hearing about these bread-and-butter budgets. no surprises are expected. they are projecting the sense of stability getting the job done. making good on promises. >> it is quite an unusual budget in that we know so much in advance. usually the big article you publish afterwards is what is

the deficit looking like? what is inflation forecast to be? we know the deficit. we know what inflation is going to look like. we know what unemployment is going to look like. there is very few surprises left. what they are trying to do with this budget is create a blueprint for the economic credibility, he wants to sort of take australians through very gently what his plans are for the budget, a series of budgets perhaps where he will introduce a series of economic reforms and also i think there is a difficult economic circumstance australia faces. we have rising inflation, the world economic situation is looking hazardous, and because of that, he has to work out a budget where he both makes people feel economically secure, does not splash any cash that risks increasing inflation. >> what are the sectors you will be watching for potential changes?

>> the main thing we have to look for is to see whether or not labor will be able to deliver on all its election promises in addition to keeping spending under control. i asked the treasurer during our interview whether or not he had to cut back on any labor spending proposals due to unexpectedly exhilarating inflation. he did not really answer. we are going to have to see in this upcoming budget whether or not the government can deliver on things like childcare. it's big infrastructure spending and also big support for renewable energy across the country, which has been a priority of this government. >> in prior periods of economic growth, we have had china to get us through. has that changed, not least of which because the relationship has changed but also the chinese economy is not going the right direction? >> absolutely. the parachute australia had in its backpack has a few holes in it. china is no longer the thing

that saves us from economic distress, but possibly a thing that causes distress. that is why the treasurer has chosen to bank this $100 billion australian windfall from commodity prices because he knows if china slows down in coming years, it is going to lead australia -- it is going to mean less demand for australia's resources, less for iron ore, for coal. that's going to blow a hole in his budget bottom line. >> ben wescott with a preview of the aussie budget to come later today. here is a check of the latest business flash headlines. apple has raised prices for music and tv plus services for the first time, citing rising licensing costs. apple music goes up by one dollar per month for an individual pricing, while tv plus jumped two dollars per months. apple's quarterly results are due out this week.

carnival cruises canceling all asia departures as hopes diminish of loosening of china's covid restrictions. the carnival unit did not mention china in his statement but previously advertised big plans to tap consumers there. costa was the first cruise company to enter china in 2006. hsbc set to face new scrutiny on its cost outlook when it reports later. a look at the headwinds in asia and the u.k. next. 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 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 by talking to our helpful switch squad

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>> this is "daybreak asia." 30 minutes into the trading session for korea and japan we are seeing the major benchmarks move to the upside and what is driving that is the session we had in wall street overnight.

particularly optimism that the fed may move to a smaller pace of rate hikes in the months ahead. also the optimism we have around corporate earnings because we have 1/5 of companies on the s&p 500 having already reported their results at 60% of those give better numbers than expected. a lot of optimism around that as well. on the flipside you have these question marks because we are still about a one hour away from the open of mainland markets. how will they perform given the extreme route, the selloff we had yesterday? a big rebuke from investors, not only on president she's leadership lineup, but stacked with key allies. also concerns along how long covid zero will last, how much support there will be for the private sector, and the general picture of the economic outlook even we had that delayed data coming through and activity data particularly in retail sales not painting a great picture of the consumer. let's look because we are seeing in the first few minutes of

trading volume starting to look thin. this line here, the dotted line is the projection of where we had throughout the session. you see we are off not just the one day but the 20 day moving average. a degree of nervousness in the markets and how chinese assets in particular will perform given of course they make up a third of the ms ci asia-pacific benchmark index. that is also playing out in the currency space this morning. we have the offshore yuan above that 7.3 level for the first time ever. we have never seen it beyond that. a lot of concerns around the outlook for china's economy, also covid zero policies, how long that would last. still keeping an eye on the korean won given it is at a 2009 low. we had seen improvement yesterday. a huge package of support for the credit sector coming through. it does seem that investors are saying that is not enough to support the sector. also eyeing the japanese yen because it is studying. as we know -- steadying as we know. still on intervention watch as

we look ahead to the boj meeting. >> japan's government bill sent distress that the government needs to watch moves in the yen. in the draft stimulus papers are we expecting there to be some strong language that the expectation from the government is the two sides need to present a united front? >> i think this stimulus package is going to show that kishida's government is supporting the boj and terms of its monetary policy while also flagging the need to be careful of the implications for markets from policy and also comments made -- if you remember after the last boj meeting, japan had to intervene after kuroda's press conference started emphasizing the need to keep stimulus going for a long time, even two or three years at

one point. remarks he later walked back. the yen got weaker and weaker, prompting the intervention. i think this is a message that hey, we don't want anymore comments like that. but the fact of the matter is the government still on board? it is providing a stimulus package, it's going to provide more help for people suffering from the pain of inflation. it's also going to have efforts to try and promote wage gains. if you remember the language that kuroda is using, he is saying ok, we have inflation above 2%, but it is cost push inflation. this is not the inflation we want. we want stable and sustainable inflation and for that we need wage gains. >> we are getting more lines coming from the finance minister. when it comes to ethics moves.

he will not comment on daily moves but that speculative excessive effects moves -- fx moves cannot be tolerated. really we are not seeing acknowledgment of whether authorities have intervened this time around. we have plenty of speculation they did on monday, that they did on friday. what more can we expect from authorities? >> what is very clear is the gloves are off. japan is tackling the weakness in the yen. it has intervened clearly and said so on one occasion. it looks highly unlikely it is coming on other occasions including yesterday. the strategy seems to be very clearly they are not going to acknowledge any of this anymore. that leaves doubt in the

markets. doubt creates fear and reluctance to bet against the government. i think also we are seeing the government wants to send a signal before this bureau -- this boj meeting on friday that we are around. do not bet against us when it gets to the yen. >> paul jackson as we continue to hear from suzuki with his favorite line, watching the market moves with a sense of urgency, and that they will take appropriate measures. let's get to vonnie quinn. >> incoming british prime minister rishi sunak has warned the u.k. faces a profound economic challenge. he calls for unity in the nation and his warring conservative party. in face of rising interest rates and a surge in mortgage costs.

he will take office tuesday after visiting king charles. >> there is no doubt we face a profound economic challenge. we now need stability and -- >> australia's budget is forecast to be less than half the level seen by the previous government. treasurer jim chalmers is set to deliver his budget speech to deliver his budget speech parliament later tuesday. figures released prior to the announcement show an underlying cash deficit of 23.4 billion u.s. dollars. vietnam's central bank has priced a second 100 basis point rate hike a week after the state bank of vietnam widened the band. officials pledged to intervene to keep money markets stable. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm vonnie quinn, this is bloomberg. haidi: asia sbc is set -- hsbc is set to report third-quarter results, bloomberg intelligence expecting the bank to face more scrutiny on credit loss challenges. our next guest says hsbc has traditionally struggled with operating costs for a while. in the air of high inflation this could get even worse. daniel is the director of -- great to have you with us especially given the broader targeting macroeconomic environment. how tough are these numbers going to be? >> the problem is hsbc's footprint. we have to remember three quarters of the bank's credit are in regions where there are significant recessionary stresses. those would include the u.k., hong kong, north america, where it still holds a fair amount of loans, and in all of these

countries including china as well, we are probably going to see a significant rise of credit costs. we have to remember we have already seen third-quarter numbers out of the u.s. banks and credit costs have risen quite a bit. in canada we have seen the same. in the first half interim reports from the banks in hong kong, we have seen a very high rate of growth. that is of course before the current quarter. that is definitely the biggest concern is credit costs. >> when it comes to net income interest you say that is likely to be fine. the guidance from bloomberg intelligence for 2023 is $37 billion. when it comes to the rates uncertainty and overshoot, what is a trade-off here when it comes to high margins but lower volumes? >> that is a good point. the bank could easily see 15% to 20% growth in the interest income.

that is a positive doubt for sure. credit cost delta could offset that to a large degree or entirely. there is another line item which has been dwindling from $3 billion to almost nothing and that is realizing and on realizing on securities. this has been coming down with rising interest rates so that could turn negative. what we have to remember with the most recent results from hsbc is that its tax rate turned negative, so that was a big boost to the second quarter profit and that could actually change entirely in the new numbers today. >> we continue to talk about the challenges in the u.k. economy but when it comes to retail banking, how is hsbc doing? could we see outperformance against the local competitors? >> it is always tough to say which other local competitors. in the u.k. a think it is

doubtful just because the bank is spread over other geographies where there is significant credit risk. in china it is expanded its wholesale banking loan book about 30% in 2.5 years whereas it is not actually expanding group wholesale loan. these things can offset any major positives in the personal banking. that is the problem with being so big, so complex, and so global. >> given they are focused on the asian markets as well, does it make sense to you they continue to remain committed to their base in london? >> well, there has for a long time been talk to move the head office and that comes and goes over the years. but i don't think it is questionable. i think they are committed to the u.k.. that is where their head offices and they have a huge amount of exposure in the u.k..

in asia we sometimes forget that because the bank often focuses on its pivot to asia and it is a business in hong kong and china. but it is a major bank in the u.k. still. it does make some degree of sense. >> we have talked about the challenges hsbc faces. what about positive risks of buybacks? or dividend payouts? >> those are the most obvious positive risks. the only problem with some of that or both of those is that its equity to asset ratio has been coming down and this is maybe the most simple measure of tier one or capital adequacy. the other point is that going into a period of sharply higher credit costs, most prudent banks wouldn't want to affect a major share buyback. you would want to bolster your loan loss reserves or bolster your capital base. i'm not sure how likely they are but yes, definitely those should

be the most positive possible surprises. >> daniel tabbush, director of for element research and consultancy is a preview of the hsbc numbers. xi jinping's power grab is sending investors running from chinese assets. more on the fallout next. this is bloomberg. ♪

>> chinese assets look set for another difficult session with investors showing alarm at president xi's tightened grip on power. clara marquez says policy risks should not be underestimated. this was the big risk flagged for the third term, increasingly inward looking and potentially more coercive and dangerous and unpredictable beijing. is this what investors are reacting to, this risk? >> i think investors are reacting to a number of things. we had a slew of economic data that on paper may have been

great at the headline but not once you dig in. from an information vacuum point of view, that is one of the big risks we see that each side will see what they want to see. that is certainly the case for many investors who discounted what was surfaced from the evidence, there would not be an easing of zero covid and xi jinping would have a tighter grip going into his third term. >> tell us how difficult it has become to understand elite politics in china right now. >> on every level. you can see it from a journalistic point of view, from diplomats, businesses. you see it in terms of the economic data. last week they pulled the data only to issue at this week without any real explanation. that behead -- that has become a future, not a bug of the system. we know less about what is going on there. there is less than terms of person-to-person relationship. the reverse is true, too. . the information getting to the top in china is much reduced.

the problem is that both sides, the spaces that are possible where you can have some sort of new and some sort of compromise become much more restricted. once that is gone the only thing that is left is escalation. >> we all watched that video of the former president being removed from the party congress. what does that tell you about perhaps as a symbolic show of what could be setting up for in the third term? >> it is really interesting. more in terms of how people reacted. we had all manner of interpretations. the official interpretation, he was unwell, video suggests he was confused. people also saw president xi expressionless, as he was being removed, intentional purge. people who know in china these

days do not speak and people who speak do not necessarily know. >> bloomberg's opinion columnist is there with the latest of what is happening in politics in china. we are awaiting the open of the markets in the mainland and hong kong. we will bring in riveting place for more context on the stock rout. also what happened monday. give us a snapshot of the market right now. >> good morning. i mean, the fact we did get the reaction and move that we got in a market that is already down 60% this tells you a lot about how wrong people were coming into the week. a lot of this has already been priced in. that might be one way to interpret that when you look at msci china. from its peak we are down 62%.

what that means historically as we are now actually seeing the worst rout on price on this index going back to the gfci. point number two is when you look at not just price, total returns, things like dividends for example, on the hang seng index, this highlights the fact this did not happen overnight, half a decade worth of total returns is now completely wiped out. in terms of valuations, for fundamental investors, two full standard deviations from the historical mean. 7.5 times earnings, that takes the lowest multiple on the hang seng index going back also to the gfci. >> very bearish bets on hong kong stocks picking up. what does that tell us on these options? >> it is not just price. yesterday -- the reason we bring it up is today we will be

looking at the same markets. second-order indicators to give us a sense of how far or near are we from the end of this route. put options, and this is ones that you see on your screens for example, on different strike prices, 15,000 all the way down to 12 on the hang seng index, you can come up with a separate set on the enterprises index. you look at volumes. i know you talked about the amount of foreign selling that took place. a lot of metrics we will track including this and the volatility index to give us a sense of how much -- or are we really near the end of this route? we will see in 30 minutes of course. >> any to buy at this point? >> that depends on how you spell by. buy or bye. one of the most followed strategists on the street, he is saying it is a buying opportunity when you look at the stock selloff.

it is disconnected from fundamentals. that is contingent on many things, including a recovery and stimulus. i will end with this. out of bank of america. what they see is now that we are done with politics we can focus on the economics and crucial will be the reopening theme, the relaxing of covid curbs which they think might happen sooner than most people expect. back to you guys. >> that's nice. we need someone to look on the bright side. bracing, strapping himself in for the start of trade this tuesday for greater china. be sure to tune in to bloomberg radio. you can hear more from big newsmakers, get in depth analysis from the broadcast team from our studio in hong kong. you can tune in via the app, that is radio plus, or bloomberg radio.com. more ahead. this is bloomberg. ♪

>> a quick check of the latest business flash headlines. the chinese metals tycoon behind this year's massive nickel squeeze is seeking to add new short positions. however we are told the firm is struggling to convince brokers who handled the trades. back in march, the huge short position prompted the lme to

halt nickel trading for a week after prices spiked 250% in a day. it consortium led by japan industrial partners is said to be considering a $16 billion valuation for toshiba in what could be asia's biggest buyout this year. sources say the jip led group is structuring a mix of cash and debt but has not finalized equity commitments from its partners. the world's biggest oilfield services provider has a new name. schlumberger is now called slb. it is rebranding itself as a technology company so it can go after more work in the clean energy space. slb will keep operating its legacy oil and gas business. >> the energy industry is facing a timeout for affordability, security, and position at the same time to ensure the future of the carbonized energy systems. we believe we have a role to play at scale.

we have the expertise, the global footprint, the technology dna to purchase a paid upscale -- participate at scale in this. >> we are getting lines from the chinese government perhaps in response to the selloff this week. china says it is supporting local foreign invested companies and is boosting measures to support inbound investment. perhaps trying to inject confidence into this market. we saw foreigners fleeing, china stocks at a record pace as a panic selling, huge volumes of panic selling took hold on monday. we saw the hang seng china index falling by the most since 2008 with a 17.9 billion yuan of foreign selling on monday. ahead of that reopening let's take a look at what we are watching in hong kong, the china markets taking focus. adrs tumbling on fragile

investor sentiment following china's leadership reshuffle. xi jinping's grip over the ruling party tightened. we saw a big losses for tencent, alibaba jd.com. hsbc reporting the third quarter numbers. standard chartered could be active as well on those earnings numbers. other u.k. exposed shares worth watching as well, product, ck asset -- prada, ck asset. rishi sunak will ascend to the third prime minister this year. ♪

>> good tuesday morning. it is 9:00 a.m. in hong kong and also shanghai. m