haidi: a very good morning.

welcome to daybreak australia. annabelle: we are counting down to asia's major market opens. shery: good evening from new york. the top stories, janet yellen calls for further de-escalation of tensions with china but says it is premature to talk about eliminating tariffs. haidi: indonesia's finance minister tells us she is optimistic about hitting the 5% growth target despite china's weak recovery. shery: the new philippine central bank governor signals tightening is still on the table and it is premature to talk about cutting rates. u.s. futures coming online under a little bit of pressure. this of course after we saw the u.s. bond rally last week hitting a wall on friday on strong economic data including consumer sentiment. really soaring to that near-two-year high.

all parts of the market were reacting. we had banks earnings, wells fargo, citi, beating lowered expectations but lenders were down. it was a broad risk off we saw across the board. the expectation right now is for the s&p 500 firms to notch a 9% drop in profits. that could be the worst season since 2020. we are watching corporate earnings very closely but given the strong economic data, we had that selloff across the curve in treasuries with the short end taking the brunt and you can see the two-year yield getting about 14 basis points. the dollar moderately higher in the friday session but we are still seeing the worst week since november, so that is a tough picture for the greenback. take a look at oil prices at the moment under a little bit of pressure after we saw those declines on the friday session. but still, again, the context right now is that it is a third week of gains for oil. it is also the s&p 500's best

week since mid-june. annabelle: a lot of uncertainty here in asia because as you were just saying, really the narrative that took hold at the end of last week was the disinflation story and traders had been clinging to that. but they did at told us perhaps the fed is not done with hiking just yet. you can see that reflected back in the japanese yen this morning because we are above the 138 handle. we had been trading below that, consolidating below that level over the course of the week. futures in the asian landscape looking very mixed this morning ahead of the moves. again, traders trying to get more data to really enforce whether the fed needs to continue hiking, whether inflation is being quelled. markets, cash markets will be shut this morning, waiting to see whether that is lifted before noon. let's change on, because something we do know is coming out this morning is economic

data from china. this is quite a slew of releases this morning. the mlf rate coming through that was cut less month. monthly activity data, and the second-quarter gdp. this is the picture here. it starts to show that slight rebound we are getting. our bloomberg economics team saying do not believe the numbers yet. yes, they are expecting growth to come in on the year in the second quarter for 7.8%, so quite a big jump from the year prior. the consensus among economists is 7% growth. this was a period last year where the lockdown in shanghai was being lifted, and so there is some sort of distortion that will also play into the numbers. they are expecting you. back to continue to show deceleration. again, it really does point to the need for further stimulus in the economy which could be reinforced through that monthly activity data as well. shery: and of course info focus this week, geopolitical tensions

in china's relationship with the u.s.. this, as janet yellen attends g20 meetings in india and climate envoy john kerry holds talks in beijing. for more let's bring in stephen engle in hong kong. let's start with janet yellen's visit to india, her third in nine months. what will be her strategy at the g20? stephen: this is another opportunity to continue this diplomatic push we have seen obviously from the cabinet members of the biden administration. you had blinken go to beijing, yellen go to beijing. yellen of course keep in mind also went to japan, g7. her engagement with the asia-pacific is intensifying. as you rightly said, this will be her third trip to india in the last nine months. she says that india is an indispensable partner in the biden administration policy,

diversifying away perhaps from overreliance on china. but the main story with kerry in beijing and yellen in g20, which of course china and russia are members of, is really to find ways -- these are her words -- to find ways to further de-escalate tensions with china. one of the main sticking points are the trump-era tariffs. the biggest piece of news that we got from a bit of a press conference from janet yellen yesterday was the fact that it would be premature to relax those trump-era tariffs at this point in time. but again, she says the biden administration is nearing completion of a near-four-year review process of the trump-era tariffs. so it is a sticking point in relations with china and china has been pushing for some relaxation, if not elimination of those tariffs. does not look like it, will code

into the treasury secretary, that it happen anytime soon. haidi: there are a lot of sticking points but climate, is this one area where we could see some deliverables, more -- stephen: as the two biggest emitters of greenhouse gases, china and the u.s., they have common in areas of concern obviously. but can they work together? i talked about the diplomatic push. this is another example of a senior cabinet official going to beijing and at least engaging with the chinese leadership on key areas where they can cooperate. economic issues as well as climate issues. john kerry is the climate envoy for the biden administration. but there have not been any projected talks between china and the u.s. on climate change in nearly a year. china basically severed top-level dialogue including on climate change issues after the

august of last year visited taiwan by then-house speaker nancy pelosi. so this will be the first time since last august, or about a year, since they are going to sit down. three full days of discussions and dialogue in beijing between the two biggest emitters of greenhouse gases. so that alone is progress. whether they can find any common ground on target, i doubt it, and i do not think that will necessarily be the deliverables. but they will talk about efficiency of the power grid and overall joint efforts. john kerry says the world is looking at the two biggest emitters to find some commonality and basically to eliminate those greenhouse gases and work together on areas of doing that. so again, the fact that they are talking and having three days of substantive talks is progress. haidi: stephen engle there, as a diplomatic flurry continues.

indonesia's finance minister says she is optimistic about the 5% economic target this year, even as china continues to face a slump. she spoke exclusively to bloomberg ahead of the g20 meeting in india on the challenges for emerging markets. >> the concern is of course there is a policy implication for each of the situations. advanced countries like in europe and especially the united states, their currency and capital is very important. so when they are responding to inflation with increasing interest rate and tightening liquidity, that definitely has a spillover to the rest of the world. on the other hand, the second largest economy like china is facing with a very low inflation, even now talking about the potential of deflation. so this kind of deviation of the

very important economy in the world will create a policy also which is going to be diverting from the phenomenon the past decade. for many countries including indonesia, we look at all of the phenomena. inflation, this is a supply disruption. so we really have to make sure that the response of the policy will address the source of the problem. it is not just the symptom of inflation itself. >> how big of a concern is china? is it a red flag for the global economy? when you look at the eco-data coming out of china continues to remain weak. >> yeah, we of course look at the manufacturing emi, also looking at the property. china needs to read jump so they

have higher growth. i think that will be the policy challenge for china. because in the past we know that china was driven mainly by investment and especially fti but also by their own credit channeling including their banks. that is why if china is facing a certain policy challenge at this very moment. for a country like indonesia which is also affected by the china performance, we really have to make sure we have enough choices in this case. for example, export destination. of course european is also weekend -- weakened. 2022 was addicted to be a recession in many countries. china is not recovering as to what we originally thought after opening from covid. indonesia is now looking at alternates like india.

we are growing in terms of the market. their economic growth is remarkably also very strong. that is why they have a lot of important oddities. at the same time india is trying to discuss on a partnership which will also be much benefiting both sides. haslinda: can the relationship between indonesia and india counter china? when you look at some data out of indonesia itself you are seeing a slowdown in exports, in investments, in lending even. can you maintain your growth targets? >> the size of china in terms of the global economy, the second largest, is certainly not as big as other countries including india. so whatever is going to happen to china is definitely going to affect the rest of the world. don't forget rural china which is very important. for many countries when export

their own material, they are getting financial capital inflow from china. that is one source of growth for many emerging countries. it cannot be immediately substituted. but for any country including indonesia which is open, we also have our domestic demand. we have to find a way that we can minimize this kind of potential weakness on the environment globally. shery: the indonesian finance minister speaking exclusively with bloomberg. stay tuned for more exclusive conversations from the g20 meetings. we will have the undp administrator and eu commissioner for economic affairs as well. haidi: and of course as you know earnings season kicking into high gear. jp morgan has posted record often. signaling stronger-than-expected earnings from lending.

why was it so -- they really found the sweet spot. >> ultimately this is about the structural tailwind of this lending boom going on across many areas of the business allowing it to profit. not just in the consumer area where there is much more lending to individual households but also on the commercial side. both of those are particularly strong. also benefiting from its size and acquisition of first republic. there are number of things working together. it did mean it was a particularly strong quarter. of course you had some high expectations of that going into this and that is kind of what you saw in the share prices. you had a decent rally but most of that tapered off on friday. the stock finished reasonably flat. there is a sense that expectations were high. perhaps and a lot of those areas they have been delivered looking

across the board at some other banks, credit card data we saw a huge jump. there are other areas that are also doing well. it has been a pretty decent start for the banks this quarter. shery: there are areas of concern as well. like loan office. how much of what happens to these banks depends on the trajectory of the fed? adam: yeah, a lot of these concern areas are things that have been well flagged. loan losses as you mentioned, particularly as it pertains to the crisis we are seeing in commercial real estate, a very well flagged area performing very sluggishly. of course with a lot of privately held assets being sold off at big discounts. not just in the states but around the world as a lot of asset allocators that have been over allocated to commercial real estate pear back on some of those assets.

so there is that area. results of course this idea, will the fed go one more time and then that is it? are we at the top of the cycle? if that plays into next year then you have removed the big tailwinds that this provided the structural weight behind this rise in lending in the net interest income which has performed so well recently. there are a lot of expectations that have been recalibrated on looking already into the start of next year and further on into the year when you might have a situation where the fed is reasonably benign and you do not have that big tailwind you have had over the last 12 months. shery: adam haigh with the latest on u.s. bank earnings. coming up, rate hikes back on the table for the philippines under a new central bank chief. catch our exclusive interview with the bsp governor later this hour. first, the $10 trillion global

stock rally faces a make or break moment as investors brace for more quarterly results from big companies. prestige economics shares their outlook for earnings season next. this is bloomberg. ♪

haidi: time for a look at the

week ahead and a major focus on china starting off with a pboc setting its one-year rate in a few hours per we will also be getting the second-quarter gdp numbers and june activity data expected to show recovery continuing to weaken. record youth unemployment. big banks will be setting one year and five year loan prime rates thursday. watching cpi and expecting the boe to have another 50 basis point rate hike in august. also getting inflation into the euro area, new zealand, and japan. other data to know, u.s. industrial production numbers, also those ppi figures from south korea are due. g20 finance ministers and central bank governors gathering in india this week. their summit set to focus on topix including financial market trends, inflation, food and energy concerns, and support for developing nations.

and that is your week ahead. shery: a near $10 trillion rally for global stocks this year faces a make or break moment as hundreds of companies report earnings over the next few weeks. areas of focus for market watchers include the impact of a slumping dollar and the substance behind all of this ai buzz. with us now is jason schenker, president at prestige economics. great to have you back. we saw last week banks easily beating lowered expectations. the bar has been set so much lower now. how are we expecting the markets to react to this earnings season? jason: i think that there is still quite a bit of concern going into this earnings season because of the elevated interest rates which are really pressuring companies with capex and what they can do with investments and there is still a lot of pressure from high cost of labor and a tight job market

pressuring profit margins from the optics side. a lot of companies are trying to navigate these two serious issues that both threaten the bottom line. there is really a lot of uncertainty going into this earnings season and we are likely to see the saint in the next one as well. -- see the same in the next one as well. shery: elevated inflation has been eating into the profits on margins of these companies. where do you expect the fed to take us from here given all the conflicting eco-data of we got last week? jason: well, there is one big thing i want to point out about last week's headline cpi number which was a really big drop off, really great thing to see. a lot of that was a year on year basis affect. last year in 2022, april, may and june, month on month members -- numbers were really good. last june prices went up 1.2%. this year they went up .2%. because we didn't have nearly as

big of a rise last year, that eroded a lot of the year-on-year affect. moving forward to the balance of the year if we have only modest inflation rate, 1.5% to 0. -- we could see this creep up on the headline inflation and be between 3% and 4% through the balance of the year. that means we are not going to get down to that 2% target the fed is looking for probably until q@ of next year -- q2 of next year. core cpi is what will drive fed decisions. it is possible we will not get to the 2% number until q2 2025. but there is a lot of good stuff to see like the drop in the goods number down 4.4%. last year it was up 17.0%. so we're moving in the right direction. but it is still going to be a

little bit longer and that is why we could still very much see those two more fed rate hikes before years end. haidi: that time will tell thing applies to the biggest driver of the rally so far this year. the ai chip related tech names. when it comes to the monetization and the value chain for ai, are there still opportunities that are less tapped going forward? jason: i think the biggest potential value for ai e-zine worker productivity in various corporate roles. i talked to lots of groups about this product because i am also the chairman of the futurist institute. some of the biggest things people spend a lot of time on his crafting job descriptions or writing lop's, putting together project plans, writing memos, press releases. if you are able to do more of that, especially in a tight labor environment, that means you can do more with less. you are able to be more productive.

that is something that could boost company productivity. as we think about the overall economy, that is probably the biggest opportunity because as we look at some of how we have hype locusts price in the impact of ai on big tech, a lot of that might already be captured in there, and we may be missing the bigger story which is the productivity lever across the economy. shery: jason schenker, we are out of time but always a treat having you with us. thank you so much. president of prestige economics. we have more to come. this is bloomberg. ♪ did you know you can get someone to shop for you? with stitch fix, it couldn't be easier. i share my style, size and budget.

and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix.

haidi: trading in hong kong is likely to be interrupted to start the week as a typhoon

brings heavy rain and winds to the city. it is the third highest on a scale of five. if the warning is still enforced by 9:00 a.m. local time it will cancel morning trading for all markets. one to watch today. next, our exclusive interview with the new philippine central bank governors, eli remolona. this is bloomberg. ♪

shery: eli remolona took over as governor of the philippine

central bank two weeks ago at a time when the bsp paused its aggressive rate hiking cycle. on a trip to canada he spoke with our kathleen hays for his first ever tv interview. kathleen is just back from canada and joins me now. i said just back because you actually had to take a train back. kathleen: i had about three flights canceled. they just would not let me into new york on the site came in through the back door. shery: but it was so worth it. going into this you thought perhaps a double return would stay there, but he sounded more hawkish. kathleen: it is interesting, because he said we are a structurally hawkish central bank because we are in inflation central -- targeting central bank. in that kind of central bank role, you have to report when you don't hit your inflation target. but more than that it is a sense that the most aggressive rate hiking cycle in 20 years.

will they continue? inflation is coming down. this is the kind of question you ask any central banker. that is where we started in here's what he said. -- and here is what he said. eli: we are not sure it has done enough. we will see. 4% is the top of the range of our target. so we want to maybe well into the target range before we consider anything like a rate cut. it will depend on how weak the economy is, how strong the economy is. but we will see. it is premature to talk about a rate cut. kathleen: because? eli: because the economy is still very strong. inflation is still above our target range. so we will have to see. kathleen: sounds like you are door is not wide open to rate cuts. you said two things. headline inflation has come down

from 8.7% year-over-year in january to 5.4% in june. so it seems to me that even though you said you could or would consider cuts if it goes below 4%, you are not on the verge of doing that. you are much more on the verge of waiting, watching, and seeing what happens. eli: that is correct. we are on the verge of waiting for better data. but this is what our models say. i think we are going to hit the target range. by next quarter, by the fourth quarter of this year. and we might overshoot on the low side, though below 2% in the first quarter of next year. and then what we hope to happen is for the inflation rate to set up within the target range. kathleen: what is driving? some people are getting worried about headline inflation because of el niño there are worries about food supply and then

prices will go up and that is a very important part of the philippines inflation picture. so why will it go down at a time like this? eli: if supply shocks disappear, they stop happening, then inflation should keep coming down. and if are tightening has worked, it might have worked to effectively than we thought. then we have to wonder if there is a risk a recession. that we might have to consider a rate cut. kathleen: you worked at the new york fed for 10 years, so i assume you have some extra sense of gauging the fed. broadly, what do you expect the fed's trajectory to be now? eli: i think it is going to pause, actually. because the last inflation number was very good. maybe it does not have to tighten anymore. so it's going to pause for a while. the tricky thing is the fed i

think meets july 25, july 26, and then the bsp meets three weeks later. three weeks is an paternity for financial markets. so if the difference between the policy rate of the fed and our policy rate becomes too wide, it kind of makes some market participants feel uneasy. and they may retreat. usually small movements are ok, it does not worry us. but sometimes when it is a sharp movement, it begins to affect expectations, and then we begin to worry. kathleen: so what does that mean? if that is what is happening, what would that mean for your august meeting? eli: well, before august, sometimes we release some kind

of forward guidance. it won't be accompanied by a policy rate move. but we try to calm the markets and then we will see in three weeks what we should do. it depends on the date. kathleen: it seems to me -- i should ask, are you open to -- is that you're open to cut, to pause, to hike, depending on what the conditions are? eli: for now, we're contemplating whether to hike or not to hike. we are not thinking about whether to cut or not to cut. it is more on the tightening side. kathleen: there you heard it. he said it is premature to talk about cutting rates, they are not looking at that. it's more keeping the pause or

even tightening more. this is significant. investors thought if inflation cuts -- people thought he must be a dove. but clearly thought they may keep tightening. the whole interview is on bloomberg.com. you will hear he is watching the peso very closely, and that is another concern they have about how they are going to manage policy and what they may have to do with rates. shery: currency risks is so important for these developing economies. kathleen hays with the latest on the philippines and other monetary policy path. let's turn to china's economy, because we are expecting a raft of data later monday including gdp and monthly activity numbers. annabelle joins us for morning calls. what is bloomberg economics predicting right now? annabelle: they are expecting some fairly solid numbers to come through. retail sales for instance,

growth of around 3.1%. just taking a look at fixed asset investment retail sales, industrial production for china over the past several years. what they are focusing on in particular will be the base effects and that is where they are saying you have to be really careful about. to put it into perspective june last year is when shanghai, that lockdown was being lifted. there was so much optimism around the revenge spending. even though it did not eventuate. when you look at that rally, that big bounce in retail sales, that will play out any numbers due later this morning. bloomberg economics when you take a look at retail sales in particular expecting growth of 5% on the year. but they say that is really going to be playing out to those base effects in particular. the devil will be in the details. what they are expecting the numbers when you parrot back, take out the base effect, it will still show that slowdown we

are continuing to see in the chinese consumer spending. it is up but only in things like cars. we are continuing to see that slowdown. that is something investors are watching very closely. haidi: what does it mean for investing? what is goldman saying about the stock market? annabelle: essentially they are looking at a lot of different factors pick they have been on quite a significant roadshow talking with people on the ground in china. what they are talking about is the underperformance you see. to put into perspective we know the world index is developed markets. that is a huge gap, that underperformance. what they are actually saying is that chinese stocks are right rebound and there are a few different factors playing into that. when you look at the growth forecast, as we go through the second half of the year you're going to see china's economy improving sequentially. they have good earnings outlooks

as well. they are saying that china is now becoming a trade. when you look at the msci china index, to quote their targets, they are expecting growth in the performance of that of 10% in a 12 month period, and for the csi 300 they are expecting it to rally 15% over the coming year. so certainly something goldman sachs is looking at closely. they were coming into this year very optimistic on the outlook for the chinese economy. something i had to scale back a little bit but they are still quite positive on stocks. haidi: taking a look at bank earnings, coming through thick and fast. wells fargo slipping despite the bank raising income outlook. announces a 14% increase compared with a 10% gain forecast. the cfo told us a little more about the bank's latest resources as well as the decision to set aside more money for loan office.

>> we are a relatively debt -- we are relatively small compared to some of the big peers out there. it's something we have been focusing on for the last few years and really making sure we are consistently adding the right people come investing in technology. the focus is to support our clients better. it is focused on u.s.-based clients for the most part. there are some outside the u.s. but primarily in the u.s. and it is supporting our corporate clients and asset management clients and others better and better each day incrementally. so we are happy with the performance we had this quarter and last quarter and i think that shows. it is something we will keep gradually building on overtime. >> commercial real estate caught a lot of eyes that wells fargo increase to the allowance for losses by about $950 million and it was commercial real estate office loans that were cited for the reason behind the move.

you have not seen significant losses yet but you had ceo charlie sharp say you expect to see it play out in the market over time. when are you anticipating to see peak pain for commercial real estate? >> i think i would broaden it other than a bit and then i will come back to office. when you look at the overall credit picture it is quite good on the consumer side we are seeing higher charge-offs but that is office door close. that is actually performing quite well so far. broadly on the commercial side of the business it is going quite well in terms of our middle-market and commercial banking clients and big chunks of commercial real estate portfolio are performing really well so far. particularly given where we are in the cycle. so really this conversation is focused and isolated on the office portfolio. i think as you look at office, it is a lot of the trends we are all talking about for a while comes of return to office. companies needing less real

estate. that is starting to come through in different cities and different properties across the country. and what we did today, for in the quarter, is make sure as we look at all the things that we can see and then think about a whole bunch of different scenarios that we stress in the portfolio. and so we built a reserve we think is appropriate to deal with a number of those scenarios. keep in mind, we have not really seen the losses be significant so far. but there will be some weakness over time and it will play out over an extended period of time, likely years and not months and quarters, as people work through the changing patterns and different issues with individual properties. shery: the wells fargo cfo speaking to bloomberg's katie greifeld and romaine bostick. coming up, the u.k. becomes the first new member of a key specific trait pact, as attention shifts to -- attention

shifts to a list of other applicants left by china. this is bloomberg. ♪ ♪ with eu on your plate, earning your degree online seems... impossible. but at grand canyon university, we specialize in helping you fit a master's degree in business into your busy day. your graduation team led by your own gcu counselor provides you with the personal support you need to succeed! achieve your goals with a plan and team behind you! find your purpose at grand canyon university. visit gcu.edu ♪

haidi: the u.k. has joined the cptpp, becoming the newest member since it came into force in 2018. paul allen joins us with more.

how significant is this for the u.k. ending broader pact -- and the broader pact? paul: it depends on who you talk to. there are already a lot of countries in there. internal projections from the u.k. show a pretty minimal impact from the deal. then again, the u.k. business and trade secretary very enthusiastic, saying it will make a significant difference and giving the u.k. a seat at the table in the world's fastest growing region. for u.k. products there will be zero tariffs on things like cars and whiskey, and for cptpp countries that run businesses in the u.k., she says that will turbocharge that investment. haidi: -- shery: what about china? how is that likely to progress? paul: that will be an interesting one because china has a number of difficulties with admitting members of the cptpp.

new zealand was the host of this meeting over the weekend. the trade minister gave a very diplomatic answer, saying there was no specific discussion on any individuals. but australia's assistance trade minister was more forthright, saying this will be some way off, obviously referencing the ongoing trade strikes by china against australia. some of those have been removed but some are still in place. the next chair of the cptpp is canada and of course china has a few trade issues with canada ongoing as well. making it even more complex come after china the next is taiwan. it will be a very interesting set of discussions trying to get china admitted to this trait pact. haidi: you mentioned when it comes to the relationship between china -- paul: the change of government

last year gave the opportunity for a face-saving reset to that relationship. we will see some strikes wound back. australian coal now finding its way back into china. there has been movement on other key issues. bali, still an outstanding problem. a lot of the trade strikes are still in place in some form or another. shery: paul allen there with the latest. let's now get you the latest on some severe weather stories we are monitoring right now. south korea says at least 39 people have died with nine missing in flooding and landslides across the storm battered country. nine bodies have been recovered from a tunnel where about 15 vehicles including a bus were trapped. the underground road was flooded after a nearby river overflowed it heavy rainfall is expected to persist through tuesday. wildfires continue to scorch parts of canada after already

burning a record 25 million acres this year, an area about the size of ice land. the damage is expected to worsen, with 900 fires still active over the weekend. most of them still out of control. british columbia is currently bearing the brunt following massive fires in alberta and quebec. a cluster of severe thunderstorms has hit the u.s. northeast, including new york city, unleashing deadly flooding in pennsylvania and halting operations at several airports. all three new york city area airports imposed a temporary pause on operations sunday afternoon. the philadelphia inquirer reports at least five people died and two children were missing after floods ripped through. trading in hong kong is likely to be interrupted to start the week as typhoon brings heavy rain and strong winds to the city. local authorities have issued

the number eight typhoon signal which is the third highest on the scale of five. hong kong exchanges and clearings says if the warning is still enforced by 9:00 a.m. local time it will cancel morning trading for all markets. we have more ahead on daybreak. this is bloomberg. ♪

5-hour energy. think of it as 5-second coffee. for when you wake up too late to make it. or you don't have time to wait in line for it. or you're just too busy for a coffee break. 5-hour energy. the 5-second coffee.

haidi: checking some top stories, the largest gaming deal in the u.s. takes a step closer to completion. u.s. appeals court denied the federal trade commission's bid to block microsoft's acquisition of activision blizzard, which means only u.k. regulators now stand between the deal closing. microsoft has agreed to keep the call of duty franchise on the sony playstation to allay concerns the merger would make more activision games exclusive to the xbox. investigating pfizer's proposed takeover of siege and in a regulatory filing. both firms will notify the deal to the european commission and the eu executive -- the filing says the eu approval is a condition for the deal to close. sources tell bloomberg the ceo's of intel, qualcomm, and nvidia

are heading to washington to lobby against extending restrictions on a sale to china. the companies have argued been cut off from their biggest market will harm the abilities to spend on advancing their technology. they say it will ultimately undermine u.s. tech leadership. elon musk says his new start up is definitely in competition with openai. during a discussion on twitter spaces, musk said xai is his latest salvo against openai. xai does not yet have any products but has unveiled a new website. musk says its goal is safely developing artificial general intelligence, or agi. taking a look at the landscape when it comes to fx trading. big questions as to where we go from here in terms of the dollars. doomsday airs are calling at the

end of an area. expecting a multiyear downtrend. but others are skeptical the dollar weakness will go much farther from here. we saw a little bit of alleviation when it comes to the trade. mixed in the g10 payers in the early part of the sydney session. pretty rage bound as well. yen is holding steady. the bank of japan governors saying uncertainty remains high over u.s. and global economic trajectories. the aussie dollar is looking pretty steady, comfortably in the $.68 u.s. range. we are watching dollar china as well. a big slew of china data dump expected. likely to be a bit deceiving in light of the flattering comparison but the domestic activity data will be the one to focus on when it comes to looking for further weakness out of the property sector and industrial production. all expected to show a marked slowdown.

retail sales is one to watch. that likely fell almost 3.5%. markets will need a pretty big boost when it comes to upside supplies out of the china data dump to get much direction. you can see the sluggishness. australian equities, the future session looking pretty flat. hong kong a great deal of uncertainty with trading likely to be scrapped monday morning. the typhoon warning signal will remain in effect before noon. hong kong exchanges trading arrangements means they will cancel the morning session for all markets. signal eight is the third highest on a signal of five. that's one to watch in terms of market disruptions. and of course we are still seeing the ongoing debate when it comes to whether last week's inflation numbers will be more this week. it means we will see a

significant change or a pullback when it comes to global central bank action, specifically the fed. much more coming up in the next hour of daybreak including more market strategy with anz. gdp data, domestic activity data, also looking at whether there view on the rba and australia's economy will change even we have a change at the top. the appointment of the first woman to leave the central bank later this year. also taking a look at issues in japan, a big driver when it comes to the recent stellar rally and how a generational change is reshaping that corporate landscape. that is it for daybreak australia. bake -- daybreak asia is next. this is bloomberg. ♪

bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright. xfinity rewards creates experiences big and small, and once-in-a-lifetime.