the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. ♪ shery: welcome to daybreak asia. we are counting down to asia's major market opens. haidi: top stories this hour,

gains as traders brace for central bank calls. a delucia for earnings. economists are seeing the chances of u.s. recession at below 50%. beijing is signaling support for consumption and property helping u.s. listed chinese equities to their biggest one-day advance since january. apple supplies are in focus, the giant hoping to keep iphone production steady despite smartphone market weakness. we have breaking news crossing the bloomberg and that is on south korea gdp numbers coming in slightly quicker than expected. stronger growth than perhaps what we were expecting. 6/10 of 1% quarter on quarter is what we are seeing. the estimate was for half a percent growth for korean it gdp. be expected to see that kind of acceleration really picking up as a result of external support. the trade deficit of course and also narrow indicators, lower prices of traded goods likely boosted net exports in terms of the supportive factor for gdp.

seasonally adjusted quarter on quarter, the second-quarter number coming at 6/10 of 1%, beating expectations of half a percent year on year. that's again of nine tents of 1% faster than the rate of 0.8% was expected. we saw potentially improved consumer confidence being a part of the modest growth across private consumption as well. we had consumer confidence rising above the neutral level of 100 for the first time since june 2022. in terms of movements in the yuan, quite a bit of fluctuating trade before policy decisions and across central banks as well as the gdp number as well, 12 90 is where the limit per dollar was according to a number of economists in terms of where we are looking at or potential consolidation. shery: take a look at how we are setting up for the asian session as this is the trading picture in u.s. futures after stocks gained ground in the regular session.

we are talking about disappointing data from both the u.s. and the euro area adding to speculation that the central banks will be very close to ending their hiking cycle. so we have that upside in stocks but the nasdaq 100 underperforming a little bit. of course we do have big results coming out of microsoft, alphabet and meadow. so we are very wary of how the corporate earnings might go, but we were looking at treasury yields. growing higher in today's session. we also had 2-year note options drawing the highest yield since 2007, so that added to the yield bond. the expectation that the fed will raise rates this week and perhaps keep arming costs elevated for an extended time really being felt across the bond space. take a look at crude, wti continuing gains. we've seen it top $78 a barrel in the new york session. we continue to see signs of a tighter market and that helped the bloomberg commodity spot

index get to the highest level since april. we we watching commodities closely as the dollar hold steady. this as we got second quarter gdp numbers out of korea and ahead of the bank of korea's next meeting, now just one month away. our global economics and policy editor kathleen hays is here with the latest. how to the gdp numbers stack up? kathleen: firmer than expected. let's take a look at a couple terminals because it puts it in perspective. let's look at the quarter over quarter number first because that is where we temporarily -- we saw the almost technical recession one month of negative growth on the gdp in korea. now that is completely in the past, it is back in the fourth quarter of the year. and you know -- notice now that's a year-over-year figure. let's start there of course because 09 person -- 0.9%, second quarter in a row is pretty good. it is not bad. with the drag on exports, yes

the trade deficit did improve but korea's exports have been hit by the slow recovery in china. a bit of a slowdown. and of course, the 11th biggest economy in the world and fourth biggest exporter, so you see how important that is to them. if you look again at the quarter over quarter comparison again you will see that the fourth quarter had a bit of a drag. now that is erased and in fact the number has come in strong and than expected, zero point 6% versus the 0.5% that was forecast and the 0.3% that we saw the month before. so this is all good news and haidi just mentioned korea's consumer confidence number, 100.7 in july, first time above 100 since june of 2022. retail sales have been saggy on consumption, that's very important to the overall growth of any economy. and that does seem to be improving as well. in terms of what the bank of korea is going to be looking at in a month, when they last looked at their inflation numbers, they signaled very quickly that even though they had fallen down to 2.7%, two

point 8% year-over-year, the bank of korea think that the inflation number may go up again, it may go up to 3% or higher. it has paused in four months it has been signaling that even when they stop hiking rates, they are not going to be quick to cut them. so you put it altogether, this is an important number and perhaps it does sort of support the bank of korea's recent messaging that yes, we may be done hiking. they're watching the u.s. and how much more the u.s. hikes. that's a big deal for any developing economy. but they have ammo to say we are not in a position where we need to cut yet. haidi: we're also watching this closely watched survey, more business economists see a better than even chance that the u.s. will avoid recession in the coming 12 months. is this a big change? obviously the bond market is telling a different story. kathleen: well, this is an absolute economist survey, nothing to do with with the bond

market expects. investors should look at this because these are chief economists at big companies across the country. and so, they are looking at what they see not only as forecasting the economy, but also what they are seeing in their businesses. and now in fact, 71% see a 50% or less chance of recession. in april, it was 50-50, so you can see there is less pessimism. i do not know if you call it optimism but less pessimism. in this july survey, done every quarter, one in four put the recession chance at 25% or less. they're basically saying i do not think it's going to happen, that dovetails with goldman. they reduced their forecast recently. they're looking at a strong job market, lower inflation, that helps companies, helps the economy, that's the idea. improves profit margins as well, that is interesting to hear that observation. we are in earnings season, people are try to figure out

what companies are doing, what investors should do. it's a positive sign for the economy as well. haidi: global economics and policy editor kathleen hays. take a look at how we are setting up when it comes to the start of trade on tuesday in asia. pretty steady actually, seeing a little bit of a green shoot in sydney futures, up 6/10 of 1%. kiwi stocks are softer on the back foot this morning. we are seeing sideways training when it comes to -- trading when it comes to key assets going not just into the fed meeting, the ecb and boj into that event. nikkei futures are looking marginally to the upside. the t-1 to watch for is really how we see greater china opens given the big jump that we had in u.s. chinese equities on the back of the readout from the bureau report showing more support for consumption as well as profit. whether that creates any kind of longevity in the rally or whether we will see that fade is something that we will be

watching for. shery: and yet the markets seem optimistic about what they heard. u.s. session, we saw chinese adr rallying. we are talking about the golden dragon china index actually seeing its best day since february. the gains were broad-based. we are talking about big cap tech names like alibaba, baidu, rising 5% or more. and really that optimism about perhaps what we might see when it comes to the support for the troubled real estate sector. so the transactions platform operator jumping nearly 7% or so. but as i said, this is a lot of optimism and speculation, but what have we seen on concrete measures is the question, right? haidi: yes and it has been this drip feed of smaller targeted measures. markets have been quite disappointed, given the big bank stimulus that we have gotten in the past. if you take a look at what was announced in the euro readout,

yes, more support for the housing market. more support for the consumption side. everything from encouragement of private firms to invest in key industries, business investment, making private enterprises a part of growth in the economy again after what has been a really hard couple of years. we know especially when it comes to private enterprise across tech and internet firms, there's been measures targeted at the construction sector and property construction. agriculture, you know, the car industry, automakers as well as targeted measures on the currency as well. but the fact that it has taken them longer and longer to make these announcements, to come to these decisions, there have been smaller scale measures. has a lot of analysts thinking that perhaps this is -- as much as we are going to get from policymakers. shery: it has been interesting to see how the narrative has changed from the beginning of the year when we were expecting huge growth coming from china to just go to about 5% growth.

and now even being able to potentially miss the target coming from beijing. so those downgrades has been really interesting to see. we will be discussing all of this with guests throughout the show. coming up wells fargo investment institute expects to see opportunities in u.s. stocks this year. more on their market outlook next. this is bloomberg. ♪

♪ >> part of the argument against high yield is this year has been a spread, it is not interesting at all. there are a bunch of parts of the fixed income market, european high yield if you are a dollar investor, you swap it back to dollars and get paid well into the nines. that strikes me as fair. haidi: blackrock fixed income ceo there on why investors need to look beyond vons for yield to our next guest says it is a time to be defensive inequities and faced -- fixed income. joining us is tracy, head of strategy at wells fargo investment institute. what do you believe is the sort of word on the street in terms of feeling like the chances of a

soft landing or a no recession are actually increasing or do you continue to look at the yield curve inversion for that running signal? tracy: we are continuing to look at things like the yield curve inversion, the warning signal, but not just that. we also think that every time the federal reserve has raised rates this quickly and to this magnitude, it has been in some kind of dislocation in the economy and is -- some would argue we have already seen the dislocation with the prices back in march. but we still think that because the fed is continuing to tighten, there are lag effects. it is likely that we still have some downside ahead of us. so we would continue to be cautious in the equity market and the fixed income markets. haidi: where would you be positioning then in terms of not missing opportunities at this

point either? tracie: that's a very important point because we have not in out of equities, but we have moved our equity positioning around to favor u.s. large caps over small caps and mid-caps. and we like a u.s. and developed market over emerging markets. so it is really about positioning within the equity space as opposed to being out of equities completely. shery: you are not worried about valuations in the u.s.? tracie: we are concerned about valuations for in particular the super seven stocks. but beyond those stocks the valuations do start to look more attractive. that does not mean that we are not facing some headwinds because of valuations. although returns has been multiple expansion. none of that is coming from earnings and we are in the third quarter of negative earnings.

so there is some risk with large caps as well, we just think there is a higher quality positioning available within large caps than some of those other asset classes. shery: the rate hike coming from the fed seems baked into prices in markets, so what will you be watching out for? tracie: yeah, so we will be watching out for what the fed says about upcoming meetings. so it is very possible that they could add another hike or even to into the mix. they may indicate that they would consider pausing in september, but we think that they will keep a rate hike on the table. they may decide to go every other meeting and then continue to watch the data. this really, it is going to be the post meeting commentary that will move markets. annabelle: how much do you expect earnings season to affect prices? tracie: yes, so we do think that

negative earnings are again baked into the current pricing. however, if we were to see downside misses, if we were to see companies saying that they are not able to grow, to support those higher valuations, then we think that could inject some volatility into the earnings season. haidi: you prefer developing markets to emerging markets but certainly there are markets in asia or economies that are ahead of the curve in terms of where they are and they perhaps have more buffer in the tightening cycle. do you see opportunities outside of the u.s. in this part of the world? tracie: so for asia, we do see some potential opportunities outside of china. we do think that china's stimulus that was announced today is a step in the right

direction, but it might not be enough really to forestall this disappointing recovery that we are seeing in china. china does have a significant impact on other asian countries and it is a support for the other asian countries, but we do see the potential for some selectivity there. korea is one that comes to mind. we feel like the auto industry in korea could see some upside. and also southeast asia on tourism, that is another potential pocket of strength. shery: tracie mcmillion always good to talk to you. head of global asset strategy at wells fargo investment institute. get a roundup of all of these stories that you need to know to get your day going in today's edition of daybreak. terminal subscribers go to dayb . also available on mobile in the bloomberg anywhere app. customize settings so you only

get the news on the industries and the assets that you care about. this is bloomberg. ♪

♪ haidi: citigroup says the longest slump in investment banking revenue is beginning to ease. the ceo told us about the outlook for the banks trading operations. >> we have to remember that trading businesses are still good. if you compare over all industry revenues to 2020 42019, the numbers are significantly higher.

it is not bad. they look worse if you compare them to recent years. they are still very healthy. and what drove the health is still around. we still have uncertainty about the economic situation. a lot of trading of portfolios has to happen. i want to be in the coming quarters, but i don't know. >> some businesses say commodities have faced a fall off over the last several months however things like rates. how much of a structural headwind or tailwind is that to the industry now that we have a new economic structure around the world. >> rate is a positive part of the story because we've had many years with rates almost dead. with regular uncertainty about what rates were going to do and we have now come back into the rates business.

we did not have rates to play with before. so it is going to continue to be a very active part of trading. >> what about investment banking? there has been headcount reductions at many firms including yours. do you think it could be worse before it gets better? >> it is limited by the need. the need is there. it is accumulating. even if the market situation is not great, they will take over and generate revenue. this has to be one of the longest slumps in investment revenues that we have experienced. it is longer than the financial crisis, so it has to turn at some point because the reason for those activities there to happen has not gone away. we cannot say exactly when, but i think it is more likely to

come back then to go in the other direction. >> in anticipation of that does that mean workforce reductions are definitively over or can there be more pressure, given the competition across the industry, how are you thinking about headcount in particular? paco: if you look at the reductions in the industry, they are small compared to the slump in revenue. people have been trying to keep capacity for when the turn happens. things will get worse if the term does not happen but as you said, it is more likely to happen then not. haidi: citigroup global market ceo paco speaking to bloomberg's sonali. let's get you the latest from the corporate front. citadels first trading revenue slid from last year. sources say the firm generated 2.7 3 billion dollars in revenue in the first six months of the year after a record 4.2 billion dollars in the first half of 2022. citadels saw a volatility it

fueled surge last year as rate and recession fears generated trading windfalls. ubs will pay about 387 million dollars in fines related to misconduct by credit suisse in its dealings. ubs has agreed to pay 268 point $5 million for the unsafe and unsound credit risk management practices at credit suisse and a consent order with the fed. u.k. regulators have find ubs a record penalty of $112 million. bloomberg learned apple is asking suppliers to produce around 85 million units of the iphone 15 this year, roughly in line with reduction orders in 2022. the company will hold shipments steady despite projections of a decline in the overall smartphone market. the tech giant is considering raising the price of its pro models, which will likely increase overall revenue. elon musk has pushed through without change of twitter's, replacing the blue bird with a stylized x.

he invited his followers to suggest the next logo and proceeded to choose one of the designs, replacing the bird within 24 hours. elon musk plans to adopt it as an interim design and the logo will be refined later. the move is part of the billionaire's vision of chance forming the 17-year-old service into an everything app. shery: take a look at the asian session. mixed picture when it comes to futures pricing and kiwi stocks trading at the moment because we are seeing kiwi stocks down for the first time in three sessions, down 3/10 of 1%. but this as we are seeing futures pointing higher. sydney of course up six times 1%. we had the aussie dollar trading in the narrow range. upswing this month against the greenback for the australian dollar but risks building on other central bank decisions we have this week, not to mention worries about the chinese economy. but perhaps we might get a little bit of a boost their

because the poly bureau has promised countercyclical moves coming from beijing in terms of stimulus. when it comes to nikkei futures, holding steady after rising for the first time in three sessions. watching the japanese yen very closely as it strengthens for the first time in one week. this ahead of the boj policy decision, the bank of japan considering sharp increases to its inflation forecast according to reports. that leading to the japanese currency pushing higher overnight. more to back in the day, sneaker drops meant getting online to wait in line. now with xfinity mobile... ...we get the fastest mobile service and can get the freshest kicks asap. i got this. save hundreds a year over t-mobile, at&t and verizon with the best price for two lines of unlimited. nice job, little sis! they grow up so fast... i'm a fan. from xfinity.

♪ shery: this is daybreak: asia. let's get to the latest in geopolitics. wheat and corn prices surging after russia attacked one of ukraine's biggest ports, ramping up risks facing kyiv's last major grain export grew to end

global supply. a drone attack hit at the port, one of ukraine's biggest river ports for grain. the attack was the latest in a series of moves by russia to stifle ukrainian exports. israel's parliament has passed prime minister benjamin netanyahu's traditional overhaul, curbing the oversight powers of courts. netanyahu and his government say judiciary has grown too powerful and is controlled by the political left. opposition lawmakers boycotted the vote as the bills passage shark protests in jerusalem and tel aviv. the shekel fell the most of any currency tracked by bloomberg. it is one month since china's foreign minister been seen in public. their absence has disrupted a string of diplomatic exchanges with trading partners including the u.k. and european union. a foreign ministry spokesperson

said they did not have information available. haidi: japan's restrictions on a chip technology exports to countries including china took effect this week, part of a push by the u.s. as allies to curb china's ability to produce advanced semi conductors. for more let's bring on bloomberg's executive editor for technology, peter elstrom. what is japan's part in this and how does it fit into the broader u.s. strategy? peter: so what the u.s. and its allies are doing are really imposing a chip blockade around china. the goal as the biden administration has laid it out is to limit china's ability to develop some of these key technologies that they need for a number of things, but particularly military applications. so japan's role in all of this is key because the companies that make the chipmaking equipment are really just in three countries. the u.s., japan and the netherlands. japan this week is imposing new

restrictions on what it's companies can export to china and other countries without a license. they fall into 23 different categories, a broad array of things. we will look at companies like tokyo electron and laser tech. many japanese companies that have dominant market shares in dominant technology. that will be effective and helpful in the u.s. effort to try to slow china's technology rise. shery: how significant is japan's role in the global chip industry? peter: it is significant. it does not have the kind of market share that u.s. companies do in certain stages of chip development, not as high-profile as tsmc in taiwan. it is probably not as high-profile as asm, the leading creator of lithography equipment. chinese companies have a near monopoly in certain stages of chip development, things like wafer cleaning, wafer

development, important stages along the way, so that if china is trying to develop its own domestic chip industry, these will create additional hurdles for them. the u.s. and allies are focused at the high-end, most advanced semi conductors. they will be able to do business with legacy chips used in things like automobiles or washing machines, that are less strategic for military applications. shery: so we know that the rivalry in tech between the u.s. and china has been going on for a while but how did become centered on the semi conductor industry? peter: chips are becoming the lifeblood of the global economy, a bit like oil in the past. chips are used in pre-much everything. we know about smart phones and computers. they are also in the data centers that run all sorts of applications on smartphones. they are used in cars increasingly, especially as we move to electric vehicles, they are more important. they are used in military applications, which is the area

of most concern right now for the united states as they clash with china over a host of geopolitical issues. haidi: bloomberg's executive editor for asia technology, peter elstrom there joining us. let's take a quick look at the creek though and how we have really seen that space start the week. it has been a little bit of a consolidation. we have seen a bit dropping -- bitcoin dropping below 29,000 for the first time in a month. a little recovery as we watch trading at the moment. some of the exuberance over the flurry of etf applications driven by the heavyweight black rock has started to fade a little as we see those applications potentially get processed. we saw the potential for an easing regulatory environment, that is starting to fade a little as well. that is why we are seeing more measured moves. bitcoin is up 75% so far this year. most of the other toque in had a

measured start to the week. ripple falling 7% in monday's session but recovery of 4/10 of 1% now, that of course has just about doubled since the federal judge two weeks ago said a ripple would not be considered security one offered to the public on these exchanges. we are starting to see a little bit of a consolidation in the asset as well. solano up four times 1%, it was up 8% monday in the session. $3000 level when it comes to bitcoin really seen as where we see the consolidation level. the market is really waiting for more developments when it comes to some of the etf applications coming to fruition. i should mention doge coin did extremely well in the session after elon musk changed the twitter logo to the x. he added the ticker logo for dogecoin which spurred speculation that it will play a bigger role in the new rebranded

twitter or x. shery: let's stay with digital assets because when it comes to the market for non-fungible tokens, it's in a slump with global volumes plunging 38% in june compared with one year earlier. you labs helped popularize and fts with the bored ape collection which sold for millions of dollars of the peak of the friendly -- frenzy. let's bring in daniel, appointed ceo this year. he joins us from tokyo where he is attending the webex event. great to have you with us. talk us through what is happening given we are seeing a little bit of a slump when it comes to nft demand. how is that affecting your business? daniel: well, first, thank you for having me. and the way we look at yuko labs in what we do with the club and crypto punks, it is about creating culture on the blockchain. what that means is we are

bringing creators and community together for them to be able to enjoy what the web three media consumption can really do. despite what may be going on in other parts of the market, our community is incredibly vibrant. we just met with the japan community of our bored ape holders last night and they identify with their bored ape and they are passionate about being part of this community. that's what it is, bringing cream unity -- community and content creator together. shery: are you going to increase your presence in japan given what you're telling us? daniel: because we have community members everywhere in the world it is important for us to bring committee memories together and support them. so we are obviously going to have an important presence here in tokyo as well as everywhere around asia. we just announced two weeks ago that we are having our annual community event called apefest, which we've done twice in the

united states. the next will be in hong kong in november. asian-pacific is an incredibly important market for us and an incredibly vibrant community that we want to support and bring together. haidi: you have no doubt been following cases as well as we know that the artist's filing to appeal to the second circuit after that was initially decided against him in terms of the violation of potential trademark from -- held by ms. is this a legal area not to mention the broader regulatory environment that would be a concern? daniel: what is important for us in our communities is the credibility of our ip, which we actually fundamentally rethink how ip is traded. so when you own an nft, one of our and fts, not only do you have the digital asset, you have the commercial aspects where you can actually use the digital asset and use it to create new

businesses. we just announced yesterday a made by apes component, where it gives the nft a little badge that says you are a legitimate bored ape holder and we have 880 businesses are community members have created off their and fts. it's important if you are and owner to protect and defend ip. that is why it is the right thing for the courts to defend that if you actually own the ip and you pay for the ip, you should have the right to commercialize it. any infringement should be protected. haidi: so is collaboration a better way of doing it? i understand it is more subversive to take the ip and do something new with it for the community, but do you think there should be more collaborations with brands and ip holders? daniel: well, what i think is

really revolutionary about the web three space and this is why i am so passionate of being the ceo of yuga labs is it rethink how you amplify brands. in the past when you where an owner of ip, you licensed it for a specific use. in web three, you are bringing the community, the social aspect together to help create these brands. that means the community helps amplify the brands, they build businesses with them. that is why the bored ape community is so strong and our brands have been able to be global in nature as quickly as they have. that also means that we actually want to participate and collaborate with some of the biggest ip and brands out there. so we have a deep collaboration with chi, for instance. they are actually incorporating some of their offerings to our community holders. but it also means that you have to be a legitimate owner of one of our nfts because the

community is helping to build the branded we want to support our community and bridge that along. shery: we heard earlier from sega that they are pulling back from web three gaming. we have heard from other gaming studios as well, cooling on the sector. how will that affect yuga labs in convincing mainstream audiences? daniel: well, as you may know, i was the president of activision blizzard, one of the largest companies in the world. the reason why i came to yuga labs was i realized how important it is with gaming being now literally a social platform, to give the players -- give influencers the capability to bring their personas, their social personas which they have created on games, across multiple platforms in multiple games. that portability of your identity and being able to

participate in the economy is a core imperative that i think is fundamentally going to re-change and restructure how gaming and other industries in the media space are going to evolve. and for us, gaming is one of those experiences that we are bringing to our community to amplify the community. we are not backing down. we have already seen it in the games that we launched, the level of engagement, the monetization. and also just the reeks that our games provide gives users in the web to gaming space a glimpse as to what web three can fundamentally do. and a little like how the internet was in the early days, 93, 90 four, when you try the internet you realize how revolutionary it's going to be, the same thing happens with web three. that is why yuga labs is committed to bringing new experiences to the world communities.

haidi: great to have you with us. with regard to binance, the ceo are planning to seek a dismissal of the cftc complaint. their intention is to seek a dismissal as outlined in the filing. we did see the cftc charging binance toward the end of march with -- and its founder with willful evasion of federal law and operating an illegal asset derivatives exchange. this was seen as the most forceful move yet to crack down the crypto exchange. binance as well as its see the low -- its ceo, the trade commission alleging that binance and its ceo broke derivatives rules to be the world's largest

trading platform. we are hearing that binance and its ceo are intending to seek dismissal of the cftc complaint. we have seen financial watchdogs around the world really coming down hard on the sector in recent months and binance which is the world's largest digital asset exchange, coming under some of the heaviest scrutiny. we will continue to watch this developing story. we will bring you new developments as they get to us. much more to come on daybreak asia, this is bloomberg. ♪ i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

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shery: welcome back. samsung says it has signed an agreement to build a second battery plant in the u.s.. that follows a prior deal for two and half billion dollar battery factory in indiana. samsung sdi says 2027 with an initial capacity of 34 gigawatt hours. so lantus owns the jeep and ram brands. they pledged to sell 5 million electric vehicles by the end of 2030. chinese battery makers see atl reports later tuesday with analyst expecting a second-quarter revenue to grow by double digits thanks to a recovery in china's electric vehicle purchases. analysts see margins above 20%, boosted by stabilize lithium

prices and brisk business outside the clean car batteries. haidi: the global energy transition is driving a significant uptick in demand for metals and minerals. the supply of many of these raw materials is constrained. the latest assessment by bloomberg nef shows australia is best prepared to boost the supply of key minerals including lithium and rare-earth, topping china in canada. let's bring in metals analyst. what really makes australia stand out, given that we know that china is sitting on significant supply of some of these ingredients? yuchen: our study considered 10 countries of various economic conditions this year and australia, canada and china emerged as the top countries in the rankings. out of the three countries they are well endowed with mineral resources when we compared the quantity and variety of known reserves, which are part of the mineral resource that can be

economically mined, austria tops the ranking. australia apart from reserve sets out in its mineral strategies. in june the austrian government released its 2023-2030 critical mineral strategy which i'll lined a well-rounded policy approach with targeted financial supports to strengthen its critical mineral supply chains. in the country's international partnerships with major demand centers including the u.s., japan and india further guaranteed its role as a global powerhouse for materials. shery: so let's put this into context. what materials are we talking about? in which countries dominate each supply? yuchen: yes, when we talk about energy transition metals, we are talking about battery metals like lithium, cobalt, nickel and graphite. we are also talking about copper and aluminum which are essential to energy infrastructure, as

well as rare earth elements which are the key ingredients to technologies from wind turbines to electric vehicles. in one key challenge facing the supply of many of these metals is the high geographical concentration of production. for example, almost 70% of the worlds cobalt is mined in the drc and in china, it is resolve for more than 65% of the world's mind graphite as well as rare earth elements. this lack of diversification is even more apparent when we look at refined supply. where china is the dominating processing hub for a wide range of battery metals and base metals. haidi: what are some of the immediate steps that countries could or should consider taking to raise critical mineral supplies? yuchen: each economy faces a unique set of challenges to

raise their mineral supply but there are common steps that countries could consider. first being expending their mineral -- expanding mineral explorations to unlock geological potential and rebrand the mining sector to attract both talents and investments into the country. in incentivize mining activities using financial support. and finally, streamline the environmental permitting processes to smooth the new elements. shery: bloomberg metals analyst yuchen. more to come on daybreak asia. this is bloomberg. ♪

♪ shery: japan's latest earnings season may well provide a reason for traders to pivot from exporters toward companies driven by local demand. let's find out why with our senior asia stock reporter. is this just the understanding that we are going to find more success stories on the transmission of price hikes to consumers? hideyuki: good morning. that is possible scenario for some market players. you know, the interesting thing about japanese market today is if you look at what happens during previous quarter, the rally has been led by basically companies with global exposure.

but when you look up earnings expectation, it is actually domestic demand driven companies that are doing far better. the forward earnings focus by analysts for domestic companies have grown 28 cents this year while the earnings expectations for global companies are -- have been almost stagnant. so domestic demand led companies are in better positioning when it comes to earnings announcement. haidi: one of the big cohorts were the trading houses. is it going to be a come down for those valuations, given the more dire kind of domestic i should say sort of external demand commodities demand picture? hideyuki: sorry, are you asking about trading companies? haidi: that's right.

are we likely to see the rally continue or is there going to be a correction there? hideyuki: many people think there is a chance of correction, because trading houses are probably one of the sectors that are likely to see a disappointing earnings. because commodity prices have been very sluggish. despite that, share prices have been rising because of the excitement of warren buffett's investment. many people think that they are probably one of the biggest candidates for facing correction. haidi: bloomberg senior editor hideyuki. we are five minutes away from the cash trading in major markets including sydney, where we are seeing a pretty optimistic started trading. 4/10 of 1% higher. asian earnings are set to gain on the back of optimism on the china stimulus announcement.

of course, still targeted toward the property sector and consumption, but that was really what we got out of the euro meeting. a bit of downside for kiwi stocks and we are looking at a bit of a mixed start to trading when it comes to japan. coming up in the next hour -- tells us why japanese policymakers have a progrowth tone with fiscal and monetary measures, plus south korea's growth on the back of a hick up in manufacturing. anz's take later. the market opens in sydney and tokyo are coming up. this is bloomberg. ♪

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not to mention the euro area giving rise to speculation that perhaps their central banks may be nearing the end of their tightening cycles. we are expecting 500 companies to report earnings this week. haidi: not to mention we will get that first reaction when it comes to the bullet bureau initiatives boosting support for the property sector, boosting support for consumption, still not the large still stimulus that perhaps a lot of market watchers were hoping for. better than nothing when it comes to an initiative to try to support chinese growth. shery: we continue to see measures to support the japanese economy and that coming from the boj expected to hold steady when it comes to that decision on its altar easy monetary policy. we are seeing the nikkei holding steady at the open as the japanese yen is around the 141 level after gaining ground against the first time in about one week or so. of course we are watching the results from retailers being

pretty strong. we are watching other stocks geared towards consumption. we are watching the strength of the yen on reports that the bank of japan is considering sharp increases with inflation forecast. jgb yields because it's been nearing that half a percent boj tolerance limit. this is we continue to see treasury yields climbing and you can see the 10 year yield around the 387 level. we saw yields climbing across the curve. take a look at how the kospi is coming online after gaining ground, extending those gains on the asia tuesday session. the one was for lecturing against the u.s. dollar given the policy decisions that we have by many central banks around the world. we are seeing it at that 1280 level after we had the second-quarter gdp numbers out of south korea expand to the .6% quarter on quarter, which was slightly more than economists had expected. haidi: take a look at the first few minutes of trading. in the staggered open here in

sydney, we are seeing quite a bit of upside about a quarter of a percent higher. they are watching the aussie dollars 67 33 expected to get more of a boost when it comes to any further china stimulus measures, but certainly the slowdown in the chinese economy and slowdown in external demands for the economy are two forces that could cap any further gains in the aussie dollar according to a number of different ethics -- effects analysts. we are also watching oil markets, we did really see some gains when it comes to wti in the session, brent crude up by a 10th of 1%, still holding close to that near three month high. china is moving to bolster growth, good news for the energy patch as well as the broader outlook being supported by some refinery issues as well as a potential for more supply cuts from opec bus. we did see wti and brent closing above that 200 moving day

average at the start of the week. that was the first time in just about one year. watch for some of those energy names in the energy session today. shery: let's bring in our next guest. japan remains a core equity market for global investors, now the head of asia equity strategy , always good to have you with us, how big of a driver will the japanese yen before equity markets in japan? >> what we can see over the last few months is the correlation between the yen and the equity market has decreased. and what we cannot serve over there very long term is that it's a time where you see the inflation rising, you have this correlation naturally declining, so the story on japan, especially after there was an increase in the share price we

saw this year is going to be very much how sustainable the increase in prices going to be. shery: despite the fact we had those price gains in japan we sell results from retailers coming in pretty strong in japan, are you betting on the consumption story in the country right now? >> domestic consumption is one of the core feels that we have on japan, and we have a pent-up demand, you have tourism, which is having a very strong recovery, you have a very large amount of savings, and you have the variation, which are still not very demanding compared to the rest of the market, so domestic consumption is definitely one of the things that we have in our investment strategy in japan. haidi: what about some of the winners we saw in the first half, do you still put money into the -- money into ai and in

commodity trading houses or is the external demand picture going to create some issues? >> not only in japan, but for asia, we have taken into the second half of the year, somewhat less aggressive view on the technology and on the semiconductor, we think that some part of the semiconductor especially on the ai momentum is going to remain quiet -- but the id that we put for the second half is a driver of growth to diversify and not only coming from the technology, but more from the domestic driver and domestic consumption in japan is one of the story and you have the other in asia. haidi: are you convinced by the

stimulus and support measures, multitudinous says it's been, but certainly on the smaller side for scale that we've seen out of beijing? >> the expectation is not really high on what's been to come out of the meeting yesterday. so we have seen a number of announcements, and that is fine, but, what we see now is that there is a growth target of 5% is in a threat. we could see the economy struggling a little bit to reach this 5%. what i would say is if i look at the theme from the equity market point of view, you have, on a number of sector, especially on the offshore market, some

evaluation which are extremely low, which are already pricing some downgrade in the earning, and we could see at some stage, and that's something that we could see in this quarter, some kind of rebound in the market. shery: we saw the chinese adrs jumping in the new york session as this chart on the bloomberg shows, if we see that follow-through in the chinese equity market today, are you telling us that perhaps this is not sustainable? >> no, we were talking of japan. it's very interesting to compare what's happening in japan and in china, where japan is outperforming because you have this salary inflation coming in on the other hand you have china underperforming because of the concern on deflation.

and we have some stimulus coming, but it is not going to change the overall picture of a deflation risk in the coming years. this is from a strategy point of view. this is what's really going to drive the equity market in china. haidi: you have downgraded korea among the basis of also showing more restraint when it comes to chip stocks, but upgrading india, do you see india as being a primary alternative to flows out of china? >> we start to see this on the flow, although it is still from a lower level. fundamentally what we like in india is a domestic driver, especially the start of pickup in the private investment of the capex in the private sector after some very large spending

and infrastructure. this is where you could see some positive surprise in earnings. so, when it comes to the second half of the year, and what is going to be the main driver of gross on the equity market, it's not going to be only a story of hardware, technology and semiconductor, but a little bit more broad-based in india is very much a part of the story. shery: head of asia equity strategy, associates editor. thank you very much for joining us today. one of the things we are watching in today's session, laser tech, which is jumping in the tokyo trading session. this after we had adrs climbing almost 6% in the new york session. the japanese chip equipment maker posting preliminary profits that beat analysts estimates. also announced guided -- guidance. below profit for the current

year but we are seeing the positive reaction in stock trading today. china's politburo signals further support for the trouble in the real estate sector profile short of announcing large-scale stimulus. analysis with bloomberg economics just ahead. this is bloomberg. ♪ i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

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haidi: china's top leaders have signaled more support for the troubled real estate sector but still holding off on announcing large-scale stimulus measures. let's bring in our bloomberg economic chief economist. we continue to see this feet of targeted measures, the decision-making seems to be taking longer than previously what we've seen. what does this tell you about the capacity that the leadership has to ease from here? >> expectations of this politburo meeting were high. remember, second-quarter gdp data was pretty disappointing in the casing of chinese economy requiring a stud ghost -- a slug of stimulus to regain momentum. what did the politburo do, they hit all the right notes, they talked about boosting confidence, supporting the private sector, resolving local

government debt, providing support to real estate, even as they recognize the serious structural problems for the sector. what was missing was any suggestion of the kind of big bang -- big bang stimulus that greeted past china down terms. why is that the case? i think the difficult reality for china is that they are now out of stimulus space. not a lot they could do with monetary policy against the backdrop of already low interest rates and very high debt. not a lot they can do with fiscal policy against the backdrop of serious problems for local governments. shery: what is that now mean for china's growth target of about 5%? >> let's remember, that bank 5% target is really not very ambitious. normally we think 5% growth, that's pretty robust, but 2022 growth was hammered by lockdowns and shanghai and other parts of

the country, that meant there's a really significant base effect which gives you an artificial boost to growth this year. so we think that china's government, even with this drip, drip stimulus rather than big bang stimulus, will easily clear the 5% target. the question is, what do the woes of the chinese economy right now say about the trend going forward. is 5% anything that china can now sustain or have some analysts fear we are in a path to significantly lower annual growth rates in 2024, 2025 and beyond. shery: here in the u.s. we have been concerned about a potential recession, but it seems more and more economists do not expect a severe recession or perhaps they are mayor -- more confident a soft landing could be achieved? >> that's right, and i think we've had a survey, business

economist suggested that perhaps even a majority of them now believe that a recession could be avoided in the year ahead. bloomberg economics view, the view from u.s. team remains that a shallow recession starting in the fourth quarter is the base case, why is that? the main reason is all the tightening the fed has had to put into the economy to control inflation. if you look back at history there is not any cases where the fed has hiked as much is that has this time some five hundred basis points and probably more to come at a meeting this week without tipping the u.s. economy into recession, certainly the data so far has been surprisingly robust, but in the end, we don't think this time is going to be any different. haidi: we are starting to see core cost like energy, food,

wheat starting to tick up pretty significantly. does this tell you that the endgame is not necessarily going to be an easy stretch when it comes to inflation and how rates are set from here, particularly with el niño all but declared at this point? >> inflation has come a long way down from its 2022 peak, our view is that the last yards back to target are the hardest to travel. why is that, it's because the last bit of inflation is the sticky piece, the peace that comes from higher wages, the peace that requires, unfortunately, in increase in unemployment and a mild recession to bring it back under control. you also mentioned other potential shocks, we following the adverse events in russia and ukraine. el niño is another risk going forward. so even without those wall

whether shocks, which could add an additional boost to inflation, we think the last piece of it is the most difficult to deal with, with the risk of those additional supply shocks, the fed could end up having a tough second half of the year. shery: bloomberg economic chief economist joining us today from taipei. the yield curve in the deepening inversion has been one of those signals of recession that we've been looking at very closely. the economist saying that perhaps that's not the signal we are looking for, that perhaps the yield curve is signaling the slowdown in inflation that typically goes together with a recession but not the actual recession itself. this coming at a time when we are headed toward a priced in rate hike this week already, that leading to yields to push higher in the asian session. we see downside for the two-year yield as well to therefore 86 level, this also following that jump that we saw after the

two-year no auction drew the highest note since 2007, but really all to do with the fed rate path and how investors are waiting, this hike, this weekend perhaps borrowing costs stay elevated fray while. bank indonesia also expected to look destinations falling inflation rate on tuesday and hold policy study to support the rupiah. our global economic and policy editor kathleen hays year with more. classic emerging-market dilemma. you have inflation, you want to cut, but then you have the pressure on the currency. kathleen: they've had their rates steady since january. let's talk about inflation. this is what is so striking. if you look at the inflation rate, they are well within the target. there target 2% to 4%, the headline is down in there now, the core rate is falling in there. let's go to this chart and this

is the one that just shows you how much rates were hiked and how they held steady. you are supposed to hold steady again for the fifth time at 5.7%. in the rupiah has been strong, but as weekend a bit. people are looking up the possible fed rate hike expected fed rate hike in the think indonesia is expected to say, wait a minute, even though it's kathleen just said our inflation rate is down well within target and has been since may, we have to hold steady. we have to not move because we don't want to risk heeding the rupiah. there's that nonexistent inflation issue that tells a story so very well. what are we looking to hear today. what will bank indonesia say about the rupiah? they are expected to acknowledge -- expect exports down 21%, that's a source of pressure on the rupiah. dollar reserves at a six month low in june.

they do have a bunch of new tools they can use to shore up their currencies, what will they say about that? it's widely expected nothing will happen on the key rate, expected to be going there. as the fed signals potential for more rates, that something that may keep them in the box again. it would be very interesting to see if he gets any hints about what he has to see, how a strong rupiah has to look at how much the fed has to signal a long pause before the bank indonesia will finally be able to cut what looks like a rate that could and should be cut by now. haidi: bloomberg's kathleen hays and we are setting up for a big week of central-bank decisions. the fed and the boj at the end of the week as well as the ecb, a conundrum when it comes to european policymakers given how soft those pmi's really work, particularly when it comes to the sluggishness in the service sector. all of that, we saw it sending that rally in european bonds as

well as u.k. gilts, but the downward pressure on the currencies of europe falling to the two week low. watching currencies again in the current session. look at how european equities are shaping up. euro stoxx 50 futures looking pretty sluggish. german deck features a temp of 1%. we did see it have trading to the week. it is a week of big earnings, big central-bank decisions and investors just tiptoeing around the sidelines. we also saw spanish equities falling with that inconclusive election result over the weekend. so another one to watch as we head into trading today. you can get a roundup of the stories you need to know to get your day going. bloomberg subscribers can go to dayb on your terminals. available on the mobile in the bloomberg anywhere app. you can customize those settings as you get the news on the industries and assets that matter most to you. this is bloomberg. ♪

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shery: citigroup says the longest slump in investment banking industry has ever seen is beginning te's. cities global market ceo told us exclusively about the outlook for the banks trading operations. >> we have to remember trading businesses are still good if you compare over industry trading revenues for what they were in 2020 or 2019. the numbers are significantly higher. so it's not bad. it looks worse if you compare them to 2022 years. they are still really healthy, and what troth that health in revenues is still around, we still have uncertainty in rates. there is uncertainty about the economic situation. enough trading in readjustments of portfolios that have to happen, and reasons to be

negative are going to be in the coming quarters, but i don't know. quite some businesses and commodities have had a fall off over the last several months, however, things like rates, how much of a structural headwind or tail end is that to the industry now that we have a new economic regime across the world? >> i think rates is a positive part of the story because we have to remember we've had many years with zero rates, we had uncertainty about what rates were going to do, and coming back to the rates business we are concerned about what they are going to do. so i think rates is going to continue to be a very active part of the markets. >> what about investment banking, there has been a prolong some, headcount reductions in many wall street firms including yours. at what point do you see the needle starting to turn or do

you think it could be worse before things start to get better? >> i don't think you could be a lot worse because it's limited by the need. the need is there and the need is accumulating with months of inactivity. even the market is not great. it will take over and it will start adding revenue. it has also been one of the longest slumps on investment revenues that we have experience. it also follows the financial crisis. the reason for those activities has not gone away. we cannot say exactly win, but a tickets more likely to come back then to going the other direction. >> in anticipation, does that mean workforce productions in that space are over or can there be more pressure. given the competition across the industry. how is the headcount in the investment bank? >> there could be more pressure but if you look at the reductions in the industry, they

are small compared to the slump in revenue. people have been calling back and are trying to get capacity for when it happens. i think things will get worse if it turned doesn't happen, but i think it's more likely to happen than not. haidi: city -- citigroup global market speaking exclusively to sonali basak. more to come on "daybreak asia". this is bloomberg. ♪

haidi: south korea's economic growth has accelerated on the back of manufacturing offering a sign of optimism is a central banks keeps monetary policy restrictive. gdp advance extent of a percent

through june for the previous quarter. let's bring in the economist for her views. is this a sign of resilience for you? >> it's pretty decent, we spoke of pickup in q2, but if you look at the details, things don't look quite as strong as the numbers suggest. you look at human q, all major components actually show signs of decline and the only reason why is because it was relative to exports with the net exports. haidi: when you take a look at the first 20 days in the export numbers that have been consistently bad for months, does it still tell you that ultimately the way to weaker extent of demand is going to be a major factor? >> the near term economic outlook does look a quick check

-- a bit challenging. the available data that we have for q3 is solid. we had exports for the first 20 day in july. we saw exports contracting. and even if we look at the numbers and later terms, they still equate disappointing, and until we see signs of the upturn in the chip sector, it's going to be a very meaningful recovery in 30 years of exports. if we look at meeting indicators, to prices, inventories for the goals, they are not signaling the imminent vitals on the cards. shery: the be ok has continued to hold policy study for the past four meeting so what can we expect from them next? >> we think that despite the hawkish stance from the be ok, we don't think that there will be further rate hikes. dave mentioned growth is very

sluggish, but the constraint for the be ok in the easing is that, number one, domestic inflation is still quite elevated, it's not back to target yet, and there's also several considerations depending on what the fed does, there are concerns that they are going in the opposite direction that it could potentially exacerbate pressure on the lawn. shery: is at the same concern for the bank of indonesia as well? >> indonesia's inflation dynamics is pretty benign. it would go even further and it looks like it's going to soften some more in the coming months. the problem is that the conditions are not conducive to cut rates at this point, you look at the rupiah that has started to come under a little bit more pressure again, so today it's going to meet everything on the policy is going to stay consistent and

they will continue emphasizing a focus on rupiah stability. shery: how does the trade picture look for these emerging economies, given the pressure that we've seen like already in south korea. >> it's different as it gets dominated by a commodity. there's a beneficiary into last year, and after this commodity, sometimes trade in indonesia is deteriorating, and that means that indonesia used to enjoy and operate a buffer. and now it's sitting. this is why it kind of limits its flexibility when it comes to prioritizing conditions when it comes to monetary policy. haidi: when you take a look at the southeast asian economies, and you cover indonesia and thailand, how much of an impact with their be from upright -- prolonged chinese slowdown if

more effective and broader stimulus is more forthcoming? >> we are already seeing the impact of the chinese curve on the rest of asia. thailand was supposed to be one of the key beneficiaries on china's reopening, especially the tourism channel, but chinese tourist arrivals to thailand was -- of the last three months, it was hovering at about 30% of pre-pandemic levels. so, we are not getting that positive spillover, that's what we were initially anticipating. >> of course the delay in formation of government in thailand is dragging on. at what point does this start to not just dent business confident but weigh on broader economic activity? >> it is probably already weighing on economies and the longer it is it tracks on for the implication for budget disbursement. so the budget cycle for the

fiscal year for thailand starts in october, but there are things that look like we will see a minimum of three and not six months delay in budget spending, so what that means his current spending can go ahead but knew investment projects are going to be affected. there will be the disbursement for those. >> really great to have you with us, looking into those key central-bank decisions including bank indonesia. it's look at our equities. we are getting a bit of a boost from that china stimulus optimism around equities that we are trading at the moment. although we are seeing when it comes to the nikkei 225, a bit of a turnaround, 3/10 of 1%, the kospi also looking a little bit flat. australia still seeing a bit up of 3/10 of 1%, as well as a bit of an uptick in the aussie

dollar, always a proxy when it comes to trading on sentiment arising out of china. we are of course looking ahead at high great the china open is and whether we see sustained positivity that we saw in the overnight u.s. session were chinese name the u.s. really saw that big jump era kiwi stocks down by's extensive 1%. that sentiment is starting to take a bit of return would broader asia-pacific markets down by just about a 10th of a percent at this point. blackrock's global fixed income cio says the high-risk premium are not wide enough to entice investors. they told us why investors should be considering other areas of credit now. >> part of the argument against high-yield has been, the spread is not interesting at all, but you can create them and there are bunch of parts of the fixed income market. european high-yield, if you are a dollar investor you swap it back to dollars any get paid well into the ninth's.

that strikes me as fair. parts of vmware you are taking risk in mexico, sovereign risk in mexico and you are getting paid double digit local rates. in the securitization market is interesting. clo's not taking a lot of credit risk. the nonagency mortgage market is the same for the same reason in the residential mortgages in great shape. if you said, what do you think of high-yield and high-grade spreads, if you are just buying that current spread, that's a fair argument. most of the yield you get comes through the risk-free rate. that's part of the idea, you can hide in parts of the front end of the yield curve and get a lot of kerry. by the way -- i just was going to say one thing on the etf, you can create a seven with a duration of interest rate sensitivity is about two. so that's pretty appealing in an environment where you want to take a lot of great risk out the curve.

>> he mentioned mexico and i want to talk international because i'm looking at the etf bank and 22% of the fund is non-us credit. so when you think about the global fixed income market right now, where is most of the opportunity? will you find in u.s. bonds or how much are you looking to overseas relative to where you usually tilt? >> the u.s. is always -- fins -- fixed income is pretty hard not to have the u.s. as a core part of your portfolio, particularly when you have the yields. the front of the yield curve is -- the averages -50, negative 60. it's hard not to have a core part of your portfolio in the u.s.. the european credit, investor great credit, european high-yield, swap back to dollars, you can buy a lot of reasonable companies without going around the yield curve. particularly as a dollar investor. the other being em, mexico, brazil, colombia, you are

getting paid local rates as long as you are willing to take some currency risks in em, it's pretty darn attractive. not only will it not hurt you from hedging, where they have been a real help with money flowing into mexico. it's a big winner in the deglobalization dynamic. same in brazil, doing really well. shery: blackrock global fixed income cio. if you missed any part of that conversation, tv is your function, you can watch us live and dive into any of the securities on bloomberg functions that we talked about and become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ the first time you made a sale onlin was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado.

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>> opposition lawmakers boycotted the vote as the bill's passage sparked protests in jerusalem and tel aviv. it also fell by the most among major currencies tracked by bloomberg. haidi: china's top legislative body is going to discuss official personnel changes as investors weigh clarity on the new central bank governor and the whereabouts of china's minister. let's bring in bloomberg's asia government and politics correspondent. rebecca, what sort of personnel changes are we talking about here, and i guess the implications at such a tenuous

time for the chinese economy, the pboc is one we are watching very closely. >> this is quite unexpected, just a one-day meeting for the national people's congress standing committee. this is the body that when the full npc is an in session, is responsible for formally appointing and removing figures. it's important into counts. the first is whether we see the extension of --, who's is expected to take on that stock -- top job at the pboc. the second is china's foreign minister who's been out of the public eye since june 25, being very closely watched, and there's a couple of options today with that meeting, so either we hear that nothing changes, in which case we no mention of him, in which case he's likely to still be that minister for another month, two months or indefinitely, but it really depends on what is going on behind the scenes, or alternatively, we hear that he is being removed, in which case

that would indicate there is some issue potentially with his health, or some other issue that has come up. these are two scenarios, really big, very closely watched. shery: what's the implications for the up -- for the economy and policymaking given all of this? >> i think the disappearance has generally underscored this fear around china's policymaking being something of a black box and impossible to determine. we've had chatter from diplomats in beijing and elsewhere around the whereabouts of him for several weeks. really kind of somehow captured the imagination, and in the information vacuum that the government has allowed to flourish. all sorts of speculation has been allowed to emerge, and is a really critical merriment -- moment because he is trying to stabilize his economy, that growth we are seeing start to splatter, as well as stabilizing

those diplomatic ties with countries like the u.s. and its allies, which increasingly view china as a competitor. on the one hand, trying to roll out or reset this global relationship, but the other, having this top diplomat missing in action, the person he's relying on in some ways to helm the implementation of these types of ethics. particularly with the day to day business of diplomacy things like meeting, greeting, having communication with other visiting foreign ministers and business delegations. >> you have really seen that impact these high-level meetings were to be held with representatives from the u.k., the eu have now been put on hold. how are we seeing the leadership maneuver? who's potentially stepping in as his whereabouts are still unclear at this point?

rebecca: it has been interesting to see how figures have stepped in. there is a possible option. this is the deputy, although his one time superior as a spokesperson at the foreign ministry. he has leaned in, he is a well credentialed figure to hear taken over seas, overseas ambassador roles. we've seen him step in, he stepped in at the foreign minister meeting, for example. so he's junior to him, potentially could step into that role, we've also seen the equivalent seeing figure to him, also stepping into some of the appointments in the meetings that he has not been attending to. shery: bloomberg's asia government correspondent rebecca. take a look at how markets are trading across asia right now. we are seeing materials, energy,

real estate leaving the gains -- leading the gains in the session. also, the msci asia-pacific index being pulled lower by health care communication and tech stocks today. we have a little bit of a mixed picture across markets with a nikkei of the topics barely holding onto gains. we see the kospi up the 10th of 1%, and kiwi stocks losing ground. be sure to tune into bloomberg radio to hear more from the day's big newsmaker getting in-depth analysis from the daybreak team broadcasting live from our studio in hong kong, listen through the app or bloombergradio.com. plenty more ahead. stay with us. ♪

shery: second-quarter earnings reported tuesday with revenue expected to grow sharply things to a recovery in china's ev purchases. that's get more details from our asia transport reporter danny lee. how stronger we expecting these results to be? >> good morning, we are expecting second-quarter revenue estimates of around 95 billion yuan in on the net income side

we are looking for around 10.5. really robust set of gross margins of somewhere between 25%. so this is really a story of recovery in the second quarter for the world's biggest maker of electric vehicle batteries. electric vehicle sales in china has also recovered somewhat after a terrible first quarter in the market. so we are looking to see that robust set of numbers in therefore see atl. but importantly, because they supply a lot of automakers and also ev makers and what we can see in the numbers as a part of the recovery story is also the strong sales of tesla, see atl relies on tesla for about 10% to 12% of its revenue, and therefore we have tesla reporting record sales, that's going to be a big benefit for see atl feeding into that story

that they are benefiting from. on top of that see a cl also being helped by retaining onto a strong market share, domestically despite strong competition with smaller competitors trying to undercut them. so we are seeing get in the numbers. we hope and expect to see the numbers of a robust set of figures overall. haidi: also betting on ev's and investing in battery production is tell tom motors. what are we expecting from those numbers? >> absolutely, one of its crown jewels is the jaguar and land rover brands. stating revenue of around one trillion rupees, that's 12.3 billion u.s. dollars. looking at the net income side of around 300. that is a strong change on the net income side after losing 650

million in the same quarter last year. but when you look at the top line, that is similar to its previous quarter, a very strong set of numbers and this is all feeding into a robust set of fair -- robust set of sales in particular. we are looking to see that benefit from the jaguar, land rover business overall as it continues to gain momentum for a very critical time as it were for them transitioning to ev, clean car lineup. haidi: our asia transport reporter. let's get you caught up with the other headlines. citadel securities slid 35% from last year. sources say that generated 2.7 3 billion dollars in revenue the first six months of the year after a record $4.2 billion in the first half of 2020 two. citadel saw a volatility food search last year as rate hikes

and recession fears generated trading windfalls. ubs will pay about 387 million dollars in fines related to misconduct by credit suisse in its dealings. ubs has agreed to pay $268.5 million for the unsafe and unsound counterparty credit risk management practices at credit suisse in a consent order with the fed. u.s. regulators have found ubs a record penalty of $112 million. bloomberg has learned that afterwards ask your suppliers to reduce around 85 million units of the iphone 15 this year, that's roughly in line with production orders in 2022. the company will hold it steady despite global rejections of a decline in the overall smartphone market. sources say the tech giant is considering raising prices of its pro models that will likely increase overall revenue. elon musk has been through with the change of twitter logo report -- replacing the twitter logo. the billionaire invited his 149

million followers to suggest an logo one proceeded to choose one of the dog -- the designs replacing the bird within 24 hours. musk says he intends to adopt it as an interim design. it will be refined later. the move is part of the billionaire's vision of transforming the 17-year-old servers into and everything app. shery: take a look at how u.s. futures are trading early in the asian session. not a lot of movement but a little bit of downside after u.s. stocks gained ground. in the wall street session we have disappointing economic data from the u.s. and the you are -- and the euro area adding to those wagers. central banks are nearing the end of their hiking cycles. this coming at a time when we have around 170 companies in the s&p 500 reporting earnings this week. jp morgan talking about renewed volatility given the delayed impact of aggressive interest rate hikes. we also heard from goldman sachs, david saying the risk to

valuations are now skewed to the upside. haidi: upside is potentially where we could see in the short term, when it comes to greater china and hong kong and shenzhen listening and that -- in the next half an hour. when it comes to futures up by 1.5 percent, really expecting to get that robust carry through to those u.s. listed a be ours for chinese companies that surged on the stimulus announcement, even though was more targeted than a lot of investors were hoping for. that's it for daybreak asia. the china open is just ahead. ♪ re a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it.

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yvonne: 9:00 a.m. in hong kong and taipei welcome to bloomberg markets china open. rishaad: looking at our top stories, markets are getting a