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kathleen: you're watching daybreak a show coming live from new york and hong kong. haidi: we are counting town to asia's major market opens. the top stories, asian stocks to start the week under pressure following mixed signals in friday's jobs report. inflation pressure from the u.s. and china. will prices are nearing highs for the year after six straight weeks of that. saudi arabia extending as his prime minister says he will not pursue the judicial overhaul. annabelle: asian stocks are starting the week under pressure and we see futures to a weaker start. we are one hour out from the open in sydney and tokyo. looking at key events on the horizon the u.s. rally

evaporated at the end of last week. we will have more on that in a moment but in asia key events include consumer prices data from china on wednesday. we could see deflation taking hold officially in the country and other factors as well. japan has got the boj releasing the summary of meeting minutes. investors will be passing over those lines carefully. any clues coming out around the prospects for exiting the program of yield curve control. japanese yen is holding steady as investors await. in terms of what else we are watching, change on. take a look at the big name companies reporting over the coming days across asia. earnings season is winding down in the u.s. and europe. in asia it's starting to kick off. $2.8 billion of market cap confirmed by reporting over the coming week. key names, alibaba, sony, just

some of the names. at softbank in the mix. let's take a look at what is happening in the rest of their region in terms of u.s. ones as well. we've got futures kicking off. mild gains at the start of trading. it's that story of a mixed jobs report that came through. fed officials are mulling the outlook for rates. brent crude, wti little bit higher. details on why that's happening but in terms of what elsewhere watching, it's in inflation report kathleen that is due out and traders are anticipating those numbers as well on thursday. kathleen: one big report after another, so let's get a preview of the week ahead. tension turns to the u.s. inflation -- inflation prints. chief rates correspondent for asia garfield reynolds joins us. garfield, we spoke to john, a longtime fed watcher.

at city, imf deputy director, on and on. he thinks the labor market is easing enough. he's not worried about rising wages. he thinks the fed is going to have to pause in september and wait to see what happens next. markets just do not seem to know quite what to make of this. what is this going to mean, this inflation report in the next few weeks, waiting to see what the fed does it do. >> part of the whole problem precisely is we are waiting for several weeks still. we do not know if there is going to be any definitive piece of data and certainly that jobs report last week was far from being it in either direction. jobs growth slowed but the unemployment rate ticked down again and we had those strong wage gains. so it's a tough one, the calls

are tough because the market in the fed are at cross purposes. the fed is noticeably wanting to be able to hold rates. that would fit in with their name. it's been let's slow inflation down enough to kill it off, but without causing a recession. they are convinced that they can see the outcome as very possible. it's a difficult outcome to achieve but they could see it as being possible. and with that would go the idea that you are going to stop hiking rates, unless the data goes back to where it was last year, when you had continually high inflation, very robust jobs numbers. the signs were there that you needed to keep hiking, otherwise you're going to get into trouble. they want to be able to stop, that means the next battlefield and investors are already starting to get a taste of that

in some of what went on last week, the next battlefield is how long do they keep rates elevated. remember, we still have bets on some very rapid rate cuts next year. a few months ago we had bets on rapid rate cuts this year. so that remains the expectation and investors are always impatient to know, not ok how long are you going to hold rates, but when are you going to start cutting? one are you going to give us what we want both as far as bond investors and equity investors go? that is the tension with the cpi report and also those bigger treasury options that are going to help to create a bit of extra volatility. haidi: what do you make of oil rally? how much upside risk is there? >> still plenty of upside risk because the backdrop for the

surprises with the bond market, it's been hit by the stock market. it's been the u.s. economy and other economies out there remaining resilient after these rate cuts. at the seam time, you have heard opec-plus is obviously a little bit like herding cats for those who are running it. so i different times they have struggled to be as disciplined on what sort of production they are putting out but they have more or less come find -- they need to avoid going to hard, too quickly on the production front. with that being the case, you've got potentially stronger demand than many expected. you've got not as -- you've got limits on supply. so that creates a world where the expectation should be to

keep rising until something says stop. until it gets to a level where opec starts to think we can be happy with where it is now, we can boost output so we get more overall revenue coming in or on the others of things, until you get some sort of problem appearing on the demand front. if you do get those forecasts for u.s. recession or elsewhere which have proceeded in the background, if they come back that would be downside risk. at the moment the sort of goldilocks assumption about the economies, it feeds into the assumption that the path for accrued oil is up. haidi: always good to have your thoughts. chief rates correspondent for asia. let's get you to key political stories following in ukraine. drone attacks on a russian naval vessel in an oil tanker are

signaling rapidly expanding war. putting at risk commodity exports by the black sea. an intelligence firm sees rates blooming and says the cost of shipping russian oil may rise as much as 50%. russia exports most of its grain and 20% of oil via the secor door. china's foreign minister has invited top diplomat joseph and his diplomatic -- for a visit. there will be a leaders summit later this year. there was a trip last month to meet china's foreign minister and other senior officials. at least six people have been killed and armories looted as conflict erected in india. police say they launched raids on the weekend to recover stolen arms and ammunition. fighting since may has killed more than 150 people. parliament will debate a no-confidence motion in the

prime minister modi's government over its failure to stop the violence. support for west african military operation to reverse a coup in niger has wavered as a move to reinstate the president arrived on sunday. leaders in nigeria have urged regional leaders to prioritize diplomacy i should say over military operation. they seized power in july and have resisted all calls to turn to democracy. kathleen: israeli prime minister benjamin netanyahu is backing away from a planned overhaul of the judicial system and is working to change the way judges are chosen. proposals sparked the largest antigovernment protest movement in the nation's history. he spoke to bloomberg about the change in strategy. >> i am absolutely sure that israel will come out stable and successful antidemocratic, at

least as democratic. more democratic. i don't think were going to tear the country apart, have civil war. right now what you are seeing is the natural conflict between opposing views that have not yet meshed but they will mesh. >> do support your central bank governor who is well respected internationally? >> sure, i appointed him. >> will you back in for another term? he has to decide by next month. >> i have not talked to him, i will. i have guarded i would say rigorously his independence in the event of the central bank and that will continue to be a policy. i will talk to him but you would not believe this, we've had no opportunity to discuss. >> will you ask him to stay on? >> possibly. i want to think about it. i think he has been an exceptional central-bank director and i think that is a possibility that i will have to talk to him about. >> one of your ministers called

him a savage for raising interest rates. >> my am ministers in our parliament tree system can say anything but it's a fact that we have never intervened with the independence of the central bank and we will not. in fact, i think i passed some laws or corrective additional laws that safeguarded the independence of the central bank. it's i do not want the government broaching in on what the central bank has to do. >> do you support interest rate hikes? >> i leave that to susan, the central bank. i've had several central bank directors. i've been in government along time. in a few months probably more time as prime minister than anybody in the western world for the last half-century. so i have a lot of central bank directors to talk to. i always talk to them in a padded room, absolutely soundproof. that we can hurl at each other

whatever we want but when i come out, i always give back into the central bank. >> it would be pretty powerful message to the markets given the divisions and turmoil if you were to ask him to stay on. >> that is a consideration. >> do you agree? >> the powerful messages the independence of the central bank and the choices i have made in bringing in central bank directors, whether it was stanley fisher and after him the current central-bank director, i think people see that we choose well. haidi: israel prime minister benjamin netanyahu speaking to bloomberg's francine in jerusalem. kathleen: still ahead the japanese 10 year yield could trigger further intervention if the boj's message remains unclear. we will discuss that later.

ubp thinks weakening an external demand will be a drag on china's growth in the third quarter. senior asia economist joins us next. this is bloomberg. ♪

♪ kathleen: this is daybreak: asia. taking a look at the week ahead. on wednesday will be getting china's july cpi numbers as the economic outlook worries investors despite beijing's drip feed of support measures. on thursday bloomberg economists expect the u.s. cpi to come in at 3.3% for july. will be watching a rate decision from the are b.i. where economists are expecting policymakers to stand pat. on friday, easing in india's industrial production data on headwinds from weaker external demand and higher rates.

in the philippines, economists are expecting second-quarter gdp to grow 6%. lifted by investment and net exports. other data to note, foreign reserves and trade numbers from china, u.s. ppi, south korea's unemployment and consumer confidence reading. that is your week ahead. haidi: a busy week ahead. our next guest says deflationary pressures in china will exert pressure on the pboc to deliver additional support measures in august. casanova is senior economist in joins us in the hong kong studio. great to see you in person after so many years. we talked about expectation into deflationary readings but i wanted to start off on the oil picture because as we know, we've seen it six straight going into a seventh week of gains both wti and brent are 2% away from the years highs i should say. there is more upside risk. it does that complicate both

inflationary picture but also potentially the losers in asia terms of who benefits from ohio -- higher oil prices and those who suffer? >> higher commodity prices and oil prices are something that the market is not discussing enough in my opinion and we are going to start to see it translate into an impact on the data probably this week. with china, in the case of china, it's beneficial. there is correlation between producer prices and economies so maybe it will alleviate deflationary this month. pressures in the country. throughout asia we are going to see some pressure building for net energy importers. india is a great example with the combination of adverse weather and higher energy prices could potentially trigger the rpi to hike later in the year. and on the other end of the spectrum, you're going to cnet energy exporters like indonesia that will benefit from higher commodity prices. and arguably have already started to benefit in the second

quarter. we might likely see that again this week as well. haidi: the picture for china appears quite weak. and you are not alone in digging pboc could relate to another rrr cut this month. does that help? we've seen it so much weakness on the confidence side, corporate, demand for extra credit is not really there. so does making more liquidity available help? >> that's a good point. they need all hands on deck and we also think the reaction function of the pboc might the lower -- lower than the market is open for because of recent changes. you are right, we are seeing more of a confidence crisis were households having negative expectations about future economic outlook being the drag on consumption more than liquidity per se with interim rates heading lower. ample indirect liquidity. this is a move to signal pboc is on it and combined with other

policies, they are looking to stimulate economic activities in the second half. the impact is stronger through sentiment then through the actual liquidity channel. kathleen: so let me jump in on japan. because we have had a couple of interesting stories about how japan in terms of equity investors kind of leaving china in the dust this year. is this warranted? how are you viewing the japanese economy now and where it is heading in light of the big policy tweak we just saw from the governor. >> well, japanese equity market has performed this year. we are cautious but of course cyclically speaking you have factors that have underpinned the equity performance including both a wide policy differential with the u.s. that is fueling depreciation and there is a

negative correlation between the exchange rate in equities. when the yen is down, equities go up. at the beginning of the year the tokyo exchange forced companies that did not meet certain criteria to do buybacks and that is a one-off factor that triggered upside in the japanese market. the last thing that supported japanese equities is the ai theme. especially certain tech names. so we think that these trends will continue in the second half but they will weaken relative to first half. decision by the governor last week to increase flexibility in the way that the bank of japan it conducts yield curve control is a sign that they are at least considering some policy tweaks before the end of the year. formal policy tweaks by the end of the year. given uncertainties regarding what intervention means, we saw them twice last week intervene but we do not know if they will intervene more regularly if pressure increases. i would say we are going to see

the market guessing and we will see japanese 10 year yields moving toward the 0.6% level in a more sustainable manner. kathleen: reserve bank of india, another big central bank expected to hold except for the expectation that may be in laois will swing up again and tempt them to do another rate hike. what do you see there? >> they are most likely going to hold this week. preferred option is to not have to do additional interest rate hikes. our b.i. is mindful of inflation and there are two things that can drive inflation swings in india drastically. the first one of course is energy prices, because the country is one of the largest net energy importers in the world. the second important driver for india is the price of key perishables. it remains lower income countries so the price of foodways significantly on their cpi basket. luckily although this is an el

niño year, we are seeing favorable monsoon rains as a result of local weather patterns. most analysts do not expect the pickup to be significant. in case we have a worsening of weather conditions and higher energy prices, we think that quarter three our bia is in the books. haidi: you mentioned india because the limit policy is one of the early policy victims if you will of el niño. do you expect more volatility for asian economies depending on how bad the weather is. rod air -- broader risk. >> climate change is a risk, so it's one thing we explore in a secular manner because we think the energy transition is going to continue to be important for the world and regions in years ahead. this year we are open to volatility and there are markets that are more exposed than

others, so within emerging markets, the impact on india could be quite significant and if we see another bout of drought in australia, that could be quite bad for assets in that country as well. so we are keeping our eyes on whether phenomenons. and we expect that we will see an increase in these sorts of adverse climate effects in the years ahead as a result of climate change. so it is also a matter of how the markets will proceed in these events. haidi: carlos casanova, senior economist at ubp. great to see you. plenty more, daybreak: asia. this is bloomberg. ♪

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♪\ kathleen: warren buffett'skathleen: berkshire

hathaway strengthened insurance business to counter inflationary pressures. vonnie quinn with more details. warren buffett did make it work. >> it's a huge come agglomerates and there are many crosscurrents involved but they seem to make it work and this is in spite of warren buffett having guided lower in may saying there would be trouble in the units. areas of strength included insurance which was unexpected but the geico insurance unit posted a 74% increase. geico performing better. it was unprofitable last year but we've seen higher premiums and lower claims as well as a reduction in advertising spending which is positive and negative. in the negative: we saw the railroad unit profit there, falling 24%. there were more headcount and expenses involved.

so you can understand how inflation is hurting that segment. in the positive column you had a higher yield from treasuries because we've seen interest rate increases so inflation helping and hurting at the same time. kathleen: i guess that's the way to make it work. let's leave it there. vonnie quinn, thank you. coming up a check on how oil markets are doing after opec-plus reaffirmed its oil supply policy. more on the coalitions latest move, coming up next. this is bloomberg. ♪ sleepovers just aren't what they used to be. a house full of screens? basically no hiccups? you guys have no idea how good you've got it. how old are you? like, 80? back in my day, it was scary stories and flashlights.

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♪ kathleen: chicago fed president

says it's important for policymakers to look at productivity before focusing on wage growth. austin goolsby said the u.s. markets are strong as confirmed by last week's data. >> it's pretty much what we expected. let's remember, the jobs number is whatever it is plus or -120,000 a month. there is no point quibbling over numbers. the job market is cooling a little to a balance level, but still extremely strong. that is the strong as part of the economy by far is how low the unemployment rate is and people can get a job if they want a job. >> to that point of being tight, hundred 70,000 plus or minus is more than catching up and keeping even with the new people, so it is tightening, is it not? >> let's say 100 thousand just from population coming into the workforce. stronger than that, it has been

the surprise of the year, of the six months that all of the people that folks thought were gone from the labor force never to return, and a lot of them are coming back. when the job market is as strong as that, you've seen labor force purchase asian rise to levels we had not seen -- participation at levels we have not seen in years. >> what about the wages? 4.4% year-over-year and that does not sound consistent with 2% inflation overall. >> the way i view it is two things. one, you cannot say anything about wages until you actually know what is happening with productivity. we got productivity numbers and they were strong for the quarter. that's very noisy but if you have strong productivity growth you can have wage growth and it

does not generate inflation. the other thing about wages is they are not a leading indicator of price inflation. they are backward looking, wages move more slowly. when things happen we get shocks. prices move, then wages. so when we see what is happening to wages today, it's kind of an amalgam of a bunch of stuff that already occurred. haidi: chicago fed president austin goolsby speaking with bloomberg's david westin. sticking with the fed, looking at the impact on commodities and taking a look at expectations in terms of prices for the second half. annabelle: a fairly tricky one because when you look at here and now, of course the outlook is gloomy. a lot of investors are seeing a recession in the u.s. by the end of next year, the end of 2024. on the other hand, really charting prospects for central banks around the world to either

start or extend their pauses. the fed is the one in particular to watch. we are not yet seeing the fed pivot, it's keeping the u.s. dollar elevated, so that's something else that can weigh on commodity prices into the second half of the year but something else as well. this chart is tracking the bloomberg spot commodity index, lied white and also the money supply. these two have tracked each other since the end of 1999 and what that tells us essentially is that as the impact of fed tightening takes effect, we are starting to see liquidity drying up even further. so sabina could keep commodity prices under pressure going into the second half of next year or rather the second half of this year, what is also notable is the broader deflationary nature of broad commodities. that is reflected in a spot gold, climbing. kathleen: i've got another

question for you. metals in particular, the outlook? annabelle: if you change on, the outlook for copper. it has been faring better than other base metals that has been under pressure. essentially when you take a look at this chart it shows copper is holding around the eight thousand $500 range. near its long-term moving average, it has been very tight. the prices of base metals and copper, very dependent on what comes out of not only the u.s. economy but china's economy. a lot of disappointment in economic numbers from china. cpi inflation numbers are the key ones to watch because it could show deflation taking effect. cpi is due out from china on wednesday. something else on the calendar is the earnings do on tuesday. this is a company that has been rushing to buy up as much supplies of copper, lithium as it can.

essentially the cash pile of this company has got debt hovering around zero so investors are focused on what glencore is going to be doing, how it will put that cash to work. kathleen: moving onto oil prices trading near three-month highs as opec-plus signals staying the course on its oil supply policy. bloomberg's su keenan joins us with more on this. they are extending their unilateral million dollar a barrel a day cut in this started last week. definitely going to be feeding over into trade now. su: there are a couple of things that are putting a bid under oil and we have is the monitoring committee of opec-plus meeting online over the weekend on friday and agreeing pretty much to stay the course in terms of their oil supply policy. then the two big countries, saudi arabia, the world's largest exporter of oil as kathleen said agreeing to extend its unilateral million barrel a

day cut into september. russia agreeing to extend a tapered version of its export cuts. now the committee issued a statement saying it will continue to closely assess market conditions and opec-plus members are willing to address market developers and take additional measures. they are doing all of this considering comebacks, holding the curves to pump up the price of oil which had slid in nearly part of the year. drop into the bloomberg and you will see crewed rising as a result of the actions by saudi and russia. the tightening of the market is indeed taking place. we are looking at the sixth straight weekly gain, the longest rising streak for a texas intermediate since june of 2022. russia and saudi arabia are leading the effort and industry data shows several other opec nation members are pumping below

assigned quotas and unable to cut further. that has to do with plagues in certain countries and adequate investment in political instability. so saudi arabia has gotten some criticism because the market is already tightening, but they're holding to these unilateral cuts and we are seeing the impact on the market. haidi: saudi's have boosted prices to oil customers in asia and europe. su: this coincides with cuts. all customers in asia and europe, their flagship arab light has been increased by $.30 per barrel. that is less than what many refiners and analysts expected. they were expecting a $.50 per barrel increase. crewed going for a heightened price of $3.50 above the benchmark.

again, if we look at how oil is trading, it is in the green and west texas intermediate actually really close to 83 after being up more than 4% over the past two sessions. a lot of this has to do with geopolitical events we've seen. will has held gains as ukraine attacked a russian vessel over the weekend. this is putting at risk significant flows of crewed oil and grains out of moscow. a drone to a russian oil tanker supplying fuels to moscow. that followed an attack on a naval ship on friday. the increased conflict could threaten russia's commodity exports via the black sea, a route that accounts for 15 to 20% of the oil russia sells on a daily basis on global markets and most of the nations grain. haidi: su keenan with the latest

on the oil patch. japan is leaving china behind as asia's two largest stockmarkets compete for capital. with geopolitical tensions weighing on chinese shares, let's discuss this with asia equities reporter in tokyo. we saw at the start of the japan rally foreign outflows really exiting china and then heading toward tokyo markets. has that trend been exacerbated? >> exactly. we are seeing investors saying that they are seeing japanese equities more attractive than chinese equities and some top fund managers are accordingly trimming their china exposure and lifting their japanese winnings. also like the taiwan largest fund companies set up a new japanese equity fund just kind of as an alternative to the

chinese exposure. on one hand, weaker economy in china and geopolitical tension. on the other hand of japan's strong rally driven by warren buffett, corporate governance, these are going to continue to push the japanese market further. morgan stanley downgraded chinese equities to equal weight while staying overweight on japanese equities, so that says a lot about how the balance is playing out between the two geographies. >> what is the impact of the tweak on yield curve control when it comes to the japanese stock market? a plus because they are making a change, a minus because it creates uncertainty? >> at the beginning people were quite worried about how the monetary policy changes might way on the japanese equity market.

strategists say this can be a boost to the market further because it removes the uncertainty around what the boj might do. so that kind of helped the market to potentially reach for a further rally going forward. and also because the changes are coming gradually, there was a sharp appreciation in the yen, positive for the market. haidi: are there any negatives? >> right, so in terms of risks, i think people are still saying that valuations of japan are looking a little less attractive at the moment. at the same time, global risk obviously around potential recession might still effects the market. so we are still watching if the yen is going to appreciate.

those are some of the risks that we will keep our eyes on. kathleen: bloomberg's asia equities reporter winnie. up next the japanese 10 year yield could go to 0.7% in one week if the boj's message remains unclear. that discussion is coming up next. this is bloomberg. ♪

haidi: it's time for japan ahead on daybreak asia japanese markets will open in about 15 minutes or so. this is the picture into the start of trading for equities. dollar-yen holding steady, shy of the 141 level. not huge moves given it's been a mixed picture when it comes to trading in the dollar. starting to see upside momentum when it comes to the u.s. dollar, watching where the dollar potentially heads. stability in the yen has been one of the contributing factors when it comes to gains in equity markets. that in removal of uncertainty from the boj after it came through with the tweak in the july meeting. nikkei futures looking softer, 8/10 of 1%. looking potentially as we get into the second half of this year's trading at where the rally goes when it comes to

initial gains that came through from big tech, ai, chip related stocks that really benefited from the global trend that drove so much of the equity rally not just in japan but the u.s. market as well, as well as japanese trading houses. do they get the benefit as we see interesting moves when it comes to commodity pricing? this broader rally that we are seeing continue to a seventh week for oil prices now, 2% away from the years highs for brent and wti, creating upside momentum when it comes to broader commodities and metals prices despite of course a continued weakness that we see out of china. we are getting more data when it comes to china. and a lot of data including cpi and ppi numbers expected to show further deflationary and disinflationary forces for the chinese economy. and of course we will be watching potentially if we get any more from the pboc.

and a lot of market observers are expecting a rrr cut later this month. kathleen: let's look at u.s. futures because friday was a tough day for stocks and bonds. s&p futures are actually showing a little bit of green on the screen. the fact that the jobs report for july had a payroll increase that was a little bit later than expected versus wages that rose more than expected has fueled the continued debate over what the fed will do. of course, there is a lot more to be watched for this week and the big one, inflation report, cpi on thursday ahead of there has been a selloff in the u.s. and now looking ahead to this week we see there is a bit of a rebound in the u.s. stock market. we will see how it continues in case into asia trade when we get korea and japan open just a moment -- 13 minutes from now.

haidi: sydney as well. you hit the nail on the head. so much of this depends on where global central banks go in the last part of the tightening cycle. where the fed goes given the jobs report on friday, really calling into question. we heard from a couple official saying these questions of when they will start having to think about pivoting to a pit it, if you will. thinking about thinking about the tweak to policy. this is the picture when it comes to australia, looking at the bond market. interestingly we have a survey on rba expectations and broadly economists are expecting a couple of meetings where they will continue to hold, another hike in november and that will be it. they see a second quarter potentially second-half easing by the time we get to next year. kathleen: in a few minutes as we know are going to get a summary of opinions from the bank of japan's july meeting, where adjusted yield curve control, we've seen two interventions to

keep the benchmark 10 year jgb yield from rising too fast. our next guest believes the yield could rise to 0.7% in a week if the boj's message remains unclear. they are chief strategist. a great to have you back on the show. coming out of the meeting last month, some of the criticism was that the governor had not exactly signaled any kind of tweak. he seemed to be more worried about inflation being stably at 2%. some were critical that his communication that was not clear. is it clear now? and that is maybe a bit of a negative here. what do you see? >> i do not see it as a negative because i think boj kept -- they wanted to have options to keep the bond markets under control.

so if they say increase the amount of their regular operations, regular inbound operations, that is going to signal that the market is going to expect the boj to buy more bonds. but if they be unclear on fixed inbound operations, that will give options for the boj to control. the bond market. so they are kind of in a free hand. doll i think they made a big step forward toward tightening, say removing n.y.c. see or even some people expect taking over. kathleen: ok, so what do you see now? a couple months ago you were in the camp that they would move in

october. now that they have made the big tweak in july, is it possible that they could take the big step and get rid of it altogether at the october meeting or wait until next year? >> pie still -- i still think they do not need ycc anymore and a good timing would be october because there's an outlook report. if they remove ycc in october, the markets are going to expect the next step and that's going to be next year. so that's going to give flexibility in the bond market, which i think the governor would like to see. haidi: what are your expectations for the yen?

we've seen a calm being restored but is there further upside when it comes to the greenback as an elevated risk? >> yes, the ball is on the greenback side. because if you see -- i mean, when -- when the boj basically -- well, uh tightened policy in july, basically hiking the 10 year rate, the yen goes up. but given that the people in the markets are seeing the other side, meaning that dollar side, i think the consensus is markets are seeing cheaper dollars. so i do think in the short term dollar-yen is going to go up. haidi: you're focused on moving

bonds. what do you see the impact of that? >> pardon me? haidi: i said your focused on potential moves in bonds because they european slowdown has a steep impact on japanese assets as well. >> yes, i think the risk, when we saw the balloons fall after week ppi from europe a week or so ago, we did see jgb's fall and japanese risk fall. at the moment, i think many domestic investors and foreign investors are just seeing domestic markets. and i think in terms of jgb in the upside, i do see a grinding on the upside of say the longer end of the jgb.

but of course it is going to be dependent on the boj, whether they are going to increase the amount of unscheduled fixed income buying or not. and i think the really poor point is that the market and boj are testing each other because they are still trying to find the right level of 10 years or 20 year. it's going to be dependent on the boj's operations. haidi: chief japan desk strategist. more to come on daybreak asia, this is bloomberg. ♪

haidi: we have the july opinion summary, and a lot of talk of flexibility of yield curve control any further plan, talking about the achievement of the 2% coming into view. ♪

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>> this is deprecation -- the why cc yield curve control is about keeping the bond market functioning. they want to make sure rates are determined by the market as much as possible. they went to get recovery and market liquidity and sharp fluctuations in interest rates. that is what it is all about, not some big monetary policy change. haidi: so many interesting points of the summary of opinions including really referring to the high level of uncertainty, adjusting has inherent difficulties, but they say getting a stable 2% goal seems to be inside. this is a light for investors -- this is a lot for investors to parse through. annabelle: the goal for stable 2% inflation is not inside yet, still a lot of uncertainties around the outlook for prices.

the key take away, another one is that essentially you can add flexibility to the yield curve control program, but still there is that need to ease and there is a long way to go in the energy members saying before starting to revise negative rates. the key question for investors has been around the out the provence, how high the 10 year yield would be allowed to be extended to, given that we have seen surprise revisions coming through. japanese again holding fairly steady in the early part of the session today, still above the 140 level, but the outlook for such as well, take a 225 -- nikeei 225, not the downside, but little bit unsurprising. it was the story of the u.s. stock really starting to leucine. in terms of when you do compare what we are seeing in the asian region, it is that outlook for japan versus china. outperformance of japan, the second-biggest stock market in the region, but essentially one

boj member saying rates should be set by the market as much as possible. let jane john, because we are keeping an eye on other markets coming online, and we have korea getting underway, the kospi weaker in the session. earnings are the big focus in asia this week, because we have u.s., europe, those numbers starting to wind down, but asia is kicking into gear, 2.8 billion dollars of market cap reporting over the next five days, but korea airspace are some of the names reporting on monday. the call stack -- kosdaq slightly underperforming, a reflection of what happened in the u.s. session on friday, and nasdaq futures slightly higher. australia is the other key marketing focus today. we do have a new poll coming out showing australia could hike

rates one more and cut into 2024, so the forecast is for the rba to hike to a peak of 3.45%, but the median is for policy easing to start by the second quarter of 2024, keeping and i, oil markets depended on where central banks go, but we are seeing wti and brent crude moving fractionally higher. haidi: our next guest chinese consumption has a disappointing recovery, encouraging signs include jeep evaluations, more policy support to look forward to. the senior investment director for asian equities, always great to have you with us. other reasons to be more constructive on chinese risk assets right now? >> that is right, and thank you for having me on the show again. i think there are several reasons to be positive on chinese equities.

i think we are seeing three key changes happening right now. the first is that earnings estimates have been cut, and we do think revisions have come down to sensible level as well after the market has been disappointed, so that is coming off of a low base. secondly, what we have been through over the course of this year has shown investors that the economy, it's recovery is slower than expected. the government recognize this, and therefore you will see that in the latest policy will -- rule. we sell policy coming out recognizing the weakness, so we should expect policies to reflect that. valuation is looking cheap, and we are seeing the fundamentals in the chinese markets as well. haidi: how would you be changing your investment strategy going

into the second half? the fund as underperformed the broader market. are you changing that direction? where are using constructive opportunities? >> we are not doing abrupt change in terms of the weight that the fund is positioned. some of the positioning is overweight information technology. that has worked out. our active positions of chinese consumption has you get to work out, but we think that is looking attractive. i think we are seeing a pretty much uncertain and volatile market, so what we have been trying to do is increase resilience for the fund. this week, we are looking toward more earnings announcements coming through as well. kathleen: are investors being too impatient with japanese steps toward stimulus?

people criticize them for taking smaller steps rather than throwing money and government spending at what is going on. do you think these targeted steps are enough, or do they need to get a bigger bazooka out? >> i think we have got to see and assess the situation on the ground as to how tough the situation is. i think from an investor's point of view, we are actually quite happy to see the chinese government is taking a disciplined approach toward stimulus and not an abrupt approach. four dated dependent targeted sickness, that could be adjusted so that policies can be more effective and a lot better. kathleen: what will it mean if the federal reserve, for example, stops raising rates if the shift toward less aggressive

moves overseas help their economies, and that helps china? do you think that is something in the long run is going to perhaps live to the overall outlook for china? >> i would say monetary policy on that front, because if you want to look at the inflation rates of china, they have remained supportive so china is comparable to the rest of the world in terms of the right situation, so what the chinese government has said is they are looking to be more accommodative and will be providing fiscal and monetary easing measures as they see fit. perhaps the rest of asia, where the rest of asia as actually

increased rates along with the u.s. over the course of last year, though to a lesser extent. that might signify a pause in terms of rate situations and the rest of asia, and that will be good for supportive accommodative policies so far for the rest of asia. generally i think the impact is more positive on the rest of asia than china. haidi: how do you see the oil rally in broader commodity price is affecting your views across asia? >> i am not really of a much view. i think we do expect on commodities to remain pretty much range bound but gradually ease, because what we have been seeing over the last few years is on the supply side it has been constrained due to underinvestment, so we should expect that gradually off of a

high base last year. haidi: asian equity senior investment director. let's get you back to annabelle for reaction to the japan numbers. annabelle: got a couple of key earnings we are focusing on, square enix is when we are focused on. it is quite wide, so a few minutes until that gets underway, but sharp is moving higher as the day gets underway, up 6% at this stage. in the context of the wall street session, adr's drop 3.5%. we saw an operating loss for the first quarter wider tahn what analysts had been forecasting, 7.6 billion zero yen, and the estimate was for ¥4.3 billion. we are seeing sharp shares down 11% so far in tokyo.

compare that to what we have seen in the topix index, stock rising more than 5% as we get underway. let's look more in the commodity space, because this is another key focus. we just had the wheat contract coming online, up around 3% at this stage, and this move follows events in the black sea over the weekend. essentially we saw the ukrainian counteroffensive against russia starting to take further hold, so a drone downing a russian naval vessel and oil tanker. russia exports most of its grain via this channel, 50% than 20% -- 15% to 20% of its oil, so that tack meaning not only higher insurance costs, shipping cost, but also ramifications for

other markets including in europe and around the rest of the world, so the, the contract another one we are watching here. kathleen: opec plus will stay the course as saudi arabia extensive reduction that aimed at shoring up the global oil markets. we will discuss the outlook. our exclusive interview with the israeli prime minister bennett benjamin netanyahu talks about gun reforms next. this is bloomberg. ♪

kathleen: is really prime minister benjamin netanyahu is backing away from a plan to

overhaul the judicial system, instead working the way judges are chosen. previous proposals have sparked the largest antigovernment protest movement in the nation's history. he spoke exclusively to bloomberg. >> i am absolutely sure that israel will, stable and successful, and democratic. in my view, a democratic. i do not think they're going to tour the country apart. i do not think we will have civil war. what you are seeing right now is a natural conflict between two opposing views that have not yet mshed - -meshed, but they will. >> do you support your central bank governors? >> sure, i appointed him. i have not talked to them yet, but i will. i have guarded rigor seriously -- rigorously his independence.

i will talk to them, but you would not believe this, but we just have not had the opportunity to discuss that. >> when you talk to him, when you ask them to stay on? >> possibly. >> what are you thinking out? >> i think he has been an exceptional director and that is a possibility i want to talk to them. >> one of his ministers called him a savage. >> our ministers in our hectic parliamentary system can say anything, but we have never intervened with the independence of the central bank, and we will not. in fact, i think i passed some laws or corrective additional laws that safeguarded to get of the central bank. i do not want the government broaching in on what the central bank has to do. >> do you support the interest rate hikes? >> i leave that decision to the central bank. i have had several central bank

directors, because i've been a government a long time. in a few months i will have more time than anybody as prime minister in the western half of the world in the past century. absolutely some proof that we can hurl at each other whatever we want, but when i come back i always give it back into the central bank directors. >> it would be a powerful message of the markets given the divisions and given the turmoil if you were to ask him to stay on. >> could be. that is a consideration. >> would that be a powerful message? >> i think the powerful message is the independence of the central bank, and the choices i have made bringing in central bank directors whether it was stanley fisher and after him the current central bank director, i think people see that we choose and choose well.

haidi: israeli prime minister bennett benjamin netanyahu speaking exclusively to bloomberg in jerusalem. let's get you caught up to date, six people have been killed as conflict erupted again in india's northeastern state. police say they like charades to uncover stolen arms ammunition. parliament will debate a new confidence motion in the prime minister's government over its failure to stop the violence. pakistan's former prime minister will not be able to contest elections in november after being convicted of corruption. police arrested khan on friday after a court sentenced him to three years in prison. he will challenge the decision in a higher court. national elections may be delayed until next year as the government assesses the results of a census.

the population increased 16% in the last two years. officials will need to revise election lists and constituencies given the addition of millions of new voters. china's foreign minister has invited the eu top diplomat and his delegation for a visit. he says the vision will allow for preparations to be made before a leaders summit. he was supposed to meet a foreign minister last month. ukraine sea drone attacks are signaling a rapidly expanding more, putting at risk russia's commodity assets. foreign freight rates are blooming and says the cost of shipping russian crude may rise by as much as 50%. russia exports most of its grain and 20% of oil via the company. kathleen: oil prices trading

near three month highs as attacks in the black sea threatened exports. sue keenan joins us with more. this is a volatile story. >> this is a key pathway, for oil and other commodities such as rain leaving russia. let's delve deeper into it. oil holding gains even as ukraine attacked another russian vessel over the weekend. there is concern this poinsettia risk significant flow of oil and grains out of moscow. the drone hit a vessel that supplies grain. it could threaten russia's commodity exports in this route which accounts for 15% to 20% of oil sold daily on russian

markets. crude oil and brent crude both up in a big way. let's talk about west texas intermediate near $83 after rising 4% over the past two sessions, up for the sixth straight week as of friday, the longest winning streak since june 2022. that has a lot to do with the fact that pe -- opec has been cutting oil and saudi arabia not only taking oil off the market course -- but simultaneously charging more to its customers. it is raising prices for its flagship product for sale to asia by $.30 per barrel, that is above the benchmark. according to a survey, they were expecting a bigger increase, perhaps $.50 a barrel, so saudi

arabia getting what it wanted right now in the near term. they are getting higher prices as a result of some of the actions they have taken. haidi: opec was holding on cost at the latest committee readings. >> the monitoring committee meeting online over the weekend and friday deciding to stay the course where they are with oil. saudi arabia, the world's biggest exporter of oil and leaving this to prop up prices and reverse the slide we saw earlier in the week is now extending their unilateral cuts. in september, russia also extending it separates, although it is using a more tapered diversion of its export cuts to roll into september, and many consuming nations have criticized the saudis for constricting up but when all markets are on track to tighten significantly. we are seeing oil prices move higher, crude nearing year to

date highs as a result of these cuts, and the winning streak again, a sign of that. the fact that we have got hostilities and the plexi area, which is a key pathway for brushing commodities, and it looks like the near term bid is fairly strong or oil and commodities in general. haidi: su keenan on watching oil and grain. we are seeing wheat about 1.8%, after ukraine attacked another russian vessel. this puts at risk exports from the plexi. futures in chicago advancing in the early trading session. more broadly these rising hostilities could still threaten russia's commodity flows.

that accounts for most of the nation's grain and 50% to -- 15% to 20%, so we are starting to see the footprint of the were growing fast. sea drones crippled that russian naval vessel, so putting at risk commodity exports. you are seeing the reaction in wheat prices still in the trading session. for that story and a random of other top stories you need to get going in today's edition of a -- daybreak, find it on dayb go. customize the settings so you get the news on the industries and assets that you care about. this is bloomberg. ♪

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corporate stories we are tracking. saudi arabia's sovereign wealth fund has reported a 16.6 billion dollar loss after the value of its investments in tech ventures plunge. the public investment fund posted revenue of $25.4 billion. it's assets under management go to $568 million. analysts see division fund returning to profitability after five quarters of losses. the average estimate is for a modest second-quarter profit when results come out on tuesday as an ai fueled rebound live startup valuations. it is fighting to regain its footing after its investment armed lost $48 billion. an indian conglomerate expects shares of its financial services business to be listed soon. it is seeking to create indigo's largest nonbanking lender,

leveraging digital and retail businesses. the germans as the new entity is expected to unlock value for shareholders. warner bros. barbie movie has stopped $1 billion in global box office sales in just its third week of release. the other being super mario brothers. barbie ducting -- chutkan $53 million and $74 million internationally. haidi: let's take a look at futures in europe as we get the week underway. there is a sense of relief when it comes to being two thirds of the way through european earnings, and not as bad as it expected. earnings growth the lowest we have seen in some time. manage expectations may mean we see limited losses for equities going forward. we are seeing weakness to kick off the week. euro stocks off by .50%.

watching any moves in the euro, a little bit of upside when it comes to the greenback. the dollar has been largely mixed within the g 10 space. digesting implications for the young, officials at odds as to whether the 2% inflation target and be achieved. so much of what hinges on the euro relying on the yen. we have been looking at the potential for the fed to pivot to thinking about how elevated they want to keep rates. that will have implications when it comes to divergence with the ecb as well. more to come. this is bloomberg. this is bloomberg. it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. 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. >> fundamentally, the plain is

not yet on a trajectory to the soft landing within the runway. we can help it will get there, and it probably looks like there is a better chance of it and it did several months ago, because we are certainly not falling short of the runway, but i still do think there are substantial inflation risks. haidi: that was the former u.s. treasury secretary larry summers and the outlook around the outlook for possession, taking us nicely to our survey. the results coming through at the top of the hour, but the key question that was put toward investors this week is when they expect to see the u.s. economy contracting. taking a look at the results in aggregate, we have more than 400 responses to this, and essentially the key take away for investors is that most see a recession by the end of next year. 20% of those seeing it happening

by the end of this year. the key thing investors are looking at, yes, we have signals of resilience coming through in the u.s. economy. the u.s. jobs report just the latest data set investors are continuing to parse over, together outlook for this is at the delayed effect of monetary tightening, and that it still has a ways to go. the huge timing thing came through from the fed. in terms of what else investors asked, it is the outlook around inflation, and again investors still saying fairly sticky, most expect it either to fall below 3% in the next 12 months, the key majority, yes, it could dip below but then go back up and more than 40% saying it is not likely to fall on al khor basis below 3% either, so that does say perhaps the expectation around the fed pivot could be

misplaced. inflation of course is the key data set we are watching over the course of the coming week. cpi is estimated to take up -- tick up. in july of last year we saw a slight pullback from the 9.1% level. the court reading one of the key things to watch. kathleen: into our next race so likely -- so nicely, they benefit president saying employment gains are slowing in an orderly manner and there is no need for further rate hikes to ease inflation. mr. bostic told us that mixed jobs report helped confirm that view. >> they came in pretty much as i expected. i expected the economy to slow down in a fairly orderly way, and this number comes in continuing that pace. some folks would have liked it to be faster, a larger gap, but

i am comfortable. i am not expecting this to be over in a short period of time. it does not surprise me wages are so strong. worker wages have trailed inflation for quite some time, so we are still in the catch-up period, and i expect we will see strong wages. when i talk to employers, the one thing they tell me is whatever they are starting their wages growth at this year, they are expecting it to be lower next year and lower again to get back to where we were pre-pandemic, so we have to keep an eye on it, but i was not concerned too much about them at this point. >> you would be the first to tell me one data point is not enough to make a decision, but do you feel the fed is on the trajectory it needs to be on to get to 2% at some point? >> we are today in a restrictive stance, and as inflation continues to fall, the degree to which it is restrictive actually grows as the gap between the inflationary and are interest

rate widens, so that will put enough constraint on the economy that it continues to slow, but i am not expecting this to be a two month or three month period. my outlook is that we will still be in restrictive territory well into 2024, and it will take a while for inflationary pressures who have seen over the last 1.5 years to dissipate. >> you will need to see more data before you come up on a position where you should be, but what data points will you be focused on? >> i am looking at three things. first is the actual inflation rate. we have to make sure inflation is not moving away from target or actually starting to stall. the second is the breadth of inflation. in all of these indices they tracked the prices for various goods. at the height of the inflation trouble, 80% of goods had inflation rates as high as 5% or more. today it is 20 and percent, and

in ordinary times it is 15% to 20%. the third is expectations. as you know, people make decisions based on what they expect things to be in the future, and if they start to expect inflation will be different than a 2% target and that is not what is happening now, then they will make different decisions, and our economic capacity will be lower. >> let's talk about breadth in a different sense. you are responsible for a good-sized region in the country. you have atlanta, miami, rural areas. where do you see the biggest variations we should be paying attention to? >> it is funny that you say that, because in my district, six states in the southeastern united states, very large and very diverse, and right before the pandemic we were using the

theme, one district, many economies. you have the big metros, atlanta, nashville, tampa, these places are growing fast and has a lot of pressure on housing as a result, but the trajectory is positive. you do not have to travel very far in the district to notice there are places that are not growing at all. a lot of rural places are struggling. haidi: the atlanta fed president speaking to david weston. japan is leaving china behind as a job largest two stock markets compete with investor capital with growth concerns and geo-medical tensions weighing on chinese shares. let's discuss this with our asian stocks reported. what are we seeing as the growing trend between these two markets? >> it seems like the tide has turned in favor of japanese equities. we see foreign buying of japanese equities exceeding that

of chinese peers the first time since 2016 and we are seeing the sector outperformed the china index for the third year in a row. this is suggesting investors prefer japan shares ever china shares, and that is stemming from different economic backdrops. we are seeing rising inflation in japan, and at the same time china is seeing more deflationary risks and people are saying this economic downturn that china is facing might be a long-term structural trend, whereas japan, we have the corporate governance improvement story and the bank of japan even after the policy each week on ycc, people are expecting policy normalization will remain slow and gradual, so that is supporting the investment case. kathleen: i just got the minutes from the bank of japan's last meeting, we are it seems to be their number one goal is to make sure the bond market keeps functioning properly.

this is not a big monetary policies signal at this point anyway. so far, what is the effect of that week not just on bonds but on japanese stocks? >> i think is so far investors we have spoken to are expecting this policy change should be rather gradual. japanese stocks upside are likely not going to be affected by this policy tweak. chinese stocks, the politburo meeting, there are supportive measures coming out, but people have not been convinced by the strong stimulus measures so far. morgan stanley downgraded chinese stocks to equal weight last week, and they are recommending people to use this rebound as a tactical trade to take profit, so we are seeing this preference of japan

overturned a continuing, even though after the doj and politburo meeting. haidi: you mentioned the key meeting which flagged a change in tone and increasing expectations we see another rrr cut for big banks months. what is the risk reward looking like? what is the risk premium for chinese stocks? >> it seems like for the time being investors are pricing in the worst-case case scenario for chinese stocks. of course, there is always an upside risk to if there is stronger stimulus coming through from the chinese government. if the pboc cuts, there could be another rebound in chinese stocks, but so far the long-term structural story has not changed for china. we are still seeing this economic slowdown, property prices has not been solved, people's confidence has not come back, so we really just need to wait and see to see if the

effect of the policies are coming through and of peoples' confidence can return to the market in the near future. haidi: john there. the recovery incompetence and economic growth will be how the policy for the property sector is sorted out. we have had recent pledges of policy support for turn up as property market citing sales, so adding to signs of deepening stress. let's bring in bloomberg's bureau chief. if you take a look at the stress being felt by developers across the board to just the confidence of households who were also roped into the broader downtrend for property sales. this is core to what the recovery will look like. >> yeah, that is true. as you said, on the property front it remains all doom and

gloom. the sales of new homes in china in july so the biggest decline in almost 12 months, so people are not buying houses in china, and supply has got way ahead of demand, especially when business confidence is low in people are not certain about their future income. hardly a day goes by without policymakers have begun to say there will be more policy to support the sector, but the thing is people have not seen any concrete measures, and the next big policy move people are widely expecting at the moment is china's government will gradually ease home purchase restrictions in major cities like shanghai, beijing and others. the capital of hunan province announced this week actually that they are going to allow a

lower threshold for people to buy second homes, and also they will consider cutting the interest rates off existing mortgages. that is going to be key, cutting the borrowing cost of the current mortgage holders will definitely help to reduce interest expenses and help drive up demand for consumption, which is key at the moment when exports are staggering. and because of geopolitical tensions. from a policy point of view, the policymakers keep saying they want to drive up demand for their home market, but based on what we are reading, they are not returning to the old days of creating a bottle in the market

and making the economy rely too much on the property for growth. kathleen: in a couple of years, the beijing government took some major steps that hit the housing market, it hit tech companies and some of those entrepreneurs you mentioned were like heroes in china, right? how easy, out possible will it be for the chinese government to restore the kind of confidence in them and their policies that they need to restore in order to get people spending, buying houses even when they offer incentives? >> it is going to be a long process. it is always easier said than done. china built way too many houses, and everybody in big cities, a lot of people who live in shanghai have got more than one house, too much, and at the same time developers built way too

many apartments over the years. to shift to a different kind of growth model requires a long transitional period, and that is definitely not going to be easy. kathleen: not easy at all, that is how it looks. staying on china now, chinese state media says at least 21 people were injured on sunday when a 5.5 magnitude earthquake hit an eastern province. the quake because one to six buildings collapsed with warnings there may be more casualties. no leaks were found in oil and gas pipelines and power supplies were normal. south korea's weather agency has urged people to take precautions after a typhoon changes back to head toward the country's second biggest city. the storm is forecast to pass on thursday and make landfall near the southeastern coast, causing rain and wind across most of the

country. the typhoon has caused damage in okinawa and taiwan. plenty more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

kathleen: warren buffett's berkshire hathaway posted gains in operating profit and strengthened its insurance --

insurance businesses. vonnie quinn back with more details. vonnie: not only depose gains, posted $10 billion, $2 billion more than the estimate and there was strengthened the insurance market thanks to the buying of allegheny. it was a 74 percent increase in insurance underwriting earnings to 1.25 begin dollars, also geico perform better than expected. this is the second straight quarter it has become profitable thanks to expense cuts, higher premiums too and lower claims and a reduction in advertising spending. we have seen inflation hit some of the other divisions in the last quarter. this time it was evident at the railroad unit, which posted a 24% drop in profits thanks to more hiring and more wages that you might anticipate in an economy like this one. the fed's rate hikes which are designed to battle inflation helping berkshire hathaway in

the quarter, because it has a huge cash word and warren buffett is a fan of u.s. treasuries. he will buy another $10 billion this weekend. the yield is much higher than when defense to the raising interest rates. the equity portfolio helped, it broadened its owning of apple, and apple is up 40% this year, and some of its other investments did extremely well. haidi: what is berkshire hathaway's positioning in terms of their investment activity going into the second half? vonnie: that is interesting, because even though we talked about how well it did, it is a net seller of equities at the moment. in the quarter that just passed it sold 12 point $6 billion of equities and only bought $4.8 billion. all of last year to $35 billion plus of equities. this year it has sold $18

billion in equities. positioning itself extremely cautiously and clearly still things evaluations are too high, and that is another reason we should expect fewer share buybacks. it has shared substantially. it sold from 520 billion in the first quarter, and there was always the search for the elusive value proposition, right? still have not found a big one but small ones in fossil fuel and others they continue to find. haidi: it is a big week for asian corporate earnings, alibaba, softbank said to report. let's bring in someone taking a look at some of those names for us. what are you watching in japan today? >> another big week for japan earnings. the big one today is toshiba

giving their first quarter after the bell today, and we are expecting them to make it into the blackness quarter after a loss in the second order of last year. all eyes on toshiba, what is happening with a $15 billion bid to take a company private expected to start this month, and any progress on that will be interesting. the other thing that has been a left field, tokyo marine, they have been tied up in a couple of scandals recently. one of those is a used car dealership chain inflating insurance bids, and they are tied up in a meeting scheduled over a car insurance contract with the big corporate names. kathleen: alibaba is a big name up. what do you expect there? >> alibaba appears their consent

since shows they will have a recently good quarter. the ant unit is coming off of a big fine regulators have imposed. there are some positive signs that have been able to overcome what they have been having. haidi: gareth with a look at some of the earnings we are watching at this part of the world. take a look at those reacting in the tokyo trading session. on the back of earnings, watching sharp on the upside, it has pared earlier gains of 8%, still hanging onto most of that rally. sharp reporting net income that beat the average analyst estimate with ¥5.5 billion being reported for the first quarter net, and we have seen interest

at 25% of shares at the highest level on that nikkei. square enix down by nearly 50%, it reformed its operating guidance for the year. they still see operating coming in it ¥55 billion, missing expectations. cost came in much higher, that creates concern of higher-than-expected development costs over the major title final fantasy. we do have more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

kathleen: let's take a look at how the markets are doing as we come to the end of our third hour of "bloomberg daybreak: asia." the nikkei is down a list of 4%. we just got the meetings for the big j. not about changing policy as much as making sure the bond market games functioning they look at these kinds of things. the kospi little change, samsung electronics is the biggest contributor there as to the decline i should say. and we have got just about a

fourth of shares falling there. so let's take a look now as we look at the futures. there you go. green across the screen, not big moves for s&p 500 futures. thaix also a. markets have opened up after the selloff on u.s. stocks on our day. they are assessing, looking ahead. we have the jobs report on friday reverberating around the world and china's currency unchanged. our guest tells us why they expect the yield curve is steep and. keep it right here. "china open" coming up. this is bloomberg. ♪