dani: good morning. this is "bloomberg daybreak: europe". i'm dani burger in london with the stories that set your agenda. countdown to the u.s. cpi print. asian equities mixed after a tech-led to selloff on wall street. disney gains after i words -- after hours as tax cuts and hollywood strikes save the company millions of dollars. gas prices jumped the most since march as lng workers in australia vote to strike. brent crude traits near an eight-month high. i will bring you the market check. we're looking at equities that are bouncing back after yesterday. yesterday was led by tech, the selloff. a little consolidation in front of the cpi, topping necessarily specific. futures are doing better this

morning, up by about 0.4%. treasuries not doing too much either, we're expecting a 30-your auction following the 10-year auction yesterday which had solid demand. yield coming in below 4%. we got siemens earnings. it is a miss pretty much across-the-board, weighted down by china decline and wind turbine loss. third-quarter industrial business profit coming in at 2.7 5 billion euros, the estimate was 2.9 3 billion euros, net income at 1.2 8 billion, that is a miss for their third quarter. it was the digital industries unit in china that saw a drop. they are having trouble with their stake in siemens energy because siemens gamesa is having issues with their wind turbine unit. we will hear from siemens'

ceo at 6:30 a.m. u.k. time. third-quarter operating profit at a 7% rise coming in at 3.7 billion euros. they are seeing net inflows into pimco, there asset manager, third-party net inflows hitting at 4 billion euros. when it comes to full year operating profit, the range they are saying is 13.2 billion to 15.2 billion, they are affirming their full year outlook. there had been expectation that potentially they would raise it. they have kept to that figure. they are seeing net inflows to allianz gi of one billion euros, so they are seeing net inflows into their asset manager and affirming their full year outlook.

we're also speaking to the cfo of allianz later this hour. that's your earnings. let's take a breath and see how asia markets are faring. we go over to bloomberg's charlotte yang. >> we're looking at a risk off session this morning, as investors count down to u.s. cpi print for signals to the fed's next step. japan market trading in a narrow range but staying cream thanks to positive earnings from honda, offsetting disappointing results from sony and olympus. we're looking at travel stocks, cosmetics and retail that got a boost after china announced they will resume travel to nations including japan and korea. korean peers also gained. the australian market erased losses due to tech and financial affairs dropping, but energy shares day of a boost and the

market is slightly higher bid. in china sentiment remains fragile, as there is elevated concern over the country's major developer country garden's liquidity situation. we're looking at onshore and hong kong trading in negative territory. we could have positivity from alibaba's earnings latest today. analysts expect the company to post the fastest growth in a year thanks to some consumer recovery. the taiwan ai rally seems to be taking some heat, after disappointing july sales from ai server companies. dani: charlotte, thank you very much. that bloomberg intelligence piece yesterday that a country garden default would be worse than evergrande causing a lot of concern in u.s. markets, too. let's get to our morning roundtable and top stories. we start with reporter valerie

tytel with a preview for what we might expect from cpi today. where do we stand, what's expected and how important is this number today? valerie: today's number, cpi is one of the most volatile days of the month. the effective month on month prints are expected to come up 0.2%, which is fantastic news. two annualize that, that is below the fed 2% target. that would be the second month in around we're printing at 0.2% month on month. we would expect the fed speak after to sound more dovish read expect them to put their next out there and talk about a cause come september. if we get below that, we might have a mission accomplished trade in the market, and might start pricing rate cuts earlier than expected. at the moment, a 15% chance of a cut come december.

expect that to increase if we get a to print today. if we get an above consensus print, that might give less credence to this disinflation narrative and maybe we won't hear too much from fed members because we have one more cpi print before they convene again. dani: perhaps they preserve any big statements for jackson hole. when we're talking about inflation, the threat of energy coming back as an inflationary force israel, yesterday showed that with net gas spiking after strikes in australia. could we have natural gas acting as another inflationary force? valerie: maybe more for europe who is more reliant on natural gas. for the u.s., and for the globe, we're having this goods disinflation impulse coming out of china. a lot of that might pick up steam later in the year.

we could dismiss it for now, but it could pressure the ecb come september if this spike in natural european gas we saw yesterday becomes more aggravated if strikes go on in australia longer, it could put the on the ecb come september. dani: got something they will welcome as they are battling inflation. a 28% surge. valerie tytel setting us up for the day. let's talk about disney, those shares are lifting the overall futures session. they gained 6% in after-hours trade. they came in from that on positive earnings. let's bring in jill to break down the earnings. you are a disney reporter veteran, so we have to talk about it. most of the positivity was around cost and reduction of costs i should say, is that fair?

jill: there is a couple things investors looking at that is positive for earnings read it is that 3 billion dollars in cost savings disney flagged. they were expecting to spend $30 billion on content this year, now it is somewhere around $27 billion. a big part of that is due to the actor and writer strikes in hollywood, and they have to move projects to a different time, helping them save money for now. the other thing to flag is if you look at some of their online video losses, they are doing better than initially expected. this is the direct to consumer division losing $500 million this fiscal quarter. that's a lot better than a year ago, when losses were at $1 billion, but it is better than initial projections for losses of $750 million. a lot of that is presenting promised because when you are looking at streaming and dtc for

disney, they are trying to make that profitable life september -- profitable by september of 2024. investors are thinking this is more optimistic then we were a few months ago on disney. dani: one of my favorite things is the fact that part of the reason subscribers for disney plus tumbled was because they lost the right to cricket games for indian premier league. jill, i will let you get back to eco. thanks so much for joining us. let's get to one of our other top stories. a story that broke a few hours ago. ecuadorian presidential candidate fernando villavicencio has been assassinated while leaving a political rally less than two weeks before voting begins. villavicencio was one of ecuador's most prominent journalists, known for his crusade against corruption.

let's get more from our reporter in quito. what are the updates at this moment? >> the situation remains very much breaking news. villavicencio's murder is a total shock. it's an unprecedented murder in a country that has already been in the throes of a surge in violence. late july, the prominent mayor of the city of monta was assassinated. this was a brazen daylight attack in a downtown area of the capital. this is not some remote area. this is the middle of the country's capital. we know there was a suspect he was caught in the crossfire and shot by police.

the suspect also died from his injuries. there is an emergency security meeting at the presidential palace led by guillermo lasso. we do not have any announcement from the presidency on what steps will be taken. we have the electoral authority also participating. this is only 10 days before national presidential election was scheduled. villavicencio was one of a number of candidates. he was one of those who looked well-placed to make it to a second round for a possible runoff vote on october 15. he had received death threats from drug lords. this is one of the leading theories behind what triggered the assassination.

who might have been behind this. dani: stephan, we appreciate you staying up, thank you so much for your coverage. he is in quito, the capital of ecuador. some other stuff we're watching out for today. we get alibaba earnings, those usually hit around noon time. we're looking for china sales to have a return to growth. issues throughout china something to keep your eye on. at 1:30 p.m. u.k. time, it is u.s. cpi. we talked to valerie about the importance for fed policymakers to comment although we get another cpi print before the next decision in september. then the 30-your auction. $23 billion of 30-year yield. pretty solid demand for the

10-year, so we will see if that can go through as smoothly. if you want a roundup of all the top stories to get your day going, dayb is where you had on your terminal. we will talk about 30-your auctions, what is at stake as the u.s. deficit grows -- we saw what happened with moody's -- more on that next. this is bloomberg. ♪

dani: it's your thursday edition of "bloomberg daybreak: europe". demand for the u.s. 10-year option was strong, the yield was under 4%. it was $38 billion of issuance, just showing you can't necessarily judge what the auction is like based on the market action. today, it's the 30-year treasury auction. joining as is bloomberg mliv strategist mark greenfield. is there any region through on demand for the 10-year into what it means for the 30-here today? or is it anyone's guesstimate demand there will be? >> we're seeing demand for

duration by people who have got yield targets. 4% is a target. a three times this year treasuries and in the secondary market when they pop above 4%, there has been demand from long-term investors so the 30-here will attract that. it will come in around the 4.2 handle, which will be interesting for people waiting a long time to get duration with yield. they will look at the path of the cpi, the chart earlier shows that the general path for inflation is coming down. it looks as though it will go down further. they are projecting into next year where they can get real return. if they can get a 4% plus coupon, inflation heading to the low 2% area, the fed may be thinking about lowering interest rates, all boxes are ticked and you have good return on a long-term instrument which is

hard to beat. if we get a high cpi today, which is not the expectation, but if it comes in 0.3% above forecast, all bets would be off and we would have a messy situation in treasury. that's not what people are expecting. probably you will get a decent sale. by next week, people will be happy having locked in high yields on the 30-year. dani: another thing we talk about on an almost daily basis is a down day in asia. it's another one today. hsi is down 1%. this headline that crossed roughly an hour ago that china will be allowing tours to the u.s., u.k. and japan -- could this benefit asia stocks? we're seeing a little pop in japan and korean tourism. >> if you were in the region in

2019, the last time we had freedom of movement out of china, you are seeing that every major country in asia, particularly the ones you mentioned short of the u.k. and u.s., they almost had a china travel policy. the numbers were just extraordinary. huge numbers of chinese people moving into big cities around the world. we saw it in singapore, bangkok and tokyo, other parts as well. they bring a lot of money, they make a huge difference to local economies and to the airlines that shift them and the hotels that receive them as well. a lot of money is being distributed by the chinese tourist. they are coming from a low base. a for you chinese tourists have been allowed to go since the start of this year, but on a limited basis. it's nothing compared to 2019.

if we get anywhere close to the numbers of tourists traveling before the pandemic, it is going to make a significant difference to quite a few countries including those you mentioned. dani: before we let you go, let's talk jgbs. there is been a lot swirling around the ycc tweak, we've got an mliv piece, if we don't promo it phase one of your blog posts, we're failing at our job. for and selling is the next headwind for bonds in japan, what is happening there? >> we had the weekly data this morning. we get reports of what foreigners are doing in bonds and equities once a week. it was the biggest selling by foreigners of japanese bonds since the beginning of january. at the beginning of january, they were reeling from the yield curve tweaks in december which sent yields much higher.

clearly, foreigners have seen the changes to the yield curve, the new threshold is 1%, we're around 0.6% so plenty of headroom to go but unnerved foreigners are expecting japanese yields to pick up over the next few weeks and get close to that number. dani: mark, thank you so much. we will talk chips and the u.s. and china. this is bloomberg. ♪

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dani: welcome back to "bloomberg daybreak: europe". president biden put limits on u.s. investments in china. we have been waiting for this announcement, a push against beijing's ability to develop

next-generation surveillance technologies. james, there was that great scoop by the team heading into this announcement that they would be more limited in scope. the announcement is more limited, how much more than initially expected? >> a couple years ago, it seemed very expensive. it wasn't limited to ai chipsets, there was talk it was going to be across all high technology. at one point, the u.s. would limit investment. those three areas are much more limited. this is just forward-looking. any investments that happened before, or that happen now because the laws haven't gone into effect yet, will not be covered. if you read the stories we have

written about this, but kind of investment, if you just buy stock in a listed company that is not covered either. i would raise two points. this is the first time this has happened. this isn't going to be the last time. we have crossed this river where the u.s. is starting to do what china does restricting private investment. there is another issue, the u.s. -- time the u.s. -- we are going to see these happening again and again. as time goes on, if trump comes back over over the next president is, we're seeing just

the first of these. just like the trump towers have not gone away, but have you stay in place. dani: if i could just jump in. i will let you get to your second point. if we get more restrictions, if this is the rubicon, will there be appetite to do it beyond things like chipmakers? could this escalate further down the line in more industries, too? >> it's possible and it could become retroactive. if you invest in tencent or alibaba, what's to say the u.s. decides to ban those investments. it could be tied up in the court system for years, like a lot of trump executive orders were. there is no reason to believe you won't expand the remit of this to other sectors like

biotechnology. the pharmaceutical industry is very worried about restrictions on their ability to invest in china. in five years, or even sooner, what's to stop that happening with the new administration or even the current administration? dani: thank you for joining us. it's clear the story isn't going anywhere. james mayger on u.s.-china chip and investment restrictions. coming up, siemens earnings missed in the last quarter, we hear from the ceo of the german industrial giant on the outlook. this is bloomberg. ♪ hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician.

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dani: good morning and welcome back to "bloomberg daybreak: europe." earnings coming through in the last half-hour. industrial profit came around 2.7 billion euros. i came just under. some weakness in their energy investment. we have been speaking with the ceo. he told bloomberg that the company had a strong quarter, it was the chinese market they did not deliver as expected. >> 50% revenue by 10. they still deliver $3 billion cash flow. it is a great quarter. we saw faster than expected normalization of the market. this was driven by china.

we're sitting on another record. i would say it is another strong quarter. >> you say normalization but orders were down in china. is that normal? what is your experience of the economic situation right now in china? >> the chinese market did not deliver as we expected. we expected china to recover in the second half of the calendar year. this has not happened at all. china is very down in the market. private consumption did not pick up. export is down. it has hit record low for the last 10 years. this is what happened. let's see how it goes.

this has impacted certain businesses. -- had a more stable situation. most impactful were our nations overseas. >> that was one of the parts that was revised down although a lot of the other goals were unchanged. is your goal more broad and if your strength is not come from china, where do you think you will come from? >> let me reiterate. we confirmed our group outlook in terms of our growth. that is excluding the impact from siemens energy. we have kept everything stable except the outlook for the industries. and we kept it to her it was before. this is based on the assumption

that it would pick up in the second half of the year. that is basically it. going forward, the megatrends that we are working on in the market of did out -- digitalization of our markets. there might be slow growth in the chinese market for the next quarter period let's see if and when the chinese government is putting some stemless on the market. there is a lot of uncertainty there. this is still the second largest market in the world. we have aced very strong footprint in the united states. most recently on a trip to south america, there is a lot of renewable hydrogen. a lot of batteries built, which we have a very high market share. for me it is more about how long

china will deal before they pick up again. dani: more earnings to bring to you. you have the forecast for the full year. growth at 27%-30 3%. they have their weight loss drug. there have been concerns about supply being able to get it. that was the subject of yesterday's big take. the lower strength aversion of the weight loss drug will remain restricted in the u.s.. they have reduced the u.s. supply and may -- in may. that has been their most growing source. the frenzy is trying to catch up.

sales beating estimates for the second quarter at 7.5 2 billion. the estimate was just under 7 billion. they have released their forecast on the high-end. still, reducing their supply or restricting the supply of their blockbuster weight loss drug. we will be speaking to the ceo at 9:00 a.m. u.k. time. stay with us for that. we also have some earnings through. that is a miss on the profit. 1.5 billion euros over 1.6 billion euro for euro -- your over year. let's run through these markets. a lot of earnings coming through. u.s. futures fighting back for

some gains after losses yesterday. perhaps disney is helping. looking at the tenure falling. down by one basis point. it is the turn of the 30 year option. let's talk about oil. crude is holding onto gains near a nine-month high. gas prices dropped the most -- jumped the most after australia workers are voted to go on strike. let's speak to david who leads our melbourne team. david, these possible strikes, what do we know and what are the possible destructions -- disruptions that could result? >> at this point, these are possible strikes. we note that workers at a number of fertility -- a number of

facilities have voted for potential action. the earliest any of that action could come could be towards the end of next week. at this stage, talks are ongoing between union leaders and company officials. even so, without the actual prospect of strikes, we have seen those reactions in the gas market. most notably, we saw a huge leap in prices yesterday. it is the most since the barely early stages of russia's invasion of ukraine. it has been enough to drive this prices higher. dani: thank you so much. bloomberg david. we get the read on the gas when it will open. the commodities soaring. rice. farmers are grappling with extreme weather events brought

along by el niño. it is about the percent of calorie intake or africa and parts of southeast asia. let's go over to jennifer. break down the rally and the impact, how is it significant? >> it is significant. this is constrained is supplied robust demand. we are looking at this thai white rice. thailand is the second biggest exporter of rice behind ndf. with the markets team is saying is that there is more room for this to potentially grow even higher. because of changing weather patterns. because of what a lot of these governments are doing. especially in thailand. 40% drop in rainfall.

farmers have asked -- the government has asked farmers to prioritize one crop a year. in india, they have restricted export of rice. we think about the context of developing confidence -- continents, russia is aced -- rice is a staple food. this adds more pain to a lot of countries across the continent. dani: thank you much. bloomberg's jennifer out of johannesburg. coming up, after earnings. a jump in second-quarter boosted by its insurance business. allianz's giulio terzariol joins us next. this is bloomberg. ♪

dani: allianz the insurer and bond giant has reported a jump in second-quarter profits. this results from the insurance business offset from its -- management unit. let's get to giulio terzariol. you have announced strong results in your insurance business. you maintain your forecast. where are you seeing the most strength come from? what is shining right now? giulio: good morning. thank you. what is shining in the insurance business right now is the corporate business. we are below the 90%. we have put a lot of effort and last years in order to improve our profitability.

we have also launched a new sector. we are seeing good results coming out of that segment. also, the performance is very resilient so we are reacting to the inflation that we are seeing. we are pleased with the resilience we are seeing. i think it will continue to be very strong. we will include profitability on the products. i would say, generally, what is strong is our performance -- the performance of our corporate business. dani: you mentioned that you reacted to inflation, are you optimistic that we are near a peak, that the most inflationary gains we have seen are already in the past? giulio: yes.

when you look at inflation, the index, a kind of reflects it. if you see year over year, there is an increase. from that point of view, the expectation might be that inflation will moderate. as far as europe, we are not counting on that. we are acting on inflation as we see it. what can happen is inflation can affect the way we moderate. clearly, inflation might not come as strong as we might expect. on the other psych, inflation will not moderate, it will be a good year to be stronger. you will be protected by the actions we are taking it at least as we go into next year, it will be lower compared to

what we saw in the course of 2023. dani: you have to hope it would come down and not rigor said again. another thing the world is dealing with is this heat wave. the climate risk. we have seen temperatures soaring and a lot of wildfires. how do you as an insurer adapt and react to the risks of climate? giulio: with insurance, what we can do, there is the price element. you have to adjust based on the expectation you have. there is a lot you can do. on this you can see there is a lot of activity going on. then, there are some elements that believe it is important to

find some sort of stretch of framework to make sure the insurance can be provided to the areas that are particularly affected. it is a combination between technical pricing, working clearly on the climate and also working with governments on creating frameworks to make sure we can offer coverage. dani: looking at some of what the other insurers have said -- in the u.s. it was 24%. how big of a market opportunity is this for allianz? giulio: there is definitely a gap. there is a market opportunity that we can seize. there are some areas where

clearly we need to work together with governments to make sure there is affordability of coverage. there is an opportunity there but there is a limit to the opportunity that we can seize. dani: when it comes to pimco and asset management. pimco, 4 billion euros. has investor sentiment and confidence stabilized? giulio: yes. there is stability coming through. there are also our expectations. we should see flows going back when they stabilize at the higher level. even over the course of 2023, in the first six months with pimco, we saw positive flows in july. from that point of view, i think we have achieved the inflation points. i think we will continue to see

positive flows as we go into the end of the year. in the future we will benefit from a higher increase of the measure we are holding. i think it has been tough that has focused on fixed income. now, i believe you will see clearly that we were meant to pick it up as we were expecting already last year. dani: your ceos talk about part of that momentum a few months ago. part was alternatives. we don't have much time but what is your target for the alternatives business? do you see this is a new era of emco which previously had its dna in bonds? is this a push into alternatives? giulio: i would say it is a

natural evolution of pimco. when you look at what they're offering now, there is a broad product range. at pimco the goal is to evolve but also with a link. i think there is a natural evolution of pimco. there is also an acquisition in the way to do it. a few years ago we did an acquisition for a different space which went off very nicely. i think it would be very strong. there is a lot already in the fixed income space. that is important to remember. clearly we can continue to evolve and make sure we are an even stronger franchise. dani: we are pretty out of time. you mentioned more acquisitions. are you planning more for pimco?

giulio: a small acquisition. we are always for that. it could be nice to bring some additional skill sets into the franchise. from that point of view, it is all about demand. we have been looking to acquisition for pimco. that could definitely be on the table. it could be a good complement to the franchise. dani: i really appreciate your time this morning. thank you for joining us. giulio terzariol, the cfo of allianz. coming up, we will speak to more insurance companies. coming up, disney gains after hours. we will have the post market trades in the u.s. session or you. this is bloomberg. ♪

dani: citadel securities is launching a fresh challenge to -- banks. the market-making powerhouse will start offering a new bond to its clients, so-called "treasury strips are coat -- strips." >> we saw the most volume. a really significant milestone for us. if you look at another institutional business, that is where we are continuing to push and grow. i think that the success that we have had comes down to the fact that we are committed to being a market maker. that is who we are as a firm, that is our dna. i'm not sure that our

competitors feel the same way, that they have that same level of intensity and focus on market-making dani: -- market-making. dani: that was david saying why they are the leaders. something you may have missed, some notable post market moves. we can start with disney. rising about 2% in post market trade. costs are coming down. content spending was $27 billion, below prior forecasts. some of their projects will be rescheduled. it is all about the writers and actors strike. disney plus subscribers did fall 7.4% in the quarter. they lost the cricket game rights. that is what bit for them. there is also some talk of raising prices for disney services. this is what bob iger had to say

about that. >> we will release details about our subscription services. our ad services will become available in select areas beginning november 1. dani: november 1, europe and some of canada. we are waiting for more earnings. wynn casinos. there was a large rebound in macau. we did learn that china will be lifting a ban on group travel. stronger north america trends, trends in vegas. that is rising or than 1.5%. a consumer health company announcing that it would be

added to the s&p 500. in terms of what the date will be, they are waiting for an event to take lace. j&j is offering -- the change will then happen. we front run that's it -- we front run that decision. state with bloomberg. we will have more important earnings and interviews throughout the day. that will include three ceos coming up. that is it for "bloomberg daybreak: europe." up next it is "bloomberg markets today." this is bloomberg. ♪

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