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.

>> good morning and welcome to daybreak australia. i am paul allen in sydney. annabelle: i am annabelle dollars in hong kong. shery: the top stories this hour. a risk of open ahead as blake's u.s. signals complicate the picture of the next fed move. goldman sachs selling in a rate cut for the second quarter 2024. >> china's economy showing few signs of a rebound. suspending trading monday on almost a dozen onshore bonds. shery: in winners erased the bulls closing in argentina's national elections. u.s. futures coming on higher in the asian session after a very volatile friday session closed at a one-month low for the s&p 500.

it was a really choppy trading session. really close to the 50 day moving average that could signal more losses. we are seeing more upside in the asian open for u.s. futures after the nasdaq 100 notched its longest weekly losing streak this year already. of course investors are really trying to digest the mixed economic picture with easing inflation worries and consumer in flood -- expectation falling and producer prices growing last month. we had that really pressuring the treasury space. we had a poorly received 30 year bond auction with the 10 year yield finishing around 415. look at oil opening in the asian session, downside pressure after seven weeks of gains for oil prices, the longest since mid 2022. we had two pieces of information investors were watching. the iea said manned in china has

been robust and world oil demand surged to a record in june. investors are watching the potential for supply holds in the black sea. it's a really tough job for investors, economists, and policymakers, whether trying to figure out where inflation, and oil prices and energy prices are going. two top u.s. inflation metrics, the u.s. consumer inflation expectations and producer prices moving in opposite directions ahead of the next federal reserve meeting. our global economics and policy editor kathleen hayes is with us. what does it mean for the fed? kathleen: the fed already had a very big decision to make, july of the last meeting, september. there have been two months between those meetings. four big reports, two inflation reports, two jobs reports, mostly talking about cpi and employment. consumer prices are important

but they are right behind cpi because they are wholesale. they don't cover retail. they don't cover what the consumer is doing. look at what is so interesting. ppi was up 0.8 percent year-over-year, a big jump compared to june up 0.2 percent and beating expectations. so on that side of the inflation ledger we just saw a cpi come in weaker than expected. just last thursday. now producer prices look too hot. it is just what the universe is trying to tell investors and the fed. on the same day the university of michigan inflation expectations, one of the oldest gauges of inflation expectations come away older -- explosion -- expectations come away older than what the new york fed does, goes back decades. inflation expectations did not weaken much. nevertheless they did go up. the year i had very much driven by inflation numbers went down

3.3 year-over-year from 3.4. the 5-10 your outlook came in -- year outlook came in 2.9 versus 3.0 and has been in that range for 24 of 25 months with gasoline prices going, people scratching their heads. if you look at this, it is good news for the fed. maybe they cannot pause in september or at least think about it. look at consumer prices contrasting producer prices. you say, maybe they cannot. maybe they have more to do. we heard it from fed officials recently. one more thing that is very interesting, paul, the consumer price index has certain elements, services went up. that could affect what we will see in the august pce deflator. the pce deflator is the fed's main gauge. health insurance costs, things that are a little more technical would also potentially lead to that being a higher number, not lower.

it was another aspect. when our bloomberg's economics team looked deep into the report suggested there was more heat than expected in the report than what we saw on the headline numbers when the number went up on that much more than expected. paul: this divergence in inflation reports is being reflected in a lot of wall street forecasts with goldman now saying there will be cuts next year. others say, do not count on it. kathleen: i will start with what i was going to finish with. mary daly the san francisco fed president last week saying the cpr report is good news, but guess what? we have more work to do. we cannot declare victory yet. nevertheless goldman sachs is now saying they think inflation is probably peaking. the fed rate hikes are peaking. that the first cut will come in the second quarter next year. they say they are penciling it in. they do not want to commit yet. so they are fudging it a bit there. meanwhile, a lot of houses are saying, we cannot predict that

yet. it looks like at the very least rates will stabilize. barclays is telling clients to sell two year treasuries because of the assumption that it's two soon -- too soon for them to move. in the next two weeks, very important things. this week the fomc minutes from the july meeting. how strongly were the two sides diverged between pausing or hiking the key rate again. how much was it a majority leaning towards another hike? that would be more towards our september move and jackson hole, the big annual meeting span sold -- sponsored by the kansas city federal reserve bank is next week. j pal on friday gives their chairs opening remarks, that the chair does every year. when the chair wants to come in the chair can use the meeting to send a strong signal on where the fed is and where they are going. last year chair powell underscored we are not done with rate hikes. i am paraphrasing. this is what people are bracing for now. to get more clues especially

after mixed readings on inflation. economics and policy editor kathleen hayes there. let's turn to china where the economic recovery is being weighted down by a worsening property slump. pressures are mounting on the pboc to ease monetary policy. july's activity data is due tuesday and likely to show little sign of a rebound in growth. with only moderate expected in industrial output, retail sales, and fixed asset investment. property investment probably continued to shrink amid mere of a possible default. the country suspended trading in nearly a dozen onshore bonds starting monday after announcing it expects a loss of $7.6 billion first half of the year. the country gardens liquidity crunch is adding to concerns about the potential drag the industry will have on growth. shery: credit demand in china has been week. we are seeing the latest data well below economists'

forecasts in july raising the risk of prolonged deflationary pressure. new loans fell to a 14 year low missing estimates by more than 50% the expected figure. let's turn to annabelle for more. households and businesses are refusing to borrow. annabelle: right, shery. this chart puts it into more detail because it offers content breaking it down by loan type. the latest numbers, there is a big difference looking from june to july. that is the orange bar. it is completely missing here. it represents household lending. you can see here a huge drop from one month to today. it's not a mistake on the chart. it is off more than 90%. there is an element of seasonality to this. when you look at the chart it also shows that period last year as well, june-july. there is contraction, the seasonality factor.

it speaks further to an ongoing weakness we see among chinese consumers and concerns in the property sector particularly in terms of demand for new property. certainly, that's a concern for beijing. the question is what they are planning to do about it. we see in terms of the set up for this session today, china futures are weaker. this chart showing the biggest amount of daily net outflows via the northbound stock connect since the start of the reopening trade the end of last year in the prior session. beijing is issuing some plans over the weekend of the state council to try to attract more foreign investment, things like offering better business, better visa, better tax conditions. paul, it seems a little piecemeal at least. so it's difficult to say at this point how the lines out from the state council could meaningfully shift market sentiment when

broadly it is looking for week for another week. paul: thank you, annabelle. let's take a quick look at the yield on the new zealand 10 year bond that has been rising to the highest now since 2011. we have the yield on that note for 88.9 at the moment. -- 488.9 at the moment. we have an our bnc rate meeting this week, currently 5.5%. the expectation was that would be it for the rv and see -- rbnz . keeping on hold this week as economic concerns continue to pile up new zealand. that 10-year note heading for numbers not seen since 2011. still to come, beijing condemns the u.s. for allowing stopovers by taiwan's vice president. more on that later this hour. first, here why cairo advisers say investors are putting too

much faith in the recent stock rally, focusing too much on big tech earnings. we will talk market strategy next. this is bloomberg.

paul: let's look at the week ahead with china sliding into deflation. we will get a day lose of data. lies industrial production,

retail sales, fixed asset investment, and it jobless due tuesday. the pboc said its benchmark for a one-year lending rate with most economists expecting no change. on the inflation front watching cpi numbers from india this -- expected to show a sustained increase in food inflation and in the u.k. price pressures remain stubborn and we get inflation data from japan friday. wednesday the fed minutes will give us more insight into the central bank's recent rate hike decision and shed light on its data-dependent future rate strategy. and the rbnz and the philippines a central bank expected to keep rates on hold this week. we will get japan's preliminary second-quarter gdp numbers. shery: we continue to watch china's tech earnings as the end of the tech crackdown brings renewed optimism for the sector. 10 send, jd.com, set to report this week. in the u.s. major retailer earnings are coming up.

the numbers should provide further insight into customer sentiment as inflation starts to ease. that is the week ahead. paul: our next guest says inflation risks are not over. valuations look expensive and he's thinks that he thinks some investors have too much faith in the recent stock market rally. ryan belanger of claro joins us now. if you plug the s&p numbers into chatgpt it will make a happy face, but you are not convinced, are you? ryan: i think the market is a little stretched in valuation. we see the market come back a long way. many people are predicting a recession that has not come yet. there have been a lot of good stories in the market. certainly you are seeing m&a activity pickup in biotech and the tech sector in general. the big players have all done very well. i am concerned about the breadth of the market rally. i just have not seen it widening

out as much as i would have hoped it would. to me that is a clear signal that we have got more to the story to come here. a lot of it hinges on the data that will be coming up in the next couple months. paul: we will look at the data in a moment. you say valuations are looking a bit rich. is it time to take some profit and put money somewhere else? if so, where? ryan: we have an alternative now. 5% cash, five per -- 5.5% money market. that's a really nice alternative which a lot of investors have never known. just, the rates have been so low for so long. so, now, there is something else to do with your money. so, you really have to dig into the companies you are buying other types of investments you are willing to make because the alternative is a nice yield on the money. so, i think that when clients are looking at that they are really trying to figure out what type of allocation they want to have.

if you have been at your company and you had a retirement plan for five or 10 years, you probably have more equity in your 401(k) balance than you think. if you have not done any rebalancing you certainly have. to me that means inherently you are probably taking more risks then you probably think you are and are comfortable with. so for investors i think you have to know what you want in your portfolios, be very diligent, ask questions, to really understand what your true risks are in a multitude of different financial scenarios that could play out here. shery: when you have those recommendations how are you factoring in the big diverging inflation signals we are getting? and what that means for the fed? ryan: yes. we are telling our clients,f keep your -- our clients, keep your equities on the lower end of the target range. we are not giving up on the stock market. we own plenty of equities. if you are comfortable having 80% of your portfolio in stocks make sure it is around that number. that it is not 100%.

just make sure your asset allocation is in line with your wrist -- risk tolerance and i think investors have no idea what their risk tolerance is until they have lost money. then it's too late. you have to dial into your portfolios to make sure you know what you own and where your risks are. if you are not comfortable taking risks, you can sit on the sideline and earn a nice yield at 5%. shery: major retailer earnings this week in the u.s.. are you concerned they will take more of a hit given the pressure on margins with higher prices? ryan: i am a little concerned about that. the last couple quarters you had volumes going down. but, pricing power has been remaining very steady and increasing allowing companies and i think eventually that will erode. productivity is an interesting point because you had a major report 10 days ago showing labor productivity has spiked again

after five consecutive quarters of decline. that was a record going back to the 1940's. that is a big story here that i think should be getting more attention. ed: --shery: ryan belanger great to have you with us. founder of claro advisors. we have more to come. this is bloomberg.

shery: the number of last -- people killed in last week's hawaii wildfires rose to 93 making it the deadliest in the u.s. in more than 100 years. for more the bloomberg news editor virginia von yatra joins us on the line. we know that search and effort rescued's are ongoing. how bad is the situation on the ground? virginia: it's not good at all. we are very worried about

whether the bodies can be identified. the fires are not completely put out yet. hundreds of people are still missing. i read a report that cadaver dogs are being sent in. residents are being told not to drink water. it is sad. paul: virginia, what's next for maui residents? virginia: it will be a long haul. the island already has a huge housing shortage. over 2200 structures in lahaina in western maui have been destroyed. the damage has taken about $5.5 billion. the biggest problem will be housing. they have already secured 1000 hotel rooms. 500 maybe for people that lost their homes and 500 for all of the rescue workers and fema

workers that will be flooding to the island. shery: do we know what started the wildfires? virginia: that's really the billion dollar question. at the moment nobody knows for sure. there is speculation that equipment belonging to the state utility company hawaii and electric may have been the search of the -- hawaiian electric may have been the source of the original spark. but island has had severe drought conditions and there was a hurricane offshore, hurricane dora with 80 mile-per-hour wind blowing in. so, that was pretty much the perfect storm for a wildfire with the possible spark, the drought, then the wind. it was terrific. -- horace it. it went so quickly to the city. to make things worse sirens meant to warn residents when there is an emergency like a tsunami did not go off. paul: virginia von natta

reporting on maui. japan is preparing for its second typhoon in a week. airlines are canceling flights and rail lines warned of eruption. the tie wound -- typhoon is expected to make landfall tuesday in central japan, now of soccer. authorities call for precautions against heavy rain and strong wind. japan airlines canceled 19 domestic flights for monday due to the storm with more updates expected. chinese farmers are facing an earlier than expected assault on props so far this year as extreme weather accelerates the spread of pests like the fall army worm. the insects devour rice and corn and appeared earlier in the northern and southern regions following heavy storms. china is both the world's biggest producer and importer of rice. the fallout from climate disaster is taking a toll on australia as well with new research showing home insurance premiums jumping the most in two

decades following weather catastrophes and higher building costs. for more details from our economics reporter, saudi ponte. what sort of increases are we talking about here? swati: home insurance premiums jumped the most in two decades, 2000 in a year. that is 28% higher than what they were one year a go. this has largely been because of higher building costs. but these extreme weather events are also a big factor. we have seen one in 100 year events becoming more common. what we are seeing in hawaii. we have seen it in europe, australia. we have seem -- seen extreme weather events in australia year after year. shery: what has been the economic cost on australia?

swati: it's hard to quantify the economic costs. the impact has been studied. they have said they will come out with a paper on this. it was expected sometime this year. it could be later this year or early next year. they are trying to look into the economic cost of the central banks globally and the central bank in austria and particular can do about it. home insurance is a big issue in australia. because, every time there is a major flood or a bushfire event, we hear about a lot of households that just did not get insurance because they cannot afford it. as home insurance costs keep rising we will see more and more households not going for insurance at all. that means raising homelessness as well. shery: our bloomberg economics

reporter swati pandey. look at how commodities are trading. focusing on oil open in the asian session, wti under pressure with rent as well after seven weeks of gains for oil prices, the longest streak of gains since 2022. the iea last week says demand in china has been robust methane world oil demand surged to a record in june. investors are very much watching potential supply holds in the black sea with j.p. morgan saying wti could reach $90 by september. there's plenty more to come. there's plenty more to come. 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. shery: china's foreign ministry

criticized the u.s. for allowing the taiwanese vice president to step over as he travels to and from paraguay. the ministry says it opposes any form of official interaction between the u.s. and taiwan and the visit seriously violates the one china principle, undermining chinese sovereignty and territorial integrity. our next guest says the biden administration is handling the transit carefully. bonnie glaser is the managing director. this trip comes after months of thawing in the u.s. china relationship, efforts from both sides. how high are the stakes now? bonnie: i think they are high for several reasons. the united states does not want to setback. with the very fragile progress it has made in relations with china. also the bite and administration

-- biden administration does not want to be seen in interfering in taiwan's presidential elections that will be taking place next january. the vice president is a candidate for president from the dpp, the ruling party that has been in power for almost the last eight years. so, they have to walk a fine line. washington has been coordinating very closely with type a and -- taipei and his campaign on both sides agreed a low profile visit is best. shery: he has vowed to safeguard sovereignty and territorial integrity. what can we expect in this visit for further escalation in u.s. china tension? bonnie: well, the chinese have taken a very harsh stance against this transit by taiwan's

vice president through new york and san francisco despite the fact it will be very very short and low-key. china's ambassador to the u.s. a few weeks ago said visit -- set the visit had to be stopped and called it a gray rino running at us. essentially these very tough remarks have i think made it necessary for beijing to do something in reaction. there will likely be more military exercises around taiwan, activity in taiwan's air defense identification zone. there is a possibility beijing will try to pick off one of taiwan's remaining 13 diplomatic allies. that's possible in the coming weeks. as guatemala has a presidential election soon. one of the candidates indicated there would be a shift in diplomatic recognition to beijing if he was selected.

paul: bonnie, you signaled the possibility of greater military activity around the taiwan strait. of course, with that kind of thing going on, the odds of misunderstanding or something else going wrong increase. where you put the chances of a potential flashpoint in terms of china and taiwan and a risk of war that would drag in the u.s. and its allies? bonnie: there has been a great deal of military activity around taiwan. on virtually a daily basis, especially since the speaker of the house of representatives, nancy pelosi, visited taiwan last summer. the chinese have been crossing what is called the media line in the strata that was set up by the united states at a 1950's. but it was never accepted by china, though, tacitly if you. now there has been an enormous

amount of activity not only in the air, but also navy ships coming within the -- up to the 24 nautical mile, what they say contiguous zone. so not inside taiwan's territorial airspace or sea space. if the chinese want to get more aggressive they will operate closer. if they were to fly or sale inside what is the 12 nautical mile territorial space, then, there is a higher risk for an accident between taiwan's military assets and china's. paul: the vice president is a presidential candidate. were he to win, what with the implications be for u.s./china relations? bonnie: well, the united states will want to have good relations with taiwan regardless of who is elected. right now three candidates are running. there may be a fourth. the ceo of fox con has talked

about possibly throwing his hat in the ring. so, the united states, again, very careful not to take sides in the election. the vice president, he is from the ruling party and has worked very closely with the current president and has said he would continue her policies, especially, prioritizing relations with the united states, preserving the status quo in the taiwan strait. if he abides by that promise and is as prudent as -- and careful as she has been, the risks of war will not be very high in terms of potentially being provoked by taiwan. but we do not know what the ambitions are of china. she jinping i think has, according to the head of the cia, has instructed the pla to have the capability to take taiwan militarily by 2027.

regardless of who is elected in taiwan, it will be a dangerous time ahead. shery: you mentioned at the fox con founder. if he joins the raised, it would make it a quad while ray -- if he does join the race, it would make it a four way race. how does an opposition candidate build up support? ronnie: i think if terry go interest the race as an independent it will boost the chances of lai winning the election. i think the only possibility that could damage lai's chances is if terry go combines on a ticket with the taiwan people's party candidate, a former mayor of taipei or possibly the tmk candidate. but i think that neither of those scenarios is likely.

current polls show with the existing three candidates running, lai is still in the lead with between 5%, 7%, 8% in the lead. the election is still months away and a lot can happen between now and then. paul: bonnie glaser is the managing director. thank you for joining us. tomorrow here are exclusive interview with taiwan's vice president lai ching-te talking about relations between the u.s. and china and the future of the nation's democracy on tuesday. shery: u.s. futures seeing upside in the asian session after a lot of volatility on the s&p 500 friday, closing out a one-month low. we had pressure coming from technology mega caps. we are seeing nasdaq 100 futures now gaining .3%.

investors are trying to digest economic data and surveys. consumer inflation expectations are falling. producer prices surprising to the upside. that will put pressure on treasuries. yields rose. we had a poorly received 30 year bond auction. the pimco founder and former cio says both stock and bond markets are overvalued. bullish investors have it wrong. he spoke to bloomberg about his outlook for markets and inflation in the u.s.. >> i think there is a case for 3% inflation going forward plus or minus. i think if we got to that point the fed would consider stopping or lowering rates over the next year or so. i think that the 10 year at 415 now, it is probably overvalued and has been overvalued for a long time in terms of the lower yield. and it too high a price.

if said funds actually came down, to 2.5% or 3%, the 10 year premium, the spread between 10 years has typically been about 135 basis points over a long time. if you had 100 -- add 135 basis points two 2.5% or 3% on fed funds you will get to where we are now suggesting that all of the bowls -- bulls on treasuries, 10 years, and long bonds, i think there arguments are misplaced. i think it has been overvalued for a long time. we are going back to proper valuation on longer-term notes and bonds. romaine: you understand what is going on with inflation and the fed and how it impacts these calls. some of the bowl calls have started to increase. if they have it wrong here, give us a sense here of why,

specifically. bill: well, i think that they got it wrong, first of all, because rates were so low. because the quantitative rate is easing and in some cases the five year real yield was 200 basis points, which sounds incredible, but it was 1.5 years ago. that is now plus 200 basis points, so, aid for hundred basis point switch in real rates. i think investors got overwhelmed with the fact that the fed would stay low for a long time and inflation would not pop its head out of the rabbit hole. it has. so, now, we are moving back into a old age world, i suppose, in which interest rates are really a sign of a healthy economy and

the way we have it now, the negative yield curve we have had it for 12-18 months. a thriving economy, a thriving finance based economy cannot do well. that does not mean it goes down in the dust. but, it cannot do well is low risk investments yield more than high-risk investments. as you get out from the 30 day bill to the 30 year bond you can see you are better off yield wise in the 30 day bill. that is just a reverted yield curve and it won't do well for the economy going forward. paul: that was the pimco cofounder bill gross speaking with bloomberg earlier. back with the u.s. economy, increasing calls including from the fed staff the u.s. will escape a recession.

let's bring in annabelle in hong kong. if that is going to happen, we may not find out until next year, right? annabelle: right. it does appear that inflation has bought the fed a little time before we can assess what is really going on. but it's a really delicate balancing act as we know. because there is risk that perhaps the fed is already late to recognize inflation. that they take the foot off the pedal too soon. at the same time, you have the delayed effect as well of monetary policy. it does, as we know, operate with a lag. as you say, yes, it is the case where you really know what is going on. with the benefit of hindsight. we have the view from the macro policy perspectives. that the woman in charge of that was a former fed policy official. she is urging investors and market participants and other economists to have patience

because you cannot determine if a soft landing is achieved in real-time. what is interesting is now the case for a soft landing is still building amongst big banks. we are seeing them starting to change opinions. bank of america was one of the latest in early august. now switching to the no recession or soft landing camp. the recession cap, the likes of barclays, bloomberg economics, tara bus, it is clear that there are a lot of economists out there more bearish on the outlook. shery: neil ferguson is someone not necessarily convinced by the soft landing narrative. annabelle: right. this is neil ferguson from stanford university, also a bloomberg opinion columnist. he put out a new post showing the u.s. economy will not land it gently. he says all of these comparisons, if it were like flying a plane, he says actually most people would prefer to either drive or sale if that is

the case because fed officials have not had much luck in the past of landing u.s. economies in a safe way. he is saying when you look at history as a guide looking at the 1920's, the 1940's, controlling inflation in those postwar boom eras has been a painful process. you can check that out on opi and go. shery: having said that, statistically speaking, flyer is safer than driving, right. annabelle: good point. we will have to ask him that. shery: there is more to come on daybreak australia. this is bloomberg.

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hyperinflation. though, we are on a crash course towards their if things don't get back on track. that is exactly what is at stake i did the election tonight. we are having a primary election that acts as a barometer for the general election that will come in october. because all the candidates are on the ballot. essentially, what each of the parties is proposing is a, we have the pro-business block proposed by markets, slashing spending, stopping printing presses at the central bank to cut back on the rampant inflation. there is the incumbents party running. there is a third-party ticket represented by the outsider bid. that is the question mark in

tonight's election. paul: let's talk about javier millet for a moment. he is an outsider and things he have said have been quite confronting, abandoning the peso, burning down argentina's central bank. when you are in an era of high inflation and people have nothing left to lose, what are the risks of a populist candidate like this coming through? manuela: the risks are higher than expected. we have no results yes -- yet from the official election body. but we are hearing some initial exit polls that estimate he could have a stronger election than was expected. if milei does well, scoring more than 20 percentage points, this could turn this into a three-way race. which increases volatility.

given that we might have to face a runoff election going into november. as you mentioned, he does propose very disruptive campaign policies including running down the central bank and his most prominent promise is to dollarize the economy. he also proposes massive spending cuts. just like the prominent pro-business block. but he does not have the party structure that they count on. so, this is one of the reasons he is such a big question mark. we really do not know what could happen if he does indeed, you know, turn this into a three-way race. shery: bloomberg reporter manuela toe bias joining -- tobias joining us from buenos aires. get commentary and analysis on

what we can expect when the markets open after the primary results depending on the election victory or how the pollster now. tliv is your function. flights between the u.s. and china are set to double from current levels by the end of october as the country's relaxed travel restrictions put in place during the pandemic. let's bring in bloomberg's asia transfer -- transport reporter danny lee. are we seeing more up to them about the transportation sector, particularly, tourism in the region? danny: good morning, sherry. we saw an announcement overnight saturday that flight levels doubled from 12 per week to 24 per week in stages until the end of october. this is really set among the backdrop of these kind of flight vacancies from the pandemic air that have not really gone away and the demand for travel out of

china and into china internationally that is still slow to come back to normal levels. so, these are frequencies, doubling its a boost for many. however, you have to put in context what it was before the pandemic, 340 per week in each direction. we are still at only 7% or 8% of crete pandemic capacity. though this is still really way down on where we are. still, the reaction to the increase in frequencies was pretty immediate. announcing it would go from four flights a week into china from san francisco to shanghai. a daily flight to beijing from san francisco, up, still, with demand quite weak. it will be interesting to see how the mainland chinese carriers will open on the stock market in shanghai and hong kong, seeing what this news means for them.

because international travel is still weak. and they are still losing money at the moment. paul: interesting point, danny. consumer sentiment in china is not great. what sort of uptake are we expecting from chinese trends? are they that eager to get back in the year? danny: this will really be a test of demand. when you have 40 flights per week in each direction, that would have been left to demand. we have seen a spillover effect of all the demand going to cities like hong kong, tokyo, and sold -- soul because of the demand between the two biggest aviation markets. but really this will be a test to see how much chinese and u.s. airlines benefit from this increase, particularly airfare stocks are really high between the transpacific markets, not just between nonstop roots.

it will be interesting to see what happens next. paul: bloomberg's asia transport reporter danny lee there. tune into bloomberg reporter -- radio to get more from today's biggest newsmakers broadcasting live in our studio in hong kong. listen via the app, radio plus, or bloomberg radio.com. there is many more to come. stay with us. this is bloomberg.

paul: let's look at price action in australia and new zealand with what is happening with bonds. a big move up in the yield for the new zealand 10 year going to levels not seen since 2011. inflation is still very much a thing in new zealand though we are expecting the rbnz to keep their cash right on hold at 5.5 percent. yields on aussie bonds move higher. we are going to get the second quarter wage price read later this week. that's it for daybreak australia. daybreak australia is next. this is bloomberg. this is bloomberg.

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