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lizzy: good morning. this is bloomberg "daybreak: europe". i'm lizzy burden in london and these are the stories that set your agenda. rebound in china and hong kong healthstream losses but contagion fears mount over china's property sector and sluggish economy. divisions over a decision most fed officials see significant upside risk to u.s. inflation, but two favored leaving rates unchanged. plus, the one falls, shrugging off beijing's most forceful guidance since october. the yen tumbles through prior intervention levels to near its weakest this year. welcome to thursday. the two stories of the week have only gathered pace. first the fed looks like it will keep rates higher for longer, that narrative strengthened by the latest fed minutes and strong u.s. seco data. november pricing picked up

slightly and investors are selling treasures. the market outlook for 2024 is its most hawkish yet. two-year yields hovering around 5%. the 10-year at levels last seen in october. yields continuing the rise in the asia session. u.s. futures are currently flat. in part, because of the second theme of the week, china weakness. the hang seng is on track to enter a bear market after a raft of ugly micro data. and after interventions by the pboc have failed to restore optimism. feeding into treasury worries about the blowback for the global economy. begin is at 140 six, fueling more talk of yen intervention. we will break down all those market moves. the main number that matters for you is the lioness is beating australia's matildas 3-1, but it is a sore subject for some of you, so let's get back to markets.

let's check in with charlotte yang. charlotte: it's a sea of red this morning in asia. we're seeing weakness across key equity markets after signs the u.s. interest rate could hold higher for longer. and more negative headlines coming out of china. starting with japan, the stoxx year cap a hit after data showed exports fell for the first time in two years. also, the currency weakening for the ninth session, entering the level of 146.4 against the dollar. authorities stepped in to boost the currency last year. stocks in korea fell. kospi fell as much as 1.7% before erasing losses. yesterday an benchmark remains in negative territory -- australian benchmark remains in negative territory. turning to china, we had a volatile session. the hang seng index falling more

than 2% is morning before technical rebounds erased most of that losses. onshore stocks had a pretty ugly early session. concerns are prevailing around different corners of the economy. for investors the key pain point is the property sector. data from private providers and local agents shows housing prices are falling more than what official data tells us. country garden shares fell more than 4% after they issued a major warning that there might be uncertainties over bond payments. another thing is contingent risk from the industry which saw several missed payments over the past few days. the next question is whether the chinese government can arrest the struggling economy, or if we have pain ahead. lizzy: we will continue the

conversation about china in a moment. time for our morning roundtable. i'm joined by bloomberg's valerie tytel and by lucille liu in beijing, and david finnerty in singapore. let's start with the fed minutes from the july meeting. policymakers are seeing significant upside risk to inflation that may mean more apex are needed but there are divisions on the committee. >> there were two key things for been the market in this statement. the first one you mentioned, that most fomc members saw significant risks to the upside on inflation. secondly, lizzy, a dovish contingent does exist at the fed. there were two fomc members, nonvoters, who favored keeping rates unchanged at the previous meeting. it's this tussle now between the doves and the more

hawkish-leaning members at the fomc. when it comes to their analysis of what did they make of this hot data of late. we have had hot retail sales and industrial production beating estimates. that led the market to believe perhaps these upside risks to inflation that most numbers saw could be even higher at the moment. lizzy: talk us through the market reaction, the treasury and dollar moves. >> in the late treasury session, the steepening continued. we saw new cycle highs for the 10-year yield, and new cycle highs for the 30-year yield. rates priced in for next year, those cuts priced next year for the fed continually get priced out little by little. the pressure also continues in the yield space overnight. there is still substantial pressure on treasury yields in the asia session, causing issues for the jgb market, we had a 20-your auction in japan that

was considerably weak. this global yield pressure is continuing. we're seeing global government yields at 15-year highs. this is a trying to keep your eye on. it has caused upheaval in the equity markets with the s&p retracing nearly 5% since highs in july. lizzy: we will keep an eye on them throughout the program. let's get back to china because according to property agents and private data providers, china's housing slump is much worse than the official data showed. bloomberg's lucille liu is with us now. what are the discrepancies in the home sales data? >> just to give a sense of these numbers, we had the official figures showing that new home prices slip something like two point or percent from the high in august. for existing homes, that is 6%. if we look at what property agents and private data providers are giving us, we're seeing drops up to 15% in prime

neighborhoods. in places where alibaba group is headquartered, that drop is 25% from 2021 highs. while it is difficult to make apples to apples comparisons it is a long running issue. insiders are saying china's official home prices indexes are likely understating the depth of the downturn. that's primarily due to the methodology, which partly relies on surveys rather than price data from transactions. we have had long running calls for china to drop the use of selected samples, and look at total market transactions to give us a better sense of what's happening in this market. especially now because it is one of, if not the most -- the biggest headwind for the economy. it is proving to be even more important for investors and policymakers. lizzy: really helpful context. how bad are the defaults in

china's credit market? >> that's another piece of data that's quite shocking. we basically had borrowers missed payments on a combined $1 billion of domestic notes in june and july. the worst two month stretch since december and january. looking ahead is where more of the problems lay because we're seeing more property firms are going to struggle to meet their debt obligations, especially as new home sales are again falling. so, eyes are on scene ocean group. they had that 30-day extension. we're looking at country garden which according to people familiar is seeking to extend a maturing note. repayment worries are building. and i think will be a period to watch, if we see the government stepped in, or if there is just

a lot of pain ahead. lizzy: country garden shares back in the red today, down 3.6% currently. thanks to lucille for that update. to deal with the situation, beijing is ramping up its battle to support the yuan, with the highest fixing bias since october. the top or that is -- talk through that is david finnerty. with the dollars supported by climbing treasury yields and economic woes seemingly worsening by the day, it seems the yuan bears will remain firmly in control. >> risks are skewed towards yuan weakening in the near-term. it's not just that, the dollar has been rallying against every currency. but the worry is the pboc is near its 20-year lows. not an official line in the sand but the market will be very wary of that. if you want weakens past that level, will stops be

triggered? if they do, that will add to downside. markets worry about chinese state bank selling the dollar ahead of those levels but at the moment risks are skewed. that dollar yuan will head towards this 7.37 handle which the market has its eye on. lizzy: as u.s. rates bushfire, the dollar strengthens broadly, and concerns about china spill over. the yen has slumped to a 2020 very low and has traded at levels that have previously triggered japan's intervention. can we expect verbal intervention from japanese officials? >> we're in the region where they have intervened before. the market is sort of looking for it. even though implied volatility is edging higher, it is nowhere near as high as a the months ago, so the market does not seem overly concerned. so far we have had very little

intervention. suzuki yesterday said he has a sense of urgency and is watching the currency market, but verbal intervention is one thing. the markets will want more solid intervention. they will be looking for a three-way meeting between the fsa, mof and boj, if that happens that is a shot across the bow, or the boj could do a great check. -- rate check. until that happens, the market is quite happy to say we're going to push dollar-yen higher to test the ministry of finance, particularly if yields go higher, because of fundamentals. traders are quite happy to test central banks and the ministry of finance to see where that land in the sand does lie. lizzy: i suppose even if they intervene, it can't guarantee it will stem the slide. thanks to david finnerty for that update.

now let's look at what's coming up today. at 9:00 a.m. london time the norges bank rate decision, economists reckon it will hike by a quarter-point to 4%, the highest level since 2008. the expectation is more hikes in the pipeline, despite the slowing of cpi inflation for july, but we will not get forecasts or rate projections because it is only an interim meeting. before the u.s. market open we get walmart earnings, second order sales expected to slow to 4%, which is still a big number when you consider it is the world's biggest retailer. at 1:30 p.m. we get initial u.s. jobless claims for the week to the 12th of august, the consensus is a slight drop to 240,000 because the previous week's uptick was accounted for partially by the bankruptcy of yellow. thinking about how walmart earnings feed into the trilogy of earnings we have had this

week and the outlook on the u.s. consumer, what do you think it says about consumer resilience? >> this week has been a big week to give us hints on how the consumer in the u.s. is holding up. overall it's been quite rose. you have to remember that the consumer and consumption makeup two thirds of gdp. we have seen many banks talking about upside risks to their forecasts. my worry is we get sales numbers from walmart which yes, they are expected to take down from 8% to 4%, but the upside risk may be pushing this narrative that gdp in the third quarter is still running at a solid pace in the u.s. lizzy: terminal subscribers can find all of those stories and more by heading to the daybreak newsletter. today they lead on the chinese shadow bank which is said to be planning a restructuring. we also have china's housing slump likely to be worse than the official numbers show.

finally, the fed minutes for that newsletter had to dayb . i want to bring you a breaking line. the u.s. is planning to escalate its his feet with mexico over gmo corn. for now we're not seeing much of a move in corn futures but we will keep across that story throughout the morning. coming up, we continue the conversation with china's deepening economic woes and the wider rates debate with our markets live team next. plus, argentina's leading presidential candidate vows to close the country's central bank. that's the view from our exclusive interview with javier milei. this is bloomberg. ♪

>> you take 2.5, and for inflation, you take 1.5, which isn't especially aggressive for real rates. and you take 75 basis points, which is lower than history for term premiums. you're looking at 4.75 on the 10-year. it could end up being higher than that. nobody knows, but it seems to me we're in a very different era than the arrow we were in, in the aftermath of the financial crisis. lizzy: paul dobson, bloomberg's executive editor for asian markets joins us to continue our conversation. what were your broad takeaways from the fed minutes? paul: two big takeaways, one

higher for longer and two, qt isn't stopping anytime soon. those are basically how the market has taken this. on the first one, yes, there are voices of concern about the need to keep on hiking but the consensus seems to be we want to keep interest rates higher, and keep them high for longer, and we might take them higher still. that was the first message. it had a medium impact on short-term interest rates, but the bigger impact was felt at the back end of the yield curve largely because part of this messaging is that qt could continue. i.e., the fed could continue to reduce holdings of government bonds. even if it goes from tightening to lowering interest rates again. that feeds into this whole supply-demand dynamic that is spooking the market and pushing up the real yield. we have seen an increase in yields during the u.s. session that has carried through to asia and is starting to wobble to the

rest of the government's bonds complex. and off the top of that, stronger dollar as well. lizzy: okta was about how it is impacting the apac region specifically. paul: we can see it in the witness for the yen and the chinese yuan as well. the higher interest rates widening that yield gap between asia and the u.s. is starting to put pressure on asia's currencies. we have been familiar with the yuan story for a while with the pboc trying to resist yuan weakness. same for the boj, we're on the cusp of some critical levels for both. we're into the intervention sound, as it is known, for the japanese yen. it is also the australian dollar and new zealand dollar the weakest since november. across the rest of emerging asia, currencies are under pressure and interest rates are

starting to price away the idea that central banks there will be cutting rates soon. if the fed is going to be cutting, asian central banks won't be cutting aggressively either. lizzy: i need some optimism. when we spoke yesterday, things in china were looking grim. even more so now perhaps, but are the reasons to be optimistic on china today? paul: no might be the easy answer. if you look at markets, they are not showing so much panic today. actually the yuan has more or less stabilized, equity market started off pretty weak in hung on, but even they have shown recovery today. we have seen stronger pushback again from the pboc against the weaker currency, and that seems to have kept it under control, along with more support from state banks. but the negative headlines keep coming through. we have seen all sorts of stealth measures to protect the market, which may have a small

impact, but probably won't have lasting impact. we're looking at this shadow bank situation which is looking pretty precarious, if they are talking about liquidity crisis, that is pretty troublesome. may have blowback for chinese banks as well. the economy looks just as gloomy, we have a big story talking about how house prices may be much weaker than the data is showing. still waiting for the silver bullet to come from policymakers but all these incremental measures are doing enough to shift the mood there. lizzy: thanks to paul dobson, bloomberg's executive editor for asian markets. i want to bring breaking lines from the ecb. we're hearing from martin kazaks, the latvian central bank chief. he says he needs to see the new ecb central bank forecasts before deciding on rate hikes. this is in an interview with latvia's tv3.

he says any additional rate hikes would be small. that is the latest commentary on the european central bank. coming up, more central bank action. new zealand's central bank governor says the economy needs a mild recession to slow activity. we bring more from our interview next. this is bloomberg. ♪

>> i would say to the markets, be confident that we have time to watch, worry and wait with where the interest rate levels are now. the forward track is a projection, it's not us trying to provide a signal, or constraint. the projection really reflects

that over recent months, we have had some upturns on economic pressures that we saw. but it will come out in the wash. what have we done? we have an official cash rate projection two years out that deviates very little from 5.5%. and we think that nicely balances the risks near-term to the upside on inflation and growth versus the more medium-term downside risks to inflation. >> is it fair to say that this opens the door a little wider to another rate hike, for example, if it proves to be needed? in other words, you are not trying to signal anything, but in terms of making this small shift but certainly noticed by everybody, does it at least do that for you if you have to do something to bring down inflation? >> the important thing is, we

never say never. monetary policy is a repeat game. we get new information, reassess the outlook, and then reassess our stance. a straight-line could be read as straight forward guidance, we can't provide that straightforward guidance because there is always too many uncertainties we need to manage. and we're trying to have optionality. at the moment, the nature of risks is to upside inflation proving to be more sticky, a global phenomenon. output growth particularly with strong inward migration in the country could prove stronger than what we have for the next one to two quarters ahead. but we're confident over the horizon that matters for us, one to two years ahead, that we're being restrictive with monetary policy and in a position where we could tighten or loosen as

needed as information unfolds. lizzy: that was the new zealand central bank governor adrian orr speaking to bloomberg. country garden warns about major uncertainties over bond payments. the strongest sign yet that a default for the distressed developer may be imminent. this is bloomberg. ♪ wow, you get to watch all your favorite stuff. it's to die for. and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you? um, it's called commitment.

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lizzy: good morning, this is bloomberg "daybreak: europe". i'm lizzy burden in london and these are the stories you are waking up to. rebound in china and hong kong stocks helps trim losses, but contagion fears amount over china's property sector and sluggish economy. divisions over a decision most fed officials see significant upside risks to u.s. inflation, but two favored leaving rates unchanged. plus, the yuan falls shrugging off beijing's most forceful guidance since october. meanwhile, began tumbles through prior intervention levels to near its weakest this year. good morning, welcome to thursday. the two big stories of the we have only gathered pace. first, the fed looks like it will keep rates higher for longer. that narrative strengthened by the latest fed minutes and strong u.s. data. november that pricing has ticked up slightly and investors are

selling treasuries. the market is its most hawkish yet, the two-year is hovering around 5% and attending-year has been at levels last seen in october. u.s. futures currently flat, the nasdaq down 0.1% in part because of china weakness. the hang seng is on track to enter a bear market, after a raft of ugly macro data and interventions by the pboc that have failed to restore optimism. feeding into treasury worries about the blowback for the global economy. the yen, for example, is at 146, feeling more talk of yen-=tervention. i want to bring you breaking news across the terminal. we have results for a payments giant, it sees first half ebitda at 43%, falling short of the estimate for 48 point 6%. but it does reiterate its

objectives. the first half processed volumes are coming in at 426 billion euros, the estimate was 463 billion euros. it attributes its drop in profit to the war for tech talent, and higher wages as well. it needed to assure that it could deliver on its lofty margin goal and justify the stock's premium relative to its peers. it has not been immune to price pressures in competition with the likes of stripe and paypal. it has pressed ahead with plans to hire 1200 more people in 2023, despite this backdrop of job cuts in the tech sector. that's all part of its longer-term growth strategy. the shares have been up almost 14% year-to-date. you have also seen first-half net revenue coming in at 739 million euros.

falling well short of the estimate. that was for -- country garden has warned about major uncertainties over bond payments. the strongest sign yet that a people for the distressed chinese property developer may be imminent. i'm joined by kevin kingsbury, what's the latest with these bonds? >> like you said, country garden said on wednesday that it has major uncertainties regarding its bond. repayments. it didn't go into more specifics than that, but it went into grace periods on two dollar coupons last week. bloomberg reported that it is in talks with bondholders about potentially extending a roughly $525 million bond that matures in early september. we have to see just where these

bonds are going to go. suspensions have been in place for 11 bonds in the past few days. there seems to be a critical mass going on here with country garden. lizzy: talk me through the scale of the broader threat for the chinese economy, markets in general, if country garden defaults? >> country garden has about four times the amount of projects that evergrande does. two years ago, when evergrande was going into its debt troubles, we were talking about what would the contagion be for the broader economy? two years later, we have another big developer, country garden which the past several years has been the country's largest developer. it has fallen to six as far as sales go. if it is unable to deliver its homes under construction. we estimated it is nearly one million homes that people have paid for, but have yet to get, because it is in various stages

of construction. if for whatever reason, country garden is unable to finish these homes, that would set off a strong economic reaction. we had these mortgage protests a year ago, regarding some smaller developers and their inability to finish construction, this would probably be multiples in excess beyond that. lizzy: we have had this drip feed of interventions from the chinese authorities, but what might the government need to do to stem the property sector's latest woes? >> you mentioned the drip. there seems to be some thousand, some pledges, but we haven't seen concrete action yet. we had interest-rate cuts announced earlier this week for key lending rates, but there is a lack of demand as far as new credit in china. july loans -- new loans where the worst in 14 years.

there doesn't seem to be this demand either from homebuyers, or other personal lending needs, or even on the corporate side to get into new financing to buy new things, to push into new areas, and get the economy on a faster growing trajectory. lizzy: thanks to kevin kingsbury for that update on china. i want to get back to the latest fed minutes from the july meeting. we learned that policymakers are seeing significant upside risks to inflation that may mean more rate hikes are needed. joining us is bloomberg's valerie tytel. your key takeaways from these minutes? it looks like there are divisions on the committee. >> a bit more apparent now that there is a dovish contingent that exists in the fomc. that was one of the key takeaways, a couple of fed members, which in fed speak means two, favored keeping rates on hold at the previous meeting. we know there is a dovish

contingent, that definitely does exist. a lot of the attention has been on the lines on inflation, that most members saw significant upside to the inflation risks. and several believe that significant disinflation is yet to become apparent in the super court metric. those are the ones that relate caught the eye of the market yesterday because those are essentially new word from the fomc. it didn't exist in the minutes from their previous meeting. it probably reflects the fact that we have had office upside momentum to growth. all this optimism about u.s. growth is pushing that sentiment that inflation has some upside risks as we go on. the one other comment i want to bring attention to is their comment on qt. powell said in a press conference that qt could continue during cuts. there wasn't much detail about

this in the minutes that it was reiterated again. it's important because this is the first comment on the path of qt since the program began. i think that is what spooked the long end of the market yesterday afterwards. lizzy: the two-year yield is edging ever closer towards 5%. up three basis points now. write down the yield moves for us. >> it's interesting to see weakness continue in the asia session all across the curve. later in the session yesterday it was about the long end weakness, yet again this evening pressure we're continuing to see. we had 30-year yields make new highs for the cycle. 10-year yields are hovering at highs since 2007, closed at a new high there. we're seeing new cuts that we had priced in for next year, those gradually get priced out. so a lot of pressure on the treasury market. this really yield surges starting to drag on risk

sentiment, we're seeing equities retrace. the s&p has retrace nearly 4.5% since the highs in july. it is having reverberations around the world and we're seeing pressure on jgb's this morning. lizzy: is in pe minis down 0.1%, nasdaq futures down 0.2%. let's bring you some more stories in brief. said it out's flagship -- sabadell's -- citadel's flagship fund is up 9% this year. all its core investment strategies are up for the year. strong performance coming despite mixed results for many other hedge funds have made recession fears and volatile commodity prices. a power struggle is shaping up inside the top ranks of goldman sachs. bloomberg has learned that manages frustrated with the leadership of ceo david solomon have been looking to his most loyal deputy john waldron for

support. sonali basak has more detail. >> as pressure mounts on goldman sachs ceo david solomon, the spotlight grows on his number two, longtime deputy john waldron, coo and president of the firm. executives are asking waldron to pick a side. to stay loyal to solomon and risk being passed over as ceo for that choice, or to win over disgruntled executives. inside the firm, waldron is responsible for much of the strategy, including turnaround that consumer business which they are exiting certain parts of. pressure mounts this quarter, as they are under pressure to post a better quarter than the last couple quarters we have seen so far. lizzy: now to european corporate news. bloomberg learned that bae

systems is in talks about a possible acquisition of ball corporation's aerospace division. in what would be the largest takeover of the year by a u.k. company, it is in talks for the unit which manufacturers instruments and sensors. at 9:00 a.m. u.k. time, we will have the latest rate decision from the norges bank. the current rate is at a 15-your high of 3.7 5%. at 1:30 p.m. u.k. time, u.s. initial jobless claims. walmart is due to report second-quarter earnings before the bell today. coming up, argentina's leading presidential candidate vows to close the country's central bank. more from our exclusive interview with javier milei. this is bloomberg. ♪

>> i think there is a previous discussion about dollarization. strictly speaking, it is to get rid of the central bank. dollarization is an instrumental issue at the end of the day. there are four argumentative axes, one is the moral issue that stealing is wrong and

seigniorage is nothing more or less than a swindle. therefore, if we consider that stealing is wrong, one of the greatest thieves in the history of mankind is the central bank. the second point has to be with a technical issue, in the argentine case, when a product has no demand its price is zero. if the local currency has no demand, its price should be zero. whatever amount of money a central bank wishes to impose, the counterpart is that the price level is infinite. demand and its price should be zero. equilibrium real balances r0. whatever amount of money a central bank wants to impose, the flip side is the price level has infinity. >> what would you do with the central bank? at one point, you made the joke that she would set it on fire. >> what you do with a building is a problem of what you decide to do with it. it's a metaphor. what i'm saying is the institution does not exist

anymore. until you can transform the banking system into a free banking system, it will have to fulfill the function of regulating the banks. the superintendent of financial institutions will continue to operate until a free banking system can be set up. >> if you are president in six months, one year, all the bills in circulation in argentina would be dollars? >> all dollars, yes. lizzy: that was our exclusive interview with argentina's presidential front runner javier milei. joining me for analysis is our maria tadeo. what more did we learn from this interview? maria: just fantastic interview from our team in windows errors. -- bunos aires. this is the men of the moment in argentina who won the vote on sunday and could potentially be the next president of argentina. there is a lot going on with

this man. after that video, you learned everything you need to know at this point. he continues to say he does not like -- in fact, he really hates the argentine central bank -- he says it is useless and has caused a lot of the problems in this country. remember triple digit inflation. he talks about this idea of using u.s. dollars in the argentine economy, people have lost trust in the argentine peso, let's just switch to the dollar. there is a question about default. he is willing to talk to the imf. argentina is in a program with the international monetary fund, but he says my fiscal reduction will be so big, there is no need for default. can he do that? there is a lot of questions in terms of his actual program and we have seen it reflected in argentine assets this week. it has been a rocky week for the country, definitely a lot of

emotions. lizzy: what to investors definitely want to see from him? maria: the fact that yesterday he spoke to bloomberg. he knows he is talking to professional market players who really understand the subject. he spoke for two hours shows that he wants to explain himself. whether they buy it or not is a different story, but investors want to see a transition from javier milei the politician, who is very good on the campaign trai, but can he be a good president? you can be a at politician but not be a good head of government. we want to see the implementation of his ideas, does he have been team and the staff to carry out his ideas? and there is a question about the tone. he is very fiery, there is no question he is controversial. could he be someone you can talk to once he is in government?

that's fundamentally the question. lizzy: i will say only this, see you in the final. this is bloomberg. ♪

>> it's the world's biggest luxury company. valued at more than $400 billion, with some of the biggest industry names under its umbrella. dr, louis vuitton, tiffany who will lead lvmh after bernardo no-- bernard arneault retires? the world is guessing which of his five children will take the reins as they assume bigger roles at lvmh? there is here with you in the clan. the eldest delphine is the head

of the second-biggest fashion brand christian dior. antoine overseas lvmh's image and public relations. bernard arnealt at three more children. frederick heads the watch brand. the youngest is in charge of developing the louis vuitton's watch catalog. >> the family makes a point of meeting once a month at the lvmh headquarters in paris. they have lunches and discuss everything from business to personal matters. >> the idea you have a family community that will stick together to avoid any type of intrusion. lizzy: for more on lvmh, we have teleported her in from the street. how ugly could this get, nicole? >> lvmh is europe's biggest

company. it's the world's largest luxury conglomerate. it is always up there in the world's top 20 companies in terms of market capital. it could really shake the industry. however, a lot of our reporting and analysts we have talked to say that when the succession will take place, it is mostly priced in already. investors are expecting at some point bernard arnault will go, the question is who will it be? lizzy: it feels like a real life episode of "succession." thank you to nicole for that reporting. the 10-year yield is climbing. and for analysis, valerie tytel is back. valerie: the most important thing for traders when they sit down this morning is the fact that we're still seeing this extended pressure on treasury

yields, after we got minutes last night that showed fed officials see some upside risk to inflation. then it was those comments on qt that it could still be ongoing, even if the fed cuts rates. we're seeing the two-year yield become scarily close to a 5% handle. i have my eye on the 10-year yield, the intraday high on the cycle has been at 4.33, we're close to that now what will. cause this treasury loss to extend? we have walmart reporting. anymore upside on the u.s. consumer that could drive optimism on u.s. growth could see these yields extend higher. we also get dated today, we have u.s. jobless claims. a lower-than-expected jobless claims. could push optimism about job

growth and cv 10-year make that cycle high. it is 4.33, the intraday high in october, my eye will be squarely on how the back end trades. this is a decent move if we take into account that these yields moved so much yesterday. i know we're in summer markets, it is light liquidity, but these are eye-catching moves before the london traders sit down at their desks. lizzy: thanks for that update on treasuries. i want to check in on china markets. you have the csi 300 down 0.4%, the hang seng down 1%. it is on track to enter a bear market. investors weighing tencent's disappointing revenues but all of the dower macro moves out of china as well. you have the offshore yuan currently pretty flat against the greenback.

the gloom injecting asian markets more broadly as well, the edit is ci -- msci asia-pacific down at levels we haven't seen since march, on track for its biggest two-day drop since october. if we have a quick think about u.k. data, we had inflation data yesterday, jobs data on tuesday. the reaction has been divided but the good news is wage growth finally outstripping inflation, even if it means the bank of england may need to keep on hiking. i'm sure they will be talking about all that and more next on "markets: today." this is bloomberg. ♪

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