>> very good morning, i am haidi

stroud-watts in sydney. shery: good evening, i am shery ahn. the top stories this hour. traders bracing for a volatile start to the week after u.s. and european policymakers at jackson hole signal rates staying higher for longer. haidi: china lowers on stock trades and pledges to slow the pace of ipo's. evergrande reporting a 4.5 begin dollars first have lost. shery: the chairman of ending up is because biggest steel producer calls for level lynnfield the west on taxes and tariffs. we hear from him at the v 20 summit. take a look at iu was futures are coming online on this agent monday session. seeing a bit of upside after stocks was last week. it was the first weekly gain in four, but there was this lack of conviction with the s&p 500 just rising six this month. equity market already hawed,

running into late july, so we are expecting a volatile start of the week. the rhetoric on rates staying higher for longer will be felt across markets. we already saw the impact on the treasury space within the sector falling after chair powell's remarks, pushing up the two year yield past the 5% level, and 10 year yield the best of 4238 level. the real five year yield surging to the highest level since 2008. brent crude also surprising the $84 per barrel level. this after falling for a second week. we see signals of additional crude supplies from iran and venezuela that have been sanctioned by the u.s., but we are seeing a thawing of relations. we talked about the potential higher for longer, those hawkish comments, the usual coming at jackson hole, but perhaps we need to read between the lines.

for the first time chair powell has acknowledged progress on super court inflation and hinted multiple times real rates are already quite restrictive. let's make sense of the signals with vonnie quinn. we are talking about categories of price pressures chair powell talked about. vonnie: enter the first time he talked about that, as you said, and he was quite a bit about the fact that inflation is coming down. however, there is still the threat of more interest rate hikes. not a promise, but definitely at the red. the light getting quoted most as we are navigating by the stars under cloudy skies. in other words, the fed does not quite know long and variable legs what they mean right now, whether that has shifted and how long is long? yields of the two year treasury kind of 5%. he stays restrictive until inflation is more near 2%.

he talked about real interest rates being positive and well above mainstream estimates of the neutral policy. let's listen to him in his own words for more on that, because this is a significant line. >> we see the current stance of policy as restrictive, putting downward pressure on economic activity, hiring, and inflation, but we cannot identify it with certainty the neutral rate of interest, so so there is always uncertainty about the precise level of monetary policy restraint. vonnie: officials cannot know when the trickle-down effect will happen in the economy. as it started happening? are we seeing the economy pick up steam again, which advocacy work -- because obviously we are. we will have more inflation and jobs data before the next fomc meeting, but we know the fed is probably on pause for september in hiking again if that is necessary, so the essential thing to take away from this is that policy is shifting toward

managing risks amid substantial uncertainty. she did not also say what it would take for the fed to lower rates. a lot of people were looking for that, because the summary of economic projections does have the fed, the fomc lowering rates at some point in 2024. the fact that he did not go there, never mentioned anything about it, did not give any hints, some people are calling that a little hawkish in the sense that he did not go there, but the senses also that he did not want traders to take any kind of hint and then run with it and be an obstacle to what the fed is trying to do. haidi: such a finely balanced narrative. when it comes to the boj, did we hear from governor a way to -- udea giving hints? >> he said there will not be a policy change until something changes. he underscored the fact that the

bank of japan is pretty sure that inflation may be a lot lower than its readings right now, and indeed on friday, got tokyo inflation below 3% for the first time in a long time, and that does seem to bear out what the governor said. she spoke for about 20 minutes on globalization. so we had interesting comments on some of the factors the bank of japan is considering. he called china' or down a disappointment and also said japan was at risk of losing out in the global rates to attract top companies, because perhaps it does not have adequate infrastructure, but no word about yield curve control or monetary policy changing. from surveys, we know traders and investors have already pushed their ideas were when that might change up to april of next year. he was certainly not talking about the again either. central bankers tend not to talk about their currencies, but there was no mention of how the yen has weekend 12% -- weakened to percent against the u.s. dollar, in part because interest

rates are lower. haidi: the u.s. commerce secretary gina raimondo is in china seeking to expand business ties despite ongoing tensions and revelry. let's go to our bloomberg editor who joins a set of washington. several top u.s. officials had visited china and the last few months against this backdrop of what we know is going to continue to be a difficult and often strange relationship. what is characterizing the trip? >> when mondo -- raimondo sits at the nexus of this china-u.s. relationship emma because her department deals with both trade promotion, promoting business, international business and trade restrictions, so that connection with some very real world issues in a way that perhaps -- this is no criticism or aspersion on

them, but perhaps top officials like antony blinken or treasury secretary yellen are not in quite the same way. she also serves at the intersection of the broader trends that you talked about or hinted at, which is the competition between the u.s. and china, where china has been extremely critical of restrictions taken by the u.s. and its allies while the chinese economy is slowing, and all of this contains or bears risk for the global economy at large. so if you frame it that way, the stakes are actually quite high. shery: you mentioned secretary blinken, secretary yellen's visit, and we had the climate envoy john kerry eating the chinese policymakers, but they

came back sort of empty-handed. what will be the measure of tangible progress from this visit? >> we have been told or she said this i believe that she is looking for practical and pragmatic steps on this visit at least, which by the way also includes shanghai, and that will be working groups on the export controls that china is upset about, and also one of the easier issues in play there is simply tourism, travel, because chinese tourism is such a boon to the global economy, a much bigger price is or a more

specific price is there has been some talk about easing toward a resumption of boeing 737 max deliveries to china, which has been stopped for a number of years. that would actually be a real tangible sign of progress. haidi: there are of course broader issues. tell us about those and if we should manage our expectations in terms of whether they get touched upon? >> absolutely, like the others before her, we mentioned lincoln -- blinken, yellen, and kerry. she is going with a clear message that the u.s. will protect its national security. which is good for the these

restrictions we put in place on chipmaking machinery and the more recent curbs on outbound investment, basically that these are not up for discussion, and there was also a lot of pressure from congress and even now from the 2024 republican presidential candidates, who would state tough on china, so that is where you have to sort of limit your expectations, and at the same time, of course, there are other broader issues. military, geostrategic issues, such as the dispute over taiwan. i once had over the weekend again that there was -- taiwan said over the weekend that there was military movement. you would not expect gina

raimondo to somehow ease or even resolve without casting any doubt on her abilities, but those are very broad issues, and i think they are also trying to sort of lightly sort of keep not out of the next but it may be slightly in the background on this visit. shery: tony joining us from washington. a geopolitical tensions just one of several reasons it investors are cautious about china. chinese regulators have now announced new measures aimed at lowering -- luring those investors back to the stock market. annabelle is looking at the changes. annabelle: for the first time we are seeing this abuse since 2008, so it really just points to the rarity of which these measures have been used in the past to either try to stimulate

investor interest, and also as well to table markets, but the rarity really points to how dire the situation has become for investors. performance of the csi 300 over the past 30 days it down nearly 5%, but getting through these changes in more details, because we had a flurry of announcements coming through on sunday from regulators, and the primary one is cutting the tax rate on stock trades. this was previously at .01 percent reduced to .05 percent on monday. handling fees on sox have been lowered, so there will be a lower ratio requirement in place, so for the existing equities, we have seen other changes as well coming through over the weekend, and these were made the listing process. so for ipo's, and that is likewise going to be slow down. details as to how regulators

plan to do that, not many, but it is this effort authorities are making to try to dispel these concerns about the economy that have been treated by trusted defaults, consumer spending, weakness in the property market, and you just mentioned geopolitical tensions as well. haidi: the property market as well, evergrande going to restart trading on monday, not exactly a great environment to rejoin the fray. annabelle: it is the first time we will see evergrande trading for 17 months, so it has been a long suspension, and a lot has happened not only for the broader chinese economy but also for evergrande in that period, because there was a long time we did not give results, but we had more numbers the company posted on sunday. as of they are coming back to the investor reaction, plus the debt restructuring process. talking about the results in more details, these were filed in the hong kong stock exchange yesterday. the key takeaway is that

evergrande continue to lose money for the first half, so losses of $4.5 billion for the six months ending june 30. compare that to the results we had last month as well for the previous two years, and we sought losses of $80 billion. the first back to back losses we saw on an annual basis since the 2009 listing. taking a look at how some china developers are traded on the first day of trading, that is another indicator. perhaps we will see a further sump -- slump to evergrande. the company says it is proved its control program. the stock last rated on march 2022. we have big creditor meeting taking place on monday, and essentially evergrande is going to be asking for creditors to approve its offshore debt overhaul plan later. they have got the backing from a lot of class a bondholders around 70%, not as much from

class c holders, but a lot of interest on the stock later today. haidi: annabelle with the latest on evergrande. one thing we are watching for market reaction when it comes to chinese economic data released over the weekend, industrial profits falling 15.5% year on year in the first seven months of 2023, almost a 17% drop in the first day. we did see the decline for the month of july easing somewhat, but the slow down and deflation risks are looming large. bloomberg economics says smaller drugs will not give much relief to the economy largely due to statistical effects and not any kind of let up in pressure is weighing on chinese growth. let's take a look at asian markets, because the big question of chinese growth, this was meant to be a growth story meant to drive 1/3 of global economic expansion. this will continue to way on

broader growth and economic economies but sentiment as well. sidney futures up .10 of 1%. asian stocks should follow u.s. equities with modest gains in the session after jay powell's speech about proceeding carefully. shery: ksw group chairman once the modi government to counter u.s. tariffs and carbon tax with similar levies. our interview with the indian steel tycoon later. we debrief jay powell's jackson hole speech with robertson stephens chief economist. this is bloomberg. ♪

>> we are navigating by the stars under cloudy skies. in such circumstances risk management considerations are critical. >> we are facing major shifts. we cannot just stay in the same box all the time and assumed that the models that we have been using for a number of years are going to produce the result that will guide us toward the right decisions. >> the physical dimensions play very reasonably. we need to continue that. it is a battle that you need to continue fighting. >> you cannot wait until you

have got all of the data before you act. by that time, it would be too late. >> we are in this position in europe and out where the euro zone economy is stagnating. whether we are in a restrictive enough territory remains to be seen. >> the labor markets and similarity with the u.s., but economic activity is slowing. >> at the current moment i would be in no rush to say we are done. haidi: global central bankers speaking at jackson hole, and our next guest says u.s. growth is too strong for the fed and does not see any rate cuts on the horizon. she is a senior grow strategist at robertson stephens. listening to the narrative being built by central bankers, including the fed chair, this idea of everyone is navigating by the stars, that there is not just the volatility of this last part of the cycle and the inflation fight but also deeper

structural shifts in global economic growth as well, so how big is the risk of policy mistakes at this point? >> i think the risks are significant, but i do not know we cannot deal with it. those risks are there. i must tell you, when i heard the navigating by the stars and cloudy skies, i was trying to imagine of paul volcker would have said something like that, and i just cannot get there. what we saw play out over the course of this jackson hole meeting was actually a pretty esoteric economic debate, and it is captured with this other statement by him about the neutral rate, which is sometimes called the r star. so what is the rate of interest

that would be consistent stable inflation rates and stable growth, not accelerating, if you will, growth? and they measure against that how restrictive our current rates, which right now based on traditional measures of what that neutral rate might be, these current interest rates are very restrictive. powell says, yeah, but we do not know what that new parade is, and that is what the market is starting to absorb once again, which is that if these rates are very restrictive, but the u.s. economy is still growing very robustly, which is, may be the new parade is not what you thought it was. maybe it is higher, which then feeds into the narrative that interest rates will stay higher for longer, and that is, of course, what was roiling the markets early on friday and will

still be very much on people's minds this week. what you heard from the central bankers that is interesting to me as an economist is most of them are highlighting that there are some real theoretical, longer-term issues that they have to come to grips with, specifically how different is this environment? but powell is not going there, because he wants to maintain credibility by saying, it is what it is, and we are not done yet. shery: jeanette, we are talking about a solid economy in the u.s. what happens to the chinese economic slump, and when does not become an issue? we saw that back in 2015 with the shock of the yuan. >> none of the world's economies operate in a vacuum here. somehow, someway, that slow down in china is going to impact

everybody. it may come through various emerging markets, other ways. a debate come through europe, the impact on germany and turn having an impact on the united states. there is an interconnection here. at that will be a factor, but i do not think anybody can look at what is going on in china and say, well, this is going to mean that the u.s. economy, which is growing at least 3% right now, apparently in the third quarter it will only go to 1%. it will just not play out that way. and how long can you wait for those negative effects to have an impact, this is the challenge for the fed. they are well aware -- they have got to be well aware, there are these negatives out there that will come at us. consumer spending is going to become increasingly challenging as access savings is absorbed, car loan delinquency rates are coming up, mortgages and fallen

like a stone because of interest rates. this issue with china, so are you going to say, i am done and wait for that to hit us. shery: we are running out of time, but it was great having with us. we have more to come. this is bloomberg. ♪

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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. the idea that we have saved five million people's lives, it's overwhelming. it's everything. shery: ecb president christine lagarde says the central bank will pay close attention to wage developments in europe as it seeks to bring inflation back to

target. speaking to us exclusively at jackson hole, she also weighed in on protectionist measures around the world, calling them a cause for concern. >> is a worrying situation. if you look at the number of protectionist measures that are being engineered, implemented around the world. if you look at the volume of trade, whether it is pure volume or momentum, it is either stable or on the decline. and the fragmentation is something that is much talked about, but that we are now beginning to see in terms of investment, in terms of market penetration by various companies around the world and the control offdi for indirect investment is now being scrutinized in a much fuller way. so we are seeing not deglobalization. let's not kid ourselves, but a

much more guarded, much more careful target of supply chain development, of setting up for investment abroad, and the purpose of those investments were different. there was a time where you were setting up a facility and a place where costs are lower. now you set up a facility because you were going to penetrate that market, and you are not relying on inward output. >> you mentioned to protect inflation. is that which you confront at the meetings in 2024? >> we will be very attentive about wage developments, because obviously one of the strongest portion of the economy where prices are going up his services, and services is labor-intensive, so this is generally less interest rate sensitive where capital expenditures are more sensitive,

so wages as they develop will maintaining enormously, which is why it is critically important that inflation expectations remain anchored at 2%. if trade unions and business associations appreciate in a relatively short order inflation will be back to 2%, they will not want to fuel more inflation by having wage or margin increases that would not be consistent with that. haidi: that was the ecb president christine lagarde's taking exclusively to tom keene at jackson hole. europe' s economy is also being affected by the slow down and china like other parts of the world. let's discuss with annabelle. this is not the way that the chinese economy was supposed to contribute to global growth this year. annabelle: that is right, i think it is so interesting when you talk about january and so much of the discussion was that china was going to be really powering will growth over the

course of 2023 and offsetting what was supposed to be a slow down, particularly in the u.s., but the reality has been anything but that, because we have continued to seem the signals of strength in the u.s. economy coming through, that resilience of the best consumer. and then at the same time, the story of china has been so much of that weak sentiment coming through and the recovery that just failed to materialize. so this has been a major talking point for economist, given that there was an expectation that china would power 1/3 of global growth over the course of the year, but the impact of that is showing up and is with the most noticeable in aj in particular, because we are seeing exports lumps particularly in north asian markets, korea and also japan showing outbound shipments that would typically have gone to china for more advanced materials and equipment. bca is saying china inflation might not be such a bad thing

for the global economy for now, because of the deflation trend we are monitoring and china is actually helping other economies do not overstimulating them with price pressures, so essentially bca research saying it will only be problematic if we start to see a recession end of the parts of the world, in the u.s. and europe. that is when china deflation would be a bad thing, but not right now. shery: we continue to seek a slew of measures coming from beijing to boost market sentiment. what has the reaction to that been so far? annabelle: just recapping some of the ones that were announced on sunday. we saw stock trades were cut to .05% from .01 percent. at the margin requirement was reduced, and there were other measures essentially at the end of last week, but the point of this is about trying to boost liquidity and the market, so we

have heard from bloomberg intelligent so far and they are saying so far china is because of broker proffered -- profit could be lifted out of this because there will be more liquidity coming in the environment. they slashed stock handling charges,'s they are pointing out ways a good benefit from this particular, but so far the reaction has been muted, because we have heard other saying as well actually wen yu do things like this, it is that short-term booze, but for a long-term market impact, probably will not materialize either. haidi: we will be watching for the impact of weakness when it comes to demand for iron ore. paul allen joins us for more. the price movement for iron ore has been quite bizarre, if you take a look at the chinese slow down. >> the price holding up, still above $100 per ton, because that is important for fortescue, so

more sensitive to this price movement than its main competitors, but we are anticipating a net income, $4.57 billion, dividend expected to take a big hit, off by 30%. not only is iron ore fortescue's biggest product, china is its weakest customer, so very exposed to the china story. fortescue shares up 10%, so still outperforming psx, still claiming to be satisfied for shareholders. shery: fortescue has added a new board member as it diversifies away from being a pure play iron ore producer. >> the new board member dr. larry marshall, this is quite a significant appointment. she is the former ceo of the government research party in

australia. he has turned that organization around from just being a government research body to have a large scale venture capital fund now as well and is home to a number of startups that have been very successful under his watch, and he has turned down that extension to join fortescue. fortescue had a lavish 20th birthday party in the deserts over the weekend, which is when larry marshall was introduced to 700 people on site, and he said fortescue is not a mining company, atlanta energy company, --, an energy company, it is a technology company. it is developing a battery and electro lysing business. the condition of larry marshall to the board really is a signal fortescue is going in a new direction. haidi: paul allen as we await fortescue numbers.

the head of india's largest steel producers remains bullish on china and why he thinks europe might be struggling. this is bloomberg. ♪

shery: i still company is looking to snap up a major just regular resources to secure

supplies for its expansion plans. the group german also told us of a summit in your daily that he wants india to counter u.s. tariffs and carbon tax with a similar levy. >> i hope india will put non-tariff barriers of importation of steel. >> specifically chinese steel? >> neco. >> how do you view the recovery in the chinese economy right now? india demand has been fairly strong through the course of the last two years, so can you give us a quick overview of how you looking up market conditions outside of india as well as inside of india? >> china, though we read a lot that it is slowing down and the

real estate market is slowing down, our economy is slowing down, but in reality as far as seo is concerned we do not see that kind of action or reaction in china. steel production remains elevated, and they produce over 50% of the world's production, and they are being consumed in china. their exports have gone up a little bit, but not to that extent and domestic demand. domestic demand has gone down. that is not the case. europe on the other hand has slowed down, and there are clear signs europe is struggling at the moment. >> ok, and india? >> india is very strong. at the last two years, india as been strong, and india will remain strong because government spending on infrastructure has been very high, so india remains very strong.

since 2004, 2005, i have not seen india as strong as it is now. >> let me ask you about your acquisition of toolmaking assets -- coal making assets. you are interest has increased over the course of the last seven months. where are you in the course of the transaction? >> coal we need in india for steelmaking. unfortunately in india we do not have high quality, we have low quality, but that is limited. so our need for that coal is very high. it is a strategic i said need for making steel. it is getting divested by sources. we as the largest indian steel

company, we believe this could be a strategic fit for us. therefore we are taking a significant stake. >> how much? >> between 20% and 40%. singularly. >> you are looking to purchase 20% or 40%? >> there are other strategic investors from japan, korea, because these countries, we do not have this coal. they are taking a stake in teck resources. >> how much will that cost? >> the total acquisition cost is $8 billion. >> when did you expect this transaction? >> we do not know. it is going on, and there are many things to be put in place.

it should happen within a month. >> within a month? that is soon enough. the one deal that has protected over time is your interest in the ev space, which were hoping to acquire, because like you have pointed out in several interviews that it is not an area that you have any strength in. you are a steelmaker. this is new for you. are you still pursuing this? how close are you do any deal? will you build this on your own? why do you want to get into electric vehicles? >> let me start from your last question, what i want to get into ev, because i believe the future of mobility in india will be ev led. it has to be electric vehicles, because we have our own domestic electricity. we do not have our own domestic fuel, so therefore it is imperative for us to manufacture. >> i am not denying the future

is ev. what strength does jsw bring to the table? >> i have the passion to do it. >> that is a strength. >> i really want to do it. we as a country have given up our market to our foreign friends from japan and korea. they have taken 75% of the market. the auto market, so we really need to up our ante and push ourselves to capture back the market from the foreign who are not based in india, my idea is that we must really be the leading players in india in our own market. i am very indian, so i believe very strongly about india. >> you are seeking to buy a business in india had to be able to capture ev.

is that anywhere close to getting done? >> it is close, but it is still not there. >> when will they get there? >> so, we do not know. whether it gets done or not, we are going to do it on our own. >> you already have a team working on ev? >> yeah. >> went he went to avenue -- >> the car on the road? between one year and 1.5 years. known as jsw. >> a more consumer facing brand name i would imagine. >> jsw. haidi: that was the jsw chairman speaking to us in new delhi. we have a lot more coming.

stick around for our interview with our guests in competition in the telecom space. subscribe to our india edition newsletter. some of the headlines we are tracking around the world, russian investigators have confirmed the death of prigozhin and last week las vegas plane crash. dna tests shows all 10 passengers were killed in the private jet went down, including production. president putin's spokesman as dismissed suggest that the crash might have been an assassination attempt approved by president putin himself. three u.s. marines were killed and five in critical condition following the crash off the coast of australian territory. it went down while performing drills with military personnel from other nations. the cause of the crash is investigation. a store northeast of the philippines has intensified into a super typhoon.

the philippine national weather bureau says the cell will remain in that category until it makes landfall in taiwan on thursday. flooding and landslides are possible in several philippine provinces with sea voyages suspended. shery: we have spoken about how such extreme weather can really pressure inflation by really restricting those food supplies, food prices can go up and accelerate inflation. if you have global supplies fallen, you could get another thread, which is protectionism, and perhaps that is one thing we are seeing from india. this is the world's largest exporter of rice, and the government is setting a price per ton for basmati rice. this follows the imposition of a 20% eort tax on rice on friday already. we have seen asian rice prices soaring to their highest in almost 15 years earlier this

month, so we can expect this to further impact on prices. haidi: do you want more bad news as to how bad climate change needs to be addressed with policy change, because on the changes giving a helping hand when it comes to pest and diseases that are destroying other types of food as well. things as variable as olive oil and orange juice and cocoa. these are some of the goods that have seen prices surging as a result of pests and diseases exacerbating crop shortages. according to scientist it will become more prevalent as climate change events multiplied. already causing the global economy $220 billion per year. invasive insects costing $70 billion per year according to the u.n. food and agriculture organization because pests adapt quite easily to changing climates, and warmer temperatures mean they are being allowed to generate more quickly

and migrate faster. that cuts down on crop yields, and you see this expanded geographic range as well as a range of insects. i am getting goosebumps reading about this, but yeah, it is not great news. shery: not great news for policymakers trying to tamp down on inflation. tune into bloomberg radio to hear more from the day's big newsmakers. get in-depth analysis from the daybreak team broadcasting live from our studio in hong kong. this is through the app, bloomberg plus, or bloomberg.com. stay with us.head. ♪ led by your own gcu counselor provides you with the personal support you need to succeed! find your purpose. visit gcu.edu

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$8 million up to $9.5 billion. it sounds like 3m negotiated a pretty good deal for themselves given this litigation has been weighing on the company for the better part of the decade. according to our source, a tentative settlement is, again, an attempt to resolve the 300,000 plus cases out there. it is effectively half of the amount estimates were saying they could have had to pay, and they have already seen it most of the cases tens of 16 that have gone to trial so far, 3m has lost, and they paid out a fairly decent amount of money for that. in fact, in one of the lawsuits, the most recent trial, a florida jury in 2022 had 3m pay $7.5 million for a serviceman that

tested weapons as part of his job and resulted in hearing loss or tinnitus, which is a horrible condition which results in a buzzing or his singing sensation in the ears, and these are the kinds of cases that have been weighing on 3m. haidi: this is a company that is no stranger to this kind of litigation either. >> all of this coming down, the tentative settlement as we are hearing from our source of being reached at a time when there is major litigation and

them trying to put one of their tech units into bankruptcy, a strategy that was rejected by a federal judge. haidi: su keenan there with the latest. we have the latest when it comes to fortescue as we are awaiting those numbers. they have named dino as the head of fortescue metals. they were the chief operating officer in 2021 with more than two decades of experience across mining and resources. that is it for "bloomberg daybreak: australia." this is bloomberg. ♪ now getting dressed is so easy. -you just get me. -they get me. -you just get me. -and they'll get you, too. take your style quiz today.

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games we've recorded. the minnesota comeback! jj's finale. butt punt! oh, is that what the my stuff feature was invented for? saving butt-related content? cause i thought it was for keeping your favorite tv shows and movies all in one place. i'm sorry, mr. sanchez. live tv and sports. and more! but mostly sports. that's fubo! haidi: you are watching daybreak asia coming