lizzy: good morning.

this as "bloomberg daybreak europe." i'm lizzy burden in london. asian stocks follow wall street higher with investors focused on upcoming economic data. the china gloom continues with economists once again trimming their expectations for growth as investors weighed the countries struggling recovery against beijing's efforts to boost sentiments without bids -- big bazooka stimulus. bloomberg learned who the buyer is a for goldman sachs investor advisory business as it refocuses attention on its ultra wealthy clients. good morning. welcome back if you are in london. i hope you had a good long weekend. i hope you're feeling refreshed. what you missed yesterday was s&p's first back-to-back gain of the month, but we are talking about august volumes, low volumes. still the rally yesterday has put the wind in the sales of asian equities this morning. u.s. futures are currently flat. now the markets have adjusted what we learned at jackson hole

investors are looking ahead to clues on monetary policy. judging by yesterday's auctions of two and five year treasury notes it looks like investors currently expect another fed hike. both options through the highest yields before the financial crisis. we will get more on that shortly. this week, we get a data dump which is all-important in the data dependent era. later today it is a jolts data ahead of the jobs report friday. we get pce numbers this week which is the fed's preferred measure of inflation. what investors want to see as the activity slowing enough to keep rate hikes at spay let's not -- at bay but not so much that a recession is coming. let's get over to avril hong in asia on how markets are faring there. it looks like equities are green across the screen again today. avril: that's right, and a lot of it is actually coming from china. it is regaining momentum on that rally and helping the sentiment

to improve to the rest of asia pacific. some of its coming from the report that the chinese officials are pledging to speed up the government spending but there is a lingering concern in the form of the property market in the country and country garden, the latest of which to kind of raise those concerns given how it is seeking an extension to its grace period for maturing yen bonds. it shows you how the countries once top developer is trying to avoid a default. if it does ms. the payments, it could have greater ramifications for the country's real estate markets. that is than what we saw from the evergrande default in late 2021 because country garden has four times the number of projects. we are keeping a close watch on the movements in the currency space of the japanese yen which is hovering at the weakest levels in a week compared to the

greenback. we had a notes coming out from goldman earlier today that we could see in the next x months began going up to 155 against the ust's the absence of forceful moves by the bank of japan. if we do see that, this would be the weakest levels that we have seen since 1990. lizzy: i'm sure the mliv team will have views on that yen outlook later. we will speak to mark cranfield. thank you to bloomberg's avril hong in singapore for the update on asian markets. it is time for the morning roundtable. i am joined by sofia horta e costa for her roundtable debut. it is great to have you on. he spent years in china observing its economy and markets. yesterday we talked about the china stimulus, the new round of china stimulus which came after the latest weak data. now we have the survey showing

that they had cut their outlook and shaved 10% of the gdp forecast down to 5.1% this year. for all this monetary and fiscal intervention, are we going to see a hard landing for china? sofia: it is still above the 5% target that beijing sets around beginning of the year around march. still expecting growth. 5.1% is not bad. if we see were other economies are going, it is bad. when it comes to the long-term trend for china, that is what economists are worried about. it is not just for this year. this is where china will go for the next few years. that is really the structural story here. hard landing are not, the concern is where the growth will come from in the future. april was talking about their more concerned about the property sector and this will not be the part of the economy that will drive growth. we don't have infrastructure spending and that will not be the solution in the long term either. for all that china has thrown at

tech innovation, it is still far behind that takes time. it is trying to do something that is incredible he hard, which is change the drivers of growth to more sustainable growth model. whether we are going to get china growing at 5% in the future is the key question. lizzy: has been a drip feed announcement after announcement. you have the csi 300 up nearly 1% today but do you think that beijing policymakers will be looking at markets and wondering whether these short-term measures should have -- should be upgraded into something bigger? sofia: they are confused as to why the market is so disappointed with everything announced. the key thing as after the politburo meetings when top policymakers gathered in beijing and said the economic tone and agenda, the expectation was something big or bigger would follow. whenever anyone cost me about this, i asked them what is that something big?

what is the big bazooka that could possibly be announced? so far as an is policy window that we normally get after the meeting, we have had mainly tax cuts, marginal, stamp duty cuts and things that essentially should make it easier or reduce the supply of stocks in the stock market and make it a little bit less attractive to pull your money out. they are not solving the liquidity issues. where is the money going to go into the stock market? at the broad picture is that china is still in a structural downturn and these measures don't fix this. these are short-term and like putting a band-aid here on the stock market. you are not fixing the long-term growth story and not doing stimulus on the fiscal side. avril was talking about increased government spending and that has not come through yet. this takes time. lizzy: you wonder if it had been announced on the same day it would have more impact. it is like a plaster on an artery. let's move on to the treasury

auction yesterday. quite remarkable results. the two year and five year treasury auctions through the highest yields in's the financial crisis. can you talk us through what is going on there. sofia: like most people in the u.k. i was off yesterday and i saw the headline and thought that is bad news. actually, the auction results were very strong. this is the market repricing a higher terminal rate after powell's speech in jackson hole. it is the market saying higher for longer is here to stay in this is the story going forward in it radical markets -- and it rattled markets in august. risk assets had a better month in july. the fact that there was still sufficient demand for this, the bid to cover ratio is good and it goes to show that actually market could adjust this. the size of these options, they were bigger than last auction for the same tenor.

what this tells me is the headline number is saying the yields are the highest since before the financial crisis but this is the markets repricing something that makes sense there was still sufficient and good demand for these auctions. lizzy: when jay powell spoke at jackson hole, initially the ever action -- the reaction was dovish than mixed in hawkish. this is a resounding reading of the speech. how can you think it came out so definitively? sofia: it was a confused reaction. i think people were trying to focus on what is new and different about the speech? the carefully, those words proceed carefully was one of the key takeaways. powell was doing this on one hand and on the other hand that. the market was confused. it is designing -- deciding on a higher terminal rate but not in a rush. we are looking at a september pause and hike in november.

they might be let's do this one meeting and skip another. that is a trend going forward. excepting higher terminal rate and higher for longer narrative is becoming entrenched. lizzy: stay with me but i want to turn to a corporate news. bloomberg has learned that goldman sachs house arrest sale of the consumer lending unit between skype is entering the final stretch and it comes as goldman plans to sell is $29 billion investment advisor business to creative planning. no sale price disclosed yet. lou moved -- bloomberg su keenan is here with more details. su: this move underscores goldman sachs is refocusing on what it does best, managing the money of the ultrarich. the sale of the investment advisory unit is related to failed forays into consumer banking and efforts to market its services to the mass affluent class. the mere millionaires next door. goldman has now agreed to sell the investment advisory business that grew out of its purchase of

nine to just four years ago. that unit is $29 billion and goldman is not revealing the price but says it expects to recognize a gain when the deal closes. now this is in stark contrast to , the other sale the goldman is pursuing, the divestment of its consumer lender green sky at a steep discount just over one year after its completed that takeover. bloomberg has learned that the sale is now in the home stretch with groups including apollo and six street working on what is poised to be their best offer. as for creative planning, the money management firm find cash buying the investment advisory unit is run by peter who has written several investment self-help. books. his firm has a custody deal with goldman and he said extending a partnership is a great strategic fit. su keenan, bloomberg, new york. that partnership is a great let's have a what else is coming up today. we will have sweden

second-quarter gdp. the consensus is for a drop to a contraction of 1.1% from growth of 0.6%. of course, it is as the policy stance squeezes the economy and more hikes to be to come if there is a further slide in the krona given that inflation is more than three times the target. at 3:00 p.m. we are going to get u.s. jewels data for july. -- joseph data for july. the expectation is for 9.5 -- that quotation is for 9582. at 3:00 p.m. we get u.s. consumer confidence. the latest reading for august and expectation is for a slight deterioration to 116.4 as the summer wanes and inflation stays elevated and mortgage rates have surged. for me, one of the most interesting point apollo made at jackson hole was that he thinks

the phillips curve might have steven. he said there is evidence that inflation has become more responsive to labor market tightness than was the case in recent decades. if you apply that to the jolts data, can we be optimistic that if there's only a slight easing in the job, wage growth can come down quickly? sofia: that could be the message and let's see what the data says they. it could be really interesting head of payrolls friday. if we see fewer jobs opening in july, is the labor supply and demand balance being rebalanced? that is what powell also said at jackson hole, the rebalancing has eased wage pressures. the markets will be looking for that. i still think the key number is wage growth. it was the key number here and what everyone is looking at. but there is optimism here that if labor and supply and demand are to balance, maybe we could

get the optimal wage growth going forward. lizzy: thanks to sofia horta e costa for joining me this morning. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. today they lead on economists cutting their china growth forecast. they also have u.k. shop price inflation slowing sharply. this is according to data in the british retail consortium, the slowest rise in grocery bills in a year. i can almost hear the sigh of relief from fred needle street. finally, they have a bloomberg scoop that clients pulled $3 billion from loan fine. it has been a tough year for many equity hedge funds. this group is based on bloomberg calculations. and investors as well. it is painful really that clients have withdrawn this money even as steve mandel's firm rebounded from a bruising 2022. you can check out that scoop and more at dayb on your

terminal. coming, china's economic outlook showing no signs of improvement. we will export that next. -- we will explore that next. this is bloomberg. ♪

lizzy: welcome back to

"bloomberg daybreak europe." it is another day of green across the screen for asian equities by china's economic outlook showing no signs of improvement. this is according to a bloomberg survey showing economists now see china's gdp growing 5.1% this year compared to 5.2% previously. bloomberg mliv strategist mark cranfield joins us now for more analysis. economists in the survey are even more downbeat on china. are you expecting more easing from the pboc? mark: i think it is inevitable that the central bank in china is going to respond further. they seem to be relatively slow in getting it done this year as it is. wherever you look, there is warning signals from the chinese economy that things are not very good. even now, 5% dp growth looks optimistic and it will be hard for china to achieve that. yes, very likely that there will be more easing.

probably very targeted and it could beat the rrr cut or another mlf cut but whatever it is, the direction is clear. they need to do more. they will probably allow the currency to weaken more as well. at the same time, it need to governments to be pushing is in other directions. they need to do more to clean up the property sector. they need to restore confidence in the banking sector as well. it is going to be a concerted effort between fiscal policy and monetary policy. for now, that is what investors see as a cap. -- as a gap. it is not everybody pushing in the same direction at the same time. once we get the so-called big bazooka a stimulus coming out of china, maybe things can improve. in the near term, it is hard going and that is reflected in the uncertainty in the financial markets. lizzy: turning to the u.s. as well, we are getting more pickup in u.s. futures as we look ahead to the wall street open. nasdaq futures are up 0.2% now. we saw yesterday the highest

yields since before the financial crisis in the options of two year and five year treasury notes. i want -- i wonder which of this week's big data points investors will be watching most closely for clarity not just on the fed rate path ahead but also recession risks. a great piece from simon white on mliv blog talking about how there continues to be signs of a u.s. recession but stockmarket is not reflecting that risk. mark: yeah, jerome powell mentioned a few times the pce data. obviously, the fed is still looking at it very closely. we have that coming out at the end of the week and if the numbers often again, that will get the fed -- give the fed more confidence that inflation is heading towards their targets. and they will have room to pause in september. there is another cpi report that comes out before that fed meeting. there is plenty for them to chew on but certainly, things are going in the right direction and

they have left the door open. they are pretty well-balanced. they have not committed themselves one way or the other in the market is responding to that by not pricing in too much for the september meeting. really it depends on the next couple of pieces of data, particularly to be sure that inflation does not suddenly spike higher, which we have seen earlier this year and that caused a bit of a panic. if you put that to but -- together, real yields were high in the united states and the options are going well because people want to lock in what seemed like reasonably high yields if the chances are that the fed will pause in september and possibly keep that pause right through the end of the year even though short-term rates are higher. the chance to lock in long-term yields is pretty attractive at the moment. lizzy: i want to discuss with you the goldman note. they see the yen and dropping to 1990 levels. that is if the boj sticks to establish stance. governor ueda did not talk about

that at jackson hole but what are the risks to this view? mark: did you pick 1990 for me because i was there? no. [laughter] that was the year when q eight was invaded. that's when the dollar-yen went so high because we had an oil crisis because iraq was invading kuwait. if the bank of japan does nothing at all and don't change policy at all and make no effort to support the yen, goldman sachs might be right. we might see the dollar-yen at 155 somewhere around there. that is unlikely to be the case. you can already see the boj chief ueda is hinted that he does not like the feedthrough on the wiki on into the inflation data in japan and is getting worse. this month, the yen has weakened again. not just against the dollar. it is very weak and that is a risk to japan. oil prices are relatively high. this will show up in their data over the next few months.

the chance are that not just the ministry of finance's response will for the yen but the bank of japan may play its part by doing something to monetary policy to support the yen. it is unlikely they will say back and do nothing and just allow the dollar-yen to go to 155. way before then, you can expect intervention. it came last year heavily around 150. this time, we might get modest tightening of policy and intervention together. letting the yen go is not an option for japan. lizzy: thanks to bloomberg mliv strategist mark cranfield, make me a better about not having been here in 1990. coming up, there is pressure on the yuan as clouds gather over china's economic outlook. our survey about the scale of the stimulus chinese authorities can deliver is coming up next. this is bloomberg. ♪

>> the yuan is going down. well against the dollar at least. that is the conclusion a professional and retail investors in latest bloomberg survey. they say it will get to them .6 yuan per dollar before the end of the year. -- 7.6 yuan. already growing problems in china's past repartee markets are deepening cracks in its economy and pushing down the currency. those worries have kept the yuan weaker than 7.2 to the u.s. dollar since early august. has flirted with a post-pandemic low prompting government prevention. easing monetary policy is not helping nor are signals from the federal reserve that interest rates could remain higher for longer. policy that is likely to keep the dollar strong. elsewhere, falling asset races are enough to learn -- earn bargain hunters with only one in five investors increasing china

exposure of the next 12 months. there is little consensus about exactly what impact of the significant selloff of chinese shares would be. one third of professional investors do not get contagion risks to equity markets but equal proportions believe additional 10 or 20% decline could set off a global stock selloff. the message is clear from survey participants. don't bank on hopes for government aid. more than half in the chinese government will offer some sort of moderate response targeted at specific industries. only one in 10 think authorities will fire bazooka like stimulus to avert a crisis. the remaining third say it will be too little too late. lizzy: bloomberg's simone foxman there. i want to check in country garden because we have heard news this morning that it is proposing a grace period of 40 calendar days for maturing yuan

bonds. that marks regarding's latest efforts to avoid a default. if it misses a payment it will impact the chinese housing market more than ever -- evergrande default in late 2021. china's country garden has four times as many projects as evergrande. that proposed solution lifting the share price for now. the shares are currently up 8.6% this morning. coming up, u.s. commerce secretary gina raimondo says trade and transparency can be a better foundation for ties between the two countries. we will have more next. this is bloomberg. ♪ i may be known for my legendary football career, but truth is, i love a bunch of sports. the only trouble is knowing where to find them. that's why i got xfinity. so, i can easily find and watch whatever sport i'm into all in one place without missing a thing. even if it's football, australian football, or football football. in a word—it's fitz-credible.

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>> good morning this is bloomberg daybreak europe these are the stories that you are waking up to. asian stocks follow wall street higher with investors focused on upcoming economic data. the china kaluma continues with economists once again trimming their expectations for growth as investors wait the country's struggling recovery against beijing's efforts to boost sentiment without stimulus. plus bloomberg learns who the buyer is for goldman sachs's advisory business as the bank refocuses its attention on its ultra wealthy clients. good morning welcome back if you are in london hope you had a long weekend. hope you're feeling refreshed. what you missed yesterday was the s&p 500's first back to back pain of the month but we are talking about august volumes. still it has pushed the winds and sales of asian equities this morning, u.s. futures pretty flat currently. s&p up a 10th of a percent

nasdaq futures up to tenths of a percent. but now that markets have digested what we learned at jackson hole investors are looking ahead to clues on where monetary policy goes next. judging by yesterday's options of two and five year treasury notes it looks like markets currently expect another fed hike. both auctions drew the highest yield since before the financial crisis. this week we also get a big data dump which is all important in this data-dependent era. later today is the jolt data ahead of the jobs report on friday and we also get the all-important pce numbers this week. the fed preferred measure of inflation. what investors want to see is that activity is slowing enough to keep rate hikes at bay but not so much that a recession is coming. let's get over now for how asian markets are faring. it looks like stocks are rising despite lingering concerns about china tell us more.

>> indeed. we saw the benchmark in china csi 300 opening with losses despite those latest measures to boost the stock market confidence and those promises of stimulus. we are seeing that rally in china markets gaining momentum as trading resumes and in the words of our mliv colleagues it looks like china markets are giving that rally another go. this might have something to do with, we have seen prior reports that chinese officials have pledged to speed up government spending but a key concern for investors will really be what we are seeing in the property market and case in point, we are seeing country gardens seeking an extension of its grace. -- grace period on a maturing bond that means it is trying to avoid a default. if we do see one from country garden this would have greater ramifications than what we saw out of the evergrande default back in late 2021 because country garden has four times as

many projects. the real estate sector really a focus for investors, we are keeping a close watch on the japanese currency and that continued weakness. goldman pushing out a note saying we could see over the next six months the japanese yen going up to 155 against the greenback in the absence of any forceful moves from the boj. if we do see that this will be the weakest levels we have seen since 1990. lizzy: thank you. i want to dig a little deeper into this survey on the chinese economy. i am joined by james, in this survey you are seeing economists shaving down there outlook but it is still above 5% in terms of growth. how big of a challenge is this for china? james: i think this is a real challenge for china. the economy last year by any measure that is not the official gdp, went into recession in the

second and third quarter. we saw a slump last year and it has not come back this year. you are looking at in other countries, it might as well be a double-dip recession here and the housing market -- the things that the government has done so far to try and stem the sales they are seeing and turn around position of sun country -- companies like country garden is not working. there stocks continue to fall and there is -- there has been a massive contraction in investment across the economy. there was an expectation that consumers would step into the fold share and would boost consumption to make up for the things like exports which are not growing anymore, housing demand is not growing. there was expectation that consumers would do that and they really are not private consumption is still weak. whether economists are saying it

is 5.1 percent, at the end of the year they were saying 5% was a conservative goal and they have raised their expectations and now they are lowering them again. leaving aside the headline number, economic activity is very weak in their does not seem to be any fix at the moment that would definitively turn that around. >> you have also been covering every twist and turn of the u.s. commerce secretary's visit to china. it looks like they are working on a solution towards a resolution, take a listen to what she said. >> we agreed to establish a new commercial issues working group, a formal working group which will involve u.s. and chinese government officials. and very importantly u.s. and chinese commercial private sector representatives as we seek solutions on trade and investment issues and to advance u.s. commercial interests in

china. >> commerce secretary we learned has also just met china's culture minister today in beijing. that happening just a few minutes ago. your take on the visit so far? james: in general she was very bullish yesterday with the comments, she has got other meetings today. she met the culture minister earlier and she has meetings planned for this afternoon with senior officials. we spoke to her last night, she was very happy with how things are going. at the same time, the things she is announced yesterday, the working group on commercial affairs and the discussion and commission exchange on export controls, these are positive steps. but they do take things back to the situation many years ago when there was these formal dialogues for discussing these kinds of questions with the

chinese and over those tensions have risen through the biden administration. and with covid as well, a -- almost all of these venues for discussion there are various problems between the u.s. and china fell away or canceled or haven't stopped. i think what you're saying at the moment is an improvement and an attempt by both sides to stabilize relations, if you think back to where they were last year at nancy pelosi went to taiwan. if you think back to earlier in february with the chinese surveillance balloon floating over the u.s.. it is definitely a better place now than it was at those periods. nobody is talking about the possibility of war like when nancy pelosi visited taiwan. but this is still not a good relationship. there is a lot of problems, unsolvable problems in a sense between the two sides and she

was very clear and has said repeatedly that she will not negotiate on issues of national security. she is not here to compromise on issues of national security and the chinese are the same. they are not willing to not -- negotiate. there are a whole bunch of problem areas on both sides that they are not going to talk about. on that basis you cannot really expect that this is going to be a massive improvement or massive better ties between the u.s. and china. lizzy: of course she is not the only big-name visiting china we also have the u.k. foreign secretary. how much do you think his visit will set the tone? james: i think these questions are definitely linked i think china looks at the rest of the world especially nations of the g7 and western nations and sees them as an overall foreign strategy. -- with the japanese coalition coming this week -- that was canceled because of a water

issue that they do look around the world and see the u.s. is trying to build up witecific ste chinese see that as part of of -- america policy. the u.k. is obviously a u.s. ally. they all see that there is a number of caught -- countries trying to improve relations and japan as well trying to improve relations with china. the improvement you are seeing, the stabilization and u.s. china ties will probably set some kind of tone for u.k. china ties. obviously some of the issues are different. there is a lot with the conservative government who are opposed to improving relations with china. in a speech earlier this year he spoke about his china policy and relations with china, it was quite controversial. i think you are seeing a general attempt from many different western nations and developed

nations to improve ties with china. the french finance minister was just here. a number of other world leaders and senior leaders of different countries coming. i think this is all part -- we definitely see this as part of an attempt from various different developed nations to improve ties with them. lizzy: of course cleverley's former boss the prime minister liz truss to was a big china hawk dimension. thank you james for that update on all things china. now to pivot to corporate news bloomberg has learned that goldman sachs sale of its consumer lending unit green sky is entering the final stretch. it comes as goldman plans to sell its 29 billion investment advisory business to creative planning. bloomberg's su keenan has the story. su: this move underscores that goldman sachs is refocusing on what it does best, managing the money of the ultrarich. the sale of the investment advisory unit is related to failed forays into consumer

banking and efforts to market its services to the mass affluent class, the mere millionaires next door. goldman has now agreed to sell the investment advisory business that grew out of its purchase of united capital just four years ago. that unit is $29 billion and goldman is not revealing the price but says it expects to recognize a gain when the deal closes. now, this is in stark contrast to the other sale that goldman is pursuing, the divestment of its consumer lender green sky at a steep discount just over one year after it completed that takeover. bloomberg has learned that the sale is now in the home stretch with groups including apollo and six street working on what is poised to be their best offer. as for creative planning, the money management firm find cash buying the investment advisory unit is run by peter maollouk, who has written several investment self-help books. his firm has a custody deal with goldman and he said extending a partnership is a great strategic fit.

su keenan, bloomberg, new york. lizzy: now for more news from the u.s. the federal reserve's head of bank supervision in san francisco is set to retire on october the 31st. he along with san francisco fed president mary daly came under scrutiny in march following the sudden collapse of silicon valley bank and other lenders. he will be temporarily replaced by neil liedson a former minneapolis fed official. now to u.s. politics former u.s. president donald trump will head to trial on march 4 next year on federal charges of trying to overturn the 2020 election. that is the day before the super tuesday primaries that are central to his bid to gain the white house. trump wanted to delay the trial until april 2026 long after voters decide whether he will get a second term. trump denies any wrongdoing.

ukrainian defense minister says his forces have pierced the first line of russian fortifications in the nations southeast. resnick off also says they are fighting to widen the breach in a bid for a potential breakthrough after its counteroffensive was bogged down. and now here is what we are looking out for for the rest of today, as we are talking about with james u.k. foreign secretary james will be in china for talks on focusing on the ukraine and 1 p.m. we get mexico gdp figures. economists see activity rising 4.6% year on year in june but a recession in the u.s. is the main risk to growth in that country. then at 3 p.m. u.s. consumer confidence data will be released and before the u.s. market opens we get asked by second-quarter earnings with along with consumer confidence data will give us a bit of a better picture on the strength of the u.s. buyer. coming up, chevron workers at

its australian a natural gas export plant unthreatening to go on strike. more on what that could mean for the global energy market just ahead, this is bloomberg. ♪

lizzy: good morning welcome back to bloomberg daybreak: europe if you are just joining us in london it is after a quarter to seven here in the city. let's start with the bloomberg scoop low and high capital clients have withdrawn some $3 billion from its funds in the 12 months since june that is according to bloomberg calculations and clients pulled more than $1 billion from its cypress hedge fund. redemptions from its fund totaled about 1.7 billion and most redemptions happened in the second half of 2022. a year both funds had significant losses.

elsewhere in corporate news winfast shares closed up 20% in new york yesterday making the unprofitable vietnamese electric vehicle business worth more than the likes of goldman sachs and going. it is currently worth about $190 billion compared to valuations of $111 billion for goldman and 137 billion for boeing. that leaves it bigger than half of the companies in the dow jones industrial. you have seen bennett fast rising a blistering 688% since its market debut on august 5. now to the news in energy markets. possible strike action is threatening more volatility in natural gas markets with chevron work straley a giving notice to stop work if a deal on paying conditions cannot be reached. bloomberg's energy reporter stephen joining us now for analysis. i thought we are at where at a moment of relief here, were

workers able to reach a deal last week, why can't chevron do the same? stephen: it looks like the unions are playing hardball here at the rhetoric has been tougher. two lng plants but along three sites that they are looking to potentially strike at starting as soon as september 7. now where woodside did make a deal perhaps the unions are thinking that they could come to a similar sort of agreement with chevron to fill that gap. they are going to put in that notice to go on strikes which is ratcheting up pressure on these pay interment disputes with chevron. of course the global gas market -- a bit surprised by this move. to move forward with the strikes. gas prices in europe last night rose as much as 10% or above. they are not near the one-month hi from earlier in august but they still are a bit higher.

there is still a chance a deal could be made. it is not clear what they're going to try to agree on at the moment but pay along with other terms seem to be the main issue at the moment. of course everyone cares about this because australia is one of the world's biggest exporters of lng, these two facilities make up about 7% of global lng exports last year so losing that if there is a disruption with strikes could certainly tighten the market leading into winter when demand for natural gas is at its peak. lizzy: what is the outlook as we head into the european winter, not when you want any sort of energy crisis to happen again especially when politicians are promising to reduce inflation. stephen: i think the situation right now is nervous but hopeful. the gas situation and europe has certainly improved from this time last year when gas prices were at a record high they have fallen about 90% from those record high levels.

but they are still much higher than the five-year average. it does add to that inflationary pressure across the board especially with consumers. one other thing to remember is that gas inventories in europe are at a seasonal high which means that they are quite prepared -- they are quite prepared for this winter. if it is cold or there are disruptions from australian plants or other problems, because europe is not getting russian pipeline gas is much as it used to you could see things tighten and prices rise. lizzy: we'll keep an eye on that bloomberg's stephen thank you for that update. coming up drivers beware, the ultra low emissions zone is expanding into london. we will discuss the political implications of that planet next. this is bloomberg. ♪ except the hours that you're sleeping. so why do we leave so much untapped potential on the table?

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lizzy: welcome back it is 6:53

here in the city of london. in our city a larger ultralow emission lane it comes into force today. high polluting vehicles pay 12 pounds 50 per day to enter the expanded zone and that is on top of the congestion charge for inner london. bloomberg's olivia has been reporting on this. thank you for coming on. this is not a new thing but it now covers an even bigger area so explain for us how this has become a national political issue in the recent elections. olivia: i think there are a few things going on. there is a lot campaigning in various elections next year. it is the expansion which was announced about this time last year or a little later in the year, is very controversial partly because of the people it

affects. you come into london, the area already covers -- people really tend to rely on public transport or a town car. there is a greater penetration of public transport and more widely available in those areas for outer london it looks a little different. it impacts drivers -- it is a little more controversial and i think there is also the point that there is a little bit of a political split in london. broadly speaking this is not 100% true but people tend to vote more conservative. in london a lot of labor safe seats, -- implementing the measure is a labor man and i think that has come into play a little bit as well in terms of the opposition. lizzy: we have just lost you

olivia but thank you for that reporting. more of that story on the terminal, thank you for joining us. i just want to stay in the u.k. because we have had some encouraging news on food inflation. this is from the british -- british retail consortium. they say they have seen the slowest rise in grocery bills and almost a year driving down price growth in u.k. shops this month. that relieves some of the pressure on the boe keep hiking rates. it is also a relief for rishi sunak given that his top priority is to harp inflation this year and food price inflation hits the poorest the hardest. part of why the ultralow emissions area is so controversial given you have these increased travel costs hitting the poorest. this is the sort of news you want with a general election on the horizon, the question is whether it is going to last or whether retailers will have just been generous with discounts

because of the recent bad weather. you have markets still expecting to more bank of england hikes which would take rates to 5.7 percent. i also want to check in on country garden. the shares are up 8.6%. this is after the news that it has proposed a grace period of 40 calendar days for a maturing you on bond. it is the latest effort from country garden it to avoid a default. i am sure they will be discussing all of that and more on the next program. it stay with us for markets today, this is bloomberg. ♪

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anna: this is bloomberg markets

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