>> you are watching daybreak asia live from new york and sydney. >> we are counting down to asia's major market opens.

>> equity futures a mixed open in asia. a flood of corporate debt sales before the fed decision. oil surge adding to inflation worries as saudi arabia and russia extend output cuts through the end of the year. >> let's get a quick check of u.s. futures doing nothing right now. we are well into september, but it has been the labor day weekend in the united states so we only had two trading sessions in september. to say session was basically the s&p down for tens of 1%. traditionally some timber not a great month for markets. it is the worst generally unless they have already rally between 10 and 20%. given that we have rallied, may be able not be so bad this year.

we will have to see. mike wilson says 3900 is where we will end the year. there are bears out there. nasdaq futures pointing lower. we had bonds seeing yields rally 15 basis points partially because 40 markets -- companies went to market and sold bonds, so a massive amount of issuance that would have depressed prices somewhat. we had a mess and move in crude oil as well -- massive move in crude oil as well. annabelle: when you have higher oil prices there is upward inflationary pressure. a firmer dollar will be weighing

on asian equities. futures here range found. feeling flat so far. the outlook for chinese, -- chinese economy. a lot of the moves given the dollar strength playing out of the fx space. the aussie and kiwi dollar printing new day-to-day lows against the greenback. we had pmi data tuesday weaker than expected, but also showing further deterioration. the japanese yen back at the level at which officials first intervened in the market last year. we will be on watch for any further jawboning to come. this is a story abroad greenback strength and perhaps we will not

see any formal intervention coming through. some traders betting on a short-term rebound for the currency. haidi: treasuries have tumbled. billions of dollars of issuance, wanting to get in before the next fed decision. let's get more from mark cranfield. her weight passed the peak when it comes to yields now? is it about the timing when it comes to debt sales? >> typically, straight off of labor day, we get a rush of issuance around the world. asia also had a huge day in terms of new bond supply. it takes a few days to settle down. the markets have to chew through fresh supply. with yields at the levels they

are, there will be plenty of people targeting specific areas. that will probably not be a major problem. what is more of a concern is oil prices because at these levels it is a problem for the inflation story. central banks around the world are probably relaxed and thought they did not need to do much in the way of tightening. if oil prices stay and $90 plus, they will have to rethink whether or not to tighten further. that is a much -- much bigger issue for the whole risk assets in our in general. with the fed meeting coming up, they will have to factor in the fact that energy prices are back to the highest level we have seen in a year. vonnie: these are coming back right now.

she was talking about the ministry of finance in japan jawboning. fx moves should reflect fundamentals, but the ministry is watching for a high sense of urgency and will not rule out any options if these moves continue. the ministry of finance in japan will not rule out any options if fx moves continue. >> there is nothing really different in what he is saying. traders will not be surprised. it may not the dollar yen down a little bit. they would probably be more interested if he said it becomes more one-sided.

it typically means japanese authorities have run out of patience. as for intervention, there has been research on the timing of intervention from japanese authorities and they often go for the weak spot in the market, which is after tokyo markets have closed. if they are going to intervene, we could expect it to come during london or new york trading hours when liquidity is thinner and they get a bigger reaction from the market when they go in heavy-handed. whether they wait, fridays definitely a day when they like to do intervention because by then the market has built up positions and it is easier to get the reaction they want. we are probably not far away from the japanese authorities doing something, but the verbal intervention will probably go on day after day. watch out for when they say

one-sided. a good signal for when they run out of patience. haidi: it is not just the yen. the strongest in june when it comes to dollar euro and dollar pound. is there vulnerabilities you are looking at if what we see is expectations of policy divergence and how economies outside of the u.s. are performing. >> definitely. the central bank divergence is a big story. yorty have short-term rates around 5.5%. -- you already have short-term rates around 5.5%. the european central bank data has been horrible. it looks as though europe is going to go into recession. they meet next week.

the chances of them recent rates now does not look very high. the market knows that. wherever you look, there is a huge yield advantage to dollar based investors and that is playing out in the currency market. if the fed sounds hawkish, that will push the dollar further. central bank divergence is a big thing and the dollar is playing that out. haidi: mark, thank you so much. oil is holding gains as asian trade opens after two key members of opec-plus says they are extending their voluntary cuts until the end big year. su keenan joins us. it seems traders were caught by surprise. >> this is a more aggressive move then what was expected. most traders expected opec+ what

extend their curbs by a month, now they are extending to the end of the gear. as one veteran trader said, this is why you do not short oil. saudi arabia continuing its unilateral production cuts of about one million barrels per day. the lowest level in the several years for a total of six months. russia is extending export production by about the same period of time. market observers are saying the saudis are guaranteeing that an already tight market becomes even more tight by the end of the year. the saudis introduced their voluntary supply cuts, deepening the reductions that already existed, back in july. most members of the cartel

cannot join because they have their own output losses. saudi arabia will make a largely solo investment. in their efforts to what they say adds stability to the oil markets are working at this point. brent hit 90 per barrel, the highest since november. we are closing -- holding close to the level as we get into asia trading, but you are seeing this sharp spike as the news hit the tape. this really was a surprise and setting up for a much tighter end of 2023 in terms of global oil market. haidi: setting up more to satisfaction from the government too. >> president biden has vowed to keep gasoline prices below

before dollar mark and we are edging perilously close to that level, even as we end the summer driving season here in the united states. gasoline prices are at the highest for this season in more than a decade. the average national price for regular is $3.81 per gallon. a lot of concerns about the inflationary impact. a spokesperson for the biden administration saying they are in regular engagement with the saudis. traders increasing their bets that west texas and brent are going to move toward $100. we are knocking on the door right now. i really need -- iranian crude has come back on the market, but has peaked.

we are looking at a very tight market. the global market was set for a deficit before the latest move. vonnie: c&s will get backing from southbank in order to buy groceries stores that kroger and albertsons are selling in order to win regulatory approval for their merger. sources are telling bloomberg that if cms -- c&s will buy these grocery stores. southbank once again has its hand in the action. still ahead, a first default but investors are putting on a

restructuring or liquidation. an update on china's property sector prices coming up. this is bloomberg. ♪

vonnie: let's get a at yields, strange session in the u.s., with 40 businesses tapping rate hike markets around the world. there was a drop in this post jobs report. the two-year at 495, regained a

lot of ground. the 10 year f4 9528. what is interesting is that many strategists are looking for the curve to steepen again which is what happens before recession. that is the indicator people are looking for, that the inverted yield curve actually this inverts. the bloomberg dollar index looks like it will had lower. our next guest says the latest jobs report is predicting a recession. joining us now is eric lynch. is that right? are we going to see the yield curve discs -- dis-invert? >> central banks have been working hard around the world. there are still low approval

ratings for the administration in the united states. the low income consumer is voting with its wallet. same-store sales were down. there is still a tremendous amount of pressure on the fed to lower price appreciation. higher for longer interest rate environment will last. the only way to crack this core inflation and now we have oil coming back is to continue to focus on the economy. vonnie: you actually want out the big united states because of the reasons you mentioned. give us some geographic and company names you are interested in. >> when we talk about opportunities, a lot of it is relative.

you have the single factor return worldwide with these mega-cap ai and i.t. stocks. nasdaq is up. russell 2000 is up. while the rest of the world is probably over indexed to manufacturing exports, those economies look worse off than the united states, there are ways to get the valuation outside of the united states that is cheap. for companies that are indexed to the post-pandemic. things like elective surgery resumption or the consumption of alcohol with your friends worldwide like with netherlands heineken. they are actually modeling made

-- earnings growth. you can get growth for a lot less than the multiple on the infotech sector. haidi: you are also not discounting shouting out china exposure. when you take a look at results from perp.com there is still momentum there even if the broader economy is not looking so great. >> that is right. if you look at the history of bubble like experiences, the further you get from the epicenter, investors can still make money. if it was tech in 2000, you actually made money outside of tech really well. as it relates to china, same

thing. you have interesting opportunities there with the bounced back post-covid. things like baidu that saw other education and health care businesses plummet during the pandemic, those are returning. price they just 14 times earnings, baidu is actually growing its earnings this year and next. apple is flat. that is a weird disconnect in the market where the china risk is seemed -- seen to be too great. baidu is 25% of its market cap in cash and short-term investments. it has this option for the

investor with the chinese regulatory approval of the ai commercialization that came out in the last few days. haidi: the outlook for further dollar strength seems to be pretty strong. is that what you consider when you take a look at companies that might suffer with the stronger dollar? >> you always have to factor that into your analysis. it is usually secondary because long run if your investing, to the extent that you are buying the bus businesses, they have supply chains and revenue footprints where there are a lot of puts and takes. currency exposure is the fundamental strength of the business. it is important. oftentimes we see wall street sell side modeling things late to the game so we take a careful

look at it. earnings power is the company's competitive position. haidi: great to talk with you, eric lynch. more to come here on daybreak: asia. this is bloomberg. ♪ ♪ is it possible to fall in love with your home... ...before you even step inside? ♪

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♪ ♪ ♪ ♪ ♪ ♪ ♪ >> country garden has avoided a first default with the payment of bond. for more, let's bring in our shanghai euro chief. a brief respite in this case. there is a lot of other downside pressure. >> country garden narrowly avoided a default again.

if it defaults it will be an ugly one. it has four times as many products as evergrande. evergrande defaulted in 2021, sending a shockwave to the industry. the company is sitting on a debt mounting. it has $2 billion maturing in the next six months and the company has said there is no guarantee it can fully repay its debt. he said in its interim report recently it will have problems meeting its financial obligations if the financial situation deteriorates. the company's payment ability depends on the supply and demand in china's property market. we are not sure whether the recent recovery in the real estate demand in big cities will be sustainable. investors are not that

optimistic. they are very pessimistic. if you look at the share price and bond price of country garden. there bonds are trading at $.14 a dollar and investors are pricing in a liquidation or a restructuring of some sort. the company stock is a penny stock now, down by 60% from its peak a year ago. vonnie: 9-14 cents on the dollar. which is pretty stunning. thank you so much for the update on country garden. let's take a quick look markets wise in sydney. down about a quarter of a

percent on futures. we will see if that holds through the open. no change in new zealand. nikkei futures in chicago pointing to a lower open as well. a pretty mixed day in the united states although the session had indices lower. the s&p 500 down for tense of 1%. -- 4/10 of 1%. we have plenty more to come on daybreak asia. this is bloomberg. ♪ so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience in the comfort of your own home. a kohler walk-in bath has one of the lowest step-ins of any walk-in bath for easy entry and exit. it features textured surfaces, convenient handrails for more stability, and a wide door for easier mobility. kohler® walk-in baths include two hydrotherapies— whirlpool jets and our patented bubblemassage™

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>> this is "daybreak: asia." we are 30 minutes out from the open. in tokyo, the focus is front

and center on the currency market. japanese government officials intervened in september of last year. that really was the state of play as we entered the morning session. we've already heard from japan's finance chief, saying he is watching these moves very closely and he is prepared to act, won't rule out any fx options given the trend does look set to remain intact for some period. the japanese yen has been a little bit firmer against the greenback this morning but still we are seeing the trend of weakness continuing. really the signal that perhaps that will be the status quo given that dollar strength story plus the signals of japanese economic weakness we saw yesterday for instance in household spending that is continuing to drop off, telling us the boj is likely to keep its easy policy settings in place. the question of course is how long the dollar strength continues as well. we have a chart that shows perhaps the dollar, on fire,

could be at risk of fanning out the fire. essentially here this chart, taking a look at the invesco u.s. dollar index bullish front. you can see investors really pulling back in this major currency etf fund. what that tells us is the dollar, having a great run. it could possibly have trouble keeping up the pace. part of that, we are seeing more fed officials starting to signal perhaps we are nearing the end of the fed tightening program and that's really what's cap the rally in place. haidi: we've heard from a wall street bear, jeremy grantham, warning the slow-moving influence of rising rates will end up torpedoing the u.s. economy. in a conversation with david rubinstein, he told us this could trigger a recession by year end and take the stock market down with it. >> the deflationary faucets from the tech stocks breaking in 2021, probably.

too big. . . the power of interest rates rising and depressing the real estate market, very negative, slow-moving influence. i suspect they will once again dominate and we will have a recession running perhaps deep into next year. and an accompanying decline in stock prices. >> the recession you are predicting is probably not going to happen in 2023. >> it may start in 2023. >> the federal reserve has said we have cleared the recession recently, the hurdle, and they don't project a recession any longer. do you disagree with the fed on that? >> the fed's record on these things is wonderful. it's almost guaranteed to be wrong. they have never called a recession. particularly not the ones following the great bubbles. they pride themselves in stimulating the bubbles. they took credit for the

beneficial effect of higher asset prices on the economy and have never claimed credit for the deflationary effect of asset prices breaking, and they always do. >> cubesat not long ago -- you have said not long ago you were not a big fan of jay powell and the way he's been handling inflation. is that correct? >> yes, that's correct. >> you think he's done a better job recently in getting inflation under control? >> i think it's largely out of his hands. the forces work. i suspect inflation will never be as low as it averaged for the last 10 years. that we have reentered a period of moderately higher inflation and therefore moderately higher interest rates. in the end, life is simple, low rates, push up asset prices, higher rates, push asset prices down. >> the gmo cofounder and long-term investment legend jeremy grantham. you can call the full interview

with david rubenstein at 9 p.m. tuesday in new york, 7:00 p.m. wednesday in hong kong. let's get you up to speed now with the geopolitical stories we are following. bloomberg has been told north korea leader kim jong-un will meet russian president vladimir putin later this week. a source says he will attend the annual eastern economic forum starting sunday. the u.s. had already warned kim expected leader level talks with putin as the russian president six weapons for his war in ukraine. the you last met in 2019. -- two last met in 2019. thailand's government will present a joint statement to parliament next week after being sworn into office almost four months following the general election. the prime minister's coalition will present its plan to jumpstart southeast asia's second largest economy. it's already planning to slash energy prices and city train fares in order to ease the cost of living and boost investments.

president joe biden has tested negative for covid-19 again just days before he is expected to travel to india for the g20 summit. the first lady, jill biden, tested positive earlier this week. biden missing the summit would be a blow to host indian prime minister modi after sources told bloomberg that chinese president xi jinping would be skipping the meeting. >> and a groundbreaking shift, india has raced ahead of china to become the world's population powerhouse. it's embarking on a bold mission to build spending billions of dollars in a massive infrastructure program. we take a look at the challenges and opportunities as india seizes the moment. ♪ >> india's longest sea bridge has been some 20 years in the making.

it is expected to hold traffic sometime later this year, it'll redistribute the burden and opportunities of rapid organization. infrastructure building has gathered speed across cities and villages. the government spending -- the government is spending record amounts on housing projects to meet needs, whose jobs and roles and cut logistics costs. india needs trillions of dollars in infrastructure spend, currently supplied by governments and multilateral institutions. the opportunity to move, house, power, connect and transact with 1.4 billion people has drawn corporate investments from locals to international mergers. but private participation is less than a third overall has varied based on policy and risk. telecommunications and aviation are mostly private owned with

many financial failures. railways are mostly government owned. growth and highways, fast bankruptcies have prompted the government to date on construction risk. lack of long-term financing, difficulties in land acquisition and even a shortage of civil engineers are all reasons for chronic delays and cost rise. then there are the challenges of quality, safety and sustainability. india has the world's second largest global network, fifth-largest metro network, and third-largest construction market. yet over three quarters of the india 2050 is yet to be built. that will likely provide opportunities, but many challenges as well.

♪ haidi: we are getting a segment from the new zealand prime minister, if you recall, election campaigning, kicking off for -- kicking off over the weekend. doing more to leverage digital creativity and offering more premium when it comes to tourism. he says he supports a green economy as well is leadership on climate. opinion polls, less than six weeks away. we know the rbnz was on the forefront when it came to the inflation flight.

rates are at the forefront of this election campaign. we are seeing many forecasts for a recession and the second half of 2023. we will be getting more from the new zealand prime minister, speaking with bloomberg tv later. you can catch that conversation at 1:40 p.m. sydney time, 11:40 a.m. in hong kong. let's get the outlook when it comes to the global chips sector. softbank, scaling back ambitions. we will be speaking to the president of industry association of smi next -- of semi next. this is bloomberg. ♪

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replace u.s. technology -- seeks to replace u.s. technology. ajit, great to have you with us. we are seeing great investment from beijing when it comes to chip and broader tech ambitions. are you surprised with the developments from the huawei tech and what it says about china trying to close that gap? >> given that the speed has become very clear, given the geopolitical tensions, each country is trying to do its best to stabilize their own operation and enhance their own operation. mo, i'm not surprised -- no, i'm not surprised. china has been working on this for years. the answer is no, i'm not

surprised. >> so, surprise but is it evidence -- no surprise but is evidence that u.s. needs to tighten restrictions even further? do you expect? that sort of reaction from washington? >> it's very critical to talk about the u.s. alone or any other country. this is not an effort which can be done by one country unilaterally. this has to really be done multilaterally, understanding, what are the risks to the industry? our philosophy is we continue to learn, we are prone global supply chain enpro industries. our approach -- pro global supply chain and pro industry. our approach, we never support any issue which will have implications on national security.

well was work with the companies and countries -- we always work with the companies and countries. the rest of the policies, i generally don't comment on it. i know historically, the u.s. has been trying to keep china as a nation away from the leading edge. china is trying to do what is good for china. and i'm not surprised with the news that happened. >> how do your members see china's efforts? >> it's a mixed bag. there are some companies that are more affected by the restriction, they are more unhappy. if it is done. multilaterally, the members are generally not happy about it.

it is not a national security issue, i don't think people complain. if it's not a national security issue, people will not complain. this is not clear to many people, how these restrictions are ensuring national security. that is the kind of, concern most companies have -- of common concern most companies have. >> adjit, is chipmaking moving away from taiwan? is that even feasible? >> the efforts have started. it's going to take years. i don't think it will move away from taiwan. but other countries will also strengthen. our industry, it took us 60 some years to get to $600 billion.

our industry will double in the next six or seven years, there is room for other countries to grow, there is room for other houses to become stronger, to stabilize supply chain disruptions. this is a good sign. taiwan is definitely -- taiwan has definitely done a very good job to become the super powerhouse of semiconductor industry and they continue to grow doing very well,. also other countries need to step up. >> some of your outlook would depend on china bouncing back a little better, right? ? many disappointed by how lackluster the growth has been so far. does that need to come from china, that demand, in order to grow your industry the way you talk? >> we are very interdependent on multiple countries. when a chip is made, substrates

come from three different countries. the design is mostly u.s. manufacturing is mostly asia, taiwan, south korea. assembly is in southeast asia. we are so interdependent on multiple countries. and this is a big problem, this can really disrupt the supply chain and the whole industry and whole society. and we learned that during the pandemic, how this disruption led to ship -- led to chip shortages and the industry came to a virtual halt. we are dependent on many countries, including china. >> ajit, i'm wondering, amongst your membership, are you seeing more decisions made when it

comes to supply chain level concerns? we are post-covid. the geopolitical tensions still persist. do you see that becoming a bigger issue for your membership? >> yes, it is. our supply chain has been working on one philosophy called "just in time," disruptions that only because of geopolitical tensions, but also climate issues, the russia-ukraine war, and a few other disruptions. the just-in-time philosophy does not work anymore. semi is working closely with members to redesign the blueprint. just in case means a little bit more cost. but supply chain disruption is more cost-centric than the just in case philosophy. also, this is a global issue, as i said before. we are interdependent on

many countries and many companies. that's the effort going on actively within semi. >> we are definitely going to need to hear more about that soon. thank you so much for joining us, the semi president and ceo. plenty more to come here on "daybreak: asia." this is bloomberg. ♪ health customers surd reported taking healthier actions. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme.

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introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management. >> the general electric ceo says the aerospace business could see annual revenue soar above $40 billion. this, as airlines snap up new plans to modernize fleets and meet surging travel demands. he told us he is bullish on growth for each of the company's three separate units. have a listen. >> i have long believed you are far better off being strong rather than just big. that was a little bit of the evolution of our conversation. we are not going to be an all singing, dancing ge going

forward. but that doesn't mean we can't lead the energy transition. that doesn't mean we can't be a leader in position health care. that doesn't mean we can't define the future of flight. that's what these three businesses can do. they will do them on their own. they will share -- we will share a history, a brand, some of the operating characteristics we've been talking about. but on a go forward basis, i don't think there was a lot of ego involved. i think the board knew that our duty was to set the businesses up for success, to serve the teams and the customers in that way. i think for some, when going through the liberator she's -- the deliberations, it was tough to think about a different construct. but as we look forward and throughout that process, everyone was looking forward, i think there was easy consensus each of these three businesses on their own bottoms were going to be industry leaders. the alignment from the board room through management to investors was going to be additive to the cause.

so, when we went around the table, it was an easy vote. >> ge's ceo speaking to bloomberg's david westin. you can koch of the full interview on wall street with. let's check some of the top corporate stories. softbank's arm, planning to raise up to $4.7 billion in the chip designer's long anticipated ipo. this marks lowered ambitions for a debut that was once expected to generate roughly twice that amount. arm will offer 95.5 one million american depositary shares for 47 to $51 each. even at the bottom of that range, the ipo will still be the world's's biggest this year. the ftc looks set to filed an antitrust suit against amazon later this month. this after the company failed to offer concessions to settle the claims. sources say the ftc plans to target the e-commerce giant's popular marketplace for

third-party merchants paying a commission on each sale. they account for more than half of amazon's online sales. ubs executives, weighing their options to renegotiate parts of the deal credits we struck for its securitized products a business. sources tell bloomberg the bank is unhappy with the terms credit suisse agreed to when it sold parts of the business to apollo global management. we are told executives are particularly concerned about management fees that must be paid to apollo. ubs will double the coverage of several stocks credit suisse wealth clients can access as part of the integration process. it will enable clients to reserve research covering more than 3000 stocks, while bond coverage will increase more than six fold to some 18,000. credit suisse's securities research for the investment bank will also be integrated with ubs'. those are the top corporate stories. here are some of the indices we

will be watching one trade opens in korea, japan and australia shortly. you can see we have stocks here on the watch as well with woodside energy down about .6%. those strikes are set going to be in focus in the next couple of days. we also have futures on the dow up. futures on the s&p are lower. the market opens in sydney, seoul, and tokyo next. this is bloomberg. ♪

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>> this is "daybreak: asia." cutting you down to asia's major market opens. a lot of the session today may be about currencies. it certainly wasn't

aboutequities . the u.s. session was lackluster for equities. we have six more fed speakers this week before the blackout period. that could change everything, too, haidi. haidi: you are absolutely right. king dollar is back. all of the currency prayers, coming under pressure with growing perceived divergence. belle is taking a look at the market open. >> we heard from the japan finance chief this morning, not ruling out options when it comes to the fx markets. we saw the yen trading above 147. at the start of the day we are kicking off with those moves in the dead space. yesterday, we had the busiest session in terms of daily supply so far when it comes to corporate debt issuance. 40 businesses, tapping high-grade markets globally. we did see treasury yields moving higher off the back of that, under a little bit of

pressure. we are keeping an eye at the 10 year yield. it was edging higher in the prior session. we did mention as well the moves in the dollar yen. that is another watch for us. we are above the 147 level. we've already heard from japan's finance chief saying he is not ruling out any options. the japanese currency here, trending around a 10 month low against the dollar. not a lot stopping it in its tracks these days given we have more fed officials coming up in the days ahead and also the japanese yen, we are expecting the boj to stick with easy policy settings given we are continuing to see signals the economic recovery post-covid is starting to stall. in korea today, the other big watch for us is the moves in the energy space. we saw brent crude moving above $90 a barrel after saudi arabia and russia, two of the biggest suppliers,

deciding to extend supply customer the end of the year. traders had anticipated the volume of the cuts but it was the duration that caught traders by surprise. the prospect of tightening has led to higher oil prices. that is something that can put upward pressure on inflation, pressures throughout the asian region. something the bank of korea will be watching closely given yesterday they highlighted international oil prices posed the biggest uncertainty for the inflation outlook. we saw the rebound in inflation again tuesday. that's the state of play. markets fairly flat in terms of equities as we come online today. australia, the focus is on eco data. in the hour ahead we will have second-quarter gdp numbers dropping. we are expecting growth of ring around the .2% mark on the quarter. weakened consumption is something we will be watching closely here following the rba decision to stay on hold in the prior session. also watching the aussie,

. fresh lows against the greenback -- the kiwi dollar. fresh lows against the greenback. yesterday the pmi data, telling us contraction is is still underway. >> let's get some views on this divergence story. you've got the resurgence of king dollar. the idea u.s. exceptionalism when it comes other stockmarket is back and play with a soft landing scenario. then there is china. where do you find value at this point? >> we to a fair bit of a valley on china if you look through the cycle. we look at the free cash flow generation. you look at the pe ratios that are down to historically low levels, i think it's important to remember there is still growth opportunities in china, despite the weakness in the economy.

and so, we do focus on where those opportunities are. if i can use an example, like stock side pee, these are up 30% year to date. >> are those opportunities in property at this point? are you sort of brave enough to venture into real estate and china? >> i think you have to be brave to venture into it. there are solid -- a couple of solid companies we do like. we are looking at this as, they are going to have to continue to push through policies to support the real estate industry, it is so important to overall consumer confidence in china. companies that are financially strong, that have the ability to benefit from picking up land bank, good-quality land banks at the moment, plus having a portfolio more focused in tier one and tier two cities where

there is an as much weakness in terms of demand. i think those are the companies we are looking at. state owned enterprises, yes, they've always had some advantages. that's where we are focused on. very selective. >> have any of the measures china has taken in the last week, have they changed your mind at all about china's recovery, what might be possible and how soon it might be possible? >> we have to push back -- like many people we have had to push back our expectations. we were hoping consumer confidence would stabilize the second half of the year but at this point in time we are looking moratti 2024 outlook for that -- more at a 2024 outlook for that. to basically sort of stabilize. until then i think is going to be very sluggish. the government is -- we've had this view for quite a long time. the government remains focused

on the debt. therefore it's a fiscal expansion that's going to be quite measured. we are expecting periods of slow growth in china during 2027. > we have seen most of the earnings come in, generally online. -- in line. guidance was cautious. if earnings continue to come in in line, will that be enough to attract investors back, or does it have to be more economy wide, a broad-based recovery for investors to come back and? >> unfortunately, there are some global headwinds as well. we are expecting global growth to slow in 2024. it's wanted to be -- it's going to be difficult to say investors come back full force and a broadway. the measures and china need to be more evident before that happens. in the meantime, certainly, there are buying opportunities

out there for good quality names. that's where i think it's important to pick those carefully. as i mentioned, there are sectors that are doing well. the domestic story, we expect ultimately while gdp growth is a slower than we are used to, a consumption growth will probably lead that over the next five years. we are still focused on the domestic consumer story for the most part in china. haidi: some of these companies that are part of your picks, this is also a global story, not just a domestic market share story. >> yes, when we look at things like -- one of the opportunities we see is byd. byd had very strong growth. the segments, it was well-positioned. we see the product suite it's

going to launch the next few months. that's going to keep growth pretty firm. the pullback in the share prices of the ev car, manufacturers the last few months, for example, we see this as a buying opportunity particularly for pyd, that we see is a high-quality name as well. -- as a high-quality name as well. there are some global stories out there because we also want to face the fact that there's going to be some pickup in global growth in the second half of 2024. as interest rates come down. >> thank you so much for your time today. fascinating conversation with the director of asia equity research at morningstar. let's get back to annabel for some of the main movers. was going on? -- what's going on? >> keep an eye on the

energy market in particular, we have brent crude coming online, we are seeing it sit above $90 a barrel. that was after saudi arabia and russia extended their supply cuts until the end of the year. saudi arabia's going to continue its you let admiral production cut back of -- unilateral a production cut back until december. russia set its export reduction of 300,000 barrels a day will be extended for the same duration. the volume of the cuts wasn't largely expected by traders but is the duration that's caught some of guard. it's the prospect of further tightening in the global energy markets that traders are watching closely. we are watching big energy producers in asia at the start of the day. we had woodside and santos coming online. moving to the upside. let's take a look at one of the sector most sensitive to energy prices, the aviation one.

airlines, a little bit mixed with trading underway in asia. we saw big moves in the u.s. session overnight. the likes of american, down 2.6%. delta, same magnitude, united down 2.5%. a sector to watch closely throughout the session. quite sensitive when it comes to the energy space. >> country garden narrowly avoiding its first he felt what are betting on an eventual restructuring on liquidation -- default but investors are betting on an eventual restructuring on liquidation. this is bloomberg. ♪

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>> oil is holding onto gains as the asian trade opens after two key members of opec-plus announced they are extending their voluntary output cuts until the end of the year. that announcement set brent crude above 90 dollars a barrel for the first time since november. su keenan joins us. traders seem to be surprised it was opec. >> this was more aggressive than most expected. most thought the saudi's and russia perhaps what extent their voluntary cuts another month. they didn't think they would do it for the rest of the year. as one veteran trader says,

this is a stark reminder why you don't take a position against what he calls the central bank of oil. saudi arabia's continuing its unilateral production cuts until the end of the year, holding output at the lowest level in several years for a total of six months at this point. russia announcing in a separate statement their export reductions will be extended by the same period, and many market observers, noting the already tight global oil market just got a lot tighter by virtue of the saudis' lead in this. they say the voluntary cut will be reviewed month to month. heir aim -- their aim is to support the stability of the oil market. you are looking at it right there. brent crude hitting $90 per barrel. it has been above $91 and the asian trading session. that's the highest we've seen

for brent november. -- for brent since november. ditto for wti. you can see the sharp jump higher when the news hit the tape. again there is the view we end to 2023 -- we are looking at a much tighter end to 2023. there could be some correction there. haidi: this is not very good timing for the biden administration. >> you've got biden seeking reelection and this is extraordinarily inflationary. biden as a personal note has pledged he will not allow gasoline prices to go above four dollars. we are knocking on the door right now, the national average in the u.s. now stands at $3.81 a gallon, much higher than this

time last year. it marks the second highest level in records going back to 1994. just for seasonal prices, we are seeing gas at the highest it's been in a decade. not a good sign for the biden administration. although a representative says they are in constant engagement with the saudi's and will continue to do so. you are looking at the bloomberg, a lot more bets than there were last week on oil going to $100 a barrel. the short-term view is that oil, the correction in brent is going to go higher. crude had been coming onto the market, the exports surged in august. they say the export is likely to pay for the year. we are looking at a very tight situation as we coast into the end of this year. >> bloomberg's su keenan there.

we have seen sugar jumping to the highest and more than a decade as traders see another year of shortages. ben, we are seeing this across a key of commodities. what's going on here? >> hi, haidi, for sugar, the primary concern is india. it boils down to whether. there have been really poor rains across india and the growing regions for sugar. there's creeping speculation that ndma end up -- that india may ends up curbing its exports. there is still scope for better production forecasts, but at the moment there was a lot of concern creeping into the market they may cut exports in the 2023-2024 season. we had the indian food secretary

interviewed last week. he's very confident on september rains and boosting crops, not only sugar but rice and wheat. you are a brave person to bet on whether. but it's wait and see. -- bet on weather. but it's wait and see on whether india will go ahead with the export curves. >> it was the hottest august in india and more than a century. india itself is worried about things like rice. that's going to have a trickle-down effect, it already is infecting other countries. explain more of that to us. >> rice restrictions on export varieties as of a couple of weeks now has really rattled the markets. there is election early next year. the modi government wants to contain food prices. they are managing to contain prices domestically.

but outside of the region, it's really shaken up the market. who are seeing countries in africa and asia -- we are seeing countries in africa and asia asking for exports. under a provision against food security. there is also indonesia tapping cambodia for rice for the first time in a decade. the are a lot of nervous countries regarding supply here. with sugar and rice, it all boils down to india and the end of the september rains and the monsoon there. there's probably more to come in this market. >> are we expecting this to be the new normal? contending with extreme weather, 2023's expected to be the hottest year on record by the end of it, is this something emerging markets are going to be

grappling with as an ongoing threat? >> it's not just emerging-markets, it is your big producers, from the u.s. to china, across europe. extreme weather affecting crops, from corn, soybean, to wheat, it's becoming a global problem. june was the hottest june on record since records began. there is extreme heat. with the harder climate -- hotter climate comes a wetter climate, extreme rains. if the world is not preparing for it, and needs to prepare for it. >> you can get around upof the stories you need to get your day going in today's edition of daybreak, go to dayb on your terminals. it's available on the

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>> struggling chinese developer country garden has avoided a first default with a last-minute payment onto dollar bonds. bloomberg intelligence says it may still struggle to avoid a downward spiral in its liquidity. for more let's bring in the shanghai bureau chief. charlie, country garden obviously staved off the problem this time, but we are going to keep seeing this. is country garden going to be able to keep making last-minute payments? >> yeah, the company just paid

the two dollar bonds coupon which is a big relief to the creditors of the company. but the reality is, the company's sitting on a lot of debt. it's one of the world's most indebted developers. and has $187 billion in total liability on loans and all kinds of debt products. the thing is the company has said very clearly in its interim report that it may have problems meeting its financial obligations a financial performance continues to deteriorate. the company also said it faces uncertainties that it may have casted doubt over its ability to continue as a growing concern. it is a serious warning and reflecting is him is him -- reflecting pessimism in the company's future.

the company shares are a penny stock now. it's trading up more than 60% below its peak despite the recent rally. >> what message does this send about the broader property sector in china, charlie? >> that's a trillion dollar question. let me share with you some data first. bloomberg economics estimates that 14 trillion yuan worth of property debt which represent about 12% of china's gdp are at risk of default. of china's top 50 private sector developers, 34 of them have defaulted. most of the private developers are facing maturing debt of $8

million in the next six months or the rest of the year, reflecting again investor caution over this special class of asset, the average price of the dollar bonds issued by the developers are about $.67 on the dollar. so people are not optimistic. the future of the developers in china depend on supply and demand. the property industry after decades of fast growth, it is facing some serious structural issues. for example, china's population is shrinking. the birth rate is declining. household debt, which is -- household leverage, which is measured against china's gdp, has more than doubled from six or eight years ago. at the same time inventory is huge.

goldman sachs estimates about 27 trillion yuan worth of inventories. it takes at least five years to clear. >> charlie zhu, with the latest on china's property sector. softbank's arm is planning to raise up to $4.7 billion in the chip designer's long anticipated ipo. this marks lowered ambitions for a debut that was once expected to generate roughly twice that amount. the arm will offer 95.5 million american depositary shares for $47 to $51 each. even at the bottom of that sale range, the ipo will still managed to be the world's biggest this year. the ftc looks set to file an antitrust suit against amazon later this month. after the company failed to offer concessions to settle the claims. sources say the ftc plans to target the e-commerce giant's popular marketplace for third-party merchants paying a commission on each sale.

third parties now account for more than half of amazon's online sales. >> let's take a quick lookon how futures in europe are opening. it doesn't look so good. the dax futures, pointed lower. you may see higher yields and germany tomorrow. the swiss franc, unchanged right now versus the u.s. dollar. its weekend about half a percent in the last couple of sessions. plenty more to come here on "daybreak: asia." this is bloomberg.

>> singapore pmi numbers, just crossing the bloomberg. for the month of august, coming in at 53.6, really bouncing back from that 51.3 which is just above that expansionary level. releasing a little bit more growth momentum there in terms

of the forward leading indicator, i should say, the august bmi for manufacturing coming in at 53.6. you can see when it comes to that bounceback, we have seen a little bit of a reaction when it comes to dollar, so much has been on the strength we have seen in the dollar, sitting at about a high we have not seen since about march. that really doesn't suggest may be some of the numbers we are waiting out of singapore could actually see a little bit more upwards momentum including the likes of retail sales from july, it was a pretty muted month when it comes to eco-numbers more broadly for singapore. let's take a look at how markets are faring at this point with belle. what are you watching? >> dollar strength is a big thing playing out across currency markets in asia this morning. a lot of the interest, really also and japan in particular because we had the japanese yen trading above the 147 level overnight, which is the level at which japanese government

officials first intervened in the currency market in september of last year. that did raise the risk of jawboning from japanese government officials and that came through this morning from the finance chief, kanda, saying he is watching the fx moves closely and he is prepared to act, not ruling out any options there. in terms of the market reaction, we saw the japanese yen a little bit for them off that but still it is the broad trend of weakness that remains intact. in terms of what they intervention means, we are hearing traders casting their views on this, saying this is the early stage for japanese government officials and jawboning could go on for quite a while yet. we have had one verbal warning and we could see more before the actually intervened to buy some yen on the market. perhaps we will see more of this to come. nico is saying that nate for intervention has been lessened somewhat because japanese household's are becoming more tolerant to imported inflation.

in terms of when it could likely be, intervention is seen as more possible during the new york trading hours, when tokyo traders are asleep. [laughter] >> thank you so much. we will be watching for that in the next new york session. the annual jeffries asia forum begins in hong kong today bringing together institutional investors and leading companies from around the world. esg. with just about every startup vehicle company its governance credentials, let's discuss how investors can cut through all the hype. joining us as the global head of esg strategy at jeffries, in hong kong for this today. hope it is as beautiful as it looks on the screen. talk to us about how you are defining esg for investors today given any new product that comes to market now seems to meet the credentials. >> it's great to be with you.

there are really two ways to think about esg. one is that these are three topics, environmental, social, and governance, that allow you as an investor to better analyze a company's intangibles and understand the company's externalities, with the idea that they drive a lot of their value in today's market conditions. the other way of looking at esg is through a thematic lens. the energy transition is front and center to most global investors. they need to think cautiously and thoughtfully about the energy transition, because it's much more complicated than what meets the eye. >> when you talk about an energy transition, do you mean renewables? electric vehicles? all of the above and lots more into one product? >> sure, there's a paradox investors are dealing with right

now. on the one hand, there's so much enthusiasm around a transition to a low carbon economy. over $70 trillion of capital from the largest investors in the world have signed on to be net zero by 2050. over 90% of the world's emissions today are under some type of zero by 2050 umbrella. you are seeing this year $1.7 trillion that will be invested in solar, wind, electric vehicles, hydro and other energy transition, i.e. non fossil fuel technologies. at the same time despite all this enthusiasm, all this excitement, 80% of the world's primary energy still comes from fossil fuels. oil demand is at all-time high. coal demand is at all-time high and gas demand is at all-time high. that's a really difficult paradox because investors are hearing a narrative on the one hand and in the real world, things are very stubbornly not changing. we think there are lots of

interesting investment opportunities if you actually think through that paradox in a thoughtful way. >> that's the thing, when you look at the numbers, even just an isolated example of australia, we are obviously -- where obviously the generate transition is critical. we had data showing us how woefully behind investment is. how much harder does the current funding environment and broader economic environment make it for the commitment to these transition sorts of deals? >> we have seen a 5x increase in global investments in energy transition over the last eight years since the paris agreement. we were at $350 billion or so in 2015. this year we will be out around $1.7 trillion. and very importantly, there's going to be $1 billion invested a day in solar around the world.

i think we are seeing an exponential rise in energy transition investments. it's not enough. our view is, because it's not enough, because the amount of needs for getting to net zero are more in the four to five trillion dollars per year, client should invest a lot more in climate adaptation, which means investing in companies and technologies that will allow the world to live in a warmer world, droughts, so companies in the water desalination space, in position agriculture space and so on and so forth. we are also advocating for clients to invest a lot more in the carbon removal industry, which we think is going to be a multibillion-dollar industry in this decade. the truth of the matter is, we will have a lot of excess co2 in the atmosphere. there arguably is already access co2 in the atmosphere and we are

going to have to remove that. there are very interesting commercial technologies today that allow us to do so. we think investors need to spend more time looking at direct air capture, more time looking at reforestation and so on than they currently. >> what do you say to global leaders? >> i'm sorry? i couldn't hear that. >> where do you see the global leadership? >> yeah, so, i'm here in hong kong. it's important to just note that, by far, the world's leader in energy transition investing is china. it is a fact that upsets i think many folks in the west. if you look at the hard numbers, china invests more in renewable energy than the next three countries combined. china's going to contribute over 40% of solar installation this

year. we are seeing of course china's leadership on the academic and research side in solar and wind. point number one is china has been the leader on energy transition. point number two is the u.s. is trying to play catch-up. the inflation reduction act likely will put between $1 trillion and $2 trillion of public investment into energy transition over the next decade. that's a very important shift from where the u.s. was just a few months ago. i think the u.s. is catching up. finally europe, europe is in a very top-down regulatory driven approach to net zero. we are seeing a lot of activity there. china's the leader, the u.s. is catching up, europe is starting in a good position in the energy transition and will continue along their ways. >> great to have you with us, the global head of esg strategy

at jeffries, joining us out of hong kong. plenty more to come here on "daybreak: asia." this is bloomberg. ♪

>> the world's biggest

corporate leadership still has a way to go to make up half of the leadership team. urging more companies to follow that lead as it issues a new report on female representation and australian boardrooms. with us now is susan lloyd the president, of the company. good to have you with us. we have these ongoing conversations. there's always a building element of frustration because it feels like it is one step forward, a couple of steps back, and progress is painfully slow. take us through your findings. these numbers are still not great. >> this is the seventh year cw has done the census and there actually has been progress and we need to celebrate that. we have the condition where every single one of australia's top 100 companies do have at

least one woman on their executive leadership team. 26 asx 300 ceos. that was up from 18 last year. of the 42 appointments, 10 of them were women. it is important to acknowledge we are moving in the right direction. nut as you say importantly, the change is still too slow, at the rate of change we are on it now, it will take another 50 years to get to gender equity in the asx 300. haidi: i have to apologize for the tone over frustration and patience, but i guess my question is, we celebrate the wins when we got them, but what is going to be needed to accelerate the rate of progress and get more female ceos at the top? if you look at something like quantas, longtime quantas manager and leader there, does the plan across the board look as optimistic for you? >> the pipeline is the key

issue. we are asking orbit australia really to do more heavy -- corporate australia really to do more heavy lifting as of today. they've done a phenomenal job around gender equity over the last 10-15 years. one of the things we are calling for is greater investment in the pipeline for traditional theater roles for the ceo. currently 82% of ceo pipeline roles are held by men. but there is no shortage of educated women in australia. we have one of the most educated female workforces in the world and we are under utilizing that workforce as women leak out of the system from the majority of graduates coming out of tertiary education into a small minority of ceos. >> have this problem in the u.s. as well and it's all over the world. you talk about the pipeline and so on. there are plenty of qualified women out there. we've heard this from managers, board members, the pipeline can be any

number of things, right? where does the pressure have to come from? investors themselves? >> and has to come froma number of -- >> it has to come from a number of directions. it makes good business sense. this is not about equity or fairness. it would be more equitable and more fair. but that is not the issue. the issue here is diversity performs better for shareholders. there should be -- this should be a business no-brainer for boards to be thinking about creating diverse teams. not just diverse around gender but genuinely diverse thought teams that will make better returns for shareholders, lower risk, better outcomes for customers. it really makes all the business sense in the world to be utilizing this highly educated workforce we have in australia. >> you are on the board of rio

tinto, you know how hard it is to get on a board. for anybody thinking, i would like to try to do that, what advice would you give them? what should they do to get on a board? >> i don't have any specific advice specifically, because sort of in my career, as long as i'm doing the next thing that is interesting, that is something i will say yes to. i would say say yes to as many things as you can as you are learning a your career, have people that can mentor you along the way. i would be curious and open to opportunities. things happen when people are curious and open. >> susan, just curiousabout the mining industry . it is one that's really struggled with its treatment of women. are there more efforts that need to be made particularly in the mining industry and other industries that might have extra

burdens to caps off? -- to cast off? >> australia has the most gender segregated workforce. women tend to be aggregated in one set of industries, more lowly paid. men and another set of industries. there are some definite challenges on both sides of those spectrum i would say that we need to get better gender balance across all industries. the ones that are female dominated now and the ones that are male-dominated now. resources is a challenging sector for ssure. the finance sector is also a sector that suffers from a big gender pay gap. construction, very tough environment to make change. i can tell you that change can be made with focus. you can get to a point where even in a construction environment for example, we were able to have a gendered balanced executive team, balanced board, and senior managers by the end

of the decade. ranked number one of the world twice in a row which i'm very proud of. > susan, we have to leave it there. thank you so much. a wonderful conversation with susan lloyd hurwitz. president at cew. hong kong has ordered the government to establish laws recognizing same-sex partnerships in one of the biggest victories yet for lgbtq activists in the financial hub. let's get more from bloomberg's bruce einhorn. what exactly did the court's findings favor? >> this was the court of final appeal which is the highest court in hong kong. it provided a bit of a mixed verdict. on the one hand, it said that there is no constitutional right to same-sex marriage. it said there is nothing in the hong kong basic law, the

equivalent of the constitution that prevents there being same-sex marriage. but the court said it is up to the government and the legislature to deal with that issue. the court did say though that the failure to provide any sort of legal recognition for same-sex partnerships, for same-sex couples is a breach of the hong kong government's obligation under the hong kong bill of rights. so the court said that the government needs to provide some sort of a legal framework. it didn't specify what that would be. we do know that another places where there isn't full-fledged marriage equality, there are governments that have things like civil unions, civil partnerships. the court gave the government two years to come up with a solution. when the clock starts ticking on that is unclear. it depends on when the court issues its final order.

there is still some uncertainty there. there's also uncertainty about what the government will do when it comes to the form of the partnership, what sort of rights will be guaranteed as a result of them. so a lot's still to be decided. that said, though, advocates for lgbtq rights here in hong kong have hailed this as a victory, even though it's not the full victory that many of them had hoped for. >> this comes as a wider push across a region for more recognition. we have seen it from india, to nepal, to japan, progress being made. looking at it from a corporate level, reputational level, is hong kong being left behind in this respect? >> currently, there really are very few places in this part of the world where there is full

marriage equality. there's taiwan, and once you get past taiwan, there is really nowhere, the supreme court in ne pal if you months ago ordered the government to allow people to register their marriages. there is uncertainty about what's going to happen there. elsewhere in asia, there is place with marriage equality. there are some cases pending, most notably in india, where the supreme court has heard arguments on marriage equality cases. it is expected to rule at some point this year. japan, some lower courts have ruled it is unconstitutional to not have marriage equality. however the legal process is still ongoing. it is unclear when that will happen. hong kong is not really very far behind the rest of asia and in some ways will be ahead by at least having some sort of legal recognition for same-sex partners, same-sex unions of some sort. >> bloomberg's bruce einhorn, with the latest.

plenty more to come here on "daybreak: asia." this is bloomberg. ♪

>> let's preview the day and china with david engels, what are we watching out for? obviously currencies is something we've been watching. [laughter] >> well, a lot of what you guys

have been covering this morning i will continue to cover in that sort of direction here, you mentioned currencies, we are also on intervention watch as far as the pboc goes. i would imagine there will be an inclination for a further, a stronger fixing today than usual. that already has been the case, because of the weakness coming through in the currency. you look at china offshore, it is 731, the weakest levels since 2007. you guys have been covering oil and the energy story very well. we will see whether or not this permeates into the equity market and hong kong. in has really been one specific -- it has been one specific sector that's managed to buck the overall trend, the equity weakness this week. i would also mention or and or -- iron ore, and has rallied a lot more than oil prices. oil is up about 25% from the bottom i believe in june. iron ore is up 30% since may.

some of these contracts come online in a couple of seconds, a couple of minutes or so. country garden is very much in focus. they made the coupon payment yesterday. we went from 12 to 15 cents. there is healed on the table -- yield on the table, with appetite for distress. now we have all the pmi numbers behind us right now. interestingly enough, touching on the weakness on the property sector, touching on the weakness and consumption, they are saying it's not all bad in china. this is an economy wrap, use drop everything away, we are actually seeing some improvement in the underlying numbers. >> how interesting. we are getting more numbers as well later on in the week. david, thank you so much. that is our bloomberg markets coanchor and chief editor, david engels.

coming up on bloomberg tv, we speak to prime minister chris hip tends -- chris hipkins. you can catch that interview at 1:40 p.m. sydney time, 11:40 a.m. hong kong time. that is that from "daybreak: asia." our markets coverage continues as we look ahead to the start of trade and hong kong, shanghai, and shenzhen. standby for "bloomberg markets: china open." this is bloomberg. ♪ use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside - and the other goals along the way. wealth plan can help get you there. ♪ j.p. morgan wealth management.

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