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haidi: a very good morning and welcome to "daybreak: australia." i am haidi stroud-watts in sydney. we are counting down to asia's major market opens. vonnie: good evening from bloomberg's world headquarters in new york, i am vonnie quinn. the top stories haidi: this-hour period president biden says china's economic downturn may reduce the risk of ai one as india's g20 submits its status as a rising power that can blunt beijing's influence. vonnie: plus, alibaba's former chief leaving the company just months after taking charge of its cloud division. haidi: we do have breaking news when it comes to this highly anticipated arm initial public offering, arm reportedly pricing its ipo width and a tradition of

the top or above of the 150 dollars a share range, according to reuters. there are also discussing raising the initial public offering range. this is the chip designer owned by softbank group. it is closer to securing enough investor support to attain the valuation of 54 point $5 billion that it was seeking. that would be at the top of its indicated range. it is considering asking investors to value it even higher, according to people familiar with the matter. following strong demand from investors, arm will be able to price the initial public offering at the top or above that $47 $51 per-share range. it would be the biggest stock market debut in two years. we have been seeing a lot of speculation when it comes to whether the valuation will fall. we are now hearing there is a possibility of raising the price range. they're also considering potentially keeping the range as

is and pricing above it on wednesday which would also lead to evaluation that is higher than 54.5 billion dollars. this story is reporting that arm will not offer more shares because softbank does not want to retain that 90.6% stake in arm following the initial public offering. vonnie: that is one of the events we are very much looking forward to this week. a massive event given the mergers & acquisitions space and how vulnerable it has been. and we have been waiting for the arm initial public offering for many years. we will get the pricing on wednesday. what else do we get wednesday? cpi data. that will turn the tone for the market until the fomc meeting and decision the following wednesday. . will see if we get hotter inflation. how much hotter will it be? enough to change traders' minds? ? they are still pricing in one more rate hike this year. it was a down week last week for major indices, the s&p and the

nasdaq. it looks for the moment as features are pointing to a higher open but argosy with the caveat that it is extremely early in the session. it is the first full trading week of september. yesterday was a holiday shortened week. we had comments from secretary janet yellen predicting that the u.s. would be able to avoid recession and she feels very confident still in that prediction. that should give a bit of oomph to marketeers who think that is perhaps the outcome we are headed for. at the same time, it is costing more to hedge against a rout these days. there is also the possibility of the strike from united auto workers thursday, that could take a huge amount of gdp, u.s. gdp could be reduced by 5.6 billion, according to anderson, if that was indeed to happen. we will be watching the prices closely as well.

annabelle: pretty big week coming up. you just said u.s. inflation on wednesday, that is looking to be the highlight. really telling us where the fed is going next. but the bets are coming in, particularly in the bond space. will see yields moving higher. we have seen treasuries moving deliberately higher than yields. fairly needed. the equities picture is pretty sanguine. as you are saying, we are coming off a weekly loss. we have seen two weeks of gains. last week, to the downside of all. the wait and see ahead of the u.s. inflation. , coming up on wednesday. some more interesting moves we are seeing in the currency space, take a look at what is happening in the japanese yen. this morning we are seeing it strengthening pretty substantially, around 0.7% against the greenback. you can see those moves coming through. what is driving that was

two different factors. first was governor what are given comments to local media essentially saying that by the end of the year, he will have enough data to know whether it is time to exit negative rates. that is one factor. the other comes down to the g20. it is that picture of rising tensions between the u.s. and china. haidi: we will stay on geopolitics. india's g20 summit has wrapped up with an agreement on a joint communique that included a consensus on russia's war in ukraine. for more, let's bring in our coanchor haslinda amin, who has been covering the summit in new delhi. you surprised by their decision to stay away, despite the language that was walked back when it comes to the war in ukraine? this is being seen as a win for india. haslinda: i win for india, for modi, and a win for the u.s. and for the g20. remember that coming into this meeting, there was a high-risk

we would not produce a communique. that failure would be a stark contrast to the success of the recently concluded brics meeting. so it is awaiting for just about everybody involved in the g20. for modi, it was a chance to step up and a chance for him to perhaps cement his position as leader of the global south, and xi jinping's absence allowed him to do just that. we talked about how that was a communique? it was not just the success of a communique, it was produced on the first day of the two-day summit. pretty unusual and a huge piece for india. it came about because the leaders agreed on a toned down description of the war in ukraine, the likes of the u.s. and its allies were pushing for a harder start. a to use the words "russia's aggression against ukraine, but it was eventually toned down. it was a general expression of

the war in ukraine that allowed everybody to come to the table and give their agreement. there were other successes. for instance, the agreement to raise the capital-intensive loans for emerging economies. that would be done via the world bank. also one thing to note, the african union will be part of the g20. it rings you back to how it was for the brics nations as well which added 11 members to that grouping. both are vying for the top spot. vonnie: we are also hearing about the u.s. wanted to put in place a system that might counter china's belt and road initiative in the middle east, tell us a little more about this? haslinda: that's right, in fact, a deal was signed between the u.s., the middle east, israel, as well as members of the middle east. it is important to note that

crown prince mohammad bin salman was part of that grouping as well. the whole idea is to build rail as well as maritime projects throughout the region to counter china's influence. it is also interesting that not too long ago, we had biting himself call crown prince the pariah, but here at the g20, we had a three-way handshake between modi, the crown prince, as well as biotin. it also shows a u.s. that is willing to come to the table to negotiate, to compromise, to counter the influence of china. haidi: president biden missed the second day of the g20 and made his way to vietnam. very interesting comments from him on china. haslinda: you are right, remember, these comments, on the back of what he said not too long ago as well, that china was a ticking bomb.

in conversations, in fact, at the press briefing in vietnam, he said china's economic might has reduced, it is facing a lot of economic headwinds and that reduces possibly the chance of china taking on or attacking taiwan. it is an important statement from the president himself. what is also interesting is that while in vietnam, vietnam raised its partnership with the u.s. to the highest level that is accorded to only close partners, like china as well as russia. one point to note is that vietnam possibly is willing to take some pushback from china to raise its relationship with the u.s., because of the anxieties to do with beijing. vonnie: haslinda amin, "bloomberg markets: asia"

coanchor who has been covering the summit in new delhi, thank you. u.s. secretary of state anthony blinken has called elon musk starlink satellites service a "vital tool for ukraine which he hopes will remain fully available." bloomberg editor tony czuczka joins us. what is the backstory to blinken 's comments on the starlink ? tony: it is the latest installment of this complicated relationship between elon musk and the u.s. government. he was quoted in excerpts from a biography last week, as saying that he had shut down starlink, this vital tool, when ukraine wanted to attack russian warships anchored in crimea, which, of course, is the region of ukraine that russia annexed

forcibly. it set up a controversy which is really the latest in elon musk being injected into geopolitics. this is a private company. at the same time, more recently, spacex has become a pentagon contractor. musk as a private citizen, his company has said that starlink is intended as a civilian tool. but of course, they know it is also being used by the ukrainians on the battlefield. so this was a backup to what secretary blinken was asked about in the interview. basically he said, i will not comment on the military specifics of this particular episode, whether it is true or not. and over musk confirmed it, what

we do expect is that starlink will remain available and it should remain available to ukrainians. so there you have it. it is a big ball of wool, probably well-known, but it takes all of these twists and turns, as we know elon musk is not shy about broadcasting his opinions. haidi: at the same time,, the u.s. launched a payload of military early warning satellites designed to counter china and russia in space. of course, we also had president biden's, about how potentially the chinese economic downturn hits into its ability militarily with regard to taiwan. how does that fit together? tony: it fits together in the sense that there has been a space race, or follow like a

star wars situation brewing for quite a while. the question here is can china and russia threatened critical u.s. satellites that are up there in space? this mission that took off today from cape canaveral is the first of its kind by the u.s.. they have been quite secretive, the pentagon, about it and they have not released much publicly. but what went up today is a payload of satellites that is being described by some of the officials as kind of a watchdog in space once it is up there. and it is part of a system that is supposed to be fully operational, which we assume has to be a ring of satellites like this by 2026. and it is all intended to double

down on this idea that the u.s. will step in and robustly defend its national security while not seeking to isolate china and decouple from china economically and also keeping military channels of communication open. but this is a very clear move and it signals that the u.s. is aware of this, as the u.s. has said in intelligence assessments very recently. and that it is trying to do something against it -- maybe "against it" is not the right thing, but to sort of have more eyes out there in space rather than in these medium orbits on the ground. haidi: tony czuczka, r bloomberg editor in washington, d.c. still ahead, more analysis on the outcomes of the g20 summit and that communicate with a

professor of asia-u.s. relations from the harvard kennedy school. but before that we will talk market strategy with banrion capital management, as investors prepare for a busy week of eco-data. this is bloomberg. ♪

haidi: let's look at the key events we will be watching this week. on the inflation front, u.s. job numbers for august are due wednesday. core inflation is expected to remain steady. janet yellen just told us every measure of price pressure is "on the road down." we will also get information and data from india on tuesday. china's data dump could shows its economic problems are spilling over into more sectors. bloomberg economics thinks the pboc will lower its mof rate by 10 basis points. in europe, you see the officials

will debate a quarter-point interest rate increase on thursday. the decision could go either way, although the commentary is expected to remain hawkish even if they opt for a pause in the hiking cycle. some other eco-data to note, jobs numbers out of australia and south -- and south korea, and initial jobless claims and retail sales too. that is your week ahead. vonnie: a lot to contend with this week. well, our next guest says afraid rate cut of any kind will only happen if there's an economic downturn and inflation suddenly drops under 2%. joining us now is shana sissel, ceo and president of banrion capital management. what do you anticipate this week out of the cpi and what it might mean for the fed rate path? shana: well, we saw a slight uptick of cpi in august but i would anticipate it to be flat in september. the year-over-year number is not as extreme as it was over the

summer, and so i think you will see it be flat. i don't expect to see a major downturn. as a result, the fed will likely pause in september as they wait to see what happens with the data through the month of september in the hopes that they will see inflation come down as we have seen some weakness in the job market. vonnie: we certainly heard janet yellen on brought back from the g20 that she is confident in the production for new recession -- a soft landing, essentially not that much damage to the job market. if that plays out for the rest of this year, does that pose any threat to equities, or do you see any situation where we might have a rout in equities? shana: i think she is being too optimistic. you can't increase interest rates and have an official come down still to the levels it has, and not see that impact on

economic growth. we are starting to see it in some of the outlook as we listen to earnings calls. but technology earnings have been stronger. we have actually seen analysts increase their earning estimates . i just don't think that necessarily the macroenvironment will impact stocks that much, but i think if you just look at valuations in general, they are pretty stretched at this point. even with the slight increase in earnings estimates, we are still looking at 12% earnings growth in the next year on the s&p. if you add 1% to 2% inflation and 18.5%, that gives you an s&p 500 of about 4600. not a lot of upside from here. i think is more likely we see a downside from here. so i think she's being overly optimistic. we are seeing cracks in the employment markets, stress on the consumer, and i think we will see a slowdown in the

economy. when we see a massive recession? i don't think so. but the longer it takes to see any slow down, i am becoming more and more concerned, because that emboldens the fed to continue to increase interest rates, which is more likely to push us into a much deeper recession. vonnie: we are up 16% on the s&p every year, despite the drop in september. so is now the time that you would say that the nvidia effect has happened, we are beyond that and we need to maybe make some changes to our portfolio? shana: the nvidia effect is real. it is actually buoying up a lot of technology stocks that don't justify being up there they are. rising tide lifts all ships. we are thrilled to see some change in leadership, we are starting to see energy stocks start to outperform.

since july, energy has outperformed all other sectors of the s&p 500 by 900 basis points. it is also the only factor in the small-cap indices that has seen a new cycle high. we are starting to see change in leadership. that, i think is what you're talking about, the nvidia effect, meaning the end of one company impacting an entire sector and what the market thinks it is going to do. vonnie: thank you for your time today, a pleasure to speak with you as always, shana sissel is president and ceo of banrion capital management. you can get a roundup of the stories you need to know to get your day going on today's edition of "daybreak." terminal subscribers can go to dayb . you can also customize the settings as well for the news on the industries and assets that matter to you. this is bloomberg. ♪

haidi: chinese tech giant alibaba facing another layer of uncertainty in its complicated breakup. the former chief daniel zhang, is leaving the company. let's bring in and appel in singapore. months ago, he had agreed to lead the cloud division. annabelle: that's right. it has been quite a sudden departure for the company, announced via a statement from alibaba on sunday. to put it in more context, daniel zhang was the former chief, he was ceo and chairman. going back a couple of months, it was announced he would eventually stepped down from that role since september so, we knew that was taking place, but he had agreed to leave the desk to lead the company's cloud division. so leaving now does introduce another layer of uncertainty to alibaba just as it is navigating that very complicated breakup. it was announced via internal memo, seen by bloomberg news on

sunday. daniel zhang had assumed the post after ceding his dual roles of executive officer and chairman. he led alibaba during a period where it ventured into new areas like physical retail, and it ended up becoming one of the company's fastest growing businesses. the former ceo is going into something else, still linked to alibaba in some sense because he will be leading or steering a $1 billion tech investment fund. that will be on alibaba's behalf. vonnie: it appears jack ma's lieutenants are taking the helm completely annabelle: . that is absolutely right. it is eddie wu who will be taking on the role, and joseph tsai, both close confidence of jack ma. they formerly will take up their positions as ceo for eddie wu and joseph tsai as chairman, that was announced yesterday. so it is quite a pivotal moment

for the company because it is navigating quite a complicated overhaul. we understand that alibaba wants to break into several different standalone companies in various sectors. suddenly both of these men are quite heavyweights in ashli babbitt. -- ken alibaba. vonnie: annabelle, thank you. another story we are watching in china country garden's next major test comes monday when creditors finish booting on the potential extension of bonds. the property developer is seeking to stretch the bonds by three years. the main focus is on a bond that 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

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haidi: g20 leaders have agreed

on a joint statement including compromise language of russia's invasion of ukraine. joining us now is a professor of u.s.-asia relations at harvard kennedy school's buffer center and also author of the book "china's good war." rana mitter, good to have you with us. do you think it is fair to say that the winner of g20 was india elevating its global positioning, and russia? rand: that is probably right. in the case of india, it appeared to be in a disadvantage because china did not send president xi jinping to the meeting and hit send -- and instead they sent their prime minister. but narenda modi moved to dominate the agenda and elevated with he wanted to talk about, one of which was the growth of the global south, the nonwestern countries in the grouping. the other thing being a new types of green energy.

russia was pleased about the final communique which officially condemned territorial aggression in a vague sense but made no mention of russia's invasion of ukraine specifically. so they will count that as a thumbs-up for them. haidi: so not only did xi jinping, his lack of attendance and his replacement, it was also eclipsed by xi's domestic activities. there was very little coverage of his trip to india, compared to what president xi was doing. does that tell you anything about the relevance of the g20, with the absence of china? rana: i think it says china is not very keen to be in the g20 when it is not leading the agenda. because india is a sort of geopolitical rival in eastern terms on areas such as naval agreements and political aggression with the united states, by being away, they

tried to make sure it was downgraded a little bit in the domestic media. but also, they have been domestic troubles in china -- -- the economy has not been doing well, and also, for the foreign minister of china, qigong, disappeared and his disappearance has not really been explained. possibly because there are internal ruptures in beijing which mean is not a good time for xi jinping to be away. haidi: one way of looking at it was that the communique was a disappointment in terms of walked back language, but another way that i have read, is that clearly, the attendees were focused on giving india a win. does that seem like a smart strategy when it comes to one way to try and counter the influence of china? rana: i think lots of other countries in the grouping, including the fact that western countries, the u.s. and the european union, will be happy about that. india is a country with which they have a slightly ambivalent

relationship, they have always been slightly reluctant to get involved in international alliances though it is broadly looking towards the west at the moment. it is worth remembering that 50% of india's arms are purchased from russia, so it does play both sides. therefore, it there is a slightly more pro-western angle in the g20 that would have gone down well. in addition, they would have been pleased about the mission of post-fossil fuel energy provision. india, china, the people in the u.s. is a major emitter of mobile good house gases. china putting that issue at the forefront suggests that they might be taking it more importantly in the future. vonnie: at president biden's news conference, he made a dig a china, which i thought was odd. he said its economic activities would hinder it from "invading" taijuan. -- invading taiwan. was it a day get china, a

reference to sanctions? it doesn't seem that china would have difficulty invading taiwan funding wise. rana: the difficulty is that it is actually very difficult militarily to plan to do such a thing. president biden's comments are probably meant to do one of those things he does off-the-cuff. . he speaks sometimes in an unfortunate-sounding, but rather accurate statements. i think it's a strong argument the right now, china is really fixated on getting its sluggish growth rate a bit more healthy. it needs more exports, it needs to stimulate domestic consumption. it needs a stable asia-pacific region to have neighbors happy with what is going on, and none of that is compatible with the confrontation over taiwan. that is probably what the president meant. vonnie: beyond that, does china have the wherewithal to, avoid continued calamities their wherewithal to get its youth employed again to avoid a shadow banking crisis?

rana: there are lots of ways it can get its economy going again. for instance, china's demographics mean it is getting old. the working age population will shrink over the years. that means china's nearly bankrupt pension system will have to either be refunded or it would be necessary to actually raise the age at which men and women in china can claim their pensions, from 50 for women and 55 for men, to something higher. even in an undemocratic society like china, that would be difficult you can see people protesting about not getting their pensions on time. that is a tough decision china will have to make if it wants to deal with the economy. it's not that these decisions are impossible to make, it is just that they are hard. haidi: that kind of makes it an interesting outlook when it comes to the medium and long-term, right, if you are looking at a structurally lower growth, more distracted china that is looking at these domestic things as a balancing

act, does that mean there will be a more subdued china on the original front? certainly much less in the way of economic diplomacy? rana: i think that it's right. china will be looking inward in a whole variety of areas. apart from the pension crisis, there is also good to be a lot of concentration on youth unemployment. just. china has in the last month stopped publishing its unemployment figures for the age group from 16-24, but most outside analysts would suggest that 30% of china's youth in that is group are not finding jobs. . new university graduates are finding that there aren't professional jobs they would expect in the labor market, which is making them feel underemployed, if not unemployed. in addition, there are a whole variety of issues to do with the fact that china continues to have health care and pension provisions, much less than it would need for the population. basically trying to grow the economy at the same time as a

property market, which was just reported on a few minutes ago in bloomberg, is beginning to show signs of losing its upper trajectory. these are all things that have to be dealt with together. they mean that internationally speaking, there will be more of a concentration i think onkeeping china fully embedded in global supply chain so that essentially manufacturing in china does not get reduced. but at the same time, there is also a sense, i think, that china could invest less at home and could bring its capital to neighboring countries such as , for instance, the automotive sector in a neighboring country such as malaysia. all looking for new economic opportunities in places like thailand, laos, and southeast asia in general. haidi: does that mean china risks not reaching its full economic growth potential? and if it does not, can it still blame u.s. hegemony for that, or

will it be down to its own domestic policymaking and, as you say, some of the long-held issue sectors like property coming home to roost? rana: their prediction some people were making a year or two ago that china would quickly overtake the united states in terms of size of gdp, is now not impossible, but less likely to be seen in the short term. because the u.s. economy is beginning to grow healthily, and china's is growing, but at a more sluggish rate. overall it is possible to see areas where, in the medium-term, china could still do well. it's highly innovative tech sector, in areas including artificial intelligence, and the use of big data tactics both in the civilian market, which, of course, is one of the biggest markets in the world along with india. along with the capacity to use that energy in military, security, and defense areas. those are all areas where china could continue to expand and

also draw on the human capital that it has which, at the high-end level, is very well trained in science and technology. having said all that, it does involve further investment. it also involves making sure that the continuing uncertainty investors have about whether or not putting money into china in the long-term, particularly in technology, these fears have to be assuaged. for investors, one of the rent problems is that china's politics and society does not look very transparent it's not. easy to predict which sector might be shut down or might be boosted by some government statement. i would say they keep to that question you have asked is predictability, could provide predictability for its own people, but also for for investors, businesses, and governments? vonnie: thank you so much for joining us today, rana mitter professor of u.s.-asia relations at harvard kennedy school's belfer center. other stories we are tracking australian prime minister

albanese has discussed a trade agreement with the french president emmanuel macron. albanese says they spoke on the sidelines of the g summit. negotiations in july had ended in deadlock due to differences over australian. agricultural products the deal has been in discussion since 2018. bloomberg has learned that italian prime minister giorgia meloni privately informed china of plans to exit the belt and road initiative. a source tells us she told chinese premier li qiang that it only seeks to withdraw from the pac-12 still extending fairly relations with beijing. u.k. prime minister rishi sunak says he raised significant concerns about alleged interference from beijing with chinese premier li qiang. soon i told -- sunak told reporters that he confronted li at the summit. that afternoons that a number of

conservative mp was detained on espionage offenses. haidi: moroccan authorities are racing to reach possible survivors after the most powerful earthquake to hit the country in over a century. more than 2000 people were killed after an earthquake friday night, with 1400 others injured. rescue efforts are being complicated by the remote mountain locations of the hardest hit region. the military has deployed specialized rescue teams, engineers, suppliers, and field hospitals. more to come here on "daybreak: australia." this is bloomberg. ♪ ♪ makes earning your bachelor's in nursing possible. balance online coursework with local in-person clinicals to prepare you to lead as a charge nurse in the time you have - from wherever you are - leaving room for what matters. achieve your goals with your personalized plan and team behind you.

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haidi: chevron has moved some crew from one of its lng facilities in australia after workers began strikes on friday. gas prices are up, with european gas futures jumping 13%. bloomberg's a mmm, bridge joins us from melbourne. any developments over the weekend? amy: the partial strikes began from 1:00 p.m. perth time on friday. it is measures they are taking such a no overtime and refusal to carry out some duties. but what is happening at the moment is that it looks very

much as if the. ridges will come quickly. of course, there have been negotiations for weeks, but it seems that despite the offshore alliance being able to broker an agreement with woodside a couple of weeks ago, it seems like the sticking points for chevron are still problematic from their perspective. vonnie: what, if any, impact has it had on production so far? amy: the thinking at the moment from analysts who are observing is that it is not having a huge impact. it seems to be more that it is going to be costing chevron through inefficiencies and other issues. but the real problem is that if this continues, it continues to drag on for weeks, then it will start to bite. japan is the biggest market for lng from these particular plants here in australia. we know that they are starting

to look at other sources, but that then is a trigger for impact on the global markets. so, of course, the longer this drags on, the bigger impact there is expected to be. that is why i said that from september 14 i guess that is when the stoppages proper are likely to take effect, if there is no deal reached in the meantime. haidi: and what are the prospects then that the issues can be resolved? amy: well, it's not looking great at the moment. in a social media post, the most recent one from the offshore alliance which is representing the workers, they have described chevron as inapt in the bargaining process. it seems the two sides are extremely far apart. therefore, the prospects for any kind of risk resolution seem unlikely before the next stoppages begin on september 14. it is a watch and wait moment to see whether they can broker

something, as they did with woodside. vonnie: amy, thank you for joining, bloombergs amy bainbridge in melbourne. oil prices are in focus, too, as we look ahead to a new training week after russia and saudi arabia extended output cuts. brent crude remains above $90 a barrel. new york traded futures are in striking distance of that level. we have seen two weekly gains. su: only a slight pullback in asian trading. what it looks like is that the bull run has legs that we are also seeing behind this that saudi arabia, which the u.s. does not have a great relationship with, appears to be teaming up with russia, another problem for the u.s. in pushing this voluntary cuts all the way to the end of the year. that really has given the big impetus to the oil prices that we have seen. if you drop into the bloomberg, you will see that bets of $100

oil are soaring, even though some banks such as jpmorgan chase remain a bit cautious. jpm say crude is unlikely to see $100 a barrel this year. that said, analysts and traders say that supply in the market is real. use hit a record 100 million barrels a day in june. the following month, saudi arabia, production to a two-year low of nine within barrels a day. check out the price charts -- a two year low of one million barrels a day. we have seen diesel fuel jump by about one third, because russia is also announcing that it is cutting back on some of its diesel exports. there was hope that the change in seasons would ease pressure on the market, at the end-of-the-year supply deficit projected by the is seen as just

as severe as in the summer. one commodity analyst says our supply demand model show some hefty deficits because the cut by the saudi's has a lot more weight than purported cuts elsewhere. when the saudi's say they will do it, they really mean it, and it is really looking like this is playing out exactly as the saudi's, the key player in the opec-plus cartel, had hoped. they really wanted to push prices higher and it looks like that is what we have got. haidi: and extreme heat is fast becoming a threat to global fuel supplies. su: it certainly is threatening our fuel security, as they say, the availability for energy assets. extreme heat around the world. for those of us experiencing it, it is one thing. but the impact it is having on the energy system is another. we know there has been a spike in electricity as most of us fire up the air-conditioners.

there has been a speed of disruptions in -- a spate of disruptions in refineries. production has been cut in the hottest months on record not just here in the u.s., but around the world. in bangkok, you saw them giving out ice blocks. elsewhere in the world, there were air-conditioners based on the street and water given out. tourists in various big cities around the world just suffering under the sweltering heat. so the extreme weather is indeed a big deal. many analysts such as trafigura group say that the problems for refineries in europe and america, with outages, these are not problems easy to fix. european crude processing fell by 700,000 barrels a day compared to a year ago, around 6% original throughput.

more than half of that drop, analysts say, is due to the heat. haidi: bloombergs su keenan with the latest on energy. we have the china securities journal reporting their views when it comes to what happens. the rrr cut is excited to continue being cut to provide more for that low-cost funding given that we have seen liquidity concerns in the broader market. the china securities journal is exciting analysts they have spoken to as saying we have seen the shortage in government once closing. it was the biggest weekly drop this year on account of that drinking liquidity situation, as well as these concerns that the pboc pboc may refrain from lowering rates given the yuan weakness, or perhaps the dollar strength. we have that data dropping later this week. bloomberg intelligence expecting

the pboc could cut the one-year mlf rate by 10 basis points in september. that would be the second reduction since we saw the new governor taking the helm in july. but there are expectations still bury the china securities journal that the rrr will continue to come under pressure. you can catch us live and see our past interviews on tv he. could also delve into any securities or the bloomberg functions we talk about -- for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ ♪ you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no. i'm going to get a second opinion. with innovation refunds, there's no upfront cost to find out.

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haidi: when new zealand's all blacks have opened with a loss to france in the rugby world cup. a pattern has emerged between the world cup results and the fate of the new zealand government whenever the tournament is held in an election year. let's bring in our next guest, what is this correlation between the performance of the all blacks and what happens at the ballot box? tracy: it's often we see in new zealand that the mood of the nation can swing on how the national rugby team performs. there has only been four occasions when in an election year and the rugby world cup tournament coincide. as you mentioned, there have been occasions where new

zealand has won the world cup. there was one time in 1999 when the all blacks crashed out early and in that year, there was a change in government. we have another election in five weeks and the all blacks have lost. so maybe the prime minister is not as buoyant today as he could otherwise been. vonnie: vonnie: obviously not, because ireland is going to win. we all know that. [laughter] let's have a listen to what he had to say and asking what the prospects for the ruling labor party are. let's have a listen. >> i am looking forward to cheering on the all blacks in the final as a reelected prime minister of new zealand. i think the all blacks are the best rugby team in the world, we are incredibly proud of them and beating think he will do exceptionally well in this world cup competition. vonnie: sounded like a huge kept. what are the prospects for the ruling labor party then, chris? tracy: they are trailing in the

polls and there is five weeks of campaign to go. the kicker is that the election is on the 14th of october, just before the sudden-death part of the rugby world cup tournament occurs. so we will be going to the ballot box before knowing their fate, which, of course, suggests why the prime minister is so confident. maybe you should've waited until the workup was over. vonnie: there you go, tracy, thank you. that is bloomberg's in wellington. i am smiling but, of course, it is very serious. that is it for "daybreak: australia." "daybreak: asia" is next. ! this is bloomberg. ♪ wait by scheduling for you... ...or the whole crew. or if you prefer to just pop in? do you. and if you wanna even tack on a covid-19 vaccine

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