♪ shery: you are watching daybreak: asia live from new york, sydney, and hong kong.

annabelle: we are counting down to asia's major market opens. haidi: asian stocks face headwinds while treasury yields rise on the feds hawkish hold. policymakers say one more hike this year and higher rates through 202025. >> a soft landing is a primary objective and i did not say otherwise. that is what we have been trying to achieve for all this time. haidi: also ahead, stellantis making a new offer to striking autoworkers even as gm's mary barra calls the union's demands too costly. thailand's new prime minister tells us he does not want to pick sides in the u.s. china rivalry. we hear from him exclusively. we have the hong kong military authority keeping its base rate unchanged at 5.75%. that's according to the de facto central bank page on bloomberg. we know that the official interest rates in hong kong move in lockstep with those of the

fed as the local dollar is pegged to the u.s. currency. when it comes to some of the concerns we have seen, hong kong traders are seeing a little more faith towards the peg in forwards trading we have been seeing. we have seen this year the cost of interbank borrowing in hong kong continuing decline. -- continuing to climb. the base rate unchanged at 5.75% in lockstep with the fed. shery: that was pretty much the expected move when it comes to the hold. it was really a hawkish hold. we expect another rate hike this year, not to mention, a higher for longer scenario. we saw u.s. stocks and bonds falling in the new york session and we continue to see pressure in the asian session. the nasdaq 100 futures underperforming as they did during the new york session given we had treasury yields climbing across the board. the two year yield now at the highest level since 2006.

the 10 year yield at the highest since 2007. that leading to more fluctuation bloomberg u.s. dollar index. we had it reversed earlier declines gaining ground to near the levels -- the highest levels of this year already. we had an eight week rally for the greenback as well. take a look at oil prices continuing to be pressuring in the asian session below $90 per barrel. this because we had a risk off move, a higher dollar, not to mention the u.s. stockpile drop was not as big as expected. our next guest thinks the fed has been pretty good at getting inflation down. the professor of public -- dr. betsey a stevenson is a professor of public policy at the university of michigan and it us now. it's good to have you with us. we see a resilient economy. can we expect a soft landing? betsey: i think everybody has their fingers crossed in the hopes we get all the way down to a soft landing. but nobody wants to jinx it.

you don't want to declare mission accomplished before we are all the way there. but, it has been nothing short of miraculous we have been able to get inflation down from 9% to near 3% with unemployment staying below 4%. and, gdp continuing to grow. haidi: if we avoid the pain of unemployment does it mean inflation will continue to remain elevated spreading around the pain to more people? what are the implications of that? betsey: well, i think the goal, and in the fed made it clear today, they will get inflation down. i mean, you are right to say that inflation spreads pain to more people. you know, it does not spread more pain, though. it spreads the pain more thinly. i think that is why we bring inflation down slowly and we do not try to crash it down right

away. because, we do not want to plunge a bunch of people into unemployment. unemployment can cause effects, negative effects that last a lifetime for people. and even go onto the next generation impact their kids. the costs of unemployment are massive and concentrated. that's not to say that people would not like to see inflation back down to 2%. the fed indicated today they are committed, as committed as ever come to getting it down. they made it clear they do not see a lot of rate cuts in 2024. it's likely they will do another rate hike. so, it's a very hawkish statement from the fed. at the same time, they said if anyone can land this ship without unemployment getting much above 4%. that is a tremendous forecast if they can achieve that. it is what we saw in the data they released today.

their projections suggest they do not expect unemployment to go as high next year as they expected in june. they expect gdp to be stronger than they expected in june. yet, they expect to be able to continue to bring inflation down. shery: the forecasting site is interesting. i thought fed chair powell's response to being asked about the neutral right saying that you only know when you get there and by how the economy reacts. is there a suggestion that even as these assessments that the neutral rate is rising up whether the long-term run rate will be the same, whether it is a moving variable that jay powell is feeling his way through looking at each piece of empirical evidence at a time? betsey: well, you know, powell said at the jackson hole conference that they are navigating by the stars under a cloudy sky. that is a lovely poetic way to

express it. the stars he is talking about are the neutral rate. and, the unemployment rate. the natural rate of unemployment. the reality is nobody knows what those are now. i think that is one of the challenges. not long ago we were worried a neutral rate had really fallen and was stuck at a very low place. i do not think anybody has any confidence it is going back to where it was pre-pandemic. at the same time, i don't think anyone has any evidence it will not. so, your guess is as good as mine. haidi: i want your thoughts on stickiness and inflation. one of those are expect that may challenge the outlook for energy prices and the other could challenge the outlook when it comes to wage inflation. these ongoing examples of labor market activism. you talk about autoworkers, lng workers on strike. even hollywood strikes that are still ongoing.

are we conflating this with how that will change the broader inflation and wage outlook going forward? betsey: you know, i think that there is a really important link between the two things. the link is, nobody really understands how much bargaining power workers have. that's because we don't know what the you star is. we do not know whether unemployment can say below 4% on whether the below 4% means workers have enormous bargaining power. the reason economists have been saying things like we will have to get unemployment 5% to 6%, or 7% to bring inflation down, is because they believe this low unemployment rate, workers have the upper hand and will be able to negotiate outsized wage increases, and of those outsized wage increases will continue to fuel inflation because they will be passed through in prices. that is not really what we have been seeing, though. we have not seen inflation driven by wage increases, at

least not yet. even when we have seen striking workers like the ups workers that got a great deal. we saw a big wage increases headed to them. we are the ceo and -- come out and say, don't worry, we have an automation plan and we will cut labor costs. it's not clear that workers have the upper hand. i think that is one of the reasons why it's hard for employers to come to an agreement. that is why we see these labor actions like striking. if you think you can get more out of your employer and your employer thinks they do not have to give as much, you just have different expectations, different senses of what can happen. everybody will want to try to test the uncertainty out there. the problem, of course, is there was a little bit of a self-fulfilling prophecy. these things go on too long and have big negative impacts on the overall economy. that slows the economy. that reduces what workers can get.

shery: dr. betsey a stevenson the director of public policy and economics at the university of michigan. market reaction that was at a bell. annabelle: we will be tracking all the central bank moves across the week in asia. it is a 36 hour central bank bonanza we have been discussing here. a couple key rate decisions are in focus for asia. on thursday we have the philippines, indonesia, taiwan all these central banks expected to hold their key rate, what we are hearing from economists here even though we are seeing food inflation pickup and rice prices the big focus of late. we are also watching further afield what is happening with the boe today. that decision is shaping up to be perhaps one of the most interesting ahead given you have economists expecting a hike by 25 basis points. money markets, though, are not quite so sure. we are seeing the inflation print, the chance of a hike really pulled back to around 50% at this stage.

again, it's a picture of higher inflation -- softer inflation, rather, and a deteriorating economic backdrop that the u.k. is facing in particular. let's look at how markets are reacting to that rate decision from the fed. as we know the decision to hold. but a further height is expected this year and also higher for longer is the narrative very much in focus. playing out in equity futures we have aussie ones looking lower as are many others. also we are seeing some sort of outsized moves already in the session today. most notably in the kiwi dollar. that was after we had gdp numbers showing the country rose out of the recession outlook in the second quarter with growth of .9% on the quarter. greater than what had been predicted by economists. not expected to take place or hold for very long. it's expected to contract again into the end of the year. the rbnz could even start to cut still keeping the focus on what is happening with the japanese yen because we are above the 148 level. we heard janet yellen, secretary

ellen, indicating the boj has a little more room there for jawboning. that will be in focus ahead of the boj decision friday. haidi: we will look across the treasury curve to see some value when it comes to duration. we will look at where yields are going from here. virtually, the entire treasury curve at this point is about at cycle highs. he still likes the inflation linked bonds as well. we will talk with him later this hour. next, we will continuing to track the market reaction to the fed's hawkish hold. this is bloomberg. this is bloomberg. ♪

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♪ >> we are prepared to raise rates further if appropriate. we intend to hold policy at a restrictive level until we are confident inflation is moving down sustainably towards our objective. haidi: fed chair jay powell confirming u.s. rates will stay higher for longer. let's look at how markets are reacting with bloomberg's to frates correspondent for asia and live contributor garfield reynolds. big reaction from treasuries about everywhere across the curve. the dollar bullish as well.

what is the take for asia? garfield: first, dollar strength. haidi: more pain ahead. garfield: more pain ahead on that front. also, you know, we have seen aussie yields jumping this morning. that is even after they moved higher yesterday and stayed higher. new zealand bonds posted for the u.k. cpi gave us a false flag that things may not be so bad. where we ended the asian day yesterday treasury yields were slightly down but aussie yields were fairly up. they continued that move. bonds will go on being vulnerable. because the fed managed to surprise with a level of hawkishness even though there had been lots of concern going in that it would be hawkish. well done jerome powell on that front.

shery: what do you expect in the next few hours given we have the boe, the boj, not to mention many other central beds including indonesia as well? garfield: yeah, well, again, the fed always plays a leading role because of the size of the treasury's market, of the u.s. dollar being the reserve currency and the u.s. economy is large as well. because of that, the fed will have plenty of impact on this front. especially in this cycle. the fed has ended up owning this cycle because while it might have been a bit later than some, it went so hard. so fervently. it converted a lot of its peers to the mission of we do not want a repeat of what went on in the early 1980's. we want to be sure we will tame inflation. that will boost the pressure on

the boe to not sound, perhaps, as uncertain about the potential for further hikes as the ecb did. it's not -- it is also going to put plenty of pressure on the boj. as it tries to find some sort of a path towards policy normalization. ueda has been tacking back and forth. he wants to be gradual. but he clearly does want to get away from the corona era in less easing. this will put a bit of extra pressure that will make that harder. for the bank of entity to they are at a somewhat easier space. they have been resting on their laurels for quite some time. that is likely to continue. but, they will face, as everyone in asia well, the continued dollar strength that makes things a bit more complicated than it otherwise might be.

scarlet: bloomberg contributor garfield reynolds. now to the latest on the u.s. auto workers strike. stellantis made a new contract offer but general motors insists the uaw demand remain too high. bloomberg's su keenan joints me with the latest. the union has been pushing for a wage increase of 36%. su: yes. it might seem like a lot but the union believes that is what their people to serves. gm is not really going that far. we will get more on that in a minute. because stellantis has made a new contract offer. they make jeeps and the chrysler model. the uaw is not sharing details of the proposal, but they say, they are reviewing it currently. all three companies, the board, -- ford, stellantis, and gm have 20% pay increases on the table before the latest stellantis offer. also, while we have talked about

how the strike is historic in many ways, it is spreading beyond detroit for the first time with 190 uaw workers striking a zs plant in tuscaloosa, alabama providing front axles for mercedes-benz vehicles. while the union does not -- does represent some supplier parts plants of these workers declared their own strike. solidarity there. stellantis will temporarily lay off about 68 employees at its ohio machining plant as a result of the strike. gm has already idled an assembly plant in fairfax, kansas. the uaw president sean fain has said more plants face more extensive walkouts if gm, ford, and a stellantis do not sweeten their offers soon. it appears as stellantis has done that. there is no word on whether it has been accepted. shery: when it comes to gm and uaw how far apart are they? su: very far apart.

in recent days we have seen signs of frustration out of gm. an op-ed piece in the pepper -- paper from gm's president indicated that the offer, the demands of the uaw is making its "untenable." mary barra, the ceo, we are told from people close to the matter addressed the salaried nonunion staff and said that the offer, or the demands that uaw is making our -- is making it too high. she compared her companies $67 per hour labor cost to set of tesla that is much lower. she said that if the union had accepted the 150,000 total compensation offered, pay, and benefits, the salary increase would be that much. the company could then grow.

but, that was the offer rejected six days ago. so, it appears that both sides, gm and the union continue to negotiate. but, the evidence is they are still very far apart. haidi: we will continue to monitor that. su keenan has the latest on the auto strikes. there is more to come on daybreak: asia. this is bloomberg.

♪ shery: tylan's newly elected prime minister says gdp growth could reach 6%-7% by the third year of his term. he spoke to us from the sidelines of the u.n. general assembly new york about the challenges the new government faces on trade and investment. >> international trade, fta, the trade agreement, we have fallen behind vietnam. the previous government did not

pay as much as it -- as much attention as is needed to sign as many fta's as possible. that's one reason. also, we should have been out to talk to various countries, to bring in more investment into the countries in the past. we have not done that enough. >> investors are not quite buying into the thai story now. >> may be because we have not been telling the story. i am hopeful that i can change their mind. >> foreign funds have been withdrawing money from the bond market. >> that does not mean they do not have confidence. that might be because of the great difference between the interest rates. i have to disagree. >> but, there is also concern about the big spending plan in the country and the likelihood that --.

>> if you do not spend, you do not get the growth. we need growth. >> is there a viable plan to fund your stimulus packages? >> yes, yes. the liquidity in thailand in the market at the moment, the fund is slow going out is because of the differential in interest rates. like today, the bond i think is at a rather weak point at 36 point something. to one dollars. that--few people are concerned. it's good for export. it's good for tourism, that we have been promoting heavily. as you are probably well aware. we have a visa free for the chinese, a big market for us. soon, there will be other policies to follow. >> the country is down 3% year to date. in addition to the 16% drop over the last three years. does that reflect the

fundamentals of the country? i am not concerned with a weakness in the currency. >> i am not. >> what is fair value? >> i don't know. it is what the market believes. i am not enter -- here to interfere with exchange rates. i do not believe in that theory. >> what are your biggest challenges in fixing the economy? >> like i said, we have been closed as a country for a while. i need to make sure that the world knows that thailand is open for business. i think there is a first initial step in growing the country again. haidi: that was the thai prime minister speaking to haslinda amin in new york. coming up, we hear from

alliancebernstein on whether they favor inflation linked markets. more on fixed income next. this is bloomberg.

haidi: you are watching "daybreak asia." counting down to the opens for sydney, soul, and tokyo, and taking a look at a host of economic indicators following

the fed. new zealand gdp numbers, out earlier. a couple of interesting things to know. the first is we saw gdp rising .9%, more than twice what economists had been expecting. also interesting to know is this metric here. there was a revision for the first quarter numbers up to 0%. you can see earlier it had been at .1% and negative territory, so a contraction. that tells us new zealand has avoided a recession on a technical basis. that could offer consolation to the ruling labour party, we are three weeks out from an election in new zealand, and we do have the labour party really trailing in the polls thus far. that is one interesting thing to note. market reaction coming through -- we saw a knee-jerk move higher for the kiwi dollar since being given up.

it does tell us that it is the fed story that's really starting to feedthrough. given we have seen a drop -- a stronger dollar coming through and the moves in treasury yields reflecting. kiwi bond yields across the curve, really reflecting again what came through from the fed. . treasuries in particular. >> it is really the action across the treasury curve we are looking at. let's bring in brad gibson. head of asia pacific fixed income at alliancebernstein. we are seeing the curves at the height of the cycle. how much further hired to we keep marching -- higher do we keep marching? >> i wish we knew. [laughter] it is all about what drives those yields higher from here. a bond yield is made of a really old component and

expectations for inflation, that real yield component now is looking very attractive to us, to percent, 2.25% -- 2%, 2.25%. that's kind of attractive for us. i think the yields from here, if they go higher, it is probably based more on the markets getting worried about inflation expectations rather than a rise in yields. haidi: so, on those worries about inflation expectations, you are also still constructive on inflation-linked bonds, is that given that we have seen some of these developments when it comes to oil markets, potentially wage pressures, what we are seeing across labor markets, is that adding to the view we could see more? >> yes, it does. it does increase the convention. we have been increasing our portfolio exposure. we are focused on the more liquid market, in the u.s.

there are other markets, europe and sweden, where we can layer in bonds across a diverse suite of markets. shery: given where treasuries are going at the moment, what does that mean for the asian counterparts taking the opposite direction whether it is the boj or the pboc? >> i think it's probably a few central banks in asia breathing a sigh of relief that the tightening cycle from the u.s. and the ecb is coming to an end. it's unlikely that a lot will hike rates further from here. it is quite difficult. we've got bank indonesia today on hold. indonesian 10 year bond yields getting to 7% would normally look good.

but when we have a u.s. ten-year about getting towards 4.5%, that 10% doesn't look as attractive. tv -- there's mixed messaging coming from the fed. haidi: we have the bank of japan after that. we have seen volatility in the jgb market, what are we expecting there? >> we are not expecting a change this meeting. we can position for that to eventually occur. the change to ycc in recent months caused jgb yields to rise. we don't think that jgb 10 year yields will get much further through 1% for example. they are likely to be on the shorter end. maybe the three to five-year curve is more affected by this negative interest rate policy.

we will see in the coming months. shery: we have the japanese yen, of differentials making a difference, how much will depend on government intervention if we continue to see this sort of weakness? >> that will certainly the case last year. we don't think the pressure is as strong at this stage. million is weaker. a lot of other currencies -- the yen is weak appear would a lot of other currencies are weaker as well. the interest rate differential between the u.s. is still very high. appreciation story for the yen is hard to follow right now. haidi: you must have better eyesight than most. you are saying if you can squint, you can see some green shoes for china and -- for china emerging? >> there has been activity

picking up, stabilization in the housing market in cities. there might be room for some assets and china to outperform valuations. government bond yields will remain well anchored by the pboc. fiscal policy also helps create more supply on the market. shery: brad gibson. head of asia pacific fixed income at alliancebernstein. thank you so much for joining us. we have the former central bank you've calling for more government support to ramp up growth, focusing on the troubled

property sector. the details of yi gang's comments, next. this is bloomberg. ♪

haidi: china's former central bank keeps has more policy support is needed to boost the economic recovery as the government struggles to revive, but it is consumer and investor conference.

beijing has taken quite a lot of measures, over 200 incremental measures to try to shore up the economy. is there more room for stimulus? what's the outlook as we get into looking at the fourth quarter? >> as you said, china has done a lot to boost the economy this year. cut interest rates. the amount banks must hold as reserves. they have just lowered the purchase threshold and major cities in order to boost property demand -- in major cities in order to boost property demand. based on pboc officials and other analysts, there is room for more cuts depending on the recovery of the market -- the property

market. they told reporters at a briefing yesterday that there is more policy space for easing. that has at its expectation of more interest rates or cuts later this year. analysts are expecting another five to 10 basis points in interest rate cuts. yi gang, the pboc governor, just wrote an article this week that china should step up stimulus, in terms of supporting policies, in terms of supporting consumer demand and also property purchase. the policy should give full plates of the property demand. shery: despite all these pledges, the markets are reacting as if they had promised fatigue. there isn't really enthusiasm at the moment, what's the outlook?

>> investors are definitely not very optimistic, as reflected by the sharp declines in the csi 300 index. the benchmark for china. the index just hit a new low this year. because foreign fund doctors have been accelerating. 21 billion yuan this month, compare that to a record 90 billion yuan in august. geopolitics -- concerns about geopolitical risks and worries on people's minds. shery: taiwan's opposition presidential candidate is pitching itself as the best choice to lead the island as tensions with china worsen. thy are pulling and -- they are

pulling in third place ahead of elections in january but using experience as taiwan's top law-enforcement official to boost his image to voters. speaking during his recent u.s. trip, he discussed his plans to keep the peace with beijing. >> the trade must be stable and taiwan must be safe. this is my top priority. >> so when you talk about dialogue andhink about the former president and how he met xi jinping in 2015. if you were to become taiwan's president, would you seek a meeting with xi? >> the most important thing at this stage is that we and taiwan still have to stabilize this area in the taiwan strait. therefore we must first improve our own national defense armaments and own self defense capabilities. of course in the process of improvement, we will start with dialogue. with the current situations and

taiwan in fact, we still have a long way to go -- in taiwan in fact, we still have a long way to go. >> one thing the u.s. is concerned about is taiwan's military commitments. the former president cut taiwan's defense spending when he was serving his term. would you cut defense spending? >> the situation at not time was completely different -- that time was completely different from the situation now. at this stage, taiwan is facing constant conflicts. it is easy to spark a conflict accidentally and trigger a war. therefore under the current situation, the defense budget cannot be reduced. if you spend the budget, it'll only go up, not down, therefore

we need to continue to discuss what the u.s. -- with the u.s. how to improve taiwan's self defense cap abilities and what equipment is most suitable for taiwan in terms of the entire arms purchase. >> when you increase the military budget, let's get specific here, will you commit to spending 3% of gdp on defense? >> in fact, no matter how much gdp it is, the most important thing is to make the structure of the national defense budget meet the needs of all our operations. one day there may even be a chance to gradually increase it to 3% or above. of course that is what should be done. protect life and property at any cost. with high gdp and high defense budget, this is not the issue. the issue is that you have to use it in the right direction and it can really make the other party not dare to start a war easily. >> you've made clear that as the

future taiwan president, your priorities are increasing taiwan's military preparedness and also seeking dialogue, negotiations with mainland china. how will you balance the two? >> taiwan's leaders should always remember one sentence -- preparation for war is necessary but avoiding war is a leader 's responsibility. the party broke the delicate equilibrium and taiwan. it brought the dynamic balance to the edge of conflict. in the imminent outbreak of war. we have to initiate exchanges with mainland scholars, experts and people. it stabilizes nongovernmental changes and gradually move to official forms of exchanges. let the trust between each other continue to accumulate and increase again. it is impossible to return to the former president's era in the short-term. >> i want to talk about business right now. if tsmc were to announce they want to invest more in the u.s.,

what would your response be? >> semi conductors are the lifeblood of our technology industry in taiwan and we must allow the advanced technologies to stay in taiwan. mature technologies can be deployed globally. we have to enact security laws to protect the core and critical technologies in semi conductors and prevent confidential information from being leaked. this is our responsibility. >> that was the taiwanese presidential candidate speaking to bloomberg's scarlet fu in new york. we have more to come on "daybreak: asia." this is bloomberg. ♪ ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures.

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>> it will be out of control. it will be a threat to humanity. nobody really stepped back to think about the specific use cases where somebody should be thinking about that, like enabling ai to automate and control the electrical grid where the water supply or the control of all the driverless cars on the road. when you think about it from that perspective, we would say, that needs to be regulated, and somebody should have to get a license to do that. >> microsoft's vice chair and

president, brad smith. meta's president of global affairs says open sourcing of the codes for ai will lead to safer models. ai has already helped meta decrease vast amounts of hate speech on facebook. >> this foundational technology is like an operating system. it is something that lots of things will be built on top of it. of course you can never preferably predict -- never perfectly predict how it will be used. no doubt there will be people who will try to use it for that purposes. but in general, it is accepted in the sector that open sourcing these things leads to safer models because you can then openly look for vulnerabilities and fix them. that is certainly the attitude that we believe is irght -- is right at this stage on this great ai journey. the prevalence of hate speech on facebook now is down to about

0.02%. i'm not just making it up. that is stuff published every quarter, audited independently, so we are not just marking our own homework. for every 10,000 bits of content you see, to bits might be hate speech -- two bits might be hate speech, that's one reason only, ai, the classifiers are getting much better. it is with rendering particularly -- worth remembering particularly all these hugely consequential elections happening next year, in the u.s., mexico, possibly the u.k. and so on, that yes, generative ai might enable bad people to try to generate bad or misleading content -- it also allows platforms like us to act against that much more quickly, so it is an adversarial space where hopefully we can use those

tools more nimbly and more effective than our adversaries and the sooner we can get beyond the kind of, oh my gosh is it going to be the end of the world? kind of thing which has a paralyzing effect on the debate -- i think there are a lot of here and now issues that we can deal with, whether it's elections, misinformation, transparency -- i certainly urge lawmakers to fixate on that. >> that was meta's president of global affairs speaking with bloomberg's caroline hyde. let's check on other corporate stories -- huawei has pledged to help china's company create cutting edge of technology. its current headset huawei will serve china's need for ai power and offer an alternative for the rest of the world. the firm is currently under u.s. sanctions. the release of its latest

smartphone, suggesting they could have produced chips that could rival its western peers. amazon is scrapping a plan three on merchants that don't use the shipping services. set to take effect next month. the reversal comes as amazon braces for a new pending antitrust suit by the ftc. the case is expected to focus in part on the firm's alleged efforts to coerce merchants into using its logistics service. saudi oil driller ades has attracted nearly $77 billion in orders for its $1.2 billion ipo. a subscription rate of over 60 times. the offering was priced at almost four dollars a share -- the top of the range -- taking the firm's value to just over $4 billion. the ipo is saudi arabia's largest this year. taking a look at the stocks we are watching when the trade opens in japan, australia and korea shortly and asia, waking

up to fed day, rates that are to be held higher for longer. japanese banks will be a focus. investors staying bullish towards the lenders despite signs the boj's trying to dial down market expectations. also watching oil producers. crude price rally taking a breather and a smaller than expected drop in u.s. crude stockpiles. taking a look across australia and new zealand bonds, we are seeing a surge in yields following the big moves we saw in treasury yields earlier. taking a look at u.s. treasury's, just about every single element of that is now close to the highs we have seen this cycle. how much further of course that can push ahead? entirely depends on how much further the fed goes. leading rates unchanged but signaling another hike this year. we are seeing headwinds coming not just from high yields but also from the strength we are seeing in the u.s. dollar. is going to create some pain

trade when it comes to those pai rs trading here in asia. . we are not done yet. we've got other central banks culminating in the bank of japan at the end of the week. shery: take a look at those yields. new zealand is also reacting to the fact that the economy surprised with stronger growth and they didn't see a recession. the new zealand economy, growing more than twice as much as economist had expected in the second quarter. so we are seeing new zealand 10 year yields rising. and when it comes to the stock market, not so much of a move. we are talking about to the downside of course, stocks falling for a second consecutive session. we are seeing the same pressure on equities as well. the asx 200 pointing to the downside. we could say three sessions of losses already. something similar we saw here in the u.s. where we have stocks down and bonds down. we may be repeating that trend

into the asian session as well. take a look at nikkei futures, pointing to the downside, .6%. that will make it a three session -- that will make it three sessions of losses if we actually end the day lower. coming up, we will speak about why we continue to see the possibility of a u.s. recession in the next six to 12 months, plus global market strategists will be with us to give us views on the latest by decision and why that could pressure some currencies. the market opens in sydney, seoul, and tokyo our next. -- are next. this is bloomberg. ♪

haidi: this is "daybreak: asia," we are counting down to the major market opens. haidi: the biggest take away is the impact of the fed signaling the rates will stay higher for longer. we are being -- we are seeing the selloff accelerated reporter: across the curve we are seeing cycle highs. that is starting to stride with the selloff in australia and new zealand. watching for japan as they come online, too. shery: we have the two year yield in the u.s. rising to the highest level since 2006, the 10 year yield the highest since 2007, we are seeing that translate into the asian markets as well. the kiwi 10 year yield at the highest level since 2011. this of course as we have not really gone through the list of

central banks we should be watching. we have the boj, today indonesia, the philippines, the boe over in europe, how are we standing up at the open? >> certainly a lot for investors and traders to be digesting this morning. it is the focus not only on the fed narrative of higher for longer coming through, also the slew of central bank decisions in asia today, the focus on the philippines, indonesia and taiwan in particular, the bok, the boe shaping up to be a wildcard decision. there's a continued focus on economic data coming through. we are on a watch for korea to release its first 20 days trade data for september. the numbers, not quite yet. we are certainly continuing -- not out quite yet. we are certainly continuing to watch the markets here, with a focus in the tech sector, given the moves we saw in the nasdaq overnight and the tech names leading the losses. it was a story of higher for longer from the fed. broadly equities coming down.

with the korean won, there was the story of the higher dollar narrative playing out. we are seeing it trading up .4% against the local currency there as we get trading underway. we will keep a watch for those exports data to drop. with that sea of the first 10 days of the month showing exports down nearly 8% on the year. let's take a look at what's happening in japan as we get trading underway here. it is still that consistent story of weakness coming through for equities. the nikkei down .4%. the boj, very much and focus because the rate decision is due on friday. the broad expectation here is for a hold. we know that, but what is really going to be keenly tracked is the governor's comments, what ueda says, any remarks around negative interest rates and the correlation between currencies and policy with the yen, still trading around a 10 month low.

we are continuing to watch what's happening on the bond space given the moves we are seeing in treasuries, bond yields, retreating here. kishida has been speaking and new york, he says he will be unveiling an outline of promised economic measures in the first half of next week, it is still that story of the boj and the government there being focused on any signals of more persistent growth in the country and what needs to be done to address that. the first 20 days of exports numbers, we saw a rise of nearly 10% for korea in september. that is quite a reversal from what we had seen the first 10 days of data -- the first one days of exports up nearly 10% on the year for south korea for september. imports still down 1.5%. let's change on and take a look at what we are seeing in terms of the market reaction to that. if you change on the board,

korea as i said, those numbers just dropping for the exports data. . a gain of 10% thereabouts on the year. not much of a market reaction. we could see something coming through in terms of the korean won. korean trade numbers are a beltway for the global economy so that is quite a reversal. in the first 20 days, we saw exports up a .9% on the her for september. imports still in contraction territory. a focus as well on how central bankers think about rates moving forward is what happens in the direction for oil. brent crude, under pressure here. trade is very much focused on the signals coming through from the fed in terms of the direction for rates. that's one of the focuses. we have seen signs of a

tighter physical crude market. that seems to be overshadowed for now. down for the asx 200 at the start of trade. haidi: our next guest sees a high likelihood of u.s. recession -- a u.s. recession starting at any time from the fourth quarter. we heard from jay powell saying the primary objective is still a soft landing. what is this telling you about the potential for a hard landing now? >> basically, we are looking at the yield curve. the last four times when there was a yield curve inversion, on average, recession would start 16 months after the inversion. if you look at the yield curve inversion this time, it started off in july of 2022, somewhere around the first quarter of the coming year would be the

recession. right now you're looking at the economy, it is -- it is pretty strong at this moment in time but of course there are different factors for this cycle. you have a lot of covid related stimulus that were in place -- that were not in place in the last four times you saw the yield curve inversion. so that has been sustaining the consumption in the u.s. a little bit more than the previous four times. that is why there could be a delay to the timing of this recession. >> as an equity investor, where would you be looking now then? >> well, after the hawkish pause last night, in terms of risk assets, for the short-term, you could see some consolidation across different asset classes and across the globe. the s&p, you are probably looking at something like 4400 as a level of support. for example.

after that, because the u.s. economy's still going relatively strong versus the rest of the globe, that could still be an area for people to be going into for say a three-month horizon. >> of course the next big one we are watching aside from the boe is the boj, we are not expecting any change, but because we have had this expectation of more tweaks to come from japan, we have seen perhaps financials there doing very well, what are we expecting? >> the japan data of course have been quite strong this year. it seems that japan is where the u.s. and europe were say roughly a year or a year-and-a-half ago. so we are expecting that this yield curve control policy

would probably be faded over the next three to six months. that is probably starting to move the interest rate out of the negative territory. therefore we are actually quite bullish on the yen. we are seeing that over a 12 month horizon, it has the potential to go to the 130-135 area. i rates would be beneficial -- higher rates would be beneficial for the banks' net interest margins. >> buta stronger yen, would that mean bigger stock markets in general given that they are also big exporters? >> not necessarily. if you look at the situation in japanese corporate's, the tse has been encouraging big

improvement in the corporate governments. companies price booked below 1 were required to do much more disclosure than the companies priced above 1. that is encouraging companies to be a log in the value -- lock in the value, doing more moves such as a share buyback and also pay more dividends. so it is improving general brought fundamentals in japan's companies. >> what are you saying about the broad fundamentals across chinese companies? we know about the challenges. how are the balance sheets of some of their big companies at least? >> the chinese companies on the micro fund, most of them are doing ok, are doing fine, it is just a macro fund really holding them back. it really depends upon how much

the government is willing to be putting up in terms of stimulus. it seems that they are settling around the current level after the latest round of stimulus that led to a reasonable -- relatively reasonable set of data likely ppi and the credit expansion. i have a feeling that they may be putting in just enough to keep it going. to see how much that may sustain. -- that may sustain these kind of datasets. if this dataset is looking ok, they might be inclined to be just piecemeal stimulus instead of doing something more bazooka like. >> daniel lam there. let's get you back to bell for some of the movers. >> we are 10 minutes into the session. a group of stocks are standing

out to the downside in the tech space. some broad-based losses coming through so far for these names. a little bit unsurprising surprising course because this is a group of stocks we know is sensitive to any moves around rates. we did have the fed signaling it is going to keep borrowing costs higher for longer. yet another rate hike over the course of this year. this move here, tracking what came through the wall street session overnight when we saw the nasdaq down 1.5%. let's change on -- we are also keeping an eye on japanese travel firms. this is related to the data that's been published, essentially we understand the number of foreign visitors to japan is now approaching pre- pandemic levels. that was over the course of august. we are now at 86% of free covid levels. the number of visitors, back to 2.2 million. that's for the august period of

this year compared to 2.5 2 million in august of 2019. a lot of those numbers also coming through from china. we saw changes from beijing relaxing restrictions on group tours to japan last month. finally let's take a quick look at what's happening with quanta s. we are waiting for the stop to start trading. essentially the reason we will be watching that one is because the former ceo, alan joyce, some question marks over whether his bonus is going to be clawed back, up to 9.3 million u.s. dollars, there's been a lot of public pressure on the airline. it was found to have illegally sacked staff and sued for selling tickets on already canceled flights. certainly a lot of focus on that airline. we are just waiting for it to start trading. we have seen it down for three straight sessions. today again a fourth day in the red. >> still ahead, we will dig into the fed's higher for longer narrative with dbs bank hong

kong and ask what it could mean for certain currencies. china's former central bank chief calls for more government support to wrap up growth -- ramp up growth with a focus on the property sector. details of yi gang's comments, next. this is bloomberg. ♪

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>> china's former central bank chief says more policy support is needed to boost economic recovery, as the government struggles to revive both consumer and investor confidence. let's get more from our greater china senior editor. what's the outlook for the fourth quarter? >> the former central bank governor and china, yi gang, telling a local newspaper that more can be done to support the economy, suggesting that more structural micro policies be taken to support housing. he is also saying the government can do more appropriately to increase demand here and china. these are all issues that have been debated. as we have been talking about,

marcus have been looking for beijing to take a bazooka approach -- markets have been looking for beijing to take a bazooka approach. and said they have been doing a gradual, piecemeal approach like cutting the reserve requirement for banks, having state owned companies pay out more in terms of dividends, loosening some restrictions on property purchases here in china. all of that so far has not seemed to be able to prop up this market. which this week hit a new low. >> what does that all mean for investors assessing the risk premium at this point? >> i think what it means is, in the short term, stimulus is not going to solve the problems that ales this economy -- ails this economy. when it comes to into meant, when it comes to the consumer -- in demand, when it comes to the consumer, there have been calls for helicopter money, to send money to the consumer, that

seems very unlikely. what seems more likely is a gradual, more conservative approach. we have seen rate cuts and reserve requirements cuts -- more of those steps are likely in the future. but anything big and broad and bazooka like is probably not coming. >> bloomberg's senior executive editor john lou with the latest. with thailand's newly elected prime minister, he says growth could reach 6% to 7% by the third year of his term. he spoke to us from the silence of the u.n. general assembly in new york about the challenges the new government faces on trade and investment. >> if you look at international trade, fta, foreign trade agreement, we have fallen behind vietnam. the previous government didn't pay as much attention as needed to sign up as many of

possible -- as many as possible. that is one reason. also we should have been out to various countries to bring in more investment into the country in the past. we have not done that enough. >> investors are not quite buying into the thai story right now. >> maybe because we haven't been telling the story. the last six months. i am hopeful that i can change their mind. >> foreign funds have been withdrawing money from the stock market, from the market. >> that doesn't mean they don't have confidence. that might mean it is because of the great difference in the interest rate. have to disagree. >> is also concerned about the big spending plan in the country -- >> there is also concerned about the big spending plan in the country on the likelihood of -- >> if you don't spend, you don't get the growth. >> is there a viable plan to i guess fund your stimulus

packages? >> yes. >> -- >> yes. the fund flow that is going out is because of the differential in the interest rates. today the bar is rather weak at 36 point something to one dollar. few people are concerned. if you have a week that -- it is good for tourism. it's visa free for the chinese. which is a big market for us. soon there will be other policies to follow. >> it is a very weak country. down 3% with to date. 16% drop over the last three years. does it reflect the fundamentals of the country? are you not concerned with the weakness in the currency? >> i'm not. >> what is fair value?

>> i don't know what is fair value. fair value is what the market believes. i'm not here to interfere with the exchange rates. i don't believe in that theory. >> what are your biggest challenges in fixing the economy? >> like i said, we have ben -- have been closed as a country for a while. i need to make sure that the world knows that taiwan is open for business. i think there's a first -- that's the first initial step in growing the country again. >> that was they thai prime minister -- the thai prime minister speaking to haslinda amin in new york. you can get around above the -- a roundup of the stories you need to know on tv.

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>> welcome back. now to the latest on the u.s. automakers autoworkers a strike. stellantis has made a new contract out. officials at general motors and says that the man's remain too high. su keenan joins us now with the latest. there is a gap with the big three carmakers, they want 20%. >> most of them have made that offer. it is hard for them to come up. stellantis has made a fifth offer. uaw, reviewing the offer.

not giving details of the proposal. we do know from a negotiator that this latest job proposal does not guarantee the unionfuture work . that was a key issue in negotiations. that suggests workers could reject this days before the friday deadline that's been set for the strike to expand. we don't know if uaw's president is going to greenlight the proposal or not. he did have a similar pay increase close to the 20% that was already offered. the strike has meanwhile expanded -- 190 uaw workers struck at a plant in alabama that is a suppliers parts plan. while the uaw represents parts plants, this is a case where the workers called

for their own strike. gm also idling an assembly plant -- eyeing an assembly plant in kansas. more plants will face walkouts if they don't sweeten their offer. we don't know if the offer from stellantis is sweet enough. >> what about gm and uaw? how far a part they looking? >> very far at this point. there are starting to be frustrations from executives at the plant. we understand from sources that mary barra addressed the non-salaried union staff saying she believes the uaw's demands are too expensive and the 150,000 -- $150,000 offer for

compensation and rejected by the union was significant. she points out labor costs are some $67 an hour versus those that tesla, which are much cheaper. the union has criticized tesla, as workers being taken advantage of by a billionaire. the negotiations are still continuing. gm, trying to see if there's any common ground. again, there is not much details coming in on the back and forth. but we do know that on friday midnight, the union, planning to expand its trike, if it doesn't have a deal with ford, gm, and stellantis. >> bloomberg's su keenan with the latest on the auto strikes. we will check on futures in europe. upside when it comes to u.k. stocks on cooling inflation outlook that came before the fed decision. the rally we saw could be in

danger not given the reaction we have seen in the u.s. and here in the asian session as well. watching bond yields given the picture across treasury yields and asia including new zealand, australia and jgb's as well. futures looking pretty muted. the rally could be quite short-lived. futures are down over half a percent. we are watching the u.k. stocks as well. the ftse 250 jumping by 1.6% after that surprise inflation number. coming up, with take a look at the the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you?

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>> we are prepared to raise

rates further if appropriate and we intend to hold policy had a restrictive level until we are confident inflation is moving down sustainably toward our objective. a soft landing is a primary objective and i did not say otherwise. the committee decided to maintain the target rate at 5% to 5.5%. it could be for other reasons the neutral rate of interest is higher for various reasons,. we have raised our policy interest rate by 5.5 percentage points. we've covered a lot of ground and the full effects of tightening have yet to be felt. >> that was the fed chair, jay powell, speaking the -- speaking following the fed decision. expectation coming through for a hawkish old. predictions of one more rate

hike the course of 2023 and that rates will stay elevated into 2024. the market reaction was most noticeable in treasuries. with some moves across the curve. quite noticeable at the front end of the curve because the two year yield, trading around its highest since 2006. in asia so far, the front end is being lifted there. we are seeing some moves in the commodities space. brent crude, coming under pressure. traders, focusing more on the outlook for rates even though we do see tighter supply fundamentals coming through into the market. likewise in the currency space, it is the picture of a stronger dollar. the dollar gauge, picking up following the fed decision. asian currencies, under pressure . is stronger dollar as moves in bond yields are being felt in the equity space and seeing a picture of weakness coming through new zealand. one of the loan standouts. fractionally in the green. taking a look at what stocks are

moving in particular, you can see a lot of the losses here are fairly broad-based. it is the more defensive, rate sensitive plays that are on focus. the financials can benefit from a rising rate environment. modest gains at the start of trade. utilities, likewise, more defensive play. tech stocks, one of the more noticeable laggards. a lot of focus on the fed and this session but a lot more central-bank action on top. >> the philippines central bank is expected to lift interest rates further thursday. are economist for southeast asia -- our economist for southeast asia joins us, you are predicting a hike? >> of course growth has slowed down the second quarter. it was quite cooler than expected. core inflation is coming down. the central bank's hiked

425 basis points already. that's probably what is behind the majority view. i think the central bank will take a different rate on the numbers. growth in the second quarter, much weaker than expected, was partly a normalization to more sustainable growth rates after this boost that we had from the opening. partly a contraction in government spending that's going to be unwound again. on the core inflation, though we have seen much improvement, it continues to decelerate. it does remain quite heated. it is over three percentage points above the midpoint of the target for headline inflation. that's probably not going to be enough to anchor inflation expectations or anchor wages or contain secondary spill over's, especially now that we have food and fuel prices on the rise again.

and the high core inflation is a signal we still have significant demand pressures in the economy, which the central bank is probably not going to be able to look through. >> we are not expecting them to have a wait and see position given of course the fed's policy announcement and signaling. >> yes. that is an added pressure. i mentioned demand's still strong. core inflation's still high. i didn't mention the headlight -- we had a backtracking on headline inflation in august. it reverted higher. the peso, under pressure. this fed move overnight reinforces the pressure on the pace of -- the peso. this is going to be on top of strain from the higher cost of fuel imports. if you look at the fx reserves, international gross reserves, those are dwindling quite quickly. the ammunition to defend the peso is getting less. i would say this would be an

added factor for the bsb today to hike. >> perhaps not such an exciting decision when it comes to indonesia, we are expecting a 7th street hold -- seventh straight hold? >> inflation there as well under control even over this episode the last 12 months, inflation stayed relatively well behaved and core never moved outside of the target range. all through this tightening episode, the central bank, bank of indonesia made it clear that what is underlying the rate hikes there was supporting the rupee. it is clear the next move will be done. we just needed to see the rupee on a firmer footing. >> tomorrow we will be speaking to the philippine central bank governor about their policy decision and the path ahead for policy at 9:15

a.m. hong kong, 9:15 p.m. new york time. i slammed as among the nation's most exposed to extreme weather events with its world-famous glaciers at risk of melting as global temperatures rise. the prime minister joined me from the u.n. general assembly to discuss their country's efforts to fight climate change and horizon tourism is putting the island's environment at risk. >> you can say that the first properly finance and realistic climate action plan was put into action in iceland in 2018. it was then revised in 2020. we have been making very concrete steps ever since my government took office at the end of the year 2017. i think however we are still not

doing enough. we had the climate summit today and i think it is very clear that all nations need to accelerate their claimant's action. we have done many things when it comes to for example renewable energy for heating and electricity. we are implementing an energy shift in our transport system, subsidizing new green technologies for better use of energy, but also to increase carbon binding. so a lot is being done in iceland. but we need to do more and that can be said about the rest of the world, too. >> tourism is a pillar of your economy and that is putting a strain on the environment. not to mention your economy's running pretty hard at the moment. how do you balance those goals. -- pretty hot at the moment. how do you balance those goals? >> tourism has really grownexponentially in iceland the last decade.

and that obviously's not just creating effects on the claimant but also -- climate but also it creates a pressure. we have been and we actually have announced that we are putting increased taxes on tourism in iceland. not high taxes to begin with, but we are talking about city taxes, etc. for people who stay in iceland. with think it is very important that we have that economic factor within that. a lot of our companies in the tourism sector are finding ways to really turn over to a green economy, to electric cars, etc. the changes happening but it is a challenge. truly a challenge. >> when it comes to women's

rights, iceland has been a front runner. you have a law that requires companies to get certified for equal pay, for equal work, how much has this helped in achieving equality? >> well, you know, the gender pay gap is actually quite an important factor of the gender gap in general. we have been diminishing the gender pay gap in iceland gradually and increased transparency through legislation has been an important factor. we are also taking new steps now. what remains of the gender pay gap in iceland is about the fact that we have a gender segregated labor market. some sectors dominated by men and some sectors dominated by women. sectors dominated by women tend to be undervalued. and that is what we are actually --

we have created a task force to really tackle this challenge. we are in the middle of a pilot project in the public service, on how to really change the value so we can actually start talking about pay equity and not just equal pay. but pay equity is a very important factor for the economic independence of women. therefore an important factor of gender equality in general. >> how big a thread is it for iceland, the russian invasion of ukraine, as a small country without a military, amid this race for control of the arctic as well? >> well, we have of course -- we are members of nato and have been since 1949. we have a different agreement with the u.s. but i think when you ask about the sense of security, i think what has happened is that people realize how important multilateral cooperation is, and not least for a small country

like iceland, which builds its existence really on the rule-based order that other countries follow the rules, respect territorial integrity, and sovereignty of other nations. i think absolutely that what has happened in iceland's people have become more aware of the importance of the lateral system. and being here at the un's general assembly, where we are talking very much about the fact that the multilateral system is under threat right now, that is under pressure right now, we are seeing deepening divisions, i think iceland is actually using its voice very clearly to support the multilateral system which is so important. especially for the smaller countries of this world. >> iceland's prime minister there. we have breaking news crossing

the bloomberg when it comes to these ongoing chevron strikes and the lng sector in australia, we are hearing that chevron and australia's lng unions are on the precipice of an accord according to the fair work commission. we are still awaiting to see confirmation of this. certainly when it comes to what we are hearing from the fw say, they are saying the parties are on the precipice of achieving historical first enterprise agreements for the chevron lng facilities in western australia. the commission saying that a large number of issues have been settled to date and they should form the foundation of an enterprise agreement between the parties for the future. there are still outstanding issues being referred to by the commission, and there is still the risk these provisions will simply "evaporate." we are hearing this after yesterday's update was that chevron said there was no agreement reached with the union following the discussions held this week. we will be continuing the strikes -- they will be continuing the strikes at the company's export plants.

that of course has been really impacting lng prices across the world. we will bring you the latest, if we can get confirmation of that deal. the australian regulator is seeking acceptance of the lng deal by friday of this week. still ahead, dbs, expecting more pressure on low yielding currencies including the yuan and yen. carrie lee will explain why we continue to say dollar strength amid the fed decision to opt for the hawkish hold. ♪ when it comes to getting your ft, cvs is pretty... flex. wanna schedule one online while prepping dinner? gravy. avoid the 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 to your flu shot, feel free! and speaking of free?

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>> take a look at how currencies are trading at the moment, we are seeing a lot of downside because we had seen the dollar fluctuating but reversing an earlier decline and actually rising. we are near this year's highs, given of course the fed's hawkish hold. we are now seeing the japanese yen under a little bit of pressure despite the fact that it slightly strengthens after japan's top currency official this week said he is in close contact with his u.s. counterpart and that executive -- excessive fx moves are unwelcome. we are seeing the korean won

under pressure given that it was trading in the narrow range but given where the dollar is going, not to mention higher oil prices are also weighing on the currency, really not surprising. the aussie is also down .4%. dbs and global market strategist carrie li thanks the fed's decision to keep rates higher for longer could put the yen and the you want under pressure. she joins us from hong kong. great to have you with us. let me start with the japanese yen. how much pressure are we talking about here when we continue to get these warnings from the government about potential intervention? >> yeah, right, for japan, actually, we have already seen a lot of verbal intervention, but somehow there has not been any actual invention -- so the market's focus will be on the boj's policy meeting tomorrow and we expect theboj to keep the rates

and the policy unchanged which is in contrast to the very hawkish message from the fed overnight. so we are going to have this persistent differential between the u.s. and japan, which is going to weigh down the yen. if the dollar yen is going to stay above 148 at this moment, then the next target would be late last year's high around 148.85 or 150. >> you don't see 150 as the line in the sand when it comes to the government actually intervening in the markets beyond just verbal communication? >> i think it is possible for the japanese government to intervene if the dollar yen is really hitting the 150 level. what does that mean it could reverse the weakness of the yen? we don't really think so. at the end of the day, it is

more about the fundamentals. and what we are talking about is still very wide -- a very wide differential between the u.s. and japan which will not be narrowed unless the boj is going to have their policy changed. >> carrie, a lot of this is the dollar strength, we saw the return of the dollar strength and if you take a look at the technicals in this terminal chart, we are seeing the golden cross looming for the dollar index, the 50 day moving average, the bullish break above 200 dma, those recent highs will be the focus. you can see the light and green. what could potentially threaten the dollar rally at this point? -- line in green. what could potentially threaten the dollar rally at this point? >> at this time we are seeing strong technical momentum pushing up the u.s. dollar. apart from that, we are seeing relatively strong -- a

relatively strong u.s. economy especially compared to that you will be in countries' ec onomies. overnight, we have already seen a hawkish signal from the fed which has been pushing up the u.s. treasury yield. this economic advantage is both supporting the dollar index. what could threaten the u.s. dollar rally may be is the coming u.s. data if the data shows signs that it is not the story -- the u.s. soft landing, if we do see signs of weakening in terms of the u.s. labor market, some slow down in terms of u.s. inflation, then probably we are going to still have some expectation on fed rate cuts

next year which could cap the upside of u.s. development. >> when you take a look at the prospects of more easing from the pboc, does that mean that there is further we asked to come potentially for the yuan? >> oh, yeah, right, so for the yuan. similar to the yen, and has been under pressure because of the differential. we have seen the pboc cut rates back in august. and then they cut rrr this month. it shows that they still have this easing bias as long as the economy's still o the track of recovery. we also don't really rule out the probability of further easing if we still see this kind of easing in terms of the economic data, so in this case,

actually, we are still going to see this differential weighing on the yuan. it is true that the pboc has done a lot to try stabilizing the currency. most of the time, this kind of actions cannot have long-lasting impact. so at the end of the day, once again, it is all about fundamentals, as long as we have this yu differential and lack of confidence in china's recovery, then the yuan might still be under pressure, with the dollar remnant be trading above 7.3, then it could maybe just -- then it may be a matter of time to be around 7.35, 7.36. >> you can hear more from the

day's newsmakers, broadcasting live from our studio in hong kong. you can listen via the app, bloomberg plus, or bloomberg radio dot com. much more ahead. this is bloomberg. ♪

>> some of the stories we are watching and asia this morning -- singapore's former prime minister has been charged with false trading offenses. he is the former head of the investment firm accused of inflating the price of the company securities in 2018. singapore has seen multiple financial scandals this year including a separate billion dollar money laundering probe. delivery hero has confirmed they will sell part of their business and southeast asia, specifically its food handed brand. according to the company negotiations are still at an early stage. it is the biggest revenue driver and asia but the firm has struggled to maintain momentum since covid lockdowns east. hong kong has lost its title as the world's freest economy to singapore. for the first time since its records began, the answer to it started a judicial independence is a factor. the hong kong government has

called the report's claims groundless. >> take a look at the downside and equity markets across asia right now. we are seeing the nikkei being led lower by tech companies as well as communication services. the kospi, seeing its lowest level since august 25. all of this of course with the fed hawkish hold and the fact that u.s. stocks and bonds also fell. we are seeing new zealand stocks still sliding higher, .2%. we did have that economic number, gdp surprising to the upside. still to come in the next hour, we will get more reaction to the fed's latest rate decision. the market opens in china our necks. -- are next. this is bloomberg. ♪ ...before you even step inside? ♪ discover the magnolia home james hardie collection. styles and textures. curated by joanna gaines.

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