to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. ♪ shery: you're watching daybreak: asia from new york, sydney and hong kong. >> we are coming onto hs major market opens. haidi: china evergrande crisis

deepens as executives are detained by authorities. markets are paused as concerns about the property sector reemerge. the selloff in treasuries extending while the dollar gauge hits its highest level this year. an excuse with lg electronics ceo as an appliance maker looks to eeev's to drive growth. shery: u.s. futures are muted after he saw the s&p 500 gaining ground for the first time. we have energy and materials stocks but really it was treasury yields and we continued seeing the rally in that space. really watching a warning about a possible shutdown and how that would reflect poorly. it is the credit agency that

gave the u.s. a top rating. pressure in the new york session. still below the $90 a barrel level as we have the dollar indexing its best day in three weeks, being propelled by treasury yields. 10 year yield at the highest level since 2007. 30 gilt yield -- year yield of the highest level. treasury selloff in its fourth week as we try to figure out where the fed goes from here. we have the preferred gauge of inflation, that data coming out later in the week. in the meantime asian assets are reflecting the treasury selloff as well. annabelle: absolutely. taking a look at the debt space. you've got the aussie 10 year at levels we haven't seen in a decade. kiwi tenure is at a level we haven't seen since 2011, huge

moves are coming across in the debt space. we are seeing it more noticeable at the longer end of the curve, so it this fed narrative playing into it. high commodity prices and the correlation between bonds and equities is breaking down as holding bonds looks less attractive. the outlook for risk assets is looking worse for the day ahead in asian trading. futures are mixed in the session. we stocks are trading flat. it's not just moves in the bond space. you've got issues around china's property sector. essentially a big selloff for china property stocks led by willows at evergrande. the stronger dollar in focus given the moves in treasuries. that is playing out in the currency space. let's look at the japanese yen as we are close to the 150

level, a level that we watch for for risk of intervention from japanese government officials. we heard from the boj policymakers yesterday. we heard from ueda and his deputy, setting the path for stimulus measures, saying why they are necessary to promote growth. nothing really to stop the yen weakness in its tracks for now. haidi: we got to talk about chinese property woes. evergrande is facing a more complex path to restructuring. one unit failed to repay a bond. executives are in detention. trying to keep up with the latest developments, things just seem to get worse for evergrande.

>> the bad news never seems to end. last week there was detention in evergrande. the company cited reasons such as things not progressing as well as expected. the news triggered a plunge in shares and securities of other chinese developers. and adding a twist and turn, the company is one of the largest offshore units. at the same time, tai shing reported x executives including the former cfo and ceo have been detained by police.

no reasons were given, but it just seems that all of these -- as to the uncertainty of the future of the company, the company is sitting on a debt of a trillion yuan and it is proposing to restructure based on the proposal this year but now the creditors, the al-shabaab borrowers and holders of the company are facing uncertainty because the company has delayed the meeting again. if you remember the proposal includes the issue of new notes. the maturity of 10 or 12 years, the current debts. and also shareholders will get a portion of equities in evergrande. it is a complex restructuring

plan but all of this depends on the future of china's property market. the market is facing oversupply and prices have plunged. investors are not buying property which is a problem for the industry and economy. shery: this does not make it easier for the property sector. how does evergrande get out of this mess? >> i think it depends on the fundamentals of the industry, which is facing a serious oversupply issue. bloomberg economics estimates 14 trillion yuan of property debts are at risk of default. that accounts for 12% of china's gdp so evergrande's debt sounds big, 2 trillion you want, the tip of the iceberg. the government is trying very hard to engineer a soft landing of the sector, stimulating by

lowering the purchasing threshold and cutting interest rates. but people are not flocking to buy the projects because they are not confident about the future. the economy is stagnating. at the same time, there are too many empty houses and uncompleted projects around the country. shery: charlie with the latest on the property woes in china as pressure mounts on the chinese economy and we are seeing geopolitics also challenging beijing leadership. were saying that the european union hasn't anti-subsidy probe into chinese electric vehicles. this was a key part of discussions by the chief trade negotiator visiting china. we heard from the vice premier

expressing strong concern and dissatisfaction. take a listen. >> we thought the eu would exercise caution. the benefits to european consumers to the departments of europe and the global corporation. haidi: of course this comes after some firm remarks from the chief trade negotiator. we have been hearing about this idea of an unbalanced trading relationship. take a listen. >> almost 400 billion euros and european companies are raising concerns about business. addressing these concerns will help china to retain its capacity and retain investments.

and sustainable high-quality economic -- haidi: these are the numbers that the chief trade negotiator is referring to. exports at about 230 billion euro imports at 620, 6 billion euros and ending up with the balance you just referred to. he talks about a lack of reciprocity and level playing field with wider shifts forcing europe to become assertive. and really saying this is not about not welcoming competition. but he wants the competition to be fair and assertive. this potentially sets up a steppingstone between the chinese president and the eu's ursula later this year. shery: we will see where the conversations go because we have not heard retaliatory measures on the antisubsidy probe, so we

will watch negotiations between the sides. let's turn to that u.s. workers strikes because they continue. uaw is in active negotiations with ford and while actors remain on the picket lines after hollywood writers clinched a deal, bloomberg's su keenan joins me with the latest. let's start with autoworkers. a new message from the uaw. su: it's hitting back at ford which announced of this pausing construction on a battery plant in michigan. it drew scrutiny because of its connection to a chinese battery maker and while ford is limiting spending because they do not have the full confidence that they can go through to the end with it, they declined to say whether it had anything to do with the strike. enter the uaw president who put out this strong criticism saying

that this is a shameful barely veiled threat to cut jobs. closing dozens of plants over the last 20 years was not enough for the big three. now they want to threaten us, so the uaw taking this negatively hours after putting out a status report that indicated optimism earlier in the day. uaw saying contract talks with ford are active after ford made concessions on friday, the deadline that the union had placed. they say there is work to be done but ford put out on announcement, not as optimistic saying there are gaps that remain in the strike negotiations so we can see by the war of words that there is tension. gm and still lantus are starting to deal with a widening strike in 20 states over the weekend.

the uaw employing a carrot and stick policy because ford had come in with concessions. they are being spared the pain of a further strike beyond the michigan plant. gm and still lantus rejected the union's demands on friday but they remain open to negotiations and those are continuing. you can see mixed reviews on returns of automakers. buying and trump are planning dueling trips to michigan. president biden plans to walk the picket line with workers and present himself as the most prounion, pro-worker president ever. trump is planning similar activity, both vying for the blue-collar worker vote as they prepare for the upcoming elections. again, the strike entering its 11th day and there are still obviously many challenges to a resolution.

haidi: early days if you compare it to the writers strike in hollywood. there have been picket lines for five months. that has reached a conclusion but we are waiting on part two for the actors. su: actors on the picket line and they have been in solidarity sharing picket lines with the writers guild which has sealed the deal and the board could approve the new contract in the next 48 to 72 hours which will allow writers to go back to work. big-box productions remain shut down because the actors will need a new contract and the alliance of the motion picture and tv producers, that is the bargaining group for the production side. writers went on strike in may. actors began in july they both have really asked for the same things, wage increase, residual

pay and assurances on how ai will be used. there is concern it could be used to animate, to write screenplays and that could result in a loss of jobs. we don't have full details on the packed but we are told they got a lot of assurances including ai. and the cost has been billions of dollars to the entertainment industry which is above the 2 million estimate from the three-month strike that hit the industry in 2007. some say the momentum of the writers guild resolution could impact the actors guild and bring them to a resolution. >> su keenan and we will get more analysis as to what comes next. in multimedia executive joins us

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jay, founder and principal. this is bold. how you frame the risk premium when it comes to how cheap china is but how uncertain? >> that is exactly right. i don't think the outlook in the near term is uncertain. there is so much negative noise around china but here is the signal and it comes from one of your own publications today. trip.com reported in 20 times increase in outbound gold versus a year ago. 20 times, not 20%, 20 times greater in that suggestible were in that suggestible organist see couple of months in terms of year-over-year comparisons, one year ago was when the lockdown in q4 of 2022 so the euro over

costs are going to be easy to beat. we will get a record discount to the u.s.. record foreign selling when year ago. jp morgan and others reporting a pickup in their china business indicators. jp morgan raised their gdp forecast for china. you're looking at a market that is priced for negative news. the real estate story has been going on for year-and-a-half. the news flow is going to be off the charts and no one's position for it. the single best risk reward trade out there. haidi: jay, short-term we are

expecting the bulk. >> i'm sorry, go ahead. haidi: i'm wondering how you view the possibility of the property sector to turn worse because we know how much of an impact that has. the chinese consumer, household, business sentiment, investment, and has the potential to create contagion. >> i don't think they will allow the property sector to deteriorate further. and what we call policy dribs and drabs of policy over the last three to six months, much focused on the property sector because it is very important. it is one of the things we paid attention to at our firm but the question is how much more downside versus upside? you are showing ever ground down 95%. ms. a talking point but is it

impactful for china equity? i do not think so. anyone worried about china property is long gone from the chinese stock market. >> is your optimism why you are overweight on commodities? how much higher can we go? >> commodity overweight has been in our multi-asset model all year and it reflects the underweight to treasuries which are almost completely out. the hedge fund world, the so-called smart money is very confused. they are jumping on whatever momentum exists across assets. they are the shortest they have been in three years. the shortest on u.s. treasuries in over one year. they are loyal and i think a lot of these traits will unwind

which is just how it works. and i think the fact that we are returning to stability suggest that things might start to work again, so it is perfectly position for the next month or two, for a lot of trades to unwind. the commodity trade for us, we are in the view and the fed validated the view last week, we are of the view that we are in a global economic recovery. the fed took recession off the table. markets have got it wrong so for us energy which is overbought, industrial metals, copper think are good not just for china but because the global economy is going to accelerate. shery: treasury is facing a mix

of not only inflation but the fact that the u.s. continues to face fiscal deficits. this potential u.s. government shutdown, how much is at stake when you have moody's morning about a potential impact? >> we need to remember that markets are forward-looking discounting mechanisms. markets have been sloppy and risk has been risk off, that has been the discounting of the auto strike, the shutdown, the rising gas prices, returning student loan payments. you hear about quadruple drugs, i think it is fully in the price and we have been underweight on treasuries for two plus years. it has been a bear market. rates have a better chance of

coming down 25 or 30 basis points over the next couple of months versus going 20 or 30 basis points higher. the action we've seen has jumped on the momentum of what has been a heavy treasury market. shery: always good to have you with us, founder and principal of dpw advisory. we have more daybreak: asia, this is bloomberg. ♪ good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪

♪ shery: taking a look at how bond markets are trading following

the treasury selloff in its fourth week, we are seeing the aussie 10 year yields rising for a fourth consecutive session, highest level since 2013. the kiwi tenure is the highest since 2011. we've seen the biggest selloff in the u.s. and the treasury space on the longer dated bonds so we yield curve in version easing but the u.s. dollar is much stronger to the highest level this year. up next, we will hear more about negotiations in hollywood over labor stri nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch.

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actors have been on strike over many of the same issues as writers including wages and residual pay for reruns on streaming services. joining us is chris, longtime filmmaker and producer and author of feeding the dragon, inside the dilemma facing hollywood, nba and american business. great to have you with us. we don't have the details of the agreement but what have you heard so far? what progress could we make on the actors negotiations from your? >> thank you for having me. the fasting is about to end for yom kippur in l.a. people are going to come back online, realizing we have a tentative agreement between the partners which is fantastic news but it does not mitigate the disruption going on in the ecosystem. warner bros. discovery was down 4% today, disney was down and

cannot hit a 52-week low, so even though this is good news, there is a long road ahead to try to figure out the right balance between the creative side and the business side of the community. shery: clearly get that balance and can we get some reflection in the actors negotiations? >> in the late 1990's i was an agent at william morris and we were booking writers on television shows such as seinfeld and renz read that had upwards of 30 people, 30 writers in every writers room. cut to today, the wga fought to have a minimum of six in you go back to the 90's, you had writers in the writers rooms guaranteed 22 episodes of television each year. they worked from july 1 to may

1. in today's world, episode commitments of six, maybe eight, possibly 10 and commitments to pay these writers as little as a single script over three weeks or maybe 10 weeks. so what the wga did was really hold firm on some very important demands that they needed to get compromise on in order to satisfy and protect union members. the main progress here. the screen actors guild will have similar issues and other issues that are different but the groundwork is laid in terms of compromise and good constructive dialogue. haidi: there is concern that this is a hollow victory in the long term. short-term demands were satisfied but we know production companies are cutting down the number of shows and this will add to costs and create a

depressive cycle even further. there are long-term challenges and this does not necessarily fix that. >> that is the case. you look at the studios in their stock prices did not reflect the good news that a lot of people were holding as far as this agreement being reached. you look at the amazons and apples and netflix and all their stocks went up, so you're seeing a massive technological disruption hitting hollywood that is not fair and balanced on both sides of various members of the amptp. you have traditional studios fighting a fight to try to figure out how to make p&l's work, while you have other companies that simply have a different advantages, that are going to start really taking

advantage of some of these new deals in the way that they operate in the way that their business models run. haidi: yes had strict before but it feels like this time it was so much more cohesive when it comes to this type of labor. is it the fact that there is social media that was put out there that they are able to garner support. it made it harder to be scabs for example. is the fact that they were united in which case does that make it harder for the actors to hold the picket lines? >> that is an interesting question and it had to do with tangibility of threats that were at stake in terms of trying to negotiate a better contract moving or word, seeing the disruption. it is almost going back to the automakers way back in the 80's or 90's when it look like automation was really going to start lace a lot of the members working on assembly lines.

you're seeing the same thing with ai technology threatening the very existence of these writers and the way they craft scripts and develop stories and adapt books and other ip. they created a strong solidarity among all 11,000 members and quite frankly the hundred thousand plus members are going to have the same solidarity. it really takes the risk that everybody feels is threatening them in order to hold firm for what was almost five months. shery: as we head toward the golden week holidays, what are you expecting in terms of hollywood performance in the box office in that country? >> as you know, golden week is great when it comes to box office returns. i go back to 2012 and you see a movie poster for the movie looper with bruce willis.

we did extremely good business during the october holiday. cut to today. for hollywood, the only movie coming out is pop a troll in the first one only did about 13 million. on top of it even though we are almost back to pre-pandemic levels at 6.3 billion box office for the china market, hollywood is only representing about 10% of that and if you cut 2019 one single movie, the last avengers movie did almost the same amount as every single film that has been released by hollywood and the china market this year. haidi: pre-to have you with us, chris fenton. the author of the dragon, the trillion dollar dilemma facing american business. talking the latest with the writers and actors strikes in the forecast when it comes to china's box office. let's get you to annabelle for a

look on how we are setting up 20 minutes away from the start of trading across major market. annabelle: that's right. you were talking about box office, this is the blockbuster this morning because it is a reaction to the treasury space. we had the 10 year hitting a level that we hadn't seen for 16 years led by the long end of the curve because the yield added 13 basis points from the prior session. so we got ozzie bonds underway this morning. you're seeing that reaction at the long end of the curve three what is driving it, there's a lot of factors being discussed. higher for longer fed rates and for other central banks as well, higher oil into it. i've u.s. government shutdown risk is looming. whichever way you play it it tells you in the australian bond space it is treasuries that are in control. we have an rba meeting next week and the expectation is for a

hold. let's change on because it is broad-based. that is a level that we have not seen since 2011. playing out in the currency space, treasury yields are rising and it puts pressure on currencies, given the stronger dollar we got the japanese yen approaching the 150 level and that is a level that we watch for intervention risk. haidi: annabelle with the markets. south korea's lg electronics is helping on is to drive growth. in his first interview with foreign media since 2021 ceo william spoke to stephen engle about the plans to generate legal solutions. >> lg electronics will transform from the current position as a

home appliance and consumer electronic company into a smart life solution company. with the goal to achieve 80 billion u.s. dollars of revenue by 2030. >> you said the appliances are key, but they are not high-margin products. services would probably be more high-value and also the telematics and conductivity between appliances not only in the home, but in vehicles as well. >> that's true. we are in the consumer business for nearly 70 years and the biggest strength is consumer insights. and deep understanding from the consumer and living spaces, especially the home. we're going beyond the home and entering into other spaces like commercial and mobility and even the virtual space.

and we're going to secure the global leadership and home prices in consumer electronics because we need to generate cash and support and drive transformation. it is also very important foundation for success of platform-based services. and providing multiple services. that will be our mainstream and it will be smarter for us. >> the vehicle solutions division, you do a lot of components. telematics, inside the vehicle and conductivity of different infotainment systems and the like. how much will the ev space be a percentage of your company by

2030? would you consider going into the electric vehicle space with their own brand of product like foxconn? thanks sony has already done? >> for electronics now it has been growing at an average growth rate. it accounts for the 14% of the revenue this year. and the backlog is expected to reach 80 billion u.s. dollars by the end of this year. we are in the middle of expanding our portfolio as the vehicle industry as a software defined vehicle. and for your questions to the automaker, we have no intention to be an automaker because we

are going to focus on what we can do well. so this means being innovative and a reliable art and are for ev automakers around the world. >> who are you talking to with active discussions? there's been active read words that you could be helping apple make its car. is there any truth to those discussions? >> this is one of the most frequently asked questions, so i believe that is because the market recognizes us as power players. and with a proven record we are confident and ready to cooperate with current automakers and future automakers as well. >> including apple if they do go forward. i know they are delayed until

maybe 2026. some of the autonomous technologies maybe need more time to work out. >> we welcome them. >> are you in direct talks with apple? >> again, we are ready to cooperate with any future or current automakers including any brand. >> that was lg electronics ceos speaking to stephen engle at their headquarters. coming up next, we recap some of the climate pledges world leaders agree on from last week's assembly in new york. this is bloomberg. ♪

shery: climate change was one of the top priorities at last week's u.n. general assembly and while world leaders agreed on the scale of the problem, friction remains over how countries should adapt as well as coupes. the head of asia-pacific joins us to discuss the developments we saw last week. anything that stood out to you? >> unlike in 2020 when we had xi jinping making announcements of carbon neutrality for 2030 and

2060, we did not have any momentous announcement at the general assembly. but an interesting development outside of new york city itself, on the eve of the assembly we saw california sue ford deceiving the general public. we have course had the world congress taking place in calgary across the continent. at that event, oil and gas executives were leaning in and saying that we need to increase fossil fuel supply to ensure energy security and affordability in the oil market seem to agree with that with crude oil $100 per barrel. haidi: also last week the u.k. delayed its fan on the internal combustion vehicles from 2030 back to 2035. do we expect governments in asia to follow suit when it comes to

the weakening of targets? >> i remain optimistic that we won't see change from asian countries. my optimism is not for good reasons to be fair. if you look at the targets in the six large economies. three of them, australia, japan and south korea have ambitious targets. but already they are not on track to meet the targets. regardless of the u.k. future, we are not -- even before the announcement we do not see countries accelerating. on the flipside, if you look at the other three, they are pretty easy targets that they have set for themselves by 2030 and they are on track for doing a lot better on their targets. from that perspective, i do not see immediate policy reaction.

at the same time, it is unfortunate that the u.k. did this because it gives a good excuse for any country including the leader that defies to relax their own targets to cite the u.k. as a reference. haidi: bloomberg head of asian-pacific ali. staying with climate, jim chanos is morning of the cost of what would be a severe push. paul allen joins us so we are expecting a speech from the treasurer. >> that will be delivered at the national forum. he will point out that the cost of disaster recovery has increased by more than 430% over the past three years. just to june 3, australia spent 1.6 million u.s. dollars on disaster recovery. the word unprecedented gets thrown around a lot. we had a town in the northern

rivers region flood twice in 2022 with extraordinary water levels 14 meters high. and we had bushfires which destroyed 7 million hectares of land. chalmers will warn of the risk for climate change saying if more is not done we will see crop yields lower by 4% by 2063 and that will be a $1.2 billion hit in today's dollars. that speech to be delivered in a few hours. shery: paul allen joining us from sydney. the boj's focus on keeping monetary policy easy has continued to weigh on the yen. analyzing predictions on the prolonged weakness next. this is bloomberg. ♪

♪ shery: taking a look at how currencies are trading at the moment after we saw the bloomberg dollar index rallying again, we are talking about the highest levelon the others we he japanese yen holding at 18. we are seeing strength but we are around october or november lows against the u.s. dollar we had bank of japan officials doubling down on the message that stimulus is needed after

last week. wj made no policy changes. take a look at the aussie holding steady. we have the aussie and the kiwi under pressure in a previous session. concerns about growth in china, talking about china take a look at the offshore you want at a 731 level. we had the worst day in over one week, given rising treasury yields. in the strength of the u.s. dollar. let's actually discuss currency moves and bring in the economy and government, paul jackson. when it comes to japanese yen, at what level should we worry about intervention? >> as officials continue to say it is not about levels, it is about move let's be clear, 150 does look like a threshold. i think we need to be getting a

bit more nervous when we cross that line. i think it is almost inevitable that we will get there eventually. not today i don't think but i think we are one verbal warning away, we've had officials say they are prepared to take bold action if needed so i think everyone get built in when you hear that expression used. also, going back to this idea that it is not the level, it is the movement, so i think we crossed the threshold and we are looking for something like a two-year move against the dollar within hours. then we got all the conditions in place for japan to enter into markets again. and we cannot be sure that that actually will happen. if dollar-yen keeps edging up

little by little, it is going to be difficult for japan enter and then justified to international allies. we heard janet yellen recently say it would be understandable if japan entered into markets with's move you -- with smooth yen movements. if we don't have that move, it's going to be difficult to justify. of course any interventions would be a stopgap measure. what is clear from boj officials is they are not helping much. haidi: as you mentioned it is not about the levels, it is about the type of movement. does that mean -- yes, we may not necessarily see that kind of inevitability about 150 triggering intervention. bloomberg's editor for japan and

korea. we are on intervention watch. as we close out the hour heading into the start of cash trading things look muted i should say. a mixed session is bonds are sinking, the dollar is rising we are seeing futures up in japan and hong kong. australia seen declines out of the open. the regional focus as we watch evergrande in the property sector. this is bloomberg. ♪ and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix. ( ♪♪ ) sometimes, all the tenacity and grit in the world... ...can't overcome the boundaries we face. ( ♪♪ ) so morgan stanley is partnering with the women's tennis association to remove them.

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claire: -- shery: this is ""bloomberg daybreak: asia." u.s. stocks saw gains. yields are at multiyear highs.

haidi: the resilience of dollar strength plays into the other story we are watching when it comes to the young, is 150 the trigger point for intervention we are now watching? particularly when you look at the weakness on a trade-weighted basis. one of the things we are watching into the start of the session. belle: we are counting down to the open here for tokyo, seoul, and sydney. it really is coming down to the moves we have seen in the space over the past few sessions, really being led by the long end of the curve. we saw the 30 year yield adding around 13 basis points. also the 10 year yield hitting its highest level that we have seen in 16 years. these are some of the actions coming through. as traders continue to digest the narrative the fed will be staying higher for longer. oil prices are also playing into

it, given they are elevated. there is a risk of a u.s. government shutdown. these are some of the possible factors driving these moves. the impact in asia, lots of different ways we can talk about this, one of those as you say is really those moves in the japanese yen, approaching the 150 level, and level we will watch for signals of government intervention. we have equities coming online, looking a little bit under pressure, as we got underway here. we will of course be really watching for any sort of intervention in the currency especially given that yesterday on the session we heard from the boj governor, ueda, and his deputy, stressing the need to keep stimulus settings in place, sparking possible further weakness in policy. take a look at what's happening in korea. here again, the focus is very much on the korea won and the currency space broadly, we have got further strengths still in

the greenback given the moves and treasuries and the korea won hovering around a 10 month low against the dollar. in terms of what else we are seeing is that focus on economic fundamentals. they do continue to weaken somewhat in korea given we had consumer confidence coming out early this morning. we saw dropped to 99.7 from 103.1 in the prior reading. if you have a reading below 100, it tells you pessimists are now outweighing optimists in korea, given that survey of more than 2000 households. even though they do say inflation expectations for the next 12 months are unchanged at 3.3%. that is how korea is coming online. let's take a look at other markets -- inflation expectations, very much tied to what we see in the commodities space. brent crude, coming online fairly flat. we have seen oil prices starting to reflect a little bit some level of buying exhaustion.

some traders perhaps looking for new catalysts that would support further purchases of oil. at this point we are still sitting around that 93 dollar level. the asx 200 under a little bit of pressure. one other factor is what happens in china today given we saw a littl -- a big selloff in china property stocks given the move by evergrande. something else adding to that is evergrande unit missing payments. you can move the -- you can put the moves in treasury compounded what was happening in the chinese market and broadly we can expect risk assets to be under pressure today. shery: let's bring in our next guest, who says the extra return equities are offering is too little relative to bombs. with us now is the senior macro strategist at lombardo due. we continue to say concerns about the bond space especially

in the u.s. when it comes to the supply side of things with a large u.s. fiscal deficit, do you think there are opportunities in the sector? >> certainly the price action last night and the past few days have been -- has been quite challenging. in the near term, it's possible they will have to cope with a little bit of elevate volatility -- elevated volatility for fixed income markets. thinking about the long-term, you are absolutely right. the relative return of bonds has improved quite a bit against equities. compared to the earnings yield for u.s. equities, for instance, treasuries are yielding higher. that is an attractive level for fixed income investors. given where we are in terms for the economic cycle for the u.s., yes they are having some positive data surprises, but we still have a pretty tight policy rate and we think it will start having some negative

impact for growth going forward, so in our view, the likely trajectory for bonds for the medium to long-term is that of stabilization and may be slightly lower yielf for longer -- yield for longer. we think the asset class will offer a better diversifying role in the next few years even though that has not been the case the last two years. shery: for diversification, we have heard optimism about emerging-market debt as well, but given the shift when it comes to central banks in those economies, do those calls still stand? >> the emerging-market currencies are definitely sensitive to the movement in u.s. yields and the dollar for sure, but in some pockets, especially places like latin america, they offer fairly high rates. in a way, they are an

interesting option natalie play for investors who might think about the medium to long-term. calling the dollar top has been very difficult. we acknowledge that. but in terms of valuation, the dollar's too expensive, if you can petition some sort of optionality against the and the main term -- in the meantime, for places like latin america, for instance, some high-yielding markets in asia, we are quite constructive still. haidi: you say you remain open-minded when it comes to china, does that mean you see any opportunities there? we are talking about chinese government bonds. very low correlation

or opportunities in equities. >> a chinese bond markets are quite low yielding and not as interesting as other markets for the time being. we are underway in chinese government bonds and remnimbi. there are some long-term challenges we need to think about. the policy delivery so far from beijing has been quite piecemeal and gradual. so it is possible that the upside might be more capped in the medium to long-term. but there is policy happening every weekend. within the outlook for the chinese equity market at this moment is quite balanced but it would play a diversifying role and certainly has been the case, surprisingly, in the last one to two weeks. haidi: what about japan?

obviously watching the yen at the moment as a result of the strength we see in the greenback. what are your expectations when it comes to what the boj does and the implications for this strong japanese equities rally we are seeing? >> so, from our perspective, investors and the market consensus have been getting the japan story wrong, even though getting the yen trajectory wide has also been difficult. the underlying momentum in the japanese economy is quite strong in our view and we do think the economy will continue to generate pretty decent growth and inflation going forward. and, of course, they have 3% plus inflation currently. from the bank of japan's perspective, putting aside political sensitivity regarding

the currency value, material weakness in the currency from no one is going to be a tricky prospect to deal with. in our view, our base case is the bank of japan will remove control in april of next year and potentially get out of negative interest rate policy entirely. before the end of next year. but this weakness in the currency related to the global bond market movement actually increases the chance that bank of japan moves earlier than expected on yield curve control abandonment. so, the currency could see some volatilities, but in the medium term, it seems too cheap from our perspective. certainly for currency investors, not a good idea in our view. the government could intervene if the dollar-yen rate goes across 150. >> homin lee

there. let's get a look at the movers. you are watching quantas again. >> i am watching quantas again. we are actually near the lowest level for quantas in nearly one year. we have seen overtures to try to lift customer sentiment around the airline, they will be spending 51 million u.s. dollars to make passenger improvements, so-called passenger improvements that include for instance adding more staff. we have actually seen cr being cut for the first time in a year coming through. it is the cost of fixing the brand that is mounting. add to that as well a lot of agitation and pressure further chairman to resign from the airline as well.

essentially some of the detractors or critics of the chairman are saying that the reform and the change that quantas needs cannot be done under this current chairman or leadership of the company. that is the state of play for quantas. it is under pressure. we have seen it sliding for the past several sessions. no trading around five also dollars a share -- now trading around five aussiedollars a share. bhp, down more than 1% so far. we are seeing bernstein analyst calls coming through cutting their recommendation to market perform from outperform, given expectations that iron ore prices are going to drop and be detrimental to miners. that as a group of stocks that is very reliant on what happens in the chinese economy. and he moves around the property sector and evergrande is in focus as well. haidi: shery: we are watching those development's across the

country. standard charter will tell us how india's inclusion in the em bond index oil dropped to 25 billion dollars from global investors by early 2025. this is bloomberg. ♪ fabulous surroundings... but everyone's looking at their phones for financial insights from merrill. is he hailing a ride to the concert hall?

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haidi: evergrande, now facing a more complex restructuring. one of its units has failed to pay on on shore bomb. the former executives are reportedly in detention. let's bring in our bureau chief, charlize -- charlie zhu.

these are more problems compounded for evergrande. >> it is a nightmare for evergrande investors. the bad news just never ends for this company. just a week ago, you remember there was news of the detention of several staff at the company's wealth managing unit, which is the company that defaulted on the products that triggered a nationwide protest from investors. just over the weekend, the company announced it has canceled a long-awaited creditor meeting -- a key one -- akey one, delaying the restructuring plan because it is facing a lot of uncertainties. and sales are not progressing as well as expected. last night the company's main on shore unit announced it has defaulted on about $500 billion worth of onshore

bonds, and at this time time -- at the same time, a chinese language publication announced several executives had been detained, including the former cfo and ceo, casting for their shadows over the future of the company. this is of course adding to uncertainty over the debt restructuring plan, which is the most complex one, because that involves the issue of billions of dollars of new bonds and also equity linked options to swap out existing debts. haidi: you call this a nightmare for evergrande investors, what about for the broader property sector as we have other developers trying to accomplish something similar? >> yes, the entire sector,

despite all the recent government efforts to prop up demand, the future is still mired in uncertainty. over the past month, the government has rolled out a series of measures to boost investor demand, cutting mortgage interest rates and lowering the threshold for people to buy property in major cities like shanghai and beijing. based on what we are hearing and seeing, people are not flocking to the showroom of new projects of developers. because people are not confident about the future of their income as well as the price trend of property, which have been stagnating over years of breakneck expansion. the future is uncertain for the entire sector. sitting on a huge amount

of inventory. goldman sachs estimates it will take years for china to clearly stockpile -- clear the stockpile. many of those are unfinished projects. they can push for a bankruptcy or liquidation but we don't know how much the recovery rate is. 10%, 20%? nobody knows. if you look at the bond prices -- prices of bonds issued by property developers, they are trading at distressed levels, tend to -- 10 to 15 cents on the dollar. >> our shanghai bureau chief with the latest on china's property challenges. this of course as we continue to see geopolitical challenges for policymakers as well. china, now telling the european union to exercise caution amid the block's anti-subsidy probe into china's ev's. the vice premier expressed

beijing's strong concern and dissatisfaction at a joint briefing with the e.u. chief trade negotiator. let's get more details from our greater china senior executive in beijing. john, given the ongoing tensions, how productive would you say the visit was to china? >> i think it was important that he came here to beijing. he is coming just after the european union, to many people's surprise, beijing announced the investigation into subsidies for electric cars, he has, while he was here in beijing, said the eu will be more. -- more folks will -- more forceful in protecting its trade rights. the vice premier said the eu should act with caution. that the european union -- keeping its markets open would be good for europe and china and

climate change and cooperation across the board. china has not signaled what it might do in retaliation if the european union were to take sanctions or put tariffs in place. but i think the impact of any tit-for-tat would be quite huge for both europe and china. haidi: i guess my question is given the domestic challenges, are we seeing any kind of change in the rhetoric? and a softening in the rhetoric from beijing and perhaps having less leverage when it comes to needing foreign investors? >> i think there's been a real effort to try and instill some confidence in multinational foreign investors, foreign businesspeople. there's been an effort to try to streamline visas, so it's easier to visit china. there have been attempts by people as a senior as the premier to emphasize that china will treat foreign investors, of foreign companies the same as it would treat domestic investors.

whether or not foreign business is buying that is hard to tell at the moment because at the same time there are issues about accessibility of data and issues about product ability of policy -- all these things are weighing on decisions as people are trying to figure out what they want to do with their money. >> our greater china senior executive, john liu, in beijing. bloomberg subscribers can find dayb on their terminal on the app, you can customize the settings so you got the news on the industries and assets that you care about. this is bloomberg. ♪

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shery: occidental petroleum's ceo says the firm plans to hold oil production study is not a splice has rallied. she discussed the outlook for crude prices with bloomberg's alix steel at the american energy summit in oklahoma city. >> i think that we all in the industry have an opinion on oil prices. usually we are wrong. i would like to say that the fact is that sense -- since china, brazil, india, russia had their growth in gdp back in 2024, real wti prices have averaged more than $80. i really think that now, to me, that indicates the midcycle price of oil is around $80. the reason he has been doing what he has been doing recently

is to balance the market because there was a time of overspend followed by a long period of overspend in the industry and then the pandemic, so now to balance the markets, it is better for all of us, because if he was not doing that, the prices could potentially go way up to over $100, but in balancing the market, you protect the downside so you have a healthy oil and gas industry but also without damaging the economies around the world. >> some of the under production or supply was because you guys, shale players, are you doing anything differently? sports doing 80, sports doing 90? >> our industry has got to the point where we are practicing much more discipline than we used to practice. you see that prices have been moderated. recently, a lot of people had predicted 120-$130 oil. you have not seen it because the industry doesn't want to go there. since that time period i just

described since 2004, prices were above $100 26% of the time. i don't think we will see that again. >> is it still capital discipline or pump more? >> capital discipline. what that means for us is we don't increase oil significantly in a market where we don't see the balance. it would only be in a market where we see the balance that we would increase our production. than it would be at a moderate pace. we really -- then it would be at a moderate pace. we really are focused on returns down production volumes. >> and he fears you are noticing, demand destruction, anything on the box hadn't -- anything on the backside in terms of demand for you guys? >> we don't see any demand destruction at this point. i don't think if prices went above $100, it would stay there long enough to destroy demand, we are continuing to see a gradual improvement and i think even in a recession, i don't think that demand would drop so significantly that it would draw

prices. -- drop prices. >> we are here at the energy security summit. part of that is let's unleash american oil. echo go up to 45 dollars a barrel, $55 a barrel. you need higher prices. if you got the go-ahead, you can do whatever you want, would you, can you, are there other constraints? >> the constraints really are making sure that you increase value. that you don't destroy value. that 26% of the time prices were above $100, a lot of valley was destroyed. because we drove up the cost of what we were doing and we were inefficient at that activity level. the industry in general. now there's a lot more discipline around how to do it and how to do it better, and not to get into an oversupply market. haidi: the occidental ceo speaking with alix steel. coming up next, we will

take a look at the jp morgan forecast, next. this is bloomberg. ♪

belle: we are 30 minutes into the session for seoul, sydney, and tokyo. what is standing out as we get underway are the moves we are seeing in the debt space this morning. yesterday we really saw the selling pressure continue in the treasury space in particular led

by the long end of the curve. you can see the u.s. 30 year yield, a little bit higher, yesterday adding 13 basis points. the 10 year yield, at the bottom of the screen, at a level we haven't seen in about 16 years. that is playing out in. the session today particularly noticeable as we get underway. at a level we haven't seen as well in about a decade. moves into bonds, treasuries, that also leads to a firmer dollar as well. today we do have currencies under pressure broadly against the greenback, the korean won for instance, down .2%. around a 10 month low again against the greenback. the japanese yen, still around or near the 150 level that we would typically watch for signs of intervention. in terms of equities, you can see every single major market so far in the red. what we are watching comes down to what's happening in china,

playing out in the commodities space this morning because you can see here the likes of steel for instance, copper coming under pressure, concerns around china's property market continuing to play out. yesterday the property sector, we saw the stocks slumping. bhp, another name we are watching in the section given we had a downgrade from bernstein coming through. the stock off 1.5% with the outlook for iron ore prices. los of different ways -- lots of different ways we can chart the moves we are seeing in the china stock space. this chart here, taking a look at etf flows. essentially foreign investors in particular are really continuing to pull their money out of this market and into other regions that are in focus for us instead. shery: what are the regions that have been heavily and focus -- haidi: one of the regions that has been heavily and focus has been india of course.

that's struggled for years to rise above the criticism of being insular, the bond market. that could be set to change. jp morgan, becoming the first provider to include them in their emerging markets index. let's bring in our next guest, who says the inclusion will bring in up to $25 billion of inflows by march of 2025. with us now is standard chartered's nagaraj kulkarni. -- charter's nagaraj kulkarni. while the reaction be muted -- will the reaction be muted given how long it's going to take to be implemented? >> hi, good morning. you are absolutely right. the announcement impact of this has been quite limited. the reason for that is what we were looking at earlier. something which has happenedfor the first time in many years. the rise in u.s. treasury yields

to the highest levels. that has counterbalanced the announcement impact of this significant event, as far as indian bonds are concerned. the inclusion will start in june of 2024 and go on until february of 2025. during those months, we are going to see about 20-$25 billion worth of inflows. just from investors that are benchmarked in this index. there are also speculations/ market talks about indian government bonds being included in the bloomberg global aggregate index as soon as this october. if that happens, then we could see additional 15-20 billion u.s. dollars of inflows during the course of next 1-1.5 years. that is quite a strong outlook as far as flows into indian

government bonds are concerned. haidi: do you expect this now means we will see similar moves from other major index providers? >> absolutely, there are two other major index providers -- the bloomberg global aggregate index which is tracked by many large global investors. that is something which we are looking at in the coming month. the other one is ftse. there, the expectations of inclusion are very minuscule, because there is a minimum credit rating criteria which india does not fulfill at the current moment. so expectations on the ftse index are not there. but for the global aggregate index provided by bloomberg,

the expectations are pretty strong. haidi: the first reaction -- shery: the first reaction to this announcement has been indian banks, financial institutions gaining ground, who will be the big winners in the market long-term? >> i would start off with it is a win-win for multiple stakeholders of the market. the investors themselves, you know, the one trillion market has very limited participation. the investor holding is just 2%. one of the lowest across emerging markets. so first investors will benefit, the foreign investors. they will get access to this very large market. idiosyncratic factors, domestic driven growth cycle, monetary policy cycle, which is quite

different from the global sort of cycle. that is the first set of benefits. then the local investors, 36% of the market is held by domestic banks. this inflow will help bring some sort of a balance in the domestic bond market. a good mix of investors with different risk/return profiles is healthy for the bond market. i am taking a much more generalized/broad-based view here. i think it benefits all the stakeholders. shery: how much of india's appeal has to do with china's own challenges? >> i think if i were to look at a little bit of history, china's issues have been coming

out this year but india has been on the radar of index providers and investors for close to 10 years. the first time this idea was floated was back in 2013. india has its own story. its own idiosyncratic factors which may have been looking at. the china thing has come up only now. it was a strong during pre-covid times. post covid, it has dampened a little bit. the focus has increased. but india has its own reasons to attract investors. >> good to have you with us, nagaraj kulkarni. coming up next, we will be watching china's developers in hopes of upcoming holiday will spark a long-awaited revival in home sales. this is bloomberg.

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shery: chinese developers are counting on the upcoming golden week holiday to spark a long-awaited revival in home sales. we are joined by our asia investing editor for more on this. will we finally see those looser

restrictions in the property sector pay off this holiday season? >> hi, shery, that is certainly what developers will be hoping for and policymakers will be hoping for as well, this is a very crucial's -- crucial season, september, october, for home sales in china, it is crucial at this time because stimulus measures have been rolled out over the past few weeks in major cities. and developers really need the stimulus measures to work because they really are relying on home sales to get cash basically. they are being shut out of capital markets. not obtaining bank loans as much as they would like. they really need the cash. and the economy really needs sales to pick up, too. start to see some signs of improvement in the market and the economy. the crisis has been dragging down the economy for more than two years now. haidi: is there much optimism at this point? >> really, have to say --

i have to say, there is a sense these stimulus measures go some way but they are focusing on the demand side, on easing mortgage temps for homebuyers. there's a question on whether that is enough to boost sentiment among homebuyers because there are so many other barriers at play here, the slowing economy, people worried about incomes, employment, also worried about home prices as well. no one wants to buy a home knowing that its valley was going to fall in the future. we've got these things weighing on sentiment and of course the raft of negative headlines we have seen from chinese developers. most notably the sort of china evergrande crisis that is not going to have to revisit its restructuring plan, that's also going to weigh on sentiment. really it's a very poorly timed development, in terms of

the prospects for the year -- the busy season, and the prospects for sales over the golden week period. >> bloomberg's asia investing editor there in tokyo. staying with china, ubs is reiterating the bank's commitment to the country after taking over as ceo. he says the integration of credit suisse is moving forward seamlessly as he looks to reassure investors in asia. >> things are progressing very well. we have made shifts very swiftly, progress in integrating credit suisse, we closed the transaction in record time thanks to the cooperation of regulators across the globe. that's one of the reasons why i am also here today in beijing. this is my first trip to asia

since taking on, getting my role that ubs -- at ubs. i think it is important for me to reach out to all the chinese stakeholders and reiterate our commitment to china. updating them on the integration. >> in your second quarter results, it mentions specifically client confidence, sentiment, and activity in asia was muted. are you still finding that is the case into the third quarter? >> well, i think that we saw in general a pickup across the globe in terms of client activity. the most important topic for us was to see the returns of assets that left credit suisse in q4, q1 of this year, we started to see assets coming back towards the end of the second quarter,

we see also very good momentum in q3, that is the most important issue. also in general, it is fair to say that investors are more constructive than they have been recently. >> so, on momentum, you talked about q3, there was a new net money and flow, 16 billion u.s. dollars in 2q, you said at the time you expected that to continue, what is it looking like in q3? what does a good momentum mean? >> we are pursuing things -- we will not be specific on numbers. the quarter is still ongoing. bt we see substantial -- but we see substantially our forecast being confirmed. and we are getting closer to the end of the quarter. that is very encouraging to see so quickly, our clients

are responding to our actions to stabilize credit suisse and to offer them the best of the combined organizations. >> it's taken your headcount, your staffing to 20,000 globall y. you talked about the need to reduce that number. how much of a reduction do you think is needed at the end of the day? >> i never really spoke about the need of reducing the headcount because it is not our philosophy, what we need to do is restructure the bank. credit suisse needed to be restructured, profoundly restructured, out of the situation. we needed to strike the synergies necessary to make both a business is stronger. so we are taking actions as we speak to resize the business.

we are also taking advantage of the fact that we had a natural attrition that is helping across the globe. we have demographic trends helping in that sense. people exiting the bank to retirements or early retirements. we are also working on facilitating movements of people within the bank, also between the two banks, as we speak. i am comfortable that we can mitigate the painful part of the job, which is the social cost. but it is very necessary to create business that is sustainable. shery: the ubs ceo speaking exclusively to bloomberg's sean lou. coming up next, the exclusive conversation with william cho on his plans to drive the ev

market. this is bloomberg. ♪ fabulous surroundings... but everyone's looking at their phones for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill.

a bank of america company. only the new sleep number smart beds let you both yosleep at your ideals workinglevel of comfort.rill. your sleep number setting. and now, all of our new next gen smart beds have temperature benefits. save $400 on the new sleep number c4 smart bed. now only $1,499. sleep next level. shop now only at sleep number haidi: south korea's lg electronics is betting on ev's to help drive growth. the ceo, william cho,

spoke to stephen engle about the plan to generate sales from the so-called vehicle solutions. >> there is a goal to achieve 80 billion u.s. dollars in revenue by 2030. >> what will be the cornerstone of that strategy? obviously, you said the appliances are key, but they're not high margin products and services would probably be more high value. and also the telematics and the connectivity between the appliances. not only in the home but in vehicles as well. >> that's true. we've been in the consumer facing business for nearly 70 years. yeah. and our biggest strength is consumer insight and a deep understanding on the consumer and their living spaces,

especially the home. but we are going beyond the home and aggressively entering into other species like commercial and mobility and even the virtual space like a metaverse. now, i would like to emphasize that we are going to secure the global leadership in home appliances and consumer electronics because we need to generate cash and support and drive a corporate wide transformation. it is also a very important foundation for the success of platform based services. we view our devices becoming a platform and providing the -- providing multiple and diverse content and services. that will be our main stream and more profitable business model for us. >> so the vehicle solutions division, you do a lot of

components, you do the telematics, you do this inside the vehicle and the connectivity of the different infotainment systems and the like. so how much will ev space be a percentage of your company, say, by 2030? and would you consider going into the ev space with your own branded product like foxconn is looking, at like xiaomi is looking, like sony has already done? >> it is a growth engine for lg electronics now and has been growing at an average growth rate of 30% over the past decade. it accounts for 14% of total revenue in the first half of this year. and all the backlog is expected to reach out 80 billion u.s. dollars by the end of this year. so we are in the middle of expanding our portfolio as a vehicle industry, the

mobility industry is evolving as a software defined vehicle. and your question to the automaker, no, we have no intention to be an automaker. because we are going to focus on what we can do well. so this means being innovative and a reliable partner for the automakers around the world. >> who are you really talking to an earnest with very active discussions right now? there's been reports that you could be making the apple car or help apple make its car. is there any truth to those discussions? >> steve, in fact, this is one of the most frequently asked questions we receive. so, i believe that's because, you know, the market recognizes us as top players in the mobility sector and with proven -- we've proven the record.

we are confident and ready to cooperate with current automakers and any future automakers as well. >> including potentially apple if they do go forward. i know they're delayed to maybe 2026. some of the autonomous technologies, maybe needs a little bit more time to workout. >> yeah. we welcome them. >> are you in direct talks with the likes of apple? >> again, we are ready to cooperate with any future or current automakers, including any brand. >> the lg electronics ceo speaking exclusively to bloomberg's stephen engle at their headquarters. take a look at how asian markets are trading at the moment, we are seeing a sea of red despite the fact that wall street managed to finish in the green, the nikkei being led lower by tech and health care right now, not surprising perhaps because we continue to see yields

higher, the japan 10 year yield, up the highest since 2013, really following the treasury selloff. the kospi down for a fourth consecutive session, the lowest level since april, and the asx 200 also at the lowest level in more than two months. of course we continued to see the aussie and the kiwi dollar also trading sideways, they were both pressured on concerns about growth in china. haidi: pressure also coming down when it comes to the japanese yen, we did have that strength and the dollar not helping matters at all, treasury's of course under pressure and the dollar sitting at its highest since about december. when it comes to dollar-yen, we saw the highest since october. boj officials doubling down on the message that stimulus is still needed. 150 is the level we are watching as we got closer to potentially a trigger for intervention, but we know of course from the recent news, it has been about the momentum, the pace of any

move. we are also watching the won, also seeing some weakness despite some foreign inflows into south korean bonds starting to get momentum. the decline in the currency after south korea consumer confidence fell to the form of low. when it comes to the witness for the aussie and the kiwi, extending losses we saw on the monday session on the back of these of slowing china concerns. still to come, the latest when it comes to the market outlook from j.p. morgan. ♪

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david: good tuesday morning from hong kong. welcome to bloomberg markets china open. let's get to your top stories. china evergrande crisis deepens with the faults piling