>> good morning. welcome to "daybreak:

australia." i'm paul allen and sidney. >> i'm annabelle droulers in hong kong. >> good evening, from new york, i'm shery ahn. the top stories this hour -- u.s. stocks extend their rebound for the fourth session with traders looking at a harder than expected ppi reading to focus on less hawkish fed commentary. >> the fomc's latest meeting meetings, showing officials agree it is time to proceed carefully. >> also ahead, israel forms an emergency unity government as officials indicate they are preparing for massive military -- a massive military assault on gaza. take a look at how u.s. futures are coming online in the asian session. a little bit of upside after we saw stocks moving higher in the afternoon session in new york. the s&p 500 gaining ground for a fourth consecutive session despite the fact that we got the harder than expected producer

price inflation reading. we had the atlanta fed president today talking about how the central bank does not necessarily need to keep tightening unless easing inflation starts to stall. we were watching the fed comments that recently have taken a more dovish turn. treasuries ended mixed with a 10 year yield following towards the 4.5% level. i talked about the ppi numbers. tomorrow we have the september cpi numbers. the expectation is for headline consumer inflation to moderate. we are headed towards earnings season as well, with wall street's biggest banks starting to report on friday. you can see crude prices there continuing to trend downward and below $84 a barrel. we had this sharp fall after reports u.s. intelligence showed iran was surprised by hamas' attack on israel, signaling that perhaps the war will not necessarily widen beyond the region. one stock we are watching

during trading today, birkenstock's slump of almost 13%. we have not seen an opening drop for mega ipo's debuts that have been this bad for a while. not really boding well for the broader ipo market. paul: we had the latest fed minutes showing policy will remain restrictive for some time and risks have become more balanced. the fed may be staying on hold until the year-end. >> the nominal side is going in the direction you want, so we are in this position where we watch and see what happens. >> in my view, this transition, taking the time to holistically assess incoming information, was warranted for a number of reasons. it reflects the fact we are

near and perhaps at the peak for this tightening cycle with the risk of inflation remaining persistently high more closely balanced with the risk of slowing activity more than needed to achieve price stability. >> -- paul: let's get more from our chief rates correspondent and mlive contributor, garfield reynolds. susan collins went on to say that further tightening could be required depending on incoming information, like the cpi tomorrow, how important is that? >> extremely important, especially after the ppi prices overnight. that report surprised to the upside. ppi went even higher than cpi. it then came down quite rapidly. now it is showing signs of stalling out. if we get signs cpi is also going to stall out, that will also bring the alarm bells. also the risk-reward for bonds

and equities as far as their trading, each precisely react -- nobody was listening to that second part. everybody has just gone, oh, you could be at peak rate? that's it. if we are done with rate hikes, that normally means in six months, the fed starts cutting. that is a very optimistic viewpoint considering how high inflation got, the highest since the 1980's, how high it still is and how strongly fed officials over the last year have tried to convey the message that, when we stop, that doesn't mean we pivot towards rate cuts. that means we expect to hold policy at a restrictive level for quite some time until inflation actually gets back down to target. that opens up the potential for vulnerabilities. shery: does that mean we should be paying more attention to the fed minutes from last month?

i thought this was sort of old, given the shift in narrative i thought we were perceiving in the last few days. >> one of the things that struck me about fed president collins' comments was she sounded like she was speaking with the minutes very much in mind. yes, they are more balanced, but what is still coming through is they are restrictive for some time. that is the expectation. along with -- i thought it was very important overnight that daly, she doesn't vote, she has been seen as being more dovish, she stressed the idea that they might need to hold rates higher in general over the longer term. that the neutral rate might actually be higher than they have been estimating it and if that is the case then there is more reason to hold rates at the level they are now and more

reason to be much more reluctant to lower them rapidly from where they are until and unless inflation is tightened. with the resilience of the economy and sticky inflation coming through, that is very much up in the air. shery: bloomberg's chief rates correspondent, garfield reynolds there. israel's defense minister has vowed to wipe hamas off the face of the earth as a new unity government signals a major ground offensive after attacks by the militant group that have killed around 1200 israelis. president biden meanwhile has issued a warning to iran, as he outlined further u.s. military support. >> i spoke with prime minister netanyahu i don't know how many times, but again this morning, and already we are surging additional military assistance, including ammunition, interceptors to replenish the

are end -- the iron dome. and made it clear -- made it clear to the iranians, be careful. shery: for more, let's bring in bloomberg's political news director, jodi schneider. lots of concerns that wiping hamas off the earth could main -- could mean a humanitarian crisis that broadens out. how difficult is antony blinken's job now in israel? >> secretary of state blinken is there to provide the sense that america is paying attention and the u.s. is standing by israel, as president biden has made clear over the past few days, including a speech very directed on that point yesterday where he

said, "we will not waiver in are supportive israel," meaning the u.s. government. this is really more secretary blinken being there, also concerned about the fates of the americans who are still missing, some who may be held hostage. he is there to play the comforter role but also to make clear the case that the u.s. will stand by israel and the u.s. will stand by israelis in whatever it needs. there may be a major humanitarian crisis in southern israel depending on what shape this war takes, what the next steps are, if there is a bombing campaign, a ground war, that may be the need that becomes more relevant more quickly, and so, that i think is the case he is going to make and that comes

as this new war management cabinet as they are calling it with these emergency powers has been formed in israel. paul: let's talk more about that. we've got some unity in the government in israel. what's the significance? >> it is remembers, prime minister netanyahu, his current defense minister, and very interestingly, his ex-defense minister, benny g., the opposition leader and really a thorn in the side of the prime minister, they do not get along, they have been at odds, most recently over the prime minister's attempt as he calls it to reform the judicial system, change how the supreme court is structured, and that of course has led to very large protests that really have been hampering israel's ability to

move forward in a lot of ways, the government's ability to move forward. they really focus on war and war powers. they will not be changing anything else in the government. this will be job one. clearly everything else will take a side -- will be set aside during these period. shery: jodi schneider there, expectations perhaps that geopolitical risk might be contained in the middle east, and has led to a risk on session in today's markets in new york. let's see how we are looking across asia. israel -- annabelle: you can see most futures here are muted but still ingrained territory. that tells us to focus today is still likely to be on the expectations from the fed, perhaps we won't see another need for a rate hike coming through. the softer dollar, the pullback

and treasuries are very supportive factors for asian equities and that is why you are seeing most looking to trade to the upside. new zealand still in negative territory. you can say china is sticking out to the upside. pointing to gains of 1.5%. it's a little bit more negative on the outlook for consumers in china. what they are seeing when they poll different consumers in mainland china, they are still quite negative on the outlook for the mainland economy. a lot of people they surveyed, the expectations for future income, those have deteriorated. less people expecting pay rises over the coming six months. as well only 31% of the interviewed consumers plan to spend more over the coming half year as well. that tells us we had seen some green shoots coming through in chinese consumers but this bank of america survey, a little bit more negative on the outlook for the mainland economy, every dependent on internal consumption there as well. paul: thanks, belle.

still to come, we take a look at how the israel-hamas conflict is likely to play out in markets with the chief investment strategist at sanctuary wealth. this is bloomberg. ♪

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>> if it doesn't spread, i don't think the global macro economic consequences will be large, maybe some positive impact on the price of oil, there may be some tendency to move to safe havens like u.s. bonds, but the effects will not be large, as long as this conflict stays contained. paul: the former u.s. treasury secretary,

larry summers, on the economic impact of the israel-hamas conflict. our next guest says this should not damage u.s. oil prices unless the conflict surges. i wonder what your reaction to larry summers' comments is. is the greatest riskier uncertainty, volatility? not knowing if it's going to get worse or be contained? >> yeah, i would agree with all of larry's comments, what we have been telling our clients as things continue to look good in the u.s. -- is things continue to look good in the u.s. the risk would be if crude oil broke above $100, wti cruse, and state about $100 -- stayed above

$100. that would be problematic. i have been trying to explain events like this or similar events like this, when war breaks out and there are atrocities and humanitarian major issues, many clients want to become very conservative in their portfolio which is extremely understandable. but unless that war impacts the u.s. economy, earnings can continue to grow, and we actually think earnings can be dropping here in the u.s. and within manufacturing can actually be traffic and improving. if that is the case, gdp's going to stay strong. you will continue to have good earnings and that will lead to higher stock prices. and again what would change that view is if crude broke above $100. paul: let's stick with crude potentially breaking above $100

at the moment. is the opportunity there as well? you do favor energy in the long-term. what is your thesis? >> we love the energy stocks and the space for quite some time. they have become disciplined in managing their balance sheets. not a lot of investment is going into the infrastructure at this time. we know supplies are somewhat constrained. and so, there has been sustainable pressure on crude prices to begin with. and any incremental increase in energy prices is very beneficial to the earnings outlook for the companies. this sector is one of the least expensive in our markets. we think there are long-term -- the long-term demand for crude oil stays positive going up to

2030. and it is an under invested sector and our market. so we think the biggest beneficiary, whether crude bricks above $100 or not, is going to be the energy sector. it is one of my favorite sectors. shery: we have been so hyper focused on the geopolitical tensions around israel that we really have not gone in depth about what to expect from this earnings season that kicks off on friday with wall street's biggest banks. how important is this season in the broader trajectory for u.s. stock markets? i worry whether or not the bar has been set higher. we are talking about the strongest upward revisions ahead of earnings since early last year. >> earnings estimate revisions are the best predictor of stock prices. we have seen them actually go up. there's a possibility that earnings in aggregate can be on the upside, signaling we have

actually [indiscernible] earnings. that is not priced in the market at all, to be quite honest with you. i think the earnings season is important. what companies are saying about the outlook. it has been a lot of talk in the u.s. there is a weakening consumer. when you look at the consumer, it is not one consumer. we have a high-end consumer, middle and low-end consumer, the low-end consumer is pressured by higher inflation, but we think the actual consumer is still in very good condition. there has been talk aboutthem adding credit , but credit is not extensive. they are just starting to add. they still have savings. we still think you will see the consumer actually spent going into the holiday season here in the u.s. we think the market is a little too pessimistic on the consumer.

that could be another bright spot for the earnings outlook for the market. shery: for how long, though? we talk about those savings. they seem to be depleting quite fast. especially as we talk about a potential recession and the higher for longer narrative starting to concern consumers. for how long will americans spend? >> one thing, here in america, we spend. as long as we have jobs and income, we love to spend. as long as the job market does not get hit to our and we are full of employment -- too hard and we are full of employment, the consumer will be ok. we are early and that cycle. leverage is a cycle in every pocket. it is a consumer cycle, a business and government cycle. if you look at the three combined, where we are stretched is at the federal level.

our government's debt level is historically extremely high. when you look at businesses and the consumer, they still have a lot of runway to actually spend, i would say another 6-12 months of room of spending can take place here in the u.s. as long as employment stays relatively strong. shery: great to have you with us. the chief investment strategist for sanctuary wealth, mary ann bartels. with her calls on the market. we have more to come on "daybreak: australia." this is bloomberg. ♪

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shery: goldman sachs is suing malaysia and a u.k. court as this agreement festers over a settlement tied to its role in the 1mdb investment fund

scandal. how unusual is this step? >> pretty unusual. how often do you hear a bank taking a nation to court? but that is exactly what is happening here with the new york-based goldman sachs, filing a claim in london against malaysia, and this all ties back to the settlement they struck with the country. we all know what the 1mdb scandal was, the diluting of the investment, extraordinary looting. goldman sachs helped with the initial fundraising, and that's been in a number of probes. in the end, goldman had to sign agreements with multiple parties and ended up paying $5 billion. the key part here is it did sign an exhaustive agreement with malaysia three years ago, but still there are disagreements about how it went down, what they still owe the country, and that has led to

disaction after months on end, with the prime minister threatening to take goldman to court if they did not redo the agreement. paul: very unusual to take the move of suing a country. who is going to appear to represent malaysia? what sort of damages is goldman seeking? >> these are part of the provisions they had in the agreement. if both sides -- if there was some disagreement, they had this option in the court of arbitration. four goldman, that was the support and safety of a third party mediator being able to come in and say goldman does not have to do anything else here. that is there hope. the way the agreement was structured, a complicated agreement, involved goldman paying $1.2 billion up front and 1.4 billion dollars tied to the assets that malaysia is able to recover. the disagreement is over how

much malaysia has been able to recover. does goldman really owe an interim payment? will they be forced to pay more down the line? malaysia paying in terms of the initial agreement? goldman's obviously had enough. it has seen these statements from the malaysian government and decided it is more prudent for them to actually take this to court in the u.k. than try to solve it behind closed doors in malaysia. paul: other corporate stories we are watching -- goldman sachs has agreed gisele its installment unit, greensky. they did not discuss the price but they expect to take a hit of $.19 per share in third quarter earnings. microsoft says it will appeal an

irs ruling that it owes almost $29 billion in taxes. this relates as to how microsoft on the gated income and expenses from its global subsidiaries from 2004 to 2013. the government says it strongly believes it acted in accordance with irs rules and regulations and that its position is supported by case law. plenty more to come on "daybreak: australia." this is bloomberg. ♪

shery: you are watching "daybreak: australia." we are seeing mixed moves and treasuries and the session. short data debt, reacting to

u.s. ppi data coming in harder than expected. let's discuss the outlook and bring in annabelle in hong kong. some are saying that now is the time to buy? annabelle: yeah that's what we're hearing from those in the market. taking a look at the moves we've had in the u.s. 10 year, a big move higher in yields driven by that expectation we will see the fed staying higher for longer. we have come off a little bit recently. haven demand, playing into this. more dovish commentary coming through from fed officials, as well, just taking that chance november rate hike off the table. still, historically speaking, the 10-year is still attractive to some of the market. let's change on and talk about one of those calls that's come through. this is from pimco, saying we are entering an era of extremely attractive fixed-income returns. they are liking this space

over the coming 6-12 months. they are little bit more bearish on the outlook for the u.s. economy. paul, they say the fed will need to start cutting rates sooner rather than later. also inflation and growth have hit the peak as well. paul: belle, we had a few days off of this conversation, that are knocking on the door of 150, what is happening? annabelle: we did really monitor it as it approached that 150, then we had question marks as to the japanese government had intervened, did a little bit of a rate check what some of the banks, we are not clear on what happens but we didn't touch the 150 level and started to move off it, came down to work 47, the 146 mark. once again, we are pushing towards 150. why? it is still a yield gap story between them. they say the yen could we can

even further. they are looking at 155 at the end of march against the greenback. they expect to stick with rates higher than longer, the fed. that is another analysis minute still shaping up in the market. shery: those rates, higher, leading to the stress among emerging economies. debt relief, in focus at the imf world bank meetings in morocco. but closely watched talks set on thursday -- set for thursday will unlikely produce breakthroughs on lenders when government defaults. we have reports from marrakech. reporter: we are here on the ground for the ongoing imf world bank meetings. wednesday we heard from a number of finance chiefs, in particular the u.s. treasury secretary, janet yellen, talking about how she is hopeful on progress in

talks with china. she will meet with the china pboc governor later this weekend the number of leaders here, fielding questions about how the israel-hamas war can potentially affect their own economies, oil prices, inflation, and their volatile currencies. coming up, we will play close attention to how debt talks are going with a number of countries in the global south, in particular we are playing close attention to zambia and their discussions on wednesday, we heard about a deal being struck with sri lanka and china on their debt talks, so we will see whether or not there's any more progress on that front. just moving forward, because this is the first imf world bank meeting happening in africa in 50 years, a lot of attention is being paid to what african leaders are calling for, in particular reform of some of these multilateral development institutions. there's been a lot of discussion around that. will see whether or not there's

been any sort of progress -- we will see whether or not there's any sort of progress on reforming this institutions. -- these institutions. shery: the french central bank chief also saying china and other nations need to take a fair share in debt restructuring of struggling nations, financing global goals like climate change. he says a revision of imf voting shares that would benefit emerging markets including china is inevitable, but those nations must play by the rules, updating the distribution of quotas is expected to be a source of major debate in marrakech. paul: a journalist has been reunited with her family in australia after her release from three years of detention in china. on x, she thanked australians for her support -- for their support. there are signs of diplomatic

warmings between canberra and beijing. a real breakthrough here. some good news. how did they secure her release? >> it depends who you speak to. in australia, we have been short on details as to how this has come about. business leaders and politicians have been lobbying for this for some time. from china's perspective, they are saying it is a matter of judicial proceedings playing out, she served her sentence and now being freed. in australia, it's very much being played out as a diplomatic victory. ahead of the prime minister visiting beijing later this year sometime. shery: expand on that. what are we expecting in australia-china ties? given that we have seen a little bit more of that relationship thawing in recent months? >> yes, absolutely, i think we had the chinese ambassador

to australia speaking yesterday saying they want to move the relationship beyond. we are also looking to those trade ties becoming warmer and tariffs on things like wine being removed so that free trade can resume. paul: this really is a very warm human story. how did cheng lei react when she got the news of her release? how has she been doing? >> we saw great photos of her arriving in melbourne yesterday. being greeted by the foreign minister. she has been escorted by the ambassador to china as well. she's been reunited with her children after almost three years away, her partner,

her family. we expect that's what she's been doing for the past days since she has gotten back. hopefully we will hear from her in time. shery: we do have breaking news at the moment -- we are getting the latest lines from the uaw labor dispute, saying the members at ford's kentucky truck that are joining the strike -- plant are joining the strike. the kentucky truck plant stoppage will generate painful aftershocks. we are now hearing from the workers that 8700 members have joined the strike after ford refused to make further movement and bargaining. this coming at a time when we saw some landmark concessions already last week from gm, to bring battery plant workers into the unions ful -- the union's

fold, but when it comes to the broader strikes, against the three big carmakers, we continue to see the walkouts, and now uaw saying that members at fort's kentucky truck plant will be joining the strike. we have more to come. this is bloomberg. ♪ at ameriprise financial, our advice is personalized, based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

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they want to act quickly on providing aid to israel but are stuck in moving legislation until they resolve who will be there next leader. republicans nominated steve scalise but are short of the 217 votes he needs to be elected speaker. for more, let's bring in mike adorning -- mike dorning. when can we expect a floor vote? >> they had planned one at 3 p.m. this afternoon and they will pass that. right now they are trying to round up enough votes, and if and when they can get enough votes to ratify steve scalise, their nominee as house speaker that is when we will see about. but right now it is hard to tell, because they are still not there. paul: well, yes, and this is shaping up to be shades of mccarthy 2.0, because let's assume steve scalise gets the

job, he's going to face a real test in november, another vote on a potential shutdown. can he survive? there are already members of the freedom, -- the freedom caucus were not keen on him . >> he is still not there on the votes, and he will have the same stresses and strains that there was a republican majority that is very slim at the moment with two seats vacant in the house. he can only afford to lose four boats on any -- four votes on any vote. some hardliners on the right want deep spending cuts, no aid to ukraine, things like that. on the other hand, 18 republicans who represent areas that biden won in the last election, they have to be

mindful of those kinds of voters. there are going to be tough strains and they are going to come to a head really quickly in mid-november when funding for the government runs out again. shery: november 17th, we are headed towards that deadline. we have a raging war in israel, ukraine -- what is on the legislative agenda right now that is frozen because it can't get a speaker? >> they've got a resolution of support for israel that's frozen because of this deadlock. but more importantly, down the road, fairly soon, there might be an actual aid request. at the moment, they will freeze the support -- it probably won't matter that much, but once the aid request comes in to send more money and arms to israel, then it will slow things down. shery: bloomberg's deputy

congressional editor there. our next guest says the white house is looking to link aid to ukraine and israel in order to pass it through congress. let's discuss more with carmiel arbit. good to have you with us. in terms of aid for israel or ukraine right now, the white house can't move because of the stalemate in congress. >> no request has been made yet. so let's just take a step back. biden gave a speech tuesday that was incredibly impassioned, personal, it was an emotional speech solidifying american support for israel in this war and the white house will put forward a request for additional military assistance to israel. that will include funding,

that will include iron dome batteries, artillery. he also indicated in that speech he will be moving a carrier fleet to the region and sending a clear message to israel's enemies that the united states will not tolerate any further provocations. the next move of course is going to be to take this to congress. as you noted, the house right now is locked in an election for the speaker. it'll be difficult to move anything quickly through congress as it has been all through this cycle of congress. but the administration's considering several options, including linking aid to israel and ukraine. potentially aid for taiwan. that could be put together in order to try to move it. there is widespread support for congress in israel and ukraine.

shery: if we see a major ground assault into gaza, as is expected from israel, how much more difficult will it be for the u.s. to get support for israel if we have more humanitarian crises unfolding in the region? >> that's a great question. this is something that's come up in the past. israel's operations in gaza. as the toll of civilians -- on sevillian ticks up -- as the toll on civilians ticks up, it'll become increasingly difficult. it is unlikely to waiver among the u.s. government or within congress, which has shown it'll continue to demonstrate steadfast support as israel deals with this particular war. the administration and almost

the entirety of congress have said this is a war unlike any others. this was truly a massacre and they expect and will support israel to respond with unprecedented force, as the u.s. has in response to other terrorist organizations like sis and al qaeda -- like isis and al qaeda. paul: things are pretty quiet on israel's northern border at the moment, but what is the risk of this expanding, if hezbollah joins or other iranian backed groups? >> israelis are watching this very closely. they have been concerned about a multi-front war for an extended time. so much so that that focus has been distracting israeli troops from estimating the growing threat posed in gaza. we have seen some small reactions coming from hezbollah and militias in syria. israel's paying close attention. they have called up reserves

in order to not only respond in gaza but also prepare for a multi-front war. if that happens, the results will be abysmal not just for israel but also for civilians around the region. paul: there are so many geopolitical implications here. within that region. for example, saudi arabia's ties with israel were warming. what's the future of that going to be? >> it is safe to say in the near term, the conversation between the u.s., israel and saudi arabia about normalization will likely be frozen and it will be very difficult for saudi arabia to pursue an agreement with israel while civilian lives are lost in gaza, while we see buildings demolished, and this will be putting a significant one of pressure on arab governments to respond and they are unlikely to show support for israel or respond favorably. that said saudi arabia could play an important role in bringing this conflict to an

end, when the timing is appropriate. and it could create space for further negotiations in the future. paul: our nonresident senior fellow for the middle east program at the atlantic council, thank you so much for joining us. we have plenty more to come on "daybreak." this is bloomberg. ♪ ( background noises ) this is a clustomer. hello! it's what happens when marketers group customers with very different behaviors... into one tangled mess.

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paul: birkenstock shares sank in new york after the $1 billion ipo. cooling a fledging rebound in ipo listings. with us we have michael hytha. the company has been profitable and around for a long time, but no? >> there's a sense that birkenstock is at the peak obits trendiness -- peak of its trendiness. it had its barbie moment. but that level of attention seems to be receiving a bit. there are concerns going forward it won't be able to keep up sales growth like it has. an even going into the ipo yesterday, the shares priced below the midpoint of the targeted range.

part of that was attributed to the idea that the company as a whole was a bit overpriced and overvalued in the listing. as we know now, it came out priced in the opening trade well below the ipo price. shery: even the offering itself was priced below the midpoint of the marketed range. how does it compare to other ipo's, especially of this size? >> frankly, it's pretty bad. we did some data crunching and looked at thereabouts 300 plus ipo's in the u.s. in the last century, any billion plus ipo, obviously, and there were only 13 that closed at a lower percentage, that actually did worse than birkenstock on its opening day. most ipo's of course gain

either a decent amount or even in some cases, an a standing amount on their first -- an outstanding amount on their first day of trading. there was the casino effect of the dot com bubble and the boom in 2021 the u.s., even those kind of first-day windfalls are not possible anymore. you still don't want to have a loss of almost 13% from your ipo price on your first day. paul: what are the implications here for the broader ipo market? >> good question -- as we know, birkenstock was the fourth of four big ipo's pricing in the u.s. in the past month. softbank's arm was one of those. out of those fuor, two are trading -- four, two are

trading below their price. instacart is the other loser. arm itself is trading at only about 7% above its ipo price. shery: so many listings and companies coming to market. thank you so much for that, michael hytha, summarizing what happened with birkenstock and what we can expect from the ipo market as well. this, as we keep track of currency markets. the dollar, unchanged after pressure in the new york session, the longest losing streak since march. on the others that trade, the japanese yen, 149, a little bit of strength there. we saw it steady around that level, given investors were very much waiting for those ppi numbers we got today, a little harder than expected. we are still waiting for u.s. consumer inflation. the headline is supposed to moderate. a little bit of trading on the sidelines right now.

especially at a time when treasury yields also ended up mixed. no real direction for currencies at the moment. you can see the trade in the kiwi dollar, the aussie dollar, not doing much. the aussie, falling from a one-week high because we had the rba assistant governor just coming out, christopher kent, suggesting the rba might reassess rate hikes that impact on the economy. we continue to head towards new zealand's elections as well over the weekend. >> that's right -- paul: that's right, the election to be held this saturday. polls indicate there's probably going to be a change of government and new zealand. there could be a change of fiscal policy as well. let's take a look at the bottom space -- the bond space. we are seeing yields declining. we are seeing a bit of a dip on the aussie tenure as well -- aussie 10-year as well.

a bit of a pop for the u.s. 2-here. on this part of the world, we definitely have an environment of falling yields. the aussie dollar, holding steady at 624 sense u.s. -- holding steady at $.64 u.s. that is it for "daybreak: australia." stick around for "bloomberg daybreak: asia" in a moment. ♪

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shery: you are watching "daybreak: asia."