haidi: a very good morning and welcome to daybreak australia. annabelle: we are counting down to asia's major market open. vonnie: good evening from new york. the top stories, the yen touching a near three week high on a report the bank of japan may raise its cap on bond yields at tuesday's meeting. haidi: u.s. stocks again, treasuries fall, and oil sinks. vonnie: plus we speak live and exclusively with the new fortescue metals ceo about the iron ore outlook. let's get a quick check on wall street. the futures open after a nice rally in the monday session. we are seeing futures pointed to a lower open for the tuesday

session but it is very early going. monday's rally was potential he on the fact israel's ground incursion may not be as much as investors has -- had dreaded. but we have to see how the week plays out because most of the week's event have yet to come. the 10 year yield rising about four basis points. a little money coming out of bond yields. and crude oil in the session monday was down 3.3%. this even as the world bank says any disruption to the oil market from the middle east war could cause a deficit between 500,000 and two million barrels a day, which would push the price of a barrel to more than $100. have some wall street bears coming out as well suggesting the fourth quarter they not be looking so good. i know we will be speaking about mark wilson's call in a few minutes. the fourth quarter in the next couple of months may not be too sweet for those hoping for a

santa claus rally. haidi: it could certainly be a rocky ride cutting through to christmas, particularly if we get volatility from the bank of japan's policy settings. of course we are watching these sharp moves we saw in the yen. the japanese currency rallying sharply come at the highest level in almost three weeks on these reports from the nikkei that the bank of japan may raise the caps on government bond yields as the doj meets for their policy powwow. we are hearing policymakers letting the yield on the 10 year government rise above 1%. that was reported on monday. and the yen, which had been trading quite a bit lower and has been trading quite a bit lower for most of the year, immediately jumped to the strongest intraday level since september 11. this could be the biggest market threat if we get that surprise from the bank of japan. given there is a sense that perhaps markets have a bit of a

mismatch when it comes to how economists are thinking about the probability of boj policy change. let's get more on that. enda curran joins us now. when you take a look at inflation, particularly core inflation, does that give us a little more of a pathway as to where the boj may be headed and whether there is a disconnect with market expectations? enda: it seems as though the japan story is being driven by external factors, the nikkei pointing out that the boj may look to tweak the yield cap. it speaks to the pressure japanese yields are under because of the big moves in the u.s., and of course the pressure on the yen because of what is going on with the strong dollar as well. if the boj was to make this move, it would of course relieve pressure to carry on the massive bond buying they have been doing, and it would take down pressure off the currency. domestic japan inflation story

-- it is less of a domestic japan inflation story per se. but the boj has a very close line on this, and they will be watching the yield curve story very closely until they make the decision later tuesday. by all accounts it does sound as though this discussion is on the table. but of course we need to wait and see what final decision comes out of the meeting. vonnie: right and today it is time to hasten and exit from ycc or fuel instability. there is a risk a disorderly exit by the japanese authorities destabilizes domestic balance sheets with large jgb holdings. how intense of a threat is that right now? enda: i think triggering financial market volatility is a very real threat for the boj. we have seen past times when they have made a surprise move it triggered shockwaves. sometimes it has been to their advantage, but they don't want to trigger a massive shock on the way out either. let's not forget the boj have painted themselves into a corner

and it comes to yield curve control. they are already a massive player in the bond market where the are skewing liquid at ponds on bond market. so there is -- skewing liquidity in japan's own bond market. but on the boj's policy settings, there are not many people forecasting a significant change there. the doj is not expected to pull out of negative rates. even if there is going to be a tweak on yield curve, they are still something of an outlier when it comes to tightening policy. the fed and others have of course in raising interest rates at such a wretched -- rapid clip to contain inflation. the boj has been a dovish outlier all this time. if they do tweak the ycc, that will not dramatically change their overall place in that story. vonnie: traders have been wagering on young volatility even if nothing changes tonight. we are at 149.05.

how much could be tolerated by the authorities? enda: i think the authorities certainly have wiggle room for seeing the yen perhaps move up somewhat. i think the authorities in tokyo have been consistent that there point is they do not want volatile trading. that is when the reserve the right to step into intervene. i don't think they would necessarily be too dismissive of some strengthening in the end. but we have to see what kind of decision comes out of this meeting. because as i say, the domestic inflation story in japan has not changed dramatically. what is changing is the big surge in u.s. yields spilling over globally, spilling into japanese yields, costing the boj a lot of money, and that is why there is a view now that they are under pressure to treat -- tweak the policy. and nikkei signaling that some change might becoming today. vonnie: that was bloomberg's global economics correspondent enda curran. you can get more analysis on the boj policy direction on today's

edition of daybreak. subscribers can go to dayb . now let's have a look at what some of the asian markets are doing. annabelle is with us in hong kong. annabelle: any perceived timing from the boj when we get that decision later today will be bearing on equity markets. following that nikkei report, we started to see an immediate reaction. nikkei futures took a bit of a hit, turned into negative territory. we saw the hang seng futures as well also turning lower. china futures are steady but broadly in the session there is a different theme taking place as well, because sydney futures, we are under one hour from the open, new zealand stocks already training -- trading a little higher. that tells us it is about how investors are really thinking about not so much earnings, but what is going on in the middle east. haidi: -- vonnie: israeli prime minister benjamin that jan has dismissed

-- benjamin netanyahu has dismissed calls to resign. he reiterated his goal of destroying hamas. >> the only thing i intend to have resign his hamas. we are going to resign them to the dustbin of history. that is my goal, that is my responsibility. vonnie: net neon also ruled out -- netanyahu also ruled out a cease-fire. four more or less bring in bloomberg's seattle bureau chief anna edgerton. how has this impacted netanyahu's standing in israel? anna: it has been a really tricky moment for him. as much as he wants to be the leader in this time of crisis he really stakes his political reputational on security. and we see israel ease in this situation were not secure. the path forward for net neon -- for netanyahu will be very

tricky. in that clip he played he also said there is a time for war and there is a time for peace. this is a time for war. we see him pushing forward for that even as people in israel question his ability to lead the country through this difficult time. vonnie: one of the biggest concerns is regionals pullover. are we seeing any signs the conflict is spreading beyond gaza? anna: absolutely. we have seen 23 attacks on u.s. forces and allies in the middle east and a lot of that has to do with iran-backed forces that are present in the region. a lot of those attacks did not hit their targets but it goes to that concern that there will be a bigger implication for the region. hezbollah in lebanon has been a concerned, how involved they are going to get. and just today we heard the u.n.

envoy for syria warning that there is not just a risk of spill over into syria, but that spillover has already happened. and what is already a very volatile situation. definitely a place where the tension and instability within and around israel can spill into the region and create a broader conflict. vonnie: what does this mean for the hostages still in gaza? anna: that is a great question and one that has been hanging over both the israeli responsys and the u.s. support for israel late response -- one of their main priorities is getting american citizens who are among the 200 hostages, getting them out and home safely pete we have seen some hostages being released. that creates the hope that the people being held could have a similar opportunity. however, as the second stage of responsys begins, that is a tricky --

haidi: anna edgerton with us on the latest in the conflict in the middle east. still ahead we will be speaking exclusively with dino otranto live here in sydney. of course a great deal of consternation on what it means for iron ore demand given china's slower, lower growth for longer outlook, as well as talking through some of the challenges of the energy transition. this is bloomberg. ♪ (adventurous music)

♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia.

vonnie: checking on u.s. futures.

it is pointed to a down session in the tuesday session after a risk rally on monday which is interesting. we are still headed for a third month of declines for u.s. stocks and we have many warnings today from wall street strategists and economists suggesting the fourth quarter will not be very good news for those hoping for a bull market. joining us to discuss all of this is ahmed riesgo, cio at insigneo. so what do you imagine the fourth quarter will look like, given we have come off of our highs very much so? the s&p 500 down 10% from its july peak. although we did see a little bit of a rally back today. ahmed: we have had a year-end price target on the index between 4100 and 4300. so we are right in the middle of it, and we are quite comfortable. we expect volatility. we do think there is some scope for equities to rally a bit but we think it will be short-lived. so, choppiness, trading range, but we expect more weakness in

the first half of 2024. and we think that is going to be because the market and investors are going to have to start grappling with the fact that we are barreling towards a recession in the united states. it has been deferred but it has not been canceled. vonnie: how does the war between israel and hamas effectiveness, if at all -- affect this, if at all? ahmed: we are concerned with a potential spillover to include belligerence between iran and the u.s. if you have a situation where irani and supply -- iranian supply comes in de-risk -- if you have a real catastrophe you could see oil prices definitively higher. but barring the hostilities being maintained between israel and hamas, neither of the two

countries are big producers of oil and they are not really located among any chokepoints for transfer either. vonnie: are you doing anything, or would you advise me want to do anything to hedge for thousand -- those outcomes, as small as they may be? ahmed: it is not our base case that the war expands to include iran, but if it does, there are things investors can do. buy oil out right as a hedge. we think that is one possible strategy. another possible strategy is to buy gold. i think you are seeing the resiliency in gold, despite real rates in the u.s. being up quite strongly. i think it is a testament to his value as a geopolitical hedge. vonnie: you mentioned recession next year. where are you seeing signs of that in the economic data right now? gdp growth was much better than forecast and many of the indicators we are getting are suggesting a very healthy economy. ahmed: yeah, and we don't expect

a recession anytime soon, at least not over the next six months. keep in mind that gdp number was somewhat flatter by a big restocking of inventories which flattered the headline numbers. but what we think is that the tightening of monetary policy that has occurred in the united states, especially over the recent couple of weeks, keep in mind the upswing we have seen in yields in the united states is the equivalent of almost 100 basis points of fate rate hikes. so the yield curve has done a lot of the fed's work for it. that tightening a policy will be trickling through to the economy. we are seeing weaknesses in forward-looking indicators. we do not expect the recession to begin right away. we think it is more of a middle of 2024 story. but we think it is time for investors who are not as noble and not able to take tactical positions or trade around it to start building that into their forecast and portfolios. vonnie: where does the 10-year

top out, given we have a very volatile potential big ahead of us with the fomc meeting and the jobs data? ahmed: in the near term it is possible that yields go higher from here. there's been a series of technical factors and technical positions in the market. we will see what happens with the announcement this week. but we do not think there is much more upside to u.s. yields. we think this is an attractive place for investors to add duration risks and start buying the longer ends of the curve. our fair volume -- very you -- if you are a fundamentally driven investor like we are, this is a good opportunity to add space. in the near term it could tick potentially higher. we think over the next six to 12 months investors who have a longer term horizon will be glad they added duration at these levels. vonnie: when we spoke to you recently you said china and the

potential of a slowdown was the biggest risk to the global economy. do you still feel that way? ahmed: no. we have seen some stabilization in the numbers of china, so that has been good to see. we have also seen increased stimulus and mandates from the chinese government to come out and buy equities, which was providing some level of support. chinese equities have been outperforming global indices. that being said, we do not think so much what ails china has to do with the economy, although it is definitely slower than what we expected. gdp in china it will grow somewhere around 5%. what is really troubling china are all the exhaustion is factors. the geopolitical risk, investor sentiment. u.s. investors especially are not keen to add on risks to chinese assets, even though they are trading very cheaply. china's asset troubles are coming from factors that go beyond the macro and the fundamental. vonnie: i have to ask about the

boj, what you are anticipating and how it could impact the markets. ahmed: we do think at some point the bank of japan has to exit its yield curve control policy. it is tough to say exactly when. we think one great asset to own for when it does is the yen. the yen we think is extremely undervalued. if you look on purchasing power parity basis it is as much as 40% undervalued. if you are a very long-term investor you definitely want to buy yen, because we think it is undervalued and it will benefit when the bank of japan starts raising rates. vonnie: thank you so much for your time today. much appreciated. ahmed riesgo's chief investment officer at insigneo. watch us live and see our past interviews on our interactive tv function, tv . you can also dive into any of the securities or bloomberg functions we speak about, plus become part of the conversation yourself by sending us instant messages during our shows.

this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh ahhh

explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

vonnie: ftx co-founder sam bankman-fried has returned to the stand at his fraud trial in new york. he pushed back as prosecutors argued he was in charge of ftx ahead of its collapse. for more let's go to su keenan. this is the first time he has faced questions under cross-examination. su: and accused of years long fraud in which billions of dollars were lost at the ftx exchange. this was his third day at the stand, the first before the judge, the second last week before his own attorney. and now he was in the hot seat under cross-examination by the assistant district attorney. and she leaned into him in many ways after last week he got his

message across. he may have made mistakes but did not defraud customers. she asked if he believed there was a hole on customers after the crash. he said he always believed there was the risk of a hole and later explained the difference. but these were the kind of evasive questions he answered. the key takeaways without the prosecution prevented overwhelming evidence, emails, texts, tweets, former testimony to congress, and pr statements by sam bankman-fried, all containing assurances that the ftx exchange was safe. bankman-fried said he could not recall what he said in the past, at which point the judge, after hearing so many evasive answers, said, just answer the question. sam bankman-fried in a very difficult position, defending himself after last week. we heard from carolyn ellison, the ceo of alameda, was the ceo

of alameda and former girlfriend, and gave devastating testimony, particularly in saying she was directed by him to keep seven different balance sheets so investors would not be scared away at their losses. when asked if he recalled receiving a spreadsheet with the seven tabs, again he was evasive, saying he remembered receiving a document that at least looked like one of the tabs. the prosecution emphasized spf tried to cultivate an image. you thought highly of yourself, he was asked, and he responded yes, i did. bankman-fried will be back in court tuesday at 9:30 where cross-examination will resume. again, the district attorney says she expects to wrap up her questioning by noon, and then it will be redirected testimony from bankman-fried's own attorney. there are some suggestions that this may wrap up and go to jury by later in the week.

haidi: there has been increasing scrutiny over alameda's relationship with tether. su: this started even before the trial and during the trial the speculation continues, even though this is not a direct part of the trial. there are certain tweets and other pieces of evidence coming out that may support it. alameda was the largest nonexchange customer of tether and wallet connected to ftx, sent about $3.9 billion in usd to tether. there have been a lot of questions raised going into this trial. where did all that money come from? tether's incoming chief executive has tried to clear up the mystery on social media, saying that there was an earlier statement that the hedge fund had wired some client money to the exchange, or facilitated buying for other traders. and that are still questions as to what was going on. but again, ftx was one of the

world's most prominent crypto exchange is at the time, and how they ended up having so much tether is a question in the background of the trial itself. back to you. haidi: bloomberg's su keenan there. take a look at some fx payers we are watching, particularly when it comes to yen. of course we had that sharp move to the highest level in about three weeks for the yen following the nikkei reporting the bank of japan considering letting it rise above 1%. also seeing dollar weakness when it comes to g10 peers. global risk sentiment kind of recovering following israel's recovering following israel's military action in gaza, perh it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, 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. vonnie: you are watching daybreak australia.

western digital shares soared more than 7% after the company said they are splitting in two. they will split off their flash memory business while his remaining hard disk drive unit will focus on selling to cloud data centers. first quarter sales fell 26% on year, a slightly better result than analysts expected. broadcom and vmware say their $ 61 billion merger is on track to close before a november 26 deadline. they did not say how close they might be for an approval from chinese regulators, their last major hurdle, but they say there is no legal impediment under u.s. merger regulations. petrochina says its third-quarter profit rose 21%, despite china's lackluster economic recovery. net income jumped more than $1 billion from a year ago following the firm's record profit the first half of this year.

petrochina fitted from discounted crew from russia as well as beijing's relaxation of natural gas price controls. bank of china saw 3% increase in its third-quarter profits. net profit rose to $7.5 billion while net interest margin narrowed. china's $56 trillion banking industry has been battling shrinking margins and rising bad loans since they were drafted by authorities to backstop the economy and prevent spillover from its sluggish property sector. haidi: gm has reached a tentative deal with the auto workers union to end a six-week strike that upended u.s. auto production. the terms still need to be approved by workers but they are's -- they are similar to deal struck with ford and stellantis. let's get more details with our auto reporter gabrielle coppola. is there a clear winner out of

these negotiations? gabrielle: i think the uaw and the union workers won these negotiations. for longer than 10 years they had really miner raises and there were a lot of things that had given up during the financial crisis in 2008 that they wanted to get back. and while they did not get everything, they got a lot. some of the biggest things are, they got a 25% wage increase across the board, plus something called cola, which is a cost-of-living adjustment. that is something they had before the financial crisis and they wanted back. they got it. you also saw a big raises were people at the lower end of the pay scale. temporary workers that were making $15 or $16 an hour will now start at $21, they will get a ratification bonus. a lot of the benefits that we usually just preserved for legacy employees who had been

there a long time, or full-time workers, now temporary workers are going to get more of that pie. and they are going to be able to transition to full-time status more quickly than they did in the past. and people will ascend the pay scale much faster, in three years instead of eight years. vonnie: what are the ramifications for the wider u.s. auto industry? gabrielle: it has been surprising. some of the takes i have seen from wall street analysts are kind of shrugging this off and saying, ok, this is not so bad, they knew they would have to pay up after what we saw inflation do the past couple of years. but i do think it is really tough. it makes it harder for the detroit automakers -- it sounds like a broken record at this point, but catch tesla. tesla is still nonunion, they have lower labor costs. it is not just about matching wages. it is about having the

flexibility to run the plant the way you want to. tesla is ahead of them when it comes to making you let your vehicles at scale and figuring out how to do that profitably. that is a tough hill they still have to climb. and now they have to do it with a couple billion dollars more labor costs than they expected. but they seem to think that they can work it out. they can take cost out of the business elsewhere. i know they are very happy to have labor peace after six weeks of strike and not knowing which plant would be hit next. it was a very chaotic time. it is good that it is done. vonnie: a little bit of stability. gabrielle coppola, thank you. hsbc will buyback next or $3 billion of its share, taking his total to $7 billion. the ceo spoke with bloomberg tv just after hsbc announced third-quarter profit which missed estimates. >> i am very pleased in that we

have reported $29 billion profit for the first nine months of the year. 7.7 for q3. that puts us on return of around 17% for the nine months. very pleased with the $3 billion buyback. that takes it to $7 billion for the full year. i'm also pleased we have announced another 10 cent dividend. in terms of the slight miss, we had treasury losses on treasury instruments because we were seeking longer duration, higher yield in treasury instruments. and that loss of $600 million we bumped in q3 will be fully recovered over subsequent quarters. that is all about our hedging strategy rather than an economic loss. it is a time in difference between a loss today and future profits over subsequent

quarters. i think we are well-positioned. we have a good momentum in the business. i think that is evidenced in our wealth performance. our revenue was up 6% in the quarter. our trading assets, or wealth balances were up 12%, i think. and we took in around $34 billion of net new invested assets in the quarter, bringing our total growth on net new invested assets to around about $77 billion for the past 12 months. so that is good momentum in diversifying our revenue stream. >> on the buyback, it does come in higher than estimates, $3 billion u.s. you know this better than most, investors always want more. is there scope for more? noel: we have very strong capital generation at the moment. as you can see in today's results, we have also announced when we sell our canadian business in q1, it's our intention to do a further

special dividend in q1, and consider what we will do with the remaining proceeds of that disposal. so i think we have good capital generation this year and good capital generation cross specs for the next 12, 24 months as well. i think we are in a good position to reward our shareholders for their patience and loyalty over the past two years. tom: i want to talk about the china part of the story as well. you did book some charges there of around half a billion dollars u.s. on some of the losses there. and you talked about any statement the uncertainty in the commercial real estate market of china. how do you see that story evolving? is it fair to assume that further charges of about that size and scope will be coming through in the quarters ahead? noel: i think we signaled at the end of last year that we had a plausible downside scenario of a potential of a next or $1 billion of ecl's on our china

real estate exposure. if you look at what we have done in q3, half a billion plus what we have taken in the first half, we booked around 800 million of that one billion plausible downside. there is the potential of a top on that in q4, but i think we are relatively comfortable with where we sit at the moment in our provisions. and by the end of the year would have been well provided on our exposures in china. clearly it's an evolving situation we will keep under review. but we think we are going to be in a good position by the end of the year. vonnie: ceo noel quinn speaking exclusively with bloomberg's tom mackenzie. turning to the outlook for u.s. stocks, more analysts are cutting their positive views retrading at year-end. let's discuss and bring in annabelle in hong kong. oppenheimer is one that lowered its target for the s&p 500. annabelle: that's right.

you mentioned one, because yes, we had seen a lot of strategists optimistic of where we would see the final months of trading going. in fact, talking about the odds we would see a santa claus rally. yes, that is really starting to be reserves -- reversed by a lot of the market. you have the israel-hamas war and the market implications of that. you also have lower risk appetite was seeing higher yields. that has been testing trading for the s&p 500. that has fallen into direction -- into correction territory. oppenheimer is now lowered its year-end target for the s&p 500 to 4400. it was at 4900 previously. again, citing the factors we just discussed. if you change now, taking a look at where the average target is for the s&p 500, the average analyst estimate is we are going to end the year at 4350, or

4370, for the s&p 500. that is checking the highest. and you have the lowest forecast here, still at this point we are 5% lower than the s&p 500 target. so really quite a way for stocks to catch up if we are going to see that by december of this year. vonnie: it is fascinating, the ultra bears are starting to look vindicated. annabelle: there are two that stand out. you have morgan stanley's michael wilson and jp morgan's margo kolanovic. wilson said a year-end stock rally is unlikely and he says there are a few different factors for this. firstly you have monetary and fiscal policy. he says they could even tighten further. there is weak breadth, and he says that is a reflection of how earnings remain at risk for most

companies. he also says profit expectations are too high. this is something that really feeds in nicely because he also says u.s. earnings estimates for double digit gains are divorced from the risks in the markets. he is looking at rising geopolitical tensions. he was one of the biggest bears on wall street over the course of 2022, but as we know, he later reversed that. and an ultra bear. vonnie: exactly. we will see what the next two months will bring. up next, we will be speaking exclusively with fortescue metals new ceo dino otranto about the iron ore outlook. this is bloomberg. ♪

haidi: you are watching daybreak australia and i am here at the international mining and resources conference beginning in sydney today, bringing together the top leaders and policymakers across the sector. our next guest is a keynote speaker who just finished speaking and runs the world's fourth largest iron ore producer. joining us exclusively is dino otranto. great to have you with us. it comes at a time where there are dueling forces facing the

industry. you have china's economy slowing, demand slowing as well. on the other hand the pressure to decarbonizing and reduce emissions is looking very expensive. so how do you position for that? dino: first off, fantastic to be here talking with you. china plays a really critical relationship partner for us at fortescue. particularly now, as we are decarbonizing our own operations, china will play an even more critical role for us in developing the renewable technology in solar and wind, and getting that cost down to ensure that we can all decarbonizing our operations profitably. haidi: how do you see the demand-side, particularly with so many uncertainties of the property sector? dino: we have seen the mayan from china over the last 10, 20 years be particularly robust for our product. particularly our product mix, we are confident that demand will continue to be there. even at five to six gdp growth

in china, on a much bigger base, we see continued robust demand for iron ore, particularly coming out of australia. haidi: you have talked about how that relationship can transition, if you will, into the future with more green energy, with more sustainable options. what does that look like in terms of the partnerships that are perhaps being explored right now? dino: for fortescue, we have been a very excess will iron ore company. 12 months ago we announced a pivot into energy and technology sector. for us, the partnership with china on this electrolyzers -- it pivots into our energy side of the business to get those projects at an economic basis so that we can grow that portfolio and help satisfy the global need for decarbonization. haidi: has the geopolitical side helped? i know that you will be in shanghai to coincide with the prime minister's trip. has there been a change in tone

with the improvement of that relationship? dino: we certainly welcome the change in tone led by the prime minister of australia. and you are right, i will be there next week visiting our operations there, 20 years of successful operations in shanghai. also with the prime minister next weekend and china. so we really welcome the warming of the relationship. haidi: twiggy forrest is an enormous proponent on driving -- it is always had to keep track of the various projects but there is a huge push into green energy and hydrogen. when can we start seeing financials and the reasoning behind this? dino: the early stages of our entrance into the iron ore market, there was -- fortescue, 2.0 is seeing that same market, albeit the market in the energy sector, particularly green energy

sector, we are confident will eclipse the resource sector. in terms of the projects we have announced we are bringing a number to our board very imminently and looking forward to announce some of those very first projects as we diversify our portfolio into the energy sector. haidi: there is a lot of spending on side projects with there are still enormous investments like the electrification of the fleet. what is the rationale between -- behind the early adopter move on that? dino: let me talk about the acquisition of williams advanced engineering. it was not an entrance into grand prix. the team is probably the planet's smartest brains around the formula e racing circuit. that technology is so critical for industrials like us to help the carbonized. the parallels between motor racing and mining we found are

so strong. so those skills are easily transferable. for us, the mining industry has been largely conservative in the way it approaches decarbonization. many of our critics would say that what we are trying to do really cannot be done because the technologies does not exist. we bring in a group like williams advanced engineering into our portfolio, and some of those problems which it seemed like climbing mount everest are actually not really problems. a lot of that technology we need is off the shelf in other industries. for mining, the call out his look to the side and see those problems as opportunities, work with entrepreneurial small companies like we have here come and get on with it. it is not that difficult. in the progress we have made in the last 12 months from when we announced our plan, to now having a real zero scope one and to plan by 2030, we're in a much

better position 12 months on now to be confident that the technology on a generation, the distribution, and the consumption -- trains, trucks, and ships -- actually already exists, making our aspiration for real zero within sight. haidi: that sounds like it necessitates big spending at a time when costs are also rising. can you tell us about how the inflation environment has played out? we are seeing across the big four miners, production has come down and breakevens have risen significantly. dino: sure. q1 is not a good indicator for long-term production. year-on-year, q1, our results have been in line with our previous year, and again we are forecasting another record year from our operations. in terms of the cost aspect, i will come back to decarbonization for a second. because we believe our investment in decarbonization makes good economic sense on top of good planetary sense. for us, ridding ourselves of 700

million liters of diesel over the coming decade, which is what we burn every year by the way, in fact helps our position to sustain is the world's lowest cost iron ore producer. haidi: what is the timeline? dino: we have been quite vocal about that. 2030 we will be real zero, scope one into emissions. you start seeing real activity. haidi: any plans to accelerate that? dino: fortescue loves setting an ambitious stretch target. so we're internally working at a more aggressive target to change our fleet now. two weeks ago we launched the first production-ready haul truck, which is really revolutionary in our industry. and that will mark the centerpiece of our treasures into a d carbonized fleet. haidi: dino really great, to have you with us, great conversation.

dino otranto, ceo at fortescue metals joining us. we will have a lot more from the conference later, including an interview with rowena smith. this is bloomberg. ♪

is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines.

vonnie: currencies likely to be volatile today. we have a few things on the agenda including the bank of japan meeting, which should see at least some trading in the yen. it's 149.11 right now. we are waiting for a few hours until the boj needs to see what happens there. we will have the fixing as well before that happens. the offshore yuan trading at 732.54. across new zealand and australia you see not much movement. the aussie dollar in new zealand dollar there. we might see some movement in the korean won though. we're anticipating some data out of korea, and also anticipating data on jobs and industrial production out of japan. so plenty on the agenda for today. if we take a look at where stocks are pointed, at least for tomorrow in the u.s., it looks like it might be a down day. this after an up day today. the s&p rallying 1.2%. but the futures at least look

like they are pointed lower, at lease for the s&p and nasdaq 100. across asia, we have stocks, futures pointed lower. and it's interesting because it looks like, at least in japan within the nikkei 225 futures lower, it is a risk off tone today. haidi: yeah. the yen will really be what we are focusing on going into this bank of decision -- bank of japan decision, because there is a sense we are going to see some repricing. obviously that nikkei reporting about the adjustment of the 10 year yield really end of the trading momentum we have seen across that currency. but the question is, the fundamentals are there. when you take a look at that inflation reading, the preferred gauge, it is pretty much double the target. and we are about to go into the next release, the first full year of readings above 2% for japanese inflation. that is the first time in more than 30 years. so you think that is perhaps enough evidence that the bank of

japan will perhaps make some sort of dramatic move, particularly given we are starting to see the impact of that weakness in the and in those inflation and growth readings as well. entrenched inflation in japan is looking pretty real, and that pressure from the macro moment is also intensifying, despite the claim we have seen from jgb yields. we have seen the dollar-yen, despite the uptick at the moment, really continuing to see upside pressure, just because of that premium on 10 year treasury yields compared to japanese peers. it is that yield gap at play. that is what we are watching as we get into the trading day. we are just a few seconds away from the start of trading here in australia as well. daybreak asia is next. this is bloomberg. ♪

(sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, what can you do with spy? i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release,

my cravings, they went away. and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works.