earlier this week, we had the rbnz meeting, and they said that was more to come. they started raising rates much sooner than anyone else apart from nord to, and they are still having a ways to go. the inflation expectations are much higher now than they were when the rbnz started hiking rate hikes. in a small open economy of new zealand, you can imagine what inflation will be like in the u.s., a much bigger economy. therefore the fed is going to have to raise rates whether or not there is a soft patch of data. i know that the economy is going to pay the price for the fed rate hikes, but that is up to the fed. tom: would that suggest that the calls that you are going to start to see a bond market -- a poor bond market now, that they are premature? ven: you are seeing the talk in rates for share, particularly on the front end, but i do think there will be -- for the time being and then we can see output, but not now. we are going to be raising rates. tom: bloomberg's mliv strategist ven ram on his prediction that you could see further downside for the nasdaq given s

there is a warning shot being fired by the rbnz.t of the world is paying closer attention to the ecb and the fed. they are staying adamantly dovish. anna: new zealand's dollar up, the australian dollar up. now on the global chip conversation, taiwan is morning unless he gets more vaccines, the world's shortage of semiconductors could be worse. cisco's chairman says the u.s. and europe should examine public-private partnerships to address the chip shortage is. -- shortages. >> the supply chain situation was one, we had to make a decision. as you know, the analysts put together what they thought the eps guide would be. we came in three cents below that. the reality is we are spending the money in our supply chain take care of our customers now. that is a decision we made. given the business momentum, we did not want to take on a lot of other costs. we felt it would be the long -- the wrong decision long-term. we took a little bit after hours. the industrial community understood why we did what we did and what we are thinking for the f

on the property market, the rbnz central projection now includes a 20% fall in prices from their peake than a year ago. francine: laura wright in london. tom, we have stocks on the move? tom: boohoo indeed. this online retailer taking a hit as there is reporting from the times about working conditions. boohoo telling bloomberg the report is misleading, but the stock-taking a decent-sized hit. prosus earnings better-than-expected, up 1.47%. pets at home, profit slipping, animal ownership is not just a covid trend, but nevertheless the down is dow -- stock is down 3%. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. anc

many of its peers, the rbnz for example, are over 5%, the fed is likely to go over 5%. is it really likely that the rba will not have to hike that high? we have seen a few people from the street increase their call for the terminal rate. deutsche bank was out over the weekend with a note saying the rba might have to hike nearly another 100 points. that would be a jolt of the market, especially to the aussie, there is not a lot priced in the front end of the curve for the aussie market. dani: to round out the week we have china data. we were speaking with arend about the idea that china is not living up to expectations, could we see the narrative shift? valerie: that's a big question for the markets. wednesday we get the china trade data. a lot of the i will be on the export data. the big question will be whether china will have this export driven growth models fail. friday we get cpi and pi, remember that a's lower-growing china is deflationary for the rest of the world. perhaps we will see impacts of slower growth on those prints. perhaps some softening there. over the

the kiwi jumped after the rbnz hike to 5.25%, faster than forecasted by most economists.eparately, new zealand house prices fell 10.5% in the year to march, the fastest annual drop since the day that series began in 2003. johnson & johnson has agreed to pay close to $9 billion to resolve all cancer lawsuits tied to its talc-based powders. the world's largest maker of healthcare products is hoping to settle about 60,000 claims and fund a trust set up in u.s. bankruptcy court to cover future liabilities. the company has already withdrawn its talc-based products from the market. italy is said to be studying ways to curtail the influence of china's sinochem on tire maker pirelli. bloomberg has learned that some of the options include limiting information-sharing on strategic technology with board members appointed by the chinese company. the discussions are another sign of rising tensions between china and the west over key technologies. general motors is cutting 5000 jobs around the world. cfo paul jacobson said it is part of a move to reduce costs that will save $1 billion

we spoke exclusively to the rbnz head at jackson hole. , we wereg forward saying everyone is tellingveryone is telling us global growth is slowing, so let's get ahead of this. let's move now and reduce the probability of doing more later. >> are the downside risks materializing? banks of newthe zealand's manufacturing index post its first drop below 50. signaling contraction for the first time in seven years. >> without doubt, there has been a lot around uncertainty. off.ally had to get a head the government's fiscal position is very strong, but the global trade uncertainty has held everyone back from investing. so it is the business confidence and the investment that is the anomaly. i think that is global. >> when you look down the road, people are already talking about the next got -- cut. are they on the right track? is that the decision you have to make? when to cut rather than if to cut? >> we certainly don't hold out from doing anything. we will do whatever it takes. we like to think we are in a positive position where our exchange rate has come off relatively competitive, part

not only that, it was followed by rba, rbnz, bank of canada, and the ecb.this long stability across the g10 space. if there was some remarkably strong data on inflation on wages, that kind of question that view, that would -- some volatility backup see some volatility pick up. but that has been going for some time, and see a new crisis something big and global and macro would have to take place to shake us out. we arethe argument is heading into japan education -- japanification. time for that later. exit is really under time pressure. -- brexit is really under time pressure. a short extension is the biggest risk of all hard brexit much more precipitously to the four -- the fore. derek: yes and no. a short extension without markets knowing much about why where that leads us, that is not positive. extension a short with a very open, clear evidence that there has been a shift in parliament with maybe the dup announcing, that is obviously different than the context is quite positive. so we need to know what the plan is in relation to a short extension and that

matt: the interesting thing, i think, about the kiwi story and the rbnz, central banks around the worldm to be wanting to normalize. clearly the u.s. is already there and moving on, but mario draghi has promised that they will not raise rates until the end of summer 2019, but people take that as a promise they will raise rates at the end of summer 2019. that, think they can meet the ecb can meet that target, or might they have to push it back as well if they don't meet inflation targets? kokou: this is important, because it also ties into the yield curve. the clear view is that this is a business cycle, which is ending in late 2019, early 2020. as a result, global growth and where the u.s. is, it does not leave a lot of room for central banks to normalize policy. on the flipside, the central banks need to normalize policy as fast as possible so they had ammunition to cut rates when the cycle ends. that's why you have a bit of a conundrum between a flat yield curve that is essentially showing that the fed obviously owns a lot of treasury and they need to sell at some point, but then the

we were focusing on the rbnz meeting.w a huge run-up in australian stocks while you saw the yield on australia's year fall to a record low. bill evans saying the rba will cut rates at its october meeting in line with the government unveiling its budget plan and that they will move their bond yield target to the same level. this came hot on the heels of the government selling bonds in a record sale today. the aussie fell to its lowest level since july 24 making it the worst performing g10 currency. anna: thank you very much. let's get a bloomberg first word news update. on u.k.ure is rising sunak.lor rishi the treasury has spent over 100 billion pounds on wage subsidies and business, but this is due to end. currents warned the level of support is not sustainable. 's plans to replace ruth bader ginsburg are gaining momentum. mitt romney says he supports moving forward with the confirmation vote. democratbut quash is hopes of stalling a nominee until inauguration day. the u.s. house has passed a stopgap funding bill after a

perhaps we will see a rate hike from the rbnz next month. anna: let's get to the crisis over natural gas. we have just seen how some of these prices are just now retreating and retreating quite substantially. natural gases and energy prices in europe have been continuing their record-breaking run and that is raising fears about supply security this winter season. dani burger is here to take us through this. even if we do see some of these contracts dropping. dani: it shows how fragile the market is. because energy supply in the europe and the u.k. relies on gas and wind, and you have low inventories when it comes to gas. europe is running out of time to build up storage before winter and wind output has been very low, as well. they fire also shut down a key pipeline. the national grid says it will partially be shut down until march. let me show you what next day energy prices look like in the u.k. this it self has hit record after record. this is the highest price ever. it is unprecedented. it is not even winter yet. it is 10 times the price

expressed in asia where we are seeing the higher moves in yields at the moment despite the fact that rbnz hydrates but there's no real reaction in the market. also in the fx markets, dollar strength and weakness across for the currencies because of the other side of the trade of dollar strength in the final thing to draw attention to is the korea leading weakness and that is about the tech play. samsung makes it more than 20% of the index so that is about tech weakness. indonesia outperforming and again, that is part of the energy outperformance and they are seeing slightly better covid news. a partial reopening in sentiment there. dani: i want to mention that we are seeing the gas benchmark open in europe, rising to a record 125, almost 126 euros. it is per megawatt each hour, and the pricing action is different for europe and the u.k. so it throws me off frequently. while you were out, you missed it surpassing 100 euros. 125 euros. i feel like there is no end in sight for the gas prices surging. mark: i'm so excited that we are still talking about gas prices. i thought that this would b

the rbnz is tomorrow. there was speculation that they might hike 50 basis points.ever believed that, but it was still a chance. it would be 25 basis points and a hawkish stance. it will probably be 25 basis points and a dovish stance. people might be panicking that they may not hike at all. we may be getting a bit of overreaction in the markets. i'm shocked by the sudden lockdown on one case. i do think it is a real negative for new zealand. it doesn't warrant the scale of move we are seeing right now. but i would not move on the short-term. i think this could be a messy couple of days. i'm curious, jordan, obviously this has kind of taken you by surprise, but i know you had previously been quite constructive on new zealand dollar. is this changing your view? how are you looking at this? jordan: it did change the view. this morning, our aussie rate strategist took off some of our exposure. we had short australia come along new zealand. australia has been deemed a terrible wave of covid and struggling with lockdowns to control it and new zealand hadn't. all those pa

the rbnz to delay an expected rate hike has rippled through markets sparking concerned that the deltae other central banks to shift their own timelines. the hike may now happen in october. >> we have to focus very much on our purpose, which is the inflation, unemployment mandate that we have. absolutely this week was not the best timing to be looking to reduce interest rates given the reduced monetary stimulus and the health situation. time is on our hands. we can observe what is going on. we have significant capacity constraints. we have supply disruptions. the underlying situation remains the same, but we thought we would observe the next few days at little cost to us. >> you brought up an interesting concept when you talked about a strategy of imminent flexibility, the need for the central bank to manage its way through a virus environment knowing it will come and go. does that mean you could potentially hike the key rate even if there are instances of outbreaks? >> i think it does. the real issue is at what extent is monetary policy being useful. it is government fiscal policy to