the rbnz coming up. rba story, day two coming up.is bloomberg. ♪ yvonne: it is about the antipodes. think about how the rba we are expected to hear the speech from phil lowe. the last hour has been about the rba z. the hawkish hike, 50 basis points, only one got it right, bank of america. david: like we planned it, bank of america joining us claudio p iron joining us, you guys nailed this one. what does this mean for the kiwi dollar? quarks i should give their -- >> i should give that credit to the consensus call. what's playing out with the kiwi's outperformance relative to the aussie, the markets are jockeying around relative interest rate expectations. i think it is difficult in the sense that you do 50 and you go back to zero. from that perspective, there is the momentum behind the rbnz with potentially raising rates further. upside risks related to inflation. by contrast it seems the rba may have opened the door to that pause, that is what is driving this relative outperformance of kiwi to aussie. david: claudio, just to broaden

kiwi debt down before the rbnz as well. when it comes to leadership from treasuries it is a big week when it comes to corporate issuance as well as sizable bond options. oil, some declines. u.s. stockpiles and the opec supply in focus. the focus for us at the moment is the rbnz decision. let's bring in our next guest who is bullish when it comes to in particular the tech space within equities. joining us is the ceo of sg capital. we had a massive week last week with the anticipation before nvidia and the big melt up following those numbers. do you think there is further to go? there are concerns with extra neri gains -- extraordinary gains. do you think you should be adding to those positions? >> we are at the beginning of the melt up. we are not seen the irrational phase. we believe there is more meaningful upset for the nasdaq -- meaningful upside for the nasdaq. if you look at the ease with which the market has digested new expectations, they went from pricing in seven to eight cuts of the fed to three cuts in line with

rate hikes -- the rbnz looking to downshift rate hikes. vladimir putin vowing to press on with his war in ukraine as he suspends moscow's last nuclear treaty with washington. >> i'm at the goldman sachs global macro conference in hong kong, day two, bringing together the bank's biggest names and industry leaders. we will hear from the -- david kostin about why 2023 means the return of alpha after a macro driven 2022. we will have a conversations about the outlook for european stocks and the war in ukraine as it heads into a second year. >> take a look at how u.s. futures are coming online in the asian session. we are seeing a little support after the s&p 500 was in the red in the new york session. the dow erasing all of this year's gains. it's all the worst day in three months -- it saw the worst day in three months. a combination of fear over geopolitics, poor corporate outlooks, and rising 10-year yie lds, close to the 4% level, as the markets try to reprice where the fed is headed from here. we have u.s. pmi numbers coming in above expe

the rbnz was not expecting it just yet. it is likely to last for most of the year and that is they point to talk about, they have already done a lot in the -- and now they have a difficult challenge if markets begin to believe the rbnz exchange rate. kathleen: a technical recession in the u.s. is a bit different because there was a committee that determines when it is a recession. in the case of new zealand, it is a rounding error. underneath it all, how big is the slow down? is it enough to bring down inflation? is it enough to make the rbnz think it has to move before is seen as a meaningful decline in inflation? >> that is right. i think we are going to see, with the gdp, declines. when we look at what is going on with new zealand, we have had the surge in migration. even though it was a rounding error, you are seeing a big curtailment of consumer spending. the rbnz, we have the data about the average interest rates being paid by households to may. even though interest rates have risen, they increase in what consumers ar

benjamin from jp morgan wasn't really expecting much nuance from the rbnz.have a preference to be silent, then strike hard and fast. it has historically been a bit of a roller coaster ride. even by that standard, what's going on now does stand out. haslinda: say what you want, new zealand has become a gold standard for other central banks as well. yes it's a small country but when it comes to policy, it does punch above its weight and size. dan: there's a lot of history here. the 90's into thousands were characterized by a shift in many economies toward central-bank independence and buttressing that independence was a formal inflation policy, generally with a two minute somewhere. new zealand was the first. they liked to remind people of that. they are very proud of that. all through the 90's, you couldn't go to any conference or listen to any speech by a central banker without some reference to inflation targeting which drew in a comparison with new zealand. when that trend was in place, it was the gold standard. it's become a little bit squishy or. chris l

why do you think the rbnz will go today?se the question is if they feel that there is a necessity potentially could do more, should they just do it today? sharon: that is what it boils down to. we can see that overs and wonders in the data. there is no one smoking gun. monetary policy is clearly working and that is what most people expect a hold. but if you look at what the reserve bank said in november, they showed a forecast, 19 basis points of tightening, practically a full hike. so our take was that they need to give us a nudge, rather than a big shove. unemployment did not rise as much as they thought. inflation didn't fall as nearly as nearly as much as they expected, migration is a bit stronger. so overall picture is still things are going there way, just to fish slowly. they also -- the overall picture is that still, things are going their way, just not too slowly. sort of the story of the wheels slipping a little bit on the risk of inflation staying too high for too long. so you can run with it a while and hope for

the rbnz did not play ball. the open daca -- the opec story is in play for david: it might be the turn of the calendar, a first quarter and a reassessment after a few days. we haven't gotten to the point to what those few days means because as of now, we are extending the risk rally across the region. 4.4% of the catch up trade here in hong kong. the dollar, more downside as we speak. against the dm though, the dollar stable right now. we will get to opec in a moment. look at this. in terms of repricing, we have seen it, but the repricing has taken place over the aggregate expectation of how high the fed will actually go. so, there has been a little adjustment. but if you measured it all the way to next year, and a reminder from the rbnz and now the philippines central-bank that because of inflation, that they say they are ready to take further policy action. it might have just been the rba. yvonne: it might have been the rba bucking the trend, offering parameters that they have very high household and also vari

here is what he said in a policy statement where the rbnz cap there record low one .3%.etary policy will remain accommodative. numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly." he has also said that it is just likely that the rbnz could raise its key rate as cut it. the fact that he said that bank would also like to seek a weaker new zealand dollar because that would help their gdp get stronger, you might think he would be ready to cut, but economists don't link so. far away from that 3.5% he would like to see in the second half of the year. no cuts, even though that could help boost new zealand's exports. chance of a move from the philippine central bank today? well, there are two economists who follow this in our recent bloomberg news survey who are looking for a rate increase, but 19 others say no way, and that is the majority few when it comes to the philippines. bank is keeping the therate at 3%, but it is first time it has not been ironclad unanimous since 2014. let's look at a chart, th

we will be speaking with the rbnz governor later this week.ou don't want to miss that conversation and of course, we are talking about dollar strength given some of that risk on sentiment that we had today across wall street. concerns that the economic recovery will lose momentum amid the resurgence of covid weighing on consumer discretionary stocks. u.s. listed chinese stocks something. let's bring in our markets reported. u.s. retail sales numbers really not helping. >> it was a risk option. risk off worries. you have it with the delta variant already building up and you have the retail sales, a disappointing miss. for a consumer economy, never good news. a sustained message across corporate earnings, bank of america fund survey. it is across the board here. haidi: when it comes to chinese adr's, also falling again. beijing ramping up on its crackdown. it has to work out what an adequate discount is going to be for these stocks. >> while china tried to moderate its growth, some of the regulatory scrutiny -- they do actually make sense. for t

the rbnz one day said 75% rate cut. then in october of 2021 they were the first to start hiking rates again. they have done two 50 basis point hikes already. this is their third in a row and you can see that investors are expecting them to get nearly to 4% by the end of the year. and their inflation rate, 6.9% year-over-year, their forecast had been 5.9%. it will be interesting to see if -- as we get more information from their policy statement that what that will show. do they change their forecast? what is their expectation? how soon do they say inflation coming down? the rbnz has been very clear. we are going to be aggressive when monetary policy. that is what they have done. of course the bank of korea doing its first rate hike of 50 basis points since 1999 when i first started using interest rates as a monetary policy tool, talking about inflation will behind for a while. their target is 1% to 3%. so clearly the new b.o.k. governor, who already endorsed a 50 basis point rate hike, he was barely sworn in and saying

haidi: we are watching the rbnz decision.mes to retail sales, stripping out inflation quarter on quarter, coming in at a contraction of 1.4%. that is worse than expectations. it extends the contraction of 6/10 of a percent that we saw in the previous quarter. a fall in retail sales mirroring the concerns about recession risks for the new zealand economy. the budget update did give a bigger than expected spending boost for the economy, there are expectations that the influx of immigration will be and inflationary force. hence the expectations the rbnz is not finished, expectations are for 25 basis points, even 50 basis points. we are seeing a depression when it comes to the consumer side of the economy. more ahead here on daybreak. this is bloomberg. ♪ lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. shery: a quick check of business flash headlines. alibaba is a cloud

shery: paul allen with the preview of the rbnz rate decision later.bloomberg's expert editors ahead. we are seeing asian bonds gain ground and follow treasuries gains. on speculation of a dovish pivot by the fed. we had seen a decline after weak results from the previous session. we are seeing a little bit of a reversal with the 10-year yield trending down at the moment. also seeing kiwi bonds gain ground ahead of the rbnz rate decision. this is bloomberg. ♪ a few years ago, i came to saona, they told me there's no electricity on the island. we always thought that whatever we did here would be an emblem of what small communities can achieve. trying to give a better life to people that don't have the means to do it. si mi papá estuviera vivo, sé que él tuviera orgulloso también de vivir de esta viviendo una vida como la que estamos viviendo ahora. es electricidad aquí es salud. shery: you are watching "daybreak: asia." berkshire hathaway has announced the death of long time vice chairman charlesnumger. warren buffett is honoring his right hand man sayi

is the rbnz really done? >> yes, we think the rbnz is done.llar was because markets as we went into the meeting this morning was pricing in either one or two hikes. it was the liquidation of those that have priced in two hikes. if you take a step back and look at the global central bank landscape, in most of the economies, the inflation pressure is between five and 6%. when a central bank brings about 7%, i think it is only natural for them to consider a pause in take to an end because they reached a state where the rates are back to neutral or slightly positive. it is what we are seeing from the fed, they are calling a timeout for now. it is not a surprise and we think it is the last hike in the cycle for the rbnz. rishaad: we have a government saying the latest data she is seeing this pleasing after a long battle. this is the language, we had yvonne say this, mission accomplished. surely that is a bit premature. you also have another player on this which is the aussie dollar is outperforming its kiwi cousin. >> i think it is a little bit pol

the bok and rbnz hiking rates as well.week we have a jobs report out of the u.s., pmi numbers out of china, europe as well, and the opec-plus meeting that will be front and center after the fpr release. everyone is looking at their crystal ball for 2022. it is interesting what they think in terms of china. given what we have seen in the lack of performance this year, next year could be different and quite positive when it comes to socgen, if the msci could lead in their forecast for next year. they are talking about above 10% when it comes to growth for msci china. compare that to the nikkei, out beating even europe, japan, and the s&p, which is at the bottom of that chart. potentially we could see these darling trades start reversing. paul: south korea and the u.s. vying for your hearts and wallets through pop-culture. we explain what soft power is all about. >> south korea is having a moment. between the netflix show squid game, the boy band bts and the oscar-winning film parasite, its culture suddenly seems to be everyw

the rbnz meets later today. other part of this story of the rally here is also what we were seeing in terms of the rsi is so most of these markets at oversold conditions coming into the rally so some strategists saying the pessimism really had reached such extreme levels that i bounce was just a question of when it would happen but phil, the thing that is very important is not to get caught up into thinking that the market bottom is here. it could be but we could be in another bull market or trap rather. we are still in a bear market and this could be another relief rally and this idea really based around a fed pivot perhaps is not near at all because if you bring up this eco-u.s. function here, we can take a look. these are all of the fed speakers that are coming up over the coming day. we already heard from mary daly earlier speaking at the council on foreign relations. she basically called inflation a corrosive disease that is eroding income. it really does paint this picture that fed officials are still very

one of the precursors to what were seeing is the rbnz. david: taking the dollar down and then dropping it. live pictures from the press briefing, they kept their rates unchanged but it's really the guidance and no cuts in price. rishaad: they are wary of ongoing inflation pressures, well, i should hope so. yvonne: i was impressed with how they've come back the last few months. that's something we are watching very closely. that briefing just started a few minutes ago. david: on top of all that, this movement seen in the rates market, now price for 100 basis points. the term premium is completely gone, we thought it was back. some of these futures for example at record highs, and i actually suspect markets have swung too much the other way on this. kiwi style qe. rishaad: let's get back to what we are really talking about, mood music coming out of the federal reserve and the federal reserve governor speaking, bill ackman all weighing in with their views. >> i am increasingly confident that policy is currently well-positioned to slow the ec

rbnz. hawkish move. aggressive move. one of the first among the central banks with a 50 basis point hike. how much more can they go? >> yeah, well, my colleagues will be delighted. they have been calling for this hike by the rbnz. how far? 2.25% by the beginning of next year. but see how the quarterly inflation numbers come out next week. that may give us more guidance in terms of justification, but we think we are on track. >> while. -- wow. do you think that in terms of the kiwi, the moves, are the rate differentials the biggest thing? is the dollar still going to be the most dominant in terms of market thinking now in the strengthen the greenback? >> yeah. it is tricky. it's like a photo finish. who is hiking 50? bank of canada potentially tonight as well doing another 50. it is a combination of commodities and informatics -- interest rate differentials. we have had basically the kiwi, the aussie, the canadian dollar outperform the u.s. dollar as a function of the commodity prices. i will be watching the aussie-kiwi c

we had the rbnz this week with j.p. morgan on what to expect. yvonne: don't forget to turn to bloomberg for more on that rbnz decision with governor for -- governor mark -- governor orr said to speak next hour. year end, rates could be at 3.20 5%. the peak, 3.90 5%. in new zealand, this is bloomberg. ♪ re efficie you become. such amazingly perfect shapes run throughout the natural world. and can now be found in the automotive one. the world's most aerodynamic production vehicle. the eqs sedan. david: 100 25 more basis points in terms of rate hikes. that is what the rbnz just told us minutes ago. have a look at the market reaction. as far as the currency is concerned, it is on it rocket here. yields actually lower here. rishaad: seen as being ahead of the curve, we did have them saying a short while ago that they would rather have too much too soon, which is better than too little too late. anyway, is that the case elsewhere? thanks for joining us. the reserve bank of new zealand is seen as being ahead of things, generally speaking, but is the na

the rbnz is doing its best to see through the fog.nce in new zealand's banking system. and they have strong tier one capital buffers in australia as well. you can understand his areidence that loan losses expected. the buffers should help absorb all of that. they can keep supplying to the economy. but these smaller ones, they could the less able to withstand any shocks. -- be less able to withstand any shocks. housing prices are likely to fall in new zealand. he's -- he suspects sustained impact on the economy and said some of them will fail. plenty of unknowns heading into the future of the rbnz. we will be hearing more in just a little while. shery: new zealand has been quite successful when it has come to stopping the spread of the virus. what are we seeing in terms of the government's plan for the economic path forward? paul: it is an interesting situation. the deputy prime minister who is not part of the majority party -- he is a minor coalition party -- without him they would not be able to govern -- he has broken ranks with the

on rbnz calibrates meaningful arrivals until 2022.degree that our view is right and we achieve herd immunity in new zealand through the course of the next year, borders open up, pressure for the rbnz to do negative rates should ease. that should be a kiwi dollar positive dynamic at the same time the rba is turning more dovish. that is where the balance of risks lie at the moment. haidi: always appreciate your time. andrew boak there. westpac says it is paying a acord $1.3 billion to settle money-laundering case. we get the details next. this is bloomberg. ♪ haidi: we have breaking news from that white house press conference. white house economic advisor larry kudlow saying he doesn't think there is a need for another broad stimulus package, that there will be targeted measures only, that they need to be smart about those measures. this coming on a day where we had a parade of federal reserve officials stressing more fiscal stimulus is critical. chair powell calling fiscal stimulus unequal by anything else. larry kudlow saying they wou

rbnz kept rates on hold. world's biggest asset ,anager is betting on beijing 2016 will be good for china and investors will be sorry they are not there. do follow me on twitter @rishaadtv, and don't forget to include #trendingbusiness. china, hong kong markets underway in 30 minutes. let's have a look at what is happening. the day after the fed, and asian markets are liking the sense of patients conveyed in that policy announcement. snapping three days of declines for most of these markets, , i continued rebound in crude oil as well as basic materials. gains, the extending kiwi dollar surging since the fed left policy rates on hold. 225, ahead of the boj announcement. 56% expect some form of additional stimulus coming be furtherether that cuts into negative rates, etf of lying, or potentially negative rates for loans, which means lenders will be paid by the central bank to lend. ,traight times index up malaysia adding negativity to the regional look at the moment. let's take a look at some earnings stock reac

the rbnz decision. basis point hike to try to get ahead of inflation before maybe a pause? that decision is a few moments away. we bring you the latest analysis as we get that announcement. this is bloomberg. ♪ >> you're

so rbnz staying pat for a second time in a row at 5.5%.remember, this is the central bank that has done 525 basis point hike. it has been pretty aggressive ahead of the curve, way ahead of the fed. and now it is keeping its rate standing pat at 5.5% for a second time in a row. dave. yep. yeah. so we're looking at, to your point there where there is some commentary on inflation and how restrictive rates are and they're saying already restrictive and that should be enough to return inflation to target. we're just going through some of the phrasing here on the statement because that i guess in some ways, short of hearing from the governor himself, which rule, by the way, here from is perhaps the best indication of tone right now. a couple of more lines coming through. the activity slowing is more in rate sensitive sectors. suffice to say it does look like it's working in terms of the currency markets right now. there's a bid coming through ever so slightly on the kiwi dollar. some forecasts are now showing a small chance of another rate hike.

yvonne: yvonne: the rbnz yvonne: continues to be hawkish.u think there's a void entering into a recession next year? grant: a lot of commentators still see resilience and strength in the economy. exports are holding out particularly well. people want our tourism to come back here. it's going to be a challenging year with a global slowdown, no doubt. a lot of economists can still see resilience. inflation well outside of the target of one to 3%. i think we can keep a balance going through into next year and avoid that. what happens in the rest of the world has a big impact on an open trading nation like new zealand. david: it is that same resilience that the reserve bank has pointed to for the need for higher rates. let me ask you directly. do you think the economy needs a recession, even a mild one? grant: obviously, we've seen a significant amount of stimulus in the economy. demand has hold up. that's what causes those inflationary pressures. most economists recognize that there will be some effect from that. we will see that demand and slo

in its policy statement, the rbnz said it expects to get up to 5.7% at its peak. now we've got that other rate hike in place so you can see when you look at that inflation rate, even though they expect it to come back down into the 2% range over the next several months, for now it's a big gap. that's one of the reasons they are moving now and why they expect to move more into 2022. unemployment down to a record low in new zealand at 3.2%. their partition rate is 71.2 percent. it's interesting that in this statement, they note that there -- they are somewhat concerned about the impact on business sentiment, getting a little bit weaker. vaccination coverage is going very well. the lockdowns are ending. they will reopen in january. we spoke to achieve economist at rbd capital markets. she said not only do they expect that rate to get up to 2%, she said it could go higher. let's listen. >> but we've seen in the policy statement is an upward revision to the rbnz's cash rate projections. up about .5%. it's probably closer to 2.5 percent. that does seem appropriate for a

the rbnz keeping its rates unchanged. of course this coming on the back of inflation expectations which have soared and growth momentum has eased. cutting property prices would be another factor. the kiwi right now losing a bit of ground, currently at 70.54 on the back of the rbnz decision, pretty much expected on hold. rishaad: yep. also at the moment equity markets moving to the upside. also against this backdrop in hong kong of the record antitrust penalty handed down to alibaba. this may not be a one-off. china continuing to scrutinize its most powerful technology companies, ordering 34 to drop anti-competitive practices over the next month. let's get over to senior analyst with eurasia group. why are they doing this, first of all? guest: i think there is the obvious message why a regulator is pursuing this route, and then there is the implicit message as well. on the obvious side, the antitrust crackdowns have intensified is the message irregular wants to send to the company. the record fine is not a one-off event. f

's that our risk for the rbnz? governor orr: it is a risk. don't think it's a new or different risks, however, and we have been doing a lot of work to see if the monetary transmission mechanism has changed at all, how impactful our interest rates on that domestic homegrown insulation. all of our work says it is business as usual. we just have to be patient. of course you mentioned the potential supply-side or relative price risks, they are always going to exist. for example, we are talking about being inside the inflation target band in the second half of this year, below 3%, and then at 2% of the same time the following year, what is holding this up? we have had to make assumptions around relative price pressures, including shipping costs as an example. but the quarrel of monetary policy is working, we have always been battered by various price shocks. annabelle: i think that goes back to your point about the ability two weather upside surprises to inflation. the risk of those really comes down to new zealand being a major commodity exporter

expressed by rbnz officials.that has come in double what was expected to be in december, before the gabriel storm that devastated the north island of new zealand, repairs are going to be going on for months, it will need billions of dollars, that will be an expansion -- expansionary, it will add to output. along with a surge of migration, 100,000 or more migrants are expected, new people in new zealand, helping to fill job positions, etc. a 2% rise in the population will result. they will be bringing more demand. that is another reason why people are saying, maybe they will do a 50 basis point rate hike. he has never been loathed what something that surprises people a bit. -- with something that surprises people a bit. some are betting on 50 basis points. they at least as they update their forecast, could not move that vision of a 5.5% terminal right to 6% --ate to 6%? at least a 25 basis point hike is the messaging it will be focused on. >> speaking of messaging, with a meeting to out tomorrow, what are we looki

let's look at kiwi assets on the back of very hawkish rbnz.imating the cash rates rising 3.25% at the end of next year. this is 67.63 -- .6763. rishaad: let's bring in mark with regards to all of this. how are people really viewing ukraine? how are they weighing that up? what are they weighing that up against? >> over the past couple of decades, traders have been really reluctant to praise into much geopolitical risk because it has usually ended without affecting markets too deeply. the amount of volatility we have seen in the past couple of weeks is probably the most we have seen since north korea first started launching missiles at the beginning of the 2000's. that quickly faded away. people are getting used to the fact that this is a little bit more extreme. you can see that we had the central bank and new zealand getting -- going ahead with a rate hike. this will deviate from his path just because of the geopolitical risks in the short term. the bigger issue is in terms of inflation and other factors, wage hikes, real things that are affec

still above the rbnz target.he rbnz government late last year, he said inflation expectations are going to be key and could force us to move faster. another reason i figure people think they will be aggressive. 50 basis points in one day? i think not. that is the consensus of economists who follow this. bloomberg thinks that as new zealand opens its borders, omicron cases are rising, that is going to hurt workers for some businesses. but they expect wage increases to slow, one thing that will make it did -- a difference. and they are also looking at the housing market cooling-off. mortgage rates has risen. that might allow the rbnz to move on rates without having to be ultra aggressive. haidi: on the other end of the inflation picture, we have the bank of america call that beckoned -- that bank of japan will have to reduce amulets. that is a big call. kathleen: and they are saying in october that the boj is going to go for that. the real rate is slightly negative, zero .1% or something like that. they will get it

hawkish stance out of the rbnz. reporter bloomberg learning the united states: has given an advisory for traveling. sources say that could impede beijing's ability to gain data. we are told the -- democrats have reached an agreement on a $3.5 trillion spending and tax plan. president biden's jobs and families initiative without republican support. senator schumer says it is part of a two track process by which they will consider a 579 million -- billion dollar intern -- infrastructure bill. an economic rebound in singapore. this is weeks of viruses. gdp for the 3 month at the end of june contracting from 2%, a jump of 3%. it means year on year, gdp was up more than 14%. no bases during strict lockdown at the start of the pandemic. the covid lockdown has been extended until the end of july in australia. australia is a good city -- australia's biggest city is performing more -- reporting more covid cases. australia is the second vaccine rollout among countries on the oecd. vonnie: lack of legal protections left asia's

sophie: this is the rbnz's financial stability report.e uncertainty for the new zealand economy. kiwi stocks lower by six times the 1%. the kiwi dollar pairing from an earlier jump sparked by the surprise beat in the first quarter jobs data. this as unemployment came down. the labor market still has some way to go. ozzie futures are pointing lower. the outlook for aussie stocks looking more optimistic. jp morgan raising its target to 7500. gains of 7%. more than double what we have seen for the msci aipac index. australian stock correlations with commodities a big factor with the raw material companies the second-biggest rating on the australian gauge. switching out the chart, the commodities rally has been broad. the cyclical recovery boosts demand for everything from energy to metals and agricultural goods. with this momentum, that has pushed the commodity price gauge 211 year highs. we are in overheated territory at the highest level in 13 years. shery: for more on the outlook on commodities, we are joined by the founder and ceo of van

our next interview is coming up, the rbnz governor joins us at 9:30 a.m. in sydney.on the earnings, walmart and home depot suspending outlooks for the year despite pretty resilient sector results screen we get the results from the biggest u.s. retail names next. this is bloomberg. ♪ shery: retailers have been among the hardest hit by the plandemic. -- the pandemic. we now have the latest round of earnings. let me get started with walmart. they beat expectations but they withdrew guidance for 2021. how well-positioned are they? allhis is the bigger move retailers have made, saying it is hard to predict the future and consumer buying habits. but omar tidwell. they increased same-store sales -- but walmart did well. they increased same-store sales. they are providing people what they need. haidi: in terms of forward guidance, do we have any expectation what they think the next recovery could look like? >> it is not clear. they are working through the with current size of consumers, they are leaning buying central goods, groceries, things for the home and that is what wa

the rbnz might hold off. wait for that to become entrenched.er key indicator being the labor market. unemployment is down to 4.7% in the first quarter. rv, one of the big four banks, sees that next year. -- rbnz, one of the big four banks, sees that next year. it is triple the pace they were expecting. rbnz already pulled back on qe, well off their piece of 1.25 billion a year ago and some analysts see purchases ending next month. >> what are the risks that could complicate things for the rbnz? paul: borders remain closed and the vaccination rate in new zealand is even worse than it is in australia and into the bloomberg vaccination tracker index so that is saying something. one area where new zealand also outstrips australia is the housing markets, the property market in new zealand even hotter than australia so that would add novation to the rbnz to book its early tightening. central banks got a close eye on the currency as well, wary of being one of the first major central banks to put some upward pressure on the new zealand dollar and creat

the rbnz delivered as expected.: they did but it still quite a dovish statement from the rbnz. i guess there are key elements that have caused a reaction in markets. the first is, there is size of their the asset purchase program to 60 billion for the year. there was speculation this would happen, but i think it goes beyond that when they signal that there is still a range of monetary policy options they can add other assets to the purchase program, and they will think about other ways to support the economy. fairly dovish in that regard. they have also left the cash rate unchanged but haven't ruled out a negative cash rate in the future, signaling it is an option. aren't prepared yet but there is discussion and consultation, so very much signaling it is prepared to move into negative territory if needed, that it could do more beyond even the step up in the asset purchase it signaled today, including suggesting it will do whatever it takes and is prepared to do more. we have seen interesting reactions from markets.

the rbnz is excited to hold the qe limit. government of lebanon has resigned after last week's devastating explosion in beirut. the cabinet quit amid rising public anger for the blast which is now responsible for at least 200 deaths and destruction of a large part of the city. the prime minister says it is the biggest disaster in recent lebanese history and blames corrupt political elites for sabotaging his administration. powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery: president trump has resumed his press briefing after a possible security incident at the white house. happening right now, president trump speaking about the economy and other pressing issues. joining us now for the latest is bloomberg's government reporter jimmy wilkins -- emily wilkins. the only thing we heard is the shooting happened outside the white house, it is now under control. what else do we know at this point? emily: at this point, we are learning about things as they come

yvonne: that was the rbnz assistant governor.ng to japan, a new board member sees inflation creeping up in the country. let's bring in our managing editor in tokyo. good news for japan, we are finally seeing some inflation. >> yes, but the cause of inflation is similar to what we are seeing elsewhere. it is largely led by fuel prices and possibly the impact of the weaker yen. these are not the healthy type of inflation that the bank of japan wants to see in order for them to change their fundamental view toward the economy. it is interesting how they mentioned that these factors were possibly going to impact japanese economy. whether that would be enough to change any sort of policy outlook is still quite unclear. paul: we are also seeing the yen week at the moment by the standards we have become accustomed to. he would be good news. she is lukewarm on that as well, isn't she? >> there are two things that play. one, she doesn't want to say anything that would sway or influence the market. a weaker yen is positive for the exporter

what happens for the rbnz?ou have to favorite quickly to an easing bias -- would you have to favorite cook quickly to an easing bias? governor orr: governor orr: we have had very strong population growth. consumption per person is actually declining, so monetary policy is working. but there are more people in the country, so record demand -- aggregate demand remains very tight. when inflation is declining, our concern is that it might not decline sufficiently fast. we are in no mood for cutting until we see inflation expectations firmly back in the bed. i pivot -- a pivot would be too big a word, but where we are with corinne: and being too high at the moment, we have limited headroom for positive inflation surprises. hence our reasonably firm stance that we are taking. haidi: you mentioned you are in no mood to entertain any leniency when it comes to inflation, because the projections show you will not start cutting until inflation is well within 1%-3%, close to 2%, the midpoint. . do you need to be thoroughly

a couple of headlines, rbnz in a statement, one governor saying that the rbnz is prepared to navigate economic financial challenges. he also says the economic recovery will continue, they will continue monetary support, and eventually settings can normalize. no details on when that can be. rbnz also saying that recovery needs continued monetary fiscal support, and they have planned to embed new risk appetite and capital framework. remember we have reports suggesting the rbnz may see bond purchases resume in a couple of months. all those headlines from the rbnz governor adrian orr. now let's get the first word news with vonnie quinn in new york. vonnie: this nation has defended its decision to launch airstrikes on iraq. speaking on a visit to rome, secretary of state antony blinken says it sends a deterrent message that the u.s. will not hesitate to protect its interest in the middle east. >> regarding the strike last night at the president's direction, u.s. military forces struck iranian-backed militia groups. they targeted facilities used by groups responsible for recent attacks on u

this as we await the rbnz's policy decision.likely to tighten by the third quarter of 2022. we are expecting the central bank might push back against that tightening chatter. haidi: coming up next, we get more on the new zealand policy decision. why the rbnz may be dispelling talks on a v-shaped recovery. this is bloomberg. ♪ >> it is not just unemployment or inflation or the employment rate. it is all three of those. they need to be above certain levels. that was the big sigh of relief on wall street. >> it is clear he things we need to go big as president biden does. >> we are at a very precarious and unique moment of economic crisis and that is why we feel confident we will be better off if we take these actions definitively. >> we think inflation is going to be a messy story and that is going to keep the fed on the sidelines. we are constructive. haidi: some guests on bloomberg television >> -- some guest on bloomberg television earlier reacting to jay powell's testimony. maintain current bond buying program for the foreseea

the rbnz has set on two bands of tightening that several economists polled by bloomberg do not expect cash rate will go beyond 2% this cycle. the prediction is for the rbnz to hike key rates to 2% by early 2023 but a rate strategists said there are risks in either direction to that outlook. there could be pressure to hike as mortars reopen in new zealand. over at citigroup, they're noting that rbnz when it comes to inflation, they put up their timeline for the hike at 2% by the first quarter of 2024. haidi: those numbers will come out from new zealand in the next five minutes or so. the st. louis fed president said it is time to end emergency measures to support the economy. he spoke exclusively with bloomberg's michael mckee. >> i think it's clear that some of the inflation will be temporary. how much feeds into a more persistent process is really the question that the committee has to wrestle with going forward. i think we are already above our target on core pc inflation. according to the summary of economic projections katie is -- the committee is predicting 3%, excluding food and

the rbnz has kicked off for the rest of the world. now that we have seen it, we have seen the spike in with the kiwi here, at 63, 60's sense. all economists, rbnz remains appropriate to continue tightening at pace. is want to watch. we have been looking at any signs they could slow this tiny path. core consumer price remains too high. let's bring in kathleen hays, for any sort of reaction. your take away so far. >> hawkish. inflation remains too high. the rate is peaking at 4.1 versus 3.9, which they said -- with a projected at the last meeting. they are talking about inflation slowing to 3% by the second quarter. that might be a little helpful. remember, this is only the third quarter of 2022. they're holding out some hope for the future. so, saying it piques that 4.1 is also bad. for now, would you not agree this underscores the market sense, economists forecasted to more 50 basis point rate hikes are coming. look what they did at the beginning of next year, but more could be coming as well. clearly, any sense that they are ready to

shery: how will the yvonne: -- the rbnz affect others?nition and they have been the two, if you look at rba governor philip lowe's comments in jackson hole, if you have your just rates above that zero or below and you need to use unconventional monetary policy tools, you want to get in front of that and get in early. i guess the nearest analogy is the rba and what they might do. here are some signs from that, when philip lowe, the rba governor, speaks very soon unconventional monetary policy. haidi: in a few minutes time we will be getting that announcement from the rbnz, thank you, james mcintyre in sydney. we are about to hear from rbnz in a few minutes and we will be hearing from the man himself on friday in an exclusive conversation at 6:30 friday morning if you are watching in hong kong. let's check is this flash headlines. nike is breaking up with amazon, ending a pilot project where it sold its products on the website. the company says the decision is part of its focus to get more direct relations with consumers, and that it will i

no surprise from the rbnz either.iette: no, preparing the markets for further rate cuts despite leaving the cash rate on hold at 2%. governor graham willis says easing will be needed to boost inflation in new zealand even as the economy grows at one of the fastest paces in the developed world. record low borrowing costs have fueled a housing boom with growth rising 3.6% to june. the strong kiwi is keeping inflation at the bottom end of the rbnz target band. they key we fell flatly sense they announced they would leave a rates on hold, but has climbed steadily since january. speaking of the stubbornly high fronterra is patting itself on the back with an earnings climb of 65%. revenue however was down by 9%. terra has cut jobs and sold assets to strengthen its balance sheet. shares down by .2% in wellington. the cheek executive told daybreak asia that he is proud of the overall numbers. >> looking at our results, looking back to 2016, extremely strong results in quite a difficult market environment with a geopolitical i

what is the rbnz expected to do?g ie are looking out for doubling down on the amount of bonds they have been buying. they started that in march. they are seen taking that number two $50 billion new zealand. and remember in the emergency march meeting, they cut their points. by 75 basis it was a surprising move, aggressive. it was always a question of the rbnz signaling they are ready to do something like that, negative rates, or more than that if needed. they are looking at a gdp in the second quarter that is expected to drop up to 22%. it was not that strong but 1.8% growth, unemployment could get to 10%. coming,e is a budget the finance minister speaking in a couple of days to give more stimulus because the economy is in need of it and that will mean more bonds. that is one more reason why the rbnz would be ready to buy more bonds. they want to keep yields from rising especially when other countries are issuing bonds, you got to do something to make sure high.ields don't get too as for negative rates, adrian, the h

the rbnz hiking a record signaling a higher peak great next year. new covid curves in shanghai and shenzhen, as cases surge short of a daily record. rishaad: we do have asian equities, some good earnings supporting the s&p, the likes of best buy, other companies as well, abercrombie & fitch helping to lift the town. new zealand is on the way down. we still have a little bit of underperformance by chinese equities as we get these fresh numbers. shanghai asking new arrivals to stay away from public venues, including restaurants, for five days. the city trying to insulate itself from a nationwide surgeon the coronavirus. it is really forcing authorities to resort to tougher restrictions. the market on the way down. yvonne: i mean, it is the hawkish comments we heard from the central bank. we expect to hear more in the press conference happening any minute now. when the rest of the world is talking about slowing down the pace of fed tightening soon, yes, they will continue on this inflation fight, but the rbnz and is saying their work is not done yet. t

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claudio, i was going to ask you about the rbnz, but let's start with the renminbi.he pboc stand out of the way or are they engendering weakness in the currency? i think they are blessing weakness in the currency. we saw in the monday open, holding below the seven level, 6.99 level and it was the fixing on monday that gave the blessing that we can go higher and it was followed by a statement by the pboc that this was in response to growing protectionism and the rise in tariffs. it was sanctioned as an offset with the potential of tariffs going higher. rishaad: how can the u.s. response to this? can they respond to it? what do they have in their armory? claudio: there are a number of things. there is the september 1 deadline in escalation. a further 300 billion. last weekend, wilbur ross was in latin america saying as soon as this week, we could have the rulings with regard to u.s. applications to trade with huawei being announced this week. we will have to see what happens to those rulings, which shows china has taken a gamble and lost some degree of confidence that

ahead, we speak to the head of the rbnz governor -- the rbnz, and whether -- on whether the inflation dragon has been slain. this is wilbur. ♪ -- 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. 76% of 23andme health customers surveyed reported taking healthier working foactions.th merrill. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme. >> let's take a look at corporate stories, jd.com's u.s. trading shares fail -- felt after they changed -- they change their merchandise. profitability of the core retail missed estimates as they boosted marketing expenses to

were looking at a 92% chance ont the rbnz takes it down august 11.resting to see how they control speculation in the property market. let's see how all this plays out. asia looking like this, up about 6/10 of 1%, highest level so far this year. not bad given all the challenges for the global economy. rishaad: thank you, david. let's look at how china has managed to weaken its currency -- so muchting much as a squeak out of its trading rivals. it has triggered cries of market manipulation and interference. g20 finance meeting taking place this weekend, they don't seem to be worried about the yuan anymore. it is a curious situation. when china last hosted the g-20, there was concerned that china was planning a steep device wishon and global markets were on the edge. all forward, and the yuan 3% against the dollar, 6% against the basket. ase people have described it a stealth device way should, but there is no finger wagging. there therestory is is so much money around the world, so china is going into this g-20 as the chair and a comfortable position.