we will be speaking with the rbnz governor adrian orr to talk about what is coming next for the rbnzfter that hawkish hold yesterday. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management. haidi: another story we are following, shares of live nation entertainment falling. bloomberg revealing a justice department move seeking a breakup over the business over antitrust violations. the case is related to ticketmaster's unrivaled control of concert ticket sales. the 2010 merger of live nation as well as ticketmaster has been the subject of several antitrust investigations

kiwi herebe long based on that view from the rbnz?n: you can make the case the kiwi will regain some ground. if anything, that view should be expressed against other commodity currencies and the same region, really. i'll see kiwi looks across -- like it is topping out. so a return of demand for the new zealand dollar could indeed push it lower from current levels. comments also come to highlight how much of a struggle for any central bank from here would be the consideration of negative rates, and equally, how much of an important driver negative rates have become for the currencies, our outlook. to the extent the markets are now repricing the risks of negative rates, that will continue to boost the kiwi, especially against the australian dollar. the other narrative in the past 24 hours has been kudlow telling us the trade deal is not dead between the u.s. and china. many people have questioned the veracity of that trade deal anyway. and then you have the chinese lashing out at the australians. many people say the chinese are pinned i

haidi: how strong is the pressure for the rbnz to cut sooner? diana: i don't think there is pressure on them now because when you look at the broad-based economic figures, i don't think anything is really signaling they need to cut right now. inflation is still too high year in australia. -- here in australia but i think that by the time we get to the middle of the year things will look quite different because the labor market will weaken and labor market strength was one reason why china's economy held up a lot better last year. despite the fact interest rates went up and inflation was higher consumers were able to offset the weakness in purchasing power with a strong earnings growth from being employed and i think that will change. we see unemployment rising to 4.5% i the middle of the year. it is 3.9%. and the consumer picture will look a lot weaker in a few months. but as we stand now, there is not any pressure on the rba to cut interest rates. haidi: it's a big political year both with conflicts ongoing and elections, indonesia heading to t

the rbnz just overnight practically had to decide we were going to hike the key rate.arned may be a 50 basis point hike and they did not because of the lockdowns new zealand and the impact that could have on the economy. that is the big question now. haidi: the weakness that we have seen in the won, does that play into things? bret: you have to wonder. the bank of korea is coming and superhot. you have virus cases. maybe it would not be a bad thing to do a rate hike, especially when you think the fed might start tapering bond purchases. our bloomberg intelligence team has a metric of covid resilience and it has to do with investment portfolios, the amount of global investment, and the idea that if the fed starts tapering, they could start removing capital from korea. here is two very important things about the charts. there is a margin. that is not going to hike rates right away but moving stimulus would be a form of tightening and look at this. the bank of korea was among the first in asia of central banks start tightening in 2017. they do not mind getting out ahead.

shery: for now, the rbnz prudence is actually making a lot of analysts and economists reassess how theyabout what other central banks could potentially do. kathleen: we have an mliv blogger who said he thought this could send other central banks in the wrong direction. it could prove to be a rash move. more of the talk is that, yes, as adrian orr said, what has happened in new zealand just shows how unpredictable and damaging the virus can be. the question that is more interesting is does this mean something for the bank of korea? they are expected to hike their key rate this year. the market has always priced in -- priced out the odds of two rate hikes down to one and is interesting because rate moves in korea and new zealand often go in tandem. they are smaller economies, smaller countries, and we have seen them right now, both looking at the overheating housing market, rising inflation. is that another reason they could be moving in tandem? some are saying they will not hike at all. others saying that maybe they will hike but they will signal that this is a dovish hike on like the ha

the rbnz has been against the move which was except -- suggested in september.ernment says the rbnz overall mandate for financial stability and full employment remains the same. in italy, mount etna continues to suppress -- surpass its record of directions. it's the most vibrant this for years. it shot lava and rock more than 6000 meters into the sky. it closed a nearby airport.

a couple of central bank decisions from the rbnz.o the bells to look at how this first market open of the week is looking. >> absolutely. they kick off the week here. starting with those jobs numbers, given the news we saw, treasuries as well as and the week. more than 200,000 payrolls added engine. that was a mess on estimates but in earnings they increased a little bit more than had been forecast. the unemployment rate edged down in the u.s. as well. a bit of a mixed jobs picture coming through. investors clear we are going to see a hike later this month and that is what we are seeing in terms of the market reaction but the big question will be what happens later on in the year. essentially, investors were split when it gets to what is ahead in terms of the fed productions. the one we will be watching over the coming days, it is off the lows last week. we could force it to move back to her 145 level. this is what comes through on the inflation picture as well. it is one of the key things watching over the coming days. the expectati

were you trying to make sure the markets were on the same page as the rbnz?e are always doing our very best to provide some guidance, some forward-looking markers for the public to be able to see, including financial markets, around how we see the economy unfolding, and hence, conditional on all of that, what we may need to do regarding monetary policy. so, yes, we have become confident around a central projection, and that projection is one where we see inflation pressures finally, i would say, normalizing, and one where we hopefully can be normalizing the level of interest rates back to a more neutral level. there is a long time between now and the middle of next year, as we have seen, but that is our best foot forward at this point. kathleen: is the virus or vaccines, new zealand's success at fighting the pandemic, is this the main thing that is opening the door to saying, maybe we could be hiking rates again? it is an optimistic -- if an optimistic scenario comes true? adrian: without a doubt, covid-19 helps implications -- they are the number one drivers

manus: as your interview with -- kathleen, great interview with the rbnz central bank governor. watch, wait, and worry, the natural resting state of the central bank. i loved it. you push him on what level of growth drop which he tolerate and what central bankers drop? i found interesting you talked about zero growth around the world is what we might need. kathleen: exactly and i think that was very wise, too. in many ways, we know that this is a global problem. we can say central banks blew it. they misjudged inflation, they overstimulated, etc., but bottom line, on top of that, there was all these other things that they did not cause. supply chain constraints. in order to battle all that and push back, very slow growth could be and probably will be required. if central banks are not willing to signal that they are not going to help change expectations, maybe that is another big part of this. you have to change people's expectations about what the central banks are going to do and what that means so that you can start reaching that. it was very interesting. i pushed him on how

we have the rbnz physician in a moment here -- decision in a moment here. they could possibly leave the door open to a further hike. the move in treasuries, the japanese yen, if you change on now to hit the 150 level against the greenback. this is typically when we watch for a sign of intervention from officials. you saw the sharp move higher in the dollar against the japanese currency. what drove that was the japanese government intervention. could there be something else aptly? we will be discussing the chance. perhaps to do with options positioning. shery: selling the dollar at the 150 level could be one of the reasons but we are also thinking intervention chatter is growing. let's get more with our . isabel -- with our across asset reporter, isabel. they have warned against these currency fluctuations. why is that 150 level so important? >> it really is just a psychological level. around this time last year, the japanese government first intervened, the first time in 24 years. this is a level a lot of analysts are watching. this could just be a standing

the rbnz cut quite aggressively in august.nt to see how those rates play out in the economy. -- you sawre's any inflation expectations drop. the rbnz forecasted a sharp we acceleration in growth next year. we will wait and see how that plays out. they want to keep their powder dry for now. if the economy does continue to weaken, they will be back. it is hands-off, much the same way a lot of european central banks, who have slightly different problems because their rates are a negative territory, they've hit the pause button two. that has allowed this to take place. people are no longer to worried about excessive rate cuts happening in central banks. nejra: you are short core government bonds. long with a lot of em rates. the fed is on pause and not cutting as far as we know for now. did that complicate your long em trade? >> the long em trade would be easier if there wasn't an easing bias in the fed. if the fed is on pause, it relies on the improvement in global growth and continued thaw in the trade war. some of the european

how much is this when it comes to domestic inflation pressures really weighing on the rbnz. what the government does fiscally. sharon: there is consumer price inflation every year -- everywhere, but new zealand is a big food exporter. we love it when our terms of trade go up above but it does all add to the inflationary picture. the inflation is all important. the tight labor market for example, like many places, they have expectations rising sharply. it is pretty clear this is not the sort of inflation that is going to go away. shery: explain the rationale here when he is trying to get to the path of least regrets that they talked about in february. sharon: up until very recently, the biggest regret was seen as causing a rise in unemployment in the very near term. but now with inflation where it is and expectations so much higher, pricing going up, the biggest regret would be losing inflation targeting credibility. it is a bit of a 180. it is not that simple. normally we turned down growth risks and consumer confidence is on the floor, for example. they would normally argue

this is a comprehensive review of how the rbnz conducts policies. phase one will focus on the question of a dual mandate, and it will then look at committee decisions. an interesting set up where they have several layers within the bank itself. the central bank itself. look at policy. it boils down to the head of the central bank. the governor. advisors within the bank. that is narrowed down again. they want to look at how that is done. she said she wants external in thisalso on -- decision-making process. it seems like they also want to move from a system where ultimately the governor makes a decision to bring it out to a more committee-based process. whatever happens, the rbnz is set to hold it steady at one .75%, a record low. if you take a look at #btv 8468, you can get a nice, clear, picture of what is going on, because you can see the cash 1.75%. there it is at target from 1% to 3%, they want to keep it close to 2%. you can see they are right about where they should be. it is interesting that they are part of the new zealand institute for econ

what are you expecting to hear from the rbnz governor? i want to start with something tracy withers nor burlington bureau picked out as the key phrase because they did make the 50-basis point hike, they point out that while there are early signs of demand easy, it continues to outpace supply. the committee agreed monetary conditions need to tighten further. how much further, mr. orr? you say the rates will peak at 5.5%? does that mean another 50-25? what would make you slow down? the fact that they say implement remains beyond the maximum level, how much does it have to slow down? that unemployment rate is still very low. and remember, they will update their forecast, very important as well. they see in terms of the more dovish part of this, the recession starting in the second quarter of this year. although adrian orr says they expect him be a mild recession. they see the policy as contractionary no, that is another cautionary sides. these are some of the things that we want to learn more about, and we want to hear them pushed on by our

what are we hearing from the rbnz and do we know what data was put at risk?not been released, the nature of the information that might have been accessed is still being determined. there was a third party filesharing service illegally accessed, it the bank is not saying when it happened, what systems were accessed or how it took place. the government said it was a malicious attack. the rbnz does a lot of confidential information obviously, it is running a 93 billion-dollar kiwi program as well. program as well. it is working closely with domestic and international cybersecurity experts as well. this comes a few months after the new zealand stock exchange got targeted in a series of cyberattacks as well. denial of service outages on that i cash -- that occasion. who is responsible for that is still unknown. we will wait to see if we get more information on this attack. shery: what about the people who carried out the attacks? do we know anything at this point? paul: that has not been released either. there are two investigations into the denial of service outa

yield about that 5% mark yesterday for the first time since 2011 and we had the interview with the rbnz governors saying recession is the bare minimum what is needed to quell inflation. that is standing out, even though we are seeing muted moves throughout the session and investor angst and the vix as we touched the 18 mark for the first time in seven sessions but 30 is usually the level indicated with heightened volatility. vix features coming on by now. we are looking towards that range-bound start tilted towards a downside with the aussie contract and the level just below 146, but china and focused throughout the session. we have steve to talk about the moves to intervene in the chinese yuan but in terms of the moves in stocks it has been that record streak of nuts selling by foreign investors so even though we sold volatility yesterday, international investors are leaving the market now hitting that level. paul: bloomberg has learned the chinese authorities told state on banks to escalate intervention in the currency market this week and push to prevent a surge in yuan volatility as

it is not just the rbnz we are focusing on.details coming out regarding the bank of japan meeting next week, and we have a bloomberg school with sources telling us officials are likely to be wary of tweaking or scrubbing their yield control stimulus and also to keep the cap in-place at five point -- 5%. the yen has been trending lower off that, also keeping it i on the nikkei, a little bit weaker at the start of trading. we are continuing to monitor lines from other central bankers, of course when the fed's williams speaking at an event new york. he says, yes, the banking sector has stabilized, but the issue is around access households and businesses have two credit, and that can be something to focus on a very closely. what that means for the fed is we are seeing the weaker won coming through, it is at its lowest level against the greenback since late november. another story we are tracking in korea is with the kospi. off when four of 1% this morning to a bull market. we are seeing a lot of activity of day traders piling into

leadthink the rbnz will the official rate on change 0.25%.icymakers in new zealand have said they accommodated to keep rates there for at least next year. i think it is time to really reflect how the economy is starting to recover following some easing in social distancing measures, and of course, also to see how the economy is hasonding to -- the rbnz injected. if the central bank decides to do something today, i think it will be likely about fine-tuning its asset purchase program. coversow, the program $30 billion worth of government of local $30 billion government funding debt. those numbers could be made bigger today. in the meantime, of course, the fed continues to push back on the idea that they will be forced to go into negative rate territory by fall of this year. we look at the bond markets and they are still hedging against that risk. is it something of an inevitability? would it create more problems than it could potentially solve in the u.s. economy? sounds like the fomc members are not too eager about negative policy rates in the

the expectation was that would be it for the rv and see -- rbnz . keeping on hold this week as economic concerns continue to pile up new zealand. that 10-year note heading for numbers not seen since 2011. still to come, beijing condemns the u.s. for allowing stopovers by taiwan's vice president. more on that later this hour. first, here why cairo advisers say investors are putting too much faith in the recent stock rally, focusing too much on big tech earnings. we will talk market strategy next. this is bloomberg. paul: let's look at the week ahead with china sliding into deflation. we will get a day lose of data. lies industrial production, retail sales, fixed asset investment, and it jobless due tuesday. the pboc said its benchmark for a one-year lending rate with most economists expecting no change. on the inflation front watching cpi numbers from india this -- expected to show a sustained increase in food inflation and in the u.k. price pressures remain stubborn and we get inflation data from japan friday. wednesday the fed minutes will give us

the key we could face more selling pressure, even if the rbnz holds. we are down 1% for the kiwi at the moment. take a look at the bonds. look.d: let's have a they said a rate cut was necessary to support jobs and their target for cpi, which they project to rise slowly. this is what you wanted here. the new zealand dollar on the slide. you can see when that rate decision came through, a fall of 1% plus at one stage. yvonne: people say there was a lot of people pricing in this cut already. we will not see too much reaction when it comes to the bond market. when it comes to your new zealand to year yield unchanged. the 10 year yield down one basis point. it is the kiwi we are watching, the aussie kiwi also bid up. 1.1% tookhis fall of the new zealand dollar to the lowest level since november 2018. they are forecasting at the moment a chance of one further rate cut in the offing for new zealand. there we have it. yvonne: we have the rba hold, the rbnz cut. malaysia cut yesterday. we have thailand and the philippines, so plenty more to digest, but it has b

as i mentioned, the rbnz is the clear line to cut.u play the policy divergence, i would go for going long aussie kiwi because while it is marginally less hawkish, it is out hawking the rbnz. that's a very clear policy divergence in my view. haslinda: it wasn't long ago that you on played a part. it has been pretty stable. the pboc has supported it in a huge way. does it play any part it all? what are the guiding factors for asian currencies? >> as you mention, the volatility has been dampened so much. the traders get excited to go from 721 to 722. in reality, that's very little volatility. so the asian currencies are not able to take their cue from the yuan. that's why any changes from the dollar leads to an outsized reaction in the asian currencies as we have seen just today. we have seen again in the dollar. we've seen outsized reaction from the juan and the tieback even though the yuan is still historically stable. haslinda: we have to talk about the yen. 151. closed to 152 which is on the cusp of the 1990 levels that we saw. and y

it is likely the rbnz will stand pat. the china market opens and earnings season coming into full swing this week with the end of beijing's tech crackdown setting the tone. felix joins us now from hong kong for a preview. what can we expect from tech earnings in china this week? >> yes, of course, tencent is a big focus this week. last week we saw alibaba signaling a comeback, and for tencent we may see a 20% jump in advertisement businesses. for other businesses we may see a 10% jump, so the chinese tech sector, the sentiment is improving, and now we have heard that china is ramping up their crackdown and they are supporting private enterprise in order to support the company -- the economy. paul: so we have a company reporting today. what are we watching their? >> we just mentioned the chinese tech sector, but it may not be the same for the semiconductor industry. just like samsung reported the worst decline since 2009 and tsmc saying the downturn after the pandemic may be longer than expected, so from hon hai we may see

david: the assistant governor their of the rbnz.ick check of that latest business flash headlines. >> macron and united microelectronics have settled a lawsuit over intellectual properties. that will make a one-time payment of an undisclosed amount to settle all competing claims. it was -- micron says it will continue to seek full restitution in a separate civil lawsuit. amazon is trying to delay the plan takeover of india's future retail company with a fresh legal challenge. amazon alleges $1.5 billion was diverted away from future retail including to a company owned by one of its founders. it is demanding an investigation. it says the allegations are baseless. kkr and cbc are said to be considering a joint did for telecom italia. kkr is already pursuing a solo offer that has been described as too low by shareholders. now we're hearing kkr could team up to share the burden of what would be europe's biggest ever leveraged buyout. the ceo rc company board to take action on the kkr bed, offering to resign to help get across the line.

after the rbnz cut rates by 75 basis points.re likely to maintain the pressure to the downside as more countries go into coronavirus lockdown. nick, we are getting to this point in the markets where we don't really understand what each volatile move to the upside or downside means. we are trying to interpret moves into gold, for example. for an sx,u watching particular the u.s. dollar? raining --tainty is reigning. certainly the dollar, with an unprecedented cut from the fed like we saw today, you would normally expect the dollar to be a lot lower than it is. as you said, the clean shirt in the dirty basket is still relevant. we are expecting the dollar to retain is strength over the next week or so. is cut aturrency, it the moment. i think short-term, the reaction we've seen since the fed cut seems to be that the markets are not taking it particularly well. i think we probably got in the short-term, the downside for risk currencies and were probably looking at dollar-yen, and something like the a ussie-yen under pressure in the

as soon it can almost, rbnz is going to move to negative rates.this auckland outbreak somehow remind you as policymakers, remind investors that may be it is still an issue that is alive and well, an issue that is on the table for rbnz? >> i do not think the reserve banks ever forgot it. we have gone to pains to explain to people we are crowding scenarios and not projections of certainty. markets to be thinking forward. they know what we have to achieve. they know the instruments we use. i really do hope they are watching the same information. growe economy continues to and do what it is doing, today's news around the coven just puts -- the covid just puts it back into perspective. be prepared. do not run around on predictions. >> how much are you depending on the new funding for lending program to give the economy the additional stimulus it will need to keep the recovery going and maybe again there will not be a need for negative rates if it does its job. >> one would hope it is a beautiful world and the sun comes up and covid goes away. we could

what have we learned from the financial stability report from the rbnz?new zealand, some of the hottest housing markets in the world. it's great if you're selling or building a house. not so great if you are a first-time homebuyer trying to get into them. according to the report, they do see a rising risk of a housing market correction. a 30% jump in home prices over the past year. can they do much about it? the head of the rbn said it's really that the government is taking steps, it's more of a bit part but that would maybe support the financial stability report, they do see further removal of stimulus in the medium-term. they watching medium-term inflation and employment indications. they are concerned that even though they're getting past the pandemic and moving from pandemic to endemic disease, that businesses may see the pullback of support from the government as a problem. and what about consumers who spending patterns may have changed? all concerns for 30 rbnz, but the door still seems to be wide open for a rate hike at their next meeting in novemb

. , and of course what is going on at rbnz.ne of the things that we will from jay powell tomorrow, is the economic outlook. what is your assessment of the global economy? would it support growth in new zealand, or is it more to the downside. >> we have been optimistic at, i should say. growth remains strong, despite all the headlines around trade wars, but they would have to become real and very vicious, because it can affect new zealand significantly. a lot of our products are either directly consumed or going into construction, that we export particular lead to the asian region, so we would have to see incomes fall quite significantly before trade was impacted. about,is thing to think and we are well supported by the moment by a strong exchange rate and terms of trade. : what are you most concern right now in terms of new zealand's economic outlook? adrian: the biggest challenges getting wages to rise. we have been below the midpoint of the inflation target for a couple of years now. to 3% for ann 1% them, and we have been at

rba, rba and z -- rbnz. now we have some signs governor lowe is starting to price in the pivot, or a leastt hint this is where they are going. opec meeting in vienna, that will be a crucial one. we have inflation numbers out of korea, thailand, taiwan, philippines. and in the u.s. jobs report. rishaad: aussie dollar, 63, now 64. but nevertheless. always great to see you. is there anything which can possibly right now halt this, i am not going to say king dollar, but i have said it now. anyway, the strength of the dollar. >> in terms of the framework on the dollar outlook, what are fx team highlights is there are two key things they are watching. they want the fed rate hike ex petitions to peak and they want the rest of the world's growth to bottom out. on the fed rate hike expectations, as far as our forecasts are concerned it is pretty much there. but when do we see the rest of the world growth bottoming out? in terms of our team's forecast, we have that happening in the first quarter of next year. that wil

the kiwi dollar to three-week low ahead of the rbnz decision.stock movers after an five-day decline, south bancshares swinging in the wake of its profit rebound. switching out the board to check in on softbank this morning on the back of earnings we got on tuesday. shares under pressure by nearly 1% and rocky 10 falling -- raku an falling after registering first quarter loss. aftera under pressure posting a first quarter loss in line with expectations. let's check in on bloomberg in sydney. rising as much as 2.7% after the posse lender announced dividends seven-year low. magellan financial rising after the fund manager pushed full-year profit with funds under management growing by 26%. because, quickly, i just want to turn to the credit market. yield floated pickup in asia's primary dollar bond market tuesday, but the mood may shift amid warnings the rally may falter on worries may plateau. , fading tos fading the lowest order ratio since the credit route dried up. hsbc warned the asian credit rally is running just a bit too hot, so expecting sp

the rbnz has been against the move which was except -- suggested in september. the government says the rbnz overall mandate for financial stability and full employment remains the same. in italy, mount etna continues to suppress -- surpass its record of directions. it's the most vibrant this for years. it shot lava and rock more than 6000 meters into the sky. it closed a nearby airport. there are no reports from injuries -- of injuries. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. haslinda: korean stocks up right now after the bop left rates unchanged. the governor saying that today's decision was unanimous and that the economic path depends on the vaccine rollout. the csx 200 index rebalancing after three days. the hung saying up by 1.5% after plunging on wednesday, led by the hong kong exchange. oil hitting a one-year high. some forecasting $100 crude in the next year or two. the global economy recovers. copper at a nine-year high with investors betting on more gains

the rbnz is the big one for us today. basis point move, the fourth straight hike of such magnitude. the most aggressive tightening from new zealand since more than three decades ago. in terms of the reaction from stocks, we are seeing equities shrugging off these concerns, they are more focused on what we had out of the u.s.. those rated -- speaking to the strength of the consumer we are still sitting there. we are seeing indexes moving a little higher this morning. haidi: let's turn to citroen -- 61 -- see schwan's a bright a threat to their electricity supply. let's bring in bloomberg energy supporter -- reporter. we just heard the government has ordered a shutdown for toyota and others. how long can we expect this last? >> the stoppages through this weekend. it is not the longest stoppage, there is some hope that maybe bring comes. that could refill this and help the situation ease a bit. to be certain, there is nothing set in stone. there are local reports from the meteorologists in china saying the seat could last th

kathleen: he also added the rbnz is not being asked to target home prices.led this saying the central bank was responsible were ready to work with the government but clearly defending what they have done so far and what it means in terms of helping to boost growth even if you are concerned about housing affordability. as we continue to monitor economic recovery, in terms of resilience, we heard from li keqiang giving a pretty up beat view as to growth prospects for next year. kathleen: he certainly did. people have been wondering about the people's bank of china. sees theer said he economy returning to its proper range next year. i want to pull up another chart, just looking about how china had that very unusual drop down in growth and now it has shot back up to just about 5%. he says china's macro policies will remain stable, effective, and sustainable. in particular, the strategy will allow consumption to lead growth. people criticize them. they'll open up to foreigners and we will absolutely not pursue a trade surplus. response toonly a president trump. i

we are extending losses to 1% off of the back of a more hawkish than expected rbnz decision.ar also seeing a bit of weakness there as well. taking a look at how the futures session is setting up. we continue to monitor the developments between russia and ukraine. joe biden expanded on sanctions. the kremlin saying that separatists and ukraine sought help from president putin. we are seeing a pretty flat session when it comes to the trading of s&p futures as well. nasdaq worsening. u.s. 10 year yield on the 196. an upside pro -- push in growth -- crude prices as well as gold. shery: let's bring in julia wang from j.p. morgan private bank for more clarity on what's happening in the market. as we continue to see geopolitical tensions and uncertainty about where central bank's around the world are going, how do you position amid all of this volatility? julia: thanks for having me on the show. i think that one of our near-term focuses is definitely to right size risk exposures entity risk to some degree if possible. that's exactly what you said earlier. obviously, the market has b

this is as we are seeing the rbnz unleash qe.will see $17 billion upon buying for new zealand to short the economy, the kiwi dollar the longest streak of losses against the u.s. dollar since 1971. let's check in on how the kiwi 10-year yield is faring. we are seeing moves for the yield that are quite extreme. we have the 10 year off as much as 53 basis points, the biggest drop on record. i want to highlight stocks to watch in sydney as we go to the open. keeping an eye on virgin australia as the carrier has flagged more capacity cuts and the australian government whitens the shutdown. santos also in view after slashing its target by 38%. also looking at this one, as it estimates jet fuel demand reductions could be as much as 80% to 90% for the timeframe. a lot of pressure on jet fuel shortage -- jet fuel storage. >> i want to get more on what we should be watching. bloomberg's global markets editor adam haigh. what is the latest we have heard from federal reserve officials on the current state? the latest comments have been those

the rbnz governor is said to announce a new stimulus tool aimed it driving borrowing costs.s on wednesday. the program is seen as a key step toward the rbnz, cutting the official tax rate into negative territory next year. the prime minister of singapore has offered a pessimistic view of the post by race economy, saying the economy is unlikely to pick up in a vibrant way anytime soon. some sectors are showing improvement but others are expected to remain in would because suspended animation. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. shery: let's get a quick check of the markets. we are seeing a relief rally across asian equity markets with asian stocks at the highest 2018.since february the nikkei at a 29 year high. the korean kospi gaining ground. the march in for the asx 200, which is gaining ground. we continue to see strength for currency markets with the korean levels that we have not seen in months. kiwi stocks at a record high. hai

kathleen: let's recap the rbnz a little bit. they did hold their rates at a record low.not protest against the strong currency as some thought. graham wheeler is the head of the rbnz, also signaling they are not going to raise rates for a considerable period. he thinks inflation will move lower. another said bsp is also meeting. no policy change because inflation has decelerated a little bit. gdp growth looks lower. taiwan's central bank also seen on hold. they have got a stronger currency that is suppressing inflation, so no change expected. a central banks can surprise, so we will see what happens next. yvonne: kathleen hays, thank you. still ahead, waiting for their health check. take a look at how u.s. banks will do in the annual stress test. betty: trumps criticism of china's role in handling north korea hurt ties between washington and beijing. a are going to talk to professor at a university next. that is donald trump speaking at a rally in iowa. this is bloomberg. ♪ yvonne: "daybreak: asia this is live from hong kong. i'm yvonne man. betty: i'm betty liu. china h

it's not just china in focus, we also had central-bank action starting with rbnz. it cut rates 50 basis points. this was as expected. if you look at the reaction in the kiwi dollar, you might not think that was the case. one of the things important to highlight is how the rbnz's comments suggested that financial conditions are still restrictive. that suggests there could be more easing to come. this is not even accounting for the action coming from london traders yet. we also had a decision from the rbi. rates unchanged in india. this was unexpected and consensus is for a move in december towards a cut. what is inch -- interesting for the indian central bank is how it shifted a stance to neutral. this is something that suggests easing to come. there are things that support this. inflation has softened. against that backdrop from the federal reserve, and that rate cut with 50 basis points really opening the door for these em central banks. tom: avril hong and singapore. thank you, more details on the china story. lines crossing on the bloomberg terminal. details com

latestthe rbnz is the central bank to test the new dovishness. traders are betting on a rate cut later. it are markets kicking off trading in asia. let's turn to sophie. we are seeing some risk on moods already. sophie: checking in on how we we racing for this session, have the rbnz expected to hold out its policy rate. going to be getting fourth-quarter gdp growth. flipping the board to check in on the market open in tokyo, we have the nikkei 225 continuing to rebound from a one-month low. we have the nikkei 225 adding .8%. arek in on how stocks faring. stocks in seoul gaining .1% while the shares have been fluctuating in the session. we have been trading fairly flat. kiwi stocks are climbing for a sixth straight day to an october 2 high. if i can pull up very quickly, this stock gaining ground. a kyoto reportee that the company could see ¥80 billion investment from a group of chinese and taiwanese companies. we are seeing a move in sk hynix as macron string -- micron grows.h check in on sk hynix. we are seeing the stock move higher by 2.1%. dem

we have seen the kiwi be the outperformer after the hawkish rbnz statement.ing in two rate hikes this year alone. that drop in the dollar reflected across most of these currencies. the dollar china trading at 6.43. a little bit of softness when it comes to trading. the bloomberg index is seeing a limit of a pick up a broad decline. the most in about two weeks after jay powell pushing back on those expectations the central bank would taper anytime soon. lots more to come. this is bloomberg. ♪ >> the domestic demand recovery on the consumption side has not been as strong as policymakers were expecting. >> they acknowledge a slowdown. >> the downward depression the second half this year is bigger than people had thought. >> the numbers may be less than initially expected. it sets china up for a good second half. >> the weakness persists throughout the rest of the year. >> looking to the second half, we need monetary policy side to support economic growth. ? some chance again. the probability is low. darker we forecast another cut in for by 50 basis points. >> so

the rbnz staying packed as expected. they are ready for negative rates.nt and business closures. the nifty pointing to a higher open, currently up .4%. the dollar continues to rise along with real yields. the dollar index hitting a one month high. dollar trade is beginning to price in risk. we have the yuan heading for the best quarter since 2009. currently lower by .2%. we have the pboc fixing rates lower for a second day. headlinesust a few coming through. one is from huawei. it's the deputy chairman. seem huawei is still willing to buy from u.s. suppliers paid we need chips for it a lot of the networking equipment. fujifilm will be applying for radio tory approval as early as october -- regulatory approval as early as october. trialsactually suspended on this particular medication, if you will. beganed its delay and clinical tests as of yesterday. move to commodities and have a look at iron ore futures on the way down. supplies weigh rising against the recovery taking place in china. concerns over demand are being compounded by the prospect of rising a

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

thee stocks weaker ahead of rbnz decision tomorrow, with a rate cut bait 10.ed in.e data -- it's not that the klein we saw in the previous two months, coming in stronger than expected, but ppi suggesting deflationary effects are continuing to way, flat in july. let's look at movers we have been washing in the session. we are looking at australian banks, results coming through, a positive report, australia's largest lender, a record seventh year of higher earnings. that hasn't an interest investors. elsewhere, anz extending on its rally from yesterday, nab getting some of that shine as well. these are some of the movers. cutting its full-year net income forecast, citing stronger yen and concerned that the flow of terrorist from china coming into japan and appetite for its beauty products could be waning, down 10%, the biggest decline since 2008. 2%,nald's, down about reporting better than expected , profit upsults after seven consecutive quarters of losses due to pokemon go. that stock is in a correction mode after surging 25% when it announced that collaborati

it has been at the forefront of tightening measures from the rbnz.e some of the crux to the economic performance. >> a bit of a mixed sure right now. kiwi stocks now gaining three tens of 1% after the rbnz rate hike. that's why we are seeing the pressure on the kiwi dollar right now. we have had such a series of rate hikes recently that it seems 50 basis points is it cutting it anymore. the unemployment rate fell again to the lowest level in 50 years. the huge jump in new positions. when it comes to nikkei futures gaining a little bit, we have weakness of the japanese yen. if you don't go along with all of this huge tightening we are seeing around the world then you're going to get punished. that's what we're are saying with the japanese yen. we continue to see support for equity markets in japan. not a lot of change when it comes to u.s. futures at the moment. perhaps some upside given that we did fall in the new york session. we pared back some of those losses that at one point exceeded 2% because we got fed officials commenting that 100 basis poin

having to do with what we get before the rbnz meets before next week. that recessionary risk being played out in that we have seen the yield curve inversion across new zealand sovereign bonds. the three year rising seven basis points. more to come here on daybreak. this is bloomberg. ♪ >> johnson & johnson will change the way it produces baby powder making all of its products based on cornstarch. this comes amid legal action against its baby powder with some consumers claiming it makes them sick. mitsubishi has established its own direct lending business that makes it the latest bank to try to take a share of the lucrative private credit market. the unit formalizes an existing operation that has offered loans since 2019. it has created more than 50 direct lending deals in the u.s.. >> we've been talking all things cba this week after earnings released but they are really now the world's least loved mega bank after they lost their last remaining bulls. it's interesting because now we see jeffries on the bullish side standing downgrading it to hold after

paul allen in sydney looking at the rbnz decision.e other stories, you are covering full-year results. australia'sk at biggest telecom company, 36 percent rise in profits, 4.46 billion dollars. that was helped by sales of shares a few months ago. it plans a $1.2 billion share buyback and to invest $2.2 billion on networks over the next three years. for 2017, targeting mid to high single digit income growth. let's take a look at how shares are doing now. down almost 1%. meanwhile, singapore, it's dominant telecom company said net profit was $704 million compared with $703 million a year ago. the company said growth was driven by mobile data and cyber security services. singtel affirms the outlook and said sales of services to corporate customers are set to rise by low teens. results arele expected in a few hours. median estimates indicate net income at $5.3 billion, revenue at $26.2 billion. china mobile with china telecom has seen growth and subscribers, beating out rivals in the reason. -- the region. website, apple is planning its f

i want to see what is going on with the kiwi dollar, swinging after the rbnz showed they held on thehike. the yen, that is sticking to a tight range, around 114, near a march low. a japanese stocks towering above the 23,000 level. the nikkei 225 -- we did get machine orders less than expected falling by 8% month-to-month, compared to the 2% drop penciled in. it is getting into negative territory in the fourth quarter. we do have most segments in the green for the nikkei 225 utilities, leading the gains, along with i.t. tech stocks. the board member telling business leaders the high level verypanese stocks are welcome and he does not see them looking overheated. he said there is a need to change the boj's etf purchases, it could lead to the rally. some stocks we are watching around the earnings story, toshiba set to report results this afternoon. in tech climbing after boosting its profit. profit --energy project will happen in march. olympus missing second-quarter estimates. japan displace lighting, admitting the results and its ability to continue is a growing concern. nissan cut it

it doesn't expect the rbnz to approve that.mp also saying an interim dividend will not be paid for the first half. amp was one of the institutions that came under most racism during the royal commission conduct in the finance and banking industry. amp saying its sale of amp unlikely to proceed. see what happens with share price when it begins trading. in's begin -- let's check with first word news. su: a new survey says the threat of recession in the uk's at the highest in more than a decade. -- in the u.k. is more at a decade -- more than a decade. a chance of dramatic slump greater now than since before the financial crisis. also there is weakening sterling, current account deficit and poor economic growth . the u.k. banking industry is seeing more job losses. societe generale has started cutting in london with sources saying 30 people have been dropped in commodities. the is to restructure investment arm to preserve its leading status in equity derivatives. the bank announced lands to cut cut positions -- plans to 1600 posit

along with the rbnz, we get the sense that the bulk of the heavy lifting of these big moves might be they have to keep up with the likes of the fed. >> that's right. the rba does want to go slow and i don't think anybody is doubting that intention. the question is whether they can really go slow in a world where the fed is going so fast. also the australian dollar is weakening with the u.s. dollar so high. if you go slow, you risk collapsing your currency. it's going to be a very tricky meeting and also a tricky communication challenge. >> the official monthly indicator slowing down a little bit this week, what does that tell us about where the rba stands as opposed to the rest of the world which seems to be remaining quite hawkish? >> even from the start of australian inflation, compared to u.s. and u.k. has not been that high. we have not had the wage breakout elsewhere in the world. i think the biggest concern that the bank has is the household debt. australian households are some of the most indebted in the world. with interest rates going up, their repayments are going up and ho

rbnz greek prime minister alexis tsipras winning a fourth vote of confidence. backing of lawmakers in a vote triggered by his landmark accord with the neighbor to the north. the government's coalition partner had pulled out in to allowin agreement the country to call itself the republic of northern macedonia. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin. this is bloomberg. come, one ofl to apple's biggest advisors to report earnings and what to expect from the taiwan semiconductor. yvonne: the pboc has been quietly trying to ease lending rates without cutting official rates. how big cash injections will help. this is bloomberg. ♪ this is bloomberg. ♪ ,ishaad: talk about the pboc could quietly make borrowing costs lower while changing official interest rates. billion input $83 cash and to the market. yvonne: providing cheaper funding of banks to allow them to lend to companies that lower rates. let's bring in mayank mishra. he joins us from singapore

. —— rbnz.ent going on in the social pa rt of investment going on in the social part of the economy. that was tony joining us earlierfrom sydney. the markets. the dow jones joining us earlierfrom sydney. the markets. the dowjones industrial average street of seven straight records ended overnight, falling by 52 point. —— streak. the nasdaq also losing ground. analysts cite the us central bank tightening monetary policy for that. i am rico hizon. sport today is coming up next. the top stories this hour: president trump steps up the pressure on north korea, with more sanctions against companies who trade with pyongyang. emergency workers at a primary school in mexico city have called off their search for children thought to have been trapped. officials said they were still trying to free one adult from the rubble. the boss of ryanair, michael 0'leary, has admitted that a "significant management failure" has caused the cancellation of 2000 flights in september and october. he told the airline's ann