the rbnz is.here , down tobig surprise 0.25%. that is the white line. how the two-year note yield is seeming to anticipate or open the door to those negative rates. and finance minister grant robinson, a great interview we had right here on bloomberg television, saying the rbnz at gdp reboundr the which he is looking for. he said that people thought maybe they will not sound so easy at this meeting. he said nevertheless they will consider that in a negative rate decision in 2021. if things pick up, does that mean they will not go ahead to negative rates? for now, they are really sitting back. number one you have the october 17 election just around the corner. maybe do not want to make any big moves at of that. that is what central banks are often seen doing. and this is an interim policy meeting. it is a november meeting where they have the opportunity to really lay out what they are going to do, how seriously negative rates are being considered. surprised a lot of people around the world by being ready, willing, maybe not able yet to embrace just that.

they deliver a new form of guidance from the rbnz.ng rates may well rise in 2022 in the second half. that is something they are not calling her with guidance that they are resetting the agenda. bank of canada, bank of england. the dollar is at a year to date low. they are resetting a quiet short dollar position. government bonds taking the tapering discussion very much in stride. let's turn our attention to geopolitics. antony blinken reiterated washington's commitment to israel's right to self-defense. in talks with benjamin netanyahu in jerusalem. lincoln pledged u.s. funds for reconstruction efforts in gaza. >> the united states will work to rally international support around that effort while also making our own significant contributions including some i will announce later today. we will work with our partners, closely with all to ensure that hamas does not benefit from the reconstruction assistance. at the same time, we need to work to expand opportunity for palestinians in gaza and the west bank including by strengthening the p

prices have gone up quite a bit and they are looking to renegotiate that, looking to renegotiate the rbnzpen question as to what this government wa nts. question as to what this government wants. it's early days. flatpack or modular homes have traditionally been used to build low—cost housing but one filipino entrepreneur is using that prefab technology to contract —— construct luxury homes. the company behind this is the first start—up to have a billion—dollar valuation as we see in this week episode of by design. how do you create a massively different shade of company that will transform the way home building is being done? i thought to myself, imagine serving a group of people who would now live in aid designer home for $100,000 us. such a formidable concept. white spent clothes with an amazing design when you can't do that same thing with the most important purchase of your life, a home? this is a 1— bedroom, and we can build it to dream, 3—bedroom, three bedroom with parking versions. it shows the concept of modularity and flexibility which is extremely valuable to many. those who t

there was no change when it came to the cash rate on the rbnz, but the comments on the kiwi dollar'sion put pressure on the currency. >> it appears there could be more easing coming down the pipe. came inexport numbers line with expectations. new zealand posting a relatively healthy trade surplus for the month of may, $1.25 billion but the rba expressing concern for the impact the currency may have on exports, signaling policy tools are under active discussion. those remarks appeared to have the desired effect. the kiwi dollar, easing a little, about 64.1 at the moment. in terms of those extra measures, the cash rate wedged at an historic low, it could ramp up when august rolls around and that would be especially considering there is more issuance coming from the government area there could be more pain coming down the pipe. the first quarter gdp numbers were worse than expected at 1.6 percent contraction, but the second quarter will make that look like a picnic. the second quarter covers the period of harshest lockdown in new zealand. shery: new zealand has done well when it comes t

we go to wellington for an rbnz conference. mary, thanks for joining us. will the fomc cut next month you -- next month? figures too early to that out but a meeting is in three or four weeks and i am actively considering all possibilities, thinking about the global economy, the domestic economy and numbers on inflation for the u.s. >> what is there in the data you see right now that would warrant an interest rate cut especially the domestic data you are receiving? >> right now, we see a domestic economy that is really solid. we have strong consumer spending, consumer confidence .umbers came out good, healthy the weakness we are seeing is in business investment. it is weighed down by global slowdown and the considerable uncertainty we face for many reasons. i'm looking carefully at this disinvestment, talking to business contact us, finding out their plans going forward and seeing if the economy needs additional stimulus to achieve our dual mandate goal, full employment and price stability. >> that is something which we have at the moment. ofare seeing litt

you have the stimulus narrative and the magical words from the rbnz, now looking at a broader range ofonetary tools. we are not done on that front. nejra: on that policy front, it was interesting that manny roman saw u.s. inflation will state for a long time before the fed raises rates. we are not getting a lot of impetus or direction today in terms of asian equities. perhaps a touch of risk appetite, but nothing to write home about. u.s. futures on the front foot after we saw gains in the u.s. session yesterday. european futures in the red. seeing a little bit of divergence in terms of the futures. third day of dollar weakness which perhaps speak to some sort of cautious risk on coming through cross assets. the 10 year yield not doing a lot. oil on the back foot after some signals of increasing stockpiles again. manus: let's dig deeper into it. the coronavirus search across is puttingstates the reopening narrative and plans in doubt. new cases have soared in places like texas, arizona, california. they all broke its record, california broke its record for new cases for the fourth time

kathleen: another thing i asked minister robertson about was the possibility of raising taxes and the rbnzing that is the way to go. he said they will minimize borrowing and everything before raising taxes. he mentioned this coming soon, may 18, when the budget is coming out, and they have taken a look at their spending and taken some things out of the budget already like a social spending program, so they are starting to make room for this cause without having to increase borrowing or raise taxes. the other biggest challenge for the year or the biggest risk to the outlook is global economic uncertainty, and that is a major factor in theme from many countries and certainly at these imf world bank readings here in washington. haidi: kathleen hays there. well, the strongest cyclone to hit western australia has made landfall, impacting operations in the key commodity producing region let's get the latest in melbourne, australia. we have been talking about the cost of reconstruction and recovery. what is the latest when it comes to it? >> overnight, finally it did cross the coast of western au

the kiwi dollar has given up the gains we saw yesterday, sparked by the rbnz's projections so the kiwi dollar back below 73. a head china's industrial profits due this thursday, the offshore yuan holding below 639, with activity showing traders are looking for a move below 635 potentially. shery: we are watching the trade front on negotiations could happen very soon with u.s. trade representative katherine tai expected to hold her first discussions with counterparts in beijing as early as tonight. the importance of tariff rollbacks as part of the next steps in trade talks. for more, let's bring in tom mackenzie in beijing. what is the u.s. hoping to achieve with these talks? tom: katherine tai has said previously that she wants to have policy continuity. she wants to build on this trade deal that was negotiated by the trump administration. she wants to use that as the platform to encourage more trade deals in china while acknowledging structural changes will continue to be challenging. she wants to check in on commitments that china has made around this deal and see that it is living u

goes more likely the rbnz and if the rba goes, the rbnz well. shery: thank you for that. there will be policy decisions from southeast asian central banks. let's go to sophie. any rate cut contenders this week? sophie: central banks will try to decide on policy this week, malaysia and the philippines could be candidates for rate cuts given the policy room in light of the fed's stance. they could hold with thailand which is staying unchanged in the first half, even as the boj governors- the bot said -- did take ahe bot cautious take. they had the slowest expansion for the economy in three years, cutting the forecast to 3.8% as well as lowering inflation. trimmed its forecast for gdp growth forecast in march lower than the government's rejection of 4.9% for the year. 25 basis point cut from malaysia which would reverse last year's hike when it comes to back -- comes to inflation's, they are below growth, forcing a case and also a rate cut at this week's decision or later in the year. there is upside risk with lebron trend higher with oil prices even with the drop in wti. th

the rbnz delivering its biggest interest rate increase in 22 years with that massive move to 1.5%.ve seen the kiwi dollar pairing those gains that we saw her earlier. the aussie trading the highest since 2020 against the kiwi. that's been driven by expectations that are being reined in and the market as to how much further and quicker's rbnz can move from here. shery: we will be watching those moves. let's turn to the geopolitical tensions still ongoing. the u.s. set to expand the size and scope of weapons it's providing to ukraine in a new $800 million package of military assistance. let's get the details from jodi schneider. what is the significance of this renewed aid? jody: it's a big package. new firepower for ukraine from the u.s.. president biden announced it today after talking to the ukrainian president on an hour long phone call. he basically outlined it. it includes new helicopters, ammunition, artillery, and other military hardware. it's a more intense military package than the mostly defensive kinds of weaponry that the u.s. had set ukraine before. it pushes the limits

one of the reasons why, the rbnz momentum to raise rates.ave to see where the economies on the other side of this delta outbreak that new zealand is seeing. it is still in lockdown. it is number -- an important part of new zealand's economy. that lockdown continuing. it's going to continue to cs reverse course on gdp in the third quarter. in my view, is likely the rbnz holds fire again in october. we have to see how the virus fares. shery: james mcintyre there. let's turn to north korea there. it conducted its second major missile tests in less than a week. pyongyang is pressing ahead with its armed buildup. the biden administration's diplomacy stalls. the leading presidential candidate told bloomberg exclusively that he thinks the u.s. approach is naive. >> [speaking non-english language] >> wins dies -- wednesdays missile launches nothing new. what is important to me is the fact that north korea has reached the completion stage of its submarine launched program. this means the collapse of the u.s. nuclear defense network. the u.s. is prepa

analysts are split on whether the rbnz will move ahead with another rate cut. dry coming through from these apple suppliers. take a look at the weakness across the japanese and korean suppliers, and that is the case. one and 2/10 of 1%, unmanufactured of this green that is taking the biggest pressure from this foxconn shargh sharp tie up which is expected to deal more market aare away from lg display, as result, sharp up a tens of 1%, that acquisition by foxconn giving it a bargaining strength and able to snare more orders as they become available. japan down by half of 1%. foxconn down 6/10 of 1%. down by over 2%. there is a sense that they are affected by apples disappointing earnings overnight. motors,ckly, kia earnings beating estimates, but still downside, three tens of 1%. ofk of china down three tens 1% buy a small bead on the net but on the downside net interest margins fell, nonperforming loans continue to rise. let's stay with apple and see what the reaction has been on social media to its earnings. what are people saying? they wereey said expecting t

adrian for not going to let virus outbreaks stop the rbnz from hiking rates as soon as october. kathleen, what is the governor's reasoning? kathleen: his reasoning is that a central bank has to learn to deal with the virus, deal with outbreaks. he says the economy is still surging ahead. there's key concerns that inflation expectations could get out of control, and he said yes, very definitely, the door is open to a rate hike in october. >> we have to focus very much on our purpose, which is, of course, the inflation and employment mandate that we had, and absolutely, this week was not the best of timing to be looking to reduce interest rates -- reduce monetary stimulus, i should say, given the health situation, but we can observe what is going on, and the underlying economics remains the same. we have severe capacity constraints. we have supply disruption creating the costs. we have above maximum sustainable employment, so the underlying situation remains the same, but we thought best let's just observe over the next few days at low cost to us. kathleen: you brought up an inter

the rbnz the latest to urge caution. >> it looks remarkably like a bubble forming to me.een them in the past, and this appears to be a classic case. far with a bubble, you never know how far it will go before it comes down. french president macron says donald trump's decision to recognize jerusalem as israel's capital is a danger to peace. he hostedts came as benjamin netanyahu in paris. as protests continue against the decision across the region, the u.s. ambassador to the united nations said it was up to israel and palestinians. president trump preparing a closing argument for tax cuts wednesday. he will speak in washington as they try to iron out differences in the two plans. the president tweeted the following. theresa may will hold a meeting with her later the for addressing the house of commons to spell out the details of her brexit deal. some of the promises made to clinch it are starting to fray. brexit secretary david davis told the bbc that britain ain't tainting regulatory alignment the eu does not mean it can set different rules. he raised the question about h

the rbnz at decision is later this week.ed to raise rates by 25 basis points, as commodity prices rise, adding further to inflationary risks as well as elevated energy prices. just really expected to cement the rbnz's conviction that further tightening is needed to prevent market pressure from morphing into a wage price spiral. also likely to see signaling of more rapid tightening. this is what we are seeing what it comes to the australian three and 10 year. the aussie dollar opening .2% softer after the may 21 election was called. shery: the 10 year yield in australian topping 3% for the first time since july, 2015. quite something when it comes to that jill -- that global bond rout. china defending its covid zero strategy as america asks americans to avoid traveling to china after what washington because the arbitrary enforcement of rules. let's bring in stephen engle. what is the latest on the shanghai lockdown? stephen: despite the fact that of course they have been in lockdown now since march 28, we're seeing a record n

. >> bank of korea like the rbnz have led, this would be their third hold if they do. love this chart because you can see how they took those rates right up and several steps . two meetings ago, they said we aren't sure maybe were going to hold and the decision today is expected to be unanimous. two things we have to watch closely. they think growth is going to slope. bubble demand is getting weaker. they are an export driven economy. and inflation is looking better part of the headline inflation is down 3.7%. we will probably get the same kind of messaging from them that we got from another to four hours ago. they've done hikes and another what to sit back and watch her come down. i think the surprise would be them looking at a cut but they probably won't because they are a target yet for inflation. everyone will be waiting to see. definitely making progress on the headline, but a ways to go. haidi: let's get a set up of the thursday markets. annabelle: this chart doesn't show. this is as we unacceptably -- unexpectedly saw the rbnz signal that it was at the end of it

short of a rate cut by talking about more stimulus in terms of etf purchases and a rate cut from the rbnz. attention turns to the g7 call later today. can european and global leaders do what central banks have not been able to do for markets? the move in s&p futures has been stunning as well. yousef: absolutely. you have to wonder why the fed could not wait 65 hours until their regular meeting and that is getting factored in. it is spooking some portions of the market and that is the feedback we have been getting on the program over the last couple of hours or so. s&p emitting futures -- many features showing that -- mini- futures showing that clearly. buy at thatd to level. looking at what is happening with the story around brent crude, down 4.2%. the losses have accelerated. even though on the fiscal and monetary side, you mentioned the boj, more is getting thrown at this. the reaction is negative. australian stocks is another example of that acceleration in any risk appetite or a version of risk appetite we are seeing across the board. the biggest movie nazi stocks since 1992. our top

we saw the rbnz on hold at record low levels, showing the discrepancy between the u.s. zealand. anchored,remains still no prospects in terms of market pricing. the rate rise potentially next year. that still holds its way. clearly, the tariffs on steel and aluminum have an impact. we know there has been a carveout on exception when it comes to australia. as long as china continues to remain robust in data, does not decelerate to sharply in terms of growth, it is almost a goldilocks scenario with those periphery countries. haidi: with the jay powell pushing up the hawkishness into 2019, when are we going to 3% for the u.s. 10 year, and what happens when we do? andre: i am sure you are familiar with our hsbc call. our minds, if it does occur, it will be temporary in nature. last night,the fomc it was not a surprise when it comes to the fed hike. to me, the one thing that stood out was the 2020 projections. %, to be exact. that is well above the long-term projections they had for 2.8% or 2.9%. i think that is less likely. they do break through percent, will be very tempora

has been and that painful unwinding now with more dovish than expected sentiment coming from the rbnzth the hold, they were looking traders that is in that positioning for vigilance from the governor and it was a softer take than expected and compounds concerns about how much the economy has slowed. looking at treasuries, processing some nuanced comments from chair powell, the first day of testimony to congress flagging rising risk of the jobs market and that was the key element, the shift when it comes to messaging on the labor market and the rate cuts still being held for the rest of the year. that is it for us. middle east and africa is next. ♪ (♪♪) (♪♪) (♪♪) (♪♪) sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals. >> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees.

together central bank we are watching is the rbnz, and the anz bank prediction is for rate hikes to resume in february as well as in april, so the key read is jumping today. tom: thank you very much. treasury secretary janet yellen says u.s. regulators are monitoring risks facing nonbank mortgage lenders. she spoke at a senate banking committee hearing. >> if sock -- ipsoc is focusing on that because nonmortgage companies like deposits which banks have. there is concern in stressful market conditions we could see the failure of one of these. tom: let's bring in paul dobson for asian markets. what is your take and what we have been hearing from janet yellen? what it spells about the depths of concerns in washington d.c.? >> this is a long-term risk, not an immediate risk, and if you look at the context in which the question was asked it was about how you were getting to grips with this are monitoring it, not is this something that is about to blow up in our face. interest rates have been at these levels for a sustained period of time, and there have not been any particular stresses faced by

rbnz releasing details of the unwinding of kiwi bond purchases.es start in july at a rate of five billion kiwi dollars per fiscal year and continue until on holdings reaches zero in mid-2027. we're seeing the 10 years -- 10-year new zealand higher. also watching comments from the treasury secretary saying it could go well above 6% and could stay there. woodside energy also tripping surging oil and gas prices to years of insufficient investment in the energy industry. the ceo said she expects prices to remain high but long-term investment will help the price outlook. shery: looking at the commodities space, we're seeing wti continuing its gain, up .2% above the $122 a barrel. it is a relentless rise, and this really fueling inflation concerns. data here in the u.s. showing the inventories have dropped again. we continue to see u.s. natural gas under pressure, this of course after that fire broke out at that texas export terminal. the fire is said to be under control at the moment. one of seven to export u.s. natural gas via sea. we're seeing gasoli

we also wanted to focus on what we see in the rbnz. we are still seeing quite steep declines on the kiwi dollar, and this is coming after some comments from the rbnz suggesting it sees financial conditions currently still restrictive, and this suggests it could see more easing to come in the days ahead. we are also seeing bonds in new zealand climbing. let's flip the board because yesterday was a really wild one for chinese stocks. just to give you a sense of how extreme it was in terms of turnover on the mainland as well as in hong kong, we saw it at a record ever biggest trading frenzy. we are hearing about people rushing to open new accounts. that is the state of play at the moment. haslinda: trepidation, frenzy, you name it. let's get to the global strategist at j.p. morgan asset management to discuss more on the markets. good to have you with us. lots of questioning about whether that sell we are seeing in china is consolidation or capitulation. >> thanks for having me. firstly, let's go back and think about the chinese equity ral

rbnz governor signaling the central bank might not be pivoting the rate cuts anytime soon. policymakers need to ensure that inflation expectations are contained while all measures of price pressures have declined, headline inflation still at four-port 7%. -- 4.7%. the rbnz has warned more hikes cannot be ruled out and cuts will not be entertained until 2025. more ahead on "daybreak: asia." this is bloomberg. ♪ that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. hey, brent! if you had to choose, would you watch paint dry or compare benefits plans? compare benefits. gusto makes it easier to find the right plan for my team. i think i'm going to need new glasses. no problem. you're covered. choose benefits without the mess. haidi: let's check in on the nikkei as we are so close to the historic 1989 peak. we are with and a whisker as we see japanese stocks continuing to rise in another strong session when it comes to tra

time for morning calls ahead of the rbnz meeting. divided over monetary policy because of the ongoing law down and heightened economic uncertainty. as you can see, markets have pared back their aggressive pricing for rate hikes this year. in westpac, they expect a more positive it sure should emerge by december given the economy has been on solid footing and activities should jump once again when covid curbs are back. westpac does see the kiwi dollar and 75 by the end of this year. him into commodities, rbc capital has upgraded their base case outlook for u.s. natural gas prices. about six dollars in the coming quarters with the market on edge amid this ongoing obvious tightness in the market, underpinned by clear risk going into this enter. rbc with options to capture upside risks. shery. shery: holding at that 57 three level but near the seven-year high. if you morgan making the call. gas is so expensive in some places that switching to oil-based fuels could add more than 900,000 barrels to daily demand. of course, we have seen bre

tolly positioning the rbnz looking at more tools and steps if needed in the future.o meeting today, the bank of thailand. also expected to hold its key rate study. that is even in the face of weak growth. why is that? kathleen: we've got two central banks meeting from countries that have done pretty well containing the virus. they are expected to keep their study.es they have cut their key rate three times this year from 1.25% down to 0.5%. remember, this is the country of 69 million people. 3200to date, reported virus cases. they have done a good job. even so, the rest of asia has been hit by the virus. what does that mean? they are not going to tourist destinations. tourism is down 12%. trade is suffering as well. the latest number on exports, up 2%. they have a weight on their economy. that is up 5%. still rising. the second-best performer in asia. traders are wondering, will the bank of thailand make a comment about being overvalued? getting us ready for rate cuts in the future. you can see the rate cuts they have made there. seen.emains to be . another thing the

the kiwi higher as the rbnz held as expected. current level for the foreseeable future. in india surging food prices are pushing up india's cpi. we are reaffirming expectation of a hawkish hold from the singapore bank. temasek warning of an uncertain road ahead after its worst returns in seven years. we hear from haslinda's conversation with the cio. haslinda: today asian stocks up for a second day as we await crucial cpi data out of the u.s. expectations that cpi will ease, and that is propping optimism, seeing rice's the last two days. taking a look at benchmarks in asia, almost all sectors are in the positive. tech, in particular alibaba among the biggest gainers. the nikkei to 25 8%, it is about the strong yen story. passing 140 which is a crucial level. expectations that boj may remove ycc when it meets at the end of the month. the 28th of july. let's wait and see if that really happens. in terms of other fx currencies in asia we're seeing gains. he talked about the dollar at a two-month low. the peso is up, as well as the t

the rbnz had to take its big steps, given a knowledge by the government, to take account more of housings an issue in australia as well. a lot of people cannot buy homes very easily. paul: this is a challenge of having low interest rates. the rba's approach at least in my view is we need house prices to be rising in order to generate enough momentum in the economy to get inflation to lift back to target. keep in mind, in australia, inflation has been below that for five years and it is well below where it needs to be still, so i think the rba has accepted actually that this is just one of the mechanisms it needs to be working to lifting inflation back to target. over -- it's different. the housing market is even stronger in new zealand, talking about 20% year on your house rise growth and yet as you say, the authorities actually want the rbnz to be more focused on having sustainability. they now have a new set of tools. we think that they will take more action. kathleen: thank you so much. hsbc chief economist for australia, new zealand, and global commodities, paul. time for global call

looking at a snapshot of rbnz policy divergence.ou have the aussie dollar topping the best winning streak since 1991 against the kiwi. negative rates in new zealand. expecting the rbnz will cut the cash rate to -50 basis rates in april. switching out the chart, made way on japanese stocks with the currency trading around a one-week high. recovery prospects remain uncertain following the gdp slump. the nikkei could be on a path to losses, during the broad rebound we have seen in asia. changing of the chart, it is not being felt, which are on track for the worst year since 2013 as the region misses out on the tech rallies that continue in wall street. southeast asia's old economy firm makes up the heaviest waiting which will longer will be the case in hong kong, adding alibaba and shalxiaomi. more on the get markets with aaron gibbs. we keep touching those record highs without really being able to surpass it when it comes to the s&p 500. when you look at the rally we are seeing in the u.s. stock market, what do you think about andbrea

here was a look at jay powell's comments to congress, and also the rbnz releasing commentary. kathleen: there's no doubt jay powell made his message perfectly clear. he has been singing the same dovish tune for a while. recent speeches at the end of the fed's last policy meeting, maybe there's inflation concerns in the market, maybe bond yields -- no doubt about it, they have risen a lot since the fed's past meeting. jay powell says nothing is going to change. >> the economy is a long way from our employment and inflation goals, and it's likely to take some time for substantial progress to be achieved. the economic recovery remains uneven and far from complete. kathleen: that was his prepared testimony. that contains the fed's new mantra -- it's going to be some time before substantial further progress on its goal is enough, in other words, getting to inflation at 2% and higher and seeing it stick there, seeing unemployment falling toward the full appointment level, jay powell says 4.3% or below is where he starts seeing that. he also is more optimistic about vaccines rolling

turning to new zealand, the latest rbnz preview. chief economist saying economy has moved quickly from resilience to frothiness given the data we have seen in inflation and jobs. she expects a 25 basis point rate hike next week. she is not ruling out 50 basis points. she does expect the rbnz will stick to a measured approach. haidi: we are taking a look at the luxury sector. a french luxury brand is taking another step in reducing its carbon footprint by revamping a signature tag in recycled material. >> we were doing sustainability before we knew the word existed. we are manufacturers. the fact that we are in contact with products, with the making of the products gives our company a very different character as opposed to many other fashion brands who do not manufacture anything. it comes naturally to us we need to protect the environment that provides the resources we use. we are taking a little bit more of a formal approach. we are developing a project that is pushing the envelope even further. like our project we are just launchi

there was one covid case and that was enough because it meant that the rbnz delayed a rate hike because the entire country went into law down. more broadly across asia, asia has been very exposed to the delta variant. the other thing that asia is exposed to is china and china equities and we had the daily crackdown headline about fresh limit on what internet companies in china can do, fresh regulations, and that is a class drumbeat. the victory china tech giants have lost about $1 trillion in market cap since the soft ongoing so that is a constant burden for the market. there is also plenty of disquiet about china evergrande, the big property developer, which is struggling to remain solvent. everywhere you look in asia, you always be china in such a big part of the picture and it is a very gloomy part of the picture right now. dani: certainly. i'm just looking at alibaba share prices which fell to record lows, falling to another record low, down an additional 3%. thank you for staying on top of that for us. that is goff of reynolds from our mliv team let's get into more of the market ac

we saw the biggest rate hike in about 22 years from the rbnz.we have had more hawkish and aggressive language from governor adrian or about the pace of monetary tightening, and they expect to keep raising rates in the coming quarters to contain inflation expectations. 1.8% quarter on quarter, slightly lower than expectations of 2% but faster than the 1.4% that was the previous quarter. the year-on-year number, 6.5% is the inflation rating for cpi. missing expectations a little. we were looking at expectations of 7.1%, but picking up the pace from the 5.9%. as such, inflation rate at 6.9%, the fastest in 32 years for new zealand. shery: a little more on the fallout from bill akron's call on netflix. they have lost more than $343 million under three-month bet. we have learned pershing square holdings sold their netflix investment today. they purchased more than 3 million shares just in january, but we are now learning to have lost more than $430 million on that three-month netflix bet. their loss on investment cut was year-to-date returns by four

the rbnz a few weeks back balked at hiking rates at a meeting that was fully priced, more than fullyriced, 27 to 28 basis points for that meeting, and they brought after the delta variant emerged in new zealand. they clarified it was merely a concern around communication. central bankers are struggling with the notion that they should be setting policy for the economy one years or two years hence but, obviously, proximate conditions factor into their thinking quite significantly. when the two are in opposition to one another, that gives them a bit of a headache. i do not see this as being super significant for the australian economy at all. i don't think it is significant for financial markets, the change that they just made. tom: goldman joining others, downgrading the growth outlook for the u.s. 5.7% from 6%. is there consensus on the u.s. outlook still overly bullish? james: yes, it is. it's incredibly complicated. of course, we have been through this unprecedented problem with unprecedented policy actions and an unprecedented degree of global coordination because the pandemic law

that the economic weakness could force the rbnz to rethink where its peak rate ends up. haidi: we are focused on the disruptions from political tensions paid would a we get it has been when it comes to geopolitics and diplomatic tensions. we had the highly debated meeting between antony blinken and china's top diplomat. it was an unusual readout i thought from that meeting from the u.s. side. quite forceful language and in line with what we heard from president i than last week saying he would make no apologies but seeking competition, not conflict. we heard antony blinken winning against one we against providing with weights about his invasion of ukraine as we get to the one-year mark of the conflict rebuking him over the alleged by a balloon incident that set off these heightened tensions between the u.s. and china saying the u.s. had information china was considering whether or not to give russia assistance. at the same time we see these developments over north korea as well. shery: really not going to help with geopolitical tensions when it comes to the intercontinen

will the rbnz be hawkish or will they hold and move in november? i want to show you what is happening in the property sector because it is still a lot of stress. we are hearing from another developer not able to pay about 200 million dell or -- $200 million. this is weighing on china. junk bonds falling about 2% -- two cents, the worst drop since 2013. let's have a look at how this is playing through into the hang seng index. ever grand -- evergrande suspended as is fantasia, but there is a ripple effect and other players falling substantially in the hong kong session and dragging on the index, leading to further downgrades off of economic delays. the evergrande saga will weigh on china's gdp. the conditions are ripe for a rrr cuts. dani: thank you. facebook suffering a devastating outage that shut out many of its 2.7 billion global users. instagram and whatsapp also affected. we are joined by our editor from our asia tech team. what has facebook said in regards to what caused the outage? peter: facebook put up a post a couple of hours ago explaini

why so much uncertainty this time around about which way the rbnz will go?eas you majority of economists do expected cut today but the markets seem to be pricing a much lower probability of that now. i think there are broadly two schools of thought. one is having adopted an exquisite easing bias in march, the governor will get on with the job and cut rates. data recently on the domestic side has been weaker than expected. in a sense, he has been delivered the conditions he's needs -- he needs to go ahead and cut. on the other hand, the economy is in pretty good shape. growth has slowed but still above 2%. some people are saying there is no real urgency. the central bank can afford to sit on its hands and see how things pan out. that is exactly what we saw the reserve bank of australia do yesterday. shery: you spoke to the governor himself last month. what were the biggest takeaways from that conversation? think it was, i for everyone really. governor orr certainly confirmed a rate cut may be a possibility. we know we are dealing with a live decision today. a

on thursday, rbnz.re is an outside chance we will be getting a move from the rbnz given inflation expectations are week. bank of the philippines and the central bank of indonesia meeting as well. inflation is nowhere near that 3% to 5% set by the bank of indonesia. in terms of commodities and currencies, dollar-yen. japan is closed today for a public holiday. an aging population, one of the biggest issues plaguing the japanese economy. iss is what dollar-yen doing, holding steady ahead of the central bank meetings. the aussie doing this, coming off losses, strengthening. china property data coming out at the bottom of this hour. we will see what impact that has. oil is the other major story. oil is rebounding off that one low we had on friday. news out of opec, the secretary could be aing there formal session that comes after this meeting in out jeers -- in algiers. rishaad: thanks a lot for that. right. the alarm bell sounding in china, warning indicator of banking shares, highlighting the risks from b

the rba pause, the rbnz accelerated. the nuances have fallen by the wayside. the bond market is looking at the fed and its hiking cycle and saying it's over. anything you do to become more aggressive is only going to make us more certain that the u.s. economy is going to face a more severe downturn. dani: okay, garfield, that's our chief rates correspondent in sydney. top credit suisse executives will have outstanding bonuses canceled or cut as much as 50%. that's an order from the swiss government following the takeover by ubs. a more let's get over to oliver crook in zurich. literally, we thought credit suisse could not face any bad news, but here we have the final nail in the coffin. talk me through what we know about this. >> we don't really even know if it is over yet. there is still unanswered questions. this specifically is an extension of what they did march 21, the government suspending pay under the swiss banking act, saying if a systemically important bank touches public funds, they can mess with remuneration. today they have decided the executive b

thank you for that, are wellington bureau chief there with the rbnz disaster plan.t it retreating in new zealand is underway, a few minutes from the staggered open in australia. lots more next. this is bloomberg. ♪ is is bloomberg. ♪ comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. haidi: very good morning. i am haidi stroud-watts. shery: good evening from new york, i am shery ahn. inhie: iso be hammered in hong kong. welcome to daybreak asia -- i am sophie kamaruddin in hong kong. welcome to daybreak asia. china is taking more steps to ease trade tensions, lifting tariffs on u.s. cars and revaluing purchases on american corn. investigators prepared to

the rba has held, the rbnz has held.anada is a useful study of a slower pace of tightening when inflation is already starting to fall. what do they do this time around? do they wait for more lags or keep going with another 25 basis point hike? >> do they keep this threat of more rate hikes on the table, alongside a possible hike today? that will be what markets are watching out for. i am interested in what we hear from bailey today. we hear from him at 9:00. a lot of attention on the u.k.'s. the u.k. -- the u.k.'s situation. the u.k.'s situation is the closest we have seen to a fiscal dominant story. i almost wish they did a stability report on government spending. right? the amount of gilts the u.k. government has to issue in the next few years, the amount of spending that they opened up over covid, and they have not necessarily drawn back on it. we get all these comments that tax cuts might be on the table and it comes to the budget later this year. a lot of speculation over whether the sustainability of interest rate

still ahead, the abn c releases the latest -- rbnz releases the latest. we will have more on the report later this hour. up next, we will discuss how the current issues when it comes to hong kong will be affecting capital flows in the long run. the matthews asia portfolio manager teresa kong will be with us next. this is bloomberg. ♪ arey: u.s.-china tensions marching further into new territory on the back of beijing's new security law for hong kong. bloomberg learned the trump administration is considering a range of sanctions on chinese officials and businesses over the crackdown. what could this mean for asian markets and hong kong status as capital?al let's go to teresa kong, portfolio manager and head of fixed-income out matthews asia. great have you with us. what should we expect in terms of capital flight? we have continued to see more fears about the status of hong kong. run, capitalg always follows opportunity. if hong kong continues to be the favorite option for chinese companies to list, and it becomes the gateway to china, after we continue to

the finance minister praised the rbnz effort to ease the economic impact of the virus. they down plied the idea of monetizing government debt to pay for the qe program. the country's bond market is continuing to function and operate well, he says. bank --ly the reserve debt is continuing to operate. liquidity levels are good within the banking sector. for now, the approach we're taking is right. karina: human the u.s., the house of representatives has passed a $484 billion coronavirus aid package even with lawmakers at odds over the next rescue bill. the debate from members wearing masks and entering the chamber under strict precautions. president trump is expected to sign the legislation which is the fourth virus related package since early last month. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. rishaad: thanks. still to come, many exclusive directors from the nec and ask goldman president. and the credit suisse ceo. this is bloo

kiwis,, rbnz, the expected to hold despite flagging inflation pressures.ance we could get a move from rbnz, but also central-bank decisions from indonesia. inflation is nowhere near that 3% to 5% target. the central bank of the philippines also meets this week. yvonne: thank you so much. we do have an update from the asx, trade will remain in the in enquire state. we could be getting more information as to what led to this delay. additionalty has security personnel after the blasts that injured 29 people. be act does appear to terror, but does not appear to have international links. a city on edge, what more do we know? >> they do not believe there was any sign of an international terror link. more importantly, no reason to believe imminent further threat. nevertheless, a huge police presence. take a look at some of the of thes, the aftermath saturday blast, a lot of panic in the city. it is not a mainstream area such street, square, wall park avenue, but a device exploded, shrapnel went everywhere, 29 people hurt, one seriously. there was a lot of propert

that would be near the rbnz target as well.hey have been the front in the tightening cycle, so they will be to closely-watched. we are looking a little bit mixed in futures. still watching the chinese market. we will have more details from our exclusive interview later this hour, the imf essentially saying that china problem could be contained for now. still, they have room to be cutting rates and also pushing out a little more stimulus that is according to the imf. shery: still ahead, microsoft shares closed at a record as it teases a new and expensive ai2 for its corporate software. details ahead. -- and expensive ai tool for its corporate software. details ahead. this is bloomberg. ♪ shery: traders expect the federal reserve to resume its tightening cycle next week, with a quarter point increase for the priced in for the first time since early june. this, after the fed left rates unchanged at the last meeting in june. the expectation is that this could be the last hike in the cycle. this, according to markets. that quarterly

more than one priced in at markets right now before year end for the rbnz. the qe, the spike at 722. take a look at sterling and raymond b. it was gains that helped alleviate some strength in the greenback overnight. 11404 for the dollar-yen. still hovering around the for your highs. haslinda: that is right. when you take a look at markets, it is about inflation should inflation fears and the prospects of subtle bank targeting weighing on market sentiment paired discuss emerging market opportunities with our next guest oversees more than $35 billion with franklin templeton said we are joined by the cio. good to have you with us. inflation front and center. it is a quagmire. there is no consensus whether it is transitory or not. >> we have been trying to grapple with this issue about inflation for the last year. the pandemic has had a lot to do with it. we are seeing economies recover. supply chain issues around the world and that is causing a lot of issues with inflation. the question is, is this for a set time? is it contained or is it more widespread? for

at pace of growth was lower 1.5% on a yearly basis which may cause the rbnz to cut rates.cial from the central bank says lower rates may still be needed to of g -- oachieve adjustments with adjustments to be made if the rbnz has got it wrong. quick work on the british pound which topped 128 and hit near a five-month high. volatility is on the rise with option traders with the biggest pricing swing since july 2015 and prospects of a deal being signed off at the eu summit. strategist ca rally towards 130. if that happens into 140 if the u.k. parliament approves, but the failure to reach a deal could see it move towards 111. haidi: sophie kamaruddin in hong kong. more on what we are watching. we have andreea papuc. we were saying earlier, that has been a while since the trade war has not been the focus but if i like investors were happy to take those bank earnings and run with it. andreea: quite interesting. a part of that is we have seen some positives in the trade negotiations. i think investors are probably more at ease at putting that in the back of their mind. there was

tune into daybreak australia for an exclusive interview with the rbnz governor.es burn across new south wales and queensland. at breaks in northern sydney are under control. firefighters managed to contain 20laze in the neighborhood cobblers north of the center of the city. three people have been killed so far. parts of eastern australia have been left vulnerable to fire by a two-year drought. to india, where new delhi s are experiencing severe pollution. the air quality rating rose above 400 on tuesday. that's about eight times the internationally accepted level. northwesting from the brought smoke to burning fields in punjab. world health organization data last year showed india at the 10th most polluted cities in the world. u.s. is putting pressure on the wto by raising the possibility of blocking approval for its budget, which would effectively stop it from working. the tradepproached body, which president trump has threatened to withdraw from entirely. the u.s. contributes more money to the wto's annual budget. global news 24 hours a day on air and on @ticto

these rate hike expectations from the rbnz being pushed back. the short end anchored for some time. coming up next, we have our big baidu exclusive set to debut in hong kong. this is bloomberg. ♪ so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's release from golo. it naturally helps reverse insulin resistance, stops sugar cravings, and releases stubborn fat, all while controlling stress and emotional eating. at last, a diet pill that actually works. go to golo.com to get yours. want to save hundreds on your wireless bill? ♪ with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and le

we see the risk aversion in the rbnz meeting tomorrow.otentially 50 basis point hike. nikkei 225 is muted. kospi down half a percent. no further details about the ipo so far. shery: biden saying that he will review the tariffs imposed on china. let's speak with u.s. trade representative kathleen ty who -- joins us from china. >> i gave a speech last october describing the biden administrations bilaterally in the u.s.-china trade and economic relationship and since then we have been engaged in conversations with china on china's performance under the phase one commitments. we also articulated the need for the united states to champion the interest of american workers on the american economy and continued to push for and fight for a level playing field in the competition with china. so what you have now is a very deliberate approach by the biden administration in our economic engagement in asia. i am delighted to be in tokyo with the president. i came to tokyo from bangkok where there were two days of trade meetings. the biden administratio

the stock market is saying it is not 100% guaranteed for a hike tomorrow for the rbnz.w is going to be tantalizing to watch. what have we got stacked? dani: it is all about the commodities coming up. bhp wants to accelerate its exit from fossil fuels. it has confirmed and talks of a potential merger of its oil and gas unit. we will have all of that up next for you. this is bloomberg. ♪ ♪ dani: welcome back to bloomberg daybreak: europe. i'm dani burger with manus cranny alongside me in dubai. the quick look at your commodity markets. copper falling yesterday. more steady today after some disruption in china boosting copper. you have brent ever so slightly lower. let's go to bhp, which has aimed to accelerate its retreat from fossil fuels. earnings out in a bit. joining us now is our correspondent. what are we expecting out of bhp? >> good morning. speculation about bhp's exit from oil and gas has had fever pitch in the last couple of days and local media are very much on top of the story that they sold oil and gas business in the price tag could come to $15 billion. it