you have nomura. goldman slashing their growth forecast for china. get to your first word news with paul allen. paul: the u.s. and taiwan have started formal negotiations on a bilateral trade initiative u.s. trade representative's office says the first round of talks is set to take place early this fall. the move is likely to inflame already higher tensions with china which has launched military drills around taiwan after speaker pelosi's visit to the island. officials agreed last month on the need to dial back the pace of interest rate hikes. minutes of the july meeting showed officials worried about the risk of over tightening and the request to restore price stability. traders are increasingly abutting the fed will increase rates by half a percentage point next month rather than another 75 basis point move nomura has downgraded its forecast for china's quarter your growth after a week of unexpected july data. activity data in august could be even worse due to the increasing number of lockdowns and the heat wave. goldman sachs downgraded its foreca

with nomura around 4%, it did barely get a profit. we see the gains in fixed income trading. could not make up for the losses we saw from equities underwriting. underscoring the difficulties facing the ceo to diversify their brokerage. in terms of what we see, nintendo was another company reporting earnings. echoing the woes we heard from sony. the software and the hardware sales declining in the quarter. production bottlenecks have been affecting a lot of companies. coming up, softbank's call, as well as toyota. waiting to see whether that company does revive upward its profit forecast. changing to the energy space this morning. the big drop in brent crude in the previous session. it is recovering this morning. opec-plus agreeing to a small hike. gasoline demand is waning. losses for the big energy companies in asia. turning to lithium shares, as well. the world's biggest lithium producers. reporting earnings after the bell. we saw the rise in the after hours price. they expect better than expected earnings. operating cash flow expec

that is a gutsy call given that goldman sachs and nomura are ripping the forecast to shreds.ou are wanting it to be long. defend yourself. alexander: absolutely. i think it is a key risk. we look at our models, monetary policy domestically and what the fed is doing. the fed has reached peak hawkish in us and monetary policy will continue to get tighter. they will raise rates most likely by 50 basis points. plus the economy of next quarter has an improving story. that is one of the things that we like to allocate. dani: i know your also aussie versus sterling. looking at yesterday's inflation data in that u.k., it is above expectations. this that change it all your sterling outlook? alexander: what is interesting is that sterling failed to benefit significantly from higher inflation. i think it is because the growth outlook is not favorable. in addition to that, negative real rates make funding the current deficit quite challenging. that type of set it -- set up usually does not bode well for currency. we think positioning has squeezed recently. the way we like to express that

we will catch up with jordan rochester of nomura.conversation with tina peterson of the conference board. that is coming up in the next hour. tom: it will be interesting to see what the formula looks like, the present state of the american economy. i must admit over the weekend, the idea of american recession has drifted away. it is still there. i get that it is probabilistic. there is a chance. but nothing like in europe. it has really drifted away. jonathan: it is more immediate and europe. it is right now. in china, there is a real weakness. for the global economy, getting closer and closer to what people would call a global recession. in the united states, what did chris harvey of wells fargo allude to? they pushed it out. maybe not avoidable, but delayed, pushed to early 2023. tom: liz saunders making it clear, the strongest dollar since 1997. jonathan: euro-dollar parity once again. your equity markets, -1.15%. for our audience worldwide, heard on radio, see on tv, this is "bloomberg surveillance." this is xfinity rewards. our

goldman sachs and nomura have cut their china gdp forecast. and fed thanks weighs on china sentiment. it is -- and the fed sinks and ways on china sentiment. stocks at the moment down 0.8%. looking at volume this morning, just for good measure, lower than they were a month ago. dex features are flat and ftse 100 futures also flat. there is a lull. the idea that mark cudmore was talking about that the next catalyst is what we will hear from in jackson hole. until then, we are in a holding pattern, although markets are trying to contest the fed. ftse is just opening up. gold spot at 1761. not only the u.s. yield curve, but in the u.k.. we had a warning from denny branch water -- denny -- danny blanchflower who says that these will make this interesting. i want to show you the u.s. 10 year yield that would give us an indication of what investors will buy in the yield curve. european stocks down 0.8%. let's get over to our bloomberg mliv managing editor mark cudmore. mark, you are looking at -- this morning. mark: this chart was flagged to me at d

george buckley is chief uk & euro area economist at the investment bank nomura.you are with the majority and you think is half a percent rise today is a given? i a percent rise today is a civen? ~ , a percent rise today is a civen? ~' , ., a percent rise today is a . iven? ~ , ., ., given? i think it is going to happen. — given? i think it is going to happen. half— given? i think it is going to happen, half a _ given? i think it is going to happen, half a percent, . given? i think it is going to| happen, half a percent, it's given? i think it is going to i happen, half a percent, it's a majority, not everybody. 30% of economists who have been surveyed think it should be a quarter %, again is probably too strong a word and i think they will deliver and raise rates by half a percent. what im act rates by half a percent. what impact will — rates by half a percent. what impact will this _ rates by half a percent. what impact will this have - rates by half a percent. what impact will this have on - impact will this have on inflation?— impact will this have on inflatio

those are the words of nomura's jordan rochester.n looking at the lowest price since march 2020. we are looking at the central bank pricing. even that cannot save sterling. this is a dollar story as well as an energy crisis and economic vortex. if you are going to -- to the front door. that is what they say. we might actually have to cut opec production. dani: i'm going to be pretty quick with this equity check because i think what you are showing is what is moving these markets. a deterioration in the euro, in a pound that is moving equities. we are seeing pretty substantial losses, down .2% for the future session. manus: did not take long to kill off the summer of love. of course unseating the technology rally. to the german power issues. markets panic, quite literally panic, over the country -- dependence on russian energy supplies. olaf scholz is in canada. part of the push is emphasizing his government is working hard to end the dependence on russian gas. >> we are working hard to become independent and we are doing a lot of inv

let me just go against that, because i was listening to nomura and they said this would be the last jumbothat you will get. from what you just said, i don't think you agree with that. do you expect multiple jumbos to get inflation back towards the corridor for the bank of england? sonali: yes. we are actually expecting another 50 basis points rate hike in september and then we expect the bank of england to switch back to its rate hike cycle. the reason i am saying that is because in other countries, we are having these stories that inflation is potentially peaking with other pressures coming down. whereas in the u.k., given the way the energy price cap works, the peak is unlikely before october. we still have pretty bad numbers coming up on the inflationary side. i think that is going to keep the pressure up on the bank of england to continue this path they have set out. they have also increased the persistence of inflation to domestic wages. i think that is an important change from last time. wages are still rising. we are in a tight labor market. dani: what does that mean for the outloo

nomura will be in focus as the country's biggest brokerage came out with a 97% slump in net income in june quarter. it is trending to the downside right now. it felt shy of estimates. fixed income was a bright spot. profit was hit by legal charges owing to the company's dealings with archegos capital management. and nintendo reporting period than anticipated results, operating profit of 760 $3 million until june. a weaker yen is failing to help softening software sales. industry commentators noted declining spending on video games compared to the same time last year. david: a ton of earnings out of japan today. we are also getting names like alibaba out with earnings today. . we are just knocking on the 100-day moving average on the hstech index, nearly 3% against today. dbs had a 1.5% higher net income. as you can see, rounding up the big three in singapore, a mixed picture. we are looking at the casinos here. rishaad: absolutely, they are opening up. we have the chinese border opening up to them. just check sjm holdings, 13% down, the lowest intraday level since august of 2009. this

goldman sachs and nomura both lowering their forecasts for china's gdp for a host of reasons now includingactory shutdown, but this time it's not because of covid it's because of heat eunice yun is live in beijing for us eunice, how hot is it? >> it's really hot, tyler, in some parts of the country 110 degrees. china's heat waves are some of the most severe since 1961 drying upland along the country's longest river, the yangtze. those areas in central and southwestern china rely heavily on hydro power so authorities have been mandating power rationing for factories and supply chains. factories are being told to suspend or reduce operations, cut working hours and grant high temperature holidays for staff and then all of that, of course, to limit electricity until august 24th. the area is home to suppliers, to apple, intel, tesla as well as toyota, and the power rationing is now extending beyond the factories so to homes, offices and to malls. residents are being told that they should expect brown outs and take part in a conservation, in an energy conservation campaign which means setting yo

i was talking yesterday to nomura's chief economist and she is looking at inflation data for asia.rs for asia are less than half markets like the u.s., europe, and the u.k.. not always is inflation much lower in asia, but also levels of consumer and corporate debt. going into jackson hole on friday if the fed is going to increase rates and a lot of central banks do the same, these squeeze affect on the european consumer and impact on debt repayments will be much more than we are seeing in asia. we are seeing asia is cheaply valued as investors put money into global stocks. >> what should investors be watching out for in asia when it comes to jackson hole? is that a narrative that perhaps asia will not have to go as fast when it comes to tightening, given price pressures are not as strong as western economies? jim: i think that's a really good point, but if you look at asia's major companies, they happen to be in the technology space chair durbin: i can't talk specifics. you think about taiwan, korea. the biggest stocks happen to be large exporters in the technology sector. what we

nomura holdings think it will be 3.5% by the end of the year.at they are a long way from done, until they see inflation starting to come down sustainably. . this is the big fight for all central banks around the world. annabelle: especially the fed. the debate continues. can it avoid recession and achieve that soft landing? what is the latest we are hearing? kathleen: this is the debate. i have to simplify it because this is high-level economists arguing. larry summers, former treasury secretary, noted harvard economist and professor. what happened was that larry summers and two others wrote a paper attacking the fed, saying, there is no way you can have a soft landing. you can't get out of inflation without getting into recession. so then chris waller and another economist at the board of governors wrote this paper about job vacancies. we're talking about all these jobs that don't get filled in the u.s. economy, why don't people take them? he said, that is the focus. rate hikes will start slowing the economy and demand will weaken so companies

gdp growth, numeral at 2.8% -- numeral -- nomura at 2.8%. is a political move more than economic because they don't want to be seen as bearish. the question is when two they get back to that level? and also being lowered, progressively through the year. it is concerning, not only for china but also global growth projections. jonathan: if it is good it probably isn't, and if it is bad it must be really bad. tom: as he said, maybe it is more accurate than we care to believe. i don't know, but i do say the veracity of the data i just talked about, there was the suspect ntc that with stuff that doesn't even make the headlines. operations being bailed out by a company you and i have never heard of. jonathan: it is complex right now that these bigger stories don't even make it into the headlines. tom: it is true. what we have to fall back on is the data of bloomberg surveillance. jonathan: that's great. this is bloomberg. ♪ this... is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial pict

downgrading china's growth goldman sachs lowering its 2022 full-year forecast to 3% from 3.3% and nomura8% they were up to 3.32 "squawk box" coming right back after this sthoo >>> time now for today's aflac trivia question. what three countries account for ab 41% of theor's wld total wheat production the answer when cnbc "squawk box" continues e aflac pre-pain . aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac! >>> now the answer to today's aflac trivia question. what three countries account for about 41% of the world's total wheat production the answer china, india, and russia the united states is fourth. >>> let's in fact get over to china, because while it's still dealing with shutdowns because of its zero covid policy, now the people there face another big problem. heat wave, scorching temperatures, drying up water supplie