interesting to hear from the pboc governor drawing together having a meeting with the banks there sayinge need to be sure there is adequate credit supply. as we said in the head in the headlines credit slowed quite a bit after july. there is a strong pickup for those market weight companies like ten crept and alibaba. -- 10 cent and alibaba. >> fool me once, shame on you. fool me twice, shame on me. seven day moving average of delta is rolling over. so will the fed be brave and look through the delta narrative which is drive now and go ahead with the taper. there you go. those are the ground zero in missouri. a number of other states as over 56% to have u.s. is now vaccinated. tom, good morning. >> welcome. good morning. thank you very much indeed. so much of that is reflected in the commodity space as well. w. tirvetion higher as well. the sum of that, the assumption after the reopening is starting to kick into gear. maybe as you say, we are reaching peak covid. all eyes will be on jackson hole toward the end of this week. whether or not we hear any details from jerome powell. checking

is the pboc worried?ater in the day, when they put out there policy statement, look at what they said. they set concern in the ppi will be temporary. inflation pressures are controllable because they have been normalizing their policy since may of 2020. ahead of the curve. they went out changing their policy ahead of everyone else. they said to mastic recovery is not yet solid. they say they expect export growth as well. we saw that yesterday. the delta variant spreading. also, small businesses have been hit by the rising commodity prices pushing up inflation. after this dovish policy statement, it seems to be increasing. let's look at the bloomberg terminal chart. this is the key rate the pboc cut, the government cut back in july. it was a surprise. you see for the big banks and small banks still at the lowest they have been in several years. jp morgan saying yesterday they expect to more cuts, one in october, one in january and possibly small cuts in the medium-term. very dovish. i love watching central

the pboc is stuck between a rock and a hard place.g to deleverage the financial sector and don't want to cut interest rates and have that go into the housing sector. you already have a bubbly housing market. as the covid outbreak becomes more serious and parts of the country lockdown again, there are calls to do more to support the economy. on the one hand, they don't want to ease interest rates too much, but on the other hand, there is increasing pressure to assist the economy. the first thing we are looking at is next week when they announce the august medium-term lending facility, whether they cut interest rates on that, whether they will make a big change to their current policy stance. shery: what is driving the calls for the deleveraging campaign? there is less of the connection between growth and instability? james: right, some connect to the government and others are saying they have been successful in their macro prudential efforts to keep a lid on the housing market, to deleverage in these areas, and now they can afford to c

on the other hand the pboc is still cautious about the price bubble. this, you can look at what the government's attitude towards the market is. it is a reflection that authorities are still cautious about price bubbles. i think the pboc will try to slow gradually, but not a sharp turn to aggressive easing. in our view, the rr cut is a turning point for liquidity conditions to more marginal easing. but i think it's mainly more a trigger if the pboc wants to go to more easing. but in our view, the pboc is going to be -- going to refrain from aggressive easing. slowly look and see to see the economy side. yvonne: david qu joining us on what to look out for in the second half. you can also find more analysis on bloomberg radio, broadcasting live from my studios here in hong kong and singapore. listen via the app or bloombergradio.com. this is bloomberg. ♪ s bloomberg. ♪ yvonne: here is your latest headlines. afterpay sword after -- soared after -- it moves into consumer lending. afterpay let's people buy items on credit and pay in installments. the deal i

the pboc fuels expectations for more policy easing. they warn investors not to pull the wool over their eyes when it comes to china risks. a very good morning. the voices rise on a taper. one man or woman's taper is another man or woman's tightening, isn't it, dani burger? bostic and kaplan have a variety of opinions. this is what i am drawn to. he differentiates the actions on fed funds from what actions are going to be on asset purchases. we must differentiate and disaggregate. good morning. dani: good morning, mr. cranny. you are spot on on pulling this out. this is something jeffrey rosenberg over at blackrock wentz out as well. the market is believing it, too. it has not moved as much as the backend which suggests we will get not necessarily raising rates anytime sooner but perhaps we get asset purchases. manus: what are the eurodollar futures telling you? this is where the differentiation comes in. you have dollars pricing and 25 basis points. is that too dovish? we can debate that in the next 30 minutes because lack rock institu

government-affiliated, argue that success in curbing growth means that pboc can ease. this contrasts with global investment banks, seeing the pboc keeping great study for now. global news 24 hours a day on air and on quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> still ahead, more insight on inflation risks, the biden spending plan, with our guest later this hour. next, our interview with the new ceo of the hong kong exchange on the impact of china's widening crackdown on the ipo pipeline. this is bloomberg. ♪ >> the new chief executive officer of the hkex downplayed the regulatory crackdown that has dented ipos and cause stocks to tumble. nicolas aguzin says there is a record pipeline of deals in the wings. nicolas: we are seeing similar type of modifications to how big tech works all around the world. all platform businesses are being scrutinized how they use their data, how they manage information about their clients, do they have too much power, how will we manage how they deal with

what do you make of the headlines this morning about the pboc's pledge to do more?think it tells you more about demand than necessarily how they are going to conduct monetary policy, but remember, the pboc is really the chinese communist party, and the party is concerned, it appears, about the direction of growth in china, one reason being they shut things down when they get cases. obviously, demand is going to be seriously affected. what do they do about it? they have been very reluctant cut interest rates. they have cut the reserve ratio, and they might do that again, or they could put more money into the markets for the repo facility that the youth. so for they have just matched demand and not flooded the market, but that seems to be less important than the idea that there is a problem going forward with china, which means a problem for the rest of the world because of demand is lower there, we are going to see if you are exports to china from not just the united states, but from everywhere else. kailey: china has adapted a covid zero policy, and it works. they h

more expectation for support from the pboc through the money markets. sense seems to be that the pboc is back in play now in terms of supporting the china economy. haidi: enda curran, our bloomberg chief asian correspondent. we have the division director of macquarie health management, martin lockers. a lot of headwinds when it comes to china. how attractive is this market to you? martin: certainly, looking at the market, on the tech side we have regulatory issues. for investors it will be very much trying to gauge how long these changes are going to take place. that impacts sentiment, in terms of investors jumping in. . but valuations are starting to look more attractive now. don't forget also through july, not only do we have the additional flareups of the delta variant within china, but we have also had the 100th anniversary of the communist party, and the typhoon. that may have some disruptive impact on manufacturing, albeit short-lived. so those numbers will probably be mixed. it is much likely that the pboc will take action more through the money

the pboc said they will extend credit.hey will not be withdrawing credit as may some thought before. that really helps support the beaten-down tech names, and that really spread to europe for a bit, and then picked up steam here in the u.s. the s&p up either a .3%, led by the cyclicals. just to highlight the china support, this is the golden dragon china and asked that monitors chinese adrs listed in the u.s. that is pumping nicely, up about 7%. just to have it off of the commodity rally, iron really getting that nice lift higher. irrespective of the pboc and what is happening with the dollar is the 10 year yield, yields up by about two basis points. no taper tantrum yet in the bond market, particularly as we head into jackson hole. guy: let's talk about what is happening with the data out of europe and how it compares to what is happening to what is happening in the united states. do you want to be a hare or a tortoise when it comes to the covid race? that is something people are asking themselves right now. if you look a

we had disappointing data and can the pboc keep on top of it?ata came in a bit lower than expectations but again, we think because the pandemic situation is coming under control, case numbers are declining there, that the outlook for the second half of this year is going to be somewhat better. there is a pent-up demand for investment spending so the investment spending that we saw was in real estate. but business investment we think is going to be recovering in the second half of this year. similarly, retail sales. the unemployment rate picked up but that is something we have seen seasonally in 2018 and 2019. so we are not too concerned about the employment trajectory. probably not too much need for further easing at this point from the pboc. we are expecting a cut to the reserve ratio and the jury is still out on what further moves the pboc might need to take but overall, we think that we will not need to see substantial easing and the economy is likely to be improving from this point onwards. francine: is this a data point in china, i don't kn

the divergence we see from the start of the pboc versus the fed.ow impactful could it be for assets? is it something we need to watch more closely? >> it is the most important investment for the capital market. the chinese economy, chinese financial markets are not as integrated to direct the capital markets. so the fed matters more than the pboc. >> absolutely. thank you for your insight. sylvain broyer. just nine months away from the french presidential elections. executives and politicians gather in paris for the conference organized i the country's biggest business lobby. with an economy still recovering from the pandemic, our executive satisfied with the current business climate in the country, tune in for the president, the french trade minister, the french treasury chief economist and the head of the court of order in charge of the public finances. coming up, the future of work as we emerge from the pandemic, companies look at the economic benefits of hybrid working for employees. that story is next. this is bloomberg. tom: this is bloomberg

he says, the pboc says that will keep inflation prices in check. they are more concerned about growth. you hear that more from state any of this morning talking about fine tuning policy, how triple our cuts are needed to boost growth -- triple r cuts are needed to boost growth. what this means for the dollar moving forward as we look into this -- david: here we go. 11.8% for the second quarter, beating estimates of 10.5 percent. let me give you context. that is the year on year, coming off -4.2 last year. the estimate, 10 point 9%. the range of estimates, to put that into context, this is a wide range of forecasts, from 7.4 all the way up to 14%. it is above the median. it is at about the mode because a lot of those forecasts were about 11.5%. you could say it is good, but roughly in line with market thinking. yvonne: the quarter on quarter numbers, 1.1% negative print for that way of looking at growth. -1.3% is lower than expected. let's bring in paul, a head of research to joins us out of hong kong. we were talking about the dollar move we have s

tom: there is a divergent view on monetary policy from the pboc versus what is happening with the fed. the pboc having to step up some support in the midst of what is looking like weaker data and this regulatory crackdown. what is the broader implication on money flows in these divergent paths? >> it is obviously an opportunity, but it will really depend on how this monetary policy -- [indiscernible] for the emerging markets including china, which by the way has ample liquidity, what the fed will be doing is crucial. if the fed will continue [indiscernible] [indiscernible] tom: ok, of course, a lot of that will come down to the strength of the dollar and if you get a strong greenback, the question is how vulnerable rem asset? do you have a view? >> i think that over time emerging markets will move to be less and less. [indiscernible] if i look at india for example, where the central banks are really starting to [indiscernible] i think that they are much, much stronger than they were at the time of the taper tantrum. [indiscernible] tom: ok, monica staying with us. thank you very much

there is debate on what the pboc will do. the question is, there will be a debate over what the pboc does, but i think there is no debate over the fact that more support is needed and the bank will be doing what it takes to ensure the economy finishes off the year on a robust note, at least that 6% growth target. yvonne: enda curran with a wrap up of our data. let's bring in our guest. your take on these numbers so far? haslinda: go ahead, hans. yvonne: go ahead, your take on these numbers. guest: it is not a surprise. we know the covid situation. china obviously is slowing. i think there is no room on policy easing, especially in light of the fact that the deleveraging cycle in china has improved stability. especially for small businesses. yvonne: you continue to see a u.s. 10 year yield that looks closer to getting to 1% than 2%. what do you think markets are pricing in and what do we need for things to reverse now? guest: we have been bullish for u.s. treasuries, and we remain bullish. we look at the interest rate differen

tom: talking of liquidity, the focus will shift to the pboc. we have the loan prime rate, we have calls from some ex-officials close to the pboc saying now is the time to come in with a surprise cut. that is not the bloomberg economics view. you are hearing from people close to the pboc saying it is time for the benchmark rate cut. it would be a surprise, but we will be focused on liquidity conditions in china as a result of these restrictions around the delta variant, although as we have been reporting it seems to be having some success in terms of eroding the spread of the variant. mark: yes, monday is the data slew. it is important to emphasize that china is still going to have a great year of growth. there is still positive growth out there. we expected to be slightly negative. we get some more idea of what we want in terms of easing. most of the market out there does not see further easing from china. why are they going to ease? the rest of the world is talking about hiking and is not seen growth that strong, but there are some prominent v

the pboc playing rearguard action amid slowing data and the regulatory push.ct more of a push? geoffrey: policy initiatives on the pboc will continue to be clear about that. in march when china signaled a fiscal restraint and the pboc signaled at that point it was willing to loosen and dial back the stimulus i bit, that was where the original policy issues started to resurface. in the u.s. we have a new infrastructure push. it is probably not the time to have fiscal and monetary stimulus withdrawn. that was done early in china and we are seeing negative aftereffects of that coupled with a new wave of the pandemic, even though relatively contained. it is a bit too late for a fiscal response going into the year end, but i would happily be positively surprised to the upside. anna: the response out of china will be relevant to that economy and the global economy. a tepid session in hand, up 0.1% on the ftse 100. the cac entirely flat. you make the point china would have to recover first before any prospect of rebound in europe. talk us through the linkages as they

pb -- pboc. francine: expecting july to start showing what you were talking about. g.d.p. growth. be in retail sales in china? >> you know, that's difficult to tell. we were hoping to see more consumption picking up. obviously late last year, we saw very significant exports. we have seen that slowing. that is what we were expecting to see. consumption pick up the slack. when we have more lockdowns in china, that affects retale sales. there are other almosts. it will be interesting to see exactly where this slowdown is. is hitting but certainly more lockdowns and slowdowns will affect at retail. will affect consumption. not just a china story. it is perhaps various different countries particularly in the asian region for this point in time. francine: what is your take on -- >> when we look at it i think one of the interesting things is we look at the big picture is to consider demand from externals. if we look at some of the data, the c.p.o. of u.s. consumers, european consumers buying into assets, china bonds, we see some strong numbers. china in various different indices. if we l

not only the delta variant but maybe what is coming out of china, a bit of stabilization from the pbocee that playing out in iron ore futures used in steel. we have heard from the pboc in chinese authorities saying they will not let this deal made in china crash -- let the steel made in china crash. i want to show you some of the groups that have been bid today. travel and leisure a good conversation with our travel reporter coming up shortly. this goes back to some of the diversification we have been talking about and definitely there is a tilt to defensive stocks that alix mentioned at the top of the hour. utilities and real estate lower. a couple of stops. -- a couple of stocks. electa, a pharmaceutical company in the nordic countries. there is worry about cost associated. -- an insurance company and upgrading what they could expect. ryanair is a good one. it points that some of these european short-haul travel companies have been benefiting from the green pass. i know they have more roots than something like iag, british airways. people have been traveling over the summer months to

there is a need for the pboc to support growth from a monetary perspective.: does the crackdown create a better investor opportunity or in -- or environment for china? >> the speed and stringent seas of china's new regulations on various sectors may seem very surprising, but regulators underline concerns that are really unique to china. they are very similar's to regulators in u.s. and europe. for example, big tech companies are under the microscope everywhere because of your -- they're who you sides and control of customer data in creating financial risks. the difference between the governor response and the rest of the world is that the chinese system of governance allows it to act faster as being more forceful. it could surprise within communication. so the companies that we have been tracking for years, and if you look at the traditional sectors, like a property and financial institutions, they are actually under very stringent red ticket -- very stringent regulations. the companies that ignore the consequences. however, those companies that follow the go

most see the pboc keeping interest rate steady for now.4 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. yvonne: lenovo top profit estimates with the pandemic boosting pc sales, widening its lead. the component shortages and returned office could dampen the outlook. we spoke exclusively with the lenovo group cfo. >> if you look at it, we had a record quarter four last year. we will have a record year. we will have a record quarter one. the results speak for themselves. with our supply chain, scale, as well as experience, we will continue to deal with the challenge successfully and deliver very strong results. >> de expect that the man to continue with more economies reopening and employees returning back to the offices? >> yes, we do see that. i do think the demand is most thought would decline. it is what i would describe as a fundamental change. i think that was primarily driven by what we describe as the digital transforma

. >> we are expecting the pboc to cut by 10 basis points.n't rule out a rate cut as soon as today. guy: some of our guests talking about what we are seeing in the chinese economy. the data are showing it is slowing more rapidly than we anticipated across a number of different metrics. bruce pang, head of chinese medicine securities macro and strategy is joining us. the slow down seems to be picking up. is that your expectation that that continues now? bruce: i think the data comes clear. the growth drivers like production, consumption, floods, covid-19 cases. alix: what is going to be the policy, appropriate policy response to this considering china and what they can actually push out? bruce: after today's data released, expectations for a rate cut. the pboc would avoid a hasty action behind the july data. the economy is worse than the data reflects. we think that china will adjust and fix the uneven recovery with targeted credit support and systemwide using and rarely with the second dish in the second half of this year. guy: one of the dat

both monetary as well as physical being too tight, your sink monetary statement coming out of the pboc and fiscal statements out of the government that start to support a more optimistic outlook for the second half. in particular encyclicals and infrastructure. in particular in the consumption space as we just discussed as you start to see transfers to chinese households in a very significant way. we think those are exciting activities from a broader investment perspective. we have to recognize emerging markets have significantly underperformed. the key exception has been india. that sets us up for a brighter second have given the u.s. outperformance in the first half. rishaad: james, we saw the revelatory overhang, the tory moves as well. i am going to ask you this question. has it been a meaningful ideological shift out of beijing? how does that play out for an investor? >> we have seen the chinese commonest party as well as xi jinping talk about this concept of common prosperity for a number of years now. we are starting to see policies put into place to start to bring that to bear

this problem does greet the issue for the pboc.re monetary stimulus can they pump into the economy when this is what they wind up more worried about. joining us is george magnus, oxford university. how do you see the dilemma the pboc has now when they are trying to tamp down the commodity prices and cannot do it fast enough and it trickles down to their effectiveness? george: this is a bit of a dilemma for monetary authorities in china, and for the government as well. coming into 2021, they were keen in terms of recovery from the pandemic to want to try to step on the policy break and fullback some of the fiscal and monetary stimulus they injected into the economy in 2020. i think that is still the agenda. i feel they are trying to balance between the economy to continue to grow. they do not want to moderate too much. the producer price numbers which they are getting are not all down to china's own policies in housing, which in the past was on a tear and now they are trying to moderate it with restrictions on mortgages, second mort

yvonne: when it comes to a signal from policymakers, pboc made a big thing -- signal that they are trying to boost liquidity and add some juice into these markets as well. 50 billion and the banking system a couple of minutes ago. seven-day reversal. as we saw the interbank rates have two month highs. liquidity gains are tight amid concerns about government bond issuance or the credit picking up. that could maybe help sentiment but we are not saying that when it comes to mainland equities. rishaad: with that in mind, adding more credibility to the pboc as well, huarong made the corporate credit side more attractive and adding to some of that. let's get to garfield reynolds. our stocks up as we had to the jackson hole symposium? is there a sense of expectations ramping up? garfield: yeah, rish. a lot of what is happened this week and the broad markets, the broad indicators,. -- is a sense of calm. delta scare has eased away. so have concerns about rapid tapering, which would have been tone deaf given the concerns about delta and the concerns about the data. the data has been more concernin

there's a lot of articles written about the pboc, pushed or cajoled into a rate cut. look at what they did with medium-term lending and what they did with the seven day repo. and the lien seems to be on levers rather than rates. enda: exactly right, manus. as you mentioned, most analysts are saying it won't be an outright interest rate. it might frighten the horses. it's more likely they will do targeted measures through to money markets, trying to put money into those sectors of the economy that needed the most, not the particularly small and medium-sized. and that's usually done through bank lending. what they may do is lower the reserve rates requirements again. there could be another one on the cards. i think the broad story is certainly a case that the pboc is on the sidelines, more action and support from them will be needed. the only debate is over what levers they will pull. the expectations are less that interest rates and more that it will be through. money markets. manus: ok, thank you very much, our chief asia correspondent on the data. ellen higgins, as w

the reason for that is the pboc just flipped its easing stance.hey have been very reluctant all year. they did not want to be seen to be fueling the relay verging economy. the government has been going the opposite direction. as usual, i think they will be called into put a base on the economy very late this year. i think the bond market will continue on rally, the economy -- the flash was liquidity. the problem is it is not getting into the real economy right now. we are facing that same problem again. the plumbing is in place but they really don't have this strong lending to small and medium enterprises. in china, youllal when you do lending at a lot of those funds don't have it right now. they are still stuck in financial markets. repose are below 2%. we are looking at the overnight. a lot of liquidity in there. the pboc thinks they are doing the right job at the moment. >> other than china, what do you like in the asian space? >> as much as we are in the eye of the storm, a lot of these credits are actually very close to recovery levels. if we

any signs of easing or support from the pboc will bode well for asian equities as a whole.ch. when the pboc came out yesterday -- and we even had earlier headlines of them reinforcing that pledge to help with liquidity and credit -- obviously, they came in short easing the rrr rate, but that is still a good thing for equities for the short term. now, we are going to focus a little bit more on financials and banks as the crackdown goes there next. anna: yes, rotates from sector to sector. thank you very much for joining us. thank you much for joining us on the european market open. that is it for this program. surveillance early edition is up next. they will take you through this rebound for global equities. this is bloomberg. ♪ >> the question is are we on track to fulfill our objectives of this operation, to bring out our people, so many afghans who helped us, and 70 afghans at risk. we believe we are. >> our engagement is not against any one country. nor is it designed to make anyone choose between countries. >> we have articulated what the fed policy is, in a clear and c

to us that means that basically the pboc is heading onto what is a more aggressive supportive and ate time -- growth supportive, and at the same time the cross cyclical component will mean the pboc is quite committed to prevent risk. it is in risk prevention mode that we think the dollar facing the cross hairs and crosswinds and we will potentially see it move stronger against the dollar towards the end of the year. rishaad: give us a sense -- we have been talked about this -- we have been talking about this cross cyclical idea floating around as of late. we have that in mind but then we have dual circulation. what do these things add up to as an investor? i know you are not actually going to be an investor there, more of a strategist. guest: that's a really good question, and i think it all comes under the whole umbrella of what president xi has increasingly said at an increasing pace -- pace, this common prosperity concept. the chinese government has this commitment going forward, a commitment going into 2022 and beyond that basically the redistribution of income and the narrowing

we are hearing that they want to lend to smaller sectors of the pboc -- the pboc wants big banks to lend sector. that opens up the prospect of more nonperforming loans and a risky economy right now. especially in the property sector with the ever grand prices. there are some definite risks if you're opening up your loan books to more risky parts of the economy. net interest margins could take a hit as well. if they are indeed being asked to cut further their loan terms for these companies. there are definite risks. big state banks account for 89% of the yuan increases in the first half. lower tier banks attributed more than half of the increase in nonperforming loan rise. npl's is what we will be watching for. we will be watching for the provisions of the nonperforming loans and how those net interest margins will be squeezed. those margins squeezed because of price cuts for lending to more vulnerable parts of the economy. >> today's numbers might look good on a year-over-year basis but is that going to hide some of the risks you were talking about? >> you might get some headline numbers

i think the pboc has to watch where things go. this is not there big worry right now.aidi: we do have some more breaking news when it comes to alibaba. the internal memo being circulated announcing that the manager accused of sexual harassment would be fired also elaborating that other managers who handled the allegations be forced to resign. they failed as critical decision-makers. they bear a responsibility. . a chief officer will be given a demerit. it does look like alibaba is trying to get ahead and make these decisions after what had been criticism over the weekend. let's get over to vonnie quinn, who has our first word headlines. vonnie: thank you and good morning. booster shots are strongly in favor for those of people with weakened immune systems. the plan could be implemented soon. debates leading up to a full senate vote on an infrastructure blueprint hit a roadblock. lawmakers are unable to agree on key amendments consider. especially on new cryptocurrency rules and flexibility or local governments. lawmakers have confidence that the full vote is just days

do you the pboc is likely to look through these? >> pboc is not worried about inflation in our opinion. have seen some downside pressure on the ppi a few months ago the letter to the crackdown on commodity price speculation. we have seen iron ore decline as a result. they have also been very clear they don't wish upside prices to spill over to the consumer segment. while we do think cpi is going to increase marginally to 1.5% by the end of the year, it remains low by historical standards. china is exporting deflation because of the domestic control on prices of commodities and of consumer prices. david: a .5% is the consensus i believe still. -- 8.5% is the consensus i believe. >> we are currently above consensus. taking into account the latest revisions as we have seen earlier, we are 8.6 percent. we are monitoring the situation with covid closely. we don't think q3 will be as bad as q1 2020 when china contracted 6.8%. not a fair comparison. it is possible growth will come -- will decline through single digits. revisions to about 8

before that it was a bit of mix and the pboc had it for a number of years.ppened over the last 18 months is these four banks have contributed over $10 trillion but the e.c.b. and the fed added over $4 trillion to their balance sheets while the bodily injury and the pboc is more moderate of around a trillion each. it will be interesting as they try to unwind these balance sheets. francine: really great charts. we'll steal them and use them for the rest of the day. yesterday, 24 hours ago we learned that new zealand was going into a lockdown. interesting timing given that we had the central bank coming out with interest rates and they refrained from raising rates. let's get straight to juliette saly in singapore. how quickly could we see theme raise rates at this point? juliette: that is the key question, isn't it? we did see the governor indicate this was due to the lockdown they did remain on hold but when you look at the pricing action of the remainder of the year, it changed substantially from where we were yesterday suggesting that there could be three ra

it is really about timing for the pboc.ike 2015, where we may have seen a market correction followed really quickly by a currency market correction, i think there will probably be more of a gap this time around. we have seen stability in the currency, but engineered weakness in the equity market. maybe once things stabilize in the equity market, we will see the pbc allowing for the qatar flows a week of the basis, and avoid any sort of that cyclical negative circle we got a couple of years ago. that is our thinking. it will probably be some onshore stimulus needed. anna: some of the activity we have seen from china has been loosening policy. rrr cuts, the injections by the pboc. there are other parts of asia doing differently. the bank of korea hiking rates. do we need this part of the global economy to come into any kind of alignment? is it strange these economies can be so linked that are moving in different directions? perhaps citing the -- fighting the delta very indifferently. does anything stack up to you? >> i think

richard: i think probably the pboc would be happy if they did not have to do much more.ave something of an easing bias and we expect them to continue to give us a little bit every so often on that to keep growth and credit roughly in line gdp. i think the issue with china is not just what the pmi numbers will say and zero covid, but this issue of underlying structural change. big changes in regulation in the tech sector, which has been a meanof growth. a big shift in the way think about income distribution and wealth. obviously the demographic issue has become more pressing in the data we have to this point. china has a really big structural agenda going on. i think it is making policymaking quite hard and growth will continue to slow because of that. haidi: when it comes to the impact of deltek, we saw the be ok -- of delta, we saw the bok move last week, and the rbnz said they were pulling back because of timing of communications. will policymakers continue to go ahead even as cases climb? richard: they will probably go ahead, ultimately it will take a brave central ba

the pboc easing, also helping chinese bonds maintain their yield premium over u.s.reasury's that we've seen since the end of may last year. >> let's get now the latest on some of the major developments on the chinese tech. stephen engle a hong kong, we have so much to get through. let me get started with alibaba. we have their reaction when it came to sexual assault allegations. >> that's right. this is an important story. obviously internally for alibaba, but across corporate china as well. there are other cases. some might argue the need to move came a little bit late in china. a celebrity, chris lu, is under investigation for allegations, now this story that emerged over the weekend, and fairly quick action at least, from the employment side, as well as condemnation for the alleged incident coming from the top ranks of alibaba, including the ceo, who put out a statement that was dated this morning and also saying before dawn, so he was up all night crafting this message in deciding to fire this employee, who is accused of sexual misconduct. rape is award they are

are looking at potentially another injection today, is this -- what is the strategy hear from the pbocof the challenges, there is one hope in china, which is very controllable under the central government. that is infrastructure project. however, the funding comes partially from local government. it is critical to continue to increase. actually, local governments can barely raise any funds for infrastructure projects, and that is why we have seen that infrastructure projects have not taken off a lot in the first half -- in july and august, so i think that the central bank is lowering yields through the open market operation injection. you have local government's -- governments . haidi: iris, i need to ask you about this segment, where we have seen reaction with evergrande, their stock tanking, distress levels, and is this going to be on a selective basis? within this sector? iris: i think it is just a very clear policy. it is deleveraging. it means that the ratio has to go down, and the cash on books has to go up, so most of the real assets property developers in china, the criteria, t

the fixed income story in china because of a, pboc ben even lens people seem to be wanting them overweightthey are happier being overweight, fixed income. have you got exposure to fixed income in china? >> we do have exposure. certainly more, loose monetary policy. and also the fact that bonds will be included in indices and bench marks and investors. incomplete passes tuitional investors are still very underwelterweight and therefore in order to manage their positions will have to invest in a bit more. it is one area where we are still constructive. dani: you talk about the short-term perhaps some concerns there. you talk about maybe some of the long-term plays in green investments. i wonder for some of the skepticism or concern you have in the short-term if there is anything you're watching for or anything that can change your mind to get more heavily involved in the region. >> the investigation, the antitrust investigations, whether these are coming to an end, that would be a very important factor. tology is very important investment area for china and it is affecting share prices. shou

we did not see a pboc easing as some had anticipated. >> things came in softer across the board.sense now that the economy is slowing more than anticipated stop unemployment rose 2.15%. the state council out of beijing put out a statement that they are concerned about great employment pressure. i think you can take it from that statement that they are noticing a slowdown in the economy. it's a question of what they choose to do. lisa: the international community is looking at china's response. do we have a sense based on the policy response of how long some of these major supply chain disruptions could occur as a result of the spreading variant? >> this is a big issue. a container port is partially closed down and we don't have much information on when it will reopen them. they are not giving much details as to what is next. another port beside hong kong, they are under similar circumstances due to the covert outbreak. it was shut for weeks and has repercussions for the international shipping chain. we have spoken to a lot of exporters about this issue. people are concerned and a

anna: where does that leave the pboc? read quite a bit this weekend about how the bureau, that meeting gave us the sense that they want to set their own agenda, and that might mean on various fronts, including diverging from the fed and easing in the second half of the year to counter the downward pressure on chinese assets. is that something you are factoring in? guest: yes, i would think so. this is something we are seeing in the last couple months. monetary policy has been more accommodative. we have seen the cuts in the rates, which was supportive for markets. on the other hand, we have economic policy from the top down, which is more restrictive. i think we will see a little bit of a balance here. all in all, i do not think it will be too supportive of economic growth. i think there will be a balance. i don't think the easing from the monetary policy side will be able to slow the growth down too much. mark: how do you think other emerging market currencies or asian currencies interpret a slight bit of policy easing f

if you see in the past couple of months, the pboc has [ indiscernible] from the yuan's perspective andslowing momentum in china's economy. i think that, given all the concerns, the debt concerns that we have talked about, the evergrande debt problem and other things going on in china, bond yields are coming off. there's not a whole lot of flows that are coming into the economy chasing currents gains. anna: when i look at government bond yields, the european story seems to be that we have seen those yields trucking up quite strongly this week. in the european context, we have seen that. dropping a little bit today. would you expect that continue, that slightly higher bond yield environment, into the summer? >> definitely. on wednesday, we saw bond yields surge by the most in a month. coming out of the summer, that is definitely a prospect. bond yields are trading too rich on the curve at the moment. they are trading like at a premium of 45 basis points over where they should actually be trading, meeting there is an awful lot of richness for the bonds to surrender. i don't expect the pre

>> we think the pboc is starting to rethink the monetary supply again.in the rrr shows we are sensitive to the growth outlook. we are in -- we are in a soft patch. the recent retail number look fairly weak. we expect the chinese government to continue injecting liquidity into the market. that is good news because the chinese market is very much a credit driven animal. we think the combination we have seen the last few cycles, i.e. credit extension is a big driver of the chinese market. they will continue to hold true. we think that could very much be an indicator the bulk of it is really here. shery: great to have your insight. we continue to watch the downside pressure on chinese adrs, chinese companies. this as we get the most direct warning coming from the u.s. sec chair. now saying investors don't know about some of those chinese companies listed in the u.s. take a listen to what he said. >> that we take a pause for now when such listings of's shell company listers based operating companies. haidi: being straightforward about the implications of a la

in a rare public review, the pboc and cbrc issued a joint statement, sending the developers bonds andres lower. evergrande has been selling assets including stakes and units over the cash crunch. asian private equity firm pag is said to be close to investing almost $3 billion in the operator. sources tell us their commitment to commercial management brings the fundraising side to $6 billion. the company was initially seeking to raise half of that amount ahead of an ipo later this year. sources tell bloomberg that softbank is offering $2.2 billion of its stake in doordash in a block trade through goldman sachs. the block trade is the latest move in softbank's selling spree that tripled to $14 billion last quarter and comes after doordash recently forecast a seasonal decline in new customers. we will have plenty more to calm on "daybreak asia -- to come on "daybreak asia." this is bloomberg. ♪ introducing xfinity rewards. our very own way of thanking you just for being with us. enjoy rewards like movie night specials. xfinity mobile benefits. ...and exclusive experiences, like the chanc

beijing, as we saw with the latest, what was said last week from the securities regulator and the pboc needs to address those debt concerns. it cannot raise cash from the debt market or the equity market. are we going to see more fire sales? the key concern also is that the property it is selling is at a loss. yvonne: sophie yea, thank you. we want to bring you the latest headlines out of seoul, the governors saying it was not a unanimous decision to a rate hike today. one member opposed. so there what one person thinking that maybe we need to hold, given the situation with delta there and how that outbreak has been weighing on the economy. so you are seeing, not much move on the won here, but you have a raised of the gains we saw at the start after that decision. they mentioned that when it came to the consumption side of it, it will improve on vaccines and that extra budget. so they are still talking potentially that they will have to see the economy improved, the outlook is still looking good, but right now they're still very cautious when it comes to the rate hike. rishaad: absolut

the pboc did inject some additional liquidity. we had another record on wall street.away from the open of the european market. there's plenty more ahead, including the open at 8:00 local time. the focus remains on the question of the fed taper and whether we get any more clarity. stay with us. 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 golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress, and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's g-o-l-o.com. ♪ anna: good morning and welcome to bloomberg markets. we will take you through all the market action this hour. the cash trade is less than an hour away. here are your top headlines. china's tech rebound fizzles. kathy woods says she is bullish on the long-term outlook for the world's

everyone has been talking about what is going on with the pboc that we might see some more liquidityoming in. what was your outlook on that? >> i think we will see an expansion of liquidity. i think a lot of numbers have been pretty weak. i think the withdrawal of foreign investors over the last couple of weeks from the chinese stock markets -- by the way, i think that is a good thing. i think one of the things china really had to worry about and was not worried about enough was that foreign inflows were still quite low overall but rising very quickly, and that creates a big problem for chinese currency policy and monetary policy, and they have been trying to counter that by encouraging outflows, but that has not been very successful either, so i think the slowdown of foreign inflows into chinese stock and bond markets is pretty good for china and should be a sign of responsiveness. i tell my clients that when the numbers are really high, they should not be coming in, and when the numbers are very low, that is a much more interesting time to come in because significant inflows underm

rishaad: looking at also what the pboc has been doing, vowing to boost credit support, this against the backdrop of what the commerce minister was talking about yesterday, which was them looking at a rough year for trade next year, may be at the end of this year as well. what did you make of all of this? >> certainly, policymakers are concerned about the short-term economic outlook in china, give any have had new cases of the delta variant in china. and then, of course, the global shortage of semiconductors. it is affecting china's exports. you have already had the chinese central bank made one rrr cut. more than likely they will consider further moves if china's economy keeps slowing. it does control market sentiment. that micro policy it is likely to remain supportive of china's economy. juliette: despite all of this that you mentioned, you still have a positive outlook that the economy will record fast growth this year. tell us more about that thinking when we ask if you are concerned about the unknowns and the spread of the delta variant. >> sure. i think we will still get historica

it might increase concerns that the pboc might allow some dollar strength to be reflected.not too optimistic about china, we do not think it is the best candidate for a short against the dollar, but again, i think it is a risk for the broader em asia. haidi: we started a conversation with commodity currencies rallying. what is the outlook with trade starting to roll over? guest: this idea that we have seen the peak of optimism post reopening, the world is contending with a virus they will not go away permanently. the world is dealing with regulatory regime with china. this idea we have seen peak growth i think will make the whole reflation trade a little choppy are. for that reason, have an recommending risk off hedges, including short kiwi dollar. we think that hedge has played out quite well. shery: great having you on, the latest on the currency space. be sure to tune into bloomberg radio to hear more from the day's big newsmakers, now broadcasting live from our studio in hong kong. listen on the app, radio plus, or bloombergradio.com. plenty more ahead. stay with us. ♪

more liquidity pumped in by the pboc, although increased concerns, another broadside in parts of the economy as a push continues to restrain and rein in areas of the chinese economy. the msci pacific gaining 7/10 of 1%. the s&p just into the green on the back of the jay powell speech. the greenback has weakened again. u.s. 10 year yield currently at 130 on the back of those comments. fed chair jerome powell, the dovish stance at jackson hole, giving investors a list to start the week. we spoke to a host of fed presidents on the timeline of the tapering. >> we put the statement about what it would begin -- take for us to begin tapering and i think we are pretty much there. >> we have a fair amount of energy and momentum and i think we can do our tapering faster. >> phase out the purchases and gives ourselves breathing room. >> keep it simple, student. start the process and get it over with. >> it may give us more flexibility down the road. >> the timing and pace of the coming reduction in asset purchases is not carried -- intended to carry a signal in terms of interest rate lift off,

in its quarterly policy report, the pboc largely pledged to keep autonomous.surge in ppi july prices temporary. they say the decline in productivity and an aging population will help suppress it. moderna has been approved for use in australia to keep -- to treat covid-19 as the country struggles to contain the delta variant. scott morrison told reporters australia should receive 10 million doses this year. sydney is currently in its seventh week of lockdown, and authorities in the state of new south wales are extending lockdowns as the virus spreads beyond major cities. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: coming up, mark says it's time to quit chinese equities. we will ask him why. this is bloomberg. ♪ is bloomberg. ♪ >> our estimate is this latest outbreak could shave gdp growth by 1% to 1.5%. >> we're not changing our forecast yet. our annual start -- forecast stands at 8.7%. we do think we need to incorporate t

started in the red, but these thoughts that you could see more targeted easing coming through from the pbocas turn things around, and the csi 300 jumping, biggest jump since may, also seeing this bond rally accelerate, as well, on the back of the thought you could see policy easing with yields at their lowest since june last year. watching the a share market because last week, mainland chinese stocks in hong kong actually had their worst month in five years. you are seeing a slight rebound and weakness in the offshore u.n., which hit those -- yuan, which last week hit those april lows. there has been a pause in the regulatory storm, but they don't see a rainbow yet because you did see them talk to other reforms on friday, in terms of real estate, commodities, overseas listings. they're saying there could be more headwinds ahead and more volatility in the earnings season. manus? manus: doesn't look like or sound like they're done just yet. thank you, juliette saly is singapore. let's bring in a man who has to deploy capital, ed smith. did you pull capital away from china? are you ready to de