oftentimes these papers will telegraph moves by the pboc. they are arguing the pboc could give banks more cash by having another as mark cranfield talked about potential rrr cut. the last time they did that was may. 25 basis points for most lenders and 55 basis points for smaller lenders. that would allow according to this article to provide banks with the liquidity needed to swap large amount of policy loans coming due for the rest of this year and will allow them to potentially match what happens with of the five year long from the pboc. that is lower mortgage rates. this article is essentially saying this is the key point in helping economic recovery. to stabilize and to bolster confidence in the property sector. essentially you know they have reduced the loan prime rate by 50 basis points, the five-year ltr by 50 basis points. that is on top of another 15 basis points cut they did previously. that brings it down to 4.3%. by rule, banks can set their mortgage rates 20 basis points below the discount. -- below prime. that would be 4.1%. th

are we going to see a much more active pboc? wei: it is not just the pboc, but also the fiscal side of things. the reality is that where we have excessive easing in interest rates on production projects, policymakers have been somewhat prudent. they might want to run past their efforts, but we are not expecting a set of easing, which is why our expectation for growth this year is with a three handle and for the next two years, we are talking 4.7% average growth and you will have strict policy on the covid front. this year will be lower, but because of the restart, next year will be higher. francine: we have a great chart that we are looking at, chinese bonds. i have to wake up. it is a monday morning. this is chinese 10 year bond. you can see that rally. do you buy into any chinese assets right now? wei: currently, we are staying close to benchmark when it comes to china allocation. we are neutral and china equities, china bonds. the balances of holding china bonds in portfolios is that when the rest of the world are hiking rate

markets also watching the pboc and the fed. how hawkish will the fed be?rlier with a stanford university economics professor, john taylor, who was at the first conference four decades ago. he says the fed should be more communicative about where policy has to go. >> if they move the way that's anticipated, maybe 75 basis points the next one. that will indicate they are on the way. what's most important now, we have learned from history, the more the fed can communicate what its objective is and would like to get back to 2% inflation and needs to do this by a monetary policy that reduces inflation, not the growth of the economy. that communication that stipulated what the policy will be is very important and i hope the fed will do that. >> when it comes to where we are at in the markets, extreme bullishness, not so much today, but we see the rally continuing to build. over the years for you, what role have financial conditions played and could the fed be paying more attention to this to bring down this bullishness? >> they have to pay attention to the marke

pboc cut its rights -- the pboc cut its rates. let's get to enda curran.cut, it was the reaction, some would say, to a backdrop that is tough. how tough is it in china at the moment? enda: it looks to be pretty tough. weakness across the board in july. retail sales down more than expected. industrial production down more than expected even though exports are holding up. investment weaker, especially private sector investment. on the housing side, new home prices, housing investment all weaker. that's why the central bank took the decision it did tonight to lower one of its key interest rates. it hasn't made a move since january. why that move will not be a game changer in and of itself, because the cost of -- because the problem in china is not the cost of borrowing, it does show how serious they are taking these things, trying to pull levers where they can. the other take away all of the data was weak, and july was meant to be the good month, when things pick up momentum again. the third quarter supposed to be better than the first quarter. now it undersc

the headline here is the pboc is morning about inflation risk.ow, structural inflation pressure could increase short-term. pressure of imported inflation is still there as well. the pboc has vowed to protect the economy from inflation threats and is promising to also steer clear of any massive monetary stimulus. let's take a look at what goldman sachs says. they have a knocked out saying pboc should maintain a low profile. looking in that policy report from the pboc, a greater emphasis on near-term inflationary pressures. economists think the pboc might continue to maintain credit growth. that's a measure we are watching very closely. also more reliance on target. make sure that happens. haidi: what about u.s. inflation? not everyone is sold on the idea that this is necessarily headed towards rate cuts. annabelle: that's right. one of those people we heard from on bloomberg television was former treasury secretary larry summers. basically, he said the numbers, yes, are encouraging. but, the latest reading does not really justify any major policy

let's talk about the pboc.uing their own warning on inflation and saying they will safeguard the economy against rising prices. let's bring in our bloomberg economics chief asian economist. help with this into context with us. inflation is nowhere near everywhere else. why is this a problem? >> i agree. if you look at the inflation data, what concerns me is not so much the inflation side but the signals on demand. if you look at inflation up a bit, that is mainly by put prices. particularly in pork prices, 20% in the year on year jump. that is after sustaining a decline for close to two years. but that is about it. if you look at inflation, that is below 1%. that is saying to us demand is sufficient. this is on the growth side rather than the inflation side. >> it was still worth a mention in the global monetary policy report, i have to wonder, in terms of the policy front, does that mean there is still more room for them to do stimulate? now that we are a little more hawkish, there is much less room for that.

the pboc tries to support the economy. are they doing enough? richard: it depends what you mean by enough. there are still things to be concerned about. i think, justifiably, adding more liquidity to a system that already seems to have excessive liquidity. there have been issues around banking sector deposits and mortgages the last couple months. let's not forget the ongoing adjustment in the property sector around debt, credit exposed. which companies are viable in a more slowly growing chinese economy. they could definitely do more. i think it is a trade-off between short-term stimulus and long-term trend. it looks like we could expect china to be a more slowly growing economy over the next few years. shery: what do you think about the narrative forming around a liquidity trap because of the issues you mentioned? what can policymakers do to fix this? richard: i do not know there is a liquidity trap. monetary policy seems to get less traction that it has in previous cycles. we also saw that in europe after the gse. in the u.s. during the gse. i

the cuts we saw from the pboc.s are definitely turning a little bit more to the red right now. let's bring our executive editor. paul, first, the data and what we saw before that with the mls. >> we are all looking pretty awful out there. pretty bleak. the lending data was such a big mess. it just goes to show you there is plenty of liquidity out there in the market. the people that kind of need the money don't really want it. they don't really see any useful way of putting that cash to good use for the economy. developers are still shut out of the market. you can cut your interest rate, really getting that money flowing through the economy again. it will take a lot more. something that really gives people confidence. when you have the zero covid policy and the crack down on the property market as well, it is hard to get the confidence going again and to get people greasing the wheels of the economy. >> i love how you put that. let me take a bigger step back. the data so far, we just talked about thailand, japan gd

it is hard to fathom why the pboc would be concerned about it.ng out of the quarterly policy report has been consistent with previous commentaries. and if were you to go ask an average mom and pop on the street in china, it is hard to imagine that they will tell you they are feeling that pinch of inflation. it is probably not the case in china, especially when all they read in the newspapers is where global prices are going through the roof. so, they are probably feeling lucky right now in china. but the pboc is probably worried about core inflation and important price inflation such as oil and gasoline, so that is why they are expecting to exceed percent in some months of the second half. but they seem to be sure they have the 3% target in control for fall 2022. shery: markets have rallied and investors are very optimistic about the chinese markets, because they expected a loss of fiscal support. what does the fact that the pboc is very concerned, or a little concerned, about inflation mean for the markets? >> that could mean potentially that th

indication the pboc may be working on other things.y mentioned is another newspaper in china is calling for a cut in the loan prime rate in the coming months. bloomberg news is latching on to a number of the policy moves that could come. we are patient they are quite blunt. economic data is alarming. authorities need to deliver full-fledged support we can go back, they are focusing on policy news. marginal benefits. the economy is in trouble. more policy support is needed. haidi: beijing says the delegation met with a taiwanese president. they discussed supply chain investments in the u.s.. american lawmakers are visiting taipei. pelosi is the first sitting speaker to visit and a quarter of a century. singapore's prime minister told us in annex list of interview could sleepwalk into conflict. >> relations have become more strained. tensions have gone up. that is the risk that can happen that we are starting to see. decisions can lead us into dangerous territory. the consequences may be more difficult to manage. we worry about accidents

new home prices fell at the fastest pace since september 2015 based on reuters calculations the pboc cut a key lending rate this morning, but analysts questioned the timing of that. an hour before the data dropped leaving them wondering if it is too little too late. in singapore, i'm sam badas. back to you. >>> a delegation of u.s. lawmakers landed in taiwan on sunday, just 12 days after nancy pelosi visited angering china. the four-member delegation will meet senior leaders to discuss u.s. and taiwan issues nancy pelosi conducted a series of discussions after the drills off the china coast. according to sources, the meeting with president biden and xi jinping would come on the tour to include visits to bali and bangkok to attend the asia pacific summit in-person attendance would mark the chinese's leaders first international trip in three years. i'm happy to bring in the chief china economy from hsbc. good morning to you. let's start off by looking at the data retail sales and industrial output is lower than anticipated. is this the sign the chinese recovery is not panning out as th

how the pboc is easing and perhaps more fiscal stimulus in the cards? ryan: i do.f you can withstand some volatility, whenever we talk about china and emerging markets, you can't ignore the geopolitics and the concern and risk there. if you can withstand some volatility, china is a good area to increase exposure. shery: good to have you with us, thank you. you can get around above the stories you need to know in today's edition of daybreak. terminal subscribers go to dayb . you can customize so you only get the news i and industries on the assets you care about. this is bloomberg. ♪ shery: hedge fund titans are remembering julian robertson, the billionaire tiger management founder who died at the age of 90. he was one of his generations most successful money managers. su keenan joins us with more. he left quite the legacy. su: said day. so many on wall street are remembering and. he was one of the most successful hedge funds. he started tiger management at 48. that's relatively old. in the late 1990's, asset soared to $22 billion. returns were averaging 32%. th

the pboc has offered no pushback after the yuan slid to a three-month low. that's get the market action in asia with juliette saly in singapore. juliette: certainly we've got the 2022 lows insight pretty you want after the offshore you on -- yuan slid yesterday. it is strengthening today but the difference here is the widening discount between on and offshore. signals a lot of pessimism about this currency and that is normally when the pboc steps in. today they didn't, today weaker by 1.5%. also watching china's bond market. big drops coming through in deals on the taint year yesterday continuing to happen today with the yield on china hovering around may 2020 lows. this is a story of a bond rally. also in australia and new zealand, the rba continuing to say they are data-dependent and there is no set path for rates but they did flag they are likely to hike again. we are also watching a sell down in softbank on a report that the hedge fund elliott management has offloaded almost all of its stake in softbank. all of this uncertainty over the chinese economy,

that is the way it usually works at the pboc.es at harvard and studied at cambridge and could be considered a continuity candidate. >> what about the pmi's later today? more into a slowing economy? stephen: absolutely. we got pmi's, the official ones yesterday. they were less than expected. the official pmi was a little better than the consensus estimate. again, it was below 50, indicating contraction. the chinese economy in august is continuing its downward slope from july, which the numbers indicated was slowing down from a pent-up demand boost we saw in june. the manufacturing pmi will be out this morning. it represents a, private manufacturers. that is the consensus estimate, right at the line between contraction and expansion. bloomberg economics expects that number to be lower. a little more bearish at 49.7. we have weaker external demand being seen. that affects directly these smaller exporters in china. the lockdowns and one of the shipping hub -- the locked out of a shipping hub likely driving at lower. satellite data we

yvonne: the pboc fixes interesting. the central bank cutting that fix the most into weeks, what messages that sending on the direction of whether china dollars going to go now? garfield: it is sending the message from the people's bank of china that comes through in slightly different methodologies. they are wanting to make it clear that they don't want to see anybody thinking it's time for one-way bids on the yuan. they don't want to say hey just because there's one thing you can expect. the other thing is by setting a much weaker fix for the yuan today that may be anybody had expected. that does reinforce the message of that stimulus is on the table, and that they are not as concerned about inflation. david: let's talk about the rba minutes, this is for the august meeting they released 30 minutes back, i can't seem to get any sort of consistent message, just translate this to us into simple english. what is it mean? garfield: as simple english, benefiting on the rba, they have said it wants to be data-dependent. it ab

shery: the pboc is tightening. have a blatantly easing -- a slow hiking we are seeing from the likes of thailand. the governor, take a listen to what he has to say. >> we do not see the need to undertake aggressive rate hikes at each meeting because of the economic situations in thailand are different than industrial countries. we will be data driven. shery: they did not want to move and they did a little bit earlier this month by 25 basis points. this is not moving as fast, there is a bigger microeconomic application of that when it comes to capital flows and the pressure on their current test currencies as well -- pressure on their currencies as well. >> and divergence in monetary policy, pboc is easing, other central banks are signaling like thailand that they will not slam the brakes. indonesia hike rates, 25 basis point move, they were not -- may not get to the interest-rate levels even though other countries are will pass that level at this point in time. heidi: a nobel laureate talking about the economy on a

we are hearing from the pboc, really revert is one of the pages of the table, calling on state owned lenders to stabilize the country by lending more, issuing more loans to the real economy. they said that in a statement, they were improving credit support for exercises, green development and innovation as well. we are consolidating economic recovery. the problem here is the confidence hit to the economy. all of this as to the fact that we are just not seeing that demand. you could ask lenders to issue more loans and lend more. >> all of this uncertainty, dementia what is happening in china. leaving investors to see what is happening after the fed heights -- rate hikes are done. and also, the fed having to ease. the market is wrong to expect a central bank to expect a long-term when. we are seeing a stock tip in the world economy that even as inflation retreats from peak, we still have issues with supply chain disruptions. imagine things happening in china right now. the war in ukraine continuing. maybe the fed will carry out that dovish pivot. let's bring in our guests. let me start

the reason is if you look at the fundamental picture, both the pboc, think it is a little aggressive. nothing too much is change on the fundamental level. the yuan is quite cheap to short get the u.s. dollar. you look at the dynamics aftermarket people are betting on the yuan to get weaker quite substantially. there is more talk of a chinese stimulus, people are not convinced is the right kind of stimulus. this will have the covid zero policy and plenty of headwinds in property we have discussed for quite some time you can probably understand why people are saying yes, then install the market is been getting carried away. >> stocks and bonds in the tech space as well, a pretty big rally when it comes to asia tech, is it a short squeeze? can we expect it go much farther now that it seems like the listing concerns are fading now? >> yes, even if it is a short squeeze, they can be pretty violent. we have two recent moves this year, one in march and one in may. the first one took 22% on the upside and 17 percent on the upside. if you got anything like it to short squeezes this year that b

the pboc does not want extreme volatility.f you look at fundamentals for china compared to the u.s., macro monetary diversions are happening. how do we disbelieve that 7.0 is a very important psychological factor. yvonne: you take a look at what carry looks like in the renminbi versus the dollar, it is basically negative now. eddie: in asia there are still positives. sharp in indonesia is positive. and bond-driven currencies. the key for asia, they are not aggressively hiking, not chasing after the fed. they are following along their own path. i think there is still room in that environment. rishaad: taking a look at a currency you do not like, the peso. it is down year to date nearly 10%. eddie: the philippine peso, import demand is massive. the philippine economy is coming back, but they are not exporting much. imports are widening the deficit. we do not see support for the philippine peso coming back anytime soon. we think the philippine peso underperforms, especially in the next one the two months. yvonne: what can policym

kathleen: it is the pboc of chinese inflation versus almost every other economy in the world. for the federal reserve, we are looking for the headline number to go down to 8.7%. the core takes out food and energy and gasoline prices. the federal reserve, several officials have made it clear that what they do will rely on four numbers, two jobs numbers and two inflation numbers. we are getting the july number. this will be feted and talked about on top of the very strong jobs report we just saw, there will be a lot of back-and-forth. a big debate in the market. let us get more on the key inflation numbers and the plume in the tech sector. we are joined by anna, and tom child. let us talk about the u.s. cpi. what are we expecting? what are we really expecting in terms of what will make a difference here? >> i think people are looking for the peak inflation numbers today. as you mention on the headline number, looking for a slowdown of 8.7%. that reflects the big dip in gasoline prices, might i suggest u.s. prices are turning a corner? the core number is expected to take a little

the ecb is falling, be boj -- the boj is falling, the pboc is falling. you're focused on qt and acceleration of qt. but the strengthening dollar has had a greater impact on global central bank balance sheets in any tweeting -- tweaking of balance sheets themselves, and that is a tightening of financial conditions we are seeing around the world. that is why we get restrictions on liquidity. it started in march of this year that the dollar strength became so big that it impacted those balance sheets. member that currency impacts are much more important than qt. now, we will focus that together with qt happening from other central banks. tom: the combination of that reduction of the $9 trillion balance sheet. thank you. mark cudmore, our mliv managing editor. let's bring in derek halpenny, head of european global markets research at mufg, as well as bloomberg's kristine aquino. kristine, we are seeing some sense of calm in these markets having digested the selloff that we saw on friday and monday. kristine: absolutely, especially in the u.k. coming back fro

it doesn't seem to matter what the pboc does. we had a rate cut yesterday.ints. a lot of people saying it is not enough. why ask people what will it take for monetary policy, from the physical side, from the central government, people just don't know. there's a huge level of anxiety in chinese markets. nothing the central banks or policymakers want to do appears to be working. it's been five months since those sweeping promises to do everything to support markets and the economy. so far, nothing has worked. the level of anxiety, confusion and markets is running so high that people don't believe in these promises. haidi: we have seen stock swings and hong kong, that has become normal for the asian markets. we could see those swings coming to new york as well. what is happening? >> ever since i first came here in 2017, this is a regular occurrence. this is why hong kong is a popular market for short-sellers. the level of stock swings and these pump and dump schemes, that is something the hong kong exchange has tackled in the last few years, is now coming to th

raises the bar for whether you see further stimulus from the pboc. mark crandall puts it well when it comes to the hawkish fed speakers, bond traders in australia projecting another 50 basis points from the rba, too. we are seeing a pickup on the 10 year, and the korean won rising after the trade deficit. tech imports declining, signaling falling global demand. let's have a look at my chart which shows what is happening in singapore. the ministry of trade downgrading their growth forecast now to 3-4%, after we saw a contraction in the june quarter, year on year growth of around 4% but the concerns flagged about chinese lockdowns and aggressive monetary tightening from central banks in terms of the outlook here in singapore. dani: jules, thank you very much. now coming up with manus and become it was the dollars biggest retreat since the start of the pandemic. we will talk about cooling u.s. inflation and its impact on foreign exchange. this is bloomberg. ♪ >> this was a good report. >> this data allows us to breathe a sigh of relief. >> is nothing li

and of course the pboc cutting back rates to stimulate growth.tion is not nearly as big a problem in china right now. there was a lot of talk going into this lpr decision, the fixing, the consensus was that there would be a 10-basis point cut. mimicking what we saw in the one year medium-term lending facility that we saw last week. that is more representative of the mortgage markets. you can clearly say that authorities are looking at supporting the property sector and they don't want more mortgage boycotts. they want developers to finish their properties and to get them delivered to the buyers, because in addition to the rate cuts that we got on the low prime rate, we had news friday that slipped under the radar, one company reporting that the three ministries, the pboc, the finance ministry and the housing ministry, had a joint statement saying that they will provide special loans for developers who are having trouble raising financing to finish their properties, and they are throwing -- not saying it is the kitchen sink yet,, but they are draw

shery: what is that mean for what the pboc and chinese government does?se we continue to get the signals that they won't act as aggressively as many investors had expected. >> basically the latest inflation print was below expectations, slightly below and china. but the officials are coming out and saying that they are concerned that this could go up even higher. so i think that it is going to be a balancing act between stimulating growth and also not overhyping the inflation worries, right? so, what we expect them to do is that they will probably be taking a more balanced approach -- approach. so the monetary front, they probably won't be able to do as much as they used to do, but on the fiscal stimulus front, we will continue to see them putting out measures, especially areas such as the stimulation of the internal consumption drive. because they do believe that right now, if you look at the situation there, internally generating growth is what they feel they are more secure about, given the outside geopolitical tensions that they are seeing. shery: wer

the pboc once again trying to defend this weak currency, and that is seeing upside on of the offshore yuan, rising .4%. let's have a look at the month of august, it has not been a good one. we are on track for a monthly loss of 1.3%, wiping out july's gains. we saw a major market seeing about a 60% drop, the biggest drop in turnover in 17 years. $320 million worth of shares changing hands in august, down from a billion last year. manus: that is a resplendent chart. juliette saly in singapore, keeping it real with pretty hectic charts. u.s. job openings, consumer confidence, both topped forecasts, adding to fears about inflation and what the fed might have to do. could we see 75 basis points month, the data raises the prospect of that move. michelle, i was wondering what you are going to cover but here we are, jolt me up in terms of the job openings. the consumer remains confident, gas prices coming down for 77 days. >> good news and bad news for the fed out of this data. the good news is, it matches the message they have been trying to send on the growth outlook, saying there will be

board in july and as kathleen was just talking about, the fed is going to be tightening while the pboc going in the opposite direction. they cut their seven day reverse repo rate and this is likely to set the stage for the loan prime rate, expected by all economists surveyed by bloomberg to have at least 10 basis points cut. the five-year lpr, more of a mixed reaction. six of 16 expecting a cut to the prime rate which is more associated with mortgages. the bank sector, we know there problems, it did drop in july for the first time in a decade and corporate and households have shown a reluctance to borrow. which really dropped off the cliff in july. it is typically a slower month but it was much lower than expected. we were going to get those cuts, unlikely, but you mentioned the power shortages and down in the south where temperatures have been above 40 degrees for a number of days. no rain for 15 days. nanjing, hasn't had any rain since early july. that is exacerbating the water levels at the hydroelectric dam. privileges will be extended to the corporate sector to this thursday. fact

i think this is a balance the pboc has. their story is different from the rest of the world. it is controlled economy. they do control prices to some extent. there's a lot more they can do to either support the economy, support the real estate, support consumers than the u.s. or other democratic nations can do. there are limited in that sense. one thing i like is that while we are seeing consumer and producer prices drop, producer prices are falling more than cpi which means the import prices for companies is lower than what they are able to charge in terms of the export price. in that dynamic, that will help earnings. with the lower dollar as stocks rise, the dollar goes lower. put that together and that spells for positive reaction. if the fed gets the hit that inflation is rolling over and you look at portfolio managers, more bears than bulls, if this trend continues, there's a lot of catching up to do and i think there will be a surge in equity prices going into the fourth quarter. >> great to have you with us. stay with us for more insight. we will be hearing from the sa

that boj and pboc is weighing into asia. the msci asia-pacific with the biggest two your drop since june. and a drop in bond markets, the aussie 10-year up by about 10 basis points. the yen could get to one point -- 140 now. and the boj with a stronger case for the on short currency showing concern about the continued weakness in the yuan, which is at a two year low, breaking through 6.9 for the first time in two years. let's have a look at what we are hearing from the bank of korea. kathleen spoke to the governor at jackson hole and they have indicated they will keep hiking, too. they won't start -- stop tightening until they see inflation peaking at about 3%. the korean won has fallen in the most in about 11 weeks. manus: it really is an asian fx collapse, relative to g10. the aussie 68.43, is going down, make sure you hedge. economists are turning more bearish on the outlook for the chinese economy, downgrading the forecast for 2022. it is now projected to grow 3.5%, down from 3.9%. we are joined by our economy editor fro

the markets were expecting the pboc to hold.s china's determination to do something about this slump in growth. on its own, a 10 basis point rate cut is not going to be adequate to the challenge. guy: let's just talk about this. surprise 10 basis point rate cut. you say surprise rate cut, i get excited. you say surprise basis point rate cut, i don't get excited. what is the signaling that comes from a surprise 10 point basis cut echo >> i think you have it right. the signal here is surprising and if you are worried about china's growth, positive. the substance 10 basis point rate cut to address a 30% drop in home sales and 7% drop in poverty as property construction, clearly, that is not enough. the question is what comes next. we think there is a little bit more to do in terms of rate cuts from the pboc. we think there is more to do with the reserve requirement. the crucial pieces are going to be what happens on fiscal policy, how much new money is there for governments to do the infrastructure spending with china often turns t

it may not be the pboc, it could actually be the chinese government, period.ly help out those markets and help out our markets. it is interesting to see that we have tech both here in the u.s. and in china moving, even with rates higher. rates higher, and especially with that 10 year back above 3%. in fact, we may have bigger china tech moving sharply higher again if we go into the bloomberg terminal and take a look. this is that nasdaq golden dragon index. the downtrend from february 2021 high, but as you can see it has done a good job of hugging this 50 day moving average. right now below it, but there is reason to think we could go back above it. if that happens, will that strength continue? we have tech here in the u.s. over the last couple of months doing pretty well on what could be this bear market rally. as for rates, let's take a look at the 10 year yields. it is a solidly back above 3%. that is pretty incredible. 22 basis points. it continues to point to the dislocation of traders in terms of trying to figure out what the fed is going to do. housing,

in line with consensus, giving market participants some kind of idea that the path to the pboc is ok with the yuan depreciating a little bit further. let's have a look at what else we are seeing because there has been a big rally coming through in a lot of these development stocks. bloomberg intelligence saying a little bit of disappointment with the one year lpr. it lost 30%. china stocks getting a boost. we really need to see more stimulus coming through from government authorities rather than a monetary policy because the data is clearly showing that cuts in terms of monetary policy are not having too much of an effect. we are looking at jackson hole, too. risk-off across the benchmark index coming down for a third day and exports in south korea barely budging in august, weighing on the south korean won , dragging down em currencies. the korean won at a 13 year low with 1340 insight, it is weaker by 1%. dani: thank you. juliette -- manus: thank you. juliette saly. in europe, politicians are being forced to seek the alternatives. in germany, the leaders say the country may need to

pboc is keeping growth stable and facility -- facilitate financing for the private sector.d to keep liquidity reasonably ample as there are challenges across the economy. the latest facebook survey showed china economy weekend in july over fresh covid outbreak. retailers face the brunt of covid restrictions with revenue falling further a fourth month. hong kong's economy has contracted for a second quarter. they are under pressure from covid restrictions and global trade. gdp is much weaker than forecast. the city [indiscernible] 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. this is bloomberg. haidi: getting more details potentially about the movements of nancy pelosi. the national newspaper in taiwan reported she is expected to arrive at 10:20 p.m. local. according to one person who spoke with us, they will be meetings on wednesday. the white house is trying to dial back tensions between washington and beijing that rose in result of the trip and urging beijing to refrain from agg

juliette: we are looking at my chart with the pboc setting the strongest yuan fix. stronger than what we were expecting and that was the second strongest we have seen. in 2018, really showing the authorities are not happy with this weakness in the currency. it's all about the diverging interest arrays. we are continuing to see the dollar rise, two. onshore and offshore yuan -- goldman sachs joining the likes of the yuan bears that we heard from last week, calling for seven to the dollar by the end of the year. let's take a look at what we are seeing in market moves. it is a little bit more of a stable today than yesterday, being led by gains in japan. we got this concern about the overall china economy. the story really hanging in -- i am never very far away from a reopening story. the thai government saying they are expecting tourism revenue and the second half, 10 billion dollars, as they continue to see revenge terrorism. we are seeing terrorism stocks rallying today. manus. manus: i will see you in thailand. another six days, very happy to chill on the beach in

growth is so slow that the pboc will need to ease policy again. they may do as early as next week and that is what traders are looking for. >> mark crumpton with the market take, bloomberg's kathleen hays as well on the head speakers --fed speakers. later on will be talking to the philippine central bank governor. that conversation 9:30 a.m. hong kong time, let's get to vonnie quinn with the first word headlines. >> chinese president xi jinping is urging regional authorities to help relieve the regional drought, adding a further risk to economic growth, some factories have been forced to curb production as the heatwave has struggled with power generation. waters at the lowest recorded levels of this time of year. the turkish central bank delivered a sharp interest rate cut despite inflation at the 24 your hike and deliver on your a record low, the monetary policy many lowered the benchmark to 30% after keeping it at 14 -- 13% after keeping it that 14%. the sudden resumption of monetary stimulus comes less than a year before elections. longtime tru

one is they are on the policy intention side, the pboc providing ample liquidity into the system.to the central bank instructions. however, in terms of the relationship between the credit supply and credit demand, the weakness is mainly the credit demand. if the corporates do not have incentive to borrow and households do not have incentive to buy a new property, then it is very difficult for banks to extend the long-term loss. in may and june, when the number was much stronger, still the high tsf number was mainly because of the short-term loans, which is more a short-term strategy for banks to pre-book the quarter, rather than provide a meaningful support for the economic activity. we are still waiting for the policy to spew over to the other industries. from that perspective, i think the question, how sustainable, how quickly the policy support is spilling over from this policy tailwind area to a broader economic activity? i think that is a big question. we have good reason to be more concerned in the fourth quarter. fourth quarter, we are facing several challenges. one is that

guest: our point of view is the china pboc has the capability to ease.flation in china fairly benign, we expect the interest rate differential between china and edm markets to widen. in addition to that, we expect the trade balance in china to further weaken the yen. that is how we see it. haidi: when it comes to equities direction, does it feel like markets are looking for an excuse to be optimistic despite the fact there is a lack of support? guest: we are in the camp that the fed will push deep into restricted territory. we are seeing contraction in the u.s., we expect to see a few more in the tar to deny that's on the table. if that happens we expect equity markets to sell off. even though we see [indiscernible] haidi: where do you see the biggest risks when it comes to the credit space? guest: for asia specifically, the main issue around the property market may blow off further. that has seen some implications across the broader credit space. even though most other asian markets are exporting to china. from contagion implications, within hours space

for pboc, the guidance, they have been pushing banks to them more.e you with us. head of china fig resource -- research at jefferies. will get in-depth analysis. you can listen in on amps up radio plus or bloombergradio.com. more ahead, this is bloomberg. ♪ haidi: singapore is overhauling its visa rules. contributing to asian price pressures, let's bring in bloomberg's asia reporter. we know how reliant the singapore economy is on foreign talent, what are they trying to accomplish here? >> singapore is really trying to recharge and burst out of the game in the reopening. see a lot during this, trying to take advantage of these times, and compete on global labor market worldwide. one official told me yesterday there was a war for global talent. we hear from the very tops of the prime minister talks often about the existential need, to bring in the foreign talent and see those as effects in the local market. there catching up to the likes of dubai, u.k.'s of germany who have rolled out special worker visas. this was a culmination of a year long effort.

we will get data out of china, expected to leave room for the pboc.itle into central bank poised for liftoff, expected to hike by 25 basis points after holding rates at .5% since may 2020. shery: on the earnings front, plenty of results this week. foxconn industrial, toshiba set to report and reveal earnings thursday. bank of australia reporting and softbank earnings come amid reports of increasing pressure on the ceo. a very busy week ahead. haidi: let's bring in our next guest that says policy error is a key risk with the macro harder to get correct. head of research at k2 asset management, george, always good to have you with us. take a look at what to year yields are doing. we have had massive volatility in the bond space. falling in surging all over the place. one is -- what is the bond market telling us on who is correct when it comes to where yields are going and the fed is going and economy could go in the next year? >> good question. we try to be predictive in the bond and equity market and one will rise, but which one? there is volatility in

the pboc's patients among this weakness is likely to continue we take a look at how they have been against that. it has been resilient. whether that stays the same or that strength is sustained is one thing to watch as well. goldman came out with a note yesterday saying it looks like it could stay for some time, given what we have seen what it comes to trade front amidst this covid pandemic, the like. it it is going to be a big thing when it comes to pmi data that we got here as well. it continues to show we have contraction in manufacturing. how we reach that bond, that is the key question. i it was still beat from what the economists were expecting. not painting a pretty picture in anyway. still, the sub gauge is not looking good either. rishaad: forward guidance and the like here, big on the manufacturing side. let's get more flesh on this with our chief asia economics reporter. >> you made a good point, it is about the sub gauge, the output and the new orders all in contraction to territory that does not suggest quick turnaround. it shows the overall pmi story, that the impact of the p

the pboc does a quarterly survey. loans are near record highs.he money in the system, there's no one that wants to draw down that cash -- the credit from the banks. yvonne: i'm wondering, if you are seeing the bond market, that where you are putting your money? >> the bond market is doing very well. coming into the rate move on monday, the bond yields dropped further. the lows of this cycle. this comes down to the fact that we have a more deflationary bison the economy. unfortunately, the cut we saw in the low prime rate is will be enough to avert a more deflationary backdrop for profits and for overall loans. rishaad: it is tinkering. what do they actually need to do? >> i think the three things outside of lifting covid, they need to go out in recapitalize the asset management companies and come to a solution about cleaning up the real estate sector. the last one has to be a real cut in the primary rates. still have positive real lending rates. people are not going to are the money. those are the three that they need to press at the moment. yvon

local time, then the decision from pboc. >> -- haidi: stephen engle.e take a look at powerhouse falling income -- handily beating estimates, that full-year underlying at 3.7 9 billion aussie. the u.s. steel market when it comes to bluescope fortunes continues to be the profit powerhouse. australia's largest steelmaker, we had seen previously raising the profit forecast by 12%. we are seeing strong numbers come through with a four year underlying profit beating expectations easily. $2.7 billion against 2.6 billion australian. bullish on stock. we will be getting more on these numbers from bluescope's managing director and ceo, joining us live on bloomberg tv at 10:00 a.m. hong kong, 12:00 noon sydney. shery: we are looking forward to treating in china. five of the biggest state owned companies announced plans to delist from u.s. exchanges. lots of volatility in the friday session. let's bring in annabelle. this includes china life, among the big names. why now? >> the timing is interesting. it does come after the u.s. house speaker nancy pelosi's trip t

i think the pboc is well regarded in all of the central banks around the world for technical expertise. .10% is the minimum to please the leadership here. >> that's an interesting point >>> elon musk making headlines tweeting yesterday congrats giga shanghai on making 1 millionth car. tesla shanghai factory was struggling after lockdowns and parts shortages. you know, we knew they would get to the 1 millionth i guess he wants to focus attention on ramping back up on production. >> how reliant thaesla is on china. >>> and aramco said the net income in the quarter reached $48.4 billion. that's up from $25.5 billion that it had in the same quarter a year ago if you compare that to our big giants here. exxonmobil was $17.8 billion for the quarter. apple was $19 billion in net income you are talking $44 billion when aramco was down. it was still out pacing our biggest growers. shares started trading on the saudi stock exchange in 2019 the company ceo says the company is ready to raise production if needed look at crude oil prices this morning. one more thing to check. right now, wti is down

check, china we are hearing more reports from chinese owned entities asking for more policy from the pboc. i could be a game changer. european stocks opening higher. euro-dollar, 101 55. the other story is what's happening in the pay. we had that wage inflation, down 3% when you take into account inflation. let's get over to mark. you're looking energy today. yes, good morning, i want to talk about the divergence between the european energy crisis in global crude prices. this is brent crude since june 8. that is the june high. down 24% overall, oil prices are lower since the war started. this is going to macro dominate the supply factors in oil prices. all the warnings about oil prices are going to say high forever, all perceived to be warmongering. that is not ease the energy crisis. the prices have been getting crazier over the last year. we are seeing gas prices, european gas mark bench -- benchmark gas prices, wishing for your energy prices up 100%. the energy crisis in europe continues to get worse, no matter what's happening in oil. ultimately, given that oil is one of the biggest d

the pboc monetary report shows inflationary pressures rising in the near term.ort came the same day that july inflation surged to a two year high. ukrainian official has told the washington post that a powerful attack on a russian air base in an occupied crimea region was the work of ukrainian central forces. it confirmed the development was it just -- would suggest an increasingly important role for an operation deep behind russian lines. the u.k. housing market is feeling the pressure of rising interest rates and the squeeze in a cost-of-living. the latest report today shows that sales expectations for the next months are at the lowest level since march of 2020. new buyer inquiries fell and the slump has yet to translate into a crisis. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. coming up, donald trump invokes the fifth amendment and refuses to answer questions to a probe. his mounting legal troubles up next. this i

the pboc has signaled it is not happy with what is going on in the currency with recent depreciation.t really does contrast to the more jubilant reactions we are getting from a fed official to the market moves. kathleen: neel kashkari, president of minneapolis, is now saying he is happy to see the stock market route after jay powell's hawkish. speech. . he said they will not quit the inflation fight until the job is done. neel said i was happy to see the stock market rallying because i know how committed they are to getting inflation down. i think the markets are misunderstanding. you think? it is not surprising to me neel kashkari is saying he is happy. it also shows they have been trying to get a strong message across. this is not an accident. this is what they want the markets to hear clearly. haidi: is he liking the markets are starting to reel from a reality check? he will might like we will see tightening. some looking to offload treasury yields. look at the chart. typically when the tightening happens and the fed pulls liquidity, stocks will struggle. this is part of the broade

plus we take a look at the yuan following the people's -- pboc's on expected rate cuts and that said,eeds to make broad policy changes to avoid another economic downturn. this is for daybreak australia. daybreak are -- daybreak asia is next. this is bloomberg. ♪ shery: you're watching "daybrsi

the fix out of the pboc is anchoring risk assets. since that time, equities higher . forex dollar down materially as we speak. who knows if this will last. it comes down to the be ok, jackson hole -- bok and jackson hole. yvonne: the be ok is one of the big factors -- bok is one of the big factors. that presser will be starting in a few minutes. you talk about what markets are pricing in, 50 basis points is the consensus for september, but there are questions about where the terminal rate lies. for the market, right now, the narrative about a pivot which we were hoping for in the last couple of weeks, that has dried up, just given what we have seen. u.s. 10 year yields are surging about 3%, and basically it has been up 50 basis points, which is the third biggest jump in basically six years, so maybe, you know, how hawkish jay powell will be is a key question. is he going to move big against these market expectations of some shift in the fed? rishaad: expectations it is why we are getting the dollar to the upside. we are nearing two-year low for the yuan, the greenback

without the -- with now the date announced of the pboc, more policy is going to be implemented versusxpectations. everybody is negative on china. what we are seeing is a lot of innovation out of china. there is a lot of demand for engineers, and for hardtack. china has shifted from software or hard tech -- to soft tech. once we see this reopening, there will be a lot of jobs for those young graduates. and the mpc priorities will be very important. tom: and we need to see that reopening, that is the caveat. where is your conviction at this point? virginie: we had this relief rally. we are now entering the phase where growth is going to slow dramatically. an environment where growth is below gdp at the end at the year in the u.s. you have to make sure you have a strong balance sheet, strong leadership teams, but also understand how inflation will impact group -- impact through inventor's and demand is instruction. so you want to continue to have a diversified portfolio with high convention along themes, growth or value. that is still the same strategy but i believe will be critical over

the more modest five basis point cut to the one year is reflecting some of the restraint by the pboc.comes as china continues to battle covid with the lockdown heavy approach and a power crunch caused by a heat wave now looking at it 2.8% in singapore, i'm sam baddas back to you. >>> let's look at the china sensitive sectors in europe markets. we have gas down 1.9%. anglo american down 1% right across the board for the minors, the chipmakers in europe, we have red for the chipmakers so pretty hefty selling in those names. the auto sector. the autos are bearing the brunt of selloff this morning. a number of names under pressure the supplier is getting more hit than what you see on the board here these are the oems volkswagen down 3% auto sector is falling out of favor among investors this morning. >>> in geopolitical news, taiwan's president says the u.s. must continue the security, economic and democratic support in the region. he was speaking to the indiana governor eric holcolmb who was the third official to visit this month. >>> xi jinping met with vladimir putin in the region this