this is bloomberg. >> the rba has taken its first baby steps.nor philip lowe spoke after the banks meeting on tuesday. >> the situation today is quite different from that that we faced in march last year. we no longer are looking over a cliff but instead we are transitioning from recovery to expansion. shery: let's talk further on this. if you take a look at the market reaction we had, is there a sense that investors are perhaps getting ahead of the situation? >> good, haidi. i think so. i like your characterization a minute ago. the rba is taking its first baby steps towards pulling back a little bit. we describe it as easing across the accelerator. if you look at the guidance around the cash rate, they are suggesting it is most likely that we will not see a rate rise before 2024 and if you compare that to current market pricing, the market has three or four rate hikes unpriced by the end of 2023 so markets are quite significantly different from the rba and it appears the market is keen to extrapolate this first little move from the rba and pri

haidi: still ahead, more insight ahead of the rba decision. coming up next, we'll take a look at china's continued crackdown on the tech industry. moving beyond didi to conclude two more companies that recently listed in new york. this is bloomberg. ♪ >> you are watching daybreak australia. england's plan to lift all covid curbs including social distancing come july 19. face masks will be voluntary and the government will no longer instruct people to work from home. boris johnson said that cases will continue to rise -- they will need exercise judgment to protect themselves. government data out of israel shows pfizer's vaccine is still stopping severe illness, although it appears to be less effective against variants. its'efficacy rate for infected people out of hospital dropped to 93%. the leaders of germany and rance -- france are urging china to allow more flights from europe as one way for the nation to strengthen political and economic ties. the three-way talks -- over cooperation africa and vaccine supply and climate protections. the eur

the rba keeps its key rate and three year yield target unchanged.hike is unlikely until 2024 at the earliest. $77 a barrel on brent capturing the attention of markets. martin malone from alpha books said there is concern around the economic competition between saudi arabia and the uae. manus: malone encapsulates it. this is a deeper level of thanks between saudi arabia -- angst between saudi arabia and the united arab emirates. what binds us together keeps us further apart. it is an obama quote. they are traveling different directions. it does not look like the tail risk of the uae leaving opec is moving anywhere to the center. there is time to get a date in the diary to reconvene. the white house is hoping for that. dani: they certainly are. consumers are facing higher gas prices at the pump. that is tricky politically. that is not what the biden administration wants to see. biden and the white house released a statement saying your meal for the fourth of costs less. they don't want to see higher inflation, be it food or at the pump. manus: very la

one of them is rba is not in hurry to get going. the rba dollar is 75 cents at the the moment. that's putting advantageous for exporters in particular considering high commodity prices at the moment. the rba pretty happy where the currency is at. then you look at a the jobs, tightening unemployment 5.1%. you got to consider as well they are probably juiced by the absence of migrant workers. not seeing that translate into wage growth or inflation. which remained outside the 2% to 3% target. there's plenty of reasons to this rba will be -- >> we have hhs down 1.3%. alibaba also under pressure. separately, reports suggesting watchdog set to block the proposal to match. >> right. we'll be focusing on india, looking at the service industry. rishaad: back with "bloomberg markets." as we focus on india. that's the scene at the moment in mumbai. we got services that can contracting further in june. this is activity. manufacturing did shrink here as well. putting those numbers to the side, our next guest is forecasting double digit growth for the full year 2022. rajini thakur join us fr

we had the rba overnight.olicy rabin during the pandemic? did we learn anything from their use of yield curve control? >> definitely. i think the rba seems more confident about the economic recovery australia is seeing despite the lockdowns they have had recently. they have pedaled back to $4 billion from five olean dollars now -- $5 billion now. that has resulted more hawkish at the margin. that is definitely a trillion dollar margin -- this will not happen until 2024. they may actually increase rates before 2024. that is definitely holding up the australian dollar today. anna: i know the new zealand dollar story is also jumping, new zealand bringing forward -- thank you for joining us. that is it for the european market open. surveillance early addition is up next -- edition is up next. u.s. markets could be a touch weaker. this is bloomberg. ♪ >> there could be 50,000 cases detected per day by the 19th. we are seeing rising hospital admissions. we must reconcile ourselves to more deaths from covid. >> so to

haidi: is your view than that it sets the rba to start tapering? shane: i think so. when the rba meats, they will make some steps toward exiting from easing monetary policy. i think they will probably announce something in relation to bond buying, either slowing the pace, or making the reviews more frequent than six months or some combination of the two. i think their commentary will remain fairly doviomorrow. i think they will wait to hike rates until 2023. haidi: gently does it. shane oliver, thank you. still ahead, sydney's lockdown is set to end this week but residents are being urged to comply with rules or risk a possible extension. the ambassador from the university of melbourne will janice with her views. but more on the surprise of the takedown -- on the surprise takedown of didi's in china first. this is bloomberg. ♪ that's quick check on oil prices after opec+ reduced again. not too far off the october 2018 highs that we saw on friday. spreads for brent elevated, pump spreads about 90, haidi. haidi: and is only you've been talking about, the potential stal

haidi: and later on today we do have the rba decision. made up their mind as to the dental unwinding of stimulus. also -- the gentle unwinding of stimulus. u.s. stocks have been offer the independence day long weekend. tech investors may it a root stock on the resumption of trading, particularly for didi and other chinese tech names. the impact of the lighting and -- the widening beijing crackdown on tech companies. we will be joined with more insight later into china's credit markets, that clamped on as well. -- and that clamped down as well. this is bloomberg. ♪ ♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network. >> welcome t

sophie: economists seeing a disruption to the near term outlook, which will prompt the rba to downgrade1 forecast and likely delay tapering until november which morgan stanley says could put downside pressure on the aussie dollar and the belly of the yield curve but flipping the page, the medium-term outlook remains robust on the accelerated back and roll out into the fourth quarter. as georgina mckay pointed out, more fiscal support coming through so the rba resuming its tapering path in november. to finish that up i august of next year. one quarter later than initially forecasted and we have morgan stanley expecting that rate lift off to still happen in the second quarter of 2023, haidi. haidi: let's take a look ahead for australia and new zealand. we will be getting the outlook for july in the coming minutes time and we are also expecting sales from companies including resolute mining as well. it is in talks after rejecting a bid that was between -- aussie dollars per share. we will continue to track any progress on that deal. rio tinto announced a record interim profit after wednesd

haidi: does that change the outlook for the rba?you look at the 2024 bond, it suggested the markets are pricing out quicker than expected tightening we had previously been looking at. will this be lower for longer? gareth: i think on the qe side, the reserve bank two weeks ago announcing they are capable for purchases in september of this year, they are holding up or meeting this week. they would not announce that taper. there is a good chance the reserve bank at the august meeting says they will no longer be tapering based on new information, and they keep extending the balance sheet the way they have been. it is a little too early to say what impact it will have. we just don't know how long the lockdown is going to go for. it is worth saying it is not the entire country. i think if it turns out to be the case that we get on top of the covid situation well enough and the lockdown does not go on for too long and the economy snaps back, the inflation pressures out there, there is still a good chance of emerging. there is so much unce

and rba decision down tuesday. you are still dealing with 1.3% lower than the 10 year.the opportunity for some other countries to get involved? we are talking about softbank repositioning itself toward latin america and other countries outside of china. as of the time for india's tech sector? -- is at the time for india's tech sector? yvonne: there is certainly a lot going on in south asia, southeast asia as well. this em tech boom. take a look at when it comes to look ahead to. we are still watching opec and the fallout from this deal that was reached. 1.5 percent lower when it comes to brent. 7245. the market taking net. this could be a negative pressure when it comes to crude prices. this is bloomberg. ♪ >> it is almost 11:00 a.m. in singapore and shanghai. welcome to bloomberg markets: asia. rishaad: let's have a look at our top stories. oil price pressure as opec attempts to pump more crude into the recovering economy. haslinda: inflation and virus fears way. -- virus fears way on outlook. rishaad: covid cases in the tokyo olympic village. more than 55 infections a

i think it is justified, dom at rba we are cyclical trade on the equity side as well. the high yield market does do a phenomenal job at indicating risk before equity investors have figured it out. when you look at high yield, leverage is collapsing earnings are accelerating. and the default rate has plummeted. we had a 9.5% default rate in the united states in 2020. that has already plummeted to roughly 2.5% and our model suggests in the next 6 to 12 months the default likely falls to 1% as a high yield investor, one of the things you want to look at, perhaps the most important thing you want to look at, is how much yield or how much spread are you earning relative to the losses you may take because of default. and since defaults have plummeted and since expectations for defaults continue to decline every single month as those earnings accelerate and as companies have very low interest payments because of the absolute level of rates and the fact that they've termed out their debt. as all of this is happening, even though yields are very low, the compensation you're get

'rba rhtth us. wee ckig after this. like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪ ♪♪ visit tdameritrade.com/learn ♪♪ ♪♪ >>> all right. welcome back, everybody. let's wrap it up as we always do time to take some of the your tweets and the first viewer what are your thoughts on amd options with earning approaching, mike. >> take a look at amd, one month option is a little bit over 40 so relatively expensive. the news out of intel, i don't think the market would pass on to amd so i think call spreads looking at 97 level is a point of resistance is the way to play your bullish play into earnings. >> all

a lockdown impact playing out in bond markets, with the aussie yield curve flattening ahead of the rbaay. 10 year treasuries are coming back online above 120. relatively steady. we sought yields fall. we are seeing oil prices a steady after sinking monday amid the broad de-risking and even as strategist continue to see a tight market for crude. shery: our next -- guess is overweight in india, japan, and singapore. we will discuss why with david chow. i understand korea, japan, and singapore have done pretty well in reining in the pandemic, but not necessarily when it comes to india. what is driving your calls? guest: for korea and japan, the economies are quite cyclical in nature. we continue to be overweight on the reflation trade. asia will continue to have a consumption boom, perhaps in the second half of this year as a vaccine start to pick up in those countries. india actually has done a pretty good job in being able to clamp down on the most recent rise in the infraction rate there. -- infection rate there. shery: david, mark greenfield just made this point on japanese equities,

goldman penciling in a material risk that the rba will scale up bond buying.seen contracting this quarter. that could send the aussie and kiwi lower in the coming weeks. turning to stocks, the asx 200, we have seen it continue to hit fresh records this month. the benchmark is still lagging global peers, trading at the lowest level in more than 20 years versus the ms guy while the index. text, energy, and financials are weighing on valuations for the asx this month with the centers leaving declines in july whereas materials are on top but the commodity boom with rising ev demand and renewable energy among key drivers for that sector. shery. shery: world leaders struggling to reach an ambitious deal when it comes to climate change. that is the latest setback in the fight against global warming. bloomberg has come up with its own long-term scenarios for net zero emissions. let's bring in the head of asia research. can we prevent the planet from warming more than two degrees celsius from preindustrial levels? >> yes, we can. although, we are sort of running out of

economists consider the rba tapering trajectory. they see the rba sticking through early september.e being dialed back. that is taking a breather. you have the text treasury staying above that 122 level on the 10 year yield. u.s. futures sticking higher since march. >> the reopening trade making a comeback with the single stocks rebounding in the u.s. session. our next guest says he still sees positive profit alert in some cyclical stocks across asia. let's bring in can -- ken wong, an asian equity portfolio specialist at eastspring investments hong kong ltd. ken: we are seeing positive earnings surprises come out and financials. we are seeing some of that happen in places like south korea as well as taiwan and taiwan as well. during the first half of the year, cyclical stocks have started to outperform. it is one of those situations where we will closely monitor the situation. >> how long will it take for us to see these flowers -- virus infections spreading? ken: if we do get further lockdowns, if we do have the economy shutting down again, that will have a deep impact. when we lo

the rba will push qe tapering to february next year, given the lockdown on gdp. we do have fresh records this month. expecting stellar results on the commodities boom. flipping the board we have seen base metals rally with nickel nearing a seven year high, easing demand. ditto for copper, which jumped on the lme. goldman is bullish on the metal. we are keeping a close eye on ev-related concerns. on the radar includes panasonic of japan and lg of south korea. haidi: tesla getting started on a big tech earnings week read after a second quarter earnings beat with the markets close. we are seeing tesla shares trading up 1.5%. let's get details. ed ludlow joins us out of san francisco. what was the highlight for you? >> this was the most candid tesla and elon musk have ever been about supply chain issues, especially semiconductor shortages. after that record level of deliveries in the second quarter, they are getting better at building the cars. margins are growing, despite the highest margin lines being down for a significant period of february. the chip shortage was

the rba meeting this week with miniature lockdowns in sydney.ariants, and smaller lockdowns. the futures trade flat. the opec bus crisis is deepening. -- opec-plus crisis is deepening. saudi arabia versus uae, it is unprecedented for both countries. they chose one destination, bloomberg television. >> i would emphasize it is the whole group versus one country. which is sad to me, that this is the reality today. >> how concerned are you, if there is no agreement and potentially we could see what we saw last year, which becomes a price war? >> we have an existing agreement. i keep reminding people. we have an existing agreement and we will honor the agreement and continue with it. the agreement requires we bring more production, yes, but keep honoring the agreement, we should kickstart what is mentioned in the agreement, which is we have to extend. again, the extension puts a lot of people in their comfort zone. it is [indiscernible] check with all of those who are participating in this market. >> -- has no production increase for august. if not e

jane: we have a real focus from the rba on employment, they became really dovish on the outlook.y have set for years, australian companies want to keep costs an interval, and they are focusing on keeping labor costs down. we've not seen much wage inflation in australia for decades. that is a concern. lowe remaining dovish, and on the other hand, the market is thinking perhaps the rbnz will hike. a different stance, and i think the new zealand dollar will remain supported. manus: we have to leave it there. jane foley. this is bloomberg. dani: good morning from bloomberg's european headquarters. it has just gone a: 30 a.m. in london. i am dani burger alongside manus cranny in dubai. here are today's top stories. >> there will be a forward guidance review, because we have to align with the strategy review we just completed. dani: christine lagarde tells investors to prepare for new guidance on monetary stimulus next week. more from our exclusive conversation with the ecb president this hour. progress on taxation. ministers from the g20 endorse a global corporate tax deal. janet yell

more economists expected the rba to delay tapering.n stanley expecting the tapering path to resume after november which should keep downside pressure on the aussie dollar which has stayed below the 74 handle early the session and after the asx 200 slipped from a record high on wednesday, we got to see miners have a boost, delivering strong exports for the june quarter. haidi. haidi: companies are seeing earnings hit by this shortage of microchips but relief could be on the way for a bipartisan infrastructure deal working its way through congress. gina raimondo told us serious investment is needed to enhance america's capability to produce leading-edge chips. >> fundamentally, the only way to solve this problem is we need to make more semiconductors in america and there is a bill working its way through the house right now which is a 52 billion dollars investment in the semiconductor industry and that is absolutely essential, david, in order for us to solve this problem for the long run. fundamentally, we have a lack of supply. we don't

we had the rba moves. they are giving those moves back and more this morning. on the equity side, chinese equities are leading gains. australia and china leading off yesterday sessions. now they are leading gains. we discussed so blindsided -- just got so blindsided yesterday. anna: let's get into a conversation about some of the big moves we have seen. the markets a little bit confused in some cases as to what is going on. the 10 year yield dropping 40 basis points at a time when we saw -- we thought investors were going to be more concerned around inflation. is this telling us anything about expectations around growth and inflation, or is this about positioning and how when so many people think something is going to happen, things play out differently because of the positioning in the markets? >> first of all, we had the fed ever so slightly more hawkish. it is not 100%. there is a chance we might be slightly hawkish someday. that means the curve flattens. that makes sense. the whole world had only heard a dovish fed the previous year. they did not expected t

whether it be rba, bank of england, new zealand, they are looking at places to normalize policy.r we will be talking higher yields. anna: good to get your perspective on the normality of this. it is not abnormal to see these moves, and then retracing some of that. in terms of what the fed communicates from here, they are not ready to communication any timetable around tapering, that seems clear. what are your expectations what we learn over the summer into the autumn? iain: the next couple of jobs reports will be important. the next one will be interesting because there should be seasonal adjustments, it could be an impressive number which sets the scene for jackson hole, and whether we talk more about tapering. an announcement in september or the december meeting, i think we will start tapering in the beginning of next year, and looking to unwind that in 9-10 months. the fed said previously from the end of tapering, maybe six months, meaning rate hikes may be back next year, but public the first quarter of 2023. anna: thank you for joining us, iain t. stealey, cio fixed income,

ahead of that, citigroup saying the outlook for inflation and wages, the rba could tip her -- taper.g a close eye on korean bonds, which rallied this week on the jump in virus cases in south korea but some strategists say that drop that they have seen of lay in yields has been excessive in light of the broad recovery. the security company seeing two rate hikes by the end of next year when the governor ends his tenure. chinese bonds jump on wednesday amid calls for pboc easing with one analyst saying a rrr cut may happen in september and thus far, china's policy makers a relatively neutral stance for the pboc. two the china-u.s. yield gap wide. haidi. haidi: we have not seen a rrr for quite some time and we are watching these fx markets and currencies moving against the dollar but also some dovish surprises from the ecb. andrew just talked about the pboc. we are watching the euro and the yuan. they expect the euro dollar to trade around 120. joining us now is a cio. as we see the reversals we have seen and the upside momentum in the dollar has been sharp, does that double down when it

sociÉtÉ gÉnÉrale saying they do not think that rba can prevent the currency rising.barrel, given the breakdown in opec talks. the 10 year yield off nine basis points. the 10 year yield for treasuries, slightly steady, higher at that level. we have jp morgan saying the moves for u.s. yield looking outsized. this is after the biggest drop. >> the equity markets a down day. our next guest maintains a positive view, but expects gains to be unevenly distributed. he joins us now. always great to have you with us. who will be the winners in the second half? >> the winners will be the ones who have lagged the market. we think they can have good catch-up potential. from the rollout of vaccines, 30% have received their first shot. two months ago, we were below 10%. using cyclical markets in the global economy accelerating and benefiting from the reopening. it is one of the markets we will still buy into, particular on weekdays like today. >> we are seeing upside for oil prices. the bloomberg terminal is showing how big a rally it was for energy stocks globally. about 30% gains

the rba turning more hawkish of late.th of those jurisdictions. what are you anticipating from the central bank story? viraj: i think the next move potentially is when we see a dovish repricing. especially where central banks tightening -- central banks' tightening expectations are. i think the growth scare could turn into growth concern. a lot of central banks will be pushing out the timing of the tightening. and what we see priced into the markets at the moment, the risk is that gets downplayed. anna: what are your expectations for august if you say it is time to take chips off the table heading into august? what does concern for policy missteps look like when it comes to reaction? i'm looking at stocks falling this morning in europe by more than 1%. they were under pressure during friday's session as well. how much do we need to lose? viraj: we have seen a huge underperformance in cyclicals, banks, materials, and energy stocks. a lot of the bad news is to some extent already in the price. i think in august what we are

when it comes to australia, citi expecting the kiwi to turn lower with the rba in play. now in japan, staying optimistic on tokyo stocks, seeing that japan's market is a proxy for a global upturn. kathleen: we have an opec-plus field. the group reached an agreement, overcoming a public feud between saudi arabia and the uae. >> it was important to decide this today. it gives markets clarity, it gives the market direction, it gives the market a vision where we are heading. therefore, it will enable people to understand how progressively the supply would come, and how cautiously it would also come. kathleen: let's bring in a commodities strategist. mike, does this change things, and is this a temporary change? we see changes on both sides of this frequently. mike: i think it is coming with crude oil, very elevated prices historically, and this probably puts a confirmation that it is more of a bear market bounce. opec has great capacity in the database. it is a matter of time and prices are doing that. we look at production and the rest of the world. u.s. shale, the highest

they have not priced into much compared to the rba, given that we are seeing the lockdown make the watersiwi stocks overall down by about a 10th of 1% and the greenback holding steady at about over 70. shery: a warning that global stock markets are headed for a bumpy ride for the second half. implications of china's crackdown, the resurgence of covid-19 cases and more. the executive director of investment strategy at overseas chinese ringing management, always good to have you. we have seen in the last couple of sessions a rebound in chinese stocks. we oversaw desk also saw the fed coming out, giving a boost to risk assets. how much worse could it get when we are seeing a little bit of support in these two fronts. vasu: with the fed, i think it is good news. with china, i am not sure it is sustainable. it may be temporary because if you look at nasdaq, golden dragon index, last night, chinese stocks and the u.s., that was down by 5% and education stocks return. they were down between six and 10% last night after surging in the earlier two sessions. i think the markets are still nervous ab

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