the rbnz coming up. rba story, day two coming up.is bloomberg. ♪ yvonne: it is about the antipodes. think about how the rba we are expected to hear the speech from phil lowe. the last hour has been about the rba z. the hawkish hike, 50 basis points, only one got it right, bank of america. david: like we planned it, bank of america joining us claudio p iron joining us, you guys nailed this one. what does this mean for the kiwi dollar? quarks i should give their -- >> i should give that credit to the consensus call. what's playing out with the kiwi's outperformance relative to the aussie, the markets are jockeying around relative interest rate expectations. i think it is difficult in the sense that you do 50 and you go back to zero. from that perspective, there is the momentum behind the rbnz with potentially raising rates further. upside risks related to inflation. by contrast it seems the rba may have opened the door to that pause, that is what is driving this relative outperformance of kiwi to aussie. david: claudio, just to broaden

rate hikes -- the rbnz looking to downshift rate hikes. vladimir putin vowing to press on with his war in ukraine as he suspends moscow's last nuclear treaty with washington. >> i'm at the goldman sachs global macro conference in hong kong, day two, bringing together the bank's biggest names and industry leaders. we will hear from the -- david kostin about why 2023 means the return of alpha after a macro driven 2022. we will have a conversations about the outlook for european stocks and the war in ukraine as it heads into a second year. >> take a look at how u.s. futures are coming online in the asian session. we are seeing a little support after the s&p 500 was in the red in the new york session. the dow erasing all of this year's gains. it's all the worst day in three months -- it saw the worst day in three months. a combination of fear over geopolitics, poor corporate outlooks, and rising 10-year yie lds, close to the 4% level, as the markets try to reprice where the fed is headed from here. we have u.s. pmi numbers coming in above expe

kiwi debt down before the rbnz as well. when it comes to leadership from treasuries it is a big week when it comes to corporate issuance as well as sizable bond options. oil, some declines. u.s. stockpiles and the opec supply in focus. the focus for us at the moment is the rbnz decision. let's bring in our next guest who is bullish when it comes to in particular the tech space within equities. joining us is the ceo of sg capital. we had a massive week last week with the anticipation before nvidia and the big melt up following those numbers. do you think there is further to go? there are concerns with extra neri gains -- extraordinary gains. do you think you should be adding to those positions? >> we are at the beginning of the melt up. we are not seen the irrational phase. we believe there is more meaningful upset for the nasdaq -- meaningful upside for the nasdaq. if you look at the ease with which the market has digested new expectations, they went from pricing in seven to eight cuts of the fed to three cuts in line with

the rbnz did not play ball. the open daca -- the opec story is in play for david: it might be the turn of the calendar, a first quarter and a reassessment after a few days. we haven't gotten to the point to what those few days means because as of now, we are extending the risk rally across the region. 4.4% of the catch up trade here in hong kong. the dollar, more downside as we speak. against the dm though, the dollar stable right now. we will get to opec in a moment. look at this. in terms of repricing, we have seen it, but the repricing has taken place over the aggregate expectation of how high the fed will actually go. so, there has been a little adjustment. but if you measured it all the way to next year, and a reminder from the rbnz and now the philippines central-bank that because of inflation, that they say they are ready to take further policy action. it might have just been the rba. yvonne: it might have been the rba bucking the trend, offering parameters that they have very high household and also vari

why do you think the rbnz will go today?se the question is if they feel that there is a necessity potentially could do more, should they just do it today? sharon: that is what it boils down to. we can see that overs and wonders in the data. there is no one smoking gun. monetary policy is clearly working and that is what most people expect a hold. but if you look at what the reserve bank said in november, they showed a forecast, 19 basis points of tightening, practically a full hike. so our take was that they need to give us a nudge, rather than a big shove. unemployment did not rise as much as they thought. inflation didn't fall as nearly as nearly as much as they expected, migration is a bit stronger. so overall picture is still things are going there way, just to fish slowly. they also -- the overall picture is that still, things are going their way, just not too slowly. sort of the story of the wheels slipping a little bit on the risk of inflation staying too high for too long. so you can run with it a while and hope for

the rbnz was not expecting it just yet. it is likely to last for most of the year and that is they point to talk about, they have already done a lot in the -- and now they have a difficult challenge if markets begin to believe the rbnz exchange rate. kathleen: a technical recession in the u.s. is a bit different because there was a committee that determines when it is a recession. in the case of new zealand, it is a rounding error. underneath it all, how big is the slow down? is it enough to bring down inflation? is it enough to make the rbnz think it has to move before is seen as a meaningful decline in inflation? >> that is right. i think we are going to see, with the gdp, declines. when we look at what is going on with new zealand, we have had the surge in migration. even though it was a rounding error, you are seeing a big curtailment of consumer spending. the rbnz, we have the data about the average interest rates being paid by households to may. even though interest rates have risen, they increase in what consumers ar

shery: paul allen with the preview of the rbnz rate decision later.bloomberg's expert editors ahead. we are seeing asian bonds gain ground and follow treasuries gains. on speculation of a dovish pivot by the fed. we had seen a decline after weak results from the previous session. we are seeing a little bit of a reversal with the 10-year yield trending down at the moment. also seeing kiwi bonds gain ground ahead of the rbnz rate decision. this is bloomberg. ♪ a few years ago, i came to saona, they told me there's no electricity on the island. we always thought that whatever we did here would be an emblem of what small communities can achieve. trying to give a better life to people that don't have the means to do it. si mi papá estuviera vivo, sé que él tuviera orgulloso también de vivir de esta viviendo una vida como la que estamos viviendo ahora. es electricidad aquí es salud. shery: you are watching "daybreak: asia." berkshire hathaway has announced the death of long time vice chairman charlesnumger. warren buffett is honoring his right hand man sayi

this is bloomberg. >> still ahead we will preview the rbnz decision. they ca longer risk of the country slipping into recession. here why the cio thinks the u.s. stock rally won't last long. this is bloomberg. ♪ >> u.s. stocks coming off the best today rally since april of 2020, the second straight day that we actually saw 95% of the s&p 500 members gaining ground. this perceived peak hawkish in us really boosting investor appetite. our next guest is not sure the u.s. stock rally will last long. let's bring in senior partner at asset management. it seems to me that it's not just you. cutting the year end price target to 3500, what are your reasons? >> to add on to some of the comments, a lot of it i see is not just rate hikes, but a supply of the amount of debt that's out there. in particular with u.s. markets, there's is an extra trillion worth of debt because of government spending over the next year. another for quantitative tightening. and so that means there are a lot more bonds for sale. and so it's just because of this massive flood of debt and

the rbnz want to get ahead of the curve. darby and said not only raise rates, but they want more with the narrative in terms of where we expect to go and that is toward 4% by the end of 2023. two your paper, the short end of the curve imploded yesterday, down the most since may 2020. that hard data, housing collapsing, richmond fed at a two-year low, we are on the cusp of stagflation. the breakeven, so bill ackman says inflation is out of control and inflation expectations are getting out of control. the euro is down, the dollar is a little bit higher. that is the state of play. breaking headlines. we come back to china conducting military exercises near taiwan to warn the u.s. dani: let's get to our other top stories. details of the fed's path forward. manus: plus we have our bloomberg anchor francine lacqua in davos, no sleep, and a lot of partying, and interviews. juliette saly is in singapore with the rbnz. and investors fleeing. traders are now dialing back the expected pace of fed hikes is the data cools. let's get a l

rbnz. hawkish move. aggressive move. one of the first among the central banks with a 50 basis point hike. how much more can they go? >> yeah, well, my colleagues will be delighted. they have been calling for this hike by the rbnz. how far? 2.25% by the beginning of next year. but see how the quarterly inflation numbers come out next week. that may give us more guidance in terms of justification, but we think we are on track. >> while. -- wow. do you think that in terms of the kiwi, the moves, are the rate differentials the biggest thing? is the dollar still going to be the most dominant in terms of market thinking now in the strengthen the greenback? >> yeah. it is tricky. it's like a photo finish. who is hiking 50? bank of canada potentially tonight as well doing another 50. it is a combination of commodities and informatics -- interest rate differentials. we have had basically the kiwi, the aussie, the canadian dollar outperform the u.s. dollar as a function of the commodity prices. i will be watching the aussie-kiwi c

of course, in new zealand, we have an rbnz governor saying he is confident the rbnz will get to its inflation target. we will get you the latest lines from that press conference. keep it here with us. this is bloomberg. ♪ haslinda: welcome back. singapore's transport ministry is investigating after a person was killed and dozens of others injured on a singapore airlines flight when it hit severe turbulence. what do we know? >> it's a really unfortunate incident. we heard how singapore's transport authorities are in touch with their thai counterparts, sending investigators to bangkok, which is where the flight made an emergency landing. the civil aviation authority of thailand is also investigating. singapore airlines says it is working with authorities. this was a flight that had more than 200 people on board, and it came from -- they came from multiple nationalities -- the u.k., australia, singapore, india -- and it was supposed to be a routine, uneventful flight. it was over the irrawaddy basin, singapore airlines says, where it hit severe turbulence. items were strewn, as you can see if yo

tracy withers joining us on the rbnz. you can turn to bloomberg for more on that meeting, go to tliv

haidi: we are watching the rbnz decision.mes to retail sales, stripping out inflation quarter on quarter, coming in at a contraction of 1.4%. that is worse than expectations. it extends the contraction of 6/10 of a percent that we saw in the previous quarter. a fall in retail sales mirroring the concerns about recession risks for the new zealand economy. the budget update did give a bigger than expected spending boost for the economy, there are expectations that the influx of immigration will be and inflationary force. hence the expectations the rbnz is not finished, expectations are for 25 basis points, even 50 basis points. we are seeing a depression when it comes to the consumer side of the economy. more ahead here on daybreak. this is bloomberg. ♪ lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. shery: a quick check of business flash headlines. alibaba is a cloud

is the rbnz really done? >> yes, we think the rbnz is done.llar was because markets as we went into the meeting this morning was pricing in either one or two hikes. it was the liquidation of those that have priced in two hikes. if you take a step back and look at the global central bank landscape, in most of the economies, the inflation pressure is between five and 6%. when a central bank brings about 7%, i think it is only natural for them to consider a pause in take to an end because they reached a state where the rates are back to neutral or slightly positive. it is what we are seeing from the fed, they are calling a timeout for now. it is not a surprise and we think it is the last hike in the cycle for the rbnz. rishaad: we have a government saying the latest data she is seeing this pleasing after a long battle. this is the language, we had yvonne say this, mission accomplished. surely that is a bit premature. you also have another player on this which is the aussie dollar is outperforming its kiwi cousin. >> i think it is a little bit pol

that's swati pandey on the rbnz. speaker kevin mccarthy left the capitol late tuesday afternoon say the two parties had yet to reach a deal to avert u.s. default. u.s. contractors are already reporting government delays in payments. joining us now is bloomberg derek wallbank. what sticks out to me is republicans may be having skepticism on june 1 being the actual six date m-- ex-date, is there a possibility we will not get resolution by next week? derek: congress works best with a firm deadline. there is a necessary amount of flex in the deadline. the deadline set by the u.s. treasury is as early as june 1. doesn't mean it will be june 1 at midnight, there could be a little flex. i've read multiple reports suggesting when the actual ex-date might be. you wind up in some bad scenarios if you say it will be at one time and it is two days in advance. it gets into danger areas. understandably, the treasury and speaker mccarthy don't want to go down that road what you do see some thoughts that that is not actually the ex-

the rbnz meets later today. other part of this story of the rally here is also what we were seeing in terms of the rsi is so most of these markets at oversold conditions coming into the rally so some strategists saying the pessimism really had reached such extreme levels that i bounce was just a question of when it would happen but phil, the thing that is very important is not to get caught up into thinking that the market bottom is here. it could be but we could be in another bull market or trap rather. we are still in a bear market and this could be another relief rally and this idea really based around a fed pivot perhaps is not near at all because if you bring up this eco-u.s. function here, we can take a look. these are all of the fed speakers that are coming up over the coming day. we already heard from mary daly earlier speaking at the council on foreign relations. she basically called inflation a corrosive disease that is eroding income. it really does paint this picture that fed officials are still very

the rbnz one day said 75% rate cut. then in october of 2021 they were the first to start hiking rates again. they have done two 50 basis point hikes already. this is their third in a row and you can see that investors are expecting them to get nearly to 4% by the end of the year. and their inflation rate, 6.9% year-over-year, their forecast had been 5.9%. it will be interesting to see if -- as we get more information from their policy statement that what that will show. do they change their forecast? what is their expectation? how soon do they say inflation coming down? the rbnz has been very clear. we are going to be aggressive when monetary policy. that is what they have done. of course the bank of korea doing its first rate hike of 50 basis points since 1999 when i first started using interest rates as a monetary policy tool, talking about inflation will behind for a while. their target is 1% to 3%. so clearly the new b.o.k. governor, who already endorsed a 50 basis point rate hike, he was barely sworn in and saying

how did the rbnz justify it?richard: well, basically, they are very worried about inflation expectations running away, and we know from a lot of evidence over the years that inflation expectations lead to real inflation. that is a real pressing concern. the broader situation in new zealand is that the economy is slowing, but demand still outpaces supply. that is a very inflationary environment, very inflationary setting. that is really with the central bank is trying to address. the market was not expecting 50 basis points. most economists polled by bloomberg were expecting 25. we have seen a market response with the kiwi dollar jumping and yields on qb government also increasing as one would expect in this situation. dani: a mere 30 minutes after that decision you had the rba government -- governor saying just because we pause it does not mean we are done hiking yet. that is bloomberg's richard henderson in melbourne there. vacancies at u.s. employers dropped to the lowest level since may of 2021. that suggests

we will be speaking with the rbnz governor later this week.ou don't want to miss that conversation and of course, we are talking about dollar strength given some of that risk on sentiment that we had today across wall street. concerns that the economic recovery will lose momentum amid the resurgence of covid weighing on consumer discretionary stocks. u.s. listed chinese stocks something. let's bring in our markets reported. u.s. retail sales numbers really not helping. >> it was a risk option. risk off worries. you have it with the delta variant already building up and you have the retail sales, a disappointing miss. for a consumer economy, never good news. a sustained message across corporate earnings, bank of america fund survey. it is across the board here. haidi: when it comes to chinese adr's, also falling again. beijing ramping up on its crackdown. it has to work out what an adequate discount is going to be for these stocks. >> while china tried to moderate its growth, some of the regulatory scrutiny -- they do actually make sense. for t

the rbnz is doing its best to see through the fog.nce in new zealand's banking system. and they have strong tier one capital buffers in australia as well. you can understand his areidence that loan losses expected. the buffers should help absorb all of that. they can keep supplying to the economy. but these smaller ones, they could the less able to withstand any shocks. -- be less able to withstand any shocks. housing prices are likely to fall in new zealand. he's -- he suspects sustained impact on the economy and said some of them will fail. plenty of unknowns heading into the future of the rbnz. we will be hearing more in just a little while. shery: new zealand has been quite successful when it has come to stopping the spread of the virus. what are we seeing in terms of the government's plan for the economic path forward? paul: it is an interesting situation. the deputy prime minister who is not part of the majority party -- he is a minor coalition party -- without him they would not be able to govern -- he has broken ranks with the

we saw the move after the rbnz 50 basis point hike.cutive one after the previous meeting in the first time to have done that back to back since the start of the ocr back in 1989. key reebonz are settling. the australian 10-year yield falling in-basis point in the overnight session. we are watching whether we will see the continued rally when it comes to the aussie. over the next hour, we will get more on the rbnz and new zealand's economy. our interview with the rbnz governor, adrian orr. this is bloomberg. ♪

we had the rbnz this week with j.p. morgan on what to expect. yvonne: don't forget to turn to bloomberg for more on that rbnz decision with governor for -- governor mark -- governor orr said to speak next hour. year end, rates could be at 3.20 5%. the peak, 3.90 5%. in new zealand, this is bloomberg. ♪ re efficie you become. such amazingly perfect shapes run throughout the natural world. and can now be found in the automotive one. the world's most aerodynamic production vehicle. the eqs sedan. david: 100 25 more basis points in terms of rate hikes. that is what the rbnz just told us minutes ago. have a look at the market reaction. as far as the currency is concerned, it is on it rocket here. yields actually lower here. rishaad: seen as being ahead of the curve, we did have them saying a short while ago that they would rather have too much too soon, which is better than too little too late. anyway, is that the case elsewhere? thanks for joining us. the reserve bank of new zealand is seen as being ahead of things, generally speaking, but is the na

the rbnz is signaling they will tighten down the road. a quick look on the other markets, equity markets in the u.s. yesterday dropping after continuously hitting all-time highs. let's get to that rbnz story because that one case of delta, as you say, not living on rates today. let's get the market impact. joining us is juliette saly. set the scene for us, what did the rbnz zoo -- do and how much of an about-face was it for the central bank? juliette: i'm going to say, what's delta got to do with it? leading into that nationwide lockdown, and then use all the rbnz which was widely expected to hike today become among the first central banks to do an about-face. as you mentioned we did see the kiwi initially drop but it has paired those losses, coming through in the overall equity market on a broad-based positive session today. so the rbnz did indicate they do have a clear tightening bias and you can see that reflected in this chart, though we have paired how many potential rate hikes we are expecting to get over the course of this year, do

the bok and rbnz hiking rates as well.week we have a jobs report out of the u.s., pmi numbers out of china, europe as well, and the opec-plus meeting that will be front and center after the fpr release. everyone is looking at their crystal ball for 2022. it is interesting what they think in terms of china. given what we have seen in the lack of performance this year, next year could be different and quite positive when it comes to socgen, if the msci could lead in their forecast for next year. they are talking about above 10% when it comes to growth for msci china. compare that to the nikkei, out beating even europe, japan, and the s&p, which is at the bottom of that chart. potentially we could see these darling trades start reversing. paul: south korea and the u.s. vying for your hearts and wallets through pop-culture. we explain what soft power is all about. >> south korea is having a moment. between the netflix show squid game, the boy band bts and the oscar-winning film parasite, its culture suddenly seems to be everyw

so rbnz staying pat for a second time in a row at 5.5%.remember, this is the central bank that has done 525 basis point hike. it has been pretty aggressive ahead of the curve, way ahead of the fed. and now it is keeping its rate standing pat at 5.5% for a second time in a row. dave. yep. yeah. so we're looking at, to your point there where there is some commentary on inflation and how restrictive rates are and they're saying already restrictive and that should be enough to return inflation to target. we're just going through some of the phrasing here on the statement because that i guess in some ways, short of hearing from the governor himself, which rule, by the way, here from is perhaps the best indication of tone right now. a couple of more lines coming through. the activity slowing is more in rate sensitive sectors. suffice to say it does look like it's working in terms of the currency markets right now. there's a bid coming through ever so slightly on the kiwi dollar. some forecasts are now showing a small chance of another rate hike.

the rbnz keeping its rates unchanged. of course this coming on the back of inflation expectations which have soared and growth momentum has eased. cutting property prices would be another factor. the kiwi right now losing a bit of ground, currently at 70.54 on the back of the rbnz decision, pretty much expected on hold. rishaad: yep. also at the moment equity markets moving to the upside. also against this backdrop in hong kong of the record antitrust penalty handed down to alibaba. this may not be a one-off. china continuing to scrutinize its most powerful technology companies, ordering 34 to drop anti-competitive practices over the next month. let's get over to senior analyst with eurasia group. why are they doing this, first of all? guest: i think there is the obvious message why a regulator is pursuing this route, and then there is the implicit message as well. on the obvious side, the antitrust crackdowns have intensified is the message irregular wants to send to the company. the record fine is not a one-off event. f

on rbnz calibrates meaningful arrivals until 2022.degree that our view is right and we achieve herd immunity in new zealand through the course of the next year, borders open up, pressure for the rbnz to do negative rates should ease. that should be a kiwi dollar positive dynamic at the same time the rba is turning more dovish. that is where the balance of risks lie at the moment. haidi: always appreciate your time. andrew boak there. westpac says it is paying a acord $1.3 billion to settle money-laundering case. we get the details next. this is bloomberg. ♪ haidi: we have breaking news from that white house press conference. white house economic advisor larry kudlow saying he doesn't think there is a need for another broad stimulus package, that there will be targeted measures only, that they need to be smart about those measures. this coming on a day where we had a parade of federal reserve officials stressing more fiscal stimulus is critical. chair powell calling fiscal stimulus unequal by anything else. larry kudlow saying they wou

the rbnz decision. basis point hike to try to get ahead of inflation before maybe a pause? that decision is a few moments away. we bring you the latest analysis as we get that announcement. this is bloomberg. ♪ >> you're

yvonne: yvonne: the rbnz yvonne: continues to be hawkish.u think there's a void entering into a recession next year? grant: a lot of commentators still see resilience and strength in the economy. exports are holding out particularly well. people want our tourism to come back here. it's going to be a challenging year with a global slowdown, no doubt. a lot of economists can still see resilience. inflation well outside of the target of one to 3%. i think we can keep a balance going through into next year and avoid that. what happens in the rest of the world has a big impact on an open trading nation like new zealand. david: it is that same resilience that the reserve bank has pointed to for the need for higher rates. let me ask you directly. do you think the economy needs a recession, even a mild one? grant: obviously, we've seen a significant amount of stimulus in the economy. demand has hold up. that's what causes those inflationary pressures. most economists recognize that there will be some effect from that. we will see that demand and slo

in its policy statement, the rbnz said it expects to get up to 5.7% at its peak. now we've got that other rate hike in place so you can see when you look at that inflation rate, even though they expect it to come back down into the 2% range over the next several months, for now it's a big gap. that's one of the reasons they are moving now and why they expect to move more into 2022. unemployment down to a record low in new zealand at 3.2%. their partition rate is 71.2 percent. it's interesting that in this statement, they note that there -- they are somewhat concerned about the impact on business sentiment, getting a little bit weaker. vaccination coverage is going very well. the lockdowns are ending. they will reopen in january. we spoke to achieve economist at rbd capital markets. she said not only do they expect that rate to get up to 2%, she said it could go higher. let's listen. >> but we've seen in the policy statement is an upward revision to the rbnz's cash rate projections. up about .5%. it's probably closer to 2.5 percent. that does seem appropriate for a

our next interview is coming up, the rbnz governor joins us at 9:30 a.m. in sydney.on the earnings, walmart and home depot suspending outlooks for the year despite pretty resilient sector results screen we get the results from the biggest u.s. retail names next. this is bloomberg. ♪ shery: retailers have been among the hardest hit by the plandemic. -- the pandemic. we now have the latest round of earnings. let me get started with walmart. they beat expectations but they withdrew guidance for 2021. how well-positioned are they? allhis is the bigger move retailers have made, saying it is hard to predict the future and consumer buying habits. but omar tidwell. they increased same-store sales -- but walmart did well. they increased same-store sales. they are providing people what they need. haidi: in terms of forward guidance, do we have any expectation what they think the next recovery could look like? >> it is not clear. they are working through the with current size of consumers, they are leaning buying central goods, groceries, things for the home and that is what wa

expressed by rbnz officials.that has come in double what was expected to be in december, before the gabriel storm that devastated the north island of new zealand, repairs are going to be going on for months, it will need billions of dollars, that will be an expansion -- expansionary, it will add to output. along with a surge of migration, 100,000 or more migrants are expected, new people in new zealand, helping to fill job positions, etc. a 2% rise in the population will result. they will be bringing more demand. that is another reason why people are saying, maybe they will do a 50 basis point rate hike. he has never been loathed what something that surprises people a bit. -- with something that surprises people a bit. some are betting on 50 basis points. they at least as they update their forecast, could not move that vision of a 5.5% terminal right to 6% --ate to 6%? at least a 25 basis point hike is the messaging it will be focused on. >> speaking of messaging, with a meeting to out tomorrow, what are we looki

still above the rbnz target.he rbnz government late last year, he said inflation expectations are going to be key and could force us to move faster. another reason i figure people think they will be aggressive. 50 basis points in one day? i think not. that is the consensus of economists who follow this. bloomberg thinks that as new zealand opens its borders, omicron cases are rising, that is going to hurt workers for some businesses. but they expect wage increases to slow, one thing that will make it did -- a difference. and they are also looking at the housing market cooling-off. mortgage rates has risen. that might allow the rbnz to move on rates without having to be ultra aggressive. haidi: on the other end of the inflation picture, we have the bank of america call that beckoned -- that bank of japan will have to reduce amulets. that is a big call. kathleen: and they are saying in october that the boj is going to go for that. the real rate is slightly negative, zero .1% or something like that. they will get it

the rbnz is excited to hold the qe limit. government of lebanon has resigned after last week's devastating explosion in beirut. the cabinet quit amid rising public anger for the blast which is now responsible for at least 200 deaths and destruction of a large part of the city. the prime minister says it is the biggest disaster in recent lebanese history and blames corrupt political elites for sabotaging his administration. powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery: president trump has resumed his press briefing after a possible security incident at the white house. happening right now, president trump speaking about the economy and other pressing issues. joining us now for the latest is bloomberg's government reporter jimmy wilkins -- emily wilkins. the only thing we heard is the shooting happened outside the white house, it is now under control. what else do we know at this point? emily: at this point, we are learning about things as they come

the rbnz has charged ahead.ight player like that depresses volatility and curbs -- deters foreign investors and bank earnings as well. volatility is much greater than japan's, but it is declining. raisevernment agreed to -- purchases to 60% of the market as well. this is an interesting situation for the rbnz. it continues to grow. >> paul allen in sydney with the latest on the rbnz. malaysia's record budget may face a tough path to approval in parliament. opposition parties are urging the finance to allocate more andy to a covid-19 fund improved social initiatives. >> the announcement has been -- and recognize the issues we face .oday it is the largest budget ever in malaysia's history. people,support not just but also the economy. it will allow us to fight the pandemic. it is highly focused on sectors that will give the highest impact. the other point i want to talk his own health care. we are spending a lot of money to ensure the government is willing to pay. >> an aggressive budget requires rigorous spending.

hawkish stance out of the rbnz. reporter bloomberg learning the united states: has given an advisory for traveling. sources say that could impede beijing's ability to gain data. we are told the -- democrats have reached an agreement on a $3.5 trillion spending and tax plan. president biden's jobs and families initiative without republican support. senator schumer says it is part of a two track process by which they will consider a 579 million -- billion dollar intern -- infrastructure bill. an economic rebound in singapore. this is weeks of viruses. gdp for the 3 month at the end of june contracting from 2%, a jump of 3%. it means year on year, gdp was up more than 14%. no bases during strict lockdown at the start of the pandemic. the covid lockdown has been extended until the end of july in australia. australia is a good city -- australia's biggest city is performing more -- reporting more covid cases. australia is the second vaccine rollout among countries on the oecd. vonnie: lack of legal protections left asia's

and, a preview of the rbnz policy decision, next. plan to remain diligent in setting monetary policy to return the economy for stability in a timely way and be judicious in balancing the risks to minimize the pain of that journey. shery: the cleveland fed president, speaking after the u.s. labor market report showed a cooling-off that could bolster the case for less hawkish fed policy paths. policy editor kathleen is back with not only what loretta mester said but more as well. >> we were talking about this earlier. what struck me about the jobs report today was as much as bond yields fell a bit, when you look at the report, it may be cooling from a hot level but it's not really cold and not even close yet. we are talking about job openings and labor turnover, a survey the fed does. it showed the vacancies which have been closely watched since the pandemic when we came out of the pandemic it peaked at 12 million vacancies, people just didn't want to get back to work. before the pandemic, you could see it was averaging around 7000, 80

sophie: this is the rbnz's financial stability report.e uncertainty for the new zealand economy. kiwi stocks lower by six times the 1%. the kiwi dollar pairing from an earlier jump sparked by the surprise beat in the first quarter jobs data. this as unemployment came down. the labor market still has some way to go. ozzie futures are pointing lower. the outlook for aussie stocks looking more optimistic. jp morgan raising its target to 7500. gains of 7%. more than double what we have seen for the msci aipac index. australian stock correlations with commodities a big factor with the raw material companies the second-biggest rating on the australian gauge. switching out the chart, the commodities rally has been broad. the cyclical recovery boosts demand for everything from energy to metals and agricultural goods. with this momentum, that has pushed the commodity price gauge 211 year highs. we are in overheated territory at the highest level in 13 years. shery: for more on the outlook on commodities, we are joined by the founder and ceo of van

you want to take a look at some of these rbnz related trades. seeing that trading pair now coming near fair value. they are not confident that the rbnz will be able to meet the more dovish pricing we are seeing across markets. chicago nikkei futures are looking upside one quarter of 1%. annabelle: yes. you said it was that story in the u.s. session. we did have that late they rebound in the u.s. benchmarks or get s&p 500 closing back above that 5200 mark. treasury yields climbed in the session. 10 year yields dropping back from the highest levels of the year so far. oil. we saw it dropping somewhat this morning, fairly steady here. more on the geopolitical angle of what we are tracking here. gold hit a fresh record high again intraday in the session. interesting to note, given there's not such a clear catalyst for gold in this sort of inflationary environment. certainly the focus is very much on valuations at this point in time. we are getting priced to perfection. anything less than that that we get in the ego data, any sort of political noise

a preview of that rbnz decision.apan's famous bullet train, riding it will get more expensive for tourists. we are looking behind price hikes of up to 77%. this is bloomberg. ♪ haidi: the rally and treasury yields to fresh multi-year highs taking the dollar to the highest evel in 10 months. on the other cited the trade, weakness for other currencies, even the japanese yen despite that it strengthen so much on intervention chatter. it is down against the u.s. dollarowards the 149 level. let's talk about more what is happening in japan, because prices are being raised for the japanese train for the first time in four decades. our reporter has the details. so how much does this have to do with what i mention how cheap the japanese yen and tourists are coming in and we been talking about this inflationary pressures in the country as well. >> good morning. they have just hiked the price of the great passes used by tourist and not residents, the first right hey kai -- rate hike and 40 years. it is not believed that it will

let's look at kiwi assets on the back of very hawkish rbnz.imating the cash rates rising 3.25% at the end of next year. this is 67.63 -- .6763. rishaad: let's bring in mark with regards to all of this. how are people really viewing ukraine? how are they weighing that up? what are they weighing that up against? >> over the past couple of decades, traders have been really reluctant to praise into much geopolitical risk because it has usually ended without affecting markets too deeply. the amount of volatility we have seen in the past couple of weeks is probably the most we have seen since north korea first started launching missiles at the beginning of the 2000's. that quickly faded away. people are getting used to the fact that this is a little bit more extreme. you can see that we had the central bank and new zealand getting -- going ahead with a rate hike. this will deviate from his path just because of the geopolitical risks in the short term. the bigger issue is in terms of inflation and other factors, wage hikes, real things that are affec

we are right at about 50 basis points on the rbnz. they will still deliver, not today, but the risk market says it's probably going to be one, maybe two. yvonne: and there's a statement from the rbnz talking about renewed restrictions, highlighting the ability of the virus, that they remain alert of the display supply disruptions covid can create and they are talking about the unemployment rate as well, at or above maximum sustainable levels. and prices are both sustainable levels. they are very much part of the economy that they have to talk about in terms of overheating. and as our james mcintyre said, they have other tools in their toolbox to handle these issues right now, but for now hold is bably the bestition. the taliban say they will allow women to work in government roles, the latest next. tencent expected to report its first profit decline in almost two years after china's crackdo wn on the tech sector. this is bloomberg. ♪ david: the internet stocks this year, we have retraced about 42%. recently we were ok, about a week an

the rbnz might hold off. wait for that to become entrenched.er key indicator being the labor market. unemployment is down to 4.7% in the first quarter. rv, one of the big four banks, sees that next year. -- rbnz, one of the big four banks, sees that next year. it is triple the pace they were expecting. rbnz already pulled back on qe, well off their piece of 1.25 billion a year ago and some analysts see purchases ending next month. >> what are the risks that could complicate things for the rbnz? paul: borders remain closed and the vaccination rate in new zealand is even worse than it is in australia and into the bloomberg vaccination tracker index so that is saying something. one area where new zealand also outstrips australia is the housing markets, the property market in new zealand even hotter than australia so that would add novation to the rbnz to book its early tightening. central banks got a close eye on the currency as well, wary of being one of the first major central banks to put some upward pressure on the new zealand dollar and creat

the rbnz delivered as expected.: they did but it still quite a dovish statement from the rbnz. i guess there are key elements that have caused a reaction in markets. the first is, there is size of their the asset purchase program to 60 billion for the year. there was speculation this would happen, but i think it goes beyond that when they signal that there is still a range of monetary policy options they can add other assets to the purchase program, and they will think about other ways to support the economy. fairly dovish in that regard. they have also left the cash rate unchanged but haven't ruled out a negative cash rate in the future, signaling it is an option. aren't prepared yet but there is discussion and consultation, so very much signaling it is prepared to move into negative territory if needed, that it could do more beyond even the step up in the asset purchase it signaled today, including suggesting it will do whatever it takes and is prepared to do more. we have seen interesting reactions from markets.

yvonne: that was the rbnz assistant governor.ng to japan, a new board member sees inflation creeping up in the country. let's bring in our managing editor in tokyo. good news for japan, we are finally seeing some inflation. >> yes, but the cause of inflation is similar to what we are seeing elsewhere. it is largely led by fuel prices and possibly the impact of the weaker yen. these are not the healthy type of inflation that the bank of japan wants to see in order for them to change their fundamental view toward the economy. it is interesting how they mentioned that these factors were possibly going to impact japanese economy. whether that would be enough to change any sort of policy outlook is still quite unclear. paul: we are also seeing the yen week at the moment by the standards we have become accustomed to. he would be good news. she is lukewarm on that as well, isn't she? >> there are two things that play. one, she doesn't want to say anything that would sway or influence the market. a weaker yen is positive for the exporter

what happens for the rbnz?ou have to favorite quickly to an easing bias -- would you have to favorite cook quickly to an easing bias? governor orr: governor orr: we have had very strong population growth. consumption per person is actually declining, so monetary policy is working. but there are more people in the country, so record demand -- aggregate demand remains very tight. when inflation is declining, our concern is that it might not decline sufficiently fast. we are in no mood for cutting until we see inflation expectations firmly back in the bed. i pivot -- a pivot would be too big a word, but where we are with corinne: and being too high at the moment, we have limited headroom for positive inflation surprises. hence our reasonably firm stance that we are taking. haidi: you mentioned you are in no mood to entertain any leniency when it comes to inflation, because the projections show you will not start cutting until inflation is well within 1%-3%, close to 2%, the midpoint. . do you need to be thoroughly

the rbnz has kicked off for the rest of the world. now that we have seen it, we have seen the spike in with the kiwi here, at 63, 60's sense. all economists, rbnz remains appropriate to continue tightening at pace. is want to watch. we have been looking at any signs they could slow this tiny path. core consumer price remains too high. let's bring in kathleen hays, for any sort of reaction. your take away so far. >> hawkish. inflation remains too high. the rate is peaking at 4.1 versus 3.9, which they said -- with a projected at the last meeting. they are talking about inflation slowing to 3% by the second quarter. that might be a little helpful. remember, this is only the third quarter of 2022. they're holding out some hope for the future. so, saying it piques that 4.1 is also bad. for now, would you not agree this underscores the market sense, economists forecasted to more 50 basis point rate hikes are coming. look what they did at the beginning of next year, but more could be coming as well. clearly, any sense that they are ready to

a couple of headlines, rbnz in a statement, one governor saying that the rbnz is prepared to navigate economic financial challenges. he also says the economic recovery will continue, they will continue monetary support, and eventually settings can normalize. no details on when that can be. rbnz also saying that recovery needs continued monetary fiscal support, and they have planned to embed new risk appetite and capital framework. remember we have reports suggesting the rbnz may see bond purchases resume in a couple of months. all those headlines from the rbnz governor adrian orr. now let's get the first word news with vonnie quinn in new york. vonnie: this nation has defended its decision to launch airstrikes on iraq. speaking on a visit to rome, secretary of state antony blinken says it sends a deterrent message that the u.s. will not hesitate to protect its interest in the middle east. >> regarding the strike last night at the president's direction, u.s. military forces struck iranian-backed militia groups. they targeted facilities used by groups responsible for recent attacks on u

watching new england ahead of the rbnz -- watching the new zealand ahead of the rbnz decision. looking at another 50 basis point hike, trying to get ahead of the curve. shery: take a look at u.s. futures right now rebounding after we saw those losses being pared back. we still had losses on the s&p 500. with the defense companies gaining ground and we actually saw them now at the moment rebounding a little bit. the -- even futures up .07% after we had social media companies erasing $100 billion given the profit warning from snap. we are watching treasuries and we have that safe haven rally. the 10-year yielded dropping. right now crude is rebounding after losing ground for a second session in new york. remember, we had the u.s. announcing the release of strategic crude. the department energy offering to sell as many as 40.1 million barrels of oil, haidi. haidi: let's get more with o ur asia editor. you take a look at what happened across the tech complex. there is no exhaustion yet when it comes to the selloff. andreea: hi, haidi. no, it doesn't look like it. even though the na

and the head of the rbnz said later it was a communication challenge. how could they turn on a dime so quickly? so they didn't. then -- and we spoke to him two days later and asked him about well, what about october? what about a rate hike then? he said they'll watch inflation. and continued to rise. jobs, they remain strong. and he said in terms of a rate hike, it's definitely a live meeting. >> a live meeting. we retain the right but not the obligation to move policy when we think it's necessary. >> now, today, even though third quarter g.d.p. is expected to track the rbnz said is to go ahead to make the rate hike because they expect a rebound after that. the latest covid developments are seen ruling out a 50 basis point rate hike which they are yesterday to do in august. and again, yes, in our bloomberg eke owe team says they will hold and signal a november hike. so there's a little more drama around this move than we might have thought. it -- thanks in part to bloomberg economics. shery: we'll find out in a few hours' time. our global and economics