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 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

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

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this of course as we continue to watch the rbnz.r are coming on the show and talking about their decision to keep wrench marks on hold but also bringing forecasts for higher interest rates. sydney futures at the moment looking higher. this on the back of the longest losing streak since october. nikkei futures unchanged. we saw a slight gain on the s&p 500 in the new york session. coming up in the next hour, we speak to emily wise of state street for her market strategy plus bloomberg equality, focusing on the future of women in afghanistan. we will be speaking with an associate professor. this is bloomberg. ♪ haidi: very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's major market opens. shery: i am shery ahn in new york. welcome to "daybreak asia." a choppy wall street session. the virus and taper talk way on the economic outlook. commodities feel the pain of china's credit tightening. copper heading for its worst week in two months. adrian orr tells

shery: for now, the rbnz prudence is actually making a lot of analysts and economists reassess how theyabout what other central banks could potentially do. kathleen: we have an mliv blogger who said he thought this could send other central banks in the wrong direction. it could prove to be a rash move. more of the talk is that, yes, as adrian orr said, what has happened in new zealand just shows how unpredictable and damaging the virus can be. the question that is more interesting is does this mean something for the bank of korea? they are expected to hike their key rate this year. the market has always priced in -- priced out the odds of two rate hikes down to one and is interesting because rate moves in korea and new zealand often go in tandem. they are smaller economies, smaller countries, and we have seen them right now, both looking at the overheating housing market, rising inflation. is that another reason they could be moving in tandem? some are saying they will not hike at all. others saying that maybe they will hike but they will signal that this is a dovish hike on like the ha

the rbnz just overnight practically had to decide we were going to hike the key rate.arned may be a 50 basis point hike and they did not because of the lockdowns new zealand and the impact that could have on the economy. that is the big question now. haidi: the weakness that we have seen in the won, does that play into things? bret: you have to wonder. the bank of korea is coming and superhot. you have virus cases. maybe it would not be a bad thing to do a rate hike, especially when you think the fed might start tapering bond purchases. our bloomberg intelligence team has a metric of covid resilience and it has to do with investment portfolios, the amount of global investment, and the idea that if the fed starts tapering, they could start removing capital from korea. here is two very important things about the charts. there is a margin. that is not going to hike rates right away but moving stimulus would be a form of tightening and look at this. the bank of korea was among the first in asia of central banks start tightening in 2017. they do not mind getting out ahead.

adrian for not going to let virus outbreaks stop the rbnz from hiking rates as soon as october. kathleen, what is the governor's reasoning? kathleen: his reasoning is that a central bank has to learn to deal with the virus, deal with outbreaks. he says the economy is still surging ahead. there's key concerns that inflation expectations could get out of control, and he said yes, very definitely, the door is open to a rate hike in october. >> we have to focus very much on our purpose, which is, of course, the inflation and employment mandate that we had, and absolutely, this week was not the best of timing to be looking to reduce interest rates -- reduce monetary stimulus, i should say, given the health situation, but we can observe what is going on, and the underlying economics remains the same. we have severe capacity constraints. we have supply disruption creating the costs. we have above maximum sustainable employment, so the underlying situation remains the same, but we thought best let's just observe over the next few days at low cost to us. kathleen: you brought up an inter

turning to new zealand, the latest rbnz preview. chief economist saying economy has moved quickly from resilience to frothiness given the data we have seen in inflation and jobs. she expects a 25 basis point rate hike next week. she is not ruling out 50 basis points. she does expect the rbnz will stick to a measured approach. haidi: we are taking a look at the luxury sector. a french luxury brand is taking another step in reducing its carbon footprint by revamping a signature tag in recycled material. >> we were doing sustainability before we knew the word existed. we are manufacturers. the fact that we are in contact with products, with the making of the products gives our company a very different character as opposed to many other fashion brands who do not manufacture anything. it comes naturally to us we need to protect the environment that provides the resources we use. we are taking a little bit more of a formal approach. we are developing a project that is pushing the envelope even further. like our project we are just launchi

there was one covid case and that was enough because it meant that the rbnz delayed a rate hike because the entire country went into law down. more broadly across asia, asia has been very exposed to the delta variant. the other thing that asia is exposed to is china and china equities and we had the daily crackdown headline about fresh limit on what internet companies in china can do, fresh regulations, and that is a class drumbeat. the victory china tech giants have lost about $1 trillion in market cap since the soft ongoing so that is a constant burden for the market. there is also plenty of disquiet about china evergrande, the big property developer, which is struggling to remain solvent. everywhere you look in asia, you always be china in such a big part of the picture and it is a very gloomy part of the picture right now. dani: certainly. i'm just looking at alibaba share prices which fell to record lows, falling to another record low, down an additional 3%. thank you for staying on top of that for us. that is goff of reynolds from our mliv team let's get into more of the market ac

the stock market is saying it is not 100% guaranteed for a hike tomorrow for the rbnz.w is going to be tantalizing to watch. what have we got stacked? dani: it is all about the commodities coming up. bhp wants to accelerate its exit from fossil fuels. it has confirmed and talks of a potential merger of its oil and gas unit. we will have all of that up next for you. this is bloomberg. ♪ ♪ dani: welcome back to bloomberg daybreak: europe. i'm dani burger with manus cranny alongside me in dubai. the quick look at your commodity markets. copper falling yesterday. more steady today after some disruption in china boosting copper. you have brent ever so slightly lower. let's go to bhp, which has aimed to accelerate its retreat from fossil fuels. earnings out in a bit. joining us now is our correspondent. what are we expecting out of bhp? >> good morning. speculation about bhp's exit from oil and gas has had fever pitch in the last couple of days and local media are very much on top of the story that they sold oil and gas business in the price tag could come to $15 billion. it

the rbnz may be likely to tighten standards. with the yen holding their a two-month high after briefly catching that 1.09 level overnight. the canadian loonie has tracked oil prices lower. checking in on wti, we are seeing falling below that. we have wti falling below the daily average. this as global demand is being clouded by the spread of the delta variant in parts of china, which has researchers saying it wiped out 5%. the company boosted a surprise boost to the dividends. here's what the ceo had to say. >> what you are seeing is a story of confidence, a story of confidence in the underlying performance of the business. 12 months on from when we laid out for your strategy, of course, the world is in a very different place from the environment -- 12 months on from when we laid out our strategy. shery: we have an alert on the bloomberg right now. the cbc saying the eviction ban -- the cdc is allowing more targeted relief. new measures aimed at helping struggling renters. let's get over to vonnie quinn for the first word headli

like the rbnz said last week, maybe we will move our rate hike to october because you have to deal withina's number on the pmi going to be strong enough to let the pboc maintain this stance where they don't have to do a lot of these things? richard: i think probably the pboc would be happy if they did not have to do much more. they do have something of an easing bias and we expect them to continue to give us a little bit every so often on that to keep growth and credit roughly in line gdp. i think the issue with china is not just what the pmi numbers will say and zero covid, but this issue of underlying structural change. big changes in regulation in the tech sector, which has been a meanof growth. a big shift in the way think about income distribution and wealth. obviously the demographic issue has become more pressing in the data we have to this point. china has a really big structural agenda going on. i think it is making policymaking quite hard and growth will continue to slow because of that. haidi: when it comes to the impact of deltek, we saw the be ok -- of delta, we saw the bok

the kiwi dollar is holding steady ahead of the rbnz decision.n early in the is your session this monday, after the big drop in 10-year yields amid concerns of the delta variant, vaccination rates are top of mind. you're seeing the divergence continue on the chart, particularly in emerging markets, where vaccinations are staying below 10%, listen like indonesia, thailand. singapore vaccination rate is about 70%. shery: let's now get to vonnie quinn with the first word headlines. vonnie: thank you. south korea's president has left the door open for talks with japan for a final liberation day speech marking his neighbor's world war ii surrender. moon jae-in says he is ready to work with japan on global threats, including the pandemic and climate change. in tokyo, the prime minister's cabinet visited a shrine that honors convicted were criminals, something that is seen as crossing a redline. . in malaysian cabinet minister says the prime minister has told his party he plans to resign. he has resisted repeated calls to step down since march of 2020,

but the markets would not be surprised if they stayed on hold, just like the rbnz did last week. rishaad: we're seeing a little more hawkish and is creeping into other central banks. indonesia, for one, reiterating their plan to reduce liquidity next year, saying that participation in actions may be lower, but they will still be on standby. is this something we will be seeing across south east asia as perhaps people start to think about the concept of living with covid rather than trying to fight it? of course, that will be contingent on inoculations. >> yes, i think the markets will start anticipating that all countries in asia will be shifting away from this zero cases intolerance of covid to a more european or u.s.-style approach of tolerating covid cases. if that is the case, central banks in southeast asia will start to tighten their policy. the economies can live with the pandemic so we can expect prices to go up. rishaad: looking at also what the pboc has been doing, vowing to boost credit support, this against the backdrop of what the commerce minister was talking about y

this after the rbnz held on a rate cut last week. paul allen with the latest.urn to vonnie quinn with the first word headlines. vonnie: thank you. the u.s. is reportedly pressuring israel not to allow a group that includes china's crc see to win a tender to build two might rail lines in the tel aviv area. it is likely to come up on thursday when mr. ali bennett talks with president -- when he speaks with president biden. china's weibo shut down 145 accounts on its platform, some of which have been sympathetic to popstar chris wu, who was accused of rape. they published information that was harmful for maintaining social order, they said. the chinese canadian was arrested in july over several sexual assault allegations. ships have resumed birthing operations south of shanghai after a two-week shutdown to quarantine dockworkers. while an official says the terminal is still closed, bloomberg data show at least five container ships have left in the last few days. french -- a french shepherd told customers for operation should return in the coming weeks. el salvador

you can turn to your bloomberg for more on the rbnz decision later.ary and analysis from bloomberg's expert editors. also be sure to tune into bloomberg radio to hear more from the days big newsmakers -- day's big newsmakers and get in-depth analysis from the daybreak team. we are broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. plenty more ahead. stay with us. ♪ shery: we are eagerly awaiting the results coming from 10 sent. china's largest tech company seeing tons of headwinds from scrutiny on its antimonopoly drive from beijing not to mention its gaming business but something 43% did not get too much help from the earnings reports. we are expecting a net income declined which would be the first profit decline since 2019. haidi: this is not a new story. it operates as a social media platform. it has been one of the biggest high-profile victims of the beijing clampdown this year and previously when it comes to the gaming clampdown as well. the antitrust issues, the influence of gaming, as well as

flipping of the board, frontloading rbnz tightening bets which raises the question if they are overshootingget with 75 basis points of rate hikes baked in for this year alone, the base case over goldman. they see the risk that the cash rate could be increased by 50 basis points this month given we saw a strong move for the labor market higher faster than expected to pre-pandemic levels. haidi: coming up next, we are taking a look at the world's largest money transport provider selling one of the units for $1 billion. western union ceo will be joining us, just ahead. this is bloomberg. ♪ haidi: we have earnings when it comes to singapore bank. dbs coming in with first-half net income of 3.7 one billion sing dollars, a gain of 55% year on year. watching that dividend payout. $.33 per share, 33 sing cents per share after the monetary authority of singapore lifted their dividend cap so it does follow on the back of the a similar trend we have seen from other major banks. coming in at 1.45%. nonperforming loans ratio at 1.5% and net income at 1.7 billion sing dollars with 868 million sing dollar

and the rbnz, it seems, when you look at the tapering and the pricing of the kiwi dollar. it might even be priced in at this point in time. but we're still talking tech, quite literally a developing story when it comes to the narrative and the stuff we are actually hearing out of chinese media when it comes to gaming and tech, in fact, publishing the message, if you will. rishaad: we will get back to that just seeing -- let's look at how the tech stocks are doing at the moment. csi up. chinese equities to the upside. hang seng bouncing back after its decline. tencent, 3.5% up. happy barbara -- alibaba is healthier, but alibaba itself is down a fraction. a revenue miss and an overall maze -- miss as well. we were talking yesterday about video gaming being "spiritual opium." that is gone now. yvonne: electronic drugs. you start to see the tone from state media. they are walking back the harshness when it comes to how they described the gaming industry. this is what we have been coming through this morning and seeing -- it is immoral to blame schools, given companies or paren

the rbnz did not do it. the rest of the region is down again after the relief yesterday. the story continues to be, at least at this point in time, the dollar story, and the cyclical story. you are getting a lot of movement in the chinese markets. talking property, a potential property tax, and speculation around bringing prices down, cost of living down. we are starting to get this movement across the property names in related things like copper. we have breaking news. yvonne: yes, sri lanka. look at the central bank. their standing rate was raised six percent from 5.5%. you are seeing more of these p.m. central banks when it comes to inflation, joining the likes of other em central banks. the aussie bank, why it decided to blink? will have to ask them on friday in the interview. but more of these emerging market central banks are dealing with the inflation issue and going ahead with it. david: i think we were talking with a guest yesterday and he said, russia is done. they are done with their hiking cycle. brazil, we know where they have taken rates up. this divergence

because the rv and said -- the rbnz, they have a lockdown at the same day.hey could not explain everything at once but still, you are kind of wondering if the bank of korea is saying we will wait until the next meeting. we will know just a couple of hours from now. haidi: in terms of the won, it has been one of the worst performers in this region. it is primed for a rebound if we see a hike. kathleen: absolutely. if you are the bank of korea, you might not mind seeing that because you don't want your currency to get into the kind of pressure with capital outflows, etc., but if you look at the chart, it is an interesting one. it shows the fed funds rate, the fed key rate down around zero. it's a nice margin there. when the fed starts tapering, that will send signals that it will be hiking rates. i want to show you this chart again because they were among the first in asia to tighten in 2017. another very important thing. bloomberg intelligence has done really interesting work. first of all, they say the best thing for them to do if they want to support the wo

the rbnz is tomorrow. there was speculation that they might hike 50 basis points.ever believed that, but it was still a chance. it would be 25 basis points and a hawkish stance. it will probably be 25 basis points and a dovish stance. people might be panicking that they may not hike at all. we may be getting a bit of overreaction in the markets. i'm shocked by the sudden lockdown on one case. i do think it is a real negative for new zealand. it doesn't warrant the scale of move we are seeing right now. but i would not move on the short-term. i think this could be a messy couple of days. i'm curious, jordan, obviously this has kind of taken you by surprise, but i know you had previously been quite constructive on new zealand dollar. is this changing your view? how are you looking at this? jordan: it did change the view. this morning, our aussie rate strategist took off some of our exposure. we had short australia come along new zealand. australia has been deemed a terrible wave of covid and struggling with lockdowns to control it and new zealand hadn't. all those pa

the rbnz to delay an expected rate hike has rippled through markets sparking concerned that the deltae other central banks to shift their own timelines. the hike may now happen in october. >> we have to focus very much on our purpose, which is the inflation, unemployment mandate that we have. absolutely this week was not the best timing to be looking to reduce interest rates given the reduced monetary stimulus and the health situation. time is on our hands. we can observe what is going on. we have significant capacity constraints. we have supply disruptions. the underlying situation remains the same, but we thought we would observe the next few days at little cost to us. >> you brought up an interesting concept when you talked about a strategy of imminent flexibility, the need for the central bank to manage its way through a virus environment knowing it will come and go. does that mean you could potentially hike the key rate even if there are instances of outbreaks? >> i think it does. the real issue is at what extent is monetary policy being useful. it is government fiscal policy to

the rba minutes this tuesday and the rbnz decision on wednesday.his cross as a no-brainer when it comes to the trade. he is still keen on countries that are trying to normalize policy. markets are pricing in for the be ok, which could happen to the korean you want -- which could happen. testing the 1172 handle. morgan stanley does not see it breaking above 1175 in the next one to two breaks -- one to next -- one to two weeks. uncertainty of who will form the next government. politics as well as virus woes have driven depreciation pressures. allowing broader em weakness in the face of fed taper chatter. shery: coming up, we have more on the latest ship crisis that sophie mentioned -- latest leadership crisis that sophie mentioned. this is bloomberg. ♪ vonnie: this is daybreak: asia. president joe biden has addressed americans from the white house as chaotic scenes play out in kabul where the taliban have returned to power. the associated press says at least seven people were killed as crowds rushed trying to board departing aircraft. the president s

haidi: he said it before, we spoke to adrian orr, the rbnz governor.urse, it is a live meeting. he gave us the clearest indication that a hike is likely in october even if there are still cases of covid-19 in the community. here is more of our conversation with him earlier. adrian: we have to focus on our purpose, which is of course the inflation and employment mandate that we had. absolutely this week was not the best timing, looking to reduce interest rates and reduce the monetary stimulus, i should say, given the health situation. time is on our hand. we can observe what is going on in the underlying economics remains the same. significant capacity constraints, supply disruption creating the costs. about maximum sustainable employment so the underlying situation remains the same. let's just observe over the next few days, low cost to us. kathleen: you brought up an interesting concept at the press conference a couple of days ago where you talked about a strategy of permanent flexibility, the need for the central bank to manage its way through a viru

strong manufacturing pmi members out of inflation expectations also at the seven-year high ahead of the rbnzt week. sidney futures up by .4% as we look for more details as to the pathway out of covid from the national cabinet meeting that is to be held later on this afternoon as well-paid when it comes to nikkei church trading in for, we are seeing outside of .1%. alibaba is trading a team dedicated to invest in getting sexual harassment complaints, a moment of reckoning and china's #metoo movement. we will discuss all this with the managing partner, next. this is bloomberg. ♪ vonnie: this is "daybreak asia." i'm vonnie quinn with the first word headlines. that francisco requires proof of covid vaccinations for indoor patrons. the mandate extends to large indoor spaces such as theaters and entertainment venues. new york city imposed a less severe mandate last week requiring indoor diners and gym-goers to offer proof of one vaccine dose. people left hong kong after the implementation of the national security law that curtails protest and dissent. more than 89,000 residents left in the 12 mont