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

the kiwi is fluctuating after the rbnz hiked by another 50 basis points.et reaction from juliette saly in singapore. juliette: a 60 basis point hike and it was a slightly more hawkish tone from the rbnz. it is up from the three point 95%. and striking a hawkish tone even though he announced and alluded to the fact that the higher prices are going to start to hurt household spending. let's a could what we're seeing in the currency reaction, you mentioned the kiwi fluctuating. it did initially spike higher against the dollar and the aussie after the rate decision, a get back some of those gains but now were up by about .2%. traders saying it will sell out before the decision and on the back was slightly -- elsewhere it's a two month high for asian stocks so we're seeing some pretty good gains coming through and were looking ahead to the big one, tencent expecting to see its first ever quarter of negative growth. analysts have knocked their forecast down about 21% from the peak in 2021. dani: now to the u.s., where retail sales and minutes of the july fed mee

manus: as your interview with -- kathleen, great interview with the rbnz central bank governor. watch, wait, and worry, the natural resting state of the central bank. i loved it. you push him on what level of growth drop which he tolerate and what central bankers drop? i found interesting you talked about zero growth around the world is what we might need. kathleen: exactly and i think that was very wise, too. in many ways, we know that this is a global problem. we can say central banks blew it. they misjudged inflation, they overstimulated, etc., but bottom line, on top of that, there was all these other things that they did not cause. supply chain constraints. in order to battle all that and push back, very slow growth could be and probably will be required. if central banks are not willing to signal that they are not going to help change expectations, maybe that is another big part of this. you have to change people's expectations about what the central banks are going to do and what that means so that you can start reaching that. it was very interesting. i pushed him on how

the rbnz is the big one for us today. basis point move, the fourth straight hike of such magnitude. the most aggressive tightening from new zealand since more than three decades ago. in terms of the reaction from stocks, we are seeing equities shrugging off these concerns, they are more focused on what we had out of the u.s.. those rated -- speaking to the strength of the consumer we are still sitting there. we are seeing indexes moving a little higher this morning. haidi: let's turn to citroen -- 61 -- see schwan's a bright a threat to their electricity supply. let's bring in bloomberg energy supporter -- reporter. we just heard the government has ordered a shutdown for toyota and others. how long can we expect this last? >> the stoppages through this weekend. it is not the longest stoppage, there is some hope that maybe bring comes. that could refill this and help the situation ease a bit. to be certain, there is nothing set in stone. there are local reports from the meteorologists in china saying the seat could last th

having to do with what we get before the rbnz meets before next week. that recessionary risk being played out in that we have seen the yield curve inversion across new zealand sovereign bonds. the three year rising seven basis points. more to come here on daybreak. this is bloomberg. ♪ >> johnson & johnson will change the way it produces baby powder making all of its products based on cornstarch. this comes amid legal action against its baby powder with some consumers claiming it makes them sick. mitsubishi has established its own direct lending business that makes it the latest bank to try to take a share of the lucrative private credit market. the unit formalizes an existing operation that has offered loans since 2019. it has created more than 50 direct lending deals in the u.s.. >> we've been talking all things cba this week after earnings released but they are really now the world's least loved mega bank after they lost their last remaining bulls. it's interesting because now we see jeffries on the bullish side standing downgrading it to hold after

we heard from the rbnz deputy governor that there is some certainty around the peak of the cash rate.business flash headlines, hang seng indices are adding baidu and other companies to the benchmark. the hang seng index will take the total number of constituents to 73 from 69. it -- the changes will take effect on september 5. japanese trading house mitsui has decided to keep its investments in natural gas company, after president putin ordered a shift in the project operator to a russian entity. the company will make a formal notification as soon as this month and next, we discuss the power crunch in china, and how it is adding to manufacturers' millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network and most recommended wireless carrier. that's a whole lot of happy campers out there. and it's never too late to join them. get $450 off any new purchase of an eligible samsung device with xfinity mobile. or add a line to your plan toda

the rbnz is very well advanced in their tightening cycle.were one of the first central banks to really begin policy normalization. i think by virtue of that, they will be much closer to its terminal rates than other central banks. it is very clear the housing market in new zealand has already turned. we are seeing concerns growing about downside risks for the economy. i think that will put a cap on how strong the key we can go from here. even though expect the rbnz to deliver a 50 basis point hike, i think that's already well priced. i don't think that will see too much support for the kiwi if they were to follow through with the hike. shery: we are really not expecting a lot of policy action from the bank of japan. where does that put the japanese yen? >> for the yen, it will largely continue to be influenced by the yield differential between the u.s. and japan. the boj certainly will continue to stand pat. they will maintain yield curve control, which means the fortunes of dollar-yen will be determined by how the u.s. 10 year yield will go

we're seeing the combined impacts of soaring interest rates, the rbnz being aggressive, supply chainhortages. building permits are up 5% july. kathleen: let's take a look at some pictures that tell a story of what going on in the market lately. it's interesting, they are surprised by a volatile risk rally going around the world between mid june and august. if you look at asia, the s&p 500, emerging markets are down. it's interesting. the fed did its first interest rate hike. now, there is definitely a down. the rate hike in july. traders figured out that it's stocks down again. this shows the stock market by sector. if you look at what is down, it's interesting to see some of these numbers. information technology was -- new zealand, australia, quite a picture. energy is the only one standing. very striking. haidi: a better picture when it comes to asia. the idiosyncratic resilience and some of the growth stories around asia. take a look at the performance, it's always the most interesting or volatile stock market. we are up 8/10 of a percent. you are seeing resilience in gains of whe

currency this morning, take moves following the interview with the rbnz governor adrian orr.about retail sales and low consumption and he says currencies are getting a catalyst to push them lower. haidi: one conversation coming up in jackson hole is why this is a market that continues to second-guess what policymakers are seeing. our next guest will be able to determine if this is a bear market rally, if we are at a peak inflation, let's go to audrey goh, senior investment strategist at standard chartered bank. the fed decided it is more likely than not a bear market pause? audrey: if we look at u.s. equities, they pulled back. a bit higher would signal an extension of the rally. today probably means we get another like down. the equity market is testing the moment. there are key variables that we are monitoring. a key is the dollar because we need to see a weaker dollar for risk assets to be sustainable, but the dollar has been strengthening in the past couple of weeks. it is not at its highest level, but other major currencies -- so jackson hole will be key to watch and giv

shery: tell us about where the credibility of the rbnz?e rising inflation expectations or inflation expectations above the reserve bank's target rate are testing and weighing on the credibility in terms of fighting inflation. we were the first bank to fight inflation in the 1980's, that is coming in check and it keeps the pressure on the reserve bank to continue tightening and bright expectations down. -- bring expectations down. heidi: we could see a statement that gets further upside to the kiwi dollars or will echo beyond $.66 -- it go beyond $.66? >> they repeat their resolute to tighten at pace. i think all of this hawkishness in maintaining their aggressiveness in terms of tightening monetary policy conditions is an upside. heidi: good to have you with us. previewing the right decision to come. up next, president biden signed into law a sweeping tax, climate, and health policy bill. we look at the act. this is bloomberg. ♪ heidi: new zealand's data coming through,: quarter on quarter, through .1 percent from the prior 3.6%, the outpu

we have the rbnz in move again. fact that the economy is already showing signs of slowing down. details of the fed july meeting would raise rates 75 basis points. australian data -- jobs data coming out followed by japan's inflation on friday. it will be a packed week. >> yes. i think this will probably be the biggest one in terms of the market moving. this is want to watch out for. let's bring in our bloomberg intelligence rates analyst. china is shooting a. i see bonds yields heading lower. >> we do expect this to happen in the second half of the year. maybe preferably to see what this could mean. the rate cut is certainly earlier than we expected. we think that trend has been happening over the last few months. it is not really just the data but china is really concerned that the economy will be facing more pressure. especially ahead of the party congress in november. they had to do something. that is why the rate cut today. >> stephen, we have the one down by .4%. what does it mean for the outlook on the currenc

but the rbnz and rba will have a big test for the health of the households and whether economies cantand those sorts of moves. haidi: let's get more on that. a commonwealth bank of australia reporting highest cash earnings in four years from continuing operations of 11% on the year. the senior analyst matt ingram joins us now. when you look at the nuances and the outlook, what does that tell us about the health of households in loan growth going forward? matt: thanks for having the on. household loan growth is definitely going to slow. cba called out slow and consumer confidence and high inflation. those two will have an impact on their mortgage. the cba is in pretty good shape. they grew by 8% this year. investor lines have been very strong. those unoccupied lines could still grow into next year thanks to strong approval numbers we sought the end of june. -- we saw at the end of june. haidi: how do you gauge the sensitivity to rising rents? matt: it was a bit of a surprise that the margin dropped again in the second half by as much as it did. but the cba is the most sensitive of aus

the kiwi, it has been falling even after the rbnz raised by 50 basis points last week and gave a more hawkish outlook than had been expected. at the moment there is no standing in the way of the dollar. >> bloomberg garfield reynolds looking ahead to what is a difficult training day and stephen engle with what is out of the pboc and china, you can follow all of the trading action on the markets live blog. commentary and analysis from our team of expert analysis -- editors here at bloomberg. you can get the effect on your investments at any given point. let's get the vonnie quinn in new york for the first word headlines. >> saudi arabian energy minister says opec may be forced to cut future markets as they become increasingly disconnected from fundamentals. he told bloomberg harmful volatility is starting functions in the market. the group meets next month to consider targets. the u.s. data permit says, it is closer than ever to being revived, the spokesman for the biden demonstration says -- the iranian position is reasonable, it is encouraging that they have dropped the man's includi

the rba and rbc are following the fed's lead -- rba and rbnz are following the fed's lead.icials to engage in intervention if the yen slides further. gsfm are really bearish on the yen. and we are close to the 140 target now. kathleen: it is like a hive of bees, those bears are stirred up now, so how aggressive do we expect the bank of japan to be? last time we were breaking through lower levels for days if not weeks, the boj got top and beat them back. can they do that again? >> it is a coin toss at this point. 140 is the target people have talked about, the line in the sand where we could see potentially strong intervention from the boj or ministry of finance. we shall have to see is what i would have to say. it is 50-50 on how effective it could be paid the key thing to remember when it comes to intervention is that it is often not a one-way gain. you need central bank years to agree -- central bank peers to agree to central bank intervention in the first place as they wrestle the yen back to normal levels. kathleen: ruth carson. ipo's suffer a slump in the rest of the w

one governor told bloomberg that the rbnz is being delivered -- deliberately ambiguous.ys that bank has yet to settle on the new estimate for its neutral rate. japan's government says the prime minister tested positive for covid and has relatively mild symptoms. the 65-year-old developed a cough and slight fever and came positive on a pcr test. he is currently resting at the official residence and will return remotely on monday. germany may not be able to replace all its natural gas from russian supplies this winter and may have to resort to nuclear power. chancellor olaf scholz says there is an option of extending the lives of the nation took a three remaining nuclear reactors -- lives of the nation's three remaining nuclear reactors. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haslinda: singapore is upping the ante to attract more top talent amid a global contest for highly skilled workers. the prime minister made the announcement dur