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.

in july, in may, the rbnz thought at 5.5%. and mind you, that's still above where the federal reserve is, that this would probably be enough. and of course, there's two sides of the coin since then. you can see that that chart showing where the rba nz now and again the idea they're going to hold and we there have been signs of weakness in the economy. you know, manufacturing down for the fifth month in a row and more. this is the kind of thing that bolsters this case. house prices are down et cetera. on the other hand, inflation, if you look at that, is only down to about 6% on a yearly rate. so the target is 1 to 3%. so that is looking kind of sticky in the latest survey from the rbnz, cpi is supposed to get down to 5.3 by the end of this year and even down to 2.83 by the end of 2024. but it's inflation expectations at 2.70%. maybe that is a good sign. and that's what they're watching very closely because we have seen an uptick recently in inflation expectations themselves, not just the survey, which suggests that that is sti

ahead, we speak to the head of the rbnz governor -- the rbnz, and whether -- on whether the inflation dragon has been slain. this is wilbur. ♪ -- for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company. 76% of 23andme health customers surveyed reported taking healthier working foactions.th merrill. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme. >> let's take a look at corporate stories, jd.com's u.s. trading shares fail -- felt after they changed -- they change their merchandise. profitability of the core retail missed estimates as they boosted marketing expenses to

later on daybreak asia, we speak to the rbnz governor adrian or. let's get to annabelle for the markets in asia. annabelle: we are focusing at what we are seen in the kiwi bond space. yields move in a little bit higher following the decision yesterday. the rbnz indicating inflation could take a little higher. one more rate hike may be needed. the question revolving around how long do rates need to stay elevated. the key rate in new zealand could be at 5.5% until 2025. in the equity space, futures will open in the red. kiwi stocks online to the downside. we have been watching the moves in the japanese yen. we are above the level the dollar again crossed in september when intervention first started. while above that at this point. the question is whether intervention risk is on the horizon. anything that will lead to meaningful appreciation of the japanese yen will need to be an exit away from the negative rates. we have seen a lot of currencies depreciate amid the dollar strength over the course of this month so perhaps the boj are unlikely to act j

we'll be watching the rbnz rate decision, of course, quite closely. said, no change expected, but still the kiwi dollar in focus on that. aussie stocks online to the downside and we're watching brant crude fractionally higher as we get trading underway but traders really caught kathleen it's that story of shrinking inventories. but then on the other side, you've got that story of china demand. and we've been discussing across these hours just how much malaise is seeping into the chinese economy, not just from loan demand, shrinking exports, but other factors that that activity data yesterday. certainly a lot for investors to be weighing there as well. the push pulled away there. let's move on to our next guest saying he's underweight on emerging markets in japanese equities. and the other side of that is he's overweight us stocks. karen calder, head of equity research for asia at joining us now. so, karen, i just have to start with some big news in the last 24 hours, actually, all week, lots of big news every 24 hours. but us retail sales stronger tha

the expectation was that would be it for the rv and see -- rbnz . keeping on hold this week as economic concerns continue to pile up new zealand. that 10-year note heading for numbers not seen since 2011. still to come, beijing condemns the u.s. for allowing stopovers by taiwan's vice president. more on that later this hour. first, here why cairo advisers say investors are putting too much faith in the recent stock rally, focusing too much on big tech earnings. we will talk market strategy next. this is bloomberg. paul: let's look at the week ahead with china sliding into deflation. we will get a day lose of data. lies industrial production, retail sales, fixed asset investment, and it jobless due tuesday. the pboc said its benchmark for a one-year lending rate with most economists expecting no change. on the inflation front watching cpi numbers from india this -- expected to show a sustained increase in food inflation and in the u.k. price pressures remain stubborn and we get inflation data from japan friday. wednesday the fed minutes will give us

yield about that 5% mark yesterday for the first time since 2011 and we had the interview with the rbnz governors saying recession is the bare minimum what is needed to quell inflation. that is standing out, even though we are seeing muted moves throughout the session and investor angst and the vix as we touched the 18 mark for the first time in seven sessions but 30 is usually the level indicated with heightened volatility. vix features coming on by now. we are looking towards that range-bound start tilted towards a downside with the aussie contract and the level just below 146, but china and focused throughout the session. we have steve to talk about the moves to intervene in the chinese yuan but in terms of the moves in stocks it has been that record streak of nuts selling by foreign investors so even though we sold volatility yesterday, international investors are leaving the market now hitting that level. paul: bloomberg has learned the chinese authorities told state on banks to escalate intervention in the currency market this week and push to prevent a surge in yuan volatility as

it is likely the rbnz will stand pat. the china market opens and earnings season coming into full swing this week with the end of beijing's tech crackdown setting the tone. felix joins us now from hong kong for a preview. what can we expect from tech earnings in china this week? >> yes, of course, tencent is a big focus this week. last week we saw alibaba signaling a comeback, and for tencent we may see a 20% jump in advertisement businesses. for other businesses we may see a 10% jump, so the chinese tech sector, the sentiment is improving, and now we have heard that china is ramping up their crackdown and they are supporting private enterprise in order to support the company -- the economy. paul: so we have a company reporting today. what are we watching their? >> we just mentioned the chinese tech sector, but it may not be the same for the semiconductor industry. just like samsung reported the worst decline since 2009 and tsmc saying the downturn after the pandemic may be longer than expected, so from hon hai we may see

it does fit into the narrative that we expect according to a number of economists that the rbnz wills unchanged. we expect potentially a bit more of a hawkish stance in terms of being vigilant in this inflation fight. the forecast, with 200 basis point of rate reductions between the second quarter of next year and the second quarter of 2026. we could see using on the horizon soon for new zealand. take a look at how markets are setting up going into the final friday session of the week. we are looking like a pretty mixed open as we continue to kind of decipher the implications of the tamer than expected u.s. inflation numbers. core cpi, small back to back increases in two years. mary daly, pitching in and saying the fed has more work to do in the inflation fight. we are seeing stocks here setting up and asia for a mixed open. we will be watching very closely when it comes to how australian assets react. we do have the double testimony -- the farewell testimony for lloyd before parliament today. we will be watching one and -- w hat we got out of that meeting between regulators and prop

the rbnz is expected to stay pat and certainly rate differentials.hat's if you had to sort of describe cross-asset moves right now there is your number, there are your numbers right now, activity numbers, just about a miss across the board. some of the people we've spoken to since the data released are pointing out that very weak retail sales number, some of the properties coming through, i mean, aussie dollar is weak anyway going into this number. we're a little bit higher on that. have a look at oil where we are on that. we're going for eight weeks of gains. if we get number eight, that would match the longest win streak or streak of gains in oil this century. there we go. doesn't happen as much iron or slightly lower in that your medium term lending facility. just a great cuts the 1015 rather there's a ten which we'll get to in a moment 15 takes you back to 2.5% 1 billion net injection there and your ten year yield, five year look, we're back to levels as that's pointing out, back to 2020. you don't normally see this move by 4 or 5 basis points, b

standouts moving above that 5% mark for the first time since 2011, that was after we heard from the rbnz and governor saying he was comfortable with the prospect of the governor. the cross as set move is in focus of that go in asset class that does not lack a higher rates environment. bitcoin touched 26,000. we are sitting around a two month low for that asset. copper in focus. we have seen that sliding over the course of this week. that is also down to concerns around the health of china's economy. if you take a look at what we are seeing for futures in the set up today, we are broadly pointed to the downside. investors were great -- weighing the higher rates environment. the prospect of the economic weakness in china it's -- in china's economy. we are seeing a step to try to shore up sentiment. shery: bloomberg learning chinese authorities told state owned banks to escalate intervention in the currency market this week and to push to prevent the surgeon yuan volatility. the onshore yuan falling towards that lowest level since 2007. we continue to see week sentiment over the economy the

a technical recession and the impact of that early tightening cycle from the romaine: -- from the rbnzust about 1%. we may have peaked at least when it comes to china's oil demands. we are seeing the appetite for fuel and other oil derived products, potentially peaking this year as the economy continues to struggle. that's going to be something to contend with given the week gains we have seen -- weak gains we have seen. >> the spring and the global strategist at j.p. morgan asset. great to have you with us. we of course are reacting to the u.s. credit rating downgrade. how significant is this, when you have the second downgrade after smp in 2011? now you have the average rating getting lower. does this affect any of the investment vehicles which are rating sensitive? >> i think it maybe does, to a certain extent. when you look at the market role broadly -- more broadly, it still represents a flight to safety of there is a risk out there, the implications outweigh a lot of what you are seeing and how investors are trading. that is what we saw the last time we experienced a shock. i don

the deepening recession as we get into the next rbnz decision. then futures down by 3/10 of a percent. watching for the rba governor, his successor, they will be speaking before a parliamentary panel for the semiannual testimony. watch for signaling on how they see the inflation fight going. kita trays trading at -- kita today treating action will be what happens with assets. potentially some key developments in the property sector woes we have been tracking. china securities watchdog is said to be meeting with property developers on friday as the crisis drag on the entries recovery. alibaba is in the makes. it is defying the economic turbulence in taking a step toward a long-awaited comeback. for more on these top stories stephen engle is with us and annabelle droulers. let me start off with you. fascinating what we can see out of this meeting. >> sources are saying the securities regulator will be calling a regular cash a meeting with select regulators. also meeting with financial institutions to find a way to get out of this trouble. this is a

we are also tracking japan's economy as well as the rbnz.y to send a hawker signal even with the economy in recession terrain and elevated inflation expectations. we talked about japan, the july cpi report may show core inflation falling back but early signal from tokyo suggests it could be surprisingly sticky. that is happening on friday. dave, a lot of data to mull over. that will impact investors sentiment. let's get perspective and insights and bring in teck leng tan, executive director at ubs ag wealth management. when you take a look at the markets, it is priced for perfection. any little bit of news would impact sentiment. teck: yeah, and i think when you say price for perfection, and i would also include the dollar because truth be told, we have been expecting the dollar to roll over earlier this year. so far, it hasn't, and part of the story despite the fact that some of the fed members are starting to talk about potential easing next year actually, the fact of the matter is that if you look at u.s. yields, they have not been behavi