reserve bank rba. they won't be doing much in terms of policy but they have surging home prices there. that is a perennial problem in australiaraise the specter of financial instability. >> the reserve bank of australia is in a position where it can't do much about it. this is because of the lockdowns. the head of the rba is saying recently that he inspects to see gdp in the third quarter, down at 2%. we are showing you on a plummet because he things unemployment which has gone to a pre-vet -- a pre-pandemic loud, he thinks it needs to go up to the high five. he does think that you're going to open up the country to international trade in november. he continues to say no rate hikes until 2024 at least. when it comes to housing and the financial stability question, you can see that as zero point 1%, a record low on the far right of the upper screens, you see house prices rising by large amounts month after month after month. this is expected to hit 20% by the end of the year. people are going to watch for any indication in the policy statement after the meeting that they are ready to put on lending curves. that is the kind of

we have already had the bank of canada ending its program, the reserve bank of australia ending it's al control, next it will be critical when you have the bank of england and the fed and markets expecting the markets to begin its tapering process. and then we have pretty high inflation numbers going into next year. i think we will see the bottleneck issues on the supply side along with strong demand. coming into the month's and year's in we have had strong performance in the equity market -- end, we have had strong performance in the equity market . i think the confluence of all of these things from the central bank to the strong equity market due to a the inflation, supply, demand side it is leading to extraordinary moves in the bond market. alix: what will be the top end rate? are we looking at zero on the 10 year bond rate, for example? marilyn: it's possible. the market interpreted the ecb has not really talking down the market pricing of rates, and certainly we know the end of the pandemic emergency program by march of 2022 next year. nothing has been announced as far as replaci

paul: let's talk about the reserve bank of australia.its financial stability report out today. in the past five months, the housing market has put on one trillion australian dollars in value. how great a focus is this? kim: we have been hearing more and more out of the rba. risks from high credit growth that have a high debt to income radio -- ratio. we have seen them come out and increase -- shery: please go ahead, i think that's an announcement on paul side of things. kim: we have seen them come out and increased the minimum loan serviceability test up to 3%. we're already seeing some action come out from the regulators to try to cool that housing market. we don't think it's going to have too much of an impact and we still think that house prices in australia will be up by around 7% over 2022. shery: thank you so much for joining us again and bearing with us through the announcement. that was kim joining us with the latest on her economic abuse. be sure to tune in for more. stay with us. this is bloomberg. ♪ shery: take a look at the c

as well as the property sector,-to-of the key themes when we get into central bank decisions in this part of the world. starting off with the reserve bank of australia will be taking a look at financial stability risks. we've seen runaway house prices again throughout the course of this pandemic. and there will be also expected to flag the upside risk to growth given that we are seeing that path out of lockdown and potentially even the reopening of international borders to see boost to those service sectors at that have been so badly hit. we're also throwing ahead tomorrow, shery, where remember the last time we spoke to governor oran, covid is not necessarily the determinant. delta is not necessarily the determinant as to whether they continue down this tightening path or not. they are expected to continue on this trajectory as they're concerned about financial stability and property prices as well. shery: so much for investors to keep track of. let's get more on these stories and risks with su kennan and kathleen hayes in new york and also in d.c., let me get started with you, bill, and start with all of the drama that we continue to see in washin

growth in the current quarter after an outbreak of the delta variance minutes from the reserve bank of australia's policy meeting earlier this month showed the central bank does not expect to raise interest rate until 2024. and in south africa, the all share is up data from statistics. south africa earliest wednesday showed consumer prices rose by percent in september as inflation continues to be a problem. meanwhile, the iron rep said while it expects the country is kind of me to grow by 5 percent up from the for present projection before that pace will slow moving into 2022. now let's go over to rachel for more from europe and the americans. think brent? here we start in the u. k. where the foot the is down. this despite rally on friday, after the latest data showed unexpected growth, the purchasing managers in next rose to 56.8, marking its highest points and back in may, thanks to gains in the services sector. however, the bank of england is now warning that inflation could hit 5 percent early next year. nearby the german dax and the french tac are both in the green, but europe's 2 largest eco

the markets now pricing in three rate hikes by the reserve bank of australia by the end of 2022.is despite the fact philip lowe has said he doesn't see any hikes until 2024. that position in terms of the pressure between the markets and what the central bankers are saying as inflation looks stickier and many people's eyes. you're looking at losses of .2%. we will look at sector by sector shortly. the u.k. in focus because of the budget that will be revealed shortly. we will see if there's anything surprising from the chancellor later today. currently down .1%. you have the deutsche bank earnings. they are holding their market share. nowhere near the kind of gains that you saw in terms of trading activity over in wall street. that distinction between european banks and u.s. banks from santander. they're positive and both markets. cac 40 lower by .1%. travel and leisure at the top. real estate, technology, travel and leisure, the main gainers. the bottom of the list, autos and banks. deutsche bank is part of that. disappointment there around the trading activity. down by 1.5%. we c

saying that he expects australia's economy to contract by at least 3% in the third quarter due to the lockdowns. and now also saying that he's opened to a review of the reserve bank of australia saying it's been a while and it has been one in 40 years since an independent review of the r.b.a. has been called and the oecd among other bodies have been calling for one to be held. well, staying with australia, and major infrastructure work in the country set to double in the next three years. opening up a potential squeeze in skilled labor and materials. and paul allen has been tracking this and paul, this seems to come at a time where we continue to see supply chain issues, more demand than supply of just about everything including the labor market here. paul: that's right. this report from infrastructure australia looks out -- at three years and one would hope some of those supply chain issues have eased a little by then and australia in the grip of a skills shortage at the moment as well thanks to the closed borders and perhaps some relief coming on that front as well. but to the content of the report, infrastructure australia sees infrastructure spending, peaking

reserve bank of australia has released its financial stability report. on the housing market. housing prices have increased by a trillion dollars in the past five months. the median auction for a price in sydney, two million dollars. the rba saying the risk of excessive borrowing due to low interest rates is very real. systemic risks are building. the rba has had a few things to say about other matters. important lending standards are maintained. it notes that cyberattacks on financial institutions do continue to rise. the financial conditions to underpin asset prices. the rba issuing some mornings and what we are seeing around the housing market. we did see this week one of the regulators tightening lending requirements. we have the aussie dollar. beg your pardon. it is $.73 at the moment. the rba stability report being released. we are watching headlines as they continue to drop your sophie is taking a look at markets. sophie: as we digest the rba report, we have the aussie bonds sustaining the weakness. the 10 year yield at the 164 level. bond bears a

paul: just recapping some news we have had from the reserve bank of australia. o defend its yield target for the first time since february the rba buying up to a billion of securities which is about $700 million u.s.. this is a -- the target is a 10th of 1%. it surged to -- the yield has already dropped two basis points on this announcement but this is the first time the rba has bought ponce to defend their target for the first time since february. the action on the bond market, the yields on the 10 year creeping up a little by shery: we have an alert on the bloomberg. we are getting the manufacturing pmi numbers out of japan, coming it at -- in at 53 for the preliminary numbers in october. they have been in expansionary territory since february of this year, and it's gotten even better, jumping from 51.5 earlier in the previous month. when it comes to services pmi, this is the headline. it has finally entered expansionary territory. they have been in contraction since december 2019. it was 47.8 input -- in september. services pmi finally entering expansion terri

the reserve bank of australia does not announce purchases to defendants bond yield target.ar yield erasing the drop as the rba avoided buying up debt. we had seen on the three year end, bond futures and bond trading shooting higher in the early trading session. really ahead of that window where the rba was expected to come into the cash market and buy up debt as a form of intervention to rein that back in. they did do that a week ago, so expectations have been running high given we have had the absence from the april 2024 maturity so far this week. we saw the three year contract dropping 76 basis points this month. even if the rba stepped in today, it was unlikely to raise that last percent. the market on the short end is getting back expectations after shooting earlier ahead of that rba window. we will watch that as the so-called bond revolt continues. traders with higher expectations as to a more hawkish action from the rba. plenty more to come on "daybreak asia." ♪ collects we are tracking the fallout of the global supply chain crunch. everything from chips to toys to co

of the target bend. that won't be sufficient for the reserve bank to raise the cash rate. they will want to be sure that wages growth is headed upward. that's a key difference between australia lot of other countries. we have not yet seen in our official data wages start to head north. we think it will happen, but it hasn't happened yet and that's what gives the central bank some time. they have to see two things. inflation moving higher, confident it's going to stay there and they will know that if they see wages moving higher. we think that's going to happen next year. a key logic is that higher actual inflation is going to make it easier for people to get a lift in wages because they will point to actual inflation. we think the whole process will take off next year, it just takes a little bit of time. shery: it was good talking to you. holders of another china evergrande bond received another payment. this is another payment very close to the deadline. what do we know? >> they made a $45 million interest payment within the grace time. again, they avoided a default and welcomed more time to negotiate with the bondholders. the company has been making slow progress. a lot of