Transcripts For BLOOMBERG Bloomberg 20240704

Were looking at markets moving into the mid morning. Parts of the morning session and we are not getting a lot of momentum coming through, not surprisingly so, given the momentum we have had across various parts of the equity markets. They just one the latest one to join in as the equity shares. We are back to session lows. The hang seng is zero point 3 . Other things we are tracking of course is the move up in treasuries and ironically speaking, of course, given that it may be in the outlook on treasuries, optics wise given the ratings downgrade, unexpectedly we are seeing that ironically going back into the treasury. Rishaad absolutely. This is a haven which is the one which is effectively being downgraded. There are other things at work here. We have refunding projects for wednesday skewing higher. The treasury barring estimates on monday. Financial and Corporate Bonds issuance lower. There are lots of things supporting the treasury market. This is a catalyst ideally i guess with regards to what happened here and perhaps a bit of solidifying taking place as far as those bonds go. This happened with s p in 2011. There was a flight to quality and so we should be looking for the dollar here as well and what it does next. A bit of a move to the upside. Certainly edges one thing to watch, right . David absolutely, and the dollar part of the conversation has really been not dollar per se. This week we had chile at the start of the week. They embarked on the easing cycle in latin america. In the next 24 hours, probably result will cut rates. If they go bigger than the market expects, expect that to gain a narrative. Ble is probably going to hike. The expectations of the terminal rate have been pulled back a bit already from we pulled back about 75 basis points from the expected terminal rate a few weeks back. Now we are back below six on that. The rba yesterday surprisingly dovish tone. To your point, its in the dollar conversation, we are looking at various parts of this global effects market which is probably moving the conversation. Rishaad absolutely. With the bank of england we had the slightly softer print albeit incredibly high historically speaking. That has ratcheted down the peak rate cut conversation to some extent. We cannot lose sight of what is going on in the u. S. Fitch coming in and doing this rating downgrade, what does it all mean . Our economics and policy editor will be making sense of it now. Kathleen, why is fitch doing this . The other thing is when you are the reserve currency and you can put as much money as you like basically, is it that big of an issue . Kathleen that is what many people will say, none of the things that they are looking at were a surprise. When this happened in 2011, there was a bit of movement in the markets but it passed pretty quickly. So, we just have to look and say number three among the Credit Rating agencies, this helps keep them on the map as well. It is true fiscal deterioration. You cannot deny that is what is going on. Maybe it is good that someone puts a spotlight on this. The erosion of governance with the issues of the debt ceiling and the backandforth, these are the kinds of things when they are talking about the standoffs and lastminute resolutions. Maybe this could have someone give a sober look at something that every party wants to blame the other one. Both are guilty. Janet yellen says she disagrees. It is based on arbitrary and outdated data. She points out this is the most liquid, the deepest, the one everybody goes to, Everybody Knows the economy is in good shape so does not make sense. Fair enough. What else can you say about it . They are doing the downgrade. I think, again, the fact that when the debt gdp ratio is expected to go from 3. 7 last year to over 6 this year, that is a big increase. There has been tons of spending. We have had the three big structure Inflation Reduction Act in 2021 and 2022 and now may be is coming home to roost a bit more. Certainly, i think the big question is a treasury refund which is not as big as it was during the pandemic. Expected to be about 102 million. A big deal for the treasury market and i think it is a big test often for investors appetite for bonds. Treasury bonds at certain yield levels. And what are the expectations about yields up or down . That is one of the most interesting parts of this that it comes right ahead of the treasury funding announcement. David ok, thats my cue to pick up right now. Kathleen, lets talk about the fed now too because i think it was mr. Goolsby that came out in the best offense of predicated on the counter as they say. Every meeting is live. Kathleen thats right. Every meeting is live as you dont know what is going on. In fact, he is president of the chicago fed and has been a dove and one of the guys who said maybe we could to do do the june skip. He was on board with that. He is now saying for a september hike, we do not know if this is a one month trend basically orbit will be a lasting something. It is a transition point any points out that last summer, the markets saw Inflation Numbers starting to go down and people thought we are turning. They went back up. That is what he wants to avoid. Contrast him with Raphael Bostic , president of the atlanta fed and he has been a centrist, a hawkish. He questioned do we need to keep hiking rates earlier this year . Now he is talk about the fact that inflation is coming down and it looks like we are having an orderly slow down and is present promising. He argues to be cautious, patient, and resolute. You cannot say they are on opposite ends at all. Theyre both figuring out what they are to do but mr. Bostic is more in the camp of saying it is time to pause. It will depend on the data. Austen goolsbee it seems like he is ready to hike if he is not completely convinced that inflation trend is going downward. Lets david lets hope he is wrong. How long have we been talking about the painful inflation story on main and wall street . Kathleen hays were spared stocks are down and bounce down. The dollar is up. We have seen the opposite move for seven days in a row. The market is taken as well deserved breather. It has been good and helen zhu is with us, managing director. Helen it is better this year than last year. David that is a lobar. Does it continue . Helen i think it does continue for a while, the next quarter or so. I think the markets mindset has shifted really quickly. When i was in new york in june, people were talking about we are coming to the tail end of the right height cycle but you dont know whether you are going into a meaningful landing scenario with the second half of this year or we are going to sail through. By the time i was back in the beginning of july, positive data points had come through in terms of the fundamentals, and people are feeling more confident that there definitely nothing major this year and maybe even know landing possible going into next year. That has catalyzed the recent market moves. The u. S. Is already red hot not much further incremental upside long as it stays in place that gives them opportunity for other places that have been lagging. Not so much late cycle but mid cycle at japan or emerging markets. May room to catch up. If manufacturing and lagging markets in the early cycle can have room to improve with policy stimulus and support, maybe we can have a bit of a global synchronized recovery type of story going into the next six months. That is what the market is currently talking about. David does that mean rotation back into the Global Market parts that have led the u. S. . Helen that is exactly what i think is happening. The u. S. Has done great particularly the magnificent seven but dilations and expeditions on that are not low at the moment and positioning is quite crowded. People are saying what is lagging . People had a lot of concerns about the Housing Market earlier and that has recovered. Consumer sentiment seems to be Getting Better as inflationary pressures are easing. Some areas that are cyclical, manufacturing oriented are looking week but usually corporate feel better and there is no immediate hard landing, etc. , they start to reinvest, restock. We start to see comments on secondquarter results about finishing in certain areas and sectors. Those are positive signs that suggest that you be we will have a continuation of this rebound going into the second half of this year. Rishaad helen, it does seem the argument about rates is not how high they go anymore but how long they stay high. Also about growth ultimately here as well but the thing is on the Monetary Policy side, perhaps people are thinking that and being a bit pollyanna, wanting to go back eventually to the days of free money which is probably not going to happen. Helen no, its actually not going to happen and you are right. People care more about growth. Risk assets dont want to see huge Interest Rate cuts. Dont think even the fed or a lot of people in policymaking positions even know what the data is going to look like later this year or into the first half of next year. I very much agree with goolsbees comments that every meeting is a live meeting. If Growth Numbers in the u. S. To stay resilient, that is a positive scenario and allows the goldilocks that i talked about earlier to continue. You dont want to see a situation where Monetary Policy flexes up towards dovish because that means growth has nosedived and we are going into a much more onerous and unpredictable situation versus what we have now. Rishaad unpredictable certainly, and it does seem like the old days of predictable Business Cycles is kind of gone by the wayside now. When you talk about perhaps buying into cyclical place, what does that mean . Helen what i am saying is if you look at the global trends, manufacturing, industrial activity, pmis and so on and so forth, they have been week for a while. Consumer and services in the u. S. Have been strong. If we do start to see some kind of recovery from these higher data areas, that is the only area that can jumpstart the economy into new cycles. Those are lagging plays that are under positioned and relatively more attractive in terms of valuations and probably the areas that have room for earnings upward revision going into 2024 if this positive combination stays in place. Those are areas we are looking a lot more at versus necessarily chasing the areas that are already the strongest performance year to date. David what looks crowded in this part of the world within the equity market base . Helen not too much to be honest. At this part of the world has been lagging. The only areas that are lightly crowded are the semi and tech space, very much following what has been happening in the u. S. With the currency still being relatively weak in japan and korea and so on and so forth with the dollar being strong, i think even the currency appreciation still leaves room for a lot of those markets to perform and certainly a lot of the other export oriented, export facing sectors in those markets or heavier industrials, financials, those are probably lagging relative to the tech space. Yeah, i think this part of the world has still got meaningful upside potential versus most of the markets in the u. S. David anything that we should be paying attention to . We are very early in the earnings season in this region so we dont have a sample size yet to figure out what companies are thinking and doing. Helen it is difficult to say. Even the u. S. Earnings season, we are only halfway through. I think that people care less about what the secondquarter numbers look like. Everybody knows some fundamentals not great but people care a lot more about what the Management Guidance is the second half of this year and maybe into next fiscal year. Any comments about the stocking the finishing in new cycle starting, etc. , if you look at areas pcs and smartphones which have been in a down cycle for a year plus, any signs of better days ahead will get the market work cited versus more excited versus what the backward looking numbers look like. Rishaad helen zhu from nf trinity. We have more on the Program Including this key to surviving climate extremes and what averments should be doing to mitigate and adapt the direct the director of university of Sydney Environmental Institute joins us. This is bloomberg. 76 of 23andme Health Customers surveyed reported taking healthier actions. Because they know health isnt just a future state. Health happens now. Start your dnapowered Health Journey today with personalized insights from 23andme. I need it cool at night. You trying to ice me out of the bed . Baby, only on game nights. You know you are retired right . Am i . Ya save up to 500 on the new sleep number® smart bed. Plus, free Home Delivery when you add an adjustable base. Shop now only at sleep number®. Rishaad a bit of a move to the downside. Tech leading the markets. They are pressing things a bit but also a backdrop of perhaps u. S. Based investors refraining from chasing what we saw as a rally in jalopy the ms in july. The msci index up 9 last month. It was down to 6. 8 billion of north bay and traffic from hong kong coming through, really bolstering its. Ive got to say if the u. S. Is saying we have two perhaps perhaps other Foreign Investors doing that through hong kong as well. That is perhaps something we have to have a deeper dive into the data over, right . David absolutely. U. S. Investors are part of the Foreign Investment boom but it is difficult to see with the personality belongs to. In the past six days, net buying across the stock, monday when turnover hit 1. 1 trillion remedy onshore in trying renminbi onshore in china. It does not usually happen but anyway, the attention is on this market, International Local media too. Does it last . Who is buying . Theres policy intent which is clear. Lets bring back helen zhu from nf trinity. It still a fast money that has come and or staying power . Helen i think it is fast money. I dont think there is a huge amount of longterm Institutional Investment interest from places like the u. S. At the moment. I think the recent rally has really been a low base of expectations and sudden push in terms of bureau commitment and some spattering of policy announcements that are inevitably going to come out over subsequent weeks after politburo meeting. There has been a lot of Short Covering investment activity. If you looked at friday before the meeting, it was 30 Short Interest activity in hong kong like an alltime high. People have very low expectations now of the fundamentals, about policy conviction and any kind of meaningful deviation is going to get rices moving. Prices moving. Rishaad people are expecting a big bazooka but they are getting piecemeal advice and strategy and bits of stimulus, if you will. The managing of this is a subtle way and perhaps it is too subtle for some investors, wouldnt you agree . Helen well, if you look at chinas toolkits, it is much more diversified versus the u. S. And many other dm countries. You tend to have more piecemeal action from different areas of the economy. A bit in terms of infrastructure stimulus, maybe fiscal support, a bit in terms of property and restoring confidence from consumers and buyers there. Some push on the consumption front overall, some push in terms of Capital Markets weird this talk of slowing down the pace of supply and possibly reducing transactional costs, etc. It is a combination of many things. There is no one big bazooka available but if you lose a lot of these little bits and pieces here and there, cyclical and Structural Reforms as well, in combination, they can have the effect of jumpstarting the confidence in the economy and the virtuous feedback loop that the government is looking for. Rishaad how do you create it because weve got the other one with developers of late in the last couple of years, a negative feedback loop . Helen absolutely, and i think that has been very, very difficult. It was a bubble that was heading in an unsustainable direction of the government wanted to deflate. When the economy was booming exports were great, there was no real covid infections in china. The selfinflicted slowdown has come to a point whereby they have to reverse course. They are starting to do that the positive thing is this is a selfinflicted slowdown. They have been slamming on the brakes really hard and now they are trying to take their foot off and normalize and reinstill confidence in the economy and property space. Theyre not necessarily hitting the gas in a dangerous way. We dont see subprime lending, its your Interest Rates, 5 down payment. We dont see fiscal subsidies are anything that we have seen in other markets were property became a bigger problem. If the first wave policies dont have enough impact, i think there will be subsequent tweaking as well on a by location basis as suitable for each individual markets. David that is the ironic thing that investors are trying to navigate. The economy will be ok at 5 growth. It does not seem the market is happy with my percent growth. Helen i think 5 growth would be ok. Obviously, given the low base last year, i think something a bit better would be more preferable. People are more concerned about the fact that the Global Economy and a lot of the dm markets are in late cycle and therefore that plus the fact that you have all these supply chain disintermediation and decoupling type of scenarios going on, people are worried about the visibility on the export front. That is why they want more visibility is a terms of domestic consumption, domestic infrastructure, and domestic property to really anchor and stabilize the expectation. David we started out this part of the segment and you mentioned the large this additional money is not here just yet. They have not at all reallocated back to china. What to happen for that to take place . We keep looking to china for the catalyst. It is is it something within the control beijing now . Helen i think you need to say virtuous feedback loop emerge and people need to feel confident about consumption and to see that in the companys guidance, their numbers, overall activity levels. People need to feel like the property markets is not necessarily going to spin out of control and the government as olivero has mentioned is going to come out with a viable plan to grow pallet bureau has mentioned is going to come out of this the bible plan. As concerns ease, you will see longerterm money coming back in and the other key factor we have to take to consideration is the dollar which has been so strong and that has put pressure on asian markets, emerging markets. A lot of capital outflow. For that reason and their work there were no other concerns. If the dollar starts to peak out, maybe the fitch downgraded and yield pop marks the top possibly but if it starts to peak out that is an impetus for capital to come back into this part of the region. If it is 6. 9 that will be totally different ballgame in terms of capital david thank you so much weird great to see you. Helen zhu there from nf trinity. 40 in on the nikkei to dubai. Big movers to tell you about the other side of this rate card this is bloomberg. The chase ink business premier card is made for people like sam, who make everyday products, designed smarter. Like a smart coffee grinder, that orders fresh beans for you. Oh, genius for more breakthroughs like that i need a breakthrough card. Like ours with 2. 5 cash back on purchases of 5,000 or more. Plus unlimited 2 cash back on all other purchases. And with greater spending potential, sam can keep making smart ideas a brilliant reality the ink business premier card from chase for business. Make more of whats yours. Rishaad we are looking at the insurance index in tokyo on the way down. It is down to reports about insurers, at least three of them at the moment really being located in fixing premiums for the rail well Railway Operators in tokyo. The same for oil refiners and steelmakers. That scandal affecting that and helping to drive down the topix. We have also a companies in the u. S. Reporting record it came out stocks records. David 9 up caterpillar. We are looking at its peers and rivals across the sector moving higher. You can see it is a chinese player. Komatsu is a proxy as far as that is concerned. 1. 5 shanghai crude. 90 minutes into the cash market session there. Plenty more ahead. This is bloomberg. Rishaad there you go, the imperial palace basking in a clear sunny day, 33 degrees celsius, the market moving to the downside as we get the yen gaining financials moving partly responsible, and we have it makes in japan, a lot of Companies Falling back in the financial space. We did look at insurers a second ago. Amber also sing aztecs like sony keeping things open. Bright spots like caterpillar jumping up to like lift up some of these other stocks as well, and on the gaining sides of things as well because ea out pa came out and said that it had bookings that were pretty light. Overall when we look at the earnings side of things in japan, taking a deep dive into them, its pretty good. David on the surface. Based on where we have the information and those estimates, we are about 30 in, just doing 86 out of 225, we have 40 or 50 japanese companys reporting today, not exclusive to the nikkei of course, so far its been 623 ,. Rishaad this is perhaps indicative of what is happening in japan as we have good forecasts coming through, and then it lends itself, does this give them more wiggle room to do more in terms of moving on in Interest Rates with yield curve control, just look at the gamut of stocks with our figures. We did have toyota there reaching solid firstquarter earnings there. That is a function of what is happening with regards to some of the positive earnings stories as we generally entered the lunch right there in tokyo. We get that nikkei headed in a southerly direction. But lets look at regional directions as a whole with a with our reporter in singapore. April. April i will take you through some of the markets that we are seeing, those profit beats out of the companys on the nikkei 225 that have reported gains hitting intraday record, already high on the back of that profit beat and jeffries also saying that the outlook remains strong, and will likely remain strong in the near term. We also have tdk and a sigh reporting later today, there in the news as the Japan Health Ministry panel will decide later this month whether to approve its breakthrough multipurpose drugs. Lets look away from big movers and look at the big story, because we are still tracking that followed from fitch downgrading the u. S. Credit rating. The dollar has been losing ground against many of its g10 peers, including the japanese yen. We are seeing also it again we can further today, and thats continuation from reactions from the rba on hold yesterday. The kiwi dollar moving lower on worse than expected jobs reports, some safe haven buys on gold, and there is a lot of demand for safe havens with no risk. Maybe a muchdeserved breather. April hung in singapore hong in singapore for us. And perhaps a good reason to take this break was news this morning, fitch downgrading the u. S. Credit rating to aa . Here are some people we spoke with. I disagree with the notion that this was arbitrary. It came as a surprise. It doesnt surprise us in terms of their estimates. There is a governance problem and that is truly a problem that we will face going forward. It has come to a economically sensitive time and it is the last thing that yellen needs for the market. The u. S. Economy shows resilience, and i think markets will brush it off. Rishaad our asiapacific head of fixed income at state street Global Advisors, pleasure to have you here with us today. We have to start on this big news. The market does not seem, at least price action in the first couple of hours since that news, does not seem to suggest this is a big deal. Your thoughts . I will great that the fitch downgraded agree that the fitch downgrade is not that great, but this clearly indicates that there are some issues with the fiscal debt ceiling and its not a surprise. When you look at market reactions, generally the market took a quite well. And the mark u. S. Is facing other issues. I think that this thing does not seem to kind of really create any market disruption at this stage. David what happens rishaad what happens with bond yields is that there are several factors that help up out with that. What happens with the dollar, because it does make for wider spread . With the downgrade, it means that the credit quality of the issue is weaker, and so the bond market should be pricing a higher yield. I think the market is not paying too much attention to this. I think on the dollar side, on the longterm, we are expecting this to come close to the end of the high, and therefore the potential risks of slow down and recessions, even a soft landing, that should lead to a softer dollar, even though the play out of a softer dollar may not be so immediate. I think in the long term it will lead in the dryer leave that up in the direction of travel. David why are treasuries not rallying . I think the treasuries right now are kind of still watching the facts and commute occasion clearly, the fact that it is going to be datadependent. And hence the market still mine out decide on where to take it, at least at the moment, they are not sure yet, folks are signaling and watching the data at the market is rightly still kind of sideways. And the recent data itself has indicated potentially that there may still be a bit more room for the economy to grow further and resiliency in the u. S. Economy is one factor. I think the policymaker sector needs to consider it very carefully. David related to the melt up and sovereign yields has been the squeeze that we are seeing on spreads. I think we are now closer to 110 on u. S. Highgrade, what are you telling your clients about these valuations in the credit space . I think in credit, our current position is that at this stage, we feel that the rates will likely be more attractive given expectations of a slow down and also moving forward, it will actually be more convenient i guess with low Interest Rates when the economy slows down further. We think that this does offer pretty good valuations from that point of view. Rishaad it seems that you know, with corporate issues being a bit tepid, that is deathly something which is affecting markets, which might also with low volatility price action being more pronounced. Yes, that is the case. The market is looking at the issuers, trying to figure out what is a better time to come into the market. That could also be some rotation of investors potentially looking up and out of the u. S. Once the situation becomes a big clear. I think we might be seeing some of the flows coming out of the u. S. Into other emerging markets as well. Rishaad so, the thing is, where do you go . If you are advising our clients, what is the deal there . For our clients we are asking them about rates versus credit. We feel that the rates would be more attractive, and if you need to stay in credit, that Investment Grade will likely be doing better than the high yield at this juncture then elsewhere, it might be more challenging given the Interest Rates impact that we have had on issues and companies. From that standpoint, we feel that investors should still be moving up into the highquality spectrum of the investments. If you are looking at global investments, you know, Dollar Strength at the moment may stay for a while, once you get bath pass that 612 month. , you need to look at other areas you can pick up additional returns over the next 612 months. We clearly see the potential movements in other markets and credit markets. David do your last point on rates, this seems to be pivotal in some sense that we have had either a dovish surprise, the rba, or the cut with chile and brazil, i wonder, are we sleeping on the possibility that a lot more Central Banks will start to ease policy . Way that they ease, i think it is a bit premature. The feeling is that Central Banks are trying to give themselves a bit more flexible indeed to decide. Flexibility to decide. They are coming down, but they may not enter a range that they feel comfortable with. Policymakers right now are trying to buy a bit of time to see if past policy tightenings they have put in place tightenings they have put in place will help the economy. And you see the central angst going beyond pause and the warnings coming out from meetings into medications clearly indicating a little bit more watch and wait kind of directions, plus also data dependent approaches. Rishaad thank you so much for joining us. The head of state street Global Advisors there. Up next. Whether event. Getting analysis from the Sydney Environment Institute on what the government needs to do to help communities adapt, and markedly also reversing this trend. This is bloomberg. Fabulous surroundings. But everyones looking at their phones for Financial Insights from merrill. Is he hailing a ride to the concert hall . No. Hes making sure his portfolio and retirement plans work in harmony. They want to adopt a child and build a new home. So theyre talking numbers with their merrill adviser. Shes not researching her next role. Shes 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. Rishaad welcome back. David welcome back. Lets talk about extreme weather, and if you feel like many of us here, we look at those headlines, july was the hottest month on record and youve felt it, you are not alone. Parts of northern china for example and are expensive the other side of the coin, feeling intense flooding after a typhoon were 20 people were killed. Heavy rainfall inundated many areas, including the adjacent province, forcing the evacuation of early one million people. Parts of india and the philippines have been hit, as well as california and vermont. The Research Group were weather attributions said rainfall causing flooding in pakistan was 75 more intense due to changes in world temperatures. David and David Schlosberg is the director of the claim institute at city university. Give us a sense of how this cycle, which of course has been laid at the doorstep of Climate Change, really works and why it is becoming difficult now to predict these downpours, which are unprecedented in many cases. Let me just start by saying that i miller climate scientist, i focus on environmental politics. It is good that everything we have seen in the last couple of years is seen as unprecedented, but it is not unpredicted. The reality has been on the more extreme ends of the predictions that we have seen in the last couple of decades. It seems clear that we will be seeing more of these bigger heat waves and more fires and more storms and more floods. Again, just as predicted. These impacts are happening now, they are going to increase and continue, and the focus, for me is about governments needing to organize and fund a lot more resilience and adaptation planning. In addition to stepping up mitigation efforts. David mitigation and adaptation is what youre talking about, adaptation. How . In many of these places, like pakistan and some of the other countries, there is not the money to really go around to do it. How can they, perhaps, carry on with what you are suggesting . Theres a lot of response building on the northern developed nations to first and foremost just stop the digging up and burning fossil fuels. The more mitigation we do, the less adaptation we have to do. The two are linked and that is the most important, to stop making the problem worse. But that second question is about investment and investment in adaptation process and commodity insert to terminate selfdetermination. In selfdetermination. There is a lot to do from that Immediate Response to longerterm eventual relocation if necessary. And that means investment. You know, not all investment is this sort of large scale what folks have been calling great infrastructure, sea walls and concrete and all that. It means investing in social capital and social cohesion. When the kind of climate disasters that you have been showing, heat waves, fires and floods, the people who are most vulnerable are those who are alone and poor who dont have social connections. The Research Says that if you build social relationships and social infrastructure, simple things like processes to check on neighbors or evacuation drills, you do that for a lot less money than larger scale projects like see walls. David professor, give us an example of who is doing this well. Good examples that we can look up to. I dont think anybody is doing adaptation well at this point. There has been, i live in australia, there has been quite a bit of work in australia in the last couple of years to start thinking in this direction. But a lot of the work is still very individualized, by individual people out of their homes after flood. And there is not a lot of planning really at that social or collective community level. I think that is the direction that we need to go. David when people talk about how a lot of these nets your targets where they were published a couple of years ago, there have been a lot of reports out on just vast numbers of, this is the investment we need by a certain. Of time, do we have a better sense of who will shoulder most of that, because i appreciate that this will probably need a multitude body approach. Multibody approach. Theres a lot of discussion about northern nations coming in to fund this. But the thing is that the more effort put into mitigation, the more effort put into slowing Climate Change and longerterm impacts, the less money we need for loss and damage. Its afterthefact, right. Its about reimbursing for that loss. But investing, again, in adaptation and resilience will lower the longerterm costs as well. Rishaad very quickly, there is a lot of focus in International Markets on esg. Is that imperative feeding through in any way . [laughter] is it feeding through . I think what is happening is were getting a lot of pushback, a lot of pushback from the fossil fuel industry. On some of the limits that were set, especially around paris. When you talk about mid zero by 2050, there is a lot of work going on with that word and 2050. The more that we do that is not offsetting, the more we do sooner, the more the better off we arced with the longterm costs. David we have to leave there. Lets continue this next time. David schlosberg there, the director at the Sydney Environment Institute, university of sydney. I had, big news coming up to talk to you guys about donald trump indicted, federal charges, conspiracy to overturn the last election, more of that next. This is bloomberg. 76 of 23andme Health Customers surveyed reported taking healthier actions. Because they know health isnt just a future state. Health happens now. Start your dnapowered Health Journey today with personalized insights from 23andme. Rishaad we are back. This is Bloomberg Markets, former President Donald Trump has been indicted on federal charges accused of conspiring to overturn the 2020 president ial election. Jack smith, special counsel, spoke shortly after that indictment was unsealed. In this case we will seek a speedy trial so that evidence can be tested in court and judged by a jury of citizens. In the meantime, i must emphasize that the indictment is only an allegation and that the defendant must be presumed innocent until Proven Guilty beyond a reasonable doubt. In a court of law. David einhorn has been with us to talk about these latest charges against the former president. Verse we have been expecting this for a long time and now we have the indictment so we know what he is being charged with. For things. Conspiracy to defraud the u. S. , to obstruct an official proceeding, obstruction of an attempt to obstruct an official proceeding, and conspiracy against the right to vote. Notably, jack smith did not charge the former president with inciting the right on january 6, the indictment also referred to alleged coconspirators. But they were not indicted as well. This was just an indictment on one person, the former president. It could make the case, if it stays this way, it could make the case go faster than the maralago case which involves multiple people, as well as the former president and involves a lot of classified information. Figuring out how to get access to that. That is potentially slowing that case down. This case does not have any of those applications. Rishaad sorry, bruce. David ok, we have to leave it there. I just got to keep. Got the queue. We will speak with you again in the next hour. Were staying with markets right now, and i think for good reason we are getting an acceleration of these losses right now. Global movers on this site, we should be at sessions low, session lows, off by 1 , might be too early to talk about this, might not be, i would argue the letter. A couple of essential decisions on deck, brazil is want to watch, i would be watching that closely more than others following the move out of chile and whether they do move faster than expected. We have in them a minority of economists where brazil might move down. The rba yesterday, 143 right now on the dollaryen, 1. 43 on the dollaryen, new zealand slowing inflation, and a great decision in thailand today. Rishaad absolutely, with so much inflation theyre going to raise rates, about 25 basis points. Is it about defending the bought baht . We will look at that in the next hour of Bloomberg Markets as well as equity benchmarks in this part of the world accelerating their lurch lower. This is numbered. Bloomberg. Sleepovers just arent what they used to be. A house full of screens . Basically no hiccups . You guys have no idea how good youve got it. How old are you . Like, 80 . Back in my day, it was scary stories and flashlights. We dont get scared. Oh, really . Mom can see your search history. Thats what i thought. Introducing the next generation 10g network. Only from xfinity. Janet blasting the downgrade based on outdated information. A corruption investigation and reservations that this is a series of scandals that have blotted their image. Donald trump order to face court on federal charges alleging a criminal conspiracy to overturn the 2020 president ial election. 12 years after the downgrade stripping the u. S. Of its aaa rating, the concert right now is that we could see a slew of other downgrades, including major banks backstopped by the federal government, taking a look at where we are, negative across the board, the msci extending its decline at session lows at this point. Remember, the index is at the highest level this year, just yesterday. Down by 1. 5 , the nikkei down by almost 2 , financials under a lot of pressure on the back of disappointing earnings, case in point, also, the yen getting it picked up weighing on exporters, the cost down 1. 3 , losses do for emerging markets, hsi down almost 2 ,. Guarded services was up almost 20 on the back of buyback plans. The dollar was under pressure and is now entering towards a positive territory, putting quite a bit of pressure on asian currencies, not surprising one down of. 07 percent, losses due for the indonesian rupee, market emergingmarket currencies under pressure. The yen getting another surprise given it is a haven play. In the commodities space, inching upwards by 1 . 85, 78, a major drawdown from u. S. Inventories, not good news for world prices right now. Lets look at the open in thailand, just a few hours away from the bank of thailand expected to raise rates by two to five basis points, doing so against benign inflation backgrounds as well. It will lift up Interest Rates to their highest levels since january 2014 taking it up to two point 25 . On the equity side we have property stocks in focus, time lenders as well, we do have these which are highly interestrate sensitive. Lets have a look at india, and we will be looking ahead to some of the stories that people are going to be watching for with the rba auction, Something Like 3 billion of treasury bills, we have earnings from titan and engineers, most of the big names out what their results. Earlyseason in india at the four. The dollar researching after that downgrade paradoxically. We will be looking at the invocations of that further afield as we go over to kathleen hays. Janet yellen is not happy, issue. Why is fitch doing this . Task is she . Why is fitch doing this . They doing it because the definite deficit is getting bigger, getting more difficult to finance. The track record for the past 20 years is that the two sides of the aisle, the republicans and democrats have a hard time agreeing on the debt ceiling and getting it passed. They are talking about reflecting the expected deterioration over the next three years, a high and growing general Government Debt burden. They also expect that the gdp will get to 6. 3 , the debt to gdp radio will get that high. 6. 3 in 2023, and so on. They are around talking about erosion of governance if this continues. There is one firm that has not downgraded them. The u. S. , it is hard to argue that the democrats will say its trump trumps fault because they cut taxes. And you can look at democrats and say under biden you have put a lot of fiscal stimulus on the table and that cost money. You have issued a lot of debt. And we are running out of money for social security, etc. Lets listen to what somebody said about this, its on a surprise, but it does potentially have global reverberations. The chief u. S. Economist at berenberg. This is clearly negative press for the u. S. And a fairly fragile time internationally as you point out. On the other hand, there is no replacement. Replacement for the u. S. As reserve currency. Just yesterday, the treasury raised its neck borrowing estimate for the Third Quarter to 1 trillion from an estimated 773 billion dollars back in early may. So its not just about the debt rating does it matter or not, its about real money and real deficits and real bonds about to be sold. That is the timing that is so interesting. Could i send we see reverberations tomorrow, notwithstanding the downgrade, the fence are not necessarily on the same page on a september rate hike. The chicago fed was one of the first voices to talk about slowing down in may or june and is saying that he wants to make sure that because we are in a transition point, inflation is coming down and the economy is slowing, but now every meeting is live, dont just look at the trend, look not just one months data. We had inflation reports, austin is taking his time and he is going to see. Rafael bostick is hawkish at times, but he is saying we have to be worried about over tightening and he is talking about looking at an orderly slowdown and what the fed has to be now is cautious, patient and resolute. Personally he is going to be watching the data closely. But mr. Bostic seems to be more leaning towards the sign of this. He says he is not going to make up his mind until september. Basically. Thank you, kathleen. Lets bring in our guest for more perspective, the Market Strategist at golden sex singapore. We know that markets dont like uncertainty or fear and we are getting just that. All Asset Classes are getting sold off. How much fear is there and how should we be concerned about what is transpiring . Given there was so much lack of fear over the last couple months, this is just a trickle that we are feeling right now. Given that the timing of this move is unclear, it is not given enough backing, i think that this kneejerk reaction could probably have difficulty carrying on into the rest of the session if the momentum on inflation and the economy continues as we have seen. If the earnings season does not throw us any negative surprises in a big way. What classes are most at risk, high yield . From the fitch move, yes. And looking at the sluice, we had Senior Officers coming out from the fed, there are worries of a credit crunch happening in the u. S. Economy later on this year. We should be mindful of the effects of monetary tightening that we have seen and that doesnt mean that there are risks specifically to the highyield sector which employees 1520 of the u. S. Labor force. Even the impact of the highyield sector can bring the economy down later this year or early 2024. It seems the conversation has changed in how high they will go because people think that they are probably done. But also how long they stay high and the impact on growth and the data supporting and people cheering this being christ in with a scenario of no landing. Priced in with a scenario of no landing. When you look at this inflationary trends, we dont need rate hikes. If those were to continue. But if you look at the strength of the labor market, i dont think that there is an emergent need to see that done in Monetary Policy and the fed is not in a hurry to start cutting rates and that obviously means that we will be in this higher for longer environment for some time. Like i mentioned earlier, we have impacts that will be seen from the aftereffects of this Monetary Policy as well which is leading us to be a little bit more cautious off of this concentrated equity rally which has been extremely driven by the expansion of multiples of a few stocks. And i think that it really is a time to get cautious and start hedging and be aware that the Interest Rates are potentially going to stay where they are for quite some time. I see a look at the you look at the dow, is that rotation taken place, are we seeing a rotation towards the e. M. . I think people who missed out on the rally or want to participate in the rally in a more broadway are looking for stocks and sectors and regions which have valuations that are not so stretched and demanding, and that certainly brings interest to a lot of those sectors, like you mentioned, the cyclicals perhaps, and given how the growth metrics are looking coming out of the u. S. , particular, it does seem like those cyclicals could have room for improvement there if those stories continue for a few more weeks and months. And emerging markets, certainly i think there are another story there which is what we have seen with chile starting its rate cut cycle this week and that would be a signal for some of the other emergingmarket Central Banks as well if we were to consider that the fed may need to be on an extended move from here, that is a signal for emerging markets to cut rates and support their growth outlooks which are supportive of their evaluations as well. Please stay with us, she will be sticking around with us, because we have more coming later this hour discussing Indias Energy market. We are seeing an acceleration in demand over the next few decades as the chinese economy slows down. I will leave you with these images of the hong kong aviation festival, the aviation day. We do have keynote speakers on the state here, like willie walsh, the director general of the national air travel association. And the hong kong airport ceo as well as others like the chief executive of pacific. This is bloomberg. upbeat music woah. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. The chase ink business premier card is made for people like sam, who make everyday products, designed smarter. Like a smart coffee grinder, that orders fresh beans for you. Oh, genius for more breakthroughs like that i need a breakthrough card. Like ours with 2. 5 cash back on purchases of 5,000 or more. Plus unlimited 2 cash back on all other purchases. And with greater spending potential, sam can keep making smart ideas a brilliant reality the ink business premier card from chase for business. Make more of whats yours. A busy one today, with the reserve bank of australia yesterday and more decisions coming out of Central Banks across the world, brazil and the bank of england, and we also have the bank of thailand that under four hours from now will see an Interest Rate hike of 25 basis points. A busy one. A bit of a head scratcher because we see inflation easing in thailand. Core inflation is easing, but it is still higher than in past years and expectations of tourism will return output and will accelerate, so perhaps bot could be erring on the side of caution, hence that 25 basis point move. Lets get insights, the Market Strategist at boc up or, they will raise rates paving the way for a cut. Absolutely. If you look at their current rates, they are still going to go to 2. 25 , where as in 2012, you go back a little bit, and peaked at 3. 5 , and in 2006 they peaked at 5 . Need to make space for that. The thai baht has been miserable since the political gridlock and they want to pop propped that up a little bit. Propped that up a little bit. Following at the tail end of a tightening cycle, will it be indonesia or korea cutting . In terms of asian Central Banks, emerging asia has less room to cut rates this time because they have been less aggressive with rate hikes because inflation was not such a problem this time around for them. But certainly some of those that have a little bit more room to cut, korea, india and it indonesia indonesia, it could be indonesia first or south korea as they are trying to attract a lot of capital as well. So, they need to kind of get support for that internally and the growth has been weakening and inflation has come down. That is a drop from the peak, so they do have some room to start cutting rates. It certainly does seem that this is a trend where we might see more easing amongst emerging market economies then developed ones, and certainly they are on a tightening cycle, if you look at the bank of england, not the u. S. , but the ecb, you look at latin america, chile at the weekend cutting at a cost of 100 100 basis points or more. Youve done some analysis on brazil which looks at the direction of Monetary Policy. What did you glean . I say thank latin america has been the most aggressive with the rate hikes, and that certainly gives them the most room to cut rates and resale, case in point, the rates have gone up to front from 2 to over 30 , that is a massive amount, and inflation is also back down to near the target from a very high level, 12 levels last year. So they do have a reason to make a move and i think what they are really waiting for is for the fed to signal that they are not going to be aggressive with rate hikes anymore and the fed datadependent result with the data continuing to signal slowing inflation, probably giving them some room to think that the fed might be on an extended pause here. And it gives them enough reason to kind of start looking at the growth side of things and propping up the economy as well. I want to go back to japan, and for the boj. The bank of japan to a key policy, but the debate over what they should do with yield curve control was apparently heated. Im not surprised. Are you . It was a smart move. But the impact has not been fell. I think there is a lot of demand that is shifting to japanese government bonds now for domestic players, particularly those with high cost of hedging, the ethics of exposure, if they are investing in western for government bonds, thats a case of shifting more and more towards those domestic bonds. And for Foreign Investors as well given that the fed and the bank of england are still expected to keep rates higher for longer. There may be a case for the to ship a little bit towards the japanese government bonds, and that should keep the demand side of things pretty strong for them. They may not be able to the yields, they may not be able to reach that 1 level that they had given their flexible target for now. To what extent will the boj intervene . We have seen them doing it. Currency pressure is quite detrimental to the economy, which is so heavily focused on exports. But, as they have said earlier, they dont look at particular levels, but the base. Even that the u. S. Dollar is potentially on a downtrend, yields should be going down as the fed is constant contemplating a longer pause, they should have little need to intervene. They need to be a better communicator, and then we have this. Thank you for your insights. Clutching more ahead, including singapore. We take a look at how the Prime Minister is expected to address private today to talk about the scandals hitting the lion city of light. Keep with us. This is bloomberg. He snores like an angry rhino. Youve never heard an angry rhino. Baby i hear one every night. Every night. Okay. Ill work on that. Save up to 500 on the new sleep number® smart bed. Plus, free Home Delivery when you add an adjustable base. 76 of 23andme Health Customers surveyed shop now only at sleep number®. Reported taking healthier actions. Because they know health isnt just a future state. Health happens now. Start your dnapowered Health Journey today with personalized insights from 23andme. Welcome back. Singapores Prime Minister is set to address the ongoing graft investigation involving the transport minister and a property billionaire, a series of scandals putting their image for clean governments governance of the test. Lets bring in our reporter to talk about it. It is unprecedented. This is really weird. You and i have been following politics for quite a while. It is usually boring. Its not boring right now. [laughter] its very interesting, its unprecedented, its certainly a test for the really government which has been in power since independence in singapore, a party which usually gets more than 60 of the vote and wins comfortably. But there are a couple of things for the Prime Minister to address. You mentioned the scandal going on right now, there is also the resignation of the now former house speaker, as well as another parliamentarian, for their own relationship. As well as opposition leaders who have had difficulty as well. One of those mps got one of their prime potential candidates out as well. There is a lot going on in singapore. I think the interest has been very high, the last election, as you know, was seen as a possible check on the ruling party. And so there is certainly interest here to see how he deals with this, and the fundamental message from the government so far has been this is what the system working is like. Its possible to have a check when a check needs to be made. The thing is you have to wonder whether it changes the mindset and shape the thinking of the voters bearing in mind that we have the president ial election coming up and the elections which are likely to take place next year. And on the back of rising property prices, these are all issues front and center in the minds of the voter. They are, and its interesting because singapore is in this forefront position right now, through the difficult ease of other places like hong kong. Theres a lot of attention on singapore. Singapore has been in the idea that it is the safe harbor in asia. Its a great place to start, to enter overall, and to base from. That reputation, i think, is market impacting. It is market underlying, even. It is really really important. And look, i have run an analysis on the electoral situation. If you look at a very baseline level, the single most vulnerable, potentially vulnerable constituency in parliament is a Group Constituency on the west coast. There is an electoral angle to the difficulties we have going up to that election. Its all about convincing the Younger Voters that governance is in place. Thank you, derek. You can also tune into your bloomberg, go to tv live tliv for more information. Lets get back to the market, we are watching hstech at this point in time down 3 pretty much led by electric vehicle stocks like neo. We are also dealing with superconductors, some up 10 at this point, which is after viral local tech videos which is prompting the movement in Shanghai National center, for instance, a massive move there, almost ready percent. Farris this energy up 2. 5 . And then theres still weakness across the board. Keep it here with us. This is bloomberg. When people come, they say theyve tried lots of diets, nothings worked or theyve lost the same 10, 20, 50 pounds over and over again. They need a real solution. Ive always fought with 510 pounds all the time. Eating all these Different Things and nothings ever working. Ive done the diets, all the diets. Before golo, i was barely eating but the weight wasnt going anywhere. The secret to losing weight and keeping it off is managing insulin and glucose. Golo takes a systematic approach to eating that focuses on optimizing insulin levels. We tackle the cause of weight gain, not just the symptom. When you have good metabolic health, weight loss is easy. I always thought it would be so difficult to lose weight, but with golo, it wasnt. The weight just fell off. I have people come up to me all the time and ask me, does it really work . And all i have to say is, here i am. It works. My advice for everyone is to go with golo. It will release your fat and it will release you. We are looking at the sinking feeling for chinese equities after that formerly stellar run for the market in july, signaling a bit of softness with tech, certainly. A 3 slide for the hang seng. Negative moves field by china telling regional governments to complete issuance of special government bonds for construction by the end of september which means that the funds will be sucked out of the investing universe more quickly than had been test painted. That is anticipated. This one aspect, and perhaps it is a bit of a gut check. The seat the see ny down by almost. 1 . U. S. Buys are also shown in china for other emerging markets. Japan is coming back, and we have bright spots, a curious act, the japanese market, but on the way down. Under pressure down almost 2 , the nikkei 225, bear in mind this is a market that has got great guns, it is still appear today, up by 26 , even though it is down 2 in the topics, down by 21 , we see financials down on the back of disappointing earnings, nomura a case in point here. The yen at 143. 32. Talking earnings, key in japan, we have operating income way above estimates there, but lets look at this mood music for the market and White Peacock people investors are not willing to take why peacock people investors are not willing to take risks. What is the deal here, many people are suggesting that it is a downward swim . Henderson exactly, it seems like the optimism that we saw has started to erode. Across asia, there are question marks in japan for equities after such a stellar road this year, more of that optimism at the start of the year has true truly reversed, and all of the stimulus hopes we were investing just has not come through. There are a lot of question marks and credit issues in a property sector which accounts for one third of gdp. Its an incredibly crucial part of the economy. These are some of the factors. In terms of the global ramifications of the fitch downgraded, it is very uncertain. There seems to be a sense that the market is shaking it off and leading economists that i have spoken to are not quite convinced, they are very puzzled by the timing and the driver of this move. It is hard to read too much into the downgrade with having an impact on patient markets. It is counterintuitive, but investors expecting treasuries will rally on the back of that downgrade is what we saw 12 years ago and the s p did the same. Precisely. That is a great point. And it does feel very, as you say, counterintuitive. When there is a bit of uncertainty with this type of move, haven assets always get it, and that includes treasuries, even though they are the target of this decision by fitch. We did see yesterday treasuries selloffs, and we placements there which was refilling or helping along that reaction. I do think that there is, given what investors and leading economists are saying, that there is a lot of skepticism about fitchs move and i have spoken with fitch this morning, and we have gone to some of their reasoning for this. It is not a prediction of what will happen with the u. S. Economy, it is the fiscal situation of the u. S. And its rising debt. And there was a mention of governance as well, which relates to the enduring, ongoing debates about the various fiscal clips and debt ceiling issues in the u. S. Cliffs and debt ceiling issues in the u. S. Is the repatriation back to the u. S. From japan, and are we seeing it tim choate impact . A potential impact . Christ this is an important topic in Financial Markets because of the size of japanese assets in the u. S. In particular. Theres a nice petition that some money comes back as japanese assets become more attractive, and in a very specific case as yield on Government Debt increases as the bank of japan produces its reduces its yield curve control programs. Which we have seen in the past week. What happens is a bit of an open question. There is the risk of quite significant Structural Forces at play, specifically demand for u. S. Debt, whether that is corporate credit, that would increase yields, and that would add borrowing costs for u. S. Businesses or u. S. Homeowners. That is a very real scenario which could play out. It is the degree to which that does play out is the big . Here. It is a potential risk and one we will be keeping a close eye on. Richard anderson, thank you for your insights. Former u. S. President donald trump has been indicted on federal charges, accused of criminal conspiracy to overturn the 2020 president ial election. Kailey leinz has more from the federal courthouse in washington. Kailey leinz has more from the federal courthouse. Conspiracy to defraud, conspiracy to obstruct an official proceeding, obstruction of a official proceeding and attack on the right to vote. These could carry 20 years in prison time. As to what happens next, the president has been ordered to appear in washington at this federal courthouse before the magistrate judge on thursday, august 3 at 4 00 eastern time to be arraigned. It is worth noting that this is not the only legal challenge facing the former president. This is the second indictment federally that he is facing. He was also indicted in relation to the classified documents case down in florida, a trial date from may 20 of 2024 has been set. He was indicted separately on state charges in new york in relation to hushmoney payments made to stormy daniels. We could see another indictment coming in august, Fulton County georgia the Fulton County georgia d. A. Says she plans to bring a potential indictment before september. The legal challenges for the former president are mounting and we will wait his appearance here in washington at the federal courthouse come thursday. Jack smith spoke at the department of justice on tuesday evening. In describing the indictment, it was fueled by lies. Lies by the defendant, targeted at obstructing a bedrock function of the u. S. Government. We will seek a speedy trial, so that evidence can be tested in court and judged by a jury of citizens. From washington, kailey leinz. Wifes 78 charges on the former president. We are going to be diving into Commodity Markets in china, and there is a shift underway between the two rivals. That is next, and this is bloomberg. Is wet, it is warm, and we are just four minutes away from the start of the trading day, on what could be a down arrow story with the rest of the region for indias capital and benchmarks. Those investors are going to be keeping tabs on today in the country. We go to the goods and services tax hounds finalizing Online Gaming casinos as well as horseracing. We have the reserve bank of india setting 2. 9 billion with the treasury bills and its earnings season in the likes of hindustan, petroleum Hindustan Petroleum and india oil. That will be out later on. A busy day for india, ending imports imports of russian oil expected to slip even further as opecplus producers start trimming exports to help balance the Global Market. Lets bring in our asia oil trading reported. Give assistance on how to get drop we are talking about with imports in russia and how about the rest of the markets like saudi arabia and iraq . Thank you for having me. Whatever goes up has to come down, so india levels oils were levels that had hit stratospheric levels are coming back down. He saw a peak of 2. 2 Million Barrels a day. And now we see a drop in imports, imports falling to. 09 Million Barrels per day. And Alliance Partners are keeping supplies of the Global Markets just to balance it. This is a group that has suffered and russias exports in the month of july were through. 1 Million Barrels a day, there was a loose volume that has exploded since 2022. To be clear, russia is still indias top supplier, so it accounts for 44 of russias total imports. Russia made up for those lost volumes by buying more from other countries like iraq, the uae and elsewhere. The supplies are level, but the refineries are still taking cheap russian barrels which are no longer available in the markets. What is going on here. Is it political, or is it more than that . What are we looking at and what are people telling you about the months ahead as far as demand for russian oil goes india . In india. The Market Intelligence estimates that they will still fall further in the month of august. Just to remind you that there are plans to cut exports by another 500,000 Barrels Per Day in the month of august as per its pledge along with opecplus partners to keep markets wellbalanced and trim the supplies. So, the imports are likely to fall by 1. 7 Million Barrels per day. Indias domestic demand has been weak because we have been seeing monsoon season, some parts of the country has been flooded. Have been flooded. Road transportation has been hit. This is just a temporary breather that the markets have taken. We are taking imports bouncing back, india will be celebrating its festival season month of diwali soon in the month of november, people buy everything from cars to apartments, kepler estimates that from the month of october, imports will bounce back to over 2 Million Barrels per day. We are going to be watching that closely. Our reporter Rakesh Sharma there. Lets look at commodities, because our next guest thinks that they need to cover roughly half of the shortfall in chinese demand as far as the Energy Complex command though. Goes. Thank you for joining us, soni kumari. Give us a sense of what is playing out with the commodity complex and how it involves new delhi and beijing. Before we go into commodities demand for these two countries, just step back and see how they are performing. India is set to rise by more than 6 over the coming years, and it is becoming one of the largest economies by 2040. At the same time, we are seeing a structural downtrend in china, china estimates its growth is 4 and it will be slowing down to 3. 5 by 2030. But demand is going to follow this emerging trend in these two economies. In the case of india, we are seeing commodities demand pickup quite strongly at the same time that commodities demand has been going to decelerate and china. Begun to decelerate in china. India needs to pick up some of the slack, and we expect them to pick up 50 of the slack left by chinas slowing economy. But it is going to need to be higher. A second what i was getting at, you cant pay all commodities with the same brush, what parts of the complex are going to be really, i suppose, adhering to your thesis . On the part of energy commodities, the pickup is going to be quite strong, and at the same time, india cannot contribute much to steal and alley minium aluminum, because china consumes much of that, and the slack is going to be quite higher. They are going to pick up nearly 20 of aluminum slack from china and 45 as far is steel. As steel. Decarbonization will also be the story of india. It will increase its demand for Critical Minerals like cobalt, lithium, what assumptions are you making about demand . Energy transitions is a dominating theme in the case of india. And they have been quite impressive, receiving additional solar capacity which has been strong. It has also a 500 gigawatts target to achieve by the 20 20s. By the 20 30s. Unfortunately, there are not many reserves of these Critical Minerals. Some of the Minerals Like lithium and nickel is 100 dependent on imports. I think that the government is right about it, they are taking action and having planning for some of these strategies and acquisitions, for example, in us really. Last year, india has signed a deal with australia, this is going to give an opportunity for australia to increase its trade relationship with china, like exporting to europe. How about indian companies, do you sing see them be more aggressive in getting these minerals from overseas . At think it is so fortified it i think it is so far decided by global factors, helped out by some of the countries like australia, who are starting acquisitions for some of these assets. And even in other communities, they are going to acquire some of these assets to secure supply chain for Critical Minerals. Rishaad what is the readthrough for prices, then . Prices, i think, in the shortterm, it is more impacted by china. China will still be a key driver for commuting markets and its likely to continue for the foreseeable future. However, in the long term, india cannot replace china. And its it will likely not be a price sector for communities, but we believe it will have a significant influence on the market over the incoming years. Just one question before i let you go, the eu has proposed legislation. How do you think that will impact indias export . Exports . India is the exporter for aluminum and steel, these two commodities are going to be active. If you look at the Carbon Intensity for producing aluminum and steel, it is quite high, so in terms of admissions goals, india also under 225 . This is going to be this carbon tax by the European Union is going to be a disadvantage for them as an exporter. And india is going to suffer. At the same time, what we see is that it will be a trigger to shape up these industries to move towards low Carbon Energy and they can meet their production with less carbon. Thank you so much. Soni kumari. Lets check on how indian stocks are trading, five minutes now, under pressure like the rest of the region. Remember, it did close at a record high on thursday. Plenty more ahead, keep it here with us. This is bloomberg. Doing business is pretty costly. So we have to invite efficiency and we have to win by value creation. Within cargo, this is our direction. Our aspiration is not to be the largest air Cargo Carrier or the cheapest, but our aspiration is to be the best. That was the cargo pacific ceo there, speaking at hong kong aviation date. A bit to help provide business in the region after covered restrictions being lifted. Lets get over to danny lee, his covering of the hong kong aviation day. They seem to be talking up the resilience of the sector, tell us more about what is driving the optimism. Orders have opened, borders have open, and there is a lot of open optimism from what was a pretty terrible three years. There is a level of optimism, but the reality is that the background is changing quickly and cargo, as we heard from their Cargo International airport got stronger during covid. Its a bit of a challenge now, after supplies coming back to the market with supply chains getting back to the normal to normal. Air cargo is facing curbing of demand which was not anticipated. On the passage side, hong kong received International Passengers coming to hong kong and through hong kong. Rishaad danny, quickly, we dont have much time, your saying that the ceo there was talking about cargo. Was that the only takeaway . What did he have to say about the future shape of the airline . Ronald was also talking up the recovery of the airline, passengers and ticket prices as well. The reality that there have been higher costs, and demand that keep the heises prices high, but those will normalize. I think it will still take another 612 months to see prices come back down to a more normalized level. Rishaad thank you very much. Danny lee there, asia travel reported, from hong kong aviation day as the city tries to get back on its feet aviation wise. Looking at markets, we are just under five minutes before we get to the lunch break for hong kong. It sure is a pricefixing move, the nikkei down almost 2 , nomura still underwater. And in the broader market, a selloff on the back of a downgrade from fish. That is it from bloomberg park its asia, middle east and africa is nice, do keep it with us. This is bloomberg. Next, do keep it with us, this is bloomberg. The chase ink business premier card is made for people like sam, who make everyday products, designed smarter. Like a smart coffee grinder, that orders fresh beans for you. Oh, genius for more breakthroughs like that i need a breakthrough card. Like ours with 2. 5 cash back on purchases of 5,000 or more. Plus unlimited 2 cash back on all other purchases. And with greater spending potential, sam can keep making smart ideas a brilliant reality the ink business premier card from chase for business. Make more of whats yours. Sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . 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